The Real Deal New York

AG asks New York State court to dismiss appeal in Rushmore case

November 09, 2010 05:30PM
By David Jones

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Gary Barnett and the Rushmore

New York State Attorney General Andrew Cuomo asked a state Supreme Court judge to dismiss a new lawsuit by Extell Development and Carlyle Realty Partners, arguing the developers missed the deadline to appeal his April 9 order to refund $16 million in escrow funds at the Upper West Side’s Rushmore.

The developers, operating under the name CRP/Extell, filed a suit last month in New York State Supreme Court, arguing that Cuomo erred in allowing 41 buyers to get out of their contracts at the condo building, at 80 Riverside Boulevard.

The so-called Article 78 appeal was filed after the developers lost their case in federal court and filed a state appeal in a last-ditch effort.

“Here as the [federal] District Court has already pointed out, petitioner should have gone directly to the [state] Supreme Court,” said Assistant AG Andrew Meier, in his filing. “As it failed to do so, it has failed to timely commence this Article 78 proceeding, and is thus barred by the statute of limitations.”

Meier noted that most appeals of AG rulings are made in state court first, and adds that the developer could have otherwise filed simultaneous appeals in federal and state court.

“Petitioner has only its own litigation strategy to blame for the untimeliness of this proceeding,” Meier wrote in the complaint. “There is no reason why petitioner could not have timely commenced an Article 78 and pursued its federal constitutional claims simultaneously, or commenced an Article 78 first and then brought its federal case.”

Meier did not explain CRP/Extell’s motives for not filing the Article 78 first, but attorney Andrew Weltchek — who is not involved in the case — previously explained that CRP/Extell wanted a more “dispassionate” forum to make a constitutional claim in pursuing the case in federal court first.

The Cuomo decision was April 9, 2010, which would give the developers four months to file an appeal.

The Rushmore buyers originally filed complaints to get out of their condominium contracts in 2009, arguing that CRP/Extell missed a September 2008 deadline to close its first apartment at the Rushmore development. The first closing did not take place until February 2009, but the developers claimed that the date was wrong due to a single-digit typo.

A hearing on the Article 78 filing is scheduled for tomorrow in state Supreme Court in Manhattan.

Richard Cohen, attorney for 33 of the buyers, Carlyle Group officials and Stroock & Stroock & Lavan declined to comment. Lawyers for CRP/Extell and Extell Development officials were not immediately available for comment and a spokesperson for the AG did not return a request for comment.

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