Opinion
Index No. 150232/2021
05-24-2023
U.S. Bank National Association, AS TRUSTEE FOR VELOCITY COMMERCIAL CAPITAL LOAN TRUST 2016-1, Plaintiff, v. BJ Organization of New York, Inc. et al, Defendant.
Attorney for the Plaintiff Daniel Norris Young, Esq. SCHILLER, KNAPP, LEFKOWITZ & HERTZEL, LLP Attorney for the Defendant BJ Eric Nelson, Esq. ERIC NELSON, ESQ. Attorney for the Defendant Mohamed Ositadinma Benjamin Okeke, Esq. O. BENJAMIN OKEKE, ESQ Attorney for the Defendant Ishola Steven Bruce Rabitz, Esq. GnS Industries Inc.
Unpublished Opinion
Attorney for the Plaintiff Daniel Norris Young, Esq. SCHILLER, KNAPP, LEFKOWITZ & HERTZEL, LLP
Attorney for the Defendant BJ Eric Nelson, Esq. ERIC NELSON, ESQ.
Attorney for the Defendant Mohamed Ositadinma Benjamin Okeke, Esq. O. BENJAMIN OKEKE, ESQ
Attorney for the Defendant Ishola Steven Bruce Rabitz, Esq. GnS Industries Inc.
RONALD CASTORINA, JR., J.
The following e-filed documents listed on NYSCEF (Motion #003) numbered 63-80, 84-85 and (Motion #004) numbered 81-83, and 86-88 were read on this motion.
Upon the foregoing documents, and after argument conducted on April 27, 2023, Motion Sequence #003 and Motion Sequence #004 are resolved and therefore, it is hereby, ORDERED, that Defendant's Motion Sequence #004 pursuant to CPLR § 3215 [c] for an order dismissing with prejudice and without leave to replead the Plaintiff's complaint as abandoned is DENIED, with prejudice, and it is further;
ORDERED, that Plaintiff's Motion Sequence #003 pursuant to RPAPL § 1321, CPLR R § 3212, CPLR § 1003, and CPLR § 3215 is GRANTED, with prejudice, and it is further;
ORDERED, that the Clerk of the Court shall enter judgment accordingly.
Memorandum Decision
I. Procedural History
On or about February 3, 2021, Plaintiff filed a summons, complaint and notice of pendency alleging that Defendants defaulted under a commercial mortgage and commercial note by failing to make payments due. Plaintiff filed Motion Sequence #003 by notice of motion on February 22, 2023 seeking (1) to strike the answer and each affirmative defense asserted by the defendant, Ahmed Nagi H. Mohamed (hereinafter referred to as "Mohamed") on the merits and with prejudice, and directing that the stricken answer be treated as a notice of appearance; (2) summary judgment in favor of the Plaintiff and against Defendant Mohamed for the relief demanded in the complaint; and (3) default judgment in favor of the Plaintiff and against Defendant Mohamed and each non-answering Defendant. Plaintiff further seeks (4) the striking the names of defendants "JOHN DOE #1-#50" and "MARY ROE #1-#50" from the caption; (5) the appointment of a referee to compute the amounts due on the subject mortgage; and (6) other such relief as this Court deems appropriate.
Defendant Mohamed filed Motion Sequence #004 by notice of cross motion on March 16, 2023, seeking (1) to dismiss Plaintiff's complaint as abandoned for failure to take proceedings for entry of judgment within one year after the default pursuant to CPLR § 3215 [c]; and (2) such other, further, and different relief as the Court deems just and proper. Plaintiff filed a combined opposition to Motion Sequence #004 and reply to Motion Sequence #003 on April 20, 2023. Defendant Mohamed filed reply on Motion Sequence #004 on April 24, 2023. Oral argument was heard by the Court on both motions on April 27, 2023.
II. Facts
This is a foreclosure action whereby Plaintiffs seek to divest Defendants of their equitable interest in the premises known as 264 Lander Avenue, Staten Island, New York 10314 due to a default on the accompanying mortgage note. On or about May 12, 2015, Defendant BJ Organization of New York, Inc., executed a commercial mortgage with Velocity Commercial Capital, LLC in the amount of $234,000.00 on what the instrument describes as 264 Lander Avenue, Staten Island, New York 10314. (NY St Cts Filing [NYSCEF] Doc No. 76).
Plaintiff alleged it is the owner and holder of the Semi-Annual Adjustable Term Note Commercial Note, when this foreclosure action was commenced on February 03, 2021 and has been the holder of the note since then (NY St Cts Filing [NYSCEF] Doc No. 74). Plaintiff maintains that it is the owner of the subject Commercial Mortgage and Commercial Note and is the mortgagee of record, as the Assignment of Mortgage expressly assign both the Commercial Note and Mortgage to the Plaintiff. (NY St Cts Filing [NYSCEF] Doc No. 76). Plaintiff contends the transfer of the loan from Velocity Commercial Capital, LLC to U.S. Bank National Association is further memorialized by the Commercial and Assignment of Collateral Agreements and Other Loan Documents expressly assigns the Note to the Plaintiff. (NY St Cts Filing [NYSCEF] Doc No. 66).
On April 01, 2020, BJ Organization of New York, Inc. defaulted under the note and mortgage by failing to make the payments due. (NY St Cts Filing [NYSCEF] Doc No. 74). The default was not cured and on February 3, 2021, Plaintiff commenced this action. Plaintiff maintains that each Defendant was served with a summons and complaint, in the appropriate form and manner. Plaintiff contends that the time for each Defendant to appear, answer or otherwise move with respect to the complaint has expired and has not been extended by stipulation, order of the court or otherwise, and no defendant appeared, answered, or otherwise moved with respect to the complaint, except Mohamed, who served an answer through counsel, and BJ Organization of New York, Inc. and Emmanuel Ishola, which served a Notice of Appearance through counsel.
III. Dismissal of Plaintiff's Complaint as Abandoned
Pursuant to CPLR § 3215 [c] "If the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed. A motion by the defendant under this subdivision does not constitute an appearance in the action." "The language of the statute is strictly construed, as it is mandatory that the court 'shall' dismiss such claims" (see Bank of NY Mellon v. Toscano, 2023 NY A.D. LEXIS 2357 [2d Dept 2023] quoting Deutsche Bank Natl. Trust Co. v. Allenstein, 201 A.D.3d 783 [2d Dept 2022], quoting CPLR § 3215 [c]; citing Ibrahim v Nablus Sweets Corp., 161 A.D.3d 961 [2d Dept 2018]).
"'Failure to take proceedings for entry of judgment may be excused, however, upon a showing of sufficient cause,' which requires the plaintiff to 'demonstrate that it had a reasonable excuse for the delay in taking proceedings for entry of a default judgment and that it has a potentially meritorious action'" (see Bank of Am., N.A. v Rice, 155 A.D.3d 593 [2d Dept 2017] quoting Aurora Loan Servs., LLC v Hiyo, 130 A.D.3d 763 [2d Dept 2015] citing HSBC Bank USA, N.A. v Grella, 145 A.D.3d 669 [2d Dept 2016]; Pipinias v. J. Sackaris & Sons, Inc., 116 A.D.3d 749 [2d Dept 2014])."Moreover, '[t]he mere fact that the legislative intent underlying CPLR § 3215 [c] was to prevent the plaintiffs from unreasonably delaying the determination of an action, does not foreclose the possibility that a defendant may waive the right to seek a dismissal pursuant to the section by his or her conduct'" (see id quoting Myers v. Slutsky, 139 A.D.2d 709 [2d Dept 1988]).
"[A] defendant may waive the right to seek dismissal pursuant to CPLR § 3215 [c] by serving an answer or taking 'any other steps which may be viewed as a formal or informal appearance'" (see OneWest Bank, FSB v Lara, 192 A.D.3d 695 [2d Dept 2021] quoting Bank of Am., N.A. v Rice, 155 A.D.3d 593 [2d Dept 2017]; quoting Myers v. Slutsky, 139 A.D.2d 709 [2d Dept 1988]). A party waives their right to seek dismissal of the complaint pursuant to CPLR § 3215 [c] by filing a notice of appearance (see Bank of Am., N.A. v. Lichter, 192 A.D.3d 957 [2d Dept 2021] citing CPLR § 320 [a]; U.S. Rof III Legal Tit. Trust 2015-1 v John, 189 A.D.3d 1645 [2d Dept 2020]; Wilmington Sav. Fund Socy., FSB v Chishty, 179 A.D.3d 1147 [2d Dept 2020]; US Bank N.A. v Gustavia Home, LLC, 156 A.D.3d 843 [2d Dept 2017]; Bank of Am., N.A. v Rice, 155 A.D.3d 593 [2d Dept 2017]).
The one-year timeframe was further tolled by the COVID-19 Emergency Protect our Small Businesses Act of 2021 which provide a 60-day stay of commercial foreclosure actions. "Any action to foreclose a mortgage pending on the effective date of this act, including actions filed on or before March 7, 2020, or commenced within thirty days of the effective date of this act shall be stayed for at least sixty days, or to such later date that the chief administrative judge shall determine is necessary to ensure that courts are prepared to conduct proceedings in compliance with this act and to give mortgagors an opportunity to submit the hardship declaration pursuant to this act." (see 2021 NY ALS 73).
The earliest served and thereafter defaulting defendants, New York City, Environmental
Control Board (NY St Cts Filing [NYSCEF] Doc No. 5) and Department of Finance (NY St Cts Filing [NYSCEF] Doc No. 4), were each served on February 16, 2021, with their time to answer expiring, at the earliest, 20 days thereafter on March 8, 2021. The one-year time to move for judgment would have expired on March 8, 2022, but for the 60-day tolling provided by the COVID-19 Emergency Protect our Small Businesses Act of 2021 stay. The 60-day tolling moved the CPLR § 3215 [c] deadline to May 7, 2022, which is one year and 60 days from March 8, 2022. All other defendants' default dates would have been after March 8, 2021 and therefore the deadline to undertake proceedings for the entry of judgment would have been later than May 7, 2022.
Plaintiff's Motion Sequence #001 motion filed May 4, 2022, (NY St Cts Filing [NYSCEF] Doc No. 19) was within the one-year, post default timeframe provided by CPLR § 3215 [c] for all non-appearing defendants in the action. Plaintiff did not abandon the action and the defaulting defendants have chosen to not contest Motion Sequence #001 or Motion Sequence #003 seeking default judgment. Motion Sequence #001 was withdrawn without prejudice on consent of Defendant Mohamad, rendering any argument concerning abandonment both waived and moot.
Furthermore, the COVID-19 Emergency Protect our Small Businesses Act of 2021 created uncertainty and lack of uniformity with respect to commercial foreclosure actions as well as the rights and responsibilities under the act. The pandemic created disruption of normal practices serving as sufficient cause for delay in proceeding to summary judgment in this action. The stay implemented by the COVID-19 Emergency Protect our Small Businesses Act of 2021 and the overall restrictions imposed in response to the COVID-19 pandemic, serves as sufficient cause for the delay in undertaking proceedings towards the entry of judgment. Plaintiff's Motion Sequence #001 for Summary and Default Judgment submitted on May 4, 2022 clearly shows an intent to not abandon the subject action as to any named party.
Accordingly, the Defendant's motion pursuant to CPLR § 3215 [c] for an order dismissing with prejudice, without leave to replead the Plaintiff's complaint as abandoned is DENIED, with prejudice.
IV. Summary Judgment
"In moving for summary judgment in an action to foreclose a mortgage, a plaintiff establishes its prima facie case through the production of the mortgage, the unpaid note, and evidence of default" (see Tri-State Loan Acquisitions III, LLC v Litkowski, 172 A.D.3d 780 [2d Dept 2019] citing Hudson City Sav. Bank v Genuth, 148 A.D.3d 687 [2d Dept 2017]; Deutsche Bank Natl. Trust Co. v Abdan, 131 A.D.3d 1001 [2d Dept 2015]). "On its motion for summary judgment, the plaintiff has the burden of establishing, by proof in admissible form, its prima facie entitlement to judgment as a matter of law" (see id citing Deutsche Bank Natl. Trust Co. v Monica, 131 A.D.3d 737 [3rd Dept 2015]).
The Uniform Civil Rules for the Supreme Court and the County Court provide that "Upon any motion for summary judgment, other than a motion made pursuant to CPLR § 3213, the court may direct that there shall be annexed to the notice of motion a separate, short and concise statement, in numbered paragraphs, of the material facts as to which the moving party contends there is no genuine issue to be tried." (see 22 NYCRR § 202.8-g [a]).
The Appellate Division, Second Department, has not yet ruled regarding the interpretation of 22 NYCRR § 202.8-g [a], nevertheless, the issue has been addressed by the Appellate Division, Third Department.
"[W]hile it would have been better for [plaintiff] to submit a paragraph-by-paragraph response to [defendants'] statement, 'blind adherence to the procedure'" set forth in 22 NYCRR 202.8-g is not required[.] (see Leberman v. Instantwhip Foods, Inc., 207 A.D.3d 850 [3rd Dept 2022] quoting Sari v Alishaev Bros., Inc., 121 A.D.3d 506 [1st Dept 2014]; Abreu v. Barkin & Assoc. Realty, Inc., 69 A.D.3d 420 [1st Dept 2010]; citing Matter of Crouse Health Sys., Inc. v City of Syracuse, 126 A.D.3d 1336 [4th Dept 2015]; Muscato v. Spare Time Ent., 2022 NY Misc. LEXIS 684 [Sup Ct, Schenectady County 2022]).
The Plaintiff's statement of facts substantially conforms with the requirements of 22 NYCRR § 202.8-g [a] by providing short and concise statements, in numbered paragraphs, of material facts as to which the Plaintiff contends that there are no genuine issues to be tried. These statements are further supported by citations to documentary evidence submitted in support of the Plaintiff's motion. In the absence of contradictory Second Department precedent, the Third Department holding is binding on this Court.
B. Prima Facie Evidence of Entitlement to Foreclosure
"A facially adequate cause of action to foreclose a mortgage requires allegations regarding the existence of the mortgage, the unpaid note, and the Defendant's default thereunder, which, if subsequently proved, will establish a prima facie case for relief" (see U.S. Bank NA v Nelson, 169 A.D.3d 110 [2d Dept 2019] citing IndyMac Venture, LLC v Amus, 164 A.D.3d 883 [2d Dept 2018]; JPMorgan Chase Bank NA v Wenegieme, 162 A.D.3d 876 [2d Dept 2018]; A/SL DFV, LLC v C.A.R.S. Constr., LLC, 161 A.D.3d 921 [2d Dept 2018]). Plaintiff's filings in this case establish a prima facie case for foreclosure. (NY St Cts Filing [NYSCEF] Doc No. 76). Plaintiff has further proved the existence of the note and mortgage, and the Defendant's default through the affidavit of Sandie Lawrence. (NY St Cts Filing [NYSCEF] Doc No. 72).
"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, and he must do so by tender of evidentiary proof in admissible form." (see Zuckerman v. New York, 49 N.Y.2d 557 [1980] citing CPLR § 3212, [b]). Plaintiff met this burden with the credible evidence submitted. The burden now shifts to the Defendant, who in opposing the motion for summary judgment "must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which he rests his claim or must demonstrate acceptable excuse for his failure to meet the requirement of tender in admissible form; mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient" (see id citing Alvord & Swift v. Stewart M. Muller Constr. Co., 46 N.Y.2d 276 [1978]; Fried v. Bower & Gardner, 46 N.Y.2d 765 [1978]; Platzman v. Am. Totalisator Co., 45 N.Y.2d 910 [1978]; Mallad Constr. Corp. v. County Fed. S&L Ass'n, 32 N.Y.2d 285 [1973]).
Defendant Mohamed's answer does not raise a genuine issue of fact that would require a trial. Defendant Mohamed denies or denies knowledge or information sufficient to form a belief with respect to the allegations set forth in the complaint. The credible documentary evidence presented by the Plaintiff and the affidavit of Sandie Lawrence fully address the denials. Defendant Mohamed's denials are not accompanied by any evidence that would elevate them to an issue of fact requiring a trial. The Court fully considered the affirmative defenses raised by the Defendant in this matter, and found them unavailing.
The plaintiff has demonstrated its prima facie entitlement to judgment as a matter of law. Accordingly, pursuant to RPAPL § 1321, CPLR R § 3212, CPLR § 1003, and CPLR § 3215, Plaintiff's Motion Sequence #003 is GRANTED in its entirety, with prejudice.
V. Decretal Paragraphs
It is hereby ORDERED that Defendant's Motion Sequence #004 pursuant to CPLR § 3215 [c] is DENIED, with prejudice, and it is further;
ORDERED, that Plaintiff's Motion Sequence #003 pursuant to RPAPL § 1321, CPLR § 3212, CPLR § 1003, and CPLR § 3215 is GRANTED, with prejudice, and it is further;
ORDERED, that the Clerk of the Court shall enter judgment accordingly.
Any contention made within the motion practice, not addressed by this Decision and Order, were considered, and found to be unavailing.
The foregoing constitutes the Decision and Order of the Court.