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Judge orders payments made by mistake to be turned over

By: Bennett Loudon//August 16, 2023

Judge orders payments made by mistake to be turned over

By: Bennett Loudon//August 16, 2023//

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A federal judge has ordered a company to repay more than $90,000 that was paid by mistake.

“Don’t you know you’re not supposed to take things that don’t belong to you?” U.S. District Court Judge David G. Larimer wrote at the start of his nine-page decision, quoting from How the Grinch Stole Christmas, a children’s book by Dr. Seuss.

“The facts underlying this lawsuit are really quite simple,” U.S. District Court Judge David G. Larimer wrote at the start of his nine-page decision.

The plaintiff, NLD Rochester LLC, a Texas corporation, bought property from the defendant, 440 Lake Avenue LLC, a New York state-based corporation, in January 2021.

The property was purchased with a tenant, a Speedway gas station. The deal included an assignment and assumption of Speedway’s lease, which transferred the right to receive Speedway’s rent payments from 440 Lake Avenue to NLD Rochester.

The assignment also required 440 Lake Avenue to pay all of plaintiff’s costs, expenses, and reasonable attorney’s fees, “arising as a result of any act, omission or obligation of (defendant) arising or accruing with respect to the lease on or after the effective date,” according to Larimer’s decision.

“Speedway mistakenly made 14 lease payments totaling $83,888 to 440 Lake Avenue instead of to NLD Rochester … Plaintiff, Speedway, and notably, even the defendant, all agree that these lease payments should have been made to plaintiff, and not to the defendant,” Larimer wrote.

NLD Rochester and Speedway asked 440 Lake Avenue to turn over the mistaken payments.

“However, even while conceding that it was never entitled to receive the lease payments, defendant steadfastly refused, and continues to refuse, to surrender them to plaintiff. Even more remarkably, defendant fails to give any good reason for not promptly turning over the mistaken lease payments,” Larimer wrote.

At first, nobody representing 440 Lake Avenue bothered to appear in court or answer a complaint filed by NLD. On April 13, NLD secured an entry of default, and moved for a default judgment.

When an attorney for 440 Lake Avenue finally made a court appearance, they filed a cross motion to vacate the entry of default, “and proposed the assertion of counterclaims for private nuisance and negligence, based on Speedway’s alleged environmental contamination of a parcel still owned by defendant, adjacent to the property, for which plaintiff is now allegedly responsible as the property’s new owner,” Larimer wrote.

Larimer granted the motion for default judgment and denied 440 Lake Avenue’s motion to vacate the default. Larimer also ruled that NLD is also entitled to costs and attorney’s fees.

“I find that defendant has utterly failed to demonstrate the existence of any meritorious defenses,” Larimer wrote.

“I find that there are no material questions of fact concerning the merits of this matter, that the defendant has not demonstrated entitlement to vacatur of the clerk’s entry of default, and that plaintiff has shown entitlement to judgment in its favor,” Larimer wrote.

Larimer also awarded NLD attorney’s fees of $21,303.43 and costs of $496.46.

“These costs and fees were necessitated solely by defendant’s obfuscation and recalcitrance relating to its contractual and equitable obligations that arose from the Assignment,” Larimer wrote.

Larimer awarded NLD $83,888 for the rent payments, plus prejudgment interest of $10,528.52. He also granted NLD’s request for attorney’s fees and costs, for a grand total of $116,216.41.

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