Atlantic Ave. Capital LLC v 980 Atl. Holdings LLC

Annotate this Case

Download PDF

Atlantic Ave. Capital LLC v 980 Atl. Holdings LLC 2021 NY Slip Op 33244(U) November 9, 2021 Supreme Court, Kings County Docket Number: Index No. 500917/19 Judge: Lawrence 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. INDEX NO. 500917/2019 FILED: KINGS COUNTY CLERK 11/09/2021 03:54 PM NYSCEF DOC. NO. 75 RECEIVED NYSCEF: 11/09/2021 At an IA$ Term, Pa_rt Comm 6- ·of the- Supreme Court of the.State .of New York. held in and .for the: County of I<jngs, at the. ·c·ourthoµse, at Civi.c Center~. Brooklyn, New York,. on the 9th day of Novembe1\ 2021. PRESENT: HON~ LAWRBNCE KNIPEL., Justice. - ~ ---.. -.- ------.-· - .,. ---- ': -·-.- -·- --------..:x _ATLANTICAVENuE·CAPlTAL LLC, Pl~intiff,. ·- against - Index No. 500917/19 98.0ATLANTIC- HOLDINGS .LLC, TRANSIT WIREL.ESS, . .LLC; . CHASKIE~:STRULOVICH; "Jcmr,.t DOE# 1" through +'JOHN DoE-#60" inclusive, the true-. names of said. defenc\aI).lS being 1,mknownto_plaintifr;. the.parties-being ._intendecl fo be those pi::rsons haying or clairµing -an interest in the mortgaged premises· described .in the. complaint by virtµe-of being ten;µits, occilpants1 owners, judgmentcreditors, or lienor_s of any-type or nature; _and/or their heirs, successors or_ assigiis in all or p~it of said pre.mis.es, Defendants. --· ·- -- - - - - - -.- - - -· - - - - - - - - -· - - - - - -- -~- - - - - - -X. NYSCEF Doc Nos. The following e-filed papersread herein:. Notice-ofMbtion/Otder to Show Cause/ Petition/Cross Motion- aml Affidavits (Affirmations) Annexed._ _ __ 66-67, 69-71 Opposin,g_ Affidavit~ (Affirmations),_ _ __ 72-73 .Reply .Affidavits (Affirmations)_ _ _ __ 74 Upon the foregoing;-p.apers in this action to foreclose a leasehold mortgage 011 the cbmiriercial Properties. at 97 6/9 84 Atlantic Avenue, 534 Grand Avenue and 971 /973 P·acific 1 of 7 [* 1] INDEX NO. 500917/2019 FILED: KINGS COUNTY CLERK 11/09/2021 03:54 PM NYSCEF DOC. NO. 75 RECEIVED NYSCEF: 11/09/2021 :Street in Brooklyn (Rental Properties), plaintiff Atlantic Avenue Capital LLC (Athmtic or plaintiff) 1noves Un motion sequence [mot. seq.] three) for an order, pursuant to Administrative Order (AO) 262, section -4b~ determining that the April 19, 20ii ·''Commercial M.ortgagor's Declaration of COVID-1.9-iR.e.lated Hardship,-' filed by .individual d9fendant Chaski~l Strulovich (Strulovich) on behalf of the. corporat.e· defendarit -980 A1lantic Holdings, LLC (960 Atlantic) (Hardship D¢cl;:tration)(NYSCEF Doc No. 65). is· 1nvalid-. 011.January 14, 2019, Atlantic-commenced this-action to forecfose a $2;700.,000.00 Iea.sehol4 mortg;:ige on the Rental Prop.erties, which secure a Septembet 19_; ·2016 note· ·executed by· 98.0· Atla,ritic arid gu_a~a.nteed by h1.dividu_al .defend;mt Strulov.ich in favor of Prospect Place Capitai LLC (Prospect). In _201:8, Prospe_ct ·accelerated the loan bas.ed on 980 Atlant'ic's failure to pay installments due··ort September 22; 20f7, -i1nd failure to ·pay all amounts· due under the mortgage on or before the .December 19., .2017 maturity date of the loan._ On, or µbout De._cember 1.4., 2018, Pro~pect a;;signed th.e Joan,. the gµaranty and an Assigmnent of Rents to Atlantic., Ori. (:fr about March 5, 2.019, 98.0 Atlantic atid Strulovjch collectively answered the compla_int By a January 24,. 2020 order, this court granted Atlantic summary Judgment and an order of reference. On .April 19~ 202: I., during the COVID·- 19 pandemic, .Strulovich tiled the l-tatdsh1p Declarati~:m ·on behaJfofth~ corporate-defendant 9~0 Atlantic; which .:a.sserts that:''My°busines~ owns, whether dfrectly or indirectly,.r~n or fewer commercial units. My business is resident in New York State, .independently owned and operated,. nnt dominant in its fieid, ~- 2 of 7 [* 2] INDEX NO. 500917/2019 FILED: KINGS COUNTY CLERK 11/09/2021 03:54 PM NYSCEF DOC. NO. 75 RECEIVED NYSCEF: 11/09/2021 and employs fifty or fewer persons. Jy[y business is experiencing financial hqrdship and is unable to pay- thf? mortgage irJfttll because ofone· or more ·ofthe following: "l. Significant loss of revenue: during the- COVID~I9 pandemic. ''2. Signiftcant increase. in necessary ·ex;penses related to: providing personal protective. equipment to employees or purchasing and. iristal_lirig other protecitive equipment 'to prevent the transinissiori of COVID-19 within the·bustness=. expenses and difficulty in: securing an· alter.nativ:e commercial property mak[Ing] it.a.hardship forthe business to: relocate io another property during the .COVID-19 :pandemic; "3. Movtrtg "4.. One ·or more ;ofthe- business;s tenants has defaulted. on a _significant amount ofthe.ir:rent.payments since March 1, 2020. "To the e:ident_ that the business has lost revenue· or had increase4 expenses, any public assistance the ·business has received since· the start qftbe COVID-19 pan~einic does not fully make up for the- business's- loss of revetn1e ot increased expenses. I understand that the-.busirtess must comply-with.ail other lawful terms wtdermy commercial mortgage-agreement. I fiuiher 1,mder~tand that lawful foes, penalti!!s or interest for not having paid the 1J,1ortgag~ in, full as required .by the cdm1i1ercial 1nortgage agreemt,:nt may .still be charged or t:ollect~d and 1nay res.ult in a nionet~ Jµ{;}gment. I also un:der.stand that the 1nortgt:1:ge Jem\er or_ ot'het foreclosing party may pursue: a-fore·cio:sure action· aga:iri~t the hµsiness on after May 1, 2021, if l do not fully .repay any 1niss¢d or partial payments and lawful fees'' (emphasis added). ot Oh October 7, 2021., Atlantic filed the-instant motion for an order determining that defendant$' Hardship Decl~ration is- invalid._ Essentially, Atlantic. challenge~ the representations- made in defendants' I4ardship·Declatatiqn regarding the size of defend@ts' 3. 3 of 7 [* 3] INDEX NO. 500917/2019 FILED: KINGS COUNTY CLERK 11/09/2021 03:54 PM NYSCEF DOC. NO. 75 RECEIVED NYSCEF: 11/09/2021 real estate business holdings and the actual -impact of the COVID'" 19 pandemic on defendants'· alleged payment default Atlantic's couns.el submits an affirmation ass~rting that Sttulovich i~ the 1•majority ow.ne1;;, of 980, Atlantic:; which is a: ·~•smaU part of Str.ulovich's teal estate business.;' Atlantic'·s connsel submits Strulovich's April 22., :2020 affidavit that he su:bmhted in another New York action, in which Strulovich specifically attests th~J: "I .am the rnajodty member/owner ·o{ the. follovvlng codet'endants: Construction Group LLC, 945 ·Park Pl LLC, 1078 Dekc1.Ib LLC, 74 Van Buren LLC, 454. Central Avenue LLC, 980 Atlantic Holdings LLC, 720 Livonia Development LLC, Penn Condominium tLC, Throop Home., LLC, The. B.ushwick Partners LLC, Brooklyn Ventures LLC, The Howard Day. House LLC,. Bay$hore,. I.nc, 3J Brooklyn LLG, 119 H;oldings LLC, Gold Cliff LLC, 9()8 Ber&en Stre.et LLC, 901 Bu.shwick Avenue·LLC, Gat~s Equity Holdings LLC; 853 Lexington·LLC, 341{ St. Nicholas LLC, 762: Willoughby LLC, 855 Dekalb Avenue LLC, The Br:idge Tower LLC, 619 Holdings LLG, Grand Suites LLC, Catalpa Developrn,;mt, LLC, Slope. Offices LLC, 482-484 Seneca LLC, 1266 Pacific LLC, ·Myrtlino Holdings, LLC, 259 l3erry LLC, 261 Berty cs· LLC, l 64Z Eqµities LLC,. 12:17 B~dford LLC, Penn & Marcy LLC, CAS ·M;inag~m~nt Compa,ny, 741 Le~ington LL:C., and ·csy HoldiilgS. LLC ... '' (see NYSCEF Doc No. 69 [emph£Lsis added]). . . Atlantic's counsel asserts that Sttulovich "is a in1;1.jority owner of numerous entities= through which he. owns anci manages. residential and commercial ·real ·estate[,]"1 rather than the smaU business owner.h~ purports to be in the Hardship Declaration. Atlantic's com1sel counsel alsq annexes Strulovich's )µne 12, 2017 dedaratie>n tbat he.submitted•in a federal court action in which he. identified additional .entities that he controlled at that tinie, 1 Atlantic's 4. 4 of 7 [* 4] FILED: KINGS COUNTY CLERK 11/09/2021 03:54 PM NYSCEF DOC. NO. 75 INDEX NO. 500917/2019 RECEIVED NYSCEF: 11/09/2021 affirms that he r~vjewe_d the public re¢ords and_· "'I foµnd that many of the proptrties are -still owned by [Sfrulovich's] entities"· which confit1ned that "Strulovich['s] real estate· business· (and 980 Atlantic Holdings; LLC indirectly) in the aggregate. contain 1nore than -ten properties." Atl:m.tic's counsel.al$o ass~rts that, contrary to th~ a~s·ertfons made in defendants' Hardship_ Declaratic;m; "[t]he- ·outbreak of- Covid in 2020 d,id not ·cause the d¢fault here."· Atlantic's counsel references the inortgage.(NYSCEF Doc No. 3)and notes that de°tendants defaulted. by failing to pay the instaliineni :due -iri September 2017 and failing to pay the ~ntire balance due on or before the Dec~mber 19; 2.017 maturity d·ate., well before the onset of the COVJD-l9· pµnd~roic . .Atlan.tic':s counsel ai;gu_es that ~'[t]here b.eing no connection between the.:default artd Cov_id, th~ defendants are_ not entitled· t_o relief under the Hai"dship statute.'~ Atlantic also submits an affidavit from Robert S.chuck (Schuck); a member of .Atlantic, whc.i attes_t$ that 980 Atlantic '~is not_ an own(!r" -and is only "a .lessee ,at the: property" who "grantec;l a le~s.ehol_d_ m011gage[,Y' ,and_ thus·,. is "not qualified" to fil~ a hatdshi p ·declaration. Schuck further attests ·that Atlantic h~s-been cdllecting rent from 980 .Atlantic'·s subtenants pursuant to. the Assignment =of Rents. Defendants, in opposition, submit an .attorney affirmation asserting: that ''no- propel"ty listed by plajntiff is owned by Sturlovich individually. ·he, at most h~d or has an interest in the entity that owns the property as of the date of the do~ument plaintiff references.'' Defense counsel. further claims that ''[p]Iairttiff also fails to sustain the 5. 5 of 7 [* 5] INDEX NO. 500917/2019 FILED: KINGS COUNTY CLERK 11/09/2021 03:54 PM NYSCEF DOC. NO. 75 RECEIVED NYSCEF: 11/09/2021 argumentthat for purpo~es of thti hardship, 980 Atlantic is not ~ owner:" Stµrloviqh also sufohits an affidavit attes~ing that the underlying lban. was ·accelerated. in Jari.uary ·2018, ''tequiting the entire. outstanding,amourtt of the loan to be repaid in fuli irtunediate]y .... '' and the original ·tender., Prospect, J'began to. collect rents from 9.80 Atl&ntic,.~ sub-:tenants under the Assignment of Le~ses ancl Rents:'' $tµrlovich ass:erts that ~'[d]ue to that action, and the pandemic~ 980 Atlantic ·was left with no caslr fJow, and could fnot.] bon-ow or otherwise ·secure :fimcis to. address this P.ropeity ot loan:" Sturlovich also argues that ·••cOVlb need not have been the cause.forthe hardship (or default); .. /' Atlantic, in reply, reiterat~s that "Covid didn;t .ca,use the. defa.ult, 1 ;md "the subtenants .kept paying ren.t,ju.st 4irectly to plaintiff." Atlantic a~serts that defendants present ·"no real ·explanation ~s to how Covid created a hardship foi." tfofondanL" AO 262/21 provides, fotelevant part: ''4. Challenging a. Hardship Declaration "h. Pending Action - Up.on motion by the plaintiff Offnotice to the defendant, a c·ourt must.schedule a hearing to determine the validity of the Hardship beclaratim:i. I~ after the hearing, the court .finds the Hardship Declaration tel be valid~ the stay shall continue·. Ifthe .court finds• that the Declaration is invalid, the matter may proceed in .the nonnal course . . .'·' 6. 6 of 7 [* 6] INDEX NO. 500917/2019 FILED: KINGS COUNTY CLERK 11/09/2021 03:54 PM NYSCEF DOC. NO. 75 RECEIVED NYSCEF: 11/09/2021 Thus, under the--circ;umstances presented he.re,. where Atlantic h~s challenged defen.darits 1 Hardship De.claratibn; a hearing is required to determin~ whether this foredos·ure action is .'stayed. Accotdi.ngly, it is hereby ORDERED that plaintiffs motion (mot seq. three) for an order detetmining that .de ndants·'_,.Hardship Declaration is invalid is held in abeyanc;e pending the ouicome,of a . · ·.~ w~ring befrnce this ~ourt on. l) . 'o·a~, ~es:-• k:,'tl--- , . . L fl -~ ~ 2021Jo det0!111ine thevajiclicy of / defendants' Hardship Declarat10n m accordance.with AO 2li2/21. This constitutes the decision :and order of the court. J.. s_. . . . c.. ,~,;.r::>··· ... ., ..-:~:tr ,./ '-..~•···· HON. LAV\l'RENCE KNIPEL ADMINiSTRATIVE "~JOG5 1 7 of 7 [* 7] ,.,./ --------· c:.-:,...-·-··

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.