Defendants had moved to dismiss several causes of action in the subject complaint. The plaintiffs are investors in a large condominium development. The defendants include individuals and entities that, in essence, had various roles as part of the “development team” (developer). Pursuant to a joint venture agreement (JVA), the developer exercised day-to-day decision making authority and was empowered to make capital calls. The plaintiffs alleged that the defendants had warranted, inter alia, that their capital contributions would not be sourced from “third parties or managed funds.” Following a fourth capital call, the plaintiffs refused to contribute their full share. Certain defendants made contributions to cover the plaintiffs’ share of the capital call and advised the plaintiffs that such contributions were “dilutive.” The plaintiffs contended, inter alia, that the capital call notice was improper and the contributions should be treated as a loan. The plaintiffs further alleged that the defendants failed to obtain approvals for “major decisions,” as required by the JVA. The court granted the defendants’ motion in part and held, inter alia, that the plaintiffs’ breach of contract claims could proceed to the extent the claims alleged certain improper transfers of ownership interests in violation of the JVA.

The JVA required that certain “major decisions” be approved by the defendants and the plaintiffs and authorized the defendants to make “additional capital calls.” The complaint alleged that the JVA provided that the “sponsor shall disclose to [plaintiffs] any changes to the direct and indirect investors in its holdings.” In 2013, the venture obtained an acquisition loan.