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Judge: Long Beach in default in $50M lawsuit

Nassau County acting state Supreme Court Justice James P. McCormack has found the City of Long Beach in default in a $50 million damages case tied to a proposed beachfront condominium project.

"This decision clears the way . . . to pursue [the] more than $50-million-dollar damage claim against the city," said Scott Mollen, a Manhattan lawyer for the plaintiff, developer Sinclair Haberman.

City spokesman Gordon Tepper said: "The city received the decision late this [Friday] afternoon. We will review it, and we anticipate filing an appeal."

The ruling stems from a decision by city officials not to live up to a stipulation agreement between Haberman's lawyers and then-city corporation counsel Corey Klein.

Last September, the City Council rejected the pact, which would have ended the lawsuit and allowed Haberman to submit an application to the zoning board of appeals to build more towers at Sea Pointe Towers on Shore Road. Then-council president Scott Mandel said in a statement that Klein had signed the stipulation without council approval.

Klein, now a city judge, could not be reached.

With the stipulation repudiated by city officials, the lawsuit was reinstated. Haberman argued the city had been dragging out the case since 2003 and had failed to respond to his amended complaint before the agreement and was therefore in default.

The city argued it did not have to live up to the statutory response time to the amended complaint -- within 10 days -- and even if it did, negotiations before the stipulated agreement provided a reasonable excuse for delay.

The court disagreed and granted Haberman's motion for a default judgment.

"It is very unfortunate for the city that it had reneged on a 'cashless' settlement agreement," said Mollen, adding that it would have let Haberman build two 191/2-story condo buildings, in addition to one that has already been constructed.

"The Habermans have been victimized for decades by . . . city officials who trampled on the Habermans' rights to develop their property," Mollen said.

McCormack ordered a July conference, at which time a date is to be set for the inquest to determine the actual amount of damages.

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