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NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
------------------------------------x
62-08 REALTY LLC, WLGT HOLDINGS LLC, :
EA 8TH AVE LLC, AA 8TH AVE LLC, and : Index No.:
EIGHTH AVE VA LLC, :
:
Plaintiffs, :
:
-against- : ORAL ARGUMENT REQUESTED
:
MSK PROPERTIES, LLC, RMDS REALTY :
TH
ASSOCIATES, LLC, 745 64 REALTY :
ASSOCIATES, LLC, 6405 SEVENTH AVENUE, :
LLC, and MSK PROPERTIES OF BROOKLYN, :
LLC, :
:
Defendants.
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MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS’ APPLICATION FOR A
TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION
HERRICK, FEINSTEIN LLP
2 PARK AVENUE
NEW YORK, NEW YORK 10016
(212) 592-1400
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TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES ........................................................................................................ ii
PRELIMINARY STATEMENT .................................................................................................. 1
STATEMENT OF RELEVANT FACTS ..................................................................................... 3
ARGUMENT ............................................................................................................................... 3
PLAINTIFFS’ APPLICATION FOR A PRELIMINARY INJUNCTION AND
TRO SHOULD BE GRANTED ................................................................................................... 3
POINT I: PLAINTIFFS ARE LIKELY TO PREVAIL ON THE MERITS
OF THEIR CLAIMS............................................................................................. 4
POINT II: ABSENT A TRO AND PRELIMINARY INJUNCTION,
PLAINTIFFS WILL SUFFER IMMEDIATE AND IRREPARABLE
HARM................................................................................................................... 7
POINT III: A BALANCING OF THE EQUITIES WARRANTS
INJUNCTIVE RELIEF ......................................................................................... 8
CONCLUSION ............................................................................................................................. 9
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TABLE OF AUTHORITIES
Page
Cases
1-10 Indus. Assocs., LLC v. Trim Corp.,
297 A.D.2d 630 (2d Dep’t 2002) ...............................................................................................4
511 W. 232nd Owners Corp. v. Jennifer Realty Co.,
98 N.Y.2d 144 (2002) ................................................................................................................4
Aetna Ins. Co. v. Capasso,
75 N.Y.2d 860 (1990) ................................................................................................................3
Barbes Rest. Inc. v. ASRR Suzer 218, LLC,
140 A.D.3d 430 (1st Dep’t 2016) ..............................................................................................4
Biles v. Whisher,
160 A.D.3d 1159 (3d Dep’t 2018) .............................................................................................8
Demartini v. Chatham Green,
169 A.D.2d 689 (1st Dep’t 1991) ..............................................................................................4
DoubleClick, Inc. v. Henderson,
No. 116914/97, 1997 WL 731413 (Sup. Ct. N.Y. Cty. Nov. 5, 1997) ......................................3
Four Times Sq. Assoc., L.L.C. v. Cigna Invs.,
306 A.D.2d 4 (1st Dep’t 2003) ..................................................................................................4
Goodfarb v. Freedman,
76 A.D.2d 565 (2d Dep’t 1980) .................................................................................................8
Kelley v. Garuda,
36 A.D.3d 593 (2d Dep’t 2007) .................................................................................................8
Nassau Roofing & Sheet Metal Co. v. Facilities Dev. Corp.,
70 A.D.2d 1021 (3d Dep’t 1979) ...............................................................................................8
Park v. Kim,
205 A.D.3d 429 (1st Dep’t 2022) ..............................................................................................4
Ruiz v. Meloney,
26 A.D.3d 485 (2d Dep't 2006)..................................................................................................8
Sau Thi Ma v. Lien,
198 A.D.2d 186 (1st Dep’t 1993) ..............................................................................................3
Weissman v. Kubasek,
112 A.D.2d 1086 (2d Dep’t 1985) .............................................................................................4
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Statutes
CPLR § 6301................................................................................................................................1, 4
CPLR § 6312(c) ...........................................................................................................................1, 3
CPLR § 6313................................................................................................................................1, 4
RPAPL § 881 ...............................................................................................................................5, 9
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62-08 Realty LLC (“62-08”), WLGT Holdings LLC (“WLGT”), EA 8th Ave LLC (“EA”),
AA 8th Ave LLC (“AA”), and Eighth Ave VA LLC (“VA” and together with 62-08, WLGT, EA,
and EA, collectively, “Plaintiffs”) respectfully submit this memorandum of law in support of their
application, pursuant to New York Civil Practice Law and Rules (“CPLR”) §§ 6301, 6312 and
6313, for a temporary restraining order (“TRO”) and preliminary injunction against Defendants
MSK Properties, LLC (“MSK”), RMDS Realty Associates LLC (“RMDS”), 745 64TH Realty
Associates, LLC (“745”), 6405 Seventh Avenue, LLC (“6405”), and MSK Properties of Brooklyn,
LLC (“MSK Brooklyn” and together with MSK, RMDS, 745, and 6405, collectively,
“Defendants”): (i) staying and tolling the closing date set forth in § 7 of the Settlement Agreement
between Plaintiffs and Defendants; (ii) staying and tolling the date by which to extend the closing
date set forth in § 7 of the Settlement Agreement; (iii) enjoining and restraining Defendants from
entering onto Plaintiffs’ property, located at 6200 Eighth Avenue, which is designated as Block
5794 Lot 75 on the tax map of Kings County (the “Property”) or taking any other action that
interferes with Plaintiffs’ ownership interest in the Property; and (iv) requiring Defendants to
obtain the authorization of their tenant – entities affiliated with Maimonides hospital – for
Defendants to enter into a construction license and access agreement, and any other agreement
contemplated by the Settlement Agreement, on behalf of Maimonides. For the reasons set forth
herein, the instant motion should be granted in its entirety.
PRELIMINARY STATEMENT1
In March 2024, Plaintiffs and Defendants entered into a Settlement Agreement, resolving
certain prior disputes between the parties. In connection therewith, Plaintiffs made an initial
payment of $2 million to Defendants and provided Defendants with Easements that preserve
1
Capitalized terms incorporate the definitions ascribed to them in the Affidavit of Wolfe Landau,
dated June 10, 2024 (“Landau Aff.”)
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certain light and air rights of their adjoining properties, the 745 Property and the RMDS Property,
upon which Defendants have a single tenant: Maimonides. In exchange for that initial
consideration, Defendants agreed to remove, and did remove, all cars parked on the Property
pursuant to a pre-existing lease between Plaintiffs and Defendants, and Defendants found alternate
parking spaces for their tenant.
Because Plaintiffs intend to develop the Property – which Defendants know Plaintiffs must
completed by June 15, 2026 in order to be eligible for the valuable 421-a tax benefits – the
Settlement Agreement mandates that Defendants cooperate with Plaintiffs in their development of
the Property, including by providing certain license and access agreements so as to facilitate
Plaintiffs’ development of the Property. Defendants expressly represented and warranted that they
have “the power to make and perform [their] obligations under [the Settlement Agreement] and
the other documents and instruments referred to [therein]” and “no further consents from any other
persons or entity are required for any of the [Defendants] to execute, deliver, and perform under
[the Settlement Agreement].”
As it turns out, Defendants failed to obtain the consent of Maimonides, their sole tenant at
the 745 Property and RMDS Property, to negotiate and execute a license and access agreement on
its behalf. Thus, Defendants have materially defaulted under the terms and conditions of the
Settlement Agreement and are in breach of contract and/or the covenant of good faith and fair
dealing implied therein, thereby putting Plaintiffs’ entire development project in jeopardy.
Absent the requested injunctive relief, the Closing Deadline of June 12, 2024, by which
Plaintiffs are supposed to pay Defendants $14.75 million, will pass and Defendants will be able to
park their cars again on the Property and effectively permanently terminate Plaintiffs’ ability to
develop the Property. Plaintiffs cannot make the requisite closing payment (or pay $5 million to
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extend the Closing Deadline by 45 days), because without a license agreement from all parties
with an interest in the 745 Property and RMDS Property, they cannot obtain the financing they
need. Plaintiffs had hoped to avoid this scenario via Defendants’ representations and warranties
in the Settlement Agreement because timely completion of the construction project was critical,
but Defendants have failed to live up to their contractual obligations.
To be clear, Plaintiffs do not primarily seek to void the Settlement Agreement, and pursue
Defendants for monetary damages. What they want is what they bargained for; the right to develop
the Property without interference from their neighbors at the 745 Property and RMDS Property.
As a result, the requested injunctive relief is necessary to preserve the status quo pending a final
outcome in this litigation.
STATEMENT OF RELEVANT FACTS
Plaintiffs refers the Court to the Affidavit of Wolfe Landau, dated June 11, 2024, for a full
recitation of the relevant facts.
ARGUMENT
PLAINTIFFS’ APPLICATION FOR A PRELIMINARY
INJUNCTION AND TRO SHOULD BE GRANTED
A preliminary injunction should be granted where the movant demonstrates: (1) a
likelihood of success on the merits of its underlying claims; (2) that it will suffer irreparable harm
if such relief is not granted; and (3) that a balancing of the equities tips in its favor. See Aetna Ins.
Co. v. Capasso, 75 N.Y.2d 860, 862 (1990). The movant need not establish the foregoing elements
conclusively; indeed, where the elements necessary for injunctive relief are sufficiently
demonstrated, the submission of evidence that would raise an issue of fact is not, standing alone,
a sufficient ground for denying a preliminary injunction. See CPLR § 6312(c); see also Sau Thi
Ma v. Lien, 198 A.D.2d 186, 187 (1st Dep’t 1993); DoubleClick, Inc. v. Henderson, No.
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116914/97, 1997 WL 731413, at *3 (Sup. Ct. N.Y. Cty. Nov. 5, 1997). Further, “[a] temporary
restraining order may be granted pending a hearing for a preliminary injunction where it appears
that immediate and irreparable injury, loss or damage will result unless the defendant is restrained
before the hearing can be had.” CPLR §§ 6301, 6313.
POINT I:
PLAINTIFFS ARE LIKELY TO PREVAIL ON THE MERITS OF THEIR CLAIMS
To establish a likelihood of success on the merits, “[a] prima facie showing of a reasonable
probability of success is sufficient; actual proof of the petitioner’s claims should be left to a full
hearing on the merits.” Barbes Rest. Inc. v. ASRR Suzer 218, LLC, 140 A.D.3d 430, 431 (1st Dep’t
2016) (quoting Weissman v. Kubasek, 112 A.D.2d 1086, 1086 (2d Dep’t 1985)); see also
Demartini v. Chatham Green, 169 A.D.2d 689 (1st Dep’t 1991). “A likelihood of success on the
merits may be sufficiently established even where the facts are in dispute and the evidence need
not be conclusive. Barbes Rest. Inc., 140 A.D.3d at 431 (citing Four Times Sq. Assoc., L.L.C. v.
Cigna Invs., 306 A.D.2d 4, 5 (1st Dep’t 2003)). Plaintiffs are able to meet and exceed this
threshold showing of their right to relief against Defendants for breach of contract and/or the
implied covenant of good faith and fair dealing.
Defendants have breached the Settlement Agreement. The elements of a breach of contract
claim are “the existence of a contract, the plaintiff’s performance thereunder, the defendant’s
breach thereof, and resulting damages.” Park v. Kim, 205 A.D.3d 429, 430 (1st Dep’t 2022).
Moreover, “[u]nder New York law, a covenant of good faith and fair dealing is implied in all
contracts.” 1-10 Indus. Assocs., LLC v. Trim Corp., 297 A.D.2d 630, 631 (2d Dep’t 2002). This
covenant embraces a pledge that neither party shall do anything which will have the effect of
destroying or injuring the right of the other party to receive the fruits of the contract. 511 W. 232nd
Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 153 (2002)).
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The Settlement Agreement is a valid and binding agreement between Plaintiffs and
Defendants. Plaintiffs have fully performed their obligations under the Settlement Agreement,
including paying Defendants $2 million and providing them with the Easements at the time of
execution, which Easements Defendants have recorded against the Property. (Landau Aff. ¶ 20).
The Settlement Agreement contemplates that the Defendants would “reasonably cooperate
[with Plaintiffs] in connection with their construction and development of the Property … by …
(i) executing a construction license and access agreement (“CLAA”) on customary commercially
reasonable terms; and (iii) … executing any other reasonably acceptable and required document
relating to support of excavation, foundation or building supports, including, without limitation
wall ties, tie-backs, anchors, straps and underpinning the tiebacks or any other similar excavation
support encroachment on any property owned by [Defendants] adjacent to [the Property].”
(Settlement Agreement § 26). The reason § 26 of the Settlement Agreement was included was to
avoid the need to commence an RPAPL § 881 proceeding concerning the RMDS Property and the
745 Property, which would only result in delay to Plaintiffs’ construction efforts (Landau Aff. ¶
27), which is urgent because of the deadline to finish the construction project by June 15, 2026 in
order to be eligible for the tax break under the former 421-a program. (Landau Aff. ¶ 19).
Plaintiffs understood that Defendants had the requisite authority to bind anyone with an
interest in the RMDS Property and 745 Property because of the representations and warranties
made by Defendants in § 16 of the Settlement Agreement. Those representations and warranties
are that: (i) Defendants have “the power to make and perform [their] obligations under [the
Settlement Agreement] and the other documents and instruments referred to [therein]”; (ii) their
“execution, delivery and performance of [the Settlement Agreement] in accordance with its terms
does not violate … any … contract, agreement, commitment, lease … to which Defendants [are]
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a party or by which it or any of its property is bound; and (iii) “no further consents from any other
persons or entity are required for any of the [Defendants] to execute, deliver, and perform under
[the Settlement Agreement].” But for the foregoing representations and warranties, Plaintiffs
would not have signed the Settlement Agreement, and agreed to pay Defendants many millions of
dollars. (Landau Aff. ¶ 30).
As it turns out, Defendants breached § 16 of the Settlement Agreement by failing to get the
consent of their sole tenant at the 745 Property and RMDS Property – entities affiliated with
Maimonides Hospital (“Maimonides”). In recent days, Maimonides has demanded that they be
included in any CLAA that impacts the 745 Property and RMDS Property, setting back Plaintiffs’
ability to obtain financing, thereby making it impossible to pay the moneys due on the Closing
Deadlines and/or to trigger the Extended Closing Deadline. (Landau Aff. ¶¶ 32-41). By
demanding their inclusion in connection with the negotiation of a CLAA between Plaintiffs and
Defendants, it is clear that Defendants do not have, and never had, “the power to make and perform
[their] obligations under [the Settlement Agreement] and the other documents and instruments
referred to [therein]” and apparently need “further consents from [their tenants] …. to execute,
deliver, and perform under [the Settlement Agreement].” In other words, Defendants have
breached § 16 of the Settlement Agreement.
As a result of the foregoing breaches, Plaintiffs have been damaged. Though the remedy
Plaintiffs prefer is specific performance – i.e., that Defendants be required to obtain the consent of
Maimonides to enter into a CLAA (and other agreements contemplated by the Settlement
Agreement) on its behalf – Plaintiffs have suffered monetary damages to the extent such relief is
not granted. For example, at the time of execution of the Settlement Agreement – and in reliance
on Defendants’ representations and warranties in § 16 of the Settlement Agreement – Plaintiffs
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paid Defendants $2 million and provided Easements benefitting the 745 Property and RMDS
Property, and burdening the Property. (Landau Aff. ¶ 20). Plaintiffs’ damages go much deeper.
Maimonides is slowing down Plaintiffs’ development plans, and possibly turning their plans
completely on their head, which through the representations and warranties of their landlord – the
Defendants – Plaintiffs had directly hoped to avoid. (Landau Aff. ¶¶ 32-41). If Plaintiffs cannot
complete construction by June 15, 2026, they will lose the valuable 421-a tax benefits, which will
cause them to lose tens of millions of dollars. (Id.; see also ¶ 19). As a result, Plaintiffs have been
substantially damaged by Defendants’ breaches of contract.
Therefore, Plaintiffs have established a likelihood of success on their breach of contract
and/or breach of the implied covenant of good faith and fair dealing claims.
POINT II:
ABSENT A TRO AND PRELIMINARY INJUNCTION, PLAINTIFFS
WILL SUFFER IMMEDIATE AND IRREPARABLE HARM
As set forth above, and in the accompanying Landau Aff., absent immediate injunctive
relief, Plaintiffs will lose everything they bargained for under the Settlement Agreement. In the
event the payment obligations are not met on the Closing Deadline or, if applicable, the Extended
Closing Deadline – and the failure to do so was not the “result of the material default by MSK
Parties” under the Settlement Agreement, which it was – Section 5 of the Settlement Agreement –
which contains the obligation for Defendants to remove their tenants’ cars from the Property – and
Section 26 of the Settlement Agreement – which contain Defendants’ obligation to cooperate with
Plaintiffs in their construction on the Property, including by providing a CLAA for the 745
Property and RMDS Property – are deemed null and void. Thus, if the Closing Deadline and/or
Extended Closing Deadline are not stayed and tolled, Plaintiffs will no longer have the ability to
develop the Property, losing their valuable real property rights by reason of Defendants’ material
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breaches of the Settlement Agreement. See Biles v. Whisher, 160 A.D.3d 1159, 1161 (3d Dep’t
2018) (finding irreparable harm where plaintiff was deprived “of their right to use and enjoy their
properties”); Kelley v. Garuda, 36 A.D.3d 593, 596 (2d Dep’t 2007) (“It is clear that the plaintiffs
would suffer irreparable injury should the defendants sell, mortgage, or otherwise encumber the
property of ISKCON, including the temple, and that an injunction on such action is necessary so
as to preserve the status quo.”); Ruiz v. Meloney, 26 A.D.3d 485, 486 (2d Dep't 2006) (“The
purpose of a preliminary injunction is to maintain the status quo and prevent the dissipation of
property that could render a judgment ineffectual.”
POINT III:
A BALANCING OF THE EQUITIES WARRANTS INJUNCTIVE RELIEF
A balancing of the equities weighs in favor of a plaintiff where “the irreparable injury to
be sustained by the plaintiff is more burdensome to it than the harm caused to defendant through
imposition of the injunction.” Nassau Roofing & Sheet Metal Co. v. Facilities Dev. Corp., 70
A.D.2d 1021, 1022 (3d Dep’t 1979). In addition, “where the defendant acted with full knowledge
and planned his violation of plaintiff’s rights, his position does not appeal to the equitable
conscience and an injunction should issue.” Goodfarb v. Freedman, 76 A.D.2d 565, 574 (2d Dep’t
1980).
Here, the balance of the equities weighs heavily in favor of Plaintiffs. By granting the
requested injunctive relief, the status quo is preserved; i.e., until a CLAA is entered with the
appropriate parties in connection with the 745 Property and RMDS Property – which was expressly
promised by Defendants under the Settlement Agreement, which promise Defendants breached
since Maimonides claimed the right to participate in negotiations of the CLAA – Plaintiffs’ rights
under the Settlement Agreement are preserved. Defendants will not suffer any harm, other than a
delay in receipt of their payments due under the Settlement Agreement if Plaintiffs are able to
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close on an appropriate CLAA – either by way of cooperation or litigation via a RPAPL 881
Proceeding. And if not, then Defendants would not be entitled to the closing payments in any
event because they would be in breach of the representations and warranties in § 16 of the
Settlement Agreement. Moreover, Defendants have found alternate parking solutions for their
tenants at the 745 Property and RMDS Property, meaning the status quo would not harm them or
their tenants. (Landau Aff. ¶ 42).
It is against equity and good conscience to permit Defendants to enforce the Closing Date
and Extended Closing Date, when Plaintiffs’ ability to make the payments due thereon is
impossible because of Defendants’ breach of their representations and warranties in § 16 of the
Settlement Agreement. Thus, the balance of the equities weighs heavily in favor of Plaintiffs and
a temporary restraining order and preliminary injunction should be granted.
CONCLUSION
WHEREFORE, for all the foregoing reasons, Plaintiffs respectfully request that this Court
grant the instant motion in its entirety, and award to Plaintiffs such other relief as the Court deems
just and proper.
Dated: New York, New York
June 11, 2024
HERRICK, FEINSTEIN LLP
By: /s/ Avery S. Mehlman l
Avery S. Mehlman
Scott C. Ross
Daniel A. Field
Two Park Avenue
New York, New York 10016
(212) 592-1400
Attorneys for Plaintiffs
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Certification of Word Count Compliance
The undersigned counsel hereby certifies that the body of the within Memorandum
of Law contains 2,718 (excluding the caption, table of contents, table of authorities and signature
block).
Dated: New York, NY
June 11, 2024
HERRICK, FEINSTEIN LLP
Attorneys for Defendants
By: /s/ Avery S. Mehlman
Avery S. Mehlman
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Preview
FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ------------------------------------x 62-08 REALTY LLC, WLGT HOLDINGS LLC, : EA 8TH AVE LLC, AA 8TH AVE LLC, and : Index No.: EIGHTH AVE VA LLC, : : Plaintiffs, : : -against- : ORAL ARGUMENT REQUESTED : MSK PROPERTIES, LLC, RMDS REALTY : TH ASSOCIATES, LLC, 745 64 REALTY : ASSOCIATES, LLC, 6405 SEVENTH AVENUE, : LLC, and MSK PROPERTIES OF BROOKLYN, : LLC, : : Defendants. ------------------------------------x MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS’ APPLICATION FOR A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION HERRICK, FEINSTEIN LLP 2 PARK AVENUE NEW YORK, NEW YORK 10016 (212) 592-1400 HF 17421308v.1 1 of 14 FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 TABLE OF CONTENTS Page TABLE OF AUTHORITIES ........................................................................................................ ii PRELIMINARY STATEMENT .................................................................................................. 1 STATEMENT OF RELEVANT FACTS ..................................................................................... 3 ARGUMENT ............................................................................................................................... 3 PLAINTIFFS’ APPLICATION FOR A PRELIMINARY INJUNCTION AND TRO SHOULD BE GRANTED ................................................................................................... 3 POINT I: PLAINTIFFS ARE LIKELY TO PREVAIL ON THE MERITS OF THEIR CLAIMS............................................................................................. 4 POINT II: ABSENT A TRO AND PRELIMINARY INJUNCTION, PLAINTIFFS WILL SUFFER IMMEDIATE AND IRREPARABLE HARM................................................................................................................... 7 POINT III: A BALANCING OF THE EQUITIES WARRANTS INJUNCTIVE RELIEF ......................................................................................... 8 CONCLUSION ............................................................................................................................. 9 i HF 17421308v.1 2 of 14 FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 TABLE OF AUTHORITIES Page Cases 1-10 Indus. Assocs., LLC v. Trim Corp., 297 A.D.2d 630 (2d Dep’t 2002) ...............................................................................................4 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144 (2002) ................................................................................................................4 Aetna Ins. Co. v. Capasso, 75 N.Y.2d 860 (1990) ................................................................................................................3 Barbes Rest. Inc. v. ASRR Suzer 218, LLC, 140 A.D.3d 430 (1st Dep’t 2016) ..............................................................................................4 Biles v. Whisher, 160 A.D.3d 1159 (3d Dep’t 2018) .............................................................................................8 Demartini v. Chatham Green, 169 A.D.2d 689 (1st Dep’t 1991) ..............................................................................................4 DoubleClick, Inc. v. Henderson, No. 116914/97, 1997 WL 731413 (Sup. Ct. N.Y. Cty. Nov. 5, 1997) ......................................3 Four Times Sq. Assoc., L.L.C. v. Cigna Invs., 306 A.D.2d 4 (1st Dep’t 2003) ..................................................................................................4 Goodfarb v. Freedman, 76 A.D.2d 565 (2d Dep’t 1980) .................................................................................................8 Kelley v. Garuda, 36 A.D.3d 593 (2d Dep’t 2007) .................................................................................................8 Nassau Roofing & Sheet Metal Co. v. Facilities Dev. Corp., 70 A.D.2d 1021 (3d Dep’t 1979) ...............................................................................................8 Park v. Kim, 205 A.D.3d 429 (1st Dep’t 2022) ..............................................................................................4 Ruiz v. Meloney, 26 A.D.3d 485 (2d Dep't 2006)..................................................................................................8 Sau Thi Ma v. Lien, 198 A.D.2d 186 (1st Dep’t 1993) ..............................................................................................3 Weissman v. Kubasek, 112 A.D.2d 1086 (2d Dep’t 1985) .............................................................................................4 ii HF 17421308v.1 3 of 14 FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 Statutes CPLR § 6301................................................................................................................................1, 4 CPLR § 6312(c) ...........................................................................................................................1, 3 CPLR § 6313................................................................................................................................1, 4 RPAPL § 881 ...............................................................................................................................5, 9 iii HF 17421308v.1 4 of 14 FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 62-08 Realty LLC (“62-08”), WLGT Holdings LLC (“WLGT”), EA 8th Ave LLC (“EA”), AA 8th Ave LLC (“AA”), and Eighth Ave VA LLC (“VA” and together with 62-08, WLGT, EA, and EA, collectively, “Plaintiffs”) respectfully submit this memorandum of law in support of their application, pursuant to New York Civil Practice Law and Rules (“CPLR”) §§ 6301, 6312 and 6313, for a temporary restraining order (“TRO”) and preliminary injunction against Defendants MSK Properties, LLC (“MSK”), RMDS Realty Associates LLC (“RMDS”), 745 64TH Realty Associates, LLC (“745”), 6405 Seventh Avenue, LLC (“6405”), and MSK Properties of Brooklyn, LLC (“MSK Brooklyn” and together with MSK, RMDS, 745, and 6405, collectively, “Defendants”): (i) staying and tolling the closing date set forth in § 7 of the Settlement Agreement between Plaintiffs and Defendants; (ii) staying and tolling the date by which to extend the closing date set forth in § 7 of the Settlement Agreement; (iii) enjoining and restraining Defendants from entering onto Plaintiffs’ property, located at 6200 Eighth Avenue, which is designated as Block 5794 Lot 75 on the tax map of Kings County (the “Property”) or taking any other action that interferes with Plaintiffs’ ownership interest in the Property; and (iv) requiring Defendants to obtain the authorization of their tenant – entities affiliated with Maimonides hospital – for Defendants to enter into a construction license and access agreement, and any other agreement contemplated by the Settlement Agreement, on behalf of Maimonides. For the reasons set forth herein, the instant motion should be granted in its entirety. PRELIMINARY STATEMENT1 In March 2024, Plaintiffs and Defendants entered into a Settlement Agreement, resolving certain prior disputes between the parties. In connection therewith, Plaintiffs made an initial payment of $2 million to Defendants and provided Defendants with Easements that preserve 1 Capitalized terms incorporate the definitions ascribed to them in the Affidavit of Wolfe Landau, dated June 10, 2024 (“Landau Aff.”) 1 HF 17421308v.1 5 of 14 FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 certain light and air rights of their adjoining properties, the 745 Property and the RMDS Property, upon which Defendants have a single tenant: Maimonides. In exchange for that initial consideration, Defendants agreed to remove, and did remove, all cars parked on the Property pursuant to a pre-existing lease between Plaintiffs and Defendants, and Defendants found alternate parking spaces for their tenant. Because Plaintiffs intend to develop the Property – which Defendants know Plaintiffs must completed by June 15, 2026 in order to be eligible for the valuable 421-a tax benefits – the Settlement Agreement mandates that Defendants cooperate with Plaintiffs in their development of the Property, including by providing certain license and access agreements so as to facilitate Plaintiffs’ development of the Property. Defendants expressly represented and warranted that they have “the power to make and perform [their] obligations under [the Settlement Agreement] and the other documents and instruments referred to [therein]” and “no further consents from any other persons or entity are required for any of the [Defendants] to execute, deliver, and perform under [the Settlement Agreement].” As it turns out, Defendants failed to obtain the consent of Maimonides, their sole tenant at the 745 Property and RMDS Property, to negotiate and execute a license and access agreement on its behalf. Thus, Defendants have materially defaulted under the terms and conditions of the Settlement Agreement and are in breach of contract and/or the covenant of good faith and fair dealing implied therein, thereby putting Plaintiffs’ entire development project in jeopardy. Absent the requested injunctive relief, the Closing Deadline of June 12, 2024, by which Plaintiffs are supposed to pay Defendants $14.75 million, will pass and Defendants will be able to park their cars again on the Property and effectively permanently terminate Plaintiffs’ ability to develop the Property. Plaintiffs cannot make the requisite closing payment (or pay $5 million to 2 HF 17421308v.1 6 of 14 FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 extend the Closing Deadline by 45 days), because without a license agreement from all parties with an interest in the 745 Property and RMDS Property, they cannot obtain the financing they need. Plaintiffs had hoped to avoid this scenario via Defendants’ representations and warranties in the Settlement Agreement because timely completion of the construction project was critical, but Defendants have failed to live up to their contractual obligations. To be clear, Plaintiffs do not primarily seek to void the Settlement Agreement, and pursue Defendants for monetary damages. What they want is what they bargained for; the right to develop the Property without interference from their neighbors at the 745 Property and RMDS Property. As a result, the requested injunctive relief is necessary to preserve the status quo pending a final outcome in this litigation. STATEMENT OF RELEVANT FACTS Plaintiffs refers the Court to the Affidavit of Wolfe Landau, dated June 11, 2024, for a full recitation of the relevant facts. ARGUMENT PLAINTIFFS’ APPLICATION FOR A PRELIMINARY INJUNCTION AND TRO SHOULD BE GRANTED A preliminary injunction should be granted where the movant demonstrates: (1) a likelihood of success on the merits of its underlying claims; (2) that it will suffer irreparable harm if such relief is not granted; and (3) that a balancing of the equities tips in its favor. See Aetna Ins. Co. v. Capasso, 75 N.Y.2d 860, 862 (1990). The movant need not establish the foregoing elements conclusively; indeed, where the elements necessary for injunctive relief are sufficiently demonstrated, the submission of evidence that would raise an issue of fact is not, standing alone, a sufficient ground for denying a preliminary injunction. See CPLR § 6312(c); see also Sau Thi Ma v. Lien, 198 A.D.2d 186, 187 (1st Dep’t 1993); DoubleClick, Inc. v. Henderson, No. 3 HF 17421308v.1 7 of 14 FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 116914/97, 1997 WL 731413, at *3 (Sup. Ct. N.Y. Cty. Nov. 5, 1997). Further, “[a] temporary restraining order may be granted pending a hearing for a preliminary injunction where it appears that immediate and irreparable injury, loss or damage will result unless the defendant is restrained before the hearing can be had.” CPLR §§ 6301, 6313. POINT I: PLAINTIFFS ARE LIKELY TO PREVAIL ON THE MERITS OF THEIR CLAIMS To establish a likelihood of success on the merits, “[a] prima facie showing of a reasonable probability of success is sufficient; actual proof of the petitioner’s claims should be left to a full hearing on the merits.” Barbes Rest. Inc. v. ASRR Suzer 218, LLC, 140 A.D.3d 430, 431 (1st Dep’t 2016) (quoting Weissman v. Kubasek, 112 A.D.2d 1086, 1086 (2d Dep’t 1985)); see also Demartini v. Chatham Green, 169 A.D.2d 689 (1st Dep’t 1991). “A likelihood of success on the merits may be sufficiently established even where the facts are in dispute and the evidence need not be conclusive. Barbes Rest. Inc., 140 A.D.3d at 431 (citing Four Times Sq. Assoc., L.L.C. v. Cigna Invs., 306 A.D.2d 4, 5 (1st Dep’t 2003)). Plaintiffs are able to meet and exceed this threshold showing of their right to relief against Defendants for breach of contract and/or the implied covenant of good faith and fair dealing. Defendants have breached the Settlement Agreement. The elements of a breach of contract claim are “the existence of a contract, the plaintiff’s performance thereunder, the defendant’s breach thereof, and resulting damages.” Park v. Kim, 205 A.D.3d 429, 430 (1st Dep’t 2022). Moreover, “[u]nder New York law, a covenant of good faith and fair dealing is implied in all contracts.” 1-10 Indus. Assocs., LLC v. Trim Corp., 297 A.D.2d 630, 631 (2d Dep’t 2002). This covenant embraces a pledge that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract. 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 153 (2002)). 4 HF 17421308v.1 8 of 14 FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 The Settlement Agreement is a valid and binding agreement between Plaintiffs and Defendants. Plaintiffs have fully performed their obligations under the Settlement Agreement, including paying Defendants $2 million and providing them with the Easements at the time of execution, which Easements Defendants have recorded against the Property. (Landau Aff. ¶ 20). The Settlement Agreement contemplates that the Defendants would “reasonably cooperate [with Plaintiffs] in connection with their construction and development of the Property … by … (i) executing a construction license and access agreement (“CLAA”) on customary commercially reasonable terms; and (iii) … executing any other reasonably acceptable and required document relating to support of excavation, foundation or building supports, including, without limitation wall ties, tie-backs, anchors, straps and underpinning the tiebacks or any other similar excavation support encroachment on any property owned by [Defendants] adjacent to [the Property].” (Settlement Agreement § 26). The reason § 26 of the Settlement Agreement was included was to avoid the need to commence an RPAPL § 881 proceeding concerning the RMDS Property and the 745 Property, which would only result in delay to Plaintiffs’ construction efforts (Landau Aff. ¶ 27), which is urgent because of the deadline to finish the construction project by June 15, 2026 in order to be eligible for the tax break under the former 421-a program. (Landau Aff. ¶ 19). Plaintiffs understood that Defendants had the requisite authority to bind anyone with an interest in the RMDS Property and 745 Property because of the representations and warranties made by Defendants in § 16 of the Settlement Agreement. Those representations and warranties are that: (i) Defendants have “the power to make and perform [their] obligations under [the Settlement Agreement] and the other documents and instruments referred to [therein]”; (ii) their “execution, delivery and performance of [the Settlement Agreement] in accordance with its terms does not violate … any … contract, agreement, commitment, lease … to which Defendants [are] 5 HF 17421308v.1 9 of 14 FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 a party or by which it or any of its property is bound; and (iii) “no further consents from any other persons or entity are required for any of the [Defendants] to execute, deliver, and perform under [the Settlement Agreement].” But for the foregoing representations and warranties, Plaintiffs would not have signed the Settlement Agreement, and agreed to pay Defendants many millions of dollars. (Landau Aff. ¶ 30). As it turns out, Defendants breached § 16 of the Settlement Agreement by failing to get the consent of their sole tenant at the 745 Property and RMDS Property – entities affiliated with Maimonides Hospital (“Maimonides”). In recent days, Maimonides has demanded that they be included in any CLAA that impacts the 745 Property and RMDS Property, setting back Plaintiffs’ ability to obtain financing, thereby making it impossible to pay the moneys due on the Closing Deadlines and/or to trigger the Extended Closing Deadline. (Landau Aff. ¶¶ 32-41). By demanding their inclusion in connection with the negotiation of a CLAA between Plaintiffs and Defendants, it is clear that Defendants do not have, and never had, “the power to make and perform [their] obligations under [the Settlement Agreement] and the other documents and instruments referred to [therein]” and apparently need “further consents from [their tenants] …. to execute, deliver, and perform under [the Settlement Agreement].” In other words, Defendants have breached § 16 of the Settlement Agreement. As a result of the foregoing breaches, Plaintiffs have been damaged. Though the remedy Plaintiffs prefer is specific performance – i.e., that Defendants be required to obtain the consent of Maimonides to enter into a CLAA (and other agreements contemplated by the Settlement Agreement) on its behalf – Plaintiffs have suffered monetary damages to the extent such relief is not granted. For example, at the time of execution of the Settlement Agreement – and in reliance on Defendants’ representations and warranties in § 16 of the Settlement Agreement – Plaintiffs 6 HF 17421308v.1 10 of 14 FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 paid Defendants $2 million and provided Easements benefitting the 745 Property and RMDS Property, and burdening the Property. (Landau Aff. ¶ 20). Plaintiffs’ damages go much deeper. Maimonides is slowing down Plaintiffs’ development plans, and possibly turning their plans completely on their head, which through the representations and warranties of their landlord – the Defendants – Plaintiffs had directly hoped to avoid. (Landau Aff. ¶¶ 32-41). If Plaintiffs cannot complete construction by June 15, 2026, they will lose the valuable 421-a tax benefits, which will cause them to lose tens of millions of dollars. (Id.; see also ¶ 19). As a result, Plaintiffs have been substantially damaged by Defendants’ breaches of contract. Therefore, Plaintiffs have established a likelihood of success on their breach of contract and/or breach of the implied covenant of good faith and fair dealing claims. POINT II: ABSENT A TRO AND PRELIMINARY INJUNCTION, PLAINTIFFS WILL SUFFER IMMEDIATE AND IRREPARABLE HARM As set forth above, and in the accompanying Landau Aff., absent immediate injunctive relief, Plaintiffs will lose everything they bargained for under the Settlement Agreement. In the event the payment obligations are not met on the Closing Deadline or, if applicable, the Extended Closing Deadline – and the failure to do so was not the “result of the material default by MSK Parties” under the Settlement Agreement, which it was – Section 5 of the Settlement Agreement – which contains the obligation for Defendants to remove their tenants’ cars from the Property – and Section 26 of the Settlement Agreement – which contain Defendants’ obligation to cooperate with Plaintiffs in their construction on the Property, including by providing a CLAA for the 745 Property and RMDS Property – are deemed null and void. Thus, if the Closing Deadline and/or Extended Closing Deadline are not stayed and tolled, Plaintiffs will no longer have the ability to develop the Property, losing their valuable real property rights by reason of Defendants’ material 7 HF 17421308v.1 11 of 14 FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 breaches of the Settlement Agreement. See Biles v. Whisher, 160 A.D.3d 1159, 1161 (3d Dep’t 2018) (finding irreparable harm where plaintiff was deprived “of their right to use and enjoy their properties”); Kelley v. Garuda, 36 A.D.3d 593, 596 (2d Dep’t 2007) (“It is clear that the plaintiffs would suffer irreparable injury should the defendants sell, mortgage, or otherwise encumber the property of ISKCON, including the temple, and that an injunction on such action is necessary so as to preserve the status quo.”); Ruiz v. Meloney, 26 A.D.3d 485, 486 (2d Dep't 2006) (“The purpose of a preliminary injunction is to maintain the status quo and prevent the dissipation of property that could render a judgment ineffectual.” POINT III: A BALANCING OF THE EQUITIES WARRANTS INJUNCTIVE RELIEF A balancing of the equities weighs in favor of a plaintiff where “the irreparable injury to be sustained by the plaintiff is more burdensome to it than the harm caused to defendant through imposition of the injunction.” Nassau Roofing & Sheet Metal Co. v. Facilities Dev. Corp., 70 A.D.2d 1021, 1022 (3d Dep’t 1979). In addition, “where the defendant acted with full knowledge and planned his violation of plaintiff’s rights, his position does not appeal to the equitable conscience and an injunction should issue.” Goodfarb v. Freedman, 76 A.D.2d 565, 574 (2d Dep’t 1980). Here, the balance of the equities weighs heavily in favor of Plaintiffs. By granting the requested injunctive relief, the status quo is preserved; i.e., until a CLAA is entered with the appropriate parties in connection with the 745 Property and RMDS Property – which was expressly promised by Defendants under the Settlement Agreement, which promise Defendants breached since Maimonides claimed the right to participate in negotiations of the CLAA – Plaintiffs’ rights under the Settlement Agreement are preserved. Defendants will not suffer any harm, other than a delay in receipt of their payments due under the Settlement Agreement if Plaintiffs are able to 8 HF 17421308v.1 12 of 14 FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 close on an appropriate CLAA – either by way of cooperation or litigation via a RPAPL 881 Proceeding. And if not, then Defendants would not be entitled to the closing payments in any event because they would be in breach of the representations and warranties in § 16 of the Settlement Agreement. Moreover, Defendants have found alternate parking solutions for their tenants at the 745 Property and RMDS Property, meaning the status quo would not harm them or their tenants. (Landau Aff. ¶ 42). It is against equity and good conscience to permit Defendants to enforce the Closing Date and Extended Closing Date, when Plaintiffs’ ability to make the payments due thereon is impossible because of Defendants’ breach of their representations and warranties in § 16 of the Settlement Agreement. Thus, the balance of the equities weighs heavily in favor of Plaintiffs and a temporary restraining order and preliminary injunction should be granted. CONCLUSION WHEREFORE, for all the foregoing reasons, Plaintiffs respectfully request that this Court grant the instant motion in its entirety, and award to Plaintiffs such other relief as the Court deems just and proper. Dated: New York, New York June 11, 2024 HERRICK, FEINSTEIN LLP By: /s/ Avery S. Mehlman l Avery S. Mehlman Scott C. Ross Daniel A. Field Two Park Avenue New York, New York 10016 (212) 592-1400 Attorneys for Plaintiffs 9 HF 17421308v.1 13 of 14 FILED: NEW YORK COUNTY CLERK 06/11/2024 10:06 AM INDEX NO. 652924/2024 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 06/11/2024 Certification of Word Count Compliance The undersigned counsel hereby certifies that the body of the within Memorandum of Law contains 2,718 (excluding the caption, table of contents, table of authorities and signature block). Dated: New York, NY June 11, 2024 HERRICK, FEINSTEIN LLP Attorneys for Defendants By: /s/ Avery S. Mehlman Avery S. Mehlman 10 HF 17421308v.1 14 of 14