Frank's W. 15th Corp. v Rao

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Frank's W. 15th Corp. v Rao 2021 NY Slip Op 30091(U) January 6, 2021 Supreme Court, Kings County Docket Number: 512327/19 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 01/11/2021 12:05 PM INDEX NO. 512327/2019 NYSCEF DOC. NO. 70 RECEIVED NYSCEF: 01/11/2021 At an !AS 'ferm, Part Comm 6 of the Supre1ne Cot1rt of the State of New York, 11eld in and for the County of Kings, at the Courthouse, at Civic Center, Brooklyn, New York, on the 61h day of January, 2021. PRESENT: HON. LAWRENCE KNIPEL, Justice. - - - - - - - - - - - -- - - - - - - - - - - - - - - - -- - - - - -X FRANK'S V./Es1· 15TH CORP., Plaintiff, Index No. 512327/19 - against - A. l~A(). NYC DEPARTivlENT OF FlNAi'-iCE, ·'.foJIN DOE AND .hNE DOE 1-10" and .. XYZ ('()flP. 1-1 O"' the na1nes being tictitious and fJILQIS unkno\yn to P!ai11tiff~ the persons or parties intended to be tenants. occupants, persons or entities. ofany, liaving or clai1ning an interest in or lien upon the pre1nises, Defendants. - - - - - -- - - - - - - - - - - - - - -- - - - - -- - - - - - - -X NYSCEF Doc Nos. "l"hc fol!ov./ing c-filed papers read herein: Notice or iv1otion/()rder to Sho\V Cause/ Pt.!tition/C'ross Motion and Affidavits (Affir1nations) Annexed _ _ _ __ I 0-25 27-43 ()pposlng ,.-\flidavits (;\ffir1nations), _ _ __ 28-43 56-65 Reply Af'tidavits (Allir1nations)• _ _ _ _ __ 56-65 66 lJp{)n the foregoing papers in tl1is action to foreclose a mc)rtgage on the property at 2743-2751 West IS"' Street in Brooklyn (Block 6997 Lots 27 and 29) (Property), plaintiff Frank's West 15"' Corp. (Frank's West) moves (in motion sequence [mot. seq.] one) for an order: (I) striking and dis1nissing defendant Bilqis A. Rao·s (Rao) ans\ver, affir1native dclCnscs and coun1crcloin1. pursuant to CPLR 3211 (b): (2) granting it sun11naryjudg1nent as against Rao, pursuant to CPLR 3212; (3) discontinuing this action as against the NYC 1 of 9 [*FILED: 2] KINGS COUNTY CLERK 01/11/2021 12:05 PM NYSCEF DOC. NO. 70 INDEX NO. 512327/2019 RECEIVED NYSCEF: 01/11/2021 f)epartn1ent of Finance (NYCDOF); (4) appointing a referee to ascertain and co1npute tl1e an1t)t111ts due and to report whetl1er the Property can be· sold in one parcel, pursuant to RP APL. 1321: and (5) a111ending the caption to elilninate the "John Doe" and "Jane Doe" dcl'cndants and tl1c NYCDOF'. Rao crossw1noves (in tnot. seq. two) for an order, pursuant to CPLR 3124, con1pe!ling 1~·rank's West lt1 respo11d to her outstanding discovery reqt1ests. Btrckgroi1nd T/1e Foreclosure Actio11 C)n June 4. 2019. F'rank's West co1n1nenced this foreclosure action by filing a su111111uns. a verified co1nplaint and a J1()tice ofpcndency against the Prt)perty. On July· 3 .. 2019. Rao ans,vered the co1nplaint and asserted several affir1native defenses, including 1::rank's West's failure to co1nply with the notice require1ne11ts of l{flJ\PI. 1103 and 1304. In addition . Rao asserted a counterclai1n against Frank's West fc)r attorne_y's fees. pttrsuant to Real Property Law § 282. Conte1nporaneously with her ans\vCr, Rao served f'rank's West with a notice to produce docu1nents and a deposition notice. On July 18. 2019. rrank's West replied to Rao's cot1nterclai1n. l·~rttnk's West's l11stt111t SttmmarJ' J11dgment Motio11 C)n July 6. 2020) Frank's West, prior to responding to Rao's outstanding discovery requests. n1ove(i for s11n1111ar)' judg1nent against Rao and for an order of reference. f<'rank's West's 111()tion is supported by an affidavit from its officer, Joanne Raffaele 2 2 of 9 [*FILED: 3] KINGS COUNTY CLERK 01/11/2021 12:05 PM INDEX NO. 512327/2019 NYSCEF DOC. NO. 70 RECEIVED NYSCEF: 01/11/2021 (Raffaele). who attests that Frank's West seeks lo foreclose on a $584,000.00 purehase n1oncy 111ortgagc enct1111bcring the ProJJerty, \Vhicl1 secures pay1nent under a Dece1nber 20. 2012 promissory note made by Rao. Raffaele attests that Rao defaulted under the note and 1nortgage by failing to pay the principal and interest that was due in March 2016 and thereafter. Frank's West submits copies of the note and 1nortgage, which retlect that Frank·s West was tl1c original lc11der. I~'rank's West a!S() seeks an order dis1nissing Ilao's ans,ver. afftr1native defenses and counterclain1 on the grou11d that the)' 011ly appl)1 to a residerttial foreclosure, are thus, arc not applicable to this co1nn1ercial foreclosure action. Raffaele attests that "the Property consists of co1nn1ercial lots as set forth in the transfer documents to RAO.'' Frank's Vilest subn1its a copy ·of a "Combined Real Estate Transfer 1'ax Return, Credit 1-ine Mortgage Certificate, and Certification of Exernption fro1n the Pay1nent of f;sti1nated Personal Lnco1ne l'ax," which indicated that the Property "conveyed". to Rao on Dece1nber 20. 2012 \Vas "co1n1nercial/industrial.'' Rao 's Opp<>sitio11 r111d Cross Motio11 to Compel Discovery Rao, in opposition, sttbtnits an affidavit attesting that '~I purchased the home located at 2743-2751 West 15'" Street. Brooklyn ... in 2012 as a residential property to live in \;vith 1ny Jl1111i!)r'' and that '"l_tJhe Property consists of three residential units" (emphasis added). Rao further attests that "[m]y daughter and I reside at 2751, First F·'loor, West 15th Street , .. " and that she rents the other two residential units at the Property to flu11ilies. Rao's daughter. Saba Rao, also attests that she resides at the 3 3 of 9 [*FILED: 4] KINGS COUNTY CLERK 01/11/2021 12:05 PM NYSCEF DOC. NO. 70 l)roperty \Vi th INDEX NO. 512327/2019 RECEIVED NYSCEF: 01/11/2021 l1er mother, As further proof that the Property is residential, Rao submits copies of the N()tices of Property Values t_l1at she received fro1n the NYCDOF regarding the Prope11y for the lax year 2020-2021, which indicate that the Property consists of "reside11tial"" units. Rao also sub1nits a Property Overview from the New York City Depart111ent of Buildings which classifies the Property as a "A1-1 Family Dwelling" and a .. T31~2 1:an1ily l)v·ielling."· Although IZao ad111its that she \Vas served v.ritl1 process, Rao attests that she never received any of the pre-foreclosure notices required by Rl)APL 1303 and 1304 or a notice of default either by personal delivery, 1nail or otherwise. !Zal1 argues that Frank's West has failed to 111eet its pritna facie burden of demonstrating its compliance with RPAPL 1303, 1304 or 1306 because it failed to provide an atlidavit of service verifying that the statutory foreclosure notices were served and l{arracle·s a(lidavit d()es 1101 address t!1e 111ailing of the requisite RPAPL notices. IZao ct)ntcnds that r·ranl<'s West's assertion that it is exe111pt fro1n the requiretnents of RPAl'L 1303. 1304 and 1306 because the Property is commercial is unsupported. Rao asserts that the note and n1ortgage ·'do not indicate this was a co1n1nercial loan." Rao contends that the tax transfer docun1ents sub1nitted by Frank's West is insufficient to prove that the Property is co1nmercial because "this doct1ment was vvholly created by P!aintifr· and .. [i]t is self-serving at best, misleading at worst and is not based upon actual land ltsage or zoning." Rao argties that "[r]egardless of the specious designation of the Property \Yrittcn into Plaintifl~s tra11slCr docun1e11t at1ncxed to its Motion ... Ne\v York_ ('ity has clcar!; classified the Property as residential." 1 4 4 of 9 [*FILED: 5] KINGS COUNTY CLERK 01/11/2021 12:05 PM NYSCEF DOC. NO. 70 INDEX NO. 512327/2019 RECEIVED NYSCEF: 01/11/2021 !Zao also cross-1noves to co1npel disclosure frotn Frank's West. Rao contends that ··[her] reqttests 1nade in disclosure docu1ne1its served on Plaintiff are essential in the defense or this case to justify that this action is not based on co1n1nercial prope1iy, as J>J;:iintirr contends, but on a residential property.'' Specificall·y_, Rao seek:s tl1e production or "any docu1nents in Plaintiffs possession that could substantiate its clai1n that tl1is was a con11ncrcial loan and more i1nportantly Plaintiff's business records which W(lUid establish the alleged default."' FrankJs West's Reply and Opposition to Cross Motion f'rank's West. in oppositio11 to the cross 1notio11, claims that the cross motion is .. no\v n1<)ot'" because it responded t() Rao's docu1nent request 011 Nove1nber 3, 2020, \vhile tl1c su1n111ar)' judg1nent 1notion and cross 111otion were pending. contends thut Rao's notice ()f Frank's West depositio11 is "baseless" and "should not be condoned by this cour1.·· frank's West. i11 reply, reasserts that the Property is con1mercial and not residential based on the sub1nission of nevv evidence. Frank's West submits copies of the closing docu1nt:nts spccif)'ing that the Property is com1nercial with its reply papers. Franlc's West also asserts, for the first ti111e on reply. that the recorded mortgage states that "Pre1nises \Yill not be iinpr0\ ed b)' 1 & 2 fa1nily d\velli11g." In additio11, Frank's West submits, for 1 the lirst ti111e ()11 repl)', a copy of the C-ertificate of Occupancy, wl1ich states tl1at the Property is used ror vel1iclc parking and storage and storage of e1npty wood, soda and beer boxes. 5 5 of 9 [*FILED: 6] KINGS COUNTY CLERK 01/11/2021 12:05 PM NYSCEF DOC. NO. 70 INDEX NO. 512327/2019 RECEIVED NYSCEF: 01/11/2021 Disc11ssio11 Su1n1na1J' j11dgn1ent is a drastic re1ncdy tl1at deprives a litigant o·fhis or her day in cnurt an<l should, thus, only be e1nployed \Vhen there is no doubt as to the absehce of triable issues ol' material liict (Kolivas v Kirchoff, 14 AD3d 493 [2005]; see also Andre v Pomeroy, 35 NY2d 361, 364 [1974]), "The proponent of a motion for summary j11dg1nent inust maize a pri1na facie showing of cntitle1nent to judg1nent, as a matter of h:t\Y. tendering surticient evidence to de111onstrate the absence of an)' 1naterial issues of fact" (Manicone v Ci1y of New York, 75 AD3d 535, 537 [2010], quoting Alvarez v Prospect Hosp .. 68 NY2d 320, 324 [1986]; see also Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985f). If it is determined that the movant has made a prima facie showing of entitlen1cnt to s1un1nary' judgn1ent, "the burden shifts to the opposing party to produce cvidentiary proof in ad1nissible for1n sufficient to establish the existence of material issues or l~1ct \Vhich require a trial of the action" (Garnhc1111 & Ha11 Real Estate Brokers v Oppenheimer. 148 ADld 493 [ 1989]). (Jenerally, to establish priina facie entitle1nent to judgment as a 1natter of law in an action to foreclose a 111ortgage, a plaintiff1nust ptoduce the mortgag-e, the unpaid note, . Deutsche Ban/c Nat/, Trust C'o. v Karibandi.. 188 AD3d 650 nnd evidence o!' default (see . 651 [2020]; Christiana Trust v Mone/a, 186 AD3d 1604, 1605 [2020]; Deutsche Bank Trnsr Co. Ams. v Garrison, 147 AD3d 725, 726 [2017]). ··111 a reside11tic1/ forcclosttre acticn1. a plaintiffrnoving for su1n1nary judgment must 6 6 of 9 [*FILED: 7] KINGS COUNTY CLERK 01/11/2021 12:05 PM NYSCEF DOC. NO. 70 INDEX NO. 512327/2019 RECEIVED NYSCEF: 01/11/2021 tender sufficient evidence de1nonstrating the absence of material issues as to its strict con1pliancc \Vith RPAPL 1304" (Wiln1ingto11 Savings Fu11d Society, FSB v Hersl1ko"M1itz, -·-· i\D3d ___ , 2020 NY Slip Op 07427, *2 (2d Dept 2020] [internal quotation marks omitted] [emphasis added]). "[!']roper service ofRPAPL 1304 notice on the borrower or borro\vers is a condition precedent to the com1nence1nent of a residential foreclosure action. and the plaintilT has tl1e burden of establishing satisfaction of this condition" (Christiana Trust v Mone/a, 186 AD3d 1604 [2020] [internal quotation marks omitted]). RPJ\PL 1304 (I) provides that: "at least ninety days before a le11der, an assignee or a 1nortgagc loan servicer com1nences legal action against the horro\vcr ... including 1nortgage foreclosure, such lender, assignee or n1ortgagc loan servicer shall give notice to the borrt1\vcr." ·rhe statute sets forth the required content of the RPAPI~ 1304 notice and provides that the notice n1ust he sent by registered or certified 111ail and also by first-class 1nail to the last kn0\\'11 address t)fthc borro\vcr. Sitnilarly, RPAPl~ 1303 requires the notice "Help iOr Hotneowners in Foreclosure" lo he delivered \Vith tl1e sun11nons and con1plai11t in residential foreclosure actions involving an ·'o\vner-t1ccupied one-to-four family dwelling." J{_Jl J\J>L. ''[P]roper service' of an 1303 11c>ticc. \Vherc required, is a condition precedent to tl1e co1n1nence1nent of a foreclosure action ... " (Prompt Mtge. Providers o/N. Am., LLC v Singh, 132 AD3d 833, 833-834 [2015 J), 1-lcre. r~ranl.::'s West has produced the lt)an d()ctnnents and sufficient evidence that 7 7 of 9 [*FILED: 8] KINGS COUNTY CLERK 01/11/2021 12:05 PM NYSCEF DOC. NO. 70 INDEX NO. 512327/2019 RECEIVED NYSCEF: 01/11/2021 l\ao dcraulted b.Y railing to pay' principal and interest that '\Vas due Ltnder the tnortgage. !·lov.,;ever. su1nn1ary judg1nent is not warranted because Rao has raised an issue of fact as t(l v·/hether the I)roperty is residential, and Frank's West has failed to satisfy its priina racic burden or prt)Ving that the Property is co1111nercial and not sulJject to t\1e 11otice requirements of RP APL 1303 and 1304 (see Flushing Savings Bank v Latham, 139 AD3d 663. 664-665 [2016] [summary judgment denied because plaintiffs successor "failed to establish, as a 1natter of lavv. tl1at the subject ioan did not qualify as a 'home loan' as defined in RPAPL 1304 (5) (a)" and "triable issue of fact (existed) as to whether the debt \\'as incurred by the dci'cndant 'pri1narily for personaL fa1nily, or household purposes,' and \Vhethcr the subject pre1nises is a '011e to four fa1nily dwelling ... used or occupied. ()r intended t<l be used or <)Ccupied vvl1olly or partly' b)' the defendant as his principal dwelling"[; Prompt Mtge. Providers of N. Am., LLC, 132 AD3d at 834 [summary judg1nent denied because ''the evidence sub1nitted by Singh in opposition was sufficient to raise a triable issue of fact as to whetl1er he 'vas an occupant of the mortgaged prc1nises al the tin1c this a;;tion vvas co1n1ne11ced and, thus. whether the pre1nises was an ·owneroccupicd one-to-f<)Ltr fa111ily tl\velling' subject to the RPAPL 1303 notice requirernent"]). "!'his court \\:ill not C()nsider the Certificate of Occupancy for the Property or the closing docun1cnts on this tnotion, since Frani('s West sub1nitted such evidence for the first ti1ne \Vitl1 its reply papers. It is well-established that ''a party 1noving for su1n1nary judgn1i:nt cannot n1ect its i1riina facie burden b)' submitting evidence for the first time in reply, and generally, evidence subn1itted for the first ti1ne in reply papers should be 8 8 of 9 [*FILED: 9] KINGS COUNTY CLERK 01/11/2021 12:05 PM NYSCEF DOC. NO. 70 INDEX NO. 512327/2019 RECEIVED NYSCEF: 01/11/2021 disregarded by the co.urt" (Cilimortgage, Inc. v Espinal. 134 AD3d 876, 879 [2015]). f{ao first raised the issue regarding Frank's West's nonco1npliance \\ ith the RPAPL 1 foreclosure notices for residential property in her answer, and thus, Frank's West was required to sub1nit all evidence that the Property \Vas co1n1nercial, and not subject to the IlPJ\Pl, notice requirc1nents. in its tTI<lving papers. Accordi11gly, it is hereby ORDERED that f"ra11l<'s West's 1notion (1not. seq. one) is only granted to the extent that: (I I this action is discontinued as agaiost NYCDOF, and (2) the caption is amended to delete the "John Doe" and "Jane Doe'' defendants and the NYCDOF. frank's West's sun1111ary judginent 1notion is otherv.1ise denied without prejudice to rene\vn! at1er the conclusion of discovery; and it is further ORDERED that Rae's cross 1notion (1not. seq. two) to co1npel discovery fro1n Frank's West is granted, and {~"rank's West shall produce documents responsive to Rao's outstanding docun1ent requests \Vithin 45 days after service of this decision and order \Vilh notice of enll')' t11creof a11d shall appear for a deposition within 30 days after production of sucl1 respo11sive docu1ncnts. ·rhis constitutes tl1e decision and order of the court. ENTER, .T. S. C. HON. WREMCE KN!PEL ADMINISTRATIVE JUDGE 9 9 of 9

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