Wilmington – 5190 Brandywine Parkway, LLC v. Acadia Brandywine Holdings LLC

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
)
WILMINGTON – 5190 BRANDYWINE )
PARKWAY, LLC, )
)
Plaintiff, )
)
v. ) C.A. No.: N17C-04-060 EMD CCLD
)
ACADIA BRANDYWINE HOLDINGS, )
LLC, )
)
Defendant. )
)
WILMINGTON – 5190 BRANDYWINE )
PARKWAY, LLC, )
)
Plaintiff, )
) C.A. No.: N17C-04-061 EMD CCLD
v. )
)
ACADIA REALTY LIMITED )
PARTERNSHIP, )
)
Defendant. )
Submitted: October 25, 2019
Decided: February 7, 2020
Upon Plaintiff’s Motion for Summary Judgment
GRANTED in part and DENIED in part
Upon Defendants’ Cross-Motion for Summary Judgment
DENIED
Michael J. Barrie, Esq., Stephen M. Ferguson, Esq., William M. Alleman, Jr., Esq., Benesch,
Friedlander, Coplan & Aronoff LLP, Wilmington, Delaware, Helen Gavaris, Loeb & Loeb LLP,
New York, New York, Attorneys for Plaintiff.
Andrew D. Cordo, Esq., Wilson Sonsini Goodrich & Rosati, Wilmington, Delaware, Adam C.
Silverstein, Esq., Rebecca E. Algie, Esq., Otterbourg P.C., New York, New York, Attorneys for
Defendants.
DAVIS, J.
I. INTRODUCTION
This contract action is assigned to the Complex Commercial Litigation Division of the
Court. Acadia Brandywine Holdings, LLC (“Holdings”) borrowed money from Bear Stearns
Commercial Mortgage, Inc. (“Original Lender”). The Original Lender and Holdings executed a
Loan Agreement and a Promissory Note (collectively “Loan Documents”). Simultaneously with
the execution of the Loan Documents, Acadia Realty Limited Partnership (“Acadia”) executed
and delivered a guaranty agreement (the “Guaranty”) to the Original Lender.1 Subsequently, the
Original Lender assigned its rights to collection under the Loan Documents to Wilmington –
5190 Brandywine Parkway, LLC (“Parkway”).
Parkway filed separate lawsuits against Holdings2 and Acadia,3 seeking recourse liability
against Holdings and Acadia (collectively “Defendants”). The Court joined the related claims.
Parkway also filed a claim in the Court of Chancery asserting that parcels were mistakenly left
out of the Loan Documents and asked the Court of Chancery for reformation of the Loan
Documents. Defendants filed cross-motions for summary judgment under the Loan Documents
and Guaranty (“Parkway’s Motion,” “Defendants’ Motion,” and collectively the “Motions”).
1
The parties have agreed that the Loan Documents and Guaranty are governed by New York law.
2
The Second Amended Complaint for Judgment on Promissory Note. Hereinafter referred to as the “Brandywine
Complaint ¶ __.”
3
The Second Amended Complaint for Judgment on Guaranty Agreement. Hereinafter referred to as the “Acadia
Complaint ¶ __.” The Brandywine Complaint and the Acadia Complaint collectively shall be referred to as the
“Complaints.”
2
For the reasons set forth below, the Court will (i) GRANT in part and Deny in part
Parkway’s Motion and (ii) DENY Defendants’ Motion. The Court finds that Defendants, in part,
violated provisions under the Loan Agreement and Guaranty—those relating to conveying
interests in property (easements, covenants running with the land and insurance proceeds) but not
those relating to the Sterling Mortgage,4 fee title interests to the Red Robin, or admissions of
insolvency.
II. RELEVANT BACKGROUND
A. Factual Background
The Original Lender loaned Holdings $26,250,000 (the “Loan”). The Original Lender
and Holdings executed the Loan Documents on June 2, 2006.5 The Loan was made
contemporaneously with three other loans as part of Acadia’s refinancing of the debt on a
shopping center known as Brandywine Town Center in New Castle County (the “Shopping
Center”).6 The Shopping Center was divided into legally distinct parcels owned by four entities
that Acadia controlled and partially owned. Under substantively identical loan documents from
the same lender, each of these four entities obtained a separate loan secured by a mortgage on
the parcels it owned and guaranteed by Guarantor.7
Additionally, Acadia executed the Guaranty, guaranteeing the debt as set forth in the
Guaranty.8 Under the Guaranty, Acadia is personally liable to Parkway for the Loan only if
certain conditions are met (the “Guaranteed Obligations”).9 The Guaranteed Obligations include
4
The “Sterling Mortgage” means that agreement between Sterling Bank and The Colby Restaurant Group, Inc.
(“Colby”).
5
Brandywine Compl., Ex. B (the “Agreement”); Brandywine Compl., Ex. C (the “Note”); Brandywine Compl., Ex.
D (the “Mortgage”). Hereinafter collectively referred to as the “Loan Documents.”
6
See Alleman Aff. Ex. 4 & Ex. 5 (the “Blacksberg Dep.”) at 29:19-22; 37:18 – 38:5.
7
See Alleman Aff. Ex. 6.
8
Brandywine Compl., Ex. E. Hereinafter referred to as the “Guaranty.”
9
Guaranty at 1.2.
3
liability for the entire outstanding debt if Holdings: (a) “admit[s], in writing or in any legal
proceeding, its insolvency or inability to Pay its debts as they become due;” (b) “fails to maintain
its status as a Single Purpose Entity . . .”; (c) “fails to obtain [Parkway’s] prior written consent to
any subordinate financing or other voluntary lien encumbering the Property;” or (d) “fails to
obtain [Parkway’s] prior written consent to any assignment, transfer, or conveyance of the
Property or any interest therein as required by the Loan Agreement or the Security
Instruments.”10
Article II of the Guaranty addresses events and circumstances that do not reduce of
discharge Acadia’s obligations under the Guaranty.11 Article II provides:
[Acadia] hereby consents and agrees to each of the following, and agrees that
[Acadia’s] obligations under this Guaranty shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and waives any
common law, equitable, statutory or other rights (including without limitation rights
to notice) which [Acadia] might otherwise have as a result of or in connection with
any of the following:
...
2.13 Other Actions Taken or Omitted. Any other action taken or omitted to be
taken or omitted to be taken with respect to the Loan Documents, the Guaranteed
Obligations, or the security and collateral therefor, whether or not such action or
omission prejudices [Acadia] or increases the likelihood that [Acadia] will be
required to pay the Guaranteed Obligations pursuant to the terms hereof, it is the
unambiguous and unequivocal intention of [Acadia] that [Acadia] shall be
obligated to pay the Guaranteed Obligations when due, notwithstanding any
occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, which obligation shall be deemed satisfied only upon the full and
final payment and satisfaction of the Guaranteed Obligations.12
The Loan Agreement also contains an “Exculpation” section.13 The Exculpation
provision requires the lender to foreclose on the property rather than collect from Holdings
10
Guaranty at 1.2(b)(E).
11
Guaranty Art. II.
12
Guaranty at 2.13.
13
Loan Agreement Sec. 9.3.
4
individually for a failure to pay. However, recourse liability is triggered if certain conditions are
met.14 Specifically, Section 9.3 states:
(B) the Debt shall be fully recourse to [Holdings] (i) in the event of: (a) [Holdings]
filing a voluntary petition under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law; (b) the filing of an involuntary petition against
[Holdings] under the Bankruptcy Code or any other federal or state bankruptcy or
insolvency law, in which [Holdings] colludes with, or otherwise assists such
Person, or solicits or causes to be solicited petitioning creditors for any involuntary
petition against [Holdings] from any Person; (c) [Holdings] filing an answer
consenting to or otherwise acquiescing in or joining in any involuntary petition filed
against it, by any other Person under the Bankruptcy Code or any other federal or
state bankruptcy or insolvency law; (d) [Holdings] consenting to or acquiescing in
or joining in an application for the appointment of a custodian, receiver, trustee, or
examiner for borrower or any portion of the Property; (e) [Holdings] making an
assignment for the benefit of creditors, or admitting, in writing or in any legal
proceeding, its insolvency or inability to pay its debts as they become due; (ii) if
the first full monthly payment of principal and interest on the Note is not paid when
due; (iii) if [Holdings] fails to maintain its status as a Single Purpose Entity after
the Guaranty Notice (as defined the Guaranty) if [Holdings] fails to permit on-site
inspections of the Property, fails to provide financial information, or fails to appoint
a new property manager upon the request of [Parkway] as permitted under this
Agreement, each as required by, and in accordance with, the terms and provisions
of the Agreement or the Mortgage; (iv) if [Holdings] fails to obtain [Parkway’s]
prior written consent to any Indebtedness or voluntary Lien encumbering the
Property; or (v) if [Holdings] fails to obtain [Parkway’s] prior written consent to
any Transfer as required by this Agreement or the Mortgage.15
A “Transfer” occurs when either Holdings or Acadia does any of the following: “sell,
convey, mortgage, grant, bargain, encumber, pledge, assign...or otherwise transfer or dispose
of...the Property or any part thereof or any legal or beneficial interest therein.”16 The Loan
Agreement specifies that “[Parkway] shall not be required to demonstrate any actual impairment
of its security or any increased risk of default hereunder in order to declare the Debt immediately
due and payable.”17
14
Loan Agreement Sec. 9.3.
15
Id.
16
Id. Sec. 5.2.10(b).
17
Id. Sec. 5.2.10(f).
5
According to Parkway, on January 16, 2008, Holdings mortgaged its interest in any
improvements on the Property to General Electric Capital Corporation.18 Parkway alleges that
Holdings did not obtain Parkway’s consent for the transfer of interest.19
The Loan matured on July 1, 2016 and Holdings failed to pay the principal, accrued
interest, default interest, and late fees (collectively “Debt”).20 On April 6, 2016, Acadia and
Parkway acknowledged that “(a) an Event of Default has occurred and is continuing under the
Loan Documents due to Borrower’s failure to pay all amounts when due as required under the
Loan Documents; (b) the Debt is due and payable in full; and (c) the Loan Documents to which
[Acadia] and [Holdings] are parties constitute the valid and legally binding obligations of
[Acadia] and [Holdings], respectively, [are] enforceable in accordance with their respective
terms.”21
Additionally, on April 6, 2016, Acadia and Holdings agreed in writing that “there are not
sufficient funds available to [Holdings] to timely pay such Third Party Expenses . . . .”22
Defendants acknowledged insufficient funds again on May 6, 2016 and June 9, 2016. On
November 21, 2017, Holdings sued Parkway in New York state court.23 Holdings sought an
injunction compelling Parkway to advance operating costs.24 Holdings stated it could not pay
other creditors because Parkway took all proceeds from Holdings’ tenants and used the money to
pay down the Loan.25
18
Acadia Compl. ¶ 50.
19
Id. ¶ 51.
20
Acadia Compl. ¶ 13
21
Acadia Compl. ¶ 28; Brandywine Compl. ¶ 30.
22
Brandywine Compl., Ex E.
23
Acadia Compl. ¶¶ 33-34; Brandywine Compl. ¶¶ 33-34.
24
Supp. Resp. at 8.
25
Id.
6
On April 29, 2016, Holdings granted an easement to a third party26 over a Parcel of the
Property (the “Reciprocal Agreement”).27 Specifically, the Reciprocal Agreement states:
[Subsidiary] hereby grants to [Holding] an easement over all portions of Parcel C-
1 which the existing improvements have been designed to support Parcel C-2, or
any portion thereof for continuous, total, adequate and safe support of all portions
of the improvements existing on Parcel C-2 as of the execution of this Reciprocal
Agreement.
[Holdings] hereby grants to [Subsidiary] an easement over all portions of Parcel C-
2 which the existing improvements have been designed to support Parcels C-2A or
C-3, or any portion thereof for continuous, total, adequate and safe support of all
portions of the improvements existing on Parcels C-2A and C-3 as of the execution
of this Reciprocal Agreement.28
Further, the Reciprocal Agreement grants:
a perpetual easement and right of access to all portions of [the shopping center] to
the extent that such access is necessary or desirable to permit such Owner to
maintain, repair or replace any portion of the property which such Owner is
responsible to maintain, repair or replace, provided that: except for any emergency
repairs necessary to prevent damage or injury to persons or property, such right of
access shall not be exercised without prior consultation of the Owner of the area
which is to be entered on; provided further that such right of access shall be
exercised in such fashion as shall minimize any interference with the operation of
the area entered upon.29
According to the Defendants, the Original Lender consented to a similar agreement in
2006 (the “2006 Declaration”).30 The 2006 Declaration allowed Subsidiary a cross-easement “to
install, repair, maintain, remove and replace any plumbing, heating, cooling, lighting or similar
fixture or equipment . . . [as long as the improvement] shall not impair the structural integrity of
the building or adversely affect any adjacent Lot.”31
26
Acadia Brandywine Subsidiary (“Subsidiary”).
27
Brandywine Compl., Ex. I. Hereinafter referred to as the “Reciprocal Agreement § __.”
28
Reciprocal Agreement § 2.1.
29
Reciprocal Agreement § 2.2.
30
Defs. Mot., Ex. 3.
31
Reciprocal Agreement § 4.3(a).
7
Holdings also executed a ground lease estoppel certificate and consent (the “Ground
Lease”) on February 13, 2017.32 The Ground Lease allows Subsidiary to mortgage Subsidiary’s
interest in the ground lease and any improvements on the property. Parkway asserts that it did
not consent to the Ground Lease. Further, Parkway asserts that “[u]pon information and belief,
[Parkway’s] predecessors in interest, as applicable, did not consent to the [Ground Lease].”33
The description of the Ground Lease is “[t]hat certain Net Ground Lease dated as of
December 11, 2006 with respect to the Premises between Ground Lessor and Borrower, as
amended and supplemented by the following documents: None.”34 A previous ground lease was
executed on December 11, 2006 (the “2006 Ground Lease”).35 Pursuant to the 2006 Ground
Lease, Holdings leased premises to Colby for the purpose of building and operating a Red Robin
restaurant. That 2006 Ground Lease gave Subsidiary rights in the Property. The 2006 Ground
Lease provided Subsidiary an option to renew the 2006 Ground Lease for three additional five-
year terms.36
B. Procedural History
Parkway filed two lawsuits with the Court to collect the principal, accrued interest,
default interest, and late fees (collectively “Debt”) from Defendants. Parkway filed suit against
Holdings to collect on the Note. Parkway also filed suit against Acadia to collect on the
Guaranty. The Court joined the cases.
Additionally, Parkway filed a complaint in the Court of Chancery seeking to reform and
foreclose on the mortgage (the “Chancery Action”) on April 6, 2017.37 Parkway asserts that
32
Brandywine Am. Compl., Ex. N. Ex. N shall be referred to as the “Ground Lease.”
33
Acadia Compl. ¶ 38; Brandywine Compl. ¶38.
34
2006 Ground Lease, Ex. B.
35
Brandywine Compl., Ex. M. Hereinafter referred to as the “2006 Ground Lease”).
36
2006 Ground Lease § 34.
37
Wilmington – 5190 Brandywine parkway, LLC v. Acadia Brandywine Holdings, LLC, 2017-0263-MTZ (Del. Ch.).
Hereinafter referred to as the “Chancery Action.”
8
parcels were mistakenly left out of the Loan Documents. Specifically, Parkway seeks: (1)
reformation of the mortgage; (2) foreclosure upon the mortgage; and (3) appointment of a
receiver to manage the mortgaged property in the interim.38
After filing the various lawsuits, Parkway requested that Holdings replace the existing
property manager as required upon request under the Loan Documents on June 8, 2017.39
Parkway again requested that Holdings replace the property manager on September 29, October
13, and October 20, 2017.40 As of January 16, 2018—the filing of the Second Amended
Complaint—Holdings has not replaced the property manager.
On November 21, 2017, Holdings filed an action in New York (the “New York Action”).
In the New York Action, Holdings sought a temporary restraining order and preliminary
injunction compelling Parkway to release rents so that Holdings could pay property expenses and
otherwise preserve the Property.41
On April 1, 2019, Parkway filed Plaintiff’s Opening Brief in Support of its Motion for
Summary Judgment (“Parkway’s Motion”). Then, on May 1, 2019, Defendants jointly filed
Opening Brief in Support of Defendants’ Cross-Motion for Summary Judgment and Answering
Brief in Opposition to Plaintiff’s Motion for Summary Judgment (“Defendants’ Motion”). After,
on May 31, 2019, Parkway filed Plaintiff’s Reply Brief (I) in Further Support of its Motion for
Summary Judgment and (II) in Opposition to Defendants’ Cross-Motion for Summary Judgment.
Finally, on June 14, 2019, Defendants filed Reply Brief in Further Support of Defendants’ Cross-
Motion for Summary Judgment. On August 14, 2019, the Court held a hearing on the Parkway
Motion and Defendants’ Motion. At the conclusion of the hearing, the Court took the matters
38
Chancery Action, D.I. 1. Hereinafter referred to as the “Chancery Complaint.”
39
Acadia Compl. ¶ 75.
40
Id. ¶ 76.
41
Supp. Mot. at 5.
9
under advisement. On October 21, 2019, Defendants filed a letter that purported to supplement
Defendants’ Motion, arguing that a new case, Urdan v. WR Capital Partners, LLC,42 provided
additional guidance on issues already raised and briefed. Parkway responded to that letter on
October 25, 2019.
III. STANDARD OF REVIEW
The standard of review on a motion for summary judgment is well-settled. The Court’s
principal function when considering a motion for summary judgment is to examine the record to
determine whether genuine issues of material fact exist, “but not to decide such issues.”43
Summary judgment will be granted if, after viewing the record in a light most favorable to a
nonmoving party, no genuine issues of material fact exist and the moving party is entitled to
judgment as a matter of law.44 If, however, the record reveals that material facts are in dispute, or
if the factual record has not been developed thoroughly enough to allow the Court to apply the
law to the factual record, then summary judgment will not be granted.45 The moving party bears
the initial burden of demonstrating that the undisputed facts support his claims or defenses.46 If
the motion is properly supported, then the burden shifts to the non-moving party to demonstrate
that there are material issues of fact for resolution by the ultimate fact-finder.47
Where, as here, the parties have filed cross motions for summary judgment and have not
argued that there are genuine issues of material fact, “the Court shall deem the motions to be the
42
2019 WL 3891720 (Del. Ch. Aug. 19, 2019).
43
Merrill v. Crothall-American Inc., 606 A.2d 96, 99-100 (Del. 1992) (internal citations omitted); Oliver B. Cannon
& Sons, Inc. v. Dorr-Oliver, Inc., 312 A.2d 322, 325 (Del. Super. 1973).
44
Id.
45
Ebersole v. Lowengrub, 180 A.2d 467, 470 (Del. 1962); see also Cook v. City of Harrington, 1990 WL 35244 at
*3 (Del. Super. Feb. 22, 1990) (citing Ebersole, 180 A.2d at 467) (“Summary judgment will not be granted under
any circumstances when the record indicates . . . that it is desirable to inquire more thoroughly into the facts in order
to clarify the application of law to the circumstances.”).
46
Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1970) (citing Ebersole, 180 A.2d at 470).
47
See Brzoska v. Olsen, 668 A.2d 1355, 1364 (Del. 1995).
10
equivalent of a stipulation for decision on the merits based on the record submitted with the
motions.”48 Neither party’s motion will be granted unless no genuine issue of material fact exists
and one of the parties is entitled to judgment as a matter of law.49
IV. DISCUSSION
The parties agree that New York law applies to the Loan Documents.50 Unless otherwise
noted, the Court will apply New York law for contract construction and interpretation in this
civil litigation. “Under New York law, the initial interpretation of a contract is a matter of law
for the court to decide. Where the agreement is unambiguous, a court may not admit extrinsic
evidence and interprets the plain language of the agreement as a matter of law.”51 “However,
‘when the language of a contract is ambiguous, its construction presents a question of fact,’
which of course precludes summary dismissal.”52
“[T]he mere fact that the Parties disagree on the proper interpretation of the contract does
not render the contractual language ambiguous.”53 “Contract language is not ambiguous if it has
‘a definite and precise meaning, unattended by danger of misconception in the purport of the
[contract] itself, and concerning which there is no reasonable basis for a difference of
opinion.’”54 “[A] term is ambiguous when it is capable of more than one meaning when viewed
objectively by a reasonably intelligent person who has examined the context of the entire
integrated agreement and who is cognizant of the customs, practices, usages and terminology as
generally understood in the particular trade or business.”55
48
Super. Ct. Civ. R. 56(h).
49
E.I. DuPont de Nemours and Co. v. Medtronic Vascular, Inc., 2013 WL 261415, at *10 (Del. Super. Jan. 18,
2013).
50
See Agreement Sec. 10.3; Parkway’s Mot. at 6; Note Art. 9; Defs. Mot. at 9; Resp. at 10.
51
Serdarevic v. Centex Homes, LLC, 760 F. Supp. 2d 322, 328 (S.D.N.Y. 2010).
52
Bank of Am. Corp. v. Lemgruber, 385 F. Supp. 2d 200, 226 (S.D.N.Y. 2005).
53
Serdarevic, 760 F. Supp. 2d at 329.
54
Id.
55
Prior v. Innovative Commc'ns Corp., 207 Fed. Appx. 158, 163 (3d Cir. 2006) (interpreting New York law).
11
“Under New York law, written agreements are construed in accordance with the parties'
intent and ‘[t]he best evidence of what parties to a written agreement intend is what they say in
their writing.’”56 “The entire contract must be reviewed and particular words should be
considered, not as if isolated from the context, but in the lights of the obligation as a whole and
the intention of the parties as manifested thereby. Form should not prevail over substance and a
sensible meaning of words should be sought.”57 “Words and phrases used in an agreement must
be given their plain meaning . . . .”58 “The rules of construction of contracts require us to adopt
an interpretation which gives meaning to every provision of a contract or, in the negative, no
provision of a contract should be left without force and effect.”59 “Even if there was an
inconsistency between a specific provision and a general provision of a contract . . . the specific
provision controls.”60
A. Parkway is Entitled to Partial Summary Judgment on Liability
1. The Full Recourse Provisions of the Loan Agreement and Guaranty Are Clear and
Unambiguous.
Parkway cites numerous cases which stand for the proposition that recourse provisions
are valid in loan agreements so long as the recourse provisions are clear and unambiguous. The
Defendants do not rebut the proposition that the recourse provisions of Loan Agreement and the
Guaranty are clear and unambiguous. The Court finds that, if triggered, the recourse provisions
in the Loan Agreement and Guaranty are unambiguous and enforceable.
56
Schron v. Troutman Sanders LLP, 20 N.Y.3d 430, 963 N.Y.S.2d 613, 986 N.E.2d 430, 433 (2013).
57
Riverside S. Plan. Corp. v. CRP/Extell Riverside, L.P., 920 N.E.2d 359, 363 (N.Y. 2009) (quoting Atwater & Co.
v. Panama R.R. Co., 246 N.Y. 519, 524 (1927)) (internal quotations omitted).
58
Bianco v. Bianco, 36 A.D.3d 490, 491, 830 N.Y.S.2d 21 (N.Y. App. Div. 2007).
59
Muzak Corp. v. Hotel Taft Corp., 133 N.E.2d 688, 690 (N.Y. 1956); see also In re El-Roh Realty Corp., 902
N.Y.S.2d 727, 729 (N.Y. App. Div. 4th Dept. 2010) (“The contract must be read as a whole to determine its purpose
and intent and it should be interpreted in a way that reconciles all its provisions, if possible) (internal quotations
omitted”).
60
Id.
12
2. Conditions Triggering Full Recourse Under the Loan Agreement and Guaranty
Have Occurred.
Parkway argues that Holdings triggered full recourse under the Loan Agreement and
Guaranty because Holdings (i) transferred interests in the Property by creating easements,
covenants and allocating insurance proceeds in the Reciprocal Agreement, (ii) encumbered the
Property by consenting to the Sterling Mortgage, (iii) transferred an interest in the improvements
to the Property in the Estoppel, and (iv) admitted that Holdings could not pay its debts when due.
i. The Reciprocal Agreement Conveyed Interests in the Property Without
Lender’s Consent.
Under Section 9.3(v) of the Loan Agreement, Holdings triggers full recourse if Holdings
does not obtain Parkway’s written consent prior to “any Transfer as required by this Agreement
or the Mortgage.”61 Similarly, under Section 1.2(b) of the Guaranty, Holdings triggers full
recourse if Holdings “if Holdings fails to obtain Parkway’s prior written consent to any
assignment, transfer, or conveyance of the Property or any interest therein as required by the
Loan Agreement or the Security Instruments.”62
a. Easements
Parkway contends that the Defendants triggered full recourse against Holdings and
Acadia by executing the Reciprocal Agreement, which was a transfer or conveyance of interests
in the Property. Parkway asserts that this was because the Reciprocal Agreement conveyed
easements, affirmative covenants, and rights to the Property’s insurance proceeds to the owners
of the rest of the Shopping Center.
In response, Defendants cite Section 8.3 of the Reciprocal Agreement which states, “in
the event of any conflict between the terms [of the Reciprocal Agreement] and the terms of the
61
Loan Agreement Sec. 9.3(B)(e)(v).
62
Guaranty at 1.2(b).
13
2006 Declaration, the terms of the 2006 Declaration shall govern and control.”63 Using this
provision, Defendants assert that any new easements or covenants created by the Reciprocal
Agreement are superseded by the 2006 Declaration. Next, Defendants argue that the parties did
not intend to alter the rights in the 2006 Declaration. As per the 2006 Declaration, “covenants
may not be modified, amended or altered in whole or in part, except by... the consent of the New
Castle County Council . . . .” Defendants note the fact that the parties did not seek or obtain the
consent of the New Castle County Council in executing the Reciprocal Agreement shows that
they did not intend to modify the 2006 Declaration.
Parkway argues that Defendants’ interpretation of the Reciprocal Agreement is contrary
to New York courts’ rules to read a contract to give effect to all of the contract’s provisions. In
addition, Parkway contends that the parties did not need the consent of the New Castle County
Council to sign the Reciprocal Agreement because (i) the 2006 Declaration is an amended
declaration, (ii) New Castle County did not sign the 2006 Declaration, and (iii) both parties agree
that the Reciprocal Agreement is the controlling agreement.
First, the Reciprocal Agreement creates an easement. “An easement is an interest in
land...which confers a right upon the holder thereof to some profit, benefit, dominion, enjoyment
or lawful use out of or over the estate of another.”64 “An easement . . . is permanent in nature.”65
Parties may create an express easement in a “writing...demonstrating that intent, signed by the
grantor.”66
63
Reciprocal Agreement Sec. 8.3.
64
Copertino v. Ward, 473 N.Y.S.2d 494, 497 (App. Div. 1984).
65
Millbrook Hunt, Inc. v. Smith, 249 A.D.2d 281, 282, 670 N.Y.S.2d 907, 908–09 (1998)
66
Coker v. Walker, 2013 WL 1858098, at *3 (Del. Ch. May 3, 2013); see also Webster v. Ragona, 776 N.Y.S.2d
347, 350 (App. Div. 2004).
14
Here, Defendants conveyed an express easement in the Reciprocal Agreement. Section
2.2 of the Reciprocal Agreement states:
Easement for Repair. Each of the Owners shall have a perpetual easement and right
of access to all portions of the Brandywine Town Center Shopping Mall to the
extent that such access is necessary or desirable to permit such Owner to maintain,
repair or replace any portion of the property which such Owner is responsible to
maintain, repair or replace....
In Section 2.2, Holdings conveyed an express easement to the three owners of the other
parcels (the “Owners”) in the Shopping Center. This is clear because Section 2.2 conveys a right
for the Owners to enter Holdings’ portion of the Shopping Mall. The conveyance is permanent
in nature because the parties specified that it is a “perpetual easement.” Finally, the easement is
express because Section 2.2 evinces the parties’ intent to create a “perpetual easement” and
Holdings signed the Reciprocal Agreement.
Section 2.2 of the Reciprocal Agreement conveys a broader easement than the 2006
Declaration. In the 2006 Declaration, Holdings granted an easement to the limited portions of
the Shopping Mall that are “Common Facilities”67 so that the Owners could “install, repair,
maintain, remove and replace” fixtures on their own lots, rather than on Holdings’ lot. In
addition, the 2006 Declaration provided access to the Brandywine Town Center Maintenance
Corporation for the purpose of performing work on equipment.68
There is no dispute that Holdings did not receive Parkway’s consent to enter into the
Reciprocal Agreement. The Reciprocal Agreement is recorded as Instrument No. 20160502-
0020277 in the land records of New Castle County. The record is clear that Holdings provided a
67
2006 Dec. at § II.4.3 – Easement in Favor of East Box Lot Owner to Make Certain Repairs, Replacements, and
Improvements. The Land and portions of each Building that are Common Facilities are subject to the following
easements: (a) The Lot Owner may install, repair, maintain, remove and replace any plumbing, heating, cooling,
lighting, or similar fixture or equipment which is part of the Lot . . . .
68
Id. at § II.4.4 – Easement in Favor or Maintenance Corporation. The Brandywine Town Center Maintenance
Corporation...shall have an easement of access through the East Box Lots at reasonable hours for the purpose of
performing maintenance, repair and replacement.
15
broader easement than in the 2006 Declaration. Defendants’ argument concerning the language
regarding conflicts between the 2006 Declaration and the Reciprocal Agreement is too stretched.
As Parkway notes, substantially all of the Reciprocal Agreement’s new encumbrances have no
corresponding provision in the 2006 Declaration—i.e., nothing in conflict with the 2006
Declaration and nothing inconsistent with the 2006 Declaration. As such, the Reciprocal
Agreement is the controlling document as to the new easement.69 Therefore, the express
easements into which Holdings entered are “interests” in the Property under Section 9.3(v) of the
Loan Agreement and Section 1.2(b) of the Guaranty which, in turn, trigger recourse liability.
This point is true as to covenants and other transfers authorized by the Reciprocal Agreement.
b. Covenants and Insurance Proceeds
Second, the Reciprocal Agreement creates covenants. A covenant is an interest in land.70
Under New York law, an affirmative covenant runs with the land if the grantor and grantee
intended it to run with the land and if the covenant touches and concerns the land.71
Parkway alleges that the Reciprocal Agreement creates the following covenants among
the Owners:
 To maintain insurance proceeds at specified levels:
o Section 3.1 – Property Hazard Insurance. Each of the Owners shall maintain
for their respective parcels, at all times, and at such Owner’s expense, a policy
or policies of insurance, insuring the buildings and improvements of such
Owner
o Section 3.2. Public Liability and Property Damage Insurance. Each of the
Owners shall secure and maintain for their respective parties, at all times, a
policy of public liability and property damages insurance applicable to the
69
See I.U.N. Am. Inc. v. A.I.U. Ins. Co., 896 A.2d 880, 888 (Del. Super. 2006) (providing that when there is no
language in both documents that conflicts or is inconsistent, then the second document controlled).
70
See Restatement § 2.1 cmt. a (noting “modern recognition that running covenants are interests in land”); Feigen v.
Green Harbour Beach Club, Inc., 204 N.Y.S.2d 381, 389 (Supr. Ct. 1960) (“Current decisions are framed in terms
of such restrictions being easements or interests in land...”).
71
See Neponsit Prop. Owners’ Ass’n v. Emigrant Indus. Sav. Bank, 278 N.Y. 248 (1939); Nicholson v. 300
Broadway Realty Corp., 7 N.Y.2d 240 (1959).
16
property of such Owner, and at such Owner’s expense, in the following
minimum amounts: (a) in the case of public liability, One Million Dollars
($1,000,000) per person and Two Million Dollars ($2,000,000) per accident . .
..
 To repair and restore any portion of the Property damaged by casualty as soon
practicable even if insurance proceeds are insufficient:
o Section 4.1. Damage Affecting Construction Located on Only One Parcel. If
any portion of the Brandywine Town Center is damaged by fire or other
casualty and such damage occurs within the Owner’s parcel only..., then any
such damages shall be repaired and restored by the Owner of the portion of
the Brandywine Town Center Shopping Center in which any such damage
occurs...at its sole cost and expense, with due diligence and in as timely a
manner as practicable under the circumstances . . . .
o Section 4.4.1. Cost of Repairs. If the cost and expense of performing any
repair and restoration of the Brandywine Town Center Shopping Mall
pursuant to Section 4.1...shall exceed the amount of any available insurance
proceeds...the excess cost and expense (or the entire amount of such cost and
expense, if there are no insurance proceeds) shall be paid by the Damaged
Owner. The Damaged Owner shall also pay any deductible amount.”
o Section 4.7. Obligation and Rights to Rebuild. Each Affected Owner shall be
obligated to repair and restore its portion of the Brandywine Town Center
Shopping Mall regardless of whether or not any insurance proceeds are
available.
 To participate in repairing and restoring damage that affect the Property and other
Owners’ parcels even if it would be more prudent to collect the insurance proceeds
and abandon the Property:
o Section 4.3 – Joint Damage. If the Brandywine Town Center Shopping Mall is
damaged by fire or other casualty and the provisions of Section 4.1 do not
apply, the affected Owners (each, an “Affected Owner”) shall, with diligence
and in as timely a manner as practicable under the circumstances, cause the
damage to be repaired and the Brandywine Town Center Shopping Mall to be
restored and the repair and restoration shall be the joint responsibility of the
Affected Owners pursuant to this Section 4.3.
o Section 4.4.2. Cost of Repairs. If the cost and expense of performing any
repair and restoration of the Brandywine Town Center Shopping Mall
pursuant to section 4.3 shall exceed the amount of any available insurance
proceeds..., the excess cost and expense (or the entire amount of such cost and
expense, if there are no insurance proceeds) shall be borne by the Affected
Owners in proportion to the Architect Allocated Ratio....
17
o Section 4.7. Obligation and Rights to Rebuild. “Each Affected Owner shall be
obligated to repair and restore its portion of the Brandywine Town Center
Shopping Mall regardless of whether or not any insurance proceeds are
available . . . .”
The Reciprocal Agreement states that all of its provisions “are intended to and shall run
with the real property benefited and burdened hereby.”72 The Reciprocal Agreement is a
recorded instrument. Here, the statements in the Reciprocal Agreement are covenants that run
with the land. This is because the statements are promises relating to the Shopping Mall, which
the parties intended to run with the land.
There is no dispute that Holdings did not receive Parkway’s consent to enter into the
Reciprocal Agreement. The covenants in the Reciprocal Agreement constitute a “transfer” of a
legal or equitable right in the Property restricted by Section 5.2.10 of the Loan Agreement.73
Therefore, the covenants into which Holdings entered are “interests” in the Property under
Section 9.3(v) of the Loan Agreement and Section 1.2(b) of the Guaranty which trigger recourse
liability.
Parkway argues that Holdings also triggered full recourse by conveying an interest in its
insurance proceeds in Section 4.7 of the Reciprocal Agreement. Section 4.7 provides:
Each Affected Owner shall be obligated to repair and restore its portion of the
Brandywine Town Center Shopping Mall regardless of whether or not any
insurance proceeds are available. Furthermore, each Affected Owner shall
cooperate with the other Affected Owner(s) in connection with any repairs or
restoration to the Brandywine Town Center Shopping Mall. If, however, one
Affected Owner defaults in the full, faithful and punctual performance of any
obligation under this Article IX [sic]..., then the other Affected Owner(s) shall have,
in addition to all other remedies it may have hereunder or at law or in equity...the
right, but not the obligation, if the Defaulting Owner has not commenced the good
faith cure of such default...(a) to make any decisions required in connection with
the performance of such obligation on behalf of the Defaulting Owner, (b) to
actually perform the obligation on behalf of the Defaulting Owner, and (c) subject
72
Reciprocal Agreement Sec. 8.1.
73
Loan Agreement Sec. 5.2.10(b)(i).
18
to the rights of any holders of mortgages encumbering the Defaulting Owner’s
property, to use the Defaulting Owner’s insurance proceeds in connection with the
performance of any such obligation. If any Affected Owner defaults in the
performance of its obligations under this Article IX [sic] as aforesaid, the other
Affected Owners are hereby irrevocably appointed attorney-in-fact of the
Defaulting Owner...to take any and all steps necessary on behalf of Defaulting
Owner to perform the Defaulting Owner’s obligations as provided herein.74
Parkway notes that insurance proceeds are a form of property. This provision conveys an
interest in the Property because it allows other Owners a right to use Defendants’ insurance
proceeds. It therefore triggers full recourse.
The Reciprocal Agreement directs the purchase of insurance and how proceeds from
insurance will be used. In the Mortgage, however, Holdings gave up conveyed all its rights to
insurance proceeds. Section 1.1 of the Mortgage addresses what property rights are conveyed by
Holdings.75 Section 1.1(j) provides that Holding has conveyed any right to “[a]ll proceeds in
respect of the Property under any insurance policies covering the Property, including, without
limitation, the right to receive and apply the proceeds of any insurance, judgments, or settlements
made in lieu thereof, of damage to the Property.”76
During argument, the Court came to understand that the Reciprocal Agreement was a
document that a potential financier encouraged. That transaction did not close and Parkway is
the successor to the Original Lender. Defendants presented the argument that the Reciprocal
Agreement and its terms are beneficial to the Property and any transfers under the Reciprocal
Agreement are minor. The Court understands these equitable arguments. The Court, however,
must enforce the terms of the relevant agreements as agreed to by the parties. The Court finds
74
Reciprocal Agreement Sec. 4.7 (emphasis added).
75
Mortgage Sec. 1.1.
76
Id. Sec. 1.1(j).
19
that the Reciprocal Agreement provides for “Transfers” that were not consented to by Parkway.
As such, the “Transfers” violate the Loan Agreement and the Guaranty.
ii. The Estoppel and Sterling Mortgage Subordinate Financing are not Voluntary
Liens Encumbering the Property.
Under Sections 9.3(iv) and 9.3(v) of the Loan Agreement, Holdings triggers full recourse
if Holdings does not obtain Parkway’s written consent prior to “any Indebtedness or voluntary
Lien encumbering the Property” or “any Transfer as required by this Agreement or the
Mortgage,” respectively. Similarly, under Section 1.2(b) of the Guaranty, Holdings triggers full
recourse if Holdings “fails to obtain Parkway’s prior written consent to any subordinate
financing or other voluntary lien encumbering the Property” or “if Holdings fails to obtain
Parkway’s prior written consent to any assignment, transfer, or conveyance of the Property or
any interest therein as required by the Loan Agreement or the Security Instruments.”77
Parkway contends that the Sterling Mortgage between Sterling Bank and Colby creates a
voluntary lien in the Property and is a transfer of an interest in the Property. Parkway supports
its contention that the Sterling Mortgage is a voluntary lien and transfer with the following
statements: Colby’s secured loans appear on a title report of the Property; the Sterling Mortgage
reflects the Property’s tax parcel identification number; the Sterling mortgage will be discharged
upon foreclosure of Lender’s Mortgage; foreclosing the Mortgage will cause Colby to default
under its loan from Sterling, jeopardizing Colby’s ability to continue generating rents (which are
Parkway’s collateral); and the Sterling Mortgage gives Sterling Bank a security interest in
proceeds from sales or subleases of Colby’s leasehold, which are Lender’s collateral because
such proceeds belong to Borrower under the Ground Lease.78 Parkway claims that, although
77
Guaranty Sec. 1.2(b).
78
See Alleman Aff. Ex. 25.
20
Holdings did not sign the Sterling Mortgage, Holdings consented to Colby executing the
Mortgage in the Ground Lease Estoppel.79
In response, Defendants assert that the Sterling Mortgage encumbers Colby’s property
rather than the Property, so it is not a voluntary lien or transfer of an interest in the Property.
Defendants argue that Parkway consented to the Sterling Mortgage by agreeing that Borrower
could grant leases under 10,000 square feet without Parkway’s consent.
Parkway responds that Holdings’ right to grant non-material leases does not imply a right
to authorize mortgages to be recorded against the Property. Parkway contends that the Loan
Agreements expressly prohibit unconsented mortgages.80 The problem with this argument is that
the Sterling Mortgage relates to Colby’s leasehold interest and nothing more.
The Court finds that Parkway did not consent to the Sterling Mortgage. But that is not
the end of the inquiry. The Sterling Mortgage is not a voluntary lien or transfer on the Property.
This is because the Sterling Mortgage relates only to Colby’s leasehold interest. Section 1.2 of
the Sterling Mortgage describes the interest conveyed, “The ‘Mortgaged Property’ consists of all
of [Colby]'s estate, right, title and interest in and to the following described property and
property rights, whether now existing or hereafter acquired . . . .” Because the Mortgaged
Property only includes Colby’s title to the Property, the Sterling Mortgage is not a lien or
transfer of the Property. Therefore, the Court holds that the full recourse provision is not
triggered by the Sterling Mortgage.
79
Section 3 states: “[Holdings] hereby consents to Colby executing a mortgage or deed of trust in favor of
[Sterling National Bank] (the “Mortgage”), encumbering, among other things, [Colby’s] interest in
Improvements and the Ground Lease. The execution and recordation of the Mortgage including UCC-1
Financing Statements will not constitute a breach or default under the Ground Lease. ground Lessor does
not need to obtain any other consents with respect to [Colby’s] execution and delivery of the Mortgage.”
80
Loan Agreement Secs. 5.1.20(v), 5.2.2.
21
iii. Holdings did not Transfer Interests in the Red Robin Building.
As noted above, under Section 9.3(v) of the Loan Agreement, Holdings triggers full
recourse if Holdings does not obtain Parkway’s written consent prior to “any Transfer as
required by this Agreement or the Mortgage.” Similarly, under Section 1.2(b) of the Guaranty,
Holdings triggers full recourse if Holdings “fails to obtain Parkway’s prior written consent to any
assignment, transfer, or conveyance of the Property or any interest therein as required by the
Loan Agreement or the Security Instruments.”81
Parkway argues that Holdings triggered personal liability by granting to Colby fee title to
improvements in the Property. Parkway contends that Holdings made this conveyance in Section
11 of the Estoppel, which states, “[w]hile the [Ground Lease] is in effect, [Colby] holds fee title
to the Improvements . . . .”82 According to Parkway, Holdings originally had title to the
Improvements in the Property.
In contrast, Holdings claims that the Ground Lease creates a ground lease in the Property
and it is only through the ground lease that Colby owns the improvements on the Property. As a
result, Defendants argue that Holdings could not convey its interest in Improvements that Colby
already owns. In addition, Defendants note that the Estoppels in 2008, 2015 and 2017 all convey
similar interests in the Property. Defendants contends that it would be illogical to convey a fee
title to the Improvements three times.
Again, both parties agree that Holdings signed the Estoppels without Parkway’s consent.
The Court finds that Holdings did not convey an interest in the Property by signing the Estoppel.
As per the Ground Lease and Estoppels, the Defendants conveyed the land on which Colby
subsequently built a Red Robin restaurant. Colby owned the Red Robin building and any
81
Guaranty at 1.2(b).
82
Estoppel Sec. 11; 2007 Estoppel Sec. 12; 2015 Estoppel Sec. 12.
22
improvements for the interim before the expiration of the Ground Lease. Section 11 clarifies that
Colby has a fee title to the Improvements on the Property during the term of the Ground Lease.
Under the applicable documents, this fee title will revert to Defendants at the termination of the
Lease. Section 11 does not convey Defendants’ existing interest in the Improvements to Colby
except incident to the Ground Lease. Therefore, full recourse is not triggered by the Estoppels.
iv. Holdings Did Not Admit that it was Insolvent in a Manner that Triggered the
Guaranty.
The Court will look to Section 9.3(i)(e) of the Loan Agreement and Section 1.2(b)(i)(E)
of the Guaranty to determine whether Holdings triggered recourse liability by “admitting”
insolvency. These provisions provide that Holdings triggers the full recourse provision by
“admitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as
they become due.”83
The parties acknowledge that Defendants provided financial statements and written
statements to Parkway asserted that “there are not sufficient funds available to [Holdings] to
timely pay [certain] Third Party Expenses.” The parties disagree as to the legal significance of
these statements.
Financial statements by themselves are not written admissions of insolvency under New
York law. In D.B. Zwirn Special Opportunities Fund, L.P. v. SCC Acquisitions, Inc., the New
York court found that financial reports indicating that the debtor’s liabilities exceeded their cash
and assets did not constitute written admissions of insolvency.84 In that case, the Court also
found that failure to pay debts alone was not sufficient to trigger full recourse liability.85
83
See Loan Agreement Sec. 9.3(i)(e); Guaranty at 1.2(b)(i)(E).
84
74 A.D.3d 530, 530 (N.Y. App Div. 1st Dept. 2010).
85
Id.
23
Parkway relies upon financial statements showing a negative equity value, expense
notices from Parkway’s servicer that there are insufficient funds to timely pay certain third party
expenses,86 and Holdings’ statements from the New York Action where Holdings stated “[a]fter
stretching terms for the past couple of months, property expenses are now or soon will be past
due, and critical services (such as fire phone lines, fire hydrant and riser water service, pest
control, security services, utilities, etc.) to operate the Property will soon be at risk of being shut
off.”87 These statements relate to the New York Action whereby Holdings seeks to require
Parkway to pay operating expenses because Parkway is sweeping all rent funds and refusing to
pay for any operating expenses absent court intervention. Holdings alleges that there are
sufficient funds, but Parkway is sweeping the funds and not allowing Holdings to pay any bills
with the swept funds.
The Court finds that these statements made under that factual scenario, in and of
themselves, do not admit insolvency. Instead, Holdings’ statements are conditional statements- if
Holdings does not receive relief in the New York Action, it will not be able to pay its bills. The
Court holds that Holdings has not made a written statement or an unconditional admission that it
cannot pay its debts as they become due of the kind that would trigger Section 9.3(i)(e) of the
Loan Agreement and Section 1.2(b)(i)(E) of the Guaranty.
B. The Statute of Limitations Has Not Run on Parkway’s Claims.
Defendants argue that the statute of limitations on Parkway’s recourse claim has run.
When Delaware courts apply the borrowing statute for an action arising from the law of another
jurisdiction, Delaware applies the shorter of the statute of limitations.88 This action raises a
86
Holdings made these statements on April 6, May 6, and June 9 of 2016.
87
Brandywine Compl. ¶¶ 33-34.
88
See 6 Del. C. § 8121.
24
claim for a breach of the promissory note. There is a six-year statute of limitations for a claim
for breach of contract in New York. Delaware has a three year statute of limitations for actions
based on contract.89 The statute of limitations for a breach of contract claim runs from the time
of the breach.90 When “the claim is for payment of a sum of money allegedly owed pursuant to a
contract, the cause of action accrues when the [party making the claim] possesses a legal right to
demand payment.”91
Defendants contend that the claim accrued on June 2, 2006 when Original Lender signed
the Loan and Note knowing that Holdings owned property, Parcel C-2, that was not part of the
Loan or Note. Defendants also claim that Parkway’s claims for recourse are barred by the statute
of limitations. Parkway argues that claims for breach of contract occur at the time of the breach.
Parkway never accelerated the Debt. So, Parkway’s claims to recover the full Debt did
not accrue until the Loan matured on July 1, 2016.92 In addition, Defendants made partial
payments on the promissory note through June 2015. These partial payments tolled the statute of
limitations.93 Under New York law, a written acknowledgment of a defaulted contract
obligation tolls the statute of limitations, so long as it is signed by the party to be charged,
recognizes an existing debt, and contains nothing inconsistent with an intention on the part of the
89
See 6 Del. C. § 8106(a).
90
See Pivotal Payments Direct Corp. v. Planet Payments, Inc., 2015 WL 11120934, at *4 (Del. Super. Dec. 29,
2015).
91
Hahn Automotive Warehouse, Inc. v. American Zurich Ins. Co., 967 N.E.2d 1187, 1190 (N.Y. 2012).
92
See Phx. Acquisition Corp., 81 N.Y.2d at 140 (dismissal for untimeliness was error; guarantor was not “obligated
to pay the whole debt upon the initial default” and lender had not accelerated the debt).
93
Bernstein v. Kaplan, 413 N.Y.S.2d 186, 188 (App. Div. 1979); see, e.g., Saljanin v. Vuksanaj, 727 N.Y.S.2d 145
(App. Div. 2001) (statute of limitations on note began running anew on date of partial payment); Skaneateles Sav.
Bank v. Modi Assocs., 668 N.Y.S.2d 819, 820 (App. Div. 1998) (reversing dismissal of lender’s claim because
“periodic payments of principal and interest on the note operated to renew the Statute of Limitations”); Roth v.
Michelson, 55 N.Y.2d 278, 281 (1982) (“It is a long-standing common-law rule that, if part payment of a debt
otherwise outlawed by the Statute of Limitations is made under circumstances from which a promise to honor the
obligation may be inferred, it will be effective to make the time limited for bringing an action start anew from the
time of such payment.”).
25
debtor to pay it.94 Defendants signed eight letters between April 6, 2016 and November 4, 2016,
in which they acknowledged that “the Debt is currently due and payable in full.”95 In those
letters Defendants also “expressly ratified and confirmed” their “respective obligations under the
Loan Documents, all of which,” “shall continue in full force and effect” and be “enforceable
against [Defendants] in accordance with their respective terms.”96 This action was commenced
on April 6, 2017. So, Parkway’s claims to recover the debt are not time-barred.
In addition, Parkway’s claims for recourse liability are not time-barred. As noted above,
Defendants triggered the full recourse provisions by signing the Reciprocal Agreement. The
Reciprocal Agreement is dated April 29, 2016. So, the statute of limitations had not expired
when Parkway filed this action in 2017.
V. CONCLUSION
For all the foregoing reasons, the Court GRANTS in part and DENIES in part
Parkway’s Motion and DENIES Defendants’ Motion. The Court further believes that the
Brandywine Complaint and the Acadia Complaint each only assert one cause of action. The
parties are to contact the Court for an additional hearing regarding the status, if any, of
outstanding issues.
IT IS SO ORDERED
/s/ Eric M. Davis
Eric M. Davis, Judge
cc: File&ServeXpress
94
N.Y. Gen. Oblig. § 17-101 (“An acknowledgment or promise contained in a writing signed by the party to be
charged thereby is the only competent evidence of a new or continuing contract whereby to take an action out of the
operation of the provisions of limitations of time for commencing actions under the civil practice law and rules other
than an action for the recovery of real property. This section does not alter the effect of a payment of principal or
interest.”).
95
Ex. 40 ¶ 3(i)(b).
96
Id. ¶ 3(iii), (vi).
26