AMBASE CORPORATION v. 111 LLC (2019)

Insofar as plaintiffs seek a preliminary injunction, that remedy is “a legal impossibility,” and the appeal is moot (Divito v. Farrell, 50 A.D.3d 405, 406, 857 N.Y.S.2d 61 [1st Dept. 2008];  see Currier v. First Transcapital Corp., 190 A.D.2d 507, 508, 593 N.Y.S.2d 16 [1st Dept. 1993] [“an injunction may not issue to prohibit a fait accompli ”] ).  The strict foreclosure that plaintiffs sought to enjoin occurred more than a year ago, in late August or early September 2017, and we denied plaintiffs' motion for a stay, pending this appeal, of so much of the order as dissolved the TRO that had been granted (see 2018 N.Y. Slip Op 61540 (U), 2018 WL 457116 [Jan. 18, 2018] ).

Plaintiffs' request for a declaratory judgment is not moot, because plaintiff 111 West 57th Investment LLC (Investment) might be entitled to damages from defendant 111 W57 Mezz Investor LLC (Junior Mezz Lender) if it is judicially determined that Investment had the right to object to the strict foreclosure pursuant to Uniform Commercial Code (UCC) § 9–620(a)(2)(B) (see Saratoga County Chamber of Commerce v. Pataki, 100 N.Y.2d 801, 812, 766 N.Y.S.2d 654, 798 N.E.2d 1047 [2003], cert denied 540 U.S. 1017, 124 S.Ct. 570, 157 L.Ed.2d 430 [2003] ).¹  However, the complaint, as currently pleaded, mentions neither damages nor a constructive trust.  Similarly, the complaint does not allege that the Spruce defendants acted in bad faith because they colluded with other defendants who are not party to this appeal or that Investment was entitled to object to the strict foreclosure under UCC 9–621(a)(1).  As plaintiffs recognize, they need to replead or amend.  As the order appealed from does not show that the dismissal was with prejudice, in and of itself, it does not prevent plaintiffs from moving for leave to amend or supplement the complaint.

FOOTNOTES

1.   Plaintiff AmBase Corporation—Investment's parent—does not explain why it (as opposed to Investment) has standing.  For example, it does not contend that Investment's corporate veil should be reverse-pierced to benefit it (AmBase).  Therefore, at a minimum, the motion court correctly dismissed AmBase's claims.Plaintiffs do not contend that the motion court erred in dismissing their claims against Spruce Capital because they failed to show why Junior Mezz Lender's corporate veil should be pierced.