Melrose Credit Union v Dzhaniyev

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Melrose Credit Union v Dzhaniyev 2018 NY Slip Op 30519(U) February 15, 2018 Supreme Court, Queens County Docket Number: 712520/2017 Judge: Leonard Livote Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: QUEENS COUNTY CLERK 02/23/2018 11:01 AM 1] NYSCEF DOC. NO. 20 INDEX NO. 712520/2017 FILED RECEIVED NYSCEF: 02/23/2018 FEB' :2 3 2018 SHORT FORM ORDER COUNTY CLERK NEW YORK STATE SUPREME COURT - QUEENS COUNTY QUEENSCOUNTY Present: Honorable Leonard Livote IAS TERM, PART 33 Acting Supreme Court Justice --------------------------------------x Melrose Credit Union, Index No: 712520/2017 Plaintiff, Motion Date: 1/2/2018 - against -Seq. No: 1 Mamed Dzhaniyev and Yanush Taxi Inc., Defendants. --~-----------------------------------x The following papers numbered 1 to 7 were read on this motion by defe~dant for an order pursuant to CPLR 3211 dismissing plaintiff's complaint in its entirety. PAPERS NUMBERED Notice of Motion, Affirmation, Affidavits and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Answering Affirmations, Affidavits and Exhibits .................... ,............. . Reply Affirmations, Affidavits and Exhibits-, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other ....................... ·............. . 1 - 4 5 - 7 Upon the foregoing papers, the motion is denied. Defendants have now moved pursuant to CPLR 3211 (a) (3) and (7), to dismiss plaintiff's complaint. The court will first address the branch of defendants' motion made pursuant to CPLR 3211 (a) (3), which provides that "[a] party may move for judgment dismissing one or more causes of action asserted against him on the ground that: ... the party asserting the cause of action has not legal capacity to sue.• In general, "[o]n a defendant's motion pursuant to CPLR 321l(a) (3) to dismiss the complaint based upon the plaintiff's alleged lack of standing, the burden is on the moving defendant to establish, prima facie, the plaintiff's lack of standing as a matter of law• (U.S. Bank N.A. v Guy, 125 AD3d 845, 847 [2d Dept 2015); see HSBC Mtge. Corp. [USA] v MacPherson, 89 AD3d 1061, 1062 [2d Dept 2011]). In support of this branch of their motion, defendants have argued that plaintiff does not have the requisite standing to commence the instant action since it has been placed in a· Page 1 of 1 of 4 4 [*FILED: QUEENS COUNTY CLERK 02/23/2018 11:01 AM 2] NYSCEF s . DOC. NO. 20 INDEX NO. 712520/2017 RECEIVED NYSCEF: 02/23/2018 conservatorship and no longer has legal capacity to bring the instant suit on its own behalf. In oppos ion, plaintiff has argued that the 12 USC§ 1787, (b) (2) (B) & (.C), more commonly known as the Federal Credit Union Act (FCUA) , does not vitiate its right to commence this action or to litigate its rights under its contract with defendants. The record contains, among other things, copies of the· pleadings, the aff idav.i t of non-party Gary Luvera (Luvera) , Director of Special Actions for the NCUA, and the affidavit of ne,n-party Andrew Bastone (Bastone), plaintiff's Chief Credit Officer. A "conservator" is defined as "[a) guardian, protector, or preserver" (Black's Law Dicti6nary [10th ed 2014)). Generally, a conservator is appointed to discharge an. entity's . .responsibilities to "protect· ·those who are incompetent to adequately conduct their personal and buslness affairs" tMatter of Scrivani's Estate, 116 Misc 2d 204, 206 [New York Sup· ct 1982] ) . Pursuant to the provisions of 12 USC §§ 1751 and 1752a (a), the National Credit Union Administration Board (NCUA), an independent agency formed within the executive branch 6f the government,. which overseei;; and regulates credit unions. and operates credit union insurance and stabilization funds, is permitted to step into the role of conservator and/or liquidating agent of a· fai'led or failing er.edit uni.on. , 12 USCA § 1787 (b) (1) and (b) (2) (A) and (B) set fo'rth the powers and duties of the NCUA as follows: "(l} Rulernaking authority of Board. The Board may prescribe such regulations as the Board determines' to be~appropriate regarding·· the conduct of the Board as conservator or liqui9ating agent. · ( 2) General powers .. (A) Successor to credit unidn. The Board shall, as conservator or liquidating agent, and by operation of law, succeed to- (i) all rigtts, titles, powers, and privileges of the credit union, and, of any member, accountholder, officer, or ~ director of such credit union with respect to the credit union a~d the assets of the credit . union; and (ii) title to the books, records; · and assets of any previous conservator or other legal custodian of such credit union .. ~ (B) Operate the credit union. The Board may, as conservator or liquidating agent- (i) take over the assets of and operate the credit Page 2 of 4 ... .. 2 of 4 . .. : 1 [*FILED: QUEENS COUNTY CLERK 02/23/2018 11:01 AM 3] NYSCEF . :~.DOC. NO. 20 , •.· INDEX NO. 712520/2017 RECEIVED NYSCEF: 02/23/2018 union with all the powe~s of the members or .shareholders, th~ direct6rs, and the officers~. of the credit union and sha)_l be authorized · to conduct all business of the credit union; · ". ·· (ii) cbllect all obligations and money due ' the credit union; (iii) perform all functions . j of the credit union in the name of the credit: union which is consistent with the appointment as conservator or liquidating agent; and (iv) preserve and conserve the assets and property of such credit un~on." 12 USCA § 1787 (b) (2) (C) and (D). further provide the following: "(C) Functions of credit union's officers, 1dir·e~tors, and s.ha.reholders. The Board may, by regulation or order, provide for the exercise of any function by any membe:i; or , . 'stockholder; director, or officer of any cr.edi t union for wh.ich the Board has been appointed conservator or liquidating a~ent. (D) Powers as conservator. The Board may, as conservator, tak~ such·action as may be- (i) necessary to put the .credit union in a sound · and solvent condition;. and (ii) app~opriate to carry on the business of the credit union and preserve and conserve the assets and property 6f the credit union." is undisputed in the record that plaintiff w~s placed in conservatorship on or abo~t February 10, 2017, and that at the time of the commencement of this· action the NCUA. \~as not liquidating plaintiff. Pursuant to the above provisions, it' is true that as conservator of plaintiff, the .NCUA assumes ·all rights and privileges of plaintiff, including the ability to bring suit for pending claims· (12 psc § 1787 [b] [2} [A] ..a.end [BJ; see Natl. Credit Union Admin. Ed. v Morgan Stanley & Co.,· Inc., Fed Sec L Rep P 97794 [SDNY Jan. 22, 2014}). Howev~r.:12.usc § 1787 (b) (2) (B), (C) and (D), merely provide tp.at the· NCUA may, as conservator, take over the credit union's assets, collect all obligations and money. due, perform all functions of the .c'redit union, and 'may take such ?Ction 1as may be necessary to .put the credit union in a sound and solvent condition. There is no · requirement forth in the FCUA that the NCUA must take such action. Nor is there any requir'ement set forth i.n the . FCUA which. provides that plaintiff must cease and desist all operations. A careful reading of the provisions of the FCUA does, how~ver, Page 3 of 3 of 4 4 [*FILED: QUEENS COUNTY CLERK 02/23/2018 11:01 AM 4] " NYSCEF DOC. NO. 20 INDEX NO. 712520/2017 RECEIVED NYSCEF: 02/23/2018 demonstrate t"hat ,· acting. in its role as .conservator ,the NCUA may permit' certain actions of .:lfs · conpervatee as a part of its oversight. 1 In this matter, as an employee of the NCUA, Luvera nas stated in his affidavit that the NCUA, as conservator, hc:.s auth.orized plaintiff to bring the _instant action· in ts owri name, that the NCUA has retained outside counsel to serve as plaintiff's counsel and to assist plaintiff in collecting monies due. and owing on underperfo.rming loans, such as has been alleged in the instant matter. Bastone has.stated that plaintiff is the owner of the note at issue in this· matter and that the note has never been assigned, ,sold or·.transferred to a.nether party. In light of the above, defendants have failed to satisfy their burden of establishing, prima fC!,cie,, that plaintiff lacks the requisite standing to bring· this action as a matter of ·1aw'(CPLR 3211 (a] (3); see MLB Sub I, LLC v' Bains, 148 AD3d 881, 882 (2d Dept 2017]) . Accordi~gly, the motion is denied. This constitutes the Order of the Court. Dated: February 15, 201S ... L~~~~~d. L~~.·· ~:~: S:c: It FILED COUNTY CLERK QUEENS.COUNTY Page 4 of 4 of 4 4

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