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New York judge has partially dismissed a lawsuit against developer Michael Shvo, ruling that he cannot be held personally liable for construction discrepancies at his Mandarin Oriental Residences in Midtown. The decision does not affect allegations of breach of contract against BSD, the shell company behind the 685 Fifth Avenue property. However, claims against Berlin Rosen, the public relations firm representing Shvo, can proceed after a judge allowed defamation allegations to move forward related to a New York Post article.

    John and Diane Goodman sued Shvo and BSD in March, alleging that their one-bedroom apartment's closets were larger than expected and lacked custom millwork agreed upon in their contract. They also accused Shvo of "wholly inappropriate and intolerable" behavior during the construction process. The couple paid $6.1 million for the condo.

    Shvo's attorney, Steven Cohen, said the lawsuit was an attempt to create sensational headlines. "This suit was all about creating sensationalist headlines, and today the headline writes itself: All claims against Michael Shvo dismissed in their entirety." A spokesperson for the Goodmans did not respond to a request for comment.

    The judge narrowed the breach of contract allegation against BSD, dismissing portions of the claim that blamed the company for not addressing items not included on the punch list. The Goodmans' attorney was also ordered to respond within seven days to an allegation that he fabricated a citation mentioned in oral argument.

    In July, the Goodmans filed a separate lawsuit against Shvo and other partners on the Mandarin Oriental project, alleging shoddy construction and seeking punitive damages. Shvo's attorneys have filed a motion to dismiss this case, with a ruling expected in November.