1-22-01070
Bankr. E.D.N.Y.Jun 13, 2025Background
- Vilma Louise Johnson (debtor) agreed to sell her Brooklyn property first to Eliezer Lever, who then assigned his rights to his wife, Chaya Shusterman; they failed to close.
- Johnson then contracted to sell the same property to Zev Cadaner, who also failed to close by the scheduled date.
- Lever and Shusterman recorded a memorandum of their contract, causing a dispute over who had rights to buy the property.
- Cadaner sued Johnson, Lever, and Shusterman in state court for declaratory judgment, specific performance, breach of contract damages, and return of down payment; crossclaims were filed over contract enforcement and tortious interference.
- Johnson filed Chapter 13 bankruptcy and removed the action to bankruptcy court, proposing to assume the Lever/Shusterman contract and reject the Cadaner contract, but later claimed the Lever/Shusterman contract was terminated prepetition.
- The main legal dispute centers on which contract is enforceable and what remedies or damages, if any, are available to the various parties under bankruptcy and state law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Lever/Shusterman contract remained enforceable | Lever contends contract still enforceable | Johnson argues contract terminated after default | Lever/Shusterman contract properly terminated, not enforceable |
| If Lever/Shusterman entitled to specific performance/damages | Lever seeks specific performance/damages | Johnson claims breach and failure to fund | Lever/Shusterman not entitled; contract properly terminated |
| Cadaner contract validity and enforceability | Cadaner seeks declaratory judgment | Johnson says contract was breached/rejected | Cadaner contract still enforceable unless properly rejected |
| Cadaner’s right to specific performance | Cadaner claims entitlement | Johnson says Cadaner not ready/willing/able | Cadaner not entitled to specific performance |
| Cadaner’s claim for damages and/or return of down payment | Cadaner seeks damages and return | Johnson disputes breach occurred | Not ripe; denied w/o prejudice—depends on plan confirmation |
| Tortious interference claims | Both sides assert, then stipulate dismissal | See left | Dismissed for lack of subject matter jurisdiction |
Key Cases Cited
- Stern v. Marshall, 564 U.S. 462 (2011) (addresses constitutional and statutory limits on bankruptcy court jurisdiction over state law claims)
- Pesa v. Yoma Dev. Grp., Inc., 965 N.E.2d 228 (N.Y. 2012) (clarifies that buyers seeking contract damages must show readiness, willingness, and ability to perform)
- Schweizer v. Sikorsky Aircraft Corp., [citation="634 F. App'x 827"] (2d Cir. 2015) (strict compliance with contractual notice provisions not required if no prejudice/actual notice)
- Grace v. Nappa, 89 N.E.2d 107 (N.Y. 1979) (material breach by seller can excuse purchaser’s nonperformance)
- Klaiber, LLC v. Coon, 851 N.Y.S.2d 667 (App. Div. 2008) (delay in curing title defects may entitle purchaser to return of deposit)