NY Secured Funding LLC v Hello Albemarle LLC

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NY Secured Funding LLC v Hello Albemarle LLC 2022 NY Slip Op 33205(U) September 19, 2022 Supreme Court, Kings County Docket Number: Index No. 513790/21 Judge: Leon Ruchelsman 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. 513790/2021 FILED: KINGS COUNTY CLERK 09/22/2022 01:32 PM NYSCEF DOC. NO. 159 RECEIVED NYSCEF: 09/22/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS : CIVIL TERM: COMMERCIAL PART 8 ----- .-----. ··------------·- .-.----· . -·--------x NY SECURED FUNDING LLC, Plaintiff; - against - Decisioh and order Index No. 513790/21 Hello Albemarle LLC, Eli Karp, CML Taping & Painting Corp., Multivista NYC LLC, New York City Environmental.Control Board, Rentom Group Corp., 1·seal USA LLC, New York State Department of Taxation and Finance, New York City Departrnent of Finance, Julian Samuel, Angela Angarica, Franchesca Medina, Derron Richardson, Ashleigh Richards, Damien DeCuir, Cristina Delgado, Marlon McEachin, Quelmi Johnson, Akpomedayin Obu-kowho, Lavona WilcbcJ.i:d, Marika Reid, Alexis Mccant, Victoria Mccant, Kirra McE1henney, Anthony Ford, Kendell AppTewhite, Adetola Lawal, Hammed Azeez, Sabir Mandil, Nasra Nimaga, Erika C. Pierre, Anthony Lewis, Devonne Gourdine, Randy Dixon, Patricia Dixon, Ashley Dixon, Santiago Ramirez, Kareem Bishop, Victor Gayton, Kayla Roberson, Arie Lesperance, Madi.sin Bradley, Arlene Bryant, JcJ.ke Shriver, Martha Haastrup, Amanda S. Penco De Jesus, Gilson T. De Jesus, Jeremy Smithj Ferlanda Juste, Arvin Pascual, Steffanie B.arrios I Khalijah Brooks/ Allyson Acl.ron, Ashley M. Buonocore, Clayton w. Susna r, Shamee ka A.. Marc, Imani N. Dickens, Mickey Alexander, RJ Livj,ng LLC, Anthony Ryan Leslie, Sheila M. Nghe, Monique Beckford, Craig Reis Brookes, Michael Lowell; Derron J, Richardson, Denis Flaviu, And Joe DougeAnd "JOHN DOE" #1 Through "JOHN DOE" #20, the last twenty (20) names bein9 fictitious and unknown to the plaintiff, the persons or parties intended being the tenants,. occupants, persons or parties, if any, having or claiming an interest.in or lien upon the mortgaged pr_emises d<:'!scribed in the Amended Verified Complaint, September 19; 2022 Defendants, ----·· --· -------·-·---- ·-·· .-- . ·-- ·-. ·----· .---· --x. PRESENT: HON. LEON RUCHELSMAN The. plaintiff h.as moved seeking the appointment of receiver pursuant to RPL §254 (10). mqtion. [* 1] a The. defendants qppose t:b.e Papers were submitted by the partie~ and. arguments held. 1 of 6 INDEX NO. 513790/2021 FILED: KINGS COUNTY CLERK 09/22/2022 01:32 PM NYSCEF DOC. NO. 159 RECEIVED NYSCEF: 09/22/2022 After reviewing ali the arguillents this court now makes the. following determination. On April 19, 2021 a loan made by plaintiff's predecessor iri interest in the amount of $15,000,000 became due. The defendants have not repaid any of the funds and on April 23, 2021 the plaintiff issued a notice of default. Pursuant to 12.03(c) of the loari agreement, upon a default "at Lender's request, Borrower shall cause a notice sul:istantially in the form of Exhibit F attached hereto (a "Tenant Notice Letter"), to be delivered to each Tenant under an ·existing Lease, riotifyinq such Tenant to send directly to the Bank promptly when due: a.11 payments, whether in the form of checks, cash, clrafts, money orders or any other type of payment whatsoever of rent or any other item payable to Borrower as landlord qr otherwise or payable to Property Manager on behalf of Borrower. Copies of stich Tenant Notice Letters, together with evidence of mailing, shall be delivered by Borrower to Lender or its designee simultaneously therewith .. I f Borrower shall enter i n t o any Future Lease after an Event of Default, Borrower shall immediately cause a Tenant Notice Letter to be delivered to the Teriant thereunder and shall deliver a copy of such Tenant Notice Letter, together with evidence of mailing, to Lender or its des.ignee within. ten (10) days after th€! effecti,ve date of such Futur~ Lease 11 (see, 'iI 12 . 0 3 (.t:) of the Loah Agreement [ NYSCE F D.oc. 2 [* 2] 2 of 6 #12 4 j ) • 'J,'he FILED: KINGS COUNTY CLERK 09/22/2022 01:32 PM NYSCEF DOC. NO. 159 INDEX NO. 513790/2021 RECEIVED NYSCEF: 09/22/2022 plaintiff alleges the defendants have frustrated the execution of such letters by expressly advising the tenants to continue to pay the defendants, causing confusion and uncertainty among the tenants. The plaintiff now moves seeking the appointment of a receiver to enable the :tenants to comply with the above noted provision of the lease and to allow the defendants to collect rents unencumbered. Conclusions of Law It is well settled that pursuant to RPL §254(10) where a mortgage specifically authorizes the appointment of a receiver upon any action to foreclose the 11i.ortgage then a. receiver may be appointed without regard to the adequacy of the security {Essex v. Newman, 220 AD2d 639., .. . . 632 NYS2d 636 [2d Qept., 1995]) . The plltpose of appointing a receiver is to preserve the property for the owner's and mortgagee's benefit. Article 10.02(xii) of the Loan Agreement entitled 'Remedies' states that upon any event 0£ default the lender has the right to "apply for without r1otice, the appointment of a receiver of th(-3! Rents, and Lender shall be entitled to the appointment of such receiver as a matter of right, without regard to the value of the Property a.s security for the Debt, or the solvency or insolvency of any person then liable for the payment Ci.f .the Debt'' (see, Loan Agreement, 91 10. 02(xii)}. It is true that. even where a loan. 3 [* 3] 3 of 6 INDEX NO. 513790/2021 FILED: KINGS COUNTY CLERK 09/22/2022 01:32 PM NYSCEF DOC. NO. 159 RECEIVED NYSCEF: 09/22/2022 agreement authorizes the appointment of a receiver such appointment rests in the discretion of the court (Ridgewood Savings Bank v. New Line Realty VI Corp., 24 MisC3d 1227 (A) , 897 NYS2d 672 [Supreme Court Bronx County 2009]) and a court in equity can vacate the appointment in appropriate circumstances (see, Naar v. I.J. Litwak & Co., Inc.i 260 AD2d 613, 688 NYS2d 698 [2d Dept., 1999]). The 'appropriate circumstances' noted is difficult to quantify. In Home Title Insurance Company v. Isaac Scherman Holding Corp., 240 AD 851, 267 NYS 84 [2d Dept., 1933] one of the earliest cases finding the "possible exercise of discretion'' denying a receiver or curtailing the receiver's rights, the court held such discretion could be exercised "in the case of hardship or the like" (id). Essentially, the court should exercise its discretion and deny a receiver whers:: the receiver would serve no useful purpose (Federal Home Loan Mortgage Corp. , v. Jerwiri Realty Associates, 1992 WL 39026A [E. D. N. Y. 1992]). For example, where the default was inadvertent the court denied the appointment of a: receiver (Fa.irmorit Associates v. Fairmont Estates, 99 AD2d 895, 472 NYS2d 208 [3"ct Dept . , 19 8 4 ] ) . Thus, other than the appropriate anc:l unusual circumstances notect there is no analysis. the court must engage in before appointing .a receiver pursuant to RPL §254 (10). There is no requirement, as argued by the defendants, that th!=! mortgagee must 4 [* 4] 4 of 6 INDEX NO. 513790/2021 FILED: KINGS COUNTY CLERK 09/22/2022 01:32 PM NYSCEF DOC. NO. 159 RECEIVED NYSCEF: 09/22/2022 demonstrate a risk of irreparable loss (see, Memorandum in Opposition, pages 5 and 6) or present competent evidence the asset is being corn:prorn:ised or mismanaged or that harm will befall the property absent a receiver (see, Memorandum in Opposition, pages 6 and 7). Clearly, there is a difference when a receiver is appointed pursuant to RPL §254 (10) where absent appropriate circumstances the request should be granted and a receiver appointed pursuant to CPLR, §6401 which demands "clear and convincing evidence o.f irreparable loss or waste to the subject property and that a temporary receiver is needed to protect their interests" {Board.of Managers of Nob Hill Condominium Section I I v. Board of Managers of Nob Hill Condominium Section I, 100 AD3d 673, 954 NYS2d 145 [2d Dept., 2012]). The defendant's attempt to require the court to engage in sµch scrutiny even where the loan agreement allows for a receiver upon a default fails to appreciate the unique allowances afforded by RPL §254 (10) which requires no such scrutiny. Further; in any event, a: review of the £acts .of this case clearly establish the defendants have failed to present any special circumstances why a receiver should not be appointed. Pursuant to RPL §254(10) a receiver may be appointed for "the rents an.d profits of the prem:Lses covered by the :mortgage; and .th!3 .t:ents and profits in the event of any default or defaults in paying the principai, intere.s.t, taxes, water rents, assessments 5 [* 5] 5 of 6 INDEX NO. 513790/2021 FILED: KINGS COUNTY CLERK 09/22/2022 01:32 PM NYSCEF DOC. NO. 159 RECEIVED NYSCEF: 09/22/2022 or premiums of insurance" (id). Where there are substantial questions cif fact or whether there are questions whether a default even occurred or there are que·stions regarding the validity of the note then a receiver is. not warranted despite languag.e pursuant to RPL §254 (10) (Phoenix Grantor Trust v. Exclusive Hospitality LLG, 172 AD3d 926:, 98 NYS3d 752 [2d Dept., 2018J), There are no questions that defaults exist. Consequently the motion seeking the appointment of a receiver is granted. The plaintiff should present a proposed order to the court ort notice to the defendants delineating the specific powers and duties of the receiver. So ordered. ENTER DATED: September 19, 2022 Brooklyn N.Y. Hon. Leon Ruchelsman JSG 6 [* 6] ---------------- ________________________ 6 of 6 ,-. .........................

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