Zerlin v. Lansburgh
Zerlin v. Lansburgh
Opinion of the Court
The appellants and appellees were joint owners of the ground lease for the Eden Roc Hotel. The group sold its interest in the lease, retaining a security interest in the lease as well as the furniture and fixtures. Ultimately, the purchaser went into bankruptcy and the selling group sought to
After the mandate was issued, the appel-lees procured an order dropping Zerlin and Cohen as parties plaintiff in the malpractice action. The underlying basis for the ruling was as follows. After the foreclosure proceedings had been commenced, the group entered into an operating agreement wherein they would operate the hotel on behalf of the trustee during the bankruptcy proceedings. It was specifically provided that the group would advance monies for the opening and operation of the hotel. Upon the failure of Zerlin and Cohen to advance the required sums, suits were successfully maintained by the remaining members of the group to foreclose the liens of these two delinquent partners. From this judgment, the trial court in the instant case concluded that since Zerlin and Cohen were no longer partners in the Eden Roc Hotel, they were not entitled to the proceeds of the legal malpractice action. We disagree.
On these facts, it is clear that the appellants’ default on the operating agreement has no relation to the original selling group’s losses sustained because of the attorneys’ malpractice. The intervening foreclosure proceeding left Zerlin and Cohen’s personal right to recover damages undisturbed.
Consequently, we reverse the order dropping Zerlin and Cohen as parties.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.