Cases and Deals

Blank Rome Secures Significant Appellate Victory for Rose Castle Redevelopment II, LLC and Principals Yoel Goldman and Zelig Weiss

A Blank Rome team secured a significant appellate victory on behalf of Rose Castle Redevelopment II, LLC and its principals Yoel Goldman and Zelig Weiss, in the Appellate Division, First Department of the New York State Supreme Court, which unanimously affirmed a lower court order confirming an arbitration award in favor of our clients in its decision on June 11, 2020. The appeal was argued nine months ago, on September 11, 2019.

In March 2018, Blank Rome secured a major victory in a six-day arbitration hearing on behalf of our clients, regarding the required payment due in connection with a joint venture to rezone and develop three parcels in Brooklyn. The arbitrator ruled that our clients owed $27.5 million (less $10 million already paid) and rejected the position of the respondents that an additional $49 million was owed. In May 2018, the arbitrator awarded our clients $1.3 million in attorneys’ fees and expenses. The Blank Rome team commenced proceedings in the New York State Supreme Court, NY County, to confirm the award; the respondents moved to vacate the award as “irrational” in seven different respects; and in August 2018, the court confirmed the award in its entirety.

The respondents then took an appeal. On appeal, the respondents/appellants abandoned six of their challenges, but pursued one issue: that the arbitrator’s finding that a contract provision was “ambiguous” was “irrational,” resulting in their being deprived of approximately eight million dollars that should have been paid to them above the $27.5 million they received. The Appellate Division ruled that, while the contract provision in question indeed was not ambiguous, the appellants’ arguments were “misplaced”—that while a court ruling as the arbitrator did “might constitute reversible error” … “the result the arbitrator reached … is supportable as a reformation of the parties’ agreement, given the highly deferential standard of review accorded arbitration awards….”

The Blank Rome team was led by Stephen E. Tisman and included Craig M. Flanders and Gregory P. Cronin.