United States District Court,
S.D. New York.
The BOARD OF MANAGERS OF the CHARLES HOUSE CONDOMINIUM, Plaintiff,
v.
INFINITY CORPORATION and Schnurmacher Bros., Defendants.
No. 92 CIV 4990 (CBM).
June 30, 1993.
 Condominium board brought action against developer and sponsor, seeking to set 
aside garage lease entered into between developer and sponsor under Condominium 
and Cooperative Conversion Protection and Abuse Relief Act.   On defendants' 
motion for summary judgment, the District Court, Motley, J., held that:  (1) 
decision in prior state court proceeding collaterally estopped board from 
bringing self-dealing claim;  (2) Act did not apply to developer's lease of 
parking garage to sponsor;  and (3) board's termination claim was not timely as 
to developer.
 Motion granted.
West Headnotes
[1] Federal Civil Procedure  226
170Ak226 Most Cited Cases
Banks that held mortgages on tenant's leasehold interest in condominium 
project's garage were indispensable parties in action brought by condominium 
board seeking to divest developer of title to commercial unit and terminate 
lease;  complete relief could not be awarded by virtue of declaratory judgment, 
since title and rights to property would be subject, to some extent, to rights 
of banks.  Fed.Rules Civ.Proc.Rule 19(a), 28 U.S.C.A.
[2] Estoppel  52(8)
156k52(8) Most Cited Cases
Amendment to offering plan under which tenants' committee "recommended" that no 
further litigation should be brought against sponsor with respect to matters in 
offering plan, together with concurrent resolution of state court litigation, 
did not estop condominium board, as committee's successor in interest, from 
bringing action against sponsor based on alleged self-dealing with developer.
[3] Judgment  828.16(1)
228k828.16(1) Most Cited Cases
Determination in prior state court proceeding that transaction between 
condominium developer and sponsor, under which sponsor was granted lease of 
development's garage, was arm's length and fully disclosed had collateral 
estoppel effect in action brought by condominium board challenging transaction 
under Condominium and Cooperative Conversion Protection and Abuse Relief Act; 
central issue in both cases was whether developer and sponsor had entered into 
unfair and oppressive "sweetheart" lease.  Condominium and Cooperative Abuse 
Relief Act of 1980, §  602 et seq., 15 U.S.C.A. §  3601 et seq.
[4] Judgment  634
228k634 Most Cited Cases
[4] Judgment  828.1
228k828.1 Most Cited Cases
Doctrine of collateral estoppel creates preclusion of issues decided in state 
court, as well as those decided in federal court, as determined by law of the 
state.  28 U.S.C.A. §  1738.
[5] Judgment  713(1)
228k713(1) Most Cited Cases
[5] Judgment  715(1)
228k715(1) Most Cited Cases
[5] Judgment  724
228k724 Most Cited Cases
Under New York law, collateral estoppel prevents relitigation of issue which is 
identical to one necessarily decided in prior action and which parties were 
afforded full and fair opportunity to contest in that proceeding.
[6] Condominium  3
89Ak3 Most Cited Cases
Provision of Condominium and Cooperative Conversion Protection and Abuse Relief 
Act providing for termination of any contract or portion of contract between 
unit owners or association and developer or affiliate of developer did not apply 
to option agreement between developer and third party.  Condominium and 
Cooperative Abuse Relief Act of 1980, §  608, 15 U.S.C.A. §  3607.
[7] Condominium  2
89Ak2 Most Cited Cases
Condominium and Cooperative Conversion Protection and Abuse Relief Act was not 
intended to apply to contracts which involved third parties and did not involve 
tenants themselves so as to be self-dealing.  Condominium and Cooperative Abuse 
Relief Act of 1980, §  602 et seq., 15 U.S.C.A. §  3601 et seq.
[8] Condominium  1
89Ak1 Most Cited Cases
Lease between developer and corporation was not a contract between tenants and 
developer and was not subject to termination under Condominium and Cooperative 
Conversion Protection and Abuse Relief Act.  Condominium and Cooperative Abuse 
Relief Act of 1980, §  608, 15 U.S.C.A. §  3607.
[9] Condominium  1
89Ak1 Most Cited Cases
Deed to condominium development's garage involving only developer's fee simple 
interest in property that it built and never conveyed did not involve a contract 
between developer and tenant that was terminable under the Condominium and 
Cooperative Conversion Protection and Abuse Relief Act. Condominium and 
Cooperative Abuse Relief Act of 1980, §  608, 15 U.S.C.A. §  3607.
[10] Condominium  4
89Ak4 Most Cited Cases
Partnership which sold its interest in residential units to sponsor, which then 
offered residential units for sale to public as part of condominium conversion 
was "developer" under Condominium and Cooperative Conversion Protection and 
Abuse Relief Act.  Condominium and Cooperative Abuse Relief Act of 1980, §  604, 
15 U.S.C.A. §  3603. 
[11] Condominium  1
89Ak1 Most Cited Cases
Parking garage "served" condominium unit owners within meaning of Condominium 
and Cooperative Conversion Protection and Abuse Relief Act, although offering 
plan permitted garage to be used for other purposes and had been used by public 
since construction;  certificate of occupancy stated that parking was primarily 
for residents and tenants, and variance in zoning resolution to permit transient 
parking was subject to condition that tenants be allowed to recapture any space 
devoted to transient parking on 30 days notice. Condominium and Cooperative 
Abuse Relief Act of 1980, §  602 et seq., 15 U.S.C.A. §  3601 et seq. 
[12] Condominium  17
89Ak17 Most Cited Cases
"Special developer control" over condominium board, for purposes of Condominium 
Cooperative Conversion Protection and Abuse Relief Act's two-year statute of 
limitation for terminating developer contracts, did not end until majority of 
condominium board actually became controlled by nonsponsor unit owners, rather 
than when sponsor lost right to appoint majority of board. Condominium and 
Cooperative Abuse Relief Act of 1980, § §  604(22), 608(b, d), 15 U.S.C.A. § §  
3603(22), 3607(b, d). 
[13] Limitation of Actions  58(1)
241k58(1) Most Cited Cases
Failure of developer and sponsor to disclose condominium board's rights under 
Condominium and Cooperative Conversion Protection and Abuse Relief Act in 
offering plan did not toll statute of limitations under Act for terminating 
developer contracts.  Condominium and Cooperative Abuse Relief Act of 1980, § §  
604(22), 608(b, d), 15 U.S.C.A. § §  3603(22), 3607(b, d).
[14] Condominium  8
89Ak8 Most Cited Cases
"Special developer control" of condominium board, within meaning of Condominium 
and Cooperative Conversion Protection and Abuse Relief Act is essentially 
developer domination of board of directors.  Condominium and Cooperative Abuse 
Relief Act of 1980, §  604(22), 15 U.S.C.A. §  3603(22).
[15] Condominium  17
89Ak17 Most Cited Cases
"Special developer control" over condominium board, for purposes of Condominium 
and Cooperative Conversion Protection and Abuse Relief Act's two-year 
limitations period for terminating developer contracts, did not end when initial 
control period as defined in offering plan ended, where bylaws gave sponsor wide 
ranging powers, including veto powers over business decisions after that date.  
Condominium and Cooperative Abuse Relief Act of 1980, §  608(b, d), 15 U.S.C.A. 
§  3607(b, d).
[16] Condominium  17
89Ak17 Most Cited Cases
Condominium and Cooperative Conversion Protection and Abuse Relief Act's two- 
year limitations period for condominium board to terminate developer contracts 
commenced on date developer owned 25% or less of units in property. Condominium 
and Cooperative Abuse Relief Act of 1980, §  608(b), 15 U.S.C.A. §  3607(b).
[17] Condominium  17
89Ak17 Most Cited Cases
Condominium developer and sponsor that prevailed in condominium board's action 
to terminate alleged self-dealing contract under Condominium Cooperative 
Conversion Protection and Abuse Relief Act were not entitled to award of 
attorney fees, where board's case was not frivolous or malicious or lacking in 
substantial merit.  Condominium and Cooperative Abuse Relief Act of 1980, §  602 
et seq., 15 U.S.C.A. §  3601 et seq.
 *600 Solovay & Edlin by Norman Solovay, New York City, for plaintiff.
 Kirschenbaum & Kirschenbaum, P.C. by Ira Levine, Garden City, NY, for 
defendants.
OPINION ON MOTION FOR SUMMARY JUDGMENT
 MOTLEY, District Judge.
 Plaintiff, the Board of Managers of the Charles House Condominium (the  
"Board"), brought suit against defendants Infinity Corporation ("Infinity") and 
Schnurmacher Brothers ("Schnurmacher") seeking declaratory judgment of the 
termination of all of defendants' rights, title, and interest in a parking 
garage pursuant to the Condominium and Cooperative Conversion Protection and 
Abuse Relief Act, 15 U.S.C. §  3601 et seq. (the "Act").   Defendants 
subsequently brought certain counterclaims and moved for summary judgment. For 
the reasons discussed herein,defendants' motion and counterclaims are granted.
 I. BACKGROUND
 Plaintiff is the Board of Managers of the Charles House Condominium.   The 
Charles House Condominium was established pursuant to the provisions of the New 
York State Condominium Act  [FN1] and is located in the City, County, and State 
of New York.   The Board brought suit on behalf of the residential unit owners 
of the Condominium.
FN1. New York Real Property Law, Art. 9-B §  339-d.
 Defendant, Infinity Corporation ("Infinity"), is a New York corporation and 
sponsor of the condominium conversion.
 Defendant, Schnurmacher Brothers ("Schnurmacher"), is a New York partnership.
 On October 5, 1955, Schnurmacher acquired title in fee simple absolute to a 
parcel of land located in New York County and in or about 1958 constructed a 
building thereon known by street number 40 East 78th Street, New York, New York 
(the "Property").   The building which was constructed consists of approximately 
102 residential units, commercial space for retail stores and offices, and an 
underground garage.   It is this structure which was subsequently converted to 
condominium use and which is the subject of this action.
 After the death of Charles Schnurmacher (one of the partners of Schnurmacher) 
the partnership embarked on a plan of net leasing partnership buildings and 
granting purchase options for cash payments so as to raise cash and settle the 
obligations of Charles Schnurmacher's estate.   Toward this end, Schnurmacher 
entered into an agreement with 1001 Madison Corporation, a wholly owned 
subsidiary of Infinity, whereby the Property was net-leased to 1001 Madison 
Corporation subject to existing leases.   Contemporaneously with the execution 
of the net-lease with 1001 Madison Corporation, Schnurmacher entered into an 
Option Agreement, also dated as April 5, 1984, with Infinity for a cash 
consideration of $6,600,000, whereby Schnurmacher granted to Infinity an 
exclusive and irrevocable option to purchase the Property subject to existing 
commercial and residential tenancies.   Pursuant to paragraph 1.3 of the Option 
Agreement, the option may be exercised at any time during the period beginning 
with the death of Adolph and Irwin Schnurmacher, the two surviving partners, and 
ending ten (10) years from the date of the Option or, if Adolph or Irwin 
Schnurmacher are still alive, 47 years from November 25, 1986, whichever was 
earlier. [FN2]
FN2. The Option Agreement stated at Section 3.2 thereof: 
The Property is presently occupied pursuant to written leases referred to in 
Exhibit B attached hereto.   Accordingly, this Agreement and the rights of 
optionee are subject and subordinate to the rights of tenants and subtenants, 
and the terms, covenants and conditions of the aforementioned leases, and the 
statutory rights, if any, of the tenants thereunder to renewal leases or rights 
to remain in the premises.   Optionor represents that all non-residential leases 
listed in Exhibit B are in full force and effect;  that to the best of 
Optionor's information and belief, the tenants are not in default thereunder;  
that Optionor has not as of the date hereof received any notice from said 
tenants that Lessor is in default thereunder, and Lessor has no information 
which would lead it to believe that it is in default thereunder.
 *601 Subsequent to the execution and delivery of the lease to 1001 Madison 
Corporation and the Option Agreement to Infinity, Infinity, as sponsor, 
submitted to the Attorney General of the State of New York, a cooperative 
offering plan.   The tenants formed a Tenants' Committee, retained independent 
counsel and opposed the terms of the cooperative offering plan because they 
believed that the sale of apartments would be subject to the April 5, 1984 Lease 
and Option Agreement.   They believed that if there were a default under the 
Lease or if the optionee failed to purchase the land and building, then 
apartment purchasers might lose their rights to the apartments, that because fee 
title to the apartments was not being conveyed, the apartment purchasers would 
not receive tax deduction benefits for the payment of real estate taxes.
 Fearing that the New York State Attorney General would reject the Cooperative 
Plan, the principals of Infinity and 1001 Madison Corporation requested a 
meeting with Schnurmacher in order to propose a restructuring of the 
transaction.
 The proposal for restructuring involved converting the Property to condominium 
use.   The condominium would be comprised of residential units ("Residential 
Units") and one commercial unit ("Commercial Units").
 The parties then proceeded to negotiate, and the transactions were restructured 
so that: 
1.  Infinity would pay all of Schnurmacher's real estate taxes related to this 
Property. 
2. Infinity would pay all of Schnurmacher's other expenses including fees for 
professional services and any real estate brokerage commissions. 
3. Infinity would pay the New York State Real Property Gains Tax if the option 
to purchase the Commercial Unit were exercised in the future at the purchase 
price of $26,000,000. 
4. Infinity would pay an additional $2,000,000 for the option on the Commercial 
Unit. 
5. The lease and option transaction at other buildings would be restructured as 
absolute sales.
 The taxes and professional fees amounted to more than $6,000,000.   Prior to 
the restructuring, Schnurmacher received $11,000,000 as option deposits. After 
the restructuring, Schnurmacher received $19,000,000 (sales proceeds) and 
$4,500,000 (option deposit) or a total of $23,500,000.   Thus, as a result of 
the restructuring, Schnurmacher received an additional $12,500,000 not including 
the payment of their taxes and expenses.
 In accordance with the transactions as restructured, Infinity submitted an 
Offering Plan to the Attorney General of the State of New York pursuant to New 
York State General Business Law §  352.   Under §  352, Infinity, as sponsor, 
sought to convert the building to condominium use.   The Offering Plan was 
accepted for filing on December 27, 1985 by the Attorney General of the State of 
New York.
 On July 26, 1986, Schnurmacher executed a "Declaration establishing a plan for 
condominium ownership."   On September 4, 1986, the Declaration of Condominium 
(the "Declaration") including condominium by-laws (the "By-laws") and floor 
plans with respect to the Property were filed with the City Register of the City 
of New York. [FN3]  The Property, *602 then owned by Schnurmacher, was thereby 
submitted according to the provisions of the New York State Condominium Act to 
create a condominium consisting of 102 residential units and 9 servant 
room/units which are collectively called the "Residential Units."   A separate 
unit identified in the Declaration as the "Commercial Unit" consists of stores, 
offices, and the garage space which is the subject of this action.
FN3. Page 1 of part 1 of the Plan under the headnote "Introduction" states: 
The Owner of the property is Schnurmacher Bros., having its principal office at 
1114 First Avenue, New York, New York. 
The Sponsor is Infinity Corporation, having its principal office at 8 Haven 
Avenue, Port Washington, N.Y. 11050.   The Sponsor is, through a wholly owned 
subsidiary, 1001 Madison Corp., the net lessee of the Property.   The Sponsor is 
a contract vendee and will acquire fee title to the Residential Units prior to 
or simultaneously with the First Closing. 
The Offer 
The Sponsor hereby offers 102 Residential Units and 9 Servant Units for sale 
under this Plan.   The purchase prices and estimated Common Charges for each of 
these Units are listed below in Schedule A-"Offering Prices and Related 
Information."   In addition, there are certain closing costs which are listed in 
"Unit Closing Costs and Adjustments." 
The stores, garage and offices at the property will constitute a separate 
condominium unit (the "Commercial Unit") retained by the Owner and net leased to 
a designee of the Sponsor and is not offered for sale under this Plan.   The 
superintendent's apartment (apartment 1A) is not offered for sale but will be 
part of the common elements. 
Page 2 part 1 of the Offering Plan under the heading "Basic Aspects of 
Condominium Ownership" states: 
Each purchaser owns his Unit outright and is entitled to exclusive possession of 
his Unit (unless it is purchased subject to the rights of a non-purchasing 
tenant) together with an interest in and right to use the General Common 
Elements and Residential Limited Common Elements other than terraces and 
balconies as to which the Unit Owner whose Unit has direct and exclusive access 
thereto has an exclusive right to use.
 Pursuant to the Declaration and by deed dated November 25, 1986, title to the 
Residential Units vested in the Sponsor, Infinity, [FN4] and these units were 
then offered for sale to the public by the Sponsor, Infinity. [FN5] (Greenberg 
Aff.   5)  The offer to sell residential units in the Property was made by 
means of a Condominium Offering Plan, dated December 27, 1985 (the "Plan").
FN4. By Deed dated November 25, 1986, Schnurmacher conveyed title to the 
Residential Units to Infinity, which Deed was recorded in the office for the 
City Register of the City of New York on December 16, 1986.
FN5. As part of the overall structure of the transaction, the Option Agreement 
with Infinity and the net Lease with 1001 Madison Corp. were modified.   A 
modification of the Option Agreement was executed by Schnurmacher and Infinity 
whereby Infinity was afforded an option to purchase the Commercial Unit from 
Schnurmacher.   The net Lease between Schnurmacher and 1001 Madison Corp. was 
also modified by making the Lease subject to the Declaration which "shall 
hereafter be deemed a lease of the Commercial Unit."
 Pursuant to New York law, the Plan was required to contain a full and accurate 
description of all terms of the offering and was to be distributed to all 
potential purchasers of units.   The Plan incorporated the Declaration and the 
By-laws and set forth the terms and conditions governing the sale and purchase 
for the Residential Units.
 The Plan, including the Declaration, By-laws and other documents described 
therein, comprised an offer to sell to the public the Residential Units.
 Schnurmacher retained ownership of the Commercial Unit.   The Declaration and 
the Plan also provided that a deed to the Commercial Unit, including the garage, 
would be issued to Schnurmacher.   On November 25, 1986, Schnurmacher as 
optionor and Infinity as optionee modified the Option Agreement dated as of 
April 5, 1984 whereby Infinity obtained an option to purchase all of 
Schnurmacher's right, title and interest to that portion of the Property 
retained by Schnurmacher and designated in the Declaration as the Commercial 
Unit.   The lease between 1001 Madison Corp. and Schnurmacher was modified by 
agreement dated April 25, 1986 making the lease subject to the Declaration of 
the Charles House Condominium and modifying the lease to be a lease of the 
Commercial Unit.
 In late 1986, 1001 Madison Corp. merged into Infinity.   Thus, in addition to 
its option to purchase right, title and interest in the Commercial Unit, 
Infinity succeeded to the rights of 1001 Madison Corp. as the tenant under the 
modified lease between Schnurmacher and 1001 Madison Corp.
 On April 22, 1986, Irwin Schnurmacher and Adolph Schnurmacher appeared before 
and were examined under oath by the New York State Attorney General.   The 
Attorney General found that the transaction between Schnurmacher and Infinity 
were arm's-length transactions.
 After the Attorney General accepted the Offering Plan for filing, an Article 78 
Proceeding was commenced in the Supreme Court of the State of New York by the 
*603 Tenants' Committee, Stanley Deutsch, Charles Fabricant, Robert Cornell, 
Bernard Janoff, and Herbert Klapper against the Attorney General of the State of 
New York seeking a judgment to set aside and annul the determination of the 
Attorney General.
 Subsequent to the commencement of the action in the State Court, the Attorney 
General, by letter dated June 25, 1986, rescinded his acceptance of the Offering 
Plan.   Thereafter, Infinity intervened in the proceeding commenced by the 
Tenants' Committee and the residential tenants, seeking a judgment compelling 
the Attorney General to accept the Offering Plan for filing and directing the 
Attorney General to cancel and annul the letter of rescission of the Plan dated 
June 25, 1986.
 The matter was presented to Justice Robert E. White of the New York Supreme 
Court for a determination. [FN6]  The court concluded that there was no 
collusion or self-dealing between Schnurmacher and Infinity. [FN7]
FN6. In Matter of the Application of the Tenants Committee of 40 East 78 Street, 
et al. v. Abrams ("East 78 Street"), No. 99306/86 (S.Ct.N.Y.Co. Feb. 11, 1987).
FN7. East 78 Street, at 3.
 A final judgment which, inter alia, dismissed the petition and directed the 
Attorney General to accept the Offering Plan for filing was entered in the 
office of the clerk of New York County on March 20, 1987.   The petitioners 
served and filed a notice of appeal from the final judgment on April 21, 1987.
 Subsequently, the Tenants' Committee and Infinity entered into an agreement 
resolving all outstanding issues, which agreement was memorialized in the Eighth 
Amendment to the Offering Plan, which was accepted for filing with the Attorney 
General of the State of New York on or about July 17, 1987.
 The Eighth Amendment to the Offering Plan incorporates as Exhibit J thereof a 
letter agreement dated June 25, 1987 between the sponsor's attorney and the 
Tenants' Committee's attorney whereby the Tenants' Committee agreed to withdraw 
its objection to the Offering Plan, withdraw its appeal from the final judgment 
of the state supreme court, and recommend to the membership not to commence any 
further litigation. [FN8]  As a result of the agreement culminating in the 
Eighth Amendment, the Tenants' Committee and the residential tenants withdrew 
the appeal of the final judgment entered in the state court litigation.
FN8. The Eighth Amendment states in pertinent part: 
The terms of the amendment (except paragraphs 1, 3, 4 and 15) are a result of 
negotiations with the Tenants' Committee of 40 East 78th Street.   The Tenants' 
Committee recommends that no further litigation be brought against the sponsor 
with respect to matters in the Offering Plan.
 Stanley Deutsch, as owner of one of the Residential Units, and the president of 
the plaintiff, The Board of Managers of the Charles House Condominium, commenced 
a proceeding before the New York State Division of Housing and Community Renewal 
("D.H.C.R.") seeking a determination that the garage portion of the Commercial 
Unit was subject to the New York State Rent Stabilization Law which would result 
in some of the parking spaces being subject to rent regulation.   By Order dated 
April 22, 1987, the D.H.C.R. denied the application.   Subsequently, Deutsch 
petitioned the Commissioner of the D.H.C.R. for an administrative review of the 
Order denying his application to determine that the garage was subject to rent 
stabilization.   The petition for administrative review was dismissed by the 
Commissioner of the D.H.C.R.
 By notice dated April 30, 1992, plaintiff served notice upon defendants  
(pursuant to the Condominium and Cooperative Conversion Protection and Abuse 
Relief Act (the "Act"), 15 U.S.C. §  3601 et seq.) terminating inter alia, (a) 
the Condominium Offering Plan;  (b) the Declaration;  (c) the By-laws;  (d) the 
Option Agreement dated as of April 5, 1984;  (e) the Lease between Schnurmacher 
Bros. and 1001 Madison Corp.;   and (f) the Deed to the Commercial Unit of the 
Charles House Condominium.
 Plaintiff filed for declaratory judgment in July 1992 adjudging that all 
rights, title and interest of the defendants in and to the parking*604 garage 
located on the Property have been validly and timely terminated under the Act.   
Defendants subsequently made certain counterclaims and moved for summary 
judgment.
 II. DISCUSSION
 Plaintiff's complaint alleges that defendants attempted to enter into an 
illegal, self-dealing conversion agreement in violation of the Act.   The Act 
was promulgated to abate specific abusive practices occurring in the cooperative 
and condominium conversion process.   See H.R. Conf.Rep. No. 1420, 96th Cong., 
2d Sess. 162, reported in 1980 U.S.Code Cong. & Admin.News 3506, at 3707.
 "The primary purpose of the Act was to protect cooperative and condominium unit 
owners against overreaching by developers.   Thus, the Act provided means for 
unit owners to challenge unconscionable leases and self-dealing contracts."  
King v. 415 Second Owners Corp., No. 86 Civ. 4800, 1987 U.S. Dist.Lexis 15211 
(S.D.N.Y. Nov. 12, 1987), *3.
 "Section 3607 of the Act, in particular, was a response to the activities of 
many developers in the 1970's who created "sweetheart" lease arrangements and 
self-dealing contracts as a condition of sale."  Barnan Association v. 196 
Owner's Corp., 797 F.Supp. 302, 304 (S.D.N.Y.1992).
 The Act permits the unit owners or an association of unit owners to terminate, 
without penalty certain long-term self-dealing contracts.   It provides in 
pertinent part: 
(a) Any contract or portion thereof which is entered into after October 8, 1980, 
and which-- 
(1) provides for operation, maintenance, or management of a condominium or 
cooperative association in a conversion project, or of property serving the 
condominium or cooperative unit owners in such project; 
(2) is between such unit owners or such association and the developer or an 
affiliate of the developer; 
(3) was entered into while such association was controlled by the developer 
through special developer control or because the developer held a majority of 
the votes in such association;  and 
(4) is for a period of more than three years, including any automatic renewal 
provisions which are exercisable at the sole option of the developer or an 
affiliate of the developer, may be terminated without penalty by such unit 
owners or such association.
 15 U.S.C. §  3607(a).   All four elements must exist for a contract to be 
terminated under the statute.  West 14th Street Commercial Corp. v. 5 West 14th 
Owners Corp., 815 F.2d 188, 197 (2d Cir.), cert. denied, 484 U.S. 850, 108 S.Ct. 
151, 98 L.Ed.2d 107 (1987).
 "The Abuse Relief Act seeks to eliminate the potential for abuse to which the 
conversion process lends itself.   Congress undertook the delicate task of 
deterring these abuses without preventing conversions from taking place. Section 
3607 of the Abuse Relief Act targeted a particular form of abuse to which 
tenants were vulnerable, namely, self-dealing leases arranged by sponsors.   
Sponsors have an economic incentive to take advantage of the temporary control 
they exert over tenants' corporations to bind tenants to long term, self-dealing 
leases--leases that potentially deprive the tenants of valuable assets."  181 E. 
73rd St. Co. v. 181 E. 73rd Tenants Corp., 954 F.2d 45, 47 (2d Cir.1992) 
(citations omitted).   See also Park So. Tenants v. 200 Cent. Park So. 
Associates, 748 F.Supp. 208, 211 (S.D.N.Y.1990), aff'd, 941 F.2d 112 (2d 
Cir.1991) (citations omitted).
 Plaintiff claims that defendants realized that the initial cooperative 
agreement would not succeed and restructured the agreement to escape the 
application of the Act.   Plaintiff points to the provision of the Declaration 
allocating only 11.8596% of the Common Elements to the Commercial Unit as 
evidence of self-dealing nature of the transaction.   Plaintiff contends that 
that allocation is disproportionate because on a square footage basis, the 
Commercial Unit constitutes 26.84% of the building and on a value basis, the 
Commercial Unit constitutes 69.5% of the value.   Nevertheless, the Commercial 
Unit only pays 11.8596% of the project's expenses.
 *605 Plaintiff attempted to terminate the Condominium Offering Plan, the 
Declaration, the By-Laws, the Option Agreement dated as of April 5, 1984, the 
Lease between Schnurmacher Bros. and 1001 Madison Corp., and the Deed to the 
Commercial Unit of the Charles House Condominium pursuant to §  3607 of the Act.
 Defendants alleged certain counterclaims and moved for summary judgment that 
plaintiff's termination is invalid.   Defendants claim that 1) plaintiff failed 
to join certain necessary and indispensable parties;  2) plaintiff is estopped 
from terminating defendants' agreement because plaintiff released defendants 
from further suit in a prior agreement;  3) plaintiff is collaterally estopped 
from raising its claims against defendants by a prior New York Supreme Court 
decision;  4) plaintiff's notice of termination was untimely;  and 5) the Act 
does not apply to defendants because Schnurmacher is not a developer as defined 
by the Act and the garage is not property serving the condominium.
 Defendants make counterclaims for declaratory judgment that the termination is 
invalid, that Schnurmacher owns the Commercial Unit in fee simple, and that 
defendants are entitled to the costs of the action.
 Both plaintiff and defendants claim a right to attorneys' fees.
 A. Standard for Summary Judgment
 Federal Rule of Civil Procedure 56(c) provides that summary judgment 
shall be rendered forthwith if the pleadings, depositions, answers to 
interrogatories, and admissions on file, together with the affidavits, if any, 
show that there is no genuine issue as to any material fact and that the moving 
party is entitled to judgment as a matter of law.
 Summary judgment is appropriate if, "in light of the evidence presented, there 
is no genuine issue as to any material fact and the moving party is entitled to 
judgment as a matter of law."  Hurwitz v. Sher, 982 F.2d 778, 780 (2d Cir.), 
cert. denied, 508 U.S. 912, 113 S.Ct. 2345, 124 L.Ed.2d 255 (1993) ( citing 
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 
L.Ed.2d 202 (1986)).   Summary judgment is appropriate when, "after drawing all 
reasonable inferences in favor of the party against whom summary judgment is 
sought, 'no reasonable trier of fact could find in favor of the non-moving 
party.' "  Horn & Hardart Co. v. Pillsbury Co., 888 F.2d 8, 10 (2d Cir.1989) 
(quoting Murray v. National Broadcasting Co., 844 F.2d 988, 992 (2d Cir.), cert. 
denied, 488 U.S. 955, 109 S.Ct. 391, 102 L.Ed.2d 380 (1988)).  See also Liberty 
Lobby, 477 U.S. at 251-52, 106 S.Ct. at 2512 (inquiry is "whether the evidence 
presents a sufficient disagreement to require submission to a jury or whether it 
is so one-sided that one party must prevail as a matter of law").
 In considering a motion for summary judgment the facts must be viewed in a 
light most favorable for the nonmoving party.  Hurwitz, 982 F.2d at 780 (citing 
United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 993, 8 L.Ed.2d 
176 (1962)).
 "The moving party bears the burden of demonstrating the absence of a genuine 
issue of material fact."  Hurwitz, 982 F.2d at 780 (citing Adickes v. S.H. Kress 
& Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970));  Knight 
v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir.1986), cert. denied, 480 U.S. 932, 
107 S.Ct. 1570, 94 L.Ed.2d 762 (1987) (party seeking summary judgment must 
demonstrate that "there is no genuine issue as to any material fact").   See 
also Barnan, 797 F.Supp. at 304.   The party seeking summary judgment "always 
bears the initial responsibility of informing the district court of the basis 
for its motion and identifying those portions of [the materials] which it 
believes demonstrate the absence of a genuine issue of material fact."  Celotex 
Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 
(1986).   See also Trebor Sportswear Co. v. Limited Stores, Inc., 865 F.2d 506, 
511 (2d Cir.1989).  "[T]he burden on the moving party may be discharged by 
'showing'--that is, pointing out to the district court--that there is an absence 
of evidence to support the nonmoving party's case."  Celotex, 477 U.S. at 325, 
106 S.Ct. at 2554.
 *606 "When the moving party has carried its burden under Rule 56(c), its 
opponent must do more than simply show that there is some metaphysical doubt as 
to the material facts."  Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 
U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (citations omitted).   
See also Barnan, 797 F.Supp. at 304.   It must establish that there is a 
"genuine issue for trial."  Matsushita, 475 U.S. at 586, 106 S.Ct. at 1356.   
See also Barnan, 797 F.Supp. at 304.
 " 'In considering the motion, the court's responsibility is not to resolve 
disputed issues of fact but to assess whether there are any factual issues to be 
tried, while resolving ambiguities and drawing reasonable inferences against the 
moving party.' "  Barnan, 797 F.Supp. at 304 (quoting Knight, 804 F.2d at 11).  
"[T]he judge's function is not [herself] to weigh the evidence and determine the 
truth of the matter but to determine whether there does indeed exist a genuine 
issue for trial."  Liberty Lobby, 477 U.S. at 249, 106 S.Ct. at 2511.   See also 
R.C. Bigelow, Inc. v. Unilever N.V., 867 F.2d 102, 107 (2d Cir.), cert. denied 
sub nom.  Thomas J. Lipton, Inc. v. R.C. Bigelow, Inc., 493 U.S. 815, 110 S.Ct. 
64, 107 L.Ed.2d 31 (1989).
 The substantive law governing the case will identify those facts which are 
material, and "[o]nly disputes over facts that might affect the outcome of the 
suit under the governing law will probably preclude the entry of summary 
judgment.... while the materiality determination rests on the substantive law, 
it is the substantive law's identification of which facts are crucial and which 
facts are irrelevant that governs."  Liberty Lobby, 477 U.S. at 248, 106 S.Ct. 
at 2510.
 B. Failure to Join Necessary and Indispensable Parties
 [1] Defendants argue that as a matter of law they are entitled to summary 
judgment because plaintiff has failed to join necessary and indispensable 
parties.   As part of the restructured condominium agreement, Schnurmacher 
leased the Commercial Unit to 1001 Madison Corp.   By virtue of the merger of 
1001 Madison Corp. with Infinity in late 1986, Infinity is the tenant of the 
Commercial Unit.   Infinity borrowed significant sums of money from Chemical 
Bank, Chase Manhattan Bank, N.A. and Marine Midland Bank, N.A. which amount was 
secured by mortgages on Infinity's leasehold interest in the Commercial Unit.  
[FN9]
FN9. Chemical Bank is the holder of a mortgage on the leasehold interest.  The 
mortgage secures an indebtedness of $13,300,124 as set forth in a consolidation 
and modification agreement dated June 27, 1991.   It was recorded in the office 
of the City Register of the City of New York on October 31, 1991. 
On June 27, 1991, Infinity delivered to the Chase Manhattan Bank a "Note and 
Mortgage Consolidation and Modification Agreement" securing an indebtedness in 
the amount of $1,330,965.57.   The mortgage was recorded in the office of the 
City Register of the City of New York on October 31, 1991. 
Marine Midland Bank, N.A. is a holder of a leasehold mortgage securing an 
indebtedness of $3,226,760.97, dated May 28, 1992.   The mortgage was recorded 
in the office of the City Register of the City of New York.
 Defendants claim that pursuant to Federal Rules of Civil Procedure, Rule 19(a), 
the banks are indispensable parties and that plaintiff's failure to join them in 
the suit is grounds for summary judgment.
 The Federal Rules establish a two pronged test for the joinder of indispensable 
parties.   The first prong, Rule 19(a), states: 
Persons to be Joined if Feasible.   A person who is subject to service of 
process and whose joinder will not deprive the court of jurisdiction over the 
subject matter of the action shall be joined as a party in the action if (1) in 
the person's absence complete relief cannot be accorded among those already 
parties, or (2) the person claims an interest relating to the subject of the 
action and is so situated that the disposition of the action in the person's 
absence may (i) as a practical matter impair or impede the person's ability to 
protect that interest or (ii) leave any of the persons already parties subject 
to a substantial risk of incurring double, multiple, or otherwise inconsistent 
obligations by reason of the claimed interest.   If the person has not been so 
joined, the court shall order that the person be made a party.   If the person 
should join as a plaintiff but refuses to do *607 so, the person may be made a 
defendant, or, in a proper case, an involuntary plaintiff.   If the joined party 
objects to venue and joinder of that party would render the venue of the action 
improper, that party shall be dismissed from the action.
 If a party is indispensable according to the terms in Rule 19(a), but joinder 
is impractical, then the second prong of the test, Rule 19(b), provides: 
Determination by Court Whenever Joinder not Feasible.   If a person as described 
in subdivision (a)(1)-(2) hereof cannot be made a party, the court shall 
determine whether in equity and good conscience the action should proceed among 
the parties before it, or should be dismissed, the absent person being thus 
regarded as indispensable.   The factors to be considered by the court include:  
first, to what extent a judgment rendered in the person's absence might be 
prejudicial to the person or those already parties;  second, the extent to 
which, by protective provisions in the judgment, by the shaping of relief, or 
other measures, the prejudice can be lessened or avoided;  third whether a 
judgment rendered in the person's absence will be adequate;  fourth, whether the 
plaintiff will have an adequate remedy if the action is dismissed for 
nonjoinder.
 Unless the conditions of Rule 19(a) are satisfied, the court need not consider 
dismissal under Rule 19(b).  Associated Dry Goods Corp. v. Towers Financial 
Corp., 920 F.2d 1121, 1123 (2d Cir.1990).   The determination of whether or not 
a party is indispensable shall be based on the pleadings. Towers, 920 F.2d at 
1124 (quoting C. WRIGHT & A. MILLER, 7 FEDERAL PRACTICE & PROCEDURE §  1604, at 
40 (1986)) (court considering "whether [an] absent person's interest in the 
litigation is sufficient to satisfy ... the first sentence of Rule 19(a) ... 
must base its decision on the pleadings as they appear at the time of the 
proposed joinder") (ellipsis in original). Thus, whether a party is 
indispensable and whether a "lawsuit must be dismissed in the absence of that 
[party], can only be determined in the context of a particular litigation."  
Curley v. Brignoli, Curley & Roberts Assoc., 915 F.2d 81, 90 (2d Cir.1990), 
cert. denied, 499 U.S. 955, 111 S.Ct. 1430, 113 L.Ed.2d 484 (1991) (quoting 
Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 118, 88 S.Ct. 
733, 742, 19 L.Ed.2d 936 (1968)).
 In this action, in which plaintiff seeks to divest Schnurmacher of title to the 
Commercial Unit and terminate Infinity's Lease of the Commercial Unit, the banks 
which hold an interest in the Lease between Schnurmacher and Infinity are 
indispensable parties.   Complete relief could not be awarded plaintiff by 
virtue of a declaratory judgment against Schnurmacher and Infinity because title 
and rights to the property would be subject, to some extent, to the rights of 
the banks in the Property.   Therefore, the banks are indispensable.
 The indispensable nature of the banks in this case does not, however, call for 
summary judgment of the case as defendants assert.  Rule 19(a) states plainly 
that if an indispensable party "has not been so joined, the court shall order 
that the person be made a party."   Dismissal under Rule 19(b) is called for 
only when joinder is not feasible.   Defendants have made no claim that joinder 
is not feasible.   Therefore, failure to join an indispensable party in this 
case is not grounds for summary judgment or dismissal.
 C. Estoppel by Release
 [2] Defendants claim that, as a matter of law, plaintiff is estopped from 
claiming any relief pursuant to an agreement between the Tenants' Committee and 
Infinity.   Stanley Deutsch and the Tenants' Committee withdrew their appeal of 
the New York Supreme Court judgment subsequent to negotiations with Infinity.   
The negotiations resulted in the adoption of the Eighth Amendment to the 
Offering Plan which states: 
The terms of this amendment, (except paragraphs 1, 3, 4, and 15) are a result of 
negotiations with the tenants' committee of 40 East 78th Street.   The tenants' 
committee recommends that no further litigation be brought against the sponsor 
with respect to matters in the offering plan.
 This amendment and its concurrent resolution of the state court litigation, 
however, are *608 insufficient to constitute a release estopping plaintiff in 
this action from claiming relief.
 The Eighth Amendment states only that plaintiff's predecessors in interest  
"recommend[ ]" that no further litigation be brought.   It does not preclude 
plaintiff's predecessors in interest from pursuing further litigation and it 
certainly does not preclude plaintiff from suit.   Therefore, defendants' 
argument that plaintiff is estopped from suing pursuant to an agreement between 
defendant Infinity Corp. and plaintiff's predecessors in interest is 
unpersuasive as a basis for summary judgment.
 D. Collateral Estoppel:  In Matter of the application of the tenants committee 
of 40 East 78 Street, et al. v. Abrams
 [3] Defendants further claim that plaintiff, as a matter of law, is 
collaterally estopped from raising its claims against defendants by a prior New 
York Supreme Court decision.   In Matter of the Application of the Tenants 
Committee of 40 East 78 Street, et al. v. Abrams, No. 99306/86 (S.Ct.N.Y.Co. 
Feb. 11, 1987).
 In previous state court proceedings, the Tenants' Committee, Stanley Deutsch 
and others sought a judgment, pursuant to state law, [FN10] declaring the 
Offering Plan null and void upon the grounds, inter alia, that Infinity failed 
to fully disclose its relationship with Schnurmacher in the transaction.   New 
York law requires that transactions be arm's-length and fully disclosed.  [FN11]
FN10. Cooperative and condominium conversions in New York are regulated by 
General Business Law, Art. 23-A §  352 et seq.   Section 352-e states: 
1. (a) It shall be illegal and prohibited for any person, partnership, 
corporation, company, trust or association, or any agent or employee thereof, to 
make or take part in a public offering or sale in or from the state of New York 
of securities constituted of participation interests or investments in real 
estate, mortgages or leases ... as defined in section three hundred fifty-two of 
this article, when such securities consist primarily of participation interests 
or investments in one or more real estate ventures, including cooperative 
interests in realty, unless and until there shall have been filed with the 
department of law, prior to such offering, a written statement or statements, to 
be known as an "offering statement" or "prospectus" concerning the contemplated 
offering which shall contain the information and representations required by 
paragraph (b).... 
(b) The detailed terms of the transaction;  a description of the property, the 
nature of the interest, and how title thereto is to be held;  the gross and net 
income for a reasonable period preceding the offering where applicable and 
available;  the current gross and net income where applicable and available;  
the basis, rate and method of computing depreciation;  and description of major 
current leases;  the essential terms of all mortgages;  the names, addresses and 
business background of the principals involved, the nature of their fiduciary 
relationship and their financial relationship, past present and future, to the 
property offered to the syndicate and to those who are to participate in its 
management;  the interests and profits of the promoters, offerors, syndicate 
organizers, officers, directors, trustees or general partners, direct and 
indirect, in the promotion and management of the venture....
FN11. In the commentary to §  352-e, the author states that "New York can be 
described as a 'full disclosure state' rather than a 'merit standard' state;  
that is, so long as full disclosure is provided by the prospectus to potential 
investors, the Martin Act is complied with." David Kaufmann, Practice 
Commentary, MCKINNEY'S CONSOLIDATED LAWS OF NEW YORK, v. 19 at 30.
 The Attorney General found that the transactions between the defendants were 
arm's-length and that the disclosure made in the conversion documents was 
adequate.   The Attorney General's determination was reviewed by the Supreme 
Court of the County of New York in a proceeding entitled "In the Matter of the 
application of the Tenants Committee of 40 East 78 Street, Stanley Deutsch, 
Charles Fabricant, Robert Cornell, Bernard Jancoff and Herbert Klapper, 
petitioners against Robert Abrams, Attorney General of the State of New York, 
respondent and Infinity Corp. respondent-intervenor."  (Index No. 99306/86, Feb. 
11, 1987)  Justice White adjudicated the only issue from which Justice Evans 
recused himself:  whether the sponsor, Respondent-Intervenor Infinity Corp. 
... materially and fraudulently misrepresented in the Plan that Infinity is the 
sole Sponsor and failed to disclose the interests of Schnurmacher Brothers in 
the Offering, *609 despite the evidence that was before the Attorney General's 
Office. [FN12]
FN12. East 78 Street, at 2.
 The New York court stated that the Property had been "sold to Infinity Corp., 
which entered into a complex sale relationship with the Schnurmacher family 
reflecting the latter's interest in a tax advantaged transaction."  [FN13]
FN13. East 78 Street, at 2.
 Justice White stated the contentions of the parties as follows:  1) Plaintiffs 
contended that "the Schnurmachers [were] actually co-sponsors of the Plan, and 
that the failure to disclose their identity as such is violative of Infinity 
Corp.'s responsibility to make full disclosure;"  and 2) Infinity Corp. 
contended that "it [was] the sole sponsor of the Plan;  that it purchased the 
property on the open market from the Schnurmacher interests in an arm's-length 
transaction;  and that Infinity Corp. has made the required disclosure of the 
various interests involved."  [FN14]
FN14. East 78 Street, at 2.
 After noting that the Attorney General had come to the conclusion that the 
transaction between the Schnurmachers and Infinity was at arm's-length and that 
the disclosure was adequate, the court concluded: 
There is nothing in the documents before this Court that would warrant setting 
aside the acceptance of the Plan for filing based upon any relationship between 
the Schnurmachers and Infinity.   The Petitioners rely largely upon the ease 
with which the agreement between the Schnurmachers was renegotiated when the 
initial filing encountered problems.   However, this is hardly sufficient to 
demonstrate the existence of any conspiracy or that the Schnurmacher family is 
actually a co-principal in the offering to the tenants.   Petitioners have 
tacitly conceded that they have no direct evidence of any conspiracy between 
Infinity and the Schnurmachers (See Petitioner's Memorandum of Law, p. 13). 
Petitioners indicate dissatisfaction with the questioning of the Schnurmachers 
at the hearing conducted by the Attorney General.   However, they offer nothing 
but speculation to contradict the sworn testimony adduced.   In sum, it cannot 
be said on the record before this Court that there was inadequate disclosure of 
the Schnurmachers' position.   Nor has any proof been adduced which would 
indicate that the Schnurmachers do have a duty or other interest in Infinity 
Corp.   Accordingly, the application is denied and the Petition is dismissed ...  
[FN15]
FN15. East 78 Street, at 3.
 In this action, plaintiff seeks declaratory judgment of the validity of its 
termination of the Condominium Offering Plan, the Declaration, the By-laws, the 
Option Agreement dated as of April 5, 1984, the Lease between Schnurmacher and 
1001 Madison Corp., and the Deed to the Commercial Unit of the Charles House 
Condominium pursuant to 15 U.S.C. §  3601 et seq.
 Defendants claim that the state court decision that the transaction between 
Infinity and Schnurmacher was at arm's length serves as collateral estoppel in 
plaintiff's present action under the Act.
 The United States Supreme Court has defined the parameters of the doctrine of 
collateral estoppel on several occasions.   In Parklane Hosiery Co., Inc. v. 
Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1970), the Court noted that 
Collateral estoppel, like the related doctrine of res judicata, has the dual 
purpose of protecting litigants from the burden of relitigating an identical 
issue with the same party or his privy and of promoting judicial economy by 
preventing needless litigation.
 Parklane Hosiery, 439 U.S. at 326, 99 S.Ct. at 649 (citing Blonder- Tongue 
Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 328-29, 
91 S.Ct. 1434, 1443, 28 L.Ed.2d 788 (1971)). [FN16]
FN16. The purpose of the doctrine of collateral estoppel is to "relieve parties 
of the cost and vexation of multiple lawsuits, conserve judicial resources, and, 
by preventing inconsistent decisions, encourage reliance on adjudication."  
United States v. Mendoza, 464 U.S. 154, 158, 104 S.Ct. 568, 571, 78 L.Ed.2d 379 
(1984) (quoting Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 414, 66 
L.Ed.2d 308 (1980)).
 *610 The doctrine of collateral estoppel applies both to questions of law and 
fact.  United States v. Stauffer Chemical Co., 464 U.S. 165, 170-71, 104 S.Ct. 
575, 578, 78 L.Ed.2d 388 (1984) ("collateral estoppel can apply to preclude 
relitigation of both issues of law and issues of fact if those issues were 
conclusively determined in a prior action") (citation omitted).
 [4] The doctrine of collateral estoppel creates preclusion of issues decided in 
state court, as well as those decided in federal court, as determined by the law 
of the state. [FN17]  In Migra v. Warren City School District BD of Ed., 465 
U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984), the Supreme Court held that
FN17. Preclusive effect is also given to state administrative proceedings.   The 
Court in University of Tennessee v. Elliott, 478 U.S. 788, 797, 106 S.Ct. 3220, 
3225, 92 L.Ed.2d 635 (1986) held that 
it is sound policy to apply principles of issue preclusion to the fact- finding 
of administrative bodies acting in a judicial capacity.   In a unanimous 
decision in United States v. Utah Construction & Mining Co., 384 U.S. 394 [86 
S.Ct. 1545, 16 L.Ed.2d 642] (1966), we held that.... 'When an administrative 
agency is acting in a judicial capacity and resolves disputed issues of fact 
properly before it which the parties have had an adequate opportunity to 
litigate, the courts have not hesitated to apply res judicata to enforce 
repose.' 
Elliott, 478 U.S. at 797-98, 106 S.Ct. at 3225-26 (citation omitted). While 
defendants in this case appeared and presented evidence regarding the 
Condominium conversion to the New York Attorney General and while plaintiff 
commenced proceedings before the New York State Division of Housing and 
Community Renewal regarding rent stabilization of the garage, it is not 
necessary to reach the issue of the preclusive nature of those proceeding to 
resolve the case at hand. 
It is now settled that a federal court must give to a state-court judgment the 
same preclusive effect as would be given that judgment under the law of the 
State in which the judgment was rendered.
 Migra, 465 U.S. at 81, 104 S.Ct. at 896.   Quoting its decision in Allen v. 
McCurry, 449 U.S. 90, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980), the Court held that 
"... Congress has specifically required all federal courts to give preclusive 
effect to state-court judgments whenever the court of the State from which the 
judgments emerged would do so ..."  Migra, 465 U.S. at 81, 104 S.Ct. at 896.This 
requirement is codified by federal statute 28 U.S.C. §  1738. [FN18]  Kremer v. 
Chemical Construction Corp., 456 U.S. 461, 466, 102 S.Ct. 1883, 1889, 72 L.Ed.2d 
262 (1982) ("Section 1738 requires federal courts to give the same preclusive 
effect to state court judgments that those judgments would be given in the 
courts of the State from which the judgments emerged").
FN18. See also Kremer, 456 U.S. at 466, n. 6, 102 S.Ct. at 1889, n. 6 
(discussing the history of the codification of 28 U.S.C. §  1738).
 [5] Under New York law, collateral estoppel prevents relitigation of an issue 
which is identical to one necessarily decided in prior action and which parties 
were afforded full and fair opportunity to contest in that proceeding.  Polur v. 
Raffe, 912 F.2d 52 (2d Cir.), cert. denied, 499 U.S. 937, 111 S.Ct. 1389, 113 
L.Ed.2d 446 (1991);  Temple of Lost Sheep Inc. v. Abrams, 930 F.2d 178 (2d 
Cir.), cert. denied, 502 U.S. 866, 112 S.Ct. 193, 116 L.Ed.2d 153 (1991);  U.S. 
v. U.S. Currency in the Amount of $228,536.00, 895 F.2d 908 (2d Cir.), cert. 
denied, 495 U.S. 958, 110 S.Ct. 2564, 109 L.Ed.2d 747 (1990).
 The central issue of the previous state court litigation decided by Justice 
White is the identical issue that is central to this litigation.   In the 
opening sentence of "Plaintiff's Memorandum of Law in Opposition to Defendants' 
Motion for Summary Judgment," plaintiff presents the question currently before 
the court in the following manner: 
Defendants Infinity Corporation ("Infinity") and Schnurmacher Bros. 
("Schnurmacher") seek by this summary judgment motion to reverse the Charles 
House apartment owners' termination under the Condominium and Cooperative 
Protection and Abuse Relief Act of 1980 (the "Act"), 15 U.S.C. 3601 et seq., of 
an unfair and oppressive "sweetheart" lease relating to the Charles House 
garage.   The operative facts which compel denial of defendants' motion are set 
forth in the accompanying *611 affidavit of plaintiff's President, Stanley I. 
Deutsch (the "Deutsch Affidavit").
 The central issue here, then, is the existence of an unfair and oppressive  
"sweetheart" lease.   The central issue in the state court proceedings was 
whether defendants 
... materially and fraudulently misrepresented in the Plan that Infinity is the 
sole Sponsor and failed to disclose the interests of Schnurmacher Brothers in 
the Offering. [FN19]
FN19. East 78 Street, at 2.
 In other words, the issue in state court was whether there was some undisclosed 
collusion between Infinity and Schnurmacher, colloquially, a "sweetheart" 
transaction.   This issue was fully litigated in state court by the Tenants' 
Committee who are in privity with plaintiff Charles House and who were lead by 
Stanley Deutsch on both occasions.
 Plaintiff argues that it is not collaterally estopped because the state court 
action brought by the Tenants' Committee concerned state law while the current 
action brought by Charles House Condominium concerns federal law.   While 
plaintiff's may be correct in asserting that this case involves a different 
claim, plaintiff cannot succeed in arguing that a different issue is involved 
here.   In other words, even though plaintiff here has brought a separate cause 
of action--one under federal law--the question is whether the central issue here 
is the same as that litigated in state court.  "Under the judicially developed 
doctrine of collateral estoppel, once a court has decided an issue of fact or 
law necessary to its judgment, that decision is conclusive in a subsequent suit 
based on a different cause of action involving a party to the prior litigation."  
Mendoza, 464 U.S. at 158, 104 S.Ct. at 571 (quoting Montana v. United States, 
440 U.S. 147, 153, 99 S.Ct. 970, 973, 59 L.Ed.2d 210 (1979)). [FN20]
FN20. The Court in Parklane Hosiery discussed the difference between res 
judicata and collateral estoppel: 
Under the doctrine of res judicata, a judgment on the merits in a prior suit 
bars a second suit involving the same parties or their privies based on the same 
cause of action.   Under the doctrine of collateral estoppel, on the other hand, 
the second action is upon a different cause of action and the judgment in the 
prior suit precludes relitigation of issues actually litigated and necessary to 
the outcome of the first action. 
Parklane Hosiery, 439 U.S. at 326, n. 5, 99 S.Ct. at 649, n. 5 (citations 
omitted).
 Throughout its argument, plaintiff repeatedly states that Schnurmacher and 
Infinity engaged in a "sweetheart" deal. [FN21]  In fact, this is the basis for 
plaintiff's complaint.   Without plaintiff's accusation that defendants engaged 
in a "sweetheart" lease there would be no transaction on which plaintiff could 
make its claims;  plaintiff has presented no other transaction as a basis for 
its termination.   However, this issue was decided against plaintiff in state 
court.   Plaintiff is collaterally estopped from raising the issue again in 
federal court.   Defendants' motion for summary judgment is, therefore, granted.
FN21. See Plaintiff's Memorandum of Law in Opposition to Defendants' Motion for 
Summary Judgment, at 1-6, 22, 25, 26, 28.
 IV. APPLICABILITY OF ACT TO DEFENDANTS
 While the doctrine of collateral estoppel, which precludes plaintiff's claims 
of self-dealing by the defendants, provides an independent and sufficient basis 
for granting defendants' motion for summary judgment, defendants' motion for 
summary judgment also succeeds because the Act is not applicable to the 
instruments that plaintiff terminated.
 Plaintiff seeks declaratory judgment supporting its termination under the Act 
of 1) the Condominium Offering Plan 2) the Declaration 3) the By-laws 4) the 
Option Agreement 5) the Lease between Schnurmacher and 1001 Madison Corp. and 6) 
the Deed for the Commercial Unit.
 The Act provides for termination of any contract or portion of a contract which 
"is between such unit owners or such association and the developer or an 
affiliate of the developer...."  [FN22]
FN22. 15 U.S.C. §  3607.
 A. Agreements Between Owners and Developers
 [6][7] The Option Agreement is between Schnurmacher, as the developer, and 
Infinity, *612 a third party.   It is not between a unit owner or association 
and a developer or affiliate.   The Act was not intended to apply to contracts 
which involved third parties and did not involve the tenants themselves so as to 
be self-dealing.   In 69th Street & 2nd Ave. Garage Associates, L.P. v. 301/69 
Owners Corp., 91 Civ. 7966, 1992 WL 47989, 1992 U.S. Dist.Lexis 2239, (S.D.N.Y. 
Feb. 28, 1992), the district court considered a third party that 
was involved in an arm's-length transaction in which it paid $1,000,000 to 
purchase the garage.   Terminating a sale to an innocent third party [ ... ] 
would thus conflict with the equitable principles underlying the statute.   
Indeed, the plain language of the Act only contemplates terminating contracts 
between the sponsor and the cooperative or condominium.
 69th Street, 1992 WL 47989, *3, 1992 U.S. Dist Lexis 2239, *7-8.   The Option 
Agreement is, therefore, not subject to termination under the Act.
 [8] The Lease between Schnurmacher and 1001 Madison Corp. is also not a 
contract  [FN23] between the tenants and the developer.   Therefore, the lease 
is not subject to termination under the Act.   Accord 2 Tudor City Place 
Associates and 2 Tudor Garden Parking Corp. v. 2 Tudor City Tenants Corp. No. 87 
Civ. 5850, 1990 WL 63809, *3, 1990 U.S. Dist.Lexis 5572, *10 (S.D.N.Y. May 9, 
1990) (where garage lease was between future developer of cooperative and 
affiliate corporation, lease could not be terminated because it was not between 
"unit owners or such [cooperative] association and the developer or an affiliate 
of the developer") (parenthetical in original).
FN23. Compare West 14th Street Commercial Corp. v. 5 West 14th Owners Corp., 815 
F.2d 188, 192 (2d Cir.), cert. denied, 484 U.S. 871, 108 S.Ct. 200, 98 L.Ed.2d 
151 (1987) (discussing why a lease is a "contract" within meaning of the Act).
 [9] The Deed to the Commercial Unit involves only Schnurmacher's fee simple 
interest in property that it built and never conveyed.   The Deed, therefore, 
certainly does not involve a contract between the developer and the tenants 
which is terminable under the Act, especially "given that the two remedial 
provisions of the statute, § §  3607 and 3608, do not address a contract that is 
an outright reservation of fee simple title in the property being converted to 
cooperative or condominium."  69th Street, 1992 WL 47989, *2, 1992 U.S. 
Dist.Lexis 2239, *3-4.
 Therefore plaintiff's termination of the Option Agreement, the Lease, and the 
Deed are invalid because §  3607 of the Act is inapplicable to such third party 
instruments.
 B. Who's a "Developer"
 [10] Defendants claim that the Act does not apply to them because Schnurmacher 
is not a "developer"  [FN24] or "affiliate of the developer"  [FN25] as defined 
by the Act.
FN24. Section 3603 of the Act defines "developer" as: (A) any person who offers 
to sell or sells his interest in a cooperative or condominium unit not 
previously conveyed, or (B) any successor of such person who offers to sell or 
sells his interest in units in a cooperative or condominium project and who has 
the authority to exercise special developer control in the project including the 
right to:  add, convert, or withdraw real estate from the cooperative or 
condominium project, and maintain sales offices, management offices and rental 
units;  exercise easements through common elements for the purpose of making 
improvements within the cooperative or condominium;  or exercise control of the 
owners' association
FN25. Section 3603 defines "affiliate of a developer" as: 
any person who controls, is controlled by, or is under common control with a 
developer.   A person "controls" a developer if the person (A) is a general 
partner, officer, director, or employer of the developer, (B) directly or 
indirectly or acting in concert with one or more other persons, or through one 
or more subsidiaries, owns, controls, holds with power to vote, or holds proxies 
representing, more than 20 per centum of the voting interest of the developer, 
(C) controls in any manner the election of a majority of the directors of the 
developer, or (D) has contributed more than 20 per centum of the capital of the 
developer.   A person "is controlled by" a developer if the developer (i) is a 
general partner, officer, director employer of the person, (ii) directly or 
indirectly or acting in concert with one or more other persons, or through one 
or more subsidiaries, owns, controls, holds with power to vote, or holds proxies 
representing, more than 20 per centum of the voting interest of the person, 
(iii) controls in any manner the election of a majority of the directors, or 
(iv) has contributed more than 20 per centum of the capital of the person;
 *613 Under the Act, a developer must sell or offer to sell property.   Section 
3603 of the Act defines "sale" as "any obligation or arrangement for 
consideration for conveyance to a purchaser of a cooperative or condominium 
unit, excluding options or reservations not binding on the purchaser."   In the 
restructured transaction which is the subject of this litigation, Schnurmacher 
conveyed title to the Residential Units to Infinity and sold Infinity an option 
to purchase the Commercial Unit in addition to its lease of the Commercial Unit 
to Infinity.
 Defendants argue that since option agreements are not sales or offers to sell 
under the Act  [FN26] and since they did not sell or offer to sell the 
Commercial Unit which includes the garage that is the subject of this 
litigation, they are not developers.   However, as part of the condominium 
conversion, defendant Schnurmacher sold its interest in the Residential Units to 
Infinity. [FN27]  Infinity then offered the residential units for sale to the 
public.   Therefore, Schnurmacher is a developer under the Act.
FN26. 15 U.S.C. §  3603 provides: 
(21) "sale", "sale of a cooperative unit" or "sale of a condominium unit" means 
any obligation or arrangement for consideration forconveyance to a purchaser of 
a cooperative or condominium unit, excluding options or reservations not binding 
on the purchaser;
FN27. See supra n. 4.
 C. Serving the Condominium Unit
 [11] Defendants also claim that the Act is inapplicable because the garage does 
not "serve" the condominium.  Section 3607 of the Act permits termination of 
contracts which provide for the "operation, maintenance, or management of a 
condominium or cooperative association in a conversion project, or of property 
serving the condominium or cooperative unit owners in such project."  "Serving 
the condominium ... unit owners" is not defined by the Act.
 In support of their position that the garage does not serve the condominium, 
defendants refer to language in the Offering Plan that permits the garage to be 
used for other purposes.   Defendants also point out that since the construction 
of the building, the garage space has been used by the public.   At no time did 
any residential tenants obtain parking privileges in the garage space as 
consideration for the execution of a residential lease for the possession of a 
residential apartment unit.   Tenants were permitted to park in the garage only 
by executing separate lease/agreements with the lessee of the garage space or 
agreeing to pay the lessee of the garage its daily, weekly or monthly parking 
rates.
 In 5 West 14th Owners, 815 F.2d at 198-99, the Second Circuit in considering 
on-site parking which was open to the public but contained preferences for unit 
owners, held that "[a] parking garage, with or without tenant preferences, 
provides a service that tenants might reasonably expect as an essential adjunct 
of their apartment complex."   See also 181 E. 73rd St. Co. v. 181 E. 73rd 
Tenants Corp., 954 F.2d 45, 48 (2d Cir.1992);  Cromwell Associates v. Oliver 
Cromwell Owners, Inc., 705 F.Supp. 116, 117 (S.D.N.Y.1988), aff'd, 941 F.2d 107 
(2d Cir.1991) (parking garages serves project);  Brabert Realty Co. v. 20125 
Owners Corp., 703 F.Supp. 314 (S.D.N.Y.1989).
 Moreover, plaintiff's documentary evidence that the garage serves the 
Condominium is persuasive.   The Certificate of Occupancy for the Property 
states that "[p]arking is primarily for resident and tenants."  (Deutsch Aff., 
Exh. A at 3).   Additionally, the Board of Standards & Appeals, under Calendar # 
752-64-B7, granted a variance in the Zoning Resolution to permit transient 
parking "on the condition that the tenants of this apartment house may recapture 
any of the space devoted to transient parking on 30 days notice ..." (Deutsch 
Aff., Exh. B at 2)
 The location of the garage, the certificate of occupancy, the Board of 
Standards & Appeals variance, in addition to the law of this Circuit, indicate 
that the garage serves the condominium unit owners.   Therefore, the garages 
serves the condominium unit owners as required by the Act.
 *614 V. UNTIMELY
 [12][13] Plaintiff served notice of termination on April 30, 1992.  Plaintiff's 
termination was, therefore, effective July 29, 1992. [FN28] Defendants claim 
that they are entitled to summary judgment because plaintiff's termination was 
untimely. [FN29]
FN28. Section 3607(d) of the Act provides: 
Following the unit owners' vote, the termination shall be effective ninety days 
after hand delivering notice or mailing notice by prepaid United States mail to 
the parties to the contract. 
In order to fall within the statute of limitations for the Act, then, actual 
termination, which occurs ninety days after notice is given, must be effected 
within the two year period.   See 2 Tudor City Place Assocs. v. 2 Tudor City 
Tenants Corp., 924 F.2d 1247, 1253 (2d Cir.), cert. denied, 502 U.S. 822, 112 
S.Ct. 83, 116 L.Ed.2d 56 (1991).
FN29. In Elan Corporation v. Reade Street Tenants Corp., slip op., No. Civ. 
3131, 1986 WL 13776 (S.D.N.Y. Dec. 4, 1986), the court considered the 
implications of the requirement, under New York law, of disclosure in the 
offering plan of purchasers' rights under the Act in order to avoid violation of 
the Martin Act.   The court determined that failure to disclose rights under the 
Act in the offering plan did not toll the statute of limitations under the Act, 
though it might be grounds for rescission of the contract in which purchasers 
purchased shares in the cooperative. 
According to this interpretation, therefore, defendants' failure, here, to 
disclose plaintiff's rights under the Act in the Offering Plan did not toll the 
statute of limitations.
 Section 3607(b) of the Act, entitled "Time of termination," states: 
Any termination under this section may occur only during the two year period 
beginning on the date on which-- 
(1) special developer control over the association is terminated;  or 
(2) the developer owns 25 per centum or less of the units in the conversion 
project, 
whichever occurs first.
 The Act defines special developer control as: 
any right arising under State law, cooperative or condominium instruments, the 
association's bylaws, charter or articles of association or incorporation, or 
power of attorney or similar agreement, through which the developer may control 
or direct the unit owners' association or its executive board.   A developer's 
right to exercise the voting share allocated to any condominium or cooperative 
unit which he owns is not deemed a right of special developer control if the 
voting share allocated to that condominium or cooperative unit is the same 
voting share as would be allocated to the same condominium or cooperative unit 
were that unit owned by any other unit owner at that time.
 15 U.S.C. §  3603(22).
 [14] Special developer control is essentially developer domination of the board 
of directors.  West 14th Street, 815 F.2d at 200.   See also 2 Tudor City Place 
Assocs. v. 2 Tudor City Tenants Corp., 924 F.2d 1247, 1253 (2d Cir.), cert. 
denied, 502 U.S. 822, 112 S.Ct. 83, 116 L.Ed.2d 56 (1991) ( "Special developer 
control did not terminate until Tenants elected an independent board of 
directors.")
 Defendant Infinity argues that plaintiff's termination is untimely because  
"special developer control" as provided by the Act ended more than two years 
prior to plaintiff's termination.   Infinity presents two reasons for this 
assertion.
 First, Infinity argues that "special developer control," under the terms of the 
Offering Plan, [FN30] is the right to appoint a majority to the condominium 
board.   Defendant Infinity argues that it lost the right to appoint a majority 
to the condominium board by September 7, 1988 when it sold residential units 
*615 having more than 50 percent of the aggregate common interest appertaining 
to all residential units.   Therefore, Infinity claims that the notice of 
termination should have been served by no later than September 7, 1990.
FN30. The Offering Plan states: 
The affairs of the Condominium shall be governed by the Condominium Board, which 
shall consist initially of three members designated by Owner.   At the first 
meeting of the Unit Owners, which will be held not later than seven months after 
the First Closing, the three-member Condominium Board shall resign in favor of a 
new seven-member Condominium Board, to be elected by Unit Owners at such 
meeting.   Thereafter, elections to the Condominium Board shall be held at the 
regular annual meeting of Unit Owners held in October of each succeeding year.   
Special meetings of Unit Owners may be called by resolution of the Condominium 
Board or on petition of Unit Owners having in the aggregate not less than 25% of 
the Common Interest of all Unit Owners.
 However, "special developer control" as defined in the Act is determined by 
actual control rather than by the right to control as defendants argue.   In 2 
Tudor City Tenants Corp., 924 F.2d at 1253, the Second Circuit noted that 
"special developer control did not terminate until Tenants elected an 
independent board of directors."
 Infinity, as late as the filing of the Fifteenth Amendment to the Offering Plan 
filed with the Attorney General of the State of New York on January 28, 1991, 
claimed that it had the right to appoint the majority of the members of the 
Board through December 9, 1992 and, in fact, did appoint the majority of the 
boardmembers at least through January, 1991.   It was not until January 1991 
that a majority of the Board actually became controlled by the non-sponsor unit 
owners. [FN31]
FN31. Infinity claims that even though it did appoint four boardmembers, only 
three were qualified pursuant to §  2.9(B) of the By- laws.   Section 2.9(B) 
states: 
In addition, any member of the Condominium Board who shall cease to be qualified 
for membership pursuant to the terms of Section 2.7 hereof shall be deemed to 
have resigned [his or her] membership effective as of the date upon which such 
qualification shall cease. 
Infinity claims that since only three of its appointees were qualified according 
to §  2.9(B), it did not appoint a majority of the seven member Board and 
therefore did not retain "special developer control." 
Infinity's argument is unpersuasive.   The last sentence of §  2.9(B) of the By-
laws relating to a deemed resignation of a member of the Board only applies to a 
member of the Condominium Board "who shall cease to be qualified for membership 
pursuant to the terms of Section 2.7 hereof." Section 2.7 of the By-laws 
provides as follows: 
Except for members designated or elected by Declarant or its designees pursuant 
to the terms of this Section 2.7 or by Sponsor and the Commercial Unit Owner 
pursuant to the terms of Section 2.10 or Section 4.9 hereof, all members of the 
Condominium Board shall be either (i) individual Unit Owners;  (ii) individual 
Permitted Mortgagees;  (iii) officers, directors, shareholders, partners, 
principals, employees, or beneficiaries of corporations, partnerships, 
fiduciaries or any other entities that are Unit Owners or Permitted Mortgagees;  
or (iv) adult Family Members of any of the foregoing. 
Section 2.7 does not apply to boardmembers designated by the Sponsor or 
Commercial Unit Owner.   By its own terms, Section 2.7 only relates to the 
qualifications of members of the Condominium Board, other than the Declarant, 
Sponsor and Commercial Unit Owner.   Therefore, since boardmembers designated by 
Infinity did not have to qualify pursuant to §  2.7, Infinity controlled three 
rather than four--that is, a majority of the members of the board through 
January 1991.
 Despite Infinity's claim that it lost the right to control the Board more than 
two years before plaintiff's termination, Infinity retained actual control, 
effecting "special developer control," so as to make plaintiff's termination 
timely.
 [15] The second argument which Infinity presents in support of its claim that 
"special developer control" ended more than two years prior to plaintiff's 
termination is that the "Initial Control Period," as defined on page 3 of the 
Offering Plan, ended on September 7, 1988.   Therefore, Infinity argues, 
"special developer control" also ended on that date.
 Plaintiff claims that apart from actual control or the terms of the "Initial 
Control Period" as provided in the Offering Plan, Infinity's "special developer 
control" within the meaning of the Act continued until at least December 10, 
1990, because section 2.5 of the By-laws gave Infinity wide ranging powers, 
including veto powers over business decisions until that date. [FN32] Therefore, 
plaintiff claims *616 that termination would have been timely through December 
9, 1992.
FN32. Section 2.5 of the By-laws of the Condominium, entitled "Certain 
Limitations On The Powers of the Condominium Board," states: 
(A) Notwithstanding anything to the contrary contained in these By-Laws, for a 
period of three years from the First Closing, so long as Sponsor or its designee 
or both shall continue to collectively own Units representing 25% or more in 
aggregate Common Interest, the Condominium Board may not, without Sponsor's or 
such designee's prior written consent: 
(i) make any addition, alteration or improvement to the Common Elements or to 
any Unit, unless the same shall be required by Law or any insurance company 
insuring the Property: 
(ii) assess any Common Charges or Special Assessments for the creation or the 
replacement of, or the addition to, all or any part of a reserve, contingency or 
surplus fund in excess of five percent in the aggregate of the estimated Common 
Expenses for any year of operation; 
(iii) increase the number or change the type of employees from that described in 
Schedule B set forth in the Plan; 
(iv) enter into any service or maintenance contract for work not covered in the 
schedule referred to in subparagraph (iii) hereinabove;  or 
(v) borrow money on behalf of the Condominium. (Schnurmacher Aff., Exh. G at H-
4)
 In Coliseum Park Apartments Co. v. Coliseum Tenants Corp., 742 F.Supp. 128 
(S.D.N.Y.1990), the court held that certain retention of power by the Sponsor 
constitutes "special developer control."   In Park South Tenants Corp. v. 200 
Central Park South Assocs., 748 F.Supp. 208, 213 (S.D.N.Y.1990), aff'd, 941 F.2d 
112 (2d Cir.1991), the District Court was persuaded that the "veto power 
accorded defendant Sponsor ... over such items as capital improvements, employee 
hiring, repairs, refinancing, augmentation of the reserve fund, provision of 
services, equipment procurement, and building leases falls within the Act's 
definition of 'special developer control' ...".  See, e.g., Barnan, 797 F.Supp. 
at 308 (special developer control relinquished on the date shareholders elected 
a majority of directors not affiliated with Sponsor).
 Plaintiff's replies as to Infinity are persuasive.   Actual control rather than 
the right to control is determinative of "special developer control." Moreover, 
despite the provision for the "Initial Control Period" in the Offering Plan, the 
By-laws indicate that Infinity's right to control extended until December 1990, 
making plaintiff's notice of termination timely.   In either case, with regard 
to Infinity, plaintiff's termination was timely.
 [16] On the other hand, termination as to Schnurmacher was not timely. 
Schnurmacher, as determined above, is the developer in this case.   Therefore 
any termination must have occurred during the two year period beginning on the 
date on which Schnurmacher owned 25% or less of the units in Property--that is, 
during the two year period beginning on November 25, 1986, the date Schnurmacher 
conveyed the Residential Units to Infinity.   In other words, not later than 
November 25, 1988.
 The termination notice in this case was effective on July 29, 1992, more than 
two (2) years after Schnurmacher owned less than twenty-five (25%) per cent of 
the units.   Pursuant to §  3607(b) cited above, even if the Act could be 
applied to all of the instruments claimed by plaintiff, the termination of the 
instruments was not timely and is ineffective.
 Even if Infinity was deemed to have continued to exercise "special developer 
control" over the association, termination as to Schnurmacher was required 
within two (2) years of November 26, 1986 when Schnurmacher owned less that 
twenty-five (25%) per cent of the units.   Therefore, even if, under the Act, 
plaintiff could properly terminate a contract between the developer and Infinity 
as third party, its termination of the instruments since they involve 
Schnurmacher is invalid.
 Plaintiff's argument that Schnurmacher and Infinity are partners and that 
Infinity's continued "special developer control" is attributable to Schnurmacher 
for the purpose of determining the statute of limitations case is unpersuasive.   
As determined above, plaintiff is collaterally estopped from arguing that 
defendants are partners or collusively acted.   Therefore, termination which was 
valid as to Infinity was not necessarily valid as to Schnurmacher.
 While plaintiff's termination was timely as to Infinity, it was not timely as 
to Schnurmacher.   Therefore, plaintiff's statute of limitations bar provides an 
additional basis for granting defendants' motion for summary judgment.
 VI. DEFENDANTS' COUNTERCLAIM
 Defendants make counterclaims for judgment 1) declaring the plaintiff's 
purported notice of termination to be null and void and of no force and effect;  
2) declaring that Schnurmacher is the owner in fee simple absolute of the 
"Commercial Unit" free and *617 clear of the claims of the plaintiff and its 
successors in interest;  and 3) awarding the costs of the action.
 For the reasons discussed herein, defendants' counterclaims are granted.
 VII. ATTORNEYS' FEES
 [17] Both sides claim a right to attorneys' fees.   The Act permits prevailing 
plaintiffs to recover attorneys' fees at the discretion of the court and 
prevailing defendants to recover attorneys' fees where there is evidence of bad 
faith.   See King v. 415 Second Owners Corp., No. 86 Civ. 4800, 1987 
U.S.Dist.Lexis 15211 (S.D.N.Y. Nov. 12, 1987), *2-3 ("The statute thus appears 
to create an asymmetry between plaintiffs, who are always entitled to a 
discretionary award of fees, and defendants, who are so entitled only if the 
action was 'frivolous, malicious, or lacking in substantial merit' ").
 In the case at hand, plaintiff's case wasnot frivolous or malicious or so 
lacking in substantial merit as to warrant awarding defendants' attorneys' fees.   
Therefore, each party shall bear its own attorneys' fees.
 VIII. CONCLUSION
 Defendants have established that there are no disputed issues of material fact.   
Defendants are entitled to summary judgment as a matter of law.
 Plaintiff is estopped from raising its central claim by a prior state court 
determination.   The Act is inapplicable to the Option Agreement, Lease, and 
Deed because these instruments did not meet the Act's definition of a self- 
dealing contract which is one occurring between the unit owners or association 
and the developer or its affiliate.   Finally, plaintiff's termination was not 
timely as to Schnurmacher, making it invalid.   Defendants' motion for summary 
judgment is, therefore, granted.   Defendants' counterclaims declaring 
plaintiff's notice of termination and termination null and void, declaring that 
Schnurmacher is the owner in fee simple of the "Commercial Unit" and awarding 
defendants' the costs of the action are also granted.   Each party shall bear 
its own attorneys' fees.
825 F.Supp. 597
END OF DOCUMENT
United States District Court,S.D. New York.
The BOARD OF MANAGERS OF the CHARLES HOUSE CONDOMINIUM, Plaintiff,v.INFINITY CORPORATION and Schnurmacher Bros., Defendants.
No. 92 CIV 4990 (CBM).
June 30, 1993.

 Condominium board brought action against developer and sponsor, seeking to set aside garage lease entered into between developer and sponsor under Condominium and Cooperative Conversion Protection and Abuse Relief Act.   On defendants' motion for summary judgment, the District Court, Motley, J., held that:  (1) decision in prior state court proceeding collaterally estopped board from bringing self-dealing claim;  (2) Act did not apply to developer's lease of parking garage to sponsor;  and (3) board's termination claim was not timely as to developer.
 Motion granted.

West Headnotes
[1] Federal Civil Procedure  226170Ak226 Most Cited Cases
Banks that held mortgages on tenant's leasehold interest in condominium project's garage were indispensable parties in action brought by condominium board seeking to divest developer of title to commercial unit and terminate lease;  complete relief could not be awarded by virtue of declaratory judgment, since title and rights to property would be subject, to some extent, to rights of banks.  Fed.Rules Civ.Proc.Rule 19(a), 28 U.S.C.A.
[2] Estoppel  52(8)156k52(8) Most Cited Cases
Amendment to offering plan under which tenants' committee "recommended" that no further litigation should be brought against sponsor with respect to matters in offering plan, together with concurrent resolution of state court litigation, did not estop condominium board, as committee's successor in interest, from bringing action against sponsor based on alleged self-dealing with developer.
[3] Judgment  828.16(1)228k828.16(1) Most Cited Cases
Determination in prior state court proceeding that transaction between condominium developer and sponsor, under which sponsor was granted lease of development's garage, was arm's length and fully disclosed had collateral estoppel effect in action brought by condominium board challenging transaction under Condominium and Cooperative Conversion Protection and Abuse Relief Act; central issue in both cases was whether developer and sponsor had entered into unfair and oppressive "sweetheart" lease.  Condominium and Cooperative Abuse Relief Act of 1980, §  602 et seq., 15 U.S.C.A. §  3601 et seq.
[4] Judgment  634228k634 Most Cited Cases
[4] Judgment  828.1228k828.1 Most Cited Cases
Doctrine of collateral estoppel creates preclusion of issues decided in state court, as well as those decided in federal court, as determined by law of the state.  28 U.S.C.A. §  1738.
[5] Judgment  713(1)228k713(1) Most Cited Cases
[5] Judgment  715(1)228k715(1) Most Cited Cases
[5] Judgment  724228k724 Most Cited Cases
Under New York law, collateral estoppel prevents relitigation of issue which is identical to one necessarily decided in prior action and which parties were afforded full and fair opportunity to contest in that proceeding.
[6] Condominium  389Ak3 Most Cited Cases
Provision of Condominium and Cooperative Conversion Protection and Abuse Relief Act providing for termination of any contract or portion of contract between unit owners or association and developer or affiliate of developer did not apply to option agreement between developer and third party.  Condominium and Cooperative Abuse Relief Act of 1980, §  608, 15 U.S.C.A. §  3607.
[7] Condominium  289Ak2 Most Cited Cases
Condominium and Cooperative Conversion Protection and Abuse Relief Act was not intended to apply to contracts which involved third parties and did not involve tenants themselves so as to be self-dealing.  Condominium and Cooperative Abuse Relief Act of 1980, §  602 et seq., 15 U.S.C.A. §  3601 et seq.
[8] Condominium  189Ak1 Most Cited Cases
Lease between developer and corporation was not a contract between tenants and developer and was not subject to termination under Condominium and Cooperative Conversion Protection and Abuse Relief Act.  Condominium and Cooperative Abuse Relief Act of 1980, §  608, 15 U.S.C.A. §  3607.
[9] Condominium  189Ak1 Most Cited Cases
Deed to condominium development's garage involving only developer's fee simple interest in property that it built and never conveyed did not involve a contract between developer and tenant that was terminable under the Condominium and Cooperative Conversion Protection and Abuse Relief Act. Condominium and Cooperative Abuse Relief Act of 1980, §  608, 15 U.S.C.A. §  3607.
[10] Condominium  489Ak4 Most Cited Cases
Partnership which sold its interest in residential units to sponsor, which then offered residential units for sale to public as part of condominium conversion was "developer" under Condominium and Cooperative Conversion Protection and Abuse Relief Act.  Condominium and Cooperative Abuse Relief Act of 1980, §  604, 15 U.S.C.A. §  3603. 
[11] Condominium  189Ak1 Most Cited Cases
Parking garage "served" condominium unit owners within meaning of Condominium and Cooperative Conversion Protection and Abuse Relief Act, although offering plan permitted garage to be used for other purposes and had been used by public since construction;  certificate of occupancy stated that parking was primarily for residents and tenants, and variance in zoning resolution to permit transient parking was subject to condition that tenants be allowed to recapture any space devoted to transient parking on 30 days notice. Condominium and Cooperative Abuse Relief Act of 1980, §  602 et seq., 15 U.S.C.A. §  3601 et seq. 
[12] Condominium  1789Ak17 Most Cited Cases
"Special developer control" over condominium board, for purposes of Condominium Cooperative Conversion Protection and Abuse Relief Act's two-year statute of limitation for terminating developer contracts, did not end until majority of condominium board actually became controlled by nonsponsor unit owners, rather than when sponsor lost right to appoint majority of board. Condominium and Cooperative Abuse Relief Act of 1980, § §  604(22), 608(b, d), 15 U.S.C.A. § §  3603(22), 3607(b, d). 
[13] Limitation of Actions  58(1)241k58(1) Most Cited Cases
Failure of developer and sponsor to disclose condominium board's rights under Condominium and Cooperative Conversion Protection and Abuse Relief Act in offering plan did not toll statute of limitations under Act for terminating developer contracts.  Condominium and Cooperative Abuse Relief Act of 1980, § §  604(22), 608(b, d), 15 U.S.C.A. § §  3603(22), 3607(b, d).
[14] Condominium  889Ak8 Most Cited Cases
"Special developer control" of condominium board, within meaning of Condominium and Cooperative Conversion Protection and Abuse Relief Act is essentially developer domination of board of directors.  Condominium and Cooperative Abuse Relief Act of 1980, §  604(22), 15 U.S.C.A. §  3603(22).
[15] Condominium  1789Ak17 Most Cited Cases
"Special developer control" over condominium board, for purposes of Condominium and Cooperative Conversion Protection and Abuse Relief Act's two-year limitations period for terminating developer contracts, did not end when initial control period as defined in offering plan ended, where bylaws gave sponsor wide ranging powers, including veto powers over business decisions after that date.  Condominium and Cooperative Abuse Relief Act of 1980, §  608(b, d), 15 U.S.C.A. §  3607(b, d).
[16] Condominium  1789Ak17 Most Cited Cases
Condominium and Cooperative Conversion Protection and Abuse Relief Act's two- year limitations period for condominium board to terminate developer contracts commenced on date developer owned 25% or less of units in property. Condominium and Cooperative Abuse Relief Act of 1980, §  608(b), 15 U.S.C.A. §  3607(b).
[17] Condominium  1789Ak17 Most Cited Cases
Condominium developer and sponsor that prevailed in condominium board's action to terminate alleged self-dealing contract under Condominium Cooperative Conversion Protection and Abuse Relief Act were not entitled to award of attorney fees, where board's case was not frivolous or malicious or lacking in substantial merit.  Condominium and Cooperative Abuse Relief Act of 1980, §  602 et seq., 15 U.S.C.A. §  3601 et seq. *600 Solovay & Edlin by Norman Solovay, New York City, for plaintiff.
 Kirschenbaum & Kirschenbaum, P.C. by Ira Levine, Garden City, NY, for defendants.

OPINION ON MOTION FOR SUMMARY JUDGMENT
 MOTLEY, District Judge.
 Plaintiff, the Board of Managers of the Charles House Condominium (the  "Board"), brought suit against defendants Infinity Corporation ("Infinity") and Schnurmacher Brothers ("Schnurmacher") seeking declaratory judgment of the termination of all of defendants' rights, title, and interest in a parking garage pursuant to the Condominium and Cooperative Conversion Protection and Abuse Relief Act, 15 U.S.C. §  3601 et seq. (the "Act").   Defendants subsequently brought certain counterclaims and moved for summary judgment. For the reasons discussed herein,defendants' motion and counterclaims are granted.
 I. BACKGROUND
 Plaintiff is the Board of Managers of the Charles House Condominium.   The Charles House Condominium was established pursuant to the provisions of the New York State Condominium Act  [FN1] and is located in the City, County, and State of New York.   The Board brought suit on behalf of the residential unit owners of the Condominium.

FN1. New York Real Property Law, Art. 9-B §  339-d.

 Defendant, Infinity Corporation ("Infinity"), is a New York corporation and sponsor of the condominium conversion.
 Defendant, Schnurmacher Brothers ("Schnurmacher"), is a New York partnership.
 On October 5, 1955, Schnurmacher acquired title in fee simple absolute to a parcel of land located in New York County and in or about 1958 constructed a building thereon known by street number 40 East 78th Street, New York, New York (the "Property").   The building which was constructed consists of approximately 102 residential units, commercial space for retail stores and offices, and an underground garage.   It is this structure which was subsequently converted to condominium use and which is the subject of this action.
 After the death of Charles Schnurmacher (one of the partners of Schnurmacher) the partnership embarked on a plan of net leasing partnership buildings and granting purchase options for cash payments so as to raise cash and settle the obligations of Charles Schnurmacher's estate.   Toward this end, Schnurmacher entered into an agreement with 1001 Madison Corporation, a wholly owned subsidiary of Infinity, whereby the Property was net-leased to 1001 Madison Corporation subject to existing leases.   Contemporaneously with the execution of the net-lease with 1001 Madison Corporation, Schnurmacher entered into an Option Agreement, also dated as April 5, 1984, with Infinity for a cash consideration of $6,600,000, whereby Schnurmacher granted to Infinity an exclusive and irrevocable option to purchase the Property subject to existing commercial and residential tenancies.   Pursuant to paragraph 1.3 of the Option Agreement, the option may be exercised at any time during the period beginning with the death of Adolph and Irwin Schnurmacher, the two surviving partners, and ending ten (10) years from the date of the Option or, if Adolph or Irwin Schnurmacher are still alive, 47 years from November 25, 1986, whichever was earlier. [FN2]

FN2. The Option Agreement stated at Section 3.2 thereof: The Property is presently occupied pursuant to written leases referred to in Exhibit B attached hereto.   Accordingly, this Agreement and the rights of optionee are subject and subordinate to the rights of tenants and subtenants, and the terms, covenants and conditions of the aforementioned leases, and the statutory rights, if any, of the tenants thereunder to renewal leases or rights to remain in the premises.   Optionor represents that all non-residential leases listed in Exhibit B are in full force and effect;  that to the best of Optionor's information and belief, the tenants are not in default thereunder;  that Optionor has not as of the date hereof received any notice from said tenants that Lessor is in default thereunder, and Lessor has no information which would lead it to believe that it is in default thereunder.

 *601 Subsequent to the execution and delivery of the lease to 1001 Madison Corporation and the Option Agreement to Infinity, Infinity, as sponsor, submitted to the Attorney General of the State of New York, a cooperative offering plan.   The tenants formed a Tenants' Committee, retained independent counsel and opposed the terms of the cooperative offering plan because they believed that the sale of apartments would be subject to the April 5, 1984 Lease and Option Agreement.   They believed that if there were a default under the Lease or if the optionee failed to purchase the land and building, then apartment purchasers might lose their rights to the apartments, that because fee title to the apartments was not being conveyed, the apartment purchasers would not receive tax deduction benefits for the payment of real estate taxes.
 Fearing that the New York State Attorney General would reject the Cooperative Plan, the principals of Infinity and 1001 Madison Corporation requested a meeting with Schnurmacher in order to propose a restructuring of the transaction.
 The proposal for restructuring involved converting the Property to condominium use.   The condominium would be comprised of residential units ("Residential Units") and one commercial unit ("Commercial Units").
 The parties then proceeded to negotiate, and the transactions were restructured so that: 1.  Infinity would pay all of Schnurmacher's real estate taxes related to this Property. 2. Infinity would pay all of Schnurmacher's other expenses including fees for professional services and any real estate brokerage commissions. 3. Infinity would pay the New York State Real Property Gains Tax if the option to purchase the Commercial Unit were exercised in the future at the purchase price of $26,000,000. 4. Infinity would pay an additional $2,000,000 for the option on the Commercial Unit. 5. The lease and option transaction at other buildings would be restructured as absolute sales.
 The taxes and professional fees amounted to more than $6,000,000.   Prior to the restructuring, Schnurmacher received $11,000,000 as option deposits. After the restructuring, Schnurmacher received $19,000,000 (sales proceeds) and $4,500,000 (option deposit) or a total of $23,500,000.   Thus, as a result of the restructuring, Schnurmacher received an additional $12,500,000 not including the payment of their taxes and expenses.
 In accordance with the transactions as restructured, Infinity submitted an Offering Plan to the Attorney General of the State of New York pursuant to New York State General Business Law §  352.   Under §  352, Infinity, as sponsor, sought to convert the building to condominium use.   The Offering Plan was accepted for filing on December 27, 1985 by the Attorney General of the State of New York.
 On July 26, 1986, Schnurmacher executed a "Declaration establishing a plan for condominium ownership."   On September 4, 1986, the Declaration of Condominium (the "Declaration") including condominium by-laws (the "By-laws") and floor plans with respect to the Property were filed with the City Register of the City of New York. [FN3]  The Property, *602 then owned by Schnurmacher, was thereby submitted according to the provisions of the New York State Condominium Act to create a condominium consisting of 102 residential units and 9 servant room/units which are collectively called the "Residential Units."   A separate unit identified in the Declaration as the "Commercial Unit" consists of stores, offices, and the garage space which is the subject of this action.

FN3. Page 1 of part 1 of the Plan under the headnote "Introduction" states: The Owner of the property is Schnurmacher Bros., having its principal office at 1114 First Avenue, New York, New York. The Sponsor is Infinity Corporation, having its principal office at 8 Haven Avenue, Port Washington, N.Y. 11050.   The Sponsor is, through a wholly owned subsidiary, 1001 Madison Corp., the net lessee of the Property.   The Sponsor is a contract vendee and will acquire fee title to the Residential Units prior to or simultaneously with the First Closing. The Offer The Sponsor hereby offers 102 Residential Units and 9 Servant Units for sale under this Plan.   The purchase prices and estimated Common Charges for each of these Units are listed below in Schedule A-"Offering Prices and Related Information."   In addition, there are certain closing costs which are listed in "Unit Closing Costs and Adjustments." The stores, garage and offices at the property will constitute a separate condominium unit (the "Commercial Unit") retained by the Owner and net leased to a designee of the Sponsor and is not offered for sale under this Plan.   The superintendent's apartment (apartment 1A) is not offered for sale but will be part of the common elements. Page 2 part 1 of the Offering Plan under the heading "Basic Aspects of Condominium Ownership" states: Each purchaser owns his Unit outright and is entitled to exclusive possession of his Unit (unless it is purchased subject to the rights of a non-purchasing tenant) together with an interest in and right to use the General Common Elements and Residential Limited Common Elements other than terraces and balconies as to which the Unit Owner whose Unit has direct and exclusive access thereto has an exclusive right to use.

 Pursuant to the Declaration and by deed dated November 25, 1986, title to the Residential Units vested in the Sponsor, Infinity, [FN4] and these units were then offered for sale to the public by the Sponsor, Infinity. [FN5] (Greenberg Aff.   5)  The offer to sell residential units in the Property was made by means of a Condominium Offering Plan, dated December 27, 1985 (the "Plan").

FN4. By Deed dated November 25, 1986, Schnurmacher conveyed title to the Residential Units to Infinity, which Deed was recorded in the office for the City Register of the City of New York on December 16, 1986.

FN5. As part of the overall structure of the transaction, the Option Agreement with Infinity and the net Lease with 1001 Madison Corp. were modified.   A modification of the Option Agreement was executed by Schnurmacher and Infinity whereby Infinity was afforded an option to purchase the Commercial Unit from Schnurmacher.   The net Lease between Schnurmacher and 1001 Madison Corp. was also modified by making the Lease subject to the Declaration which "shall hereafter be deemed a lease of the Commercial Unit."

 Pursuant to New York law, the Plan was required to contain a full and accurate description of all terms of the offering and was to be distributed to all potential purchasers of units.   The Plan incorporated the Declaration and the By-laws and set forth the terms and conditions governing the sale and purchase for the Residential Units.
 The Plan, including the Declaration, By-laws and other documents described therein, comprised an offer to sell to the public the Residential Units.
 Schnurmacher retained ownership of the Commercial Unit.   The Declaration and the Plan also provided that a deed to the Commercial Unit, including the garage, would be issued to Schnurmacher.   On November 25, 1986, Schnurmacher as optionor and Infinity as optionee modified the Option Agreement dated as of April 5, 1984 whereby Infinity obtained an option to purchase all of Schnurmacher's right, title and interest to that portion of the Property retained by Schnurmacher and designated in the Declaration as the Commercial Unit.   The lease between 1001 Madison Corp. and Schnurmacher was modified by agreement dated April 25, 1986 making the lease subject to the Declaration of the Charles House Condominium and modifying the lease to be a lease of the Commercial Unit.
 In late 1986, 1001 Madison Corp. merged into Infinity.   Thus, in addition to its option to purchase right, title and interest in the Commercial Unit, Infinity succeeded to the rights of 1001 Madison Corp. as the tenant under the modified lease between Schnurmacher and 1001 Madison Corp.
 On April 22, 1986, Irwin Schnurmacher and Adolph Schnurmacher appeared before and were examined under oath by the New York State Attorney General.   The Attorney General found that the transaction between Schnurmacher and Infinity were arm's-length transactions.
 After the Attorney General accepted the Offering Plan for filing, an Article 78 Proceeding was commenced in the Supreme Court of the State of New York by the *603 Tenants' Committee, Stanley Deutsch, Charles Fabricant, Robert Cornell, Bernard Janoff, and Herbert Klapper against the Attorney General of the State of New York seeking a judgment to set aside and annul the determination of the Attorney General.
 Subsequent to the commencement of the action in the State Court, the Attorney General, by letter dated June 25, 1986, rescinded his acceptance of the Offering Plan.   Thereafter, Infinity intervened in the proceeding commenced by the Tenants' Committee and the residential tenants, seeking a judgment compelling the Attorney General to accept the Offering Plan for filing and directing the Attorney General to cancel and annul the letter of rescission of the Plan dated June 25, 1986.
 The matter was presented to Justice Robert E. White of the New York Supreme Court for a determination. [FN6]  The court concluded that there was no collusion or self-dealing between Schnurmacher and Infinity. [FN7]

FN6. In Matter of the Application of the Tenants Committee of 40 East 78 Street, et al. v. Abrams ("East 78 Street"), No. 99306/86 (S.Ct.N.Y.Co. Feb. 11, 1987).

FN7. East 78 Street, at 3.

 A final judgment which, inter alia, dismissed the petition and directed the Attorney General to accept the Offering Plan for filing was entered in the office of the clerk of New York County on March 20, 1987.   The petitioners served and filed a notice of appeal from the final judgment on April 21, 1987.
 Subsequently, the Tenants' Committee and Infinity entered into an agreement resolving all outstanding issues, which agreement was memorialized in the Eighth Amendment to the Offering Plan, which was accepted for filing with the Attorney General of the State of New York on or about July 17, 1987.
 The Eighth Amendment to the Offering Plan incorporates as Exhibit J thereof a letter agreement dated June 25, 1987 between the sponsor's attorney and the Tenants' Committee's attorney whereby the Tenants' Committee agreed to withdraw its objection to the Offering Plan, withdraw its appeal from the final judgment of the state supreme court, and recommend to the membership not to commence any further litigation. [FN8]  As a result of the agreement culminating in the Eighth Amendment, the Tenants' Committee and the residential tenants withdrew the appeal of the final judgment entered in the state court litigation.

FN8. The Eighth Amendment states in pertinent part: The terms of the amendment (except paragraphs 1, 3, 4 and 15) are a result of negotiations with the Tenants' Committee of 40 East 78th Street.   The Tenants' Committee recommends that no further litigation be brought against the sponsor with respect to matters in the Offering Plan.

 Stanley Deutsch, as owner of one of the Residential Units, and the president of the plaintiff, The Board of Managers of the Charles House Condominium, commenced a proceeding before the New York State Division of Housing and Community Renewal ("D.H.C.R.") seeking a determination that the garage portion of the Commercial Unit was subject to the New York State Rent Stabilization Law which would result in some of the parking spaces being subject to rent regulation.   By Order dated April 22, 1987, the D.H.C.R. denied the application.   Subsequently, Deutsch petitioned the Commissioner of the D.H.C.R. for an administrative review of the Order denying his application to determine that the garage was subject to rent stabilization.   The petition for administrative review was dismissed by the Commissioner of the D.H.C.R.
 By notice dated April 30, 1992, plaintiff served notice upon defendants  (pursuant to the Condominium and Cooperative Conversion Protection and Abuse Relief Act (the "Act"), 15 U.S.C. §  3601 et seq.) terminating inter alia, (a) the Condominium Offering Plan;  (b) the Declaration;  (c) the By-laws;  (d) the Option Agreement dated as of April 5, 1984;  (e) the Lease between Schnurmacher Bros. and 1001 Madison Corp.;   and (f) the Deed to the Commercial Unit of the Charles House Condominium.
 Plaintiff filed for declaratory judgment in July 1992 adjudging that all rights, title and interest of the defendants in and to the parking*604 garage located on the Property have been validly and timely terminated under the Act.   Defendants subsequently made certain counterclaims and moved for summary judgment.
 II. DISCUSSION
 Plaintiff's complaint alleges that defendants attempted to enter into an illegal, self-dealing conversion agreement in violation of the Act.   The Act was promulgated to abate specific abusive practices occurring in the cooperative and condominium conversion process.   See H.R. Conf.Rep. No. 1420, 96th Cong., 2d Sess. 162, reported in 1980 U.S.Code Cong. & Admin.News 3506, at 3707.
 "The primary purpose of the Act was to protect cooperative and condominium unit owners against overreaching by developers.   Thus, the Act provided means for unit owners to challenge unconscionable leases and self-dealing contracts."  King v. 415 Second Owners Corp., No. 86 Civ. 4800, 1987 U.S. Dist.Lexis 15211 (S.D.N.Y. Nov. 12, 1987), *3.
 "Section 3607 of the Act, in particular, was a response to the activities of many developers in the 1970's who created "sweetheart" lease arrangements and self-dealing contracts as a condition of sale."  Barnan Association v. 196 Owner's Corp., 797 F.Supp. 302, 304 (S.D.N.Y.1992).
 The Act permits the unit owners or an association of unit owners to terminate, without penalty certain long-term self-dealing contracts.   It provides in pertinent part: (a) Any contract or portion thereof which is entered into after October 8, 1980, and which-- (1) provides for operation, maintenance, or management of a condominium or cooperative association in a conversion project, or of property serving the condominium or cooperative unit owners in such project; (2) is between such unit owners or such association and the developer or an affiliate of the developer; (3) was entered into while such association was controlled by the developer through special developer control or because the developer held a majority of the votes in such association;  and (4) is for a period of more than three years, including any automatic renewal provisions which are exercisable at the sole option of the developer or an affiliate of the developer, may be terminated without penalty by such unit owners or such association.
 15 U.S.C. §  3607(a).   All four elements must exist for a contract to be terminated under the statute.  West 14th Street Commercial Corp. v. 5 West 14th Owners Corp., 815 F.2d 188, 197 (2d Cir.), cert. denied, 484 U.S. 850, 108 S.Ct. 151, 98 L.Ed.2d 107 (1987).
 "The Abuse Relief Act seeks to eliminate the potential for abuse to which the conversion process lends itself.   Congress undertook the delicate task of deterring these abuses without preventing conversions from taking place. Section 3607 of the Abuse Relief Act targeted a particular form of abuse to which tenants were vulnerable, namely, self-dealing leases arranged by sponsors.   Sponsors have an economic incentive to take advantage of the temporary control they exert over tenants' corporations to bind tenants to long term, self-dealing leases--leases that potentially deprive the tenants of valuable assets."  181 E. 73rd St. Co. v. 181 E. 73rd Tenants Corp., 954 F.2d 45, 47 (2d Cir.1992) (citations omitted).   See also Park So. Tenants v. 200 Cent. Park So. Associates, 748 F.Supp. 208, 211 (S.D.N.Y.1990), aff'd, 941 F.2d 112 (2d Cir.1991) (citations omitted).
 Plaintiff claims that defendants realized that the initial cooperative agreement would not succeed and restructured the agreement to escape the application of the Act.   Plaintiff points to the provision of the Declaration allocating only 11.8596% of the Common Elements to the Commercial Unit as evidence of self-dealing nature of the transaction.   Plaintiff contends that that allocation is disproportionate because on a square footage basis, the Commercial Unit constitutes 26.84% of the building and on a value basis, the Commercial Unit constitutes 69.5% of the value.   Nevertheless, the Commercial Unit only pays 11.8596% of the project's expenses.
 *605 Plaintiff attempted to terminate the Condominium Offering Plan, the Declaration, the By-Laws, the Option Agreement dated as of April 5, 1984, the Lease between Schnurmacher Bros. and 1001 Madison Corp., and the Deed to the Commercial Unit of the Charles House Condominium pursuant to §  3607 of the Act.
 Defendants alleged certain counterclaims and moved for summary judgment that plaintiff's termination is invalid.   Defendants claim that 1) plaintiff failed to join certain necessary and indispensable parties;  2) plaintiff is estopped from terminating defendants' agreement because plaintiff released defendants from further suit in a prior agreement;  3) plaintiff is collaterally estopped from raising its claims against defendants by a prior New York Supreme Court decision;  4) plaintiff's notice of termination was untimely;  and 5) the Act does not apply to defendants because Schnurmacher is not a developer as defined by the Act and the garage is not property serving the condominium.
 Defendants make counterclaims for declaratory judgment that the termination is invalid, that Schnurmacher owns the Commercial Unit in fee simple, and that defendants are entitled to the costs of the action.
 Both plaintiff and defendants claim a right to attorneys' fees.
 A. Standard for Summary Judgment
 Federal Rule of Civil Procedure 56(c) provides that summary judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.
 Summary judgment is appropriate if, "in light of the evidence presented, there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law."  Hurwitz v. Sher, 982 F.2d 778, 780 (2d Cir.), cert. denied, 508 U.S. 912, 113 S.Ct. 2345, 124 L.Ed.2d 255 (1993) ( citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986)).   Summary judgment is appropriate when, "after drawing all reasonable inferences in favor of the party against whom summary judgment is sought, 'no reasonable trier of fact could find in favor of the non-moving party.' "  Horn & Hardart Co. v. Pillsbury Co., 888 F.2d 8, 10 (2d Cir.1989) (quoting Murray v. National Broadcasting Co., 844 F.2d 988, 992 (2d Cir.), cert. denied, 488 U.S. 955, 109 S.Ct. 391, 102 L.Ed.2d 380 (1988)).  See also Liberty Lobby, 477 U.S. at 251-52, 106 S.Ct. at 2512 (inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law").
 In considering a motion for summary judgment the facts must be viewed in a light most favorable for the nonmoving party.  Hurwitz, 982 F.2d at 780 (citing United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 993, 8 L.Ed.2d 176 (1962)).
 "The moving party bears the burden of demonstrating the absence of a genuine issue of material fact."  Hurwitz, 982 F.2d at 780 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970));  Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir.1986), cert. denied, 480 U.S. 932, 107 S.Ct. 1570, 94 L.Ed.2d 762 (1987) (party seeking summary judgment must demonstrate that "there is no genuine issue as to any material fact").   See also Barnan, 797 F.Supp. at 304.   The party seeking summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of [the materials] which it believes demonstrate the absence of a genuine issue of material fact."  Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).   See also Trebor Sportswear Co. v. Limited Stores, Inc., 865 F.2d 506, 511 (2d Cir.1989).  "[T]he burden on the moving party may be discharged by 'showing'--that is, pointing out to the district court--that there is an absence of evidence to support the nonmoving party's case."  Celotex, 477 U.S. at 325, 106 S.Ct. at 2554.
 *606 "When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts."  Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (citations omitted).   See also Barnan, 797 F.Supp. at 304.   It must establish that there is a "genuine issue for trial."  Matsushita, 475 U.S. at 586, 106 S.Ct. at 1356.   See also Barnan, 797 F.Supp. at 304.
 " 'In considering the motion, the court's responsibility is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party.' "  Barnan, 797 F.Supp. at 304 (quoting Knight, 804 F.2d at 11).  "[T]he judge's function is not [herself] to weigh the evidence and determine the truth of the matter but to determine whether there does indeed exist a genuine issue for trial."  Liberty Lobby, 477 U.S. at 249, 106 S.Ct. at 2511.   See also R.C. Bigelow, Inc. v. Unilever N.V., 867 F.2d 102, 107 (2d Cir.), cert. denied sub nom.  Thomas J. Lipton, Inc. v. R.C. Bigelow, Inc., 493 U.S. 815, 110 S.Ct. 64, 107 L.Ed.2d 31 (1989).
 The substantive law governing the case will identify those facts which are material, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will probably preclude the entry of summary judgment.... while the materiality determination rests on the substantive law, it is the substantive law's identification of which facts are crucial and which facts are irrelevant that governs."  Liberty Lobby, 477 U.S. at 248, 106 S.Ct. at 2510.
 B. Failure to Join Necessary and Indispensable Parties
 [1] Defendants argue that as a matter of law they are entitled to summary judgment because plaintiff has failed to join necessary and indispensable parties.   As part of the restructured condominium agreement, Schnurmacher leased the Commercial Unit to 1001 Madison Corp.   By virtue of the merger of 1001 Madison Corp. with Infinity in late 1986, Infinity is the tenant of the Commercial Unit.   Infinity borrowed significant sums of money from Chemical Bank, Chase Manhattan Bank, N.A. and Marine Midland Bank, N.A. which amount was secured by mortgages on Infinity's leasehold interest in the Commercial Unit.  [FN9]

FN9. Chemical Bank is the holder of a mortgage on the leasehold interest.  The mortgage secures an indebtedness of $13,300,124 as set forth in a consolidation and modification agreement dated June 27, 1991.   It was recorded in the office of the City Register of the City of New York on October 31, 1991. On June 27, 1991, Infinity delivered to the Chase Manhattan Bank a "Note and Mortgage Consolidation and Modification Agreement" securing an indebtedness in the amount of $1,330,965.57.   The mortgage was recorded in the office of the City Register of the City of New York on October 31, 1991. Marine Midland Bank, N.A. is a holder of a leasehold mortgage securing an indebtedness of $3,226,760.97, dated May 28, 1992.   The mortgage was recorded in the office of the City Register of the City of New York.

 Defendants claim that pursuant to Federal Rules of Civil Procedure, Rule 19(a), the banks are indispensable parties and that plaintiff's failure to join them in the suit is grounds for summary judgment.
 The Federal Rules establish a two pronged test for the joinder of indispensable parties.   The first prong, Rule 19(a), states: Persons to be Joined if Feasible.   A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in the person's absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (i) as a practical matter impair or impede the person's ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest.   If the person has not been so joined, the court shall order that the person be made a party.   If the person should join as a plaintiff but refuses to do *607 so, the person may be made a defendant, or, in a proper case, an involuntary plaintiff.   If the joined party objects to venue and joinder of that party would render the venue of the action improper, that party shall be dismissed from the action.
 If a party is indispensable according to the terms in Rule 19(a), but joinder is impractical, then the second prong of the test, Rule 19(b), provides: Determination by Court Whenever Joinder not Feasible.   If a person as described in subdivision (a)(1)-(2) hereof cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent person being thus regarded as indispensable.   The factors to be considered by the court include:  first, to what extent a judgment rendered in the person's absence might be prejudicial to the person or those already parties;  second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided;  third whether a judgment rendered in the person's absence will be adequate;  fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.
 Unless the conditions of Rule 19(a) are satisfied, the court need not consider dismissal under Rule 19(b).  Associated Dry Goods Corp. v. Towers Financial Corp., 920 F.2d 1121, 1123 (2d Cir.1990).   The determination of whether or not a party is indispensable shall be based on the pleadings. Towers, 920 F.2d at 1124 (quoting C. WRIGHT & A. MILLER, 7 FEDERAL PRACTICE & PROCEDURE §  1604, at 40 (1986)) (court considering "whether [an] absent person's interest in the litigation is sufficient to satisfy ... the first sentence of Rule 19(a) ... must base its decision on the pleadings as they appear at the time of the proposed joinder") (ellipsis in original). Thus, whether a party is indispensable and whether a "lawsuit must be dismissed in the absence of that [party], can only be determined in the context of a particular litigation."  Curley v. Brignoli, Curley & Roberts Assoc., 915 F.2d 81, 90 (2d Cir.1990), cert. denied, 499 U.S. 955, 111 S.Ct. 1430, 113 L.Ed.2d 484 (1991) (quoting Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 118, 88 S.Ct. 733, 742, 19 L.Ed.2d 936 (1968)).
 In this action, in which plaintiff seeks to divest Schnurmacher of title to the Commercial Unit and terminate Infinity's Lease of the Commercial Unit, the banks which hold an interest in the Lease between Schnurmacher and Infinity are indispensable parties.   Complete relief could not be awarded plaintiff by virtue of a declaratory judgment against Schnurmacher and Infinity because title and rights to the property would be subject, to some extent, to the rights of the banks in the Property.   Therefore, the banks are indispensable.
 The indispensable nature of the banks in this case does not, however, call for summary judgment of the case as defendants assert.  Rule 19(a) states plainly that if an indispensable party "has not been so joined, the court shall order that the person be made a party."   Dismissal under Rule 19(b) is called for only when joinder is not feasible.   Defendants have made no claim that joinder is not feasible.   Therefore, failure to join an indispensable party in this case is not grounds for summary judgment or dismissal.
 C. Estoppel by Release
 [2] Defendants claim that, as a matter of law, plaintiff is estopped from claiming any relief pursuant to an agreement between the Tenants' Committee and Infinity.   Stanley Deutsch and the Tenants' Committee withdrew their appeal of the New York Supreme Court judgment subsequent to negotiations with Infinity.   The negotiations resulted in the adoption of the Eighth Amendment to the Offering Plan which states: The terms of this amendment, (except paragraphs 1, 3, 4, and 15) are a result of negotiations with the tenants' committee of 40 East 78th Street.   The tenants' committee recommends that no further litigation be brought against the sponsor with respect to matters in the offering plan.
 This amendment and its concurrent resolution of the state court litigation, however, are *608 insufficient to constitute a release estopping plaintiff in this action from claiming relief.
 The Eighth Amendment states only that plaintiff's predecessors in interest  "recommend[ ]" that no further litigation be brought.   It does not preclude plaintiff's predecessors in interest from pursuing further litigation and it certainly does not preclude plaintiff from suit.   Therefore, defendants' argument that plaintiff is estopped from suing pursuant to an agreement between defendant Infinity Corp. and plaintiff's predecessors in interest is unpersuasive as a basis for summary judgment.
 D. Collateral Estoppel:  In Matter of the application of the tenants committee of 40 East 78 Street, et al. v. Abrams
 [3] Defendants further claim that plaintiff, as a matter of law, is collaterally estopped from raising its claims against defendants by a prior New York Supreme Court decision.   In Matter of the Application of the Tenants Committee of 40 East 78 Street, et al. v. Abrams, No. 99306/86 (S.Ct.N.Y.Co. Feb. 11, 1987).
 In previous state court proceedings, the Tenants' Committee, Stanley Deutsch and others sought a judgment, pursuant to state law, [FN10] declaring the Offering Plan null and void upon the grounds, inter alia, that Infinity failed to fully disclose its relationship with Schnurmacher in the transaction.   New York law requires that transactions be arm's-length and fully disclosed.  [FN11]

FN10. Cooperative and condominium conversions in New York are regulated by General Business Law, Art. 23-A §  352 et seq.   Section 352-e states: 1. (a) It shall be illegal and prohibited for any person, partnership, corporation, company, trust or association, or any agent or employee thereof, to make or take part in a public offering or sale in or from the state of New York of securities constituted of participation interests or investments in real estate, mortgages or leases ... as defined in section three hundred fifty-two of this article, when such securities consist primarily of participation interests or investments in one or more real estate ventures, including cooperative interests in realty, unless and until there shall have been filed with the department of law, prior to such offering, a written statement or statements, to be known as an "offering statement" or "prospectus" concerning the contemplated offering which shall contain the information and representations required by paragraph (b).... (b) The detailed terms of the transaction;  a description of the property, the nature of the interest, and how title thereto is to be held;  the gross and net income for a reasonable period preceding the offering where applicable and available;  the current gross and net income where applicable and available;  the basis, rate and method of computing depreciation;  and description of major current leases;  the essential terms of all mortgages;  the names, addresses and business background of the principals involved, the nature of their fiduciary relationship and their financial relationship, past present and future, to the property offered to the syndicate and to those who are to participate in its management;  the interests and profits of the promoters, offerors, syndicate organizers, officers, directors, trustees or general partners, direct and indirect, in the promotion and management of the venture....

FN11. In the commentary to §  352-e, the author states that "New York can be described as a 'full disclosure state' rather than a 'merit standard' state;  that is, so long as full disclosure is provided by the prospectus to potential investors, the Martin Act is complied with." David Kaufmann, Practice Commentary, MCKINNEY'S CONSOLIDATED LAWS OF NEW YORK, v. 19 at 30.

 The Attorney General found that the transactions between the defendants were arm's-length and that the disclosure made in the conversion documents was adequate.   The Attorney General's determination was reviewed by the Supreme Court of the County of New York in a proceeding entitled "In the Matter of the application of the Tenants Committee of 40 East 78 Street, Stanley Deutsch, Charles Fabricant, Robert Cornell, Bernard Jancoff and Herbert Klapper, petitioners against Robert Abrams, Attorney General of the State of New York, respondent and Infinity Corp. respondent-intervenor."  (Index No. 99306/86, Feb. 11, 1987)  Justice White adjudicated the only issue from which Justice Evans recused himself:  whether the sponsor, Respondent-Intervenor Infinity Corp. ... materially and fraudulently misrepresented in the Plan that Infinity is the sole Sponsor and failed to disclose the interests of Schnurmacher Brothers in the Offering, *609 despite the evidence that was before the Attorney General's Office. [FN12]

FN12. East 78 Street, at 2.

 The New York court stated that the Property had been "sold to Infinity Corp., which entered into a complex sale relationship with the Schnurmacher family reflecting the latter's interest in a tax advantaged transaction."  [FN13]

FN13. East 78 Street, at 2.

 Justice White stated the contentions of the parties as follows:  1) Plaintiffs contended that "the Schnurmachers [were] actually co-sponsors of the Plan, and that the failure to disclose their identity as such is violative of Infinity Corp.'s responsibility to make full disclosure;"  and 2) Infinity Corp. contended that "it [was] the sole sponsor of the Plan;  that it purchased the property on the open market from the Schnurmacher interests in an arm's-length transaction;  and that Infinity Corp. has made the required disclosure of the various interests involved."  [FN14]

FN14. East 78 Street, at 2.

 After noting that the Attorney General had come to the conclusion that the transaction between the Schnurmachers and Infinity was at arm's-length and that the disclosure was adequate, the court concluded: There is nothing in the documents before this Court that would warrant setting aside the acceptance of the Plan for filing based upon any relationship between the Schnurmachers and Infinity.   The Petitioners rely largely upon the ease with which the agreement between the Schnurmachers was renegotiated when the initial filing encountered problems.   However, this is hardly sufficient to demonstrate the existence of any conspiracy or that the Schnurmacher family is actually a co-principal in the offering to the tenants.   Petitioners have tacitly conceded that they have no direct evidence of any conspiracy between Infinity and the Schnurmachers (See Petitioner's Memorandum of Law, p. 13). Petitioners indicate dissatisfaction with the questioning of the Schnurmachers at the hearing conducted by the Attorney General.   However, they offer nothing but speculation to contradict the sworn testimony adduced.   In sum, it cannot be said on the record before this Court that there was inadequate disclosure of the Schnurmachers' position.   Nor has any proof been adduced which would indicate that the Schnurmachers do have a duty or other interest in Infinity Corp.   Accordingly, the application is denied and the Petition is dismissed ...  [FN15]

FN15. East 78 Street, at 3.

 In this action, plaintiff seeks declaratory judgment of the validity of its termination of the Condominium Offering Plan, the Declaration, the By-laws, the Option Agreement dated as of April 5, 1984, the Lease between Schnurmacher and 1001 Madison Corp., and the Deed to the Commercial Unit of the Charles House Condominium pursuant to 15 U.S.C. §  3601 et seq.
 Defendants claim that the state court decision that the transaction between Infinity and Schnurmacher was at arm's length serves as collateral estoppel in plaintiff's present action under the Act.
 The United States Supreme Court has defined the parameters of the doctrine of collateral estoppel on several occasions.   In Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1970), the Court noted that Collateral estoppel, like the related doctrine of res judicata, has the dual purpose of protecting litigants from the burden of relitigating an identical issue with the same party or his privy and of promoting judicial economy by preventing needless litigation.
 Parklane Hosiery, 439 U.S. at 326, 99 S.Ct. at 649 (citing Blonder- Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 328-29, 91 S.Ct. 1434, 1443, 28 L.Ed.2d 788 (1971)). [FN16]

FN16. The purpose of the doctrine of collateral estoppel is to "relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication."  United States v. Mendoza, 464 U.S. 154, 158, 104 S.Ct. 568, 571, 78 L.Ed.2d 379 (1984) (quoting Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 414, 66 L.Ed.2d 308 (1980)).

 *610 The doctrine of collateral estoppel applies both to questions of law and fact.  United States v. Stauffer Chemical Co., 464 U.S. 165, 170-71, 104 S.Ct. 575, 578, 78 L.Ed.2d 388 (1984) ("collateral estoppel can apply to preclude relitigation of both issues of law and issues of fact if those issues were conclusively determined in a prior action") (citation omitted).
 [4] The doctrine of collateral estoppel creates preclusion of issues decided in state court, as well as those decided in federal court, as determined by the law of the state. [FN17]  In Migra v. Warren City School District BD of Ed., 465 U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984), the Supreme Court held that

FN17. Preclusive effect is also given to state administrative proceedings.   The Court in University of Tennessee v. Elliott, 478 U.S. 788, 797, 106 S.Ct. 3220, 3225, 92 L.Ed.2d 635 (1986) held that it is sound policy to apply principles of issue preclusion to the fact- finding of administrative bodies acting in a judicial capacity.   In a unanimous decision in United States v. Utah Construction & Mining Co., 384 U.S. 394 [86 S.Ct. 1545, 16 L.Ed.2d 642] (1966), we held that.... 'When an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose.' Elliott, 478 U.S. at 797-98, 106 S.Ct. at 3225-26 (citation omitted). While defendants in this case appeared and presented evidence regarding the Condominium conversion to the New York Attorney General and while plaintiff commenced proceedings before the New York State Division of Housing and Community Renewal regarding rent stabilization of the garage, it is not necessary to reach the issue of the preclusive nature of those proceeding to resolve the case at hand. 
It is now settled that a federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered.
 Migra, 465 U.S. at 81, 104 S.Ct. at 896.   Quoting its decision in Allen v. McCurry, 449 U.S. 90, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980), the Court held that "... Congress has specifically required all federal courts to give preclusive effect to state-court judgments whenever the court of the State from which the judgments emerged would do so ..."  Migra, 465 U.S. at 81, 104 S.Ct. at 896.This requirement is codified by federal statute 28 U.S.C. §  1738. [FN18]  Kremer v. Chemical Construction Corp., 456 U.S. 461, 466, 102 S.Ct. 1883, 1889, 72 L.Ed.2d 262 (1982) ("Section 1738 requires federal courts to give the same preclusive effect to state court judgments that those judgments would be given in the courts of the State from which the judgments emerged").

FN18. See also Kremer, 456 U.S. at 466, n. 6, 102 S.Ct. at 1889, n. 6 (discussing the history of the codification of 28 U.S.C. §  1738).

 [5] Under New York law, collateral estoppel prevents relitigation of an issue which is identical to one necessarily decided in prior action and which parties were afforded full and fair opportunity to contest in that proceeding.  Polur v. Raffe, 912 F.2d 52 (2d Cir.), cert. denied, 499 U.S. 937, 111 S.Ct. 1389, 113 L.Ed.2d 446 (1991);  Temple of Lost Sheep Inc. v. Abrams, 930 F.2d 178 (2d Cir.), cert. denied, 502 U.S. 866, 112 S.Ct. 193, 116 L.Ed.2d 153 (1991);  U.S. v. U.S. Currency in the Amount of $228,536.00, 895 F.2d 908 (2d Cir.), cert. denied, 495 U.S. 958, 110 S.Ct. 2564, 109 L.Ed.2d 747 (1990).
 The central issue of the previous state court litigation decided by Justice White is the identical issue that is central to this litigation.   In the opening sentence of "Plaintiff's Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment," plaintiff presents the question currently before the court in the following manner: Defendants Infinity Corporation ("Infinity") and Schnurmacher Bros. ("Schnurmacher") seek by this summary judgment motion to reverse the Charles House apartment owners' termination under the Condominium and Cooperative Protection and Abuse Relief Act of 1980 (the "Act"), 15 U.S.C. 3601 et seq., of an unfair and oppressive "sweetheart" lease relating to the Charles House garage.   The operative facts which compel denial of defendants' motion are set forth in the accompanying *611 affidavit of plaintiff's President, Stanley I. Deutsch (the "Deutsch Affidavit").
 The central issue here, then, is the existence of an unfair and oppressive  "sweetheart" lease.   The central issue in the state court proceedings was whether defendants ... materially and fraudulently misrepresented in the Plan that Infinity is the sole Sponsor and failed to disclose the interests of Schnurmacher Brothers in the Offering. [FN19]

FN19. East 78 Street, at 2.

 In other words, the issue in state court was whether there was some undisclosed collusion between Infinity and Schnurmacher, colloquially, a "sweetheart" transaction.   This issue was fully litigated in state court by the Tenants' Committee who are in privity with plaintiff Charles House and who were lead by Stanley Deutsch on both occasions.
 Plaintiff argues that it is not collaterally estopped because the state court action brought by the Tenants' Committee concerned state law while the current action brought by Charles House Condominium concerns federal law.   While plaintiff's may be correct in asserting that this case involves a different claim, plaintiff cannot succeed in arguing that a different issue is involved here.   In other words, even though plaintiff here has brought a separate cause of action--one under federal law--the question is whether the central issue here is the same as that litigated in state court.  "Under the judicially developed doctrine of collateral estoppel, once a court has decided an issue of fact or law necessary to its judgment, that decision is conclusive in a subsequent suit based on a different cause of action involving a party to the prior litigation."  Mendoza, 464 U.S. at 158, 104 S.Ct. at 571 (quoting Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970, 973, 59 L.Ed.2d 210 (1979)). [FN20]

FN20. The Court in Parklane Hosiery discussed the difference between res judicata and collateral estoppel: Under the doctrine of res judicata, a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action.   Under the doctrine of collateral estoppel, on the other hand, the second action is upon a different cause of action and the judgment in the prior suit precludes relitigation of issues actually litigated and necessary to the outcome of the first action. Parklane Hosiery, 439 U.S. at 326, n. 5, 99 S.Ct. at 649, n. 5 (citations omitted).

 Throughout its argument, plaintiff repeatedly states that Schnurmacher and Infinity engaged in a "sweetheart" deal. [FN21]  In fact, this is the basis for plaintiff's complaint.   Without plaintiff's accusation that defendants engaged in a "sweetheart" lease there would be no transaction on which plaintiff could make its claims;  plaintiff has presented no other transaction as a basis for its termination.   However, this issue was decided against plaintiff in state court.   Plaintiff is collaterally estopped from raising the issue again in federal court.   Defendants' motion for summary judgment is, therefore, granted.

FN21. See Plaintiff's Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment, at 1-6, 22, 25, 26, 28.

 IV. APPLICABILITY OF ACT TO DEFENDANTS
 While the doctrine of collateral estoppel, which precludes plaintiff's claims of self-dealing by the defendants, provides an independent and sufficient basis for granting defendants' motion for summary judgment, defendants' motion for summary judgment also succeeds because the Act is not applicable to the instruments that plaintiff terminated.
 Plaintiff seeks declaratory judgment supporting its termination under the Act of 1) the Condominium Offering Plan 2) the Declaration 3) the By-laws 4) the Option Agreement 5) the Lease between Schnurmacher and 1001 Madison Corp. and 6) the Deed for the Commercial Unit.
 The Act provides for termination of any contract or portion of a contract which "is between such unit owners or such association and the developer or an affiliate of the developer...."  [FN22]

FN22. 15 U.S.C. §  3607.

 A. Agreements Between Owners and Developers
 [6][7] The Option Agreement is between Schnurmacher, as the developer, and Infinity, *612 a third party.   It is not between a unit owner or association and a developer or affiliate.   The Act was not intended to apply to contracts which involved third parties and did not involve the tenants themselves so as to be self-dealing.   In 69th Street & 2nd Ave. Garage Associates, L.P. v. 301/69 Owners Corp., 91 Civ. 7966, 1992 WL 47989, 1992 U.S. Dist.Lexis 2239, (S.D.N.Y. Feb. 28, 1992), the district court considered a third party that was involved in an arm's-length transaction in which it paid $1,000,000 to purchase the garage.   Terminating a sale to an innocent third party [ ... ] would thus conflict with the equitable principles underlying the statute.   Indeed, the plain language of the Act only contemplates terminating contracts between the sponsor and the cooperative or condominium.
 69th Street, 1992 WL 47989, *3, 1992 U.S. Dist Lexis 2239, *7-8.   The Option Agreement is, therefore, not subject to termination under the Act.
 [8] The Lease between Schnurmacher and 1001 Madison Corp. is also not a contract  [FN23] between the tenants and the developer.   Therefore, the lease is not subject to termination under the Act.   Accord 2 Tudor City Place Associates and 2 Tudor Garden Parking Corp. v. 2 Tudor City Tenants Corp. No. 87 Civ. 5850, 1990 WL 63809, *3, 1990 U.S. Dist.Lexis 5572, *10 (S.D.N.Y. May 9, 1990) (where garage lease was between future developer of cooperative and affiliate corporation, lease could not be terminated because it was not between "unit owners or such [cooperative] association and the developer or an affiliate of the developer") (parenthetical in original).

FN23. Compare West 14th Street Commercial Corp. v. 5 West 14th Owners Corp., 815 F.2d 188, 192 (2d Cir.), cert. denied, 484 U.S. 871, 108 S.Ct. 200, 98 L.Ed.2d 151 (1987) (discussing why a lease is a "contract" within meaning of the Act).

 [9] The Deed to the Commercial Unit involves only Schnurmacher's fee simple interest in property that it built and never conveyed.   The Deed, therefore, certainly does not involve a contract between the developer and the tenants which is terminable under the Act, especially "given that the two remedial provisions of the statute, § §  3607 and 3608, do not address a contract that is an outright reservation of fee simple title in the property being converted to cooperative or condominium."  69th Street, 1992 WL 47989, *2, 1992 U.S. Dist.Lexis 2239, *3-4.
 Therefore plaintiff's termination of the Option Agreement, the Lease, and the Deed are invalid because §  3607 of the Act is inapplicable to such third party instruments.
 B. Who's a "Developer"
 [10] Defendants claim that the Act does not apply to them because Schnurmacher is not a "developer"  [FN24] or "affiliate of the developer"  [FN25] as defined by the Act.

FN24. Section 3603 of the Act defines "developer" as: (A) any person who offers to sell or sells his interest in a cooperative or condominium unit not previously conveyed, or (B) any successor of such person who offers to sell or sells his interest in units in a cooperative or condominium project and who has the authority to exercise special developer control in the project including the right to:  add, convert, or withdraw real estate from the cooperative or condominium project, and maintain sales offices, management offices and rental units;  exercise easements through common elements for the purpose of making improvements within the cooperative or condominium;  or exercise control of the owners' association

FN25. Section 3603 defines "affiliate of a developer" as: any person who controls, is controlled by, or is under common control with a developer.   A person "controls" a developer if the person (A) is a general partner, officer, director, or employer of the developer, (B) directly or indirectly or acting in concert with one or more other persons, or through one or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, more than 20 per centum of the voting interest of the developer, (C) controls in any manner the election of a majority of the directors of the developer, or (D) has contributed more than 20 per centum of the capital of the developer.   A person "is controlled by" a developer if the developer (i) is a general partner, officer, director employer of the person, (ii) directly or indirectly or acting in concert with one or more other persons, or through one or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, more than 20 per centum of the voting interest of the person, (iii) controls in any manner the election of a majority of the directors, or (iv) has contributed more than 20 per centum of the capital of the person;

 *613 Under the Act, a developer must sell or offer to sell property.   Section 3603 of the Act defines "sale" as "any obligation or arrangement for consideration for conveyance to a purchaser of a cooperative or condominium unit, excluding options or reservations not binding on the purchaser."   In the restructured transaction which is the subject of this litigation, Schnurmacher conveyed title to the Residential Units to Infinity and sold Infinity an option to purchase the Commercial Unit in addition to its lease of the Commercial Unit to Infinity.
 Defendants argue that since option agreements are not sales or offers to sell under the Act  [FN26] and since they did not sell or offer to sell the Commercial Unit which includes the garage that is the subject of this litigation, they are not developers.   However, as part of the condominium conversion, defendant Schnurmacher sold its interest in the Residential Units to Infinity. [FN27]  Infinity then offered the residential units for sale to the public.   Therefore, Schnurmacher is a developer under the Act.

FN26. 15 U.S.C. §  3603 provides: (21) "sale", "sale of a cooperative unit" or "sale of a condominium unit" means any obligation or arrangement for consideration forconveyance to a purchaser of a cooperative or condominium unit, excluding options or reservations not binding on the purchaser;

FN27. See supra n. 4.

 C. Serving the Condominium Unit
 [11] Defendants also claim that the Act is inapplicable because the garage does not "serve" the condominium.  Section 3607 of the Act permits termination of contracts which provide for the "operation, maintenance, or management of a condominium or cooperative association in a conversion project, or of property serving the condominium or cooperative unit owners in such project."  "Serving the condominium ... unit owners" is not defined by the Act.
 In support of their position that the garage does not serve the condominium, defendants refer to language in the Offering Plan that permits the garage to be used for other purposes.   Defendants also point out that since the construction of the building, the garage space has been used by the public.   At no time did any residential tenants obtain parking privileges in the garage space as consideration for the execution of a residential lease for the possession of a residential apartment unit.   Tenants were permitted to park in the garage only by executing separate lease/agreements with the lessee of the garage space or agreeing to pay the lessee of the garage its daily, weekly or monthly parking rates.
 In 5 West 14th Owners, 815 F.2d at 198-99, the Second Circuit in considering on-site parking which was open to the public but contained preferences for unit owners, held that "[a] parking garage, with or without tenant preferences, provides a service that tenants might reasonably expect as an essential adjunct of their apartment complex."   See also 181 E. 73rd St. Co. v. 181 E. 73rd Tenants Corp., 954 F.2d 45, 48 (2d Cir.1992);  Cromwell Associates v. Oliver Cromwell Owners, Inc., 705 F.Supp. 116, 117 (S.D.N.Y.1988), aff'd, 941 F.2d 107 (2d Cir.1991) (parking garages serves project);  Brabert Realty Co. v. 20125 Owners Corp., 703 F.Supp. 314 (S.D.N.Y.1989).
 Moreover, plaintiff's documentary evidence that the garage serves the Condominium is persuasive.   The Certificate of Occupancy for the Property states that "[p]arking is primarily for resident and tenants."  (Deutsch Aff., Exh. A at 3).   Additionally, the Board of Standards & Appeals, under Calendar # 752-64-B7, granted a variance in the Zoning Resolution to permit transient parking "on the condition that the tenants of this apartment house may recapture any of the space devoted to transient parking on 30 days notice ..." (Deutsch Aff., Exh. B at 2)
 The location of the garage, the certificate of occupancy, the Board of Standards & Appeals variance, in addition to the law of this Circuit, indicate that the garage serves the condominium unit owners.   Therefore, the garages serves the condominium unit owners as required by the Act.
 *614 V. UNTIMELY
 [12][13] Plaintiff served notice of termination on April 30, 1992.  Plaintiff's termination was, therefore, effective July 29, 1992. [FN28] Defendants claim that they are entitled to summary judgment because plaintiff's termination was untimely. [FN29]

FN28. Section 3607(d) of the Act provides: Following the unit owners' vote, the termination shall be effective ninety days after hand delivering notice or mailing notice by prepaid United States mail to the parties to the contract. In order to fall within the statute of limitations for the Act, then, actual termination, which occurs ninety days after notice is given, must be effected within the two year period.   See 2 Tudor City Place Assocs. v. 2 Tudor City Tenants Corp., 924 F.2d 1247, 1253 (2d Cir.), cert. denied, 502 U.S. 822, 112 S.Ct. 83, 116 L.Ed.2d 56 (1991).

FN29. In Elan Corporation v. Reade Street Tenants Corp., slip op., No. Civ. 3131, 1986 WL 13776 (S.D.N.Y. Dec. 4, 1986), the court considered the implications of the requirement, under New York law, of disclosure in the offering plan of purchasers' rights under the Act in order to avoid violation of the Martin Act.   The court determined that failure to disclose rights under the Act in the offering plan did not toll the statute of limitations under the Act, though it might be grounds for rescission of the contract in which purchasers purchased shares in the cooperative. According to this interpretation, therefore, defendants' failure, here, to disclose plaintiff's rights under the Act in the Offering Plan did not toll the statute of limitations.

 Section 3607(b) of the Act, entitled "Time of termination," states: Any termination under this section may occur only during the two year period beginning on the date on which-- (1) special developer control over the association is terminated;  or (2) the developer owns 25 per centum or less of the units in the conversion project, whichever occurs first.
 The Act defines special developer control as: any right arising under State law, cooperative or condominium instruments, the association's bylaws, charter or articles of association or incorporation, or power of attorney or similar agreement, through which the developer may control or direct the unit owners' association or its executive board.   A developer's right to exercise the voting share allocated to any condominium or cooperative unit which he owns is not deemed a right of special developer control if the voting share allocated to that condominium or cooperative unit is the same voting share as would be allocated to the same condominium or cooperative unit were that unit owned by any other unit owner at that time.
 15 U.S.C. §  3603(22).
 [14] Special developer control is essentially developer domination of the board of directors.  West 14th Street, 815 F.2d at 200.   See also 2 Tudor City Place Assocs. v. 2 Tudor City Tenants Corp., 924 F.2d 1247, 1253 (2d Cir.), cert. denied, 502 U.S. 822, 112 S.Ct. 83, 116 L.Ed.2d 56 (1991) ( "Special developer control did not terminate until Tenants elected an independent board of directors.")
 Defendant Infinity argues that plaintiff's termination is untimely because  "special developer control" as provided by the Act ended more than two years prior to plaintiff's termination.   Infinity presents two reasons for this assertion.
 First, Infinity argues that "special developer control," under the terms of the Offering Plan, [FN30] is the right to appoint a majority to the condominium board.   Defendant Infinity argues that it lost the right to appoint a majority to the condominium board by September 7, 1988 when it sold residential units *615 having more than 50 percent of the aggregate common interest appertaining to all residential units.   Therefore, Infinity claims that the notice of termination should have been served by no later than September 7, 1990.

FN30. The Offering Plan states: The affairs of the Condominium shall be governed by the Condominium Board, which shall consist initially of three members designated by Owner.   At the first meeting of the Unit Owners, which will be held not later than seven months after the First Closing, the three-member Condominium Board shall resign in favor of a new seven-member Condominium Board, to be elected by Unit Owners at such meeting.   Thereafter, elections to the Condominium Board shall be held at the regular annual meeting of Unit Owners held in October of each succeeding year.   Special meetings of Unit Owners may be called by resolution of the Condominium Board or on petition of Unit Owners having in the aggregate not less than 25% of the Common Interest of all Unit Owners.

 However, "special developer control" as defined in the Act is determined by actual control rather than by the right to control as defendants argue.   In 2 Tudor City Tenants Corp., 924 F.2d at 1253, the Second Circuit noted that "special developer control did not terminate until Tenants elected an independent board of directors."
 Infinity, as late as the filing of the Fifteenth Amendment to the Offering Plan filed with the Attorney General of the State of New York on January 28, 1991, claimed that it had the right to appoint the majority of the members of the Board through December 9, 1992 and, in fact, did appoint the majority of the boardmembers at least through January, 1991.   It was not until January 1991 that a majority of the Board actually became controlled by the non-sponsor unit owners. [FN31]

FN31. Infinity claims that even though it did appoint four boardmembers, only three were qualified pursuant to §  2.9(B) of the By- laws.   Section 2.9(B) states: In addition, any member of the Condominium Board who shall cease to be qualified for membership pursuant to the terms of Section 2.7 hereof shall be deemed to have resigned [his or her] membership effective as of the date upon which such qualification shall cease. Infinity claims that since only three of its appointees were qualified according to §  2.9(B), it did not appoint a majority of the seven member Board and therefore did not retain "special developer control." Infinity's argument is unpersuasive.   The last sentence of §  2.9(B) of the By-laws relating to a deemed resignation of a member of the Board only applies to a member of the Condominium Board "who shall cease to be qualified for membership pursuant to the terms of Section 2.7 hereof." Section 2.7 of the By-laws provides as follows: Except for members designated or elected by Declarant or its designees pursuant to the terms of this Section 2.7 or by Sponsor and the Commercial Unit Owner pursuant to the terms of Section 2.10 or Section 4.9 hereof, all members of the Condominium Board shall be either (i) individual Unit Owners;  (ii) individual Permitted Mortgagees;  (iii) officers, directors, shareholders, partners, principals, employees, or beneficiaries of corporations, partnerships, fiduciaries or any other entities that are Unit Owners or Permitted Mortgagees;  or (iv) adult Family Members of any of the foregoing. Section 2.7 does not apply to boardmembers designated by the Sponsor or Commercial Unit Owner.   By its own terms, Section 2.7 only relates to the qualifications of members of the Condominium Board, other than the Declarant, Sponsor and Commercial Unit Owner.   Therefore, since boardmembers designated by Infinity did not have to qualify pursuant to §  2.7, Infinity controlled three rather than four--that is, a majority of the members of the board through January 1991.

 Despite Infinity's claim that it lost the right to control the Board more than two years before plaintiff's termination, Infinity retained actual control, effecting "special developer control," so as to make plaintiff's termination timely.
 [15] The second argument which Infinity presents in support of its claim that "special developer control" ended more than two years prior to plaintiff's termination is that the "Initial Control Period," as defined on page 3 of the Offering Plan, ended on September 7, 1988.   Therefore, Infinity argues, "special developer control" also ended on that date.
 Plaintiff claims that apart from actual control or the terms of the "Initial Control Period" as provided in the Offering Plan, Infinity's "special developer control" within the meaning of the Act continued until at least December 10, 1990, because section 2.5 of the By-laws gave Infinity wide ranging powers, including veto powers over business decisions until that date. [FN32] Therefore, plaintiff claims *616 that termination would have been timely through December 9, 1992.

FN32. Section 2.5 of the By-laws of the Condominium, entitled "Certain Limitations On The Powers of the Condominium Board," states: (A) Notwithstanding anything to the contrary contained in these By-Laws, for a period of three years from the First Closing, so long as Sponsor or its designee or both shall continue to collectively own Units representing 25% or more in aggregate Common Interest, the Condominium Board may not, without Sponsor's or such designee's prior written consent: (i) make any addition, alteration or improvement to the Common Elements or to any Unit, unless the same shall be required by Law or any insurance company insuring the Property: (ii) assess any Common Charges or Special Assessments for the creation or the replacement of, or the addition to, all or any part of a reserve, contingency or surplus fund in excess of five percent in the aggregate of the estimated Common Expenses for any year of operation; (iii) increase the number or change the type of employees from that described in Schedule B set forth in the Plan; (iv) enter into any service or maintenance contract for work not covered in the schedule referred to in subparagraph (iii) hereinabove;  or (v) borrow money on behalf of the Condominium. (Schnurmacher Aff., Exh. G at H-4)

 In Coliseum Park Apartments Co. v. Coliseum Tenants Corp., 742 F.Supp. 128 (S.D.N.Y.1990), the court held that certain retention of power by the Sponsor constitutes "special developer control."   In Park South Tenants Corp. v. 200 Central Park South Assocs., 748 F.Supp. 208, 213 (S.D.N.Y.1990), aff'd, 941 F.2d 112 (2d Cir.1991), the District Court was persuaded that the "veto power accorded defendant Sponsor ... over such items as capital improvements, employee hiring, repairs, refinancing, augmentation of the reserve fund, provision of services, equipment procurement, and building leases falls within the Act's definition of 'special developer control' ...".  See, e.g., Barnan, 797 F.Supp. at 308 (special developer control relinquished on the date shareholders elected a majority of directors not affiliated with Sponsor).
 Plaintiff's replies as to Infinity are persuasive.   Actual control rather than the right to control is determinative of "special developer control." Moreover, despite the provision for the "Initial Control Period" in the Offering Plan, the By-laws indicate that Infinity's right to control extended until December 1990, making plaintiff's notice of termination timely.   In either case, with regard to Infinity, plaintiff's termination was timely.
 [16] On the other hand, termination as to Schnurmacher was not timely. Schnurmacher, as determined above, is the developer in this case.   Therefore any termination must have occurred during the two year period beginning on the date on which Schnurmacher owned 25% or less of the units in Property--that is, during the two year period beginning on November 25, 1986, the date Schnurmacher conveyed the Residential Units to Infinity.   In other words, not later than November 25, 1988.
 The termination notice in this case was effective on July 29, 1992, more than two (2) years after Schnurmacher owned less than twenty-five (25%) per cent of the units.   Pursuant to §  3607(b) cited above, even if the Act could be applied to all of the instruments claimed by plaintiff, the termination of the instruments was not timely and is ineffective.
 Even if Infinity was deemed to have continued to exercise "special developer control" over the association, termination as to Schnurmacher was required within two (2) years of November 26, 1986 when Schnurmacher owned less that twenty-five (25%) per cent of the units.   Therefore, even if, under the Act, plaintiff could properly terminate a contract between the developer and Infinity as third party, its termination of the instruments since they involve Schnurmacher is invalid.
 Plaintiff's argument that Schnurmacher and Infinity are partners and that Infinity's continued "special developer control" is attributable to Schnurmacher for the purpose of determining the statute of limitations case is unpersuasive.   As determined above, plaintiff is collaterally estopped from arguing that defendants are partners or collusively acted.   Therefore, termination which was valid as to Infinity was not necessarily valid as to Schnurmacher.
 While plaintiff's termination was timely as to Infinity, it was not timely as to Schnurmacher.   Therefore, plaintiff's statute of limitations bar provides an additional basis for granting defendants' motion for summary judgment.
 VI. DEFENDANTS' COUNTERCLAIM
 Defendants make counterclaims for judgment 1) declaring the plaintiff's purported notice of termination to be null and void and of no force and effect;  2) declaring that Schnurmacher is the owner in fee simple absolute of the "Commercial Unit" free and *617 clear of the claims of the plaintiff and its successors in interest;  and 3) awarding the costs of the action.
 For the reasons discussed herein, defendants' counterclaims are granted.
 VII. ATTORNEYS' FEES
 [17] Both sides claim a right to attorneys' fees.   The Act permits prevailing plaintiffs to recover attorneys' fees at the discretion of the court and prevailing defendants to recover attorneys' fees where there is evidence of bad faith.   See King v. 415 Second Owners Corp., No. 86 Civ. 4800, 1987 U.S.Dist.Lexis 15211 (S.D.N.Y. Nov. 12, 1987), *2-3 ("The statute thus appears to create an asymmetry between plaintiffs, who are always entitled to a discretionary award of fees, and defendants, who are so entitled only if the action was 'frivolous, malicious, or lacking in substantial merit' ").
 In the case at hand, plaintiff's case wasnot frivolous or malicious or so lacking in substantial merit as to warrant awarding defendants' attorneys' fees.   Therefore, each party shall bear its own attorneys' fees.
 VIII. CONCLUSION
 Defendants have established that there are no disputed issues of material fact.   Defendants are entitled to summary judgment as a matter of law.
 Plaintiff is estopped from raising its central claim by a prior state court determination.   The Act is inapplicable to the Option Agreement, Lease, and Deed because these instruments did not meet the Act's definition of a self- dealing contract which is one occurring between the unit owners or association and the developer or its affiliate.   Finally, plaintiff's termination was not timely as to Schnurmacher, making it invalid.   Defendants' motion for summary judgment is, therefore, granted.   Defendants' counterclaims declaring plaintiff's notice of termination and termination null and void, declaring that Schnurmacher is the owner in fee simple of the "Commercial Unit" and awarding defendants' the costs of the action are also granted.   Each party shall bear its own attorneys' fees.
825 F.Supp. 597
END OF DOCUMENT