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When Is Part Performance 'Part Performance in Real Estate Cases'?

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Adam Leitman Bailey Wins Heated Litigation After Aggressive Investigation Disproves Adversaries' Prescriptive Easement Claims

Adam Leitman Bailey P.C. Stops The Frick From Building Access Door That Would Crowd The Beautiful Block With Massive Long Lines and Development

Adam Leitman Bailey, P.C. Defeats Statute of Limitations Argument in Foreclosure Action and Quiet Title Action

Adam Leitman Bailey, P.C. Obtains Critical Information For Client In Rent Overcharge Dispute

Sponsor’s Attempt to Avoid Liability for Construction Defects and to Limit Valid Claims of the Condominium Unit Owners Soundly Rejected by the Appellate Division

Representing a Mitchell-Lama Cooperative, Adam Leitman Bailey, P.C. Secures Surrender of Multiple Apartments in Non-Primary Residence Cases 

Adam Leitman Bailey, P.C Utilizes “Zombie Foreclosure” Statute to Avoid Lengthy Foreclosure Process

De-Acceleration of Loan Found Valid to Defeat Statute of Limitation Defense Notwithstanding Word Processing Error In Stipulation of Discontinuance

Adam Leitman Bailey, P.C. Successfully Navigates HUD Approval Process In Achieving Interest Rate Reduction Of A Senior Citizen Not-for-profit Housing Corporation’s Underlying Commercial Mortgage

Adam Leitman Bailey, P.C. Defeats Landlord’s Partial Summary Judgment Motion Amidst Overlapping Claims in Parallel Holdover Proceeding

Adam Leitman Bailey, P.C. Defeats Application for Stay Pending Appeal, Defeats Renewal Motion, and is Awarded Judgment Of Foreclosure and Sale

Adam Leitman Bailey, P.C. Saves Client From Buying Unit that Would One Day Have Lost The Unit’s Windows

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Adam Leitman Bailey, P.C. Secures A Highly Favorable Settlement On Behalf Of New Home Buyers Against A Developer That Breached Its Own Option Contract 

Adam Leitman Bailey, P.C. Defeats Motion For Default And Contempt, As Well As Oath Summons, Despite Eleventh Hour Retention

Adam Leitman Bailey, P.C. Defeats Retroactive Application of Anti- SLAPP Action After Victory on Defamation and Malicious Prosecution Claims for Cooperative

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RPAPL §881—License To Permit Use of Adjacent Property During Construction Denied—Constant Unapproved Changes to Construction Plans Did Not Rise to The Level of Proof Required by RPAPL §881 and Permanent Change to Respondent’s Property Preclude the Granting of a §881 License—No Reimbursement of Expert and Attorney Fees When License Is Not Granted

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Articles

When Is Part Performance 'Part Performance in Real Estate Cases'?

Real Estate Litigation

Adam Leitman Bailey | John Desiderio

In my 27 years as a real estate litigator, until recently, I have never used the sword of part performance as much as I have been relying on it now. One of the reasons is the extreme desire of the real estate investor to get rich quickly at the expense of everyone else by using deliberate cunning, deceitful actions. Another common trait in these actions has been a problem with the language barrier of the other real estate party from another country. I also believe that some of the new real estate entrants are not as street smart or educated on the rules of the game as their predecessor real estate investors, allowing them to be taken advantage of. In addition, real estate players may not be working as hard as their parents to do their due diligence and paper deals. As far as their advisors, the number of qualified real estate attorneys and advisors may be lacking as very few real estate attorneys came into existence during the years between 2008 and 2012. Ergo, the rules of part performance must be understood and asserted in more cases.

However, it is a difficult doctrine to prove as we learned in a recent case last year, Toobian v. Golzad, 193 AD3d 778, 780, 147 NYS 3d 61 (2d Dept. 2021), that proper planning can turn a losing case into a winner:

The doctrine of part performance is not easily applied in practice. A party who relies on the part performance exception must demonstrate that his or her actions are “unequivocally referable” to the oral agreement which he or she seeks to establish. “Unequivocally referable” conduct is conduct which is inconsistent with any other explanation. It is insufficient that the oral agreement gives significance to plaintiff’s actions. Rather, the actions alone must be unintelligible or at least extraordinary, explainable only with reference to the oral agreement. Significantly, the doctrine of part performance is based on principles of equity, in particular, recognition of the fact that the purpose of the Statute of Frauds is to prevent fraud, not to enable a party to perpetrate a fraud by using the statute as a sword rather than a shield. Toobian v. Golzad, 193 AD3d 778, 780, 147 NYS 3d 61 (2d Dept. 2021). (Internal quotes and citations omitted) (Emphasis added).

Non-written agreements, made between individual persons, and oral promises that are ancillary to written agreements, including ancillary promises to written agreements made between commercial enterprises, no matter how large or small the enterprise, are enforceable, whenever facts are present that satisfy the doctrine of part performance. The doctrine of part performance is an exception to the proscriptions of the Statute of Frauds (General Obligations Law §§ 5-701, 5-703(4)), as recognized and applied under the equity powers of the courts.

As explained in Messner Vetere Berger McNamee Schmetterer Euro RSCG Inc, v. AEGIS Group PLC, 93 NY2d 229, 235 (1999),

the doctrine of part performance is based on principles of equity, and specifically, recognition of the fact that it would be a fraud to allow one party to a real estate transaction to escape performance after permitting the other party to perform in reliance on the agreement.

The equitable ground of the doctrine is codified in General Obligations Law §5-703(4):

Nothing contained in this section abridges the powers of courts of equity to compel the specific performance of agreements in cases of part performance.

The Court of Appeals, in Woolley v. Stewart, 222 NY 347. 350 (1918), cited in Messner, stated the essential basis of the doctrine as follows:

A party to [an oral agreement to convey an estate or interest in real property], other than a lease for a term not exceeding one year, is nugatory and unenforceable, [and] a party to the agreement may legally and rightfully refuse to recognize or perform it. The breach of a void agreement is not a fraud or a wrong in law. He may, however, withdraw himself from the policy and defense of the statute, or waive its protection, by inducing or permitting without remonstrance another party to the agreement to do acts, pursuant to and in reliance upon the agreement, to such an extent and so substantial in quality as to irremediably alter [the] situation and make the interposition of the statute against performance a fraud.

Examples of Part Performance

In ‘Walter v. Hoffman,’ 267 NY 365 (1935), a seller brought an action for specific performance against the buyer of the seller’s property based upon an oral agreement the parties had entered into for purchase and sale of the property. The seller sought to require the buyer to pay the unpaid balance of the purchase price and to accept the deed for the property. The court affirmed the judgment of specific performance upon facts showing that the defendant buyer had taken exclusive and sole possession of the property, had used the property as her home, and had made alterations and improvements to it. The court found that in this case there was part performance “by both parties” that was unequivocally referrable to the alleged oral contract.

In applying the equities, the court noted that “courts may properly take into consideration the acts or part performance by both parties.” 267 NY at 370. (Emphasis added). The court explained:

[T]he problem is whether part performance of the oral agreement creates irremediable injury to the suitor if complete performance is withheld. Unless there has been part performance by the suitor, there has ordinarily been no change of position by him, and therefore no injustice to him if the contract is not performed. To the extent therefore, the acts of part performance relied on must be acts of the suitor. None the less, resultant injustice or injury may be increased, or indeed, arise from subsequent acts performed by the other party. That is true, notably, where, as in this case, a seller has given possession or real property to the buyer and the buyer has then used the property. (Emphasis added) (Citations omitted).

The court held, on evidence that defendant’s “possession has been long continued in the intervening time the buyer has enjoyed the benefit of complete ownership, and the seller has been unable to dispose of the property[,] [r]eturn of possession under such circumstances might be an incomplete measure of justice…[since] as we have said, there has been an alteration of the property. True, the alteration may be an improvement. None the less, if the property is returned to the seller, she will receive something different from what she owned before and something that she may not want.” (Empasis added) Id., at 370-371.

In Pinkava v. Yuriw, 64 AD3d 696, 882 NYS2d 687 (2d Dept. 2009), the plaintiffs (husband and wife) alleged an oral agreement with the defendants (the wife’s sister and husband), to pay $150,000.00 over time to the defendants, in order to purchase the defendants’ interest in an apartment building that the plaintiffs and defendants owned together pursuant to a joint venture whereby the parties had purchased and managed the property for profit. The plaintiffs paid the defendants an initial amount of $51,000.00 towards the purchase price and agreed to pay the balance over time (and the evidence showed that plaintiffs were meeting their obligation and had assumed sole responsibility for management of the building).

Upon the death of the sister’s husband, the plaintiffs offered to pay the balance of the purchase price, tendered a check to do so, and ordered a title search on the property. The sister refused to accept the plaintiffs’ check, and the plaintiffs then learned that the defendant sister had conveyed her interest in the property to her son.

The plaintiffs sued to set aside the conveyance to the sister’s son, to impose a constructive trust upon the defendants’ interest in the property, and for specific performance. The court affirmed the denial of the defendants’ motion which sought to dismiss plaintiffs’ claims as barred by the Statute of Frauds, and the court also affirmed dismissal of defendants’ motion for summary judgment on defendant’s counterclaims.

The court found that “in response to the defendants’ prima facie showing that enforcement of the alleged oral agreement was barred by the statute of frauds, the plaintiffs raised triable issues of fact as to whether they had partially performed in a manner unequivocally referable to the its terms,” concluding that “there is evidence from which a trier of fact might conclude that the plaintiffs’ conduct was extraordinary and explainable only by a reference to the oral contract.” 64 AD3d, at 692-693.

The court also determined that, “accepting plaintiffs’ factual allegations as true, and according them the benefit of every favorable inference, as we must,” the plaintiffs’ allegations of payments to the [defendants] and their contribution of time managing the property was sufficient to establish the transfer in reliance and unjust enrichment elements of a cause of action for a constructive trust.” Id., at 693.

“Agreement To Agree”

As held, in Frankel v. Ford Leasing Development Company, 7 AD3d 757, 776 NYS2d 905 (2d Dept. 2004), a “[l]etter [that] expressly contemplated a more complete and formal contract and omitted many essential terms of a contract,” was only an agreement to agree “which is unenforceable under the statute of frauds.” And, the letter was unenforceable even though “the parties engaged in extensive negotiations and exchanged proposed purchase agreements.” The court noted that the extensive negotiations and exchange of proposed agreements “further demonstrated the absence of a complete agreement.”

Joint Ventures and Corporate Shares

Parties often enter into oral agreements with the intention of establishing a commercial enterprise in which the individual parties to the agreement will jointly share in the purchase and management of a real estate project through some corporate form of ownership.

The history of the case of Anostario v. Vicinanzo, 59 NY2d 662 (1983) presents another vivid example of the differing judicial judgments that may result when one or another of the parties to such an oral joint venture seeks to avoid the Statute of Frauds by invoking the doctrine of part performance.

As set forth in Anostario v. Vicinanzo, 56 AD2d 406, 302 NYS2d 933 (3d Dept. 1977), with subsequent Appellate Division rulings at 60 AD2d 674, 400 NYS2d 512; 79 AD2d 825, 435 NYS2d 367; and 87 AD2d 940, 451 NYS2d 238, plaintiff Anostario brought an action for specific performance alleging that he and defendant Vicinanzo had agreed to purchase certain realty through the vehicle of a corporation in which each was to become an equal shareholder, but that defendant breached the agreement and completed the transaction for his own benefit.

The parties had signed an agreement with the property owner whereby, in consideration of a payment of $560,000, title would be conveyed to a corporation to be created by them. The parties also jointly signed a promissory note for a bank loan used to cover payment (by their jointly drawn check) of the deposit on the purchase price of the contract to purchase the property. The defendant arranged for the formation of the corporation to which title would be conveyed, and the parties assigned their interest in the contract to the corporation.

The defendant obtained a mortgage commitment of $580,000 from a second lender, the closing took place, title was transferred to the corporation, the promissory note was paid off, and the new corporation took control of the property.

Defendant (an attorney) attended to all matters related to the closing and remained the sole shareholder of the corporation. Plaintiff claimed that defendant had solicited his assistance to manage the building and service the tenants after the takeover, agreeing that they would share equally in the enterprise. Defendant claimed that he had consistently asked plaintiff to contribute capital in exchange for a minority interest in the project.

A majority of the Third Department panel (in the first of its four separate rulings in the case) noted that the contract “was not exempt from [the Statute of Frauds] by operation of the so-called joint venture exception,” because the parties had agreed to carry out their plan in corporate form, citing Weisman v. Awnair Corporation America, 3 NY2d 444 (1957), but holding, although (a)“none of the writings proffered by plaintiff, either separately or collectively, adequately spelled out the terms of the supposed association between the parties,” and (b) “although not argued by the parties,” that the court was nevertheless “persuaded that the [dismissal by Supreme Court] should be reversed and a new trial granted because [plaintiff’s] evidence did establish yet another exception to the Statute of Frauds, namely, that of part performance.” 56 AD2d, at 409 (Emphasis added). The court explained that:

one does not generally place his name on a promissory note with another as an eleemosynary gesture. Plaintiff’s later execution of the assignment while that note was still outstanding would be extraordinary indeed if it was done in the expectation of mere employment by the new corporation. The fact that additional personal investment was unnecessary, owing to the size of the mortgage procured by the defendant in this remarkable transaction, does not lessen the force of plaintiff’s deeds. It simply presents a factual matter for Trial Term to entertain in its resolution of the opposing contentions of these parties. Without reference to words of promise, plaintiff gained some degree of interest in the transaction when he signed the purchase agreement and he became fiscally obligated thereto when he signed the note. The assignment to of that interest to the new corporation was needed to allow the matter to proceed and it can be logically explained only as an incident of assured ownership in that entity. 56 AD2d, at 410 (Emphasis added).

However, after three additional rulings of the Third Department adhering to its original decision, the Court of Appeals weighed in (at 59 NY2d, at 663) holding that:

Plaintiff’s actions, viewed alone, are not “unequivocally referable” to an agreement to convey one-half interest in defendant’s corporation. While the agreement alleged provides a possible motivation for plaintiff’s actions, the performance is equivocal, for it is as reasonably explained by the possibility of other expectations, such as the receipt of compensation other than in the form of an equity interest in the corporation. Moreover, the performance undertaken by plaintiff is also explainable as preparatory steps taken with a view toward consummation of an agreement in the future. (Emphasis added).

Nevertheless, as the Court of Appeals also noted, in Walter v. Hoffman, supra, 267 NY, at 369, decisions issued by the courts on whether part performance is sufficient or insufficient “are sometimes valuable as guides in the application of these general principles in other cases, where the conditions are different,…. but the correct application depends always upon the facts in the particular case.” (Emphasis added)

Conclusion

As the above discussion shows, the doctrine of part performance can overcome the strictures of the Statute of Frauds when parties enter into unwritten business deals, or into written business deals with unwritten ancillary terms, and they do not contemplate all of the possible circumstances that might arise in the course of their dealings. Nevertheless, the party relying upon the doctrine of part performance must (a) allege facts showing that the parties did orally agree to the contract that the party seeks to enforce, (b) that the acts of “part performance,” by the party seeking to enforce the oral agreement, must be “so clear, certain, and definite in their object and design” as to be deemed “unequivocally referable” to the agreement, and (c) that the party’s acts alone would be otherwise unintelligible or, at least, extraordinary, unless they were done in reliance upon the existence of the alleged agreement.

Such agreements can arise in any number of circumstances, and particularly in those situations where individuals agree to engage in joint venture partnerships, which are themselves exempt from the Statute of Frauds, but where acts of part performance of the unwritten terms of the venture may nevertheless need to be proven, either to enforce the agreement and/or to show that the agreement is not barred by the Weisman rule, which, if interpreted strictly, would prevent the joint venture partners from using separate corporate entities to carry out the purposes of a business plan that involves more than one project.

Attorneys who enter the fray at the time when the deals are coming apart must carefully review all of the facts in order to be able to make the best case possible for their clients—whether that be to show that a party’s actions are either “unequivocally referable” to an alleged oral agreement, or that they are not. The difference between one or the other conclusion may be difficult to determine; but the ultimate determination will depend upon the ability of the individual attorney to persuade the court to accept his or her interpretation of the facts.

Adam Leitman Bailey is the founding partner of Adam Leitman Bailey, P.C. John M. Desiderio is the chair of the firm’s real estate litigation group. Shayne Messing, a Spring 2022 litigation extern at the firm and a student at New York Law School, and Richard Silverberg, a 2021 Fall extern at the firm and a student at Hofstra Law School, contributed to the preparation of this article.

Case Studies

Adam Leitman Bailey Wins Heated Litigation After Aggressive Investigation Disproves Adversaries' Prescriptive Easement Claims

Title Insurance Claims Group 

Adam Leitman Bailey 

Adam Leitman Bailey PC was retained by the new purchaser of a house in the Hamptons to defend an ongoing case, brought by her neighbor, in which the neighbor claimed it had an prescriptive easement which gave it the right to continue to use the client’s property to access a nearby creek. Though the previous owner of her property was unable to defeat these claims, when Adam Leitman Bailey P.C. entered the case and took the neighbor’s deposition, the neighbor’s entity dropped all claims.

               The neighbor claimed that he and his family had moved into his house more than twenty years before, that he and his guests had used the client’s property since then to walk down to a creek, and that, since his entity owned the next door house, he and his family had the right to continue to use it. The previous owner, represented by another firm, brought a motion for summary judgment before discovery was done, but the court rejected it. One of the reasons the court gave is that the town had been aware of the existence of a cleared path to the creek since at least 2015 because it had approved a survey showing it, and the town had never issued a violation. The case was a loser, or a very difficult case, according to outgoing counsel. Enter Adam Leitman Bailey, P.C.

The plaintiff-neighbor appeared to have used my client’s entrance to her property to get to the bay over a quarter mile away each summer for the last 20 years. This attorney reminded me he was an expert on title insurance, in fact all he litigated was title claims. He argued that the neighbor could garner a prescriptive easement from using the walkway each season and only during the season. We had other problems. Outgoing counsel refused to give us their file and the discovery already produced. The neighbor had planned his case for many years and waited for the property to be sold to my client who would have no knowledge of any past behavior. And we had to spend money to conduct discovery because our shots at a motion to dismiss and summary judgement had been lost by prior counsel without our best arguments. We had to obtain the discovery materials and papers from opposing counsel.

As with every property dispute at Adam Leitman Bailey, P.C., we always go to the property. You can never underestimate the amount one can learn. None of the other attorneys in this case had visited this property. Here is what they missed: There was no walkway to get to the bay. It was covered by protected Hampton’s wetlands that were illegal to cut or move. It turned out that the neighbor could not get an affidavit or statement from the house directly facing both of the parties homes. We called the nice gentleman living in the house. He did see the neighbor using his kayaks to fish and crab and exercise—but not on the bay. This neighbor on the other side of the street saw him daily during the summer months for years using the bridge next to his property to get to the ocean side and never saw him approach the front property of my client. He never did walk from his house 75 feet to the street and walk another 50 feet with heavy kayaks to the front of my client’s property. And this neighbor confirmed that no other person in the world saw him at this location. When examining the walkway, the few times the neighbor used the bay he would bring his kayaks to the edge of his property or as close to the bay that he could go even crossing another neighbor’s property and then put the kayaks and his body over the fence—wearing out this part of the fence.

This was a large victory for my client, as she no longer had to worry about three quarters of the property that he claimed to have the right to walk on and pass through. We found the sullied fence that must have been the entrance point on a cold day in November. But he still could see my client from this location, and her biggest fear was being seen naked in the shower if he stood on this spot far away from her glass house looking back. She was scared of him and this prospect of the loss of privacy for her and her two children as she is a single mother.

So as the facts got better and the town had woken up about protecting the land, we were now aware that it would be impossible to use this walkway without disrupting and harming protected wetlands. This provided another tool to winning the case because even if the neighbor won a prescriptive easement, if he was not allowed to use the walkway, he could not use the easement and if he did use it he would be using the land illegally.

We had prepared heavily for the deposition. I started the questions going slowly into each time he had used the walkway to get to the bay. Collecting the names of every person that had joined him on his trips to the bay. Very few people had gone to the bay with him in the last 20 years and his testimony made me wonder what these people would say when subpoenaed for a deposition. It also turned out that the neighbor was divorcing his wife who was also scheduled for a deposition which would provide more valuable evidence. The only constant persons using the bay with him were his children but interestingly they had taken years off which made me wonder if the neighbor had any witnesses for each of the consecutive years he needed to claim his prescriptive easement.  And the firm developed evidence from the surveyor to demonstrate that the survey that the town had approved in 2015 showed only half the path that was claimed, and that the other half did not exist.

               Then came the deposition of the neighbor. He did not remember being on the property on any specific occasion, and was unable to explain exactly when he had used what he referred to as the Path, but he admitted that he’d cut down the vegetation there whenever and wherever it got in his way. Since Adam Leitman Bailey P.C. could show that the neighbor’s conduct was in violation of the town’s Wetlands Ordinances, it knew it could attempt to obtain a violation from the Department of Land Management.

Because the deposition was long and slow and with pointed questions on every detail, the neighbor lost his temper many times during the deposition and admitted breaking the law by taking metal tools to cut the wetlands in violation of New York Law. He also admitted not using much of the path to get to the bay. He also could not remember using the bay for 10 consecutive years. By the end of the deposition he looked and his words seemed like he was defeated. It was only a matter of days until he surrendered and ended his case forever giving up his claim for access to the bay which his house did not provide. My client once again had her privacy and her children’s privacy and she felt her life was whole again.



Adam Leitman Bailey represented the prevailing owner sued for a prescriptive easement.

Adam Leitman Bailey P.C. Stops The Frick From Building Access Door That Would Crowd The Beautiful Block With Massive Long Lines and Development

Real Estate Litigation

Joanna C. Peck  | Adam Leitman Bailey 

Earlier in 2022, a prominent family representing the homeowners of 71st Street learned that The Frick had planned for a new entrance for an American with Disabilities Accessibility (ADA) ramp on their block. The alleged plan was to allow access to the back entrance, thus creating an alternate entry point for catering and event hall services. This could result in large amounts of people, traffic, delivery, and food trucks lining up on this tree-lined block.

Adam Leitman Bailey P.C. jumped into action. We visited the site and gathered information by speaking to the workers, neighbors and experts and studying The Frick’s building plans. We learned that the Frick needed to raise money to survive, and this outlet would allow them to earn extra revenue.

Adam Leitman Bailey drafted a letter for the community board and, with his team, created a video showing the street with and without the commotion of a crowd. The letter was distributed to the ‘Transportation Committee of Community Board 8 regarding the Americans with Disabilities Ramp proposed by the Frick at the 71st Street entrance of the Frick Library’.

At this appearance, Adam Leitman Bailey, P.C. advised the Transportation Committee that The Frick was being dishonest with their intentions for the ramp. They argued that The Frick was using the need to install an ADA ramp as a decoy and were planning to install a catering and event hall services ramp instead. More importantly, Bailey was given the chance to cross-examine the architect in charge of The Frick’s construction. This cross-examination demonstrated to the Community Board members that the Frick was being disingenuous by not answering Adam Leitman Bailey truthfully.

Adam Leitman Bailey knew to go into more detail by explaining to the Committee that the ramp would result in this quiet and pristine street being turned into another dirty and derelict space in the city by a strew of food trucks. Bailey challenged the Frick on why this ramp was not in their original plans. Bailey challenged their claim that they were using the space as a library when no one could enter inside to check out a book. He showed the Community Board members that The Frick had no intention of using this space for its stated purpose. He also educated the Committee on how the unlawfully large size of the ramp would result in safety issues for the public using the sidewalk. Despite this resounding cross-examination and presentation, the vote was not cast in our favor as it did not challenge the ramp. However, the vote was close, and the word spread quickly, gaining momentum for the cause.

On February 15th, with our letter and materials in hand, the full Community Board 8 met again. They amended the resolution submitted by the Frick and voted to approve The Frick’s ramp for limited purposes only. The ramp is only to be used during library hours and for operational needs (i.e. no ticket sales, catering, or parties would take place). As a result, the fake library, which did not need the additional entrance in the first place, would never be built.

The tree-lined block was saved from food and delivery trucks, traffic and large crowds of people by the small law firm that does not believe in ‘no’ from food and delivery trucks, traffic and large crowds of people.



Adam Leitman Bailey spoke at the hearing and created the strategy to battle The Frick’s attorneys and developers. Joanna C. Peck worked at reducing the noise at the Townhouses and finding inaccuracies in the building plans. The Adam Leitman Bailey, P.C. Marketing Team created the PowerPoint and Video presentation. 

Adam Leitman Bailey, P.C. Defeats Statute of Limitations Argument in Foreclosure Action and

Quiet Title Action

Foreclosure Litigation Group

Jackie Halpern Weinstein | Courtney J. Lerias | Danny Ramrattan 

Adam Leitman Bailey, P.C. was retained by a Lender in connection with a foreclosure action and a quiet title action. The Lender’s predecessor in interest commenced a prior foreclosure action in 2009 that was ultimately dismissed without prejudice by the First Department Appellate Division on November 21, 2019.

In response to the dismissal of the foreclosure action, the Borrower commenced a quiet title action on May 28, 2020 seeking to discharge the mortgage as time-barred by the statute of limitations. Adam Leitman Bailey, P.C. entered into a stipulation with the Borrower to extend the Lender’s time to respond to the Complaint to September 30, 2020.

Adam Leitman Bailey, P.C. then commenced a new foreclosure action on August 31, 2020, which the Borrower moved to dismiss as time-barred, and Adam Leitman Bailey, P.C. moved to dismiss the quiet title action.

The arguments in both dismissal motions were identical. The Borrower argued that the statute of limitations ran because the Lender accelerated the loan on November 18, 2009 when the first foreclosure action was commenced, and the instant foreclosure action was commenced over 6 years later on August 31, 2020.

In response, Adam Leitman Bailey, P.C. argued that although the statute of limitations did start on November 18, 2009 when the first action was commenced, the action fell under the CPLR 205(a) savings statute, which provides a six-month grace period during which an action, which was originally timely commenced, but was then “terminated” in any manner other than voluntary discontinuance, failure to obtain personal jurisdiction, neglect to prosecute, or final judgment upon the merits, may timely be re-filed and served.

Initially, the Lender’s time to recommence this action would have been May 21, 2020—six months after the November 21, 2019 dismissal. However, due to the Covid-19 Pandemic, the Governor issued Executive Orders which suspended “any specific time limit for the commencement, filing, or service of any legal action, notice, motion, or other process or proceeding, as prescribed by the procedural laws of the state”, and Adam Leitman Bailey, P.C. successfully argued that the Executive Orders tolled the statute of limitations from March 20, 2020 to at least July 6, 2020. Based upon the toll, the new deadline for the Lender to recommence the foreclosure action and serve the Borrower became September 6, 2020. Adam Leitman Bailey, P.C. argued that the Lender timely recommenced pursuant to CPLR 205(a) by commencing the action on August 31, 2020, and personally serving Borrower on September 1, 2020.

The Borrower argued that CPLR 205(a) was not available to the Lender, as it was merely a successor in interest to the Plaintiff in the first foreclosure action, and not the same plaintiff. In response, Adam Leitman Bailey, P.C. argued that, pursuant to CPLR 1018, the Lender steps into the shoes of its predecessor in interest, and that, regardless, the Lender was assigned the loan prior to the dismissal of the first foreclosure action.

The Court fully adopted Adam Leitman Bailey, P.C. ’s arguments dismissing the Borrower’s quiet title action and denying the Borrower’s motion to dismiss the foreclosure action, in holding that the Lender’s second commenced foreclosure action was timely under the savings statute.

Jackie Halpern Weinstein, Courtney J. Lerias, and Danny Ramrattan of the Foreclosure Litigation Group at Adam Leitman Bailey, P.C. secured this result for its client.

Adam Leitman Bailey, P.C. Obtains Critical Information For Client In Rent Overcharge Dispute

Supreme Court Litigation

Carolyn Rualo |Dov Treiman| Jeffrey R. Metz

Under New York law, if a landlord obtains J-51 tax benefits from New York City, the landlord must treat its tenants as rent stabilized. In this case, the owner failed to do so and for years treated our client as deregulated and charged rents exceeding that allowable under rent stabilization. Our client commenced a rent overcharge case in the Supreme Court.

There, the determination of whether rent overcharges would be computed on the basis of the rent charged four years earlier than when the complaint was filed, or whether that rent was unreliable and DHCR’s default formula would be used, would turn on whether our client could establish a fraudulent scheme to deregulate his apartment. To do so, Adam Leitman Bailey, P.C. sought permission to serve a judicial subpoena duces tecum on DHCR seeking the building-wide rent roll registrations. Recognizing that the information would show its untoward conduct, the landlord moved for a protective order to suppress the production of the DHCR information. The Supreme Court denied the landlord’s motion and it appealed to the Appellate Division, First Department.

Adam Leitman Bailey, P.C. successfully defended the order on appeal. Based upon Adam Leitman Bailey, P.C.'s arguments, the Appellate Division rejected the landlord’s contention that the records were utterly irrelevant to any proper inquiry, which is the standard necessary to suppress, and found, to the contrary, that the records sought were relevant in determining whether the landlord engaged in a fraudulent scheme to deregulate the client’s apartment, and others in the building as well as whether the landlord re-registered any of the apartments while it was receiving J-51 benefits. This information, the Court concluded, would establish whether fraud could be shown.

Dov Treiman and Carolyn Rualo represented the client before the Supreme Court. Jeffrey R. Metz represented the client before the Appellate Division, First Department.

Sponsor’s Attempt to Avoid Liability for Construction Defects and to Limit Valid Claims of the Condominium Unit Owners Soundly Rejected by the Appellate Division

New Construction Litigation

Courtney J. Lerias | Jeffrey R. Metz

In a hotly contested dispute between the Board of a Condominium and the Sponsor of the Condominium, the Board brought suit alleging, among other things, that there were numerous construction defects that the Sponsor was obligated to remedy but failed to do so. The Board’s complaint noted that the defects included were not limited to the eleven most serious defects which were listed in the complaint. The complaint also referenced the engineer’s report which set forth other numerous defects. The Engineer’s Report and a listing of all the defects found were also provided to the Sponsor in discovery.

The Sponsor disclaimed responsibility for any repairs or damages asserting that the Offering Plan contained a broad and controlling disclaimer stating that the buyers were taking the units and the building in an “as is” condition.

Subsequently, the Sponsor moved for summary judgment to dismiss the cause of action asserting the construction defects claim. Sponsor also argued that the additional defects which were set forth by the Board in discovery amounted to an improper indirect attempt to amend the Board’s complaint. The Board opposed the motion and the trial court denied the Sponsor’s motion for summary judgment, but granted that portion of the Sponsor’s motion which sought to limit the claims for the eleven items listed in the complaint. Both parties appealed to the Appellate Division, First Department.

On appeal, Adam Leitman Bailey, P.C. established that the Offering Plan, contained only limited waivers and that the Sponsor could not waive away its statutory obligations with respect to violations that had been found. Moreover, Adam Leitman Bailey, P.C. pointed out that the Sponsor failed to submit an affidavit from anyone with personal knowledge to demonstrate that the claimed defects fell within the disclaimers set forth in the Offering Plan or that the defects were not within the Sponsor’s obligation to comply with the law. The Appellate Division agreed and affirmed the denial of summary judgment.

The Appellate Division also adopted Adam Leitman Bailey, P.C.’s arguments that the information regarding the defects that was provided in discovery could be proven at trial. The Court found that the Board’s complaint was sufficiently particular to give the Sponsor notice of the matters that the Board intended to prove at trial. Further, the Court found that there was no need for the Board to move to amend its complaint.

Jeffrey R. Metz and Courtney J. Lerias represented the Board before the Supreme Court and at the Appellate Division.

Representing a Mitchell-Lama Cooperative, Adam Leitman Bailey, P.C. Secures Surrender of Multiple Apartments in Non-Primary Residence Cases

Landlord Representation 

Vladimir Mironenko

Cooperative apartment buildings in New York governed by Mitchell-Lama Rules are required to ensure residents’ compliance with the rules. Akin to rent stabilization and rent control laws, shareholders must primarily reside in the apartment and may not generally sublet their apartment.

When suspecting rule violations, management investigates whether unauthorized occupants are present in the apartment or whether shareholders are linked to other residences. Working with private investigators and performing our own due diligence, Adam Leitman Bailey, P.C. helped to identify and prosecute offending shareholders. Once such rules violations appear corroborated, we serve the offending shareholders with notices of intention to terminate the tenancy, listing the grounds and facts upon which the notice is based.

Each matter then proceeds to a conference and then a hearing before a hearing officer at the Department of Housing Preservation and Development, charged with enforcing New York City Mitchell-Lama Rules. Adam Leitman Bailey, P.C., routinely represents Cooperative buildings in these cases.

Recently, after expiration of the COVID moratorium, Adam Leitman Bailey, P.C. was called upon to investigate and commence dozens of such non primary residence and illegal subletting cases for one of our clients, a large Brooklyn Mitchell-Lama Cooperative.

Analyzing investigation reports and mandatory income affidavits, and performing our own searches, we identified and built cases against non compliant shareholders. We then drafted and served notices to shareholders detailing facts demonstrating their non primary residence or illegal subletting. Often times this includes ownership or rental of other properties, voter registration, driver license record, utilities and cell phone service linked to other residences, and observations by building staff and residents.

In several recent cases, the shareholders found the evidence against them so overwhelming and the notices so detailed that the shareholders (in many cases through counsel) immediately gave up, opting to sign agreements surrendering the apartments instead of proceeding to a hearing. Adam Leitman Bailey, P.C. will aggressively prosecute the cases at the Department of Housing Preservation and Development, but in all of the cases it was assigned to. 

Vladimir Mironenko at Adam Leitman Bailey, P.C. represents the Mitchell-Lama COOP. 

Adam Leitman Bailey, P.C Utilizes “Zombie Foreclosure” Statute to Avoid Lengthy Foreclosure Process

Foreclosure Litigation Group  

Jackie Halpern Weinstein | Danny Ramrattan | Julia Singer

Adam Leitman Bailey, P.C was retained by a Lender in connection with a foreclosure action of a vacant and abandoned building. Instead of moving for an Order of Reference and then having a Referee compute the amount due, the firm utilized a recent law to file a combined and expedited motion for all aspects of the decision at once.

On April 13, 2022, the firm moved for an Expedited Judgment of Foreclosure and Sale for Vacant and Abandoned property under RPAPL § 1309. The law allows for such as long as the Defendant’s time to answer the complaint in the foreclosure proceeding has expired. It also requires photographs evidencing that the subject property is vacant and abandoned as well as utility company records or other documentation evidencing the vacant and abandoned status of the premises. After exhibiting suitable evidence to the property’s abandoned nature, the Plaintiff can immediately submit its Judgment of Foreclosure, instead of going through the process of appointing a Referee and submitting a Referee’s Oath and Report of what is owed.

The reason this legislation was enacted is because of so called “Zombie Foreclosures” and their detrimental effect on neighborhoods. “Zombie Foreclosures” occur when, after a foreclosure action is commenced, the homeowner moves out of the mortgaged property, and it sits vacant and abandoned. These foreclosures cause upset when neighbors complain of decreasing property value due to abandoned properties. RPAPL § 1309 combats this by allowing for an expedited process so that the property does not sit vacant, to the detriment of the surrounding properties. Foreclosure processes can be extremely lengthy, which can cause undue hardship on the lenders, the defendants, and people residing close to the mortgaged property.

Seeing that this was the case in this foreclosure action, Adam Leitman Bailey, P.C argued using the recent legislation, that the surrounding circumstances allowed for the law to be utilized in this instance. The Borrowers in this case had executed an Affidavit attesting that they physically abandoned the Mortgaged Premises and no longer considered the Mortgaged Premises to be their principal home, residence, or dwelling. Because of this statement and the diligent work of Adam Leitman Bailey, P.C in obtaining photos of the abandoned property, as well as property inspections, the parties were spared a lengthy and unnecessary foreclosure process.

The Judge here granted the Motion and agreed with Adam Leitman Bailey, P.C.’s arguments regarding the application of RPAPL § 1309. By hard work and attention to detail, we were able to secure this win for our clients and speed along the process of foreclosure.

Jackie Halpern Weinstein, Danny Ramrattan, and Julia Singer of the Foreclosure Litigation Group at Adam Leitman Bailey, P.C. secured this result for its client.

De-Acceleration of Loan Found Valid to Defeat Statute of Limitation Defense Notwithstanding Word Processing Error In Stipulation of Discontinuance

Appellate Litigation 

Jeffrey R. Metz | Jackie Halpern Weinstein

In a mortgage foreclosure action where Adam Leitman Bailey, P.C. participated in the appeal to the Appellate Division, Second Department the lower court refused to grant the mortgagee summary judgment on its foreclosure complaint and for an order of reference finding that there was an issue of fact as to whether the claim was time barred. A foreclosure action had been brought against the mortgagor in May 2011 but was then discontinued by stipulation in December 2016. However, the stipulation contained a typographical or word processing error. Instead of stating that the loan was de-accelerated, the stipulation provided that the “loan is de.” An affirmation submitted in support of the discontinuance similarly contained the incomplete statement that the case was discontinued and the loan was “de”.

After the discontinuance, the borrower received a Notice of De-Acceleration indicating that the acceleration of indebtedness that had been referred to in the complaint was rescinded and the mortgagor thus reverted the loan back to an installment loan. However, the borrower continued to be in arrears and a new foreclosure action was commenced in September 2017. The borrower’s answer set forth numerous defenses including that the new action was time barred because it was brought more than six years after the debt had been accelerated. Because of the typographical/word processing error where the  stipulation of discontinuance and the supporting affirmation provided that the “loan is de”, the trial court denied summary judgment to both the mortgage and the borrower who also moved for summary judgment dismissing the foreclosure action.

On appeal, Adam Leitman Bailey, P.C. pointed out that the voluntary discontinuance and the subsequent actions of the mortgagee such as sending a Notice of De-Acceleration, treating the loan as an installment loan, and other actions showing that the loan had been de-accerlerated, required that the owner of the note and mortgage be granted summary judgment. The Appellate Division agreed, explaining that while the six year statute of limitations begins to run once the entire debt is accelerated by virtue of the commencement of a foreclosure action, the record showed that the 2011 action was voluntarily discontinued such that the acceleration of the debt was revoked, and, therefore, the subsequent foreclosure action was timely commenced. As a result the owner was granted summary judgment on its complaint and an order of reference.

Jeffrey R. Metz  and Jackie Halpern Weinstein of Adam Leitman Bailey, P.C. participated in the appeal.

Adam Leitman Bailey, P.C. Successfully Navigates HUD Approval Process In Achieving Interest Rate Reduction Of A Senior Citizen Not-for-profit Housing Corporation’s Underlying Commercial Mortgage

Purchase and Sale of Homes 

Steven Wagner | Niki Khindri 

Adam Leitman Bailey, P.C. acts as general counsel to a not-for-profit housing company for senior citizens located in Brooklyn. The building in question was in dire need of various capital improvements and repairs, but with limited cash on hand to do so. The housing company sought to take advantage of pandemic-level interest rates to reduce the rate on the building’s existing mortgage, which would free up much needed cash for the building upgrades. The catch was, reducing the interest rate on the existing loan required the prior approval of HUD, which is not always an easy (or speedy) process. With interest rates rising on a weekly basis, Adam Leitman Bailey, P.C. stepped in to expedite the approval process. By working with the lender, the managing agent and the board of directors, Adam Leitman Bailey, P.C. was able to facilitate and garner everything required by HUD to issue its approval, and within days thereafter prepared the file for closing. On the morning of closing, the parties were notified that HUD’s approval was required for the release of certain monies in the company’s reserve account to be used as a down payment for certain funds due to the lender. Having no way to obtain HUD approval on the day of closing, and facing rapidly rising interest rates and potential adjournment fees, Adam Leitman Bailey, P.C. worked with the managing agent and the lender to successfully formulate a work-around which enabled the loan to close as scheduled. As a result, the housing company achieved a reduction in its interest rate mere days before a rate increase which would have rendered any cost savings obsolete. The housing company now has cash on hand to make much needed repairs and improvements for the benefit of its elderly community.

Steven Wagner and Niki Khindri of Adam Leitman Bailey, P.C. represented the housing company in this transaction.

Adam Leitman Bailey, P.C. Defeats Landlord’s Partial Summary Judgment Motion Amidst Overlapping Claims in Parallel Holdover Proceeding

Tenant Representation

Adam Leitman Bailey | Dov Treiman | Jennifer Milosavljevic

Adam Leitman Bailey, P.C. was retained by a tenant to defend him in a summary holdover proceeding. The proceeding, however, was far from a garden variety holdover proceeding predicated upon the termination of a long-term month-to-month tenancy. Instead, the Landlord here was so enraged by the Tenant’s exercise of his lawful right in applying for the Emergency Rental Assistance Program (ERAP), which stayed the holdover proceeding pending a final determination of the Tenant’s eligibility under the Program, that theycommenced a Supreme Court Action seeking, inter alia, a money judgment for arrears that accrued prior to termination of the tenancy along with an award of attorneys’ fees.  

The manifest problem with the Landlord’s all too transparent attempt to circumvent the statutory ERAP stay was that the arrears, use and occupancy sought in the Supreme Court action were already encompassed in the Tenant’s ERAP application and the holdover petition. Nevertheless, the Tenant tendered payment for the arrears sought by the Landlord only to witness the Landlord irrationally reject the payment.  

The Supreme Court action also seeked an exorbitant $25 million based upon the Tenant’s alleged thwarting of the Landlord’s plans to convert the subject building to condominium ownership. This forms the true basis of the dispute and has seemingly compelled the Landlord to engage in unprecedented levels of harassment in hopes that the Tenant, the sole remaining occupant of the building that has not entered into a buyout agreement with the Landlord, will simply surrender his home of the past fifteen years. The epitome of the harassment was the placement of a machine that produced a continuous, mind-numbing noise directly outside of the Tenant’s door for several weeks without cessation. Although the Landlord maintained that the machine was an “air filter” placed upon every floor upon which construction was taking place, no similar machine was found on any other floor where construction work was in progress.  

The Landlord moved for partial summary judgment on its claim for three months’ worth of rental arrears. Adam Leitman Bailey, P.C. opposed the motion arguing that it was moot given the Tenant’s tender of the amount sought in the motion and similarly, that the Landlord was in violation of centuries of law by splitting its claim between the Supreme Court action and Civil Court proceeding.   

The Court adopted Adam Leitman Bailey P.C.’s arguments, holding that litigating both the action and the holdover proceeding at the same time is a waste of judicial resources. The Court denied Landlord’s motion and in doing so, stayed the Supreme Court action pending a final determination of the holdover proceeding.  

Adam Leitman Bailey, Dov Treiman, and Jennifer Milosavljevic of the Landlord and Tenant Practice Group at Adam Leitman Bailey, P.C. secured this result for their client.  

Adam Leitman Bailey, P.C. Defeats Application for Stay Pending Appeal, Defeats Renewal Motion, and is Awarded Judgment Of Foreclosure and Sale

Foreclosure Litigation Group  

Jackie Halpern Weinstein | Danny Ramrattan | Courtney Lerias

In a foreclosure action being repeatedly delayed by the tactics of the Borrower, Adam Leitman Bailey, P.C. was retained to change in as counsel for Plaintiff and aggressively complete the action to a Judgment of Foreclosure and Sale.

The 2015 action was originally dismissed in 2018 for Plaintiff’s failure to timely move for the appointment of a referee. The Court later granted Plaintiff’s motion to vacate the dismissal, for summary judgment, and to appoint a referee. Defendant in opposition to that motion argued that Plaintiff failed to serve the pre-foreclosure notices required by the Mortgage and by RPAPL § 1304. The Court determined that the affidavit in support sufficiently proved compliance with the pre-foreclosure notices.

Adam Leitman Bailey, P.C. moved for Judgment of Foreclosure and Sale, in response to which the Borrower not only opposed, but also cross-moved for a stay pending appeal. The Borrower re-raised the arguments regarding the pre-foreclosure notices required by the Mortgage and RPAPL § 1304, and, in another delay attempt, argued that there needed to be a referee’s hearing to determine the amount due.

In opposition and reply, Adam Leitman Bailey, P.C. argued that there was no basis to stay the action pending appeal due to the vacatur of the 2018 dismissal because the Borrower failed to oppose that portion of the prior motion and is now estopped from raising that argument on appeal. Moreover, Adam Leitman Bailey, P.C. argued that sufficient proof was submitted in support of compliance with the pre-foreclosure notices required by the Mortgage and RPAPL § 1304. Regarding the demand for a Referee’s hearing, Adam Leitman Bailey, P.C. was clear that correspondence was diligently sent to the Borrower’s counsel inviting them to review the proposed Referee’s Report and advise if there were any challenges to it, and that the Borrower failed to respond with any objections.

Before the Court could issue a decision on the motion and cross-motion, the Borrower also filed a renewal motion arguing that there was a change of law with respect to the RPAPL § 1304 notices that should have changed the decision on the prior vacate and summary judgment motion granted in favor of Plaintiff. In opposition, Adam Leitman Bailey, P.C. argued that there was no change in the law, but rather new decisions interpreting it.

The Court simultaneously issued decisions on both motion sequences fully adopting all of Adam Leitman Bailey, P.C.’s arguments. The Court determined that there was not a change of law, and that, regardless, Plaintiff complied with the pre-foreclosure notices. The Court denied the stay request and granted Judgment of Foreclosure and Sale in favor of Plaintiff.

Jackie Halpern Weinstein, Courtney Lerias, and Danny Ramrattan of the Foreclosure Litigation Group at Adam Leitman Bailey, P.C. secured this result for the Plaintiff.

Adam Leitman Bailey, P.C. Saves Client From Buying Unit that Would One Day Have Lost The Unit’s Windows

Transactional and Banking Department 

Jason E. Rogovich

New development transactions pose an entirely different set of risks, benefits, and logistical challenges than a traditional re-sale. Many times, Purchasers enter a contract for a Unit that is not yet built, in a building without a financial history and potentially not yet cleared by institutional lenders for closing. These factors often cause confusion around due diligence and delays when it comes to closing on the Unit.

Two first-time homebuyers retained Adam Leitman Bailey, P.C. to represent their interest in purchasing in a popular downtown new development condominium. Since the building was brand new, it involved a detailed offering plan review. Utilizing a shared screen function, Adam Leitman Bailey, P.C. and the clients were able to go through the pertinent Sections of the offering plan, which ultimately revealed that the Unit had “lot line” windows. This meant, if the neighboring property chose to build or develop, one of the bedrooms risked losing a window. This would force the owners to turn the former bedroom into an office or media-room. Ultimately, this risk was not something the clients could palette. Shortly after, the clients entered into contract for another Unit in the same development, without lot line windows.

Jason E. Rogovich, of the Transactional and Banking Departments at Adam Leitman Bailey, P.C. handled the closing.

Precautions to Take for New Development and Sponsor Deals

Transactional and Banking Department 

Amy Chen 

New York City arguably has the most complex residential real estate transactions compared to other cities in the United States. Starting with numerous types of property available and its unique contract and due diligence process, to the examination and clearance of any potential title issues, and finishing with the actual closing. Each step of the process requires extensive care and caution to ensure the buyer or seller is sufficiently protected from any risks that would occur both along the process or after the closing.

When working with new developments or Sponsor sales, often times, an additional layer of complexity is added to the transaction due to the level of uncertainty and time constraints is imposed on the buyer. These units, at the time of contract signing, commonly have yet been completed and buyers would not see the finished unit until a week before closing. Even then, it is common to have walkthrough issues with minor things such as touch ups, to bigger issues such as damaged products.

In a recent case here at Adam Leitman Bailey, P.C., we were able to secure a $20,000 credit for our clients due to damaged countertop conditions. The success in this negotiation is attributed to multiple factors within the contract and pre-closing stage of the transaction. To begin with, the damaged countertop was observed well in advance of closing which allows sufficient time to obtain accurate replacement quotes from a third party. The parties contractually were also able to adjourn the closing date to a future date which allotted additional time for negotiations. Furthermore, we were able to secure an additional walkthrough to ensure all other initial walkthrough issues had been addressed prior to closing.

In summary, while there are uncertainties in new developments outside of the buyer’s control, these risks may be minimized through different ways. While different sponsors would be willing to agree to different terms, it is still essential to advocate for additional adjournment rights, an additional walkthrough, and a time period of which all punch-list items will need to be completed by. Additionally, it is also imperative to have a legal team who would advocate for you. Here at Adam Leitman Bailey, P.C., our mission is to ensure that buyers are well protected under all circumstances even if the unexpected may arise at the time of closing.

Adam Leitman Bailey, P.C. Secures A Highly Favorable Settlement On Behalf Of New Home Buyers Against A Developer That Breached Its Own Option Contract 

Supreme Court Litigation 

 Eric Askanase | John Desiderio | Andrew Winters

Buyers who purchase homes in new developments can face a myriad of potential problems from construction delays to workmanship issues. However, during the overheated upstate pandemic real estate rush, a new hazard arises when unscrupulous developers cancelled contracts in favor of better offers, which was the very situation faced by Adam Leitman Bailey, P.C.’s clients, who paid for an option to purchase and build a new house in a luxury Orange County, N.Y. community, only to have their deposit returned and contract illegally terminated when the developer found a buyer for a higher price.  

Our clients, a married professional couple who had vacationed in the area for many years, fell in love with the new development – a residential community of luxury homes with ample community facilities and parks and surrounded by woodlands. In August 2021, after touring the development in its early stages, they selected a prime corner lot, paying a premium fee for the site and upgraded luxury amenities for the large house the developer would build in consultation with the clients. Although tax lot numbers had not yet been issued, the clients paid a substantial deposit and negotiated and signed an option agreement requiring that they would sign final contracts and make further deposits within 10 days after the tax lot numbers had been issued – information that was solely within the control of the developer.  

Over the course of the next several months, the clients had numerous, professional, and amicable conversations with the developers’ agents concerning build choices, timing, and the status of the tax lot numbers, during which they were repeatedly assured by the Developer that the tax number had not yet been issued. During that same period of time, upstate housing prices were increasing by the month, reassuring our clients that they made the right choice. In November 2021, within days after the developer finally notified the clients that the tax lot number had been issued – and that it was now time to make appointments with the builders to select final home finishes – the clients signed the final contracts and wired the required deposits. However, only hours later, the developer’s agent notified our clients that – even if it was illegal – they were going to cancel the contract and could sell to someone else at a higher price and that the developer was not interested in moving forward with the client. The developer returned the various deposits and refused to entertain any further discussions; and our clients believed they had been used as a pawn by the Developer to increase its purported sales numbers while still secretly marketing the very home they had optioned. 

After being retained, Adam Leitman Bailey, P.C. promptly filed a complaint against the developer demanding that it meet its contractual obligations to build and sell the home to our clients, or pay damages. The developers shockingly responded that, despite their assurances that the tax lot numbers had not yet been issued, they had received them long before notifying our clients, and so the option fulfillment had been untimely. Following extensive motion practice and limited discovery, it became clear that the developers had numerous motives for breaching the contract which presented a prime opportunity for a negotiated settlement that could both stem legal costs and offset our client’s financial loss.  

Although the Developer initially refused to provide a reasonable settlement offer, through careful negotiation and ongoing pressure, Adam Leitman Bailey, P.C. was able to finally secure a settlement that both made our clients whole and gave them the closure they needed to move on. 

Adam Leitman Bailey, P.C.’s Supreme Court Litigation Practice Group in this matter was led by Eric Askanase, John Desiderio, and Andrew Winters. 

Adam Leitman Bailey, P.C. Defeats Motion For Default And Contempt, As Well As Oath Summons, Despite Eleventh Hour Retention

Real Estate Litigation

Andrew Winters | Dov Treiman



On a street in Harlem known worldwide for the performance and production of music, an upstart hometown music recording studio was embroiled in a dispute with its neighbor who complained the performance and production of his music was causing damages to his quality of life. The dispute heated up and litigation was commenced by the neighbor, but the studio attempted to represent itself. Lacking legal expertise and facing declining prospects of victory, the studio turned to Adam Leitman Bailey, P.C. for help. 

Upon taking this matter, attorneys for Adam Leitman Bailey, P.C. quickly learned that the studio was deep inside a judicial nightmare. Several months prior to being retained, the Court entered a temporary restraining order (“TRO”) on default against the studio enjoining any activity at the studio in violation of the noise code. With a motion pending filed by the studio’s neighbor seeking an Order of default and contempt for the studio’s alleged violation of the TRO, as well as a hearing pending before the NYC Office of Administrative Trials and Hearings (“OATH”) on a summons issued against the studio for an alleged noise complaint, the studio was in dire straits.  

Adam Leitman Bailey, P.C. attorneys jumped into action in defense of the studio and immediately commenced work on all fronts. Contractors already hired to install sound absorption materials and make other improvements to the studio to soundproof the premises were expedited. An acoustical engineer was hired and scheduled to inspect the premises upon completion of these improvements. Pleadings were drafted, alongside opposition to the pending order to show cause filed by the neighbor. Attorneys from Adam Leitman Bailey, P.C. appeared, together with representatives of the studio, to fight the summons issued against the studio.  

The first victory was achieved when OATH dismissed the summons in its entirety. Adam Leitman Bailey, P.C. attorneys successfully argued that the studio had taken several efforts to soundproof the studio and the summons was issued without a sufficient evidentiary basis, as the officers from the police department issued the summons based upon testimony from the neighbor alone, without testing any noise levels emanating from the studio itself.  

The second victory came when the Court denied the neighbor’s motion for default and contempt and compelled the neighbor to accept the studio’s newly drafted answer. Attorneys at Adam Leitman Bailey, P.C. successfully argued that although the studio was in default, the studio engaged in remedial measures ever since the Court entered its TRO and the neighbor utterly failed to submit any evidence that the studio was in violation of that Order. Thus, there was no prejudice to the neighbor in compelling them to accept the late answer. Further evidence that the studio’s remedial measures were successful bolstered its arguments by demonstrating that the studio was now in compliance with the noise code.   

With the summons dismissed, no pending motions, and the studio’s answer deemed served on all parties, the studio is positioned to take the offensive. Attorneys from Adam Leitman Bailey, P.C. are ready to zealously continue to defend this matter to its ultimate conclusion.  

Adam Leitman Bailey P.C. attorneys Andrew Winters made the appearances before the various bodies and Dov Treiman crafted the papers. 

What is a PUD? (Planned Unit Development)

Mortgage Finance Practice Group 

Rosemary Liuzzo Mohamed

What is a Planned Unit Development (“PUD”)? This question has been coming up lately in the banking department at dam Leitman Bailey, PC. It is important to understand what a PUD is when closing mortgages as there are certain steps a bank attorney must take to ensure the lender has perfected its lien accordingly.

So, what is a PUD? A PUD is made up of several one family homes, they can also be condominiums or townhouses, both residential and commercial. The surrounding property is maintained by a Homeowner’s Association (“HOA”) reserved for use only by the owners of the homes within the PUD. The homes are all built together and can look like a small village or town or apartment complex. The homeowners own both the home and the lot on which it sits and will pay dues to the HOA, usually monthly, to maintain and upgrade the surrounding property and its amenities. This HOA fee is mandatory for the homeowners.

What are some amenities you may find within a PUD? The streets and landscaping may be maintained by the HOA rather than tax dollars. There may be a gated entrance, a pool, security, basketball and/or tennis courts, children’s activities and more.

All PUDs will have an HOA. However, there are HOAs which are not PUDs. You may live in a home which belongs to an HOA only, HOA fees can be mandatory or optional, PUDs are mandatory. An HOA only home will have fees that contribute to neighborhood amenities such as a pool, playground, or landscaping, but are not within a PUD. A PUD will also most times have a recorded declaration in the county clerk’s office.

If a home is determined to be within a PUD, a lender giving a mortgage will need to take some additional steps in the loan process. The lender will need to collect additional documents and financial information to approve the PUD and the home for lending. What are lenders looking for? They will look at the reserves, delinquencies, if any, and how many residential vs. commercial units there are. The lender will then assess how much risk is associated with lending on the home within the PUD and issue an approval or denial. This should not slow down the mortgage process and is addressed early in the approval stage.

If approved, the loan will move to closing. At closing the bank attorney will have a PUD rider signed and added to the mortgage and will obtain a PUD endorsement to the lender’s title insurance policy.

Adam Leitman Bailey, P.C. Defeats Retroactive Application of Anti- SLAPP Action After Victory on Defamation and Malicious Prosecution Claims for Cooperative

Condominium & Cooperative Board & Building Representation

Steven Wagner | Bonnie Berkow

Adam Leitman Bailey, P.C. was retained by a Cooperative to pursue a defamation claim brought against a former Board member and a shareholder for posting and disseminating libelous and defamatory remarks against the Cooperative Board of Directors. The Defendants counterclaimed alleging “lack of probable cause” and “intimidation” and seeking unspecified damages.

The Cooperative filed a motion for partial summary judgment, seeking dismissal of certain of the affirmative defenses and the counterclaims, to the extent they allege malicious prosecution or abuse of process. Both Defendants filed a cross-motion to dismiss the Complaint, alleging that the action was not authorized by the Board President and that it failed to state a cause of action for defamation. Shortly thereafter, one of the Defendants filed another cross-motion seeking dismissal of the Complaint on the grounds that the action for defamation was a “strategic lawsuit against public participation” (known as a SLAPP suit) and for recovery of costs and attorneys’ fees.

In 1992, legislation was enacted to address a concern about the use of civil litigation, primarily defamation suits, to intimidate or silence those who speak out at public meetings against proposed land use development and other activities. While this action was pending, the statute was amended to broaden the scope of its application to apply to speaking out in any place open to the public or public forum. Violation of the new, broader, definition was subject to mandatory reimbursement of the Defendant’s legal fees.

Adam Leitman Bailey, P.C. argued in opposition to the SLAPP motion that the amended statute should not be applied retroactively and that the pending action was not an action involving public petition and participation under the former, more restrictive, definition. The Court agreed and denied the motion to dismiss. The Court also denied the separate motions by the two Defendants to dismiss the Complaint. Defendants were unable to defeat Adam Leitman Bailey’s argument that the action had been duly authorized by the Board President.

Adam Leitman Bailey was also successful on its motion to dismiss the counterclaims for malicious prosecution and abuse of process. These counterclaims and related affirmative defenses were dismissed by the Court.

Steven Wagner and Bonnie Reid Berkow of Adam Leitman Bailey P.C. prevailed for the board of directors and the building of this cooperative. 

Press Mentions

NYSBA Real Estate Titles: The Practice of Real Estate Law in New York (4th ed.)

Book Review by Brook Boyd 

Adam Leitman Bailey

I purchased the 2d edition of the New York State Bar Association’s Real Estate Titles over two decades ago. No dust ever accumulated on it, since it was in constant use, not only by me, but also by my colleagues who repeatedly borrowed it. Recently, I acquired the new 4th edition of Real Estate Titles, updated and now named “Real Estate Titles—The Practice of Real Estate Law in New York” (called Real Estate Titles 4th below). Real Estate Titles 4th was edited by contributing authors Adam Leitman Bailey of Adam Leitman Bailey, P.C. and Michael J. Berey of First American Title Insurance Company. It is available at https://realestatetitlesbook.com/ and also in an electronic format from the New York State Bar Association. Here are my impressions of this book.

U.S. and International Preference for New York Law

The first question is, who should read this book? Why should a lawyer, who practices in a state other than New York, care about New York law? The answer is that, in large deals, more contracts tend to apply New York law than the law of any other state. For example, an analysis of the provisions for choice of law and forum, in agreements included in 2002 SEC filings by public companies, found that approximately 50% applied New York law. Theodore Eisenberg and Geoffrey P. Miller, The Flight to New York: An Empirical Study of Choice of Law and Choice of Forum Clauses in Publicly Held Companies’ Contracts, 30 Cardozo L. Rev. 1475 (2009). New York law was chosen by public companies about three times more often than the law of Delaware (the second most popular state) was chosen by public companies (with respect to contractual provisions for choice of law and forum). For the reasons why New York law is often chosen in non-New York transactions, see, e.g., Boaz Morag, Katie Gonzalez and Elizabeth Brody, “New York as the Preferred Law and Forum for Commercial Disputes” (Practical Law Feb. 6, 2020), and Andre Jaglom and Michael Galligan, New York Law as the Gold Standard Choice—FOR GLOBAL BUSINESS CONTRACTS (Feb. 1, 2019).

Also, in my experience, commercial loan agreements disproportionately designate New York law as the governing law, for reasons such as New York’s lender-friendly usury exemption for loans of $2,500,000 or more. N.Y. Gen. Oblig. Law §5-501(6)(b). New York law also is more likely (than the law of other American states) to be designated as the applicable law in international contracts, based on an analysis of contracts involved in disputes before the International Court of Arbitration of the International Chamber of Commerce, which is headquartered in Paris. Gilles Cuniberti, The International Market for Contracts: The Most Attractive Contract Laws, 34 Nw. J. Int’l. L. & Bus. 455, 516 (2014). Similarly, in Central America, apparently lawyers tend to prefer to draft contracts that apply the law of New York rather than the law of other U.S. states. Ignacio Andrade Aycinena and Claudia Pontaza, The New York Law as the Choice of Law in Central America Contracts.

Broad Scope of ‘Real Estate Titles 4th’

The title “Real Estate Titles” is a little misleading, because the scope of this book covers not only real estate title work, but also many other aspects of legal practice that relate to real estate, such as trusts and estates, litigation, contracts, legal entities (such as corporations and unincorporated entities, nonprofits and governmental entities), finance, civil and criminal forfeitures, bankruptcy, environmental issues, “oil and gas” and mining, taxation, and transportation (including roads and railroads).

Both the ABCs and the Details Are Covered

While Real Estate Titles 4th provides an overview of New York real estate practice and related areas, it also includes many essential technical details. As just one very simple example, if a married couple buys a house, how should they take title to their house? One of the perks of being a New York state resident is that a married couple can take title as tenants by the entirety, whereas most U.S. states do not permit this form of ownership. An advantage of owning a single-family home, as tenants by the entirety, is that if a spouse’s creditor gets a judgment that becomes a lien against the marital home, then generally such creditor cannot enforce such lien against the home unless the non-debtor spouse dies, or the spouses are divorced (or the marriage is annulled, or there is a marital separation by court order or judgment or written agreement). Real Estate Titles 4th §§1.23-1.24, pps. 1-22 to 1-23. See generally id. p. 5-55.

However, according to Real Estate Titles 4th, “a federal tax lien against only one of the … tenants by the entirety can be enforced by a sale of the entire property, including the interests of the nondebtors …, on the authority of Internal Revenue Code §§6321 and 7403. Bankruptcy Code §363(h) also authorizes the sale of all interests in a property upon the bankruptcy of one of the … tenants by the entirety” (footnotes omitted), subject to applicable bankruptcy exemptions. Real Estate Titles 4th §1.19, p. 1-20. See also id. §9.16, p. 9-19 and §15.59, p. 15-61 and 15-62. But see id. §5.106, p. 5-56 regarding federal and state liens for estate taxes.

A tenant by the entirety may also be entitled to certain protections under the Civil Asset Forfeiture Reform Act of 2000 (CAFRA). Pub. L. No. 106-185, 114 Stat. 202 (2000). See also Real Estate Titles 4th §14.6, p. 14.6 et seq.

A deed to a same-sex New York couple who are married in New York, or in a different State recognizing same-sex marriage, creates a tenancy by the entirety, unless the deed provides otherwise. Id. §7.7, p. 7.6. A same-sex couple may identify “themselves on a deed as husband and husband, wife and wife, husband and wife, or spouse and spouse, as well as the more traditional tenants by the entirety, if they so wish. However, same-sex couples should be advised against taking title on a deed as partner and partner.” Id. pps. 32-3 to 32-4.

Highlights of Other Helpful Sections

While my page limits for this article prevent me from giving you a summary of all of the many useful points in Real Estate Titles 4th, here are a few more samples of items that may be of interest to you:

Confirm That Documents Are Signed by Informed Signatories With Capacity To Act. In the “old days,” generally a closing was held in person. Lawyers had the opportunity to explain the documents being signed, and to have conversations with the signatories in order to confirm that they understood what was being signed. Now, in many “virtual” closings, there is often no Zoom “face to face” interaction between the lawyers and the signatories. However, Real Estate Titles 4th warns us that “[d]eeds and contracts of an incapacitated (incompetent) person, made after a judicial declaration of incapacity, are absolutely void. This disability applies until such time as a court of competent jurisdiction authorizes the incapacitated person to reassume control of his or her property. The deed of an incapacitated (incompetent) person who has not yet been judicially declared as such is merely voidable, not absolutely void” (emphasis added). Id. §3.4, pps. 3-3 to 3-4. Similar rules apply to incapacitated (impaired) persons. Id. §3.5, p. 3-4.

Approximately 6.5 million Americans that are at least 65 years old are living with Alzheimer’s, and it is estimated that 12.7 million Americans will have Alzheimer’s in 2050. Alzheimer’s Disease Facts and Figures (Alzheimer’s Association 2022). Also, some successful people are addicted to drugs or alcohol, or have poor vision, dyslexia, or other mental impairments. Lawyers therefore should be cautious about accepting any document signed by a person without either having any meaningful contact with such person or receiving other appropriate assurances as to such person.

File To Get Notice of a Real Property Tax Foreclosure. One of my relatives was an intelligent man, who graduated from an Ivy League law school, and who had a distinguished career in government service. Once, when he bragged about the property that he had inherited in Texas, I asked him if he had been paying the property taxes. When he said no, I replied, “YOU HAVEN’T BEEN PAYING THE TAXES?!” In an instant, he realized that his nest egg was in trouble. He soon learned that the property had been sold for nonpayment of real property taxes. He flew down to Texas and consulted with a local lawyer, who informed him that nothing could be done to get his property back. However, Real Estate Titles 4th explains that, in New York state, “[a]ny mortgagee, lienor, lessee or other person having a legally protected interest in real property who wishes to receive copies of the [tax foreclosure] notices may file a declaration of interest pursuant to RPTL §1126. The declaration of interest is good for ten years and may be extended for an additional ten years.” Real Estate Titles 4th, §12.19, p. 12-27. However, a separate procedure is followed in New York City. “New York City’s in rem tax foreclosure statute provides for notice by publication and by mail to the names and addresses shown on registration cards filed with the city by interested parties (i.e., owners, mortgagees, lienors and others having an interest in the property).” Id. §12.20, p. 12-28. It could be argued that it is not necessary to make these filings if you own only one home, where you live, but what about the risk of an extended illness, glaucoma, or dementia when you are older? Also, if you own a second home, or you own investment property, you may lose track of one bill, and then this oversight will trigger a tax foreclosure. In any event, each mortgage lender should make the required N.Y. filing to get notice of any real property tax foreclosure affecting any property that is mortgaged to such lender, but apparently few lenders make such filings. Id. §12.19, p. 12-28.

Need To Estimate the Actual Economic Impact of Commercial Leases. Real Estate Titles 4th, id. Ch. 25, provides many examples of vague commercial lease provisions providing for (1) additional rents that are supposedly intended to cover “inflation” but that are actually far above the inflation rate, and (2) “expense reimbursement” provisions in commercial leases that are substantially in excess of the landlord’s actual expenses. Another example of an unfair lease provision is the inclusion (in the tenant’s square footage) of areas that are in the sole control of the landlord, such as equipment rooms that service only other tenants. The lawyers for the parties therefore need to focus not just on the literal provisions of the lease, but also their economic impact on their respective clients.

N.Y. Mortgage Lenders Should Get TIRSA Title Insurance Endorsement and Avoid Negative Amortization; and a N.Y. Mortgage Can Secure Swap Breakage Costs. In the case of a loan secured by a mortgage in New York State, Real Estate Titles 4th advises that, “[t]o further confirm the coverage of the Loan policy, lenders typically obtain a Title Insurance Rate Service Association (TIRSA) Mortgage Tax Endorsement …. The endorsement ‘insures the owner of the indebtedness secured by the insured mortgage(s) against loss or damage which may be sustained by reason that all mortgage recording taxes required to be paid on the insured mortgage(s) have not been paid.’” Id. §27.5, p. 27-6. If such mortgage provides for negative amortization (i.e., adding unpaid interest to principal), or charging interest on interest, this will trigger additional mortgage recording tax. Id. §27.11, p. 27-15. However, the breakage costs, under an interest rate swap agreement, will not trigger additional mortgage recording tax, if (1) such costs are secured as “additional interest” on a related mortgage loan, (2) the notional amount of principal under the swap agreement does not exceed the principal amount of the mortgage, and (3) the swap provider is the same as the mortgagee or an affiliate thereof. Id. §§27.11-27.12, pps. 27-15 to 27-16.

Conclusion

Real Estate Titles 4th is a very impressive book. It represents the fruit of the labors of many skilled lawyers, over two generations, who unselfishly (without any fee) spent many hours to write this book in order to help others avoid the hidden rocks that would otherwise shipwreck them. These authors have my complete admiration and respect.

Brook Boyd is counsel at Meister Seelig & Fein in its New York office, and specializes in real estate and corporate transactions. He is the author of Boyd, ‘Real Estate Financing’ (Law Journal Press, 50th ed. 2022).

New Construction Litigation 

Adam Leitman Bailey

RPAPL §881—License To Permit Use of Adjacent Property During Construction Denied—Constant Unapproved Changes to Construction Plans Did Not Rise to The Level of Proof Required by RPAPL §881 and Permanent Change to Respondent’s Property Preclude the Granting of a §881 License—No Reimbursement of Expert and Attorney Fees When License Is Not Granted

A petitioner moved pursuant to RPAPL §881 (§881), for a license to enter upon the respondent’s property “for an extended period of time.” The respondent opposed the application and counterclaimed for reimbursement of expert fees, attorney fees and costs.

The respondent’s property and the petitioner’s property share a common wall (south wall). The petition described construction that would occur along the east, south and west sides of the respondent’s property. The work would include, inter alia, removal of the south wall and trees and would involve excavation and foundation work related to such removal. The petitioner claimed that there was “no reasonable alternative to stabilize the (respondent’s property’s) soil then to replace the disturbed soil and install timber lagging to keep the soil in place.”

The petitioner stated that it had “not yet been determined what permanent reinforcement the West Wall will require after the project is completed if, in fact, any is required.” The petition also stated that “[t]he improvements constituting the Work are mostly temporary in nature and are all intended to safeguard” the project property, the adjacent property and or the public during the contemplated construction and permit the project to be built.

The petitioner alleged that there had been an “extensive and lengthy negotiation for license fees and reimbursement to respondent, which ultimately failed, and that the breakdown in communication effectively amounts to a refusal by respondent to permit access to respondent’s property by petitioner.” The petition further alleged that the respondent would not suffer “any loss of use or enjoyment” of its property if the license were granted since the adjacent property is “unimproved and vacant.” The petition set forth several details of the contemplated work and was supported with expert affidavits.

The respondent countered that it had never refused access to the petitioner. The contemplated construction involves “permanent encroachments,” there are “unresolved boundary disputes between the parties,” the petitioner “cavalierly responded to requests for information necessary to effect a license agreement”, and that because of these issues the respondent has been “restrained from the ability to market and sell its property to another entity.” The respondent supported its opposition with expert affidavits.

The respondent also argued that the development plans are “not clear or precise,” and the petitioner has new plans which the respondent had yet to be provided with, including “the scope and the duration of the construction work to be completed.” The respondent noted that the petition omitted “dates and times for the many stages of the project.” It asserted that the petitioner was unfairly accusing the respondent of being “unreasonable.” The respondent sought reasonable attorney and expert fees and in the event that the license is granted, adequate protections.

The petitioner alleged, inter alia, that the respondent had been provided with “up to date documents in an attempt to finalize an access agreement.” It noted that the “depth and complexity of the tree roots will not be known until the tree on respondent’s property is removed.” The petitioner further alleged that the “timber lagging will be abandoned in place and will continue to serve this function unless and until the adjacent property is developed—it will not inhibit respondent’s ability to utilize the 7” of its property in a future development.” The petitioner emphasized that the respondent’s property is vacant and “there is no business or residence that would suffer interruption or disruption as a result of the access sought by petitioner.”

Thereafter, the petitioner advised the court that the “7 inches of timber-lagging will no longer remain on respondent’s property, and it is believed that respondent’s west-wall only needs to be braced temporarily.” Additionally, a respondent’s expert asserted that a sidewalk bridge “encroaches and trespasses between 3 3/4 inches and 8 3/4 inches onto respondent’s property.”

A petitioner’s expert affidavit addressed “altered plans with respect to the timber lagging,” indicating that instead of installing timber lagging, the contractor will “excavate approximately 9 feet horizontally onto the adjacent property….” This expert described a “new plan” that would eliminate “bracing/shoring” in the area of excavation related to the south wall and contemplated use of a “concrete deadman” in conjunction with the excavation. The expert further stated that “it is possible that bracing/shoring of the West Wall will be temporary.” The petitioner also contended that certain work should not be characterized as “encroachments,” but they are rather “protections” for the benefit of the respondent’s property. The petitioner also asserted that the disposal of excavated soil will comply with environmental regulations.

The respondent argued that the “plans are constantly changing and the majority of the areas of concern remain uncertain….” It asserted that the petitioner’s use of “essentially the entirety of the respondent’s property for an unknown duration places a severe hardship and inconvenience upon respondent….”

Section 881 provides for a license when a neighbors contemplated “improvements or repairs cannot be made by the owner or lessee without entering the premises of an adjoining owner or his lessee, and permission so to enter has been refused….” Section 881 further provides that the petition “shall state the facts making such entry necessary and the date or dates on which entry is sought. Such license shall be granted by the court in an appropriate case upon such terms as justice requires. The licensee shall be liable to the adjoining owner or his lessee for actual damages occurring as a result of the entry.”

The court explained that the granting of a §881 license is “addressed to the sound discretion of the court, which must apply a reasonableness standard in balancing the potential hardship to the applicant if the petition is not granted against the inconvenience to the adjoining owner if it is granted.” Courts are to consider “the nature and extent of the requested access, the duration of the access, the protections to the adjoining property that are needed, the lack of an alternative means to perform the work, the public interest in the completion of the project, and the measures in place to ensure the financial compensation of the adjoining owner for any damage or inconvenience resulting from the intrusion.”

Courts have held that “[w]here a petitioner seeks a license to create a permanent encroachment now not in existence, however slight, the ‘relief sought transcends the statute… and it is contrary to the elementary principles of equity.’” The court also stated that if a petitioner “fails to provide items sought that had been memorialized in detailed, specific plans approved by the Department of Buildings, a petitioner has failed to make a showing of reasonableness and necessity of the trespass.”

The court denied the §881 license. The petitioner failed to provide the court with a “clear–cut detailed, and specific plan about how they intend to use respondent’s property, nor the duration of the use.” Although both parties indicated that the contemplated duration of the petitioner’s use of the respondent’s property is approximately 24 months, the court was “concerned about the ever—changing and unreliable construction plans….” The court was also concerned “about the bracing of the south wall and the west wall, what it would ultimately entail and the permanency of the eventual solution.”

The court cited the petitioner’s changing description of the necessary work and noted that the petitioner’s environmental report was a “purely speculative report of what will be done with the soil from respondent’s property.” Moreover, the “scope and nature” of the petitioner’s use of access to respondent’s property was “ambiguous with respect to the substantial alterations.” The timber lagging was originally described as “not permanent but would remain on respondent’s property after the project completion” and then the timber lagging was eliminated in favor of “extensive excavation,” in connection with “bracing, that may or may not be permanent to a large portion of the respondent’s property for an unknown duration of time.”

The court refused to accept that “any permanent changes to respondent’s property would entail mere ‘protection’ rather than ‘encroachment’ of respondent’s property.” The court also did not agree that because the respondent’s property is a vacant lot, there would be “no business or residence that would suffer interruption or disruption as result of the access sought by petitioner.”

The respondent provided evidence that it intended to sell the property and such sale “could not progress due to the continued negotiations and uncertain nature of the work to be done to the property.” The court stated that the fact that the respondent’s property is “an unused commercial lot does not permit the petitioner to use the property however and whenever they see fit, and to make permanent changes to the property in the process.”

The court emphasized that decisional precedent held that “before it can grant a license pursuant to … §881, it is critical that the court be apprised of the exact nature, timing and extent of the work requiring the license.” The court held that the “constant unapproved changes to the construction plans do not rise to the level of proof required pursuant to…§881, and the permanence of the changes to respondent’s property requires that the court deny petitioner’s application.”

The court denied the respondent’s request for attorney and expert fees, explaining that case law has held that “if a respondent is successful in opposing an 881 petition and no license is granted then that respondent would not be entitled to attorneys’ fees for successfully opposing the petition.”

Comment: Adam Leitman Bailey, counsel for the respondent, emphasized that as Justice Guzman held, the movant’s plans “must be detailed and specific and provide the neighbor with the ability to understand the potential work and damage that might occur.” He stated that this decision illustrates that absent compliance with such requirement, access will be denied.

Darius P. Chafizadeh of Harris Beach PLLC and Thomas Smith of Smith Buss & Jacobs LLP, counsels for the petitioner stated they understand the court’s concerns and they are pleased that the parties were able to reach a mutually acceptable license agreement following the court’s decision.

Highbridge Facilities v. Cromwell Avenue Investors, LLC, Supreme Court, Bronx County, Index No. 810953-2021E, decided Feb. 23, 2022. Guzman, J.

Awards & Recognitions

Chambers & Partners Ranks Adam Leitman Bailey as One of New York’s Top Real Estate Litigators in 2022

Chambers & Partners once again ranked Adam Leitman Bailey as one of the leading real estate litigators in New York. Placing in the top 4 litigators ranked in New York, he is the only real estate litigator to also be awarded Martindale-Hubbell “AV” Preeminent rating, a Best Lawyers ranking for himself and his law firm, awarded by Super Lawyers as one of New York’s “Top 100” attorneys, and selected among America’s Top 100 Bet-The-Company Litigators. Chambers remarked that Adam Leitman Bailey “is a noted real estate litigator with substantial expertise handling high-stakes disputes.”

Chambers & Partners is one of the most renowned and prestigious legal directories in the world, Chambers & Partners now produces eight legal guides covering 185 jurisdictions, in addition to various other guides such as legal career and global practice guides. Chambers is a highly respected and influential London-based research and publishing company that provides rankings of the leading business lawyers and law firms from around the world. The unbiased U.S. national rankings are compiled from the opinions of colleagues and competitors, including general counsel at Fortune 100 companies, high profile entrepreneurs building up their own private corporations and significant purchasers of legal services. Chambers conducts rigorous research in its evaluation and rating of lawyers and firms, including interviews with clients and other attorneys. Chambers evaluates the technical legal ability of the lawyers and firms it rates, as well as their reputations for professional conduct, client service, and results obtained. The ranking research company conducted by 200 Research Analysts, across 200 jurisdictions and providing nearly 6,000 rankings tables, annually collecting hundreds of thousands of responses from clients, the majority via in-depth interview. 

Chambers Associate Ranks Adam Leitman Bailey, P.C. in 5 Categories Nationwide in the 2022 Associate Satisfaction Survey

Eponymous founder Adam Leitman Bailey is ranked highly in Chambers USA. This year’s Chambers Associate rankings greatly reflect the hard work that Adam Leitman Bailey, P.C. has put into fostering a desirable, inclusive, and welcoming work environment that pushes each associate to be the best they can be, while also providing remarkable legal services to their clients.

Adam Leitman Bailey has received raving reviews in the 2022 Chambers Associate guide. Below is a full review by the Chambers Associate 2022 Guide: 

"In the concrete jungle where dreams are made of, Adam Leitman Bailey associates can help “create miracles” in the real estate world. “The people here are considered high-caliber and relentless characters – and I knew I needed to work with them,” declared one of our interviewees right off the bat. This description gives you a good sense of the entrepreneurial energy at Adam Leitman Bailey, a relatively young (founded in 2000) but strong player in the field, with a penchant for all things real estate and all things New York. Adam Leitman Bailey’s specialist focus was a huge draw for our interviewees: “What’s really fascinating about real estate law is that on the face of it a matter may seem like an easy contractual dispute, but when you get into it you discover that it actually touches upon so many varied areas of law.”

A recent case saw Leitman Bailey and his team spark a “new law for all developers in New York, whereby if you buy someone else’s development or multi-family building, you’re not responsible for the first developer’s defects. In New York, that rocked the industry. We’re known for making new laws and rocking the industry.” ..."

CHAMBERS ASSOCIATE RANKS ADAM LEITMAN BAILEY, P.C. AN EXCELLENT PERFORMER FOR CAREER DEVELOPMENT:

Due to the size of the firm, juniors are able to “work very closely with the senior attorneys here.” This means that “mentorship comes from them easily whenever I need advice or input.” We heard that partners are “invested in my development. They’re open and willing to teach and I feel comfortable asking questions about any issues, even if I’ve made a mistake.” The reportedly kind nature of the leadership here means “they tackle issues in a very logical and blameless way. There’s a lot of guidance and problem solving.”

Juniors told us they “have the ability to really take the reins” on their careers. We heard of juniors having conversations with partners about the kind of work they want to do and receiving guidance on what the firm is looking for in the future: “They’ll take me under their wing and go through the process to allow me to develop the skills I need.” There’s a heavy emphasis on business development and juniors building a practice from the start of their careers. “They’ve been interested in getting me published on legal issues and have helped me to find topics and issues to write about that are topical,” a source told us.

CHAMBERS ASSOCIATE RANKS ADAM LEITMAN BAILEY, P.C. AN ELITE TOP LAW FIRM FOR ASSOCIATE QUALITY OF LIFE:

Adam Leitman Bailey, P.C. was ranked as a Top 10 Firm for Quality of Life for their associates. For every firm taking part in our annual interview-based research, we also invite their junior associates to respond to an online survey covering every aspect of law firm life. They complete 40 questions asking about everything from their initial views on the firm and its competitors, to their relationships with partners and clients, to the firm’s handling of D&I and pro bono. We also ask them about their expectations, aspirations and how important all these factors were when joining the profession and how those views change as they mature. Each question involves a rating, which we agglomerate here for comparison. The quality of life scores are a combination of all topics that can affect personal fulfillment at a law firm, from salary, to hours, to flexible working, to parental policy.

Chambers Associate is a career guide prepared by Chambers & Partners that “gives law students an unparalleled view into the working lives of associates at the nation’s leading law firms.” Chambers & Partners is one of the most renowned legal directories in the world. Chambers has published the leading directories of the legal profession, now producing eight legal guides covering 185 jurisdictions. Chambers is thus a highly respected and influential research and publishing company that provides rankings of the leading business lawyers and law firms from around the world. The prestigious guide covers all of the major practice areas at the national level, as well as key specialties within each state. The unbiased U.S. national rankings are compiled from the opinions of colleagues and competitors, including general counsel at Fortune 100 companies, high profile entrepreneurs building up their own private corporations and significant purchasers of legal services.

Adam Leitman Bailey, P.C. Other Rankings:

Quality of Life - Elite Performer (Top 10)

Associate Retention - Excellent Performer (Top 25)

Career Development - Excellent Performer (Top 25)

Associate Satisfaction - Strong Performer (Top 30)

Diversity, Equity & Inclusion - Strong Performer (Top 30)

Client Testimonials

“I now have a suspicion that Adam/Team Adam Leitman Bailey, P.C. is my lucky charm…Clearly, some magic powers are at play here”

Letter of Reference

"As I am sure you heard, {anon} and I heard the judge rule in favor of about 32 tenants before we got called up. By some miracle/mercy, he changed his tone for us and we won the eviction easily and almost immediately. I think the court room echoed when both of our jaws dropped to the ground.

I don’t know if you all know this, but I now have a suspicion that Adam/Team Adam Leitman Bailey, P.C is my lucky charm/might have magic powers: Years ago, a judge was making it absolutely impossible for me to purchase my dream home in Brooklyn. The people I was working with before I met Adam had over 100 years of experience in real estate law and they all said they had never seen anything like it. This went on for literal years. My friends in Italy told me/joked that it was time to slip the judge some cash. It was an incomprehensible situation. I hired Adam and the next day his associate went to the courthouse and low and behold suddenly all the papers were available, on someone’s desk, all ready to go. Adam says this was a coincidence, but based on what happened yesterday I think not! Clearly, some magic powers are at play here 🙂

Thank you all so much for your hard work on this and for writing excellent documents and coming up with a strategy that was so water tight, even this pro tenant judge with a moratorium mandate could not say no to us!

Thank you, thank you!"

“Adam is the lawyer you dream of having by your side!”

Letter of Reference

“Adam is the lawyer you dream of having by your side! He goes in fearless and totally slays your opponent and reduces them to zero! He did that in my case against a billionaire landlord! He is my true hero and a best friend! He is one of a kind with a huge heart and genius mind!”

“She CRUSHED the sponsor and got the building back ALL of what was owed PLUS late fees!”

Letter of Reference

“Hope you’re doing well! You should be very very proud of our girl; she CRUSHED the sponsor and got the building back ALL what was owed PLUS late fees! She’s becoming nearly as amazing as you now 😊😊!”

Lecture

Adam Leitman Bailey Spoke to Columbia Law School Real Estate Finance Class About His Experiences and Knowledge Litigating Real Estate Cases

On April 25, 2022, Adam Leitman Bailey addressed a Columbia Law School Real Estate Finance Class and discussed “The Most Important Cases that Every Transactional Attorney Must Know to Represent Clients Effectively”. The professor, Steven G. Horowitz, called it “a review from the trenches.”

He used personal anecdotes and his own cases as well as some of the most important and useful cases ever decided that every future transactional attorney should know before practicing transactional law or working for a company. He delved into each story and case and explained in each instance the importance to the transactional attorney and in between gave some tips on being a good lawyer and even used some of his own prominent cases as examples.  

Community

Victoria Bossone Receives the 25th Raymond “Hap” Harrison Scholarship Award



Building Foundations and Dreams 

This past week, Victoria Bossone, a senior at New Milford High School received the 25th Raymond “Hap” Harrison Scholarship. The scholarship is named for Adam Leitman Bailey’s Track & Field and Cross Country Coach in High School who he credits much of his success not only in running but for much of what he has accomplished in his career. Ms. Bossone was chosen out of all New Milford High School students by the Guidance Department to be a paid intern at Adam Leitman Bailey, P.C.. She will attend Monmouth University and major in Speech Pathology.

The Raymond “Hap” Harrison Scholarship is funded through the Building Foundations charity, founded by Adam Leitman Bailey in 2002. The charity’s mission is to assist students of all ages in pursuing their professional and personal dreams by providing financing, scholarships, education, internships, real-life experience and any other tools necessary to reach their dreams. It is a $40,000 scholarship divided evenly across 4 years. The Raymond “Hap” Harrison Scholarship has donated over a million dollars since 2008.

Dave Wilson taught at New Milford High School when Adam Leitman Bailey attended the school. At the award ceremony he made the following remarks:

“I was only teaching for a couple of years and as you all are well aware, there are these life events that occur. Adam was in a horrible car accident and Adam was told that you are not going to college and that you would be lucky if you can get through high school and we’ll get you through. Adam was an All-League runner and he went back to cross country and went back to track and then he went to college….and law school….and he’s got his own firm in New York. Adam is involved in so much and he is so busy but one of the things I can tell you is all you have to do is call Adam and say Adam I’m a New Milford student and you have his attention. Because he is going to help you achieve whatever is the rest of that sentence. Because New Milford is special for him - and he doesn’t do it just for New Milford; he has a couple of schools that he has kind of adopted, but he is always there for New Milford. He’s always there for New Milford students. He leads some of our students on a tour of lower Manhattan and shows them the historic parts of lower Manhattan, and talks about his work as a lawyer and in defending the constitution and what that means. He puts himself out there and tells you: the students, that you can do this too. Follow your bliss. Do your passion. These aren’t just words that people are saying to you. You can do whatever you set your minds to.”

Words from Victoria : 

“I was planning on thanking you for everything you have done for me today in person, yet I unfortunately missed you at the end of the day. Although my time here is not finished, I figured now would be an appropriate time to express my gratitude for you and the opportunity you have gifted me, since I will no longer be here when you return from your well-deserved vacation. I will never be able to verbalize how grateful I am that I am one of the few lucky high school students who possess the honor of saying they have worked with you for a summer. Whether you were conscious of it or not, you have not only demonstrated to me the ins and outs of how a successful office and individual functions, but also numerous life lessons I will forever carry with me to better my future. I am beyond thankful that I was selected for this incredible opportunity. Not only have you been a mentor to me, but you have given me a genuine insight into the working world I will eventually become a part of. I know I will see you soon and of course will thank you then once more, but till then from the bottom of my heart thank you so much for this amazing experience.”

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