Almonte v Medaro

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Almonte v Medaro 2019 NY Slip Op 34249(U) December 16, 2019 Supreme Court, Westchester County Docket Number: Index No. 50899/19 Judge: Gerald E. Loehr 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: 1] WESTCHESTER COUNTY CLERK 12/17/2019 12:34 PM NYSCEF DOC. NO. 82 • 11 INDEX NO. 50899/2019 RECEIVED NYSCEF: 12/17/2019 ..... · -.~. ..... To statutory time To commence commence the statutory time period of appeals right period of appeals as of ofright (CPLR 5513jal), 5513Ia]), you you are advised (CPLR advised serve a copy copy of of this order to serve this order with notice of entry. notice of entry, upon all parties. parties. SUPREME COURT COURT OF THE THE ST STATE SUPREME A TE OF NEW NEW YORK YORK COUNTY OF WESTCHESTER COUNTY WESTCHESTER -----------------------------------------------------------------)( -----------------------------------------------------------------X LUIS ALMONTE. ALMONTE. LUMAL LUMAL REALTY REALTY LLC, AVAAR AV AAR ADVISORY, INC., ADVISORY, INC., Plaintiffs, Plaintiffs, DECISION AND ORDER DECISION AND ORDER Index 50899/19 Index No.: No.: 50899/19 -against-against- MEDARDO ,. PALMA, PALMA, a/k/a MERDADO ANTHONY ANTHONY PALMA, PALMA, MEDARDO alk/a MERDADO 24 WB REALTY REALTY CORP., GRENACHE CORP., VICTOR VICTOR ABREU, ABREU, GRENACHE HOLDINGS SOUTHBRIDGE RE LLC, LENDINGHOMES LENDINGHOMES HOLDINGS CORP., CORP., SOUTHBRIDGE FUNDING, HUNTER FOOTE, JANE DOE DOE FUNDING, CORP. CORP. HUNTER FOOTE, JOHN JOHN DOE DOE AND AND JANE in possession, fictitious name possession, being being a fictitious name as the true names names are unknown, unknown, Defendants. Defendants. ---------------------------------------------------------------------------------)( ---------------------------------------------------------------------------------X LOEHR, J. LOEHR, The following following papers I - I I were of Defendants papers numbered numbered 1-11 were read read on the pre-answer pre-answer motion motion of Defendants Grenache Holdings Corp. ("Grenache") ("Grenache") and Southbridge Southbridge RE LLC ("Southbridge") ("Southbridge") and the prepreGrenache Holdings answer motion of of Defendant LendingHomes Funding Funding Corp. ("LendingHomes") to dismiss dismiss the answer motion Defendant LendingHornes Corp. ("LendingHomes") Complaint. Complaint. Papers Papers Numbered Numbered Notice of Motion Notice of Motion - Affirmation Affirmation - Affidavit Affidavit - Exhibits Exhibits Memorandum Support Memorandum of of Law in Support 2 Affirmation - in Opposition Affirmation Opposition - Exhibits Exhibits 3 Memorandum of Law in Opposition Memorandum of Opposition 4 Affirmation Reply Affirmation 5 1 of 6 [*FILED: 2] WESTCHESTER COUNTY CLERK 12/17/2019 12:34 PM NYSCEF DOC. NO. 82 INDEX NO. 50899/2019 RECEIVED NYSCEF: 12/17/2019 Reply Reply Memorandum Memorandum of of Law . 6 Notice of of Motion Motion - Affidavit Affidavit - Exhibits Exhibits Notice 7 Memorandum Memorandum of of Law Law in Support Support 8 Affirmation in Opposition Opposition - Exhibits Exhibits Affirmation 9 Memorandum of of Law Law in Opposition Opposition Memorandum 10 Reply Memorandum Memorandum of of Law Reply II 11 Upon the foregoing foregoing papers, papers, and as alleged alleged in the Complaint Complaint and supported supported by the Upon submitted unspecified date submitted documentary documentary evidence, evidence, it appears appears that that on an unspecified date prior prior to November November 20, 2015, Luis Almonte Almonte loaned loaned Victor Victor Abreu Abreu and Medaro Medaro Pena Penal1 (collectively, (collectively, the "Borrowers") "Borrowers") 2015, $220,000 so that that the latter latter could could close close on the property property located located at 6 Crest Crest Place, Place, Elmsford, Elmsford, New New $220,000 "Property'), evidenced evidenced by a Mortgage Mortgage Note. Inasmuch as it was understood understood that the York (the "Property'), Note. Inasmuch Borrowers were were going going to take take title title to the Property Property in Abreu's Abreu's closely closely held corporation, Avaar Avaar Borrowers held corporation, Advisory Group, Inc. (" ("Avaar"), security for the loan, Abreu Abreu pledged shares ((all of the Advisory Group, Avaar"), as security pledged his shares all of stock) November stock) in Avaar, Avaar, delivering delivering all the shares shares to Almonte. Almonte. Avaar Avaar purchased purchased the Property Property on November 20,2015 using the borrowed borrowed funds. The terms terms of of the outstanding outstanding loan and the pledge of Avaar's Avaar's pledge of 20, 2015 using stock notwithstanding, notwithstanding, on July 12, 2017 2017 Avaar Avaar purported purported to borrow borrow $160,000 $160,000 from from Southbridge Southbridge purported to grant grant Soughbridge Soughbridge a Mortgage Mortgage on the Property Property to secure secure same. The Mortgage Mortgage and purported executed by Medardo Medardo Palma, Palma, purporting President of of A Avaar. Then, on vaar. Then, was executed purporting to be the President 26,2017, Merdado Palma, Palma, again claiming claiming to be the President President and Secretary Secretary of of Avaar, Avaar, July 26, 2017, Merdado purported execute and deliver deliver a Deed Deed on behalf behalf of of Avaar Avaar transferring transferring title to the Property Property to purported to execute vaar' s assets Gren ache. Although Grenache. Although the sale was, allegedly, allegedly, of of substantially substantially all of of A Avaar's assets and not made made in regular course course of of its business, business, the documents documents show show that Grenache Grenache was aware aware the sale sale was the regular without shareholder shareholder approval. approval. In order order to finance finance the foregoing, foregoing, in July July 2017, 2017, Grenache Grenache allegedly allegedly without borrowed borrowed $246,000 $246,000 from ABL One, LLC which which was granted granted a Mortgage Mortgage on the Property Property in that amount, with with $169,333 $169,333 thereof thereof being being used used to satisfy satisfy the July 12, 12,2017 Mortgage. By Deed Deed dated dated amount, 2017 Mortgage. January 30, 20 2018, Grenache then then transferred transferred the Property Property to Southbridge, Southbridge, a related related corporation, corporation, January I 8, Grenache which financed financed the transaction transaction with with a Mortgage Mortgage loan loan in the amount amount of$320,000 of$320,000 from which While not clear, clear, it appears appears that that Borrower Borrower Medaro Medaro Pena Pena and Defendant Defendant Medardo Medardo Palmer Palmer While same person. person. may be the same 1, 2 2 of 6 [*FILED: 3] WESTCHESTER COUNTY CLERK 12/17/2019 12:34 PM NYSCEF DOC. NO. 82 INDEX NO. 50899/2019 RECEIVED NYSCEF: 12/17/2019 LendingHomes. LendingHomes. Plaintiffs commenced this action on January 15,2019. Complaint contains contains nine Plaintiffs then commenced this action January 15, 2019. The Complaint nine causes causes of of action. action. With With respect respect to the movants, movants, the First First Cause Cause of of Action Action is against against Palma, Palma, Abreu Abreu Grenache based based on their fraudulent conspiracy conspiracy to transfer transfer the Property Property from the former former to the and Grenache their fraudulent Action is against latter latter upon upon a forged/unauthorized forged/unauthorized Deed. Deed. The second second Cause Cause of of Action against Grenache Grenache and Southbridge with transfer of of the Property Grenache to Southbridge Southbridge based based on Southbridge with respect respect to the transfer Property from Grenache the latter latter being part of of the fraud, but even if if not, having acquired nothing nothing under original being part but even having acquired under the original invalid Deed. The The Fifth Fifth Cause Cause of of actions actions seeks seeks a declaration declaration that LendingHomes' Mortgage is a LendingHomes' Mortgage invalid nullity as based based on an invalid invalid Deed. The The Ninth Cause of of Action seeks to rescind rescind Avaar's Action seeks Avaar's 2017 2017 nullity Ninth Cause Deed and all subsequent subsequent Deeds Deeds of of the Property Property and all Mortgages Property Mortgages placed placed on the Property Deed subsequent to the 2017 2017 Deed. subsequent Grenache and Southbridge Southbridge move dismiss the Complaint Complaint as to them failing to state a Grenache move to dismiss them as failing claim. First, First, they argue argue that moving Defendants' sufficient claim. that the moving Defendants' fraud is not not pleaded pleaded with with sufficient specificity. Second, Second, they argue that Palmar actual authority authority to transfer transfer the Property; Property; and and if if specificity. they argue Palmar had actual not, then purchaser for value value of without then apparent apparent authority. authority. Third, Third, that as a bona bona fide purchaser of the Property Property without knowledge of of the Palma's Palma's and Abreu's Abreu's fraud, their title to the Property Property is insulated insulated pursuant their title pursuant to knowledge Real Property Property Law because all of of the Plaintiffs Plaintiffs are not claiming claiming title the Law§9 266. Fourth, Fourth, because title to the Property, they capacity to bring action. And that the moving moving Defendants Defendants were Property, they lack the capacity bring this action. And Fifth, Fifth, that were served. not properly properly served. deals with an agent agent does so at his peril and must make the necessary necessary effort effort to One who deals must make discover the actual scope scope of of his authority authority (ER Holdings, W P.R. Corp., 65 AD3d AD3d Holdings, LLC LLC v 122 WP.R. discover 1275, 1277 [2d Dept Dept 2009]). 2009]). As alleged, alleged, and in fact supported supported by documentary documentary evidence, evidence, Abreu Abreu pledged of the shares shares of of Avaar Plaintiff to secure secure Plaintiffs Plaintiffs loan to Abreu. Abreu. Therefore, Therefore, as pledged all of Avaar to Plaintiff alleged, Palma had no authority authority to sell the Property Property or execute execute a Deed Deed therefor deliver same same therefor and deliver alleged, Palma had to Grenache. Grenache. Grenache Grenache says Palma Palma had actual actual authority. authority. The Complaint Complaint alleges alleges he did not; and and as this CPLR 3211 motion, motion, Grenache Grenache cannot cannot attempt attempt to contradict contradict same same - although although Grenache Grenache this is a CPLR explain how how Palma Palma could could have actual authority authority in light light of of the the pledge pledge of of all of of Avaar's Avaar's fails to explain have actual had apparent shares. shares. Grenache Grenache then then argues argues that that if Palma Palma did not have actual actual authority, authority, he had apparent authority to execute execute the Deed. Grenache bases bases this, with straight face, on Palma's Palma's Affidavit. authority Deed. Grenache with a straight Affidavit. It is, of Assuming the of course, course, black black letter letter law, that an agent agent cannot cannot create create his own own authority authority (id.). Assuming were before before the Court Court on a 3211 motion, Grenache has failed failed to offer offer any act or word word of of issue were motion, Grenache 3 3 of 6 [*FILED: 4] WESTCHESTER COUNTY CLERK 12/17/2019 12:34 PM NYSCEF DOC. NO. 82 INDEX NO. 50899/2019 RECEIVED NYSCEF: 12/17/2019 Almonte which which would would have have conferred conferred apparent apparent authority authority on Palma Palma to execute execute and deliver deliver the Almonte Deed Deed title, while while RPL RPL 266 insulates insulates a good good faith purchaser value under under a As to fraud and title, purchaser for value voidable deed, it does does not do so when when the title is void. As alleged, alleged, and not not contradicted contradicted by the voidable documentary evidence evidence submitted, submitted, Palma Palma executed executed and delivered delivered the Deed Deed to the Property Property without without documentary corporate authority authority and without without complying complying with with Business Business Corporation Corporation Law§ Law S 909(a). 909(a). This This corporate renders the 2017 2017 Deed void and and therefore therefore Grenache's Grenache's Deed, Deed, even even if if Grenache Grenache were unaware unaware and renders 1 Dept innocent of of the original original fraud (ML.C. (ML.C Construction, Construction, Inc. v Zhang, Zhang. 162 AD3d AD3d 410 410 [P [1'1Dept innocent Solar Line, Universal Universal Great Great Brotherhood, AD3d 862,863 862, 863 [2d Dept Dept 2018]; Solar Brotherhood, Inc. v Prado, 100 AD3d LLC., 103 AD3d 2012]; Fan-Dar/Properties, Fan-Dorf Properties, Inc. v Classic Classic Brownstones Brownstones Unlimited, Unlimited, LLC, AD3d 589,590 589, 590 1 Dept 2013]; [1'1Dept 2013]; Kingston AD3d 430,431 430, 431 [2d Dept Dept 2008]; 2008]; Karan Karan v Hoskins, Hoskins, 22 [1" Kingston v Breslin, 56 AD3d AD3d 638 [2d Dept 2005]; 2005]; Wu v Wong, Wong, 288 AD2d AD2d 104, 105 [1' W1 Dept Dept 2001]; 2001]; see also also First First AD3d National Bank of a/Nevada AD3d 740, 740,741-42 Dept 2010]; 2010]; Bouffard Be/ese, Nevada v Williams, 74 AD3d 741-42 [2d Dept Bouffard v Befese, National Bank LLC, 111 III AD3d AD3d 866, 870-71 [2d Dept Dept 2013]). 2013]). Grenache's s fraud - which which is only only relevant relevant if if the 2017 2017 Deed Deed were voidable, voidable, instead instead As to Grenache' of void, Grenache Grenache asserts asserts that that it was unaware unaware of of Palma's Palma's fraud and did its due diligence diligence that that of Palma was authorized authorized to execute execute the Deed. Assuming, Assuming, again, again, that that the issue issue is even even before before the Palma Court on a 3211 motion, motion, one one wonders wonders what due diligence diligence Grenache Grenache could could have have done done when when Court Grenache knew knew there there had had been been no shareholder shareholder meeting meeting to approve approve the sale, never never asked asked to see the Grenache shareholder's stock stock and the Avaar Avaar corporate corporate seal does does not appear appear on any of of the documents. documents. sole shareholder's foregoing can can be seen seen as evidence evidence of of Grenache's Grenache's participation if not not participation in the fraud, if In fact, the foregoing knowledge of of it (see Williams Williams v Mentore, AD3d 664 [2d Dept Dept 2014]). 2014]). Mentore, 115 AD3d knowledge Thus, Thus, the Plaintiffs Plaintiffs have have stated stated valid valid causes causes of of action action as to all of of the foregoing,2 foregoing,' the motion to dismissed dismissed based based thereon thereon is denied. denied. However, However, in that that Defendants Defendants have have also moved moved to motion dismiss on the basis of improper improper service service and have submitted submitted evidence evidence that that the person person served served was dismiss basis of authorized to receive receive service. service. That That motion motion is granted granted to the extent extent of of a traverse traverse hearing. hearing. Such Such not authorized being without prejudice prejudice to Plaintiffs, Plaintiffs, if if they are inclined, inclined, to seek an extension extension of of time time to reserve reserve being without under CPLR 306-b. 306-b. under CPLR state above, above, the Fifth Fifth Cause Cause of of Action Action in the Complaint Complaint asserts asserts that that LendingHomes' LendingHomes' As state 22 clearly Avaar Avaar has the capacity capacity to sue for the return return of of its Property. Property. And clearly 4 4 of 6 [*FILED: 5] WESTCHESTER COUNTY CLERK 12/17/2019 12:34 PM NYSCEF DOC. NO. 82 INDEX NO. 50899/2019 RECEIVED NYSCEF: 12/17/2019 Mortgage is invalid invalid as based based on the invalid invalid 2017 2017 Deed. Deed. LendingHomes LendingHomes moves moves to dismiss dismiss Mortgage because, it asserts, asserts, the documentary documentary evidence evidence establishes establishes that, even even if if the 2017 2017 Deed Deed was invalid, invalid, because, encumbrancer for value. value. As the documentary documentary evidence evidence establishes establishes no they were a good faith encumbrancer thing, their their motion motion is denied denied in full as well. All that the documentary documentary evidence evidence establishes establishes is such thing, that the 2017 2017 Deed Deed was either either void or voidable. voidable. If Ifvoid, reasons stated stated above, above, void, for the reasons Mortgage is void. void. If If only voidable, voidable, the documents documents fail to establish establish that that ..LendingHomes LendingHomes Mortgage LengingHomes had no notice notice of of the fraud. LengingHomes The Plaintiff, Plaintiff, Grenache Grenache and and Southbridge Southbridge shall appear appear in the Settlement Settlement Conference Conference Part, The courtroom 1600, on January January 14, 14,2020 9:15am to schedule schedule a traverse. traverse. Thereafter, Thereafter, the remaining remaining courtroom 2020 at 9:15am parties shall appear appear in the Preliminary Preliminary Conference Conference Part, courtroom courtroom 800. This This constitutes constitutes the parties decision and and order order of of the Court. Court. decision White Plains, Plains, New Dated: White New York December 1(,,2019 December / I,, 2019 GERALD E. LOEHR LOEHR HON. GERALD J.S.C. J.S.C. SPOLZINO, SMITH, SMITH, BUSS BUSS & JACOBS JACOBS LLP SPOLZINO, Attorneys for Plaintiffs Plaintiffs Attorneys Yonkers Avenue Avenue 733 Yonkers Yonkers, NY NY 10704 Yonkers, WILSON ELSER ELSER MOSKOWITZ MOSKOWITZ EDELMAN EDELMAN & DICKER DICKER LLP WILSON Attorneys for Defendants Defendants Granache Granache and Southbride Southbride Attorneys 1133 Westchester A Avenue 113 3 Westchester venue White Plains, Plains, NY NY 10604 White 5 5 of 6 [*FILED: 6] WESTCHESTER COUNTY CLERK 12/17/2019 12:34 PM NYSCEF DOC. NO. 82 INDEX NO. 50899/2019 RECEIVED NYSCEF: 12/17/2019 DELBELLO DONNELLAN DONNELLAN WEINGARTEDN WEINGARTEDN WISE WISE & WIEDERKEHR, WIEDERKEHR, LLP DELBELLO Attorneys for Defendant Defendant LendingHomes LendingHomes Attorneys Lexington A Avenue One North North Lexington venue White 0601 White Plains, Plains, NY I10601 6 6 of 6

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