MB Fin. Bank, N.A. v 22 Renwick St. Assoc. LLC

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MB Fin. Bank, N.A. v 22 Renwick St. Assoc. LLC 2011 NY Slip Op 34120(U) October 12, 2011 Supreme Court, New York County Docket Number: 650048/11 Judge: Melvin L. Schweitzer Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 10/19/2011 1] INDEX NO. 650048/2011 NYSCEF DOC. NO. 53 RECEIVED NYSCEF: 10/19/2011 SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY PRESENT: PART Justice '-Jt;° ;~o:,;t; INDEX NO. MOTION DATE -v - '2."'l.. ~E~WlC..)(.. STReeT AssocJ47l!S t..LL., ~~ OCJ MOTION SEQ. NO. MOTION CAL. NO. The following papers, numbered 1 to _ _ were read on this motion to/for - - - - - - PAPERS NUMBERED Notice of Motion/ Order to Show Cause - en z Answering Affidavits - en Cross-Motion: 0 <t w a: Affidavits - Exhibits ... Exhibits ~---------~-~ Replying Affidavits ~-~--~~---------~ ~es D No CJ wz (..) - j:: en ~ ...J .t<, &/J.AAJTE/) ::::::> ...J ~"!/lb .., 0 0 u.. w c :::c w l- I- .O~~ Or~. a: a: a: 0 o~~in~ ~ u.. w a: tiboUJ > ...J ...J ::::::> i;, De;1s b . or~. u.. I(.) w 0.. en w a: en w en <t z (..) 0 j:: 0 ~ Dated: ~ /:Z.,, )...O}J Check one: 0 FINAL DISPOSITION Check if appropriate: 0 M~N l. SCHWEITZEJ .c. ~ON-FINAL DISPo'sc; ON DO NOT POST 0 SUBMIT ORDER/ JUDG. ~SETTLE 0 REFERENCE ORDER/ JUDG. [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 45 -----------------------------------~------------------------------------x MB FINANCIAL BANK, N.A. "root.f!/N Index No. i gg c SM# Plaintiff, -against- DECISION AND ORDER 22 RENWICK STREET AS SOCIA TES LLC, et al. Sequence No. 001 Defendants. ------------------------------------------------------------------------x MELVIN L. SCHWEITZER, J.: This is a commercial real estate foreclosure action. Plaintiff, the lender, seeks summary judgment against defendant, the borrower, on, inter alia, its foreclosure action and its claim for a deficiency judgment. . Facts Lender, MB Financial Bank, N.A. (Lender or plaintiff), accelerated a $19,000,000 loan (Loan) as a result of a default in the payment of interest by borrower (Borrower or defendants). Lender commenced this foreclosure action in January 2011 as a result of the acceleration and Borrower's consequent default on the Loan according to its terms. The Loan had been made to fund the acquisition of land for, and the construction of, a condominium building in New York City. " Broadway Bank, predecessor-in-interest to Lender, made the Loan to Borrower in 2007. On April 23, 2010, Broadway Bank was closed by the Illinois banking regulators and the Federal Deposit Insurance Corporation (FDIC) was appointed receiver of the bank. Lender purchased the assets of the bank. By virtue of the purchase, the notes, mortgages and other agreements relating to the Loan were assigned to the Lender. [* 3] Lender also seeks foreclosure against certain parties asserting mechanic's liens and against certain government entities named as defendants. These defendants have not responded to the complaint or this motion. Borrower answered in February 2011, denying every substantive allegation of the complaint and asserting affirmative defenses of lack of standing of the Lender and failure to state a cause of action. Borrower also contends Lender failed to comply with discovery requests. Borrower asserts that Lender's motion for summary judgment is based solely on an affirmation of regularity of counsel for Lender who has no personal knowledge of the facts and, instead, relies upon verification of the complaint by a bank officer. Borrower says the verification was signed in Illinois and was not accompanied by a certificate of conformity required by CPLR 2309 (c) and RPL 299 (a). Accordingly, Borrower claims both the affirmation and verification are inadmissible and of no probative value. Borrower also contends Lender's motion is based on out-of-state assignment documents pursuant to out-of-state powers of attorney. It says that neither the assignments nor powers of attorney contain certificates of conformity and, therefore, the Lender lacks standing because the mortgages were not effectively assigned. Discussion Lender argues that "A mortgagee establishes a prima facie case for foreclosure by production of the mortgage documents and proof of default." Bank Leumi Trust Co. ofNew York v Lightning Park, Inc., 215 AD2d 246, 24 7 (I st Dept 1995); see also Chem. Bank v Broadway 55-56th St. Assocs., 220 AD2d 308, 309 (1st Dept 1995). Once a plaintiff has established a prima facie case for foreclosure, the burden shifts to the defendant to come forward with 2 [* 4] admissible evidence of the existence of a question of fact. See Red Tulip, LLC v Neiva, 44 AD3d 204,209 (lst Dept 2007), leave denied, IONY3d 741 (2008); Chem. Bank, 220 AD2d at 309. Mere conclusions of fact or law are insufficient to defeat a summary judgment motion. See Banco Popular N. America v Victory Tax Mgmt., Inc., I NY3d 381, 383 (2004). Thus, evidence presented by a defendant in an attempt to avoid summary judgment in a foreclosure action must meet a threshold of believability. See e.g. New York State Urban Dev. Corp. v Marcus Garvey Brownstone Houses, Inc., 98 AD2d 767, 770 (2d Dept 1983); Freisch-Groningsche Hypotheekbank Realty Credit Corp. v Ward Equities, 188 AD2d 397, 398 (I st Dept 1992). To meet this burden, the defendant must provide "proof in admissible form sufficient to create a mate:ial issue of fact necessitating a trial." Franchini v Palmieri, I NY3d 536, 537 (2003). Here, Lender, as plaintiff, asserts it has established a prima facie case for a judgment of foreclosure and for a deficiency judgment to the extent that any deficiency remains in the amounts owing on the Loans after the completion of the related foreclosure auction. In addition, it says Borrower's affirmative defenses, as defendants, are baseless and raise no question of fact. 1 Plaintiff has demonstrated the existence of the loan and mortgage documentation and has provided undisputed proof of the defaults:· In this regard, it notes defendants' answer denies breach but does not plead payment and the failure to do so constitutes a waiver of the defense of payment and an admission of nonpayment. Plaintiff also argues that defendants' affirmative defenses are stated as bare legal conclusions, unsupported by facts. As such, plaintiff states they have no effect. The court agrees with ;plaintiff on this point. 3 [* 5] As to the omission of a certificate of conformity attesting to the verification of the complaint, plaintiff characterizes this as a mere irregularity, and further cures this omission nune pro tune by the submission of a certificate of conformity. As to the assignments of the mortgages, plaintiff points out they complied with RPL 309 (b) and that no certificate of conformity is required under RPL 299 (a). Plaintiff also points out that CPLR 2309 (c) only applies to oaths and affirmations, not acknowledgments, and thus the provision has no relevance to the assignment of the mortgages. Finally, it points out the assignments were made, and plaintiff as Lender, had physical possession of the notes and mortgages prior to commencement of the action. Plaintiff thus asserts that the lack of standing defense is groundless_. The court agrees with plaintiffs arguments. The irregularity has been rectified nune pro tune .. Furthermore, the acknowledgments of the assignments of the mortgages and the power of attorney given by the FDIC complied substantially with RPL 309-b and thus no certificate of conformity was required by RPL 299 (a). Additionally, CPLR 2309 (c) does not require a certificate of conformity as it relates only to oaths and affirmations. Finally, plaintiff, Lender, had possession of the mortgages before initiating this action. Consequently, the standing to sue defense is baseless. Also, the court, in the circumstances, sees no need for discovery and does not view deferidants' claim as an impediment to the granting of summary judgment. For these reasons, plaintiffs motion for summary judgment is granted and defendants' motion for discovery is denied. 4 [* 6] Accordingly, it is hereby ORDERED that plaintiffs motion for summary judgment is granted and plaintiff is dire\ted to settle an order and judgment and submit it to the court; and it is further ORDERED that defendants' motion for discovery is denied. Dated: October/~, 2011 R: MELVIN L. SCHWEITZ .! . 5

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