Jeff Schreiber and Eugene Meyers, representing firm client The Birch Group (Birch), prevailed on appeal in the New Jersey Appellate Division (101 Hudson Properties, LLC V. Birch Real Estate Services, LLC et al, A-000506-23), which affirmed the firm’s successful pre-answer motion to dismiss a breach of contract action in New Jersey Superior Court, Hudson County, arising from Birch’s $380 million acquisition of the Merrill Lynch building in Jersey City, New Jersey.  The Court below also entered a judgment in favor of Birch for its legal fees and costs, which was also affirmed.

In 2021, under the original, complex financing structure for the transaction, Birch entered into a contract to acquire 101 Hudson Street in Jersey City from Mack Cali and a separate contract with the plaintiff under which, simultaneously with closing on its purchase from Mack Cali, Birch would convey to plaintiff only the 101 Hudson Street land and lease back the land from plaintiff under a long-term ground lease.  Birch ultimately closed the transaction without doing the sale/leaseback transaction with plaintiff, after plaintiff declared Birch in default due to delays in closing the transaction, demanded that plaintiff’s $5 million deposit be returned from escrow and Birch agreed to terminate the contract and returned the deposit.

After Birch acquired the property, the plaintiff filed an action for specific performance of its terminated contract. The plaintiff’s complaint also asserted a claim for breach of the implied covenant of good faith and fair dealing, seeking $65 million in damages.  On behalf of Birch, MSF filed a pre-answer motion to dismiss the complaint, arguing that the contract’s remedies clause barred the plaintiff’s claims because the plaintiff had irrevocably elected to terminate the deal and that once the plaintiff received the refund of its deposit, it no longer had any right to specific performance and waived any right to seek damages. The Court below agreed with MSF’s interpretation of the contract, dismissed with prejudice and entered judgment in Birch’s favor for its fees and costs, after which plaintiff appealed and, today, the Appellate Division affirmed.