Opinion
No. 34598/08.
2013-02-20
Vladimir SUDIT, d/b/a VS International, Plaintiff, v. Sara ROTH a/k/a Chaya Roth, Moshe Roth, Congregation Minchas Yosef, Congregation Mincahs Yosef D'Valirsh and Rabbi Mendel Heimlich, Exclusive Door Co., Inc., New York State Department of Taxation and Finance, New York City Environmental Control Board, Defendants.
Joseph J. Haspel, PLLC, Goshen, for Plaintiff. J. Michael Gottesman, Esq., Kew Gardens, for Defendant.
Joseph J. Haspel, PLLC, Goshen, for Plaintiff. J. Michael Gottesman, Esq., Kew Gardens, for Defendant.
DAVID SCHMIDT, J.
Upon the foregoing papers, plaintiff Vladimir Sudit moves for an order renewing the prior motion to confirm the referee's report and granting a judgment of foreclosure and sale pursuant to RPAPL 1351. Defendants Moshe Roth and Sara Roth (collectively referred to as the Roths) cross-move for an order: (1) dismissing the complaint for failing to state a cause of action, or (2) in the alternative, requiring plaintiff to join FCV Consultants Inc (FCV) to the action.
Sudit's motion is granted and plaintiff will be entitled to a judgment of foreclosure upon the submission of an order settled on notice.
The Roths' cross-motion is denied.
It is requested that plaintiff adopt the relevant language contained in the Foreclosure Department's sample order form for Judgments of Foreclosure that is available through the Court's website (http:// www.nycourts .gov/courts/2jd/kings/civil/sampleforms.shtml).
This foreclosure action arises out of the Roths' failure to pay $1,375,000 to Sudit
by June 29, 2008 as required by a stipulation and order of settlement dated June 29, 2007 (Stipulation). This Stipulation resolved three actions (two in Supreme Court, Kings County, under Index Numbers 39597/04 and 17323/06 and one in Supreme Court, Sullivan County) that involved defaults by the Roths and other parties with respect to payments required by various loan obligations. Although defaults with respect to several different loans were addressed in the stipulation, the loan obligations relevant to this action originally involved three separate notes and mortgages in the amounts of $1,500,000 (Mortgage 1),
Of note, the settlement agreement requires payment of the $1,375,000 to the “Lender,” which it defines as a collective reference to “Sudit and FCV [an entity apparently controlled by Sudit], as well as Julia Sherman and Rimma Sherman.”
The original mortgagees with respect to this $1,500,000 mortgage were FCV, Sudit, Julia Sherman and Rimma Sherman. Julia and Rimma Sherman assigned their interest in this note and mortgage to Sudit and Boris Yelisovetsky on April 8, 2002.
The original mortgagee with respect to this $216,559.50 mortgage was 405 Bedford Realty, which assigned its interest in the property to FCV in March 1999.
that originally covered four parcels located in Brooklyn, and that were “spread” over a fifth parcel (146 Rutledge Street, Brooklyn, NY) by way of three separate “spreader agreements,” each dated November 6, 2002. Pursuant to a later agreement entered into in October 2003, the Roths acknowledged the debts owed under the notes and mortgages and agreed to payment terms to satisfy the loans secured by the three mortgages.
FCV was the original mortgagee with respect to this $311,559.50 mortgage.
Although the Stipulation reduced the total amount owed under the three separate notes to $1,375,000, it also expressly provided that, in the event of default, the obligations and mortgages would remain independent and several obligations, and that leave was granted to Sudit “to commence foreclosure proceedings on any obligation in accordance with Election of remedies provisions of the RPAPL.” It is undisputed that Roth failed to pay the $1,375,000 due under the stipulation by June 29, 2008. Based on this default, Sudit, on December 30, 2008, commenced this action.
In the complaint, Sudit collectively refers to the three mortgages noted above, as spread onto 146 Rutledge Street by the Spreader agreements, as the “Rutledge Mortgage” (¶ 17 complaint), and alleges that the total due and owing under the three mortgages is the stipulated amount of $1,375,000, plus interest (¶ 30 complaint,). Although the complaint identifies Sudit as the holder of the above noted mortgages, the complaint does not address whether FCV and Yelisovetsky, assignees of interests in the notes and mortgages and/or original mortgagees, still retained an interest in the notes and mortgages. Roth appeared in this action by way of an answer dated March 25, 2009. The court, in an order dated April 14, 2011, granted Sudit's summary judgment motion, and signed an order of reference appointing Jack Segal, Esq., as a referee to hear and report on the amount due on the “Note and Mortgage.” In his referee's report, Segal considered the amount due under each mortgage to be its pro rata percentage of the $1,375,000 total for all three mortgages.
In this regard, Segal identified the $1,500,000 mortgage as Mortgage 1, found it represented 73.96 percent of the $1,375,000 total, and thus calculated the interest on a total due of $1,016,950 for Mortgage 1. With respect to the $216,559.50 mortgage (Mortgage 2), Segal found it represented 10.68 of the $1,375,000 total, and thus calculated the interest due on a total of $146,850. Finally, with respect to the $311,559.50 mortgage (Mortgage 3), Segal found it represented 15.36 percent of the $1,375,000 total, and thus calculated the interest due on a total of $211,200.
Roth appealed this court's grant of summary judgment. While this appeal was pending, Sudit moved for an order confirming the referee's report, and for an order granting a judgment of foreclosure and sale. In these papers, Sudit specifically requested that the judgement of foreclosure and sale be limited to Mortgage 1, the mortgage that initially secured the loan of $1,500,000.
This court, in an order dated June 6, 2012, granted Sudit's motion only to the extent of confirming the referee's report. On its own motion, the court found that Sudit's papers showed that FCV and Yelisovetsky were co-mortgagees, and that, as such, FCV and Yelisovesky were necessary parties to this action. The court thus directed Sudit to join FCV Consultants, Inc., (FCV) and Boris Yelisovetsky as parties to this action by amending the complaint and serving it upon FCV and Yelisovetsky within 60 days of this order with notice of entry and denied the portion of Sudit's motion seeking a judgment of foreclosures. This denial was made with leave to renew the motion for a judgment of foreclosure after FCV and Yelisovetsky had been joined as parties to the action or Sudit had otherwise demonstrated that FCV and Yelisovetsky are not necessary parties.
In an order dated September 26, 2012, the Appellate Division, Second Department affirmed this court's grant of summary judgment ( see Sudit v. Roth, 98 AD3d 1106, 1106 [2d Dept 2012] ). In its decision, the Second Department stated:
The plaintiff established its prima facie entitlement to judgment as a matter of law by producing a so-ordered stipulation setting forth the appellants'
obligation arising from certain underlying mortgages and agreements, and proof of the appellants' default ... In opposition, the appellants failed to raise a triable issue of fact. Contrary to the appellants' contention, the stipulation did not constitute a novation, as it did not extinguish the appellants' prior obligations ( id. [citations omitted] ).
The appellants were Sara and Moshe Roth.
It is on this factual background that the parties have made the motion and cross-motion.
In his motion, Sudit initially contends that FCV and Yelisovetsky are not necessary parties. With respect to Yelisovetsky, Sudit has appended an affidavit from Yelisovetsky in which Yelisovetsky states that his “interest in Mortgage 1 [the mortgage at issue] was the result of my investment in this transaction ... [and that] [s]ubsequently, but prior to the time this foreclosure action was commenced, my investment was repaid by Sudit and I resigned my interest in Mortgage 1.” Yelisovesky further states that he has no current interest in the mortgage and that he consents to a judgment of foreclosure in Sudit's name alone. Given that an assignment may be made orally ( see American Banana Co. v. Venezolana Internacional De Aviacion S.A. (VIASA), 67 A.D.2d 613, 620 [1st Dept 1979], affd49 N.Y.2d 848 [1980];Bourne v. Haynes, 235 N.Y.S.2d 332, 334 [Sup Ct, Kings County 1962] ) and does not require any particular words to become effective ( see Leon v. Martinez, 84 N.Y.2d 83, 88, [1988] ), Yelisovetsky's affidavit is sufficient to demonstrate that he has assigned his interest in the mortgage to Sudit. Even if it does not clearly demonstrate the existence of an assignment, the affidavit sufficiently demonstrates that Yelisovetsky is not a necessary party to this action given his renunciation of any interest in the judgment ( see Zoloto v. White House Beef Co., 19 A.D.2d 530, 530–531 [1st Dept 1963] ).
Sudit has also demonstrated that FCV is not a necessary party to this action through the submission of a copy of an assignment in which FCV assigned its interests to Sudit. Although this assignment was first submitted in Sudit's reply papers, the assignment may properly be considered in support of Sudit's motion since defendants had an opportunity to address the assignment in further opposition papers ( see Goldstein v. Town of Warwick, 87 AD3d 1054, 1054 [2d Dept 2011]; Turturro v. City of New York, 77 AD3d 732, 734 [2d Dept 2010] ).
In the prior order, the court did not address the propriety of Sudit's request that the judgment of foreclosure be limited to Mortgage 1, but noted that the request appeared to be one that would be covered under CPLR 3217(b). Upon further consideration, it would appear that CPLR 3217(b) is not applicable since Sudit is not actually seeking to withdraw his claims with respect to Mortgages 2 and 3, but rather, is merely seeking to limit his affirmative relief in the action. Nevertheless, the concerns that underlie a request to withdraw a cause of action would appear relevant here. Namely, in addressing a request to withdraw a claim under CPLR 3217(b), courts have stated that, “[o]rdinarily, a party cannot be compelled to litigate and, absent special circumstances, leave to discontinue a cause of action should be granted unless the party opposing the motion can demonstrate prejudice if the discontinuance is granted” ( 1701 Rest. on Second, Inc. v. Armato Props., Inc., 83 AD3d 526, 526–527 [1st Dept 2011][internal quotation marks omitted]; see also St. James Plaza v. Notey, 166 A.D.2d 439, 439 [2d Dept 1990] ).
Here, there does not appear to be any rule or law that would require that Sudit proceed against all three mortgages at this time, and, indeed, he would have had the discretion to choose which of the three mortgages to enforce at the time he commenced this action ( see Seawood Invs. v. Goldstein, 51 A.D.2d 592, 592 [2d Dept 1976] ). In opposing the original motion and in opposition to the renewed motion, the Roths have failed to identify any specific prejudice they would suffer if the judgment of foreclosure is limited to Mortgage 1. As such, this court will allow Sudit to limit the judgment of foreclosure to Mortgage 1.
However, nothing in this order should be read as precluding defendants from opposing any subsequent request by Sudit for relief with respect to Mortgages 2 and 3.
Contrary to the Roths' contentions, limiting Sudit's relief to Mortgage 1 does not require a new determination by the referee since the referee already found that Mortgage 1 represented 73.96 percent of the $1,375,000 due under the stipulation, or $1,016,950, plus interest in the amount of $299,144.75, for a total amount due under Mortgage 1 through September 23, 2011 of $1,316,094.75.
The Roths, in their motion, nevertheless assert that Sudit's motion should be denied and the action should be dismissed because Sudit has failed to state a cause of action. In doing so they rely on caselaw holding that a motion to dismiss for failure to state a cause of action under CPLR 3211(a)(7) may be made at any time ( see Schel v. Roth, 242 A.D.2d 697, 697–698 [2d Dept 1997]; Herman v. Greenberg, 221 A.D.2d 251, 251 [1st Dept 1995]; CPLR 3211[e] ). Despite this broad language to the effect that a motion to dismiss may be made at any time, the time to move to dismiss does not extend to a motion made after the grant of summary judgment.
The grant of summary judgment is the procedural equivalent of a determination at trial ( see Rivers v. Birnbaum, 102 AD3d 26, 42 [2d Dept 2012] ). “To obtain summary judgment it is necessary that the movant establish his cause of action or defense sufficiently to warrant the court as a matter of law in directing judgment in his favor (CPLR 3212, subd [b] ), and he must do so by tender of evidentiary proof in admissible form” (Zuckerman v. City of New York, 49 N.Y.2d 557, 562 [1980][internal quotation marks omitted] ). As such, when a court grants summary judgment in favor of a plaintiff, it necessarily finds that the plaintiff has a cause of action—the standard for denying a motion to dismiss under CPLR 3211(a)(7) ( see Leon v. Martinez, 84 N.Y.2d 83, 87–88 [1995] ). Moreover, the grant of summary judgment is a determination on the merits that is entitled to preclusive effect and becomes the law of the case ( see Roldan v. Astoria Generating Co., L.P., 90 AD3d 1014, 1015 [2d Dept 2011]; Callaghan v. Curtis, 82 AD3d 816, 817 [2d Dept 2011] ). The doctrine of the law of the case forecloses reexamination of an issue “absent a showing of subsequent evidence or change of law” (Wells Fargo Bank Minn., N.A. v. Perez, 70 AD3d 817, 817 [2d Dept 2010][internal quotation marks omitted], lv denied14 NY3d 710 [2010],cert dnied –––U.S. ––––, 131 SCt 648 [2010] ). Accordingly, the Roths cannot now attack the sufficiency of the complaint after this court granted Sudit summary judgment and the judgment was affirmed on appeal ( see id.).
The Roths additionally claim that the mortgages were paid off and that they have complete defenses to the proceeding. To the extent that the Roths' motion may be deemed a motion to renew the prior summary judgment determination under CPLR 2221(e)(2), they have failed to provide a reasonable justification for failing to present the evidence that the mortgages were paid off at the time of the summary judgment motion ( see Yebo v. Cuadra, 98 AD3d 504, 506 [2d Dept 2012], lv dismissed20 NY3d 905 [2012];Deutsche Bank Nat. Trust Co. v. Wilkins, 97 AD3d 527, 528–529 [2d Dept 2012]; Coccia v. Liotti, 70 AD3d 747, 752–753 [2d Dept 2010]; CPLR 2221[e][3] ). “While it may be within the court's discretion to grant leave to renew upon facts known to [a] party at the time of the original motion ... a motion for leave to renew is not a second chance freely given to parties who have not exercised due diligence in making their first factual presentation” ( Coccia, 70 AD3d at 752–753 [internal citations and quotation marks omitted]; see also Yebo, 98 AD3d at 506).
In addition to the Roths' arguments regarding payment, they argue that Sudit's motion must be denied with respect to Sara Roth because she was not a party to the Settlement agreement. This argument, however, was made by the Roths in opposition to the motion for summary judgment, and has necessarily been rejected by this court in granting summary judgment and the Appellate Division in affirming the grant of summary judgment.
Accordingly, the Roths have failed to demonstrate grounds warranting the grant of their own cross-motion or the denial of Sudit's renewed motion for a judgment of foreclosure.