Sharestates Invs. DACL LLC v XYZ Dev. II LLC

Annotate this Case

Download PDF

Sharestates Invs. DACL LLC v XYZ Dev. II LLC 2021 NY Slip Op 31731(U) May 17, 2021 Supreme Court, Kings County Docket Number: 526262/19 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 05/21/2021 04:10 PM NYSCEF DOC. NO. 86 INDEX NO. 526262/2019 RECEIVED NYSCEF: 05/21/2021 At an IAS Term, Part Comm 6 of the Supre1ne Court of the State of New York, held in and for the County of Kings, at the Courthouse, at Civic Center, Brooklyn, New York, on the 17th day of May, 2021. PRESENT: HON. LAWRENCE KNIPEL, Justice. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X SHARESTATES lNVESTl\llENTS DACL LLC, Plaintiff, - against - Index No. 526262/I 9 XYZ DEVELOPMENT II LLC, AARON JOHNSON, XYZ HOLDINGS LLC, XYZ GROUP LLC, XYZ PARTNERS LA LLC, XYZ HOLDINGS LA LLC, XYZ42 VAN BURENLLC,XYZ 1555 PACIFIC LLC,XYZ 1535 PACIFICLLC, 1523 DOHENY LLC, XYZ PARTNERS I.LC, BABAK POURTAVOOSI PC, Br\BAK POURTAVOOSI, Individually, CASSAFORTE LTD., FRE 348 QUINCY I.LC, JOSHUA LEWSKI, CRIMINAL COURTOF.rHECJTY OFNE\VYORK, NYC PARKING VIOLATIONS BUREAU, DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT, NYC ENVIRONMEN'J'AL CONTROL BOARD~ ALEKSANDEll V!NAR, and JOHN DOE 1-10, said names being fictitious and unknown to plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, l1aving or claiming an interest in, or lien upon the premises described in the complaint, Defendants. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X 1 of 7 [*FILED: 2] KINGS COUNTY CLERK 05/21/2021 04:10 PM NYSCEF DOC. NO. 86 INDEX NO. 526262/2019 RECEIVED NYSCEF: 05/21/2021 The following e-filed papers read l1erein: NYSCEF Doc Nos. Notice ofMotiori/Order to Sl1ow Cause/ Petition/Cross Motion and Affidavits (Affirmations) A1lliexed,_ _ __ 51 53-58 Opposing Affidavits (Affir1nations), _ _ __ 65-73 Reply Affidavits (Aftirmatio11s), _ _ _ __ 78-81 Upon the 1bregoing papers in this action to fbreclose a 1nortgage on the commercial property at 348 Quincy Street in Brooklyn (Property), defendants XYZ Development II LLC (Development II or borrower), XYZ Holdings LLC (Holdings), XYZ Partners LA LLC (Partners LA), XYZ Holdings LA LLC (Holdings LA), XYZ 42 Van Buren LLC (Van Buren), XYZ 1555 Pacific LLC (1555 Pacific), XYZ 1535 Pacific LLC (1535 Pacific), 1523 Doheny LLC (Doheny), XYZ Partners LLC (Partners), Cassafortc Ltd. (Cassaforte), FRE 348 Quincy LLC (FRE 348 Quincy) and Joshua Lewski (Lewski) (collectively, Moving Defendants) move (in motion sequence [mot. seq.] one) for an order: (1) dismissing the verified complaint filed by the plaintiff, Sharestates Investments DACL LLC (Sharestates), pursuant to CPLR 3211 (a) (3), (a) (4), and (a) (7) or, alternatively, (2) staying this action, pursuant to CPLR 2201, pending the resolution of tl1e prior pending action in Nassau County Supre1ne Court captioned Cassaforte Ltd., et al. v Sl1arestates Investments DAC LLC, et al., Nassau County index No. 614558/19 (Prior Pending Nassau Action). 2 2 of 7 [*FILED: 3] KINGS COUNTY CLERK 05/21/2021 04:10 PM NYSCEF DOC. NO. 86 INDEX NO. 526262/2019 RECEIVED NYSCEF: 05/21/2021 Backgro11nrl On Dece1nbcr 3, 2bl 9, Sharestates com1nenced this comn1ercial foreclosure action by filin_g a su1n1nons, a verified complaint and a notice of pendency against the Property. The complaint seeks to foreclose on a $2,015,000.00 consolidated mortgage encumbering the Property, which was allegedly executed by Development II, the owner of the Property, in favor of Sharestates on April 9, 2019 (complaint at iii! I 0-11 ). The complaint alleges that "the defendants have failed to comply with the conditions of said mortgage by omitting to pay the installments of $15,112.50 each and the escrow money for taxes which became due on 09/01/19 and subsequent thereto, or within 10 days thereafter, and same not having been paid, plaintiff has declared the entire amount due" (id. at if 15). Notably, the complaint alleges that: ''110 other action or proceeding at law, in equity or otherwise has been had or tal(en for the recovery of the ''"hole or any part of the principal sum, and interest, or either of them secured by said mortgage note and mortgage." (id. at if 17). Movi11g Defendants' I11sta11t Dismissal Motion Moving Det'enda11ts assert that dismissal of tl1e co1nplaint is warranted because "[t]he 1nortgage loan at issue in this foreclosure action is currently the subject of two other actions, both ofwhicl1 were filed before this foreclosure." The Moving Defendants assert that Cassaforte, the owner of Development 11, com1nenced a related action in New York County Supreme Court on June 10, 2019, captioned Cassaforte Ltd., et al. v Aaron Johnson, et al, New York County index No. 3 3 of 7 [*FILED: 4] KINGS COUNTY CLERK 05/21/2021 04:10 PM NYSCEF DOC. NO. 86 INDEX NO. 526262/2019 RECEIVED NYSCEF: 05/21/2021 653387/19 (Prior Pending New York Action), but that no notice of pendency was filed against the llroperty in the Prior Pending New York Action. On October 18, 2019, Cassaforte com1nenced the Prior Pending Nassau Action against Sharestates a11d ot11ers to quiet title to the Property based on an alleged fraudulent schc111e to refinance the Property \Vithout Cassaforte's consent, in wl1ich Cassaforte seeks a declaratory judg111e11t that the Sharestates mortgage-s on the Property are null and void. The co1nplaint in the Prior Pending Nassau Action alleges that the very same mortgage at issue here is unenforceable because the defendants therein had no actual or apparent authority to cause Develop1nent II to refinance the rnortgage witl1out Cassaforte's consent. The Moving De-fendants submit an affidavit of service in the Prior Pending Nassau Action reflecting that Sharestates was served \Vith process therein on October 29~ 2019. The Moving Defendants assert that "[r]ather than respond to the Nassau Complaint in a tiinely 1nanner, Plai11titT filed this action on Dece1nber 3, 2019 - over six weeks after the Nassau Complaint was filed." The Moving Defendants also annex Sharestates' pending rnotidn to dis1niss t11e complaint in the Prior Pending Nassau Action, which was filed on or about January 16, 2020, "l'he Moving Defendants argue that this foreclosure actio11 should be dis1nissed, pursuant to CPLR 3211 (a) (4), because the Prior Pending Nassau Action was filed 46 days prior to t11is foreclosure action and "it is undisputed that the legal issue of the enforceability of tl1e Quincy Mortgage is central to both this action and tl1e Nassau Action." The Moving Defendants also argue tl1at "[i]f this action moves forward, there is 4 4 of 7 [*FILED: 5] KINGS COUNTY CLERK 05/21/2021 04:10 PM NYSCEF DOC. NO. 86 INDEX NO. 526262/2019 RECEIVED NYSCEF: 05/21/2021 a significant risk of inconsistent outcomes between this action and the Nassau Action one court may rule [that] the Quincy mortgage is enforceable, but the other may rule the opposite." The Moving Defendants further contend that dismissal is warranted, pursuant to CPLR 3211 (a) (3), because plaintiff Share.states lacks legal capacity to sue, since the 1nortgage is unenfbrceable. Alternatively, if the court deter1nines that dis111issal is not \Varranted, the Moving Defendants assert that the court should stay these proceedings pending the outcome of the Prior Pending Nassau Action, pursuant to CPLR 2201. S/1arestates' Oppositio11 Sharestates, in opposition, asserts that dis1nissal is not warranted, pursuant to CPLR 3211 (a) (4), because "there is no issue regarding 'the validity and enforceability' of the insta11t mortgage loan" as "no decision has been tnade regarding MOVING DEFENDANTS' claims in the Nassau County Action." Sharestates also contends that "1nost all [sic] defendants in the instant tbreclosure are entirely absent from the Nassau Cou11ty action" and that this foreclosure action and the Prior Pendi11g Nassau Action seek substantially different relief. Sharestates also argues that it would be prejudiced if this foreclosure action is dis1nissed based on t11e pendency of the Prior Pending Nassau Action because it cannot seek tbreclosure of the Property in Nassau Cot1nty. Movi11g Defenda11ts' Reply Moving Defendants, in reply, advise that on February 11, 2020, the complaint in the Prior Pending Nassau Action \Vas a1nended to add Development II as a plaintiff. Additionally, by a March 3, 2020 order, the Prior Pending Nassau Action was transferred 5 5 of 7 [*FILED: 6] KINGS COUNTY CLERK 05/21/2021 04:10 PM NYSCEF DOC. NO. 86 INDEX NO. 526262/2019 RECEIVED NYSCEF: 05/21/2021 to New York County and consolidated with the Prior Pending New York Action under New York County index No. 653387/19. Moving Defendants argue that the validity and enforceability of tl1e mortgage is the central issue in both this foreclosure action and the Prior Pending Nassau Action. Moving Defendants reiterate that "Plaintiff is not entitled to foreclose in this action if the Quincy Mortgage is determi11ed to be null and void as the plaintiffs have asserted in the previously-file_d Nassau Action." At a ininimum, Moving Defendants seeks a stay of this foreclosure action pending the outco1ne of the Prior Pending Nassau Action, which has now been consolidated with the Prior Pending New Yori( Action. Discussion CPLR 2201 provides that "[e]xcept where otherwise prescribed by law, the court i11 which an action is pending may grant a stay of proceedings in a proper case, upon such terms as 1nay be just.~, 1-Iere, to prevent inconsistent rulings regarding the enforceability of the consolidated mortgage, a stay of this foreclosure action is warranted pendi11g the outcome of the Prior Pending Nassau/New York Action (Consolidated Action). Accordingly, it is hereby ORDERED that Moving Defendants' motion (mot. seq. one) is only granted to the extent that this foreclosure action is stayed until there is a final determination regardi11g the enforceability of the subject mortgage in the Consolidated Action, and the parties shall promptly notify this court upon a final determination in the Consolidated Action regarding the enforceability of the subject mortgage. 6 6 of 7 [*FILED: 7] KINGS COUNTY CLERK 05/21/2021 04:10 PM NYSCEF DOC. NO. 86 INDEX NO. 526262/2019 RECEIVED NYSCEF: 05/21/2021 l'his constitutes the decision.and order of the cou1i. ENTER, J. HO!" ~AWRENGE:" KNIP!:':(, ADMINISTRATIVE JUDGE 7 7 of 7

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.