Michael Shvo’s legal woes just got a little lighter.
A New York judge on Monday dismissed the claims against the developer as an individual in a lawsuit alleging construction discrepancies at Shvo’s Mandarin Oriental Residences in Midtown.
The move does not affect parts of a breach of contract allegation against BSD, the shell company that developed the 685 Fifth Avenue property. The judge, responding to a request from the defendants to dismiss, allowed claims to proceed that Berlin Rosen, the public relations company representing Shvo, defamed the plaintiffs in a New York Post article.
John and Diane Goodman sued Shvo and BSD in March, alleging the closets in their one-bedroom apartment were bigger than expected and that the unit lacked the agreed-upon custom millwork. They claimed that the developer failed to complete all the items on the punch list.
The couple, who paid $6.1 million for the condo, also accused Shvo of “wholly inappropriate and intolerable” behavior, including “foul language, refusal to acknowledge errors and outright toxic conduct.”
“There was never any legal basis to the Goodmans’ attacks on Mr. Shvo,” Steven Cohen, one of Shvo’s attorneys, said in a statement. “This suit was all about creating sensationalist headlines, and today the headline writes itself: All claims against Michael Shvo dismissed in their entirety.”
An attorney for the Goodmans did not respond to a request for comment.
Two weeks after filing their suit, the Goodmans updated it to include allegations that Berlin Rosen defamed them in a statement given to the New York Post. A spokesperson told the outlet that the lawsuit was a “shameless attempt to use the courts and the press to extort money by an individual with a history of frivolous lawsuits.”
“We expect to ultimately prevail on dismissing the defamation claims as well, as we were successful in dismissing the other claims,” Cohen, who is also representing Berlin Rosen, said in a statement.
The judge ruled that the plaintiffs did not provide enough evidence to hold Shvo personally liable for their complaints at the property. He also narrowed their breach of contract allegation against BSD, dismissing portions of the claim that blamed the company for not addressing items that weren’t included on the punch list, which the Goodmans okayed during a walkthrough of the unit before closing.
The judge also ordered the Goodmans’ attorney to respond within seven days to an allegation that he fabricated a citation mentioned in oral argument.
In July, the Goodmans filed a separate lawsuit against Shvo, BSD and other partners on the Mandarin Oriental project, again alleging shoddy construction, including unfinished amenities and a rooftop “transformed into a wasteland of dead foliage and an algae-infested pool.”
The complaint, which alleges fraud and negligence among other claims, described the building’s condition as “a pervasive sense of neglect, and compromised services that in no way live up to Mandarin Oriental five-star standards and the [developers’] hype.”
The lawsuit seeks punitive damages including a refund of the purchase price plus closing and renovation costs. Shvo’s attorneys filed a motion this month to dismiss the case; a ruling is expected in November.
“This is a disgruntled buyer who has decided to declare war,” Shvo’s attorney told the Post in July.
Shvo is also facing a $600 million lawsuit filed by the CEO of Core Club, who accused the developer of misleading the members-only organization about the development of club locations in New York, San Francisco and Milan.
That lawsuit also targeted some of Shvo’s backers, including German pension group Bayerische Versorgungskammer or BVK, which publicly distanced itself from involvement with the claims levied against the developer.
Shvo’s attorneys in July sought dismissal of the lawsuit, calling it “a kitchen sink of frivolous claims” and “a public hit job.” The case is pending.
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This article has been updated to specify the judge dismissed the claims against developer Michael Shvo as an individual and to differentiate from those against BSD and Berlin Rosen in the same lawsuit.