Opinion
525033/19
09-08-2020
BAIN595 LLC, Plaintiff, v. AFEB HOLDINGS LLC, Golden Bridge LLC d/b/a Golden Bridge Funding LLC, and Alishaev Law Group, Defendants.
Attorney for plaintiff Bain595 LLC, Jason J. Rebhun, Esq., Law Offices of Jason J. Rebhun, P.C., 225 Broadway, 38th Floor, New York, NY 10007, 646-201-9392. Attorney for defendants AFEB Holdings LLC and Golden Bridge LLC d/b/a Golden Bridge Funding LLC, Edward A. Vincent, Esq., Borchert & LaSpina, P.C., 1902 Whitestone Expy, Ste 302, Whitestone, NY 11357. Attorney for Alishaev Law Group, David Alishaev, Esq., 10015 Queens Blvd, Ste 203, Forest Hills, NY 11375, (718) 459-2030.
Attorney for plaintiff Bain595 LLC, Jason J. Rebhun, Esq., Law Offices of Jason J. Rebhun, P.C., 225 Broadway, 38th Floor, New York, NY 10007, 646-201-9392.
Attorney for defendants AFEB Holdings LLC and Golden Bridge LLC d/b/a Golden Bridge Funding LLC, Edward A. Vincent, Esq., Borchert & LaSpina, P.C., 1902 Whitestone Expy, Ste 302, Whitestone, NY 11357.
Attorney for Alishaev Law Group, David Alishaev, Esq., 10015 Queens Blvd, Ste 203, Forest Hills, NY 11375, (718) 459-2030.
Francois A. Rivera, J.
Recitation in accordance with CPLR 2219 (a) of the papers considered on the joint notice of motion filed on February 3, 2020 under motion sequence number one by AFEB Holdings LLC (hereinafter AFEB) and Golden Bridge LLC d/b/a Golden Bridge Funding LLC (hereinafter Golden Bridge) (collectively the movants) for an order: (1) pursuant to CPLR 3212 granting summary judgment dismissing the third and fourth causes of action in the complaint of BAIN595 LLC (hereinafter BAIN or plaintiff) to quiet title as asserted against them; (2) canceling the notice of pendency; and (3) granting summary judgment in favor of AFEB and Golden Bridge for the relief requested in AFEB and Golden Bridge's first counterclaims: (i) declaring AFEB to be the sole fee owner of the property; (ii) declaring Golden Bridge to have a priority purchase money mortgage lien encumbering the property; and (iii) barring plaintiff from claiming any right, title, or interest in the property or interfering with AFEB's right to quiet enjoyment of the property.
In the alternative, the movants seek an order: (1) granting partial summary judgment to AFEB and Golden Bridge dismissing plaintiff's demand for recovery of legal fees, consequential damages, and punitive damages as to plaintiff's third cause of action and, (2) granting partial summary judgment to Golden Bridge on Golden Bridge's second counterclaim for equitable subrogation. The motion is opposed by plaintiff.
Notice of motion
Affirmation in support
Affidavit of Golden Bridge in support
Affidavit of AFEB in support
Exhibits A-S
Affirmation of plaintiff's counsel in opposition
Affirmation of plaintiff in opposition
Exhibits 1-3
Affirmation in reply
BACKGROUND
On November 15, 2019, plaintiff commenced the instant action to, among other things, quiet title to a real property located at 674 East 22nd Street, Brooklyn, New York 11210 (Block 05221, Lot 36) (hereinafter the subject property). On December 12, 2019, AFEB filed a verified answer. On December 23, 2019, Alishaev Law Group (hereinafter Alishaev) filed a verified answer. On January 15, 2020, Golden Bridge filed a verified answer with two counterclaims. The first counterclaim was to quiet title. The second counterclaim was for equitable subrogation and unjust enrichment. On January 16, 2020, AFEB filed an amended verified answer with a single counterclaim to quiet title to the subject property. On January 28, 2020, plaintiff filed a reply to AFEB's counterclaim. On January 28, 2020, plaintiff filed a reply to Golden Bridge's counterclaims.
BAIN's verified complaint pleads six causes of action. The first is asserted against AFEB for tortious interference. The second is asserted against Alishaev for tortious interference. The third is to quiet title as asserted against AFEB. The fourth is to quiet title as asserted against Golden Bridge. The fifth is for injunctive relief as against AFEB. The sixth is pursuant to New York Judiciary Law 487 as asserted against Alishaev for allegedly perpetuating a fraud upon the court.
THE COMPLAINT
The verified complaint alleges the following salient facts. Plaintiff purchased the subject property from Egbert Baptiste (hereinafter Baptiste) by a contract of sale (hereinafter the contract) dated June 7, 2016. After executing the contract and accepting the down payment, Baptiste ceased communications with the plaintiff and failed to perform his obligations under the contract. This led the plaintiff to file a breach of contract and specific performance action against Baptiste under Index Number 503048/2019 (hereinafter the specific performance action).
On June 19, 2019, defendant Alishaev filed a Notice of Appearance on behalf of Baptiste in the specific performance action. On October 3, 2019, the court granted plaintiff's motion for a default judgment against Baptiste and appointed a Referee to conduct the sale in accordance with the contract. Despite the plaintiff's filing of the notice of pendency and the judgment in the specific performance action, and recording the contract on ACRIS, AFEB closed a deal with Baptiste and took title to the subject property on August 21, 2019.
Defendant Alishaev and AFEB had actual knowledge of the contract of sale and plaintiff's interest in the subject property and intentionally interfered with same and undermined the plaintiff's contract to take Baptiste's business for its own personal gain and to intentionally damage plaintiff. Upon information and belief, after signing the contract, Baptiste began dealing with AFEB, who with the assistance of Alishaev persuaded and manipulated Baptiste into breaching his contract with plaintiff.
After AFEB interfered with the contract and improperly closed on the subject property, AFEB executed a $900,000.00 Mortgage Construction Loan with Golden Bridge. AFEB used the funds of the Golden Bridge mortgage to commence massive construction/demolition and renovation work on the subject property, which further damaged the plaintiff by altering and encumbering the subject property.
THE MOVANTS' COUNTERCLAIMS
Golden Bridge's answer with counterclaims and AFEB's answer with counterclaims stated the following identical allegations of facts. On September 16, 2001, Baptiste purchased the subject property. On December 15, 2006, Baptiste gave a mortgage for the subject property to Countrywide Home Loans, Inc. in exchange for a loan of $501,000.00 (hereinafter the Countrywide mortgage). On October 3, 2008, Baptiste gave a mortgage to Abe Betesh in exchange for a loan of $50,000.00, which mortgage was subject to the Countrywide mortgage. On February 8, 2012, Betesh commenced a foreclosure action against Baptiste in the Supreme Court of Kings County under Index Number 3235/2012 (hereinafter the foreclosure action) and filed a notice of pendency against the subject property. On December 24, 2013, a judgment of foreclosure and sale was entered in the Kings County Clerk's Office in the foreclosure action.
Plaintiff's contract with Baptiste was executed and recorded after the judgment of foreclosure and sale. Baptiste did not have title to the subject property to convey to plaintiff at the time of execution of the contract. Plaintiff had actual knowledge or notice of the judgment of foreclosure and sale in the foreclosure action when plaintiff entered into the contract with Baptiste. Plaintiff's contract with Baptiste was subject to the pending foreclosure action due to the notice of pendency and subsequent judgment of foreclosure and sale.
Golden Bridge's counterclaim also stated the following additional allegations of fact. On July 25, 2019, AFEB purchased the subject property at foreclosure auction for $1,000.00, which purchase was subject to the Countrywide mortgage. The completion of the foreclosure auction extinguished Baptiste's interest in the subject property, including the right of redemption.
On August 21, 2019, the Referee executed a deed to AFEB closing the sale of the subject property to AFEB. On August 21, 2019, AFEB gave a mortgage to Golden Bridge in exchange for a loan of $900,000.00. As part of that sale, $468,930.00 of the proceeds of Golden Bridge's mortgage were used to pay and satisfy the Countrywide mortgage via a pre-negotiated short sale. Golden Bridge is a bona fide purchaser of the subject property. Golden Bridge is entitled to a declaration that it has a priority purchase money mortgage lien encumbering the subject property and that plaintiff and every person claiming under plaintiff are barred from claiming any right, title, or interest therein.
Golden Bridge has advanced monies to the benefit of the plaintiff for insurance, taxes, and other carrying charges for the subject property. Golden Bridge has paid and satisfied prior encumbrances and liens against the subject property. Plaintiff has been unjustly enriched by its wrongful retention of funds and benefits derived from the use of Golden Bridge's funds for the payment and satisfaction of outstanding mortgages and liens encumbering the subject property and for taxes, insurance, and other carrying charges. These funds and benefits rightfully belong to Golden Bridge.
AFEB's counterclaim also stated the following additional allegations of fact. AFEB is a bona fide purchaser for value. AFEB seeks a judgment declaring that AFEB is the sole fee owner of the subject property and that plaintiff and every person claiming under plaintiff are barred from claiming any right, title, or interest in therein. AFEB is entitled to have said order or judgment direct the Office of the City Register of the City of New York and the Kings County Clerk's Office to record the order or judgment of this Court upon payment of the requisite fees and costs.
LAW AND APPLICATION
The movants seek an order pursuant to CPLR 3212 granting summary judgment in their favor dismissing the third and fourth causes of action in the complaint to quiet title as asserted against them and canceling the notice of pendency. They also seek an order granting summary judgment in their favor on their first counterclaim declaring AFEB to be the sole fee owner of the property and a judgment declaring Golden Bridge to have a priority purchase money mortgage lien encumbering the property and barring the plaintiff from claiming any right, title, or interest in the property or interfering with AFEB's right to quiet enjoyment of the property.
It is well established that summary judgment may be granted only when it is clear that no triable issue of fact exists ( Alvarez v. Prospect Hospital , 68 NY2d 320 [1986] ). The burden is upon the moving party to make a prima facie showing that he or she is entitled to summary judgment as a matter of law by presenting evidence in admissible form demonstrating the absence of material facts ( Guiffirda v. Citibank, 100 NY2d 72 [2003] ).
A failure to make that showing requires the denial of the summary judgment motion, regardless of the adequacy of the opposing papers ( Ayotte v. Gervasio , 81 NY2d 1062 [1993] ). If a prima facie showing has been made, the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact ( Alvarez , 68 NY2d at 324 ).
Pursuant to CPLR 3212 (b), a court will grant a motion for summary judgment upon a determination that the movant's papers justify holding, as a matter of law, that there is no defense to the cause of action or that the cause of action or defense has no merit. Furthermore, all of the evidence must be viewed in the light most favorable to the opponent of the motion ( Marine Midland Bank v. Dino & Artie's Automatic Transmission Co. , 168 AD2d 610 [2nd Dept 1990] ).
In support of their motion, AFEB and Golden Bridge have submitted, among other things, the affidavits of Avrekh Fayzakov, the sole fee owner of AFEB (hereinafter Fayzakov) and of Stephen I. Feder, the counsel and authorized signatory of Golden Bridge (hereinafter Feder). Feder has averred personal knowledge of the business practices and procedures of Golden Bridge. Fayzakov has averred personal knowledge of the business practices and procedures of AFEB.
Both Fayzakov and Feder swear to the following facts. On July 25, 2019, AFEB purchased the subject property at a foreclosure auction for $1,000.00, which purchase was subject to a prior outstanding mortgage. A copy of the report of the sale was annexed. On August 21, 2019, the closing occurred, and the Referee executed a deed to AFEB. A copy of the referee's deed was annexed. On August 21, 2019, AFEB gave a mortgage to Golden Bridge in exchange for a loan of $900,000.00. A copy of the recorded mortgage was annexed. AFEB used the proceeds from the Golden Bridge mortgage to pay and satisfy the Countrywide mortgage via a pre-negotiated short sale in the amount of $468,930.00. Copies of the mortgage proceeds disbursement form, wire, and recorded release of the mortgage were annexed.
The movants documentary evidence establishes that on February 8, 2012, Abe Betesh commenced a foreclosure action under Index Number 3235/2012 against Baptiste, among others, by filing a summons, complaint and notice of pendency against the subject property (hereinafter the 2012 foreclosure action). BAIN is claiming an interest in the subject property based on a contract of sale with Baptiste which was executed on June 7, 2016 and recorded on ACRIS on July 8, 2016. Plaintiff's execution of the contract of sale and the filing of same occurred in 2016, four years after Betesh commenced the 2012 foreclosure action and filed a notice of pendency in that action.
CPLR 6501 provides as follows:
A notice of pendency may be filed in any action in a court of the state or of the United States in which the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property, except in a summary proceeding brought to recover the possession of real property. The pendency of such an action is constructive notice, from the time of filing of the notice only, to a purchaser from, or incumbrancer against, any defendant named in a notice of pendency indexed in a block index against a block in which property affected is situated or any defendant against whose name a notice of pendency is indexed. A person whose conveyance or incumbrance is recorded after the filing of the notice is bound by all proceedings taken in the action after such filing to the same extent as a party.
Article 65 of the CPLR sets forth the authority and procedural requirements for securing a notice of pendency. Once the notice has been properly filed with the county clerk where the property is situated (see CPLR 6511 ), it puts the world on notice of the plaintiff's potential rights in the action and thereby warns all comers that if they then buy the realty or lend on the strength of it or otherwise rely on the defendant's right, they do so subject to whatever the action may establish as the plaintiff's right ( Siegel, New York Practice § 334, at 509 [3d ed.] ; see also CPLR 6501 ; In re Sakow , 97 NY2d 436, 440 [2002] ).
The movants have correctly contended that pursuant to CPLR 6501, plaintiff's interest in the subject property was subject to the final judgment in the 2012 foreclosure action. A mortgagor or other owner of the equity of redemption of a property subject to a judgment of foreclosure and sale may redeem the mortgage at any time prior to the foreclosure sale ( Liberty Dabar Assocs. v. Mohammed , 183 AD3d 880 [2nd Dept 2020], citing Norwest Mtge., Inc. v. Brown , 35 AD3d 682, 683 [2nd Dept 2006] ). The right to redeem is extinguished as a matter of law upon the foreclosure sale, whether or not the deed has been delivered, and once the right to redeem is lost, it cannot be revived, even by court order ( Liberty Dabar Assocs. , 183 AD3d 880 ). The foreclosure action became final after the entry of judgment of foreclosure and the valid sale of the property at auction ( Sakala v. Bank of New York Mellon , 172 AD3d 640, 641 [2nd Dept 2019], citing Dulberg v. Ebenhart , 68 AD2d 323, 327 [1st Dept1979] ). In the case at bar, the entry of the judgment of foreclosure and the valid sale of the subject property to AFEB at the auction extinguished Baptiste rights and interest in the subject property. Consequently, at the time Baptiste executed the contract of sale with the plaintiff he possessed no interest in the subject property which he could convey. Valid title passed to AFEB extinguishing any and all rights previously possessed by Baptiste or the plaintiff.
Based on the sworn testimony and documentary evidence submitted by AFEB and Golden Bridge, the movants have made a prima facie showing that the plaintiff had no valid interest in the subject property. Furthermore, it established the following facts. On August 21, 2019, AFEB gave a mortgage to Golden Bridge in exchange for a loan of $900,000.00. As part of that sale, $468,930.00 of the proceeds of Golden Bridge's mortgage were used to pay and satisfy the Countrywide mortgage via a pre-negotiated short sale. Consequently, the movants established that Golden Bridge was a bona fide encumbrancer for value of the subject property.
In opposition, the plaintiff claimed that the motion was procedurally defective because the movants did not annex all the pleading. Plaintiff claimed that the motion was missing AFEB's and Alishaev's answer. In fact, the amended answer of AFEB and the answer of Alishaev were annexed to the motion. Moreover, all the pleadings were available to the court through the NYSCEF filing system. Second plaintiff stated that the motion was premature in that discovery was not complete and no party had been deposed yet. Contrary to the plaintiff's contention, the movants' motion was not premature as the plaintiff failed to offer any evidentiary basis to suggest that discovery may lead to relevant evidence, or that facts essential to opposing the motion were exclusively within the knowledge and control of the movants (see CPLR 3212 [f] ; Lazarre v. Gragston , 164 AD3d 574, 575 [2nd Dept 2018] ). The mere hope or speculation that evidence sufficient to defeat a motion for summary judgment may be uncovered during the discovery process is an insufficient basis for denying the motion ( Lazarre , 164 AD3d at 575 ; Williams v. Spencer—Hall , 113 AD3d 759, 760 [2nd Dept 2014] ).
The other arguments concerned plaintiff's evidentiary support on it claims for tortious interference. The movants alleged interference with the plaintiff's contract, however, this had no bearing on Baptiste's inability to perform the contract. As previously indicated, at the time Baptiste signed the contract, he had no interest in the subject property which he could convey. Therefore, plaintiff's evidentiary submission in support of its claims for tortious interference does not raise a triable issue of fact on the movants' counterclaims or the plaintiff's claims to quiet title.
The movants have demonstrated entitlement to summary judgment dismissing plaintiff's third and fourth causes of action to quiet title. By the instant decision, order and judgment, plaintiff's remaining causes of action would affect the title to, or the possession, use or enjoyment of, real property. Accordingly, the movant has demonstrated entitlement to cancellation of the notice of pendency. AFEB and Golden Bridge also established entitlement to summary judgment on their respective first counterclaims declaring that AFEB is the sole fee owner of the subject property. They have also established entitlement to a judgment declaring that Golden Bridge has a priority first mortgage lien encumbering the subject property.
Plaintiff's opposition papers did not raise a triable issue of fact.
The movant also sought an order, in the alternative, granting them partial summary judgment dismissing the plaintiff's demand for recovery of legal fees, consequential damages, and punitive damages as to plaintiff's third cause of action and granting partial summary judgment to Golden Bridge on Golden Bridge's second counterclaim for equitable subrogation. However, inasmuch, as the Court has granted the first branch of the movants' motion, it does not reach this branch seeking relief in the alternative.
DECISION ORDER AND JUDGMENT OF THIS COURT:
The joint motion of AFEB Holdings LLC and Golden Bridge LLC d/b/a Golden Bridge Funding LLC pursuant to CPLR 3212 for an order granting summary judgment dismissing the third and fourth causes of action to quiet title as asserted against each of them in the complaint of BAIN595 LLC is granted.
The joint motion of AFEB Holdings LLC and Golden Bridge LLC d/b/a Golden Bridge Funding LLC for an order cancelling the notice of pendency is granted.
The joint motion of AFEB Holdings LLC and Golden Bridge LLC d/b/a Golden Bridge Funding LLC pursuant to CPLR 3212 for an order granting summary judgment on their first counterclaim declaring that AFEB Holdings LLC is the sole fee owner of the subject property is granted.
The joint motion of AFEB Holdings LLC and Golden Bridge LLC d/b/a Golden Bridge Funding LLC pursuant to CPLR 3212 for an order granting summary judgment declaring Golden Bridge Funding LLC to have a priority purchase money mortgage lien encumbering the subject property is granted.