Golden Bridge LLC v Rutland Dev. Group, Inc.

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Golden Bridge LLC v Rutland Dev. Group, Inc. 2020 NY Slip Op 33107(U) September 11, 2020 Supreme Court, Kings County Docket Number: 505934/18 Judge: Lawrence S. Knipel 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 09/21/2020 10:21 AM NYSCEF DOC. NO. 109 INDEX NO. 505934/2018 RECEIVED 09/21/2020 At an IAS l'e1111, Con1111ercial Part 6 ofNYSCEF: the Supre1ne Court of the State ofNe\v York, held in and for the County of l(ings, at the Courthouse, at C'ivic Center, Brook1)'11, New York, 011 the 11 111 day of Septcn1ber, 2020. PRESENT: HON. LAWRENCE KN!Plil., Justice. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X GOLDEN BR!!JGE Ll.('., d/b/a GOLDEN BRIDGE FUNDING Lf_,C, I>Jaintif!~ })F.;(;fSION ,-\ND ORDER - against - Index Nn. 505934/l 8 Ru-rLAND DEVELOPM~NT GROUP' INC., Mot. Seq. No. 8-9 NE\\I YORI{ Sl'A1'E DEPARTMEN'r OF T,\XAl'!ON AND F'!NANCE, JOI-JN V/JLLIAMS, and 1,EN Srv111·H, De!endants, - - - - - - - - - - - - - - - - - - - - - - - - - - - - - .. - - - - - - - - - - - - -X ·rhc following e-JileJ papers read herein: J>apers Nun1bercd: Notice of Motion/Cross Motion, Af:fir1nations, and Exhibits A n n e x e d - - - - - - - - - - - - - - - Affirn1alion (Affidavit) in Opposition and Exhibits Annexed _ _ Reply Affir1nation and Exhibits Annexed--------- 111 the pos1-judg1ne11t, pc>st-auction phase of this co1111nercial foreclosttre case, the following 1notion a11d cross 1notion 11ave been consolidated for disposition: In Seq. No. 8, plaintiff Golden Bridge LLC, doing business as Golden Bridge Funding LLC (plaintiff), moves for an order: (I) pursuant to Judiciary Law § 753 (A) (3), punishing nonparty l 76 Brooklyn NYC DBYC LLC (the bidder) by fine or imprisonment, or both, for contcn1pt for its fail11re to ch)se the transaction on tl1e t\vo underlying properties located at I024 Rutland Road and I 026 Rutland Road in Brooklyn, Nl)w York (the I 024 property and the I 02(5 property_, respectively; collectively, the properties) in accordance w-ith the Co11tt's order, dated Mar. 13, 2020 and entered by the Kings County Clerks Office on June l l, 2020 (NYSCEF #82) (the prior order): and/or (2) in the alternative, directing Referee Jeffrey R. 1 of 6 [*FILED: 2] KINGS COUNTY CLERK 09/21/2020 10:21 AM NYSCEF DOC. NO. 109 INDEX NO. 505934/2018 RECEIVED NYSCEF: 09/21/2020 Miller, Esq. (the referee), to pay to plaintiff the bidder's down payment of $165,000 (the dovvn pay1nent) forthwith as a rest1lt of the bidder's failure to close the sale oftl1e properties in \'iolation of the JJrior order and clir(.!ctiI1g tl1c referee to re-auction the properties fortl1\vitl1; and/or (3) a\varding costs and/or punitive sanctions against tl1e bi(ider, it1 a sLun of11<)t less than $1,500, as a result of plaintiff preparing and serving its motion. In Seq. Nt). 9, the bidder cross-n1oves for leave, in effect p11rsua11t to CPLJ{ 222 I (d), ( l) to rearguc its 111otio11, lJy order to sho\v cause, dated Feb. 24, 2020, in Seq, No. 6 for at1 order directing the referee to return the down payment lo the bidder (NYSCEF #76) (the prior 111otion), \Vhich f)fior 1notio11 \Vas denied by tl1e prior order; and (2) to rearg11c plaintifrs cross n1otion, lJJ' notice of 111otion, dated Mar. 6, 2020, in Seq. No. 7 for an order co1npe[\ing the bidder to close on the properties "\Vithi11 7 clays, ti1ne of the essence of the closing date,., and in the event tl1at the bidder failed to close within tl1at deadline, directing the referee to disburse t11e do\v11 pa;11nen1 to JJlaintiff (NYSCEJ=i #79) (the prior cross 111otion), \vhich prior cross 1notion 1vas granted by the JJrior order to extent that tl1e "closing [\vas] to take place 1within J 10 days fron1 service of a copy of tl1[ at] order"; and, upon rearg11me11t, vacating the pri<.lr order, granting the prior 1no1i-on, and denying the prior cross tnotion. Bac/cgro1111<l On Mar. 13, 2020 \Vl1e11 tl1e Co1ui issued the JJrior order, tl1e con1plaii1t in the quiettitle action captioned Alleyne v Rutland Dev. Group Inc. and Golden Bridge LLC, dlbla Golden Bridge Funding, LLC, index No. 505513/19 (Sup Ct, Kings County) regarding the 1024 propcrl)' (the quiet-title action) had already been dis1nissed by orclet, dated Oct. 16, 2019 (the dis111issal order), and the notice of pendency against tl1c 1024 property l1ad alread; 1 been vacated by order, dated Dee. 18, 2019. The plaintiff in the quiet-ti!le action did not seek 2 2 of 6 [*FILED: 3] KINGS COUNTY CLERK 09/21/2020 10:21 AM NYSCEF DOC. NO. 109 INDEX NO. 505934/2018 RECEIVED NYSCEF: 09/21/2020 a stay of the dis111issal order. What ren1ained outstanding <:it the tirne of the prior order - and vvhich ren1ai11s 011tstandi11g as of the date of tl1is decision a11d order-is the as-yet u11perfected ap.peal by the plaintiff in the quiet-title actio11 fron1 t11e unstayed dist11issal order. 1~11e ti1ne to perfect that appeal (2019-13512) currently expires on Sept. 23, 2020,' unless tltrther extended. The parties disagree as to wl1etherthe bidder is obligated to close notwithstanding tl1e pendency of the appeal fro1n the lrnstayed disn1issal order in the quiet-title action. l'he bidder conte11(_ied in its prior 1nt)tion that it vvas not obligated to close and tl1at it \Vas entitled to the return of the dow11 pay1nc11t because the title to the properties vvas (and still is) uni11s11rable without exception for the a11peal as to the 1024 i1roJ:ierty. Plaintiff, on t11e otl1cr hand, 1naintained in its JJrior cross 1notion that the appeal's existence \Vas (and still is) i1nn1aterial to the bi(lder's obligati(ln to close because the notice ()fpendency underlying the dis1nissal order l1ad been vacated. ~fhe Court, in the prior order, rejected tl1e bidder's co11te11tio11 and agreed \\ ith plaintiff'1s position to tl1e extent of directi11g that tl1e closing take place \Vi thin 1 ten days frt)}TI the date of service ()f ll1at order. l'he closii1g did not occttr, a11d the instant 111otion practice e11s11e(L Discussion It is well establisl1cd tl1at "a purc_haser at a foreclosure sale is e11titled t() a good, marketable ti tie" (Jorgensenv Endicoll Trust Co,, 100 AD2d 647, 648 [3dDept 1984] [citing (Heller v Cohen, I 54NY 299, 306 [ 1897], reargument denied 155 NY 625 [1898] [emphasis 1 ,)ee Second Judicial Departn1ent's Ad1ninistrative Order No. 2020~0707. 3 3 of 6 [*FILED: 4] KINGS COUNTY CLERK 09/21/2020 10:21 AM NYSCEF DOC. NO. 109 INDEX NO. 505934/2018 RECEIVED NYSCEF: 09/21/2020 added-]). As Justice David B. Vaugha11 observed in the decision and order previously' isstted in this actio11: "An1arketable title is one that inay be freely i11ade tl1e subject of resale. It is -011c \vhicl1 can be readily sold or i11ortgaged to a person of reasonable prudence, the test of the i11arlcetability of a title being \vhetl1er tl1ere is a11 objection thereto st1cl1 as would interfere \Vith a sale or with the inarket value o·f t11e J1roperty. Tl1e la1v assures to a bity'er a title free .fron1 reasonctble dottbt, birt not_fi·on1 eve1y doubt, and tl1e 1nere possibilit;1 or suspicion of a de,,fect, iv!1icl1 according to ordi11a1y experience has no JJr(Jbable basis, does not demonstrate an. unn1ar/cetable title. If the only defect in tl1e title is a very ren1ote and i1nprobable contingenC)', a slender possibilit)1 only, a conveyance will l1e decreed. Stated another \Vay: l"he test is 11ot the hazard of possible litigatio11. for, as has been pointed ottt, it seems to be the inalienable right of an)' person to start a la\v[]suit. 'fhe test is rather the chan-ce of successful attaclc. '' (Decision and Order, dated July I, 2019 [NYSCEF #51 ], al 3 [internal quotation marks and citati{)ns 01nitted; e111phasis added]). At the ti1nc of Justice Vaughan's decision and order, the q11iet-title actio11 was active, and tl1c notice ofpendency re111ai11ed in effect. l'here·fore, Jt1stice Vaughan rt1led - and the pa1ties have not cl1allcnged his ruling.- tl1at the the11-effective notice -ofpendcnc:y against the I 024 propet1y precluded plainlif1; at that iime, from compelling the bidder to close on both properties (see Decision and Order, dated July I, 2019, at4). Justice Vaugl1a11, hovvever_. did nol direct the referee to return tl1e down pa)'n1ent to tl1e bidder because, at t/1c1t tinie. the bidder sot1ght 110 sucl1 relief by \VU)' of a n1otion or cross niotion (id.). Since the11, tl1e status of the quiet-title action has changed dra111atic~lly. The q11iet-title action has been dis111issed; 11() stay of such order has been sought; and t11e notice ofpcndenC)' has been ·vacated. AII that re1nains at this poi11t is an appeal fro1n the unstayed disn1issal 4 4 of 6 [*FILED: 5] KINGS COUNTY CLERK 09/21/2020 10:21 AM NYSCEF DOC. NO. 109 INDEX NO. 505934/2018 RECEIVED NYSCEF: 09/21/2020 order. 1'11c pe11dency of the ap}Jeal oftl1e tu1stayed order dis1nissing tl1e qtliet-title action does not render title to the ]Jroperties u111narketable (see Da Silvl1 v Musso_. 76 NY2d 436, 438 [1990]; Singh v Ahomad. 154 AD3d 683, 684 [2d Dept 2017]; 425 E. 26'" St. Owners Corp. v Beaton, 128 AD3d 766. 767-768 [2d Dept 2015]; A1alco Realty Corp. v Westchester Condos, llC, 114 AD3d 413, 415 [!st Dept 2014]). That the bidder's title insurer has refused to issue an insurance policy 011 the title \Vithout exception for the pending appeal_, is not a valid basis for tl1e bidder's refusal to close. crhcre is a funda1nental difference bet\veen 1narketable title a11d inst1rable title. Whereas niarl<etable title is "a title free fro1n reasonable doubt. but not from every doubt" (Regan v Lanze, 40 NY2d 475, 482 [1976]), insurable title, u1/1en required as a contractztal condition for title defiver~v, is a ''title tl1at a reptttable title insurance company is willing to insure" (Ardi v Martin, 24 Misc 3d 1219[A], 2009 NY Slip Op 51525[U], *4 [Sup Ct. Suffolk County 2009]. reargament denied 2009 NY Slip Op 32407[Ul [Sup Ct, Suffolk County 2009], affd 79 AD3d 1078 [2d Dept 2010], Iv denied 23 NY3d 904[2014]). No requirement that the referee provide the bidder with an insurable title is set fortl1 in eitl1er the Order Confirn1ing Referee Repo11 and Jt1dgn1ent ofForeclost1re and Sale, dated Dec. 6, 2018 (the JFS), the Terms of Sale executed by the referee (the terms tlf sale), or tl1e Mc1norandu1n of Purchase and Agreen1ent to Co1nply vvith tl1e Annexed 'fer1ns of Sale executed by t11e bidder (tl1e purchase 1ne111orandu1n). It is clear that the bidder breached the purchase n1en1orandu1n when it failed to close in accordance with tl1e pri(lr order. 5 5 of 6 [*FILED: 6] KINGS COUNTY CLERK 09/21/2020 10:21 AM NYSCEF DOC. NO. 109 INDEX NO. 505934/2018 RECEIVED NYSCEF: 09/21/2020 Co11c/11sio11 Accordi11gly. it is ()RDI~IZED that plaintiffs tnotion is granted to the extent that the referee is directed (1) to disburse to plaintiff the bidder's down payment of$165,000 within 20 days after service of tl1is decisio11 and order \Vi th 11otice of entry, and (2) to re-a11ction the properties in accordance vvitl1 the .TFS and the ter1ns of sale; and it is further ORDERED that the bidder's cross inotion is denied in its entirety; and it is further ORDERI::;:D that plaintiffs counsel is directed to elec-tronica-lly ser\'C a copy of this decision a11d order \Vitl1 notice of entry on the bidder's co1u1sel and on tl1e referee, and to clectro11ically file an affidavit of said service vvitl1 tl1e Kings County Cler!<. l'l1is constitutes the decision and order of the Court. ENTERr Ju ice Lawrence Knipel 6 6 of 6

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