Puka Capital Funding, LLC v L & N Twins Place, LLC
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Puka Capital Funding, LLC v L & N Twins Place, LLC 2013 NY Slip Op 33656(U) April 3, 2013 Supreme Court, Bronx County Docket Number: 307611/2011 Judge: Howard H. Sherman 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. [* 1] FILED Apr 16 2013 Bronx County terk ¢ SUPREME COURT OF THE S "'ATE OF NEW YORK COUlF 1HE BRONX ------Pu - Cap ------------------------1Funding, LLC., ~-----~-----~----~--~-~--x Index No. 307611/2011 ry - Lc Plaintiff 4 stlace, LLC Decision and Order Defendant ----------------------------------------· ----~--------------------------~-x The following papers numbered 1- l 3 read on motion by Maria Balaj for an order granting renewal of this, court's prior decision and order and the motion of plaintiff for an order pursuant to CPLR 5228 appointing plaintiff as a receiver art hereby consolidated for purooses of disposition NUMBERED PAI ERS n Order to Show Cause - Affidavit f1aria Balaj Exhs. A-F Affidavit of Alexander J. Zadrima - l::xhs. A,B /Affidavit of Eli Cohn, . 1,2,3,4 Memorandum of Law in Support of Motion 5 Affidavit in Opposition to Motion - ~xhs.AcD 6 Memorandum of Law in Oppositio1 to Motion 7 Affidavit in Reply - M. Balaj - Exh.1. 8 Order to Show Cause - Affidavit /Zc f Balaj - Exhs. 9 Affidavits Of M. Balaj and E. Cohen in Opposition 10,11 Memorandum of Law in Oppositim 12 Affirmation in Reply" Exhs. A-C 13 Upon the forgoing pap1 rs, the motion for renewal and the motion for a receiver are decided as set forth helm-. . Fae s and Procedural Backvround By decision and order 01 this court dated March 27, 2012, the motion of plaintiff Puka Capital Funding, LLC ('f1a Capital" ) fo, summary judgment in lieu of a complaint was granted. On A!ril 10, 2012, judgment was entered in accordance with the decision and order in the a aunt of$ 356, 987.17 with interest calculated at the rate I I [* 2] FILED Apr 16 2013 Bronx County Clerk of 6 % per annum from 02/26/0rThe underlying claim wa the default of defendant L & N Twins Place , LLC ("L&N ") in the payment of pr cipal on a promissory note dated February 28, 2002 signed by David Balaj as a me ber of L & N . By its terms, all outstanding principal and accrued interest was due a d payable as of February 28, 2007. It is undisputed on this r cord, that in February 26, 2002, David Balaj and his wife Maria Balaj the only other me ber of L & N, purchased real property in Pleas-antville, New York, 1 after having recei ed $861,000.00 from Puka Capital, a limited liability company whose managing dire tor is Zef Balaj, ("Z. Balaj") , the father of David Balaj. Also undisputed is the f ct that that on April 30, 2002, L & N paid to Puka $ 587, 043.00 . In 2009, David Balaj com enced divorce proceedings in Supreme Court, Westchester County. 2 In August 2011, Puka C pital commenced this action seeking payment of the unpaid principal on the note. Puka moved for summ ry judgment in lieu of a complaint, and in opposition, Maria Balaj maintained that th balance of the funds advanced by Puka Capital not i 1., ~ee-bedroom ' The premises is de=ibe bedroom apartments , and one, a a 7 unit residential building with six units being oneunit. f 'Bolaj v. Balaj, Index#. 3678109, Su:rem ¢ Court, Westcheste< County [* 3] FILED Apr 16 2013 Bronx County Clerk 1 repaid, was, in fact, intended t be a gift form her mother and father-in-law. To date, David Balaj has ot interposed an answer or appeared in this action. arties 1) Maria Balaj moves for le ve to renew the prior motion on the basis of new documents not offered in oppo ·tion to the motion that would change the prior determination [CPLR 2221 (e)(2 ]. Mrs. Balaj attests that th first time she saw the promissory note was when this action was commenced, and sh maintains that the documents she has recently discovered establish that the no e did not exist until prepared by her spouse in 2010, and that while those do ents existed at the time of the motion, Mrs. Balaj did not then know of their existenc , and only now could secure them. The first of these docum nts3 consists of a meta-data history in connection with a Microsoft Word document file n her home computer retrieved with the assistance of her divorce attorney's para-leg l, that "indicated that the Promissory Note was created on January 17, 2010." The des·gnated author of the document is Alexander J. Zadrima, Maria's Balaj's brother, who is attorney, and who, on occasion, represented Z. Balaj. The second document is typewritten letter addressed to Zef and Lina, 4from 3 ExhibitD 4 Mr. And Mrs. Zef Balaj 3 [* 4] FILED Apr 16 2013 Bronx County lerk Maria and David dated May 3, 002, thanking them for the "extremely generous monetary gift towards out new ome ." Alexander J. Zadrima, E q., ("Zadrima" ) attests that he represented Zev Balaj in connection with commercial tr sactions and would send to his client" pro-forma commercial forms in Microsoft ord format for his use" including "a fill-in-the-blank Promissory Note form." [Affid vit of Alexander . Zadrima 13] Zadrima denies that he prepared the 2002 promisso note, which he states is confirmed by the fact that he did not, as would be his custo ry practice, witness or notarize the signatures. In addition, he attests at the meta-data attached to the pro-forma note indicates that the document was saved b him, while the meta-data submitted in support of the motion indicates that the last m dification was made and saved not by him, but by a computer identified as "Preferr d Customer." The motion is also supp rted by a three-page excerpt of the April 6, 2011 examination before trial testim ny of David Balaj in the divorce proceeding. The subject note was offered as de dant' s exhibit in the deposition, and David Balaj in identifying it, testified that his ife, while being aware of the loan , had no knowledge of the note, nor would she eve /1 acknowledge the fact why it was drafted." [DAVID BALA! EBT: 374-375). 5 5 Balaj v. Balaj. Index No 23678/09, Supreme Court, Westchester County 4 [* 5] FILED Apr 16 2013 Bronx County 11erk I Puka Capital opposes th: motion on the grounds that the documents and representations made by Balaj d Zadrima are wholly speculative, contrary to earlier representations, and refuted b documentary evidence, and there is no reasonable justification offered for the fail re to tender either document in opposition to the original motion. It is argued that the com uter printout of the unsigned note could have been timely discovered and submitt d with the exercise of diligence, and any explanation described by movant as a "stro e of luck" is not a reasonable explanation for a lack of such diligence. It is maintained that the adrima affidavit lacks probative value as there is no showing that the two-page exe ted note had its origins in the four-page proforma sample provided by Zadrima t Zef Balaj attests that he ever received the "thank you" letter in May 2002, or anytime thereafter , and as bo his son and daughter-in-law lived in his house at the time awaiting the completion o the renovation of the Pleasantville property, it would be unlikely that such a note woul have been sent to him and his wife at Puka Capital's business address. Moreover, ere is no explanation other than the claim of a heightened sense of suspicion hy the letter signed by the movant, was not retrieved and offered in opposition to th original motion. 5 [* 6] FILED Apr 16 2013 Bronx County 11erk In addition, it is maintai ed that the letter, signed only by L & N's principals , could not effect a discharge or modification of the note as against the non-signatory plaintiff, by its own terms,6 and the applicable provisions of the law [U.C.C. § 3-605 ]. In reply, Maria Balj atte s that her proof of "fraud" is even more compelling as the computer that produced th note was not purchased by her spouse until 2006, as evidenced by a copy of the inv ice annexed as an exhibit. 2) By order to show cause, ef Balaj moves for an order appointing Puka Capital as the receiver of the Pleasantvill real property pursuant to CPLR 5228(a) contending that there is a need to conserve he property and protect its position as a judgment creditor , "In that the Premises appears to be the only asset of L& N through which the Judgment may eventually bes ·sfied." [Affidavit of Zef Balaj 16]. It is alleged that as a res lt of L&N' s failure to apply the rental income to real estate taxes, utilities and insur ce , these expenses remain unpaid. Z. Balaj attests that since entry of the judgment, "P ka has been forced to pay some of expenses and undertaken some necessary re ·rs at the Premises because L& N either refuses or fails to meet its obligations vis-a-vis e Premises." [ld.14]. Balaj further attests that e and his wife are the only members of both Puka Capital and ZLD Realty, LLC, company engaged exclusively in the business of 6 Paragraph 7 6 [* 7] I FILED Apr 16 2013 Bronx County llerk managing commercial and resi ential real estate in this state and New Jersey, and his wife is approved by the Office o Court Administration to receive appointment as a receiver. Through their entitie , Lina and Zef Balaj manage eight buildings in the Bronx and Westchester, and a comme cial property in New Jersey, and are fully capable of acting as receiver for the subjec premises. As Puka only seeks auth rity to collect rents and to pay expenses and maintain lease agreements, it is argued at any required undertaking should be "nominal." Maria Balaj opposes the motion attesting that since 2002, she has assisted in the management of the property w ere she and her children reside, and she continues to collect rents, make repairs and lean and sweep the hallways [Affidavit of Maria Ba1aj 116]. She denies the allegatio of misuse of the rents she has collected, and further attests that pursuant to the ter s of the divorce order, her spouse is required to pay expenses for the marital reside e, thus accounting for the expenditures by Puka referenced in the moving paper . Balaj argues that there is o demonstration here of special circumstances warranting the appointment of receiver, and contends that if the court makes such a determination , under the cir stances here, the Receiver should be a neutral party , not her in-laws. In reply, Puka argues th tit is in the best position to serve as receiver here, and 7 [* 8] FILED Apr 16 2013 Bronx County 11erk I contends that it has made the r quisite showing under the statute , demonstrating the need to conserve the property d protect the interests of the judgment creditor, as the property is the only asset of the judgment debtor. ssion and Conclusion Upon review of the pap s herein, the court finds that the movant member of the defendant limited liability com any, has demonstrated a sufficient basis for the renewal of the summary judgment moti n . To the extent it may be a gued that the reason proffered for the failure to present the computer history and "th you" note on the original motion are less than compelling, it is also to be obse · ed that the court may exercise its discretion in the interests of justice. It is settled that "[r]ene al motions generally should be based on newly discovered facts that could not e offered on the prior motion (see CPLR 2221[e]), courts have discretion to relax this re uirement and to grant such a motion in the interest of justice" (see e.g. Spinac v Carlto Group, LTD., 99 AD3d 603, 952 N.Y.S.2d 870 [1st Dept. 2012]; Mejia v Nanni, 307 AD2 870, 763 N.Y.S.2d 611 [1st Dept. 2003]; Daniels v City of New York, 291AD2d260, 737 .Y.S.2d 598 [1st Dept. 2002]; Strong v Brookhaven Mem. Hosp. Med. Ctr., 240 AD2d 726 659 N.Y.S.2d 104 [2nd Dept. 1997]). Tuccillo v. Bovis Lend Lease. Inc .. 101 A.D.3d 62 958 N.Y.S.2d 86 [1 81 Dept. 2012] I 8 [* 9] FILED Apr 16 2013 Bronx County 11erk ' I I The record here support such a finding, and upon renewal, it is the further finding of this court that the mo ant has raised material issues of fact concerning the execution of the note to pre lude a finding of dispositive relief. The computer data retrie ed raises an at least arguable issue of fact that the execution of the note, acknowle ged as an event completed without the movant's knowledge, was contemporane us with the commencement of divorce proceedings between L & N's principals and was in furtherance of a fraudulent scheme to deprive her of recovering her share of the a sets to which she would be entitled . While it is unresolved here as to the timin of its execution, it is clear that the note's enforcement, an event that would have been riggered by a default in 2007, came at a time at which the marriage of the principals was · the course of being dissolved. For the reasons above stted the motion of the defendant for renewal is granted and that upon such newal, the court vacates its prior order of ! March 27, 2012 granting the mo' ·on of the plaintiff for an award of summary judgment in lieu of a complaint as there a e triable issues of fact. The motion of plaintiff f ran order pursuant to CPLR 5228(a) is denied as academic. This constitutes the decis'on and order of this court. Dated : April 3, 2013 9 .
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