Bank of America, N.A. v Oliver, LLC
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Bank of America, N.A. v Oliver, LLC 2012 NY Slip Op 30335(U) February 7, 2012 Supreme Court, New York County Docket Number: 602513/09 Judge: Debra A. James Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. lNED ON 211012012 [* 1] SUPREME COURT OF THE STATE CF NEW YORK - NEW YORK COUNTY PRESENT: PART 59 DEBRA A. JAMES Justice EANK OF A M E R I C A , N . A . , as Lender dnd Pl a i r i t i f f , P 1 a i r i t . i ff , -v- Index No.: 60251 3/09 Motion Date: 0911311 1 Motion Seq. No.: O L I V E R , T l T l C , 9S1 L L C , S I M O N E L I A S , I Z A K Motion Cal. SENBAHAK, S T E V E N ELGHANAYAN, BANK O F AMER.%CA, N . R . , GA'I'RWAY D E M O L I T I O N CORP. , FUV SEWER & WA?'F:H, I N C . , F:TIT)INGTON S E C U R I T Y , I N C . , MAYRICH CONSTRUC'YION COMF'ANY , TWI N COIJNTY S H E E T M E T A L , I N C . , L O U I S L . HUTTERMARK f S O N S , INC., RC DOLNER i L L C , SHN C O N S U L T I N G CORP . , POLO E L E C T H X C ClORP , D F C STRUCTUR !4S, L L C , RW KEPROGRnPHTCS L L C , A C T T V E F I R E S P R I N K L E R C O R P . , k;NVIRONMENTAL CONTROL BOARD, C I T Y O F NEW YOHK DEPARTMENT of F I N A N C E , S T A T E o f NEW YOKK, arid " J O H N DOE" N O S . 1 - 2 5 , 4 No.: Defendants. The following papers, numbered 1 to 10 were read on this motion to renew. k PAPERS NUMBERED Notice of Motion/Order to Show Cause -Affidavits -Exhibits 3 - 9 Answering Affidavits - Exhibits Replying Affidavits - Exhibits Cross-Motion: Yes 0 No Upon t h e foregoing papers, D e f e n d a n t s 0 ive-r-, LLC.', 351 L L C , Sirnon E l i a s and I z a k 1 Senhaliar aid St.ever-1 Elcjhanayal-1 move p u r - s u a n t t.o C P L R 2 2 2 1 ( e ) seeking leave L o r e n e w t h i s c:nu?-t.'s O r d e r dated A p r i l 27, 2011, ai-id u p o n 1-enewal d e n y p l . a i n t i f f s m o t i o n f o r summary j~ i d g n ~ and t . ~~ 2s 0- i=$ 03 7 Checkone: 0 FINAL DISPOSITION Check if appropriate: DO NOT POST NON-FINAL DISPOSITION REFERENCE Ll SETTLE/S U BM IT ORDE RIJ U DG. [* 2] otherwise stay this foreclosure proceeding. Plaintiff cross- rn0ve.s to substit-uteNine Fifty-Five Development Asssociates LLC in its p l a c e and stead as plaintiff. For t h e reasons that follow, the court shall grant the motion to renew and upon renewal adhere to its prj.or determination granting summary judgment to plaintiff and s h a l l grant the cross-motion for substitutionMovarlts seek renewal based upon the assignment of the Acquisition Mortgage that incorporated prior mortgages securing approximately $9.2 Inillion in indebtedness and the Gap Mortgage that secured $19.1 million in borrowings. the subject of this foreclosure action. Those mortgages are It is undisputed t h a t both mortgages were assigned by the plaintiff Bank of America (BOA) to proposed plaintiff Nine Fifty-Five Development Associates LLC (Nine Fifty-Five) by assignment agreements dated October 13, 2010, which were cluly recorded on in the City Register on October 27, 2010. Movants correctly assert that the assignments occurred after the prior motion for summary judgment was submitted on J u l y 30, 2010 and that they therefore could not have placed that fact. before t h e court or made legal arguments based upon that fact. A motion to renew should be granted upon a showing of new facts where the moving party sets forth a justifiable excuse for n o t presenting the facts to the court. [Movaiits] ha[vel satisfied [the] burden on the motion to renew. -2- [* 3] . The existing material facts relating to . . available . . . at t h e time of the motion. + - were not . Leave to renew is Lhe appropriate remedy under such circumstances. Seifts v Mark:l.c!, 211 AD2d 848, 849 (3d Dept 1995) (citations omitted). Movants argue that the assignments divested plaintiff from standing to bring this action as it no longer had any legal or equitable interest in the mortgages. See Katz v East-Ville Realty Co., 249 AD2d 243 ( l SDept 1998) ( Plaintiff sattempt to t foreclose u p o n mortgage in which he had no legal or equitable inLerest. was without foundation in law or fact, and the IAS Court s dismissal of t h e foreclosure action pursuant to CPLR 3211 (a) (1) was, accordingly, appropriate ). A s cited by the m o v a n t s , the Court. in Katz further held that [dlismissal was also warranted by reason of plaintiff s failure to j o i n the party to whoIn he assigncd the mortgage and who, he concedes, possesses a security interest in the property. I. d The rnovants reljance upon Katz however is misplaced. There is no dispute that at the time this action was commenced BOA w a s the mortgagor and had t.he right to foreclose upon the property unlike Katz wherc! the assignment occurred prior to the action beirig comnenced. Thus citing Katz, the Court. has held I r i order to commence a foreclosure action, the plaintiff must h a v e a legal. or equitable interest in t h e mortgage. Where the plajntiff is the assignee of the mortgage and t h c uncler1.ying n o t e at the time the foreclosure action was commenced, the plaint.iff has standing to maintain the cictiori. Here, [plaintiff] lacked standing to bring this -3- [* 4] foreclosure action because it was not the assignee of the mortgage or1 . . . the day t h e action was commenced. A foreclosure of a mortgage may not be brought by one who h a s no title to it. * * k In sum, iri;i.sIriuch as the assignment was not made until aftcr the SuIruiions was filed, Wells Fargo had no standing to bring t h i s action. Wells Farqo Bank, N.A. v Marchione, 69 AD3d 204, 207-211 (ad Dept 2009) ( c i t . a t i o n s and internal quotations omitted) . Therefore, BOA had the right to commence this foreclosure action as it had not. assigned the mortgages at: t h e time the action was commenced T h e movants curiously argue Lhat Central Federal Sav., F . S . B . v 405 W. 45t~hSt., Tnc. (242 RD2d 512 [ 1 3 t Dept 19971) supports their position because the Court therei-n stated [ S I ince defendant. does not2 challenge the substantive validity of the assignment of the subject mortgage to [the assignee], and since a n assignee of a mortgage c a n continue an action in the name of the oriyirlal mortgagee, even in the absence of a formal substitution (CPLR 1018), there is no merit to defendant s claim that t . h c action should be dismissed on the ground that the named plaintiff owns no rights i n this matter. Movants assert that Central Federal supports their position because unlike that case here they challenge? BOA S ability to assign the mortgages under Section 0 . 1 . 3 of the Fee Acquisition Loan Agreement (Fee Loan) d a t e d October 12, 200 7. Movants arguments are inapposite. Based upon Lhe Court s holclinq i n C e n t r a l Federal, if BOA S assignment of the mortgages -4- [* 5] is valid then proposed plaintiff Nine Fifty-Five is permitted to continue this action in BOA s stead. B u t even if this court were to hold that the assignments were void, the movants would not be entitled to a reversal of summary judgment against them since BOA wou1.ci continue to the be the holder of the mortgages and the 1novarit.s argument as Lo BOA s standing would fail as a result. l herefore, based upon Central Federal the court shall adhere to its prior grant o ¬ summary judgment to the plaintiff. The court shall also grant plaintiff s cross-motion to subst.itute Nine Fifty-Five as plaintiff pursuant to CPLR 1018. Movarits ar.gue that this court s h o u l d deny the cross-motion because the Fee Loan bars the assignment,of t h e loan to any entity other than a bank or financial institution. Section 8.13 of t-he Fee 1,oan entitled Assignment; Participation provides in pertinent part that the Lender may at any time assign to any bank or other institution with the consent of the Administrative Agent arid notice to Borrower, which consent shall riot be unreasonably withheld 01 clclayed . . . all or a proportionate part of a1 1. of its rights and obligations, pursuant to an Assignment and Assumpt.ion Agreement executed by such Assignee and the assigning Lender. . . Movants argue that Mayrich Construction Company also opposes the cross-motion in connection with its separate motion to renew and the court s h a l l consider its opposition to the cross-motion in connection with its motion to renew. -5- [* 6] a s s i g n e e Ninc! F ' i f t y - F i v e i s not. (3 bank o r fi.riaricia1 i n s t i t u t i o n arid tl-iereforc BOA has blreac:hed 1t.s o b l i y a t i o n s u n d e r t h e Fee Loan s o a s t.o c o n s t i t u t e ; f r a u d which i s a d e f e n s e t o t h e mortgage I foreclosure a c t i o n . M o v c a r i t s ' argument l a c k s m e r i t . First, the c i t e d s e c t i o r i of th? Fee Loan contains no p i - o h i b i t i o n a g a i n s t . t h e t y p e o f assignment. that. w a s e x e c u t e d here. movant:; The p r o v , i s i o n r e l i e d upon by merely p r c s c r i - b e s the r c q u i r e m e n r s t h a t must be fu1.f i l l e d i f BOA were t.o assign i t s 1.iyht.s u n d e r t h e mortgage t o a bank o r financial i n s t i tutiori. A s s t a t e d by t h e Second C i r c u i t a n a l y z i n g a si m i 1a r c 011 t.raCI t LEI 1 p rov i si on The c l a i m t h a t t h e assigrirneri:; from [ t h e o r i g i n a l lender] t o [ t h e assignee] i s . i n v a l i d can be d i s p o s e d of q u i c k l y . Under N e w York law, o n l y e x p r e s s l i - m i t a t i o n s on a s s i g n a b j 1 i t y ar-e e n f o r c e a b 1 , e . "To reveal the i n t e n t necessary t o preclude the power t o a s s i g n , o r cause an a s s i g n m e n t v i o l a t i v e of c o n t r a c t u a l p r o v i a i - o n s t o be wholly v o i d , [a contracbual] c l a u s e tnust c o n t a i n express p r o v i s i o n s t h a t any a s s i g n m e n t shall be v o i d 01' i n v a l i d i f not. made i n a c e r t a i n s p e c i f i e d way." l'he 1,etter' Agreement a t i s s u e p r o v i d e s : "This l e t t e r agreerrierit shall be b i n d i n g upon you [ b o r r o w e r ] , your si.~ccessor:; arid a s s i g n s , and shall i n u r e t o the b e n e f i t of us [ t h e original l c n d e r ] , o u r successors , t r a n s f c r e e s and assigns. W e [thc orig.i.na1 l e n d e r ] may assign all o r any part. of O U T i n t e r e s t i n t h j . s letter agreement t o any f i n a n c i a l ir-ist.iL.ution. 'This l a n g u a g e f a i l s t o restrict t h e assignment. expressly in any way. While i t e x p l i c i t l y p e r m i t s assig1irnent.s t.0 f i r i a n c i a l i n s t i t u t i o n s , it. does riot. limit. a s s i g n m e n t s o n l y t o these e n t i t . i . e s . The assri.gnrnent was therefore valid a t L h e time i t w a s made. Since w e h o l d that 2s a m a t t e r of N e w York l a w , L h e debt: was a s s i g n a b l e t o [ t h e a s s i g n c c ] , w h e t h e r o r n o t i t is a [* 7] f i n a n c i a l i n s t i t u t i o i i , t . h e r e is no need t.o conside-ra p p e l l a n t s c l a i m that. f a c t u a l issues e x i s t a s t o whether [Ll-ic a s s i g n e e ] i : 3 a f i n a r i c i a l i n s t i t u t i o n . - -Pravj 11 Bariker - A s s o c i a t e s , Lt.d. v Banco P o p u l a r ne1 Per-u, 1.09 F3d 850, 856 (2d C i r 1 3 y r / ) ( c i t a t i o n s atid f o o t n o t e o m i t t e d ) . Similar t o t h e p r - o v i s i o n cor-isidercd by t h e Court i n P r a v i n , t.he assignment. p r - o v i s i o n i n t h e Fee Loan does not, b y i t . 3 ter-rns bar. t.he asslignmcItnt of t h e mortgages t o Nine F i f t y - F i v e . v C:ari.st.C) (:on-st.. C o r p o r a t i o n , 3 0 3 of l o a n s E)r-ohibit.cdo n l y See Allhusen 452 (1.952) ( a s s j . g n m e n t NY 4 4 6 , [ w ] hen c l e a r lariyuage i s u s e d , a n d t h e p l a i n e s t w o r d s have been chosen ) . Furt.hcriuore, S e c t . i o n 8 . 1 5 of t h e Fee Loan S u c c e s s o r s and Assigns p r o v i d e s i n p e r t i n e n t p a r t . t h a t [e] xcept a s herein p r o v i d e d , t h i s Agreement. shall be bindj.ng upon and i n u r e t o t h e bericf it. o f Borrowcr-,A d m i n i s t r a t - i v e Agent and Lenders and t h e i r respective h e i r s , persorial repres2ntativcs, s u c c e s s o r s and ~ i s s i g r i s . N o t w i t h s t a n d i n g t h e foregoing, Borrower rnay n o t a s s i g n , t - r a n s f e i - or sct o v e r t o a n o t h e r , i n wholc or i n p a r t . , a l l or any EIAI-L . of its b e n e f i t s , r i g h t s , d u t i e s and o b l i g a t - i o n s h e r e u n d e r . l hus corivrary t o inovants argument , when the p a r t i e s int.erided Lo prohi.bi t assiynrnents by t-he b o r r o w e r s , such r e s t r i c t i o n w a s i n a d e explicit in t h e text of t h e F e e Loan. There i s no s i m i l a r p r o v i s i o n a p p l - i c a h l e t o t h e p l a i n t i f f , which thus evinces the parties . j.nt.ent, t h a t the plaint i f f be able t o f r e e l y a s s i g n t.lic? 1oar1 a i d [no g a q c : a p p u r t el-iari thc ret,o . rt t. -7- [* 8] Accordingly, i t . is ORDERED t h a t t h e rriotion t o r e n e w t h i s c o u r t ' s O r d e r of A p r i l 27, 2011, by dcfcridarits OLIVER, LLC, 951 LLC, STMON ET.iIAS, JZAK SENBA ¬IAR and STEVEN ELGHIANAYAN i s DENIED; arid i t i s f u r t h e r ORDERED that p l a i n t i f f ' s c r o s s - m o t i o n t o s u b s t i t u t e NINE FIFTY-FIVE DEVELOPMEN'I' ASSOCIA'I'ES LLC as p l a i n t i f f i n this a c t i o n i s GKANTEL) arid t - l i a t t.hc c a p t i o n of t h i s action shall. r e a d as follow:; : NINE FIFTY-FIVE DEVELOPMENT ASSOCIATES LLC, Plaintiff, -vOLIVER, LLC, 951 LLC, SIMON ELIAS, IZAK S E N H A H A K , STEVEN ELGILANAYAN, BANK OF AMERICA, N . A . , GATEWAY DEMOLITION COKP., FCV SEWER 61 WATER, ZNC., EL)DING?'ON SECURITY, INC., MAYRICH CONSTRUCTION COMPANY, TWIN COUNTY SHEET METAL, INC., LOUZS 1.1. RUTTERMARK & SONS, INC., RC DOLNER LLC, SEN CONSULTING CORP., POLIO r:I,ECTRIC CORP , DFC STRUCTURES , LLC , BW REPROGRAPHICS LLC, ACTIVE FIRE SPRINKLER CORP., ENVIRONMENTAL CONTROL BOARD, CITY OF' NEW YORK DEPARTMEN'].' FINANCE , S?'R'I.'E of of NEW YORK, arid "JOHN DOE" NOS. 1-25, Deferidarits. and it. i s f u r t h e r , ORDERED that upon service of a copy of t h i s O r d e r with n o t . i c e of eritr-y upon a l l . p a r t i e s the c a p t - i o n of t h i s a c t i o n shall be deerned amended and NINE FIFTY-FIVE DEVELOPMENT ASSOCIATES LLC shall bc t.lie p l a i n t i f f i n t h i s a::tjon; and i t js f u r t h e r [* 9] ORDERED that. cross-rriovant s h a l l s e r v e a copy of t h i s order wiLh n o t i c e of e n t r y upon t h e Cointy Clerk ( R o o m 141B) arid t h e Clerk of t h c T r i . a I S u p p o r t Office (Room 158) , who are d i r e c t e d t o mark t h e Uler-lc, ~ e c o r d s t o reflect t-lic change i n the c a p t i o n r herein. T h i s is t.he d e c i s i o n and o r d e r of t h e court. Dated: ENTER : F e h r u a r y 7 , 2012 -9-
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