A couple who bought a newly-built $1.5 million house in Rye is suing the developer for allegedly refusing the fix a defective storm water system that has allowed flooding on their property.
Katie and Parker Lee are demanding $1 million from Susan Cappelli and 50 Walker Avenue Associates LLC, in a complaint filed on May 2 in Westchester Supreme Court.
Cappelli and her company “failed to provide an operable storm management system as required by the contract,” the complaint states.
Cappelli said in a brief telephone interview that the allegations are false. The stormwater system was developed by an engineer and inspected and approved by the City of Rye. “There is nothing wrong with the storm water system,” she said. The problem is with inadequate catch basins on the city street.
Cappelli, who operates SAC Development, and Thomas DeMasi, owner of Alpine Construction, have built many luxury houses in Rye.
In 2016, an affiliate of their businesses, 50 Walker Avenue Associates, paid $650,000 for a house on Walker Avenue. In 2018, the company mortgaged the property for $1,080,000 to finance a construction loan.
Cappelli is listed on the mortgage as the corporation’s managing member and DeMasi, who is not named as a defendant in the lawsuit, as a member.
In 2019, they demolished the house and built a 2,583-square-foot, 5-bedroom Colonial.
In 2020, they sold the house to the Lees for $1.55 million.
Plumbing, electrical, heating, cooling and storm management systems were warranted as free of defects for two years, according to the complaint. If notified within 30 days of a defect, the corporation had 60 days to either repair or replace the system.
One feature of the property is a driveway that slopes to the garage and basement below ground level.
The Lees claim they asked if there were any flooding issues and were told there had been none.
(A clause in a sales contract rider, detailing 50 Walker Avenue Associates’ representations about the property, is crossed out. It states: “To the best of their knowledge, the dwelling on the premises is not located in a flood zone as designated by the federal government.”)
On Sept. 1, 2021, a year and a half after the Lees bought the house and while the warranty was still active, five feet of water flooded the garage and basement, “caused by the defective storm management system.”
The corporation failed to repair or replace the storm water system, the Lees claim, and their basement and garage have been flooded three more times since then.
The storm that flooded the Lee’s house was from the remnants of Hurricane IDA, one of the most damaging cyclones in recent U.S. History.
“No property is going to handle a hurricane or tropical storm,” Cappelli said.
She said she and her partner met with the Lees after the storm, offered to raise the driveway at the curb and even offered to buy back the property. The Lees, she said, refused the offer to buy, stating that you can’t buy anything in Rye for $1.5 million anymore.
Meanwhile, Cappelli says she has been trying for years to get the city to fix problems with street flooding caused by inadequate catch basins.
“I don’t do things half way,” Cappelli said. “I do things to the 100th percent.”
The Lees accused the corporation of breach of contract. They accused the corporation and Cappelli of violating the New York debtors and creditors laws by conveying property with intent to defraud.
The Lees are represented by Mount Kisco attorney Heather R. Gushue.
