In re: 650 Fifth Avenue and Related Properties

Background

The late Jeremy Levin and Lucille Levin, referred to as the Levins, moved for summary judgment against Assa Corporation and Assa Company Limited, collectively called Assa. The Levins held partially unsatisfied judgments totaling $28,807,719.00 against Iran. They asked the court to rule that property associated with Assa was available to satisfy those judgments under Section 201 of the Terrorism Risk Insurance Act of 2002 (TRIA).

The property included Assa’s 40 percent partnership interest in the 650 Fifth Avenue Company, which owned and managed a building at 650 Fifth Avenue, and Assa’s interests in funds held in United States bank accounts. The court had previously determined that the property was “blocked assets” under the TRIA. In a 2017 judgment, the court extinguished Assa’s “right, title, and interest” in the property and awarded all of those interests to other judgment creditors. The Second Circuit affirmed that judgment as to Assa, and the judgment became final after Assa did not seek review by the Supreme Court.

Legal standard

Summary judgment is appropriate when the evidence shows that no genuine dispute exists about a fact that could affect the outcome and the moving party is entitled to judgment under the law. The court must view disputed facts and reasonable inferences in favor of the party opposing the motion.

Under Section 201(a) of the TRIA, blocked assets of a terrorist party, including assets of its agency or instrumentality, may be attached or executed to satisfy a qualifying judgment. The court explained that the terrorist party or its agency or instrumentality must still have a property interest in the assets for them to be available under the statute.

Court’s analysis

The court agreed with the Levins that Assa’s assets were blocked under the TRIA. But the court held that the property could not be executed against by the Levins because Assa’s interest had already been extinguished.

The 2017 judgment expressly eliminated Assa’s ownership interest and awarded the property to the other judgment creditors. The judgment also stated that the outstanding compensatory damages in those creditors’ judgments exceeded the estimated value of the Assa property. That finding indicated that no residual would remain for Assa to claim.

The Levins argued that no judicial accounting had determined whether all judgment creditors’ claims could be satisfied and that a remaining balance might therefore exist after the property was sold and distributed. The court rejected summary judgment on that theory as well. Without an accounting, the court said, it was impossible to determine whether any residual existed or whether Assa could claim it. Even if the Levins had offered admissible evidence of a residual, that possibility would create a genuine dispute of material fact and prevent summary judgment.

Disposition

The court denied the Levins’ motion for summary judgment. The order was amended only to correct a clerical error in the original order, which had incorrectly referred to a motion by the defendants rather than the Levins’ motion. Senior United States District Judge Loretta A. Preska stated that the substance of the original order was unchanged.