Adam Leitman Bailey, P.C. Helps Upper West Side Condominium to Achieve Winning Settlement
After months of rigorous negotiations, Adam Leitman Bailey, P.C., has successfully concluded a settlement that will enable its client, a 50-unit condominium on Manhattan’s Upper West Side, to obtain control of common and commercial spaces that the sponsor sought to dominate and to realize substantial revenue from those elements. The settlement with the sponsor also included valuable financial consideration including free managing agent service for eighteen months and forgiveness of six-figure mortgage debt on the condominium superintendent’s unit.
The settlement resolves two lawsuits that have been pending between the condominium and the sponsor since 2013. In the first action, the sponsor, asserting rights it had reserved for itself in the declaration and offering plan to exercise control over the condominium building’s roof, sued to enforce its alleged right to receive all revenue to be generated from a rooftop cellular tower lease over a period of twenty years. After the sponsor commenced suit in Nassau County, Adam Leitman Bailey, P.C., assisted the condominium in tendering the claim to the condominium’s directors’ and officers’ insurance carrier. Next, the firm forced the sponsor to concede to a change of venue to New York County where the building is situated and the legal precedents were highly favorable to the condominium as to the sponsor’s waiver and estoppel of its rights under the condominium documents – the arguments that would be critical to victory. The firm also supervised the early stages of document discovery.
At the same time, Adam Leitman Bailey, P.C., represented the condominium as plaintiff against the sponsor in an action alleging that the sponsor had underfunded the statutory reserve fund by more than $500,000. In May 2014, the firm prevailed against the sponsor on its motion to dismiss, as the Court in the Commercial Division of Nassau County Supreme Court held that the condominium had alleged a valid claim for breach of contract based on the sponsor’s apparent failure to fully fund the statutory reserve fund. The court also ruled that the claim was timely and not barred by the statute of limitations, as the sponsor had contended. Shortly after the parties appeared for a preliminary conference in the reserve fund action and began to conduct document discovery, the sponsor approached Adam Leitman Bailey, P.C., to commence settlement negotiations.
Through hard work and creative lawyering, Adam Leitman Bailey, P.C., negotiated a winning settlement for the condominium, obtaining a variety of benefits for the condominium that would not have been achievable through litigation alone. The sponsor agreed to transfer control of the roof and all other sponsor-controlled elements of the building to the condominium – a complete victory in the sponsor’s lawsuit having a value of several hundred thousand dollars. The sponsor also agreed to convey two commercial units to the condominium. Thus, the condominium will now be in a position to control spaces that had previously been under sponsor control and to derive all future revenue to be generated from the productive use of those spaces. The sponsor also agreed to forgive a six-figure mortgage indebtedness with respect to the condominium’s purchase of the superintendent’s unit; to provide eighteen months of free managing agent service; and to license various storage lockers to the condominium until all existing rent-stabilized apartments are eventually sold, a benefit that could last for decades.
Jeffrey R. Metz represented the condominium with respect to the reserve fund action.
Leonard H. Ritz represented the condominium with respect to the settlement.