SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK ---------------------------------------------------------------------x LIBERTY MEADOWS, LLC, DEMETRIUS A.

TSUNIS a/k/a JIM TSUNIS and ENRICO SCARDA, VERIFIED COMPLAINT Plaintiff, Index No. -againstBETHPAGE FEDERAL CREDIT UNION, Defendant. ---------------------------------------------------------------------x Plaintiff, by his attorneys, Pinks, Arbeit & Nemeth, Esqs., for its verified complaint, alleges: 1. At all times hereinafter mentioned, plaintiff Liberty Meadows, LLC (Liberty)

was and is a New York limited liability company having its principal place of business in Hauppauge, New York. 2. At all times hereinafter mentioned, plaintiffs Demetrius A. Tsunis (Tsunis) and

Enrico Scarda (Scarda) were and are the managing members of Liberty. 3. Upon information and belief, at all times hereinafter mentioned Bethpage Federal

Credit Union (BFCU) is authorized to conduct business within the State of New York as a federally chartered credit union subject to the rules and regulations set forth in the Credit Union Membership Access Act of 1998 and the rules and regulations promulgated pursuant to that statute. 4. On or about March 29, 2007 plaintiff Liberty purchased real property in Port

Jefferson, New York consisting of 17.57 acres for a purchase price of $8,213,053.

5.

On August 21, 2007 plaintiff Liberty purchased an additional .88 acres adjacent to

the 17.57 acres previously purchased for a purchase price of $400,000. 6. The aforesaid properties were purchased subject to approval of an application to

the Village of Port Jefferson for development of 43 age-restricted (55 and over) senior citizen townhouse condominiums including a central clubhouse approximately 1,776 + square feet in size (the Senior Citizen Project). 7. Prior to April 10, 2010, BFCU had offered to refinance a shopping center owned

by a limited liability company of which Tsunis and Scarda were the managing members. 8. Defendant, at that time, informed plaintiffs that it was anxious to expand its

lending business by financing real estate development, construction, and related projects. 9. Plaintiffs Tsunis and Scarda rejected BFCUs offer and instead suggested that

BFCU finance their Senior Citizen Project, which BFCU agreed to do. 10. On or April 6, 2010 BFCU offered to lend plaintiffs up to $15,000,000.00 for the

development of the Senior Citizen Project, $4,000,000.00 of which was to be allocated to the land purchase and the balance to be advanced after plaintiffs constructed model units. 11. The loan offer was made on behalf of BFCU by Richard Burgess whose title was

Commercial Relationship Manager (Burgess) and Lawrence S. Jones, Assistant Vice President (Jones) and on behalf of Liberty by plaintiff Tsunis. 12. 13. Plaintiffs accepted BFCUs offer to finance the Senior Citizen Project. On April 6, 2010 BFCU advanced $4,000,000.00 to Liberty which represented the

land acquisition portion of its commitment. 14. Thereafter, plaintiffs relied upon the commitment agreement made by BFCU and

in reliance thereof undertook the permitting process, site development and construction of model condominium units. Plaintiffs, in reliance on BFCUs representations that it would fund the
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Senior Citizen Project, spent over $1,500,000.00 for development thereof which included site work, model and common area construction. 15. All conditions imposed by BFCU for funding of the remainder of the loan were

met by the plaintiffs which included the following: (A) Loan to sell-out value did not exceed 50% as per an appraisal commissioned for by BFCU; and (B) Payment of interest and all fees required BFCU. 16. On October 12, 2010 BFCU unilaterally amended its agreement to provide

$15,000,000.00 in financing and instead committed to a financing package totaling $10,050,000.00 which would be allocated as follows: Land Purchase Dr. W (payments to seller) Capital One (purchase money loan repayment) Site Work Contingency Fund Interest Reserve Revolving Credit (to be used for construction) Total: 17. $4,000,000.00 $ 400,000.00 $ 850,000.00 $1,100,000.00 $ 800,000.00 $ 800,000.00 $2,100,000.00 $10,050,000.00

Plaintiffs accepted BFCUs change to its commitment agreement and agreed to

accept financing at $10,050,000.00. 18. Between October 13, 2010 and July 29, 2011 BFCU, through Burgess and Jones,

assured plaintiffs that the loan was approved by BFCU and that as a matter of formality it was to be presented to a loan committee and thereafter funded. 19. Upon information and belief, the remainder of the loan commitment was not

presented to BFCUs loan committee for approval and/or in spite of its agreement, BFCUs loan committee wrongfully refused to approve funding. 20. Upon information and belief, in spite of their promises, Burgess and Jones
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presented the financing package to their committee under BFCUs preconceived plan to have it disapproved. 21. Upon information and belief, BFCU did not have the lending capacity to fulfill its

loan agreement with plaintiffs at the time it presented the financing package to its committee. 22. On or about November 1, 2011 defendant notified plaintiffs that it would not

advance plaintiff any further funds. 23. Plaintiffs thereafter obtained a $10,000,000.00 loan for the Senior Citizen Project

from Valley National Bank and the $4,000,000.00 advance was repaid to BFCU with interest, in full. 24. Solely as a result of BFCUs refusal to fund the Senior Citizen Project, plaintiffs

development of the Senior Citizen Project was stalled for a period in excess of 15 months. 25. Solely as a result of BFCUs refusal to comply with its commitment to fund the

construction of the Senior Citizen Project, plaintiffs were unable to make timely payment to its subcontractors and materialmen which, therefore, resulted in a loss of plaintiffs Tsunis and Scardas reputations as responsible real estate developers. 26. Solely as a result of the construction delay which was caused by BFCUs refusal

to fund the Senior Citizen Project, plaintiffs lost credibility in the community which resulted in the loss to it of potential sales. 27. In order to renew community interest in the Senior Citizen Project and generate

sales of its units, plaintiffs were forced to and did reduce its published unit price and provide other amenities which cost plaintiffs $150,000.00 per unit. These concessions would not have been provided had the Senior Citizen Project been built in the timeframe as planned. 28. Defendant knew that in the event it did not fund the Senior Citizen Project

plaintiffs would suffer damages as hereinafter set forth.

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AS AND FOR A FIRST CAUSE OF ACTION ON BEHALF OF LIBERTY MEADOWS, LLC (Common-Law Fraud) 29. Upon information and belief, at the time of its agreement to fund the Senior

Citizen Project, BFCU did not have statutory authority to finance the construction of the Senior Citizen Project for the agreed amount. 30. Defendant had a duty to disclose to plaintiff that it may not have the lending

capacity to fund the development of plaintiffs construction project. 31. Upon information and belief, at the time defendant represented to plaintiffs that it

would fund the project, it never did intend to do so for the full amount of its commitment. 32. That defendants misrepresentation to plaintiffs were made for the purpose of

inducing plaintiffs to finance at least a portion of the construction project with the defendant in order for defendant to earn the interest and financing fees associated therewith. 33. Had defendant informed plaintiffs that complete funding of plaintiffs

construction project was contingent upon defendants ability to comply with federal law and regulations and its financial standing at the time advances were to be made, plaintiffs would have sought and been able to finance the project with another bank or financial organization which had the expertise and ability to properly handle the funding of the Senior Citizen Project. 34. That as a result of defendants false misrepresentations, plaintiffs were delayed in

the completion of its construction project. 35. $8,450,000.00. AS AND FOR A SECOND CAUSE OF ACTION ON BEHALF OF LIBERTY MEADOWS, LLC (Negligent Misrepresentation) 36. Defendant by Burgess and Jones represented to plaintiffs that they had vast
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That as a result of the foregoing, plaintiffs have been damaged in the sum of

experience in the financing of the multi-family real estate development. 37. 38. Defendants representations as to its experience were false. That defendant, by Richard Burgess and Lawrence S. Jones, negligently

misrepresented defendants ability to fund the construction loans which it committed to provide to plaintiff. 39. That defendant negligently strung plaintiffs along by falsely representing to the

plaintiffs that defendant would fund the loan. 40. The information provided to the plaintiffs was false in that defendant

misrepresented its ability and willingness to fund construction of the Senior Citizen Project in the amount of $15,000,000.00 and later in the amount of $10,050,000.00. 41. Plaintiffs, in reliance upon defendants misstatements, funded the construction

project themselves including payment of bank fees which cost plaintiffs in excess of $1,500,000.00. 42. As a result of defendants refusal to fund, plaintiffs cash was depleted and they

were unable to pay contractors, materialmen and other obligations associated with the project. 43. That as a result of defendants misrepresentations the project has been delayed for

a period of at least 15 months. 44. Plaintiffs have been damaged in the sum of at least $8,450,000.00. AS AND FOR A THIRD CAUSE OF ACTION ON BEHALF OF LIBERTY MEADOWS, LLC (Breach of Contract) 45. Defendant breached its contract to finance plaintiffs construction project by its

failure to fund the construction loan portion of its agreement. 46. That as a result of defendants breach of contract, plaintiffs have been damaged in

the amount of at least $8,450,000.00.

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AS AND FOR A FOURTH CAUSE OF ACTION ON BEHALF OF DEMETRIUS A. TSUNIS a/k/a JIM TSUNIS (Breach of Contract) 47. Plaintiff Tsunis is a third-party creditor-beneficiary to the agreement between

Liberty and BFCU. 48. At all times hereinafter mentioned defendant knew that Tsunis was a real estate

developer and as such, regularly invested in real estate development opportunities which required the use by him of substantial personal cash reserves. 49. Tsunis, prior to the transactions hereinbefore described, enjoyed a good reputation

as a builder/developer of residential multi-family residential projects. 50. That as a result of defendants conduct, Liberty, Tsunis and Scarda were unable to

make timely payment to their contractors, subcontractors and materialmen. 51. Solely as a result of defendants refusal to fund the Senior Citizen Project,

subcontractors refused to work on the Senior Citizen Project, thereby delaying its completion. 52. That plaintiff Tsunis spent a substantial portion of his cash in order to salvage the

Senior Citizen Project in reliance upon defendants agreement to provide financing. 53. That as a result of defendants failure to provide the promised financing, plaintiff

Tsunis was forced to forego other development opportunities from which he would have earned substantial profits. 54. Plaintiff Tsunis, as a result of the foregoing, has been damaged in the sum of at

least $15,000,000.00. AS AND FOR A FIFTH CAUSE OF ACTION ON BEHALF OF ENRICO SCARDA (Breach of Contract) 55. Plaintiff Scarda is a third-party creditor-beneficiaries to the agreement between

Liberty and BFCU.

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56.

At all times hereinafter mentioned defendant knew that Scarda was a real estate

developer and as such, regularly invested in real estate development opportunities which required the use by him of substantial personal cash reserves. 57. Tsunis and Scarda, prior to the transactions hereinbefore described, enjoyed a

good reputation as builder/developers of residential multi-family residential projects. 58. That as a result of defendants conduct, Liberty, Tsunis and Scarda were unable to

make timely payment to their contractors, subcontractors and materialmen. 59. Solely as a result of defendants refusal to fund the Senior Citizen Project,

subcontractors refused to work on the Senior Citizen Project, thereby delaying its completion. 60. That plaintiff Scarda spent a substantial portion of his cash in order to salvage the

Senior Citizen Project in reliance upon defendants agreement to provide financing. 61. That as a result of defendants failure to provide the promised financing, plaintiff

Scarda was forced to forego other development opportunities from which he would have earned substantial profits. 62. Plaintiff Scarda, as a result of the foregoing, has been damaged in the sum of at

least $15,000,000.00. WHEREFORE, plaintiffs demand judgment as follows:

A.

On plaintiffs First Cause of Action in the sum of $8,450,000.00 plus punitive

damages in a sum;
B. C. D.

On plaintiffs second cause of action in the sum of $8,450,000.00; On plaintiffs third cause of action in the sum of $8,450,000.00; On plaintiffs fourth cause of action in a sum to be determined by the Court but

which is in at least the sum of $15,000,000.00; E. On plaintiffs fifth cause of action in a sum to be determined by the Court but
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which is in at least the sum of $15,000,000.00; and F. Costs and disbursements of this action. Yours, etc., PINKS, ARBEIT & NEMETH, ESQS. Attorneys for Plaintiff By:______________________________________ Steven G. Pinks 140 Fell Court - Suite 303 Hauppauge, New York 11788 (631) 234-4400

Dated: Hauppauge, New York May 2, 2012