New York Commercial Bank v. Estate of George E. Paraskevaides et al

Filing 154

FINDINGS OF FACT AND CONCLUSIONS OF LAW: The Court concludes that defendants are jointly and severally liable to NYCB for the amount of $5,655,470.00 plus interest accrued up to the date of Final Judgment plus reasonable attorneys' fees an d expenses. Within 7 days of this Order, NYCB shall file a proposed Final Judgment that includes the interest up to the date of Final Judgment. Any response to the proposed Final Judgment shall be filed within 3 days thereafter. NYCB's claims fo r specific performance are denied as are Lapas's claims for declaratory judgment and specific performance. NYCB may move under Fed. R. Civ. P. 54(d)(2) for attorneys' fees and expenses by August 2, 2019. Defendants may respond within 21 days and NYCB may reply 14 days thereafter. (Motions due by 8/2/2019.) (Signed by Judge P. Kevin Castel on 7/11/2019) (jwh)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------------------------------x
NEW YORK COMMUNITY BANK,
Plaintiff,
-against-

18-cv-3987 (PKC)
FINDINGS OF FACT AND
CONCLUSIONS OF LAW

ESTATE OF GEORGE E. PARASKEVAIDES,
et al.,
Defendants.
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CASTEL, U.S.D.J.
Plaintiff New York Community Bank (“NYCB”) brings three breach of contract
claims against defendants the Estate of George E. Paraskevaides (the “Estate”), Christina G.
Paraskevaides, Charis C. Lapas, Lapas L.C., Efthyvoulos Paraskevaides, Leoni ParaskevaidouMavronicola, and Blazec Enterprises Limited (“Blazec”). Lapas asserts two counterclaims
against NYCB for breach of contract. These are the Court’s findings of fact and conclusions of
law after a bench trial of the claims. Fed. R. Civ. P. 52(a)(1). 1
FINDINGS OF FACT
I.

The Loan Agreement and the Guaranty
1.

In January 2003, non-party Heritage Green Development, LLC (“Heritage

Green” or the “Borrower”) purchased 1,031 acres of vacant land in La Plata Charles County,
Maryland (the “Property”). (Delfoe Decl. ¶ 2; PX Y ¶ 15; PX Z ¶ 15; PX AA ¶ 15).

1

The citation to any evidence is intended to be illustrative and is not necessarily the sole evidentiary support for a
finding. Any finding of fact improperly designated as a conclusion of law or vice versa should be considered under
the proper designation.

2.

Heritage Green obtained financing from the Davis Corporation to

purchase the Property by executing a Purchase Money Deed of Trust Note, dated January 9,
2003, payable to the Davis Corporation in the principal amount of $8,250,000.00 (the “Original
Loan”). (PX A; Delfoe Decl. ¶¶ 3-4).
3.

On July 7, 2004, the Davis Corporation assigned the Original Loan to

Atlantic Bank of New York (“Atlantic Bank”). (PX C; Delfoe Decl. ¶ 5).
4.

On July 7, 2004, Heritage Green entered into an Amended and Restated

Revolving Credit Line Deed of Trust Note with Atlantic Bank (the “Loan Agreement”). (PX B;
PX T at Resp. No. 1; PX U at Resp. No. 1; Delfoe Decl. ¶ 6).
5.

The Loan Agreement provided for a maximum principal amount of

$33,000,000.00 and originally provided for a maturity date of July 7, 2009. (PX B; Delfoe Decl.
¶ 7).
6.

Defendants Charis C. Lapas, Lapas L.C., Christina G. Paraskevaides,

Efthyvoulos Paraskevaides, Leoni Paraskevaidou-Mavronicola, and George E. Paraskevaides
executed a Guaranty of Payment (the “Guaranty”) on July 7, 2004, thereby becoming
Guarantors of the loan underlying the Loan Agreement. (PX G; PX H § 24; Doc. 110 at 3; PX T
at Resp. No. 3; PX U at Resp. No. 2; PX AB ¶¶ 6-7; Delfoe Decl. ¶ 8). Blazec later executed a
Guaranty of Payment on July 7, 2009 and also became a Guarantor. (PX H at 1; PX AB ¶ 14;
Delfoe Decl. ¶ 16)
7.

On February 9, 2006, NYCB entered into an Acquisition and Assumption

Agreement with Atlantic Bank, wherein NYCB became Atlantic Bank’s successor-in-interest
and Atlantic Bank transferred all of its assets and liabilities to NYCB. (PX D; PX E; Delfoe
Decl. ¶ 15).
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8.

Section 1 of the Guaranty provides that each of the Guarantors

“unconditionally guarantees the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all liabilities, obligations and indebtedness of the Borrower to the
Bank now existing or hereafter arising under the [Loan Agreement] . . . whether for principal,
interest, fees, . . . expenses or otherwise, and any and all expenses (including reasonable counsel
fees and expenses) incurred by the Bank in enforcing any rights under this Guaranty.” (PX G §
1).
9.

Section 6(d) of the Guaranty required certain Guarantors to provide

financial information to NYCB as follows:
i. within ninety (90) days after the close of each calendar year
personal financial statements for Charis C. Lapas, George E.
Paraskevaides, . . . and Lapas L.C. in form acceptable to the Bank
together with all supporting documentation including, without
limitation, confirmation of liquidity and financial statements
regarding all real estate investments.
ii. within thirty (30) days after filing, tax returns for the preceding
calendar year but only for Charis C. Lapas . . . and Lapas L.C.
iii. within fifteen (15) days after request by the Bank, such other
information with respect to the financial condition or operations of
each Guarantor as the bank may from time to time reasonably
request.
All financial statements of the Guarantor shall be accompanied by a
letter signed by such Guarantor certifying that the Guarantor has
not failed to observe or perform any of the terms or provisions of
this Guaranty and that since the date of the last financial statement
there has been no material adverse change in the financial condition
of the Guarantor.
(PX G § 6(d)).
10.

Section 10 of the Guaranty governed “Events of Default,” which included

non-payment of any obligation under the Loan Agreement, any petition in bankruptcy filed by or
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against Heritage Green and not dismissed within forty-five days, and any failure of a Guarantor
to observe or perform any term or provision of the Guaranty that is not cured within an
applicable grace period. (PX G § 10).
11.

The Guarantors’ liability was “joint and several” under the Guaranty. (PX

G § 17).
II.

The Confirmation of Guaranty
12.

On February 25, 2010, each of the defendants executed the Confirmation

of Guaranty and Environmental Indemnity (the “Confirmation”). (PX H; Delfoe Decl. ¶ 17).
NYCB is the counterparty to the Confirmation. (PX H; Delfoe Decl. ¶ 18).
13.

Section 2(d) of the Confirmation confirms that each Guarantor “remain[s]

liable for all the obligations of . . . [a] ‘Guarantor’ under the [Guaranty].” (PX H § 2(d)).
14.

Section 5 of the Confirmation ratified and confirmed the Guaranty and all

of the “Guarantors’ representations, warranties, covenants and obligations thereunder in their
entirety.” (PX H § 5).
15.

In particular, the Guarantors confirmed their unconditional guarantee to

make “timely and full payment and repayment” of (1) “all obligations of [Heritage Green] under
[the Loan Agreement],” including the entire principal balance thereof, any and all accrued and
unpaid interest, interest at any default or involuntary rates, late charges, and any other amounts
as may be provided in the Loan Agreement and the Guaranty; and (2) “all costs and expenses of
and advances by [NYCB] (including, without limitation, attorneys' fees and disbursements) in
enforcing the Loan [Agreement] and [Guaranty] and Borrower’s and Guarantors’ obligations
thereunder . . . together with interest thereon at any such default or involuntary rates[.]” (PX H §
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5(b)(i)).
16.

Section 6(iii) of the Confirmation provides that if the Borrower fails to

make payment at the maturity date, an “Event of Default” may be declared under the Guaranty
once NYCB provided written notice to the Guarantors and the Guarantors failed to cure the
default “on or before fifteen (15) days after the giving of such written notice.” (PX H § 6(iii)).
17.

The Confirmation further provides that, “[e]xcept as modified hereby, the

[Guaranty] . . . remain[s] unmodified and in full force and effect.” (PX H § 9).
18.

Section 19 of the Confirmation states that the Guarantors would

“irrevocably designate George P. Yeonas, Esq. . . . as Guarantors’ authorized agent to receive
and accept any notice or legal process from [NYCB]. . . . If [Mr. Yeonas] shall die, become
incapacitated, retire or resign, the Guarantors agree immediately to secure a substitute agent
reasonably acceptable to [NYCB]. Any default by Guarantors in the obligation set forth in this
Section 19 shall constitute an additional Event of Default under the Guaranty.” (PX H § 19).
III.

The Loan Agreement Matures and Heritage Green Defaults
19.

The Loan Agreement’s maturity date was extended by agreement multiple

times, with the last extension setting a maturity date of July 1, 2016. (PX I; PX T at Resp. No. 7;
PX U at Resp. No. 7; PX Y ¶ 33; PX Z ¶ 33; PX AA ¶ 33; Delfoe Decl. ¶ 26).
20.

On July 1, 2016, the Loan Agreement matured and all outstanding

principal and interest became due and payable. (PX I; PX J; PX T at Resp. No. 8; PX U at Resp.
No. 8; Delfoe Decl. ¶¶ 28, 54).
21.

As of July 1, 2016, the outstanding principal owing on the Loan

Agreement and under the Guaranty was $15,500,000.00, exclusive of interest and costs. (Delfoe
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Decl. ¶ 55; PX J; PX M; PX N).
22.

Despite the Loan Agreement’s maturity, the Borrower did not make a

payment on the loan balance between July 1, 2016 and September 2, 2016. (PX J; Delfoe Decl. ¶
29).
23.

On September 2, 2016, NYCB declared an Event of Default under the

Loan Agreement. (Delfoe Decl. ¶ 30; PX J).
24.

On the same day, NYCB sent a letter to the Guarantors and their

authorized agent under the Confirmation, demanding payment of $15,500,000.00, the principal
amount then owing on the loan, and accrued interest. (PX J; Delfoe Decl. ¶ 31).
25.

On April 20, 2017 and March 30, 2018, NYCB sent additional demand

letters to the Guarantors through their authorized agent, demanding the payment of the
$15,500,000.00, plus any accrued interest, fees, expenses, late charges, and all other amounts
provided in the Loan Agreement, Guaranty, and Confirmation. (See PX K; PX O; Delfoe Decl. ¶
33).
IV.

No Payments Are Made by the Guarantors and
Heritage Green Files for Bankruptcy
26.

The Guarantors have not made any payment on the loan balance to

NYCB. (PX T at Resp. Nos. 26-27; PX U at Resp. Nos. 25-26; Delfoe Decl. ¶¶ 32, 34, 59; see
also PX O; PX K).
27.

On September 27, 2017, Heritage Green commenced Chapter 11

proceedings in the United States Bankruptcy Court for the Southern District of New York, under
the case caption In re Heritage Green Development, L.L.C., Case No. 17-12701-mew. (PX L;
PX T at Resp. No. 14; PX U at Resp. No. 14). At this time, the outstanding principal due from
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defendants under the Loan Agreement, Guaranty, and Confirmation remained $15,500,000.00,
exclusive of interests and costs. (PX N; PX Y ¶ 38; PX Z ¶ 38).
28.

On February 22, 2018, with the approval of the Bankruptcy Court, the

Property was auctioned and sold for $9,950,000.00. (PX N). NYCB has received $9,844,530.00
of the sale proceeds. (Delfoe Decl. ¶ 61; PX Q; PX R; PX S).
29.

Thus, the remaining unpaid principal due under the Loan Agreement as of

the date of these Findings of Fact and Conclusions of Law, is $15,500,000.00 less $9,844,530.00,
which is $5,655,470.00.
V.

Mr. Yeonas Resigns as Authorized Agent and Certain Defendants
Fail to Provide Requested Financial Information to NYCB
30.

On April 16, 2018, Mr. Yeonas resigned as authorized agent to receive

legal notice or process from NYCB on behalf of the Guarantors. (PX W; PX T at Resp. No. 28;
PX U at Resp. No. 27).
31.

On April 27, 2018, NYCB sent a letter to the Guarantors demanding the

designation of a new agent for service of process as required by Section 19 of the Confirmation.
(PX P; PX T at Resp. No. 29; PX U at Resp. No. 28).
32.

In that same letter, NYCB also demanded that Charis C. Lapas, Lapas

L.C., and the Estate provide the financial information required by Section 6(d) of the Guaranty.
(PX P).
33.

The Guarantors have not designated a new agent for service of process or

provided the requested financial information. (PX T Resp. Nos. 30-34; PX U at Resp. No. 29;
Delfoe Decl. ¶¶ 41-44).
34.

Lisa Delfoe testified that the purpose of the provision in Section 19 of the
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Confirmation, requiring the appointment of a replacement agent for service of process, and the
provision in Section 6(d) of the Guaranty, requiring certain defendants to provide financial
information, was “to make it easier to collect” the amount due under the Loan Agreement. (Tr.
21).
VI.

NYCB Denies Charis Lapas’s Request to Be Released
Pursuant to Section 17 of the Confirmation
35.

Section 17 of the Confirmation provides, in part, “that at such time as an

amended and restated operating agreement for the Borrower has been entered into by the parties
to the existing operating agreement of the Borrower, [NYCB] shall, within a reasonable time
thereafter in no event exceeding ten (10) business days, deliver a written release to Charis C.
Lapas (but not Lapas, L.C.) which shall release him from any liability under the [Guaranty] . . .
.” (PX H § 17).
36.

Charis C. Lapas is the manager of the Borrower, Heritage Green. (Lapas

37.

On June 7, 2018, Charis C. Lapas wrote to NYCB claiming that the

Decl. ¶ 1).

Borrower’s existing operating agreement had been amended on February 23, 2018 and
requesting that NYCB return an executed copy of the “Release of Charis C. Lapas from
Guaranty,” which was appended as “Exhibit A” to the Confirmation (the “Release Form”). (DX
19).
38.

NYCB refused to execute the Release Form. (DX 20).

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CONCLUSIONS OF LAW
39.

NYCB commenced this action on May 3, 2018, asserting three causes of

action for breach of contract. (Doc. 1).
40.

First, NYCB asserted a breach of contract claim against each defendant

seeking recovery of money damages for an amount in principal and interest due and owing under
the Loan Agreement, Guaranty, and Confirmation as well as additional amounts incurred in
enforcing the Guaranty and Confirmation, including reasonable attorneys’ fees. (Id. at 10).
41.

Second, NYCB asserted a breach of contract claim against Charis C.

Lapas, Lapas L.C., and the Estate for failing to provide to NYCB the financial information
described in Section 6(d) of the Guaranty. (Id. at 10-11).
42.

Third, NYCB asserted a breach of contract claim against all defendants for

failing to designate a new agent for service of process after the resignation of George P. Yeonas
on April 16, 2018, as required in Section 19 of the Confirmation. (Id. at 11).
43.

The Guaranty and the Confirmation are both governed by New York law

and both provide that “[e]ach Guarantor . . . submits to the jurisdiction of the courts of the State
of New York and The United States District Court for the Southern and Eastern District[s] of
New York . . . for the purpose of any suit, action or other proceeding” arising out of any
Guarantor’s obligations under the Guaranty or Confirmation. (PX G §§ 13, 19; PX H §§ 21, 23).
44.

The parties briefed all claims under New York law, and such “implied

consent . . . is sufficient to establish choice of law.” See Krumme v. WestPoint Stevens Inc., 238
F.3d 133, 138 (2d Cir. 2000) (omission in original) (quoting Tehran-Berkeley Civil & Envtl.
Engineers v. Tippetts-Abbett-McCarthy-Stratton, 888 F.2d 239, 242 (2d Cir. 1989)).
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I.

NYCB’s Breach of Contract Claims
a.

Count I: NYCB Is Entitled to Judgment and Damages Based on
Defendants’ Breach of the Guaranty and Confirmation
45.

To recover for breach of contract under New York law, “a plaintiff must

prove, by a preponderance of the evidence, (1) the existence of a contract between itself and that
defendant; (2) performance of the plaintiff’s obligations under the contract; (3) breach of the
contract by that defendant; and (4) damages to the plaintiff caused by that defendant’s breach.”
Diesel Props S.r.l. v. Greystone Bus. Credit II LLC, 631 F.3d 42, 52 (2d Cir. 2011).
46.

The Guaranty and the Confirmation are valid and binding contracts

between NYCB and the defendants.
47.

The defendants breached the Guaranty and Confirmation by failing to

make any payments to NYCB since the Loan Agreement matured. (PX T at Resp. Nos. 26-27;
PX U at Resp. Nos. 25-26); Wechsler v. Hunt Health Sys., Ltd., 330 F. Supp. 2d 383, 403
(S.D.N.Y. 2004) (“Non-performance of a contractual duty is a breach.”).
48.

“Under New York law, for a breach of a contract to be material, it must go

to the root of the agreement between the parties.” Frank Felix Assocs., Ltd. v. Austin Drugs,
Inc., 111 F.3d 284, 289 (2d Cir. 1997) (internal quotations omitted); see also Times Mirror
Magazines, Inc. v. Field & Stream Licenses Co., 103 F. Supp. 2d 711, 731 (S.D.N.Y. 2000)
(“[A] breach is material if it defeats the object of the parties in making the contract and
deprive[s] the injured party of the benefit that it justifiably expected.” (internal quotation marks
omitted)).
49.

The defendants’ breach of the Guaranty and Confirmation was material

because, by failing to make payments, the defendants deprived NYCB of the benefit of its
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bargain, namely, repayment of the subject loan. See ARP Films, Inc. v. Marvel Entm’t Grp.,
Inc., 952 F.2d 643, 649 (2d Cir. 1991) (“Failure to tender payment is generally deemed a
material breach of a contract.”); Jafari v. Wally Findlay Galleries, 741 F. Supp. 64, 67 (S.D.N.Y.
1990) (“The failure to tender payment is a material breach of a contract.”)
71.

NYCB suffered damages as a result of defendants’ breach in the total

amount of $5,655,470.00 (the remaining unpaid principal) plus any interest accrued prior to the
entry of judgment in this matter.
72.

The Court awards NYCB $5,655,470.00 plus interest accrued prior to the

entry of judgment.
73.

Pursuant to the Guaranty and Confirmation, NYCB is also entitled to

reasonable costs and expenses, including reasonable attorneys’ fees, incurred in connection with
its enforcement of the Guaranty and Confirmation. (See PX G § 1; PX H § 5(b)(i)).
b.

Counts II and III: NYCB is Not Entitled to Specific Performance
74.

Defendants Charis C. Lapas, Lapas L.C., and the Estate breached the

Guaranty and Confirmation by failing to provide requested financial information to NYCB as
required by Section 6(d) of the Guaranty. (See PX G § 6(d); PX H § 9; PX T at Resp. Nos. 3134; Delfoe Decl. ¶¶ 41-43.).
75.

All defendants breached the Confirmation by failing to appoint a new

agent for service of process when Mr. Yeonas resigned as defendants’ authorized agent on April
16, 2018, as required by Section 19 of the Confirmation. (PX W; PX H § 19; Delfoe Decl. ¶ 44).
76.

NYCB seeks an order of specific performance, compelling defendants to

comply with Section 19 of the Confirmation by appointing a substitute agent for service of
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process and compelling Charis C. Lapas, Lapas L.C., and the Estate to comply with their
obligations under Section 6(d) of the Guaranty by providing NYCB with the requisite financial
information for the last three years. (Doc. 1).
77.

“In general, specific performance is appropriate when money damages

would be inadequate to protect the expectation interest of the injured party and when
performance will not impose a disproportionate or inequitable burden on the breaching party.”
Cho v. 401-403 57th St. Realty Corp., 300 A.D.2d 174, 175 (1st Dep’t 2002) (internal citations
and quotation marks omitted); see also Versatile Housewares & Gardening Sys. Inc. v. Thill
Logistics, Inc., 819 F. Supp. 2d 230, 241 (S.D.N.Y. 2011) (“Specific performance will not be
ordered where money damages would be adequate to protect the expectation interest of the
injured party, but it will be ordered when such damages would not be an ‘adequate remedy’ for
the non-breaching party, as in cases in which damages will be difficult to prove with certainty,
damages would not allow the procurement of substitute performance, or the contract involves
unique goods or services.” (internal quotation marks omitted)); Deutsche Bank Nat’l Trust Co. v.
Morgan Stanley Mortg. Capital Holdings LLC, 289 F. Supp. 3d 484, 495 (S.D.N.Y. 2018) (“In
determining whether money damages would be an adequate remedy, a trial court must consider,
among other factors, the difficulty of proving damages with reasonable certainty and of
procuring a suitable substitute performance with a damages award.”).
78.

Specific performance is not appropriate here because, as Lisa Delfoe

testified, (Tr. 21), the purpose of both Section 19, requiring the disclosure of financial
statements, and Section 6(d), requiring the appointment of a replacement agent, was “to make it
easier to collect” from defendants the amount due to NYCB under the Loan Agreement. As
such, an award of money damages equal to the amount due to NYCB under the Loan Agreement
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“would be adequate to protect the expectation interest of [NYCB].” See Versatile Housewares,
819 F. Supp. 2d at 241.
79.
II.

The Court accordingly denies NYCB’s requests for specific performance.

Charis Lapas’s Counterclaims
80.

On August 15, 2018, Charis C. Lapas filed his Answer to NYCB’s

Complaint and asserted two counterclaims against NYCB based on NYCB’s refusal to release
him from his obligations under the Guaranty and Confirmation following a purported
amendment to Heritage Green’s operating agreement on February 23, 2018. (PX Y).
81.

His first counterclaim seeks a declaratory judgment, pursuant to 28 U.S.C.

§§ 2201-2202, that pursuant to Section 17 of the Confirmation, Lapas is entitled to receive an
executed Release Form from NYCB, releasing him from his obligations under the Guaranty and
Confirmation. (PX Y ¶¶ 13-18).
82.

His second counterclaim alleges that NYCB breached the Confirmation by

refusing to execute the Release Form and seeks an order of specific performance compelling
NYCB to execute and deliver the Release Form. (PX Y ¶¶ 19-28).
83.

“A fundamental principal of contract law provides that the material

breach of a contract by one party discharges the contractual obligations of the non-breaching
party.” Bear, Stearns Funding, Inc. v. Interface Group-Nevada, Inc., 361 F. Supp. 2d 283, 291
(S.D.N.Y. 2005); see also Dep’t of Economic Dev. v. Arthur Anderson & Co. (U.S.A.), 924 F.
Supp. 449, 483 (S.D.N.Y. 1996) (“The non-breaching party will be discharged from the further
performance of its obligations under the contract when the breach goes to the root of the
contract.” (internal quotation marks omitted)).
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84.

As discussed above, Lapas materially breached the Confirmation by

failing to make payments due to NYCB after the Loan Agreement matured on July 1, 2016 and
NYCB sent him a letter demanding payment on September 2, 2016. This material breach
occurred over a year prior to the alleged amendment of the Borrower’s operating agreement on
February 23, 2018. Lapas’s failure to make payments therefore “discharge[d] [NYCB] from
further performance of its obligations under the [Confirmation],” including the obligation in
Section 17 that NYCB execute the Release Form upon amendment of the Borrower’s operating
agreement. See Dep’t of Economic Dev., 924 F. Supp. at 483.
85.

In the same vein, Lapas cannot establish his counterclaim for breach of the

Confirmation because performance by the aggrieved party is an element of a breach of contract
claim, Diesel Props, 631 F.3d at 52, and Lapas did not perform his obligation under the
Confirmation to make “timely and full payment and repayment of . . . all obligations of [Heritage
Green] under [the Loan Agreement],” (PX H § 5(b)(i)).
86.

Lapas urges the Court to consider the drafting history of Section 17 of the

Confirmation and infer from that history that the parties intended for NYCB to execute the
Release Form upon amendment of the Borrower’s operating agreement regardless of whether
Lapas performed his obligations under the Guaranty and Confirmation. After reviewing the
Confirmation, the Court holds that Section 17 is an unambiguous contractual provision that must
be interpreted according to its plain terms without regard to any drafting history. See W.W.W.
Assocs. v. Giancontieri, 77 N.Y.2d 157, 162 (N.Y. 1990) (“Evidence outside the four corners of
the document as to what was really intended but unstated or misstated is generally inadmissible
to add to or vary the writing.”); Omni Quartz v. CVS Corp., 287 F.3d 61, 64 (2d Cir. 2002) (“It
is well established that a court may not admit extrinsic evidence in order to determine the
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meaning of an unambiguous contract.”).
87.

In any case, Lapas has also failed to demonstrate by a preponderance of

the evidence that the Borrower’s operating agreement was ever properly amended. The
document that Lapas submitted as the amendment, titled “First Amendment to the Amended and
Restated Operating Agreement of Heritage Green Development LLC,” is undated, stating only
“February __, 2018,” with a blank space instead of a number corresponding to the day of the
month. (See DX 18). Moreover, the document purports to amend terms related to the
distribution of losses and assets for a company that, by February 23, 2018, had ceased to operate,
was in bankruptcy, had sold off its sole asset, and had no anticipated profits available for
distribution.
88.

The Court concludes that NYCB did not breach the Confirmation by

declining to release Lapas from his obligations under the Guaranty and Confirmation and
accordingly denies Lapas’s requests for declaratory judgment and specific performance.
CONCLUSION
The Court concludes that defendants are jointly and severally liable to NYCB for
the amount of $5,655,470.00 plus interest accrued up to the date of Final Judgment plus
reasonable attorneys’ fees and expenses. Within 7 days of this Order, NYCB shall file a
proposed Final Judgment that includes the interest up to the date of Final Judgment. Any
response to the proposed Final Judgment shall be filed within 3 days thereafter. NYCB’s claims
for specific performance are denied as are Lapas’s claims for declaratory judgment and specific
performance.

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NYCB may move under Fed. R. Civ. P. 54(d)(2) for attorneys’ fees and expenses
by August 2, 2019. Defendants may respond within 21 days and NYCB may reply 14 days
thereafter.
SO ORDERED.

Dated: New York, New York
July 11, 2019

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