Concept 9, LLC v Alpine Holding, LLC

[*1] Concept 9, LLC v Alpine Holding, LLC 2012 NY Slip Op 50063(U) Decided on January 19, 2012 Supreme Court, Sullivan County LaBuda, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 19, 2012
Supreme Court, Sullivan County

Concept 9, LLC, Plaintiff,

against

Alpine Holding, LLC, LAKESHORE REALTY HOLDING, LLC, EVERGREEN REALTY HOLDING, LLC, REGENCY ESTATES DEVELOPMENT CORP., BOARD OF MANAGERS OF ALPINE ACRES CONDOMINIUM, SHMUEL SALAMON, SURI SALAMON, NEW YORK STATE COMMISSIONER OF TAXATION AND FINANCE, and JOHN DOE NOS. "1-100", said names being fictitious, the person or parties intended being the persons, parties, or entities, if any, having or claiming an interest in or lien upon the mortgaged premises described in the complaint., Defendants.



4147-2010



APPEARANCES:Goldberg & Rimberg PLLC

115 Broadway 3rd Floor

New York, New York 10006

By: Michael E. Gindi, Esq.

Attorneys for Plaintiff

Stuart I. Davis, Esq.

715 Church Street Suite 209

Brooklyn, New York 11218

Attorney for non-captioned party

BMG Southern Equities, LLC

Marvin N. Newburg, Esq.33 North Street

Monticello, NY 12701

Attorney for Shmuel Salamon and Suri Salamon

Frank J. LaBuda, J.



The plaintiff moves for default judgment against the defendants, Alpine Holding, LLC, Lakeshore Realty Holding, LLC, Evergreen Realty Holding, LLC, Regency Estates Development Corp., Shmuel Salamon and Suri Salamon ("Defendants"). Plaintiff also seeks the appointment of a Referee to compute and report the amount due in this foreclosure proceeding. Defendants, Alpine, Lakeshore, Evergreen and Regency have failed to appear or oppose the motion. The Salamon defendants failed to appear but oppose the motion.

The defendants borrowed $2.5 million dollars from Continental Funding Group LLC in 2005 and pledged real property located in Sullivan County as collateral for the loan. The mortgage was sold and assigned to the plaintiff on June 30, 2009. The plaintiff maintains the defendants failed to make the required payments and have defaulted on the terms and conditions of the mortgage. The plaintiff alleges the amount due on the mortgage as of June 30, 2010 is $2,461,039.95

The plaintiff commenced this foreclosure action against the named defendants on December 21, 2010. On January 5, 2011, the plaintiff served the Summons and Complaint upon the Secretary of State on behalf of defendants Alpine, Lakeshore, Evergreen and Regency pursuant to CPLR § 311, CPLR § 311-a, Business Corporation Law § 306 and Limited Liability Law § 303. Service upon the individual defendants, Shmuel and Suri Salomon, was completed on January 29, 2011 pursuant to CPLR § 308(4). The defendant, New York State Commissioner of Taxation and Finance served a Notice of Appearance in this action on January 26, 2011. The plaintiff mailed an additional summons to Alpine, Lakeshore, Evergreen and Regency on March 8, 2011 pursuant to CPLR § 3215(g)(4)(I). The plaintiff maintains none of the defendants have answered the summons and complaint and now are in default. The plaintiff contends it is entitled to a judgment by default pursuant to CPLR § 3215.

The Salamon defendants requested and received an extension of time to answer this within motion until July 22, 2011. The Salamon defendants offered an Affirmation dated July 21, 2011 in which they allege jurisdiction has not been attained over them as they were not properly served. The process server served the summons and complaint by affixing it to the door of 248 Hewes [*2]Street, Apt. C-3, Brooklyn, New York on January 6, 7,10, 2011. The defendants maintain they have not resided at that address since 2005. The defendants claim they reside at 254 Hooper Street, Brooklyn, New York. The Salamon defendants claim they had no notice of the pendency of this action. The Salamon defendants allege since personal jurisdiction was not attained, the plaintiff is precluded from obtaining a default judgment against them. In addition, the Salamon defendants allege there is a meritorious defense to this mortgage foreclosure action. The defendants claim they have paid $100,000.00 on the purchase price of their vacation home and approximately $25,000.00 in real property taxes over the past few years.

The BMG Southern Equities, LLC is a non-captioned alleged party in interest which requested and received an extension to answer this within motion. BMG Southern Equities, LLC ("BMG")has filed a Notice of Limited Appearance and alleges it is a "John Doe" defendant and is a successor-in-interest to defendants Alpine Holding, LLC and Regency Estates Development Corp. BMG requests that a Referee be appointed to examine the plaintiff under oath and to take proof regarding the acts and circumstances stated in the complaint.

Service of process on a corporate defendant by serving the summons and complaint on the Secretary of State is valid service pursuant to Business Corporation Law § 306. (Shimel v. 5 South Fulton Ave. Corp., 11 AD3d 527 [2nd Dept. 2004]) and valid against a limited liability company. (see, Limited Liability Company Law § 303(a)).

In order to obtain a default judgment against a non-appearing defendant, the plaintiff must move for a judgment within one year of the default and show, 1) proof of service of the summons and complaint; 2) proof of the claim and 3) proof of the default. (see, CPLR § 3215(f); Woodson v. Mendon Leasing Corp., 100 NY2d 62 [2003]).

A review of the record revels the defendants, Alpine, Lakeshore, Evergreen, and Regency failed to appear or answer the complaint or oppose the instant motion. The pleadings evidence a viable cause of action for foreclosure as required by CPLR § 3215(f). (Fappiano v. City of New York, 5 AD3d 627 [2nd Dept. 2004; lv denied 4 NY3d 702 [2004]). This Court determines the defendants are hereby in default pursuant to CPLR § 3215 and the plaintiff is entitled to a default judgment on its foreclosure action. (State v. Williams, 20 Misc 3d 1106(A){2008}).

The plaintiff offered an Affidavit of Service from a process [*3]server who alleges he served the Salamon defendants at their last known address at 248 Hewes Street, Brooklyn, New York. The Salamon's maintian they have not resided at the Hewes Street address since 2005 and currently reside at 254 Hooper Street, Brooklyn, New York.

An affidavit of a process server constitutes prima facie evidence of proper service under CPLR § 308 and a defendant's bare denial and unsubstantiated denial of receipt is insufficient to rebut the presumption. (Beneficial Homeowner Service Corp. v. Girault, 60 AD3d 984 [2nd Dept. 2009]). However, when a defendant provides a sworn denial of service, "the affidavit of service becomes non-conclusive and shifts the burden of proof to the plaintiff to substantiate the allegation of personal service". (Chaudry Const. Corp. v. James G. Kalpakis & Associates, 60 AD3d 544 [1st Dept. 2009]). The sworn denial of the defendant generally rebuts the presumption of proper service which necessitates an evidentiary hearing. (U.S. Bank v. Arias, 85 AD3d 1014 [2nd Dept. 2011]).

The Salamon defendants have denied receipt of service but offer no proof of where they actually reside. This Court will require a traverse hearing to ascertain if jurisdiction was attained over the Salamon defendants by service of the summons and complaint pursuant to CPLR § 308(4).

BMG Southern Equities, LLC alleges it is the successor-in-interest to defendants Alpine Holding, LLC and Regency Estates Development Corp. and seeks a hearing by a Referee regarding the allegations contained in the complaint.

Pursuant to CPLR § 1001(a), a person or entity ought to be joined as a party to an action if such person or entity "might be affected by a judgment" in the action. (Matter of Red Hook/Gowanus Chamber of Commerce v. New York City Bd. of Stds. & Appeals, 5 NY3d 452 [2005]). The primary reason for compulsory joinder is to avoid a multiplicity of actions and to protect the non-parties whose rights should not be jeopardized if they have a material interest in the subject matter. (Joanne S. v. Carey, 115 AD2d 4 [1st Dept. 1986]). The non-joinder of necessary parties may be raised at any stage of the proceedings, by any party or by the court on its own motion, including for the first time on appeal. (City of New York v. Long Is. Airports Limousine Serv. Corp., 48 NY2d 469 [1979]).

Although BMG Southern Equities, LLC does not articulate its interest in this foreclosure action, this court must hold a [*4]hearing to determine whether BMG is a necessary party who should be joined in this action and, if so, to compel its joinder. (Censi v. Cove Landings, Inc., 65 AD3d 885 [2nd Dept. 2009].

Based upon the above, it is

ORDERED, that default judgment is herein granted as to all named parties except ALPINE HOLDING, LLC, REGENCY ESTATES

DEVELOPMENT CORP., SHMUEL SALAMON and SURI SALAMON, and it is further

ORDERED, that default judgment is reserved as to the named parties ALPINE HOLDING, LLC, REGENCY ESTATES DEVELOPMENT CORP., SHMUEL SALAMON and SURI SALAMON and non-captioned BMG Southern Equities, LLC. pending hearings, and it is further

ORDERED, that this Court shall schedule a Traverse Hearing to determine proper service upon named defendants ALPINE HOLDING, LLC, REGENCY ESTATE DEVELOPMENT CORP., SHMUEL SALAMON and SURI SALAMON, and it is further

ORDERED, that this Court shall schedule a fact finding hearing to determine if non-captioned BMG Southern Equities, LLC. is a proper successor party in interest to ALPINE HOLDING, LLC, and REGENCY ESTATE DEVELOPMENT CORP., and it is further

ORDERED, that this Court is hereby names Kirk Orseck, Esq., Po. Box 469, Liberty, NY 12754, 845-292-5800, as Referee in this proceeding and shall participate in the hearings and compute and report the amount due plaintiff pursuant to RPAPL § 1321, and it is further

ORDERED, The Sullivan County Court Clerk shall schedule the above hearing and notify each party as to the schedule.

This shall constitute the Decision and Order of this Court.

DATED: January 19, 2012

Monticello, NY

Hon. Frank J. LaBuda

Acting Supreme Court Justice

Papers Considered: [*5]

1.Notice of Motion dated March 18, 2011;

2.Affirmation of Michael E. Gindi, Esq. dated March 18, 2011 with exhibits annexed;

3. Affirmation of Robert L. Rimberg, Esq, dated March 18, 2011 with exhibits annexed;

4.Notice of Limited Appearance With Demands dated May 16, 2011;

5.Affirmation of Shmuel Salamon dated July 21, 2011 with exhibits annexed;

6.Notice of Demand for Referee's Examination dated July 26, 2011;

7. Affirmation of Cecily A. Harris, Esq. dated August 12, 2011.