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Wiener In Hot Water: The Decision To Turn Up The Heat
May 8, 2010 by Neil · Leave a Comment
New York multifamily power player Joel Wiener faces not one, but two recently certified class action lawsuits in the federal courts.
Judge Colleen McMahon certified two overlapping classes to proceed against Wiener’s Pinnacle Group NY LLC. She stated that if Plaintiffs’ allegations are true, “all [of Pinnacle's] rent-regulated tenants either have been subjected to, or are at risk of being subjected to the same general course of allegedly fraudulent and harassing conduct, the same pattern of racketeering.”
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The Court then certified a class compromised of “all persons who [as of April 27, 2010] are tenants in rent-regulated apartments in New York City directly or indirectly owned in whole or in part by the Pinnacle Enterprise.” This Injunctive Class will not get any money. Instead, they seek declaratory and injunctive relief to bring Pinnacle’s alleged improper practices to an end.
The court also certified a second, Liability Class so that those tenants seeking damages for Pinnacle’s conduct will have the opportunity to prove that Pinnacle and Wiener violated RICO and state consumer protection laws. The Liability Class is comprised “of all persons who, at any time between July 11, 2004 and [April 27, 2010], were tenants in rent-regulated apartments in New York City directly or indirectly owned in whole or in part by the Pinnacle Enterprise.”
If the Plaintiffs succeed in proving that the Defendants violated the law, the Court will then have to decide how to proceed with the determination of each tenant’s damages.
Since this is a RICO case, and fraud is alleged, if Plaintiffs prove that Wiener committed fraud, he can be personally liable to pay out of pocket.
What does that mean?
Since the insurance companies are probably footing the bill for Wiener’s defense, they may tell Wiener to personally cough up whatever damages a jury calculates — if he’s found to have engaged in fraud personally.
That, however, is an enormously high hurdle to overcome.
