Court Opinion

ID: 4505814
Source: CourtListenerOpinion
Date Created: 2020-02-07 20:02:50.500671+00
Date Added: 2024-06-11T15:04:27.910455
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

                                         )
WILMINGTON – 5190 BRANDYWINE             )
PARKWAY, LLC,                            )
                                         )
              Plaintiff,                 )
                                         )
         v.                              )   C.A. No.: N17C-04-060 EMD CCLD
                                         )
ACADIA BRANDYWINE HOLDINGS,              )
LLC,                                     )
                                         )
              Defendant.                 )

                                         )
WILMINGTON – 5190 BRANDYWINE             )
PARKWAY, LLC,                            )
                                         )
              Plaintiff,                 )
                                         )   C.A. No.: N17C-04-061 EMD CCLD
         v.                              )
                                         )
ACADIA REALTY LIMITED                    )
PARTERNSHIP,                             )
                                         )
              Defendant.                 )

                           Submitted: October 25, 2019
                            Decided: February 7, 2020

              Upon Plaintiff’s Motion for Summary Judgment
                GRANTED in part and DENIED in part

          Upon Defendants’ Cross-Motion for Summary Judgment
                               DENIED
Michael J. Barrie, Esq., Stephen M. Ferguson, Esq., William M. Alleman, Jr., Esq., Benesch,
Friedlander, Coplan & Aronoff LLP, Wilmington, Delaware, Helen Gavaris, Loeb & Loeb LLP,
New York, New York, Attorneys for Plaintiff.

Andrew D. Cordo, Esq., Wilson Sonsini Goodrich & Rosati, Wilmington, Delaware, Adam C.
Silverstein, Esq., Rebecca E. Algie, Esq., Otterbourg P.C., New York, New York, Attorneys for
Defendants.

DAVIS, J.

                                         I.       INTRODUCTION

        This contract action is assigned to the Complex Commercial Litigation Division of the

Court. Acadia Brandywine Holdings, LLC (“Holdings”) borrowed money from Bear Stearns

Commercial Mortgage, Inc. (“Original Lender”). The Original Lender and Holdings executed a

Loan Agreement and a Promissory Note (collectively “Loan Documents”). Simultaneously with

the execution of the Loan Documents, Acadia Realty Limited Partnership (“Acadia”) executed

and delivered a guaranty agreement (the “Guaranty”) to the Original Lender.1 Subsequently, the

Original Lender assigned its rights to collection under the Loan Documents to Wilmington –

5190 Brandywine Parkway, LLC (“Parkway”).

        Parkway filed separate lawsuits against Holdings2 and Acadia,3 seeking recourse liability

against Holdings and Acadia (collectively “Defendants”). The Court joined the related claims.

Parkway also filed a claim in the Court of Chancery asserting that parcels were mistakenly left

out of the Loan Documents and asked the Court of Chancery for reformation of the Loan

Documents. Defendants filed cross-motions for summary judgment under the Loan Documents

and Guaranty (“Parkway’s Motion,” “Defendants’ Motion,” and collectively the “Motions”).

1
  The parties have agreed that the Loan Documents and Guaranty are governed by New York law.
2
  The Second Amended Complaint for Judgment on Promissory Note. Hereinafter referred to as the “Brandywine
Complaint ¶ __.”
3
  The Second Amended Complaint for Judgment on Guaranty Agreement. Hereinafter referred to as the “Acadia
Complaint ¶ __.” The Brandywine Complaint and the Acadia Complaint collectively shall be referred to as the
“Complaints.”

                                                      2
        For the reasons set forth below, the Court will (i) GRANT in part and Deny in part

Parkway’s Motion and (ii) DENY Defendants’ Motion. The Court finds that Defendants, in part,

violated provisions under the Loan Agreement and Guaranty—those relating to conveying

interests in property (easements, covenants running with the land and insurance proceeds) but not

those relating to the Sterling Mortgage,4 fee title interests to the Red Robin, or admissions of

insolvency.

                                  II. RELEVANT BACKGROUND

        A. Factual Background

        The Original Lender loaned Holdings $26,250,000 (the “Loan”). The Original Lender

and Holdings executed the Loan Documents on June 2, 2006.5 The Loan was made

contemporaneously with three other loans as part of Acadia’s refinancing of the debt on a

shopping center known as Brandywine Town Center in New Castle County (the “Shopping

Center”).6 The Shopping Center was divided into legally distinct parcels owned by four entities

that Acadia controlled and partially owned. Under substantively identical loan documents from

the same lender, each of these four entities obtained a separate loan secured by a mortgage on

the parcels it owned and guaranteed by Guarantor.7

        Additionally, Acadia executed the Guaranty, guaranteeing the debt as set forth in the

Guaranty.8 Under the Guaranty, Acadia is personally liable to Parkway for the Loan only if

certain conditions are met (the “Guaranteed Obligations”).9 The Guaranteed Obligations include

4
  The “Sterling Mortgage” means that agreement between Sterling Bank and The Colby Restaurant Group, Inc.
(“Colby”).
5
  Brandywine Compl., Ex. B (the “Agreement”); Brandywine Compl., Ex. C (the “Note”); Brandywine Compl., Ex.
D (the “Mortgage”). Hereinafter collectively referred to as the “Loan Documents.”
6
  See Alleman Aff. Ex. 4 & Ex. 5 (the “Blacksberg Dep.”) at 29:19-22; 37:18 – 38:5.
7
  See Alleman Aff. Ex. 6.
8
  Brandywine Compl., Ex. E. Hereinafter referred to as the “Guaranty.”
9
  Guaranty at 1.2.

                                                     3
liability for the entire outstanding debt if Holdings: (a) “admit[s], in writing or in any legal

proceeding, its insolvency or inability to Pay its debts as they become due;” (b) “fails to maintain

its status as a Single Purpose Entity . . .”; (c) “fails to obtain [Parkway’s] prior written consent to

any subordinate financing or other voluntary lien encumbering the Property;” or (d) “fails to

obtain [Parkway’s] prior written consent to any assignment, transfer, or conveyance of the

Property or any interest therein as required by the Loan Agreement or the Security

Instruments.”10

        Article II of the Guaranty addresses events and circumstances that do not reduce of

discharge Acadia’s obligations under the Guaranty.11 Article II provides:

        [Acadia] hereby consents and agrees to each of the following, and agrees that
        [Acadia’s] obligations under this Guaranty shall not be released, diminished,
        impaired, reduced or adversely affected by any of the following, and waives any
        common law, equitable, statutory or other rights (including without limitation rights
        to notice) which [Acadia] might otherwise have as a result of or in connection with
        any of the following:
                                               ...

        2.13 Other Actions Taken or Omitted. Any other action taken or omitted to be
        taken or omitted to be taken with respect to the Loan Documents, the Guaranteed
        Obligations, or the security and collateral therefor, whether or not such action or
        omission prejudices [Acadia] or increases the likelihood that [Acadia] will be
        required to pay the Guaranteed Obligations pursuant to the terms hereof, it is the
        unambiguous and unequivocal intention of [Acadia] that [Acadia] shall be
        obligated to pay the Guaranteed Obligations when due, notwithstanding any
        occurrence, circumstance, event, action, or omission whatsoever, whether
        contemplated or uncontemplated, and whether or not otherwise or particularly
        described herein, which obligation shall be deemed satisfied only upon the full and
        final payment and satisfaction of the Guaranteed Obligations.12

        The Loan Agreement also contains an “Exculpation” section.13 The Exculpation

provision requires the lender to foreclose on the property rather than collect from Holdings

10
   Guaranty at 1.2(b)(E).
11
   Guaranty Art. II.
12
   Guaranty at 2.13.
13
   Loan Agreement Sec. 9.3.

                                                   4
individually for a failure to pay. However, recourse liability is triggered if certain conditions are

met.14 Specifically, Section 9.3 states:

        (B) the Debt shall be fully recourse to [Holdings] (i) in the event of: (a) [Holdings]
        filing a voluntary petition under the Bankruptcy Code or any other Federal or state
        bankruptcy or insolvency law; (b) the filing of an involuntary petition against
        [Holdings] under the Bankruptcy Code or any other federal or state bankruptcy or
        insolvency law, in which [Holdings] colludes with, or otherwise assists such
        Person, or solicits or causes to be solicited petitioning creditors for any involuntary
        petition against [Holdings] from any Person; (c) [Holdings] filing an answer
        consenting to or otherwise acquiescing in or joining in any involuntary petition filed
        against it, by any other Person under the Bankruptcy Code or any other federal or
        state bankruptcy or insolvency law; (d) [Holdings] consenting to or acquiescing in
        or joining in an application for the appointment of a custodian, receiver, trustee, or
        examiner for borrower or any portion of the Property; (e) [Holdings] making an
        assignment for the benefit of creditors, or admitting, in writing or in any legal
        proceeding, its insolvency or inability to pay its debts as they become due; (ii) if
        the first full monthly payment of principal and interest on the Note is not paid when
        due; (iii) if [Holdings] fails to maintain its status as a Single Purpose Entity after
        the Guaranty Notice (as defined the Guaranty) if [Holdings] fails to permit on-site
        inspections of the Property, fails to provide financial information, or fails to appoint
        a new property manager upon the request of [Parkway] as permitted under this
        Agreement, each as required by, and in accordance with, the terms and provisions
        of the Agreement or the Mortgage; (iv) if [Holdings] fails to obtain [Parkway’s]
        prior written consent to any Indebtedness or voluntary Lien encumbering the
        Property; or (v) if [Holdings] fails to obtain [Parkway’s] prior written consent to
        any Transfer as required by this Agreement or the Mortgage.15

        A “Transfer” occurs when either Holdings or Acadia does any of the following: “sell,

convey, mortgage, grant, bargain, encumber, pledge, assign...or otherwise transfer or dispose

of...the Property or any part thereof or any legal or beneficial interest therein.”16 The Loan

Agreement specifies that “[Parkway] shall not be required to demonstrate any actual impairment

of its security or any increased risk of default hereunder in order to declare the Debt immediately

due and payable.”17

14
   Loan Agreement Sec. 9.3.
15
   Id.
16
   Id. Sec. 5.2.10(b).
17
   Id. Sec. 5.2.10(f).

                                                   5
        According to Parkway, on January 16, 2008, Holdings mortgaged its interest in any

improvements on the Property to General Electric Capital Corporation.18 Parkway alleges that

Holdings did not obtain Parkway’s consent for the transfer of interest.19

        The Loan matured on July 1, 2016 and Holdings failed to pay the principal, accrued

interest, default interest, and late fees (collectively “Debt”).20 On April 6, 2016, Acadia and

Parkway acknowledged that “(a) an Event of Default has occurred and is continuing under the

Loan Documents due to Borrower’s failure to pay all amounts when due as required under the

Loan Documents; (b) the Debt is due and payable in full; and (c) the Loan Documents to which

[Acadia] and [Holdings] are parties constitute the valid and legally binding obligations of

[Acadia] and [Holdings], respectively, [are] enforceable in accordance with their respective

terms.”21

        Additionally, on April 6, 2016, Acadia and Holdings agreed in writing that “there are not

sufficient funds available to [Holdings] to timely pay such Third Party Expenses . . . .”22

Defendants acknowledged insufficient funds again on May 6, 2016 and June 9, 2016. On

November 21, 2017, Holdings sued Parkway in New York state court.23 Holdings sought an

injunction compelling Parkway to advance operating costs.24 Holdings stated it could not pay

other creditors because Parkway took all proceeds from Holdings’ tenants and used the money to

pay down the Loan.25

18
   Acadia Compl. ¶ 50.
19
   Id. ¶ 51.
20
   Acadia Compl. ¶ 13
21
   Acadia Compl. ¶ 28; Brandywine Compl. ¶ 30.
22
   Brandywine Compl., Ex E.
23
   Acadia Compl. ¶¶ 33-34; Brandywine Compl. ¶¶ 33-34.
24
   Supp. Resp. at 8.
25
   Id.

                                                     6
        On April 29, 2016, Holdings granted an easement to a third party26 over a Parcel of the

Property (the “Reciprocal Agreement”).27 Specifically, the Reciprocal Agreement states:

        [Subsidiary] hereby grants to [Holding] an easement over all portions of Parcel C-
        1 which the existing improvements have been designed to support Parcel C-2, or
        any portion thereof for continuous, total, adequate and safe support of all portions
        of the improvements existing on Parcel C-2 as of the execution of this Reciprocal
        Agreement.

        [Holdings] hereby grants to [Subsidiary] an easement over all portions of Parcel C-
        2 which the existing improvements have been designed to support Parcels C-2A or
        C-3, or any portion thereof for continuous, total, adequate and safe support of all
        portions of the improvements existing on Parcels C-2A and C-3 as of the execution
        of this Reciprocal Agreement.28

Further, the Reciprocal Agreement grants:

        a perpetual easement and right of access to all portions of [the shopping center] to
        the extent that such access is necessary or desirable to permit such Owner to
        maintain, repair or replace any portion of the property which such Owner is
        responsible to maintain, repair or replace, provided that: except for any emergency
        repairs necessary to prevent damage or injury to persons or property, such right of
        access shall not be exercised without prior consultation of the Owner of the area
        which is to be entered on; provided further that such right of access shall be
        exercised in such fashion as shall minimize any interference with the operation of
        the area entered upon.29

        According to the Defendants, the Original Lender consented to a similar agreement in

2006 (the “2006 Declaration”).30 The 2006 Declaration allowed Subsidiary a cross-easement “to

install, repair, maintain, remove and replace any plumbing, heating, cooling, lighting or similar

fixture or equipment . . . [as long as the improvement] shall not impair the structural integrity of

the building or adversely affect any adjacent Lot.”31

26
   Acadia Brandywine Subsidiary (“Subsidiary”).
27
   Brandywine Compl., Ex. I. Hereinafter referred to as the “Reciprocal Agreement § __.”
28
   Reciprocal Agreement § 2.1.
29
   Reciprocal Agreement § 2.2.
30
   Defs. Mot., Ex. 3.
31
   Reciprocal Agreement § 4.3(a).

                                                        7
        Holdings also executed a ground lease estoppel certificate and consent (the “Ground

Lease”) on February 13, 2017.32 The Ground Lease allows Subsidiary to mortgage Subsidiary’s

interest in the ground lease and any improvements on the property. Parkway asserts that it did

not consent to the Ground Lease. Further, Parkway asserts that “[u]pon information and belief,

[Parkway’s] predecessors in interest, as applicable, did not consent to the [Ground Lease].”33

        The description of the Ground Lease is “[t]hat certain Net Ground Lease dated as of

December 11, 2006 with respect to the Premises between Ground Lessor and Borrower, as

amended and supplemented by the following documents: None.”34 A previous ground lease was

executed on December 11, 2006 (the “2006 Ground Lease”).35 Pursuant to the 2006 Ground

Lease, Holdings leased premises to Colby for the purpose of building and operating a Red Robin

restaurant. That 2006 Ground Lease gave Subsidiary rights in the Property. The 2006 Ground

Lease provided Subsidiary an option to renew the 2006 Ground Lease for three additional five-

year terms.36

        B. Procedural History

        Parkway filed two lawsuits with the Court to collect the principal, accrued interest,

default interest, and late fees (collectively “Debt”) from Defendants. Parkway filed suit against

Holdings to collect on the Note. Parkway also filed suit against Acadia to collect on the

Guaranty. The Court joined the cases.

        Additionally, Parkway filed a complaint in the Court of Chancery seeking to reform and

foreclose on the mortgage (the “Chancery Action”) on April 6, 2017.37 Parkway asserts that

32
   Brandywine Am. Compl., Ex. N. Ex. N shall be referred to as the “Ground Lease.”
33
   Acadia Compl. ¶ 38; Brandywine Compl. ¶38.
34
   2006 Ground Lease, Ex. B.
35
   Brandywine Compl., Ex. M. Hereinafter referred to as the “2006 Ground Lease”).
36
   2006 Ground Lease § 34.
37
   Wilmington – 5190 Brandywine parkway, LLC v. Acadia Brandywine Holdings, LLC, 2017-0263-MTZ (Del. Ch.).
Hereinafter referred to as the “Chancery Action.”

                                                    8
parcels were mistakenly left out of the Loan Documents. Specifically, Parkway seeks: (1)

reformation of the mortgage; (2) foreclosure upon the mortgage; and (3) appointment of a

receiver to manage the mortgaged property in the interim.38

         After filing the various lawsuits, Parkway requested that Holdings replace the existing

property manager as required upon request under the Loan Documents on June 8, 2017.39

Parkway again requested that Holdings replace the property manager on September 29, October

13, and October 20, 2017.40 As of January 16, 2018—the filing of the Second Amended

Complaint—Holdings has not replaced the property manager.

         On November 21, 2017, Holdings filed an action in New York (the “New York Action”).

In the New York Action, Holdings sought a temporary restraining order and preliminary

injunction compelling Parkway to release rents so that Holdings could pay property expenses and

otherwise preserve the Property.41

         On April 1, 2019, Parkway filed Plaintiff’s Opening Brief in Support of its Motion for

Summary Judgment (“Parkway’s Motion”). Then, on May 1, 2019, Defendants jointly filed

Opening Brief in Support of Defendants’ Cross-Motion for Summary Judgment and Answering

Brief in Opposition to Plaintiff’s Motion for Summary Judgment (“Defendants’ Motion”). After,

on May 31, 2019, Parkway filed Plaintiff’s Reply Brief (I) in Further Support of its Motion for

Summary Judgment and (II) in Opposition to Defendants’ Cross-Motion for Summary Judgment.

Finally, on June 14, 2019, Defendants filed Reply Brief in Further Support of Defendants’ Cross-

Motion for Summary Judgment. On August 14, 2019, the Court held a hearing on the Parkway

Motion and Defendants’ Motion. At the conclusion of the hearing, the Court took the matters

38
    Chancery Action, D.I. 1. Hereinafter referred to as the “Chancery Complaint.”
39
    Acadia Compl. ¶ 75.
40
   Id. ¶ 76.
41
    Supp. Mot. at 5.

                                                          9
under advisement. On October 21, 2019, Defendants filed a letter that purported to supplement

Defendants’ Motion, arguing that a new case, Urdan v. WR Capital Partners, LLC,42 provided

additional guidance on issues already raised and briefed. Parkway responded to that letter on

October 25, 2019.

                                        III. STANDARD OF REVIEW

         The standard of review on a motion for summary judgment is well-settled. The Court’s

principal function when considering a motion for summary judgment is to examine the record to

determine whether genuine issues of material fact exist, “but not to decide such issues.”43

Summary judgment will be granted if, after viewing the record in a light most favorable to a

nonmoving party, no genuine issues of material fact exist and the moving party is entitled to

judgment as a matter of law.44 If, however, the record reveals that material facts are in dispute, or

if the factual record has not been developed thoroughly enough to allow the Court to apply the

law to the factual record, then summary judgment will not be granted.45 The moving party bears

the initial burden of demonstrating that the undisputed facts support his claims or defenses.46 If

the motion is properly supported, then the burden shifts to the non-moving party to demonstrate

that there are material issues of fact for resolution by the ultimate fact-finder.47

         Where, as here, the parties have filed cross motions for summary judgment and have not

argued that there are genuine issues of material fact, “the Court shall deem the motions to be the

42
   2019 WL 3891720 (Del. Ch. Aug. 19, 2019).
43
   Merrill v. Crothall-American Inc., 606 A.2d 96, 99-100 (Del. 1992) (internal citations omitted); Oliver B. Cannon
& Sons, Inc. v. Dorr-Oliver, Inc., 312 A.2d 322, 325 (Del. Super. 1973).
44
   Id.
45
   Ebersole v. Lowengrub, 180 A.2d 467, 470 (Del. 1962); see also Cook v. City of Harrington, 1990 WL 35244 at
*3 (Del. Super. Feb. 22, 1990) (citing Ebersole, 180 A.2d at 467) (“Summary judgment will not be granted under
any circumstances when the record indicates . . . that it is desirable to inquire more thoroughly into the facts in order
to clarify the application of law to the circumstances.”).
46
   Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1970) (citing Ebersole, 180 A.2d at 470).
47
   See Brzoska v. Olsen, 668 A.2d 1355, 1364 (Del. 1995).

                                                           10
equivalent of a stipulation for decision on the merits based on the record submitted with the

motions.”48 Neither party’s motion will be granted unless no genuine issue of material fact exists

and one of the parties is entitled to judgment as a matter of law.49

                                             IV. DISCUSSION

        The parties agree that New York law applies to the Loan Documents.50 Unless otherwise

noted, the Court will apply New York law for contract construction and interpretation in this

civil litigation. “Under New York law, the initial interpretation of a contract is a matter of law

for the court to decide. Where the agreement is unambiguous, a court may not admit extrinsic

evidence and interprets the plain language of the agreement as a matter of law.”51 “However,

‘when the language of a contract is ambiguous, its construction presents a question of fact,’

which of course precludes summary dismissal.”52

        “[T]he mere fact that the Parties disagree on the proper interpretation of the contract does

not render the contractual language ambiguous.”53 “Contract language is not ambiguous if it has

‘a definite and precise meaning, unattended by danger of misconception in the purport of the

[contract] itself, and concerning which there is no reasonable basis for a difference of

opinion.’”54 “[A] term is ambiguous when it is capable of more than one meaning when viewed

objectively by a reasonably intelligent person who has examined the context of the entire

integrated agreement and who is cognizant of the customs, practices, usages and terminology as

generally understood in the particular trade or business.”55

48
   Super. Ct. Civ. R. 56(h).
49
   E.I. DuPont de Nemours and Co. v. Medtronic Vascular, Inc., 2013 WL 261415, at *10 (Del. Super. Jan. 18,
2013).
50
   See Agreement Sec. 10.3; Parkway’s Mot. at 6; Note Art. 9; Defs. Mot. at 9; Resp. at 10.
51
   Serdarevic v. Centex Homes, LLC, 760 F. Supp. 2d 322, 328 (S.D.N.Y. 2010).
52
   Bank of Am. Corp. v. Lemgruber, 385 F. Supp. 2d 200, 226 (S.D.N.Y. 2005).
53
   Serdarevic, 760 F. Supp. 2d at 329.
54
   Id.
55
   Prior v. Innovative Commc'ns Corp., 207 Fed. Appx. 158, 163 (3d Cir. 2006) (interpreting New York law).

                                                       11
         “Under New York law, written agreements are construed in accordance with the parties'

intent and ‘[t]he best evidence of what parties to a written agreement intend is what they say in

their writing.’”56 “The entire contract must be reviewed and particular words should be

considered, not as if isolated from the context, but in the lights of the obligation as a whole and

the intention of the parties as manifested thereby. Form should not prevail over substance and a

sensible meaning of words should be sought.”57 “Words and phrases used in an agreement must

be given their plain meaning . . . .”58 “The rules of construction of contracts require us to adopt

an interpretation which gives meaning to every provision of a contract or, in the negative, no

provision of a contract should be left without force and effect.”59 “Even if there was an

inconsistency between a specific provision and a general provision of a contract . . . the specific

provision controls.”60

     A. Parkway is Entitled to Partial Summary Judgment on Liability

         1. The Full Recourse Provisions of the Loan Agreement and Guaranty Are Clear and
            Unambiguous.

         Parkway cites numerous cases which stand for the proposition that recourse provisions

are valid in loan agreements so long as the recourse provisions are clear and unambiguous. The

Defendants do not rebut the proposition that the recourse provisions of Loan Agreement and the

Guaranty are clear and unambiguous. The Court finds that, if triggered, the recourse provisions

in the Loan Agreement and Guaranty are unambiguous and enforceable.

56
   Schron v. Troutman Sanders LLP, 20 N.Y.3d 430, 963 N.Y.S.2d 613, 986 N.E.2d 430, 433 (2013).
57
   Riverside S. Plan. Corp. v. CRP/Extell Riverside, L.P., 920 N.E.2d 359, 363 (N.Y. 2009) (quoting Atwater & Co.
v. Panama R.R. Co., 246 N.Y. 519, 524 (1927)) (internal quotations omitted).
58
   Bianco v. Bianco, 36 A.D.3d 490, 491, 830 N.Y.S.2d 21 (N.Y. App. Div. 2007).
59
   Muzak Corp. v. Hotel Taft Corp., 133 N.E.2d 688, 690 (N.Y. 1956); see also In re El-Roh Realty Corp., 902
N.Y.S.2d 727, 729 (N.Y. App. Div. 4th Dept. 2010) (“The contract must be read as a whole to determine its purpose
and intent and it should be interpreted in a way that reconciles all its provisions, if possible) (internal quotations
omitted”).
60
   Id.

                                                         12
           2. Conditions Triggering Full Recourse Under the Loan Agreement and Guaranty
              Have Occurred.

           Parkway argues that Holdings triggered full recourse under the Loan Agreement and

Guaranty because Holdings (i) transferred interests in the Property by creating easements,

covenants and allocating insurance proceeds in the Reciprocal Agreement, (ii) encumbered the

Property by consenting to the Sterling Mortgage, (iii) transferred an interest in the improvements

to the Property in the Estoppel, and (iv) admitted that Holdings could not pay its debts when due.

              i.   The Reciprocal Agreement Conveyed Interests in the Property Without
                   Lender’s Consent.

           Under Section 9.3(v) of the Loan Agreement, Holdings triggers full recourse if Holdings

does not obtain Parkway’s written consent prior to “any Transfer as required by this Agreement

or the Mortgage.”61 Similarly, under Section 1.2(b) of the Guaranty, Holdings triggers full

recourse if Holdings “if Holdings fails to obtain Parkway’s prior written consent to any

assignment, transfer, or conveyance of the Property or any interest therein as required by the

Loan Agreement or the Security Instruments.”62

                   a. Easements

           Parkway contends that the Defendants triggered full recourse against Holdings and

Acadia by executing the Reciprocal Agreement, which was a transfer or conveyance of interests

in the Property. Parkway asserts that this was because the Reciprocal Agreement conveyed

easements, affirmative covenants, and rights to the Property’s insurance proceeds to the owners

of the rest of the Shopping Center.

           In response, Defendants cite Section 8.3 of the Reciprocal Agreement which states, “in

the event of any conflict between the terms [of the Reciprocal Agreement] and the terms of the

61
     Loan Agreement Sec. 9.3(B)(e)(v).
62
     Guaranty at 1.2(b).

                                                  13
2006 Declaration, the terms of the 2006 Declaration shall govern and control.”63 Using this

provision, Defendants assert that any new easements or covenants created by the Reciprocal

Agreement are superseded by the 2006 Declaration. Next, Defendants argue that the parties did

not intend to alter the rights in the 2006 Declaration. As per the 2006 Declaration, “covenants

may not be modified, amended or altered in whole or in part, except by... the consent of the New

Castle County Council . . . .” Defendants note the fact that the parties did not seek or obtain the

consent of the New Castle County Council in executing the Reciprocal Agreement shows that

they did not intend to modify the 2006 Declaration.

        Parkway argues that Defendants’ interpretation of the Reciprocal Agreement is contrary

to New York courts’ rules to read a contract to give effect to all of the contract’s provisions. In

addition, Parkway contends that the parties did not need the consent of the New Castle County

Council to sign the Reciprocal Agreement because (i) the 2006 Declaration is an amended

declaration, (ii) New Castle County did not sign the 2006 Declaration, and (iii) both parties agree

that the Reciprocal Agreement is the controlling agreement.

        First, the Reciprocal Agreement creates an easement. “An easement is an interest in

land...which confers a right upon the holder thereof to some profit, benefit, dominion, enjoyment

or lawful use out of or over the estate of another.”64 “An easement . . . is permanent in nature.”65

Parties may create an express easement in a “writing...demonstrating that intent, signed by the

grantor.”66

63
   Reciprocal Agreement Sec. 8.3.
64
   Copertino v. Ward, 473 N.Y.S.2d 494, 497 (App. Div. 1984).
65
   Millbrook Hunt, Inc. v. Smith, 249 A.D.2d 281, 282, 670 N.Y.S.2d 907, 908–09 (1998)
66
   Coker v. Walker, 2013 WL 1858098, at *3 (Del. Ch. May 3, 2013); see also Webster v. Ragona, 776 N.Y.S.2d
347, 350 (App. Div. 2004).

                                                      14
        Here, Defendants conveyed an express easement in the Reciprocal Agreement. Section

2.2 of the Reciprocal Agreement states:

        Easement for Repair. Each of the Owners shall have a perpetual easement and right
        of access to all portions of the Brandywine Town Center Shopping Mall to the
        extent that such access is necessary or desirable to permit such Owner to maintain,
        repair or replace any portion of the property which such Owner is responsible to
        maintain, repair or replace....

        In Section 2.2, Holdings conveyed an express easement to the three owners of the other

parcels (the “Owners”) in the Shopping Center. This is clear because Section 2.2 conveys a right

for the Owners to enter Holdings’ portion of the Shopping Mall. The conveyance is permanent

in nature because the parties specified that it is a “perpetual easement.” Finally, the easement is

express because Section 2.2 evinces the parties’ intent to create a “perpetual easement” and

Holdings signed the Reciprocal Agreement.

        Section 2.2 of the Reciprocal Agreement conveys a broader easement than the 2006

Declaration. In the 2006 Declaration, Holdings granted an easement to the limited portions of

the Shopping Mall that are “Common Facilities”67 so that the Owners could “install, repair,

maintain, remove and replace” fixtures on their own lots, rather than on Holdings’ lot. In

addition, the 2006 Declaration provided access to the Brandywine Town Center Maintenance

Corporation for the purpose of performing work on equipment.68

        There is no dispute that Holdings did not receive Parkway’s consent to enter into the

Reciprocal Agreement. The Reciprocal Agreement is recorded as Instrument No. 20160502-

0020277 in the land records of New Castle County. The record is clear that Holdings provided a

67
   2006 Dec. at § II.4.3 – Easement in Favor of East Box Lot Owner to Make Certain Repairs, Replacements, and
Improvements. The Land and portions of each Building that are Common Facilities are subject to the following
easements: (a) The Lot Owner may install, repair, maintain, remove and replace any plumbing, heating, cooling,
lighting, or similar fixture or equipment which is part of the Lot . . . .
68
    Id. at § II.4.4 – Easement in Favor or Maintenance Corporation. The Brandywine Town Center Maintenance
Corporation...shall have an easement of access through the East Box Lots at reasonable hours for the purpose of
performing maintenance, repair and replacement.

                                                        15
broader easement than in the 2006 Declaration. Defendants’ argument concerning the language

regarding conflicts between the 2006 Declaration and the Reciprocal Agreement is too stretched.

As Parkway notes, substantially all of the Reciprocal Agreement’s new encumbrances have no

corresponding provision in the 2006 Declaration—i.e., nothing in conflict with the 2006

Declaration and nothing inconsistent with the 2006 Declaration. As such, the Reciprocal

Agreement is the controlling document as to the new easement.69 Therefore, the express

easements into which Holdings entered are “interests” in the Property under Section 9.3(v) of the

Loan Agreement and Section 1.2(b) of the Guaranty which, in turn, trigger recourse liability.

This point is true as to covenants and other transfers authorized by the Reciprocal Agreement.

                  b. Covenants and Insurance Proceeds

         Second, the Reciprocal Agreement creates covenants. A covenant is an interest in land.70

Under New York law, an affirmative covenant runs with the land if the grantor and grantee

intended it to run with the land and if the covenant touches and concerns the land.71

         Parkway alleges that the Reciprocal Agreement creates the following covenants among

the Owners:

            To maintain insurance proceeds at specified levels:

                  o Section 3.1 – Property Hazard Insurance. Each of the Owners shall maintain
                    for their respective parcels, at all times, and at such Owner’s expense, a policy
                    or policies of insurance, insuring the buildings and improvements of such
                    Owner

                  o Section 3.2. Public Liability and Property Damage Insurance. Each of the
                    Owners shall secure and maintain for their respective parties, at all times, a
                    policy of public liability and property damages insurance applicable to the
69
    See I.U.N. Am. Inc. v. A.I.U. Ins. Co., 896 A.2d 880, 888 (Del. Super. 2006) (providing that when there is no
language in both documents that conflicts or is inconsistent, then the second document controlled).
70
    See Restatement § 2.1 cmt. a (noting “modern recognition that running covenants are interests in land”); Feigen v.
Green Harbour Beach Club, Inc., 204 N.Y.S.2d 381, 389 (Supr. Ct. 1960) (“Current decisions are framed in terms
of such restrictions being easements or interests in land...”).
71
   See Neponsit Prop. Owners’ Ass’n v. Emigrant Indus. Sav. Bank, 278 N.Y. 248 (1939); Nicholson v. 300
Broadway Realty Corp., 7 N.Y.2d 240 (1959).

                                                         16
           property of such Owner, and at such Owner’s expense, in the following
           minimum amounts: (a) in the case of public liability, One Million Dollars
           ($1,000,000) per person and Two Million Dollars ($2,000,000) per accident . .
           ..

   To repair and restore any portion of the Property damaged by casualty as soon
    practicable even if insurance proceeds are insufficient:

       o Section 4.1. Damage Affecting Construction Located on Only One Parcel. If
         any portion of the Brandywine Town Center is damaged by fire or other
         casualty and such damage occurs within the Owner’s parcel only..., then any
         such damages shall be repaired and restored by the Owner of the portion of
         the Brandywine Town Center Shopping Center in which any such damage
         occurs...at its sole cost and expense, with due diligence and in as timely a
         manner as practicable under the circumstances . . . .

       o Section 4.4.1. Cost of Repairs. If the cost and expense of performing any
         repair and restoration of the Brandywine Town Center Shopping Mall
         pursuant to Section 4.1...shall exceed the amount of any available insurance
         proceeds...the excess cost and expense (or the entire amount of such cost and
         expense, if there are no insurance proceeds) shall be paid by the Damaged
         Owner. The Damaged Owner shall also pay any deductible amount.”

       o Section 4.7. Obligation and Rights to Rebuild. Each Affected Owner shall be
         obligated to repair and restore its portion of the Brandywine Town Center
         Shopping Mall regardless of whether or not any insurance proceeds are
         available.

   To participate in repairing and restoring damage that affect the Property and other
    Owners’ parcels even if it would be more prudent to collect the insurance proceeds
    and abandon the Property:

       o Section 4.3 – Joint Damage. If the Brandywine Town Center Shopping Mall is
         damaged by fire or other casualty and the provisions of Section 4.1 do not
         apply, the affected Owners (each, an “Affected Owner”) shall, with diligence
         and in as timely a manner as practicable under the circumstances, cause the
         damage to be repaired and the Brandywine Town Center Shopping Mall to be
         restored and the repair and restoration shall be the joint responsibility of the
         Affected Owners pursuant to this Section 4.3.

       o Section 4.4.2. Cost of Repairs. If the cost and expense of performing any
         repair and restoration of the Brandywine Town Center Shopping Mall
         pursuant to section 4.3 shall exceed the amount of any available insurance
         proceeds..., the excess cost and expense (or the entire amount of such cost and
         expense, if there are no insurance proceeds) shall be borne by the Affected
         Owners in proportion to the Architect Allocated Ratio....

                                        17
                    o Section 4.7. Obligation and Rights to Rebuild. “Each Affected Owner shall be
                      obligated to repair and restore its portion of the Brandywine Town Center
                      Shopping Mall regardless of whether or not any insurance proceeds are
                      available . . . .”

           The Reciprocal Agreement states that all of its provisions “are intended to and shall run

with the real property benefited and burdened hereby.”72 The Reciprocal Agreement is a

recorded instrument. Here, the statements in the Reciprocal Agreement are covenants that run

with the land. This is because the statements are promises relating to the Shopping Mall, which

the parties intended to run with the land.

           There is no dispute that Holdings did not receive Parkway’s consent to enter into the

Reciprocal Agreement. The covenants in the Reciprocal Agreement constitute a “transfer” of a

legal or equitable right in the Property restricted by Section 5.2.10 of the Loan Agreement.73

Therefore, the covenants into which Holdings entered are “interests” in the Property under

Section 9.3(v) of the Loan Agreement and Section 1.2(b) of the Guaranty which trigger recourse

liability.

           Parkway argues that Holdings also triggered full recourse by conveying an interest in its

insurance proceeds in Section 4.7 of the Reciprocal Agreement. Section 4.7 provides:

           Each Affected Owner shall be obligated to repair and restore its portion of the
           Brandywine Town Center Shopping Mall regardless of whether or not any
           insurance proceeds are available. Furthermore, each Affected Owner shall
           cooperate with the other Affected Owner(s) in connection with any repairs or
           restoration to the Brandywine Town Center Shopping Mall. If, however, one
           Affected Owner defaults in the full, faithful and punctual performance of any
           obligation under this Article IX [sic]..., then the other Affected Owner(s) shall have,
           in addition to all other remedies it may have hereunder or at law or in equity...the
           right, but not the obligation, if the Defaulting Owner has not commenced the good
           faith cure of such default...(a) to make any decisions required in connection with
           the performance of such obligation on behalf of the Defaulting Owner, (b) to
           actually perform the obligation on behalf of the Defaulting Owner, and (c) subject

72
     Reciprocal Agreement Sec. 8.1.
73
     Loan Agreement Sec. 5.2.10(b)(i).

                                                     18
        to the rights of any holders of mortgages encumbering the Defaulting Owner’s
        property, to use the Defaulting Owner’s insurance proceeds in connection with the
        performance of any such obligation. If any Affected Owner defaults in the
        performance of its obligations under this Article IX [sic] as aforesaid, the other
        Affected Owners are hereby irrevocably appointed attorney-in-fact of the
        Defaulting Owner...to take any and all steps necessary on behalf of Defaulting
        Owner to perform the Defaulting Owner’s obligations as provided herein.74

        Parkway notes that insurance proceeds are a form of property. This provision conveys an

interest in the Property because it allows other Owners a right to use Defendants’ insurance

proceeds. It therefore triggers full recourse.

        The Reciprocal Agreement directs the purchase of insurance and how proceeds from

insurance will be used. In the Mortgage, however, Holdings gave up conveyed all its rights to

insurance proceeds. Section 1.1 of the Mortgage addresses what property rights are conveyed by

Holdings.75 Section 1.1(j) provides that Holding has conveyed any right to “[a]ll proceeds in

respect of the Property under any insurance policies covering the Property, including, without

limitation, the right to receive and apply the proceeds of any insurance, judgments, or settlements

made in lieu thereof, of damage to the Property.”76

        During argument, the Court came to understand that the Reciprocal Agreement was a

document that a potential financier encouraged. That transaction did not close and Parkway is

the successor to the Original Lender. Defendants presented the argument that the Reciprocal

Agreement and its terms are beneficial to the Property and any transfers under the Reciprocal

Agreement are minor. The Court understands these equitable arguments. The Court, however,

must enforce the terms of the relevant agreements as agreed to by the parties. The Court finds

74
   Reciprocal Agreement Sec. 4.7 (emphasis added).
75
   Mortgage Sec. 1.1.
76
   Id. Sec. 1.1(j).

                                                     19
that the Reciprocal Agreement provides for “Transfers” that were not consented to by Parkway.

As such, the “Transfers” violate the Loan Agreement and the Guaranty.

             ii.    The Estoppel and Sterling Mortgage Subordinate Financing are not Voluntary
                    Liens Encumbering the Property.

           Under Sections 9.3(iv) and 9.3(v) of the Loan Agreement, Holdings triggers full recourse

if Holdings does not obtain Parkway’s written consent prior to “any Indebtedness or voluntary

Lien encumbering the Property” or “any Transfer as required by this Agreement or the

Mortgage,” respectively. Similarly, under Section 1.2(b) of the Guaranty, Holdings triggers full

recourse if Holdings “fails to obtain Parkway’s prior written consent to any subordinate

financing or other voluntary lien encumbering the Property” or “if Holdings fails to obtain

Parkway’s prior written consent to any assignment, transfer, or conveyance of the Property or

any interest therein as required by the Loan Agreement or the Security Instruments.”77

           Parkway contends that the Sterling Mortgage between Sterling Bank and Colby creates a

voluntary lien in the Property and is a transfer of an interest in the Property. Parkway supports

its contention that the Sterling Mortgage is a voluntary lien and transfer with the following

statements: Colby’s secured loans appear on a title report of the Property; the Sterling Mortgage

reflects the Property’s tax parcel identification number; the Sterling mortgage will be discharged

upon foreclosure of Lender’s Mortgage; foreclosing the Mortgage will cause Colby to default

under its loan from Sterling, jeopardizing Colby’s ability to continue generating rents (which are

Parkway’s collateral); and the Sterling Mortgage gives Sterling Bank a security interest in

proceeds from sales or subleases of Colby’s leasehold, which are Lender’s collateral because

such proceeds belong to Borrower under the Ground Lease.78 Parkway claims that, although

77
     Guaranty Sec. 1.2(b).
78
     See Alleman Aff. Ex. 25.

                                                  20
Holdings did not sign the Sterling Mortgage, Holdings consented to Colby executing the

Mortgage in the Ground Lease Estoppel.79

         In response, Defendants assert that the Sterling Mortgage encumbers Colby’s property

rather than the Property, so it is not a voluntary lien or transfer of an interest in the Property.

Defendants argue that Parkway consented to the Sterling Mortgage by agreeing that Borrower

could grant leases under 10,000 square feet without Parkway’s consent.

         Parkway responds that Holdings’ right to grant non-material leases does not imply a right

to authorize mortgages to be recorded against the Property. Parkway contends that the Loan

Agreements expressly prohibit unconsented mortgages.80 The problem with this argument is that

the Sterling Mortgage relates to Colby’s leasehold interest and nothing more.

         The Court finds that Parkway did not consent to the Sterling Mortgage. But that is not

the end of the inquiry. The Sterling Mortgage is not a voluntary lien or transfer on the Property.

This is because the Sterling Mortgage relates only to Colby’s leasehold interest. Section 1.2 of

the Sterling Mortgage describes the interest conveyed, “The ‘Mortgaged Property’ consists of all

of [Colby]'s estate, right, title and interest in and to the following described property and

property rights, whether now existing or hereafter acquired . . . .” Because the Mortgaged

Property only includes Colby’s title to the Property, the Sterling Mortgage is not a lien or

transfer of the Property. Therefore, the Court holds that the full recourse provision is not

triggered by the Sterling Mortgage.

79
   Section 3 states: “[Holdings] hereby consents to Colby executing a mortgage or deed of trust in favor of
[Sterling National Bank] (the “Mortgage”), encumbering, among other things, [Colby’s] interest in
Improvements and the Ground Lease. The execution and recordation of the Mortgage including UCC-1
Financing Statements will not constitute a breach or default under the Ground Lease. ground Lessor does
not need to obtain any other consents with respect to [Colby’s] execution and delivery of the Mortgage.”
80
   Loan Agreement Secs. 5.1.20(v), 5.2.2.

                                                         21
            iii.    Holdings did not Transfer Interests in the Red Robin Building.

           As noted above, under Section 9.3(v) of the Loan Agreement, Holdings triggers full

recourse if Holdings does not obtain Parkway’s written consent prior to “any Transfer as

required by this Agreement or the Mortgage.” Similarly, under Section 1.2(b) of the Guaranty,

Holdings triggers full recourse if Holdings “fails to obtain Parkway’s prior written consent to any

assignment, transfer, or conveyance of the Property or any interest therein as required by the

Loan Agreement or the Security Instruments.”81

           Parkway argues that Holdings triggered personal liability by granting to Colby fee title to

improvements in the Property. Parkway contends that Holdings made this conveyance in Section

11 of the Estoppel, which states, “[w]hile the [Ground Lease] is in effect, [Colby] holds fee title

to the Improvements . . . .”82 According to Parkway, Holdings originally had title to the

Improvements in the Property.

           In contrast, Holdings claims that the Ground Lease creates a ground lease in the Property

and it is only through the ground lease that Colby owns the improvements on the Property. As a

result, Defendants argue that Holdings could not convey its interest in Improvements that Colby

already owns. In addition, Defendants note that the Estoppels in 2008, 2015 and 2017 all convey

similar interests in the Property. Defendants contends that it would be illogical to convey a fee

title to the Improvements three times.

           Again, both parties agree that Holdings signed the Estoppels without Parkway’s consent.

The Court finds that Holdings did not convey an interest in the Property by signing the Estoppel.

As per the Ground Lease and Estoppels, the Defendants conveyed the land on which Colby

subsequently built a Red Robin restaurant. Colby owned the Red Robin building and any

81
     Guaranty at 1.2(b).
82
     Estoppel Sec. 11; 2007 Estoppel Sec. 12; 2015 Estoppel Sec. 12.

                                                          22
improvements for the interim before the expiration of the Ground Lease. Section 11 clarifies that

Colby has a fee title to the Improvements on the Property during the term of the Ground Lease.

Under the applicable documents, this fee title will revert to Defendants at the termination of the

Lease. Section 11 does not convey Defendants’ existing interest in the Improvements to Colby

except incident to the Ground Lease. Therefore, full recourse is not triggered by the Estoppels.

          iv.     Holdings Did Not Admit that it was Insolvent in a Manner that Triggered the
                  Guaranty.

         The Court will look to Section 9.3(i)(e) of the Loan Agreement and Section 1.2(b)(i)(E)

of the Guaranty to determine whether Holdings triggered recourse liability by “admitting”

insolvency. These provisions provide that Holdings triggers the full recourse provision by

“admitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as

they become due.”83

         The parties acknowledge that Defendants provided financial statements and written

statements to Parkway asserted that “there are not sufficient funds available to [Holdings] to

timely pay [certain] Third Party Expenses.” The parties disagree as to the legal significance of

these statements.

         Financial statements by themselves are not written admissions of insolvency under New

York law. In D.B. Zwirn Special Opportunities Fund, L.P. v. SCC Acquisitions, Inc., the New

York court found that financial reports indicating that the debtor’s liabilities exceeded their cash

and assets did not constitute written admissions of insolvency.84 In that case, the Court also

found that failure to pay debts alone was not sufficient to trigger full recourse liability.85

83
   See Loan Agreement Sec. 9.3(i)(e); Guaranty at 1.2(b)(i)(E).
84
   74 A.D.3d 530, 530 (N.Y. App Div. 1st Dept. 2010).
85
   Id.

                                                         23
        Parkway relies upon financial statements showing a negative equity value, expense

notices from Parkway’s servicer that there are insufficient funds to timely pay certain third party

expenses,86 and Holdings’ statements from the New York Action where Holdings stated “[a]fter

stretching terms for the past couple of months, property expenses are now or soon will be past

due, and critical services (such as fire phone lines, fire hydrant and riser water service, pest

control, security services, utilities, etc.) to operate the Property will soon be at risk of being shut

off.”87 These statements relate to the New York Action whereby Holdings seeks to require

Parkway to pay operating expenses because Parkway is sweeping all rent funds and refusing to

pay for any operating expenses absent court intervention. Holdings alleges that there are

sufficient funds, but Parkway is sweeping the funds and not allowing Holdings to pay any bills

with the swept funds.

        The Court finds that these statements made under that factual scenario, in and of

themselves, do not admit insolvency. Instead, Holdings’ statements are conditional statements- if

Holdings does not receive relief in the New York Action, it will not be able to pay its bills. The

Court holds that Holdings has not made a written statement or an unconditional admission that it

cannot pay its debts as they become due of the kind that would trigger Section 9.3(i)(e) of the

Loan Agreement and Section 1.2(b)(i)(E) of the Guaranty.

     B. The Statute of Limitations Has Not Run on Parkway’s Claims.

        Defendants argue that the statute of limitations on Parkway’s recourse claim has run.

When Delaware courts apply the borrowing statute for an action arising from the law of another

jurisdiction, Delaware applies the shorter of the statute of limitations.88 This action raises a

86
   Holdings made these statements on April 6, May 6, and June 9 of 2016.
87
   Brandywine Compl. ¶¶ 33-34.
88
   See 6 Del. C. § 8121.

                                                       24
claim for a breach of the promissory note. There is a six-year statute of limitations for a claim

for breach of contract in New York. Delaware has a three year statute of limitations for actions

based on contract.89 The statute of limitations for a breach of contract claim runs from the time

of the breach.90 When “the claim is for payment of a sum of money allegedly owed pursuant to a

contract, the cause of action accrues when the [party making the claim] possesses a legal right to

demand payment.”91

         Defendants contend that the claim accrued on June 2, 2006 when Original Lender signed

the Loan and Note knowing that Holdings owned property, Parcel C-2, that was not part of the

Loan or Note. Defendants also claim that Parkway’s claims for recourse are barred by the statute

of limitations. Parkway argues that claims for breach of contract occur at the time of the breach.

         Parkway never accelerated the Debt. So, Parkway’s claims to recover the full Debt did

not accrue until the Loan matured on July 1, 2016.92 In addition, Defendants made partial

payments on the promissory note through June 2015. These partial payments tolled the statute of

limitations.93 Under New York law, a written acknowledgment of a defaulted contract

obligation tolls the statute of limitations, so long as it is signed by the party to be charged,

recognizes an existing debt, and contains nothing inconsistent with an intention on the part of the

89
   See 6 Del. C. § 8106(a).
90
   See Pivotal Payments Direct Corp. v. Planet Payments, Inc., 2015 WL 11120934, at *4 (Del. Super. Dec. 29,
2015).
91
   Hahn Automotive Warehouse, Inc. v. American Zurich Ins. Co., 967 N.E.2d 1187, 1190 (N.Y. 2012).
92
   See Phx. Acquisition Corp., 81 N.Y.2d at 140 (dismissal for untimeliness was error; guarantor was not “obligated
to pay the whole debt upon the initial default” and lender had not accelerated the debt).
93
   Bernstein v. Kaplan, 413 N.Y.S.2d 186, 188 (App. Div. 1979); see, e.g., Saljanin v. Vuksanaj, 727 N.Y.S.2d 145
(App. Div. 2001) (statute of limitations on note began running anew on date of partial payment); Skaneateles Sav.
Bank v. Modi Assocs., 668 N.Y.S.2d 819, 820 (App. Div. 1998) (reversing dismissal of lender’s claim because
“periodic payments of principal and interest on the note operated to renew the Statute of Limitations”); Roth v.
Michelson, 55 N.Y.2d 278, 281 (1982) (“It is a long-standing common-law rule that, if part payment of a debt
otherwise outlawed by the Statute of Limitations is made under circumstances from which a promise to honor the
obligation may be inferred, it will be effective to make the time limited for bringing an action start anew from the
time of such payment.”).

                                                         25
debtor to pay it.94 Defendants signed eight letters between April 6, 2016 and November 4, 2016,

in which they acknowledged that “the Debt is currently due and payable in full.”95 In those

letters Defendants also “expressly ratified and confirmed” their “respective obligations under the

Loan Documents, all of which,” “shall continue in full force and effect” and be “enforceable

against [Defendants] in accordance with their respective terms.”96 This action was commenced

on April 6, 2017. So, Parkway’s claims to recover the debt are not time-barred.

         In addition, Parkway’s claims for recourse liability are not time-barred. As noted above,

Defendants triggered the full recourse provisions by signing the Reciprocal Agreement. The

Reciprocal Agreement is dated April 29, 2016. So, the statute of limitations had not expired

when Parkway filed this action in 2017.

                                               V. CONCLUSION

         For all the foregoing reasons, the Court GRANTS in part and DENIES in part

Parkway’s Motion and DENIES Defendants’ Motion. The Court further believes that the

Brandywine Complaint and the Acadia Complaint each only assert one cause of action. The

parties are to contact the Court for an additional hearing regarding the status, if any, of

outstanding issues.

         IT IS SO ORDERED

                                                               /s/ Eric M. Davis
                                                               Eric M. Davis, Judge
cc:      File&ServeXpress

94
   N.Y. Gen. Oblig. § 17-101 (“An acknowledgment or promise contained in a writing signed by the party to be
charged thereby is the only competent evidence of a new or continuing contract whereby to take an action out of the
operation of the provisions of limitations of time for commencing actions under the civil practice law and rules other
than an action for the recovery of real property. This section does not alter the effect of a payment of principal or
interest.”).
95
   Ex. 40 ¶ 3(i)(b).
96
   Id. ¶ 3(iii), (vi).

                                                         26