A New York appellate court ruled against TAB Equity Group, LLC in a significant breach of contract case on September 23, 2026. The decision affects TAB Equity and its principal, Rafael Tabibov, who were seeking damages from Sharestates Investments DACL, LLC and Toorak Capital Partners, LLC. The ruling clarifies the responsibilities of parties involved in construction loans and the legal implications of contract disputes.

The case, known as TAB Equity Group, LLC v. Sharestates Invs. DACL, LLC (Docket No. 2022-07472), originated from a construction loan agreement between TAB Equity and Sharestates. The court's decision is crucial for understanding how similar contract disputes may be handled in the future.

Background

In November 2018, TAB Equity Group, led by Rafael Tabibov, entered into a construction loan agreement with Sharestates. The agreement involved a loan of $277,000, which included an initial disbursement of $192,000 and additional reserve funds of $85,000. The loan was secured by a mortgage on a commercial property in Hempstead, New York.

In June 2020, TAB Equity and Tabibov executed an escrow agreement, which stated that certain funds would be held in escrow to pay outstanding interest on loans from Sharestates. However, disputes arose over the disbursement of the reserve funds. In December 2020, Toorak Capital Partners, as Sharestates' assignee, initiated foreclosure proceedings against TAB Equity and Tabibov, leading to further complications and legal actions.

In August 2021, TAB Equity filed a lawsuit against Toorak and Sharestates, alleging breach of contract and tortious interference with contract. TAB Equity claimed that the defendants failed to provide a correct payoff letter and improperly disbursed the reserve funds. The case eventually reached the New York Appellate Division after the lower court dismissed the complaint against Toorak and denied TAB Equity's request to amend its complaint.

The Ruling

The New York Appellate Division, in a decision written by Justices Lara J. Genovesi, Barry E. Warhit, Laurence L. Love, and Susan Quirk, affirmed the lower court's ruling. The court stated, "the complaint and Tabibov's affidavit submitted in opposition to the Toorak defendants' motion failed to identify which provision of the TAB loan documents the Toorak defendants allegedly breached." This ruling highlights the importance of clearly identifying contractual obligations in legal disputes.

The court also noted that there was no evidence to support TAB Equity's claim that Toorak interfered with the sale of the property. The ruling emphasized that the plaintiff could not perform under the contract of sale, leading to the purchasers demanding a return of their down payment. Thus, the court upheld the dismissal of both the breach of contract and tortious interference claims against the Toorak defendants.

Impact

This ruling has significant implications for businesses and individuals involved in contract disputes, particularly in the construction and real estate sectors. It underscores the necessity for plaintiffs to provide clear evidence of contractual breaches and to articulate their claims effectively. The court's decision may set a precedent for how similar cases are handled in the future, particularly regarding the requirements for establishing breach of contract and tortious interference.

The outcome of this case serves as a reminder for parties entering into contracts to ensure that all terms are clearly defined and understood. It also highlights the importance of accurate documentation and communication in financial transactions.

What's Next

Details were not available in the court filing regarding whether TAB Equity intends to appeal the decision. There may be related cases pending, but specific information was not provided.