209 E. 2nd St. Lender LLC v Haimil Realty Corp.
Annotate this CaseDecided on March 10, 2021
Supreme Court, New York County
209 East 2nd Street Lender LLC, Plaintiff,
against
Haimil Realty Corp., MENACHEM HAIMOVICH, NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, NEW YORK CITY DEPARTMENT OF FINANCE, and JOHN DOE #1 THROUGH JOHN DOE #12, Defendants.
850271/2018
Kriss & Feuerstein LLP, New York, NY (Michael J. Bonneville of counsel), for plaintiff.
Wenig Saltiel LLP, New York, NY (Dan M. Blumenthal of counsel), for defendants[FN1].
Gerald Lebovits, J.
In July 2017, defendant Haimil Realty Corporation executed a $1.5M promissory note in favor of 209 East 2nd Street Lender LLC (Original Plaintiff). As security for repayment, Haimil Realty and the Original Plaintiff executed a mortgage and assignment of leases and rents and [*2]security agreement that encumbered commercial real property located at 209 East Second Street. Defendant Menachem Haimovich executed a guarantee that secured the note.
The Original Plaintiff brought this action in 2018, alleging that Haimil Realty defaulted on the note and that Haimovich defaulted on his obligations under the guarantee, and seeking to foreclose on the mortgage. In August 2019, while the action was pending, the Original Plaintiff assigned the note and mortgage to Maguire 209 East 2nd LLC (Proposed Plaintiff). The Proposed Plaintiff now seeks to continue the action against defendants in place of the Original Plaintiff. If permitted to do so, the Proposed Plaintiff asks this court to grant summary judgment against defendants under CPLR 3212, to appoint a referee to compute money owed, and to award other related relief.
The Proposed Plaintiff's motion is granted in full.
DISCUSSION
I. Whether the Proposed Plaintiff Has Standing to Continue This Action
Defendants contend that the Proposed Plaintiff lacks standing to continue the action in place of the Original Plaintiff, and therefore that the Proposed Plaintiff's motion for summary judgment must be denied. This court disagrees.
Defendants assert that CPLR 1012 and 1013 govern when a party may intervene, such that the Proposed Plaintiff's failure to satisfy the requirements of these sections forecloses its standing. But the Proposed Plaintiff is not seeking to intervene in a foreclosure action between two other parties on the ground that it has an interest in the action; it is seeking to continue the action directly, in the shoes of the Original Plaintiff. CPLR 1018 provides that "upon transfer of interest, an action may be continued against the original parties unless a court directs the person to whom the interest is transferred to be substituted or joined in the action." In the specific context of foreclosure actions, CPLR 1018 authorizes the assignee of a mortgage to continue the action in the name of the original mortgagee without first having been substituted into the action. (See Central Fed Savings, F.S.B. v 405 W. 45th St., Inc., 242 AD2d 512, 512 [1st Dept 1997].) The Proposed Plaintiff thus may continue this action in the place of the Original Plaintiff without regard to the intervention requirements of CPLR 1012 or 1013.
Defendants argue in the alternative that the Proposed Plaintiff cannot continue the action because it (assertedly) has failed to show that it is the assignee or holder of the promissory note, as opposed to being the assignee of the mortgage. (See NYSCEF No. 150 at ¶¶ 34, 35, 39, 40.) But the instrument assigning the mortgage from the Original Plaintiff to the Proposed Plaintiff expressly provides that the assignment encompasses both the mortgage and "the bonds or notes or obligations described in said mortgage, and the monies due and to grow due thereon with the interest"—that is to say, the note. (NYSCEF No. 143 at 3 [capitalization omitted].) That is sufficient. (See U.S. Bank, N.A. v Collymore, 68 AD3d 752, 754 [2d Dept 2009].) In any event, on reply the Proposed Plaintiff also submits a copy of the note with an attached allonge dated August 14, 2019, endorsing the note to the Proposed Plaintiff. (See NYSCEF No. 155 at 15; see also NYSCEF No. 154 at ¶¶ 6-8 [discussing the assignment and allonge].)
II. The Proposed Plaintiff's Motion for Summary Judgment
Under CPLR 3212, a movant must make "a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact." (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986].) Once the movant has made out its prima facie showing, the burden shifts to the nonmovant to "establish the existence of material issues of fact which require a trial of the action." (Vega v Restani Const. Corp., 18 NY3d 499, 503 [2012].)
In foreclosure actions, the foreclosing lender seeking summary judgment may establish its prima facie case by submitting the mortgage, unpaid note, and evidence of default. (US Bank N.A. v Ezugwu, 128 AD3d 592, 593 [1st Dept 2015].) Proposed Plaintiff's motion papers provide the mortgage between Haimil Realty and the Original Plaintiff (see NYSCEF No. 131); the promissory note (see NYSCEF No. 130); the assignment of the note and mortgage to Proposed Plaintiff (see NYSCEF No. 143); and a sworn affidavit by Marc Yassky, Original Plaintiff's manager, attesting to defendants' default (see NYSCEF No. 137 at ¶ 9-11).
Defendants' contrary arguments in their opposition papers are conclusory and unsupported. Such arguments are insufficient to defeat summary judgment.[FN2] (See Spaulding v Benenati, 57 NY2d 418, 425 [1982].) Indeed, these arguments do little more than reference affirmative defenses and counterclaims asserted in defendants' answer. (See NYSCEF No. 150 at ¶¶ 16-19, 41-43, 45.) That course cannot satisfy defendants' burden in opposing summary judgment, either. (See NYP Holdings, Inc. v McClier Corp. 83 AD3d 426, 428 [1st Dept 2011], citing S.J. Capelin Assoc. v. Globe Mfg. Corp., 34 NY2d 338, 343 [1974].) And the referenced defenses and counterclaims are themselves largely conclusory and lack factual detail or specificity in any event.[FN3] (See NYSCEF No. 99 at ¶¶ 35-37 [affirmative defenses]; ¶¶ 38-42 [first counterclaim]; ¶ 47 [second counterclaim].)
Finally, defendants contend that the summary-judgment motion should be denied as premature because defendants need further discovery in order to oppose the motion. But a party seeking to rely upon CPLR 3212 (f) to defeat a summary-judgment motion must "demonstrate that the needed proof is within the exclusive knowledge of the moving party" and provide a basis beyond "mere hope or conjecture" to believe that further discovery would uncover evidence supporting the party's claims in opposition. (Voluto Venture, LLC v. Jenkens & Gilchrist Parker Chapin LLP, 44 AD3d 557, 557 [1st Dept 2007].) Defendants have not met this burden here. The Proposed Plaintiff's motion for summary judgment therefore is granted.
Settle order.
DATE 3/10/2021 Footnotes
Footnote 1: Counsel for defendants withdrew following briefing on this motion. (See NYSCEF No. 173.)
Footnote 2: Defendants do raise a more specific argument that summary judgment should be denied because the Original Plaintiff allegedly failed to comply with the notice requirements of Real Property Actions and Proceedings Law § 1303 or the mortgage instrument. But the Proposed Plaintiff's summary-judgment papers lay out in detail why no such notice requirements applied to them. (See NYSCEF No. 145 at 8-10.) Defendants' opposition papers do not address the Proposed Plaintiff's arguments on this point, much less overcome them.
Footnote 3: This court takes no position on whether the asserted affirmative defenses or counterclaims would be defective if they were to be considered on their own terms at the pleading stage. At a minimum, though, something more is required at summary judgment.
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