Insight

By Conducting Aggressive Discovery Proving Bidder Could Not Prevail in Litigation, Adam Leitman Bailey, P.C. Overcomes Claims

By Conducting Aggressive Discovery Proving Bidder Could Not Prevail in Litigation, Adam Leitman Bailey, P.C. Overcomes Claims

Marianne Sanchez

Marianne Sanchez

July 21, 2021 05:03 PM

Bidder sues successful buyer of property claiming that it was the rightful owner of property and actual buyer should have known about filed lawsuit.

Adam Leitman Bailey, P.C.’s client was a small family company that, after saving for years, purchased a small multi-family King’s County apartment building in order to supplement their income. Their former counsel conducted thorough due diligence that showed no clouds on the title or other issues of concern. However, unbeknownst to our client, the seller had previously defaulted on a contract to sell the same property to another party, who – without filing any notice of pendency or other evidence alerting the world to their claims on the property – had secured an undocketed default judgment related to the Property. Months after our clients closed, this other party sued, asserting the right to unwind our client’s purchase and take possession of the Property.

Immediately after being engaged to defend against this litigation, Adam Leitman Bailey, P.C. began aggressively seeking court intervention to speed discovery and move towards summary judgment dismissing the claim and clearing the cloud on the Property. Using motion practice to spur quick discovery, the firm was able to quickly establish that Plaintiffs had never filed a notice of pendency or any other documentation to alert the general public and potential purchasers, of their claims to the Property. And despite the standstills and other delays from the COVID-19 pandemic, Adam Leitman Bailey, P.C. was able to force Plaintiffs to complete all depositions in record time, with a video deposition of our client taken last July during the height of the pandemic.

As expected, the evidence uncovered by Adam Leitman Bailey, P.C. – including testimony by both Plaintiffs and Defendants – conclusively proved that that Defendants neither knew, or could have known, of Plaintiffs’ former lawsuit and claims. Indeed, Adam Leitman Bailey, P.C. was able to secure admissions from Plaintiff on the record that they had never secured final judgment in their prior lawsuit, had never filed any notice of pendency or recorded any information the New York City ACRIS real estate records database, and had no reason to believe defendants knew about their claims before closing on the property years after the Plaintiff’s purported contract. Simply put, the evidence showed that – even if Plaintiffs’ claims to the property were eventually secured – Adam Leitman Bailey, P.C.’s clients were bona fide purchasers for value able who would likely be able to retain the property.

Faced with impending summary judgment deadlines and, the strong evidence mustered by Adam Leitman Bailey, P.C., and Plaintiff’s unreasonably high settlement demands, the Court scheduled a settlement conference for all parties and counsel, during which Adam Leitman Bailey, P.C. was able to secure a settlement in an amount less than even the cost of arguing summary judgment, and by which Plaintiffs’ disclaimed all rights and claims to the Property. Adam Leitman Bailey, P.C. understands that sometimes the best litigation tactic is a well-timed settlement. By maintaining pressure, and recognizing the right time to settle, Adam Leitman Bailey, P.C. achieved all of its client’s goals without the risk or cost of extensive substantive motion practice and trial.

Adam Leitman Bailey, P.C. Supreme Court Litigation Group Attorneys Eric S. Askanase, and Marianne Sanchez secured the victory.

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