SOL-MM III LLC v. JPMorgan Chase Bank, N.A.
- John Koeltl
- 1:23-cv-06479
- U.S. District Court · Southern District of New York
- 6
In SOL-MM III v. JPMorgan, Judge Koeltl granted reconsideration, ruling Count III against the MOA Guarantor should be dismissed while preserving possible amendment for declaratory relief.
SOL-MM III LLC’s fraudulent-transfer claim in Count III against the MOA Guarantor was ruled subject to dismissal; SOL-MM may still seek permission to amend its complaint to add a declaratory-relief claim against that defendant.
What happened
SOL-MM III LLC sued JPMorgan Chase Bank, N.A., and other defendants over financing for the development of the American Dream Mall. The court had dismissed the fraudulent-transfer claim in Count III against the JPM Defendants but had allowed it to continue against the MOA Guarantor.
The American Dream Defendants asked the court to reconsider that decision. They argued that SOL-MM had identified the MOA Guarantor as only a nominal defendant, meaning it was not a real party with an interest in the dispute. SOL-MM acknowledged that description but argued that the issue had not been raised as an independent basis for dismissal and that it could still seek declaratory relief against the MOA Guarantor.
Judge John G. Koeltl granted the motion for partial reconsideration. He ruled that because the claim failed against the real parties in interest, it should also have been dismissed against the nominal defendant. The ruling did not prevent SOL-MM from seeking permission to amend its complaint to add a declaratory-relief claim against the MOA Guarantor.
The detailed version
- SOL-MM III LLC v. JPMorgan Chase Bank, N.A. · No. 1:23-cv-06479
- John Koeltl
- May 5, 2025
Background
The case concerns financing for development of the American Dream Mall. SOL-MM III LLC sued two groups of defendants: the JPM Defendants and the American Dream Defendants. The opinion identifies the JPM Defendants as JPMorgan, D5 Hawks LLC, WE Tahoe 1 LLC, and WE Tahoe 2 LLC. The American Dream Defendants include New WEM Holdings Affiliate 1 Ltd., New WEM Holdings Affiliate 2 Ltd., New WEM Holdings Ltd., MOA Holdings III, LLC, Ameream LLC, Meadow A-B Office LLC, Meadow C-D Office LLC, Meadow Hotel LLC, and Meadow Baseball LLC.
In Count III of the Second Amended Complaint, SOL-MM asserted fraudulent-transfer claims under the Minnesota Uniform Voidable Transactions Act. The claims concerned the transfer of the MOA Equity in 2021 and the capping of related Reimbursement Claims. In the earlier ruling on the defendants’ motions to dismiss, the court dismissed Count III as to the JPM Defendants because SOL-MM had not adequately alleged that they were proper defendants. The court did not dismiss Count III as to MOA Holdings III, LLC, referred to as the MOA Guarantor.
Motion for Partial Reconsideration
The American Dream Defendants moved for partial reconsideration of the decision allowing Count III to proceed against the MOA Guarantor. They pointed to SOL-MM’s statement that it had added the MOA Guarantor to Count III “as a nominal defendant only.” A nominal defendant is generally a party that has no interest in the subject matter and against which no claim for relief is properly stated.
SOL-MM did not dispute that it had described the MOA Guarantor as a nominal defendant. It argued that the defendants had not expressly presented nominal-defendant status as an independent reason for dismissal in the original motion and that SOL-MM could seek declaratory relief against the MOA Guarantor.
Court’s Analysis
The court concluded that its earlier ruling had overlooked SOL-MM’s admission that the MOA Guarantor was a nominal defendant. That fact had been presented to the court during the motion to dismiss, and the defendants had cited the admission in their reply. The court also concluded that the defendants had not been required to rely on nominal-defendant status earlier because the claim against the JPM Defendants had not yet been dismissed.
The court held that when a plaintiff fails to state a claim against the real parties in interest, the related claim against a nominal defendant must also fail. Because the court had dismissed Count III as to the JPM Defendants, it ruled that Count III should also have been dismissed as to the MOA Guarantor.
The court stated that it was unclear whether the Second Amended Complaint sought declaratory relief against the MOA Guarantor. It further stated that the original motion to dismiss had not presented the arguments SOL-MM was now making about pursuing such relief.
Disposition
The court granted the American Dream Defendants’ motion for partial reconsideration. The ruling was without prejudice to SOL-MM’s ability to seek leave to amend the Second Amended Complaint to add a claim for declaratory relief against the MOA Guarantor in connection with Count III. The clerk was asked to close the motion at ECF No. 128.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.