Professional Documents
Culture Documents
Plaintiffs,
- against -
One Central Park West Property Limited ("One Central Park West"), by its
undersigned attorneys, Cleary Gottlieb Steen & Hamilton LLP ("Cleary Gottlieb"), for their
Complaint against defendant FranPearl Equities Corp. ("FranPearl"), allege on the basis of
knowledge with respect to itself and its own conduct and on information and belief as to all other
matters, as follows:
contractual obligation to purchase a residential unit in the Trump International Hotel and Tower
Building from One Central Park West forlan agreed price of $7,800,000.00.
2. By this action, One Central Park West seeks, among other things, an order
1) declaring that the Final Sales Contract (as defined below in Paragraph 14) by and among One
Central Park West and FranPearl regarding the transfer of Unit Number 29A at the building
known as the Trump International Hotel and Tower Building located at One Central Park West,
New York, New York, 10023 ("Unit 29A"), is valid and enforceable by its terms, 2) declaring
that FranPearl breached the Final Sales Contract by failing to settle the purchase of Unit 29A as
required by the terms thereof, and 3) awarding damages to One Central Park West, including but
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not limited to liquidated damages as provided for under the Final Sales Contract. One Central
Park West also seeks an order awarding damages based upon FranlPearl's breach of the implied
covenant of good faith and fair dealing as well as the doctrine of promissory estoppel.
THE PARTIES
3. One Central Park West is a corporation organized and existing under the
laws of Canada, with its principal place of business at Suite 3100 Canwest Place, 201 Portage
State of New York, with its principal place of business at 120 West 23rd Street, New York, NY
10011.
5. This Court has jurisdiction over the subject matter and the parties of this
BACKGROUND
Unit 29A, which at that time was being offered by One Central Park West for sale for the price
of $9,000,000.00.
well as certain items located iji the unit, for a price of $7,800,000.00.
9. On October 30, 2008, counsel for One Central Park West provided
counsel for FranPearl with a draft sales contract for Unit 29A (the "Draft Sales Contract" ) via
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email, which provided for the sale of Unit 29A from One Central Park West to FranPearl for a
price of $7,800,000.00. The Draft Sales Contract included a list of certain furniture and other
items in the apartment that were to be included in the sale price, commonly referred to as the
"inventory list." The inventory list initially included with the Draft Sales Contract mistakenly
included a sculpture, a bar and a coffee table (the "Over-Inclusive Inventory List").
10. The sculpture, bar and coffee table at issue are of sentimental value to the
estate of Israel Asper (the "Asper Estate"). Israel Asper is the founder of Canwest Global
Communications Corp., the parent company of One Central Park West ("Canwest").
11. The next day, October 31, 2008, counsel for One Central Park West
emailed counsel for FranPearl a revised inventory list (the "October 31I' Email") that did not
include the aforementioned sculpture, bar and coffee table (the "Updated Inventory List"). In
that email, counsel for One Central Park West expressly stated that the inventory list had been
revised and instructed counsel for FranPearl to disregard the Over-Inclusive Inventory List sent
12. The October 3 Is Email also welcomed counsel for FranPearl to contact
counsel for One Central Park West with any questions. Counsel for FranPearl did not provide
26 U.S.C. § 1311 of the Internal Revenue Code of 1986, as amended, be added to the Draft Sales
Contract. Counsel for FranPearl did not provide any comments or any objection to the Updated
Inventory List. Counsel for One Central Park West considered the suggested change and, after
making certain revisions with the consent of FranPearl, circulated a revised version of the
provision.
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14. On November 12, 2008, counsel for One Central Park West prepared an
execution version of the sales contract for Unit 29A that included FranPearl's requested revisions
referred to in paragraph 13, above (the "Contract"). Counsel for One Central Park West then
sent the Contract to counsel for FranPearl with the Updated Inventory List attached thereto (the
two documents are collectively referred to herein as the "Final Sales Contract"). Counsel for
FranPearl made no suggestions or objections to any part of the Final Sales Contract.
15. On November 12, 2008, One Central Park West executed the Contract that
16. On November 13, 2008, counsel for One Central Park West received from
counsel for FranPearl four original Contracts signed by FranPearl that attached the Over-
failed to mention that he had replaced the Updated Inventory List with the Over-Inclusive
Inventory List, despite the fact that the Updated Inventory List had been circulated as the correct
inventory list to be appended to the contract since October 31, 2008 and that the Updated
Inventory List had been attached to the Contract when circulated for signature on November 12,
2008.
18. On the same day, November 13, 2008, in order to remedy the apparent
mistake by counsel for FranPearl, counsel for One Central Park West attached FranPearl's
signature pages to the Final Sales Contract which had been circulated to FranPearl's counsel the
day before and emailed the Final Sales Contract, with signature pages, to FranPearl.
19. Also on the same day, November 13, 2008, Cleary Gottlieb, in its role as
escrow agent, received from FranPearl a down payment in the form of a check in the amount of
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$780,000.00. (Section 16 of the Contract provides that Cleary Gottlieb shall act as escrow agent
20. Counsel for One Central Park West first noted in an email sent to
FranPearl's counsel at 2:15 pm. on November 13, 2008 (the "November 13'h Email") that the
hard copy version of the contract it had received, which attached the Over-Inclusive Inventory
List and included FranPearl's signature pages, did not contain certain revised language that
counsel for One Central Park West had included in the version of the Contract delivered for
FranPearl's signature on November 12"'. In that email, counsel for One Central Park West asked
counsel for FranPearl whether the revised language, which related to the manner in which the
22. FranPearl gave no indication that it had any objection whatsoever to the
Updated Inventory List during the entire course of the negotiations from the date the Updated
Inventory List was first circulated on October 31, 2008 through November 13, 2008, when
FranPearl signed the Contract and substituted the Over-Inclusive Inventory List for the Updated
Inventory List.
23. In an email on December 4, 2008 counsel for FranPearl requested that the
closing of the transaction (the "Closing") be delayed from the date contained in Section 4 of the
Contract of December 15, 2008 until December 29, 2008. After due consideration, counsel for
One Central Park West agreed to that request in an email on December 5, 2008.
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26. On December 18, 2008, more than one month after the Contract had been
executed by both parties, FranPearl's counsel objected for the first time to the Updated Inventory
List.
27. On December 18, 2008, in a telephone conversation with counsel for One
Central Park West, counsel for FranPearl stated that FraniPearl expected the three items at issue
28. Later that same day, December 18, 2008, FranPearl's counsel also stated
that FranPearl would be willing to proceed with the scheduled Closing on the understanding that
such a Closing would not include the three items at issue, if One Central Park West would agree
29. One Central Park West believes that the market value of the three items at
30. As a result of sentimental value, at the request of the Asper Estate, One
Central Park West removed the items from Unit 29A prior to December 15'h' and shipped them to
31. Because FranPearl's valuation of the three items at issue seemed to have
been unjustifiably inflated, on December 19, 2008, counsel for One Central Park West initially
informed FranPearl by voicemail that One Central Park West would not be willing to agree to the
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32. In response, on December 19, 2008, counsel for FranPearl sent a letter to
counsel for One Central Park West stating that FranPearl did not intend to close on Unit 29A (
33. In the December 19"' Letter, counsel for FranPearl suggested that its
transmission of signature pages to the Contract that included the Over-Inclusive Inventory List
instead of the Updated Inventory List on November 12, 2008 "constituted a counteroffer" by
FraniPearl despite the fact that FranPearl never explicitly stated that it was thereby making a
counteroffer.
34. Even assuming that FranPearl's valuation of the three disputed items were
accurate, FranPearl only valued these at approximately 0.3% of the total purchase price.
FranPearl's own valuation of the three items demonstrates that the difference between the Over-
Inclusive Inventory List and the Updated Inventory List is not financially material to the sale of
Unit 29A. Indeed, in light of the value of the overall transaction, the fact that FranPearl would
focus on the relatively insignificant value of the three items at issue as its purported justification
for its attempt to void the entire transaction suggests that FranPearl's current position is
motivated by something other than FranPearl's stated desire to obtain the three items at issue.
35. On December 19, 2008, counsel for One Central Park West sent a reply
letter to counsel for FranPearl stating its belief that the Final Sales Contract was enforceable
according to its terms and stating the intention of One Central Park West to proceed with the
Closing scheduled for December 29, 2008, but that One Central Park West would be willing to
agree to the suggested $25,000 reduction in purchase price in consideration of the size of the
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36. On December 22, 2008, counsel for FranPearl sent a letter to counsel for
One Central Park West (the "December 2 2 nd Letter") arguing that the transmission of the Final
Sales Contract by counsel for One Central Park West to counsel for FranPearl on November 1I3 t
November 12, 2008. In the December 2 2 nd Letter, counsel for FranPearl rejected what it had
characterized as One Central Park West's "counteroffer" and further stated that FranPearl was no
longer willing to enter into the agreement it had proposed four days previously to purchase Unit
37. In the December 2 2 nd Letter, counsel for FranPearl also demanded the
return of FranPearl's down payment and stated that if Cleary Glottlieb did not return that down
payment by noon on December 23, 2008, FranPearl would take "all appropriate legal action."~
38. On December 23, 2008, counsel for One Central Park West sent a letter to
counsel for FranPearl (the "December 2 3 rd Letter") stating that the Contract was enforceable and
that One Central Park West stood ready, willing and able to perform all of its obligations,
including its obligations with respect to the Closing scheduled to take place on December 29,
2008 and stating further that it intended to perform all of its obligations under the contract.
39. Counsel for One Central Park West appended the following to the
December 2 3 rd Letter: (i) a timeline of facts, (ii) a summary of adjustments and closing checks
(on the assumption that the transaction would in fact close on December 29h"), and (iii) an
amendment to the Contract regarding an issue initially requested by FranPearl before the dispute
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40. On December 24, 2008, counsel for FranPearl sent a letter to counsel for
One Central Park West (the "December 24h"Letter") stating that "no contract exists" and
41. On December 24, 2008, in preparation for the Closing, counsel for One
Central Park West gave counsel for FranPearl notice, via email, of the time and conference room
42. In addition, on December 24, 2008, counsel for One Central Park West
arranged to have First American Title Insurance Company of New York ("First American") on
call to appear at the Closing to facilitate recording of the deed and other Closing documents.
Counsel for One Central Park West also held the executed deed and other documents necessary
to consummate the Closing in the appointed conference room at the appointed time.
45. As of November 12, 2008 (the date the Contract was signed by both
parties), there was no reason for One Central Park West to believe that the parties had not
reached a meeting of the minds with respect to the inventory list to be appended to the Contract.
Moreover, counsel for FranPearl never communicated any objection to the Updated Inventory
List until December 18, 2008. This objection was made more than six weeks after the October
3 Ist Email to FranPearl' s counsel, which included the revised version of the contract documents
and which explicitly pointed out the substitution of the Updated Inventory List for the Over-
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46. On November 13, 2008, counsel for One Central Park West sent the Final
Sales Contract, consisting of the Contract and the Updated Inventory List, via email to counsel
for FranPearl along with the signature pages of both FranPearl and One Central Park West.
Counsel for FranPearl made no suggestions or objections to any part of the Final Sales Contract.
47. On November 14, 2008, counsel for One Central Park West sent two hard
copies of the Final Sales Contract via messenger to counsel for FranPearl along with the
signature pages of both FranPearl and One Central Park West. Once again, counsel for
FranPearl made no suggestions or objections to any part of the Final Sales Contract.
48. On November 25th and 26h and December 1st counsel for One Central
Park West and counsel for FranPearl exchanged emails regarding the scheduling of a conference
call with First American, the title company handling the transaction.
49. In an email on December 9, 2008, counsel for FraniPearl noted that it had
inadvertently omitted FranPearl's broker, Ruth Goldman, from the contract of sale and asked
counsel for One Central Park West how to address this issue. The parties decided to draft an
amendment to the contract to include her name in the "Brokers" section. The negotiation of that
amendment took place beginning on December 9, 2008 and continued until December 19, 2008;
the day after counsel for FranPearl initially objected to the Updated Inventory List and the same
day of the December 19t Letter in which counsel for FranPearl formally objected to the absence
Central Park West and counsel for FranPearl on December 4th and December 1O0h other
amendments to the contract were also negotiated after the contract had been executed by both
parties.
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51. On December 1I, 2008 counsel for FranPearl sent an email to counsel for
One Central Park West attaching documentation required by 26 U.S. C. § 13 11 of the Internal
52. On December 15, 2008 counsel for FranPearl sent an email to counsel for
One Central Park West attaching "Exchange Instructions, Return Checklists, Assignment, Notice
of Assigrnment and Request for Funds" requesting that counsel for one One Central Park West
together, demonstrate that counsel for FranPearl reviewed the contract subsequent to FranPearl's
execution of the contract. Despite the numerous interactions between counsel for FranPearl and
counsel for One Central Park West during the time period from November 13, 2008 to December
18, 2008 regarding various provisions of the contract, FranPearl's counsel failed to make any
Contract and its subsequent conduct demonstrating its reliance on the Final Sales Contract as
valid and binding constitute ratification and acceptance by FranPearl of the Final Sales Contract.
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6. Closing Documents:
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period or if for any other reason Escrowee in good faith shall elect
not to make such payment, Escrowee shall continue to hold such
amount until otherwise directed by Notice from the parties to this
Contract or a final, nonappealable judgment, order or decree of a
court. However, Escrowee shall have the right at any time to
deposit the Down payment with the clerk of a court in the county
in which the Unit is located and shall give Notice of such deposit
to Seller and Purchaser. Upon such deposit or other disbursement
in accordance with the terms of this para. 16, Escrowee shall be
relieved and discharged of all further obligations and
responsibilities hereunder.
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61. One Central Park West repeats and realleges paragraphs 1 through 60
62. The Final Sales Contract constitutes a valid and enforceable contract.
63. FranPearl's failure to pay the balance of the Purchase Price (as defined in
the Contract) on the date of the Closing constitutes a breach of FranPearl's obligations under,
64. FranPearl's failure to comply with the terms of the Contract, including but
not limited to Sections 3, 4, 6(b) and 40, has injured One Central Park West by, among other
65. As a direct and proximate result of FranPearl's breach, One Central Park
West is entitled to a judgment declaring that it is entitled to retain FranPearl's down payment as
66. All conditions precedent to the institution and maintenance of this action
and the granting of the relief sought herein have occurred, have been waived or have otherwise
been satisfied.
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68. On October 31, 2008, One Central Park West advised FranPearl that it
should disregard the Over-Inclusive Inventory List and that it should instead append the Updated
69. On December 18, 2008, more than one month alter the Contract had been
executed by both parties, FranPearl objected for the first time to the Updated Inventory List. On
information and belief, FranPearl knew at that time that it was improper to rely upon the Over-
Inclusive Inventory List, which One Central Park West had previously advised FranPearl on
70. On that same day, December 18, 2008, FranPear stated that it would be
willing to proceed with the scheduled Closing on the understanding that such a Closing would
not include the three items at issue, if One Central Park West would agree to a $25,000 reduction
71. Even assuming that FranPearl's valuation of the three disputed items were
accurate, FranPearl only valued these at approximately 0.3% of the total purchase price.
72. On December 19, 2008, One Central Park West advised FranPearl that the
Final Sales Contract was enforceable according to its terms and that One Central Park West
intended to proceed with the Closing scheduled for December 29, 2008, but that One Central
Park West would be willing to agree to the suggested $25,000 reduction in purchase price in
consideration of the size of the requested reduction when compared to the value of the overall
transaction.
73. On December 22, 2008, FranPearl advised One Central Park West by
letter that it was no longer willing to honor the proposal that it had made four days earlier, on
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December 18, to purchase Unit 29A if the agreed upon purchase price of $7,800, 000 were
reduced by $25,000.
absence of the three items at issue from the proposed sale of Unit 29A cannot be the true basis
good faith and fair dealing by unfairly, arbitrarily and unreasonably construing and interpreting
the parties' correspondence and the relevant contract documents, in a knowingly improper
attempt to prevent One Central Park West from receiving the fruits of the parties' bargain.
obligations and to deal fairly with One Central Park West in the transactions at issue, including
but not limited to its obligations to comply with Sections 3, 4, 6(b) and 40 of the Contract, and to
take all actions necessary to enable One Central Park West to receive the fruits of the parties'
bargain consistent with those provisions and all other applicable provisions of the Contract.
77. For the foregoing reasons, FranPearl breached the implied covenant of
78. FranPearl's breach of the implied covenant of good faith and fair dealing
has injured One Central Park West by, among other things, depriving it of FranPearl's
contractual undertakings.
79. FranPearl's breach of the implied covenant of good faith and fair dealing
has fur-ther injured One Central Park West by requiring it to incur substantial costs associated
with seeking a replacement buyer, including, but not limited to, any potential losses associated
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with any difference between the amount for which FranPearl agreed to purchase Unit 29A and
80. FranPearl's breach of the implied covenant of good faith and fair dealing
has also injured One Central Park West by requiring it to incur substantial costs associated with
bringing this action, including, but not limited to, attorneys' fees.
81. One Central Park West repeats and realleges paragraphs 1 through 80
82. On or about October 29, 2008, FraniPearl offered to purchase Unit 29A, as
83. On October 30, 2008, counsel for One Central Park West provided
counsel for FranPearl with the Draft Sales Contract, which provided for the sale of Unit 29A
84. The inventory list attached to the Draft Sales Contract provided to
FranPearl on October 30, 2008 mistakenly included a sculpture, a bar and a coffee table (the
85. On October 31, 2008, One Central Park West advised FranPearl that it
should disregard the Over-Inclusive Inventory List and that it should instead append the Updated
proposed sale of Unit 29A did not include the three items at issue.
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88. On November 13, 2008, FranPearl provided Cleary Gottlieb, in its role as
escrow agent, a down payment in the form of a check in the amount of $780,000.00, as required
by the Contract.
89. In an email on December 4, 2008 counsel for FranPearl requested that the
Closing be delayed from the date contained in Section 4 of the Contract of December 15, 2008
until December 29, 2008. After due consideration, counsel for One Central Park West agreed to
that request in an email on December 5, 2008. As a result of this correspondence, the Closing
90. On December 18, 2008, more than one month after the Contract had been
executed by both parties, FranPearl objected for the first time to the Updated Inventory List. On
information and belief, FranPearl knew at that time that it was improper to rely upon the Over-
Inclusive Inventory List, which One Central Park West had previously advised FranPearl on
91. On that same day, December 18, 2008, FranPearl stated that it would be
willing to proceed with the scheduled Closing on the understanding that such a Closing would
not include the three items at issue, if One Central Park West would agree to a $25,000 reduction
92. Even assuming that FranPearl's valuation of the three disputed items were
accurate, FranPearl only valued these at approximately 0.3% of the total purchase price.
93. On December 19, 2008, One Central Park West advised FranPearl that the
Final Sales Contract was enforceable according to its terms and that One Central Park West
intended to proceed with the Closing scheduled for December 29, 2008, but that One Central
Park West would be willing to agree to the suggested $25,000 reduction in purchase price in
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consideration of the size of the requested reduction when compared to the value of the overall
transaction.
94. On December 22, 2008, FranPearl advised One Central Park West by
letter that it was no longer willing to honor the proposal that it had made four days earlier, on
December 18, to purchase Unit 29A if the agreed upon purchase price of $7,800,000 were
reduced by $25,000.
absence of the three items at issue from the proposed sale of Unit 29A cannot be the true basis
96. One Central Park West's reliance upon FranPearl' s statements and
conduct indicating that FranPearl would purchase Unit 29A was foreseeable.
97. One Central Park West's reliance upon FranPearl's statements and
conduct indicating that FranPearl would purchase Unit 29A was reasonable.
statements and conduct indicating that FranPearl would purchase Unit 29A, One Central Park
West incurred substantial costs associated with preparing for the Closing, including but not
statements and conduct indicating that FranPearl would purchase Unit 29A, One Central Park
West did not market Unit 29A to alternative buyers after November 12, 2008, the date on which
FranPearl signed the Contract. On information and belief, One Central Park West was injured as
a result of its inability to market Unit 29A to alternative buyers during that period.
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statements and conduct indicating that FranPearl would purchase Unit 29A, One Central Park
West has incurred, and will continue to incur, substantial costs associated with seeking and
ultimately obtaining a replacement buyer, including, but not limited to, potential losses
associated with any difference between the amount for which FranPearl agreed to purchase Unit
statements and conduct indicating that FranPearl would purchase Unit 29A, One Central Park
West has incurred, and will continue to incur, substantial costs associated with bringing this
WHEREFORE, One Central Park West demands a trial by jury pursuant to Rule 38 of the
Federal Rules of Civil Procedure and respectfully requests that the Court enter an order:
3. Granting judgment to One Central Park West and awarding liquidated damages
on the First Claim in an amount to be ascertained at trial, but not less than $780,000.00;
4. Granting judgment to One Central Park West and awarding liquidated damages
on the Second Claim in an amount to be ascertained at trial, but not less than $780,000.00;
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5. Granting judgment to One Central Park West and awarding damages on the Third
6. Granting any such other or further relief as the Court deems just and proper.
Dated: New York, New York CLEARY G TIEB STEEN & HAMILTON L.LP
January 5, 2009 ,
By : _ _ _ _ _ _ _ _ _ _ _ _ _ _
Lawrence B. Friedman
Christopher P. Moore
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