U.S. Bank Nat'l Ass'n v. Lightstone Holdings LLC

• Decision Date: 14 February 2013
• Citation: 2013 N.Y. Slip Op. 00982,960 N.Y.S.2d 18,103 A.D.3d 458
• Parties: U.S. BANK NATIONAL ASSOCIATION, etc., Plaintiff–Appellant, v. LIGHTSTONE HOLDINGS LLC, et al., Defendants–Respondents, Wachovia Bank, N.A., Defendant.
• Court: New York Supreme Court — Appellate Division

103 A.D.3d 458
960 N.Y.S.2d 18
2013 N.Y. Slip Op. 00982

U.S. BANK NATIONAL ASSOCIATION, etc., Plaintiff–Appellant,
v.
LIGHTSTONE HOLDINGS LLC, et al., Defendants–Respondents,
Wachovia Bank, N.A., Defendant.

Supreme Court, Appellate Division, First Department, New York.

Feb. 14, 2013.

[960 N.Y.S.2d 19]

Venable LLP, Baltimore, MD (Gregory A. Cross of the bar of the State of Maryland, admitted pro-hac vice, of counsel), for appellant.

Kasowitz, Benson, Torres & Friedman LLP, New York (David M. Friedman of counsel), for Lightstone Holdings LLC and David Lichtenstein, respondents.

Meister Seelig & Fein LLP, New York (Stephen B. Meister of counsel), for Line Trust Corporation Ltd. and Deuce Properties Ltd., respondents.

Cleary Gottlieb Steen & Hamilton LLP, New York (Howard S. Zelbo of counsel), for Bank of America, N.A., Merrill Lynch Mortgage Lending, Inc., U.S. Bank National Association, etc., Debt II ESH, L.P., Debt–U ESH, L.P. and KeyBank National Association, respondents.

Buchanan Ingersoll & Rooney PC, New York (Kristi A. Davidson of counsel), for KeyBank National Association, respondent.

TOM, J.P., ANDRIAS, FREEDMAN, ROMÁN, GISCHE, JJ.

[103 A.D.3d 458]Order, Supreme Court, New York County (Melvin L. Schweitzer, J.), entered September 7, 2011, which granted defendants' motion to dismiss the complaint, unanimously reversed, on the law, without costs, and the motion denied. Order, same court and Justice, entered September 6, 2011, which denied plaintiff's motion seeking declaratory relief, unanimously affirmed, without costs.

This case involves a dispute between two sets of creditors, Senior Lenders (plaintiff) and Junior or Mezzanine Lenders, as to who has priority to payments personally guaranteed by defendants Lightstone and Lichtenstein but capped at $100 million, under Loan and Guaranty Agreements (made to both sets of lenders) and an Intercreditor Agreement (IC Agreement), in the event of default by the borrowers.

There are provisions in the various agreements, all of which [103 A.D.3d 459]were executed on the same day, that are not fully consistent with each other. “It is a cardinal rule of contract construction that a court should avoid an interpretation that would leave contractual clauses meaningless. Stated otherwise, courts are obliged to interpret a contract so as to give meaning to all of its terms” ( 150 Broadway N.Y. Assoc., L.P. v. Bodner, 14 A.D.3d 1, 6, 784 N.Y.S.2d 63 [1st Dept. 2004] [internal quotation marks omitted] ).

Here, while...