Bank of America N.A. v. 414 Midland Avenue Associates, LLC, et al.
2010 NY Slip Op. 08053, 2010 N.Y. App. Div. LEXIS 8360 (2d Dept. Nov. 9, 2010)
Eric D. Koster and Judith C. Zerden received a favorable and notable decision from the Appellate Division of the Supreme Court, Second Department, on behalf of the firm's client, Bank of America, N.A. In an action to quiet title to a valuable parcel of commercial real property in the City of Rye, New York, the Second Department unanimously affirmed the Supreme Court, Westchester County, in our favor on both procedural and substantive grounds that, as between co-tenants, the mere recording of a deed, without any change in possession or actual notice to the allegedly ousted co-tenant, does not constitute an ouster sufficient to commence the running of the statute of limitations. Largely a matter of first impression in New York insofar as no appellate court has previously ruled on these specific issues, the decision is notable as it conclusively establishes the rights of co-tenants, and serves as the seminal decision in this area.
William Jeffcock v. MCP SO Strategic 56, L.P.
Summary judgment granted dismissing the purchaser's complaint against the sponsor of a newly constructed condominium development which sought a rescission of the contract of sale and return of the contract deposit on the ground that the contract violated the Rule Against Perpetuities.
Matter of Jamaica Acquisition Inc. v. Shea
Decided: September 25, 2009
Justice Ira B. Warshawsky
Minority Shareholders Prevail in Valuation Litigation
KECL Partner Fred Weinstein acted as lead trial counsel for seven shareholders of 3 Bus Companies who exercised their rights under the Business Corporation Law to dissent against a proposed merger of those Companies into a REIT (Real Estate Investment Trust). After the shareholders' exercise of their rights to dissent, the Companies offered them $7.00 for each share that would have been issued to them in the REIT. When the offer was rejected by the shareholders as not representing the fair value of their interests, litigation ensued to determine fair value. After 12 days of trial, on September 29, Justice Ira Warshawsky (Supreme Court, Nassau County) concluded that the value of the dissenting shareholders' interests was equal to $11.69 per share in the REIT or 67% more than what was offered to them. In his decision, Judge Warshawsky repeatedly cited testimony elicited by Fred in his cross examination of the experts who testified for the Companies. The Court described one of the experts as "inconsistent at best" and characterized a portion of his testimony as "absolutely amazing". The Court further found that the "...the ongoing changing fair value calculations proffered by the [Companies], even during trial, was vexatious to the Respondents" and awarded the shareholders prejudgment interest as well as 50% of their legal fees and costs. The Decision was published as a decision of interest in the New York Law Journal on October 15 and can be accessed here. Fred was assisted at trial by corporate partner Stephen Levy.
Madoff Investor Loses Bid For Return of Deposit
A man who claimed he "lost nearly all" his personal assets in Bernard L. Madoff's massive Ponzi scheme and therefore could not close on a $1.8 million Old Westbury home cannot recover his deposit, a state judge has ruled. In denying David Blumenfeld's claim of impossibility of performance, Supreme Court Justice Vito M. DeStefano of Nassau County (See Profile) held that while Mr. Blumenfeld "may have been the victim of an unfortunate fraud" it did not relieve him of his obligations under the sales contract. Last November, Mr. Blumenfeld paid a $180,000 deposit to Michael and Laureen Sassower for their home, with the remainder due at closing one month later. A day before the original closing date, Mr. Blumenfeld claimed "without advance warning of any kind" he learned he had lost his investments due to Mr. Madoff's fraud. In allowing the Sassowers to keep the $180,000 deposit, Justice DeStefano noted that Mr. Blumenfeld "utterly failed to provide any details as to the amounts lost, the nature of his lost investments, or the actual state of his current finances and assets." Sassower v. Blumenfeld, 004731-09, appears on page 40 of the proint edition of today's Law Journal. - Vesselin Mitev
Successful Objection to Trust Reformation Proceedings
Our Trusts and Estate' s litigation group recently was successful in defeating the attempt by one of the major corporate Trustees in the United States to sell interests in Manhattan commercial real estate owned by a Trust for a fraction of the appraised value of at least $70,000,000. Our firm represented a few of the more than 100 vested beneficiaries of the Trust.
On behalf of our clients, we opposed the corporate Trustee' s proceeding to have the Westchester County Surrogate' s Court authorize the sale, based upon: (a) the express language of the 1926 testamentary Trust and (b) what our clients considered to be the well-below fair market value contract price the corporate Trustee was willing to accept.
The corporate Trustee was represented by a large Manhattan firm and its legal fees were funded by the proposed purchaser, who was also the owner of the remaining non-Trust interests in the real property.
The Court appointed two separate Guardians ad Litem: one for a beneficiary under a mental disability, and one for the numerous infant vested and contingent remaindermen, both of whom filed Reports with the Court in support of the corporate Trustee' s application to sell the real property.
In a well reasoned 10 page decision, the Surrogate agreed with our arguments and denied the corporate Trustee' s application. The property is presently encumbered by an under market 99 year lease that expires in 2019. Moreover, the Trust itself will terminate upon the death of a Trust beneficiary who is more than 90 years old. On his death, the Trust properties (including another commercial mid-Manhattan building the corporate Trustee sought permission from the Court to market, which our clients opposed and in which the Court concurred with our clients) will pass to a corporate entity of which the present Trust beneficiaries will be the sole shareholders. The corporate Trustee will have no further interest in the Trust and the beneficiaries/shareholders will be able to decide amongst themselves, without the interference of the corporate Trustee, what to do with the properties and at what price they can be sold.
Trust & Estate' s Litigation Partner, Michael H. Friedman, along with Trust & Estate' s Partner, Susan Slater-Jansen spearheaded this matter, along with the assistance of litigation counsel Judith Zerden.