Capital One, N.A. v Knollwood Props. II, LLC

[*1] Capital One, N.A. v Knollwood Props. II, LLC 2013 NY Slip Op 50111(U) Decided on January 25, 2013 Supreme Court, Dutchess County Pagones, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 25, 2013
Supreme Court, Dutchess County

Capital One, N.A., successor by merger to North Fork Bank, Plaintiff,

against

Knollwood Properties II, LLC, John P. Pollis II, Frank Stortini, and New York State Department of Taxation and Finance, Defendants.



1018/10



ZACHARY MURDOCK, ESQ.

LAZER, APTHEKER, ROSELLA

& YEDID, P.C.

Attorneys for Plaintiff

225 Old Country Road

Melville, New York 11747

WILLIAM T. BURKE, ESQ.

O'NEIL & BURKE, LLP

Attorneys for Defendant

FRANK STORTINI

301 Manchester Road, Suite 203

Poughkeepsie, New York 12603

MICHAEL B. DOYLE, ESQ.

DOYLE & BROUMAN, LLP

Attorneys for Defendants

KNOLLWOOD PROPERTIES II, LLC

and JOHN P. POLLIS II

3152 Albany Crescent Street, Second Floor

Bronx, New York 10463

JACQUELINE T. MARTIN, ESQ.

Referee

Two Cannon Street, Suite 305

Poughkeepsie, New York 12601

James D. Pagones, J.

The plaintiff moves for an order: (1) pursuant to RPAPL §1355 confirming the referee's report of sale; and (2) pursuant to RPAPL §1371 granting a deficiency judgment against defendants Knollwood Properties II, LLC, John P. Pollis II and Frank Stortini jointly and severally in the amount of $1,645,692.27 together with interest from October 11, 2011. Defendants Knollwood Properties II, LLC, John P. Pollis II and Frank Stortini oppose the instant application. For the reasons set forth more fully herein, it is ordered that the plaintiff's motion is granted in its entirety.

The defendants' contentions that the instant motion was not

timely filed nor properly served are without merit. The plaintiff has supplied unrefuted evidence demonstrating that its application was timely served within ninety days as required by RPAPL §1371(2). The referee's deed, which is dated January 11, 2012, was mailed to the plaintiff on January 12, 2012 and received on January 13, 2012. Therefore, the plaintiff's time to serve its motion expired on April 12, 2012. As is evidenced by the affidavits of service filed by the plaintiff, service upon the defendants was accomplished on April 10, 2012, within the ninety-day time limit. The defendants' contention that delivery of the deed should be deemed to have occurred on November 14, 2011 is without merit. (See, Reconstruction Finance Corp. v. Finch, 8 AD2d 869 [3rd Dept. 1959][finding that time for making a motion for a deficiency judgment under similar predecessor deficiency judgment statute was measured from the time of delivery of the deed and not an earlier time at which it might or should have been delivered].)

Similarly, the plaintiff has submitted uncontradicted affidavits of service demonstrating that its motion was personally served upon counsel for the defendants as required by RPAPL §1371(2). Moreover, the plaintiff took the additional, but unnecessary, action of serving the attorneys of record by overnight delivery. Accordingly, the court finds that the plaintiff's instant application was timely and properly served.

The defendants further assert that a hearing is required to determine the value of the subject property before a deficiency judgment can be entered. In support of its application for a deficiency judgment, the plaintiff has supplied a detailed and comprehensive appraisal report establishing a value for the subject property as of October 14, 2011. The October 14, 2011 appraisal indicated a value of $730,000.00, which is $120,000.00 less than the value of the property pursuant to an appraisal obtained in March 2011 in anticipation of the originally noticed foreclosure sale scheduled for March 29, 2011. Notwithstanding [*2]the lower appraised value as of the sale date, the plaintiff voluntarily elected to use the higher valuation in calculating the alleged deficiency, which inures to the benefit of the defendants. In opposition, the defendants have submitted an affidavit from a real estate broker opining that the value of the subject property at the time of the sale was $3,343,950.00, a value substantially in excess of the plaintiff's lien.

"[A] mortgagee is entitled to a deficiency judgment equal to the amount of the indebtedness, less the sale price of the property or the fair market value, whichever is higher." (Marine Midland Bank v Harrigan Enters., 118 AD2d 1035, 1037 [3rd Dept. 1986].) Generally, a court must determine "the fair and reasonable market value of the mortgaged premises as of the date such premises were bid in at auction." (RPAPL §1371 [2].)

Here, the court finds that the defendants have failed to raise a triable issue of fact regarding the appraised value of the subject property so as to warrant a hearing. The court further finds that the fair and reasonable value of the mortgaged premises at the time of the foreclosure sale was $850,000.00. The affidavit submitted in opposition by the defendants is from Gary DiMauro, a licensed real estate broker. Mr. DiMauro does not provide any indication as to his qualifications aside from noting he has been licensed for over twenty years, does not specify how long he has been appraising properties in the area, whether he has any familiarity with commercial properties, nor whether he has ever previously been asked to appraise commercial properties. Moreover, the court notes that the value alleged by the defendants is more than double the value the defendants alleged the subject property to be worth when defendant Knollwood unsuccessfully sought a Chapter 11 bankruptcy just three months earlier.

Finally, the defendants' contention that the referee's report of sale was not timely filed is without merit. Pursuant to RPAPL §1355(1), the referee must file the report of sale within thirty days after completing the sale and executing the proper conveyance to the purchase. The defendants acknowledge that counsel or the referee are permitted to request an extension of time to file the report. Here, the plaintiff previously requested and received an extension of the filing period, which would have expired thirty days from the referee's execution of the deed in January 2012, to February 27, 2012 by reason of the referee's unavailability. The referee's report was thereafter timely filed on February 15, 2012.

Accordingly, it is ordered that the plaintiff's motion is granted in all respects. The referee's report of sale is confirmed and the plaintiff is granted a deficiency judgment against defendants Knollwood Properties II, LLC, John P. Pollis II and Frank Stortini, jointly and severally, in the sum of [*3]$1,645,692.27 together with interest from October 14, 2011 and the plaintiff shall have execution therefor.

The Court read and considered the following documents upon this application:

PAGES NUMBERED

1.Notice of Motion.............................1-3

Affirmation-Murdock.....................1-7

Exhibits................................A-B

2.Affirmation in Opposition-Burke..............1-3

3.Amended Affirmation in Opposition-Burke......1-3

4.Affirmation in Opposition-Doyle..............1-13

Exhibit.................................A

Affidavit in Opposition-John Pollis.....1-3

Affidavit-Gary DiMauro..................1-4

5.Reply Affirmation-Lazer......................1-28

Exhibits................................A-G

The foregoing constitutes the decision and order of the

Court.

Dated:Poughkeepsie, New York

January 25, 2013

ENTER

HON. JAMES D. PAGONES, A.J.S.C.