client-letter-matter-closure.docx

1034-00003 · Ridgeway, Tanaka & Schiff LLP · Closing

client-letter-matter-closure.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP Attorneys at Law 599 Lexington Avenue, 34th Floor New York, NY 10022 Telephone: (212) 984-7600 Facsimile: (212) 984-7601 www.calderwoodharkness.com

January 31, 2024

VIA FIRST CLASS MAIL AND EMAIL

Jonathan R. Caldwell 440 East 72nd Street, Apt. 18D New York, NY 10021

Re: Caldwell v. Whitfield et al., Supreme Court of the State of New York, Kings County, Index No. 519847/2023 — Matter Closure and Preservation of Rights

Dear Mr. Caldwell:

I. Purpose of This Letter

We write to confirm that Calderwood & Harkness LLP is formally closing the above-referenced matter effective January 31, 2024. As you are aware, the firm was retained pursuant to our engagement letter dated September 11, 2023, to prosecute claims sounding in fraud and related causes of action against Marcus D. Whitfield ("Whitfield") and Pinnacle Greystone Capital LLC ("Pinnacle Greystone") arising from the co-investment in the mixed-use development project located at 540-548 Atlantic Avenue, Brooklyn, New York 11217 (the "Subject Property"). The purpose of this letter is to memorialize the formal closure of this matter, to provide a comprehensive summary of the current procedural posture of the case, to address the preservation of your legal rights going forward, to outline the procedures by which your original documents will be returned, and to confirm the final billing status of your account with the firm. We encourage you to retain this letter in your permanent files as a reference document, and we are of course available to address any questions that may arise.

II. Summary of Procedural History and Current Status

For the sake of completeness and to ensure that your records accurately reflect the full procedural history of this litigation, we summarize below the key events and filings that occurred during the pendency of this action.

Commencement of the Action. On September 18, 2023, we filed a Verified Complaint on your behalf in the Supreme Court of the State of New York, Kings County, asserting six causes of action against the defendants: (1) common-law fraud; (2) fraudulent inducement; (3) constructive fraud; (4) breach of fiduciary duty; (5) unjust enrichment; and (6) aiding and abetting fraud against Pinnacle Greystone Capital LLC. The Complaint set forth in detail the factual allegations underlying each claim, including the undisclosed property tax liens, the concealed environmental assessment, the inflated pro forma rent roll, and the undisclosed consulting agreement, all of which are summarized further in Section IV below.

Defendants' Answer. Defendants Marcus D. Whitfield and Pinnacle Greystone Capital LLC, represented by Ridgeway, Tanaka & Schiff LLP, with Helen K. Tanaka serving as lead partner, filed their joint Answer on October 23, 2023. The Answer denied all material allegations of the Complaint and asserted numerous affirmative defenses, including, among others, failure to state a cause of action, the statute of limitations, the doctrine of unclean hands, waiver, estoppel, ratification, and the economic loss doctrine.

Motion for Preliminary Injunction. On October 2, 2023, we filed a motion on your behalf seeking a preliminary injunction to restrain the defendants from further encumbering, transferring, or otherwise conveying any interest in the Subject Property during the pendency of the action. The motion was supported by your sworn affidavit, as well as documentary evidence including the recorded liens and the concealed Phase II environmental assessment. The motion was heard before the Honorable Patricia Velez, Justice of the Supreme Court, on October 30, 2023. Following oral argument, Justice Velez issued a written decision and order on November 8, 2023, denying the motion on the grounds that you had not demonstrated a likelihood of success on the merits sufficient to warrant the extraordinary remedy of preliminary injunctive relief, and that the potential harm could be adequately compensated by monetary damages. While we respectfully disagreed with the Court's analysis, you elected not to seek leave to reargue or to appeal the denial, which was within your right.

Mediation. At the direction of the parties and consistent with the Court's encouragement of alternative dispute resolution, the parties participated in a full-day mediation session on December 14, 2023, before Jerome Aschkenazy, Esq. of Meridian Dispute Resolution Services LLC. The mediation was conducted in good faith by both sides; however, despite extensive negotiations facilitated by Mr. Aschkenazy, the parties were unable to reach a resolution at that time.

Settlement Discussions. Following the mediation, settlement discussions continued through January 2024. Over the course of multiple written proposals and counterproposals exchanged between counsel, the parties narrowed the financial gap but ultimately could not reach agreement. Your final counteroffer was $3,600,000, and Mr. Whitfield's final offer, communicated through his counsel at Ridgeway, Tanaka & Schiff LLP, was $2,350,000. The resulting $1,250,000 gap between the parties' respective positions could not be bridged despite sustained efforts. Settlement discussions were formally terminated by mutual written communication between counsel on January 22, 2024.

Voluntary discontinuance. Following the termination of settlement discussions, and pursuant to your express instructions as communicated during our call on or about January 23, 2024, with Douglas Carmichael and Francesca Morano, we prepared and filed a Stipulation of Voluntary discontinuance Without Prejudice on January 26, 2024, pursuant to CPLR § 3217(a)(2). The stipulation was executed with the consent of the defendants through their counsel at Ridgeway, Tanaka & Schiff LLP. The stipulation was so-ordered by the Honorable Patricia Velez, J.S.C., on January 29, 2024. Accordingly, the action has been discontinued without prejudice and without costs to either party. A conformed copy of the so-ordered stipulation is included in your litigation file and will be returned to you as described in Section V of this letter.

III. Preservation of Rights — Without Prejudice discontinuance and Statute of Limitations

We wish to emphasize a critically important point regarding the nature of the discontinuance: because the action was discontinued without prejudice, you retain the legal right to refile the claims asserted in this action — as well as any additional or amended claims supported by the facts — against Marcus D. Whitfield and Pinnacle Greystone Capital LLC at a future date, subject to the applicable statutes of limitations and other procedural requirements. A discontinuance without prejudice does not constitute an adjudication on the merits and does not give rise to a defense of res judicata or collateral estoppel with respect to the claims that were asserted or could have been asserted in this action.

Applicable Statutes of Limitations. Under New York law, the applicable statute of limitations for fraud claims is six (6) years from the date of the fraud, or two (2) years from the date the plaintiff discovered the fraud (or could with reasonable diligence have discovered it), whichever is later. See CPLR § 213(8). The breach of fiduciary duty claim, to the extent it is predicated on fraud, is also subject to the six-year limitations period. The unjust enrichment claim is generally subject to a six-year limitations period under CPLR § 213(1).

Application to Your Claims. As set forth in the Complaint, you discovered the alleged misrepresentations underlying the fraud and related claims in or about August 2023. Specifically, the discovery encompassed: (a) the approximately $1,340,000 in undisclosed New York City real property tax liens encumbering the Subject Property; (b) the concealed Phase II environmental site assessment prepared by Ridgepoint Environmental Consultants LLC, which identified an estimated $620,000 in soil and groundwater remediation costs associated with the Subject Property; (c) the inflated pro forma rent roll provided by the defendants in connection with the investment, which overstated annual gross rental income by approximately $580,000; and (d) the undisclosed $370,000 consulting agreement between Pinnacle Greystone Capital LLC and Glenmore Realty Advisors Inc., an entity believed to be controlled by or affiliated with Mr. Whitfield.

Based on the date of discovery in August 2023, the two-year discovery-based limitations period under CPLR § 213(8) would expire approximately in August 2025. However, because the underlying misrepresentations were made during the period of March through May 2021, the six-year limitations period measured from the date of the underlying fraud would extend to approximately March through May 2027. As a practical matter, the longer of the two periods would apply, affording you additional time in which to refile if you so choose.

CPLR § 205(a) Toll. We also draw your attention to the provisions of CPLR § 205(a), which provides a six-month grace period within which to recommence an action if the original action was timely commenced and was subsequently terminated other than by voluntary discontinuance, failure to obtain personal jurisdiction, neglect to prosecute, or a final judgment on the merits. We note, however, that the applicability of Section 205(a) to voluntary discontinuances under CPLR § 3217(a)(2) involves complex considerations and has been the subject of varying judicial interpretations. Accordingly, while Section 205(a) may provide an additional safety net in certain circumstances, you should not rely solely on this provision. The statute of limitations analysis in this area can be complex, and we strongly urge you to consult with counsel well in advance of any applicable limitations deadline if you wish to refile your claims.

Your Present Election. We understand that, at this time, you have elected not to refile the action. As you conveyed during our January 23, 2024 conference, this decision is based on several considerations, including what you have described as litigation fatigue, your desire to preserve the co-investment relationship with Mr. Whitfield and to explore a potential negotiated exit from Atlantic Yards Development Partners LLC through means other than litigation, and the estimated remaining litigation costs through trial, which we projected to be in the range of $350,000 to $500,000, exclusive of any potential appellate proceedings.

While we respect your decision, we strongly recommend that you take the following precautions to preserve your ability to refile should circumstances change:

1. Calendar the relevant statute of limitations dates. At a minimum, you should calendar: (a) August 2025 (approximate expiration of the two-year discovery-based limitations period); and (b) March through May 2027 (approximate expiration of the six-year period from the date of the underlying misrepresentations). We recommend setting reminder dates at least six (6) months in advance of each deadline.

2. Contact counsel promptly if circumstances change. Should your circumstances change — for example, if negotiations for an exit from Atlantic Yards Development Partners LLC break down, if you discover additional evidence of fraud or wrongdoing by the defendants, or if the defendants take actions that impair or threaten the value of your investment — you should promptly contact this firm or other counsel to evaluate the advisability of recommencing the action.

3. Preserve all documents and communications. You should continue to preserve all documents, electronic communications, and other materials relating to the investment, the Subject Property, and your dealings with Mr. Whitfield, Pinnacle Greystone Capital LLC, and Atlantic Yards Development Partners LLC. Document preservation is essential to supporting any future claims you may elect to bring.

Please note that the firm is not undertaking any ongoing obligation to monitor the applicable statutes of limitations, and the responsibility for timely asserting your legal rights rests solely with you.

IV. Scope of Investment and Claims — Summary for Client Records

For the benefit of your records, we provide the following summary of the underlying investment and the claims asserted in this action.

The Investment. The subject investment involved the acquisition and planned redevelopment of the approximately 42,000-square-foot mixed-use building located at 540-548 Atlantic Avenue, Brooklyn, New York 11217, situated on an approximately 0.38-acre lot zoned C6-2A under the New York City Zoning Resolution (the "Subject Property"). The acquisition was structured through Atlantic Yards Development Partners LLC (EIN: 87-1253946) (the "Company"), a New York limited liability company in which Caldwell Urban Ventures LLC (your wholly-owned entity) held a 40% membership interest and Pinnacle Greystone Capital LLC held a 60% membership interest. The Subject Property was acquired on May 14, 2021, at a purchase price of $14,800,000. The acquisition was financed through a combination of senior debt and equity, as follows:

• Senior Loan: $9,620,000, provided by Broadmark Commercial Lending Corp., representing an approximately 65% loan-to-value ratio;

• Total Equity at Closing: $5,180,000, comprised of $2,072,000 contributed by Caldwell Urban Ventures LLC (representing your 40% pro rata share) and $3,108,000 contributed by Pinnacle Greystone Capital LLC (representing its 60% pro rata share);

• Mr. Caldwell's Total Committed Equity: $5,920,000, inclusive of the initial equity contribution at closing and subsequent capital calls and carrying cost contributions made through August 2023.

Damages Claimed. The Complaint sought compensatory damages in the aggregate amount of $6,200,000, calculated as follows:

• $5,920,000 representing your total out-of-pocket equity investment;

• $148,000 representing Caldwell Urban Ventures LLC's 40% share of the $370,000 advisory fee paid to Glenmore Realty Advisors Inc. under the undisclosed consulting agreement, which diverted Company funds without your knowledge or consent;

• Approximately $132,000 in carrying costs, professional fees, and lost opportunity costs incurred as a direct result of the defendants' fraudulent conduct;

• Plus punitive damages in an amount to be determined by the trier of fact, based on the alleged willfulness and egregiousness of the defendants' misconduct.

The foregoing facts and claims are fully preserved by the without-prejudice discontinuance and may be reasserted in their entirety if you elect to refile the action, subject to the statute of limitations considerations discussed in Section III above.

V. Return of Client Documents and File Retention

Return of Original Documents. In connection with the closure of this matter, Calderwood & Harkness LLP will return to you all original documents belonging to you that are currently in the firm's possession. These include, but are not limited to:

• Original executed investment agreements, including the Operating Agreement of Atlantic Yards Development Partners LLC and all amendments thereto;

• Original executed subscription agreements and capital call notices;

• Correspondence between you and the defendants or their representatives;

• Financial records and tax-related documents provided to the firm by your accountants at Ellerby & Associates CPAs LLP;

• The original appraisal report prepared by Tidewater Appraisal Group LLC (Kevin Romero, MAI, senior appraiser) in connection with the Subject Property;

• The copy of the Phase II environmental site assessment prepared by Ridgepoint Environmental Consultants LLC, to the extent an original or certified copy is in our files;

• Any other original client materials provided to the firm during the course of the representation.

Unless you direct us otherwise, these documents will be returned to you via secure courier (requiring signature upon delivery) to your address at 440 East 72nd Street, Apt. 18D, New York, NY 10021. We anticipate arranging shipment within approximately fifteen (15) business days following the date of this letter. If you prefer an alternative delivery method, a different delivery address, or wish to arrange for pickup at our offices, please contact us within thirty (30) days from the date of this letter.

Firm File Retention. In accordance with Calderwood & Harkness LLP's document retention policy, the firm will retain copies of the firm's work product (including memoranda of law, research, draft pleadings, and attorney notes), the complete litigation file (including all filed pleadings, motion papers, court orders, correspondence with Ridgeway, Tanaka & Schiff LLP, mediation-related materials and submissions to Meridian Dispute Resolution Services LLC, and transcripts), and all billing records for a period of seven (7) years from the date of this letter — i.e., through January 31, 2031. After the expiration of this seven-year period, the firm may destroy the retained files without further notice to you, unless you provide us with written instructions to the contrary prior to such date. We recommend that you make a note of this retention period in your records.

VI. Final Billing Summary

We confirm the following with respect to the financial aspects of the engagement:

Engagement Period: September 11, 2023, through January 31, 2024.

Engagement Team and Applicable Hourly Rates:

Total Professional Fees Billed: $287,450.00

Total Disbursements: $18,320.00, which includes filing fees (including index number purchase fee and request for judicial intervention fee), process service costs, mediation fees payable to Meridian Dispute Resolution Services LLC for the December 14, 2023 mediation session, appraisal costs payable to Tidewater Appraisal Group LLC, and miscellaneous disbursements including courier charges, document reproduction, and electronic research costs.

Total Amount Invoiced: $305,770.00 ($287,450.00 in professional fees plus $18,320.00 in disbursements).

We are pleased to confirm that the full amount of $305,770.00 has been received and that your account with the firm is paid in full. No further amounts are due or outstanding. A detailed final billing summary, including an itemized breakdown of professional fees by timekeeper and a schedule of disbursements, accompanies this letter under separate cover.

VII. Termination of Attorney-Client Relationship

We wish to confirm clearly and for the record that, with the formal closure of the above-referenced matter, the attorney-client relationship between Calderwood & Harkness LLP and Jonathan R. Caldwell with respect to the matter of Caldwell v. Whitfield et al., Supreme Court of the State of New York, Kings County, Index No. 519847/2023, is hereby terminated effective January 31, 2024.

As noted above, and as we wish to reemphasize, the firm is not undertaking any ongoing obligation to monitor statutes of limitations, changes or developments in applicable law, or changes in the status of the Subject Property, Atlantic Yards Development Partners LLC, or the defendants. Nor is the firm undertaking any obligation to advise you of any future legal matters, regulatory developments, or other events that may affect your rights. The responsibility for monitoring and protecting your legal rights going forward rests entirely with you. Should you decide at any time to take further legal action in connection with the matters described herein, you should engage qualified counsel promptly and well in advance of any applicable limitations deadlines.

It has been a privilege to represent you in this matter. While the outcome was not the resolution any of us had hoped for at the outset, we believe the litigation was conducted diligently and in your best interests throughout. The firm remains available should you require legal services in the future, whether in connection with this matter or any other matter in which we may be of assistance.

VIII. Contact Information

Should you have any questions regarding this letter, the closure of the matter, the return of your documents, or any other aspect of the representation, please do not hesitate to contact the undersigned directly:

Douglas Carmichael, Esq. Calderwood & Harkness LLP 599 Lexington Avenue, 34th Floor New York, NY 10022 Telephone: (212) 984-7614

Email: dcarmichael@calderwoodharkness.com

We thank you for your confidence in the firm and wish you well.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Douglas Carmichael Partner

Enclosures:

Final Billing Summary (under separate cover)

cc: (via email)

Francesca Morano, Esq. (Calderwood & Harkness LLP) Patrick Gallagher, Esq. (Calderwood & Harkness LLP)

This letter and any accompanying documents constitute a confidential attorney-client communication. If you have received this letter in error, please notify the sender immediately and destroy all copies.

Attorney	Role	Hourly Rate
Douglas Carmichael	Responsible Partner	$1,150/hour
Francesca Morano	Billing Partner	$1,075/hour
Patrick Gallagher	Lead Associate	$725/hour
Simone Laroche	Working Associate	$550/hour

CALDERWOOD & HARKNESS LLP Attorneys at Law 599 Lexington Avenue, 34th Floor New York, NY 10022 Telephone: (212) 984-7600 Facsimile: (212) 984-7601 www.calderwoodharkness.com
January 31, 2024
VIA FIRST CLASS MAIL AND EMAIL
Jonathan R. Caldwell 440 East 72nd Street, Apt. 18D New York, NY 10021
Re: Caldwell v. Whitfield et al., Supreme Court of the State of New York, Kings County, Index No. 519847/2023 — Matter Closure and Preservation of Rights
Dear Mr. Caldwell:
I. Purpose of This Letter
We write to confirm that Calderwood & Harkness LLP is formally closing the above-referenced matter effective January 31, 2024. As you are aware, the firm was retained pursuant to our engagement letter dated September 11, 2023, to prosecute claims sounding in fraud and related causes of action against Marcus D. Whitfield ("Whitfield") and Pinnacle Greystone Capital LLC ("Pinnacle Greystone") arising from the co-investment in the mixed-use development project located at 540-548 Atlantic Avenue, Brooklyn, New York 11217 (the "Subject Property"). The purpose of this letter is to memorialize the formal closure of this matter, to provide a comprehensive summary of the current procedural posture of the case, to address the preservation of your legal rights going forward, to outline the procedures by which your original documents will be returned, and to confirm the final billing status of your account with the firm. We encourage you to retain this letter in your permanent files as a reference document, and we are of course available to address any questions that may arise.
II. Summary of Procedural History and Current Status
For the sake of completeness and to ensure that your records accurately reflect the full procedural history of this litigation, we summarize below the key events and filings that occurred during the pendency of this action.
Commencement of the Action. On September 18, 2023, we filed a Verified Complaint on your behalf in the Supreme Court of the State of New York, Kings County, asserting six causes of action against the defendants: (1) common-law fraud; (2) fraudulent inducement; (3) constructive fraud; (4) breach of fiduciary duty; (5) unjust enrichment; and (6) aiding and abetting fraud against Pinnacle Greystone Capital LLC. The Complaint set forth in detail the factual allegations underlying each claim, including the undisclosed property tax liens, the concealed environmental assessment, the inflated pro forma rent roll, and the undisclosed consulting agreement, all of which are summarized further in Section IV below.
Defendants' Answer. Defendants Marcus D. Whitfield and Pinnacle Greystone Capital LLC, represented by Ridgeway, Tanaka & Schiff LLP, with Helen K. Tanaka serving as lead partner, filed their joint Answer on October 23, 2023. The Answer denied all material allegations of the Complaint and asserted numerous affirmative defenses, including, among others, failure to state a cause of action, the statute of limitations, the doctrine of unclean hands, waiver, estoppel, ratification, and the economic loss doctrine.
Motion for Preliminary Injunction. On October 2, 2023, we filed a motion on your behalf seeking a preliminary injunction to restrain the defendants from further encumbering, transferring, or otherwise conveying any interest in the Subject Property during the pendency of the action. The motion was supported by your sworn affidavit, as well as documentary evidence including the recorded liens and the concealed Phase II environmental assessment. The motion was heard before the Honorable Patricia Velez, Justice of the Supreme Court, on October 30, 2023. Following oral argument, Justice Velez issued a written decision and order on November 8, 2023, denying the motion on the grounds that you had not demonstrated a likelihood of success on the merits sufficient to warrant the extraordinary remedy of preliminary injunctive relief, and that the potential harm could be adequately compensated by monetary damages. While we respectfully disagreed with the Court's analysis, you elected not to seek leave to reargue or to appeal the denial, which was within your right.
Mediation. At the direction of the parties and consistent with the Court's encouragement of alternative dispute resolution, the parties participated in a full-day mediation session on December 14, 2023, before Jerome Aschkenazy, Esq. of Meridian Dispute Resolution Services LLC. The mediation was conducted in good faith by both sides; however, despite extensive negotiations facilitated by Mr. Aschkenazy, the parties were unable to reach a resolution at that time.
Settlement Discussions. Following the mediation, settlement discussions continued through January 2024. Over the course of multiple written proposals and counterproposals exchanged between counsel, the parties narrowed the financial gap but ultimately could not reach agreement. Your final counteroffer was $3,600,000, and Mr. Whitfield's final offer, communicated through his counsel at Ridgeway, Tanaka & Schiff LLP, was $2,350,000. The resulting $1,250,000 gap between the parties' respective positions could not be bridged despite sustained efforts. Settlement discussions were formally terminated by mutual written communication between counsel on January 22, 2024.
Voluntary discontinuance. Following the termination of settlement discussions, and pursuant to your express instructions as communicated during our call on or about January 23, 2024, with Douglas Carmichael and Francesca Morano, we prepared and filed a Stipulation of Voluntary discontinuance Without Prejudice on January 26, 2024, pursuant to CPLR § 3217(a)(2). The stipulation was executed with the consent of the defendants through their counsel at Ridgeway, Tanaka & Schiff LLP. The stipulation was so-ordered by the Honorable Patricia Velez, J.S.C., on January 29, 2024. Accordingly, the action has been discontinued without prejudice and without costs to either party. A conformed copy of the so-ordered stipulation is included in your litigation file and will be returned to you as described in Section V of this letter.
III. Preservation of Rights — Without Prejudice discontinuance and Statute of Limitations
We wish to emphasize a critically important point regarding the nature of the discontinuance: because the action was discontinued without prejudice, you retain the legal right to refile the claims asserted in this action — as well as any additional or amended claims supported by the facts — against Marcus D. Whitfield and Pinnacle Greystone Capital LLC at a future date, subject to the applicable statutes of limitations and other procedural requirements. A discontinuance without prejudice does not constitute an adjudication on the merits and does not give rise to a defense of res judicata or collateral estoppel with respect to the claims that were asserted or could have been asserted in this action.
Applicable Statutes of Limitations. Under New York law, the applicable statute of limitations for fraud claims is six (6) years from the date of the fraud, or two (2) years from the date the plaintiff discovered the fraud (or could with reasonable diligence have discovered it), whichever is later. See CPLR § 213(8). The breach of fiduciary duty claim, to the extent it is predicated on fraud, is also subject to the six-year limitations period. The unjust enrichment claim is generally subject to a six-year limitations period under CPLR § 213(1).
Application to Your Claims. As set forth in the Complaint, you discovered the alleged misrepresentations underlying the fraud and related claims in or about August 2023. Specifically, the discovery encompassed: (a) the approximately $1,340,000 in undisclosed New York City real property tax liens encumbering the Subject Property; (b) the concealed Phase II environmental site assessment prepared by Ridgepoint Environmental Consultants LLC, which identified an estimated $620,000 in soil and groundwater remediation costs associated with the Subject Property; (c) the inflated pro forma rent roll provided by the defendants in connection with the investment, which overstated annual gross rental income by approximately $580,000; and (d) the undisclosed $370,000 consulting agreement between Pinnacle Greystone Capital LLC and Glenmore Realty Advisors Inc., an entity believed to be controlled by or affiliated with Mr. Whitfield.
Based on the date of discovery in August 2023, the two-year discovery-based limitations period under CPLR § 213(8) would expire approximately in August 2025. However, because the underlying misrepresentations were made during the period of March through May 2021, the six-year limitations period measured from the date of the underlying fraud would extend to approximately March through May 2027. As a practical matter, the longer of the two periods would apply, affording you additional time in which to refile if you so choose.
CPLR § 205(a) Toll. We also draw your attention to the provisions of CPLR § 205(a), which provides a six-month grace period within which to recommence an action if the original action was timely commenced and was subsequently terminated other than by voluntary discontinuance, failure to obtain personal jurisdiction, neglect to prosecute, or a final judgment on the merits. We note, however, that the applicability of Section 205(a) to voluntary discontinuances under CPLR § 3217(a)(2) involves complex considerations and has been the subject of varying judicial interpretations. Accordingly, while Section 205(a) may provide an additional safety net in certain circumstances, you should not rely solely on this provision. The statute of limitations analysis in this area can be complex, and we strongly urge you to consult with counsel well in advance of any applicable limitations deadline if you wish to refile your claims.
Your Present Election. We understand that, at this time, you have elected not to refile the action. As you conveyed during our January 23, 2024 conference, this decision is based on several considerations, including what you have described as litigation fatigue, your desire to preserve the co-investment relationship with Mr. Whitfield and to explore a potential negotiated exit from Atlantic Yards Development Partners LLC through means other than litigation, and the estimated remaining litigation costs through trial, which we projected to be in the range of $350,000 to $500,000, exclusive of any potential appellate proceedings.
While we respect your decision, we strongly recommend that you take the following precautions to preserve your ability to refile should circumstances change:
1. Calendar the relevant statute of limitations dates. At a minimum, you should calendar: (a) August 2025 (approximate expiration of the two-year discovery-based limitations period); and (b) March through May 2027 (approximate expiration of the six-year period from the date of the underlying misrepresentations). We recommend setting reminder dates at least six (6) months in advance of each deadline.
2. Contact counsel promptly if circumstances change. Should your circumstances change — for example, if negotiations for an exit from Atlantic Yards Development Partners LLC break down, if you discover additional evidence of fraud or wrongdoing by the defendants, or if the defendants take actions that impair or threaten the value of your investment — you should promptly contact this firm or other counsel to evaluate the advisability of recommencing the action.
3. Preserve all documents and communications. You should continue to preserve all documents, electronic communications, and other materials relating to the investment, the Subject Property, and your dealings with Mr. Whitfield, Pinnacle Greystone Capital LLC, and Atlantic Yards Development Partners LLC. Document preservation is essential to supporting any future claims you may elect to bring.
Please note that the firm is not undertaking any ongoing obligation to monitor the applicable statutes of limitations, and the responsibility for timely asserting your legal rights rests solely with you.
IV. Scope of Investment and Claims — Summary for Client Records
For the benefit of your records, we provide the following summary of the underlying investment and the claims asserted in this action.
The Investment. The subject investment involved the acquisition and planned redevelopment of the approximately 42,000-square-foot mixed-use building located at 540-548 Atlantic Avenue, Brooklyn, New York 11217, situated on an approximately 0.38-acre lot zoned C6-2A under the New York City Zoning Resolution (the "Subject Property"). The acquisition was structured through Atlantic Yards Development Partners LLC (EIN: 87-1253946) (the "Company"), a New York limited liability company in which Caldwell Urban Ventures LLC (your wholly-owned entity) held a 40% membership interest and Pinnacle Greystone Capital LLC held a 60% membership interest. The Subject Property was acquired on May 14, 2021, at a purchase price of $14,800,000. The acquisition was financed through a combination of senior debt and equity, as follows:
• Senior Loan: $9,620,000, provided by Broadmark Commercial Lending Corp., representing an approximately 65% loan-to-value ratio;
• Total Equity at Closing: $5,180,000, comprised of $2,072,000 contributed by Caldwell Urban Ventures LLC (representing your 40% pro rata share) and $3,108,000 contributed by Pinnacle Greystone Capital LLC (representing its 60% pro rata share);
• Mr. Caldwell's Total Committed Equity: $5,920,000, inclusive of the initial equity contribution at closing and subsequent capital calls and carrying cost contributions made through August 2023.
Damages Claimed. The Complaint sought compensatory damages in the aggregate amount of $6,200,000, calculated as follows:
• $5,920,000 representing your total out-of-pocket equity investment;
• $148,000 representing Caldwell Urban Ventures LLC's 40% share of the $370,000 advisory fee paid to Glenmore Realty Advisors Inc. under the undisclosed consulting agreement, which diverted Company funds without your knowledge or consent;
• Approximately $132,000 in carrying costs, professional fees, and lost opportunity costs incurred as a direct result of the defendants' fraudulent conduct;
• Plus punitive damages in an amount to be determined by the trier of fact, based on the alleged willfulness and egregiousness of the defendants' misconduct.
The foregoing facts and claims are fully preserved by the without-prejudice discontinuance and may be reasserted in their entirety if you elect to refile the action, subject to the statute of limitations considerations discussed in Section III above.
V. Return of Client Documents and File Retention
Return of Original Documents. In connection with the closure of this matter, Calderwood & Harkness LLP will return to you all original documents belonging to you that are currently in the firm's possession. These include, but are not limited to:
• Original executed investment agreements, including the Operating Agreement of Atlantic Yards Development Partners LLC and all amendments thereto;
• Original executed subscription agreements and capital call notices;
• Correspondence between you and the defendants or their representatives;
• Financial records and tax-related documents provided to the firm by your accountants at Ellerby & Associates CPAs LLP;
• The original appraisal report prepared by Tidewater Appraisal Group LLC (Kevin Romero, MAI, senior appraiser) in connection with the Subject Property;
• The copy of the Phase II environmental site assessment prepared by Ridgepoint Environmental Consultants LLC, to the extent an original or certified copy is in our files;
• Any other original client materials provided to the firm during the course of the representation.
Unless you direct us otherwise, these documents will be returned to you via secure courier (requiring signature upon delivery) to your address at 440 East 72nd Street, Apt. 18D, New York, NY 10021. We anticipate arranging shipment within approximately fifteen (15) business days following the date of this letter. If you prefer an alternative delivery method, a different delivery address, or wish to arrange for pickup at our offices, please contact us within thirty (30) days from the date of this letter.
Firm File Retention. In accordance with Calderwood & Harkness LLP's document retention policy, the firm will retain copies of the firm's work product (including memoranda of law, research, draft pleadings, and attorney notes), the complete litigation file (including all filed pleadings, motion papers, court orders, correspondence with Ridgeway, Tanaka & Schiff LLP, mediation-related materials and submissions to Meridian Dispute Resolution Services LLC, and transcripts), and all billing records for a period of seven (7) years from the date of this letter — i.e., through January 31, 2031. After the expiration of this seven-year period, the firm may destroy the retained files without further notice to you, unless you provide us with written instructions to the contrary prior to such date. We recommend that you make a note of this retention period in your records.
VI. Final Billing Summary
We confirm the following with respect to the financial aspects of the engagement:
Engagement Period: September 11, 2023, through January 31, 2024.
Engagement Team and Applicable Hourly Rates:
Total Professional Fees Billed: $287,450.00
Total Disbursements: $18,320.00, which includes filing fees (including index number purchase fee and request for judicial intervention fee), process service costs, mediation fees payable to Meridian Dispute Resolution Services LLC for the December 14, 2023 mediation session, appraisal costs payable to Tidewater Appraisal Group LLC, and miscellaneous disbursements including courier charges, document reproduction, and electronic research costs.
Total Amount Invoiced: $305,770.00 ($287,450.00 in professional fees plus $18,320.00 in disbursements).
We are pleased to confirm that the full amount of $305,770.00 has been received and that your account with the firm is paid in full. No further amounts are due or outstanding. A detailed final billing summary, including an itemized breakdown of professional fees by timekeeper and a schedule of disbursements, accompanies this letter under separate cover.
VII. Termination of Attorney-Client Relationship
We wish to confirm clearly and for the record that, with the formal closure of the above-referenced matter, the attorney-client relationship between Calderwood & Harkness LLP and Jonathan R. Caldwell with respect to the matter of Caldwell v. Whitfield et al., Supreme Court of the State of New York, Kings County, Index No. 519847/2023, is hereby terminated effective January 31, 2024.
As noted above, and as we wish to reemphasize, the firm is not undertaking any ongoing obligation to monitor statutes of limitations, changes or developments in applicable law, or changes in the status of the Subject Property, Atlantic Yards Development Partners LLC, or the defendants. Nor is the firm undertaking any obligation to advise you of any future legal matters, regulatory developments, or other events that may affect your rights. The responsibility for monitoring and protecting your legal rights going forward rests entirely with you. Should you decide at any time to take further legal action in connection with the matters described herein, you should engage qualified counsel promptly and well in advance of any applicable limitations deadlines.
It has been a privilege to represent you in this matter. While the outcome was not the resolution any of us had hoped for at the outset, we believe the litigation was conducted diligently and in your best interests throughout. The firm remains available should you require legal services in the future, whether in connection with this matter or any other matter in which we may be of assistance.
VIII. Contact Information
Should you have any questions regarding this letter, the closure of the matter, the return of your documents, or any other aspect of the representation, please do not hesitate to contact the undersigned directly:
Douglas Carmichael, Esq. Calderwood & Harkness LLP 599 Lexington Avenue, 34th Floor New York, NY 10022 Telephone: (212) 984-7614
Email: dcarmichael@calderwoodharkness.com
We thank you for your confidence in the firm and wish you well.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Douglas Carmichael Partner
Enclosures:
Final Billing Summary (under separate cover)
cc: (via email)
Francesca Morano, Esq. (Calderwood & Harkness LLP) Patrick Gallagher, Esq. (Calderwood & Harkness LLP)
This letter and any accompanying documents constitute a confidential attorney-client communication. If you have received this letter in error, please notify the sender immediately and destroy all copies.
Attorney | Role | Hourly Rate
Douglas Carmichael | Responsible Partner | $1,150/hour
Francesca Morano | Billing Partner | $1,075/hour
Patrick Gallagher | Lead Associate | $725/hour
Simone Laroche | Working Associate | $550/hour

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