The opinion
ARC NYWWPJV001, LLC v WWP JV LLC
2025 NY Slip Op 30445(U)
February 4, 2025
Supreme Court, New York County
Docket Number: Index No. 654977/2022
Judge: Joel M. Cohen
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
Op 30001(U), are republished from various New York
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publication.
INDEX NO. 654977/2022
NYSCEF DOC. NO. 517 RECEIVED NYSCEF: 02/04/2025
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 03M
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ARC NYWWPJV001, LLC,A DELAWARE LIMITED INDEX NO. 654977/2022
LIABILITY COMPANY,
07/12/2024,
Plaintiff, MOTION DATE 07/12/2024
-v-
MOTION SEQ. NO. 013 014
WWP JV LLC,A DELAWARE LIMITED LIABILITY
COMPANY, DECISION + ORDER ON
Defendant. MOTION
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WWP JV LLC, A DELAWARE LIMITED LIABILITY COMPANY, Third-Party
Index No.
Plaintiff,
-against-
NEW YORK REIT LIQUIDATING LLC
Defendant.
--------------------------------------------------------------------------------X
HON. JOEL M. COHEN:
The following e-filed documents, listed by NYSCEF document number (Motion 013) 185, 186, 187, 188,
189, 190, 191, 192, 193, 194, 195, 196, 197, 198, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208,
209, 210, 211, 212, 213, 214, 215, 216, 217, 218, 219, 220, 221, 222, 223, 224, 343, 344, 345, 346,
347, 348, 349, 350, 351, 352, 353, 354, 355, 356, 357, 358, 359, 360, 361, 362, 363, 364, 365, 366,
367, 368, 369, 370, 371, 372, 373, 374, 375, 376, 377, 378, 379, 380, 381, 382, 383, 384, 385, 386,
387, 388, 389, 390, 391, 392, 393, 394, 395, 396, 397, 398, 399, 400, 401, 402, 403, 404, 405, 406,
407, 408, 409, 410, 411, 412, 413, 414, 415, 416, 417, 418, 419, 420, 421, 422, 423, 424, 425, 426,
427, 428, 429, 430, 431, 432, 433, 434, 435, 436, 437, 438, 439, 440, 441, 487, 488, 489, 490, 491,
492, 493
were read on this motion for SUMMARY JUDGMENT .
The following e-filed documents, listed by NYSCEF document number (Motion 014) 228, 229, 230, 231,
232, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 243, 244, 245, 246, 247, 248, 249, 250, 251,
252, 253, 254, 255, 256, 257, 258, 259, 260, 261, 262, 263, 264, 265, 266, 267, 268, 269, 270, 271,
272, 273, 274, 275, 276, 277, 278, 279, 280, 281, 282, 283, 284, 285, 286, 287, 288, 289, 290, 291,
292, 293, 294, 295, 296, 297, 298, 299, 300, 301, 302, 303, 304, 305, 306, 307, 308, 309, 442, 443,
444, 445, 446, 447, 448, 449, 450, 451, 452, 453, 454, 455, 456, 457, 458, 459, 460, 461, 462, 463,
464, 473, 474, 475, 476, 477, 478, 479, 480, 481, 482, 483, 484, 485, 486
were read on this motion for SUMMARY JUDGMENT .
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INDEX NO. 654977/2022
NYSCEF DOC. NO. 517 RECEIVED NYSCEF: 02/04/2025
Upon the foregoing documents, and for the reasons stated on the record following the
January 29, 2025 oral argument, the Court granted the motion for summary judgment filed by
Plaintiff ARC NYWWPJV001 (“Arc”) and Counterclaim Defendant New York REIT
Liquidating LLC (“NYRT”), and denied the motion for summary judgment filed by Defendant
WWP JV LLC (“WWP JV”).
Because the Court did not specifically address one aspect of Plaintiff’s proposed
declaratory relief (relating to the Initial Budget), the Court supplements its on-the-record
decision to address that issue. Specifically, on summary judgment Plaintiff seeks a declaration
that “the Initial Budget expired on December 31, 2018, and Owner Member does not have an
ongoing obligation to fund capital expenditures budgeted in the Initial Budget” (NYSCEF 186 at
21). For the reasons set forth below, summary judgment is granted to Plaintiff with respect to
that relief.1
The Third Amended and Restated Limited Liability Company Agreement of WWP
Holdings, LLC (the “Agreement”) provided the following definitions:
“2018 Budget Year” means the Budget Year ending on December
31, 2018. . . .
“Annual Budget” means the annual operating expense and capital
budget for the Company and its Subsidiaries, which shall be a part
of the Annual Business Plan; . . .
“Annual Business Plan” means the Company and its Subsidiaries’
business plan for any Budget Year, which may consist of, and
which in all events shall include, the Annual Budget for such
Budget Year. . . .
1
In their pleadings, the parties set forth various requests for declaratory relief relating to the
Initial Budget and the Reserve described in Section 7.3(b) of the Agreement. The Court finds
that the substance of the dueling requests for declaratory relief is resolved by the declarations set
forth at the end of this Decision and Order, which resolves all pending claims in the litigation.
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NYSCEF DOC. NO. 517 RECEIVED NYSCEF: 02/04/2025
“Approved Annual Budget” means the Annual Budget in the form
that has received Board Approval, whether included as part of an
Approved Annual Business Plan or otherwise. The Initial Budget
shall be deemed to constitute an Approved Annual Budget.
“Approved Annual Business Plan” means an Annual Business Plan
that, in its entirety, has received Board Approval. An Approved
Annual Budget shall be deemed to constitute an Approved Annual
Business Plan with respect to the corresponding Budget Year
unless a separate Annual Business Plan receives Board
Approval. . . .
“Budget Year” means, with respect to Fiscal Year 2017, the period
beginning on the Effective Date and ending on December 31,
2017; and, with respect to each Fiscal Year thereafter, “Budget
Year” means the period beginning on January 1 and ending on
December 31 of such year. . . .
“Current Budget Year” means the Budget Year ending on
December 31, 2017. . . .
“Initial Budget” means the initial budget for the Company and its
Subsidiaries from and after the date hereof, in the form attached as
Schedule B to the Disclosure Letter.
(NYSCEF 204 § 1.1).
Section 6.2 of the Agreement provides that: “Prior to the date of this Agreement, the
Participating Members have approved the Initial Budget (which shall constitute an Approved
Budget and an Approved Business Plan) for the Current Budget Year and the 2018 Budget Year”
(id. § 6.2[a] [emphasis added]). Section 6.2 further required the Administrative Member
(defined as Investor Member or WWP JV [id. §§ 1.1; Preamble]) to “submit to the Board a
proposed Annual Business Plan (including a proposed Annual Budget) for the succeeding
Budget Year” and prescribed the method by which objections to said budgets or business plans
would be raised and resolved (id. § 6.2[a]). That process included the following:
If, prior to the commencement of any Budget Year, the Board has
not approved the amount to be allocated to all line items set forth
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NYSCEF DOC. NO. 517 RECEIVED NYSCEF: 02/04/2025
in the proposed Annual Budget for such Budget Year, then, as to
any disputed line items, . . . the amount budgeted for such line item
shall be deemed to be the amount, . . . of the corresponding line
item in the immediately preceding Budget Year’s Approved
Budget, and such amount shall be controlling until such time as
such disputed line item receives Board Approval or is resolved
pursuant to arbitration in accordance with Section 6.2(b).
(Id.) Further, Section 7.3(c) provides that the parties would contribute their “Pro Rata Share of
capital required to be funded by additional capital contributions for the purposes set forth in the
Initial Budget” (id. § 7.3[c]).
“Contract terms themselves will be controlling when they establish the parties’ common
meaning so that a reasonable person in the position of either party would have no expectations
inconsistent with the contract language” (Eagle Indus., Inc. v DeVilbiss Health Care, Inc., 702
A2d 1228, 1232 [Del 1997]).2 “When there is uncertainty in the meaning and application of the
terms of the contract, [Delaware courts] will consider testimony pertaining to” extrinsic evidence
(Pellaton v Bank of New York, 592 A2d 473, 478 [Del 1991]). “However, if the instrument is
clear and unambiguous on its face, neither [the Delaware Supreme] Court nor the [Delaware]
trial court[s] may consider parol evidence ‘to interpret it or search for the parties’ intent[ions]’”
(id. [citing Hibbert v Hollywood Park, Inc., 457 A2d 339, 343 [Del 1983]). In addition to the
Initial Budget, the parties do not dispute that WWP JV prepared Annual Budgets for the 2019,
2020, 2021, and 2022 Budget Years (NYSCEF 345 ¶¶ 45-48, 53).
The Court concludes that the Agreement is clear and unambiguous with respect to the
scope and expiration date of the Initial Budget. Based on the language set forth above, the Court
finds that the Initial Budget expired at the end of the 2018 Budget Year (that is, December 31,
2
No party disputes the Agreement is governed by Delaware law (see NYSCEF 204 § 15.8).
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2018). WWP JV’s chief rejoinder—that the “purposes” of the Initial Budget did not expire on
December 31, 2018—is unavailing. While the “purposes” may have been carried forward into
subsequent and distinct Annual Budgets, that does not foreclose a declaration that the Initial
Budget itself expired.
Accordingly, it is
ORDERED that Arc & NYRT’s motion for summary judgment (MS 13) is granted, and
WWP JV’s motion for summary judgment (MS 14) is denied, for the reasons set forth on the
record and in this Decision and Order; it is further
ORDERED that WWP JV’s cross-motion to strike portions (MS 13) of the Ashner
Affidavit is denied, substantially for the reasons contained in Arc and NYRT’s reply brief
(NYSCEF 487); it is further
ORDERED, ADJUDGED, AND DECLARED that Initial Budget expired on December
31, 2018, and that Owner Member does not have an obligation to fund capital expenditures
pursuant to the Initial Budget; it is further
ORDERED, ADJUDGED, and DECLARED that Owner Member and NYRT have no
obligation to maintain the Reserve referenced in Section 7.3(b) of the Agreement and the
Agreement does not preclude them from distributing said Reserve to stakeholders; it is further
ORDERED that entry of judgment (and the effect of the declarations set forth above) is
stayed for seven (7) days from the date this Decision and Order is filed to permit time for
Defendant to file an application for an interim stay and motion to stay pending appeal in the
Appellate Division, First Department; it is further
ORDERED that Arc and/or NYRT may submit an application for attorneys’ fees, with
adequate supporting documentation and briefing, within fourteen (14) days from the date of this
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Decision and Order, and WWP JV may respond within ten (10) days from the date the
application is filed; and it is further
ORDERED that the parties upload a copy of the transcript of the January 29, 2025
hearing to NYSCEF upon receipt.
This constitutes the Decision and Order of the Court.
2/4/2025
DATE JOEL M. COHEN, J.S.C.
CHECK ONE: X CASE DISPOSED NON-FINAL DISPOSITION
□
GRANTED DENIED X GRANTED IN PART OTHER
APPLICATION: SETTLE ORDER SUBMIT ORDER
□
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE
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