Excerpts from the Ghermezians' Complaint Against the Town Board, CDA and IDA
For summary of legal case and full text of complaint, go to
Note that these are no more than allegations, one side of a legal conflict that needs to be proven in court.
11.
The seemingly spontaneous request for CAT to submit to review by RIDA was outside of any obligation in the Purchase Agreement and outside of any normal course activities of RIDA.
12.
CAT initially refused to agree to the RIDA review, but the Town threatened CAT that, if it did not agree, CAT would have to sue in order to force the Town and the CDA to close on the Purchase Agreement.
13.
During negotiations, to induce CAT to agree to RIDA review and assuage CAT’s concerns, the Town and the CDA represented to CAT that the ability to terminate was solely for “optics”, but that that the Town fully intended to close with CAT even if RIDA, ultimately, did not approve CAT.
14.
In a March 2022 meeting, ...Aguiar told Justin Ghermezian, Margaret Blakey, and Alan Glazer of CAT that she wanted to be “crystal clear” that the Town fully supported closing the deal with CAT and that the RIDA process was solely intended to ensure a closing could take place quickly and development could commence. The Town officials further assured CAT that RIDA would find it financially capable and approve the revised structure, that the RIDA review process was, essentially, a pro forma exercise, and that the Town would close on the sale of the Property to CAT regardless of the outcome of the RIDA review process.
24.
To the Town Board, a denial of the authorizing resolution, just in time for the upcoming election on November 7, 2023, would be red meat for constituents who falsely believed that CAT intended to build a cargo jetport at the EPCAL site, despite CAT’s numerous public denials and written submissions to RIDA and the Town, that it would not build a cargo jetport.
30.
As set forth herein, the Town, the CDA and RIDA repeatedly breached their contractual obligations to CAT under the Purchase Agreement, the Letter Agreement, and the Preliminary Agreement; the Town and the CDA defrauded and/or otherwise improperly induced CAT to enter into the Letter Agreement and the Preliminary Agreement; and the Town improperly interfered with RIDA’s review of CAT’s financial capability pursuant to the Preliminary Agreement in order to influence RIDA’s determination.
83.
With the Project stalled as a result of the Town’s failure to get the subdivision approved, a vocal minority of residents, who were simply against any effort to develop the Property, expressed growing opposition to the sale of EPCAL to CAT.
91.
In or about February 2022, after CAT had expressed concern about shifting decision making to RIDA concerning CAT’s continued financial ability to purchase the Property and complete the Project, the Town’s attorneys assured CAT’s attorneys that RIDA would approve the Project, that the second review was, essentially, pro forma, but that these terms were non-negotiable. Faced with the prospect of miring the Project in years of litigation if it refused to acquiesce to the Town’s demand, and in reliance on the Town’s affirmative representations the RIDA financial review would be a rubber stamp approval.
92.
On March 4, 2022,...Aguiar went so far as to say that she wanted to be “crystal clear” that the Town fully supports closing on the deal with CAT. She further assured CAT that the concept of involving RIDA, and closing via a ground lease, was solely in order to get the project started prior to completion of the subdivision process.
93.
The CAT and Town representatives also addressed the provision that granted the Town a right to “nullify” the Purchase Agreement in the event RIDA denied CAT’s application, to which CAT had objected. To assuage CAT’s concerns and to induce CAT to proceed with the RIDA process, the Town representatives assured CAT that the provision was for purely optical reasons, and that they, and the entire Town Council, intended to honor the Purchase Agreement regardless of whether RIDA approved CAT’s application or not.
171.
Aguiar said aloud what was supposed to be buried by pretext: killing CAT’s project was not about finances. It was about the Town having grown tired of the Ghermezian family, who they derisively view as outsiders, and about greed in wanting to re-trade a deal the Town no longer liked or was willing to honor.
282.
The Town and the CDA, in direct contradiction to their contractual obligations to act “in furtherance of the purposes” of the Purchase Agreement, obstructed and hindered CAT’s efforts and progress in the purchase and development of the Property by:
(a) Failing to designate SCWA (Suffolk County Water Authority) as the legal server of water to EPCAL or otherwise proceed with the Part 666 permit;
(b) Failing to obtain the subdivision approval or to meet the Filing Date;
(c) Actively and persistently seeking to terminate the Purchase Agreement, including by forcing CAT to enter into the 2022 Letter Agreement and the 2022 Preliminary Agreement;
(d) Interfering with and influencing RIDA’s decision making process by directly pressuring RIDA to make a premature decision;
(e) Interfering with and influencing RIDA to rule against CAT through publicly and privately expressing strong disfavor of CAT’s purchase and development of the Project;
(f) Failing to correct the erroneous public belief that CAT intends to build a commercial cargo jetport at the Property; and
(g) Irrationally and unfairly relying on RIDA’s baseless determination on CAT’s financial wherewithal and declaring the Purchase Agreement “null and void” through expedited special meetings for political gain. that could not be provided until after the transaction closed and further approvals were provided by the Town.
295.
All of the breaches alleged herein by the Town and the CDA were willful and/or malicious in nature. As such, any contractual restrictions or limitations on such claims are not enforceable.
337.
The Town and the CDA made a series of false representations intended to persuade Plaintiff to enter the Letter Agreement and Preliminary Agreement. These representations include:
.*The Town representatives’ representation in the March 4, 2022 meeting with CAT that the Town and the CDA supported the project and intended to close the transaction with CAT;
.*Supervisor Aguiar’s representation in the March 4, 2022 meeting with CAT that the Town would proceed with the sale regardless of RIDA’s conclusion as to CAT’s financial capability; and
.*Deputy Town Attorney Annemarie Prudenti’s representations in the March 4, 2022 meeting with CAT that the RIDA evaluation was purely for appearances, that the Town had no concerns about CAT’s financial wherewithal;
.*The Town’s affirmative assurances to CAT that RIDA would confirm CAT’s financial capability and approve its application;.
*The Town’s assurances to CAT that the RIDA review process was solely intended to expedite the closing of the transaction in order that CAT could proceed with Project; and
.*The Town’s assurances to CAT that the RIDA review process was, in substance, a pro forma exercise.
338
The Town’s assurances that it would proceed with the sale regardless of RIDA’s analysis were clear, unambiguous, and intended to reassure Plaintiff that the Town would not inflict the very harm that the Town actually and intentionally inflicted on Plaintiff, i.e., termination of the Purchase Agreement on pretextual grounds.
339.
CAT was substantially harmed by its justified reliance on Town’s false assurances, as they enabled the Town and the CDA to wrongfully deprive CAT of the Property that it has a contractual right to purchase. The Town and the CDA knew that no lawful means existed to terminate the Purchase Agreement and therefore issued the false promises and assurances to CAT in order to manufacture false grounds to terminate the contract. Had Town officials not actively misled CAT, it would have been impossible for them to wrongfully terminate the Purchase Agreement.
344.
The Town and the CDA misrepresented material facts regarding their intention, plan, and commitment with regard to the deal with CAT with the intent to deceive and for the purpose of inducing CAT to enter into the Letter Agreement and Preliminary Agreements.
346
As a result, CAT is entitled to rescission of both the Letter Agreement and the Preliminary Agreement, a declaration that the purported termination of the Purchase Agreement based on these fraudulently contracts is invalid, and to specific performance of the Purchase Agreement.
359
The Town and the CDA knew that no lawful means existed to terminate the Purchase Agreement and therefore issued the false promises and assurances to CAT in order to manufacture false grounds to terminate the contract. Had Town officials not actively misled CAT, it would have been impossible for them to wrongfully terminate the Purchase Agreement.
WHEREFORE, Plaintiff demands judgment against the defendants as follows:
1. Adjudicate and declare that the 2022 Letter Agreement, the 2022 Town
Resolutions, and the 2022 Preliminary Agreement are void and unenforceable;
2. Adjudicate and declare that CAT is entitled to specific performance under the
Purchase Agreement and that the parties shall proceed to closing on sale of the
Property;
3. Compensatory damages in an amount to be determined at trial;
4. Prejudgment and post-judgment interest;
5. Costs and attorney’s fees incurred in connection with this action; and
6. Such further and other relief as this Court deems just and proper
