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Sunset Homeowners Ass'n Inc. v. DiFrancesco

Standing Exists to Claim Covenants Breached by Properties' Use as Airbnb Rental Units

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DECISION AND ORDERINTRODUCTION Plaintiffs Sunset Homeowners Association, Inc. (the “Sunset HOA” or the “Association”) and Glenn Arthurs (“Arthurs”) (collectively, “Plaintiffs”) commenced this action in New York State Supreme Court, Cattaraugus County, on December 4, 2018, alleging that Natascha DiFrancesco and Bryan DiFrancesco (collectively, “Defendants”) breached their contractual obligations by advertising and utilizing their properties as rental units through Airbnb, Inc., and HomeAway, Inc. (Dkt. 1-2 at 4-18).¹ Plaintiffs also obtained a temporary restraining order in state court that, among other things, prohibited the use of Defendants’ properties for rental purposes. (Dkt. 1-3 at 1-4). On January 3, 2019, Defendants removed this action to federal court. (Dkt. 1).Presently before the Court is Plaintiffs’ motion for a preliminary injunction (Dkt. 1-3 at 5-184) and Defendants’ motion to dismiss (Dkt. 3). For the following reasons, the Court denies Defendants’ motion to dismiss, in part, to the extent it is based on a lack of standing. The Court holds Defendants’ remaining arguments in abeyance along with Plaintiffs’ motion for a preliminary injunction until both sides have had the opportunity to submit further briefing as instructed below.BACKGROUND²Defendants are citizens of Ontario, Canada (Dkt. 1 at

3-4 (Notice of Removal)) and homeowners of two properties on Sunset Road, Ellicottville, New York (Dkt. 1-2 at 5). While Natascha purchased both properties at issue (Dkt. 3-8 at 4 (Bryan’s Affidavit); Dkt. 3-12 at

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