NYCTL 2008-A Trust & the Bank of NY v Singh

[*1] NYCTL 2008-A Trust & the Bank of NY v Singh 2012 NY Slip Op 51187(U) Decided on June 27, 2012 Supreme Court, Queens County Markey, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 June 27, 2012
Supreme Court, Queens County

NYCTL 2008-A Trust and the Bank of New York AS COLLATERAL AGENT AND CUSTODIAN FOR NYCTL 2008-A TRUST

against

Indera K. Singh, et al.



30526/2009



For the Plaintiff: Levy & Levy, by Joshua Levy, Esq., 12 Tulip Drive, Great Neck, New York 11021

For Defendant Indira K. Singh: Malik & Associates, P.C., by Pankaj Malik, Esq., 75-35 31st Avenue, East Elmhurst, New York 11370

Charles J. Markey, J.

Plaintiffs commenced this action on November 13, 2009, seeking to foreclose the tax lien encumbering the real property known as 110-12 153rd Street, Jamaica, in Queens County, New York (Block 12153, Lot 13) (subject property) and to recover interest, costs, disbursements, and attorney's fees pursuant to section 11-335 of the New York City Administrative Code (Administrative Code). Plaintiffs allege that they are the holders of a tax lien certificate dated June 26, 2008, evidencing the sale of the subject tax lien, allegedly based upon delinquent water charges totaling $4566.66 incurred at the subject property, and "noticing" fees and surcharges. Plaintiffs allege that the semi-annual payment of interest due on the tax lien was not paid, and the default continued for 30 days, and consequently they elected to foreclose the tax lien.

Defendant Indera K. Singh served an answer denying the material allegations of the complaint, asserting four affirmative defenses based upon failure to state a cause of action, satisfaction, lack of proximate cause, and lack of standing, and interposing three counterclaims based upon a claim of payment in satisfaction of the lien, negligence and abuse of process. Defendant Indera K. Singh seeks damages, including attorneys fees, and an award of sanctions. Plaintiffs served a reply denying the allegations in the counterclaims.

Plaintiffs has determined the identity of defendants "John Doe No.1" through "John Doe #5" are Roxanne Thompson, Maria Guzman, Alexandra Obregon, Romein Ramsarran, and Ganpati Singh and have caused them to be served. Plaintiffs did not cause defendants "John Doe [*2]#6" through "John Doe #100" and United States of America and New York State Department of Taxation and Finance to be served with process, insofar as plaintiffs have determined those defendants are unnecessary party defendants.

Defendant Indera K. Singh moves for summary judgment, dismissing the complaint asserted against her, and in her favor on her counterclaims. Plaintiffs oppose the motion and cross move for summary judgment in their favor against defendant Indera K. Singh, to strike her answer, for leave to appoint a referee to compute the amount due to plaintiffs and to ascertain whether the subject premises should be sold in one parcel, and for leave to amend the caption substituting Roxanne Thompson, Maria Guzman, Alexandra Obregon, Romein Ramsarran and Ganpati Singh, in place and stead of "John Doe #1" through "John Doe #5," deleting reference to defendants "John Doe #6" through "John Doe #100," and United States of America and New York State Department of Taxation and Finance.

The proponent of a summary judgment motion "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact" (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, 49 NY2d 557 [1980]).

Defendant Indera K. Singh is the record owner of the subject property, having obtained title to it by deed dated May 9, 2008, from her father, Roopnarine Singh, who in turn, had obtained title to it by deed dated December 22, 1999. Defendant Indera K. Singh claims that plaintiffs have no right or standing to seek foreclosure, asserting the delinquent water charges comprising the lien were paid in full, and thus, the tax lien is invalid and improperly encumbers the subject property. She asserts that, in October 2004, Roopnarine Singh tendered a check to the New York City Department of Environmental Protection ("DEP"),[FN1] dated October 11, 2004, drawn on the bank account of Chanchal Realty, Inc., and made payable to the "NYC Water Board," in the amount of $8,336.08, intending that the check funds be applied to water charges incurred in connection with the subject property.

According to defendant Indera K. Singh, the DEP misapplied the check funds by crediting them to an account established for another property known as 531 Sutter Avenue, in Brooklyn, Kings County, New York (the "Brooklyn property"), which previously had been owned by her father. Defendant Indera K. Singh contends her father brought the error to the DEP's attention in March 2005, but the matter was not resolved by the DEP until after the sale of the subject tax lien to plaintiffs, when by letter dated August 22, 2008, the DEP acknowledged the subject property's account balance was $755.23, representing the then current charges in the amount of $443.31, plus an overcredit in the amount of $311.92.

Plaintiffs claim there were outstanding water charges incurred on the subject property prior to the tax lien sale, which had been converted to a lien, and the lien was properly sold at the [*3]tax lien sale. They assert that when the DEP originally processed the check tendered by Roopnarine Singh, it applied the funds to the Brooklyn account because "1003-32775-001," an account number associated with the Brooklyn property, appeared on the face of the check. Plaintiffs concede that the DEP, in responding to the request made by Roopnarine Singh in March 2005 to redirect the check funds to the account for the subject property, initially complied with the request. They also concede that on March 15, 2005, the DEP reversed the transfer, in part, to satisfy water charges which allegedly had been due and owing on the Brooklyn property on July 27, 2003, the date of its conveyance by Roopnarine Singh and Amriti Singh, his wife, to "531 Sutter Avenue LLC." Plaintiffs assert that as a consequence of this partial reversal, a balance in the amount of $4,733.65 remained due on the account for the subject property.

Plaintiffs also assert that additional water charges and interest continued to accrue on the subject property from March 2005 to the date of the tax lien sale. Plaintiffs contend that during that period, the DEP credited the account for the subject property with two additional payments in the amounts of $4,500.00 and $3,000.00, but those payments were insufficient to satisfy the lien in full. Plaintiffs additionally assert that the August 22, 2008 letter from the DEP to Roopnarine Singh does not prove the tax lien is invalid, inasmuch as the account balance for the subject property recited therein was as of August 22, 2008- -not as of the date of the tax lien sale. Plaintiffs contend the lien balance as of the date of the tax lien sale was $4,566.86, and upon the sale, the lien was removed from the account for the subject property in the DEP's books.

Defendant Indera K. Singh argues that the DEP should have applied all of the check funds to the account for the subject property, and was without authority to, in effect, apply any portion of them to the account for the Brooklyn property. She contends that at the time of the tender of the check, neither she, nor her father, had any ownership interest in the Brooklyn property. She also contends that her father conveyed the Brooklyn property to the purchaser, which accepted title to it subject to open water charges. She alternatively contends that even assuming the DEP had the authority to apply a portion of the check funds to the Brooklyn property, the open water charges on the Brooklyn property totaled only $2,540.21 as of the date of that conveyance, and therefore, the DEP should not have partially reversed the transfer in an amount greater than $2,540.21.

Plaintiffs assert that defendant Indera K. Singh may not contest the validity of the tax lien based upon a claim the DEP misapplied a portion of the tendered check funds to the Brooklyn property, or improperly refused to credit all of the tendered check funds to the subject property. They contend, among other things, that no administrative appeal was filed, within 120 days of the August 22, 2008 letter, of the DEP's determination to apply only a portion of the check funds to the subject property, and consequently, defendant Indera K. Singh is precluded from raising a defense of invalidity of the lien, or lack of standing, based upon the purported misapplied payment.

Contrary to the assertion of defendant Indera K. Singh, plaintiffs properly may raise the argument of lack of exhaustion of administrative remedies, in relation to the issue of whether the lien is valid. Plaintiffs, in their opposition and cross motion papers, addressed defendant Indera K. Singh's claim of payment in her original motion papers, by offering the affidavit of Kayetrina Murchison, the "legal liaison" for the DEP Bureau of Customer Services, explaining the application of the check funds by the DEP. Defendant Indera K. Singh, in her papers in reply and [*4]opposition to plaintiffs' cross motion, argued the DEP improperly applied a portion of the check funds to the Brooklyn property, and alternatively, argued the amount of funds applied to the Brooklyn property was incorrect. Defendant Indera K. Singh thus initiated the arguments about the propriety of the determination by the DEP vis-a-vis the application of the check funds and correctness of the lien amount in her reply papers and opposition papers, and plaintiffs properly availed themselves of an opportunity to respond to the argument in their reply papers.

Both defendant Indera K. Singh and plaintiffs, furthermore, submitted surreply papers, addressing the arguments of defendant Indera K. Singh, and the Court has considered the surreply papers. The Court, therefore, may consider the merits of whether defendant Indera K. Singh should be precluded from arguing that the DEP improperly applied the check funds, or erroneously applied the wrong amount, on the ground of failure to exhaust administrative remedies (see, Goldstein v Town of Warwick, 87 AD3d 1054 [2nd Dept. 2011]; Teplitskaya v 3096 Owners Corp., 289 AD2d 477 [2nd Dept. 2001]; Basile v Grand Union Co., 196 AD2d 836 [2nd Dept. 1993]).

Subject to certain exceptions not applicable here, "one who objects to the act of an administrative agency must exhaust available administrative remedies before being permitted to litigate in a court of law" (Watergate II Apts. v Buffalo Sewer Auth., 46 NY2d 52, 57 [1978]). Defendant Indera K. Singh has failed to establish that Roopnarine Singh pursued administrative appellate remedies regarding the dispute with the DEP over the application of the check funds vis-a-vis the subject property (see, 15 Rules of the City of New York, Appx. A, Part IX). The letter dated August 22, 2008 makes specific mention of a letter dated April 19, 2007, whereby the DEP purportedly advised Roopnarine Singh regarding the charges billed to the subject property. Defendant Indera K. Singh has failed to present the April 19, 2007 letter, or any other evidence regarding the appellate steps taken by Roopnarine Singh to dispute any bills or notices of delinquency generated after March 15, 2005, when the alleged mis-crediting took place, and the date of the sale of the tax lien.

Water rents, in any event, are a personal liability of the person for whose benefit or by whom the water is taken or used (see, NYC Administrative Code § 11-315), and, therefore, it cannot be said that the DEP improperly applied a portion of the check funds to satisfy the unpaid water charges incurred by Roopnarine Singh, as a co-owner and tenant by the entirety of the Brooklyn property, once it came to the DEP's attention that the Brooklyn property had been previously sold on July 27, 2003 to a third party. Defendant Indera K. Singh, in addition, may not challenge within the confines of this action, the amount of check funds applied by the DEP to the Brooklyn property's account.

Furthermore, unpaid water rents are a lien upon the property (see, NYC Administrative Code § 11-301), and to the extent defendant Indera K. Singh took title to the subject property at a time when the DEP records indicated overdue water charges totaling $4,566.86, she took title subject to the lien in that amount. Defendant Indera K. Singh, who had been advocating with the DEP on behalf of her father concerning the allocation of the check funds, moreover, was aware by no later than March 18, 2005, the DEP had determined to credit less than the full amount of the check funds to the account for the subject property. Defendant Indera K. Singh received an email from Carol Brooks, as director of refunds and remittance for the DEP, to that effect on that date. [*5]

Defendant Indera K. Singh, moreover, has failed to demonstrate that - - even assuming the DEP should have credited the entirety of the check funds to the subject property's account - - there would have been no delinquent balance constituting a lien at the time of the tax lien sale.Under these circumstances, defendant Indera K. Singh has failed to "affirmatively establish" the tax lien is invalid and therefore unenforceable against her property (NYC Administrative Code § 11-337).

Summary judgment dismissing the complaint asserted against defendant Indera K. Singh, and in her favor on her counterclaims, is thus inappropriate and unwarranted.

The third counterclaim for abuse of process based upon commencement of this action, furthermore, fails to allege any collateral, improper objectives which would support this counterclaim (see, Marine Midland Bank, N.A. v Village Latch, Inc., 123 AD2d 605 [2nd Dept. 1986]).

The motion by defendant Indera K. Singh for summary judgment dismissing the complaint and in her favor on her counterclaims is, therefore, denied.

With respect to that branch of the motion by plaintiffs for summary judgment against defendant Indera K. Singh, plaintiffs have submitted a copy of the pleadings, affidavits of service, and an affirmation of regularity of their counsel. They also have submitted a copy of the tax lien certificate and schedule, evidencing ownership of the tax lien (see, NYCTL 1996-1 Trust v Railroad Maintenance Corp., 266 AD2d 39 [1st Dept. 1999], lv. to appeal dismissed, 94 NY2d 899 [2000]), and the affidavit of Hillary Leonard, a vice president of Plymouth Park Tax Services, LLC, the servicing agent for plaintiffs, attesting to the default in payment of the tax lien in full within one year after the sale of the tax lien. By their submissions, plaintiffs have established their entitlement to summary judgment as against defendant Indera K. Singh (see, NYCTL 1998-2 Trustee v 2388 Nostrand Corp., 69 AD3d 594 [2nd Dept. 2010]; NYCTL 1996-1 Trust v Orit Diagnostic Ctr., Inc., 19 AD3d 668 [2nd Dept. 2005]; NYCTL 1996-1 Trust v Westmoreland Assoc., 2 AD3d 811 [2nd Dept. 2003]).

The burden, therefore, shifts to defendant Indera K. Singh to demonstrate the existence of a triable issue of fact (see, Zuckerman v City of New York, 49 NY2d 557, supra; U.S. Bank Trust N.A. Trustee v Butti, 16 AD3d 408 [2nd Dept. 2005]; Mahopac Natl. Bank v Baisley, 244 AD2d 466, 467 [1997], lv. to appeal dismissed, 91 NY2d 1003 [1998]).

Defendant Indera K. Singh has failed to come forward with any evidence showing the existence of a triable issue of fact with respect to any defense. Plaintiffs are entitled to summary judgment as against her (see, NYCTL 1996-1 Trust v Orit Diagnostic Center, Inc., 19 AD3d 668, supra; NYCTL 1996-1 Trust v Westmoreland Assoc., 2 AD3d 811, supra).

The cross motion by plaintiffs for summary judgment against defendant Indera K. Singh, to strike her answer, for leave to appoint a referee are granted and for leave to amend the caption as proposed is granted.

Settle order.

______________________________________

J.S.C.

Footnotes

Footnote 1: "[The] DEP is authorized to act as billing agent on behalf of the Water Board, which promulgates rules and regulations, and fixes and collects water, wastewater charges, and revenue related to the use of the City's water system (see, Public Authorities Law § 1045—a, et seq.)," (Washington Mut. Bank, FA v City of New York, 23 Misc 3d 1139(A), 2009 WL 1652849, 2009 Ny Slip Op 51198(U) [Sup Ct Kings County 2009]).