Berriman Funding LLC v Top Gen. Mdse., Inc.

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Berriman Funding LLC v Top Gen. Mdse., Inc. 2021 NY Slip Op 30410(U) February 1, 2021 Supreme Court, Kings County Docket Number: 521862/16 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 02/10/2021 12:19 PM NYSCEF DOC. NO. 221 INDEX NO. 521862/2016 RECEIVED NYSCEF: 02/10/2021 At an IAS Term, Part Con1rn 6 of the Supreme Cotni of tl1e State of New York, held in and for the County of Kings, at the Courthouse, at Civic Center, Brool(lyn, New York, on the 1si day of February, 2021. PRESENT: HON. LAWRENCE KNIPEL, Justice. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X HERRIMAN FUNDING LLC, Plaintiff, - against - Index No. 521862/16 TOP GENERAL MERCHANDISE, INC., 728 BERRIMAN LLC, RACHEL MINSKY, SHALOM MINSKY, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK STA TE DEPARTMENT OFT AXA TION AND FINANCE and "SMITI-1" COMMERCIAL TENANT, Defendants. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X 1'he following e-filed papers read herein: NYSCEF Doc Nos. Notice of Motion/Order to Show Cause/ Petition/Cross Motion and Affidavits (Affin11ations) Annexed,_ _ _ _ _ __ 196-204 Opposition Affidavits (Affirmations) Annexed _ __ 208-212 Reply Affidavits (Affir1nations) Annexed'-~--- 213-219 207-212 213-219 Upon the foregoing papers in this action to foreclose a com1nercial mortgage on the real property at 728 Berriman Street in Brooklyn (Property), plaintiff Herriman Funding LLC (Berriman Funding) moves (in motion sequence [mot. seq.] seven) for an order confirming the February 3, 2020 referee report (Reforee Report) on the ground that it comports with the overwhel1ning weight of the evidence and granting Berriman 1 of 9 [*FILED: 2] KINGS COUNTY CLERK 02/10/2021 12:19 PM NYSCEF DOC. NO. 221 INDEX NO. 521862/2016 RECEIVED NYSCEF: 02/10/2021 Funding a judg1nent of foreclosure and sale. Defendants Top General Merchandise, Inc., 728 Berriman LLC, Rachel Minsky and Shalom Minsky (collectively, defendants) cross-move (in mot. seq. eight) for an order, pursuant to CPLR 3211 (a) (7) and (a) (8), dismissing the complaint. Background Tltis Foreclosure Action On December 8, 2016, Banco Popular North America (Banco Popular), Berriman Funding's predecessor, commenced this action to foreclose a co1n1nercial inortgagc encumbering the Property by fili11g a summons, a verified complaint and a notice of pendency against the Property. The complaint alleged that the mortgage matured on May 7, 2016, and the full principal amount of the mortgage loan was due and owing. By a December 30, 2017 assignment, the note and mortgage were assigned fro1n Banco Popular to Berriman Fttnding. Berriman Funding was substitttted for Banco Popular as plaintiff in this action by a June 21, 2017 order. On August 3, 2017, defendants collectively answered the complaint, asserted several af:tir1native defenses and asserted two counterclai1ns. On or about February 8, 2018, Berri1nan Funding 1noved for su1n1nary judg1nent, an order of reference, an order striking and dis1nissing defend_ants' answer, affinnative defenses and counterclaims and for other relief, which was returnable on October I0, 2018 (after several adjourn1nents at defendants' request). Defendants opposed Berriman 2 2 of 9 [*FILED: 3] KINGS COUNTY CLERK 02/10/2021 12:19 PM NYSCEF DOC. NO. 221 INDEX NO. 521862/2016 RECEIVED NYSCEF: 02/10/2021 Funding's motion on the merits. On the October JO, 2018 return date of the motion, defendants argued that they never received the proceeds of the mortgage loan. On October JO, 2018, the court (Vaughan, J.) issued an order holding Berriman Funding's motion in abeyance pending a fra1ned-issue hearing before a special referee to hear and determine the limited issue of "whether the _defendants received the principal amount due on the mortgage [and] if so the motion for summary judgment should be granted." After hearings before the special referee on March J l, 2019, April 11, 2019 and June 27, 2019, the referee issued a November 4, 2019 decision determining that Bcrri1nan Fundi11g had ·'substantiated the principal amount due on the 1nortgage and according to Justice Vaughan's order summary judgment should be granted to the Plaintiff." By a December 17, 20J9 order, the court (Vaughan, J.) confirmed the referee's report, granted Berriman Funding's summary judg1nent, struck and dis1nissed def'endants' answer, affir1native defenses and counterclaims and referred the foreclosure to a referee to ascertain and co1npute the amount due and owing and to determine whether tl1e Property could be sold in parcels. Notably, defendants did not move to reargue or appeal fro1n the court's December 17, 2019 order granting Berrirnan Funding summary judgment. On Jauuary 30, 2020, the referee held a hearing to detennine the amount due and owing and whether the Property could be sold in parcels, and defendants failed to appear. 3 3 of 9 [*FILED: 4] KINGS COUNTY CLERK 02/10/2021 12:19 PM NYSCEF DOC. NO. 221 INDEX NO. 521862/2016 RECEIVED NYSCEF: 02/10/2021 On February 3, 2020, the referee issued the Referee's Report, which determined that $541,320.85 was due and owing under the mortgage loan as of December 31, 2019, plus interest until the entry of judgment, and that the Property should be sold as one parcel. Berriff1an Fundi11g's Instant Motion Berriman :r~unding now inoves fbr an order confir1ning tl1e Referee's Report and granting it ajudg1ne11t of foreclosure and sale, including an award of costs, disbursements and reasonable legal fees. Berriman Funding submits copies of: (l) the December 17, 2019 order of reference; (2) its notice of the referee's January 30, 2020 hearing upon defense counsel; and (3) the Referee's Report. Berriman Funding contends that its motion should be granted because "[t]he Referee's Report comports with the overwhelming wGight of the evidence adduced before the Referee." Berriman Funding's counsel affir1ns that in preparation for the hearing before the referee his "firm prepared an affidavit of computation and fon:varded same to the Plaintiff for review and signature[,]" but defendants and their counsel failed to appear for the hearing. Berriman Funding also sub1nits an "Affirmation of Services Rendered" by its counsel in support of its request for $68,199. l 7 in attorneys' fees (for services rendered through November 5, 2020), estimated future attorneys' fees of $10,000.00, plus disbursements of$594.00, in accordance with the terms ofthe mortgage. Defe11da11ts' Opposition and Cross Motion 4 4 of 9 [*FILED: 5] KINGS COUNTY CLERK 02/10/2021 12:19 PM NYSCEF DOC. NO. 221 INDEX NO. 521862/2016 RECEIVED NYSCEF: 02/10/2021 Defendants, in opposition and in support of t11eir cross motion to dis1niss, submit an attorney aftinnation generally arg11ing that this matter should be dismissed "based on Plaintiffs abandon1nent thereof ... " Defense counsel further asserts that defendants Shalom and Rachel Minsky executed a $500,000.00 promissory note and a credit line inortgage for a te11-year term and "inuch to their surprise the loan was only for a one (1) year period." Defense counsel also argues that "Plaintiff failed to show that the note was negotiated or assigned directly from any prior mortgage-holder to Plaintiff' and that Berrhnan Funding lacks standing to foreclose. Defense counsel also argues that Berriman Funding continued this action in bad faith because defendants sought a loan modification. Finally, defense counsel argues that Berriman Funding's inotion to confirm the Referee Report should be denied because plaintiff failed to serve defendants witl1 pre-foreclosure notices pursuant to RPAPL 1304. Defense counsel argues that the complaint should be dis1nissed because "Defendants were not served at all with [the] Referee['s] transcript of the hearing for the referee's report dated November 4, 2019 ..."and" Plaintiff never served any papers upon Defendants and submitted false affidavits of service of a notice -of hearing on referee's report for January 30, 2020 ... " Regarding t11e Referee's Report, defense counsel claims that "the Referee never informed the Defendants about the co1np11tation, nor afforded them the opportunity to present evidence, doc11mentary or oral other than a notice ofhearing for January 30, 2020 5 5 of 9 [*FILED: 6] KINGS COUNTY CLERK 02/10/2021 12:19 PM NYSCEF DOC. NO. 221 INDEX NO. 521862/2016 RECEIVED NYSCEF: 02/10/2021 ... which was never doclceted with the court and neither Plaintiff nor Referee showed up" (emphasis added). In addition, defense counsel asserts that "the Referee Report failed to specify the amount of the accelerated princip[al] balance of the loan and the amount of interest ... " Defense counsel asserts that "[t]he computation niay well be flawed unless the referee has taken into account the cash received by Banco Popular when they froze the Defendants' account and seized all those funds" (emphasis added). Defense counsel also argues that the referee "fails to take into account the amounts that were paid under a previous tnoditication and extension agreement." Berriman 's Opposition to tlze Cross Motio11 and Reply Berriman Funding, in opposition to defendants' cross motion a11d in further support of its motion to confirm the Referee Report, asserts that by a Decen\ber 17, 2019 order Berri1nan Funding was awarded su1nmary judg1nent, defendants' affirmative defenses. were dismissed, defendants' answer was stri~lcen and the court held that there were no triable issues of fact. Berri1nan Funding .asserts that "Defendants' Cross Motion is inerely a poorly veiled atte1npt to reargue previously adjudicated and rejected allegations and defenses[,]" including lack of standing and failure to serve pre-foreclosure notices pursuant to RPAPL 1304. Berriman Funding asserts that the December 17, 2019 order gra11ting it summary judgment is res judicata, and it is "i1nproper and frivolous for the Defendants to seek dismissal of the co1nplaint after Plaintiff was granted su1nmary judgment." 6 6 of 9 [*FILED: 7] KINGS COUNTY CLERK 02/10/2021 12:19 PM NYSCEF DOC. NO. 221 INDEX NO. 521862/2016 RECEIVED NYSCEF: 02/10/2021 Berrirnan Fu11ding's counsel also affinns that defense counsel's clai111s "that he was not served with the Notice of Hearing for the referee's computation ofa1nount[s] due are completely false" because such notice was served upon defense counsel on January 17, 2020 along with correspondence. Berri1nan Funding sub1nits copies of the January 17, 2020 notice ofl1earing and tl1e correspondence to defense counsel enclosing the notice of 11earing. Berrirnan Funding argues that since defendants failed to appear for the January 30, 2020 hearing, "the numerous arguments and citations in [defense counsel's] Aftir1natio11 regarding [the] referee's hearings are irrelevant and without merit." Discussion "The report of a referee should be confir1ned whenever the findings are substantially suppm1ed by the record, and the referee has clearly defined the issues and resolved matters of credibility" (Citimortgage, Inc. v Kidd, 148 AD3d 767, 768 (2017]). CPLR 4403 authorizes a court to confirm or reject a referee's report and, thereafter, to "render decision directing judgment in the action." Here, Herriman Funding made a timely motion to confirm the February 3, 2020 Referee Report and has demonstrated that the Referee Report is substantially supp011ed by the record. Defense counsel's mere asse1iion that the Ret'eree Report ~'1nay well be flawed" is insufficient to establish that the Referee Report is not substantially supported by the record. Contrary to defense counsel's contention, the record reflects that defense counsel was served with notice of the January 30, 2020 referee hearing, yet defendants 7 7 of 9 [*FILED: 8] KINGS COUNTY CLERK 02/10/2021 12:19 PM NYSCEF DOC. NO. 221 INDEX NO. 521862/2016 RECEIVED NYSCEF: 02/10/2021 and tl1eir counsel failed to appear. Berritnan Funding has also demonstrated its entitlement to $594.00 in disbursements and $68,199.17 in attorneys' fees for services rendered through November 5, 2020, pursttant to t11e ter1ns of the loan docu1nents. Following the foreclosure sale of the Property, Berriman Funding can submit a further application deti;tiling and updating the total a1nount of reasonable attorneys' fees and disbursements that it has incurred from November 6, 2020 through the conclusion of this action. Defendants' cross inotion to dismiss the complaint is denied since Berri1nan Funding was previously awarded summary judg1nent and defendants' answer, affir1native defenses (including lack of standing) and counterclaims were already adjudicated, dis111issed and stricken, pursuant to the December 17, 2019 decision and order. l)efendants never moved to reargue the December 17, 2019 decision and order, the dis1nissal of their answer a11d affir1native defenses is res judicata, and consequently, their attempt to relitigate defenses which were finally adjudicated in Berriman Funding's favor is rejected. Accordingly, it is hereby ORDERED that Berriman Funding's motion (in mot. seq. seven) is granted to the extent that: (1) the Referee Report is confirmed; (2) Berriman Funding is entitled to a judgment of foreclosure and sale, and an order and judgment sl1all be settled on notice; and (3) Berriman Funding is awarded $68, 199.17 in attorneys' fees (for services rendered through November 5, 2020) and disbursements of $594.00. Berriman Funding's request 8 8 of 9 [*FILED: 9] KINGS COUNTY CLERK 02/10/2021 12:19 PM NYSCEF DOC. NO. 221 INDEX NO. 521862/2016 RECEIVED NYSCEF: 02/10/2021 for $10,000.00 for estimated attorneys' fees (from November 6, 2020 through the conclusion of this action) is denied with leave to renew after the Property is sold, based 011 the actual attorneys' fees it incurs; and it is further ORDERED that defendants' cross motion (in mot. seq. eight) is denied in its entirety. Tl1is constitutes the decision and order of the court. ENTER, J. S. C 9 9 of 9

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