Preview
FILED: ROCKLAND COUNTY CLERK 01/19/2024 11:09 PM INDEX NO. 030709/2023
NYSCEF DOC. NO. 92 RECEIVED NYSCEF: 01/19/2024
Exhibit “A”
FILED: ROCKLAND COUNTY CLERK 01/19/2024 11:09 PM INDEX NO. 030709/2023
NYSCEF DOC. NO. 92 RECEIVED NYSCEF: 01/19/2024
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF ROCKLAND
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KPL GREEN LLC, Index No. 030709/2023
Plaintiff,
-against- AFFIDAVIT OF
LENA E. PAXOS, ESQ.
IN OPPOSITION TO
GREENPORT/HUDSON ASSOCIATES LLC, DEFENDANTS' JOINT
MORGENSTERN DeVOESICK, PLLC, as Escrow MOTION TO DISMISS
Agent, and CRAZY BEER WORLD, INC., PLAINTIFF'S
COMPLAINT
Defendants.
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LENA E. PAXOS, ESQ. being duly sworn, deposes and says:
1. I am a member of CONDON PAXOS PLLC and I am fully familiar with the facts
and circumstances surrounding this matter based upon a review of the file maintained by this office
in the ordinary course of business.
2. I submit this Affidavit in Opposition to the Defendants' Joint Motion to Dismiss.
3. Except where expressly stated otherwise, I make this Affidavit based upon my
personal knowledge.
4. A copy of the Plaintiffs Verified Complaint is annexed herewith as Exhibit "A".
FACTUAL STATEMENT
5. In and around June 7, 2022, KPL GREEN, LLC successor in interest to Maraki
Realty Corp. ("Green") entered into a contract of sale with Greenport/Hudson Associates LLC
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("GHA") (the "Contract of Sale") for the purchase of real property located at 300 Fairview Avenue,
Hudson, NY (the "Premises"). A copy of the Contract of Sale is annexed to Exhibit A as Exhibit
"A".
6. The Premises is a single-story commercial shopping plaza with fifteen (15)
commercial tenants (See ,i 7 of Plaintiffs Verified Complaint at Exhibit "A").
7. The agreed upon purchase price for the Premises was $5.9 Million Dollars (the
"Purchase Price").
8. During negotiations, GHA advised that they were in negotiations with Crazy Beer
World to lease the 17,000 square foot space that was formerly leased to ALDI.
9. In fact, on March 31, 2022, GHA emailed Green the proposed terms of the Crazy
Beer World lease which factored into the 5.9-million-dollar Purchase Price.
10. Thereafter, on or about May 25, 2022, GHA informed Green that a Lease
Agreement was executed between Crazy Beer World and GHA on the terms previously sent to
Green on March 31 , 2022 ("Beer Lease").
11. GHA also informed Green that the Beer Lease contained a liquor license
contingency, which allowed the tenant to terminate the Lease if they were unable to procure the
necessary liquor licensing from the State of New York. (See a copy of the Beer Lease which is
annexed to Exhibit A as Exhibit "B").
12. The Liquor License Contingency granted Crazy Beer World, " 120 days to move its
existing New York State SLA license to the Premises" (the "Liquor License Contingency"). (See
the Beer Lease which is annexed to Exhibit A as Exhibit "B").
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13 . For many months, e-mails and discussions were exchanged about Purchaser' s
concern that should Crazy Beer World terminate the lease Purchaser will have overpaid on the
Purchase Price.
14. In fact, language was carefully crafted and plainly inserted into the Contract of Sale
to address a reduction in the Purchase Price should Crazy Beer World terminate the Beer Lease.
Copies of some of the e-mail exchanges regarding the reduction in the Purchase Price should Crazy
Beer World not obtain the necessary licensing are annexed herewith collectively as Exhibit "B".
15. More specifically, the Parties, through counsel, established an Escrow Fund amount
and inserted specific language in the Contract of Sale establishing that the parties agreed that, "the
end date of several contingencies set forth in the Beer Lease (including, but not limited to, the
liquor license continencies) may exceed the anticipated Closing Date, the Escrow Agent for the
Premises shall continue to hold the Escrow Fund until such date as the Beer Lease is executed and
all contingencies are cleared, satisfied waived or removed or the Beer Lease is canceled."
16. As such, the Contract of Sale established that the Purchase Price for the Premises
was calculated to include the final execution of the Beer Lease which included removal of the
Liquor License Contingency (See ,r 10 of Plaintiff's Verified Complaint at Exhibit "A").
17. And further that the Contract of Sale contemplates that without the Beer Lease, the
value of the Premises was less than the Purchase Price. (See Contract of Sale which is annexed as
Exhibit A to the Plaintiffs Verified Complaint which is annexed herewith as Exhibit "A").
18. At the request of the Purchaser, the Contract of Sale incorporated a mathematical
calculation illustrating the devaluation of the Premises in the absence of the Beer Lease.
Specifically, that, "if the Beer Lease is not fully executed without contingencies, the loss of
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revenues will cause a reduction in the Premises ' Net Operating Income ("NOI") by $52,621 , as is
set forth below, which would cause a reduction of the Purchase Price by $578,910.00.
With Tenant Without Tenant DELTA
NOI $536,290 $483,669 $52,621
Cap Rate 9.08966% 9.08966% 0%
Price $5,900,000 $5,321 ,090 $578,910
(See Contract of Sale which is annexed as Exhibit A to the Plaintiffs Verified Complaint which
is annexed herewith as Exhibit " A").
19. At the time of the execution of the Contract of Sale between Green and GHA,
the Liquor License Contingency had not yet been satisfied, cleared, removed nor waived and could
surpass the anticipated Closing Date.
20. As such, the respective parties included language in the Contract of Sale to address
how the mathematical reduction, supra, would be applied towards the Purchase Price should Crazy
Beer World fail to satisfy its Liquor License Contingency and/or terminate the Lease.
21. It states at Paragraph 2, in relevant part, that:
2. PURCHASE PRICE. The purchase price shall be Five Million Nine
Hundred Thousand Dollars ($5 ,900,000) ("Purchase Price") payable by
Purchaser in cash or certified funds at Closing.
At Closing, $578,910.00 of the Purchase Price shall be escrowed (the
"Escrow Fund") with Seller' s attorneys as Escrow Agent (Escrow Fund")
with Seller' s attorneys as Escrow Agent pending Seller' s execution of the
proposed lease ("Beer Lease") with Crazy Beer World, Inc. d/b/a Beer
Universe ("Beer Universe"). Purchaser reserves its right to seek an
adjustment of the Escrow Fund amount prior to the expiration of the Due
Diligence Period in order to conduct an independent evaluation of the net
operating income ("NOI") both with and without the Beer Lease.
Seller represents that the NOI of $536,290, set forth below, is based upon
the final execution and removal of contingencies of the Beer Lease
regarding the 17,000 +/- square feet space which the current tenant, ALDI,
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is currently occupying but is expected to vacate prior to the delivery date
set forth in the Beer Lease.
Seller further represents that if the Beer Lease is not fully executed without
contingencies, the loss of revenue will cause a reduction in the Premises'
NOI by $52,621 , as is set forth below.
With Tenant Without Tenant DELTA
NOI $536,290 $483,669 $52,621
Cap Rate 9.08966% 9.08966% 0%
Price $5 ,900,000 $5,321 ,090 $578,910
The respective parties have agreed that as the end date of several
contingencies set forth in the Beer Lease (including, but not limited to, the
liquor license contingencies) may exceed the anticipated Closing Date, the
Escrow Agent for the Premises shall continue to hold the Escrow Fund until
such date as the Beer Lease is executed and all contingencies are cleared,
satisfied, waived or removed or the Beer Lease is canceled.
Within three (3) days of the Beer Lease not being executed, Seller shall
provide Purchaser' s counsel with written notice of the same and, upon
Purchaser's receipt of said notice, the full amount of the Escrow Fund shall
be remitted to Purchaser's counsel. If the Escrow Fund is dispersed to
Purchaser as a result of Beer Universe ' s failure to execute the Beer Lease,
or satisfy the contingencies set forth therein, the Purchaser and/or its
affiliates covenant and agree that they shall have no right to seek any further
indemnification or compensation from Seller in excess of the Escrow Fund.
If the contingencies are satisfied, cleared, waived, and /or removed and the
Beer Lease is executed, then the full amount of the Escrow Fund shall be
transferred to the Seller, upon three (3) days written notice to Purchaser's
counsel, less the monthly rent payments, as set forth in the Beer Lease,
which shall be released to Purchaser in amounts equal to the monthly rent
and the four (4) month construction period (the "Forgiveness Period").
However, should the Beer Lease not be fully executed on or before the
Closing Date, Seller shall also authorize the release of said monthly rent
payments from the Closing Date up to and through the Forgiveness Period.
It being understood and agreed between Seller and Purchaser that once rent
payments are made pursuant to the Beer Lease, no further monthly
payments from the Escrow Fund shall be tendered to Purchaser and the
remaining Escrow Fund shall be released to Seller upon three (3) days
written notice to Purchaser.
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22. In summary, if the Beer Lease did not materialize, due to Crazy Beer World's inability
to obtain the necessary licensing from the State of New York or its termination of the Beer Lease, the
Escrow Fund would be released to the Plaintiff as a proper reduction in the Purchase Price.
23. In addition, Paragraph 11 (M) of the Contract of Sale states as follows:
11. REPRESENTATIONS, WARRANTIES AND COVENANTS. Seller
represents and warrants as follows:
* * *
M. Seller covenants and warrants that if the Beer Lease with Beer Universe is not
fully executed with all contingencies for liquor licensing either satisfied, cleared,
waived, or removed at the time of Closing then all furniture, fixtures and
equipment shall be removed and said vacant unit shall be delivered in a broom
cleaned condition; provided however, if Beer Universe has time remaining to
satisfy liquor licensing contingencies and is still pursuing the satisfaction of such
contingencies, Seller shall deposit Thirty Thousand Dollars {$30,000) with the
Escrow Agent to pay for the removal of such furniture, fixtures and
equipment in the event that unit is not leased to Beer Universe or any other
tenant and such other tenant does not take possession of the vacant unit with the
furniture, fixtures and equipment. The foregoing $30,000 escrow shall be
released to Seller upon the earlier of the following: {a) possession of the
leased premises by Beer Universe; {b) a new tenant executing a lease for the
Premises with the furniture, fixtures and equipment remaining; or {c) such
premises being delivered to Buyer in a broom clean condition with all
furniture, fixtures and equipment removed (Emphasis Added).
24. In addition, at Paragraph 3 of the Contract of Sale states that "upon execution of
this Contract by both parties, Purchaser shall deposit with Morgenstern DeVoesick PLLC, as
escrow agent the sum of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) ("Initial
Deposit"). Upon expiration of the Due Diligence Period, the Purchaser shall deposit an additional
Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00)("Additional Deposit")(the Initial
Deposit and the Additional Deposit collectively the "Deposit"). The Deposit shall be returned to
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Purchaser in the event this Contract is terminated in accordance with the provision of this Contract.
(Emphasis added).
25. On June 6, 2022, the Plaintiff executed the Contract of Sale. (See Contract of Sale
which is annexed as Exhibit "A" to the Plaintiffs Verified Complaint which is annexed herewith
as Exhibit "A").
26. By e-mail dated June 7, 2022, GHA's counsel, Defendant Morgenstern DeVoesick
PLLC ("MDP"), forwarded to me a copy of their wiring instructions. A copy of the e-mail and
wiring instructions are annexed herewith as Exhibit "C".
27. On June 7, 2022, GHA executed the Contract of Sale. (See Contract of Sale which
is annexed as Exhibit A to the Plaintiffs Verified Complaint which is annexed herewith as Exhibit
"A").
28. On that same day, upon contract execution, Plaintiff remitted, through counsel, the
initial contractual wire to MDP' s escrow account in the amount of $250,000.00. A copy of the
wire confirmation is annexed herewith as Exhibit "D".
29. On September 9, 2022, upon the end of the contractual due diligence period,
Plaintiff remitted, through counsel, a second wire to MDP's escrow account in the amount of
$250,000.00. A copy of that wire confirmation is annexed herewith as Exhibit "E".
30. Thereafter, on or about October 5, 2022, GHA and Crazy Beer World entered into
a written amendment whereby the Liquor License Contingency was extended up to and through
December 31 , 2022 ("Beer World Amendment"). (See Beer World Amendment which is annexed
as Exhibit C to the Plaintiffs Verified Complaint which is annexed herewith as Exhibit "A").
31. On or about November 8, 2022, was the Closing for the Premises (the
"Closing Date").
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32. Notably, as of the Closing Date, Crazy Beer World's Liquor License Contingency
had still not yet been cleared, satisfied, waived or removed.
33. On November 14, 2022, MDP accepted an additional $77,273.91 into its escrow
account from our firm via wire. A copy of that wire confirmation is annexed herewith as Exhibit
"F".
34. Pursuant to the Contract of Sale, Seller' s attorneys, MDP, were to act as Escrow
Agent and establish an Escrow Fund from the closing proceeds, provided by the Plaintiff, to ensure
that there was money to be returned to the Plaintiff should there be a termination of the Beer Lease.
(See Contract of Sale which is annexed as Exhibit A to the Plaintiffs Verified Complaint which
is annexed herewith as Exhibit "A").
35. There were no obligations on the part of the Plaintiff nor its counsel as it relates to
the Escrow Fund except for Plaintiffs obligation to pay the closing proceeds on the Closing Date
to GHA - which it did.
36. Pursuant to the Contract of Sale, the Escrow Agent, MDP, was required to provide
written notice to counsel for the Plaintiff prior to releasing any of the Escrow Fund to GHA.
Neither MDP, nor anyone on its behalf, provided any such written notice to Plaintiff.
37. On January 3, 2023 , three (3) days past the expiration of the Liquor License
Contingency, counsel for Crazy Beer World, contacted your affiant, as Plaintiffs counsel, and
asked for an extension of the Liquor License Contingency and additional extensions as to other
terms in the Beer Lease including a further rent abatement.
38. Crazy Beer World's request was outside the designated contingency period.
39. On January 18, 2023, in light of Crazy Beer World's apparent termination of the
Lease, I e-mailed Jeffrey DeVoesick, Esq., a partner at MDP, and asked for immediate proof of
the Escrow Fund. A copy of that January 18, 2023 , e-mail is annexed herewith as Exhibit "G".
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40. In addition to sending the January 18, 2023 , e-mail, I made several phone calls and
left several voice mail messages at the MDP firm requesting immediate proof of the Escrow Fund.
41. On January 19, 2023, after receiving no response, I sent another email to MDP
requesting proof of the Escrow Fund. A copy of that email is annexed herewith as Exhibit "G".
42. On January 19, 2023, Jeffrey DeVoesick, Esq. from MDP indicated that he "will
respond later today." A copy of that email is annexed herewith as Exhibit "G".
43. Despite Mr. DeVoesick's assurance that he would respond later that afternoon, our
office received no response from Mr. DeVoesick nor Mr. DeVoesick' s office.
44. As such, On January 20, 2023, at noon, I was forced to send yet another email as to
the status of the Escrow Fund, to which neither I nor my office received a response. As such, at
7:12PM that same day, another email was sent to MDP regarding the status of the Escrow Fund.
A copy of those e-mails are annexed collectively herewith as Exhibit "G".
45. On Monday January 23 , 2023, Mr. DeVoesick provided an e-mail but made no
mention of the establishment of the Escrow Fund as set forth in the June 7, 2023, Contract of Sale.
A copy of that January 23, 2023, e-mail is annexed herewith as Exhibit "G".
46. At no point between the Closing Date through January 24, 2023, had Mr.
DeVoesick nor MDP ever communicated any email exchanges, phone calls, discussions or
communications between himself and Mr. Hrdlicka.
47. Yet, on January 24, 2023 , Crazy Beer World's counsel, Mr. Hrdlicka, forwarded e-
mail exchanges between himself and Mr. DeVoesick, wherein Mr. Hrdlicka states, in relevant part,
"Sorry, I am going to head out so just in case the landlord doesn't agree to the extension the tenant
reserves their right to cancel the lease since they have not received the liquor license yet." (See
Exhibit E to the Plaintiffs Verified Complaint which is annexed herewith as Exhibit "A").
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48. On January 24, 2023, my office sent to GHA, Mr. DeVoesick, Mr. Hrdlicka, and
Crazy Beer World, via email, First Class Mail and Certified Mail Return Receipt Requested, a
written letter acknowledging and accepting Beer World's termination of the lease, a copy of the
same is annexed herewith as Exhibit "H".
49. On January 24, 2023, counsel for Green sent to GHA and Mr. DeVoesick, via email,
First Class Mail and Certified Mail Return Receipt Requested, a written letter demanding
disbursement of the Escrow Fund pursuant to Paragraph 2 of the Contract of Sale, a copy of the
same is annexed herewith as Exhibit "I".
50. To date, all Defendants have failed to provide proof of the Escrow Fund and have
further failed to disburse the same in accordance with Paragraph 2 of the Contract of Sale.
51. For the foregoing reasons, I respectfully request that the Court deny the relief
sought in the Defendants' Joint Motion to Dismiss in its entirety and grant Plaintiff the cost of
having to defend this Motion.
Lena E. Paxos, Esq.
Sworn to before me this
23rd day of June, 2023
· ~.u&L
/' Notary Public
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Word Count Certification
The total number of words in the foregoing affidavit exclusive of point headings and
footnotes and exclusive of the caption, table of contents, table of authorities, proof of service,
certificate of compliance, or any authorized addendum containing statutes, rules, regulations, etc.
is 2,868.
The document complies with the applicable word count limit and is based on the word
count of the word-processing system used to prepare the document.
Dated: June 23, 2023 CONDON PAXOS PLLC
By: __________________________
Brian K. Condon
Attorneys for Plaintiff
55 Old Turnpike Road, Suite 502
Nanuet, New York 10954
(845) 627-8500
Brian@CondonPaxos.com