Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Attias v. 532 Brooklyn, LLC

United States District Court, E.D. Pennsylvania

December 12, 2019

MOSHE ATTIAS and MARION COURT, LLC, Plaintiffs,
v.
532 BROOKLYN, LLC and ALAIN KODSI, Defendant.

          MEMORANDUM

          Goldberg, J.

         The case before me involves one of several ongoing disputes related to a series of failed real estate development transactions in and around Philadelphia, Pennsylvania. In November 2018, Rachel Foster, 532 Brooklyn, LLC (“532 Brooklyn”), and DEMK, LLC (“DEMK”) brought suit against Moshe Attias and Unity Loft, LLC (“Unity”) alleging liability arising out of four of these transactions (the “Foster Action”).[1] Thereafter, on February 15, 2019, Moshe Attias and Marion Court, LLC filed suit in state court against 532 Brooklyn and Alain Kodsi (who is Rachel Foster's husband), alleging liability arising out of a separate real estate transaction (the “Attias Action”). Following removal of the Attias Action to federal court, both the Foster and Attias Actions were administratively consolidated.

         Plaintiffs in the Attias Action (Attias and Marion Court, LLC) now seek to amend their Complaint to join WPHL Housing Associates, LLC (“WPHL”) as a defendant and to assert claims against WPHL in connection with a fifth failed real estate transaction. For the following reasons, 1 will grant the Motion.

         I.FACTUAL BACKGROUND

         A. Facts in the Original Complaint

         The following facts are taken from Plaintiffs' Complaint in the Attias Action:[2]In July 2016, Plaintiff Attias was the sole member of Plaintiff Marion Court, which in turn was the sole owner of a property located at 5824-38 and 5840-50 N. 13th Street, Philadelphia, PA (“the 13th Street Property”). The 13th Street Property consisted of a lot with two buildings, one designated as Building 1 and the other designated as Building 2. (Compl. ¶¶ 6-8.)

         In July 2016, Defendant Kodsi approached Attias for the purpose of conducting a § 1031 exchange.[3] The two men agreed to jointly renovate Buildings 1 and 2 and convert said buildings into apartments under the following terms:

a. Attias, through Marion Court, would sell the 13th Street Property to 532 Brooklyn for $3.8 million.
b. The sale proceeds would be used to clear mortgages, liens, and past taxes on the 13th Street Property and to renovate Building 1.
c. Upon completion of the Building 1 renovations, 532 Brooklyn would transfer title to Building 1 to Kodsi.
d. The parties would then obtain construction financing in the amount of $1.2 million, using Building 1 as collateral, to renovate and complete construction of Building 2.
e. Upon payment of $250, 000 by Attias, 532 Brooklyn would transfer title of Building 2 to Attias.
f. The parties would share certain profits derived from the construction and renovation of the 13th Street Property.

(Compl. ¶¶ 11-13.)

         A closing for the sale of the 13th Street Property took place on September 8, 2016, during which Attias executed a deed transferring ownership of the 13th Street Property to 532 Brooklyn in exchange for $3.8 million. The parties agreed that Kodsi and 532 Brooklyn would pay $2, 330, 669.50 of the purchase price at or near the closing and that the remaining portion of the purchase price, plus legal fees, would be paid on September 7, 2017. (Id. ¶¶ 16, 18, 19.) Payment of the remaining purchase price was secured by a promissory note. According to the Complaint, Defendants have not paid any portion of the remaining purchase price to Plaintiffs. (Id. ¶¶ 20- 22.)

         Between 2016 and 2017, Plaintiffs performed substantial renovations on Building 1. In 2017, however, Defendant Kodsi directed Plaintiffs to send all of their construction forces to another construction project, which the parties were then working on at the old West Philadelphia High School. Defendants' demand prevented Plaintiffs from completing construction and renovation work on the 13th Street Property. (Id. ¶¶ 23-25.)

         In 2018, Defendants agreed to make scheduled payments to Plaintiffs for the completion of the development of Building 1. After February 9, 2018, however, they ceased making payments.

         Subsequently, on May 26, 2018, without Plaintiffs' knowledge or consent, Defendants sold the Property to 5824 N 13th Street LLC, which is an entity managed by Kodsi's friend and business partner Lael Shultz. According to the Complaint, the sale price for the 13th Street Property was millions of dollars below its fair market value. In conjunction with that sale, Defendants and 5824 N 13th Street caused a mortgage in the amount of $8, 000, 000 to be placed on the 13th Street Property. Plaintiffs aver that Defendants are now renovating the 13th Street Property with Schultz, to ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.