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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK 09CIV 00029--------------------------------------------------- x-ONE CENTRAL PARK WEST PROPERTY LIMITED,Plaintiffs,

- against -FRANPEARL EQUITIES CORP., f

Defendants. .~)D,. ~ I,--------------------------------------------------- A--

One Central Park West Property Limited ("One Central Park West"), by itsundersigned attorneys, Cleary Gottlieb Steen & Hamilton LLP ("Cleary Gottlieb"), for theirComplaint against defendant FranPearl Equities Corp. ("FranPearl"), allege on the basis ofknowledge with respect to itself and its ow n conduct and on information and belief as to all othermatters, as follows:

NATURE OF THE ACTION1 This action involves FranPearl's improper attempt to back ou t of its

contractual obligation to purchase a residential unit in the Trump International Hotel and TowerBuilding from One Central Park West forlan agreed price of $7,800,000.00.

2. By this action, One Central Park West seeks, among other things, an order1) declaring that the Final Sales Contract (as defined below in Paragraph 14) by and among OneCentral Park West and FranPearl regarding the transfer ofUnit Number 29 A at the buildingknown as the Trump International Hotel and Tower Building located at One Central Park West,New York, New York, 10023 ("Unit 29A"), is valid and enforceable by its terms, 2) declaringthat FranPearl breached the Final Sales Contract by failing to settle the purchase of Unit 29A asrequired by the terms thereof, and 3) awarding damages to One Central Park West, including but

Case 1:09-cv-00029-DAB Document 1 Filed 01/06/2009 Page 1 of 22

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not limited to liquidated damages as provided for under the Final Sales Contract. One CentralPark West also seeks an order awarding damages based upon FranlPearl's breach of the impliedcovenant of good faith and fair dealing as well as the doctrine of promissory estoppel.

THE PARTIES3. One Central Park West is a corporation organized and existing under the

laws of Canada, with its principal place of business at Suite 3100 Canwest Place, 201 PortageAvenue, Winnipeg, MB R3 3L7, Canada.

4. FranPearl is a corporation organized and existing under the laws of theState of New York, with its principal place of business at 120 West 23rd Street, New York, NY10011.

JURISDICTION AN]) VENUE5. This Court has jurisdiction over the subject matter and the parties of this

action pursuant to 28 U.S.C. 1332(a)(2).6. Venue is proper in this Judicial District under 28 U.S.C. 1391(a).

BACKGROUNDA. The Negotiation And Sale OfUnit 29A

7. On or about October 28, 2008, a representative of FranPearl inspectedUnit 29A, which at that time was being offered by One Central Park West for sale for the priceof $9,000,000.00.

8. On or about October 29, 2008, FranPearl offered to purchase Unit 29A, aswell as certain items located iji the unit, for a price of $7,800,000.00.

9. On October 30, 2008, counsel for One Central Park West providedcounsel for FranPearl with a draft sales contract for Unit 29A (the "Draft Sales Contract" ) via

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email, which provided for the sale of Unit 29A from One Central Park West to FranPearl for aprice of $7,800,000.00. The Draft Sales Contract included a list of certain furniture and otheritems in the apartment that were to be included in the sale price, commonly referred to as the"inventory list." The inventory list initially included with the Draft Sales Contract mistakenlyincluded a sculpture, a bar and a coffee table (the "Over-Inclusive Inventory List").

10. The sculpture, bar and coffee table at issue are of sentimental value to theestate of Israel Asper (the "Asper Estate"). Israel Asper is the founder of Canwest GlobalCommunications Corp., the parent company of One Central Park West ("Canwest").

11 . The next day, October 31, 2008, counsel for One Central Park Westemailed counsel for FranPearl a revised inventory list (the "October 31I' Email") that did notinclude the aforementioned sculpture, bar and coffee table (the "Updated Inventory List"). Inthat email, counsel for One Central Park West expressly stated that the inventory list had beenrevised and instructed counsel for FranPearl to disregard the Over-Inclusive Inventory List sentwith the Draft Sales Contract the day before.

12. The October 3 Is Email also welcomed counsel for FranPearl to contactcounsel for One Central Park West with any questions. Counsel for FranPearl did not provideany comments or any objection to the Updated Inventory List.

13 . On November 5,2008, counsel for FranPearl suggested that a reference to26 U.S.C. 1311 of the Internal Revenue Code of 1986, as amended, be added to the Draft SalesContract. Counsel for FranPearl did no t provide any comments or any objection to the UpdatedInventory List. Counsel for One Central Park West considered the suggested change and, aftermaking certain revisions with the consent of FranPearl, circulated a revised version of theprovision.

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14. On November 12, 2008, counsel for One Central Park West prepared anexecution version of the sales contract for Unit 29A that included FranPearl's requested revisionsreferred to in paragraph 13 , above (the "Contract"). Counsel for One Central Park West thensent the Contract to counsel for FranPearl with the Updated Inventory List attached thereto (thetwo documents are collectively referred to herein as the "Final Sales Contract"). Counsel forFranPearl made no suggestions or objections to any part of the Final Sales Contract.

15. On November 12, 2008, One Central Park West executed the Contract thathad been circulated to counsel for FranPearl earlier that day.

16. On November 13, 2008, counsel for One Central Park West received fromcounsel for FranPearl four original Contracts signed by FranPearl that attached the Over-Inclusive Inventory List instead of the Updated Inventory List.

17. In transmitting the Contract on November 12th, counsel for FranPearlfailed to mention that he had replaced the Updated Inventory List with the Over-InclusiveInventory List, despite the fact that the Updated Inventory List had been circulated as the correctinventory list to be appended to the contract since October 31, 2008 and that the UpdatedInventory List had been attached to the Contract when circulated for signature on November 12,2008.

18. On the same day, November 13 , 2008, in order to remedy the apparentmistake by counsel for FranPearl, counsel for One Central Park West attached FranPearl'ssignature pages to the Final Sales Contract which had been circulated to FranPearl's counsel theday before and emailed the Final Sales Contract, with signature pages, to FranPearl.

19. Also on the same day, November 13, 2008, Cleary Gottlieb, in its role asescrow agent, received from FranPearl a down payment in the form of a check in the amount of

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$780,000.00. (Section 16 of the Contract provides that Cleary Gottlieb shall act as escrow agentfor FranPearl's down payment relating to the instant transaction.)

20. Counsel for One Central Park West first noted in an email sent toFranPearl's counsel at 2:15 pm. on November 13, 2008 (the "November 13'h Email") that thehard copy version of the contract it had received, which attached the Over-Inclusive InventoryList and included FranPearl's signature pages, did not contain certain revised language thatcounsel for One Central Park West had included in the version of the Contract delivered forFranPearl's signature on November 12"'. In that email, counsel for One Central Park West askedcounsel for FranPearl whether the revised language, which related to the manner in which thedown payment would be paid,, was acceptable to FranPearl.

21. Counsel for FranPearl responded in an email sent at 2:23 pm on November13, 2008 that the change "should be fine."

22. FranPearl gave no indication that it had any objection whatsoever to theUpdated Inventory List during the entire course of the negotiations from the date the UpdatedInventory List was first circulated on October 31, 2008 through November 13, 2008, whenFranPearl signed the Contract and substituted the Over-Inclusive Inventory List for the UpdatedInventory List.

23. In an email on December 4, 2008 counsel for FranPearl requested that theclosing of the transaction (the "Closing") be delayed from the date contained in Section 4 of theContract of December 15, 2008 until December 29, 2008. After due consideration, counsel forOne Central Park West agreed to that request in an email on December 5, 2008.

24. As a result of this correspondence, the Closing was delayed untilDecember 29, 2008.

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25. On December 15, 2008, FranPearl performed a walk-through inspection ofUnit 29A, as is customarily performed by a purchaser of real estate.

26. On December 18, 2008, more than one month after the Contract had beenexecuted by both parties, FranPearl's counsel objected for the first time to the Updated InventoryList.

27. On December 18, 2008, in a telephone conversation with counsel for OneCentral Park West, counsel for FranPearl stated that FraniPearl expected the three items at issueto be transferred as part of the sale of Unit 29A.

28. Later that same day, December 18, 2008, FranPearl's counsel also statedthat FranPearl would be willing to proceed with the scheduled Closing on the understanding thatsuch a Closing would not include the three items at issue, if One Central Park West would agreeto a $25,000 reduction in the purchase price of Unit 29A.

29. One Central Park West believes that the market value of the three items atissue is significantly lower than $25,000.00.

30. As a result of sentimental value, at the request of the Asper Estate, OneCentral Park West removed the items from Unit 29A prior to December 15'h' and shipped them tothe homes of various family members of the Asper Estate.

31. Because FranPearl's valuation of the three items at issue seemed to havebeen un justifiably inflated, on December 19, 2008, counsel for One Central Park West initiallyinformed FranPearl by voicemail that One Central Park West would not be willing to agree to thesuggested $25,000 reduction in purchase price.

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32. In response, on December 19, 2008, counsel for FranPearl sent a letter tocounsel for One Central Park West stating that FranPearl did not intend to close on Unit 29A (the December 1 th Letter").

33. In the December 19"' Letter, counsel for FranPearl suggested that itstransmission of signature pages to the Contract that included the Over-Inclusive Inventory Listinstead of the Updated Inventory List on November 12, 2008 "constituted a counteroffer" byFraniPearl despite the fact that FranPearl never explicitly stated that it was thereby making acounteroffer.

34. Even assuming that FranPearl's valuation of the three disputed items wereaccurate, FranPearl only valued these at approximately 0.3% of the total purchase price.FranPearl's own valuation of the three items demonstrates that the difference between the Over-Inclusive Inventory List and the Updated Inventory List is not financially material to the sale ofUnit 29A. Indeed, in light of the value of the overall transaction, the fact that FranPearl wouldfocus on the relatively insignificant value of the three items at issue as its purported justificationfor its attempt to void the entire transaction suggests that FranPearl's current position ismotivated by something other than FranPearl's stated desire to obtain the three items at issue.

35. On December 19, 2008, counsel for One Central Park West sent a replyletter to counsel for FranPearl stating its belief that the Final Sales Contract was enforceableaccording to its terms and stating the intention of One Central Park West to proceed with theClosing scheduled for December 29, 2008, but that One Central Park West would be willing toagree to the suggested $25,000 reduction in purchase price in consideration of the size of therequested reduction when compared to the value of the overall transaction.

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36. On December 22, 2008, counsel for FranPearl sent a letter to counsel forOne Central Park West (the "December 2 2nd Letter") arguing that the transmission of the FinalSales Contract by counsel for One Central Park West to counsel for FranPearl on November 1Itby email and November 14th by mail constituted a "counteroffer" to its "counteroffer" ofNovember 12, 2008. In the December 2 2nd Letter, counsel for FranPearl rejected what it hadcharacterized as One Central Park West's "counteroffer" and further stated that FranPearl was nolonger willing to enter into the agreement it had proposed four days previously to purchase Unit29A if the purchase price were reduced by $25,000.

37. In the December 2 2nd Letter, counsel for FranPearl also demanded thereturn of FranPearl's down payment and stated that if Cleary Glottlieb did not return that downpayment by noon on December 23, 2008, FranPearl would take "all appropriate legal action."~

38. On December 23, 2008, counsel for One Central Park West sent a letter tocounsel for FranPearl (the "December 23rd Letter") stating that the Contract was enforceable andthat One Central Park West stood ready, willing and able to perform all of its obligations,including its obligations with respect to the Closing scheduled to take place on December 29,2008 and stating further that it intended to perform all of its obligations under the contract.

39. Counsel for One Central Park West appended the following to theDecember 23rd Letter: (i) a timeline of facts, (ii) a summary of adjustments and closing checks(on the assumption that the transaction would in fact close on December 29h"), and (iii) anamendment to the Contract regarding an issue initially requested by FranPearl before the disputearose, but unrelated to the present dispute.

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40. On December 24, 2008, counsel for FranPearl sent a letter to counsel forOne Central Park West (the "December 24h"Letter") stating that "no contract exists" andreiterating FranPearl' s demand for the return of its down payment.

41. On December 24, 2008, in preparation for the Closing, counsel for OneCentral Park West gave counsel for FranPearl notice, via email, of the time and conference roomlocation of the Closing, per the contract.

42. In addition, on December 24, 2008, counsel for One Central Park Westarranged to have First American Title Insurance Company of New York ("First American") oncall to appear at the Closing to facilitate recording of the deed and other Closing documents.Counsel for One Central Park West also held the executed deed and other documents necessaryto consummate the Closing in the appointed conference room at the appointed time.

43. Neither FranPearl nor its counsel appeared at the Closing.44. Cleary Gottlieb is holding FranPearl's down payment in escrow pending

resolution of the instant dispute.B. FranPearl's Conduct After its Execution of the Contract

45. As of November 12, 2008 (the date the Contract was signed by bothparties), there was no reason for One Central Park West to believe that the parties had notreached a meeting of the minds with respect to the inventory list to be appended to the Contract.Moreover, counsel for FranPearl never communicated any objection to the Updated InventoryList until December 18, 2008. This objection was made more than six weeks after the October3 Ist Email to FranPearl' s counsel, which included the revised version of the contract documentsand which explicitly pointed out the substitution of the Updated Inventory List for the Over-Inclusive Inventory List.

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46. On November 13, 2008, counsel for One Central Park West sent the FinalSales Contract, consisting of the Contract and the Updated Inventory List, via email to counselfor FranPearl along with the signature pages of both FranPearl and One Central Park West.Counsel for FranPearl made no suggestions or objections to any part of the Final Sales Contract.

47. On November 14, 2008, counsel for One Central Park West sent two hardcopies of the Final Sales Contract via messenger to counsel for FranPearl along with thesignature pages of both FranPearl and One Central Park West. Once again, counsel forFranPearl made no suggestions or objections to any part of the Final Sales Contract.

48. On November 25th and 26h and December 1st counsel for One CentralPark West and counsel for FranPearl exchanged emails regarding the scheduling of a conferencecall with First American, the title company handling the transaction.

49. In an email on December 9, 2008, counsel for FraniPearl noted that it hadinadvertently omitted FranPearl's broker, Ruth Goldman, from the contract of sale and askedcounsel for One Central Park West how to address this issue. The parties decided to draft anamendment to the contract to include her name in the "Brokers" section. The negotiation of thatamendment took place beginning on December 9, 2008 and continued until December 19, 2008;the day after counsel for FranPearl initially objected to the Updated Inventory List and the sameday of the December 19t Letter in which counsel for FranPearl formally objected to the absenceof the three items at issue in the proposed sale of Unit 29A.

50. As is demonstrated by email correspondence between counsel for OneCentral Park West and counsel for FranPearl on December 4th and December 1 0h otheramendments to the contract were also negotiated after the contract had been executed by bothparties.

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51. On December 1I, 2008 counsel for FranPearl sent an email to counsel forOne Central Park West attaching documentation required by 26 U.S. C. 13 11 of the InternalRevenue Code of 1986, as amended.

52. On December 15 , 2008 counsel for FranPearl sent an email to counsel forOne Central Park West attaching "Exchange Instructions, Return Checklists, Assignment, Noticeof Assigrnment and Request for Funds" requesting that counsel for one One Central Park Westobtain the signature of its client on the Notice of Assignment.

53. Each of the above-referenced interactions, considered either separately ortogether, demonstrate that counsel for FranPearl reviewed the contract subsequent to FranPearl'sexecution of the contract. Despite the numerous interactions between counsel for FranPearl andcounsel for One Central Park West during the time period from November 13 , 2008 to December18, 2008 regarding various provisions of the contract, FranPearl's counsel failed to make anyobjection to the Updated Inventory List until December 18, 2008.

54. FranPearl's failure to communicate any objection to the Final SalesContract and its subsequent conduct demonstrating its reliance on the Final Sales Contract asvalid and binding constitute ratification and acceptance by FranPearl of the Final Sales Contract.C. Material Provisions Of The Contract of Sale

55 . Section 3 of the Contract states in relevant part:3. Purchase Price: (a) The purchase price("Purchase Price") is $7,800,000.00, payable as follows:(i) $780,000.00 ("Down payment") on the signing ofthis Contract by bank check drawn on a bank acceptable to Selleror wire transfer, the receipt of which is hereby acknowledged, to

be held in escrow pursuant to para. 16; and(ii) $7,020,000.00 constituting the balance of thePurchase Price, by certified check of Purchaser or official bankcheck (except as otherwise provided in this Contract) on thedelivery of the deed as hereinafter provided.I1I


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(b) All checks in payment of the Purchase Price shallrepresent United States currency and be drawn on or issued by abank or trust company authorized to accept deposits in New YorkState. All checks in payment of the Down payment shall bepayable to the order ofEscrowee (as hereinafter defined). Allchecks in payment of the balance of the Purchase Price shall bepayable to the order of Seller (or as Seller otherwise directspursuant to subparas. 6(a)(ix) or 19(b)).(c) Except for the Down payment and checksaggregating not more than one-half of one percent of the PurchasePrice, including payment for closing adjustments, all checksdelivered by Purchaser shall be certified or official bank checks ashereinabove provided,

56. Section 4 of the Contract states in relevant part:4. Closing of Title: The closing documents referred

to in para. 6 shall be delivered, and payment of the balance of thePurchase Price shall be made, at the closing of title ("Closing"), tobe held on or about December 15, 2008 at 10:00 A.M., at theoffices ofCleary Gottlieb Steen & Hamilton LLPOne Liberty PlazaNew York, New York 10006or at the offices of Purchaser's lending institution or its counsel;provided, however, that such office is located in either the City orCounty in which either (a) Seller's attorney malntains an office or(b) the Unit is located.

57. Section 6(b) of the Contract states in relevant part:6. Closing Documents:(b) At the Closing, Purchaser shall deliver to Seller thefollowing: (i) Checks in payment of (y) the balance of thePurchase Price in accordance with subpara. 3(b) and (z) anyPurchaser Transfer Tax;(ii) If required by the Declaration or By-Laws,power of attorney to the Board, in the form required by theCondominium. The power of attorney shall be executedand acknowledged by Purchaser and, after being recorded,shall be sent to the Condominium;

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(iii) New York City Real Property Transfer TaxReturn executed and acknowledged by Purchaser and anAffidavit in Lieu of Registration pursuant to New YorkMultiple Dwelling Law, each in proper form forsubmission, if applicable; and(iv) If required, New York State EqualizationReturn executed and acknowledged by Purchaser in properform for submission.

58. Section 40 of the Contract states in relevant part:40. Delay in Closing. In the event that Purchaser isunable to close within fourteen (1 4) days of the Closing Date forany reason other than a delay by Seller, Purchaser agrees that:(a) Purchaser shall close this transaction within thirty (30) daysafter the Closing Date, time being of the essence against Purchaserand (b) that Purchaser shall pay Seller, as liquidated damages,

interest on the purchase price at the rate of 6% per annum, for eachday from and after the fourteenth day from the Closing Datethrough and including the actual date of Closing.59. Section 16 of the Contract states in relevant part:

16. Down payment in Escrow: (a) Seller's attorney("Escrowee") shall hold the Down payment for Seller's account inescrow in a segregated bank account at the depository identified atthe end of this Contract until Closing or sooner termination of thisContract and shall pay over or apply the Down payment inaccordance with the terms of this para. 16. Escrowee shall hold theDown payment in an interest-bearing account for the benefit of theparties. If interest is held for the benefit of the parties, it shall bepaid to the party entitled to the Down-payment and the partyreceiving the interest shall pay any income taxes thereon. Ifinterest is not held for the benefit of the parties, the Down-paymentshall be placed in an IOLA account or as otherwise permitted orrequired by law. The Social Security or Federal Identificationnumbers of the parties shall be furnished to Escrowee uponrequest. At closing, the Dow n payment shall be paid by Escroweeto Seller. If for any reason Closing does no t occur and either partygives Notice (as defined in paragraph 14) to Escrowee demandingpayment of the Down payment, Escrowee shall give prompt Noticeto the other party of such demand. If Escrowee does not receiveNotice of objection from such other party to the proposed paymentwithin 10 business days after the giving of such Notice, Escroweeis hereby authorized and directed to make such payment. IfEscrowee does receive such Notice of objection within such 10 day

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period or if for any other reason Escrowee in good faith shall electnot to make such payment, Escrowee shall continue to hold suchamount until otherwise directed by Notice from the parties to thisContract or a final, nonappealable judgment, order or decree of acourt. However, Escrowee shall have the right at any time todeposit the Down payment with the clerk of a court in the countyin which the Unit is located and shall give Notice of such depositto Seller and Purchaser. Upon such deposit or other disbursementin accordance with the terms of this para. 16, Escrowee shall berelieved and discharged of all further obligations andresponsibilities hereunder.

(b) The parties acknowledge that, although Escrowee isholding the Down payment for Seller's account, for all otherpurposes Escrowee is acting solely as a stakeholder at their requestand for their convenience and that Escrowee shall not be liable toeither party for any act or omission on its part unless taken orsuffered in bad faith or in willful disregard of this Contract orinvolving gross negligence on the part of Escrowee. Seller andPurchaser jointly and severally agree to defend, indemnify andhold Escrowee harmless from and against all costs, claims andexpenses (including reasonable attorney's fees) incurred inconnection with the performance of Escrowee's duties hereunder,except with respect to actions or omissions taken or suffered byEscrowee in bad faith or in willful disregard of this Contract orinvolving gross negligence on the part of Escrowee.

(c) Escrowee may act or refrain from acting in respectof any matter referred to herein in full reliance upon and with theadvise of counsel which may be selected by it (including anymember of its firm) and shall be fully protected in so acting orrefraining from action upon the advice of such counsel.

(d) Escrowee acknowledges receipt of theDownpayment by check subject to collection and Escrowee'sagreement to the provisions of this para. 16 by signing in the placeindicated in this Contract.(e) Escrowee or any member of its firm shall bepermitted to act as counsel for Seller in any dispute as to thedisbursement of the Downpayment or any other dispute between

the parties whether or not Escrowee is in possession of theDownpayment and continues to act as Escrowee.60. Section 13(a) of the Contract states in relevant part:

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13. Defaults and Remedies: (a) If Purchaser defaultshereunder, Seller's sole remedy shall be to retain theDownpayment as liquidated damages, it being agreed that Seller'sdamages in case of Purchaser's default might be impossible toascertain and that the Downpaymnent constitutes a fair andreasonable amount of damages under the circumstances and is no ta penalty.

FIRST CLAIM- BREACH OF CONTRACT61. One Central Park West repeats and realleges paragraphs 1 through 60

inclusive as if fully set forth herein.62. The Final Sales Contract constitutes a valid and enforceable contract.63. FranPearl's failure to pay the balance of the Purchase Price (as defined in

the Contract) on the date of the Closing constitutes a breach of FranPearl's obligations under,among other things, Sections 3, 4, 6(b) and 40 of the Contract.

64. FranPearl's failure to comply with the terms of the Contract, including butnot limited to Sections 3, 4, 6(b) and 40, has injured One Central Park West by, among otherthings, depriving it of FranPearl's contractual undertakings.

65. As a direct and proximate result of FranPearl's breach, One Central ParkWest is entitled to a judgment declaring that it is entitled to retain FranPearl's down payment asliquidated damages pursuant to Section 13 of the Contract.

66. All conditions precedent to the institution and maintenance of this actionand the granting of the relief sought herein have occurred, have been waived or have otherwisebeen satisfied.

SECOND CLAIM- BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIRDEALING

67. One Central Park West repeats and realleges paragraphs I through 66inclusive as if fully set forth herein.

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68. On October 31, 2008, One Central Park West advised FranPearl that itshould disregard the Over-Inclusive Inventory List and that it should instead append the UpdatedInventory List to the Draft Sales Contract.

69. On December 18 , 2008, more than one month alter the Contract had beenexecuted by both parties, FranPearl objected for the first time to the Updated Inventory List. Oninformation and belief, FranPearl knew at that time that it was improper to rely upon the Over-Inclusive Inventory List, which One Central Park West had previously advised FranPearl onnumerous occasions was to be replaced with the Updated Inventory List.

70. On that same day, December 18 , 2008, FranPear stated that it would bewilling to proceed with the scheduled Closing on the understanding that such a Closing wouldnot include the three items at issue, if One Central Park West would agree to a $25,000 reductionin the purchase price ofUnit 29A.

71. Even assuming that FranPearl's valuation of the three disputed items wereaccurate, FranPearl only valued these at approximately 0.3% of the total purchase price.

72. On December 19, 2008, One Central Park West advised FranPearl that theFinal Sales Contract was enforceable according to its terms and that One Central Park Westintended to proceed with the Closing scheduled for December 29, 2008, but that One CentralPark West would be willing to agree to the suggested $25,000 reduction in purchase price inconsideration of the size of the requested reduction when compared to the value of the overalltransaction.

73. On December 22, 2008, FranPearl advised One Central Park West byletter that it was no longer willing to honor the proposal that it had made four days earlier, on

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December 18, to purchase Unit 29A if the agreed upon purchase price of $7,800,000 werereduced by $25,000.

74. In light of the facts and circumstances, FranPearl's objection to theabsence of the three items at issue from the proposed sale ofUnit 29A cannot be the true basisfor FranPearl's unwillingness to proceed with the sale.

75. On information and belief, FranPearl breached the implied covenant ofgood faith and fair dealing by unfairly, arbitrarily and unreasonably construing and interpretingthe parties' correspondence and the relevant contract documents, in a knowingly improperattempt to prevent One Central Park West from receiving the fruits of the parties' bargain.

76. FranPearl further failed to adhere in good faith to its contractualobligations and to deal fairly with One Central Park West in the transactions at issue, includingbut not limited to its obligations to comply with Sections 3, 4, 6(b) and 40 of the Contract, and totake all actions necessary to enable One Central Park West to receive the fruits of the parties'bargain consistent with those provisions and all other applicable provisions of the Contract.

77. For the foregoing reasons, FranPearl breached the implied covenant ofgood faith and fair dealing contained in the Contract.

78. FranPearl's breach of the implied covenant of good faith and fair dealinghas injured One Central Park West by, among other things, depriving it of FranPearl'scontractual undertakings.

79. FranPearl's breach of the implied covenant of good faith and fair dealinghas fur-ther injured One Central Park West by requiring it to incur substantial costs associatedwith seeking a replacement buyer, including, but not limited to, any potential losses associated

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with any difference between the amount for which FranPearl agreed to purchase Unit 29A andthe final sales price to any other party.

80. FranPearl's breach of the implied covenant of good faith and fair dealinghas also injured One Central Park West by requiring it to incur substantial costs associated withbringing this action, including, but not limited to, attorneys' fees.

THIRD CLAIM- PROMISSORY ESTOPPEL81. One Central Park West repeats and realleges paragraphs 1 through 80

inclusive as if fully set forth herein.82. On or about October 29, 2008, FraniPearl offered to purchase Unit 29A, as

well as certain items located in the unit, for a price of $7,800,000.00.83. On October 30, 2008, counsel for One Central Park West provided

counsel for FranPearl with the Draft Sales Contract, which provided for the sale ofUnit 29Afrom One Central Park West to FranPearl for a price of $7,800,000.00.

84. The inventory list attached to the Draft Sales Contract provided toFranPearl on October 30, 2008 mistakenly included a sculpture, a bar and a coffee table (theOver-Inclusive Inventory List).

85. On October 31, 2008, One Central Park West advised FranPearl that itshould disregard the Over-Inclusive Inventory List and that it should instead append the UpdatedInventory List to the Draft Sales Contract.

86. Accordingly, as of October 31, 2008, FranPearl understood that theproposed sale ofUnit 29A did not include the three items at issue.

87. On or about November 12, 2008, FranPearl executed the Contract.

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88. On November 13, 2008, FranPearl provided Cleary Gottlieb, in its role asescrow agent, a down payment in the form of a check in the amount of $780,000.00, as requiredby the Contract.

89. In an email on December 4, 2008 counsel for FranPearl requested that theClosing be delayed from the date contained in Section 4 of the Contract ofDecember 15, 2008until December 29, 2008. After due consideration, counsel for One Central Park West agreed tothat request in an email on December 5, 2008. As a result of this correspondence, the Closingwas delayed until December 29, 2008.

90. On December 18, 2008, more than one month after the Contract had beenexecuted by both parties, FranPearl objected for the first time to the Updated Inventory List. Oninformation and belief, FranPearl knew at that time that it was improper to rely upon the Over-Inclusive Inventory List, which One Central Park West had previously advised FranPearl onnumerous occasions was to be replaced with the Updated Inventory List.

91. On that same day, December 18, 2008, FranPearl stated that it would bewilling to proceed with the scheduled Closing on the understanding that such a Closing wouldnot include the three items at issue, ifOne Central Park West would agree to a $25,000 reductionin the purchase price of Unit 29A.

92. Even assuming that FranPearl's valuation of the three disputed items wereaccurate, FranPearl only valued these at approximately 0.3% of the total purchase price.

93. On December 19, 2008, One Central Park West advised FranPearl that theFinal Sales Contract was enforceable according to its terms and that One Central Park Westintended to proceed with the Closing scheduled for December 29, 2008, but that One CentralPark West would be willing to agree to the suggested $25,000 reduction in purchase price in

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consideration of the size of the requested reduction when compared to the value of the overalltransaction.

94. On December 22, 2008, FranPearl advised One Central Park West byletter that it was no longer willing to honor the proposal that it had made four days earlier, onDecember 18, to purchase Unit 29A if the agreed upon purchase price of $7,800,000 werereduced by $25,000.

95. In light of the facts and circumstances, FranPearl's objection to theabsence of the three items at issue from the proposed sale of Unit 29A cannot be the true basisfor FranPearl's unwillingness to proceed with the sale.

96. One Central Park West's reliance upon FranPearl' s statements andconduct indicating that FranPearl would purchase Unit 29A was foreseeable.

97. One Central Park West's reliance upon FranPearl's statements andconduct indicating that FranPearl would purchase Unit 29A was reasonable.

98. As a result of One Central Park West's reliance upon FranPearl'sstatements and conduct indicating that FranPearl would purchase Unit 29A, One Central ParkWest incurred substantial costs associated with preparing for the Closing, including but notlimited to brokers' fees and attorneys' fees.

99. As a result of One Central Park West's reliance upon FranPearl'sstatements and conduct indicating that FranPearl would purchase Unit 29A, One Central ParkWest did not market Unit 29A to alternative buyers after November 12 , 2008, the date on whichFranPearl signed the Contract. On information and belief, One Central Park West was injured asa result of its inability to market Unit 29A to alternative buyers during that period.

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100. As a result ofOne Central Park West's reliance upon FranPearl'sstatements and conduct indicating that FranPearl would purchase Unit 29A, One Central ParkWest has incurred, and will continue to incur, substantial costs associated with seeking an dultimately obtaining a replacement buyer, including, but not limited to, potential lossesassociated with any difference between the amount for which FranPearl agreed to purchase Unit29A and the final sales price to any other party.

101. As a result of One Central Park West's reliance upon FranPearl'sstatements and conduct indicating that FranPearl would purchase Unit 29A, One Central ParkWest has incurred, and will continue to incur, substantial costs associated with bringing thisaction, including, but not limited to, attorneys' fees.

PRAYER FO R RELIEFWHEREFORE, One Central Park West demands a trial by jury pursuant to Rule 38 of the

Federal Rules of Civil Procedure and respectfully requests that the Court enter an order:1. Declaring that the Contract is valid and binding;2. Declaring that FranPearl breached the Contract;3. Granting judgment to One Central Park West and awarding liquidated damages

on the First Claim in an amount to be ascertained at trial, but not less than $780,000.00;4. Granting judgment to One Central Park West and awarding liquidated damages

on the Second Claim in an amount to be ascertained at trial, but not less than $780,000.00;

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5. Granting judgment to One Central Park West and awarding damages on the ThirdClaim in an amount to be ascertained at trial; and

6. Granting any such other or further relief as the Court deems just and proper.

Dated: New York, New York CLEARY G TIEB STEEN & HAMILTON L.January 5,2009 ,

By _ _ _ _ _ _ _ _ _ _ _ _ _ _Lawrence B. FriedmanChristopher P. Moore

One Liberty PlazaNew York, New York 10006(212) 225-2000Attorneys for Plaintiff

LP

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