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FILED: NEW YORK COUNTY CLERK 09/30/2022 06:53 PM INDEX NO. 652698/2022
NYSCEF DOC. NO. 55 RECEIVED NYSCEF: 09/30/2022
EXHIBIT 1
FILED:
FILED: NEW
NEW YORK
YORK COUNTY
COUNTY CLERK
CLERK 08/11/2022
09/30/2022 02:44
06:53 PM
PM INDEX
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NO. 652698/2022
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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EXRP 14 HOLDINGS LLC,
Index No. 652698/2022
EXRP,
VERIFIED COMPLAINT
- against -
LS-14 AVE LLC, JURY TRIAL DEMANDED
Defendant.
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Plaintiff, EXRP 14 HOLDINGS LLC (“Plaintiff,” “Purchaser,” or “EXRP”), by and
through its undersigned attorneys, as and for its Verified Complaint against Defendant LS-14 AVE
LLC (“Defendant” or “Seller”), states as follows:
NATURE OF ACTION
1. This is an action for breach of contract, tortious interference, and related claims
arising from Seller’s blatant breach of its agreement to sell EXRP a completed retail unit in New
York City, and Seller’s scheme to keep the unit for itself and steal from EXRP a more than $20
million lease EXRP had negotiated for its space.
2. This action arises out of Seller’s undisputed failure to timely construct and convey
to EXRP the 11,500 square-foot retail unit at the FÖRENA Condominium located at 540 6th
Avenue, New York, New York (the “Retail Unit”) under the parties’ Agreement of Purchase and
Sale (the “PSA”), on or before May 27, 2022 – the amended outside Closing Date agreed upon by
the parties. Seller failed to timely complete its promised construction of the Retail Unit in
accordance with the plans and specifications attached to the PSA.
3. In the face of Seller’s repeated failures to satisfy its contractual obligations, EXRP
agreed five separate times to amend the PSA to provide Seller additional time to complete the
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required work. Even then, on the fifth amended outside Closing Date of May 27, 2022, Seller still
failed to meet the requisite conditions of Closing, including to complete construction of the Retail
Unit and obtain an Architect’s Certification attesting thereto. Seller’s failures constituted a clear,
indisputable default. (As of the filing of this Complaint, the Retail Unit remains uncompleted and
currently hosts a temporary storefront.)
4. When the parties could not agree on a proposed sixth amendment to the PSA
forwarded by Seller in June 2022 that would push the outside Closing Date back even further,
Seller decided to take matters into its own hands. Having defaulted on its contractual obligation to
sell its property to EXRP on or before the outside closing date, Seller concocted a scheme to try
and interfere with the valuable lease EXRP had negotiated for its space by taking the tenant for
itself and cutting Purchaser out of the process. As part of its scheme, Seller drafted and sent EXRP
a sham closing notice, threatening to steal EXRP’s significant down payment and the more than
$20 million lease that EXRP had negotiated for itself with an attractive, well-capitalized national
bank (“Tenant”) for the space that Seller was required to deliver to EXRP. Seller’s bad-faith sham
notice purported to notice a July 6, 2022 Closing Date – after the outside closing date had passed
(and while Seller remained in breach of the contractual prerequisites to closing in any event).
When EXRP refused to comply with Seller’s sham notice, Seller then comically claimed that it
could terminate the PSA and steal EXRP’s down payment.
5. In addition to trying to steal EXRP’s deposit and back out of its contractual
obligations, Seller’s actions appear to have been motivated by its desire to tortiously interfere with
the lease EXRP had worked hard to negotiate with Tenant, in an effort to steal that relationship for
itself. Seller’s sham notice was a brazen attempt to unlawfully terminate EXRP and usurp its fully
negotiated lease with an attractive creditworthy tenant. Seller’s bad-faith actions violate the PSA,
in the face of EXRP’s repeated prior good-faith accommodations.
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6. EXRP has commenced this action to recover the significant money damages
resulting from Seller’s breaches, defaults, and tortious actions, and related declaratory relief
regarding Seller’s actions, including its sham closing notice and bad-faith termination of its
obligations under the PSA after Seller indisputably had defaulted. EXRP seeks an award of
damages for the significant damage Seller’s actions have caused, including its out-of-pocket
expenses, lost leasing revenue, and increased financing costs, in an amount to be determined at
trial, but no less than $5.6 million.
PARTIES, JURISDICTION AND VENUE
7. Plaintiff, EXRP 14 HOLDINGS LLC, is a Delaware limited liability company with
an office located at 805 Third Avenue, New York, New York 10022.
8. Defendant LS-14 AVE LLC is a Delaware limited liability company with an office
located at 1500 Broadway, Suite 1901 New York, NY 10036 as well as an office at 7525 Irvine
Center Drive, Suite 200, Irvine, California 92618. Defendant LS-14 AVE LLC is an affiliate of
LANDSEA HOMES and shares the same business address and office personnel.
9. This Court possesses personal jurisdiction over Seller pursuant to Section 27.16 of
the PSA and because Seller does business in the State of New York and because Seller transacted
business in the State of New York by entering the PSA for the sale of the Retail Unit, which is
located in this State, and this action arises from Seller’s breach of that agreement.
10. Venue is proper in this County under C.P.L.R. §§ 501, 503(a) and 507 and pursuant
to Section 27.16 of the PSA.
FACTUAL ALLEGATIONS
The Agreement of Purchase and Sale
11. On September 12, 2018, EXRP and Defendant LS-14 AVE LLC entered into the
Agreement of Purchase and Sale. Under the PSA, Defendant LS-14 AVE LLC agreed to construct
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and sell to EXRP the Retail Unit at the mixed-use condominium under development at 536-540
6th Avenue and 61-69 West 14th Street, New York, New York that is now known as the FÖRENA
Condominium.
12. Upon executing the PSA, EXRP paid Seller a multi-million dollar deposit.
13. The PSA contains detailed provisions concerning the plans and specifications that
govern Seller’s construction of the Retail Unit for EXRP. EXRP was not obligated to close until
the Retail Unit was completed in accordance with those plans and specifications and after the
Seller received an architect’s certificate of completion.
14. Seller was required to complete construction and the rest of closing conditions no
later than an agreed-upon outside Closing Date of March 12, 2022, and the parties agreed that time
was of the essence. All amendments to the PSA had to be in writing.
EXRP Repeatedly Accommodates Seller’s Requests to Amend the PSA
To Extend the Closing Date
15. By early 2022, Seller communicated that it was unable to complete the Retail Unit
on or before the agreed-upon existing outside Closing Date of March 12, 2022, under the PSA.
EXRP thereafter repeatedly agreed to extend the Closing Date for Seller’s benefit.
16. On January 11, 2022, EXRP and Seller entered into the First Amendment to
Agreement of Purchase and Sale, amending the time for Closing set forth in the PSA, including to
extend the outside Closing Date from March 12, 2022 to April 30, 2022.
17. On April 29, 2022, EXRP and Seller entered into the Second Amendment to
Agreement of Purchase and Sale, again amending the time for Closing set forth in the PSA,
including to extend the outside Closing Date from April 30, 2022 to May 10, 2022.
18. On May 10, 2022, EXRP and Seller entered into the Third Amendment to
Agreement of Purchase and Sale, again amending the time for Closing set forth in the PSA,
including to extend the outside Closing Date from May 10, 2022 to May 16, 2022.
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19. On May 16, 2022, EXRP and Seller entered into the Fourth Amendment to
Agreement of Purchase and Sale, again amending the time for Closing set forth in the PSA,
including to extend the outside Closing Date from May 16, 2022 to May 20, 2022.
20. On May 20, 2022, EXRP and Seller entered into the Fifth Amendment to
Agreement of Purchase and Sale, again amending the time for Closing set forth in the PSA,
including to extend the outside Closing Date from May 20, 2022 to May 27, 2022 (the “Fifth
Amendment”).
Seller Defaults on the PSA by Failing To Complete and Deliver
The Retail Unit by the Final Amended May 27, 2022 Closing Date
21. Seller did not close by the outside Closing Date. On the final amended Closing Date
of May 27, 2022, Seller again failed to meet the conditions of Closing. The Retail Unit had not
been completed in accordance with the required plans and specifications, and the Seller had not
provided a certificate of completion from any architect.
22. As of May 27, 2022, and as of the filing of this Complaint, the Retail Unit remains
uncompleted and still has only a temporary storefront in place.
23. In fact, as of May 27, 2022, it was apparent that Seller would be unable to complete
the Retail Unit storefront for months more. Seller attempted to negotiate a sixth amendment to the
PSA, which would include yet another extension of the outside Closing Date for Seller’s benefit.
The parties failed to reach an agreement and did not enter into any further amendments of the PSA.
Seller Pretends to Terminate the PSA
24. On June 28, 2022, Seller responded to the parties’ failure to enter into a sixth
amendment of the PSA by serving a plainly improper sham closing notice—referencing the PSA,
as most recently amended by the Fifth Amendment—suddenly claiming that “Seller has satisfied
all conditions to Closing and hereby notifies Purchaser that the Closing shall occur on July 6,
2022.” A copy of this notice is annexed hereto as Exhibit A.
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25. On June 30, 2022, EXRP responded to the sham notice by serving a letter rejecting
Seller’s purported notice of Closing on the basis of Seller’s indisputable failure to satisfy the
conditions to Closing on or before the outside Closing Date of May 27, 2022, agreed to in the
operative Fifth Amendment. EXRP also noticed Seller that its failure to complete the Retail Unit
in accordance with the PSA’s plans and specifications constituted another default under the PSA.
A copy of this notice is annexed hereto as Exhibit B.
26. On July 1, 2022, Seller served another notice insisting on the July 6, 2022 Closing,
claiming that “the Retail Unit was completed in accordance with the Retail Unit Plans and
Specifications and all legal requirements prior to the outside Closing Date, and Seller did in fact
receive a certificate of completion executed by the Project Architect confirming that the Retail
Unit has been completed in accordance with the Retail Unit Plans and Specifications.” A copy of
this July 1, 2022 notice and the annexed June 14, 2022 correspondence from Seller’s architect is
annexed hereto as Exhibit C.
27. The architect’s letter expressly acknowledged that Seller had failed to satisfy the
necessary conditions to closing: it conceded that the storefront of the Retail Unit was incomplete
and in fact indicated that the “storefront doors will be completed as a post-closing obligation” —
even though the PSA provides that such pre-closing failures are not permitted and completion of
those requirements are conditions precedent for any closing.
28. In addition, as set forth in EXRP’s notice, the architect’s letter was dated June 14,
2022, after the outside Closing Date had passed, and it vaguely references “the contract
documents” rather than the controlling “Retail Unit Plans and Specifications.” Seller’s failure to
forward the architect’s letter for more than two weeks after, and only after Seller’s sham “Closing
Notice” was rejected, is further indicative of Seller’s bad faith. On July 5, 2022, EXRP responded
again by serving a notice, again rejecting the July 6, 2022 Closing Date, and citing the architect’s
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June 14, 2022 letter that definitively confirmed that Seller had failed to satisfy the conditions as of
the operative outside Closing Date. A copy of EXRP’s July 5, 2022 letter is annexed hereto as
Exhibit D.
29. Seller thereafter made no efforts to address the serious legal or factual issues
raised in EXRP’s July 5, 2022 notice. Instead, on July 6, 2022, Seller simply served a sham
notice of termination, wrongfully purporting to terminate the Purchase Agreement and retain
Purchaser’s down payment. A copy of the Seller’s July 6, 2022 notice is annexed hereto as
Exhibit E.
30. Seller’s sham notice of termination is predicated on blatant, bad-faith false
misrepresentations—like “Seller is ready, willing and able to perform its obligations under the
Purchase Agreement,” even though it could not deliver the unit at issue as required and admitted
so many times in seeking to negotiate another amendment to the PSA—and is a transparent, brazen
attempt to steal EXRP’s multi-million dollar deposit. The sham notice was wholly improper
including because Seller was in default of the PSA and was obviously not ready, willing and able
to perform its obligations under the PSA as of the outside Closing Date of May 27, 2022. Indeed,
even as of its invented Closing Date of July 6, 2022, Seller remained in default and still was not
ready, willing and able to perform its obligations under the PSA, as the Retail Unit still had not
been completed (and will not be completed for months more).
31. Incredibly, adding insult to injury, Seller’s July 6, 2022 notice further demanded
that EXRP “promptly provide Purchaser’s contact at Prospective Tenant so that Seller may discuss
with the Prospective Tenant possible consummation of a lease therewith.”
32. Seller’s demand revealed the rest of Seller’s ill-fated plan: its bad-faith attempt to
usurp for itself the lucrative contract EXRP had negotiated with its tenant, which EXRP had
secured after investing its efforts and resources in marketing and then negotiating a lease with a
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well-known, creditworthy bank. EXRP had negotiated with Tenant a twelve-year lease for more
than $20 million. Once Seller learned of EXRP’s successful contract, it decided to try and cut
EXRP out of the process and take EXRP’s lease for itself.
FIRST CAUSE OF ACTION
(Breach of Contract)
33. EXRP repeats and realleges the foregoing Paragraphs, as if fully set forth herein.
34. On September 12, 2018, EXRP and Seller entered into the PSA, which is a valid
and enforceable agreement, complete and definite in all material terms.
35. EXRP paid Seller a deposit as a down payment.
36. Under the PSA, Seller was obligated to, among other things, construct and convey
the Retail Unit in accordance with the PSA’s plans and specifications at the time of Closing.
37. EXRP fully complied with the PSA and was ready, willing, and able to perform the
remainder of its obligations under the PSA including, but not limited to, the payment of the
Purchase Price.
38. Seller defaulted under the PSA by, among other things, (i) failing to complete the
Retail Unit in accordance with the PSA’s plans and specifications or to obtain a proper Architect’s
certificate on or before the outside Closing Date; (ii) sending a sham closing notice and improperly
demanding that EXRP close on its purchase in violation of the terms of the PSA; and (iii) sending
a sham default notice, in an effort to usurp EXRP’s fully negotiated lease with Tenant.
39. Seller’s defaults under the PSA constitute Willful Defaults.
40. Seller’s defaults and Willful Defaults under the PSA have caused EXRP damage,
including by causing it lost rents, interfering with its relationship with Tenant, significantly
increasing financing costs for EXRP’s purchase, and causing EXRP to incur out-of-pocket
expenses, in addition to the Seller’s efforts to steal EXRP’s deposit.
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41. Purchaser is entitled to a fair and reasonable amount for its money damages under
in addition to a return of its down payment.
42. EXRP seeks an award of its significant damages in an amount to be determined at
trial, but in no event less than $5.6 million plus interest thereon, together with an award of costs
and disbursements of this action, including reasonable attorneys’ fees and expenses.
SECOND CAUSE OF ACTION
(Specific Performance In The Alternative)
43. Plaintiff repeats and realleges the foregoing Paragraphs, as if fully set forth herein.
44. On September 12, 2018, Plaintiff and Seller entered into the PSA, which is a valid
and enforceable agreement, complete and definite in all material terms.
45. EXRP paid Seller a deposit as a down payment.
46. Under the PSA, Seller was required to, among other things, construct and convey
the Retail Unit in accordance with the PSA’s plans and specifications at the time of Closing.
47. Plaintiff has fully complied with the PSA and is ready, willing, and able to perform
the remainder of its obligations under the PSA including, but not limited to, the payment of the
Purchase Price.
48. Seller has defaulted under the PSA by, among other things, failing to complete the
Retail Unit in accordance with the PSA’s plans and specifications or to obtain a proper Architect’s
certificate on or before the outside Closing Date.
49. Seller has further defaulted under the PSA by, among other things, improperly
purporting to terminate the PSA while it was in default.
50. The Retail Unit is a unique property, specifically bargained for by Plaintiff.
51. Purchaser may obtain specific performance in addition to money damages in the
event of Seller’s breach.
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52. As an alternative to the allegations in Count I, insofar as money damages are not
an adequate remedy for Plaintiff, and Plaintiff has no adequate remedy at law, Plaintiff seeks
an Order directing Seller to specifically perform its obligations under the terms of the PSA
including, but not limited to, completing the Retail Unit in accordance with the PSA, together with
an award of costs and disbursements of this action, including reasonable attorneys’ fees and
expenses.
THIRD CAUSE OF ACTION
(Declaratory Relief)
53. EXRP repeats and realleges the foregoing Paragraphs, as if fully set forth herein.
54. On September 12, 2018, EXRP and Seller entered into the PSA, which is a valid
and enforceable agreement, complete and definite in all material terms.
55. EXRP has fully complied with the PSA.
56. Seller claims that it has validly terminated the PSA and can retain EXRP’s multi-
million dollar down payment. EXRP disputes Seller’s contention.
57. EXRP claims that Seller has defaulted under the PSA by failing to close by the
outside Closing Date of May 27, 2022, and to meet the requisite conditions of Closing, among
them, that Seller complete the Retail Unit and obtain an Architect’s Certification attesting thereto
by the outside Closing Date, and by sending sham closing notices and notices of default. EXRP
further claims that Seller has committed Willful Defaults.
58. There is an actual, bona fide, and justiciable controversy between EXRP and Seller
as to their respective rights and obligations under the PSA. The declaration sought herein deals
with a present controversy as to an ascertainable set of facts.
59. Seller has directed Royal Abstract of New York, LLC (the “Escrow Agent”) to
release to Seller the Memo of PSA and Termination of Memo, and EXRP has directed the Escrow
Agent to release the Memo of PSA and Termination of Memo to EXRP. A copy of the Seller’s
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letter to Royal Abstract of New York, LLC dated July 6, 2022 is annexed hereto as Exhibit F. A
copy of the Purchaser’s letter to Royal Abstract of New York, LLC dated July 8, 2022 is annexed
hereto as Exhibit G.
60. EXRP has no adequate remedy at law.
61. By reason of the foregoing, EXRP is entitled to a declaratory judgment that Seller
is in default of the PSA, that Seller has committed acts constituting Willful Defaults, that Seller’s
sham notice of default is invalid and not enforceable in any respect, and directing the Escrow
Agent not to release the Memo of PSA and Termination of Memo to Seller and to instead release
the Memo of PSA and Termination of Memo to Purchaser, together with an award of costs and
disbursements of this action, including reasonable attorneys’ fees and expenses.
FOURTH CAUSE OF ACTION
(Equitable Estoppel and Promissory Estoppel)
62. EXRP repeats and realleges the foregoing Paragraphs, as if fully set forth herein.
63. In the alternative to the claims set forth in Counts I and II, Seller made a clear and
unambiguous promise to EXRP that it would deliver the Retail Unit in accordance with the PSA’s
plans and specifications and obtain a proper Architect’s certificate on or before the outside Closing
Date.
64. Seller knowingly and intentionally made these statements with the intent to induce
EXRP to rely on Seller’s promises, and EXRP reasonably and foreseeably relied on Seller’s
promises.
65. EXRP has been unconscionably injured by its reliance on Seller’s statements. In
reliance on these promises, EXRP expended significant time and resources to make plans
regarding the Retail Unit, including but not limited to identifying potential tenants for the Retail
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FILED: NEW YORK COUNTY CLERK 09/30/2022 06:53 PM INDEX NO. 652698/2022 NYSCEF DOC. NO. 55 RECEIVED NYSCEF: 09/30/2022 EXHIBIT 1 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 08/11/2022 09/30/2022 02:44 06:53 PM PM INDEX INDEX NO. NO. 652698/2022 652698/2022 NYSCEF NYSCEF DOC. DOC. NO. NO. 35 55 RECEIVED RECEIVED NYSCEF: NYSCEF: 08/11/2022 09/30/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK -------------------------------------------------------------------------------------------------------------------------------------------X EXRP 14 HOLDINGS LLC, Index No. 652698/2022 EXRP, VERIFIED COMPLAINT - against - LS-14 AVE LLC, JURY TRIAL DEMANDED Defendant. --------------------------------------------------------------------------------------------------------------------X Plaintiff, EXRP 14 HOLDINGS LLC (“Plaintiff,” “Purchaser,” or “EXRP”), by and through its undersigned attorneys, as and for its Verified Complaint against Defendant LS-14 AVE LLC (“Defendant” or “Seller”), states as follows: NATURE OF ACTION 1. This is an action for breach of contract, tortious interference, and related claims arising from Seller’s blatant breach of its agreement to sell EXRP a completed retail unit in New York City, and Seller’s scheme to keep the unit for itself and steal from EXRP a more than $20 million lease EXRP had negotiated for its space. 2. This action arises out of Seller’s undisputed failure to timely construct and convey to EXRP the 11,500 square-foot retail unit at the FÖRENA Condominium located at 540 6th Avenue, New York, New York (the “Retail Unit”) under the parties’ Agreement of Purchase and Sale (the “PSA”), on or before May 27, 2022 – the amended outside Closing Date agreed upon by the parties. Seller failed to timely complete its promised construction of the Retail Unit in accordance with the plans and specifications attached to the PSA. 3. In the face of Seller’s repeated failures to satisfy its contractual obligations, EXRP agreed five separate times to amend the PSA to provide Seller additional time to complete the 1 of 18 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 08/11/2022 09/30/2022 02:44 06:53 PM PM INDEX INDEX NO. NO. 652698/2022 652698/2022 NYSCEF NYSCEF DOC. DOC. NO. NO. 35 55 RECEIVED RECEIVED NYSCEF: NYSCEF: 08/11/2022 09/30/2022 required work. Even then, on the fifth amended outside Closing Date of May 27, 2022, Seller still failed to meet the requisite conditions of Closing, including to complete construction of the Retail Unit and obtain an Architect’s Certification attesting thereto. Seller’s failures constituted a clear, indisputable default. (As of the filing of this Complaint, the Retail Unit remains uncompleted and currently hosts a temporary storefront.) 4. When the parties could not agree on a proposed sixth amendment to the PSA forwarded by Seller in June 2022 that would push the outside Closing Date back even further, Seller decided to take matters into its own hands. Having defaulted on its contractual obligation to sell its property to EXRP on or before the outside closing date, Seller concocted a scheme to try and interfere with the valuable lease EXRP had negotiated for its space by taking the tenant for itself and cutting Purchaser out of the process. As part of its scheme, Seller drafted and sent EXRP a sham closing notice, threatening to steal EXRP’s significant down payment and the more than $20 million lease that EXRP had negotiated for itself with an attractive, well-capitalized national bank (“Tenant”) for the space that Seller was required to deliver to EXRP. Seller’s bad-faith sham notice purported to notice a July 6, 2022 Closing Date – after the outside closing date had passed (and while Seller remained in breach of the contractual prerequisites to closing in any event). When EXRP refused to comply with Seller’s sham notice, Seller then comically claimed that it could terminate the PSA and steal EXRP’s down payment. 5. In addition to trying to steal EXRP’s deposit and back out of its contractual obligations, Seller’s actions appear to have been motivated by its desire to tortiously interfere with the lease EXRP had worked hard to negotiate with Tenant, in an effort to steal that relationship for itself. Seller’s sham notice was a brazen attempt to unlawfully terminate EXRP and usurp its fully negotiated lease with an attractive creditworthy tenant. Seller’s bad-faith actions violate the PSA, in the face of EXRP’s repeated prior good-faith accommodations. 2 2 of 18 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 08/11/2022 09/30/2022 02:44 06:53 PM PM INDEX INDEX NO. NO. 652698/2022 652698/2022 NYSCEF NYSCEF DOC. DOC. NO. NO. 35 55 RECEIVED RECEIVED NYSCEF: NYSCEF: 08/11/2022 09/30/2022 6. EXRP has commenced this action to recover the significant money damages resulting from Seller’s breaches, defaults, and tortious actions, and related declaratory relief regarding Seller’s actions, including its sham closing notice and bad-faith termination of its obligations under the PSA after Seller indisputably had defaulted. EXRP seeks an award of damages for the significant damage Seller’s actions have caused, including its out-of-pocket expenses, lost leasing revenue, and increased financing costs, in an amount to be determined at trial, but no less than $5.6 million. PARTIES, JURISDICTION AND VENUE 7. Plaintiff, EXRP 14 HOLDINGS LLC, is a Delaware limited liability company with an office located at 805 Third Avenue, New York, New York 10022. 8. Defendant LS-14 AVE LLC is a Delaware limited liability company with an office located at 1500 Broadway, Suite 1901 New York, NY 10036 as well as an office at 7525 Irvine Center Drive, Suite 200, Irvine, California 92618. Defendant LS-14 AVE LLC is an affiliate of LANDSEA HOMES and shares the same business address and office personnel. 9. This Court possesses personal jurisdiction over Seller pursuant to Section 27.16 of the PSA and because Seller does business in the State of New York and because Seller transacted business in the State of New York by entering the PSA for the sale of the Retail Unit, which is located in this State, and this action arises from Seller’s breach of that agreement. 10. Venue is proper in this County under C.P.L.R. §§ 501, 503(a) and 507 and pursuant to Section 27.16 of the PSA. FACTUAL ALLEGATIONS The Agreement of Purchase and Sale 11. On September 12, 2018, EXRP and Defendant LS-14 AVE LLC entered into the Agreement of Purchase and Sale. Under the PSA, Defendant LS-14 AVE LLC agreed to construct 3 3 of 18 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 08/11/2022 09/30/2022 02:44 06:53 PM PM INDEX INDEX NO. NO. 652698/2022 652698/2022 NYSCEF NYSCEF DOC. DOC. NO. NO. 35 55 RECEIVED RECEIVED NYSCEF: NYSCEF: 08/11/2022 09/30/2022 and sell to EXRP the Retail Unit at the mixed-use condominium under development at 536-540 6th Avenue and 61-69 West 14th Street, New York, New York that is now known as the FÖRENA Condominium. 12. Upon executing the PSA, EXRP paid Seller a multi-million dollar deposit. 13. The PSA contains detailed provisions concerning the plans and specifications that govern Seller’s construction of the Retail Unit for EXRP. EXRP was not obligated to close until the Retail Unit was completed in accordance with those plans and specifications and after the Seller received an architect’s certificate of completion. 14. Seller was required to complete construction and the rest of closing conditions no later than an agreed-upon outside Closing Date of March 12, 2022, and the parties agreed that time was of the essence. All amendments to the PSA had to be in writing. EXRP Repeatedly Accommodates Seller’s Requests to Amend the PSA To Extend the Closing Date 15. By early 2022, Seller communicated that it was unable to complete the Retail Unit on or before the agreed-upon existing outside Closing Date of March 12, 2022, under the PSA. EXRP thereafter repeatedly agreed to extend the Closing Date for Seller’s benefit. 16. On January 11, 2022, EXRP and Seller entered into the First Amendment to Agreement of Purchase and Sale, amending the time for Closing set forth in the PSA, including to extend the outside Closing Date from March 12, 2022 to April 30, 2022. 17. On April 29, 2022, EXRP and Seller entered into the Second Amendment to Agreement of Purchase and Sale, again amending the time for Closing set forth in the PSA, including to extend the outside Closing Date from April 30, 2022 to May 10, 2022. 18. On May 10, 2022, EXRP and Seller entered into the Third Amendment to Agreement of Purchase and Sale, again amending the time for Closing set forth in the PSA, including to extend the outside Closing Date from May 10, 2022 to May 16, 2022. 4 4 of 18 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 08/11/2022 09/30/2022 02:44 06:53 PM PM INDEX INDEX NO. NO. 652698/2022 652698/2022 NYSCEF NYSCEF DOC. DOC. NO. NO. 35 55 RECEIVED RECEIVED NYSCEF: NYSCEF: 08/11/2022 09/30/2022 19. On May 16, 2022, EXRP and Seller entered into the Fourth Amendment to Agreement of Purchase and Sale, again amending the time for Closing set forth in the PSA, including to extend the outside Closing Date from May 16, 2022 to May 20, 2022. 20. On May 20, 2022, EXRP and Seller entered into the Fifth Amendment to Agreement of Purchase and Sale, again amending the time for Closing set forth in the PSA, including to extend the outside Closing Date from May 20, 2022 to May 27, 2022 (the “Fifth Amendment”). Seller Defaults on the PSA by Failing To Complete and Deliver The Retail Unit by the Final Amended May 27, 2022 Closing Date 21. Seller did not close by the outside Closing Date. On the final amended Closing Date of May 27, 2022, Seller again failed to meet the conditions of Closing. The Retail Unit had not been completed in accordance with the required plans and specifications, and the Seller had not provided a certificate of completion from any architect. 22. As of May 27, 2022, and as of the filing of this Complaint, the Retail Unit remains uncompleted and still has only a temporary storefront in place. 23. In fact, as of May 27, 2022, it was apparent that Seller would be unable to complete the Retail Unit storefront for months more. Seller attempted to negotiate a sixth amendment to the PSA, which would include yet another extension of the outside Closing Date for Seller’s benefit. The parties failed to reach an agreement and did not enter into any further amendments of the PSA. Seller Pretends to Terminate the PSA 24. On June 28, 2022, Seller responded to the parties’ failure to enter into a sixth amendment of the PSA by serving a plainly improper sham closing notice—referencing the PSA, as most recently amended by the Fifth Amendment—suddenly claiming that “Seller has satisfied all conditions to Closing and hereby notifies Purchaser that the Closing shall occur on July 6, 2022.” A copy of this notice is annexed hereto as Exhibit A. 5 5 of 18 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 08/11/2022 09/30/2022 02:44 06:53 PM PM INDEX INDEX NO. NO. 652698/2022 652698/2022 NYSCEF NYSCEF DOC. DOC. NO. NO. 35 55 RECEIVED RECEIVED NYSCEF: NYSCEF: 08/11/2022 09/30/2022 25. On June 30, 2022, EXRP responded to the sham notice by serving a letter rejecting Seller’s purported notice of Closing on the basis of Seller’s indisputable failure to satisfy the conditions to Closing on or before the outside Closing Date of May 27, 2022, agreed to in the operative Fifth Amendment. EXRP also noticed Seller that its failure to complete the Retail Unit in accordance with the PSA’s plans and specifications constituted another default under the PSA. A copy of this notice is annexed hereto as Exhibit B. 26. On July 1, 2022, Seller served another notice insisting on the July 6, 2022 Closing, claiming that “the Retail Unit was completed in accordance with the Retail Unit Plans and Specifications and all legal requirements prior to the outside Closing Date, and Seller did in fact receive a certificate of completion executed by the Project Architect confirming that the Retail Unit has been completed in accordance with the Retail Unit Plans and Specifications.” A copy of this July 1, 2022 notice and the annexed June 14, 2022 correspondence from Seller’s architect is annexed hereto as Exhibit C. 27. The architect’s letter expressly acknowledged that Seller had failed to satisfy the necessary conditions to closing: it conceded that the storefront of the Retail Unit was incomplete and in fact indicated that the “storefront doors will be completed as a post-closing obligation” — even though the PSA provides that such pre-closing failures are not permitted and completion of those requirements are conditions precedent for any closing. 28. In addition, as set forth in EXRP’s notice, the architect’s letter was dated June 14, 2022, after the outside Closing Date had passed, and it vaguely references “the contract documents” rather than the controlling “Retail Unit Plans and Specifications.” Seller’s failure to forward the architect’s letter for more than two weeks after, and only after Seller’s sham “Closing Notice” was rejected, is further indicative of Seller’s bad faith. On July 5, 2022, EXRP responded again by serving a notice, again rejecting the July 6, 2022 Closing Date, and citing the architect’s 6 6 of 18 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 08/11/2022 09/30/2022 02:44 06:53 PM PM INDEX INDEX NO. NO. 652698/2022 652698/2022 NYSCEF NYSCEF DOC. DOC. NO. NO. 35 55 RECEIVED RECEIVED NYSCEF: NYSCEF: 08/11/2022 09/30/2022 June 14, 2022 letter that definitively confirmed that Seller had failed to satisfy the conditions as of the operative outside Closing Date. A copy of EXRP’s July 5, 2022 letter is annexed hereto as Exhibit D. 29. Seller thereafter made no efforts to address the serious legal or factual issues raised in EXRP’s July 5, 2022 notice. Instead, on July 6, 2022, Seller simply served a sham notice of termination, wrongfully purporting to terminate the Purchase Agreement and retain Purchaser’s down payment. A copy of the Seller’s July 6, 2022 notice is annexed hereto as Exhibit E. 30. Seller’s sham notice of termination is predicated on blatant, bad-faith false misrepresentations—like “Seller is ready, willing and able to perform its obligations under the Purchase Agreement,” even though it could not deliver the unit at issue as required and admitted so many times in seeking to negotiate another amendment to the PSA—and is a transparent, brazen attempt to steal EXRP’s multi-million dollar deposit. The sham notice was wholly improper including because Seller was in default of the PSA and was obviously not ready, willing and able to perform its obligations under the PSA as of the outside Closing Date of May 27, 2022. Indeed, even as of its invented Closing Date of July 6, 2022, Seller remained in default and still was not ready, willing and able to perform its obligations under the PSA, as the Retail Unit still had not been completed (and will not be completed for months more). 31. Incredibly, adding insult to injury, Seller’s July 6, 2022 notice further demanded that EXRP “promptly provide Purchaser’s contact at Prospective Tenant so that Seller may discuss with the Prospective Tenant possible consummation of a lease therewith.” 32. Seller’s demand revealed the rest of Seller’s ill-fated plan: its bad-faith attempt to usurp for itself the lucrative contract EXRP had negotiated with its tenant, which EXRP had secured after investing its efforts and resources in marketing and then negotiating a lease with a 7 7 of 18 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 08/11/2022 09/30/2022 02:44 06:53 PM PM INDEX INDEX NO. NO. 652698/2022 652698/2022 NYSCEF NYSCEF DOC. DOC. NO. NO. 35 55 RECEIVED RECEIVED NYSCEF: NYSCEF: 08/11/2022 09/30/2022 well-known, creditworthy bank. EXRP had negotiated with Tenant a twelve-year lease for more than $20 million. Once Seller learned of EXRP’s successful contract, it decided to try and cut EXRP out of the process and take EXRP’s lease for itself. FIRST CAUSE OF ACTION (Breach of Contract) 33. EXRP repeats and realleges the foregoing Paragraphs, as if fully set forth herein. 34. On September 12, 2018, EXRP and Seller entered into the PSA, which is a valid and enforceable agreement, complete and definite in all material terms. 35. EXRP paid Seller a deposit as a down payment. 36. Under the PSA, Seller was obligated to, among other things, construct and convey the Retail Unit in accordance with the PSA’s plans and specifications at the time of Closing. 37. EXRP fully complied with the PSA and was ready, willing, and able to perform the remainder of its obligations under the PSA including, but not limited to, the payment of the Purchase Price. 38. Seller defaulted under the PSA by, among other things, (i) failing to complete the Retail Unit in accordance with the PSA’s plans and specifications or to obtain a proper Architect’s certificate on or before the outside Closing Date; (ii) sending a sham closing notice and improperly demanding that EXRP close on its purchase in violation of the terms of the PSA; and (iii) sending a sham default notice, in an effort to usurp EXRP’s fully negotiated lease with Tenant. 39. Seller’s defaults under the PSA constitute Willful Defaults. 40. Seller’s defaults and Willful Defaults under the PSA have caused EXRP damage, including by causing it lost rents, interfering with its relationship with Tenant, significantly increasing financing costs for EXRP’s purchase, and causing EXRP to incur out-of-pocket expenses, in addition to the Seller’s efforts to steal EXRP’s deposit. 8 8 of 18 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 08/11/2022 09/30/2022 02:44 06:53 PM PM INDEX INDEX NO. NO. 652698/2022 652698/2022 NYSCEF NYSCEF DOC. DOC. NO. NO. 35 55 RECEIVED RECEIVED NYSCEF: NYSCEF: 08/11/2022 09/30/2022 41. Purchaser is entitled to a fair and reasonable amount for its money damages under in addition to a return of its down payment. 42. EXRP seeks an award of its significant damages in an amount to be determined at trial, but in no event less than $5.6 million plus interest thereon, together with an award of costs and disbursements of this action, including reasonable attorneys’ fees and expenses. SECOND CAUSE OF ACTION (Specific Performance In The Alternative) 43. Plaintiff repeats and realleges the foregoing Paragraphs, as if fully set forth herein. 44. On September 12, 2018, Plaintiff and Seller entered into the PSA, which is a valid and enforceable agreement, complete and definite in all material terms. 45. EXRP paid Seller a deposit as a down payment. 46. Under the PSA, Seller was required to, among other things, construct and convey the Retail Unit in accordance with the PSA’s plans and specifications at the time of Closing. 47. Plaintiff has fully complied with the PSA and is ready, willing, and able to perform the remainder of its obligations under the PSA including, but not limited to, the payment of the Purchase Price. 48. Seller has defaulted under the PSA by, among other things, failing to complete the Retail Unit in accordance with the PSA’s plans and specifications or to obtain a proper Architect’s certificate on or before the outside Closing Date. 49. Seller has further defaulted under the PSA by, among other things, improperly purporting to terminate the PSA while it was in default. 50. The Retail Unit is a unique property, specifically bargained for by Plaintiff. 51. Purchaser may obtain specific performance in addition to money damages in the event of Seller’s breach. 9 9 of 18 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 08/11/2022 09/30/2022 02:44 06:53 PM PM INDEX INDEX NO. NO. 652698/2022 652698/2022 NYSCEF NYSCEF DOC. DOC. NO. NO. 35 55 RECEIVED RECEIVED NYSCEF: NYSCEF: 08/11/2022 09/30/2022 52. As an alternative to the allegations in Count I, insofar as money damages are not an adequate remedy for Plaintiff, and Plaintiff has no adequate remedy at law, Plaintiff seeks an Order directing Seller to specifically perform its obligations under the terms of the PSA including, but not limited to, completing the Retail Unit in accordance with the PSA, together with an award of costs and disbursements of this action, including reasonable attorneys’ fees and expenses. THIRD CAUSE OF ACTION (Declaratory Relief) 53. EXRP repeats and realleges the foregoing Paragraphs, as if fully set forth herein. 54. On September 12, 2018, EXRP and Seller entered into the PSA, which is a valid and enforceable agreement, complete and definite in all material terms. 55. EXRP has fully complied with the PSA. 56. Seller claims that it has validly terminated the PSA and can retain EXRP’s multi- million dollar down payment. EXRP disputes Seller’s contention. 57. EXRP claims that Seller has defaulted under the PSA by failing to close by the outside Closing Date of May 27, 2022, and to meet the requisite conditions of Closing, among them, that Seller complete the Retail Unit and obtain an Architect’s Certification attesting thereto by the outside Closing Date, and by sending sham closing notices and notices of default. EXRP further claims that Seller has committed Willful Defaults. 58. There is an actual, bona fide, and justiciable controversy between EXRP and Seller as to their respective rights and obligations under the PSA. The declaration sought herein deals with a present controversy as to an ascertainable set of facts. 59. Seller has directed Royal Abstract of New York, LLC (the “Escrow Agent”) to release to Seller the Memo of PSA and Termination of Memo, and EXRP has directed the Escrow Agent to release the Memo of PSA and Termination of Memo to EXRP. A copy of the Seller’s 10 10 of 18 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 08/11/2022 09/30/2022 02:44 06:53 PM PM INDEX INDEX NO. NO. 652698/2022 652698/2022 NYSCEF NYSCEF DOC. DOC. NO. NO. 35 55 RECEIVED RECEIVED NYSCEF: NYSCEF: 08/11/2022 09/30/2022 letter to Royal Abstract of New York, LLC dated July 6, 2022 is annexed hereto as Exhibit F. A copy of the Purchaser’s letter to Royal Abstract of New York, LLC dated July 8, 2022 is annexed hereto as Exhibit G. 60. EXRP has no adequate remedy at law. 61. By reason of the foregoing, EXRP is entitled to a declaratory judgment that Seller is in default of the PSA, that Seller has committed acts constituting Willful Defaults, that Seller’s sham notice of default is invalid and not enforceable in any respect, and directing the Escrow Agent not to release the Memo of PSA and Termination of Memo to Seller and to instead release the Memo of PSA and Termination of Memo to Purchaser, together with an award of costs and disbursements of this action, including reasonable attorneys’ fees and expenses. FOURTH CAUSE OF ACTION (Equitable Estoppel and Promissory Estoppel) 62. EXRP repeats and realleges the foregoing Paragraphs, as if fully set forth herein. 63. In the alternative to the claims set forth in Counts I and II, Seller made a clear and unambiguous promise to EXRP that it would deliver the Retail Unit in accordance with the PSA’s plans and specifications and obtain a proper Architect’s certificate on or before the outside Closing Date. 64. Seller knowingly and intentionally made these statements with the intent to induce EXRP to rely on Seller’s promises, and EXRP reasonably and foreseeably relied on Seller’s promises. 65. EXRP has been unconscionably injured by its reliance on Seller’s statements. In reliance on these promises, EXRP expended significant time and resources to make plans regarding the Retail Unit, including but not limited to identifying potential tenants for the Retail 11 11 of 18 FILED: FILED: NEW NEW YORK YORK COUNTY COUNTY CLERK CLERK 08/11/2022 09/30/2022 02:44 06:53 PM PM INDEX INDEX NO. NO. 652698/2022