Asher Edelman, et al., Plaintiffs–Appellants, v. LLC 20

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Supreme Court, Appellate Division, First Department, New York.

Asher Edelman, et al., Plaintiffs–Appellants, v. Emigrant Bank Fine Art Finance, LLC, et al., Defendants–Respondents, John Does 1–20, Defendants.


Decided: November 29, 2011

Mazzarelli, J.P., Andrias, Friedman, Catterson, Freedman, JJ. Browne George Ross LLP, Uniondale (Lee A. Weiss of counsel), for appellants. Foley & Lardner LLP, New York (Jeremy L. Wallison of counsel), for respondents.


Order, Supreme Court, New York County (O. Peter Sherwood, J.), entered May 23, 2011, which granted defendants' motion to dismiss the complaint, and awarded them $204,964.25, plus interest, in attorneys' fees, unanimously affirmed, without costs.

Plaintiffs' third cause of action, which is based on an alleged misrepresentation made in the fall of 2008, is barred by the release in the Standstill Agreement, which is dated as of October 14, 2009.   The release includes contingent claims, and this claim of a March 2010 injury arising out of the parties' December 2008 and January 2009 agreements was a contingent claim at the time the Standstill Agreement was executed (see Matter of People, 272 N.Y. 210, 214 [1936] ).

Plaintiffs make no arguments on appeal as to the fourth cause of action or the second cause of action to the extent it relates to the pre-Standstill Agreement period;  they have therefore abandoned their appeal as to these claims (see e.g. Matter of Metropolitan Museum Historic Dist. Coalition v De Montebello, 20 AD3d 28, 34 [2005] ).

With respect to the remainder of the second cause of action, plaintiffs' claim that defendants “never had [any] intention of finalizing” the loan modification on which defendant Emigrant Bank Fine Art Finance, LLC “ultimately reneged” does not make a fraud cause of action out of a breach of contract claim (see Non–Linear Trading Co. v. Braddis Assoc., 243 A.D.2d 107, 118 [1998];  see also Gordon v. Dino De Laurentiis Corp., 141 A.D.2d 435, 436 [1988] ).

As to plaintiffs' first cause of action, even if, under the March 8, 2010 Pre–Negotiation Agreement, defendants were required to send written notice of termination of discussions before sending a notice of default under the loan documents, the complaint's conclusory allegation of damages is insufficient to sustain the cause of action (see e.g. Arcidiacono v. Maizes & Maizes, LLP, 8 AD3d 119 [2004];  Gordon, 141 A.D.2d at 436).

The procedure directed by the motion court for entertaining defendants' request for attorneys' fees was proper.

The attorneys' fee provision in the Standstill Agreement applies to the “enforcement” thereof;  defendants' defense of the

instant action constitutes enforcement of the agreement (see Soundview Shopping Ctr. v. Port Bay Assoc., 230 A.D.2d 729 [1996] ).