PITTSBURGH – A battle over a $300,000 escrow deposit between a New York buyer and the owners of The Priory Hotel in Pittsburgh has reached a Pennsylvania state court.
Priory Hospitality, Inc., Priory Holdings, LLC and Historic St. Mary’s Inc. of Pittsburgh filed suit in the Allegheny County Court of Common Pleas on Aug. 5 versus 614 Pressley, LLC of Brooklyn, N.Y. and Stewart Title Guaranty Company, of Pittsburgh.
The suit says that the seller plaintiffs contracted with the buyer defendants on May 28, 2019, for the latter to purchase The Priory Hotel and Pittsburgh’s Grand Hall at the Priory, a 42-room historic boutique hotel, events and banquet facility on the North Side of Pittsburgh.
In accordance with the contract, defendant 614 Pressley, LLC made a $300,000 deposit with co-defendant Stewart Title, who was acting as the escrow agent for the transaction.
Per the agreement, the buyer had 60 days (July 27, 2019) in which to conduct due diligence, with an unqualified right to terminate the agreement and be refunded the full deposit within that time period. Furthermore, the closing on the property was to occur within 60 days after the conclusion of the due diligence period (Sept. 25, 2019).
The suit states though 614 Pressley represented it had the financing to complete the deal, the parties made a dozen time extension amendments to the agreement, in order for the buyer to obtain the financing needed to purchase the property.
Due to the coronavirus pandemic, a thirteenth amendment was made which restricted the seller’s ability to book future events and hotel reservations, and the parties set a closing date for the sale of the property for Aug. 11.
However, on July 24, the buyer reiterated an earlier notice and gave verbal notice to the seller that it would not buy the property, due to not having sufficient financing.
That same day, the plaintiffs sent the defendants and the buyer’s counsel a letter informing them that the buyer had declared an intention not to buy the property, and that it was entitled to retain the $300,000 deposit made for the purchase.
Five days later, on July 29, counsel for the buyer sent the plaintiffs a letter informing them it wanted to terminate the agreement, citing the “COVID-19 pandemic” as the reason, and that it wanted to pursue the return of the deposit.
For a count of declaratory judgment, the plaintiff is seeking the $300,000 deposit held by Stewart Title Guaranty Company, plus interest, costs and attorney’s fees.
The plaintiffs are represented by Christopher W. Cahillane of Tucker Arensberg, in Pittsburgh.
The defendants have not yet secured legal counsel.
Allegheny County Court of Common Pleas case GD-20-008352
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com