FILED: NEW YORK COUNTY CLERK 11/10/2011 NYSCEF DOC. NO. 35 INDEX NO. 650871/2010 RECEIVED NYSCEF: 11/10/2011 TABLE OF CONTENTS Page TABLE OF AUTHORITIES PRELIMINARY STATEMENT FACTUAL BACKGROUND 4 ARGUMENT 4 I. PLAINTIFF IS NOT ENTITLED TO SUMMARY JUDGMENT BECAUSE ISSUES OF FACT EXIST CONCERNING WHETHER THE BANKS PREVENTED THE OCCURRENCE OF THE EVENTS THAT WOULD HAVE RELIEVED RELATED OF LIABILITY UNDER THE GUARANTY 4 Il. IS NOT ENTITLED TO SUMMARY JUDGMENT FOR THE SEPARATE REASON THAT ISSUES OF FACT EXIST CONCERNING WHETHER THE AMOUNT IT NOW SEEKS FALLS WITHIN THE DEFINITION OF 7 A. Summary Judgment ls Precluded By Issues Of Fact Conceming Whether The Amounts Plaintiff Seeks "Bec[a]me Due and Payable" Under The Loan Agreement 8 l. Issues Of Fact Concerning Whether The Banks' Material Repudiation Of The Loan Agreement Deprived Them Of Any Rights And Relieved BVO Of Any Obligations Preclude Sumrnary Judgment 8 2. Nothing In The Guaranty Excuses Plaintiff From Having To Prove That The Loan Principal "Bec[a]me Due And Payable" ll 3. To The Extent That There Is Any Doubt, The Guaranty's Specific Language Providing That The Loan Principal Must "Become Due And Payable" In Order To Be A "Guaranteed Obligation" Trumps The More General Provisions Concerning Waiver Of Defenses 13 B. Nothing In The Loan Agreement Prevents A Claim That The Banks' Breach Relieved BVO Of Any Further Liability Thereunder 15 1. This Court Has Already Rejected Plaintiffs Argument 15 2. The Court Was Correct In Its Prior Ruling That The Loan Agreement Does Not Permit The Banks To Enforce Its Terms After They Have Repudiated It 15 C. Neither The "Loan Advance Agreements" Nor The "Pre-Negotiation Agreement" Foreeloses Any Argument That The Banks' Repudiation Of The Loan Agreement Deprived Them Of Any Rights Tltereunder 18 i TABLE OF CONTENTS ?coI1t'lIl1 Page 1. Plaintiffs Argument About The Pre-Negotiation Agreement I gnores Both The Language Of That Document And The Nature Of BVO's Claims 19 2. Plaintiffs Argument About The "Loan Advance Agreements" Similarly I gnores The Terms Of Those Agreements And The Relevant Facts 20 PLAINTIFF IS NOT ENTITLED TO SUMMARY JUDGMENT FOR THE ADDITIONAL REASON THAT FACTUAL DISPUTES EXIST CONCERNING WHETHER THE BANKS CAUSED THE ALLEGED DEFAULTS THAT LED THEM TO ACCELERATE THE LOAN ANDIOR CAUSED BVO TO BE UNABLE TO PAY PRINCIPAL BECAME AND 22 CONCLUSION 25 ii TABLE OF AUTHORITIES Cases Page Anglo Irish Bank Corp. Ltaf v. Ashltenazy, 28 Mise.3d 2010 WL 3211830 (Sup. Ct. NY. Co. Aug. 4, 2010) Banc of America Securities LLC v. Solow Building Co. IL LLC, 47 239, 847 N.Y.s_2d 49 Dept. 2007) Banco Popular North Amer. v. Lieberman, T5 460, 905 82 (151 Dept. 2010) Bank of Tokyo-Mitsubishi, Ltd, New York Branch v. Kvaerner, 243 1, 671 905 (151 Dept. 1998) Borrero v. Baturone, 68 666, 891 71 (Isl Dept. 2009Triple Crown Merger Co., Inc. v. Citigroup Global Mkts. Inc., 19 Mise.3d l129(A), 2008 wt. 1970900 (sup. Ce. may 7, 2008) Canterbury Realty and Equip. Corp. v. Poughkeepsie Sav. Bank, 135 102, 524 531 (3d Dept. 1988) 8, 2 Clearview Concrete Products Corp. v. S. Charles Gherardi, Inc., 88 461, 453 750 (2d Dept. 1982) 18 3,25 20 Computer Possibilities Unlimited Inc. v. Mobil Oil Corp., 301 70, 747 468 (15' Dept. 2002) Diamond Castle Partners IVPRC, L.P. v. IAC/lnteractivecorp, 82 421, 918 73 (151 Dept. 2011) DRIQ LLC v. Burlington Ins. Co., 74 693, 905 58 (151 Dept. 2010) FCI Grp., lne. v. City ofNew York, 54 171, 862 352 Dept. 2008) Gannett Co., Inc. v. Tesler, 177 353, 577 248 (lst Dept. 1991) General Trading v. Food Corp., 292 266, 738 845 (151 Dept. 2002) Ginett v. Computer Task Grp., lne., 962 F.2d 1085 (2d Cir. 1992) Harrison Court Assoes. v. 220 Westchester Avenue Assocs., 203 224, 609 653 (201 Dept. 1994) Hotel 2] Mezz Lender LLC v. Mitchell, 63 447, 880 67 (151 Dept. 2009TABLE OF AUTHORITIES |c0nt'd| Page Johnson v. Lebanese Am. Univ., 84 427, 922 57 Dept. 2011) 22 Kooleraire Serv. ana' Installation Corp. v. Bai ofEa'uc. ofthe City ofN1f', 28 101, 320 46 (1971) 6, 7 Liberty Mui. Ins. Co. v. Perfect Knowledge, inc., 299 524, 752 677 (2d Dept. 2002) 10 Lumber Indus., Inc. v. Woodlawn Furniture Corp., 26 924, 274 813 (151 Dept. 1966) 20 Manufacturers Traders Trust Co. v. Sullivan, 188 1023, 592 994, 994-95 (4th Dept. 1992) (collecting cases) 5 Merrill Realty/Carl! Burr, Inc. v. Skinner, 63 590, 483 979 (1984)_ 7 Muzak Corp. v. Hotel Taft Corp., 1 42, 150 171 (1956) 14 North Fork Bank v. ABC Merchant Servs., Inc. 49 701, 853 633 (2d Dept. 2008) 13 Palm Beach Mort. Mgmt., LLC v. Rea' Tulip, LLC, 18 379, 795 559 (15'Dept. 2005) 12 People v. Evans, 94 499, 706 678 (2000) 15 Pfizer, Inc. v. Corp., 348 F. Supp.2d 11 (S.D.N.Y. 2004) 17, 18 Phoenix Acquisition Corp. v. Campeore, Inc., 81 138, 596 752 (1993) 8 Plymouth Capital Co. v. District Court of Elbert Cnty., 955 P.2d 1014 (Colo. 1998) 9 Red Tulip, LLC v. Neiva, 44 204, 842 1 Dept. 2007) 12, 23 Ritt v. Lenox Hill Hosp., 182 560, 582 712 (lst Dept. 1992) 11 Rosenthal Paper Co. v. National Folding Box cf: Paper Co. 226 N.Y. 313 (1919) 10, 17, 18 Smolev v. Carole Hochman Design Grp., Inc., 79 540, 913 79 (151 Dept. 2010) 9 Sokolojfv. Harriman Estates Dev. Corp., 96 409, 729 425 (2001) 18 iv TABLE OF AUTHORITIES gcont'tl| Page Speciai Situations Fund HL L. P. v. Versus Tech., Iac., 227 321, 642 894 (151 Dept. 1996) Sieriirig Nail' Bank v. Biaggi, 47 436, 849 521 (151 Dept. 2008) 12 Surisirie Steak, Salad Seafooci Iac. v. WLM Realty, Irie., 135 891, 522 292 (3d Dept. 1987) Union Free Sch. Dist. No. 7 v. Nowicki, 57 66, 291 679 (Sup. Ct. Westchester Co. 1968) 15 van WagrierAa'ver. Corp. v. S&MEriiers., 67 186, 501 628 (1986) 18 Weiis Fargo Bank NA. v. Gabriel, No. 2011 WL 1748571 (D. Colo. May 6, 2011) 9 Young v. Whiiney, 111 1013, 490 330 (3d Dept. 1985) 6 Other A uri: Restatement (Second) of Contracts 245 6, 7 Restatement (Second) of Contracts, 374(1) 10 Restatement (Third) of Restitution and Unj ust Enrichment, 36(2) 10 siga, NY. Pm. 448 (am Ed.) 15 Rules ce-10. R. Civ. P. 12001) 9 Defendant The Related Companies, L.P. ("Related") submits this memorandum of law in opposition to the motion of plaintiff Hypo Real Estate Capital Corporation ("plaintiff") for partial summary judgment on its First Cause of Action seeking $32,500,000 pursuant to a guaranty (the For the reasons set forth herein, plaintiffs motion - made in the face of this Court's prior ruling rejecting many of its arguments - should be denied, with costs. PRELIMINARY STATENIENTI This motion - made before any discovery has taken place - represents a blatant attempt by plaintiff to circumvent this Court's prior ruling in the companion case with which this action has been consolidated (the Action") that the primary obligor, Base Village Owner, LLC has adequately stated a cause of action for a judgment declaring that plaintiff and the three other banks for which it acts as "Agent" (collectively, "the Banks") repudiated their obligations under their Loan Agreement with and as a result, BVO was relieved of any further obligations thereunder. This Court denied the Banks' motion to dismiss that claim. But although it whispers this fact in a footnote in its brief (at 1), plaintiff neglects to add that- with no more facts than it placed before the Court the last time - plaintiff is once again making many ofthe same arguments that this Court already rejected. Simply stated, just as at this early stage ofthe proceedings this Court denied the Banks' motion to dismiss BVO's claim that the Banks (and not EVO) breached their obligations, it should likewise deny plaintiffs current motion, which is largely based onthe same grounds as its previous one. To do otherwise would result in dramatically different rulings by this Court on virtually the same record. Plaintiff tries to circumvent this insurmountable obstacle to the relief it now requests by arguing that even establishes that it owes no money under the Loan Agreement by reason of the Banks' wrongful actions, Related should nevertheless be required to pay plaintiff the Terms not defined herein have the meanings assigned to them in the accompanying affidavit of Tyler Siegel. amount it is seeking on their behalf. But as plaintiff acknovvledges, in order to be entitled to such payment plaintiff would first have to prove that a "Guaranteed Obligation" (as that term is defined in the Guaranty) exists. The Guaranty defines that term to mean only Loan principal that has "become due arzdpayrtbIe" by BVO under the Loan Agreement. If BVO prevails on its declaratory judgment claim, then because of the Banks' repudiation of the Loan Agreement nothing will have "become due and payable" by BVO thereunder. Plaintiff does not deny that there are deep and vigorous disputes concerning the existence, timing and effect of any such repudiation by the Banks. These disputes preclude summary judgment here because they go to the core of whether the amounts plaintiff novv seeks are a "Guaranteed Obligation." (Point ILA). Plaintiff attempts to persuade this Court that these disputes are irrelevant because (according to plaintiff) the Loan Agreement provides that no breach by the Banks can ever relieve BVO of liability; and to the extent that BVU and Related ever had a right to assert any claim or defense based on such a breach, they waived it in a "Pre-Negotiation Agreement" andfor a series of "Loan Advance Agreements." But this Cotnt already decided most of these issues against plaintiff and the other Banks in connection with its order denying their motion to dismiss BVO's declaratory judgment claim. That prior determination is not only binding here; it is also correct as a matter of lavv. Nothing in the Loan Agreement permits the Banks to enforce it after they have repudiated it, and the Pre-Negotiation Agreement and Loan Advance Agreements preserve the claims and defenses that BVO and Related have asserted both here and in the BVU Action. Thus, none of these arguments enables plaintiff to escape the material factual dispute as to whether any principal ever "bec[a] me due and payable" tmder the Loan Agreement and thereby became a "Guaranteed Obligation" under the Guaranty. (Points IIB and C). If the Court agrees that such issues of fact exist, it should deny plaintiffs motion based 2 on those issues alone. But even in the absence of a factual dispute on this question, plaintiff would not be entitled to summary judgment because there is a separate factual dispute concerning whether the other condition to liability under the Guaranty - a failure by BVO to pay whatever principal became due - was caused by plaintiff and the other Banks. In particular, BVO's declaratory judgment claim includes allegations that plaintiff and the other Banks starved it of cash and caused it to be turable to satisfy its alleged obligations under the Loan Agreement. Those allegations, in turn, form the basis for Related's defense that plaintiff is responsible for any damage it claims to have suffered. As a matter of law, if those allegations are proven then plaintiff may not rely on BVO's alleged failure to satisfy its obligations as a basis for holding Related liable under the Guaranty. Because under the terms of the Guaranty Related cannot be liable in the absence of such a failure, issues of fact concerning whether plaintiff and the other Banks caused that failure would preclude summary judgment here even if there were no dispute that any principal ever "bec[a] me due and payable" under the Loan Agreement. (Point Although the material disputes that exist with respect to either of these issues would preclude summary judgment, the Court need not even reach them (or their implications for the BVO Action, where they lie at the core of the declaratory judgment claim as to which plaintiff has not sought summary judgment) because there is an additional factual dispute that is unique to this action: whether plaintiff and the other Banks prevented the occurrence of the events that, murder the express terms of the Guaranty, would have relieved Related of liability for the amount plaintiff now seeks. Specifically (and as plaintiff admits), Lmder those express terms such liability would have ceased if BVO had obtained bona fide sales contracts for $380 million worth of condominium units in the Project and had made a certain "Land Release Payment." But material fact issues exist as to whether the Banks' failure to provide funds for the construction of 3 a particular portion of the Project ("the 13B Building") prevented BVO from commencing construction of that portion. As detailed below and in the accompanying affidavit, BVO could not have achieved $380 million in sales without constructing the 13B Building. Moreover, under the terms ofthe Loan Agreement, the "Land Release Payment" referenced in the Guaranty could only be made in connection with the sale of a certain parcel of the land within the Project. It was impossible to interest any buyer in (or for any buyer to obtain financing for) a purchase of that land while the Project was in the stalled state created by BVO's inability to begin construction of the 13B Building. As a result, the Banks' failure to md that construction made it impossible to enter into the transaction that would have resulted in the "Land Release Payment." If the Banks materially contributed to the failure of either of the two conditions to Related's release from liability under the Guaranty, then as a matter of law plaintiff may not rely on the non-occurrence of those conditions as a basis for claiming that Related was not released. Because there are factual disputes with respect to both of those conditions., summary judgment is inappropriate regardless of whether any other factual dispute exists. (Point I). FAC TUAL BACKGROUND The relevant facts are set forth in the accompanying affidavit of Tyler Siegel (the "Siegel Affidavit" or "Siegel Aff.") and affirmation of Mark Walfish (the "Walfish Affirmation" or "Walfish the contents of which are incorporated herein by reference. ARGUNIENT I. PLAINTIFF IS NOT ENTITLED TO SUMMARY JUDGMENT BECAUSE ISSUES OF FACT EXIST CONCERNING VVHETI-IER TI-IE BANKS PREVENTED TI-IE OCCURRENCE OF THE EVENTS THAT WOULD HAVE RELIEVED RELATED OF LIABILITY UNDER THE GUARANTY Although material factual disputes concerning various issues that are pending before the Court in the BVO Action (which are discussed in further detail below) preclude summary 4 judgment here, the Court need not reach those issues - or the question of whether it is appropriate to consider (or reconsider) them outside of the BVO Action, in which plaintiff has not sought summary judgment - because there are issues of fact concemin the separate question of whether the Banks "interfered with or prevented the occurrence of" the conditions that (as plaintiff concedes), under the terms of the Guaranty, would have relieved Related of any liability for the amotmts plaintiff now seeks. As a matter of law, if the Banks so acted then Related is "relieved of [its] obligations under" the Guaranty. Manufacturers Traders Trust Co. v. Sullivan, 188 1023, 592 994, 994-95 (4th Dept. 1992) (collecting cases). Specifically, Related's obligations with respect to the $32,500,000 amount at issue on this motion were to be totally extinguished upon plaintiffs receipt of contracts of sale for $3 80 million worth of condominium units in the Proj ect; and the "Land Release Payment" for a parcel known as the "Phase II Land." (Pl. Br. at Guaranty Amendment, As explained in the Siegel Affidavit, in order to have 83 80 million worth of condominium units to sell, had to begin substantial construction of the 13B Building - something that the Banks made it impossible for BVO to do by failing to provide the necessary funds. (Siegel Aff. 1|1[ 44-45). BVO's inability to begin substantial construction of that building also made it impossible to make the "Land Release Payment for the Phase II Land" (the second condition to Related's release from liability for the amount plaintiff now seeks - see Guaranty Amendment, 2). Under the Loan Agreement, that Land Release Payment could be made only in conjunction with "a conveyance of [that land] to a Person other than (which Person may be an affiliate of (Loan Agreement, The Loan Agreement provided for the amount of References to "Pl. Br." are to plaintiffs moving brief References to "Phelps Affidavit" or "Phelps Aff" are to the Affidavit of Jeffrey L. Phelps, submitted with plaintiffs moving papers. References to "Foster Aff." are to the Affinnation of Timothy L. Foster, also submitted with those papers. References to "Loan Agreement," "Guaranty," and "Guaranty Amendment" are to Exhibits 1, 4 and 5 to the Phelps Affidavit, respectively. 2 5 that Land Release Payment to be determined upon such a sale: if the sale were to an affiliate, the amount would be a certain minimum set forth in the Loan Agreement; if it were to a non- aftiliate, it would be the greater of that amount or the actual net proceeds ofthe sale. (td. 8.2.4, Phelps Aff. Exh. 3 (Second Amendment to Loan Agreement), 2.9). But as explained in the Siegel Affidavit, as long as BVO was unable to begin substantial construction ofthe 13B Building the Project was stalled. As long as the Project remained stalled, the parcel was surrounded by uncertainty and thus unattractive to any buyer. And even assuming that a buyer was nevertheless interested in purchasing the parcel, as a practical matter no such buyer (affiliated with BVO or not) could obtain the necessary financing in light of this uncertainty. (Siegel Aff. 1111 46-52). The Banks' failure to provide the funds necessary to begin construction of 13B thus made it impossible to enter into the transaction that would both determine the amount of the Land Release Payment for the Phase 11 Land and generate that payment. Regardless of whether the Banks' conduct was a breach of the Loan Agreement, if that conduct interfered with BVO's ability to obtain the requisite number of sales contracts or to make the relevant Land Release Payment, then as a matter of law that conduct operated to release Related from liability under the Guaranty for the $32,500,000 that plaintiff now seel>1 25 As detailed in the Siegel Affidavit, at all relevant times the Banks aftirmatively led BVO to believe that they intended to comply with their lirnding obligations. (See Siegel Aff. 1111 23, 33). Thus, the fact that the Banks had not yet done so was by no means sufficient to put BVO (or anyone else) on notice that they had in fact determined that they never would. At most, it meant that the Banks were purporting to deliberate concerning their obligations - which is a far cry from having decided to repudiate them altogether. 2? The case law relied upon by plaintiff presupposes that BVU was at that time aware of the Banks' wholesale repudiation of their obligations. See Gannett Co., Inc. v. Tester, 177 353, 577 248, 249 Dept. 1991) ("def`endant specifically waived the aforementioned defenses by confirming the guarantee at a time when he was aware of afiegea' (emphasis added); Clearview Concrete Products Corp. v. S. Charles Gherardt, Inc., 38 461, 466, 453 750, 754 (Ed Dept. 1932) (party "abandoned its rescission rights when - cognizant ofthe #and - it accepted the benefits of the contract and thereby affirmed it") (emphasis added); Lumber Indus., Inc. v. Woodlawn Furniture Corp., 26 924, 925, 274 813, 814-15 Dept. 1966) (where defendants "accepted and even solicited extensions of time to defray their obligations at a time when they were aware ofthe atteged antecedent they "waived" any right to rely on that fraud as a defense) (emphasis added). As set forth above, that is most deiinitely not the case here. 27 As explained in the Siegel Affidavit, these "Loan Advance Agreements" were signed in connection with the Banks' provision of certain funds for the ofthe 13A Building. (See Siegel Aff. 11 17). ln the BVO Action, claims that the Banks provided these funds (even though they had already decided that they would never comply with their obligation to ftuid the construction ofthe 13B Building) because the completion ofthe 13A Building would result in substantial payments to them, and would meanwhile increase the foreclosure value of the Proj ect. Uri; see Foster Aff. Exh. B, '1|1l 36, 51). 20 Banks' unsuccessful motion to dismiss the BVO Action based on documentary evidence. (See Walfish Aff. 111] 4-6 and Exhs. 7-10). This Court has already rejected that argument, and nothing plaintiff has submitted here warrants a different result. (See supra at 15 and n.l 9). Should the Court nevertheless decide to reach the merits of plaintiffs argument, it should once again reject it. As with its assertions concerning the "Pre-Negotiation Agreement," plaintiffs argument about the "Loan Advance Agreements" ignores the fact that Related and BVO contend that at the time of each of these documents they were not aware of the Banks' decision to repudiate their obligations under the Loan Agreement. Under the very case law on which plaintiff relies, the fact that there is (at a minimum) a dispute as to this issue precludes summary judgment based on a finding of waiver. (See supra, n.26). Indeed, the Loan Advance Agreements specifically state that "ro the knowledge of and Related], neither [plaintiff] nor any of the [other Banks] are in default of any of their respective obligations under the Loan Documents." (Phelps Aff. Exhs. 9-21 at 3) (emphasis added). This statement expressly affirms that BVO and Related were unaware of the Banks' prior determination that they were never going to provide funds for the 13B Building, regardless of whether their obligation to provide those funds had become absolute. Moreover, in twelve of the thirteen Loan Advance Agreements the parties specified that this statement "shall not constitute an acknowledgment or confirmation by or Related] that it does not have, and snail not constitute waiver of any claims, eoanterciaints, ojsets, abarernenrs or deductions against or related to any of its obligations under the Loan Documents or otherwise against [any ofthe (See, Phelps Aff. Exh. 10 at 3) (emphasis added)). Although we submit that even without this clarification plaintiff would not have met its burden of proving that the language on which it relies was intended to operate as a waiver or release of any claims or 21 defenses (let alone claims and defenses that are based on allegations that the Banks committed a repudiation that was unknown to BVO or Related at the relevant tirne),23 the clarification - joined to that language by a semicolon - confirms that the parties intended no such thing. IH. PLAINTIFF IS NOT ENTITLED T0 SUMMARY JUDGMENT FOR THE ADDITIONAL REASON THAT FACTUAL DISPUTES EXIST CONCERNING WHETHER THE BANKS CAUSED THE ALLEGED DEFAULTS THAT LED THEM TO ACCELERATE THE LOAN ANDIOR CAUSED BVO TO BE UNABLE TO PAY WHATEVER PRINCIPAL BECAME AND Wholly apart from the foregoing, issues of fact exist concerning the separate question of whether the Banks brought about the events upon which they relied to accelerate the Loan and thereby contend that principal "bec[a]me due and payable"; andfor caused BVO to be unable to pay whatever principal did "become due and payable." In the BVO Action, BVO alleges that the Banks starved it of cash and rendered it unable to continue making the payments and allocations that the Agreement would otherwise require. (Foster Aff. E1-th. B, 6, 51; Siegel Aff. 111] 34-38, 46-5 6). Because the Banks have not moved for summary judgment in that Action, for purposes of this motion the Court must assume that there are fact issues concerning whether or not the Banks caused BVU to be unable to perform the obligations as to which BVO allegedly defaulted. Those fact issues preclude judgment here. (See Foster Aff. Exh. F,1l say" Specifically, if (as BVO claims) the Banks caused BVO to be unable to make the payments and allocations called for under the Loan Agreement, then as a matter of law Related's obligations under the Guaranty are discharged. As the Canterbury court explained: A promisee who prevents the promisor from being able to perform the promise can not maintain suit for nonperforrnance, he discharges the promisor from duty. 28 See Johnson v. Lebanese Am. Univ., S4 421430, 922 57, 60 Dept. 2011) (defendants invoking release "bore the burden of establishing that the release was unambiguous as a matter of law and that there were no material issues of fact regarding whether it precluded the claims asserted by plaintiff in his complaint"). 29 It is not now open to plaintiff to attempt to address those issues on reply. (See supra, n. 14). 22 There are cases, also, in which a promisee discharges the promisor from his contractual duty by nnjusrly causing the happening ofa condition ofrhar dnzy . Canterbury, 135 at 107, 524 at 535 (collecting eases; citations and internal quotations omitted; emphasis in Canterbury). Here, Related's duty to make payment under the Guaranty was conditioned not only on the Loan principal having "become due and payable" under the Loan Agreement, but also on BVO having failed to pa[y] [it] when due." (Guaranty, 1.4). But BVO claims that the Banks caused it to be unable to make the payments and advances as to which plaintiff now claim BVU defaulted. (See Siegel Aff. 1111 34-38, 46-56). If BVO's contentions are correct, then the Banks are guilty of precipitating the very alleged defaults that they claim triggered liability tuider the Guaranty - with the result that, under Canterbury, they cannot rely on those alleged defaults as a basis for such liability. Cf Red Tulip6-7 (noting reasoning, but finding it inapplicable where - unlike here - "the debt was already in default" when lender acted and lender was "within his rights"; also noting that fully- -developed record "does not support a finding that [lender] wrongfully caused [borrower's] default or some other condition precedent that led to acceleration of the debt"). The analysis is no different if plaintiffs claim that the principal of the "Facility Loan" became due on 1, 2010 is considered in isolation. Under the Loan Agreement, that principal papa si 74 mi11iap)3? was to be paid using certain "Required Land Payments." (Siegel Aff. 1l1l 53-54; see Phelps Aff. Exh_ 3 (Second Amendment to Loan Agreement), 2.4). Such "Land Release Payments," in turn, were to be made upon the sale This amount is less than the $194,680,196 that plaintiff demanded from Related in the only "Demand Letter" it claims to have sent with respect to the Guaranty. (See Foster Aff Exh. A (Complaint), 1[ 36; contrary to plaintiffs assertions, Exhibit 23 to its moving papers is not a copy of the "Demand Letter" that is described in its Complaint or attached thereto as an exhibit). To be entitled to the amount sought in that letter - which exceeds the amount of the Facility Loan by nearly as much as plaintiff seeks on this motion - plaintiff would have to prove (among other things) not only that the Facility Loan matured, but also that the rest of the Loan was properly accelerated. 31] 23 (either to an affiliate of BVO or to a third party) of certain parcels of` the land on which the Project was being built (in particular, the "Phase II Land" discussed above and three additional parcels: th "Phase IV Land," the "Lot 6 Land and Lot 7 Land," and the "Lot 5 Land"). (Siegel Aff". 1147; see Loan Agreement, 8.2.4, Phelps Aff. Exh. 3, 2.9). The Loan Agreement provided for the amount of each "Land Release Payment" to be determined upon such a sale - if the sale were made to an affiliate, the associated "Land Release Payment" would be an amount specified in the Loan Agreement; if the sale were to a non-affiliate, it would be the greater of that amount or the net proceeds ofthe sale. (Loan Agreement, see Phelps Aff. Exh. 3, 2.9). The minimum "Land Release Payments" for the first three of these parcels totaled over $178 million - more than enough to pay off the entire Facility principal. (Phelps Aff. Exh. 3, 2.9). These parcels, however, could not be sold while the Project remained stalled due to the Banks' failure to fund the construction of the 13B Building. (Siegel Aff. 51-52). Moreover, with respect to the "Phase "Lot "Lot and "Lot 5" parcels there was an additional impediment to sale: under an Ordinance passed by the Town of Snowmass Village in 2004, no building permit could issue for any of these parcels until "substantial constniction ha[d] been begurl" onthe 13B Building. (Id. 43-50 and Exh. 6). This inability to obtain building permits - which would continue indefinitely until such construction began - made a sale of those parcels doubly impracticable. (Siegel Aff. 111] 51-52). BVO could not begin construction ofthe 13B Building because the Banks failed to provide the necessary funds. (See tal 29-33, 45). This, in turn, prevented the sale of the relevant parcels to anyone (affiliated or not). Without such a sale, the Land Release Payments that would have paid the principal ofthe Facility Loan (which BVU did not separately have the funds to pay) could not be made. (Siegel Aff. 53-56). 24 ln light of these facts, there is (at the very least) a fact issue as to whether the conduct of plaintiff and the other Banks brought about BVO's failure to pay the Facility principal. There is also a fact issue as to whether the Banks' actions in starving BYO of funds rendered it unable to fund the Amounts" as to which the Banks claim BVO defaulted (causing plaintiff to purport to accelerate the Loan). (Siegel Aff. 1111 34-38). Under Canterbury, a finding against the Banks on these issues would mean that no failure by BVO to comply with these alleged obligations could trigger the Guaranty. Accordingly, plaintiffs claims in this action require plaintiff to defeat BVO's (and Related's) allegations that the Banks' conduct precipitated the alleged defaults that form the basis for those claims.3 CONCLUSION For the reasons set forth above and in the accompanying affidavits, plaintiff motion for summary judgment should be denied, with costs. Dated: New York, New York November 10, 2011 LLP By. Mark Walfish Adrierme B. Koch H. Seiji Newman Kristina Pieper Trautmann 605 Third Avenue New York, NY 10158 212 953-6000 Attorneys for Defendant The Related Companies, LP. -. Plaintiff has not even attempted to argue on this motion that there are no factual disputes with respect to those allegations. Indeed, its "Statement of Undisputed Material Facts" does not address those allegations at all. Plaintiffs tacit acknowledgement that it cannot now dispose of all of the factual issues raised by those allegations renders summaryjudgment improper wholly apart from the existence of any fact questions regarding the Banks' material breach and the impact thereof. See Manufacturers Traders Trust Co., 183 at 1023, 592 at 994-95 (plaintiff lender not entitled to summary judgment on guaranties because "factual issues exist whether plaintiff interfered with or prevented the occun'ence of conditions which would have terminated defendants' liability under the guaranties and whether, as a result, defendants are relieved of their obligations under those guaranties"}; see also supra, notes 3-5 and cases cited therein. 31 25