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Judge rules against motel owner in resort case

Cites ‘irreparable damage’ to resort project if motel sold to another party

SARANAC LAKE — A judge has blocked Lake Side Motel owner David Manning from selling his property while a lawsuit that Saranac Lake Resort filed against him is pending.

State Supreme Court Justice Martin Auffredou, in a ruling issued Friday, said there’s a danger of “irreparable damage” to the resort developers if he doesn’t issue a temporary injunction and Manning is allowed to sell the motel before the litigation is resolved.

In the meantime, however, the judge has ordered Saranac Lake Resort to post a six-figure guarantee, representing the amount Manning is due under the contract he signed with the resort.

The Lake Side Motel is one of three Lake Flower Avenue motels that have been under contract to sell their properties to the developers since fall 2015. Saranac Lake Resort LLC plans to demolish all three motels to make way for a proposed 90-room, four-story hotel with a spa, conference center and two restaurants.

Manning terminated his contract May 1 when the developers failed to close on the sale of the property, after previously granting the developers three extensions. Manning’s lawyer, Jim Brooks, of Lake Placid, has said his client is frustrated with the repeated extensions the developers have asked for and has questioned their wherewithal and willingness to complete the resort project.

The resort is suing Manning for breach of contract in an effort to keep try to keep the project alive. Its lawyer, Matt Norfolk, of Lake Placid, has said Manning had no right to terminate the contract because he didn’t have clear title to the property, among other things. If Manning is allowed to sell to someone else, Norfolk has said that his clients would lose thousands of dollars they’ve invested in developing the project, including $90,000 paid to Manning over the past year.

In his decision to issue a preliminary injunction, the judge found the resort has provided evidence for the court “to conclude there is a sufficient probability or likelihood of success on the merits.”

“(Saranac Lake Resort) has also established a danger of irreparable damage in the absence of an injunction,” Auffredou wrote. “If (Manning) were allowed to sell or dispose of the subject property prior to the conclusion of the instant litigation, (the resort) stands to lose its substantial investment in the development project and any judgment in (the resort’s) favor would be rendered ineffectual.”

Auffredou said the resort has shown the success of the project hinges on it acquiring title to Manning’s property. He also said he considered “the importance of the development project to the Saranac Lake community” in making his decision.

“(Manning) is no doubt justifiably frustrated and disappointed that the closing did not occur on May 1, 2017, as (he) was expecting to receive the sum of $545,669.90 at closing. The court, nevertheless, finds that the balance of equities weigh in favor of (the resort).”

At the same time, however, the judge scolded Saranac Lake Resort for bringing the lawsuit just days before the May 1 closing date without notifying Manning. He said it was “with some reluctance” that he would approve the preliminary injunction, and he ordered the resort to post an “undertaking” in the amount of $545,669.90, the balance it owes to Manning, within 10 days of the decision.

The lawyers for Manning and the resort couldn’t be reached for comment on Auffredou’s decision as of press time.

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