Preview
FILED: NEW YORK COUNTY CLERK 01/14/2022 04:07 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 535 RECEIVED NYSCEF: 01/14/2022
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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CRESCO LABS, NEW YORK, LLC, a New
York limited liability company, and CRESCO
Index No.: 652343/2018
LABS LLC, an Illinois limited liability company,
Hon. Andrew Borrok
Plaintiffs,
-against- Mot. Seq. No. __
FIORELLO PHARMACEUTICALS, INC., a
New York corporation,
Defendant.
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MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFFS’ MOTION
FOR LEAVE TO FILE A SUR-REPLY IN OPPOSITION TO
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
Defendant Fiorello Pharmaceuticals, Inc. (“Fiorello”) respectfully submits
this opposition to Plaintiffs Cresco Labs, LLC and Cresco Labs, New York, LLC’s
(“Cresco’s”) frivolous motion for a sur-reply. Cresco objects to Fiorello’s use of its
reply papers in exactly the way reply papers are intended – to respond to the
arguments Cresco made in its opposition brief. 1
1
By submitting its sur-reply with its moving papers, Cresco has violated Commercial Division Rule 18, which
prohibits the submission of a sur-reply without the Court’s “express permission in advance.” This is an independent
reason for this Court to deny Cresco’s motion. Mindful of Rule 18’s direction that “[o]pposing counsel who receives
a copy of materials submitted in violation of this Rule shall not respond in kind,” Fiorello does not here respond to
Cresco’s unauthorized sur-reply.
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From the filing of this Action in May 2018 and for the more than three and a
half years since then, Fiorello has consistently argued that in New York recovery for
breach of a preliminary agreement is limited to out-of-pocket reliance damages. In
its motion for summary judgment or alternatively to limit damages (Motion
Sequence 11), Fiorello expressly addressed New York law’s limitations on damages
for breach of a preliminary agreement. [NYSCEF 341, (SJSeq11_Moving_Br) at
23-31]. Fiorello’s moving brief relied heavily on the holdings and rationale of
Goodstein Constr. Corp v. City of New York, 80 NY2d 366 [1992] and also cited to
nine subsequently decided cases that follow Goodstein’s damages limitation.
(Seq11_Moving_Br at 23-31).
In opposition, Cresco wrongly argued both that “[t]he trend of authority has
moved away from Goodstein” and that Goodstein was distinguishable inter alia
because the Goodstein defendant did not enter a transaction with a different party
similar to the transaction outlined in the preliminary agreement at issue in the case.
([NYSCEF 342] (SJSeq11_Opp_Br) at 21-22, 23 at n.6)).
Cresco now complains and improperly seeks a sur-reply because Fiorello
replied to these baseless arguments. ([NYSCEF 281] (Sur-reply_Mov_Br).
Fiorello’s citation to authority refuting Cresco’s arguments is entirely proper. As
the First Department has stated: “the function of reply papers is to address arguments
made in opposition to the position taken by the movant.” EPF Int’l Ltd. v. Lacey
2
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Fashions Inc., 170 AD3d 575, 575 [1st Dept 2019] (reply affirmation “responded to
issues raised in [] opposition papers … [i]t did not improperly raise new arguments
or theories on which to base its motion.”)
In this spirit, Fiorello cited two recent cases to show that New York has not
moved away from Goodstein: Garda USA, Inc. v Sun Capital Partners, 194 AD3d
545 [1st Dept 2021] and Logic LP Acquisition Co., LLC v. Prestige Employees
Adm’rs, Inc., No. 653504/2020, 2021 WL 3284683 [Sup Ct, New York County July
28, 2021]. 2 Rather than new legal argument, both Garda and Logic LP stand for the
same proposition as Goodstein – that recovery for breach of a preliminary agreement
is limited to reliance damages. There is no requirement that Fiorello cite every case
on point in its moving papers or that reply briefs cite only cases used in the moving
papers.
Cresco’s description of Fiorello’s use of Garda is both self-defeating and
misleading.
First, Cresco complains: “[a]fter Cresco distinguished Goodstein in its
opposition brief” in reply Fiorello cited Garda. (Sur-reply_Mov_ Br at 2). Exactly
– Fiorello properly replied to the new arguments Cresco made in its opposition. Yee
v. Panousopoulos, 176 AD3d 1142, 1144–45 [2d Dept 2019](IAS Court did not
improperly consider new arguments made on reply where “reply responded to the
2
Logic LP was decided after Fiorello served its summary judgment moving papers.
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arguments raised [] in opposition to their motion”); Sanford v. 27-29 W. 181st St.
Ass’n, Inc., 300 AD2d 250, 251 [1st Dept 2002] (“Plaintiffs’ opposing affidavit
virtually demands that defendants supply this statement … [a]s such, the reply
affidavit is clearly responsive to arguments raised in the opposing papers.”)
In its opposition, Cresco tried to minimize Goodstein, arguing that New York
law was moving away from it. [Seq11_Opp_Br at 23, n.6]. Fiorello countered:
Cresco’s erroneous argument that Goodstein is no longer good
law relies on out-of-state authority, while ignoring the First
Department’s express holding earlier this year in Garda, 194
AD3d 545. Even more recent is Logic LP Acquisition Co., LLC
v. Prestige Employees Adm’rs, Inc., No. 653504/2020, 2021 WL
3284683, *1 [Sup Ct, New York County July 28, 2021](“It is
well settled…that recovery for breach of a letter of intent that
does not, as here, contain a binding purchase commitment, is
limited to out-of-pocket costs and not expectation damages or
lost profits.”)(citing Garda and Goodstein). As Garda, Logic
LP, and decades of caselaw establish, New York is not trending
away from Goodstein.
(NYSCEF _530) (Seq11_Reply_Br at 9).
Cresco also tried to limit Goodstein’s scope, arguing that Goodstein’s
limitation on damages should not apply to Cresco’s claim because “in Goodstein the
City decided not to proceed with a multifamily development project altogether,
whereas here Fiorello engaged in almost precisely the same transaction but with a
different buyer.” [Seq11_Opp_Br at 21]. Fiorello responded with cases applying
Goodstein where the defendant entered a similar transaction with a new
counterparty.
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[] Cresco argues that the Goodstein defendant did not complete
the contemplated project, while Fiorello later entered a deal with
GTI. This also played no role in the reasoning of Goodstein and
its progeny, some of which apply its damages limitation where
a transaction was completed with another. Garda, 194 AD3d
545 (target sold to a competitor “for significantly more than
plaintiff had offered”); Imperium Capital, LLC v. Krasilovsky
(Mercer) Family Ltd. Partnership, No. 651240/2013, 2013 WL
4013491, *3 [Sup Ct New York County 2013](when “defendant
notified Imperium that it would not be proceeding with the sale,
as it had received a higher offer from another buyer” it had
already signed a contract with another party). The issue is the
damage caused by the alleged breach of exclusivity, not what
Fiorello did subsequently. Absent an actual Definitive
Agreement consistent with the LOI, approved by Shareholders
and DOH, Cresco would be in the same position.
[Seq11_Reply_Br at 14-15]. Of the two cases Fiorello cited in that paragraph, only
Garda was first cited in reply. Fiorello previously had cited Imperium Capital, as
an example of a case applying Goodstein’s damages limitation. [Seq11_Moving_Br
at 15].
Second, contrary to Cresco’s mischaracterization [Seq11_Opp_Br. at 2],
Fiorello did not describe Garda as “controlling.” Rather, Fiorello described the rule
articulated in Goodstein and reiterated in Garda as controlling:
Even if Cresco could establish causation, Cresco’s recovery
would be limited to out-of-pocket damages associated with the
LOI. This rule, articulated in Goodstein Constr v. City of New
York, 80 NY2d 366 [1992] and recently reiterated by the First
Department in Garda USA, Inc. v Sun Capital Partners, 194
AD3d 545 [1st Dept 2021] is controlling.
[Seq11_Reply_Br at 2] (emphasis added).
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The three excerpts quoted in full above are the only places Garda or Logic LP
appear in Fiorello’s reply brief.
The First Department has expressed a strong policy disfavoring sur-replies
stating: “The practice of filing a sur-reply was repudiated by this Court” and then
noting that its expressed policy “has been applied to bar consideration of such
submissions.” Garced v. Clinton Arms Assocs., 58 AD3d 506, 509 [1st Dept 2009]
(declining to accept additional submission). Cresco has utterly failed to demonstrate
good cause for setting aside that policy to grant Cresco the sur-reply it seeks.
Consistent with Cresco’s pattern in prior briefings, Cresco relies on
mischaracterizations of inapposite cases. None of those cases provide any basis to
support a sur-reply here. For example, Cresco cites Diane Serra Inc. v. Charmer
Indus., Inc., but declines to explain that in that case, the court denied permission to
file a sur-reply for the same reasons this Court should deny Cresco’s motion, i.e.
because the reply brief did not “raise new issues of law or fact which require a
response from plaintiffs.” 190 Misc 2d 386, 391 (Sup Ct New York County 2002).
The two cases Cresco cites that do grant sur-replies are unavailing. In Beazer
v. New York City Health & Hosps. Corp., the court allowed a sur-reply only because
the movant had “advanced a certain argument for the first time through a
supplemental affidavit by its expert.” 76 AD3d 405, 407 (1st Dept 2011). This is a
far cry from Fiorello citing a 2021 First Department case to refute Cresco’s
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untethered argument that New York courts are trending away from following
Goodstein.
In U.S. Bank Tr., N.A. v. Rudick, 156 AD3d 841 [2d Dept 2017], the Second
Department held that the IAS Court had not abused its discretion to allow a sur-reply
where “plaintiff proffered a valid excuse” and the court gave the defendant “a full
opportunity to respond to, and submit further evidence addressing, the plaintiff's
submissions.” Id. at 842. The opinion does not disclose the plaintiff’s “valid excuse,”
but here Cresco offers no excuse at all for failing to make whatever points it deemed
necessary in its opposition papers. Cresco certainly could have chosen to address
Garda, a First Department case exactly contrary to its opposition brief arguments
that New York courts are moving away from Goodstein and that Goodstein does not
apply where a transaction was completed with another party, rather than hoping that
no one would notice it. Indeed, Fiorello previously had cited Garda in its
Respondent’s brief to the Appellate Division on Cresco’s unsuccessful appeal.
Similarly, Cresco’s authorities do not support its alternative argument that,
should the Court not consider Cresco’s sur-reply, it must decide Fiorello’s summary
judgment motion without reference to Garda. Cresco’s reliance on authorities
involving new facts or legal arguments are inapposite. Unlike in the cases on which
Cresco relies, Moorman v. Meadow Park Rehab. & Health Care Ctr., LLC, 57
AD3d 788, 789 [2d Dept 2008] and Gleasion v. Chase, No. 27394/08, 2009 WL
7
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6849874 [Sup. Ct. New York County Sept. 15, 2009], Fiorello did not advance new
arguments or grounds for the first time in reply. Fiorello only directly responded to
Cresco’s opposition by citing additional authority for the same legal principles
articulated in Goodstein. Goodstein’s limitations on Cresco’s potential recovery to
out-of-pocket expenses – and that New York state courts continue to apply
Goodstein without exception – is not a new argument, ground, or affirmative
contention made for the first time on reply. Quite simply, Goodstein continues to be
controlling authority in New York and limits damages, if any, to Cresco’s out-or-
pocket costs incurred during the LOI period.
CONCLUSION
For the reasons above Defendant respectfully requests that the Court deny
Cresco’s improper motion for a sur-reply with costs and attorney’s fees for this
opposition, and award to Fiorello such further relief as may be just and proper.
Dated: January 14, 2022 Respectfully submitted,
Garden City, New York
IZOWER FELDMAN, LLP
Attorneys for Defendant
Fiorello Pharmaceuticals, Inc.
By: /s/Rachel Izower-Faddé
Ronald D. Lefton
Rachel Izower-Faddé
1325 Franklin Ave., Suite 255
Garden City, NY 11530
Tel: (646) 688-3232
Fax: (646) 304-7071
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CERTIFICATION OF COMPLIANCE WITH WORD COUNT LIMIT
I certify pursuant to Rule 17 of the Rules of Practice for the Commercial Division that the
total number of words in the Memorandum of Law in Opposition to Plaintiffs’ Motion for
Permission to File a Sur-Reply, exclusive of the caption and signature block, is 1774.
IZOWER FELDMAN, LLP
Attorneys for Defendant
Fiorello Pharmaceuticals, Inc.
By: /s/Rachel Izower-Faddé
Ronald D. Lefton
Rachel Izower-Faddé
1325 Franklin Ave., Suite 255
Garden City, NY 11530
Tel: (646) 688-3232
Fax: (646) 304-7071
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FILED: NEW YORK COUNTY CLERK 01/14/2022 04:07 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 535 RECEIVED NYSCEF: 01/14/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ----------------------------------------------------------X CRESCO LABS, NEW YORK, LLC, a New York limited liability company, and CRESCO Index No.: 652343/2018 LABS LLC, an Illinois limited liability company, Hon. Andrew Borrok Plaintiffs, -against- Mot. Seq. No. __ FIORELLO PHARMACEUTICALS, INC., a New York corporation, Defendant. ----------------------------------------------------------X MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFFS’ MOTION FOR LEAVE TO FILE A SUR-REPLY IN OPPOSITION TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT Defendant Fiorello Pharmaceuticals, Inc. (“Fiorello”) respectfully submits this opposition to Plaintiffs Cresco Labs, LLC and Cresco Labs, New York, LLC’s (“Cresco’s”) frivolous motion for a sur-reply. Cresco objects to Fiorello’s use of its reply papers in exactly the way reply papers are intended – to respond to the arguments Cresco made in its opposition brief. 1 1 By submitting its sur-reply with its moving papers, Cresco has violated Commercial Division Rule 18, which prohibits the submission of a sur-reply without the Court’s “express permission in advance.” This is an independent reason for this Court to deny Cresco’s motion. Mindful of Rule 18’s direction that “[o]pposing counsel who receives a copy of materials submitted in violation of this Rule shall not respond in kind,” Fiorello does not here respond to Cresco’s unauthorized sur-reply. 1 of 9 FILED: NEW YORK COUNTY CLERK 01/14/2022 04:07 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 535 RECEIVED NYSCEF: 01/14/2022 From the filing of this Action in May 2018 and for the more than three and a half years since then, Fiorello has consistently argued that in New York recovery for breach of a preliminary agreement is limited to out-of-pocket reliance damages. In its motion for summary judgment or alternatively to limit damages (Motion Sequence 11), Fiorello expressly addressed New York law’s limitations on damages for breach of a preliminary agreement. [NYSCEF 341, (SJSeq11_Moving_Br) at 23-31]. Fiorello’s moving brief relied heavily on the holdings and rationale of Goodstein Constr. Corp v. City of New York, 80 NY2d 366 [1992] and also cited to nine subsequently decided cases that follow Goodstein’s damages limitation. (Seq11_Moving_Br at 23-31). In opposition, Cresco wrongly argued both that “[t]he trend of authority has moved away from Goodstein” and that Goodstein was distinguishable inter alia because the Goodstein defendant did not enter a transaction with a different party similar to the transaction outlined in the preliminary agreement at issue in the case. ([NYSCEF 342] (SJSeq11_Opp_Br) at 21-22, 23 at n.6)). Cresco now complains and improperly seeks a sur-reply because Fiorello replied to these baseless arguments. ([NYSCEF 281] (Sur-reply_Mov_Br). Fiorello’s citation to authority refuting Cresco’s arguments is entirely proper. As the First Department has stated: “the function of reply papers is to address arguments made in opposition to the position taken by the movant.” EPF Int’l Ltd. v. Lacey 2 2 of 9 FILED: NEW YORK COUNTY CLERK 01/14/2022 04:07 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 535 RECEIVED NYSCEF: 01/14/2022 Fashions Inc., 170 AD3d 575, 575 [1st Dept 2019] (reply affirmation “responded to issues raised in [] opposition papers … [i]t did not improperly raise new arguments or theories on which to base its motion.”) In this spirit, Fiorello cited two recent cases to show that New York has not moved away from Goodstein: Garda USA, Inc. v Sun Capital Partners, 194 AD3d 545 [1st Dept 2021] and Logic LP Acquisition Co., LLC v. Prestige Employees Adm’rs, Inc., No. 653504/2020, 2021 WL 3284683 [Sup Ct, New York County July 28, 2021]. 2 Rather than new legal argument, both Garda and Logic LP stand for the same proposition as Goodstein – that recovery for breach of a preliminary agreement is limited to reliance damages. There is no requirement that Fiorello cite every case on point in its moving papers or that reply briefs cite only cases used in the moving papers. Cresco’s description of Fiorello’s use of Garda is both self-defeating and misleading. First, Cresco complains: “[a]fter Cresco distinguished Goodstein in its opposition brief” in reply Fiorello cited Garda. (Sur-reply_Mov_ Br at 2). Exactly – Fiorello properly replied to the new arguments Cresco made in its opposition. Yee v. Panousopoulos, 176 AD3d 1142, 1144–45 [2d Dept 2019](IAS Court did not improperly consider new arguments made on reply where “reply responded to the 2 Logic LP was decided after Fiorello served its summary judgment moving papers. 3 3 of 9 FILED: NEW YORK COUNTY CLERK 01/14/2022 04:07 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 535 RECEIVED NYSCEF: 01/14/2022 arguments raised [] in opposition to their motion”); Sanford v. 27-29 W. 181st St. Ass’n, Inc., 300 AD2d 250, 251 [1st Dept 2002] (“Plaintiffs’ opposing affidavit virtually demands that defendants supply this statement … [a]s such, the reply affidavit is clearly responsive to arguments raised in the opposing papers.”) In its opposition, Cresco tried to minimize Goodstein, arguing that New York law was moving away from it. [Seq11_Opp_Br at 23, n.6]. Fiorello countered: Cresco’s erroneous argument that Goodstein is no longer good law relies on out-of-state authority, while ignoring the First Department’s express holding earlier this year in Garda, 194 AD3d 545. Even more recent is Logic LP Acquisition Co., LLC v. Prestige Employees Adm’rs, Inc., No. 653504/2020, 2021 WL 3284683, *1 [Sup Ct, New York County July 28, 2021](“It is well settled…that recovery for breach of a letter of intent that does not, as here, contain a binding purchase commitment, is limited to out-of-pocket costs and not expectation damages or lost profits.”)(citing Garda and Goodstein). As Garda, Logic LP, and decades of caselaw establish, New York is not trending away from Goodstein. (NYSCEF _530) (Seq11_Reply_Br at 9). Cresco also tried to limit Goodstein’s scope, arguing that Goodstein’s limitation on damages should not apply to Cresco’s claim because “in Goodstein the City decided not to proceed with a multifamily development project altogether, whereas here Fiorello engaged in almost precisely the same transaction but with a different buyer.” [Seq11_Opp_Br at 21]. Fiorello responded with cases applying Goodstein where the defendant entered a similar transaction with a new counterparty. 4 4 of 9 FILED: NEW YORK COUNTY CLERK 01/14/2022 04:07 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 535 RECEIVED NYSCEF: 01/14/2022 [] Cresco argues that the Goodstein defendant did not complete the contemplated project, while Fiorello later entered a deal with GTI. This also played no role in the reasoning of Goodstein and its progeny, some of which apply its damages limitation where a transaction was completed with another. Garda, 194 AD3d 545 (target sold to a competitor “for significantly more than plaintiff had offered”); Imperium Capital, LLC v. Krasilovsky (Mercer) Family Ltd. Partnership, No. 651240/2013, 2013 WL 4013491, *3 [Sup Ct New York County 2013](when “defendant notified Imperium that it would not be proceeding with the sale, as it had received a higher offer from another buyer” it had already signed a contract with another party). The issue is the damage caused by the alleged breach of exclusivity, not what Fiorello did subsequently. Absent an actual Definitive Agreement consistent with the LOI, approved by Shareholders and DOH, Cresco would be in the same position. [Seq11_Reply_Br at 14-15]. Of the two cases Fiorello cited in that paragraph, only Garda was first cited in reply. Fiorello previously had cited Imperium Capital, as an example of a case applying Goodstein’s damages limitation. [Seq11_Moving_Br at 15]. Second, contrary to Cresco’s mischaracterization [Seq11_Opp_Br. at 2], Fiorello did not describe Garda as “controlling.” Rather, Fiorello described the rule articulated in Goodstein and reiterated in Garda as controlling: Even if Cresco could establish causation, Cresco’s recovery would be limited to out-of-pocket damages associated with the LOI. This rule, articulated in Goodstein Constr v. City of New York, 80 NY2d 366 [1992] and recently reiterated by the First Department in Garda USA, Inc. v Sun Capital Partners, 194 AD3d 545 [1st Dept 2021] is controlling. [Seq11_Reply_Br at 2] (emphasis added). 5 5 of 9 FILED: NEW YORK COUNTY CLERK 01/14/2022 04:07 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 535 RECEIVED NYSCEF: 01/14/2022 The three excerpts quoted in full above are the only places Garda or Logic LP appear in Fiorello’s reply brief. The First Department has expressed a strong policy disfavoring sur-replies stating: “The practice of filing a sur-reply was repudiated by this Court” and then noting that its expressed policy “has been applied to bar consideration of such submissions.” Garced v. Clinton Arms Assocs., 58 AD3d 506, 509 [1st Dept 2009] (declining to accept additional submission). Cresco has utterly failed to demonstrate good cause for setting aside that policy to grant Cresco the sur-reply it seeks. Consistent with Cresco’s pattern in prior briefings, Cresco relies on mischaracterizations of inapposite cases. None of those cases provide any basis to support a sur-reply here. For example, Cresco cites Diane Serra Inc. v. Charmer Indus., Inc., but declines to explain that in that case, the court denied permission to file a sur-reply for the same reasons this Court should deny Cresco’s motion, i.e. because the reply brief did not “raise new issues of law or fact which require a response from plaintiffs.” 190 Misc 2d 386, 391 (Sup Ct New York County 2002). The two cases Cresco cites that do grant sur-replies are unavailing. In Beazer v. New York City Health & Hosps. Corp., the court allowed a sur-reply only because the movant had “advanced a certain argument for the first time through a supplemental affidavit by its expert.” 76 AD3d 405, 407 (1st Dept 2011). This is a far cry from Fiorello citing a 2021 First Department case to refute Cresco’s 6 6 of 9 FILED: NEW YORK COUNTY CLERK 01/14/2022 04:07 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 535 RECEIVED NYSCEF: 01/14/2022 untethered argument that New York courts are trending away from following Goodstein. In U.S. Bank Tr., N.A. v. Rudick, 156 AD3d 841 [2d Dept 2017], the Second Department held that the IAS Court had not abused its discretion to allow a sur-reply where “plaintiff proffered a valid excuse” and the court gave the defendant “a full opportunity to respond to, and submit further evidence addressing, the plaintiff's submissions.” Id. at 842. The opinion does not disclose the plaintiff’s “valid excuse,” but here Cresco offers no excuse at all for failing to make whatever points it deemed necessary in its opposition papers. Cresco certainly could have chosen to address Garda, a First Department case exactly contrary to its opposition brief arguments that New York courts are moving away from Goodstein and that Goodstein does not apply where a transaction was completed with another party, rather than hoping that no one would notice it. Indeed, Fiorello previously had cited Garda in its Respondent’s brief to the Appellate Division on Cresco’s unsuccessful appeal. Similarly, Cresco’s authorities do not support its alternative argument that, should the Court not consider Cresco’s sur-reply, it must decide Fiorello’s summary judgment motion without reference to Garda. Cresco’s reliance on authorities involving new facts or legal arguments are inapposite. Unlike in the cases on which Cresco relies, Moorman v. Meadow Park Rehab. & Health Care Ctr., LLC, 57 AD3d 788, 789 [2d Dept 2008] and Gleasion v. Chase, No. 27394/08, 2009 WL 7 7 of 9 FILED: NEW YORK COUNTY CLERK 01/14/2022 04:07 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 535 RECEIVED NYSCEF: 01/14/2022 6849874 [Sup. Ct. New York County Sept. 15, 2009], Fiorello did not advance new arguments or grounds for the first time in reply. Fiorello only directly responded to Cresco’s opposition by citing additional authority for the same legal principles articulated in Goodstein. Goodstein’s limitations on Cresco’s potential recovery to out-of-pocket expenses – and that New York state courts continue to apply Goodstein without exception – is not a new argument, ground, or affirmative contention made for the first time on reply. Quite simply, Goodstein continues to be controlling authority in New York and limits damages, if any, to Cresco’s out-or- pocket costs incurred during the LOI period. CONCLUSION For the reasons above Defendant respectfully requests that the Court deny Cresco’s improper motion for a sur-reply with costs and attorney’s fees for this opposition, and award to Fiorello such further relief as may be just and proper. Dated: January 14, 2022 Respectfully submitted, Garden City, New York IZOWER FELDMAN, LLP Attorneys for Defendant Fiorello Pharmaceuticals, Inc. By: /s/Rachel Izower-Faddé Ronald D. Lefton Rachel Izower-Faddé 1325 Franklin Ave., Suite 255 Garden City, NY 11530 Tel: (646) 688-3232 Fax: (646) 304-7071 8 8 of 9 FILED: NEW YORK COUNTY CLERK 01/14/2022 04:07 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 535 RECEIVED NYSCEF: 01/14/2022 CERTIFICATION OF COMPLIANCE WITH WORD COUNT LIMIT I certify pursuant to Rule 17 of the Rules of Practice for the Commercial Division that the total number of words in the Memorandum of Law in Opposition to Plaintiffs’ Motion for Permission to File a Sur-Reply, exclusive of the caption and signature block, is 1774. IZOWER FELDMAN, LLP Attorneys for Defendant Fiorello Pharmaceuticals, Inc. By: /s/Rachel Izower-Faddé Ronald D. Lefton Rachel Izower-Faddé 1325 Franklin Ave., Suite 255 Garden City, NY 11530 Tel: (646) 688-3232 Fax: (646) 304-7071 9 of 9