INDEX NO.

652721/2014

FILED: NEW YORK COUNTY CLERK 04/15/2015 03:59 PM

NYSCEF DOC. NO. 131

RECEIVED NYSCEF: 04/15/2015

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
-----------------------------------------------------------X
FCRC MODULAR, LLC and FC
Index No: 652721/2014
MODULAR, LLC (formerly known as
FC+SKANSKA MODULAR, LLC)
Hon. Judge Saliann Scarpulla
Plaintiffs,

AFFIRMATION OF PETER E.
MORAN, ESQUIRE IN SUPPORT OF
MOTION FOR A FINDING OF CIVIL
CONTEMPT

-againstSKANSKA MODULAR LLC and

RICHARD A. KENNEDY,
Defendants.
------------------------------------------------------SKANSKA MODULAR LLC and
RICHARD A. KENNEDY,
Third-Party Plaintiffs
-against
FOREST CITY RATNER COMPANIES,
LLC, FOREST CITY ENTERPRISES, INC.,
JOHN DOES 1-10 AND JANE DOE,

Third-Party Defendants
----------------------------------------------------------- X
PETER E. MORAN, an attorney duly admitted to practice law before the Courts of the
State of New York, under penalty of perjury, hereby affirms as follows:
1.
party
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I am a member of Peckar & Abramson, P.C., co-counsel for Defendant/Third-

Plaintiff

Skanska

Defendant/Third-party

Modular

Plaintiff

LLC

Richard

("Skanska
A.

Modular")

Kennedy

and

("Kennedy")

Defendants/Third-party Plaintiffs) in the above-captioned matter.

attorneys

for

(collectively

2.

I am fully familiar with the facts and circumstances of this case as set forth

herein and I submit this Affirmation in support of Defendants/Third-party Plaintiffs motion,

pursuant to CPLR 2308 (a) and 753 (of Article 19) of the New York Judiciary Law et seq.,
to: (a) hold non-parties Berlin Rosen Ltd. (Berlin Rosen) and Greenland US Holding, Inc.
a/k/a Greenland Group Co., Greenland Company USA, and Greenland US (Greenland) in
civil contempt of court based on their failure to properly respond to a subpoena duces tecum
(the Subpoenas) duly served upon each of them; (b) require that Berlin Rosen and
Greenland produce forthwith all documents responsive to the Subpoenas at the New York
office of Peckar & Abramson PC; (c) award Defendants/Third-party Plaintiffs their costs and
attorneys fees reasonably expended in pursuit of Berlin Rosens and Greenlands compliance
with the Subpoenas, together with a statutory penalty of two hundred fifty dollars ($250) each
against Berlin Rosen and Greenland, and that Berlin Rosen and Greenland be held jointly and
severally liable for payment of Defendants costs and attorneys fees incurred; and (d) for
such other and further relief as this Court deems just and proper.
A.

Background

3.

This action arises out of a construction project formerly known as the B2

Residential Project at Atlantic Yards ("Project"), which project is the subject of two earlierfiled actions currently pending before this Court, namely Skanska USA Building Inc. v.
Atlantic Yards B2 Owner LLC, Forest City Ratner Companies LLC, et al., Index No.
652680/2014 (Scarpulla, J.) (the Skanska Action) and Atlantic Yards B2 Owner LLC v.
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Skanska USA Building Inc., Index No. 652681/2014 (Scarpulla, J.) (the B2 Owner Action).
Skanska USA Building, Inc. (Skanska), a party to the Skanska Action and the B2 Owner

A Professional Corporation

Action, was the construction manager on the Project pursuant to the Construction

Management and Fabrication Services Agreement ("CM Agreement"), effective on or about

October 31, 2012, entered into with Atlantic Yards B2 Owner LLC (B2 Owner), an affiliate
of Third-party Defendant Forest City Ratner Companies LLC (Forest City), for the
construction of the Project.
4.

The Project is a 34 floor residential high-rise building, consisting of

approximately three hundred fifty (350) units, to be constructed using prefabricated modular
units assembled at a factory located at the Brooklyn Navy Yard and then erected at the B2
project site adjacent to the Barclays Center in Brooklyn, New York.
5.

Commercial disputes arose on the Project.

The Skanska and B2 Owner

Actions essentially are competing lawsuits by the Skanska affiliated parties and the Forest
City affiliated parties, each alleging the other breached the CM Agreement.
6.

In this structured transaction, the CM Agreement was one of the various

agreements executed between Skanska and its affiliates and Forest City and its affiliates with
an effective date of October 31, 2012 for the Project. Another agreement was executed,
entitled Limited Liability Agreement of FC+S Modular LLC ("LLC Agreement"), which
created FC+S Modular LLC (FC+S), the jointly-owned company that would fabricate the
modular units for this Project as a subcontractor of Skanska. The LLC Agreement was
executed by Plaintiff FCRC Modular LLC (FCRC Modular), B2 Owner, Skanska, and
Defendant/Third-party Plaintiff Skanska Modular LLC (Skanska Modular).
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7.

This action was commenced by FCRC Modular, allegedly under the terms of

the LLC Agreement, and, among other things, asserting claims of breach of the LLC
Agreement against Skanska Modular and tortious interference with contract against Richard

Kennedy, an officer of Skanska and the past-president and past-director of FC+S. A correct
copy of Plaintiffs First Amended Complaint is attached hereto as Exhibit A. In turn,
Skanska Modular and Mr. Kennedy have asserted counterclaims and third-party claims
(further explained below) which include, among other things, a claim for Plaintiffs breach of
the LLC Agreement and Mr. Kennedys claim for libel per se.

A correct copy of

Defendants/Third-party Plaintiffs Answer to the First Amended Complaint, Counterclaims

and Third-party Complaint is attached hereto as Exhibit B.
8.

In or about November 2014, FCRC Modular purchased Skanska Modulars

membership interest in FC+S and changed the name of the company to FC Modular LLC
(FC Modular). FC Modular was subsequently added as a co-plaintiff in this action.
B.

The Berlin Rosen Subpoena and Its Relevancy

9.

As further explained below, the subpoena issued to Berlin Rosen seeks

discovery of facts related to a Press Release that Berlin Rosen issued on behalf of a Forest
City related entity and which Defendant/Third-party Plaintiff Kennedy claims contains
statements which are libelous per se. There are open issues which the subpoena seeks to
address that relate directly to this claim, that include but are not limited to, the identities of the
persons or entities which authorized the issuance of the Press Release and the scope and
extent of the Press Releases dissemination. As further explained below, this information is
material to the Eighth Counterclaim in which Mr. Kennedy alleges, pursuant to Williams v.
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Williams, 23 N.Y.2d 592 (1969), that this action was commenced maliciously and brought
solely for the purposes of later defaming him by disseminating defamatory information to
members of the industry in which he does business through the aforementioned Press Release
and other as yet unknown publications.
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10.

By way of background, Plaintiffs Second Cause of Action alleges a claim

against Mr. Kennedy for alleged tortious interference with contract in which they allege that
Mr. Kennedy knowingly, wrongfully, intentionally, maliciously, in bad faith and without
reasonable justification or excuse [sic] induce, persuade and entice Skanska Modular to
engage in ultra vires acts causing it to violate and breach the LLC Agreement in order to
further the interests of Skanska USA and contrary to the interests of FCRC Modular and the
Company. Ex. A hereto, at 77.
11.

Mr. Kennedy has denied these allegations in the Answer and has asserted the

Eighth Counterclaim and Third-party claim with respect to Plaintiffs commencement of this
action and as to the contents of a Press Release issued by Berlin Rosen, the press agent of one
or more of the Forest City entities. Specifically, Mr. Kennedy alleges, among other things,
that:
a)
The commencement of the within action against him was a
malicious act, and brought solely for the purposes of later defaming him
by disseminating defamatory information to members of the industry in
which he does business.;
b)
After commencement of the action against Kennedy, Forest City
and Jane Doe authorized the publication of a press release, on or about
September 5, 2014 and on several other as yet unknown occasions
thereafter, to prominent and multiple construction trade publications
providing that the complaint also states a claim for tortious interference
with contract against Kennedy because he knowingly, wrongfully,
intentionally, maliciously, in bad faith and without reasonable justification
or excuse induced Skanska Modular to breach the LLC Agreement."; and

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c)
The press release which was purposely and intentionally
published to prominent and multiple trade publications and media is not a
privileged act, but rather, constitutes libel per se as against Kennedy,
because it was malicious and alleges false and defamatory charges
designed to injure the reputation and cause embarrassment to Kennedy in
his trade and business and affect his business dealings, it attacks his
professional abilities and fitness to perform in his profession, and asserts

improper performance and unprofessional conduct in his business

dealings.
Ex. B hereto, at p. 46, 100-102.
12.

In order to elicit discovery as to the facts surrounding the issuance of the Press

Release, particularly as to which individuals and/or entities affiliated with Forest City
authorized its issuance, on October 22, 2014, Defendants/Third-party Plaintiffs, by their
counsel, issued a Subpoena Duces Tecum to Berlin Rosen (the Berlin Rosen Subpoena). A
correct copy of the Berlin Rosen Subpoena with attachments is attached hereto as Exhibit C.
The subpoena commanded that certain categories of documents relating to the Press Release
be produced on November 19, 2014.
13.

The Berlin Rosen Subpoena was duly served upon Berlin Rosen on October

22, 2014, along with the statutory witness fee, at its designated address for service of process.
A correct copy of the process servers Affidavit of Service is attached hereto as Exhibit D.
14.

The Berlin Rosen Subpoena attached a schedule of documents to be produced

regarding the Press Release and also provided a copy of the Press Release. Ex. C hereto, at p.
4 and Ex. A thereto. The document demand solely sought documents relating to the Press
Release and specifically those documents identifying: (a) its preparation and contents; (b) any
person or entity which or whom authorized Berlin Rosen to issue the Press Release; (c) to
whom the Press Release was issued; and (d) all inquiries made to Berlin Rosen regarding the
Press Release and any response(s) made to such inquiries. Id. at p. 4. The subpoena also
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specifically quoted the allegedly libelous statements at issue and advised Berlin Rosen that the
information being sought was necessary and relevant to determine the entities and
individuals which and/or whom authorized the issuance of this Press Release. Id. at p. 2.

C.

The Greenland Subpoena and Its Relevancy

15.

As further explained below, the subpoena issued to Greenland (the Greenland

Subpoena) relates to the contractual rights existing in the LLC Agreement and the capital
contributions made by FCRC Modular to FC+S for FC+S to perform future work on buildings
known as B3 and B4 at the Atlantic Yards Project. Because Greenland has allegedly acquired
the controlling interest in the Atlantic Yards Project and presumably has rights in the B3 and
B4 buildings, it is apparent that Greenland possesses information concerning the decision that
was made for B3 not to be built modularly and/or as to the manner in which B4 is to be built.
In essence, Greenland possesses information as to how or why FC+S has been allegedly
deprived of future work on B3 and/or B4, a subject matter of multiple counterclaims/thirdparty claims, including but not limited to, the 2nd, 3rd, 4th, 5th, and 6th Counterclaims/Thirdparty claims. See, Ex. B hereto.
16.

By way of background, Defendants/Third-party Plaintiffs allege in numerous

instances in their Counterclaims and Third-party Complaint that certain promises,

representations, and capital contributions were made by the Forest City entities before and
during the parties transaction and in the LLC Agreement which included a promised pipeline
of future modular work to be performed, including but not limited to commitments that the
"B3 Owner" and "B4 Owner" or their Prime Contractor would contract with FC+S for the
future projects at Atlantic Yards known as B3 and B4. See, Ex. B hereto, at 30, 54, 58-63,
79, 83-86 (i.e., pp. 31, 32, 36-37, 41-44).
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17.

From public statements made by the Forest City entities and from third-party

defendant Forest City Enterprise, Inc.s (Enterprises) Securities and Exchange Commission
filings, it is alleged at least as early as December 2013, the Forest City entity developing
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Atlantic Yards1 had entered into an agreement with Greenland to create a joint venture to
develop the project and whereby Greenland would acquire a 70% interest in the Atlantic
Yards Project (which included the B3 and B4 buildings). Id. at 28 (b)-(h). The sale to
Greenland is believed to have closed in June 2014. Id. at 29.
18.

It is further alleged that in or about April 2014, Forest City announced

publically to the media that the B3 project would be built conventionally, not modularly. Id.
at 30, 58.
19.

Upon information and belief, following FCRC Modular, Forest City,

Enterprises, and/or John Doe 1s sale of 70% of their interest in the Atlantic Yards Project,
Greenland now controls the decision as to whether buildings at the Atlantic Yard Projects are
to be built modularly or conventionally. Id. at 46.
20.

With respect to B3, Defendants/Third-party Plaintiffs claim that, contrary to

the terms and conditions of the LLC Agreement, FCRC Modular, Forest City, Enterprises and
John Doe 1 and their affiliates repudiated their obligations under the LLC Agreement by
deciding, with Greenland, that FC+S would not receive a contract for the B3 Building, and
that the B3 Building would not be built modularly, but conventionally. Id. at 61 (emphasis
added); see also, id. at 79, 83-85.

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In paragraph 11 of the First Amended Complaint (Ex. A hereto), Plaintiffs admit that third-party defendant
Forest City is the developer of the Atlantic Yards Project. This statement is suspect, however, and is subject to
further investigation through discovery, particularly in that the Atlantic Yards Development Agreement [see
Docket Entries 94 & 95 in the Skanska Action] lists other Forest City affiliates, not Forest City, as the developer.
Regardless, it is believed that prior to the sale of 70% of its interest to Greenland, Forest City, Enterprises and/or
John Doe 1 and/or their affiliates were the developer of the Atlantic Yards Project and controlled the decision as
to whether the B3 and B4 buildings at the Atlantic Yards Project would be built modularly or by conventional
methods. See, Ex. B hereto, at 33. Since the sale to Greenland, it is believed that Greenland now controls the
decision as to whether buildings at the Atlantic Yard Project are to be built modularly or conventionally. Id. at
46.

21.

Similarly, with respect to B4, it is alleged that, contrary to the terms and

conditions of the LLC Agreement, FCRC Modular, Forest City, Enterprises and John Doe 1
and their affiliates repudiated their obligations under the LLC Agreement by deciding, with
Greenland, that Greenland would decide whether the B4 Building would be built
conventionally or modularly, thereby repudiating the commitment of a contract to FC+S with
regard to the B4 Building. Id. at 62 (emphasis added); see also, id. at 79, 83-85.
22.

In order to elicit discovery as to the B3 and B4 buildings, on October 22, 2014,

Defendants/Third-party Plaintiffs, by their counsel, issued the Greenland Subpoena.

correct copy of the Greenland Subpoena with attachments is attached hereto as Exhibit E.
The subpoena commanded that certain categories of documents be produced on November 20,
2014. Id. at pp. 5-6, Schedule A thereto.
23.

The Greenland Subpoena was duly served upon Greenland through its

designated agent for service of process in Albany, NY, on October 23, 2014, along with the
statutory witness fee. A correct copy of the process servers Affidavit of Service is attached
hereto as Exhibit F.
24.

Amongst other things, the Greenland Subpoena seeks to discover documents

relating to the creation of the joint venture between Greenland and the Forest City developer
entity, information as to the B3 and B4 buildings, how B3 and B4 are to be built
(conventionally or modularly) and by which entities, and the rights of FC+S to construct B3
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and/or B4. Ex. E hereto, at pp. 5-6.

25.

The Greenland Subpoena specifically recites that FC+S rights to perform

work on the B3 and/or B4 buildings are in dispute in this action and why, through publically

available information, Defendants are aware that Greenland has acquired rights with respect
to these buildings and the manner in which they are likely to be built and by whom. Id. at p.
2.
D.

Subsequent Events

26.

After the issuance of the Subpoenas and following the filing of

Defendants/Third-party Plaintiffs initial Verified Answer, Counterclaims and Third-party

Complaint dated October 22, 2014, counsel for Plaintiffs, Natan Hamerman, Esq. of Kramer
Levin Naftalis & Frankel LLP, contacted me, among other things, to seek additional time to
respond to the Counterclaim and Third-party Complaint and to extend the due dates for the
responses to the Subpoenas.
27.

Mr. Hamerman advised that his office did not represent Greenland and that he

was not sure yet if Berlin Rosen would be represented by his office. Mr. Hamerman stated
that Greenland may be represented by the law firm of DLA Piper LLP, but he could not
confirm this representation.
28.

Nonetheless, opposing counsel procured an adjournment of the return dates of

the Subpoenas to December 22, 2014 and a Stipulation was reached to this effect. A correct
copy of the Stipulation dated November 11, 2014 is attached hereto as Exhibit G. Mr.
Hamerman advised me that he would notify Greenland and Berlin Rosen of the adjourned
dates.
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29.

Subsequently, three (3) additional extensions of time to the return dates of the

Subpoenas were procured. A correct copy of the Stipulation dated December 4, 2014 is
attached hereto as Exhibit H (extending the return dates of the Subpoenas to January 7,

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2015); a correct copy of the Stipulation dated December 24, 2014 is attached hereto as
Exhibit I (extending the return date of the Subpoenas to March 5, 2015); and a correct copy
of the Stipulation dated January 26, 2015 is attached hereto as Exhibit J (extending the return
date of the Subpoenas to March 16, 2015). This last date, March 16, 2015, is the current due
date for Greenlands and Berlin Rosens production of documents in response to the
Subpoenas. At all times, I understood that Kramer Levin Naftalis & Frankel LLP were
advising Berlin Rosen, Greenland, and/or their attorneys of the adjourned dates of the
Subpoenas.
30.

Well after issuance of the Subpoenas, on March 10, 2015, Plaintiffs and Third-

party Defendants filed a Motion to Dismiss [Motion Sequence 2], pursuant to CPLR 3211
(a)(1) and (a)(7), essentially seeking to dismiss all of Defendants/Third-party Plaintiffs
counterclaims, third-party claims, and certain affirmative defenses. By stipulation of counsel,
Defendants/Third-party Plaintiffs opposition to said motion is due on April 16, 2015 and the
motion is now scheduled for submission in Courtroom 130 on May 15, 2015.
31.

On Friday, March 13, 2015, I contacted Mr. Hamerman to discuss, among

other things, whether Greenland and/or Berlin Rosen would be producing documents in
response to the Subpoenas on the approaching return date of March 16, 2015. I was advised
that while Kramer Levin Naftalis & Frankel LLP did not represent Greenland or Berlin
Rosen, the last information Plaintiffs counsel had received was that neither Greenland nor
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Berlin Rosen would be producing documents on the return date and that they would instead be
asserting objections based upon the pending motion to dismiss the Counterclaims and Thirdparty Complaint. As to party discovery, it was represented to me that Plaintiffs position was
that all party discovery had been stayed by virtue of the motion to dismiss, pursuant to CPLR
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 3214 (b), such that Plaintiffs would not be responding, at this time, to the Notice of
Discovery and Inspection and the First Set of Interrogatories that had been served in October
2014.
32.

Based upon my conversations with counsel for Plaintiffs, I am confident that

opposing counsel has advised Greenland, Berlin Rosen, and/or their respective attorneys of
the adjourned dates and of the current return date of March 16, 2015 for the Subpoenas and
that they have discussed the Subpoenas and the pendency of the motion to dismiss made by
Plaintiffs/Third-party Defendants.
33.

Despite having been properly served with a subpoena seeking relevant

documents, Greenland and Berlin Rosen ignored the March 16th return date of the Subpoenas
and they failed to produce any documents, to timely state any objections or otherwise
communicate with counsel for Defendants/Third-party Plaintiffs on or before the March 16th
return date, despite having the Subpoenas since late-October 2014.
34.

As to Greenland, on March 19, 2015, my office received mail from DLA Piper

LLP, on behalf of Greenland, which contained a belated form of Responses and Objections
to the Greenland Subpoena. A correct copy of the Responses and Objections is attached
hereto as Exhibit K. Despite those Responses and Objections being dated March 16th, they
were not communicated to or received by my office prior to the subpoena return date.
35.

A simple review of Greenlands catch-all Responses and Objections

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demonstrates that Greenland will not produce certain documents (see Greenlands responses
to request numbers 5, 6, 11, 12) and, with respect to all other requests, it imposes arbitrary
limitations and responds with a myriad of contingencies that must be met before Greenland

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will produce documents. Specifically, Greenland says it will only produce documents if the
[Plaintiffs] Motion [to dismiss] is denied and if no party is able to produce the requested
document in party document discovery and only if the request concerns any decision not
to build B3 and/or B4 modularly, following a reasonable period to search for such document.
See, e.g., id. at p. 8, response to Document Request No. 1.
36.

Similarly, with respect to the Berlin Rosen Subpoena, my office received on

March 20, 2015 via certified mail, belated objections from Montgomery McCracken Walker
& Rhoads LLP, on behalf of Berlin Rosen. A correct copy of Berlin Rosens Responses and
Objections is attached hereto as Exhibit L. Berlin Rosens objections are virtually identical
in form and substance to those previously received from Greenlands attorneys, and they
place the same arbitrary conditions upon the production of responsive documents (i.e., Berlin
Rosen will produce only if the Plaintiffs motion to dismiss is denied and if no party to the
action is able to produce the documents). Id. at p. 5.
37.

Defendants/Third-party Plaintiffs have made this application by way of one

combined motion. While Greenland and Berlin Rosen have committed separate violations of
their respective subpoenas, in the interests of judicial economy and so as not to exacerbate the
legal costs and expenses incurred by Defendants/Third-party Plaintiffs to secure compliance
with the Subpoenas (which legal costs and expenses are the responsibility of Greenland and
Berlin Rosen), a single combined application has been made.
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38.
not

produce

Every day that Greenland and/or Berlin Rosen disobey the Subpoenas and do
responsive

documents,

they

defeat,

impair,

impede

and

prejudice

A Professional Corporation

Defendants/Third-party Plaintiffs rights and/or remedies as a litigant in this matter and, in

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particular, they impede and prejudice Defendants/Third-party Plaintiffs ability to prosecute

the counterclaims/third-party claims and to respond to Plaintiffs pending motion to dismiss
the Counterclaims and Third-party Complaint. See, CPLR 3211 (d).

Thus, the instant

application for a finding of civil contempt of court, plus an award of penalties, costs, and
attorneys fees has been made.
39.

No prior application has been made for the relief sought herein.

40.

In the Skanska Action, there is currently a motion pending to have this matter

jointly tried with the Skanska Action pursuant to CPLR 602 (a). That motion was marked
fully submitted in Courtroom 130 on April 8, 2015.
DATED:

New York, New York

April 15, 2015

PECKAR & ABRAMSON, P.C.

By:

/s/ Peter E. Moran

PETER E. MORAN

41 Madison Avenue, 20th Floor

New York, NY 10010
Telephone: (212) 382-0909
Pmoran@pecklaw.com
Co-Counsel for Defendant Skanska
Modular LLC and Attorneys for
Richard A. Kennedy
- andSandy K. Feldman, Esq.
Peter N. Flocos, Esq.
K&L GATES LLP
599 Lexington Avenue
New York, New York 10022
Telephone: (212) 536-3900
Co-Counsel for Defendant
Skanska Modular LLC

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