The Appellate Division of the Supreme Court of the State of New York has ruled in favor of Kenneth S. Grossman in a breach of contract case against Alex Zoldan and Barbara Zoldan. The court's decision, issued on June 10, 2026, confirms that the Zoldans failed to uphold their contractual obligations regarding indemnification. This ruling is significant as it clarifies the enforcement of indemnification clauses in business agreements.
The dispute arose from a 2014 agreement between Grossman and the Zoldans, which was intended to facilitate the acquisition and development of a real property in Scarsdale, New York. The court's decision impacts the Zoldans, who are now liable for damages due to their failure to indemnify Grossman as stipulated in their contract.
Background
The parties involved in this case are Kenneth S. Grossman, the plaintiff, and Alex Zoldan and Barbara Zoldan, the defendants. In April 2014, they entered into a Binding Memorandum of Understanding (MOU) that outlined their roles in acquiring, financing, developing, and marketing a parcel of real estate in Scarsdale. Under the agreement, Grossman was responsible for providing the necessary funding, while the Zoldans were designated as the general manager and contractor for the project.
As part of the MOU, the Zoldans agreed to indemnify Grossman for any losses incurred during the project. Grossman established a limited liability company, 31 Paddington, LLC, to manage the project, which included obtaining a $1.6 million construction loan. The property was eventually sold for $2.65 million in January 2021. However, Grossman claimed that he incurred significant losses and that the Zoldans failed to fulfill their indemnification obligations, prompting him to file a lawsuit in September 2021.
The Ruling
The court ruled in favor of Grossman, affirming the Supreme Court's order that granted his motion for summary judgment on the breach of contract claim. The court found that Grossman had established his right to indemnification based on the MOU. The opinion stated, "The plaintiff established his prima facie entitlement to judgment as a matter of law on the first cause of action alleging breach of contract with regard to the indemnification provision of the MOU."
The ruling emphasized that Grossman provided sufficient evidence of his performance under the contract and demonstrated that he incurred a loss of $1,144,163, which the Zoldans failed to cover as required. The court also noted that the Zoldans did not raise any valid issues of fact to counter Grossman's claims, leading to the decision to deny their cross-motion for summary judgment.
Impact
This ruling reinforces the importance of indemnification clauses in contracts, particularly in real estate and development agreements. It clarifies that parties who agree to indemnify others must fulfill those obligations or face legal consequences. The decision serves as a reminder for businesses to carefully consider the terms of their contracts and the potential liabilities they may incur.
The outcome of this case could influence future agreements in similar contexts, as it underscores the need for clear and enforceable indemnification provisions. It also illustrates the court's willingness to uphold contractual obligations when one party can demonstrate compliance and the other fails to perform as agreed.
What's Next
The Zoldans have the option to appeal the court's decision, although details regarding any potential appeal were not available in the court filing. There are no related cases pending at this time.