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Winning at Arbitration: When Time is Money

When a developer has made an investment in a property to build out and sell units, the time it takes to go to market is, literally, money. So when our client, the Sponsors of a 74-lot luxury home development in Rockland County, ran into a legal dispute with the existing home owners’ association (HOA) that threatened to further delay construction of new units, Cuddy & Feder came in to help move things along.

The dispute with the HOA involved the parties’ compliance with the HOA’s Declaration and other governing documents and with a Settlement Agreement, which the parties had entered into in 2011. Unfortunately, rather than resolve matters quickly and amicably, the HOA took the immoderate steps to interfere with the Sponsors’ approval process with the Attorney General’s office and filed a lien against their lots. These actions could cause untold delays, as would litigation.

Rather than go to court, Cuddy & Feder’s Litigation team, including Andrew Schriever, Brendan Goodhouse and Conor Walline, was able to enforce the arbitration agreement, and brought the HOA to the table. Following 11 days of hearings on the issue of liability, the Arbitrator issued a decision in which he ruled that the HOA had breached multiple provisions of the relevant agreements, particularly relating to the HOA’s interference with the Sponsors’ ability to market and sell lots and with the Sponsors’ regulatory approval process with the Attorney General’s office, and that all amounts underlying the lien that the HOA had filed against the Sponsors’ lots were invalid. The parties then held two days of hearings on the issue of damages, after which the Arbitrator awarded the Sponsors a net judgment of approximately $2.75 million, which included an award of attorneys’ fees and costs of approximately $660,000. Additionally, the Arbitrator ruled that the HOA was required to fund a $300,000 shortfall in its reserve funds, making the total benefit of the judgment to the Sponsors in excess of $3 million.

Cuddy & Feder’s Litigation team may be hard-nosed litigators, but we keep our clients’ business needs foremost. When time is money, and the opponent’s strategy is to cause delay, our Litigation team will work to bring about the swiftest resolution with the best results.