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Nathan v. Cooper

December 12, 2007

DENNIS NATHAN AND NAAMAN S. NATHAN, PLAINTIFFS,
v.
MARK A. COOPER AND JEMA G. COOPER, DEFENDANTS.



The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge

OPINION & ORDER

I. BACKGROUND

On May 8, 2006, Dennis and Namaan Nathan ("Plaintiffs") entered into a real estate contract with Mark and Jema Cooper ("Defendants"), whereby Plaintiffs agreed to purchase Defendants' cooperative apartment located in New York City for $1.9 million. Compl. ¶ 6-7. Plaintiffs paid Defendants a ten-percent, or $190,000, deposit. Id. ¶ 8. Pursuant to paragraph 6.1 of the purchase contract, the sale of the apartment was conditioned upon the unanimous approval of Plaintiff's application by the building's Co-op Board ("Board"); if there was no such approval, Paragraph 6.3 of the contract provided that the security deposit would be refunded. Id. ¶ 9-10. The apartment was for his mother who was moving to the City from New Jersey.

As part of the Plaintiffs' application package, he was required to verify his financial assets to the Board. Plaintiffs represented assets totaling $89 million dollars, which included $1.8 million in cash, $17.5 million in real estate, and $19 million in securities. In addition, Plaintiff Dennis Nathan listed his interest in his company, Communication Components, Inc. at an estimated value of $50 million.

While reviewing Plaintiff's purchase application, the Board became aware of Plaintiff Dennis Nathan's previous felony conviction, and requested more information. On June 28, 2006, Plaintiff's attorney, Bradley Shaw, provided the Board with a letter of explanation. Attached to the letter were copies of both the Criminal Judgment which included Nathan as a Defendant and excerpts from the Third Circuit opinion.

Subsequently, on July 13, 2006, the Board rejected Plaintiffs' application; on July 17, 2006, Plaintiffs demanded return of the $190,000 deposit. Compl. ¶ 12-13. Defendants refused, claiming that they were entitled to keep the deposit. Id. ¶ 15. On August 4, 2006, Plaintiffs filed a complaint seeking damages in the amount of the deposit, plus interest as well as attorneys' fees and court costs. Defendants responded on October 9, 2006, denying wrongdoing and counterclaiming that Plaintiffs, in bad faith, submitted an incomplete application package as required by the purchase contract and that therefore Defendants were entitled to retain the deposit.

A jury trial was held from July 9, 2007 to July 12, 2007. The jury found in favor of Plaintiffs, and judgment was entered in the amount of $190,000 on July 13, 2007. Subsequently, the parties both submitted post-judgment motions. Plaintiffs filed a motion to amend the judgment to include pre- and post-judgment interest as well as attorneys fees. Defendants filed a renewed motion for judgment as a matter of law or, in the alternative, a new trial.

II. DISCUSSION

Defendant's Motions

A. Motion for Judgment as a Matter of Law

Pursuant to Fed. R. Civ. P. 50, Defendants move for judgment as a matter of law. A Rule 50 motion for judgment as a matter of law should only be granted where "there is no legally sufficient evidentiary basis for a reasonable jury to find for [a] party on that issue." Merrill Lynch Interfunding, Inc. v. Argenti, 155 F.3d 113, 120 (2d Cir. 1998).

Defendants predicate their motion on the argument that Plaintiff's failure to verify their total assets in the application submitted to the Board constitutes bad faith, default, and/or misrepresentation entitling Defendants to retain the $190,000 security deposit.*fn1 On their Board application, Plaintiffs listed assets totaling nearly $90 million. Def. Mot. for Judgment as a Matter of Law 1. These assets included approximately $39 million in cash, real estate and various securities-all of which were verified in the application. See Pl. Memo. in Opp. to Mot. for Judgment as a Matter of Law Ex. 1. On the other hand, Defendants argue that Plaintiff Dennis Nathan failed to verify the $50 million valuation of his company, and that this omission constitutes a misrepresentation or bad faith entitling them to retain the deposit pursuant to ¶ 13.1 of the contract.*fn2 Def. Reply Mem. 1.

Defendants' argument in support of their motion is unavailing. If the Board had lingering questions about Plaintiffs assets, the application review process provided ample time and opportunity for them to request additional information before deciding on Plaintiff's application.*fn3

However, evidence produced at trial indicated that Plaintiffs' "financials were acceptable" to the Board. Def. Ex. E. Moreover, as shown at trial the Board application contained Plaintiff Dennis Nathan's income tax return listing an annual adjusted gross income of over $10 million, including income derived from his company. Pl. Ex. 11. Finally, Plaintiff Dennis Nathan testified at trial ...


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