Greenberg Freeman scored a significant victory in the New York Court of Appeals in favor of our client Jade Realty LLC.
In a 5-1 decision, New York’s highest court ruled in Jade Realty LLC v. Citigroup Commercial Mortgage Trust 2005-EMG et al., No. 185 (November 19, 2012), that Jade Realty should not have been required to pay a prepayment penalty upon its voluntary prepayment of a mortgage note where a drafting error by the bank’s counsel created a condition under which the penalty amount was “zero” in the absence of a default under the note. Although enforcing the note as written created a counterintuitive situation under which the prepayment penalty due in the event of a voluntary prepayment could be lower during the earlier years of the note’s terms than during the later years, the Court held that simply because the terms of the note were “novel and unconventional” does not mean that the Court was permitted to rewrite the terms of the parties’ agreement as long as the note, as written, was enforceable according to its terms.
The case was briefed and argued by Michael A. Freeman. Click here to read a copy of the decision.