Ladder Capital Fin. VIII REIT LLC v 1917 ACP Owner LLC
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Ladder Capital Fin. VIII REIT LLC v 1917 ACP Owner LLC 2021 NY Slip Op 31754(U) May 11, 2021 Supreme Court, New York County Docket Number: 850188/2020 Judge: Francis A. Kahn III 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] NEW YORK COUNTY CLERK 05/19/2021 04:43 PM] NYSCEF DOC. NO. 76 INDEX NO. 850188/2020 RECEIVED NYSCEF: 05/19/2021 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: PART HON. FRANCIS A. KAHN, Ill IAS MOTION 32 Justice ------------------------------------------------------------------------------X LADDER CAPITAL FINANCE VIII REIT LLC, INDEX NO. 850188/2020 MOTION DATE Plaintiff, MOTION SEQ. NO. _ _ _ 00_1_ __ -v1917 ACP OWNER LLC,120W116LLC,110W116 LLC,ACP ST. NICHOLAS LLC,ISAAC KASSIRER, EMERALD EQUITY GROUP LLC,IL PORTFOLIO LENDER 2, LLC,E&M 116TH STREET LLC,ACP PORTFOLIO MEMBER LLC,DMT PLUMBING & HEATING CORP., NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, JOHN DOE NO. I THROUGH JOHN DOE NO. XXX DECISION + ORDER ON MOTION Defendant. --------------------------------------------------------------------------------X The following e-filed documents, listed by NYSCEF document number (Motion 001) 22, 23, 24, 25, 26, 27,28,29, 30,42,43 MISCELLANEOUS were read on this motion to/for Upon the foregoing documents, the motion is determined as follows: The within action is to foreclose on a consolidated commercial mortgage, dated April 5, 2019, encumbering four parcels of real property and securing a loan totaling $30,600,000.00. The properties at issue are located at 1917 Adam Clayton Powell Jr. Blvd., 120 W l 1661h St., 110 W. l 16'h St., and l lOth St. Nicholas Ave., New York, New York 10026. The mortgage at issue contained the following provision under section 7.1: "Upon the occurrence and during the continuance of an Event of Default, Lender may ... [g] apply for the appointment of a receiver which appointment is hereby authorized and consented to by Borrower, without notice and without regard for the adequacy of the security for the Debt and without regard for the solvency of Borrower, any guarantor or indemnitor with respect to the Loan or any Person liable for the payment of the Debt or any part thereof'. Now, Plaintiff moves pursuant to RPL §254[ 1O] and RP APL §I 325 for the appointment of a temporary receiver of the rents of the mortgaged premises. A conference was held pursuant to Administrative Order 157 /20 and the Court heard from the parties regarding the applicability and scope of the COVID-19 Emergency Protect Our Small Businesses Act of 2021 [COVID Business Act] (L. 2021, c. 73) and Executive Order 202.28, et seq. Under Real Property Law §254[1 O], the appointment of a receiver in the event of a default is proper where the parties to the mortgage agree to same even without notice or without 850188/2020 LADDER CAPITAL FINANCE VIII vs. 1917 ACP OWNER LLC Motion No. 001 1 of 5 Page 1of5 I i [*[FILED: 2] NEW YORK COUNTY CLERK 05/19/2021 04:43 NYSCEF DOC. NO. 76 P~ INDEX NO. 850188/2020 RECEIVED NYSCEF: 05/19/2021 regard to the sufficiency of security (see ADHY Advisors LLC. v 530 W l 52nd St. LLC, 82 AD3d 619 [1 51 Dept 2011]; 366 Fourth St. Corp. v Foxfire Enters., 149 AD2d 692 [2nd Dept 1989]). Despite the parties' contractual assent, the appointment is not perfunctory and the court, in the exercise of it equitable power, retains the discretion to deny the appointment of a receiver (see ADHY Advisors LLC. v 530 W l 52nd St. LLC, supra; Nechadim Corp. v Simmons, 171 AD3d 1195, 1197 [2nd Dept 2019]). In the present case, it is undisputed that the parties' mortgage provided Plaintiff may apply for the appointment of a receiver regardless of the adequacy of the property as security and that, among other violations, Defendant Mortgagor defaulted in repayment under the note. Accordingly, Plaintiff established its entitlement to the appointment of a receiver of the mortgaged premises (see eg CSFB 2004-CJ Bronx Apts LLC v. Sinckler, Inc., 96 AD3d 680 [2nd Dept 2012]). With respect to the applicability of the COVID Business Act, to date, Defendant Mortgagor has not filed the required Hardship Declaration wherein it swears to the applicability of the Act and its financial hardship. Indeed, in denying Defendants' motion to dismiss Plaintiff's complaint (Motion Seq No 1) the Court noted in its March 9, 2021 decision that Defendants proffered no evidence of their financial hardship. As to Executive Order 202.28, et seq, on May 7, 2020, New York Governor Andrew Cuomo issued EO 202.28 which contained the following "directive": "There shall be no ... enforcement of ... a foreclosure of any residential or commercial mortgage for non-payment of such mortgage, owned ... by someone otherwise facing financial hardship due to the COVID-19 pandemic". Governor Cuomo extended this "directive" with bookended or overlapping Executive Orders 202.48 1, 202.55, 202.60, 202.67, 202.72, 202.79, 202.87, 202.92, 202.96. Again, no evidence has been proffered of Mortgagor's financial hardship. Substantively, Defendants have not demonstrated that denial of the appointment of a receiver is an appropriate exercise of the court's discretion (see eg Shaw Funding, LP v Bennett, 185 AD3d 857, 858 [2nd Dept 2020]; Nechadim Corp. v Simmons, supra). Accordingly, it is ORDERED that the motion for the appointment of a Temporary Receiver is granted; and it is further ORDERED that Bruce Lederman, Esq., 747 3rd Ave-23 Floor, New York, New York 10017, is hereby appointed with the usual powers and directions of a Temporary Receiver for the benefit of Plaintiff of all the rents and profits now due and unpaid or become due during the pendency of this action and issuing out the mortgaged property mentioned in the complaint, known by the street addresses as 1917 Adam Clayton Powell Jr. Blvd., 120 W 11661h St., 110 W. 1 l l6 h St., and l I01h St. Nicholas Ave., New York, New York 10026; and it is further 1 E? T?e d!rective in 20~.28 was continued only for commercial mortgagors since the directive was "superseded by Ieg1slat10n for a res1dentJal tenant" 850~88/2020 LADDER CAPITAL FINANCE VIII vs. 1917 ACP OWNER LLC Motion No. 001 2 of 5 Page 2 of 5 [*[FILED: 3] NEW YORK COUNTY CLERK 05/19/2021 04:43 NYSCEF DOC. NO. 76 P~ INDEX NO. 850188/2020 RECEIVED NYSCEF: 05/19/2021 ORDERED that the Temporary Receiver is authorized to take charge and enter into possession of the property; and it is further ORDERED that before entering her/his duties, the Temporary Receiver shall be sown to fairly and faithfully discharge the duties committed to him and shall execute to the People of the State of New York and file with the Clerk of the Court an undertaking in the sum of $180,000.00 conditioned for the faithful discharge of the duties of Temporary Receiver; and it is further ORDERED that the Temporary Receiver is hereby directed to demand, collect and receive from the occupants, tenants and licensees in possession of said premises, or other persons liable therefor, inclusive of the mortgagor, all the rents and license fees thereof now due or unpaid or hereafter that become fixed or due and the Temporary Receiver is authorized to institute and carry on all legal proceedings necessary for the protection of said premises or to recover possession of the whole, or any part thereof, and apply to this Court to fix reasonable rental value and license fee value and to compel the tenants and occupants to attorn to the Temporary Receiver; and it is further ORDERED that the Temporary Receiver may institute and prosecute suits for the collection of rent, license fees and other charges now due or hereafter to become due and fixed, and summary proceedings for the removal of any tenants or licensees or other persons therefrom; and it is further ORDERED that pursuant to the General Obligation Law section 7-105, anybody holding any deposits or advances of rental as security under any lease or license agreement affecting space in the premises affected by this action shall turn same over to said Temporary Receiver within five (5) days after said Temporary Receiver shall be qualified; and thereupon the said Temporary Receiver shall hold such security subject to such disposition thereof as shall be provided in an Order of the Court to be made and entered in this action; and it is further ORDERED that anybody in possession of same shall tum over to said Temporary Receiver all rent lists, orders, unexpired and expired leases, agreements, correspondence, notices and registration statements relating to rental spaces or facilities in the premises; and it is further ORDERED that notwithstanding anything to the contrary contained in this order, the Temporary Receiver shall not, without the further, prior order of this Court, upon prior notice to the plaintiff, make improvements or substantial repairs to the property at a cost in excess of $2,500.00, except that in an emergency, if funds need to be expended in excess of $2,500 or would otherwise require Court intervention, no Court approval will be necessary if counsel for plaintiff agrees in writing that the receiver may make such disbursement; and it is further ORDERED that the Temporary Receiver shall deposit all monies received by her/him into any FDIC-insured bank where she has an account for this purpose and such account shall show the name of this action and the Temporary Receiver shall furnish plaintiff's attorneys with monthly statements of the receipts and expenditures of the Receivership together with a photocopy of the monthly statements received from said depository and no withdrawals shall be 850~88/2020 LADDER CAPITAL FINANCE VIII vs. 1917 ACP OWNER LLC Motion No. 001 3 of 5 Page 3 of 5 [*[FILED: 4] NEW YORK COUNTY CLERK 05/19/2021 04:43 NYSCEF DOC. NO. 76 P~ INDEX NO. 850188/2020 RECEIVED NYSCEF: 05/19/2021 made therefrom except as directed by the Court or on a draft or check signed by the Temporary Receiver; and it is further ORDERED that the Temporary Receiver is authorized from time to time to rent and lease any part of the premises for terms not exceeding one ( 1) year or such longer terms as may be required by applicable laws or regulations; to keep the premises insured against loss by damage or fire; to pay the taxes, assessments, water rates, sewer rates, vault rents, salaries of employees, supplies and other charges; to comply with all lawful requirements of any municipal department or other authority of the municipality in which the mortgaged premises are situated and to procure such fire, liability and other insurance as may be reasonably necessary; and it is further ORDERED, that the tenants, licensees or other persons in possession of said premises attom to the Temporary Receiver and pay over to the Temporary Receiver all rents, license fees, and other charges of such premises now due and unpaid or that may hereafter become due; and that the defendants be enjoined and restrained from collecting the rents, license fees and other charges of said premises from interfering in any manner with the property or its possession; and from transferring, removing or in any way disturbing and of the occupants or employees; and that all tenants, occupants, employees and licensees of the premises and other persons liable for the rents be and hereby are enjoined and restrained from paying any rent or license fees or other charges for such premises to the defendants, their agents, servants or attorneys; and it is further ORDERED that the Temporary Receiver is prohibited from incurring obligations in excess of the monies in her hands without further Order of this Court or written consent of Plaintiffs attorney and Plaintiff may advance money, which can be recouped in this litigation; and it is further ORDERED that the Owner turn over to the Temporary Receiver all rents collected from and after the date of this Order; and it is further ORDERED that all persons now and hereafter in possession of said premises, or any part thereof, and not holding such possession under valid and existing leases or tendencies, do forthwith surrender such possession to the Temporary Receiver, subject to emergency laws, if any, and it is further ORDERED that the Temporary Receiver after paying the expenses of the management and care of the said premises as above provided retain the balance of the monies which may come into his hands until the sale of the said premises under the judgment to be entered in this action and/or until further Order of this Court, and it is further . ORDE~D that the Temporary Receiver, or any party hereto, may at any time, on proper notice to all parties who have appeared in this action, apply to the Court for further and other instru~tion~ or powers necessary to enable the Temporary Receiver to properly fulfill her duties or for mtenm fee payments; and it is further 850!88/2020 LADDER CAPITAL FINANCE VIII vs. 1917 ACP OWNER LLC Motion No. 001 4 of 5 Page 4 of 5 [*[FILED: 5] NEW YORK COUNTY CLERK 05/19/2021 04:43 INDEX NO. 850188/2020 P~ RECEIVED NYSCEF: 05/19/2021 NYSCEF DOC. NO. 76 ORDERED that the appointed named herein shall comply with Section 35a of the Judiciary Law, Sections 6401-6404 of the CPLR, Section 1325 ofRPAPL and Rule 36 of the Chief Judge; and it is further ORDERED that notwithstanding any other provision of this order, the Temporary Receiver shall not appoint an attorney, managing agent, appraiser, auctioneer or accountant without prior order of this Court, and that the receiver shall apply to the court and file a separate application for appointment of a managing agent, attorney or other managing services pursuant to 36.1 of the Uniform Court Rules. ! I t It lI ORDERED that this matter is set down for a conference on June 23, 2021@ 10:00 am via Microsoft Teams. Part Clerk Tamika Wright (tswright@nycourts.gov) will forward the appearing parties an invitation to the conference via email. 5/1112021 DATE CHECK ONE: CASE DISPOSED GRANTED D - INAL DISPOSITION DENIED GRANTED IN PART APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT 850188/2020 LADDER CAPITAL FINANCE VIII vs. 1917 ACP OWNER LLC Motion No. 001 5 of 5 D D ,. OTHER REFERENCE Page 5 of 5 ;I ,1
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