January 9, 2017 News

Azorim at Ridge Hill Defeats Defendants’ Summary Judgment Request for Declaration that Azorim’s Purchase of a Mortgage on a Joint Venture Development Voided the Mortgage

January 9, 2017 – In an 80-page decision, the Supreme Court of the State of New York, County of Westchester, Commercial Division (Scheinkman, J.), granted a motion on behalf of Azorim at Ridge Hill, LLC to dismiss key claims against Azorim and largely denied motions to dismiss Azorim’s claims against Ridge Hill Holdings, LLC and related defendants.

Azorim and Ridge Hill Holdings partnered to develop a four-tower luxury condominium project in Yonkers.  Upon learning of substantial misconduct by Ridge Hill Holdings and its principals managing the project, however, Azorim filed suit alleging breach of fiduciary duty and related claims.  During litigation, the mortgage on the project moved into default.  When Ridge Hill Holdings refused to participate in paying off the mortgage, Azorim purchased the mortgage.  In turn, Ridge Hill Holdings counterclaimed that Azorim had stolen a key corporate opportunity from the joint venture by purchasing the mortgage and that Azorim had defamed Ridge Hill Holdings.  After extensive and expedited discovery, Defendants moved for summary judgment to dismiss many of Azorim’s claims and to dramatically limit the remaining claims, and for a declaration that the mortgage was voided by Azorim’s purchase.  Azorim simultaneously moved to dismiss Ridge Hill Holdings’s theft and defamation claims.

In granting Azorim’s motion to dismiss Ridge Hill Holdings’s theft of corporate opportunity and defamation claims, the Court reaffirmed that a party claiming theft of corporate opportunity must show that the corporation could have taken advantage of the opportunity and that, in any event, the purchase of the joint venture’s debt was not a corporate opportunity.  Correspondingly, the Court denied Ridge Hill Holdings’s request for a declaration that the mortgage was void.  In addition, the Court denied the bulk of Defendants’ motions to dismiss Azorim’s claims against them, and left all of Azorim’s substantive claims standing against Ridge Hill Holdings and several individual defendants, including claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and fraud.  Litigators Y. David Scharf, Gayle Pollack, and Fred H. Perkins represent Azorim in the on-going action.