Billionaire Sues UES Neighbor Over 'Egregious' Townhouse Damage

UPPER EAST SIDE, NY — The billionaire owner of an Upper East Side townhouse is suing his doctor neighbor, alleging that an "egregiously mismanaged construction project" at the next-door mansion has filled his home with mold and cracked a skylight, among other costly mistakes.

Thursday's suit was brought by the owners of 48 East 65th St., previously identified in public records and news reports as Warren and Harriet Stephens.

Warren Stephens is an investment banker from Arkansas with a reported net worth of $3.2 billion, and bought the Lenox Hill townhouse in 1999 for use as a pied-à-terre, according to reports from the time.

Twenty years later in 2019, it appeared in the headlines again when a woman working in the townhouse was trapped inside an elevator for three days. Warren and Harriet Stephens said the woman was a longtime employee of theirs, and called the incident "unfortunate."

Next door on their block between Madison and Park avenues is the 10,000-square-foot mansion at 46 East 65th St., formerly owned by the famed composer Franz Waxman. It now belongs to Shawn Khodadadian, a gastroenterologist who practices on Park Avenue, and who bought the opulent building for $12 million in 2018.

Soon after, Khodadadian won approval from the city's landmarks commission to expand the five-story home with a rooftop addition and new balconies on its facade and rear yard. In 2020, a developer working for Khodadadian asked permission to install roof protections on the Stephenses' townhouse ahead of the renovations, the lawsuit says.

But trouble began in the summer of 2021, according to the Stephenses' lawsuit, when water began leaking into their roof, first through fifth floors, and basement, the suit alleges. The leaks fostered mold, and caused wood to warp and buckle, the suit says.

Meanwhile, by October 2021, an inspection found numerous "missing and loose bricks" in the wall that separates the two homes, including damage that punctured the Stephenses' elevator shaft — forcing one of the unnamed owners to relocate to a hotel, the suit says.

By May 2022, another inspection showed "a large crack" in the Stephenses' facade above their patio, presumably caused by bricks falling from above, they say. The "dangerous" situation has prevented them from using the patio, "a beautifully landscaped entertainment area," since 2021, the suit alleges.

Finally, at some point during construction, a skylight on the Stephenses' roof had its glass cracked, only to be hastily sealed using clear silicone by workers who never notified the owners, the suit says.

By June 2022, the Stephenses opted to revoke permission they had given Khodadadian's workers to keep construction protections on their townhouse. But the protections remain in place — amounting to "an ongoing trespass," they say.

The Stephenses seek a combined $585,608 in damages. In addition to an LLC tied to Khodadadian, the suit names construction and design companies allegedly hired to do the botched work.

Requests for comment sent to Khodadadian's attorney and medical office were not immediately returned.

Warren Stephens's purchase of the townhouse sparked a flurry of rumors in 1999, given the then-imminent New York arrival of another Arkansas power couple: Hillary and Bill Clinton.

"I guess [New Yorkers] assume everybody from Arkansas is related, or somehow in cahoots together or something," Stephens told the Observer at the time. "It really has nothing to do with the Clintons."

Indeed, Stephens has been a major donor to Republican politicians, and emerged as a critic of Donald Trump starting in 2016 — though he later donated millions to a pro-Trump PAC in 2020.