The following e-filed documents, listed by NYSCEF document number (Motion 008) 360, 361, 362, 363, 364, 365, 366, 367, 368, 369, 370, 371, 372, 373, 374, 375, 376, 377, 378, 379, 380, 381, 382, 383, 384, 385, 386, 387, 388, 389, 390, 391, 392, 393, 394, 395, 396, 397, 398, 399, 400, 401, 402, 403, 404, 405, 406, 407, 408, 409, 410, 411, 412, 413, 414, 415, 416, 417, 418, 419, 420, 421, 422, 423, 424, 425, 426, 427, 428, 429, 430, 431, 432 were read on this motion for SUMMARY JUDGMENT. DECISION ORDER ON MOTION Plaintiffs The Board of Managers of 325 Fifth Avenue Condominium and 325 Fifth Avenue Condominium (plaintiffs) bring this action to recover damages for alleged construction defects in the building located at 325 Fifth Avenue, New York, New York (the building), including the building’s balconies. Defendants FS Project Management LLC n/k/a FirstService Project Management, LLC (FSPM) and FirstService Residential New York, Inc. i/s/h/a First Service Residential New York, LLC (FSR) (together, FS defendants) move, pursuant to CPLR 3212, for summary judgment dismissing all claims against them. BACKGROUND FSR was retained as the managing agent of the building, pursuant to an agreement dated August 3, 2006 (the Management Agreement) (NY St Cts Elec Filing [NYSCEF] Doc No. 377 1). Article FOURTH of FSR’s Management Agreement provides as follows: “The Agent shall perform the following services with due diligence and care: (a) Cause to be hired, paid and supervised, all persons necessary to be employed in order to properly maintain and operate the Building… (b) Cause the Building to be maintained in such condition as may be deemed advisable by the Owner, including interior and exterior cleaning, and cause repairs and alterations of the building to be made, including, but not limited to, electrical, plumbing, steamfitting, carpentry, masonry, elevator, decorating, and such other incidental alterations or changes therein as may be proper, subject only to the limitations contained in this agreement or in the Condominium Declaration or By-Laws… (c) Recommend and, with the approval of the Owner, cause all such acts and things to be done in or about the Building as shall be necessary or desirable to comply with any orders or violations affecting the Building, as a result of any action by any federal, state, or municipal authority having jurisdiction thereover…except that if failure to promptly comply with any such order or violation would or might expose the Owner of the Agent to criminal liability, the Agent may cause such order or violation to be complied with after consultation, if feasible, with the president, vice-president or treasurer of the Owner (in the order given)… *** (v) Generally, do all things deemed necessary or advisable by the Board of Managers of the Owner for the proper management of the Building. However, in the event any such things are not within the services enumerated in paragraphs FOURTH (a) through FOURTH (u) above (e.g. without limitation compliance with a new administrative or filing requirement), Agent shall be entitled to additional compensation from Owner therefore as owner and Agent mutually agree” (NYSCEF Doc No. 378). FSR’s property manager primarily communicated with the Board president about operations, but communicated with the entire Board regarding urgent and important matters (NYSCEF Doc No. 377 3; NYSCEF Doc No. 374, Kirschenbaum tr at 75, 77-78). The former Senior Property Manager at Cooper Square Realty (which became FirstService Residential), Gustavo Rusconi (Rusconi) testified that, in July 2007, “a couple of the glass panels cracked and fell onto the public space behind the building” (NYSCEF Doc No. 368, Rusconi tr at 50). In response, the New York City Department of Buildings (DOB) issued violations to the building (id. at 52, 59). On August 2, 2007, FSR’s senior property manager retained Howard L. Zimmerman Associates, P.C. (HLZA) on behalf of the building to investigate the cause of the incident, including “inspect[ing] all the balconies (approximately 180 balconies) and associated attachment mechanisms…” (NYSCEF Doc No. 393 at 2). At the time, the Board was controlled by the Sponsor (NYSCEF Doc No. 364, Moy tr at 22). On November 15, 2007, HLZA issued a nine-page initial report to FSR, detailing the findings of its investigation into the cause of the balcony glass breakage (NYSCEF Doc No. 380, Zimmerman aff, 6). HLZA’s principal, Howard L. Zimmerman, FAIA (Zimmerman), avers that the report recommended further testing, remedial action and preventative maintenance in connection with the balcony glass panels and railings (id., 7). The report noted that certain balconies exhibited settlement cracks in the cantilevered concrete slabs of the balconies, which was expected and should be monitored over time, and categorized this as a “low priority” issue (NYSCEF Doc No. 380 at 15). The Board’s president, Monica Tadros (Tadros), testified that the non-Sponsor affiliated members never received a copy of this report (NYSCEF Doc No. 365, Tadros tr at 118-120). However, Tadros later admitted that she probably received the November 15, 2007 report, but did not read it because she could not open attachments on her phone (id. at 141-148). Plaintiffs allege that the Sponsor Board members directed FSR to give HLZA “instructions” to narrow this report (NYSCEF Doc No. 399 at 2). On December 10, 2007, HLZA issued a revised report (NYSCEF Doc No. 380, Zimmerman aff, 8). Zimmerman avers that this report recommended laboratory and site testing, including a mock-up of the balcony glass panel and railing system, to determine the cause of the glass failure and/or the guardrail system as a whole, as well as a thorough examination of relevant industry standards and codes to determine compliance (id.). The testing only pertained to the balcony glass panel and railing systems, but did not pertain in any manner to the cantilevered concrete slabs of the balconies at the building (id.). In December 2007, Steven Charno (Charno), one of the Sponsor’s directors, wrote an email to Rusconi, Marc Kotler (Rusconi’s supervisor), Tom Epstein, and Adam Mann, stating that “[HLZA] has issued a revised report, which unfortunately, despite our instructions to the contrary, still goes beyond the scope of addressing why the glass may have broken” (NYSCEF Doc No. 399 at 2). Charno stated that FSR and the Sponsor’s representatives should see if they “can get [HLZA] to delete sections that do not relate to possible causes as to why the glass may have broken” (id.). On June 10, 2008, HLZA issued a final report (NYSCEF Doc No. 380, Zimmerman aff, 9). This report did not determine why the balcony glass panels broke (id). However, HLZA determined that the July 2007 glass breakage incident was “not inconsistent with a falling object breaking the upper panels,” and that “based on our inspection, reinforced concrete structure does not appear to have contributed to the breakage” (id). The report also detailed the necessary steps to repair the balcony glass panel and railing systems, which had been completed at the time the report was issued (id.). In 2008, repairs were made to slab edge cracks in the building’s balconies (NYSCEF Doc No. 365, Tadros tr at 296-297). On July 1, 2009, a glass panel shattered onto Fifth Avenue, causing the Police Department to close the sidewalk and the DOB to issue a vacate order prohibiting access to any of the building’s balconies (NYSCEF Doc No. 370, Ostafin tr at 60-64). The Sponsor still controlled the Board at the time (NYSCEF Doc No. 365, Tadros tr at 94, 300). The Board retained a new engineer, Frank Seta Associates (FSA), to investigate and determine a solution to the glass panel issue (NYSCEF Doc No. 422 at 2). FSA determined that the glass panels of the balconies were breaking because “there were no thermal breaks between the materials”, i.e., “the concrete of the balconies, the aluminum railings, and the glass” (NYSCEF Doc No. 373, Foley tr at 22-23, 30-31). The absence of a thermal break did not have an effect on the concrete slab (id. at 31). Plaintiffs further allege that, in July 2009, FSR learned of a structural crack in the balcony of apartment 32E that had been “overlooked” during the Sponsor’s prior patchwork repairs (NYSCEF Doc No. 418 at 2). They allege that it was later determined that the entire concrete slab on that balcony had to be “[d]emolish[ed] and reconstruct[ed]” (NYSCEF Doc No. 419 at 2). In November 2009, FSR’s subsidiary, FSPM, was retained as the owner’s representative to replace the glass balconies (NYSCEF Doc No. 374, Kirschenbaum tr at 152-153). FSPM’s role was to facilitate the project, i.e., to make sure the work was done efficiently and timely, and that it did not disrupt the building (id. at 157, 160). FSPM was “not there to determine that the specs are followed. That’s the engineer’s responsibility” (id. at 160). FSPM’s Owner’s Representative Agreement provides: “1. Statement of Purposes and Services The purpose of this agreement is for Owner to engage Representative as its consultant to provide the professional services as set forth in Exhibit A to this Agreement (the ‘Services’) in connection with the replacement of the glass partitions on the balconies (the ‘Project’) at the Property located at and known as 325 Fifth Avenue, New York, NY (the ‘Property’)…” (NYSCEF Doc No. 379). Exhibit A required FSPM to provide various services during the pre-construction phase, including selecting engineers, financial planning, and reviewing specifications with engineers (id. at 7). During the construction phase of the balcony glass project, FSPM was required to chair weekly meetings and provide controlled inspections (id.). FSPM’s general counsel, who drafted the Owner’s Representative Agreement, testified that he never saw an executed copy of the agreement (NYSCEF Doc No. 374, Kirschenbaum tr at 41, 148). In a November 18, 2009 email, Tal Eyal (Eyal), the president of Cooper Square Project Development, Inc., now known as FSPM, wrote to the Board after “an incident that occurred on Tuesday, November 17, 2009 where a small piece of glass from the south facing facade fell onto the neighboring building” (NYSCEF Doc No. 416 at 2). Eyal stated that that FSPM would “learn (at an accelerated pace) the history of the balcony railing glass and help the Board come to a decision in order to rectify this situation” (id). Eyal indicated that FSPM “understood the severity of the situation” and would report to the Board on a regular basis (id.). Canido Basonas Construction Corp. (Basonas) performed rigging work, removed the existing glass panels, and installed a new railing system, and Walsh Associates installed the new glass panels pursuant to the plans and specifications prepared by FSA (NYSCEF Doc No. 373, Foley tr at 215-216, 219-220). According to an email dated May 14, 2010, DOB’s representative requested “structural drawings of the composition of the balconies,” “[t]o completely discount that there are no structural design defects with the existing defects” (NYSCEF Doc No. 423 at 2). Plaintiffs allege that, in response, FSPM delivered a letter to DOB from the engineer, indicating that it had “performed daily controlled inspections for concrete placement and rebar installation,” and that “all concrete placement of the exposed balconies was completed in accordance with the structural drawings and specifications” (NYSCEF Doc No. 424 at 2). When Basonas was drilling holes in the concrete balcony slabs, it “hit a rebar” on a single line of balconies (NYSCEF Doc No. 373, Foley tr at 232, 250-251). FSPM instructed Basonas “to move [the drill] to the side and then adjust it and go to the side of the rebar” and Basonas “adjusted their positioning and they were able to complete” the railing installation (id. at 233, 236). The building paid for the balcony glass panel and railing replacement project with contributions from the Sponsor in exchange for a release, the building’s insurance carrier in exchange for a release, and a special assessment imposed on the unit owners (NYSCEF Doc No. 363, Bartow tr at 32, 44-45, 59, 106). In April 2012, FSPM assisted the Board in retaining a licensed engineer to conduct a Local Law 11 inspection prior its due date in February 2013 (NYSCEF Doc No. 369, Seddio tr at 43-44). The Board retained Lawless & Mangione Architects and Engineers LLP (L&M) as the engineer to perform the Local Law 11 inspection (id. at 63-64, 81-82). During the Local Law 11 inspection, L&M discovered “the concrete issue…in the balconies” (NYSCEF Doc No. 373, Foley tr at 129-131). Thereafter, the Board retained Whitlock Dalyrmle Poston & Associates, P.C. (WDP) and Thornton Tomasetti to provide second and third opinions (NYSCEF Doc No. 369, Seddio tr at 79-80; NYSCEF Doc No. 363, Bartow tr at 15). WDP’s and Thornton Tomassetti’s reports identified various original construction defects in the concrete slabs of the building, including excessive congestion of the reinforcing steel rebar at the edges of the slab, lack of ties anchoring the rebar, improper placement of rebar hooks, inadequate spacing of the rebar, use of an improper size of reinforcing steel rebar, and insufficient air content in the poured concrete (NYSCEF Doc No. 363, Bartow tr at 41-42; NYSCEF Doc No. 365, Tadros tr at 109). Plaintiffs have been unable to obtain a final certificate of occupancy for the building as a result of the ongoing balcony concrete slab reconstruction work (NYSCEF Doc No. 365, Tadros tr at 340-343). As relevant here, the complaint asserts the following two claims: (1) breach of contract against FSR (count nine); and (2) breach of contract against FSPM (count twelve) (NYSCEF Doc No. 62, complaint
