Developers appeal Rushmore refund order

By David Jones | February 15, 2012 04:30PM

Lawyers for Extell Development and Carlyle Realty Partners yesterday appealed a state Supreme Court order to refund $16 million in escrow funds to buyers at the Rushmore condominium on Manhattan’s Upper West Side.

Justice Anil Singh ruled against the Rushmore developers, who filed a so-called Article 78 appeal against former Attorney General Andrew Cuomo, who in April 2010 ordered return of the condo deposits to 41 buyers at the 80 Riverside Boulevard tower.

Buyers in the case argued that the developers failed to close their first sold apartment by a Sept. 1, 2008 deadline, but the partnership of CRP/Extell countered that a “scrivener’s error” in the Rushmore offering plan should have actually read Sept. 1, 2009. After losing multiple appeals in federal court, the developers filed suit in State Supreme Court arguing that Cuomo failed to let them cross-examine the buyers in a full hearing.

According to court documents, CRP/Extell cites three main reasons for the appeal to be considered:

Singh ruled that the AG was “rational under the circumstances” not to consider extrinsic evidence in the case. In court filings and oral arguments, lawyers for Extell have repeatedly stated that the buyers never really cared about the deadline for the first closing, and that they used the date as a technical error to get out of the contracts because of the real estate crash.

The developers also argue that Singh erred in ruling that the court cannot consider evidence that was not placed before the AG during the hearings, but must decide based on what evidence was placed in front of the AG during the hearings. As part of their appeal, the developers sought the ability to collect documents and other evidence from the buyers as to whether they really cared about the deadline.

Finally, the developers argue that they should be allowed “reformation,” in which the dates would essentially be rewritten based on what they say was their true intent, a September 2009 deadline.

Lawyers for the buyers, which are down to 40, since one of the 41 cases was settled, complained that this new appeal is just another attempt to frustrate the buyers after multiple judges rejected the CRP/Extell arguments.

“We are once again disappointed by the sponsor’s ongoing tactics of delay,” said Richard Cohen, who represents 33 of the condo buyers in the Rushmore case. “For almost three years, in the court system and at the attorney general’s office, sponsor has tried to prevent the inevitable return of the purchasers’ down payments. Five judges, three courts and the AG have all agreed that the purchasers’ down payments should be returned to them.”

A spokesperson for Extell said the company “has no comment at this time.” Carlyle declined to comment through a spokesperson, as did the AG.

Boies Schiller & Flexner partner Edward Normand, who represents Extell in the Rushmore case, was not immediately available for comment.