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> Hemdat Yamim

Shabbat Parashat Shemini 5781

P'ninat Mishpat: Preserving the Management Companys Security part I

(based on ruling 77009 of the Eretz Hemdah-Gazit Rabbinical Courts)

Case: The plaintiffs (=pl) are the sixty families of a kevutzat rechisha (a group that buys land and builds a housing project together), organized by a management company (=def2). Pl all signed two agreements: 1) A management agreement between them and def2; 2) A partnership agreement, signed by all of pl, in which their obligations as partners are spelled out. At the time of adjudication, pl were close to completing, after many years, the project. Def2 claimed outstanding fees (approximately 2.5 million shekels) from pl, and pl are planning a major countersuit against def2 for mismanagement. Pl are trying to receive outside funding to continue the project, which is now unfeasible because their lawyer (=def1) created a he’arat azhara (=he’az; an encumbrance) on behalf of def2, preventing pl from taking legal actions on their property, including putting a lien on it to a financial institution. Def2 is willing to remove the he’az only if pl put in escrow the amount of money def2 is suing for. Pl argue that def1 did not have a right to create the he’az for def2, as it was authorized only to be in def1’s name, as pl’s lawyer looking out for their interests against the possibilities of a partner not fulfilling his obligations to them.

 

Ruling: [The first part of the presentation focuses on jurisdiction. The agreements specify that adjudication of disputes is at Eretz Hemdah. However, pl plan to sue def1 and def3 (owner and CEO of def2) personally and since they have personal liability insurance and their insurance companies are not included in the arbitration clause, def1 and def3 say that if they demand personal liability, that part should be in civil court. This prompted pl to say that under this circumstance, they want to adjudicate with def2 as well in civil court and only deal with lifting he’az in beit din. Def2 wants everything related to it adjudicated in beit din. Originally, def1 also wanted to keep the he’az until his legal fees were paid or guaranteed, but pl and def1 reached a compromise based on a formula the sides had arrived at a year earlier.] 

The present adjudication, on the he’az, needs to be taken care of swiftly, whereas the rest of the adjudication is highly complex, the countersuit is not yet complete, and there is a disagreement about the venue of the adjudication [ed. note – it was later decided by court ruling]. Yet, the two adjudications are connected. Def2’s claim to rights for the security of a he’az or an escrow are stronger if there is already a finding that they are owed the money. Since pl demands that this be done immediately and separately, the only way for us to rule on the he’az is if we work with the worst-case-scenario assumption for pl. In other words, can we force def2 to give up the he’az even if pl collectively owe def2 the full amount def2 demands?

We will see the answer to that question next time.

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Dedication

We daven for a complete and speedy refuah for:

Nir Rephael ben Rachel Bracha
Yisrael ben Rivka

Rivka Reena bat Gruna Natna

Arye Yitzchak ben Geula Miriam

Neta bat Malka

Meira bat Esther

Together with all cholei Yisrael

 

Hemdat Yamim is dedicated

to the memory of:

Those who fell in wars

for our homeland

 

Eretz Hemdah's beloved friends

and Members of

Eretz Hemdah's Amutah

 

Rav Shlomo Merzel z”l
Iyar 10, 5771

 

Rav Reuven Aberman z"l

Tishrei 9 ,5776

 

Mr. Shmuel & Esther Shemesh z"l

Sivan 17 / Av 20

 

Mr. Moshe Wasserzug z"l

Tishrei 20 ,5781

 

R' Eliyahu Carmel z"l

Rav Carmel's father

Iyar 8 ,5776

 

Mrs. Sara Wengrowsky

bat RMoshe Zev a”h.

Tamuz 10 ,5774

 

Rav Asher & Susan Wasserteil z"l
Kislev 9 / Elul 5780

RMeir ben

Yechezkel Shraga Brachfeld z"l

&

Mrs. Sara Brachfeld z"l

Tevet 16 ,5780

 

RYaakov ben Abraham & Aisha

and

Chana bat Yaish & Simcha

Sebbag, z"l

 

Rav Yisrael Rozen z"l
Cheshvan 13, 5778

 

Rav Benzion Grossman z"l
Tamuz 23, 5777

 

Rav Moshe Zvi (Milton)

Polin z"l

Tamuz 19,  5778

 

R' Abraham Klein z"l

Iyar 18 ,5779

&

Mrs. Gita Klein z"l

Av 4

 

Yitzchak Zev Tarshansky z"l

Adar 28, 5781


Hemdat Yamim
is endowed by Les & Ethel Sutker
of Chicago, Illinois
in loving memory of
Max and Mary Sutker

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