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East Mark International, Ltd. v. Adar, LLC

United States District Court, Third Circuit

January 24, 2014

EAST MARK INTERNATIONAL, LTD
v.
ADAR, LLC, d/b/a THE LINCOLN ON LOCUST, L.P

MEMORANDUM

HARVEY BARTLE, III, District Judge.

Before the court is the motion of intervenors Benzion "Sam" Faibish ("Faibish") and Yehuda Olewski ("Olewski") for reasonable counsel fees and costs pursuant to Rule 16(f)(1)(C) of the Federal Rules of Civil Procedure.

This diversity action arose out of a dispute over the ownership of the building located at 1222-1226 Locust Street in Philadelphia. Plaintiff East Mark International, Ltd. ("East Mark"), a Marshall Islands corporation with its principal place of business in Hong Kong, was the holder of a mortgage for $3, 600, 000 on the building. Following an alleged default by the owner, defendant ADAR d/b/a The Lincoln on Locust, L.P. ("Lincoln on Locust"), East Mark filed a complaint for confession of judgment in this court in March 2013. After the Clerk of Court entered judgment in favor of East Mark and a Marshal's sale was scheduled, the intervenors filed an "emergency motion for temporary restraining order" in this court on June 6, 2013.

In their emergency motion, the intervenors alleged that they had a 42.5% ownership interest in Lincoln on Locust and the building at issue. They further asserted that the mortgage held by East Mark was a fraud intended to deprive them of their ownership interest in the property. We granted the motion for a temporary restraining order on June 21, 2013. The order cancelled the Marshal's Sale of the property which was to take place on June 24, 2013. On July 2, 2013, we extended the temporary restraining order through July 17, 2013. We scheduled a preliminary injunction hearing for August 14, 2013.

On August 13, 2013, a day before the hearing was to occur, Faibish, Olewski, East Mark, and Lincoln on Locust filed a stipulation for court approval. We approved the stipulation the same day, and the hearing was cancelled. The Stipulated Order stated in relevant part:

It is hereby stipulated agreed [sic] by and between East Mark International, Ltd. ("East Mark"), plaintiff herein, and Adar, LLC d/b/a The Lincoln on Locust, L.P. (collectively "Adar"), defendants herein, and Benzion ("Sam") Faibish and Yehuda Olewski (collectively "Intervenors"), as follows:
1. Intervenors' Petition to Strike/Open Confessed Judgment shall be deemed and marked as withdrawn.
...
4. Defendants and intervenors have agreed that the dispute between the parties relating to the property located at and known as 1222-1226 Locust Street, Philadelphia, Pennsylvania 19107 (the "Property"), shall be resolved through an agreed upon Rabbinical Court, in a Bet Din proceeding (the "Bet Din proceeding").
5. East Mark shall not take any further action on the judgment by confession obtained in this case on or about March 6, 2013, except as specifically permitted or required by the Bet Din proceeding.
6. The hearing scheduled for August 14-15, 2013, shall be canceled as moot.
7. Intervenors' bond posted in this matter shall be released to Intervenors.

On October 17, 2013, Faibish and Olewski, along with I.M. Rottenburg and Kalman Farkas, filed a motion "to enforce stipulated Order and for mandatory injunctive relief."[1] In their motion, intervenors maintained that Lincoln on Locust as well as East Mark violated the Stipulated Order when East Mark filed on September 17, 2013 an "emergency petition to strike the lis pendens filed against the property located at 1222-1226 Locust Street, Philadelphia, Pennsylvania, and to complete specific performance under agreement of sale" in the Court of Common Pleas of Philadelphia County. See East Mark Int'l, Ltd. v. Lincoln on Locust, L.P. et al., Phila. Com. Pl. Ct., Sept. Term, 2013, No. 01879. The lis pendens consisted of the July 30, 2012 order of a Bet Din which had been filed with the Recorder of Deeds of Philadelphia County and prohibited the sale of the building without authorization of the Bet Din. The Common Pleas Court granted East Mark's petition on September 24, 2013 and struck the lis pendens from the record.

With the lien removed, there was no impediment recorded on the title to prevent Lincoln on Locust from selling the property to a third party without the approval of the intervenors. As it turned out, Lincoln on Locust had entered into an agreement of sale with Pelican Properties, LLC ("Pelican"), an arms-length buyer, back on January 30, 2013, subject to the removal of the lis pendens. Closing took place on September 25, 2013, a day after the Common Pleas Court had granted the petition to strike the lis pendens.[2] Since East ...


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