Adam Leitman Bailey's Blog, page 9
October 25, 2022
October 3, 2022
Crain’s Names Adam Leitman Bailey, P.C. One Of The Top 5 Best Law Firms To Work For In NYC
Adam Leitman Bailey, P.C. has been named one of Crain’s 2022 Top 100 Best Places to Work in New York City. Adam Leitman Bailey, P.C. placed #5 in the law firm category.
The Crain’s program awards various industries throughout New York’s five boroughs, home to over 220,000 businesses. The rankings aim to identify and recognize the city’s best employers, and this year was based on more than 23,000 employee surveys as well as an assessment of employer policies, practices, and demographics. An outside independent research company, Best Companies Group, conducts the research and compiles the results, which are then published by Crain’s New York Business.
Adam Leitman Bailey Appeared On CNN To Discuss The Fraud Lawsuit Filed By The Attorney General Against Former President, Donald Trump
Adam Leitman Bailey appeared on CNN to discuss the 222 page fraud lawsuit filed by Attorney General, Letitia James, against the former President. Despite beating Donald Trump in a lawsuit filed in 2011, he believes that the AG will have a very difficult time prevailing and explains why.
September 28, 2022
“Standing” to Sue Sham Condo, Co-Op Sponsors Changed
By: Adam Leitman Bailey & John M. Desiderio
May 1st, 2008
Kramer v. W10Z/515 Real Estate Ltd. Partnership, 1 a recent decision of the Appellate Division, First Department, is a case of great importance to purchasers of new condominium and cooperative apartment units.
In a sweeping opinion, the court completely overhauled, if not expressly overruled, a line of its own decisions that appeared to effectively bar any private suit against condo and co-op sponsors who make fraudulent representations in offering plans for newly constructed or converted condominiums and cooperative apartments.
The court definitively held that the Martin Act (General Business Law, Art. 23-A) does not preclude a private party from prosecuting an otherwise valid common-law fraud claim in connection with the sale of securities whenever the alleged fraudulent conduct is such that the attorney general would be authorized to bring an action against the defendant under the Martin Act.
In truth, the First Department, in Kramer, did nothing more than reaffirm the law as set forth by the Court of Appeals in CPC International v. McKesson Corp.2 and in Vermeer Owners v. Guterman,3 which hold that there is no private right of action under the Martin Act, but that common-law fraud claims are not barred where the plaintiff can prove scienter and reliance.
However, in a line of cases beginning with Whitehall Tenants Corp. v. Estate of Olnick,4 the First Department had interpreted CPC International and Vermeer to mean that the attorney general’s exclusive right to enforce the Martin Act against fraudulent securities and real estate offerings barred private litigants from asserting a common-law fraud cause of action for any act or omission that the attorney general was otherwise authorized to prosecute.5
To be sure, the First Department did not hold explicitly that a private litigant could never have standing to bring a fraud action against a sponsor, but the court did hold, in Whitehall, that standing to bring such actions could not be achieved through “artful” pleading and that private plaintiffs would not be permitted to “press any claim based on the sort of wrong given over to the attorney general under the Martin Act.” Thereafter, in a series of subsequent decisions, the court seemed intent on creating a barrier against private fraud actions that appeared to be nearly insurmountable.
In Thompson v. Parkchester Apartments Co. (Thompson I), the court held that plaintiffs must plead “a unique set of circumstances whose remedy is not already available to the attorney general,” in order “to establish a viable independent claim for deception and false representation.” The court reiterated the “unique circumstances” formula in Thompson II. However, just what “unique circumstances” would satisfy this criterion, for a sponsor’s affirmative misrepresentations, as opposed to a sponsor’s failure to make required disclosures, was not explained.
Moreover, the “unique circumstances” pleading requirement established by the court in Thompson I and Thompson II was actually derived from an earlier decision, 15 East 11th Apartment Corp. v. Elghanayan,6 in which the plaintiffs had alleged fraud based solely on the sponsor’s failure to make certain disclosures in the offering plan, but not upon any affirmative misrepresentations in the plan itself. In Elghanayan, the court affirmed summary judgment dismissing the plaintiffs’ complaint with this analysis:
The Complaint alleges the Elghanayan defendants’ concealment of certain dangerous structural conditions from the purchasers. We are concerned primarily with the first cause of action in that complaint, alleging six specific instances of fraud in connection with the failure to disclose this information in the Offering Plan. There is nothing unique about the pleading of a common-law remedy in Action No. 1 that is not already available to the attorney general under the statute. It would thus appear that plaintiff in Action No. 1, rather than pleading common-law fraud, is in reality alleging nothing more than a private cause of action which is prohibited under the Martin Act.
In Kramer, the First Department noted that the holding against “artful pleading” in Whitehall “makes good sense” because, common-law fraud was alleged, and, unlike the attorney general who need not allege or prove either scienter or intentional fraud, “there was no evidence of reliance by the allegedly defrauded shareholder or intent to defraud by the sponsor.” The Whitehall holding was therefore intended “to prevent an end run around the rule prohibiting a private right of action under the Martin Act” because “a private plaintiff cannot be permitted to bring a cause of action that, although styled as one for common-law fraud, lacks proof of an essential element of common-law fraud.”
Nevertheless, Kramer further noted that “the reasoning of Whitehall Tenants Corp. has erroneously been extended to cases in which there is no legitimate reason to question at the pleading stage the ability of the plaintiff to prove all of the essential elements of common-law fraud.”
And Kramer went on to say that: The decisions of this Court after Whitehall Tenants Corp. appear to regard as an example of the “artful pleading” first decried in Whitehall Tenants Corp. every claim of common-law fraud arising out of conduct that could have been the basis for an action by the Attorney General. Certainly none of those decisions suggest a principled basis for identifying those claims of common-law fraud that would not be regarded as such impermissible ploys.
The Martin Act
The court said that it is no “end run” around the Martin Act for the plaintiff to have an opportunity to prove the truth of the allegations when all the elements of fraud have been properly pleaded.
In such cases, the court said it “makes no sense” to “throw the plaintiff out of court merely because the attorney general would be entitled to relief under the Martin Act.” In addition, the Court reasoned that, as the Martin Act was enacted to protect the public from fraudulent exploitation and has a broad remedial purpose, to construe the act “to have abolished the right of purchasers of “condominium and cooperative interests (and purchasers of other securities) to sue sellers for common-law fraud is to give the Martin Act a construction that is antithetical to its remedial purpose.” Moreover, the court noted, there is not anything in the text of the Martin Act, nor in any decision of the Court of Appeals, that lends support to such a construction.
Kramer is a ringing reaffirmation of the rights of condo/co-op apartment owners who purchased their “new homes”7 essentially sight unseen—before the building construction or conversion was even begun or completed— and in full, complete, and necessary reliance upon the builder developer who is offering the premises for sale. While there is good reason to confine prosecutions, for failing to comply with the Martin Act disclosure requirements, to the jurisdiction of the attorney general, to ensure unified and consistent regulatory enforcement, there is no good reason to prevent victimized purchasers from recovering damages for very real and palpable injuries incurred in connection with shoddy construction by fraudulent sponsors.
While the First Department in Kramer has justifiably re-set the balance between purchasers and sellers of new condominium and cooperative apartments, when fraud is present in the transaction, the decision may also add significantly to the obligation that honest sponsors have to make full disclosure in their offering plans of material defects or needed major repairs to the building.8 This was actually the issue in the lower court upon which the plaintiffs’ claim foundered, but which the First Department did not discuss in its opinion permitting the Kramer plaintiffs to assert their common-law fraud claim.
The court overhauled, if not expressly overruled, its own decisions that appeared to bar a private suit against condo and co-op sponsors who make fraudulent representations in plans for newly constructed condos and co-ops.
Common-Law Fraud
The plaintiffs in Kramer had moved to amend their complaint to allege common-law fraud. However, as Justice Jane solomon noted in her opinion, which denied plaintiffs’ motion,9 the plaintiffs’ claim relied principally upon the fact that the sponsor had failed to disclose in the offering plan the transitory construction problems that were experienced while the building was under construction. Justice Solomon noted that,atoral argument, “the court voiced doubt over whether an offering plan should disclose such transitory construction problems.” The plaintiffs then submitted an additional letter argument contending that the sponsor had intentionally withheld the information from the offering plan.
Justice solomon said that the plaintiffs’ distinction had “some appeal, because the Attorney General does not have to prove scienter to establish a Martin Act violation.” But, she reasoned, “this distinction is unworkable on these allegations, because the nature of the wrong is based on omissions of legally required disclosures[,] [and] [a]n intentional omission is no less a violation of the Martin Act than a careless omission, and the Attorney General may prosecute both.”
The “doubts” that Justice solomon voiced at oral argument were based on her concern that the “duty of disclosure sought by the Kramers would significantly expand a sponsor’s disclosure obligations and burdens under the Martin Act.” specifically, the Kramers had “maintained that offering plan amendments must also disclose the historical fact that a construction problem occurred, even if the sponsor fixed the problem.” Justice solomon noted, therefore, that “allowing these fraud claims to go forward would have broad policy repercussions on every sponsor of a condominium project.”
Conclusion
The First Department apparently had no qualms about the policy implications that bothered Justice solomon. Nevertheless, in “making sense” of the standing requirements for common-law fraud cases involving real estate offerings, it is clear that the First Department has made it necessary for all sponsors of new condominium and cooperative apartment construction to closely review the disclosures made in their offering plans and plan amendments concerning the problems encountered during the course of construction. Honesty is still the best policy, but the First Department may have just made that policy a lot more expensive.
1. AD3d, 844 Nys2d 18 (1st Dept. 2007).
2. 70 Ny2d 268, 519 Nys2d 804 (1987).
3. 78 Ny2d 1114, 578 Nys2d 128 (1991).
4. 213 AD2d 200, 623 Nys2d (1st Dept. 1995), leave denied, 86 Ny2d 704, 631 Nys2d 608 (1995).
5. see, e.g., Thompson v. Parkchester Apartments Co., 271 AD2d 311, 706 Nys2d 637 (2000) (Thompson II); Thompson v. Parkchester Apartments Co., 249 AD2d 68, 670 Nys2d 858 (1st Dept. 1998), leave dismissed, 92 Ny2d 946, 681 Nys2d 476 (1998) (Thompson I).
6. 220 AD2d 295, 632 Nys2d 119 (1st Dept. 1995).
7. see General Business Law, Article 36-B, §777(5).
8. see 13 NyCrr 20.3.
9. 10 Misc3d 1056A, 809 Nys2d 482 (2005).
Adam Leitman Bailey, P.C. Ranked as New York’s Best and Brightest Company to Work For 2022
Adam Leitman Bailey, P.C. is excited to share that we have been selected as one of New York’s Best and Brightest Company’s to Work For!
The categories applicants were scored on include: Compensation, Benefits and Employee Solutions; Employee Enrichment, Engagement and Retention; Employee Education and Development; Recruitment, Selection and Orientation; Employee Achievement and Recognition; Communication and Shared Vision; Diversity and Inclusion; Work-Life Balance; Community Initiatives; and Strategic Company Performance.
You can view our Best and Brightest awards page here!
About the Best and Brightest Programs:
The Best and Brightest Companies to Work For® competition identifies and honors organizations that display a commitment to excellence in operations and employee enrichment that lead to increased productivity and financial performance. This competition scores potential winners based on regional data of company performance and a set standard across the nation. This national program celebrates those companies that are making better business, creating richer lives and building a stronger community as a whole. There are numerous regional celebrations throughout the country, such as Atlanta, Boston, Chicago, Dallas, Detroit, Grand Rapids, Houston, Milwaukee, San Diego, San Francisco, Miami, New York, Charlotte, Denver, Seattle, Nashville, and Portland.
Adam Leitman Bailey Ranked in ‘Best Lawyers in America 2023’ for Ninth Year in a Row
Adam Leitman Bailey has been named to Best Lawyers in America list for the ninth year in a row. Inclusion in Best Lawyers is based on a rigorous peer-review survey. This year’s results were determined using more than 12.2 million confidential evaluations by top attorneys. It is exclusively these attorneys who selected this year’s honorees, which makes recognition in Best Lawyers a true reflection of talent in the industry. Candidates who are nominated for consideration are voted on by currently recognized lawyers working in the same practice area and located in the same geographic region. Their awards and recognitions are based purely on the feedback the receive from these top lawyers. Those who receive high peer reviews undergo a thorough verification process to ensure they are currently still in private practice. Only then can these top lawyers be recognized by Best Lawyers, and for nine years now, Mr. Bailey has.
Vault Names Adam Leitman Bailey, P.C. Top 150 Law Firms to Work For Under 150 Attorneys for 2022
Adam Leitman Bailey, P.C. Joins Vault’s Top 150 Under 150 List as One of the Best Midsize Law Firm to Work For.
Vault has also released its new Top 150 Under 150 list—Vault’s collection of the leading small and midsized firms in the U.S. with 150 or fewer attorneys.
To determine the Top 150 Under 150, Vault first developed a list of the best-known and most sought-after U.S. firms with 150 attorneys or fewer. Our editorial and research teams pored through Vault survey data, news stories, trade journals, and other legal publications; spoke with lawyers in the field; and reviewed other published rankings. Vault editors also assessed each firm for prestige, quality of life, and professional growth opportunities and then narrowed down the results to come up with a list of 150 law firms known for providing top-notch service and delivering big results.
About Vault Career Intelligence:
Vault, an Infobase Company, is the most comprehensive and trusted resource for law students and laterals to research law firms. Vault’s law firm rankings and profiles deliver the insider perspective and essential information candidates need to make successful career decisions. Each year, Vault surveys thousands of associates to understand what life is like for attorneys at the nation’s top law firms. Vault ranks law firms by prestige, region, and practice area as well as top firms for quality of life using its annual survey results. Additionally, Vault publishes other valued resources including the Vault Guide to Summer Associate Programs and Interviewing, Vault’s Guide to Legal Practice Areas, the Vault Guide to First Year of Law School, and Law Firm Diversity Profiles. This year, Vault also released the Vault Guide to Navigating Your Legal Career in the Time of Coronavirus. Through Vault’s law school platform, thousands of students from nearly 100 partnering law schools across the country have unlimited access to this critical information.
Adam Leitman Bailey, P.C. Ranked in Expertise’s 2022 Top 37 Real Estate Law Firms in New York City
Every year, Expertise.com decides on the most prominent local experts in a variety of fields with the goal of connecting the public with the best. This year, after researching over 4000 real estate law firms, Expertise.com ranked Adam Leitman Bailey, P.C. as one of the top 37 real estate law firms in New York City. They scored real estate lawyers on more than 25 variables across five categories, and analyzed the results to create a hand-picked list of the best real estate lawyers in New York, NY. Adam Leitman Bailey, P.C. was nominated and recognized for our reputation, credibility, experience, availability, and professionalism. [Click the Awards to see the Full Ranking]
Adam Leitman Bailey, P.C. has also been ranked in Expertise’s Top 15 Best Real Estate Attorneys in Brooklyn, and Top 26 Best Real Estate Attorneys in Yonkers for 2022.
[image error]
August 31, 2022
Pay up or lawyer up: What does a holdout cost a developer?
New development activity is back in New York, and the roar of construction has awakened a dreaded industry bogeyman: the holdout.
From the Diamond District to Billionaires’ Row, neighbors and tenants have dug in their heels and hobbled major projects. Perhaps the starkest example is playing out at Miki Naftali’s Upper West Side condominium conversion at 215 West 84th Street.
In February, the developer sued Ahmet Ozsu, the sole remaining tenant in the 16-story apartment building on the site, alleging that Ozsu’s refusal to move has cost him $25 million in lost rent and profits.
But that hefty price tag doesn’t tell the full story. There are financing and operational costs to be considered, as well as legal fees and a great intangible: reputational damage.
All of them must be weighed against the high price, but relative simplicity, of buying out a tenant or paying off a pesky neighbor.
So just how much can a holdout cost? The Real Deal put together a breakdown.
[…]
The Community Housing Improvement Program, a landlord trade group, recently broke down the operating costs for buildings with rent-stabilized units, including properties that are 95 percent market-rate.
CHIP’s data pegs maintenance, fuel, labor, utilities and insurance at $6,200 per year per tenant, on average. And although just one tenant remains, Naftali is likely on the hook for keeping the whole building online.
“The tenant has a right to full habitability, meaning all the services the tenant got when the building was full, the tenant still has the right to get now,” said Adam Leitman Bailey, the attorney representing Ozsu in the Naftali case. Bailey declined to comment in more detail, citing ongoing litigation.
Those expenses could run as high as $795,000 per year, or $2,178 per day for Natfali. Tack on the annual property tax bill of $822,000, according to public records, and that adds another $2,252 per diem.
Between financing and operations, Naftali could be spending nearly $10,000 daily.
August 10, 2022
American Bar Association Journal: ‘My Path To Law: Finding a Home in The Law’
Adam Bailey: “In life, no challenge became too difficult for me to handle. No battle existed that I could not overcome.”
Daily, I wonder from where my passion against and disdain for injustice derived. The ingredients? Something rising inside me that shoots through my entire body and makes my heart beat faster, combined with a need to help others no matter how small the task. I realize how blessed I am to be part of a profession that feeds my drive, and though I have never been able to find out what caused it, my childhood provides fertile ground.
Ripped at age 5 from my home in Queens and my biological father, I hit the road with my mother, a new man and my sister, onward to Los Angeles to look for work after massive teacher layoffs that had engulfed both my parents. By this time, I had already made my first appearance in front of a judge in divorce court and grew used to going from hotels to rental homes, running to escape the landlords in different towns. Learning in the car where we were headed, there were no goodbyes to friends and family or my home that I would never see the inside of again.
We finally settled down after missing kindergarten. I do not recommend any New York City child be transplanted to California. Besides being different, carrying a thick accent and being extremely skinny, I was bullied inside and outside the home—my contact with my father was limited to living with him at camp in New York during the summers.
My temporary reprieve also involved learning how a new law works—Proposition 13, promoting integration, passed in Los Angeles. I boarded a bus each morning to drive more than an hour each way to an inner-city school. Now, at age 9, on this bus, I used my time to devour books—especially The Hardy Boys—and my love for reading had been ignited. This school also provided free lunch to a very underweight child, and the bullying ceased during this time, as these students focused on the essentials of life—food, shelter and survival. Although I had no idea at the time, reading became an important skill for succeeding in the law.
Another important quality was born, as I had to learn to become a leader for the sake of protecting myself and my sister, a year younger. I also spoke publicly at a rally for the first time as parents without political or monetary power gathered to protest the three-hour bus rides taken to and from school. These gatherings looked very similar to the ones I attend regularly in my capacity as a lawyer representing or educating large groups of people.
In seventh-grade English class, I was introduced to a book about John Peter Zenger—the reason I have been giving my entire life to wanting to become an attorney. Zenger was a newspaper publisher arrested for seditious libel and saved (acquitted by a jury) by a top lawyer, Andrew Hamilton, who used the power of words to convince a jury a person should be able to write whatever they want about a governmental official as long as the words were truthful.
At this exact moment, I knew what I wanted to do for the rest of my life. And a few years later, I was told it would only be a dream—“only rich people go to law school.” So I set a new goal of being a journalist until I finally met a lawyer, and he explained how he paid for law school with loans.
On my birthday, 29 years later, in the exact location where Hamilton went to trial to defend Zenger, I would join 466 others to celebrate the publication of my first book on how to buy a home for first-time buyers with a dedication that read: “To everyone who grew up (like me) without business-savvy parents to teach them the lessons in this book.”
As a child, the only thing worse than moving to a foreign state is moving again another 3,000 miles to a new state, New Jersey. At 13 years old, my life was thrown into chaos again.
The bullying became much worse, and once again I held my head high and learned or adapted to taking the pain of a punch.
In life, no challenge became too difficult for me to handle. No battle existed that I could not overcome. I learned to survive with less, and I had to become street smart to survive. I knew school was the only way out, and getting good grades was the only option. I needed the books to have characters to relate to and to replicate. I learned to be able to spend long hours by myself and to be able to focus on a project for a long period of time. I remember buying a pair of shoes at a garage sale and telling a bully at school that I was bringing them back into style. I had to be not just a leader but a leader who could overcome so much at such a young age.
Hence, I prepared for law school almost from when I could walk. I studied hard. I solved my own problems. I learned empathy and understood different types of people. I conquered so much just by surviving. By never having a video game or watching much television, my mind was clear and sharp. I did not know it at the time, but my analytical abilities allowed me to see strategies into the future. I never followed anyone else, which assisted in making me a natural leader of people. No human could be more disciplined. I never lose control of my temper, and I can usually work longer and harder hours than anyone else I have ever met.
I discovered in law school and beyond that I had jungle street skills and a passion for justice. Although it took me nine months to find a job after law school, once I took my first job, I never looked back. I was determined to try to become the best lawyer I could be. And whether in court or in a boardroom, each day, I try to be better than the next, always thankful for the gift of being a lawyer and this profession where I am able to do so much for so many—knowing at least in part because of the training I received during the first 14 years of my life.
Read the Original Article in the American Bar Association Journal Here
