Chelsea Building Owner – Successful Enforcement of Surrender Agreement
Achieved a $1 million victory on behalf of a Chelsea building in an action to enforce the strict terms of a surrender agreement for prime retail space in Manhattan’s Chelsea neighborhood. On summary judgment, the Supreme Court, New York County, determined that a commercial tenant breached its contractual obligation to vacate our client’s prime, street level space, ordered the return of an unearned termination fee (including an $800,000 deposit in escrow and $200,000 cash advance), and awarded interest and attorneys’ fees.
Non-Profit Organization – Litigation against Former Board Members
Achieved an important victory on behalf of a non-profit pro-bono client asserting claims against several former board members who had used their positions of trust to loot the organization for their own personal gain by misappropriating funds from the client’s operating accounts, gaining control of the organization's Harlem apartment buildings, misappropriating rental income from those properties, and ultimately selling one of the buildings for their own benefit. Herrick successfully argued a motion for a preliminary injunction, obtaining an order from the court enjoining the defendants from holding themselves out as officers of the non-profit, and requiring them to return the organization’s apartment buildings to our client’s control.
Defending Challenge Construction of High-Rise Residential Tower
Represent owner/developer in the zoning for their development of Manhattan high rise residential condominium building, including opposing an effort to halt construction and a challenge to the project’s approval brought by local community groups.
REIT – Real Estate Litigation
Represented an affiliate of a leading REIT in winning summary judgment: (a) in an adverse possession action brought by the owners of adjacent property; and (b) in a separate real estate breach-of-contract suit arising out of an agreement sell property in Manhattan.
Defeated Zoning Challenge to Construction of Residential Tower
Successfully represented owner/developer of 32-story residential tower on Upper East Side in defeating zoning challenge and lawsuit brought by community groups and elected officials.
Successful Prosecution of Breach of Operating Agreement in Real Estate Partnership
Represent international real estate investment firm in dispute with partner/co-owner of commercial building on Upper West Side over a contractually-negotiated share of leasing proceeds. On summary judgment, Court awarded all monetary relief demanded and declaratory relief in client’s favor.
Zoning Resolution Dispute With Developer
Represent ground lessor in action to enforce and declare consent rights as “party-in-interest” under New York City Zoning Resolution in dispute with developer planning to construct residential tower in the “Two Bridges” neighborhood of Manhattan.
Developer – Successful Defense in Breach of Contract and Fraud Dispute
Herrick successfully defended Muss Development in the Appellate Division, First Department appeal of Princes Point LLC, et al. v. Muss Development LLC et al., a case involving the plaintiff's breach of a $36 million contract to purchase Princes Point, a 23-acre waterfront parcel of land on the south shore of Staten Island, from Muss. The First Department unanimously confirmed Herrick's earlier Supreme Court, New York County victory for Muss, which entitles the real estate developer to retain the plaintiffs' approximately $4 million deposit plus other fees totaling nearly $1 million. In doing so, the court delved into an area where there was a dearth of case law in New York – namely, whether a prospective real estate purchaser anticipatorily breaches a sale contract by commencing an action against the seller for rescission before the closing date, and whether, in that event, the seller is required to show that it was ready, willing, and able to complete the sale. The court held that the plaintiff had anticipatorily breached the contract and that Muss is entitled to keep the deposit and other significant fees without having to show that it was ready, willing and able to close. Once there was a breach, there was no need to spend time and money preparing for a closing that was not going to happen.
Brooklyn Bridge Park Developers – Dismissal of Lawsuits Seeking to Halt Construction
Successfully defended the developers of a $320 million Brooklyn Bridge Park hotel and condominium project, defeating two lawsuits filed by activists seeking to halt construction of the project. In a decision of significance to the New York real estate industry, Herrick secured an order in New York state court denying plaintiffs’ motions for both an injunction and a declaratory judgment that the planned buildings exceeded height limitations specified in the project’s governing documents. The court found that the development complied with the law and further ruled the legal challenge barred by the statute of limitations for bringing an Article 78 proceeding. Herrick then defeated a second lawsuit claiming to assert a different land use violation, securing dismissal of the complaint on the grounds of failure to exhaust administrative remedies, statute of limitations and res judicata. Herrick continues to represent the clients on the plaintiffs’ appeal.
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.
Developer – Dispute over Down Payment Favorably Resolved
Represented a real estate developer in litigation with the seller of a Midtown Manhattan property over the return of the client’s multimillion dollar down payment on the property after the seller materially breached a contract of sale between the parties by failing to cure violations at the property as required, refusing to allow our client access to the property in violation of the agreement, and improperly noticing a “time of the essence” closing. The dispute was resolved favorably under a settlement that recovered significant damages for the client.
International Residential Developer – Regulatory Investigations
Advising one of the world’s largest residential developers with respect to regulatory investigations relating to the removal of deed restrictions on a Manhattan property.
Special Servicer for $124 Million Mortgage Loan – Foreclosure and Ancillary Litigation
Representing the special servicer for a $124 million mortgage loan encumbering the Mall at the Source, a shopping center located in Westbury, New York. Herrick prosecuted a foreclosure action on the property to conclusion, obtaining a $145 million judgment against the property owner, and represented the client as the successful bidder at the foreclosure sale. The firm is also handling certain ancillary litigation relating to a purchase option held by our client on adjoining property, and obtained an appellate court decision that thwarted an attempt by the holder of a mortgage on the adjoining property from extinguishing the purchase option through foreclosure proceedings.
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.”
East Village Hotel Developer – Access Dispute with Adjacent Property Owner Favorably Resolved
Represented the developer of a 280-room hotel in Manhattan’s East Village as plaintiff in litigation with the owner of an adjacent property who had initially refused to grant critical access required to construct safety equipment and demolish a masonry structure that projected onto our client’s property. Threatened with carrying costs of over $500,000 for every month that the project was delayed as well as the prospect that the delay would interfere with the successful negotiations and cooperation achieved with the remaining adjacent landowners, our client sought a court order granting a license to access the defendant’s property. This dispute was resolved quickly under an amicable settlement which granted our client access to the adjacent property allowing construction to proceed.
Real Estate Finance Company – Entry and Collection of $12 Million Judgment
Herrick obtained the entry of a judgment totaling approximately $12 million against a real estate developer, two of his sons, and their affiliated entities. Following the entry of judgment, the judgment debtors refused to comply with multiple court orders holding the defendants in contempt and compelling them to respond to a variety of subpoenas. Herrick conducted depositions and other discovery regarding the judgment debtors' ability to pay and, upon doing so, filed an application for an installment payment order under C.P.L.R. § 5226. Following a four-day hearing before a court-appointed referee, the referee found one of the judgment debtors had an imputed annual income of $370,000 and that two of the other judgment debtors each had imputed annual incomes of $830,000. On that basis, the referee recommended, and the Supreme Court confirmed, that the judgment debtors are required to pay $406,000.00 per annum to Herrick's client, in equal installments of $33,833 per month, until the amounts due on the judgment have been paid and satisfied in full.
Debtor in Complex Commercial Real Estate Bankruptcy
Represented the debtor in a complex bankruptcy involving a closely held corporation whose main asset, a valuable Manhattan commercial property, had been placed under receivership prior to the chapter 11 filing. Our court confirmed reorganization plan resolved all disputes with shareholders and included a new $16.5 million mortgage loan used to satisfy all creditors.
Developers – Summary Judgment Dismissing Breach of Joint Venture Claims
Obtained summary judgment on behalf of real estate developers dismissing all claims filed by a plaintiff alleging our clients had breached an oral joint venture that entitled the plaintiff to share in the profits of a sale of a Brooklyn property. The Kings County Supreme Court also denied plaintiff’s cross motion for leave to amend and to compel disclosure.
Fashion Designer – Flagship Manhattan Store Leasing Dispute
Represented, as co-counsel, one of the world’s largest luxury fashion designers, as plaintiff, in litigation with the landlord of its flagship Manhattan retail location. Victories on behalf of the client included a ruling enjoining the landlord from terminating our client’s lease, an order for our client to continue paying the current rent under the lease rather than a much higher amount requested by the landlord, and a decision rejecting the landlord's motion for our client to post an $83 million bond related to plans to demolish and redevelop the site. The dispute was resolved in a settlement, pursuant to which the client obtained a new, long-term lease.
Real Estate Owner – $3 Million Commercial Leasing Dispute
Represented an affiliate of one of the nation’s largest owners, developers and managers of class A office space in a Manhattan office leasing dispute with a high profile hedge fund tenant and two unauthorized sub-tenants over unpaid rent and associated charges totaling nearly $3 million. Shortly after commencing litigation, the firm negotiated a settlement which allowed the client to quickly recover possession of the space.
Special Servicer – Litigation to Collect over $100 Million in Loans Secured by Campground Sites
Represented a commercial mortgage special servicer in its efforts to collect amounts due under two loans for $75 million and $38 million, secured by campground sites located throughout the country. Our representation of the client involved seven foreclosure actions, filed in both New Jersey and New York state courts, through which we have taken title to all seven properties. In the course of prosecuting these actions, we obtained an important decision from the Appellate Division, enforcing our client's standard pre-negotiation agreement – an agreement routinely obtained by lenders to avoid potential lender liability claims.
Appellate Division Reverses Civil Penalty against Landlord over ADA Accommodations
Herrick achieved a significant appellate victory on behalf of a national real estate development and management firm, securing a ruling from the Appellate Division, Second Department that reversed a New York City Commission on Human Rights order requiring the client to pay a $185,000 fine for denying a tenant's request to construct a handicapped-accessible entrance to her Queens apartment. In its ruling, the court wrote that the record lacked "substantial evidence" to contradict our client’s claim that installing an accessible entrance was not structurally feasible. The decision was the culmination of a nearly 6-year-long dispute in which we initially prevailed on the client’s behalf before an administrative law judge who held that the proposed accommodation sought by the tenant was not reasonable. The Commission, however, summarily rejected the ruling, and awarded $200,000 in damages and penalties. A Queens Supreme Court affirmed the agency’s decision but reduced the award of damages. On appeal, and after oral argument, the Second Department reversed the trial court’s decision, holding that the Commission’s determination of unlawful discrimination and award of damages should have been annulled in its entirety.
Special Master and Mediator – High Profile Real Estate Business Divorce
Acting as the court appointed mediator and special master for discovery in a high-profile business divorce involving 2 Herald Square, a large prominent “mixed use” building that is directly across the street from Macy’s Herald Square flagship store, and additional properties located in other states. The litigants include certain family members and other investors in a well known New York City based real estate company.
Condominium Developer – Dispute with Borough of Jamesburg Favorably Resolved
Successfully represented the developer of 42 newly completed residential condominium units located in Monroe Township, NJ in challenging the Borough of Jamesburg’s refusal to accept attempts to register the units as rentals, an issue critical for the closing of a pending sale of the property to a third-party buyer. This dispute was resolved amicably soon after filing suit in the Superior Court of New Jersey under an agreement that will allow the client to receive rental unit licenses after resubmitting applications to the Borough along with all applicable registration fees.
Real Estate Owners – “Baseball Arbitration” and Litigation over Valuation and Buy-out of NYC Shopping Center
Herrick delivered a major victory to real estate owners in a buy out dispute between partners over the valuation of a New York City shopping center that they co-owned. Prior to Herrick's involvement, the opposing party had won the right to buyout our clients' interest in the retail center, with the purchase price to be set based on a neutral appraiser's determination as to which party's appraisal was more accurate. The firm achieved two decisive victories on behalf of our clients in New York Supreme Court, obtaining an order that the appraisal process move forward immediately and then that the "date of valuation" was to be current rather than a 2012 date that the parties had previously discussed. Thereafter, two months of extensive appraisal proceedings ensued, and our valuation was ultimately chosen over the opposing party's assessment, which was many millions of dollars lower. The valuation date decision was affirmed, with costs, by the Appellate Division, Second Department.
Developer – Zoning Dispute with the City of Long Beach
Representing a real estate owner/developer in a high-profile dispute with the City of Long Beach, New York over zoning ordinances relating to a planned four tower residential project. In what has become one of the longest-running land use litigations in the country, Herrick helped to secure significant appellate wins, including an order permitting our client to seek damages in excess of $50 million, including interest and legal fees, against the City, and a judgment declaring it entitled to a building permit that would allow completion of the ocean front development as originally approved. In more recent rulings, the Appellate Division, Second Department held that the City had defaulted in serving an amended answer to our suit and failed to proffer a legally sufficient excuse for its default. The court further held that the individual City defendants named in our complaint should not have been dismissed from the litigation by the trial court and can therefore be held liable for damages.
All Claims Voluntarily Dismissed Following Award of Sanctions in Real Estate Dispute
Successful defense of an LLC in litigation over the breach of an alleged joint venture agreement which plaintiffs claimed entitled them to an ownership interest in a valuable Manhattan property. Herrick obtained an order canceling plaintiffs’ notice of pendency on the property, and successfully argued for sanctions based on frivolous litigation conduct. In addition to negotiating a substantial monetary settlement for attorneys’ fees and for costs associated with delays in refinancing a $32 million mortgage on the property, Herrick secured the voluntary dismissal of our client from the action and the plaintiffs’ unconditional and irrevocable release of any and all claims to ownership of the property.
Outlet Mall Developer – Regulatory Investigation
Representing the developer of a New York City outlet mall in an investigation into whether the Empire State Development Corporation’s financial support for economic development projects has been influenced by developer political contributions.
Real Estate Developer – NYS Attorney General Investigation Resolved Favorably
Achieved a highly favorable settlement involving no admission of wrongdoing on behalf of a real estate developer and two of its principals in an investigation by the New York State Attorney General into alleged improper lead removal procedures and harassment of tenants.
Mezzanine Lenders – Stuyvesant Town-Peter Cooper Village Litigation
Herrick and co-counsel successfully represented junior lenders in litigation related to the foreclosure of Stuyvesant Town-Peter Cooper Village, Manhattan's largest housing complex, which our clients alleged was based on a flawed premise, designed to provide an unjust windfall of approximately $1 billion to the defendants at the expense of junior lenders. This litigation, fought primarily in New York state court, was ultimately settled in an agreement that resolved all claims between the parties and helped clear the way for a future sale of the complex.
All Claims Dismissed in Litigation Challenging $9 Million Sale of Brooklyn Apartment Building
Secured a ruling dismissing all claims against the insured buyers of a Brooklyn apartment building in litigation seeking to strip them of their interests in the property. The plaintiff launched a multi-pronged attack on the $9 million sale of the building, claiming the transaction had violated his right of first refusal, that the individual who had signed the deed transferring title to the property lacked capacity, and that the deed itself was a forgery. In its ruling, a New York state court granted our motion to dismiss in its entirety and cancelled the notice of pendency.
Real Estate Investor – Successful Prosecution of Breach of Contract of Sale Agreement
Achieved a significant victory on behalf of a major New York City real estate investor in a breach of contract dispute with the would-be-buyer of five of our client's multiple-dwelling residential properties, who breached a contract of sale between the parties by failing to fully pay the agreed upon down payment as required in the agreement. The court granted our motion for partial summary judgment, striking the defendant's affirmative defenses, denying the defendant's cross motion for leave to amend its answer to interpose counterclaims, and ordering the defendant to pay $850,000 in damages, plus interest, to our client.
Bridge Lender – Real Estate Debtor Bankruptcy
Represented the bridge lender in a single asset real estate debtor case in which Herrick successfully won default rate interest of 24% during the pendency of the debtor's chapter 11 case, where the non-default interest was 12% and the only default asserted was the filing of the debtor's bankruptcy case. Herrick also successfully defeated the debtor's reorganization plan that contemplated a cramdown of the client's mortgage debt, ultimately leading to a consensual chapter 11 plan in which the luxury high-rise condominium in Williamsburg securing the mortgage was transferred to our client.
Dispute with Former Property Manager – Allegations of Fraud and Self-Dealing
Represented the property owner of four valuable Manhattan buildings in an action filed in New York state court against our client's former property manager with damage claims in excess of $5 million. The dispute, which involved allegations of fraudulent and bad-faith conduct that included self-dealing, comingling of funds, and the misrepresentation of material information, was resolved favorably for the client following Herrick's successful opposition to motions to dismiss, strike allegations in the complaint, and for summary judgment.
Lender and Special Servicer – $126 Million Mortgage on Miami’s Shore Club Hotel
Represented the lender and mortgage servicer in litigation against a hotel developer filed in Nassau County Supreme Court and in the Appellate Division, Second Department. The underlying dispute involved an action filed by our clients in Florida seeking to foreclose the $126 million mortgage on the Shore Club Hotel in Miami, and the hotel developer's ultimately unsuccessful attempts to derail that action. Having slipped a purchase option into a hotel tenant's lease, which purported to convey to the tenant a right to purchase the mortgage loan at fair market value, the developer then "purchased" the option from the tenant and sought to enforce that option in the Florida foreclosure action. On the eve of an expected adverse ruling in Florida, the developer brought its claim to Nassau County, where the trial court granted a preliminary injunction, effectively preventing our clients from foreclosing the mortgage. We filed an appeal and obtained a reversal, resulting in the dismissal of the Nassau County action. Leave to appeal was denied by New York's Court of Appeals.
Real Estate Management Company – Precedent Setting Decision in Wage & Hour Action
Successful defense of a real estate management company and its principal sued by a former residential janitor and two alleged former laborers at New York City properties managed by our client. The plaintiffs claimed minimum wage and overtime violations under the Fair Labor Standards Act and New York Labor Law, as well as related common law claims. The court granted, in substantial part, our motion to dismiss, striking 9 of the plaintiffs’ 12 claims in one of the first decisions to interpret the minimum wage and overtime provisions under New York law and the Minimum Wage Order for the Building Service Industry as they relate to residential janitors.
Lender – Times Square Hotel Enforcement Action
Represented the lender of a $65 million loan to fund the acquisition of a Times Square area hotel following the alleged breach of a provision in the loan agreement requiring that a restaurant tenant servicing the hotel be opened to the public by a specific date. This litigation was ultimately settled favorably after hard fought litigation.
Property Buyers – Appellate Victory in Specific Performance Dispute
Herrick secured an appellate victory in the Superior Court of New Jersey, Appellate Division on behalf of the buyers of a multi-million dollar custom-built home whose specific performance claim against a contractor who had deviated from the contracted plans had been dismissed by the trial court. The appellate court reversed, directing the trial court to order specific performance with an escrow to be established at closing to cover any damages. Herrick continues to represent the clients in litigating their damage claims.
Commercial Real Estate Dispute – Right of First Refusal
Successful representation of the tenant of a Lakewood, NJ commercial property in litigation seeking injunctive relief and specific performance arising out of landlord's wrongful attempt to sell the property to a third party in a breach of the "right of first refusal" clause in the lease agreement between the parties. Herrick was able to secure an injunction blocking the sale, which cleared the way for our client to purchase the property, which it has done.
Special Servicer – Motion for Summary Judgment Granted, Lender Liability and Breach of Good Faith Claims Dismissed
Successful defense of the special servicer of an $18 million loan secured by a Parsippany, New Jersey hotel property against the debtor's claims of fraud, lender liability and breach of good faith. In December 2014, the court granted our motion for summary judgment, dismissing all claims against our client.
Veteran NYC Developer – Partnership Dispute
Successfully represented veteran New York City developer as plaintiff in litigation filed in New York state court arising out of a dispute with former business partners over interests in a certain major New York City real estate development project. Herrick was able to resolve the dispute quickly, negotiating a settlement agreement on favorable terms for our client, which avoided protracted litigation.
Retail Property Owner – Asbestos Remediation Litigation
Represented the owner of a Massachusetts retail property in a declaratory judgment action filed by the property's former owner following our client's demand that that the former owner pay the cost of remediating asbestos at the property. As an alternative to lengthy litigation, Herrick was able to engage the plaintiff in mediation which resulted in a very favorable settlement for our client.
Real Estate Investment Firm – Acquisition and Foreclosure of $60 Million Mortgage Loan
Advised a New Jersey-based investment firm with over 3.3 million square feet of real estate assets under ownership on the acquisition and foreclosure of a $60 million mortgage loan encumbering an office building located in White Plains, NY. The loan, already in default, was acquired out of a securitized trust. We proceeded to prosecute a pending foreclosure action to judgment, and then represented the client as the successful bidder at the foreclosure sale. Herrick continues to represent the client in connection with various disputes at the property.
Verizon Wireless – Appellate Victory in Cell Phone Tower Zoning Dispute
Represented Verizon Wireless in the company's successful appeal of a New Jersey township's denial of a variance allowing for the construction of a 140-foot cell tower. The victory followed a more than seven year effort to obtain approval for the project which aimed to provide service in a "dead zone" affecting the Princeton, NJ area. In a unanimous decision, the New Jersey Superior Court, Appellate Division reversed a lower court's ruling, agreed with our argument that the township's zoning board had acted improperly and ordered the board to reconsider the application.
Majority Shareholder – Successful Litigation for Control of Midtown Manhattan Property
Successful representation of a majority shareholder in a dispute with a minority stakeholder over control of a corporation whose sole asset was a valuable Manhattan property. Through litigation filed in New York state court, Herrick was able to secure the client control over a building located on prime midtown Manhattan real estate.
Building Materials Manufacturer – Product Liability Disputes
Representing major manufacturer of commercial and residential roofing in multiple warranty claims.
National Department Store Chain – Breach of Contract Dispute with Real Estate Brokerage Company
Defense of a national retail chain in litigation filed by a real estate brokerage company seeking damages related to an alleged breach of contract and other claims.
Condominium Sponsor – Construction Defect Dispute with Construction Manager and Contractors
Representing the sponsor of a Brooklyn, NY condominium development in litigation with the project's construction manager and contractors arising from claims by the condominium's board of managers that work in accordance with an offering plan under which the condominium's units were sold was not adequately performed.
New York State Association for Affordable Housing – Challenge to Local Law 44
Representing the New York State Association for Affordable Housing and individual developers in litigation seeking to invalidate Local Law 44 - which requires any developer receiving city funding to submit quarterly wage reports - as unconstitutional, pre-empted by New York state law, and imposing an unreasonable economic burden on small businesses competing for affordable housing work.