Thursday, July 9, 2009

Lawsuit Filed Against NYRA

Property Bidder Claims Foul on Public Auction

By Patricia Adams

The June 10th auction to sell off 64 lots belonging to the New York Racing Association (NYRA) has resulted in a lawsuit filed last month by one of the bidders at the sale. John Sita, a Brooklyn resident, attended the auction and purchased a total of more than $1 million of property being offered by Maltz Auctioneers on behalf of NYRA.

Now Sita contends, NYRA says he is not the owner of three of those lots, located along Huron Street near Hawtree Street and Eckford Avenue. The lots named in the suit were, according to Sita, sold to him as the highest bidder at the auction for $233,200.

Stephan Gleich, Sita’s attorney told The Forum that the three lots were the only ones being held up by NYRA and that there were no problems with the rest of his client’s purchase.= Gleich says that Sita got a signed contract from NYRA on the day of the auction and that copies of that document were filed as part of his client’s lawsuit.

According to Gleich NYRA agreed on the day of the sale to Sita’s bid but decided not to honor the sale after having received a higher bid from a party who did not even attend the auction. “It is my client’s position that when an auction is held and all the rules of the seller are followed and you put up your money and are the highest bidder then the process is complete,” said Gleich. “It is unconscionable to think that the auction would continue to force bidders to pay more than the original agreement.”

Gleich further explained that if NYRA did not want to sell the property for less than a certain amount they could have entered a reserve on particular lots which would pre-empt the sale at anything less than their target price.

Rules for the auction were posted on the website for Maltz Auctions prior to the sale and clearly stated that successful bidders would meet immediately following the auction with David R. Maltz & Co. Inc. representatives to complete the necessary documents. Within 48 hours after the auction, a total deposit and buyers' premium equal to 16% of the high bid at auction must have been received.

Gleich states that his client followed through with every requirement, but notification never came within 48 hours of the auction. What did come however was a phone call from Maltz to inform Sita that if he wanted the three lots he thought he already owned, he would have to fork over an additional sum to match a bidder that came in roughly $70,000 higher than his bid.

“My client has a signed contract and there was failure of notification. If that does not secure the property for Mr. Sita then I am confident that the fact that the process is inherently unfair will prevail in this matter.”

According to Dan Silver, NYRA’s Director of Communication and Media Relations, "NYRA conducted the auction with full transparency and to the letter of the rules that were widely published and known to all auction participants. That being said, NYRA will not comment on the particulars of any pending lawsuit pending resolution of the matter through the judicial system."

The lawsuit filed on behalf of Sita in late June must be answered within twenty days of service. A spokesperson at Maltz Auctions refused comment in the matter.

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