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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: January 20, 2019

Appeal of Preliminary Injunction Moot Because Act Sought to be Enjoined Already Occurred

On January 17, 2019, the First Department issued a decision in AmBase Corp. v. Spruce Capital Partners LLC, 2019 NY Slip Op. 00352, holding that the appeal of the denial of a preliminary injunctyion was moot because the act sought to be enjoined already had occurred, explaining:

Insofar as plaintiffs seek a preliminary injunction, that remedy is a legal impossibility, and the appeal is moot. The strict foreclosure that plaintiffs sought to enjoin occurred more than a year ago, in late August or early September 2017, and we denied plaintiffs’ motion for a stay, pending this appeal, of so much of the order as dissolved the TRO that had been granted.

Plaintiffs’ request for a declaratory judgment is not moot, because plaintiff 111 West 57th Investment LLC (Investment) might be entitled to damages from defendant 111 W57 Mezz Investor LLC (Junior Mezz Lender) if it is judicially determined that Investment had the right to object to the strict foreclosure pursuant to Uniform Commercial Code (UCC) § 9-620(a)(2)(B). However, the complaint, as currently pleaded, mentions neither damages nor a constructive trust. Similarly, the complaint does not allege that the Spruce defendants acted in bad faith because they colluded with other defendants who are not party to this appeal or that Investment was entitled to object to the strict foreclosure under UCC 9-621(a)(1).

(Internal quotations and citations omitted).

It is common in commercial litigation that parties seek equitable relief such as injunctions, attachments or the appointment of a temporary receiver in order to preserve assets or maintain the status quo when money damages will not make them whole at the end of a litigation. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding seeking–or opposing–such relief.

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