Matters

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.

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.

Title Insurer – ARIAS UK Arbitration

Successfully represented a leading title insurance company in a London breach of contract arbitration initiated by the Cypress-based buyer of a $32 million Ukrainian property.  Herrick negotiated a settlement resolving the dispute for a small fraction of the original claim.

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.

New York City Water Board Bill Credit Lawsuit

Herrick litigators successfully represented the Rent Stabilization Association and building owners Prometheus Realty, Portofino Realty and Tuscan Realty in a complete New York State Supreme Court victory against the New York City Water Board, and the New York City Department of Environmental Protection for illegally sidestepping the State's Public Authorities Law.

On June 6, 2016, Herrick won a temporary restraining order, stopping the Water Board from raising rates by 2.1% and granting a $183 bill credit for 1-3 family homeowners, which excluded larger multi-family dwellings. On June 20, Justice Carol R. Edmead of State Supreme Court in Manhattan ruled that the actions of the water board were “an abuse of discretion” and exceeded the board’s authority. Herrick government relations co-chair Kevin Fullington, litigation partner Michael Berengarten and associate Jared D. Newman represented the plaintiffs.

Resources

Seller of Large Commercial NJ Property – Motion to Dismiss Granted in Litigation Challenging Local Zoning Board Approval

On behalf of an owner of a multi-million-dollar commercial property in Union County, New Jersey, Herrick obtained summary dismissal of an action in lieu of prerogative writs filed by two plaintiffs who each claimed an interest in a neighboring property and sought to obstruct the sale and redevelopment of our client's property. On our motion to dismiss, the New Jersey Superior Court held that the plaintiffs lacked standing to challenge the redevelopment approvals granted by the municipal planning board and dismissed the complaint against our client with prejudice. Herrick continues to represent the client in connection with plaintiffs' appeal.

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.

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 plaintiffs' 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’ appeals of both decisions.

Fashion Designer – Flagship Manhattan Store Leasing Dispute

Working with co-counsel, Herrick obtained a number of favorable rulings involving millions of dollars on behalf of a leading fashion designer as plaintiff in litigation with the landlord of its flagship Manhattan retail location. Prior to reaching a settlement, victories on behalf of the client included a ruling enjoining the landlord from terminating our client’s lease, an order that our client continue paying the current rent under the lease rather than the much higher amount requested by the landlord, and a decision rejecting the landlord's motion for our client to post an $83 million bond “for lost opportunity damages” related to plans to demolish and redevelop the site, and instead requiring a bond of only $750,000. The dispute was resolved in a settlement, pursuant to which the client obtained a new, long-term lease.

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.

Real Estate Company – Significant Settlement in Legal Malpractice Dispute

Herrick negotiated a substantial settlement on behalf of a real estate holding company in a malpractice dispute with its former counsel over zoning analysis provided in connection with our client's acquisition of a valuable development property in Lower Manhattan.

Real Estate Investment and Development Firm – Dispute with JV Partner in Luxury Midtown Manhattan Apartment Tower

Representation of a real estate investment and development firm as plaintiff in litigation arising from allegations that a joint venture partner, and various entities under the partners' control, engaged in acts of self-dealing, fraud, waste and mismanagement of the jointly owned LLC created by the parties to construct, own and develop a Midtown Manhattan high rise luxury apartment building.

Durst Fetner Residential Business Divorce

Represented Fetner in business divorce negotiations, and the buyout of the Durst family’s interests in the luxury rental building Epic, on West 31 st Street in Manhattan. The transaction was part of a $740 million business divorce between the Fetner and Durst families, the details of which were reported in the April 11, 2016 Wall Street Journal article “How Two New York Real-Estate Families Parted With Grace.”

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.

Property Owners – Real Estate Brokerage Dispute

Represented property owners in litigation and negotiated settlement arising from a real estate broker's alleged breach of fiduciary duty while acting on our clients' behalf to broker four properties located in New York City's East Village and Lower East Side.

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 Owners – Dismissal of Action Seeking Specific Performance

Herrick successfully argued for the dismissal of claims for breach of contract and specific performance filed by plaintiffs following our client's termination of a contract for the sale of real property located in Brooklyn, New York. Agreeing that the plaintiffs had failed to satisfy a critical mortgage contingency requirement under the contract, the court dismissed the complaint in its entirety. Plaintiffs' appeal of the decision to the appellate division was also successfully rebuffed.

Community Preservation Corporation – Real Estate Litigation

Outside counsel to CPC, a leading provider of capital for affordable housing in New York state, in numerous foreclosure actions, many involving stalled condominium development projects that are resolved through litigation or loan workouts.

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.

Real Estate Investment Firm – Motion to Quash Granted

Herrick successfully quashed a subpoena served on a prominent real estate investment firm by certain defendants in a Southern District of New York bankruptcy proceeding on a fishing expedition seeking information for use in a separate, pending lawsuit unrelated to the bankruptcy. Complying with an extremely tight briefing schedule, Herrick successfully argued the motion to quash - quickly thwarting the defendants' gamesmanship.

Real Estate Brokerage – Commission Dispute

Represented a real estate brokerage firm to successfully resolve an objection to the collection of a large commission earned on the multimillion dollar sale of a Miami property on behalf of a bankrupt entity.

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 "baseball" arbitration that resolved a 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 locked in 2012 as the other side had argued. 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.

Real Estate Brokerage and Investment Firm – Family Business Divorce

Representing a commercial real estate brokerage and investment firm and its principals in a business divorce dispute arising from the removal of a partner and the termination for cause of a former employee. This litigation, in which the opposing parties seek a judicial dissolution of the business, includes claims for breach of fiduciary duty, defamation, breach of contract, tortious interference and unjust enrichment.

Title Insurance Companies – Successful Resolution to Mortgage Fraud Litigation

Herrick achieved significant victories on behalf of title insurance companies in litigation with two former employees and a title issuing agent formerly authorized to issue policies on our clients' behalf, in connection with an alleged mortgage fraud scheme involving "mortgage stacking," or the practice of fraudulently obtaining multiple mortgages on a property by concealing outstanding liens. After negotiating a very favorable settlement with the corporate defendants, the firm obtained a decision referring an inquest on damages against the individual defendants to a Special Referee whose report, which recommended substantial damages, was ultimately confirmed by the court.

Upper Eastside Co-op Owner – Construction Litigation Dispute with Former Contractor and Architect

Representing plaintiffs in a construction litigation dispute with their former contractor and architect involving claims for breach of contract, fraud and professional malpractice in connection with the multimillion dollar renovation of an Upper Eastside apartment.

Real Estate Investment Company – Appellate Counsel in Litigation over Failed $600 Million Acquisition

Herrick scored an important appellate victory for one of New York City's biggest property owners, re-opening the door for our client to seek substantial damages from its former partner in a high profile, but ultimately failed deal to purchase a nearly 50 percent interest in a two million square foot office and retail building in Midtown Manhattan. Replacing prior counsel, Herrick argued the client's appeal of the trial court's dismissal of its claims against parties alleged to have illegally deprived it of the benefits of the deal it had forged. In its ruling, the Appellate Division, First Department threw out the trial court's limit on damages our client can claim on its breach of the confidentiality agreement cause of action against the former partner, noting in the opinion that our client "plausibly alleges" the defendant's breach of the agreement caused our client to lose the deal.

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.

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.

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.

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 a 2014 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.

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.

 

Hospitality Group – Building Violations

Advise client on matters concerning building violations before the NYC Environmental Control Board and the NTC Criminal Court.

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.

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.

Developer – Dispute with the City of Long Beach, New York

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 condominium project. Herrick helped secure an appellate win permitting our client to seek monetary damages against the city in this litigation which also seeks a judgment declaring that our client is entitled to a building permit that would allow completion of the ocean front development as originally approved.

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.

Limited Liability Company – Malpractice Claims

Representing a limited liability company in litigation with former counsel in a dispute involving allegations of malpractice in the preparation of a written operating agreement and the refinancing of a property located in Brooklyn. Action seeks to recover damages of over $11 million, plus interest and attorneys' fees.

Real Estate Investment Company – Litigation Arising from Failed Real Estate Joint Venture

Representing a real estate investment company in litigation arising from a failed joint venture to acquire, own and operate a 50 percent tenant-in-common interest in fourteen valuable midtown Manhattan commercial properties. Dispute includes claims that our client's former partner breached a contribution agreement between the parties by selling the rights and interest in the acquisition to a third-party for its own benefit, misappropriating funds intended for joint venture purposes, and misappropriating a $46 million payment that it was not entitled to under the terms of the agreement.

Insurance Coverage Dispute — Commercial Liability Insurance

Representation of an insurer in a coverage dispute over whether the insurer had a duty to indemnify its insured in connection with an underlying tenant class action litigation alleging unlawful overpayment of charges and assessments.

Insurance Coverage Dispute — Commercial Property Insurance

Representation of an insurer in a dispute with a building owner over whether coverage existed under its commercial property insurance policy for over $1 million in claimed property damage caused by an underground water supply line rupture.

Private School – Dispute with General Contractor

Representing a private school on Manhattan's Upper Eastside in litigation with former general contractor and subcontractors in a dispute claiming $15 million in damages related to a fire occurring during a significant renovation project due to the alleged negligence of the defendants.

Global Manufacturer of Building Products – Product Liability Litigation

Represented a global manufacturer of building products in litigation filed by an insurer, as subrogee of the purchaser of two roof systems. Plaintiff asserted claims for negligence, strict products liability and breach of express warranty relating to the alleged failure of those systems in a high wind event. Action was settled and dismissed on terms very favorable to our client.