Velocity Commercial Capital,. LLC v 61 Washington Ave., LLC

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Velocity Commercial Capital,. LLC v 61 Washington Ave., LLC 2021 NY Slip Op 32868(U) December 17, 2021 Supreme Court, Kings County Docket Number: Index No. 524070/19 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 01/05/2022 01:53 PM NYSCEF DOC. NO. 77 INDEX NO. 524070/2019 RECEIVED NYSCEF: 01/05/2022 At an IAS Tenn. Com_mercfal .Part 6_.of .the Supreme Court of the State of New York, held ~n and fpr the Coupty o.f Kings, at ihc, .Courthouse, at 360 Adams Street, Brooklyn, New York~ on the li~ day of December 202L PRESENT: HON. LAWRENCE KNIPEL, Justice. ---------- .------ - .·---------.- ----------·---------~ X "VEL0C[TY COMMERCIAL CAPITAL-,. LLC, Plaintiff, DECISION AND ORDER. -against- Index No. 524070/19 .61 WASf·lINGtQ.N AYE., LLC, et.al., Mot. Seq. No. 4 O.cfendants. ------- .-- . ------- ..------ ---- .---------------- .--- X. The following e-filed papers read herein;_ NYSCEF Doc. Nos . :· Order to Show Cmise,Affidavits (Affinnations), and Exhibits Annexed . . Opposing Affidavit (Affirmation)_ _ _ _ _ _ _ __ Affidavit/Affinnat ion in Reply and Exhibits Annexed _ _ In this action to foreclose a commercial mortgage. an a three-family residence located at 353 Monroe Street in Brooklyn, New York,(the "property''), plaintiff Velocity Cor:ii_mercial CapitaJ, LLC (the. ··"plainHff') moves in S-eq. No. 4 for an ·order'": (. 1) pl.lrsuant . . . . to CPLR 2104; enforcing th(;! seltlt:1ment agreement-entered inio by plaintiff and. defendant 61 Washington Ave, LLC (the ''defendant"); and (2} vacating the stay extant in this. action µpon the defendanes filing of a Commercial Mortgagor's Dedaratioil of ·CO VID-19 ..Related H::u:dship (the- ''hardship declarat:ion.'~) (NYS.CEF Doc No. 5 5} 1 of 6 [*FILED: 2] KINGS COUNTY CLERK 01/05/2022 01:53 PM NYSCEF DOC. NO. 77 INDEX NO. 524070/2019 RECEIVED NYSCEF: 01/05/2022 Background On May 31, 2019, the defendant borrowed $963,750 from the plaintiff, with such loan to be secured by a first-lien commercial mortgage on the property. The mortgage was recorded with the Office of the City Register on June 7, 2019. Shortly thereafter, the defendant defaulted under the terms of the mortgage loan by failing to make monthly payments due and owing to the plaintiffon and after)uly 1, 2019. On November 4, 2019, the plaintiff instituted this action against the defendant (among others) to foreclose its mortgage lien, and concurrently filed a notice ofpehdency against the propetty. The defendant, although duly served with ptocess, failed to interpose a timely answer or to timely appear in this action otherwise. On April 21, 2020, the defendant conveyed the prope1ty to nonparty 353 Monroe Street LLC (the ''transferee") for no consideration (NYSCEF.Doc No. 73). It appears that the transferee is an entity which was formed by one of the defendant's members, Miguel Sanfiz, shortly prior to the defendant's conveyance of the property to the ttansferee {NYSCEF Doc No. 43). Meanwhile, Dn January 29, 2020, the plaintiff moved for leave to enter a default judgment as against the defendant (among others) and for an order of reference. On August 17; 2020, the defendant opposed the plaintiff's motion and, by way of cross motion, sought leave to interpose a belated answer. On October 20, 2020, the plaintiff opposed the dcfend~nt 1 s cross. motion. Since Apdl 27; 2021, the action has been stayed upon the de fend ant's· filing of the aforementioned hardship declaration. 2 2 of 6 [*FILED: 3] KINGS COUNTY CLERK 01/05/2022 01:53 PM NYSCEF DOC. NO. 77 INDEX NO. 524070/2019 RECEIVED NYSCEF: 01/05/2022 On August 13, 2021, the plaintiff and the defendant, with each represented by counsel; entered into an out-of-court settlement agreement (NYSCEF Doc No. 60) (the ''settlement agreement" or ''SA''). 1 In the settlement agreement, the defendant acknowledged that it owed the plaintiff the aggregate sum of$1,399,495.22 calculated as of July 29, 2021 (the "outstancling debt''), with interestand charges co11tinuing to accrue (SA, ii 3.B}. Under the terms of the settlement agreement, the plaintiff agreed to accept $1,275,600 (the "'base settlement antount'') 1 if paid on or before August 28, 2021 (the . . . . .. "initial due date"}, as a post-default short-payoff settlement for a discounted sum certain (SA, 4if3.C). The settlement agreement further provided that if the defendant failed to pay the base settlement amount by the initial due date, it could elect, on notice to the plaintift's counsel, to pay the base settlement amount 15 days late1' on September 12, 2021 {the "extended due date') (SA, ,-ri1 3.C-3.D). If the defendant exercised the extension option, it would be required to pay immediately an additional amount $20,000, which, together with the base settlement amount, would raise the total settlement amount to $1,295,000 {the "extended settlement amount"), likewise as a post-default short-payoff settlement for a diScounted sum certain (SA, ii 3 .D). The defendant fmiher agreed that if it failed to pay the base settlement amount (or the extended settlement amount, as applicable}by the initial due date (or the extended due date, as applicable), then: ''[The plaJntiff] ; .. may ... proceed with the Action and. [the defendant] . . . will withdraw its peridirtg motion to vac.ate default and its opposition to [the plaihtifPs] motion, inter alia, for a default judgp1.erit arid [the defendant] .. ·. wiil not in any way.contest the Action, including, the. motion i ·The· settlement agreement, as filed with the: Kings County Clerk, is ·signed by the defendm1 t 011ly. 3 3 of 6 [*FILED: 4] KINGS COUNTY CLERK 01/05/2022 01:53 PM INDEX NO. 524070/2019 NYSCEF DOC. NO. 77 RECEIVED NYSCEF: 01/05/2022 for a defauh judg'ment;. referee,·s computation; motion for fin.&l judgment and sale, and .hereby cohsent[s] to the entcy of a final judgment of foreclosure and .sale and further agree[&] -and at:;kn9.wledge[s] that [it] ·currently [has] title to the [property]", that [the- defendant] will not .assign title or any interest therein to the[property] to any third party atany time unless and until [the defendant] timely _pays the· [base]. Settleinent A1nount ( cfr the Extended Settlement Amount, if applicable) as set forth above.,~ (SA, ,r ·3._.F). Thereafter, the defendant failed tCJ t'imely pay the_ base Settlem~nt ainoqnt, Likewise, the. defendant 13y emajl, failed to timely request an extension of the initial due date. dated Augus.t 30, 2.021, the plaintiff's counsel so notified the defendant's cm.inset (NYSCEF Doe No. 61). By order to show cause, dated September 27, 2021, the plaintiff moved to enforce ·the tenns of the settlement agreeinent and to vacate' 1.hc stay extant upon th~ defendant's tiling .of the hardship declaration. (NYSCEF ·--noc No. 63). The defendant ·opposed. On October-21, 2021, the (;ourt reserved decision on the plaintiff's, rnotion. 2 Discussion Pursuant to CPLR 2io·4~ an '~agreeinent between parties: or their attonieys relating to any matter in an action . . . is not bind-in~ upon a party unless it is .iri a wri_ting subscribed by her or her attorney.;' CPLR2104 requires that''thc agreement itself: .·. be irt writing, signed by th,c party (or attorney) to be bound'' (Kataldo v Atlantic Chevrolet Cadillac, 161 AD3.d 1059, 1060 [2d Dept 2018] [internal quotation marks omitted]). 2 The Court bas disregarded the defendant;s ·post..:submissiori- filing (NYSCEF Doc No.- 75) as _an improper surreply. · · 4 4 of 6 [*FILED: 5] KINGS COUNTY CLERK 01/05/2022 01:53 PM NYSCEF DOC. NO. 77 INDEX NO. 524070/2019 RECEIVED NYSCEF: 01/05/2022 Here, the defendai1t does not dispute that the settlement agreement complies with CPLR 2104. Rather, the defendant asserts that the settlement agreement is unenforceable for two reasons; first, that the plaintiff,jn various ways, breached the implied covenant of good faith and fail' dealing inherent iil the settlement agreement; and second, that the $20,000 stipulated smrt for extending the initial due date was usurious either as a civil or as a criminal matter (see General Obligations Law § 5-521 [1] and [3]). Neither contention is meritorious. The defendant's first contention is conclusively refuted by the extensive documentary proof submitted by the plaintiff (NYSCEF Doc No. 68-74). The defendant's second contention misapprehends the substance of the settlement agreement as a post-default short-payoff settlement for a discounted sum certain. The amount to be paid by thedefendan t under the settlement agreement, whether paid at $1,275,000 on the initial due date of August28, 2021, or paid as a sum of $1;295,000 Uhder a 15-day extension through September 12, 2021, was, in each instance, less than the acknowledged post-default mortgage indebtedness o-f $1,399;495.22 calculated as of July 29, 2021. As the plaintiff did not charge the defendant interest in excess of the legal rate {it actually charged the defendant the extended settlement amount which, in total, was less than what the latter owed under the mortgage loan after default), the settlement agreement was not usurious. 5 5 of 6 [*FILED: 6] KINGS COUNTY CLERK 01/05/2022 01:53 PM NYSCEF DOC. NO. 77 INDEX NO. 524070/2019 RECEIVED NYSCEF: 01/05/2022 Conclusion Based on the foregoing; it is hereby ORDERED that the plaintiffs motion in Seq. No. 4 is granted in its entirety; and it is further ORDERED that the stay extant upon the defendant's filing of the hardship declaration is vacated. The plaintiffs counsel is directed to electronically serve a copy of this decision and order with notice of entry on the other parties' respective counsel, artd to electronically file an affidavit of service thereof with the Kings County Clerk. This constitutes the decision and order of the Coµrt. EN TE HON. lAWRENCEKNIPEL ADMINISTRATIVE JUDGE 6 6 of 6

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