Condo board’s crusade against Savanna principals struck down by state’s top court

Appellate judges previously ruled buyers couldn't pierce the LLC veil

From left: 125 North 10th Street, Christopher Schlank and Nicholas Bienstock
From left: 125 North 10th Street, Christopher Schlank and Nicholas Bienstock

New York State’s Highest Court shot down a Williamsburg condominium board’s effort to directly sue the principals of Savanna Real Estate, in a move that further enforces the protections created by limited liability companies.

In 2012, residents at 125 North 10th Street sued entities linked to Savanna and also sued the company’s principals, Christopher Schlank and Nicholas Bienstock, claiming their new condos were shoddily constructed, resulting in leaks, flooding, odors and dangerous conditions. An appellate court ruled in May, however, that Schlank and Bienstock were protected from personal liability through their LLC, and thus their names would need to be removed from the suit.

The condominium board pressed forward, pushing the personal liability issue all the way up to the Court of Appeals, where it was finally shot down this month. In an October 17 decision, Judge Janet DiFiore wrote that “the motion is dismissed on the ground that the order sought to be appealed from does not finally determine the action within the meaning of the constitution.”

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In other words, because the condo board has not yet been given a decision on its full apartment damage claims (those are still pending in Brooklyn), it’s not a problem the appeals court can really handle just yet.

It is quite rare for this kind of real estate litigation to even reach the Court of Appeals in the first place. Savanna’s counsel, Andrea Roschelle of Starr Associates, said that it was the only condo board-related case she could recall landing at That Court since 2009. Roschelle was not surprised with the outcome. “Statutorily, they really had no grounds,” she said. “It would have been easier for them if they had just gone back to the Second Department [appellate division] and said ‘you made a mistake.’”

Jennifer Bock, attorney for the 125 North 10th Street condo board, did not immediately return a request for comment.