FILED: NEW YORK COUNTY CLERK 07/11/ :13 PM INDEX NO /2010 NYSCEF DOC. NO. 548 RECEIVED NYSCEF: 07/11/2016

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1 FILED: NEW YORK COUNTY CLERK 07/11/ :13 PM INDEX NO /2010 NYSCEF DOC. NO. 548 RECEIVED NYSCEF: 07/11/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK MARTIN MOTOR SALES, INC. and JANET L. SCHLANGER, -against- Plaintiffs, Index No /10 BARA TT A, BARA TT A & AID ALA, LLP, JOSEPH A. BARATTA, and JOSEPH P. BARATTA, Defendants. STATEMENT OF FACTS ON BEHALF OF JOSEPH A. BARATTA Defendant JAB is the son of Defendant )PB and a minority member of Defendant BB&A, a registered limited liability partnership primarily engaged in the practice of law in New York City with offices located at 546 Fifth Avenue, New York, New York Starting approximately in 1995, Martin Schlanger ("Martin"), the patriarch of Martin Motor Sales, Inc. ("MMS"), engaged the law firm of Baratta & Goldstein ("B&G") to represent MMS. All agreements regarding required legal work and fees resulted from communications between Martin and )PB, the senior partner of B&G. Upon Martin's demise in 1998, MMS continued to be represented by B&G and subsequently by BB&A. Whenever special separate legal representation was required for matters outside the ordinary course of MMS' regular business, new contingency business fee agreements were reached between MMS and the law firm via communications with MMS' representative(s) and only JPB, on behalf of the law firm. An example of this was the prior special situation regarding the MMS sale of real estate to Con Edison and the Honda dealership sale to Potamkin Motor Sales in 2005 and of 5

2 Subsequently, when new special situations arose in 2007 requiring additional le;gal representation beyond the ordinary business of MMS, namely the transactions involving the sale of the MMS Volvo dealership and the subsequent sale of the two properties in New York City at th Avenue, the contingency success fee arrangements were entered into solely by )PB on behalf of BB&A, and Plaintiffs' representatives, including their separate independent attorney, John Wagner, Esq. ("Wagner"). Despite extremely difficult conditions, namely the family feud between Janet Schlanger ("Janet") and her son Mark Schlanger ("Mark"), BB&A was able to successfully bring about the various closings, netting Plaintiffs multi-millions of dollars. Had this not occurred, Plaintiffs would have suffered significant financial losses due to the subsequent economic downturn. JAB's sole involvement was with only one transaction, namely his assistance at the successful closing ofreal estate properties sold by Plaintiffs to Rockrose Development Corp. ("Rockrose"). Subsequent to the two successful separate commercial sales transactions in 2007 in New York City ("2007 Transactions"), for the sum of approximately $23,000,000.00, Janet's son Mark, in 2009, brought two separate lawsuits, in two different Florida courts, against his mother Janet and Plaintiff MMS. One lawsuit involved the administration of a family trust, and the other involved the 2007 Transactions. Janet's second child, her daughter Ellen Bregg ("Ellen"), was involved in the trust fund lawsuit and further supported her mother in the second Florida case as well. Janet and Ellen had been alienated from Mark for years and were not on speaking terms. This fact alone made the successful closings of the 2007 Transactions a herculean task on the part ofbb&a. In an apparent distorted and totally speculative belief that somehow )PB might help or support Mark's lawsuit claims, in Florida, Plaintiffs, including Bregg, apparently in complicity with 2 2 of 5

3 attorneys David Schachter, Esq. and David Bolton, Esq. commenced the instant frivolous and malicious lawsuit in 2010, and particularly against JAB personally. The only reasonable inference to be drawn from the commencement of this frivolous and malicious lawsuit was to threaten )PB personally, both by harm to himself, but also to his son, JAB, in the hopes that )PB would capitulate to any demands of Plaintiffs to avoid any such possible harm. Therefore, the within lawsuit was brought for totally improper and unwarranted purposes by Plaintiffs, with the instigation of Bregg, and with the complicity of Schachter and Bolton, thereby perpetrating a fraud not only upon Defendants, but also upon the Court. All of the discovery, thousands of documents, and deposition testimony have established that JAB had done nothing whatsoever with respect to discussing and coming to an agreement regarding fees for the extra-special legal representation of MMS by BB&A regarding the two multimillion dollar transactions herein. Rather, the evidence has adduced that JAB merely participated in the second successful closing, i.e., Rockrose, thereby assisting in the Plaintiffs reaping multimillions of dollars, shortly before the economic downturn struck. All of these facts confirm that Plaintiffs, with the knowing complicity of their attorneys, i.e., Schachter and Bolton, commenced and continued over years this pernicious lawsuit against JAB personally. In 2015, Plaintiffs admitted in an affidavit filed in this Court by Ellen that all payments from the escrow accounts were correct and accurate, and Plaintiffs withdrew the accounting claim from the case. Plaintiffs were fully aware that JAB had absolutely nothing to do with the accounting, and that Plaintiffs and Ellen were provided with full and accurate accountings of the $23,000,000 and yet chose to start and continue the lawsuit against JAB for an accounting when no such claim ever existed against him. In 2012, when the Florida cases against Plaintiffs and Ellen were disposed of, Plaintiff Janet obtained an assignment of the contingent success legal fee paid by her son, Mark, to BB&A from the combination sale of real property in New York City in conjunction with Martin and Mark Realty Co., 3 3 of 5

4 LLC ("M&M") owned by Mark and Janet on a 50/50 basis. Here, again, Plaintiff Janet, as assignee of a five year old contingent success fee payment made to BB&A by agreement with Mark (Mark was represented by his own independent counsel) took the assignment for the purpose of adding it to the lawsuit, as testified by Ellen at a deposition. Janet testified at her deposition that she did not even know that her son Mark had an excessive fee claim or that she had an assignment of the claim for excessive fees against JAB. Both Janet, as individual Plaintiff, and Ellen further testified that they never discussed fees with JAB or paid any fees from the proceeds of the 2007 Transactions to JAB. JAB performed services with respect to one of the two 2007 Transactions by assisting his father ()PB) at the successfully completed combination sale of real property ( Eleventh Avenue) owned by MMS and M&M in 2007 to Rockrose Development Corp. ("Rockrose"). JAB performed administrative services as a part of the closing representing Plaintiffs. Plaintiffs were also represented by the Wagner law firm with respect to the 2007 Rockrose closing, as was Plaintiff Janet's son Mark, who was also represented by his own attorney. Plaintiffs' FAC states that JAB (and all Defendants) in a general allegation favored Mark in the 2007 Transactions, even though JAB never did anything but work on the Rockrose closing, and Mark had his own separate independent attorney for the closing. JAB did not perform any other services for MMS and M&M. There is no specific claim against JAB for a breach of fiduciary obligation. All of the fee payments made by Plaintiffs and Plaintiffs assignee Mark were paid to BB&A by specific written direction from Janet, as sole owner and director of MMS and by M&M. JAB never received any payments from the separate MMS fee escrow accounts set up for payment of fees to BB&A by MMS regarding legal representation on the two separate transactions herein. There is not one document or any testimonial evidence that shows that JAB individually had anything to do with any of the fees paid to BB&A as a result of the successful 4 4 of 5

5 completion of the 2007 Transactions. There is no allegation or proof of individual wrongdoing or any bad act by JAB that would warrant any liability whatsoever on him personally. Dated: New York, New York July 11, 2016 To: David Bolton David Bolton, P.C. Attorneys for Plaintiffs 666 Old Country Road, Suite 509 Garden City, New York Renda & Associates, P.C. Attorneys for Defendants Raratta, Raratta & Aidala LJ.P and Joseph P. Baratta 546 Fifth Avenue New York, NY of 5