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Newman Ferrara Announces Motion to Dismiss Denied in Breach of Warranty of Habitability Class Action Brought by Gateway Plaza Residents

Newman Ferrara LLP announced that on December 4, 2015, the Honorable Eileen A. Rakower, Justice of the Supreme Court, New York County, denied a motion to dismiss filed in the action In re Gateway Plaza Residents’ Litigation, Index No. 651023/2014, by defendants Marina Towers Associates, L.P., a development company and landlord owned by the LeFrak Organization, and its management company, Gateway Residential Management LLC (collectively “Defendants”).

Gateway Plaza, a massive residential apartment complex located in Manhattan’s Battery Park City, is comprised of six 34-story buildings, totaling 1,881,621 square feet, and 1,712 apartments. The Consolidated Class Action Complaint (the “Complaint”) sustained by Justice Rakower alleges that, as a result of uniform conditions, defects, and deterioration at the complex, a significant amount of external air is drawn into the apartments exposing tenants to unreasonably cold external temperatures during the winter months and unreasonably hot temperatures during the summer months. Indeed, even with heating and cooling systems running at full capacity, apartment temperatures regularly dip below 50 degrees in the winter and can become oppressively hot in the summer.

Because of these conditions, tenants resort to self-help measures in order to block air flowing through seams in aging and uninsulated window systems and the thru-wall HVAC systems called “PTAC” units – relying on duct tape, plastic sheeting, and rolled-up towels. Others have reported sealing off entire rooms in order to cut-down on the exorbitant electricity costs associated with maintaining a tolerable temperature. As further alleged in the Complaint, for years Defendants have ignored violations and complaints about these conditions and have even disregarded a self-commissioned energy audit identifying the same issues and recommending significant structural remedial measures be taken. As a result, Plaintiffs, consisting of current and former Gateway Plaza residents, are seeking damages including rent abatements, compensatory damages, and injunctive relief.

Finding Plaintiffs’ allegations sufficient, Justice Rakower denied Defendants’ motion to dismiss Plaintiffs’ claims for breach of warranty of habitability pursuant to New York Real Property Law § 235-b, breach of lease agreements, and unjust enrichment. Commenting on the ruling, Newman Ferrara partner Jeffrey Norton stated, “We are pleased with the result. And, with the Court’s ruling behind us -- and with residents facing yet another cold winter dealing with these issues – we intend to aggressively pursue additional evidence in support of our claims, certification of the proposed class, adjudication on the merits, and a favorable recovery on behalf of all aggrieved Gateway Plaza residents.”

Plaintiffs are represented in this matter by Newman Ferrara LLP and Morgan & Morgan, P.C., who serve as Co-Lead Counsel, and Sanford Heisler Kimpel, LLP, which serves as Co-Counsel. If you are a Gateway Plaza tenant and have questions about this case, or your rights, you may contact Newman Ferrara partner Jeffrey M. Norton by phone (212.619.5400), or by email (jnorton@nfllp.com).

Newman Ferrara maintains a multifaceted practice based in New York City with attorneys specializing in complex commercial and multi-party litigation, securities fraud and shareholder litigation, consumer protection, civil rights, and real estate. For more information, please visit the firm’s website at www.nfllp.com.


Newman Ferrara LLP

Jeffrey M. Norton

1250 Broadway, 27th Fl.

New York, NY 10001

Tel: (212) 619-5400