21212 26th Ave. Debt Holder LLC v Chabad Lubavitch Community Ctr. of Northeast Queens, Inc.

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21212 26th Ave. Debt Holder LLC v Chabad Lubavitch Community Ctr. of Northeast Queens, Inc. 2021 NY Slip Op 33104(U) November 12, 2021 Supreme Court, Queens County Docket Number: Index No 706974/20 Judge: Leonard Livote 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] QUEENS COUNTY CLERK 11/17/2021 03:21 PM NYSCEF DOC. NO. 90 INDEX NO. 706974/2020 RECEIVED NYSCEF: 11/17/2021 SHORT FORM ORDER FORM ORDER SHORT COUNT Y NEW STATE SUPRE SUPREME COURT - QUEEN QUEENSS COUNTY ME COURT YORK STATE NEW YORK 33 Part 33 A/IAS Part Part A/lAS Commercial Part Present: Commercial Livote Leonar d Livote Honorable Leonard Present: Honorable . Suprem Supremee Court Justice Court Justice --- ----------------- - --------------------------x _____~-----------------------------------------x 706974/20 Index No 706974/20 LLC, 21212 Index HOLDE R LLC, DEBT HOLDER AVENU E DEBT 26th AVENUE 21212 26th Plaintiff, Plaintiff, Motion Date: 6/15/21 Motion Date: -- 'against against -- CENTE R CHABADD LUBA COMM UNITY CENTER VITCH COMMUNITY LUBAVITCH CHABA CHABAD OF INC., CHABAD OF NORTHEAST QUEENS, INC., NORTH EAST QUEENS, BLANC HE INC., BLANCHE NORTHEASTERN QUEENS, INC., NORTH EASTE RN QUEENS, THE CO-EX ECUTO R OF THE SUSAN BENENSON BENEN SON AS CO-EXECUTOR SUSAN A/KIA BENEN SON AIKIA ESTATE SIEV BENENSON ESTHE R SIEV ESTAT E OF ESTHER BENEN SON GAIL BENENSON ESTHER SHARO N GAIL BENEN SON, SHARON ESTHE R S. BENENSON, ESTHE R ESTAT E OF ESTHER AS CO-EXECUTOR THE ESTATE CO-EX ECUTO R OF THE BENENSON, ESTHE R S. BENENSON, SIEV BENENSON A/KlA ESTHER BENEN SON AIKI SIEV ECUTO R OF AMY LYNN CO-EXECUTOR BENEN SON AS CO-EX YNN BENENSON AMYL A/KIA BENEN SON AIKIA SIEV BENENSON THE ESTHE R SIEV ESTAT E OF ESTHER THE ESTATE BENEN SON ESTHER MICHA ELJOE L BENENSON BENEN SON, MICHAELJOEL ESTHE R S. BENENSON, ESTHE R ESTAT E OF ESTHER THE ESTATE AS CO-EXECUTOR OF THE CO-EXECUTOR-OF BENENSON, ESTHE R S. BENENSON, SIEV BENENSON A ESTHER A/KIA BENEN SON AIKI SIEV THE CO-EX ECUTO R OF THE and PETER L YNFIEL D AS CO-EXECUTOR PETER LYNFIELD and BENEN SON. ESTATE SIEV BENENSON. ESTHE R SIEV ESTAT E OF ESTHER Seq 1 AIKIAI BENEN SON, ESTHE R S. BENENSON, A/KlAl ESTHER Defendants Defendants FILED 11/17/2021 COUNTY CLERK QUEENS COUNTY ___________________________________ ------------x -------x --------------------------------------- motion by read on this motion below read The numbered 1 - 10 below papers numbered following papers The following to judgme nt to 3212, granting Plaintiff Order (i) pursuant CPLR § S 3212, granting summar summaryy judgment pursuant to CPLR Plaintif f for an Order fees attorneys' fees Plaintif f attorneys' Plaintiff each and all of of it~ its claims; claims; and (ii) awardin awardingg Plaintiff Plaintif f on each and CPLR §§ pursuant to CPLR Order, (a) pursuant and SS 3215 and motion for an Order, cross motion the cross costs; and, the and costs; of the Counterclaim of upon the Counterclaim 3011, Plaintif f upon against Plaintiff judgme nt against default judgment 3011, for a default pursuant to Plaintiff, (b) pursuant Chabad served by Plaintiff, Reply was served which no Reply Defendants, to which Chabad Defendants, judgme nt and granting CPLR § S 3212, 3212, denying denying Plaintiffs summaryy judgment granting motion for summar Plaintif fs motion CPLR Center nity Center Commu Lubavitch Community Chabad Lubavitch summary Defendants Chabad of Defendants favor of judgme nt in favor summary judgment against Queens Inc. against eastem Queens ofNorth of Northeastern Chabad of Queens, Inc. and Chabad Northeast Queens, of Northeast pursuant to CPLR LLC, (c) pursuant Plaintiff CPLR Holder LLC, Debt Holder Avenue Debt 26th Avenue 21212 26th Plaintif f 21212 1 1 of 4 [*FILED: 2] QUEENS COUNTY CLERK 11/17/2021 03:21 PM NYSCEF DOC. NO. 90 INDEX NO. 706974/2020 RECEIVED NYSCEF: 11/17/2021 Plaintiffs Complaint s3211(a)(1), dismissing this action action and Plaintiffs Complaint in this l(a)(l), (3) and (7), dismissing §321 Note and a satisfied Mortgage and satisfied paid and action, which which seeks seeks recovery recovery on a fully paid Mortgage Note action, d) on the Chabad which it is not, ((d) Guaranty thereof co-guarantor,r, which Chabad recovery as a co-guaranto thereof or recovery Guaranty paid Mortgage fully paid Note and Mortgage Defendants' ' Counterclai Counterclaim, Mortgage Note declaring the Mortgage m, declaring Defendants Lubavitch Community satisfied and that Chabad Lubavitch Community Center Center of of Defendant Chabad that Defendant and satisfied of the Mortgage Northeast Queens, Inc. is entitled entitled to a satisfaction Mortgage which which secured secured satisfaction of Northeast Queens, paid and satisfied. been fully paid the satisfied. which has been Note, which Mortgage Note, the Mortgage PAPERS PAPERS NUMBERED NUMBERE D Affidavits Notice of Motion, Motion, Affirmation Affirmation, , Affidavits Notice of 1-4 and ;.................. ................... Exhibits ...................................... ;.................. and Exhibits Cross Motion, Motion, Affirmation, Affidavits Affirmation, Affidavits Cross 5-8 and Exhibits.............................................................................. and Exhibits.................................. Affidavits Answering Affirmations, Affidavits Answering Affirmations, And Exhibits ........................................................................... . And Exhibits Affidavits Reply Affirmations, Affirmations, Affidavits Reply ..................... 9-10 And :....................................... ~ ....................... :.................. Exhibits .............. ~ And Exhibits Other ................ ................ ................ ................ ........... . Other determined as cross-motio!l, are determined Upon the foregoing motion and cross-moti0!1 papers, the motion foregoing papers, Upon follows: follows: of Center of In March March 2009, Lubavitch Community Community Center Chabad Lubavitch Defendant Chabad 2009, Defendant obtained a $950,000 Northeast (the "Borrower" "Borrower") ) obtained $950,000 loan, evidenced evidenced by Queens, Inc. (the Northeast Queens, further was further Note was a Note and secured secured by a related "Note"). The Note Mortgage (the "Note"). related Mortgage Note and Defendant Borrower, Defendant affiliate of secured by two guarantees, of the Borrower, given by an affiliate guarantees, one given secured guarantee Chabad of of Northeast emn Queens, Queens, Inc. (the ''Chabad "Chabad Guarantor," Guarantor," and its guarantee Northeaster Chabad Benenson (the "Benenson Esther Siev Benenson the "Chabad Guarantee") "Benenson given by Esther and one given Guarantee") and the "Chabad "Guarantees"). Chabad Guarantee, Guarantee" and, collectively collectively with Guarantee, the "Guarantees"). with the Chabad Guarantee" became Guarantee became Benenson Guarantee and the Benenson Esther Siev Benenson 2019, and away in 2019, passed away Benenson passed Esther Siev five represented by obligation of of her estate (the "Estate"). "Estate"). The Estate Estate is represented her estate an obligation defendants in this capacity as defendants that capacity individual named in that who are named co-executors, who individual co-executors, failing to makeNote by failing defaulted on the Note lawsuit. In January January 2020, 2020, the Borrower Borrower defaulted lawsuit. Note, in full, off the Note, pay off the failing to pay later by failing and later payments, and monthly payments, required monthly the required Neither the Borrower when own terms Borrower nor the April 1, 2020. Neither terms on April matured by its own when it matured balance due. As paying the balance default by paying Chabad cured the default Estate cured nor the Estate Guarantor, nor Chabad Guarantor, lder seeking a result, lawsuit was filed on June then-noteholder seeking June 8, 2020 by the then-noteho this lawsuit result, this Guarantees. both Guarantees. and both recovery Note and underthe Note recovery underthe 2 2 of 4 111ou11t:;;~;:d~;;~:::;':~i;;;:l:~:r::~c;~~i~~l arrer CLERK the lawsUIt was commenced, in order from INDEX NO. 706974/2020 [*FILED: 3] QUEENS~nonlY COUNTY 11/17/2021 03:21 PM to protect itself ;d:;1i:i~;~t~~~ t~~~~any, mounting penalty interest, the Estate formed Plaintiff, a limited liability company, NYSCEF DOC. NO. 90 RECEIVED NYSCEF: 11/17/2021 and caused purchase the Note Note from the then-noteholder then-noteholder (the original plaintiff caused it to purchase original plaintiff using funds provided provided by the Estate. Note was duly assigned assigned to in this lawsuit), lawsuit), using Estate. The Note Plaintiff by the then-noteholder then-noteholder and Plaintiff plaintiff in this Plaintiff Plaintiff was substituted substituted as the plaintiff lawsuit against lawsuit against Defendants. Defendants. ~ ~~~ In order prima facie case on a promissory promissory note, a plaintiff plaintiff order "[t]o "[t]o establish establish a prima instrument and the defendant's make must establish must establish the existence existence of of the instrument defendant's failure to make payment pursuant pursuant to the terms terms of instrument." (Stewart Services Corp. v payment of the instrument." (Stewart Info. Services Misc 3d 1222(A) 2012]). Furthermore Furthermore "[o]nce Corporatair LLC, 35 Mise Corporatair LLC, 1222(A) [Sup Ct 2012]). "[o]nce a plaintiff has met met its burden, burden, the defendant defendant must must then then establish plaintiff establish by admissible admissible triable issue concerning concerning a bona bona fide defense." evidence evidence the existence existence of of a triable defense." (Id.) (Id.) plaintiff establishes prima facie cause A plaintiff establishes a prima cause of of action action on a guarantee guarantee by establishing establishing the existence existence of of the underlying underlying obligation, obligation, the guarantee guarantee and the failure of prime olbigor make the payments payments required required by the prime prime obligor failure of the prime olbigor to make obligor (see USA Auto Auto Funding, Funding, LLC. v Capital Inc., 8 Mise Misc 3d Capital City Coach Lines, Inc., 1009(A) 1009(A) [Sup Ct 2005]). 2005]). However, where where the note is paid paid in full by a co-guarantor, However, co-guarantor, the only cause of of action recover for contribution action available available is one by the co-guarantor co-guarantor to recover contribution against against the AD3d 730, 731 [2d Dept Dept other other co-guarantors co-guarantors (Mediclaim, (Mediclaim, Inc. v Groothuis, Groothuis, 38 AD3d who has paid paid more more than his or her proportionate proportionate 2007]). "Only 2007]). "Only a co-guarantor co-guarantor who share liability is entitled share of of the common common liability entitled to contribution contribution from the other other coguarantors" Rudolph, 298 A.D.2d N.Y.S.2d 726 [1st guarantors" (Panish (Panish v. v. Rudolph, A.D.2d 237, 748 N.Y.S.2d Dept.2002]). Dept.2002]). In the instant instant case, plaintiff plaintiff is not a bona-fide bona-fide third-party third-party assignee assignee of of the estate defendants. Plaintiff moves moves for note; plaintiff is an alter note; rather, rather, plaintiff alter ego of of the estate defendants. Plaintiff summary judgment and defendant summary judgment defendant cross-moves cross-moves to dismiss. dismiss. Plaintiffs breach of Plaintiff s first cause cause of of action action alleges alleges breach of the note; the second second cause of guarantees; and the fifth cause of action action alleges alleges breach breach of of the guarantees; cause of of action action seeks contractual attorney's attorney's fees pursuant contractual pursuant to the note. However, However, because because plaintiff plaintiff is not good faith assignee, assignee, plaintiff plaintiff cannot cannot maintain attorney's a good maintain actions actions for breach breach or attorney's second, and fifth causes causes of of action action must dismissed. fees. Accordingly, Accordingly, the first, second, must be dismissed. In the third cause of of action, action, plaintiff contribution claim claim on plaintiff seeks to pursue pursue a contribution third cause subrogation theory. cause of of action alleges a claim for contribution. contribution. a subrogation theory. The fourth fourth cause action alleges However, plaintiff cannot recover of action action for contribution contribution as However, plaintiff cannot recover pursuant pursuant to a cause cause of not a co-guarantor co-guarantor of of the note Groothuis, supra, at 731 note (see, Mediclaim, Mediclaim, Inc. v Groothuis, it is not Dept 2007]). 2007]). Accordingly, Accordingly, the third third and fourth fourth causes causes of of action action must must be [2d Dept 3 3 of 4 dismissed.COUNTY INDEX NO. 706974/2020 , [,FILED: ._4] ______ d_i_s1_11_i_ss_e_d_. _ _ _ _CLERK ____ _ _ _ _ _ _ 03:21 _ _ _ _PM ~ [* QUEENS 11/17/2021 NYSCEF DOC. NO. 90 RECEIVED Defendants cross-move default judgment judgment on its counter counter against11/17/2021 Defendants cross-move for a default claimNYSCEF: against However, plaintiff plaintiff moves moves by separate separate motion motion (seq. no. 2) to extend extend its plaintiff. plaintiff. However, compel acceptance acceptance of of the late answer. answer. Accordingly, Accordingly, the time to answer time answer and/or and/or compel cross-motion judgment is denied. denied. cross-motion for a default default judgment judgment is denied; denied; the Accordingly, the plaintiff's plaintiff's motion motion for summary summary judgment Accordingly, paid and plaintiff plaintiff cross-motion is granted granted because because.the note was fully paid cross-motion to dismiss dismiss is the note of the relief relief lacks standing maintain an action action for contribution; contribution; the remainder remainder of lacks standing to maintain sought denied and it is, sought in the cross-motion cross-motion is denied ORDERED, that the complaint complaint is dismissed. dismissed. ORDERED, that Any other fu11her relief relief requested requested and not specifically specifically addressed addressed is Any other or further' denied. denied. This Order of of the Court. This constitutes constitutes the Order Dated: November 12, 2021 Dated: November 12,2021 -~~~. 4 4 of 4 ~tTote.. Ls.r

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