Investors Bank v Rodney Realty, LLC

Annotate this Case

Download PDF

Investors Bank v Rodney Realty, LLC 2022 NY Slip Op 32631(U) July 29, 2022 Supreme Court, Kings County Docket Number: Index No. 500832/21 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. 500832/2021 FILED: KINGS COUNTY CLERK 08/03/2022 11:43 AM NYSCEF DOC. NO. 60 RECEIVED NYSCEF: 08/03/2022 At an JAS Term , Part COMM-6 of the Supreme Court of the State of New York; held in and for the County ofKings, at the Courthouse, at 360 Adams Street, Brooklyn, New York, on the 29 th day of July, 2022. . . . . . . PRESENT: HON. LAWRENCE KNIPEL, Justice. ----. --------------- . -----. -----------------. - .-. ----. -- . ---------------X INVESTORS BANK, Plaintiff: -againstIndex No. 500832/21 RODNEY REALl'.Y, LLC; HERMAN MEISELS; JOEL WEBl:R, AS TRUSTEE OF THE HOR IM FAMILY TRUST; MORDECHAI KRAUSZ, AS TRUSTEE or THE HOR!M FAMILY TRUST; BERNARD GOLOB ERGER, ASTRUSTEE or THE HORIM FAMILY TRUST; ENVIRONMENTAL CONTROL BOARD OF THE CITY OF NEW YO!tK; NEW YORK STATE COMMISSIONER OFLA130R;.S!MCHA GRUENHUT; NEW YORK STATE Mot. Seq. 1,2 DEPARTMENi'OF TAXATION AND FINANCE; AND "JOHN DOE:#1 THROUGH JANEDOE#15" AND "ABC CORP.#1 THROUGH f/10",.these last namq:sbcing fictitious arid unknown to the Plairttin: the persons or partics or entities, if any, having or claiming any intetest in or lien t1pbn the mortgaged premise described inthe Verified Complaint, Defendants. --· -- ·--·· ---· ------ ·---- ·-- ·-------------· ------- ·------ ·-------------- ·X The following e-:filed papers read herein: Notice of Motion/Order to Show Cause/ Petition/Cross Motion and Affidavits (Affinnations) Annexed _ _ _ _ _ _ __ Opposition Affidavit$ (Affii•ma\fons) f\nm.~xed _ _ __ NYSCEF Doc Nos. 20-44: 46-54 In this actioi1 to foreclose a commcrcia I mortgage on the real prdpetty known as 170 Rodney Street h1 Brooklyn, New York (Block 2193, Lot 26) (hereinafter ''Prop-ertfJ plaintiff, Investors Bank (plaintiff or "investors"), moves (in motion sequence [mot. seq.] [* 1] 1 of 9 . FILED: KINGS COUNTY CLERK 08/03/2022 11:43 AM NYSCEF DOC. NO. 60 INDEX NO. 500832/2021 RECEIVED NYSCEF: 08/03/2022 one) for an order: (I) granting plaintiff summary judgment and striking the answer and counterclaims of defendants Rodney Realty, LLC and Herman Meisels and the verified answer of defendants Joel Webet, As Trustee of the 1-:lorim Family Trust and Mordechai Krausz, As Trt1stee of the Horim Family Trust, (2) appointing a referee to co1npute the amount due, (3) amending the caption to substitute "John" Green as John Doe # l, Hersch Meisels as John Doe #2, Zissel Silberstein as John Doe #3, "John' 1 Obelander as John Doe #4, Joe Blumenberg as John Doe #5, HenryBlu111cnberg as John Doe #6, YosephKraus as John Doe #7, and Toby Kraus as Jane Doc # 1, and to strike the remaining John Doe, Jane Doe, and ABC ·corp. defendants except John Doe #8 who was served but his name is unknown. Defendants Joel Weber, as Trustee of the Horim Family Trust and Mordechai Krausz, as Trustee of the Horim Family Trust (hereinafter collectively referred to as "Defendant Movants'') oppose plaintiffs motion· fot summary judgment and cross--movc, in mot. seq. two, for summary judgment dismissing plaintiffs c0111plaint in its entirety for failure to comply with the notice requirements under Real Property Actions and Proceeding Law (RPAPL) 1303 (b). Background On January 12, 2021, plaintiff cmnmenccd this c:ommercial foreclosure action by filing a summons and verified co 1n111 a.int and a notice ofp ~itden cy against the Property (sc e NYSCEF Doc. Nos. 1, 2). The complaint aiieges that defendant Rodney Realty, LLC (hereinafter ''Borrower"), executed and delivered a promissory note dated January 2.8, 20 i 6 (hereinafter "Nate") in the principal amount of $2, i 00,000 .00 in favor of Investors, which 2 [* 2] 2 of 9 INDEX NO. 500832/2021 FILED: KINGS COUNTY CLERK 08/03/2022 11:43 AM NYSCEF DOC. NO. 60 RECEIVED NYSCEF: 08/03/2022 was secured by a mortgage and security agreement made as of January 28, 2016 (hereinafter "Mortgage") for the principal stun, which wa$ duly recorded in the Office of the City Register of the City of New York onFcbruary 10, 2016 (NYSCEF Doc No. 1 at ~~ 6, 7). The complaint also alleges that the loan was further secured by a guaranty and suretyship agreement (hereinafter "Guaranty") executed and delivered by defendant Herman MCiscls ('•Meisels") on or about January 28, 2016, whereby Meisels unconditionally guaranteed payment of any and al I obligations of Borrower (id. at ii 26). The complaint alleges that Borrower defaulted under the Note arid Mortgage by failing to inakeathcpayrnentdue on March 1,2020 and all subsequent monthly payments" {id. at~ 12}. The complaint also alleges a default under the Mortgage due to the transfer by Borrower of"afifty percent (50%) interest in the mortgaged premises without obtaining the consent of the Plaintiff' (id. at ~. 13). In this regard, the complaint alleges that Defendant Movants have a fifty percent (50%) ownership interest in the Prnpe1iy by a deed froin the lforim Family Trust, dated January 30, 2019 and recorded in the Office of the City Register of the City of New York on February 11, 2019 (id. at ~I 9). 1 The complaint alleges that plaintiff"is the current holder of the Note and Mortgage" (id. at·~ I 0). Annexed to the complaint are copies of the Note, Mortgage and Guaranty (see id. at Exhibits A-C). According to the com plaint, previous'! y, the Pro pci-ty was transferred to the I-I oi"im Fani il y Trust, Joel Weber, T1;ustee, and Bcrriai-d Goldberg~r, Trustee by a deed from Borrower dated April 21, 2016 and recorded in the Office a f the City Register of the. City ofNcWYork on May 12; 2016, under which d~fendant.Bcrnard Goldberger. as Trustee of the Horim Family Ttust, may still have an interest in said premises (NYSCEF Doc No. t, ~· 9). · 1 ..,. ·.l [* 3] 3 of 9 FILED: KINGS COUNTY CLERK 08/03/2022 11:43 AM NYSCEF DOC. NO. 60 INDEX NO. 500832/2021 RECEIVED NYSCEF: 08/03/2022 On June 13; 2021, Borrower and Meisels filed a joint answer to the complaint in which they asserted seventy-seven (77) alTirnrntive defenses and Severi c6untcrclaims (NYSCEF Doc No. 15). On June 16,2021, DefendarttMovants filedan answer asserting 12 affirmative defenses (NYSCEF Doc No. 16). One of Defendant Movants' affirmative defenses is plaintiff's failure "to meetthe legal tequirerncnts that arc conditions precedent to bringing a residential mortgage foreclosure action by ... failing to provide the notices to all tenants and residents ofthe subject premises as required pursuant to RPAPL§ 1303(b), 1304 and 1306n (id. at~ 7). Investors' Motion/or Summary Judgment On December 8, 2021, plaintiff filed the instant motion for summary judgment, an order of reference and other relief by submitting an attorney affirmation and an affidavit from Stephen Schwarz (Schwarz), Authorized Signatory and Assistant Vice President of Investors. Plaintiff produces copies of the Note, Mortgage, Guaranty, and deeds evidencing the tl'ansfer of the Pt6perty in both 2016 and 2019 (see NYSCEFDoe Nos. 23- 25, 27). Schwarz avers that Hortower and Meisels "failed to comply with the terms, covenants and conditions of the Note, Mortgage, and Guaranty by defaulting in the payment due on March 1, 2020 and all subsequent monthly payments" (NYSCEF Doc No, 22, ii l O), Schwarz further avets that Borrower additionally "defaulted under the Nate and M'ortgage by transferring a frfi:y percent (50%) i11terest iq the Property to the Hori in Fatnil y Trust; Joel Weber, Trustee., and Bernard Goldqetgcr~ Trustee Without obtaining Plaitttifes cons.ent (id. at ~11}. 4 [* 4] 4 of 9 FILED: KINGS COUNTY CLERK 08/03/2022 11:43 AM NYSCEF DOC. NO. 60 INDEX NO. 500832/2021 RECEIVED NYSCEF: 08/03/2022 Plaintiff also argues that defendants' answers fail to raise any genuine issues of material fact to contradict its proof of default under the Note, Mortgage, and Guaranty. Further, that the answer filed by Borrower and Meisels constitutes frivolous, ccmduct. Regarding Defendant Movants' third aflirmative defense alleging plaintiff's failure to provide notices to all tenants and residents ofthe Property under RPAPL I 303{b ), Schwarz avers that said provisions are inapplicable since they only apply torcsidential foreclosures and that the subject action is a cmnmercial foreclosure (id. at~ 24(3)). Defendant !vlovants' Cross-motitmfor Summary Judgment Defendant Movants oppose plaintiffs motion and cross-move for summary jµdgment m'.guing that the complaint must be dismissed in its entirety due to plaintiff's undisputed failure to comply with RP APL IJ03(b ). Defendant Movants point out that, by way of Schwarz's affidavit, plaintiffad'mits thatit foiled to provide the requisite notice to tenants upon the mistaken belief that it was notrequircd to doso. In addition, Defenclant Movants contend that plaintiffs- failure has been substantiated by two sworn affidavits from Property tenants, Joel Blumenberg and Joseph Krausz, who attest thatthey personally handle their mail "especially when the subject matter ofa letter relates to financial !natters pertaining to the residence of'' their family (NYSCEF Doc Nos. 52-53, ·~· 6). Further, their attorneys provided thein a sample "1303 Notice,'' a document that they aver having never seen until supplied by their attorneys (id1 at ~ 5) artd they ate certain they did not.receive the 1'lJ03 Notice" at any point in time (id at~ 7). [)efendant Movants also assert thatRPAPL 1303 is clear on its facethattenants are requited to receive notice of a fore.closure actionwhen the property on which they reside 5 [* 5] 5 of 9 INDEX NO. 500832/2021 FILED: KINGS COUNTY CLERK 08/03/2022 11:43 AM NYSCEF DOC. NO. 60 RECEIVED NYSCEF: 08/03/2022 is residential. Notably, the cover page of the mortgage annexed to plaintiff's papers states that the Property is a "dwelling only" occupied by four families (see NYSCEF Doc No. 24). Defendant Movants fmiher contend that RPAPL 1303 does not require that the loan he made to an individual and thus, the fact that the alleged loan was made tci a corporate entity does not alter the reality that the subject property is residential. Defendant Movants additionally argue that plaintiff is not entitled to summary judg1nent because it failed to establish that Borrower defaulted on the Note. Specifically, Defendant Movants contend that plaintiffs evidence, namely, the Schwarz affidavit, is insufficient to establish a default without·production ofany business records evidencing a default since a supporting affidavit',s role is simply to lay a proper evidentiary foundation of the underlying business record, Plaintiff's Opposithm In oppbSition to Defend.ant Movant's•ctoss-motion to dismiss and in reply to its own motion, plaintiff argues that Defendant Movants cannot rely on RP APL l303(b) because they are nottenants living atthe Property. Further; thatthc cases relied uponby Defendant Movants are inapposite because they involve mortgagors who claim that they themselves did not receive the 1303 notice. Nevertheless, plaintiffstates that it served the 1303 notice to lenants on February 15, 2022, via certified and first-class ITrnil. Plaintiff proffers a copy of the affirmation ofservice (NYSCEF Doc No, . . . .55). Regarding ptoofof default, plaintiff submits a reply affidavit from Schwar-2:; \3/ho avers that "as the loan officer in ·charge of the loan. and with personal knowledge of the facts, I submitted an affidavit attesting that the default occurred and providing. details 6 [* 6] 6 of 9 INDEX NO. 500832/2021 FILED: KINGS COUNTY CLERK 08/03/2022 11:43 AM NYSCEF DOC. NO. 60 RECEIVED NYSCEF: 08/03/2022 regarding the default including the date of the default and the amount due'' (NYSCEF Doc No. 56, Schwarz Affidavit, , 3). Nevertheless, Schwarz provides that he has attached a copy ofplaintiffsrecord showing that the next payment date..for the loan is March I, 2020 (the date of default) as fui•thctproofof the default under the loan (see id.). JJefendantMovants' Reply In reply, Defendant Movants assert thatplaintif'rs delivery of the requisite• notices more than ayear after commencement of this action is unavailing since RPAPL 1303 requires that the notice be delivered to tenants Within tc11 days of delivery of the summons and complaint. Becausc it is undisputed that plaintiff failed to comply with RP APL 1303, Defendant Movants argue that its cross'-motion for summaryjudgrnent must be granted and the case dismis.sed. Even if they were nolgranted summary judgment, Defendant Movants contend that plaintiff failed tomeet its primafacie burden for summaryjµdgmcntbecausethepurported business recordproffcredbyplaintiffis deficient insofar as itfails to showtheloan history, when actual payments were made) and when the alleged default occurred. Further, that it is evident that the record, which is dated February 11 ,2022, was created for the purposes of litigation since the-alleged default occµrred in March of2020, approximately two years prior. Because the purpoi1ed business record was not created contemporaneous tothe time of the default; Defendant Mc.wants argue that the proffered record does not constitute a proper business record and is merely inadi11issible hearsay. 7 [* 7] 7 of 9 FILED: KINGS COUNTY CLERK 08/03/2022 11:43 AM NYSCEF DOC. NO. 60 INDEX NO. 500832/2021 RECEIVED NYSCEF: 08/03/2022 Discussion Pursuant to RPAPL 1303(1), "[t]he foreclosing party in a mortgage foreclosure action, involving residential Teal property shall provide notice to: (a) any mortgagor if the action relates to an owner-occupied one-to-four family dwelling; and (b) any tenant of a dwelling unit ii1 acco,·dance with the provisions a/this section" (emphasis added). The notice to any tenant required hyRPAPL 1303(1 )(b) must be delivered within ten days of the service of the summons and complaint (sec RPAPL 1303(4)). The contents of the notice required urider RPAPL 1303(l)(b) are provided under RPAPL 1303(5). "'Residential real property' shaLI mean real property located in this state improved by any building or structure that is or may be used, in whole or in part, as the home or residence of one or more persons, and shall include any building or structure used for both residential and commercial purposes" (RP APL 1305 (1 )(a)), "RPAPL 13 03 is a condition precedent to the con1n1ence1nent of a foreclosure action ancJ the failure to comply is a basis for dismissal ofa c01nplaint which may be raised at any tiine while the action is pending" (JPMorgan Chase Bank, NA. vLee, l86AD3d685, 687 [2d Dept 2020] [citing Eastern Sav. Bank; FSB v Tromba, 148 AD3d 675, 676 [2dDept 2017]]). Here, it is undisputed that the subject property is residential. Plaintiff also concedes that notices pursuant to RPAPL 1303 were not maiied Property until February 15i to any o,f the tenants residing at the 2022, nearly two years from when many of the defendants hereii1 were served with process (sc.e NYSCEF Doc Nos. 3-10). Because it is undisputed that plaintiff did not comply with a condition precedent to suit,Defendant Movants' cross- [* 8] 8 of 9 INDEX NO. 500832/2021 FILED: KINGS COUNTY CLERK 08/03/2022 11:43 AM NYSCEF DOC. NO. 60 RECEIVED NYSCEF: 08/03/2022 motionto dismiss the complaint must be granted (see JPMorgan Chase Bank, N.A. v Lee, supra). As such, the remaining issues need not be addressed. Conclusion Accordingly, it is hereby ORDERED that Investors' 1tJ.otion for summaryjudgmentand an order of reference is denied; and it is further ORDERED that Defendant Movants· cross-motion for summary judgment dismissing the complaint for failure to comply with RPAPL 1303(b) is granted and the cmnplaint is hereby dismissed in its entirety. This constitutes the decision and order ofthe court. ENTER, HON .. LAWRENCE KNIPEL ADMINISTRATIVE JUDGE 9 [* 9] 9 of 9

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.