Kenwood Commons LLC v TBG Funding LLC

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Kenwood Commons LLC v TBG Funding LLC 2020 NY Slip Op 32511(U) July 28, 2020 Supreme Court, Kings County Docket Number: 526029/19 Judge: Leon Ruchelsman 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] KINGS COUNTY CLERK 07/29/2020 11:35 AM NYSCEF DOC. NO. 66 INDEX NO. 526029/2019 RECEIVED NYSCEF: 07/29/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS : CIVIL TERM: COMMERCIAL PART 8 ------------------------------------------x KENWOOD COMMONS LLC ET AL, Plaintiff, Decision and order - against - Index No. 526029/19 TBG FUNDING LLC, Defendant, ------------------------------------------x PRESENT: HON. LEON RUCHELSMAN July 28, 2020 The plaintiff has moved seeking to reargue a decision which granted defendants motion to dismiss pursuant to CPLR §3211. Papers were submitted by the parties and arguments held. After reviewing all the arguments this court now makes the following determination. This matter concerns an approximately 74-acre historic site situated in a designated Federal Opportunity Zone in the Central Business District of Albany, New York. Plaintiff, Kenwood purchased the Property without any mortgage debt in August 2017. In December 2017, Kenwood sought to place a loan on the Property, and in connection therewith, obtained a $5 Million "bridge loan" (the "TBG Loan") from Plaintiff evidenced by the Note and Mortgage which provided for short-term needs and was anticipated by all parties to be repaid from the proceeds of a larger refinancing, which would provide the funding not only to repay the TBG Loan, but also the funds necessary to complete construction and develop the property. 1 of 5 [*FILED: 2] KINGS COUNTY CLERK 07/29/2020 11:35 AM NYSCEF DOC. NO. 66 INDEX NO. 526029/2019 RECEIVED NYSCEF: 07/29/2020 Defendant, TBG, through its words and actions, gave Plaintiffs reason to be assured that Kenwood, as Borrower, would not suddenly, and without warning, be declared in "default" and subjected to the consequences that follow therefrom. Nonetheless, on April 13, 2019, TBG commenced a foreclosure action in Albany County entitled TBG Funding LLC v. Kenwood Commons, LLC et al, Index No. 902353-19 (The "Albany Foreclosure Action") against all the plaintiffs in this Action. The plaintiffs chose to not assert any counterclaims in the Albany Foreclosure Action and instead commenced the instant action. The plaintiff’s complaint alleges six separate causes of action: 1) Fraudulent Inducement; 2) Breach of Contract; 3) Intentional Interference with Prospective Economic Advantage; 4) Slander Per Se; 5) Malicious Prosecution; and 6) Declaratory Judgment. The court granted defendant’s request to dismiss the action and the plaintiff has now moved seeking to reargue that determination. Since the previous decision did not address any of the legal issues presented this decision will provide a fuller explanation of the basis for its determination. Essentially, the defendants have moved seeking to dismiss the complaint on the grounds there is a pending lawsuit governing the same facts and circumstances in Albany County and that all matters must be raised there. The plaintiff opposes the motion. 2 2 of 5 [*FILED: 3] KINGS COUNTY CLERK 07/29/2020 11:35 AM INDEX NO. 526029/2019 NYSCEF DOC. NO. 66 RECEIVED NYSCEF: 07/29/2020 Conclusions of Law CPLR §3211(a)(4) provides that a motion to dismiss a lawsuit on the grounds another lawsuit is pending should be granted when “both suits arise out of the same subject matter or series of alleged wrongs” (id, Aurora Loan Services LLC v. Reid, 132 AD3d 778, 17 NYS3d 894 [2d Dept., 2015]). sought in the two actions Thus, where the reliefs are “substantially the same” then dismissal is proper (Scottsdale Insurance Company v. Indemnity Insurance Corp., RRG, 110 AD3d 783, 974 NYS2d 476 [2d Dept., 2013]). The term “substantially the same” is defined as a cause of action as sufficiently similar to a simultaneously pending cause of action, when the ruling of one may directly conflict with the ruling of the other (see, Diaz v. Philip Morris Companies, Inc., 28 AD3d 703, 815 NYS2d 109 [2d Dept., 2006]). Thus, a motion to dismiss made in this case should be granted where an identity of parties and causes of action in the pending action raises the danger of conflicting rulings. “CPLR 3211(a)(4) vests a court with broad discretion in considering whether to dismiss an action on the ground that another action is pending between the same parties on the same cause of action” (Whitney v. Whitney, 57 NY2d 731, 454 NYS2d 977 [1982]). In this case all the causes of action should be addressed in the pending litigation in Albany County. First, there is no requirement for identical legal theories to be presented in both actions as long as the two actions are ‘substantially similar’ 3 3 of 5 [*FILED: 4] KINGS COUNTY CLERK 07/29/2020 11:35 AM INDEX NO. 526029/2019 NYSCEF DOC. NO. 66 RECEIVED NYSCEF: 07/29/2020 (Cheric, Cherico & Associates v. Midollo, 67 AD3d 622, 886 NYS2d 914 [2d Dept., 2009]). The causes of action in this case essentially challenge whether the Albany Foreclosure Action was commenced at the proper time and with a proper contractual basis. Thus, the fraudulently first cause induced. of action That alleges directly foreclosure was properly commenced. the relates to guaranty was whether the The second cause of action alleges the defendant breached the contract by accelerating the debt and commencing the foreclosure. relates to commenced. with whether the That issue, again, directly foreclosure in Albany was properly The third cause of action, intentional interference prospective economic gain is actionable if effected by unlawful means or, under the theory of prima facie tort, by lawful means without justification (Rad Advert., Inc. v. United Footwear Org., Inc., 154 AD2d 309, 60 NYS3d 472 [2d Dept., 2017]). To determine whether the plaintiff has adequately pled a prima facie claim, the court must first determine if the initiation of the Albany Foreclosure Action was unlawful or without justification. The fourth cause of action for slander alleges statements were made by TBG that the plaintiff was in default. The fifth cause of action alleges malicious prosecution in commencing the foreclosure action without declaratory any basis. judgement is The last essentially cause a foreclosure action was improperly commenced. of action for determination a the Thus, all the causes of action in this lawsuit address whether the other action was 4 4 of 5 [*FILED: 5] KINGS COUNTY CLERK 07/29/2020 11:35 AM INDEX NO. 526029/2019 NYSCEF DOC. NO. 66 proper RECEIVED NYSCEF: 07/29/2020 and address thus ~hese the claims. Albany Foreclosure Action a conflict of adequately Thus, there is no basis for dual lawsuits that deal, essentially, with the same issues. of can rulings raised by a Moreover, the dang.er para1:;.e1 pending action addressing the exact same issues is apparent. Because this lawsuit is substantially the same as the pending action in Albany County and that a finding in this action may conflict with the rulings of the Albany Foreclosure Action, the court exercises its discretion pursuant to CPLR §3211 (a) (4) and dismisses this action. Therefore, based on the foregoing, the motion seeking to dismiss the complaint is granted and the motion seeking reargument is denied. So ordered. ENTER: DAT~D: July 28, 2020 Brooklyn N.Y. 7161 Hon. Leon Ruchelsman JSC 5 of 5 5

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