Complaint: Grant Avenue Owners Corp v. Grant Briarwood LLC
Complaint: Grant Avenue Owners Corp v. Grant Briarwood LLC
Complaint: Grant Avenue Owners Corp v. Grant Briarwood LLC
22173/2016E
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/30/2016
Defendants.
You are hereby summoned to answer the complaint in this action and to serve a copy of your
answer on the undersigned attomey(s) for plaintiff(s) within twenty (20) days after the service of this
summons, exclusive of the day of service (or within thirty (30) days after service is completed if this
summons is not personally delivered to you within the State of New York); and in case of your
failure to appear or answer, judgment will be taken against you by default for the relief demanded in
the complaint.
By: _ _,,__ _ _ _ _ _ _ _ __
Jose I. Farca
A omeys for Plaintiff
: 7 Broadway, 61h Floor
, ew York, New York 10013
(212) 431-1300, Ext. 610
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF BRONX
--------------------x IndexNo. - - - - -/2016
GRANT A VENUE OWNERS CORPORATION, for itself
and on behalf of its Tenant-Shareholders,
Plaintiff,
Defendants.
Plaintiff GRANT AVENUE OWNERS CORPORATION, for itself and on behalf of its
BACKGROUND
A. The Parties
domestic corporation duly organized and existing under the laws of the state ofNew York, is
a cooperative housing corporation which owns the property known as the Solara and located
at 1259-1275 Grant Avenue, Bronx, New York (Block 2453, Lots 81 and 68, respectively, of
and belief, a domestic limited liability company organized and existing under the laws of the
state ofNew York, having a place of business at 36-35 Bell Boulevard, Bayside, New York,
GOODMAN (collectively, the "Principals"), are natural persons who, upon information and
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belief, reside in the state of New York or have a business address at 36-35 Bell Boulevard,
Bayside, New York, and were at all relevant times members and principals of the Sponsor.
and belief, a domestic corporation duly organized and existing under the laws of the state of
New York, having a place of business at 36-35 Bell Boulevard, Bayside, New York, and was
at all relevant times an affiliated entity of the Sponsor, the Sponsor's managing agent for the
5. Defendant MVM REAL TY AS SOCIA TES, LLC DIBI A MVM AssOCIA TES
("MVM") is, upon information and belief, a domestic limited liability company organized
and existing under the laws of the state of New York, having a place of business at 954
Gerard A venue, Bronx, New York, and was at all relevant times one of the Sponsor's selling
certain regulatory agreements with governmental agencies including the NYC Partnership
Housing Development Fund Company, Inc. (the "HDFC"), and the New York City Housing
Development Corporation (the "HDC"), under which the HDFC would hold title to the
Property while the Sponsor agreed to develop and construct thereon two residential
apartment buildings with parking, after which the HDFC would convey the Property to the
Co-op.
7. In accordance with said agreements, upon information and belief, the Sponsor
filed plans with the New York City Department of Buildings in June 2007 to construct two
8. Upon information and belief, the Sponsor filed a Cooperative Offering Plan,
which was accepted for filing on or about September 5, 2008 (the Offering Plan, as amended,
hereinafter referred to as the "Offering Plan" or "Plan"), to construct and develop two (2)
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Ill
new ten-story residential buildings containing 160 residential apartments - 80 apartments at
1259 Grant Avenue known as Solara West, and 80 apartments at 127 5 Grant Avenue known
as Solara East - and 73 parking space units (1259 and 1275 Grant Avenue, collectively, the
9. Upon information and belief, on May 12, 2008, the Sponsor and its Principals
10. Upon information and belief, the Sponsor constructed the Buildings at the
Property.
11. Upon information and belief, beginning May 12, 2008, defendants, including
Briarwood and MVM, marketed the Co-op to sell residential apartments and parking spaces
(the apartments and parking spaces, collectively, the "Units") in the Buildings.
12. Upon information and belief, the first Purchase Agreements for Units in the
13. Upon information and belief, the Plan was declared effective on January 22,
2010, as set forth in the Second Amendment to the Offering Plan dated February 4, 2010.
14. Upon information and belief, final Certificates of Occupancy for both of the
15. Upon information and belief, by deed dated April 16, 2010, the HDFC
16. Upon information and belief, on April 16, 2010, the Sponsor and/or Principals
caused the Co-op to enter into a Management Agreement with Sponsor's affiliate Briarwood
to operate and manage the Co-op and its Buildings pursuant to the terms and conditions of
17. Upon information and belief, the first closing on the sale of a Unit to a
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18. Upon information and belief, pursuant to the By-Laws of the Co-op which are
contained in the Plan, the initial Board of Directors was comprised of three (3) directors until
19. Sponsor retained voting control of the initial Board of Directors of the Co-op,
upon information and belief, by defendants Vincent L. Riso, Raymond Riso and James Riso
20. Upon information and belief, until March 8, 2011, the Sponsor retained voting
control of the Board of Directors of the Co-op via defendants Vincent L. Riso, Raymond
Riso and James Riso holding all three of the positions on the Board.
21. Upon information and belief, the Sponsor relinquished control of the Board of
Directors of the Co-op on or about March 8, 2011, upon an election at which four out of five
of the directors elected were residential apartment unit owners in the Co-op.
22. Upon information and belief, the Sponsor nevertheless continued to maintain
a representative on the Board of Directors of the Co-op- to wit, defendant Vincent L. Riso-
who remained as the fifth director until after all Units in the Co-op were sold.
23. Upon information and belief, all Units have been sold as of the date hereof.
C. Defendants' Obligations
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the building plans, the Sponsor reserves the right to substitute
materials, fixtures, appliances and equipment of equal or better
quality or design for any of those set forth. Sponsor reserves the right
to change the size, number and location of the Buildings and other
improvements as well as the Apartment Corporation Common Area,
provided such changes do not change or adversely affect the Shares
appurtenant to an Apartment for any Apartment for which a Stock-
Transfer has taken place or for which a Purchase Agreement has been
executed and is in effect unless all affected Purchasers consent in
writing to such a change and all affected Purchasers are given the
right to rescind their Purchase Agreement and to receive the return of
their down payment. No such change will be made unless it is first
disclosed in a duly filed amendment to the Offering Plan.
26. The Plan provides, in part (at page 161), as follows:
9. ***
Sponsor agrees to pay for authorized and proper work in the
establishment and sale of the Apartment Corporation, including but
not limited to advertising, printing, architectural and legal services.
14. ***
The Sponsor will promptly correct any material patent defects
in the construction of the Buildings and the Apartments thereon, or in
the installation or operations of any mechanical equipment therein,
due to substantially improper workmanship or material substantially
at variance with the architectural plans and specifications, provided
the Sponsor is notified of such defect in writing by certified mail,
return receipt requested (a) within sixty (60) days from the date of the
Stock-Transfer to an Apartment and (b) within one year from the
Closing as it applies to the Common Area of the Buildings to .the
Apartment Corporation. If any defect in the Common Areas can only
be detected after said period of occupancy of a particular Apartment,
Sponsor will correct said defect in the construction of the Common
Areas in the installation or operation of any mechanical equipment
therein due to improper workmanship or materials substantially at
variance with the architectural plans and specifications, if notified by
the Board within sixty (60) days from the date of the Stock-Transfer
to or first leasing of that particular Apartment. Sponsor will also
correct any latent defects in the construction of the Buildings and the
Apartments therein or in the installation or operation of any
mechanical equipment therein due to substantially improper
workmanship or material substantially at variance with the
architectural plans and specifications, provided it is notified of such
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defects in writing by the Tenant-Shareholder as to such Apartment
within one (1) year from the date of the Stock-Transfer of such
Apartment or is notified by the Board with respect to Common Areas
within one year after the Closing. On three (3) days' notice from
Sponsor the Board and/or the Tenant-Shareholder in question shall
allow Sponsor, Sponsor's contractors and/or the Managing Agent
access to the Buildings or the Apartment in question on any weekday
which is not celebrated as a federal or state holiday to inspect and/or
correct such defect. The quality of construction shall be comparable
to local standards customary in the particular trade and in accordance
with the plans and specifications.
***
Notwithstanding the above, any exception, exclusion or
standard which does not meet or exceed a relevant specific standard
of the applicable building code, or in the absence of such relevant
specific standard a locally accepted building practice, shall be void as
contrary to public policy and shall be deemed to establish the
applicable building code standard or locally accepted building
practice as the warranty standard.
***
28. The Purchase Agreements for the purchase and sale of Units expressly
Purchaser has received a copy of the Plan and all filed amendments to
the Plan (which includes the Proprietary Lease to be entered into with
the Apartment Corporation, the schedules, By-Laws and House Rules
attached thereto, all of which are incorporated herein by reference and
made part of this Agreement with the same force and effect as if fully
set forth herein) at least three (3) full business days prior to Purchaser
executing this Purchase Agreement.
29. The Purchase Agreements also provide that:
material in order to complete construction of the Buildings in accordance with the plans filed
31. Under the Plan, the Sponsor was required to correct, repair or replace any and
all defects relating to the construction of the Buildings, or the installation or operation of any
construction practices and if the materials are materially at variance with the plans.
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32. The Plan further provided that upon the closing of the sale of each Unit, the
Sponsor shall assign all warranties in its possession to the purchaser of the Unit.
33. Sponsor and Principals represented in the Plan that the Plan did not knowingly
contain any false statement of fact or knowingly omit any material fact and that all statements
34. Sponsor and Principals warranted m the Plan that they have primary
responsibility for compliance with the provisions of Article 23-A of the General Business
Law, the Regulations of the Attorney General in Part 20, and such other laws and regulations
as may be applicable, and that they read the entire Plan and investigated the facts set forth
therein.
35. Sponsor and Principals certified that the Plan did not omit any material facts,
contain any untrue statements of material fact, contain any fraud, deception or concealment,
Buildings, certain defects in the construction of the Buildings, including Units and Common
(a) the failure to properly construct the "A" line of residential apartments
in both Buildings in the appropriate manner and with the appropriate
materials and the requisite noise attenuation, leading to unreasonable
noise transmission into those apartments, and resulting in the issuance
of municipal violations for noise;
(b) the failure to properly construct the windows, roof, parapets and
facades of both Buildings in the appropriate manner and with the
appropriate materials, leading, inter alia, to leaks into various Units
and Commons Areas; and
(c) the failure to properly construct the foundations and retaining walls of
the Buildings in the appropriate manner and with the appropriate
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materials, leading, inter alia, to the sinking of the courtyard and the
misalignment of the courtyard gates surrounding the Buildings.
38. The existence of construction defects were communicated to the Sponsor or
Briarwood.
39. The Sponsor and/or Briarwood acknowledged and agreed to repair certain of
the construction defects, and purported to take remedial action to address some of them.
and/or the failure to take proper and effective remedial measures, numerous leaks, noise, and
other conditions that do not conform to the applicable laws, regulations, codes and legal
41. Plaintiff incorporates the allegations set forth in ,i,i 1 through 40 above by
reference.
42. The Plan provides, among other things, that the Sponsor will perform such
work and supply such materials, and to cause the same to be performed and supplied, as is
necessary in order to complete the design and construction in accordance with the plans and
specifications for the design and construction work filed with the Department of Buildings of
the City of New York and other appropriate governmental authorities and generally in
43. The Sponsor entered into Purchase Agreements to sell Units in the Buildings
to Plaintiff's Tenant-Shareholders, which Purchase Agreements provided, inter alia, that the
44. As signatories to the Plan, the Sponsor and Principals agreed to undertake and
complete construction and development of the Buildings substantially in accordance with the
plans and specifications filed with the New York City Department of Buildings.
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45. The Sponsor and Principals failed to complete construction and development
of the Buildings substantially in accordance with the plans and specifications filed with the
46. The Sponsor and Principals breached contractual obligations to Plaintiff and
its Tenant-Shareholders in that the Buildings were improperly and inadequately designed and
were not constructed and completed in a competent and workmanlike manner and in
accordance with the plans and specifications for the Buildings as required by the Plan.
suffered and will continue to suffer damages in an amount to be determined at trial, but
48. The Sponsor and Principals are jointly and severally liable to Plaintiff and its
49. Accordingly, Plaintiff requests judgment on its own behalf and on behalf of
multiple Tenant-Shareholders against the Sponsor and Principals jointly and severally in the
50. Plaintiff incorporates the allegations set forth in ,i,i 1 through 49 above by
reference.
51. Pursuant to the Plan, the Sponsor gave the Co-op a warranty that:
The Sponsor will promptly correct any material patent defects in the
construction of the Buildings and the Apartments thereon, or in the
installation or operations of any mechanical equipment therein, due to
substantially improper workmanship or material substantially at
variance with the architectural plans and specifications ...
52. The Sponsor received notice of and acknowledged the existence of defects in
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54. By reason of the foregoing, Plaintiff and its Tenant-Shareholders have
suffered and will continue to suffer damages in an amount to be determined at trial, but
55. The Sponsor and Principals are jointly and severally liable to Plaintiff and its
56. Accordingly, Plaintiff requests judgment against the Sponsor and Principals
57. Plaintiff incorporates the allegations set forth in ,i,i 1 through 56 above by
reference.
58. The Sponsor's Purchase Agreements contained an implied duty and covenant
of good faith and fair dealing to perform the required work and supply the required materials,
and to cause the same to be performed and supplied, as is necessary in order to complete the
construction and development of the Buildings substantially in accordance with the plans and
specifications for the design and construction work filed with the Department of Buildings of
the City of New York and other appropriate governmental authorities, and generally in
59. The Sponsor breached its implied contractual duty of good faith and fair
dealing to Plaintiff and its Tenant-Shareholders in that the Buildings were improperly and
manner and in accordance with the plans and specifications for the Building as required by
the Plan.
suffered and will continue to suffer damages in an amount to be determined at trial, but
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61. The Sponsor and Principals are jointly and severally liable to Plaintiff and its
62. Accordingly, Plaintiff requests judgment for itself and on behalf of and its
Tenant-Shareholders against the Sponsor and Principals jointly and severally in the amount
63. Plaintiff incorporates the allegations set forth in ,r,r 1 through 62 above by
reference.
64. Under applicable law, Sponsor and Principals impliedly warranted to Plaintiff
and purchasers of Units that the Buildings, including Units and commons areas, would be
constructed in a skillful, careful and workmanlike manner, consistent with proper design,
engineering and construction standards and practices, free of material, latent, design and
structural defects.
65. Plaintiff and/or its Tenant-Shareholders timely notified the Sponsor and/or its
including Units and commons areas, in accordance with applicable law of Sponsor's
breaches of warranties.
66. The Sponsor and Principals their warranties and, as a result of its breach of
contract, the Buildings, including Units and commons areas, were improperly and
accordance with the plans and specifications for the Buildings as required by the Plan.
suffered and will continue to suffer damages in an amount to be determined at trial, but
68. The Sponsor and Principals are jointly and severally liable to Plaintiff and its
Tenant-Shareholders under the Plan.
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69. Accordingly, Plaintiff requests judgment on its own behalf and on behalf of its
Tenant-Shareholders against the Sponsor and Principals jointly and severally in the amount
70. Plaintiff incorporates the allegations set forth in ,i,i 1 through 69 above by
reference.
71. The Sponsor had a duty to Plaintiff and its Tenant-Shareholders to cause the
accordance with the Building Plans and Specifications, and proper design, engineering and
72. The Sponsor failed to discharge and perform its duty to Plaintiff and its
and inadequately constructed and completed in a competent and workmanlike manner and in
accordance with the plans and specifications for the Buildings as required by the Plan.
suffered and will continue to suffer damages in an amount to be determined at trial, but
74. Accordingly, Plaintiff requests judgment on its own behalf and on behalf of its
Tenant-Shareholders against the Sponsor jointly and severally in the amount of not less than
$2,000,000.
75. Plaintiff incorporates the allegations set forth in ,i,i 1 through 74 above by
reference.
76. Plaintiff claims that the Sponsor and Principals are jointly and severally
required to comply with their contractual and common law duties to correct and remedy the
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various defects and conditions that pertain in the Buildings in order to bring same into
conformity with the plans and specifications for the Buildings as required by the Plan,
including, but not limited to, the examples particularly alleged above.
77. Upon information and belief, the Sponsor and Principals deny Plaintiffs
claims.
78. There is thus a dispute as to the respective rights and legal relations by and
between the Sponsor and Principals and the Plaintiff with respect to the Plan and Buildings.
respective rights of the parties is desirable and necessary in order that the parties' rights may
loss of their valuable and unique rights with respect to the Plan and the Buildings.
81. Plaintiff requests judgment declaring that the Sponsor and Principals are
jointly and severally required to comply, and enjoining and directing the Sponsor and
Principals to comply, with their contractual and common law duties to correct and remedy
the various defects and conditions that pertain in the Buildings in order to bring same into
conformity with the plans and specifications for the Building as required by the Plan,
82. Plaintiff incorporates the allegations set forth in ,r,r 1 through 81 above by
reference.
83. Beginning in or about 2008, the Sponsor and Principals offered for sale to the
public Units in the Co-op and caused to be published and distributed to the public and
Plaintiff and its Tenant-Shareholders, brochures and advertisements, promising, among other
things, that the Buildings would be constructed and completed in accordance with all
applicable zoning and building laws, regulations, codes and other requirements of the City of
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New York, all as part of a scheme or artifice to deceive and defraud Plaintiff and its Tenant-
Shareholders and others by means of false and fraudulent representations and material
om1ss10ns.
or about 2008, the Sponsor and Principals, and their selling agents Briarwood and MVM,
falsely stated and represented to Plaintiff and its Tenant-Shareholders, both verbally and in
Agreements entered into by Unit purchasers, that the Buildings would be and were properly
accordance with the Building Plans and Specifications and proper design, engineering and
construction practices.
85. The statements and representations made by the Sponsor and Principals, and
their selling agents Briarwood and MVM, and the omissions as described above and
incorporated herein by reference, were false, in that the Buildings were improperly and
material design and construction defects not in accordance with the Plans and Specifications
86. Beginning in 2008 and continuing to date, the defendants knew that the
statements and representations and omissions were false at the times they were made and/or
concealed, and were further made and/or omitted for the purpose of deceiving and defrauding
Plaintiff and its Tenant-Shareholders and inducing them to rely thereon in purchasing Units
in the Co-op.
87. The defendants purposefully and intentionally concealed from Plaintiff and its
above were material and Plaintiff and its Tenant-Shareholders believed them to be true and
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89. By reason of the foregoing, Plaintiff and its Tenant-Shareholders have
suffered and will continue to suffer damages in an amount to be determined at trial, but
believed to equal or exceed the purchase prices paid for their respective Units.
90. Accordingly, Plaintiff requests judgment on its own behalf and on behalf of its
Tenant-Shareholders against the defendants jointly and severally in the amount of not less
than the purchase prices paid by the Tenant-Shareholders for their respective Units.
91. Plaintiff incorporates the allegations set forth in ,r,r 1 through 90 above by
reference.
defendants, and the material distributed by them relating to the Co-op, including the Purchase
were untrue, deceptive and misleading in material respects and which were known by them
and/or in the exercise of reasonable care should have been known, to be untrue, deceptive
and/or misleading in a material respect, in violation of General Business Law 349 and
350.
93. The defendants knew and/or should have known that their conduct and
representations reasonably caused Plaintiff and its Tenant-Shareholders to conclude that the
Building and Units were free from material design and construction defects.
94. The defendants knew and/or should have known that their representations and
concealments were false, incomplete and misleading at the time they were made, and/or
of the defendants, and reasonably relying on the truth and completeness of those
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96. By reason of the foregoing, Plaintiff and its Tenant-Shareholders have
suffered and will continue to suffer damages in an amount to be determined at trial, but
believed to equal or exceed the purchase prices paid for their respective Units.
97. Accordingly, Plaintiff requests judgment on its own behalf and on behalf of its
Tenant-Shareholders against the defendants jointly and severally in the amount of not less
than the purchase prices paid by the Tenant-Shareholders for their respective Units.
Raymond Riso and/or James Riso owed Plaintiff and its Tenant-Shareholders a fiduciary
duty to disclose and correct all defects in the construction and development of the Buildings
by the Sponsor, of which they were Principals, and to disclose and correct all material
100. Said defendants breached said fiduciary duty by failing to make disclosures
suffered and will continue to suffer damages in an amount to be determined at trial, but
102. Accordingly, Plaintiff requests judgment on its own behalf and on behalf of its
Tenant-Shareholders against the Sponsor jointly and severally in the amount of not less than
$2,000,000.
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AS AND FOR A TENTH CAUSE OF ACTION
103. Plaintiff incorporates the allegations set forth in 11 1 through 102 above by
reference.
104. Upon information and belief, on April 16,2010, the Sponsor and/or Principals
caused the Co-op to enter into a Management Agreement with Sponsor's affiliate Briarwood
to operate and manage the Co-op and its Buildings pursuant to the terms and conditions of
105. Sponsor, Principals and/or Briarwood knew and intended that Plaintiff and its
106. Briarwood breached its contractual obligations to Plaintiff and its Tenant-
Shareholders in that the Buildings were improperly and inadequately maintained and/or
repaired, or was not maintained and repaired in a competent and workmanlike manner and in
suffered and will continue to suffer damages in an amount to be determined at trial, but
108. Accordingly, Plaintiff requests judgment on its own behalf and on behalf of its
(b) that Plaintiff recover, on its own behalf and on behalf of its Tenant-
Shareholders, from the Sponsor and Principals,jointly and severally,
damages in an amount to be determined at trial, but believed to be in
sum amount of not less than $2,000,000;
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On the Third Cause of Action
(c) that Plaintiff recover, on its own behalf and on behalf of its Tenant-
Shareholders, from the Sponsor and Principals,jointly and severally,
damages in an amount to be determined at trial, but believed to be in
sum amount of not less than $2,000,000;
(d) that Plaintiff recover, on its own behalf and on behalf of its Tenant-
Shareholders, from the Sponsor and Principals, jointly and severally,
damages in an amount to be determined at trial, but believed to be in
sum amount of not less than $2,000,000;
(e) that Plaintiff recover, on its own behalf and on behalf of its Tenant-
Shareholders, from the Sponsor and Principals,jointly and severally,
damages in an amount to be determined at trial, but believed to be in
sum amount of not less than $2,000,000;
(f) declaring that the Sponsor and Principals are jointly and severally
required to comply, and enjoining and directing the Sponsor and
Principals to comply, with their contractual and common law duties
to correct and remedy the various defects and conditions that pertain
in the Buildings in order to bring same into conformity with the plans
and specifications for the Building as required by the Plan, including
the examples particularly alleged above;
(g) that Plaintiff recover, on its own behalf and on behalf of its Tenant-
Shareholders, from the defendants, jointly and severally, damages in
the amount of not less than the purchase prices paid by the Tenant-
Shareholders for their respective Units;
(h) that Plaintiff recover, on its own behalf and on behalf of its Tenant-
Shareholders, from the defendants, jointly and severally, damages in
the amount of not less than the purchase prices paid by the Tenant-
Shareholders for their respective Units;
(i) that Plaintiff recover, on its own behalf and on behalf of its Tenant-
Shareholders, from defendants Vincent L. Riso, Raymond Riso
and/or James Riso,jointly and severally, damages in an amount to be
determined at trial, but believed to be in sum amount of not less than
$2,000,000;
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On the Tenth Cause of Action
G) that Plaintiff recover, on its own behalf and on behalf of its Tenant-
Shareholders, from Briarwood damages in an amount to be
determined at trial, but believed to be in sum amount of not less than
$2,000,000;
together with the costs and disbursements of this action, and such other, further and different
By:-=----~----------
Jos . Farca
omeys for Plaintiff
7 Broadway, 6th Floor
New York, New York 10013
(212) 431-1300, Ext. 610
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF BRONX
-------------------x Index No. - - - -/2016
GRANT A VENUE OWNERS CORPORATION, for
itself and on behalf of its Tenant-Shareholders,
Plaintiff,
- against - VERIFICATION
Defendants.
2. I have read the foregoing complaint and know the contents thereof; the same
are true to my own knowledge, except as to those matters alleged upon information and
belief; and as to those matters, I believe them to be true. The basis of such information and
belief are the books and records maintained by plaintiff, and its agents and employees.
CHEVONDPY .....
Sworn to before me this
.3.Q_ day of Marc 016
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