Clarke v. Alabama Mar. Asset Holdings, LLC

Clarke v Alabama Mar. Asset Holdings, LLC 2024 NY Slip Op 30914(U) March 19, 2024 Supreme Court, New York County Docket Number: Index No. 653874/2021 Judge: Joel M. Cohen Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

[FILED: NEW YORK COUNTY CLERK 03/19/2024 04:56 P~ INDEX NO. 653874/2021 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/19/2024

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 03M ----------------------------------------------------------------------------------- X

THOMAS M CLARKE, ANA M CLARKE INDEX NO. 653874/2021

Plaintiffs, MOTION DATE 12/26/2023 - V - MOTION SEQ. NO. 001 ALABAMA MARITIME ASSET HOLDINGS, LLC,

Defendant. DECISION+ ORDER ON MOTION ----------------------------------------------------------------------------------- X

HON. JOEL M. COHEN:

The following e-filed documents, listed by NYSCEF document number (Motion 001) 12, 13, 14, 15, 16, 17, 18, 19, 20, 21 were read on this motion for SUMMARY JUDGMENT

Defendant Alabama Maritime Asset Holdings, LLC' s ("Defendant") unopposed motion

for summary judgment is granted to the extent that Plaintiffs Thomas M. Clarke's and Ana M.

Clarke's ("the Clarkes" or "Plaintiffs") Complaint is dismissed. Defendant's motion for

summary judgment is denied with respect to Defendant's Counterclaim, which is dismissed.

A. Background

In 2018, non-party BAE Systems Southeast Shipyards AMCH Inc. ("BAE"), as seller,

entered into a purchase and sale transaction with Defendant Alabama Maritime Asset Holdings,

LLC's ("Alabama Maritime" or "Defendant") predecessor, Epic Maritime Asset Holdings, LLC

("Epic"), as buyer, to sell a shipyard ("Alabama Shipyard"). Defendant provided BAE with a

promissory note in the amount of $10,000,000 ("Note" [NYSCEF 3]) as part of the Alabama

Shipyard transaction. The Note is subordinated to certain senior loans under the terms of a

Subordination Agreement (NYSCEF 5).

653874/2021 CLARKE, THOMAS M vs. ALABAMA MARITIME ASSET Page 1 of4 Motion No. 001

[* 1] 1 of 4

[FILED: NEW YORK COUNTY CLERK 03/19/2024 04:56 P~ INDEX NO. 653874/2021 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/19/2024

Plaintiffs executed a Personal Guarantee ("Guaranty" [NYSCEF 4]) of the principal and

interest under the Note (the "Guaranteed Obligations"). The Guaranty is "an absolute,

unconditional and continuing guaranty of payment of the Guaranteed Obligations ... " The

Guaranty includes the following condition precedent to claims by Plaintiffs against Defendant:

Until all of the Guaranteed Obligations shall have been paid in full, the Guarantor hereby agrees not to assert the rights that the Guarantor may now have or hereafter acquire, whether by subrogation, contribution, reimbursement, recourse, exoneration, contract or otherwise, to recover from the Maker [Defendant] or from any property of the Maker [Defendant] any sums paid under this Guaranty.

Defendant defaulted on the Note resulting in multiple lawsuits. First, in 2020, BAE

commenced an action against Epic on the Note. On February 10, 2021, the Court granted

summary judgment in favor of Epic because BAE is prohibited from enforcing the Note until the

senior loans are satisfied under the terms of the Subrogation Agreement (BAE Sys. Southeast

Shipyards AMHC Inc. v Epic Mar. Asset Holdings, LLC, 2021 N.Y. Slip Op. 30416[U], 1 [N.Y.

Sup Ct, New York County 2021]).

Second, also in 2020, BAE commenced an action against the Clarkes to enforce the

Guaranty (BAE Systems Southeast Shipyards AMHC Inc. v. Thomas M Clarke and Ana M

Clarke, [Index No. 651486/2020]). On January 22, 2201, the Court granted summary judgment

in favor of BAE on its Guaranty claim (NYSCEF 7 [Tr. 16-26]; NYSCEF 6 [March 26, 2021,

Judgment]).

Third, on June 17, 2021, Plaintiffs filed their Verified Complaint (NYSCEF 2) in this

action against Defendant asserting claims for Common Law Exoneration and Quia Timet (a

common law injunction against future harm). Generally, Plaintiffs seek a judgment requiring

Defendant to satisfy the Note and any debts that become due on the Note. On July 23, 2021,

Defendant filed a Verified Answer with Counterclaim for breach of the Guaranty (NYSCEF 11).

653874/2021 CLARKE, THOMAS M vs. ALABAMA MARITIME ASSET Page 2 of 4 Motion No. 001

[* 2] 2 of 4

[FILED: NEW YORK COUNTY CLERK 03/19/2024 04:56 P~ INDEX NO. 653874/2021 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/19/2024

Plaintiffs have not replied to the Counterclaim or otheiwise made any filings since the

Complaint.

B. Discussion

In support of a motion for summary judgment under CPLR 3212, the movant must make

a prima facie showing of entitlement to judgment as a matter oflaw, tendering sufficient

evidence to demonstrate the absence of any material issues of fact (Alvarez v. Prospect Hospital,

68 N.Y.2d 320 [1986]). If the movant successfully demonstrates its prima facie entitlement to

summary judgment as a matter of law, the burden of proof shifts to the party opposing the

motion (Winegrad v. New York University Medical Center, 64 N.Y.2d 851, 853 [1985]).

The Note and Guaranty were annexed to the Verified Complaint. The Guaranty includes

a clear and unambiguous condition precedent requiring that Plaintiffs pay the Guaranteed

Obligations before asserting claims, including claims for exoneration, against Defendant

( Greenfield v Philles Records, Inc., 98 NY2d 562, 569 [2002]). The Complaint alleges that there

is an "unpaid principal balance ... plus accrued and unpaid interest" on the Note establishing that

Plaintiffs have not complied with the condition precedent. Plaintiffs have not filed opposition to

Defendant's motion to rebut the prima facie case for dismissal. Accordingly, summary judgment

dismissing the Complaint for failure to comply with the express condition precedent is warranted

(Oppenheimer & Co., Inc. v Oppenheim, Appel, Dixon & Co., 86 NY2d 685, 690 [1995]; ALJ

Capital L L.P. v David J Joseph Co., 48 AD3d 208 [1st Dept 2008]).

Summary judgment is denied with respect to Defendant's Counterclaim for breach of the

Guaranty, which is dismissed. Defendant seeks damages including the "costs, disbursements and

legal fees incurred in defending this action." However, Defendant is a not a party to the

Guaranty. Even if Defendant was a party to the Guaranty, there is no contractual provision or

653874/2021 CLARKE, THOMAS M vs. ALABAMA MARITIME ASSET Page 3 of 4 Motion No. 001

[* 3] 3 of 4

!FILED: NEW YORK COUNTY CLERK 03/19/2024 04: 56 PM! INDEX NO. 653874/2021 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/19/2024

statute that permits for the recovery of attorney's fees ( City ofNew York v Zuckerman, 234

AD2d 160, 161 [1st Dept 1996]). Upon searching the record, the Court dismisses Defendant's

Counterclaim (CPLR 3212[b]).

• • * * * Accordingly, it is

ORDERED that Defendant's motion for summary judgment is GRANTED to the extent

that the Complaint is DISMISSED with prejudice; it is further

ORDERED that Defendant's motion for summary judgment on its Counterclaim is

DENIED and, upon searching the record, the Court GRANTS summary judgment in favor of

Plaintiffs and the Counterclaim is DISMISSED with prejudice; it is further

ORDERED that the Clerk enter judgment dismissing the Complaint and the

Counterclaim with prejudice, without costs to either party.

This constitutes the decision and order of the Court.

3/19/2024 DATE JOEL M. COHEN, J.S.C.

~ CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION

GRANTED □ DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE

653874/2021 CLARKE, THOMAS M vs. ALABAMA MARITIME ASSET Page4 of 4 Motion No. 001

[* 4] 4 of 4