45 John NY LLC v. HS 45 John LLC

1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------X
In re: 	: 	Chapter 11
:
HS 45 JOHN LLC, 	: 	Case No. 15-10368 (SHL)
:
Debtor. 	:
------------------------------------------------------X
45 JOHN NY, LLC, 	: 	Adv. Proc. No. 16-01180 (SHL)
:
Plaintiff, 	:
:
-against- 	:
:
HS 45 JOHN LLC, 	:
:
Defendant. 	:
------------------------------------------------------X
MEMORANDUM OF DECISION
A P P E A R A N C E S:
GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP
Counsel for HS 45 John LLC
1501 Broadway, 22nd Floor
New York, NY 10036
By: 	J. Ted Donovan, Esq.
SHER TREMONTE LLP
Counsel for 45 John NY, LLC
80 Broad Street, Suite 1301
New York, NY 10004
By: 	Justin M. Sher, Esq.
Mark Cuccaro, Esq.
SEAN H. LANE,
UNITED STATES BANKRUPTCY JUDGE
Before the Court is the motion of HS 45 John LLC (the “Defendant” or the “Debtor”) for
summary judgment dismissing this adversary proceeding [ECF No. 9] (the “Motion”), and the
motion of 45 John NY, LLC (the “Plaintiff” or the “Purchaser”) opposing the Motion and cross-
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 1 of 25

2
moving for summary judgment [ECF No. 16] (the “Cross-Motion” and, together with the
Motion, the “Motions”). For the reasons stated below, the Court denies both Motions.
BACKGROUND
To understand the present Motions, some background on Debtor’s related bankruptcy
case is necessary. The Debtor filed for Chapter 11 relief on February 20, 2015. Defendant’s
Response to Plaintiff’s Statement of Allegedly Undisputed Facts (“Undisputed Facts”) ¶ 1 [ECF
No. 18]. Debtor was the proposed purchaser of the real property located at 45 John Street, New
York, NY (the “Property”) under a September 19, 2014 contract with 45 John Lofts LLC, the
owner at that time. Undisputed Facts ¶¶ 2–3. The Debtor alleges that after making a down
payment of $14.33 million toward the $65.9 million purchase price, the principals of 45 John
Lofts LLC, Chaim Miller and Sam Sprei, misappropriated the bulk of the deposit and then failed
to close. Motion ¶ 7. The resulting default interest and potential foreclosure action motivated
Debtor’s Chapter 11 filing. Id. ¶ 8.
In its resolution of the bankruptcy, the Debtor together with 45 John Lofts LLC
(collectively the “Sellers”) agreed to sell the property to the Purchaser. Cross-Motion at 2;
Undisputed Facts ¶ 3. The parties entered into an Asset Purchase Agreement, dated October 19,
2015 (the “APA”) [ECF 1-1], for the sale and purchase of the Property. Undisputed Facts ¶ 3.
The APA set a purchase price of $73M. APA § 3.1. For the purposes of this adversary
proceeding, the relevant provisions of the APA include the following definitions and
representations:
- 	“Debtor and 45 John Lofts collectively, the ‘Seller’ . . . .” (APA at 1);
- 	“The [Property] is sold and shall be conveyed free and clear of all claims, liens, taxes,
and encumbrances of any kind or nature whatsoever, to the fullest extent permitted under
11 U.S.C. § 363 (b) and (f) . . . .” (APA § 2.1);
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 2 of 25

3
- 	“The [Property] is currently vacant and no person or entity has any right or option to
lease or acquire any portion thereof.” (APA § 7.1.3); and
- 	“Seller has not entered into any leases, licenses or other occupancy agreements, or any
service contracts or other contracts or agreements affecting any portion of the
[Property].” (APA § 7.1.5).
The APA was approved by this Court pursuant to the Order Confirming Debtor’s Chapter 11
Plan Of Reorganization As Supplemented And Approving The Sale Of Real Property At 45 John
Street, New York To 45 NY LLC Free And Clear Of All Claims, Liens, Taxes And Non-Permitted
Encumbrances dated December 22, 2015 (the “Approval Order”) [Case No. 15-10368, ECF No.
184].
Purchaser closed on the Property on January 15, 2016 (the “Closing”). Motion ¶ 9.
Before closing on the Property, the Purchaser conducted on-site due diligence during which it
encountered a cell tower structure on the Property (the “Cell Tower”). Undisputed Facts ¶ 8. As
it turned out, an earlier fee owner of the Property had entered into an N.Y. Structure Lease
Agreement, dated December 14, 2004 (the “Cell Tower Lease”), with Lin Cellular
Communications Corporation (NY), LLC, which subsequently became Cingular Wireless PCS
LLC (also known as AT&T Wireless) (hereinafter “AT&T”). Undisputed Facts ¶ 9. On or
around the date of the Closing (January 15, 2016), the parties established an escrow of $25,000
to be held by “Kevin Nash, Esq. of Goldberg Weprin Finkel Goldstein LLP, as disbursing agent
under the Plan . . . pending resolution of the motion to terminate or reject the [AT&T] Cell
Tower Lease,” and memorialized by an “Escrow Receipt.” Complaint to Recover Money From
Debtor Ex. B (the “Escrow Agreement”) [ECF No. 1]. The parties dispute what was known by
whom regarding the Cell Tower Lease at the time of the Closing, what representations were
made regarding any planned removal of the Cell Tower, the purpose and scope of the Escrow
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 3 of 25

4
Agreement, and the impact of the Cell Tower on the condition of the Property. See Undisputed
Facts.
Ultimately, the Debtor filed Debtor’s Motion To Terminate Cell Tower Lease Or
Alternatively To Reject Cell Tower Lease (the “Rejection Motion”) [Case No. 15-10368, ECF
No. 188]. That Rejection Motion was opposed by AT&T. See AT&T’s (A) Objection To
Debtor’s Motion To Terminate Cell Tower Lease or Alternatively To Reject Cell Tower Lease
And (B) Motion Pursuant To FRCP 60(B) For Relief From Sale Order (the “Rejection
Objection”) [Case No. 15-10368, ECF No. 193]. In late June 2016, the Court held a hearing on
the Rejection Motion (the “Rejection Hearing”), at which time the Court denied the Rejection
Motion and granted AT&T’s requested relief under Rule 60(b) of the Federal Rules of Civil
Procedure (“FRCP”). See H’rg. Tr. [Case No. 15-10368, ECF No. 223]. The Court
memorialized its ruling with a subsequent order dated July 11, 2016 (the “Rejection Order”)
[Case No. 15-10368, ECF No. 221]. No appeal was filed from the Rejection Order.
At the Rejection Hearing, the Court touched on the issue of potential Debtor liability
related to the Cell Tower Lease as it attempted to ascertain the parties’ views on their respective
rights and any anticipated additional litigation. After the Court explained that its understanding
at that time was that such liability was limited to the $25,000 held in escrow, the Court requested
confirmation of its understanding from Debtor’s counsel while inviting “anybody else [to] chime
in if they disagree[d] or . . . want[ed] to be heard on th[e] issue.” Hr’g. Tr. 14:18–20. Debtor’s
counsel responded affirmatively and Purchaser’s counsel said nothing. Hr’g. Tr. 14:18–15:7.
The Court followed up on these comments with a similar observation in the Rejection Order,
while explicitly preserving AT&T and Purchaser’s “rights, claims, and defenses under the Cell
Tower Lease and applicable non-bankruptcy law . . . .” Rejection Order at 2. The parties dispute
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 4 of 25

5
the significance of the Court’s statements as well as each other’s responses (or lack thereof).
These disputes are at the core of the Motion and Cross-Motion.
On July 6, 2016, Purchaser commenced the instant adversary proceeding asserting claims
against Debtor for breach of contract under the APA. See Complaint to Recover Money From
Debtor (the “Complaint”) at 4, ¶ 17 [ECF No. 1]. In the Complaint, Purchaser alleges that
Debtor breached the APA by (1) failing to ensure the Property was “free and clear of all claims,
liens, taxes and encumbrances of any kind or nature whatsoever” (APA § 2.1); (2) failing to
ensure the Property was “vacant and no person or entity ha[d] any right or option to lease or
acquire any portion thereof” (APA § 7.1.30); and (3) falsely representing that it had “not entered
into any leases, licenses, or other occupancy agreements, or any service contracts or other
contracts or agreements affecting any portion of the John Street Property” (APA § 7.1.5).
Purchaser contends that the result of these alleged breaches of the APA is that Purchaser is
unable to use the premises as intended. Complaint ¶ 15; see id. ¶ 14 (alleging that the continuing
presence of the Cell Tower has “caused considerable damage” to the premises); see Declaration
of Vlad Tsirkin (“Tsirkin Decl.”) ¶ 13 [ECF No. 16-8]. Purchaser specifically requests that the
Court award damages of $500,000 (Complaint ¶ 20), which matches its report of AT&T’s
estimated cost to remove or relocate the Cell Tower (Complaint ¶ 17). Purchaser contends that it
is now entitled to prevail on its claims as a matter of law. See Cross-Motion at 1.
Debtor does not deny the existence of a contract or that Purchaser upheld its performance
obligations by paying the purchase price. Rather, Debtor challenges the breach allegations and
offers several affirmative defenses that it argues should result in summary judgment in its favor.
Specifically, Debtor argues that Purchaser waived its contractual rights to sue for breach of the
APA by its actions in relation to the Rejection Hearing (including the creation of the escrow),
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 5 of 25

6
and that the Court’s Rejection Order precludes Purchaser’s Complaint under the doctrines of res
judicata, collateral estoppel, and the law of the case. Motion ¶ 22; Debtor’s Reply Memorandum
of Law in Further Support of Motion for Summary Judgment Dismissing (“Debtor Reply and
Opp.”) at 4–6 [ECF No. 17]. Debtor asserts that if it does not prevail on its affirmative defenses,
the Court should deny summary judgment to the Purchaser because Debtor has not breached
APA Sections 7.1.5 or 7.1.3, and because in regards to Purchaser’s rights to sue, the APA and
Escrow Agreement read together are at best ambiguous. Debtor Reply and Opp. at 4.
DISCUSSION
A. Applicable Standards
1. 	Summary Judgment
FRCP 56 governs the granting of summary judgment and is made applicable to this
adversary proceeding under Rule 7056 of the Federal Rules of Bankruptcy Procedure. Summary
judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, show that there is no genuine issue as to any material
fact and that the [movant] is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986). “The party seeking summary judgment bears the burden of
establishing that no genuine issue of material fact exists and that the undisputed facts establish
[the movant’s] right to judgment as a matter of law.” Rodriguez v. City of New York, 72 F.3d
1051, 1060–61 (2d Cir.1995); see McHale v. Boulder Capital LLC (In re 1031 Tax Grp., LLC),
439 B.R. 47, 58 (Bankr. S.D.N.Y. 2010).
If the movant carries this initial burden, the nonmoving party must set forth specific facts
that show triable issues, and cannot rely on pleadings containing mere allegations or denials. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87 (1986); see also Lipton
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 6 of 25

7
v. Nature Co., 71 F.3d 464, 469 (2d Cir. 1995); In re: Residential Capital, LLC, 533 B.R. 379,
395–96 (Bankr. S.D.N.Y. 2015). “[T]he mere existence of some alleged factual dispute between
the parties will not defeat an otherwise properly supported motion for summary judgment . . . .”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986) (emphasis in original). If the
Court determines that “the record taken as a whole could not lead a rational trier of fact to find
for the non-moving party, there is no genuine issue for trial.” Matsushita, 475 U.S. at 587
(citations omitted). “In deciding whether material factual issues exist, all ambiguities must be
resolved and all reasonable inferences must be drawn in favor of the nonmoving party.” In re
Ampal-Am. Israel Corp., No. 12-13689 (SMB), 2015 WL 5176395, at *10 (Bankr. S.D.N.Y.
Sept. 2, 2015), aff’d sub nom. In re: Ampal-American Israel Corp., No. 15-CV-7949 (JSR), 2016
WL 859352 (S.D.N.Y. Feb. 28, 2016), aff’d sub nom. In re Ampal-Am. Israel Corp., 677 F.
App’x 5 (2d Cir. 2017) (citing Matsushita, 475 U.S. at 587). The Court may also grant some but
not all of the relief requested in a summary judgment motion if it finds disputed issues of fact as
to some of the issues presented. In re: Residential Capital, 533 B.R. at 395 (citing Fed.R.Civ.P.
56(g)).
2. 	Breach of Contract
By its terms, the APA is governed by New York law. APA § 17. To establish a claim
for breach of contract under New York law, a plaintiff must prove four elements: “(1) the
existence of a contract, (2) performance of the contract by one party, (3) breach by the other
party, and (4) damages suffered as a result of the breach.” Glob. Packaging Servs., LLC v. Glob.
Printing & Packaging, No. 15-CV-7747 (NSR), 2017 WL 1232731, at *3 (S.D.N.Y. Mar. 31,
2017) (citing Johnson v. Nextel Commc’ns, Inc., 660 F.3d 131, 142 (2d Cir. 2011)).
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 7 of 25

8
Under New York law, “the interpretation of a contract is a question of law that may be
properly decided on a motion for summary judgment, provided the language of the contract at
issue is clear, not ambiguous. In re: Residential Capital, 533 B.R. at 398 (collecting cases).
“Thus, ‘[i]n a dispute over the meaning of a contract, the threshold question is whether the
contract is ambiguous…. When an agreement is unambiguous on its face, it must be enforced
according to the plain meaning of its terms.’” In re DPH Holdings Corp., 553 B.R. 20, 27
(Bankr. S.D.N.Y. 2016) (quoting Lockheed Martin Corp. v. Retail Holdings, N.V., 639 F.3d 63,
69 (2d Cir. 2011)) (alteration in original) (omission in original). “[C]ontract language is
ambiguous if it is reasonably susceptible to more than one meaning.” In re: Residential Capital,
533 B.R. at 398 (internal quotations omitted). “The language of a contract is not made
ambiguous simply because the parties urge different interpretations in the litigation, nor does
ambiguity exi[s]t where one party’s view strains the contract language beyond its reasonable and
ordinary meaning . . . or where ‘ambiguity’ emanates not from the language used in the contract
but, rather, from a party’s subjective perception of its terms.” In re DPH Holdings Corp., 553
B.R. at 27 (citations omitted). Finally, “‘[t]o the extent the moving party’s case hinges on
ambiguous contract language, summary judgment may be granted only if the ambiguities may be
resolved through extrinsic evidence that is itself capable of only one interpretation, or where
there is no extrinsic evidence that would support a resolution of these ambiguities in favor of the
nonmoving party’s case.’” In re Old Carco LLC, 538 B.R. 674, 681 (Bankr. S.D.N.Y. 2015)
(quoting Topps Co. v. Cadbury Stani S.A.I.C., 526 F.3d 63, 68 (2d Cir. 2008)).
B. Debtor’s Alleged Breaches
Purchaser alleges three breaches of the APA, all stemming from the Cell Tower and Cell
Tower Lease.
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 8 of 25

9
The first alleged breach involves APA Section 2.1, which states that “[t]he John Street
Property is sold and shall be conveyed free and clear of all claims, liens, taxes and encumbrances
of any kind or nature whatsoever, to the fullest extent permitted under 11 U.S.C. § 363(b) and (f)
. . . .” APA § 2.1. This standard bankruptcy sale language, written in parallel to the language of
the cited Bankruptcy Code provision, is clear and unambiguous on its face. Based on the
undisputed facts, the continuing validity of the Cell Tower Lease places the Debtor in breach of
this provision.
Second, Purchaser claims that Debtor breached APA Section 7.1.5. That Section, in
relevant part, states that “Seller has not entered any leases . . . affecting any portion of the John
Street Property.” Debtor counters that it “was entirely accurate in this statement, as the Debtor
was not a party to the Cell Tower Lease, which is dated 2004, some ten years before the Debtor
became a contract vendee of the Property.” Debtor Reply and Opp. at 4–5. As the text of
Section 7.1.5 is unambiguous, and the Debtor did not enter into Cell Tower Lease, the Debtor
would appear at first blush to prevail on this claim.
However, Section 7.1.5 actually represents that not only the Debtor, but also 45 John
Lofts, LLC, the entity controlled by Chaim Miller and Sam Sprei, had not entered “any leases . . .
affecting any portion of the John Street Property.” APA § 7.1.5; see APA at 1 (defining “Seller”
as “Debtor and 45 John Lofts collectively”). Purchaser correctly pointed out that “the Cell
Tower Lease ran with the [Property]” Plaintiff’s Memorandum of Law in Reply To Debtor’s
Opposition to Plaintiff’s Motion for Summary Judgment (“Purchaser Reply”) at 4 [ECF No. 20]1 .
The Lease reads: “[t]he terms and conditions contained in this Agreement will run with the
1 	The Court cites to the earlier filings in the main bankruptcy to underscore to readers the level of confusion
and disagreement regarding the facts in this case, not as the basis for its resolution of the Motions.
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 9 of 25

10
Property and bind and inure to the benefit of the parties, their respective heirs, executors,
administrators, successors and assigns.” Purchaser Reply at 4 n.2 (quoting Cell Tower Lease §
22(c)). While Debtor never actually acquired the Property, it is undisputed that 45 John Lofts,
LLC was the owner prior to the Closing.2 Given the undisputed facts, therefore, 45 John Lofts,
LLC—and accordingly the “Seller” as defined under the APA—was in breach of Section 7.1.5 at
the date the contract was signed.3
Purchaser’s third breach allegation relies on APA Section 7.1.3, which states that “the
John Street Property is currently vacant and no person or entity has any right or option to lease or
acquire any portion thereof.” APA § 7.1.3. Debtor argues that this representation was true as
“the import and intent of this representation was that there were no people residing as tenants in
the building.” Debtor Reply and Opp. at 5. The Court finds this provision to be clear on its face
and in support of Purchaser’s interpretation. By use of the words “person or entity” the contract
clearly contemplates that a business (such as AT&T) as well as an individual might lease space
within the building. APA § 7.1.3. By use of the words “any portion thereof,” the contract left
open-ended the nature of the “right or option to lease or acquire” beyond the traditional tenancy
of an apartment or office unit within the building. Id.; see In re: Residential Capital, 533 B.R. at
399 (intent “must be gleaned from within the four corners” of the written instrument).
2 	Moreover, in its Rejection Objection filed prior to the Rejection Hearing, AT&T informed this Court that it
remained current on its rent payments under the Lease to the “Landlord of record as of February 2016,” noting that
from July 2014 to February 2015, its checks were cashed “by either SoftStone Development on behalf of 45 John
Lofts LLC or by 45 John Lofts LLC directly . . . .” Rejection Objection ¶ 14. Even AT&T is unclear what entity
was cashing its checks over the subsequent year. See id.
3 	The Court notes that the APA provides no guidance as to the sharing of liability between selling parties in
such a situation—by contrast to purchasing parties—and neither party involved in the current adversary proceeding
has discussed the issue in any briefing. See APA § 21 (“If Purchaser consists of two or more parties, the liability of
such parties shall be joint and several.”) (emphasis added).
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 10 of 25

11
Notwithstanding the breach of these three APA provisions, summary judgment for the
Purchaser is not appropriate because Defendant has raised material questions of fact regarding
the effect of the Escrow Agreement and its waiver defense. Specifically, Debtor argues that the
Purchaser’s rights to sue under the APA were modified and/or waived by the Escrow Agreement.
That Agreement in its entirety is only a single paragraph and reads as follows:
Escrow Receipt: The undersigned Kevin Nash, Esq. of Goldberg Weprin Finkel
Goldstein LLP, as disbursing agent under the Plan shall hold the sum of $25,000 in
escrow (the “Escrow”) pending resolution of the motion to terminate or reject the
[AT&T] Cell Tower Lease (the “Lease”). The motion to terminate or reject the
Lease will be filed within 10 days of the date hereof for a hearing at the first
available date. The escrow shall remain in place for a period of no more than 90
days and may be used to fund any resolution of the [AT&T] claim. In the event the
Lease is not terminated and the equipment is not removed (at no cost to Purchaser),
within 90 days, the escrow agent will turn over the Escrow to Purchaser without
any further notice [of] delay.
Escrow Agreement. The parties offer competing interpretations of the purpose and intended
reach of the Escrow Agreement. Debtor alleges that the Escrow Agreement was intended to
establish the $25,000 as a cap on all potential Debtor liability related to the Cell Tower Lease.
Motion ¶¶ 2–5. In contrast, Purchaser contends that the escrow was only “intended to cover the
Plaintiff’s attorneys fees’ [sic] in connection with the removal of the Cell Tower structure” and
was neither “a cap on damages” nor “Plaintiff’s sole remedy.” Cross-Motion at 3; Tsirkin Decl.
¶¶ 10–11.4
The Court finds the Escrow Agreement to be ambiguously written and potentially
supportive of either parties’ interpretation. The Escrow Agreement dictates clearly the
conditions upon which the disbursing agent is to turn over the escrow to Purchaser, but nothing
4 	Significantly, Purchaser also argues that the Escrow Agreement itself was not a valid modification of the
contract and therefore should not impact the Court’s analysis of the Section 2.1 breach allegation. Purchaser Reply
at 4–5. As resolution of this argument is inextricably linked to Debtor’s waiver defense, the Court analyzes both
together below. As explained in that analysis, the Court finds it appropriate to consider the Escrow Agreement for
purposes of both Motions for summary judgment.
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 11 of 25

12
else. It makes no mention of attorneys’ fees, limits, caps, remedies, or damages of any kind. A
reasonably intelligent person might extrapolate not only the two proposed interpretations, but
several others as well. See In re DPH Holdings Corp., 553 B.R. at 26 (“Under New York law, a
contract is ambiguous if its terms could suggest more than one meaning when viewed objectively
by a reasonably intelligent person . . . .”) (quoting Chesapeake Energy Corp. v. The Bank of New
York Mellon Trust Co., N.A., 773 F.3d 110, 113–14 (2d Cir.2015)).
Summary judgment based on the Escrow Agreement might still be warranted “if the
[Escrow Agreement’s] ambiguities may be resolved through extrinsic evidence that is itself
capable of only one interpretation . . . .” In re Old Carco LLC, 538 B.R. at 681 (quoting Topps
Co., 526 F.3d at 68). But the extrinsic evidence here is just as ambiguous as the text itself.
Purchaser submitted the Declaration of its Chief Financial Officer. See Tsirkin Decl. But the
CFO’s statements here are nothing more than bald assertions of intent, without explanation of the
basis of his knowledge, and met by direct denials. See Undisputed Facts ¶¶ 10–11. Debtor
responds first by observing that Purchaser was aware of the existence of the Cell Tower prior to
Closing, and although it had the “right under the APA to postpone the closing . . . , it did not do
so, electing to close immediately instead.” Debtor Reply and Opp. at 5; Undisputed Facts ¶ 8.
Second, Debtor highlights Purchaser’s silence during the Rejection Hearing regarding the Cell
Tower Lease and any related liability in the face of repeated reference to the issues and
questioning by the Court5 as well as a statement filed by the Debtor prior to the Rejection
Hearing.6 Altogether, these competing facts offer no improved clarity.
5 	Hr’g. Tr. 11:23–12:9, 14:4–8; 14:17–15:5, 16:16–23, 18:3–10.
6 	The statement reads:
At the request of the Buyer, an escrow of $25,000 was established at closing to cover issues arising
in connection with the Cell Tower Lease. Beyond the escrow, the Debtor has no liability to the
Buyer. Additionally as requested, the Debtor moved to terminate the cell tower lease in view of the
prolonged non-payment of rents, or, alternatively, to reject the cell tower lease with the accrued
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 12 of 25

13
In addition to the lack of clarity about the meaning of the Escrow Agreement, the factual
picture is further muddied by the “no modification” clause in the APA. APA § 19. That clause
dictates that the “APA may not be modified, changed, supplemented or terminated, nor may any
obligations hereunder be waived, except by written instrument signed by the party to be charged
or by its agent duly authorized in writing or as otherwise expressly permitted herein.” Id.
Purchaser relies on the “no modification” clause to challenge the Escrow Agreement’s validity as
a modification of the APA. Purchaser Reply at 4–5; Motion ¶¶ 2–5. The Escrow Agreement
was signed only by Kevin Nash, counsel to the Debtor, and not by any representative of the
Purchaser, supporting the notion that the Escrow Agreement may simply be an escrow
arrangement rather than a binding contract modification. See, e.g., Argilus, LLC v. PNC Fin.
Servs. Grp., Inc., 419 F. App’x 115, 118–119 (2d Cir. 2011) (holding that an unsigned memo
accompanying an executed confidentiality agreement could not validly modify that agreement in
contravention of a similar no waiver or modification clause).
But “no modification” or “no waiver” clauses can themselves be waived and the
competing factual narratives presented by the parties raise that possibility here. See Luitpold
Pharm. 784 F.3d at 95 (citing 510 Joint Venture v. Solcoor, Inc., 177 A.D.2d 465, 575 N.Y.S.2d
897, 899 (2d Dep’t 1991)). Counting the facts in favor of the non-moving parties then, neither
side carries the burden to triumph on its own summary judgment motion. Given the questions
raised as to the nature of the Escrow Agreement and, therefore, what the parties believed was at
stake at the Rejection Hearing, further development of the factual record is required.
arrears to be offset against possible rejection damages. That motion remains pending before the
Court, and is now being pursued by counsel for the Buyer.
Debtor’s Statement With Respect To the Cell Tower, June 6, 2016 ¶ 4 [Case No. 15-10368, ECF No. 213].
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 13 of 25

14
C. Waiver
Under New York law, “[a] breach of contract may be waived by the non-breaching
party.” Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of New Jersey, Inc., 448 F.3d
573, 585–86 (2d Cir. 2006) (citations omitted). Waiver requires that a contractual right be
“knowingly, voluntarily and intentionally abandoned.” Luitpold Pharm., Inc. v. Ed. Geistlich
Sohne A.G. Fur Chemische Industrie, 784 F.3d 78, 95 (2d Cir. 2015) (quoting Fundamental
Portfolio Advisors, Inc. v. Tocqueville Asset Mgmt., L.P., 7 N.Y.3d 96, 104 (2006)); see Am. Int’l
Grp. Europe S.A. (Italy) v. Franco Vago Int’l, Inc., 756 F. Supp. 2d 369, 380 (S.D.N.Y. 2010)
(“A party has waived a contractual right when it voluntarily and intentionally abandons the
enforcement of that right.”) (citations omitted). “[W]aiver should not be lightly presumed and
must be based on a clear manifestation of intent to relinquish a contractual protection.” Luitpold
Pharm. 784 F.3d at 95 (quoting Fundamental Portfolio Advisors, 7 N.Y.3d at 104); Royal Park
Investments SA/NV v. Deutsche Bank Nat’l Tr. Co., No. 14CV04394AJNBCM, 2016 WL
4613390, at *15 (S.D.N.Y. Aug. 31, 2016) (same). “‘[M]ere silence, oversight or
thoughtlessness in failing to object’ is insufficient to support an inference of waiver.” Luitpold
Pharm., 784 F.3d at 95 (quoting Courtney–Clarke v. Rizzoli Int’l Publ’ns, Inc., 251 A.D.2d 13
(1st Dep’t 1998)); Beth Israel, 448 F.3d at 586 (same); Am. Int'l Grp., 756 F. Supp. 2d at 380
(same).
Waiver “is essentially a matter of intent which must be proved.” Beth Israel, 448 F.3d at
585 (quoting Jefpaul Garage Corp. v. Presbyterian Hosp., 61 N.Y.2d 442, 446 (1984)). “[T]he
intent to waive is usually a question of fact.” Id. (quoting Jefpaul Garage, 61 N.Y.2d at 448)
(alteration in original); see McDarren v. Marvel Entm’t Grp., Inc., No. 94 CIV. 0910 (LMM),
1995 WL 214482, at *5 (S.D.N.Y. Apr. 11, 1995) (“An implied waiver is invariably a matter of
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 14 of 25

15
intention and, therefore, an issue of fact.”) (citations omitted). Accordingly, “where a waiver is
not express, but found in the acts of a party, summary judgment is not appropriate.” McDarren,
No. 94 CIV. 0910 (LMM), 1995 WL 214482, at *5 (citing Vernon Lumber Corp. v. Harcen
Constr. Co., 155 F.2d 348, 349 (2d Cir.1946)).
Here, Debtor does not argue that Purchaser has explicitly waived any of its contractual
rights. Debtor argues instead that Purchaser implicitly waived its claims for breach of contract
under the APA by (1) remaining silent in the face of repeated statements by the Court and Debtor
at the Rejection Hearing regarding its rights under the APA; and (2) failing to respond when the
Court directly questioned Debtor and invited any other party to chime in on the issue. Motion ¶¶
23–28.
There are facts that lend support to Debtor’s position. There is no question that, on the
day of the Rejection Hearing, the Court repeatedly made plain its understanding of the Escrow
Agreement. Hr’g. Tr. 11:23–12:9, 14:4–8; 14:17–15:5, 16:16–23, 18:3–10. While the Court
directed its question on the topic to the Debtor, it also clearly welcomed any other party to
“chime in” if they disagreed with the Debtor’s response. Hr’g. Tr. 14:18–20. Moreover,
Counsel for the Purchaser was not just present and observing the proceedings, but thoroughly
active throughout the Rejection Hearing, speaking substantially more than Debtor’s counsel.
Finally, Purchaser made no objection or comment when, following the Rejection Hearing, the
Court ordered the Debtor to “release the $25,000 escrow and pay it to the Purchaser.” Rejection
Order at 2.
But notwithstanding these facts, the Court cannot grant summary judgment on the waiver
defense. The case law disfavors summary judgment where waiver is based on the kind of silence
or inaction that occurred here. See, e.g., Beth Israel, 448 F.3d at 586 (“There has, of course,
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 15 of 25

16
been evidence that the hospitals never previously objected to the [contract] rate of
reimbursement they were receiving . . . , but we cannot determine that this failure to object, as a
matter of law, effects a waiver.”); McDarren, No. 94 CIV. 0910 (LMM), 1995 WL 214482, at *5
(holding that summary judgment was inappropriate based on alleged implied waiver where
plaintiffs delayed in requesting a contractually promised “general release” while accepting other
required performance in the form of payment of $850,000); see also Royal Park Investments, No.
14CV04394AJNBCM, 2016 WL 4613390, at *15 (finding that waiver was not established by a
failure to invoke certain available contractual remedies or “otherwise object . . . to [the] alleged
breach other than by bringing suit within the applicable statute of limitations” when under “no
contractual obligation” to behave differently). In cases where summary judgment is based upon
waiver through silence, intent must be manifested more clearly by, for example, the passage of
greater time or the active selection of alternative legal options. See Am. Int’l Grp., 756 F. Supp.
2d at 380–81 (S.D.N.Y. 2010) (“Franco Vago’s failure to assert the forum selection clause
during the first eleven months of the pending litigation goes far beyond mere silence, oversight,
or thoughtlessness in failing to object . . . . Franco Vago made no mention of the clause in its
answer, nor did it at any time file a motion to dismiss based on the forum selection clause . . . .”).
No such circumstances exist here.
Moreover, for the reasons discussed above, the existence of the “no modification” clause
casts further doubt on parties understanding of the Escrow Agreement and what they believed
was at stake at the Rejection Hearing. Construing the record in favor of the Purchaser for
purposes of Debtor’s Motion for summary judgment, the facts are not sufficient to provide a
clear manifestation of Purchaser’s intent to relinquish a contractual right.
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 16 of 25

17
D. Res Judicata
Debtor also raises the defense of res judicata. Res judicata, or claim preclusion, provides
that “a final judgment on the merits of an action precludes the parties or their privies from
relitigating issues that were or could have been raised in that action.” Monahan v. N.Y. City
Dep’t of Corr., 214 F.3d 275, 284–285 (2d Cir. 2000) (quoting Allen v. McCurry, 449 U.S. 90,
94 (1980)); Burgos v. Hopkins, 14 F.3d 787, 789 (2d Cir. 1994) (same). “The purpose of the
doctrine . . . is to promote finality.” In re DeFlora Lake Dev. Assocs., Inc., 517 B.R. 587, 594
(Bankr. S.D.N.Y. 2017) (citing Chase Manhattan Bank, N.A. v. Celotex Corp., 56 F.3d 343, 345
(2d Cir. 1995)).
Under federal law, res judicata “bars later litigation if [an] earlier decision was (1) a final
judgment on the merits, (2) by a court of competent jurisdiction, (3) in a case involving the same
parties or their privies, and (4) involving the same cause of action.”7 In re Motors Liquidation
Co., 576 B.R. 313, 321 (Bankr. S.D.N.Y. 2017) (quoting In re MF Glob. Holdings, Ltd., No. 11-
15059 (MG), 2014 WL 3536977, at *4 (Bankr. S.D.N.Y. July 17, 2014)) (alteration in original).
“The burden is on the party seeking to invoke res judicata to prove that the doctrine bars the
second action.” In re DeFlora, 517 B.R. at 595 (quoting Computer Assocs. Int’l, Inc. v. Altai,
Inc., 126 F.3d 365, 369 (2d Cir. 1997)). The current situation satisfies only three of the four
requirements.
7 	Federal preclusion standards apply when considering the effect of prior federal decisions resolving issues
of federal law. See Ball v. A.O. Smith Corp., 451 F.3d 66, 69 (2d Cir. 2006); but see In re Qiao Lin, No. 14-42344-
ESS, 2017 WL 4326370, at *8 (Bankr. E.D.N.Y. Sept. 28, 2017) (“[S]tate law rules of preclusion should be applied
to state law claims that have been determined by a federal court exercising pendent or supplemental jurisdiction
under 28 U.S.C. § 1367 in a federal question case.”) (quoting Curtis v. Ferrandina (In re Ferrandina), 533 B.R. 11,
23 (Bankr. E.D.N.Y. 2015)). Regardless, “there is no discernible difference between federal and New York law
concerning res judicata and collateral estoppel.” Algonquin Power Income Fund v. Christine Falls of New York,
Inc., 362 F. App’x 151, 154 (2d Cir. 2010) (citing Marvel Characters, Inc. v. Simon, 310 F.3d 280, 286 (2d Cir.
2002)).
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 17 of 25

18
First, the Rejection Hearing concluded with a final judgment on the merits. The Second
Circuit has held that “a bankruptcy court order . . . constitutes a ‘final judgment’ and is thus a
predicate for res judicata.” EDP Med. Computer Sys., Inc. v. U.S., 480 F.3d 621, 625 (2d
Cir.2007); see Moore, No. 02 CV 5021 NG/LB, 2008 WL 2357406, at *1 (finding a Bankruptcy
Court’s order sustaining an objection and expunging a proof of claim to be a final order for the
purposes of res judicata).
Second, this Court was acting within its jurisdiction. “Bankruptcy judges may hear and
determine all cases under title 11 and all core proceedings arising under title 11, or arising in a
case under title 11, referred under subsection (a) of this section, and may enter appropriate orders
and judgments.” 28 U.S.C. § 157(b)(1). See Moore v. The Wiz, Cablevision, No. 02 CV 5021
NG/LB, 2008 WL 2357406, at *1 (E.D.N.Y. June 4, 2008) (finding a Bankruptcy Court order
sustaining an objection and expunging a proof of claim a “final judgment on the merits by a
court of competent jurisdiction.”). At the Rejection Hearing, this Court ruled on issues well
within its competence, namely on a debtor’s request to terminate or reject a lease under the terms
of a contract and Section 365(a) of the Bankruptcy Code, and on a party’s request to seek relief
from a Section 363 sale under FRCP 60(b). See Corbett v. MacDonald Moving Servs., Inc., 124
F.3d 82, 89 (2d Cir. 1997) (“There may be circumstances in which a bankruptcy court lacks
competent jurisdiction, such as where it acts as a traffic court or a court of domestic relations.
But . . . [h]ere, the bankruptcy court exercised powers that are within its competent jurisdiction:
e.g., confirm a plan of reorganization, 11 U.S.C. § 1129; classify claims, id. § 1123(a)(1);
discharge claims, id. § 523; and provide the means for implementing a reorganization plan, id. §
1123(a)(5).”).
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 18 of 25

19
Third, it is undisputed that the same parties were present through representation at the
prior preceding. Counsel for both Purchaser and Debtor (as well as AT&T) made appearances at
the Rejection Hearing. See Hr’g. Tr. at 1:10–18.
But Debtor’s res judicata defense fails the fourth prong of the test because the current
adversary proceeding does not involve any of the same causes of action as those resolved by the
Rejection Hearing, and therefore does not bar Purchaser’s claims. The only causes of action
before the Court that day were Debtor’s motions for termination and rejection of the Cell Tower
Lease and AT&T’s sale relief request under FRCP 60(b). Admittedly, a particular argument
might still be precluded even if it is not made at a prior proceeding. “Res judicata extends to all
claims that ‘were or could have been raised in that action.’” EDP Med. Computer Sys., Inc. v.
United States, 480 F.3d at 626 (quoting Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394,
398 (1981)) (emphasis in original). However, Purchaser’s contract rights under the APA were
not directly relevant to the motions then being litigated and, for the reasons states above, it is
unclear whether Purchaser believed that staying silent on the issue would impact those rights.
Given the undisputed facts before the Court, therefore, the Debtor’s res judicata defense fails.
E. Collateral Estoppel
Collateral estoppel, or issue preclusion, is distinct from res judicata. “[U]nder collateral
estoppel, once a court has decided an issue of fact or law necessary to its judgment, that decision
may preclude relitigation of the issue in a suit on a different cause of action involving a party to
the first case.” Burgos, 14 F.3d at 789 (quoting Allen, 449 U.S. at 94); see also In re Abreu, 527
B.R. 570, 579 (Bankr. E.D.N.Y. 2015) (“Collateral estoppel, however, is a narrower doctrine
than res judicata, and serves to preclude parties from relitigating specific issues that were raised,
litigated, and actually decided by a judgment in a prior proceeding, regardless of whether the two
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 19 of 25

20
suits are based on the same cause of action.”) (citations omitted). “Collateral estoppel under
federal law requires that ‘(1) the identical issue was raised in a previous proceeding; (2) the issue
was actually litigated and decided in the previous proceeding; (3) the party had a full and fair
opportunity to litigate the issue; and (4) the resolution of the issue was necessary to support a
valid and final judgment on the merits.’” In re Horowitz, No. 14-36884 (CGM), 2016 WL
1039581, at *5 (Bankr. S.D.N.Y. Mar. 15, 2016) (quoting Purdy v. Zeldes, 337 F.3d 253, 258 (2d
Cir. 2003). “The party asserting collateral estoppel bears the burden of demonstrating that it is
entitled to this relief.” Bear, Stearns & Co. v. 1109580 Ontario, Inc., 409 F.3d 87, 93 (2d Cir.
2005) (citations omitted).
Based on the undisputed facts before the Court, Debtor’s collateral estoppel defense fails
on all prongs of the test and therefore does not bar Purchaser’s claims. First, the current
proceeding does not raise the same issues as addressed at the Rejection Hearing. “To show the
identity of the issues, the Court must analyze ‘whether the issues presented by this litigation are
in substance the same as those resolved . . . previously.” In re Horowitz, No. 14-36884 (CGM),
2016 WL 1039581, at *6 (quoting Montana v. United States, 440 U.S. 147, 155 (1979)). Simply
put, the question of Purchaser’s contract rights under the APA do not overlap at all with the
elements of a rejection claim under Section 365(a) or the elements of a request for relief from an
order under FRCP 60(b). For the same reasons, the issues underlying this adversary proceeding
were not actually litigated and decided in the prior proceeding. It is true that Purchaser attended
and participated in the Rejection Hearing and that the questions of Debtor liability and the
significance of the Escrow Agreement were discussed. But those issues were not raised or
addressed by any of the briefing and, as a technical matter, were not at issue before the Court.
Any discussion of the issues by this Court or the parties was peripheral to the matters actually
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 20 of 25

21
being litigated at the Rejection Hearing. See, e.g., Khandhar v. Elfenbein, 943 F.2d 244, 248 (2d
Cir. 1991) (noting that to dismiss an action on the basis of issue preclusion, a court must find that
the issue was squarely addressed and specifically decided in the prior proceeding).
F. 	Law of the Case
Debtor’s final defense is the doctrine of the law of the case. That doctrine provides that
“[w]hen a court decides upon a rule of law, that decision should continue to govern the same
issues in subsequent stages in the same case.” Arizona v. California, 460 U.S. 605, 618 (1983);
see also Johnson v. Holder, 564 F.3d 95, 99 (2d Cir. 2009). “Law of the case rules have
developed to maintain consistency and avoid reconsideration of matters once decided during the
course of a single continuing lawsuit. These rules do not involve preclusion by final judgment;
instead, they regulate judicial affairs before final judgment.” In re PCH Assocs., 949 F.2d 585,
592 (2d Cir. 1991); see In re Motors Liquidation Co., 576 B.R. at 321 (“Where res judicata bars
parties in subsequent actions from relitigating what has already been decided, law of the case
holds that a court should adhere to its earlier decisions in subsequent stages of litigation . . . .”)
(citations omitted). “Courts apply the law of the case doctrine when their prior decisions in an
ongoing case either expressly resolved an issue or necessarily resolved it by implication.”
Aramony v. United Way of Am., 254 F.3d 403, 410 (2d Cir. 2001) (citations omitted). “[T]he law
of the case doctrine does not apply to dicta, but only a prior court’s rulings of law.” Russul
Corp. v. Zim Am. Integrated Shipping Servs. Co., No. 06 CIV. 0037JCF, 2009 WL 3247141, at
*4 (S.D.N.Y. Oct. 5, 2009) (collecting cases). The doctrine of the law of the case “operates to
create efficiency, finality, and obedience within the judicial system.” In re AMR Corp., 567 B.R.
247, 254 (Bankr. S.D.N.Y. 2017) (quoting Allapattah Servs., Inc. v. Exxon Corp., 372 F.Supp.2d
1344, 1363 (S.D. Fla. 2005)). “It is not a substantive limit on the power of the court . . . and
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 21 of 25

22
every court retains the authority to reconsider its prior non-final rulings.” In re AMR Corp., 567
B.R. at 254 (quoting Liani v. Baker, 2010 WL 2653392, at *11 (E.D.N.Y. June 28, 2010)).
For the purposes of the law of the case, this adversary proceeding is part of the same
“case” as the Rejection Hearing and Rejection Order. See In re Moise, No. 15-73102-AST, 2017
WL 3126851, at *9 (Bankr. E.D.N.Y. July 20, 2017) (under the law of the case doctrine, separate
contested events or adversary proceedings tied to a single main bankruptcy case are all part of
the same case); In re AMR Corp., 567 B.R. at 256 (collecting cases); In re Terrestar Corp., No.
16 CIV. 1421 (ER), 2017 WL 1040448, at *4 (S.D.N.Y. Mar. 16, 2017), appeal dismissed (June
7, 2017); see also Artra Grp., Inc. v. Salomon Bros. Holding Co., No. 93 A 1616, 1996 WL
637595, at *4 (N.D. Ill. Oct. 31, 1996) (“In the bankruptcy context, the word ‘case’ is a term of
art which refers to ‘that which is commenced by the filing of a petition; it is the “whole ball of
wax,” the chapter 7, 9, 11, 12 or 13 case.’”) (quoting 5 Collier on Bankruptcy ¶ 1109.02[4]
(Lawrence P. King, ed., 15th ed. 1996)).
But Debtor’s law of the case defense fails on the same grounds as its other preclusion
defenses—the Court did not resolve any of the issues raised in this action either expressly or
necessarily by implication during the prior proceedings. The only motions argued in front of the
Court at the Rejection Hearing on June 27, 2016 were the Debtor’s Rejection Motion and
AT&T’s Rejection Objection. The Court’s verbal order (and subsequent written Rejection
Order) granting AT&T’s 60(b) motion was made expressly in reliance on the fact that AT&T did
not receive proper notice of the bankruptcy sale in the first instance.8 The Court’s verbal order
8 	The transcript reads:
“So based on the record before the Court, the Court concludes that the building was not sold free
and clear of this lease. That’s because there was no dispute that AT&T was not given notice of the
sale motion, was not a noticed party.”
Hr’g. Tr. 16:24–17:4.
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 22 of 25

23
(and subsequent written Rejection Order) denying Debtor’s Rejection Motion was made
expressly in reliance on finding that (1) AT&T presented evidence that it had in fact continued
making lease payments until sale of the Property to Purchaser; and (2) that the Debtor conceded
it was not a party to the Cell Tower Lease originally or at that time.9 For neither ruling was an
interpretation of the Escrow Agreement, the purpose of the $25,000 escrow account, or any other
limit on Debtor liability discussed or relevant.
While the Court did raise the escrow in an attempt to prevent additional litigation, the
Court’s statements during the Rejection Hearing regarding Debtor liability were not a ruling but
merely an effort at clarifying the situation. The Court repeatedly noted on the record that its
understanding at that time was that Debtor’s liability related to the Cell Tower issue was limited
to the $25,000 placed in escrow. Hr’g. Tr. 11:23–12:9, 14:4–8; 14:17–15:5, 16:16–23, 18:3–10.
The Court requested clarification from Debtor’s counsel while inviting “anybody else [to] chime
in if they disagree or . . . want to be heard on th[e] issue.” Hr’g. Tr. 14:18–20. In the preamble
to the Rejection Order, the Court wrote: “it appearing that the Debtor’s liability in connection
with the Cell Tower Lease is a $25,000 escrow account that was established at the closing on the
sale at the request of the Purchaser.” Rejection Order at 2 (emphasis added).
9 	The transcript reads:
“So as to the motion to reject the lease, the basis for that motion was nonpayment. Evidence was
presented to me, however, that in fact payments were made. Moreover, the debtor concedes the lease
was not and is not with the debtor but with the party that predates Messrs. Miller and Sprei in this
case. So it’s not all that surprising that debtors may or may not know whether payments had been
made. Indeed, anyone who spent any time in this case knows there was a massive amount of
confusion surrounding the affairs of Mr. Miller and Sprei as to this property and other matters in
this case and a huge amount of resulting litigation. We can just add this lease as one more to the
body count of that confusion. But given all these facts, the Court does not have a basis at the moment
to grant the motion to reject the lease and will deny it without prejudice based on what I have.”
Hr’g. Tr. 17:13–18:2.
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 23 of 25

24
Admittedly, the Court indicated reliance on the alleged liability limit when preserving
AT&T and Purchaser’s rights outside of the bankruptcy court. See Hr’g. Tr. 18:5–13 (ruling that
AT&T and the Purchaser’s rights in respect of the post-sale lease payments were preserved while
observing that the “issue does not concern the debtor’s estate given the debtor’s lack of any
further liability relating to this lease or any claims that the debtors might have arising under this
lease.”); Rejection Order at 2 (“ORDERED, that all of AT&T’s and the Purchaser’s rights,
claims, and defenses under the Cell Tower Lease and applicable non-bankruptcy law are
preserved . . . .”). But this does not change the fact that (1) the Court never actually ruled on the
issue but rather merely observed what “appeared” to be the state of the facts; and (2) the question
of Debtor liability simply was not a legally relevant factor for the actual motions under
consideration. See United Artists Theatre Circuit, Inc. v. Twp. of Warrington, PA, 316 F.3d 392,
397–98 (3d Cir. 2003) (after writing that it “believe[d]” the district court had ruled correctly on
an issue, the court acknowledged in a footnote that the question of whether the standard applied
below had been superseded by new law had only been raised by the appellate court itself during
oral argument and it therefore disclaimed any settled opinion on the issue); Great Lakes Dredge
& Dock Co. v. Tanker Robert Watt Miller, 957 F.2d 1575, 1578 (11th Cir. 1992) (after observing
that a contribution action might be barred by a settlement, the court acknowledged that the lower
court had not actually ruled on the issue and that parties still retained any related rights); Forbes
v. Lenox Fin. Mortg., LLC, No. 1:08-CV-2513-CC, 2009 WL 10664946, at *1 (N.D. Ga. Feb. 12,
2009) (observing that after the prior court had opined on propriety of venue, it had “correctly
recognized that it lacked jurisdiction to review or alter its transfer order[] in any event”); see also
United Artists Theatre, 316 F.3d at 397–98 (the “law-of-the-case doctrine relieves a court of the
obligation of considering an issue twice, but [the court] must be careful to prevent the doctrine
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 24 of 25

25
from being used to prevent a properly raised argument from being considered even once”)
(emphasis in the original). Therefore, based on the undisputed facts before the Court, Debtor’s
law of the case defense also fails.
CONCLUSION
For all the reasons stated above, the Court denies both Motions for summary judgment.
The parties shall settle an order and jointly confer about the next stage in these proceedings,
including the possibility of mediation. The parties also shall contact Chambers within 14 days to
schedule a status conference.
Dated: New York, New York
February 9, 2018
/s/ Sean H. Lane
UNITED STATES BANKRUPTCY JUDGE
16-01180-shl Doc 21 Filed 02/09/18 Entered 02/09/18 17:12:01 Main Document
Pg 25 of 25