Marjorie Silver has authored a book on collaborative law. (Photo by Sabina Mollot)
By Sabina Mollot
A Stuyvesant Town attorney, whose career has been shaped by alternative law, or more specifically, law when practiced in a way that’s meant to be more civil — and less traumatizing — for all involved in a case, has just released on a book on the subject.
Transforming Justice, Lawyers, and the Practice of Law was put together by Marjorie Silver, who also wrote one chapter with the other 15 chapters written by different authors.
Nearly all those authors, along with Silver, were participants in the Project for Integrating Spirituality, Law and Politics (PISLAP), which is aimed at making law more collaborative and less adversarial. The publisher is the family-owned Carolina Academic Press.
Silver, who’s been an attorney for decades and is also an associate professor at Touro Law Center, said she has always tried to encourage students to practice law in the same fashion, “in a way that’s less adversarial, more healing.”
Tenants defend the rent freeze. (Photos by Sabina Mollot)
By Sabina Mollot
A group of tenants from around the city are hoping to intervene in a lawsuit that was filed in July aimed at stopping the rent freeze authorized a month earlier by the Rent Guidelines Board.
That lawsuit was filed by the Rent Stabilization Association, an organization that represents around 25,000 landlords in New York City.
On Tuesday morning, the tenant group announced its intention to fight the litigation at a rally held at Foley Square, near the courthouses. The group, dubbed the Rent Justice Coalition, includes tenant and civic groups from around the city with legal representation by Legal Aid Society, Goddard Riverside and the Urban Justice Center.
Event organizer Larry Wood of Goddard Riverside told the crowd of tenants and activists, “The RSA says the Rent Guidelines Board used criteria they shouldn’t have. The RSA claims tenant affordability shouldn’t have been considered. It’s outrageous to say they’re not supposed to think about tenant hardship.”
The suit had argued that the issue of affordability shouldn’t be handled by the RGB, but by government-sponsored rent relief subsidies.
Peter Cooper resident Blake Rodriguez of DCTK9, with other dog walkers, walks a dog close to home in August. (Photo by Sabina Mollot)
By Sabina Mollot
In September, new doggie daycare center Happy Dogs, which is located on First Avenue north of 23rd Street, sued a former trainer the company had worked with, accusing Blake Rodriguez, a Peter Cooper resident, of poaching customers and starting a competing business, Dream Come True K9 (DCTK9).
The problem, said Ien and Jennifer Cheng, who own Happy Dogs, was that during the course of their working relationship, Rodriguez said he wanted to open his own rehabilitation center for dogs with behavioral issues. Though they knew this, they became concerned that despite his having signed an agreement not to compete, his center, located a mile and half downtown of Happy Dogs in Manhattan, would do just that by offering overnight boarding as Happy Dogs also does.
The contract called for him not to start a competing business within three miles of of Happy Dogs after the working relationship had ended. Happy Dogs also accused Rodriguez of illegally boarding dogs in his apartment.
A month after the suit was filed, last Thursday, a judge at a city Civil Court heard arguments from both sides and while he didn’t come to any decision, indicated he didn’t think Rodriguez’s dog walking and training company posed much of a threat to Happy Dogs. Noting that DCTK9 is a startup while Happy Dogs has two locations (one in Kips Bay and another in McCarren Park in Brooklyn), Judge Robert Reed said, “It’s like a gnat causing annoyance to an elephant.”
Reed brought up how many dogs there were in the city, saying that just that morning he’d been emailed an ad for a doggie daycare service “and I don’t have a dog.” He added that he wondered why Happy Dogs was so worried about losing clients when “there’s a lot more people with dogs within that three mile radius” of Manhattan.
Happy Dogs owner Jennifer Cheng at the First Avenue facility in 2013 (Photo by Sabina Mollot)
In response, attorney Robert Landy, who was representing Happy Dogs, said that while Happy Dogs didn’t consider itself unique, it was trying to keep its clients from being poached by Rodriguez. The lawsuit had stated that the Chengs had seen testimonials on DCTK9’s website from former clients of Happy Dogs. In response to Reed’s earlier comparison of the two businesses, the attorney said that he “wouldn’t consider Happy Dogs a giant elephant,” but agreed that Happy Dogs was a bigger operation. He said the company recently expanded so that there are now 30 employees.
Landy added that Rodriguez and the Chengs had worked on the group training sessions held at Happy Dogs together and as a result Rodriguez got confidential information about the company’s clients and their dogs’ needs. He also said that during a time after the working relationship had ended but when the Chengs and Rodriguez were still trying to renew it, there was a lot of back and forth on what Rodriguez was going to do with his company, with boarding being a murky subject.
Rodriguez’s website, he added, initially described DCTK9 as a one-stop shop for various dog-related services. But DCTK9, in a written response to the lawsuit, had said Rodriguez had been unaware of this at first since he hadn’t been the one to designed his recently revamped website. The website also utilized SEO services aimed at bringing more traffic to the site. This, Rodriguez’s counter-complaint explained, was the reason for the “one-stop shop” wording. In court, Landy said he found that difficult to believe.
“The defendant will say what’s most useful for himself and then back away from it,” said Landy.
Reed, however, said he was concerned that “stopping (Rodriguez) from being able to go off on a new venture, I don’t know if that’s in keeping with public policy.” He also said he thought the two businesses’ neighborhoods’, DCTK9’s on the Lower East Side vs. Happy Dogs near Stuyvesant Town/Peter Cooper and Gramercy Park were different in the latter ones “have a bit more money.”
In arguing for DCTK9, attorney Aglaia Davis said Rodriguez doesn’t advertise or solicit clients, and when he gets calls, refers the caller to his website to make sure what the person is looking for is training or walking as part of a training program, rather than daycare. “If someone was to say, ‘I don’t want to be with Happy Dogs, anymore. I’m looking for somewhere to drop off my dog and pick it up at 5,” DCTK9 wouldn’t be able to offer the service, she said. “Their businesses are not competing.”
At this point, Reed said he couldn’t even understand why there was a dispute.
Following the arguments, Rodriguez who’d been present at court, said he thought “this whole thing is silly.” He said the only dogs he offers boarding to are the ones participating in his training program or that have used the training program in the past.
“We do make an expectation for dogs we’ve trained,” he said. “It’s not for everybody. It’s not daycare.”
He also denied boarding dogs in his apartment in Peter Cooper Village.
“I have a center. That’s where I live. I have a dog,” he said.
The Chengs weren’t present at the court appearance, and Landy declined to make any further comment. A spokesperson for CW declined to comment on whether or not Rodriguez has boarded dogs at his home.
Stuyvesant Town leasing office (Photo by Sabina Mollot)
By Sabina Mollot
On Monday, CWCapital tried to get a lawsuit that had been filed by representatives of a group of junior lenders last month tossed on the grounds that it was “a story-book portrayal of events.” In this latest court action, CWCapital and co-defendant Wachovia also accused hedge fund Centerbridge Partners, who is representing the lenders, of forming “shell entities” in order to buy into junior loans two months ago, for the sole purpose of suing the owner, the website law360.com first reported.
At that time, CWCapital had taken ownership of Stuyvesant Town/Peter Cooper Village through a deed instead of holding a previously planned auction sale on some of the property’s mezzanine debt. The lenders, once unable to purchase a key piece of mezzanine debt, filed suit in which the company also accused CW of giving themselves a near $1 billion windfall while junior lenders received nothing. Centerbridge had called CWCapital’s takeover “executed on the flawed premise that the amount owed on the senior loan was greater than the value of the property.” CW represented that $4.4 billion was owed on the mortgage when the amount was really $3.45 billion, the lenders said.
But on Monday, CW and Wachovia countered that the plaintiffs were not junior lenders “at any relevant time,” Law 360 quoted the companies as saying in their brief. “Rather, plaintiffs are shell entities that acquired their junior loan positions after, and with full knowledge that, the senior lender had pursued the DIL [deed in lieu transaction], which automatically terminated the ICA (inter-creditor agreement).”
Further, CW argued, “Through this litigation, Centerbridge does not seek to recoup any alleged loss, but rather to earn more than $1 billion in profit on a highly speculative investment in litigation that it made with eyes wide open after the DIL and the termination of the ICA. New York disdains the commercialization of litigation, and its champerty statute is a full stop to what Centerbridge is trying to do here.”
When canceling the mezzanine auction that had been set for June 13, CW also entered into talks with the ST-PCV Tenants Association and the de Blasio administration on a plan that would preserve affordability at around 6,000 apartments. Although the 60-day deadline on those talks has since passed, all parties have agreed that the conversation would continue.
In a mid-July meeting between Mayor de Blasio, the Tenants Association and local elected officials, de Blasio said the TA’s idea of maintaining affordability by going condo would be considered. However, the TA also said it was told by the mayor at that time that his “main thrust is affordable rentals.”
A spokesperson for CWCapital and a spokesperson for Centerbridge did not respond to a request for comment by Town & Village’s press time.
Update: In response to the court action, the Tenants Association issued the following statement.
“We are carefully monitoring this lawsuit because its outcome may affect the stability and long-term affordability of thousands of apartments people call home. Of course the elephant in the room is the multibillion-dollar debt saddled on this great community by speculators and predatory equity. We remain determined to prevent that from happening again.”
Stuyvesant Town leasing office (Photo by Sabina Mollot)
By Sabina Mollot
Last week, CWCapital was sued by holders of Stuyvesant Town’s mezzanine debt who claimed that the new owner cheated them out of hundreds of millions of dollars.
The lawsuit, which was first reported by Bloomberg, is being led by Centerbridge Partners, which is representing six limited liability companies who are named as plaintiffs.
The suit follows a decision by CW last month to take title to Stuyvesant Town/Peter Cooper Village through a deed rather than hold a foreclosure sale that had been scheduled for June 13.
By doing this, Centerbridge accused CW of a “continuing pattern of misconduct” to keep control of the property and “reap an unjust windfall of $1 billion” that should go to lower level lenders, who’ve received nothing.
The report went on to say the lenders, in their complaint, called CWCapital’s takeover “executed on the flawed premise that the amount owed on the senior loan was greater than the value of the property.” CW represented that $4.4 billion was owed on the mortgage when the amount was really $3.45 billion, the lenders said.
A spokesperson for Centerbridge, Michele de Milly, said the lawsuit shouldn’t impact the tenants.
In an official statement, Centerbridge said, “We believe that Stuyvesant Town is and will continue to be a unique and extraordinarily important property, both for the City of New York and for the thousands of tenants who make it such a robust community. This legal matter is an inter-creditor dispute and we do not expect it to affect Stuyvesant Town or its residents. Funds affiliated with Centerbridge Partners, which have owned mezzanine loans of Stuyvesant Town and Peter Cooper Village, have been forced to commence this lawsuit because of the actions taken by CW Capital, in violation of an inter-creditor agreement.”
CWCapital, however, denied this and called the suit “without merit.”
“The assertions made in the lawsuit are utterly baseless and without merit,” spokesperson Brian Moriarty said. “The fact that the complaint centers on a deed in lieu transaction completed before the plaintiff acquired their position exposes the plaintiff’s specific intent to wrest a quick profit from ‘purchased litigation.’ Centerbridge acquired this position at a deep discount in hopes of reaping a windfall at the expense of the bondholders we represent and residents who deserve a timely resolution that will provide certainty and a path forward for the community.”
The litigation, which also names commercial-mortgage trusts set up by Wachovia Bank, may slow down a sale process. However, it shouldn’t stop the city from its current plan of trying to work with CW to maintain affordability at the property while satisfying the bondholders.
When CW canceled the foreclosure auction it also agreed to hold off on a sale for two months while working with the de Blasio administration along with local elected officials representing ST/PCV to come up with a plan. According to Council Member Dan Garodnick, this litigation doesn’t change that.
“This is largely a dispute between lenders and it does not affect our strategy,” he said. “The only question is whether this has the effect of slowing things down further, which is not at all clear at this moment.”
A New York Times story on June 11 had quoted Deputy Mayor Alicia Glen as saying a plan was being explored that would keep as many as 6,000 units in ST/PCV affordable in exchange for a tax exemption.
However, as of late June, Garodnick told Town & Village there aren’t yet any numbers figured out and city officials stressed that was just one possibility.
“The numbers that have been floated were hypothetical and not based on the substance of any negotiation,” Garodnick said.
Lenders Fannie Mae and Freddie Mac have already committed to not financing a deal that would be unacceptable to the tenants or the city.
Beth Israel’s First Avenue building (Photo by Sabina Mollot)
By Sabina Mollot
On Friday, Attorney General Eric Schneiderman announced that he was filing a lawsuit against Beth Israel and St. Luke’s-Roosevelt hospitals as well as Continuum Health Partners, accusing all three of accepting Medicaid payments they were not entitled to. Continuum is the company that owned both hospitals prior to a recent merger with Mt. Sinai.
The lawsuit accuses the hospitals and Continuum of failing to return money to Medicaid they knew was only received due to a computer error in 2009 and 2010. According to the suit, the hospitals submitted improper claims to Medicaid due to the error until the New York State comptroller notified Continuum in 2010 that there were problems with those claims.
The complaint also said that in February of 2011, Continuum found over 900 potentially improper claims to Medicaid after conducting an internal investigation. The total of those claims was over one million dollars. But according to the A.G., the hospitals’ parent company then failed to repay it all within 60 days, instead only repaying “small batches of affected claims” over the next two years. The rest were finally paid by March, 2013, but, the A.G. said, repayments for over 300 of those claims were only made after federal involvement.
This was in June, 2012, when the United States Attorneys’ Office for the Southern District of New York issued a Civil Investigative Demand to Continuum. The complaint against Continuum, Beth Israel and St. Luke’s-Roosevelt was filed under the New York False Claims Act and other statutes in U.S. District Court for the Southern District of New York.
A spokesperson for Mt. Sinai, Gregory Williams, said the company doesn’t comment on pending litigation. However, Williams added, “We intend to argue our case vigorously in court.”
Warshaw Hardware owner Ed Warshaw (Photo by Sabina Mollot)
By Sabina Mollot
Earlier in the year, the owner of Gramercy’s Warshaw hardware shop found himself on the receiving end of a lawsuit by the former president of the National Arts Club, which was also filed against the club.
In the suit, O. Aldon James accused business owner Ed Warshaw of breaking into apartments he controlled, so the club could clear out the spaces, which were hoarded, after he stepped down as president amidst allegations of misusing the club’s money and real estate. At the time, James said he lost no less than $10 million worth of personal property, including items that would have helped defend him in his legal battle with the club, as a result of the cleanup.
However, that lawsuit has since been settled, Warshaw shared this week. A deal was actually reached in July, when Warshaw was away, in which James would agree to the suit in exchange for a settlement to Warshaw of $10.
“I’m still waiting for my ten dollars,” noted Warshaw, although he admitted he doesn’t care about the money. After the suit was filed, Warshaw denied any wrongdoing, saying that although he had done locksmithing work for the club, he didn’t have anything to do with the entering of any James-controlled spaces.
“It just hurt my feelings,” he said this week, “for him to include me in his shenanigans. I’ve known the guy for so long.”
The settlement was actually part of a larger settlement James reached with Attorney General Eric
Former National Arts Club President O. Aldon James (Photo courtesy of National Arts Club)
Schneiderman in July, in which he was made to pay $950,000 to the club. In exchange a number of lawsuits between him, his twin brother John and friend Steven Leitner against the club and vise versa, all ended, according to Roland Riopelle, the club’s attorney.
Over the phone this week, Riopelle explained, “It ended when that settlement went down in July.”
Since then, he said the National Arts Club has been “thriving,” and that he wishes James success in “whatever endeavor he has moved onto.”
The lawsuit was also against the club for what James called a “malicious” attempt by the administration that replaced him to throw him, John and Leitner out of their apartments at the club building on Gramercy Park South.
He said the club’s then Vice President John Morisano had Warshaw break into his apartment and change the locks to a space leased to John James to store artwork. Other items O. Aldon James said were locked up and later destroyed included 25 years worth of day planners and important financial records like credit card receipts, billing slips and some benefactor data.
However, those charges were denied by Riopelle. Riopelle told T&V at the time the only things tossed during the cleanup were items that were “obviously junk” and not paperwork. He also defended Warshaw, confirming the business owner’s story that he hadn’t been involved in the locksmithing work.
“This is like the Japanese horror movie version of litigation,” Riopelle told this paper. “It’s like Godzilla’s tail wiping out the hardware store while battling with the National Arts Club.”
When asked for comment, Barry Felder, the attorney representing James in the case said, “There was a global settlement and Warshaw was included in the global settlement.”
Prior to the settlement, Warshaw said he actually ran into the club’s former longtime leader nearby the club building on East 20th Street. Warshaw attempted to talk to him, but said James got flustered in response. “He kept saying, ‘I wasn’t the guy. I wasn’t the guy.’”