Matters

Rent Stabilization Association – NYC Water Board Bill Credit Lawsuit

Represented the Rent Stabilization Association and individual building owners in high profile litigation challenging a proposal by New York City Water Board, and the New York City Department of Environmental Protection to subject landlords of large residential properties to a water bill rate hike in order to fund a one-time credit for the owners of smaller, one-to-three-family homes.  In both the trial court, and before the Appellate Division, First Department, Herrick secured rulings blocking the levying of an estimated $76 million in rate hike charges which, we argued, would set a dangerous precedent of instituting arbitrary bill credits and rate hikes, made regardless of economic need and without any rational water-related purpose.   Notwithstanding that we convinced two separate courts and a majority of the total judges that heard the case (6 out of 11, including the Chief Judge of the State’s highest court) of the merits of our position, a divided New York Court of Appeals overturned the lower court decisions and declared that the appellants may implement the bill credits and rate increase.  Shortly after the decision was delivered, however, the appellants issued a public notice proposing to implement the bill credits, while repealing the planned rate increase. Accordingly, this case demonstrates that although it’s difficult to challenge the rationality of determinations by public agencies, even an ultimately unsuccessful legal challenge can cause public agencies to reexamine their conduct.

Resources

Developer of Brooklyn Property – Petition for Access License Granted

Successfully represented the developer of a multi-unit Bedford-Stuyvesant property in seeking an order in Kings County Supreme Court granting temporary access to an adjacent property in order to secure and repair a foundation wall and to lift a stop-work order issued by the Department of Buildings.   Following oral arguments, the court denied defendant’s motion to dismiss and granted a license allowing our client to continue the development of its own property.  

Appellate Win Reverses $9 Million Judgment against Buyers of Upper West Side Landmarked Property

Secured an important First Department win, reversing what was essentially a $9 million judgment against real estate developers in litigation against the seller of a landmarked property located on Manhattan’s Upper West Side.  At issue was whether or not a $10 million “approval payment” beyond the $32 million contract purchase price payment was contingent upon the seller actually obtaining certain building approvals rather than merely applying for them.  Herrick achieved a series of victories in the trial court, including pressuring the seller into withdrawing a default notice claiming our client had breached the terms of the contract, and securing the withdrawal of the seller’s initial counsel due to a conflict of interest, prior to the issuance of a potentially devastating decision that dismissed our client’s principal claims.  We appealed to the Appellate Division, First Department, which unanimously reversed the ruling, finding that “the motion to dismiss should have been denied,” and that a reading of the contractual language determining that the seller was merely required to seek approvals rather than actually obtain them, “would render meaningless or absurd contractual terms regarding reduction of payment in the face of a failure to obtain the approvals.”