Opinion
Index No. 850450/2023
01-12-2024
O-SB 510 SIXTH FINANCE, LLC, Plaintiff, v. 510 BORROWER LLC, CLINTON SMULLYAN, ARLINE VOGEL, MOSBACHER PROPERTIES GROUP, LLC, BOARD OF MANAGERS OF THE GREENWICH CONDOMINIUM, THE CITY OF NEW YORK, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, JOHN DOE #L THROUGH JOHN DOE #50, THE LAST FIFTY NAMES BEING FICTITIOUS AND UNKNOWN TO PLAINTIFF, Defendant
Unpublished Opinion
PRESENT: HON. FRANCIS A. KAHN, III Justice
DECISION+ ORDER ON MOTION
Francis A. Kahn III, Judge
The following e-filed documents, listed by NYSCEF document number (Motion 003) 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 106, 107, 110, 143 were read on this motion to/for JUDGMENT - SUMMARY.
Upon the foregoing documents, the motion is determined as follows:
The within action is to foreclose on a consolidated, amended and restated mortgage encumbering a parcel of commercial real property known as Commercial Unit No. A, 510 Avenue of the Americas a/k/a 65/75 West 13th Street a/k/a 62/66 West 14th Street a/k/a 510/526 Avenue of the Americas a/k/a 65 West 13th Street, New York, New York, New York. The mortgage was given by Defendant 510 Borrower LLC ("Borrower") to non-party Manufacturers and Traders Trust Company ("Trust") to secure a loan with an original principal amount of $49,000,000.00 which is memorialized by a consolidated, amended and restated promissory note. The note and mortgage are both dated November 7, 2016 and were executed by Defendant Arline Vogel ("Vogel") as Managing Member of non-party M510 LLC, the Manager of Borrower. Concomitantly with these documents, Defendants Vogel and Clinton Smullyan, Jr. ("Smullyan") executed a guarantee of the indebtedness.
On May 21,2020, Borrower executed a deferment agreement with non-party M&T Bank ("M&T"), the apparent assignee of the note and mortgage, which suspended installment payments under the note through July 2020. In that agreement, Defendants acknowledged the indebtedness as well as their obligation to repay the debt. Defendants further assented to "relinquish any and all rights of setoff, counterclaims and defenses". On July 23, 2000, the parties executed another deferment agreement which delayed installment payments until October 2020.
Plaintiff commenced this action alleging inter alia Defendants defaulted in repayment under the note. Defendants Borrower, Vogel, Smullyan and Mosbacher Properties Group, LLC ("MPG") answered jointly and pled six [6] affirmative defenses. Now, Plaintiff moves for inter alia summary judgment against Borrower, Vogel, Smullyan and Mosbacher, for a default judgment against the nonappearing parties, striking the appearing Defendants' affirmative defenses, appointing a referee to compute and to amend the caption. Defendants Borrower, Vogel, Smullyan and Mosbacher oppose the motion.
In moving for summary judgment, Plaintiff was required to establish prima facie entitlement to judgment as a matter of law though proof of the mortgage, the note, and evidence of Defendants' default in repayment (see eg U.S. Bank, N.A. v James, 180 A.D.3d 594 [1st Dept 2020]; Bank of NY v Knowles, 151 A.D.3d 596 [1st Dept 2017]; Fortress Credit Corp, v Hudson Yards, LLC, 78 A.D.3d 577 [1st Dept 2010]). Proof supporting a prima facie case on a motion for summary judgment must be in admissible form (see CPLR §3212[b]; Tri-State Loan Acquisitions III, LLC v Litkowski, 172 A.D.3d 780 [1st Dept 2019]). A plaintiff may rely on evidence from persons with personal knowledge of the facts, documents in admissible form and/or persons with knowledge derived from produced admissible records (see eg U.S. Bank N.A. v Moulton, 179 A.D.3d 734, 738 [2d Dept 2020]). No particular set of business records must be proffered, as long as the admissibility requirements of CPLR 4518[a] are fulfilled and the records evince the facts for which they are relied upon (see eg Citigroup v Kopelowitz, 147 A.D.3d 1014, 1015 [2d Dept 2017]).
Plaintiffs motion was supported with an affidavit from James R. Pomeranz ("Pomeranz"), a Senior Vice President of Plaintiff. Pomeranz stated that his affidavit was based upon both his personal knowledge and examination of business records. However, he does not indicate what information is based on personal observation or derived from records (see Bank of N.Y.Mellon v Gordon, 171 A.D.3d 197, 206 [2d Dept 2019] ["a witness may always testify as to matters which are within his or her personal knowledge through personal observation"]). To the extent Pomeranz's knowledge is based upon a review of the books and records, his affidavit laid a proper foundation for the admission of Plaintiffs records into evidence under CPLR §4518 (see Bank of N.Y. Mellon v Gordon, 171 A.D.3d 197 [2d Dept 2019]). Nevertheless, virtually all the salient loan documents were created by Plaintiffs assignors and Pomeranz failed to demonstrate knowledge of any other entity's record keeping practices (see Berkshire Bank v Fawer, 187 A.D.3d 535 [1st Dept 2020]; IndyMac Fed. Bank, FSB v Vantassell, 187 A.D.3d 725 [2d Dept 2020]). Pomeranz also failed to attest that any records received from prior makers were incorporated into the records Plaintiff kept and were routinely relied on in its business (see U.S. Bank N.A. v Kropp-Somoza, 191 A.D.3d 918 [2d Dept 2021]; Tri-State Loan Acquisitions III, LLC v Litkowski, 172 A.D.3d 780, 782-783 [2d Dept 2019]; cf Bank of Am., N.A. v Brannon, 156 A.D.3d 1, 10 [1st Dept 2017]).
As to Defendants' default, it "is established by (1) an admission made in response to a notice to admit, (2) an affidavit from a person having personal knowledge of the facts, or (3) other evidence in admissible form" (Deutsche Bank Natl. Trust Co. v McGann, 183 A.D.3d 700, 702 [2d Dept 2020]). Although the terms contained in the deferral agreement could establish Defendant's default (see Redrock Kings, LLC v Kings Hotel, Inc., 109 A.D.3d 602 [2d Dept 2013]; EMC Mortg. Corp, v Stewart, 2 A.D.3d 772 [2d Dept 2003]), those records were not created by Plaintiff and no evidentiary foundation for the admission of those records was demonstrated.
Accordingly, since none of the evidence proffered to demonstrate the note, mortgage and Defendants' default is in admissible form, Plaintiff failed to establish any of the prima facie elements of the cause of action for foreclosure (see Federal Natl. Mtge. Assn, v Allanah, 200 A.D.3d 947 [2d Dept 2021]).
As to the branch of Plaintiff s motion to dismiss Defendants' affirmative defenses, CPLR §3211 [b] provides that "[a] party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit". For example, affirmative defenses that are without factual foundation, conclusory or duplicative cannot stand (see Countrywide Home Loans Servicing. L.P. v Vorobyov, 188 A.D.3d 803, 805 [2d Dept 2020]; Emigrant Bank v Myers, 147 A.D.3d 1027, 1028 [2d Dept 2017]). When evaluating such a motion, a "'defendant is entitled to the benefit of every reasonable intendment of its pleading, which is to be liberally construed. If there is any doubt as to the availability of a defense, it should not be dismissed" (Federici v Metropolis Night Club, Inc., 48 A.D.3d 741,743 [2d Dept 2008]).
As pled, all the affirmative defenses are entirely conclusory and unsupported by any facts in the answer. As such, these affirmative defenses are nothing more than unsubstantiated legal conclusions which are insufficiently pled as a matter of law (see Board of Mgrs. of Ruppert Yorkville Towers Condominium v Hayden, 169 A.D.3d 569 [1st Dept 2019]; see also Bosco Credit V Trust Series 2012-1 v. Johnson, 177 A.D.3d 561 [1st Dept 2020]; 170 W. Vil. Assoc, v. G &E Realty, Inc., 56 A.D.3d 372 [1st Dept 2008]; see also Becher v Feller, 64 A.D.3d 672 [2d Dept 2009]; Cohen Fashion Opt., Inc. v V & M Opt., Inc., 51 A.D.3d 619 [2d Dept 2008]). Further, to the extent that specific legal arguments were not proffered in support of any affirmative defense, those defenses were abandoned (see U.S. Bank N. A. v Gonzalez, 172 A.D.3d 1273, 1275 [2d Dept 2019]; Flagstar Bank v Bellafiore, 94 A.D.3d 1044 [2d Dept 2012]; Wells Fargo Bank Minnesota, N.A v Perez, 41 A.D.3d 590 [2d Dept 2007]).
Plaintiff has established that it is entitled to a default judgment against all non-appearing Defendants (see CPLR §3215; SRMOFII2012-1 Trust v Telia, 139 A.D.3d 599, 600 [1st Dept 2016]).
The branch of Plaintiff s motion to amend caption is granted without opposition (see generally CPLR §3025; JP Morgan Chase Bank, N.A. v Laszio, 169 A.D.3d 885, 887 [2d Dept 2019]).
Accordingly, it is
ORDERED that the branch of Plaintiff s motion for summary judgment on its causes of action for foreclosure and appointment of a referee are denied, and it is
ORDERED that all the affirmative defenses in Defendants' answer are stricken, and it is
ORDERED that the Defendants captioned as "JOHN DOE" are hereby stricken from the caption, and it is further
ORDERED the caption is amended as follows:
SUPREME COURT STATE OF NEW YORK COUNTY OF NEW YORK
O-SB 510 SIXTH FINANCE, LLC, Plaintiff, -against-
510 BORROWER LLC, CLINTON SMULLYAN, JR., ARL1NE VOGEL, MOSBACHER PROPERTIES GROUP, LLC, BOARD OF MANAGERS OF THE GREENWICH CONDOMINIUM, THE CITY OF NEW YORK, and NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, Defendants.
and it is
ORDERED that this matter is set down for a status conference on March 20, 2023 @ 11:20 am via Microsoft Teams.