Laufer v Skillman Estates, LLC 2014 NY Slip Op 31357(U) May 23, 2014 Sup Ct, Kings County Docket Number: 503414/2013 Judge: Ann T. Pfau is the story of some New York real estate shenanigans.  The question for this court was whether this was simply one person getting (legally) skinned or was it deceit?

“Defendants Moshe Junger and Moses Rosner were members of defendant Skillman Estates LLC (Skillman).  Skillman owned real property in the Williamsburg neighborhood of Brooklyn, and was the sponsor of a proposed condominium project on property. Plaintiff Moshe C. Laufer (Laufer) alleges that, on August 17, 2004, he entered into an agreement with Skillman to purchase a 1/12 interest in Skillman’s property (Verified Complaint), and simultaneously Skillman eritered into a contract to sell plaintiffs an interest in condominium units in the building.(id 14)  Laufer complaintd that  Skillman, Rosner and Jnnger breached the agreements, and commenced a Beth Din arbitration proceeding, which in time resulted in an award in Laufer’s favor in the amortnt  of $1,551,000 and specific performance, which award was confirmed by this court  resulting in a judgment on default in the amount of $1,551,000, entered on November 2009 under index number 25173/2008.

Defendant Eastern Capital Group LLC (ECG) was the mortgagee on the property, and upon Skillman’s default, it commenced a ‘mortgage foreclosure proceeding (Foreclosure Action, index number 3217/2008) in August 2008 (Aff.ofJerry A. Montag, II Esq. In Support of Motion to Dismiss para 8) . Laufer appeared by counsel in the Foreclosure Action, with cross-claims and counterclaims asserting a vendee’s lien arising from his November 2, 2009 judgment against Skillman(id. at 9). ECG moved for summary judgment and the appointment of a referee to compute, which was granted over Laufer’s oppositi0n (id., at 9, and Decision, dated December 16th , 2010, Ex. A to Montag Aff.)

In early 2012 ECG entered into a forebarence agreement with Rosner, Junger and Skillman, which was so-ordered by Justice Hinds-Radix of this court on April 27,,2012, and filed on May 18, 2012 (Forbearance Agreement, Montag Aff., Ex. C). Among other things, the Forbearance Agreement provided that Junger transferred his interest in Skillman to Rosner; that Skillman and Rosner waived any objection to the entry by ECG of a judgment of foreclosure and sale; ECG discontinued the action as against Junger, and waived any deficiency claim against Junger, Rosner or Skillman if they complied with the terms of the Forbearance Agreement; and ECG agreed that, in the event the property was successfully converted to a condominium, Rosner’s son, defendant Mendy Rosner, could purchase Unit 4B for $300,000.

Here, the claims alleged in the Verified Complaint against the ECG I Defendants arise from the Forbearance Agreement, which was known to plaintiffs before, ECG moved for judgment of foreclosure and sale. Plaintiffs were Parity to the foreclosure action, and Laufer opposed and cross”moved against ECG’s motion for a judgment of  foreclosure and sale. There are no facts alleged in the Verified Complaint to explain or justify why the claims against the ECG Defendants are raised now, rather than when the parties litigated the significance of the  vendee’s lien and the Forbearance Agreement in  the Foreclosure Action. To the extent that plaintiffs did raise these issues, they were litigated to a final conclusion. Indeed, Laufer argued repeatedly, and without success, that his vendee’s lien took precedence.  Even though the legal theory raised in this proceeding is not identical to those set forth in the mortgage proceeding, the claims against the ECG are barred under the doctrine of res judicata. Moreover, the claims against Seyfarth Shaw and the John Doe II attorneys, presumably meant to include Seyfarth Shaw attorneys, are barred under the doctrine of collateral estoppel because they are entirely derivative of the attorneys representatn of ECG m the pnor actIon, and of its role in presentmg the Forbearance to the court.”