("Parnes"); James G. Houlihan
("Houlihan"); Houlihan Parnes Realtors LLC ("HP Realtors"); Frank T.
Chiarello ("Chiarello"), WRA Properties, Inc. ("WRA"); Novick,
Edelstein, Lubell, Reisman, Wasserman & Leventhal, P.C. ("Novick");
Patricia A. Friederich ("Friederich"); and Peter M. Rivera ("Rivera").
Singh alleges that he was repeatedly defrauded by the HP Defendants in
connection with various transactions regarding the Building,
specifically: (1) Mithilas's purchase of the Building from Gates in
December 1986 and the related mortgage financing provided by Gates; (2)
the later assignment of the mortgage by Gates to Parnes and Chiarello and
collection of the mortgage debt and Building rents by them; (3) the
foreclosure action filed by Parnes and Chiarello in 1996 in which
attorneys Novick and Friederich, in violation of ethical standards,
represented Parnes and Chiarello and advanced their fraudulent purposes;
(4) the receivership proceeding in which Rivera was appointed a receiver
by a state court in 1997 and (5) the sale of the Building by Mithila in
1997 to WPA, an entity controlled by Chiarello, and WRA's subsequent
assignment of the mortgage to other defendants.
Singh alleges that Gates was a fictitious entity formed by Parnes and
Houlihan in violation of applicable state laws and for the sole purpose
of defrauding Mithila in the purchase and mortgaging of the Building.
Singh also claims that Parnes and Houlihan conducted their real estate
brokerage business as a racketeering enterprise engaged in fraudulent
buying and selling of real property, of which their transactions with
Mithila regarding the Building was an example. The pattern of fraudulent
and racketeering conduct, violating various provisions of state and
federal law, that Singh attributes to these defendants includes forming
fictitious entities, concealing and misrepresenting material facts,
forging documents, charging inflated brokerage fees, mail and wire fraud
and collecting money under threat of bringing foreclosure actions.
The second motion is that made by State Supreme Court Justice Douglas
E. McKeon ("McKeon"). Singh alleges that in connection with the
receivership action, Friederich and Rivera, by means of false and
misleading statements, conspired with McKeon and procured McKeon to rule
against Singh in denying a motion to vacate the receivership.
The third motion represents that of three defendants involved in
Mithila's sale of the Building in 1997. In that transaction, which Singh
alleges occurred under duress by Parnes and Chiarello, Mithila conveyed
the Building to 1930 Grand Concourse LLC ("1930 Grand Concourse"), which
later transferred to David Green ("Green"), who in turn assigned the
Building's underlying mortgages to 1056 Boynton Realty ("Boynton").
According to Singh, Boynton was a fictitious entity formed by Parnes and
Houlihan as part of their scheme to defraud.
Finally, the fourth motion was filed by HSBC Bank USA, ("HSBC"),
successor to Marine Midland Bank. Singh asserts that Boynton fraudulently
assigned two mortgages in the Building to HSBC in connection with a
$1,300,000.00 financing in March 1998 allegedly carried out in
furtherance of the conspiracy with Parnes and Green to defraud.
B. PRIOR LITIGATION
Under the principles enunciated by the Second Circuit in Cortec Indus.
v. Sum Holding, 949 F.2d 42 (2d Cir. 1991), and related cases, the
Court, in considering the motions to dismiss, takes note of three prior
actions brought by Mithila, Singh and relatives in some form of privity
Singh, against some of the HP Defendants arising out of the same
events and transactions that form the core of the action Singh asserts in
this case. Those cases are:
1. Singh v. Parnes, New York State Supreme Court, Queens County, Index
No. 24180/96 ("Singh I").
Plaintiff in Singh I was Bina Singh, wife of Singh and the designated
purchaser and signatory of the contract for sale of the Building in 1986.
In essence, the complaint in Singh I, filed in 1996, alleges that HP
Realtors, Parnes, Chiarello and Gates, among others, conspired to defraud
Mithila in connection with the sale and mortgage financing of the
Building by Gates. The state court, granting defendants' motions for
summary judgment in 1999, ruled that (a) Bina Singh had failed to plead
with the requisite specificity the nature of the tortious acts defendants
committed; (b) Mithila, having been dissolved by the State for failure to
pay taxes, lacked legal capacity to sue, and thus was barred from
maintaining any action in New York courts; and (c) Singh's fraud claim
was barred by the statute of limitations. The same court in March 2001
denied a motion by Dwarika Singh for leave to intervene or substitute
himself as plaintiff in that matter, noting that Singh had failed to
establish that Mithila was an existing corporation.
2. Singh v. Parnes, New York State Supreme Court, Bronx County, Index
No. 21529/97 ("Singh II").
This action, naming as defendants, among others Parnes, Chiarello and
Rivera, was filed in August 1997 by or on behalf of Singh's children, who
alleged that their parents lacked authority to sell the Building and
sought to set aside as fraudulent the 1997 conveyance of the Building to
1930 Grand Concourse. Singh filed an affidavit in that action asserting
fraud by Parnes, Chiarello and others in connection with their dealings
with Mithila related to the Building. The court, in a decision issued by
McKeon in January 1998, found that the Singh children's claims failed to
state a cause of action in fraud against any of the defendants and denied
the relief requested.