Bacolitsas v. 86th and 3rd Owner, LLC
2012 U.S. App. LEXIS 25931
| 2d Cir. | 2012Background
- Brompton Condominium in Manhattan, sponsor 86th & 3rd Owner, LLC, and escrow agent Michael, Levitt & Rubinstein, LLC administer unit purchases.
- Sponsor filed HUD statement of record, property report, and Plan with attached Draft Declaration, satisfying ILSA filing requirements.
- Plaintiffs signed May 2008 Purchase Agreement for Unit 20A at $3.4 million while construction was ongoing; deposits totaling $510,000 (15% of price) were made under a two-stage payment plan.
- Agreement prohibited recording (Section 31); declaration filed in February 2009 after completion of construction.
- In March 2009 the sponsor canceled the Agreement and retained the $510,000 deposit; the NY Attorney General ultimately ruled in Plaintiffs’ favor only after deposit release; Plaintiffs later sought ILSA revocation in district court, which granted summary judgment for Plaintiffs; the Second Circuit reversed and remanded for judgment for Defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1703(d)(1) requires the lot description to be in a form acceptable for recording | Bacolitsas/Nikolaidou: description must be recordable; contract form matters | Bacolitsas/Nikolaidou: description must be in a form acceptable for recording by statute; district court’s view | Description in the contract was in a form acceptable for recording; revocation denied |
| Whether the liquidated damages clause complies with §1703(d)(3) | Clause misstates rights under ILSA | Clause complies; 15% cap or actual damages governs | Clause satisfies §1703(d)(3); Liquidated damages not revocable under ILSA |
Key Cases Cited
- Stein v. Paradigm Mirasol, LLC, 586 F.3d 849 (11th Cir. 2009) (ILSA as a buyer’s remorse defense to contract breach)
- Barnhart v. Thomas, 540 U.S. 20 (Sup. Ct. 2003) (Rule of the last antecedent governs statutory modifiers)
- Allard K. Lowenstein Int’l Human Rights Project v. Dep’t of Homeland Sec., 626 F.3d 678 (2d Cir. 2010) (interpretation of statutory language and modifiers)
- Lopez v. Terrell, 654 F.3d 176 (2d Cir. 2011) (Chevron framework and agency interpretation relevance)
- Dodd v. United States, 545 U.S. 353 (U.S. 2005) (statutory construction presumption; legislative intent)