Concept 9, LLC v. 614 Realty, LLC

189 A.D.3d 992

133 N.Y.S.3d 901 (Mem)

CONCEPT 9, LLC, plaintiff-respondent,

v.614 REALTY, LLC, et al., defendants-respondents;

Jacob Daskal, nonparty-appellant;

v.Jeffrey Saltiel, etc., et al., nonparty-respondents.

2017–01856

Index No. 6372/09

Supreme Court, Appellate Division, Second Department, New York.

Submitted—September 24, 2020

December 9, 2020

Jacob T. Fogel (Ephrem J. Wertenteil, New York, NY, of counsel), for nonparty—appellant.

Kriss & Feuerstein LLP, New York, N.Y. (Jason S. Leibowitz and Thomas A. Hooker of counsel), for plaintiff-respondent.

REINALDO E. RIVERA, J.P., JOHN M. LEVENTHAL, HECTOR D. LASALLE, VALERIE BRATHWAITE NELSON, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, nonparty Jacob Daskal appeals from an order of the Supreme Court, Kings County (Kenneth P. Sherman, J.), dated December 1, 2016. The order, insofar as appealed from, denied that branch of nonparty Jacob Daskal's motion which was to vacate the foreclosure sale of the subject property.

ORDERED that the order is affirmed insofar as appealed from, with costs.

In this action to foreclose a mortgage on certain real property in Brooklyn, the Supreme Court awarded the plaintiff a judgment of foreclosure and sale on default in the amount of $804,493.20 plus post-judgment interest and, inter alia, directed that the property be sold at public auction. The foreclosure auction took place on November 12, 2015. When the referee asked for an opening bid, the plaintiff's successor in interest (hereinafter the bank) announced that the upset price was $1.8 million, and that the bank's opening bid was $1,000. With no other bids made, the property was sold to the bank.

Before the property was transferred, nonparty Jacob Daskal moved for leave to intervene in the foreclosure action and to vacate the foreclosure sale. Daskal asserted that he was a prospective bidder of the property at the foreclosure auction, but that he and other prospective bidders were illegally prevented from bidding because the plaintiff artificially inflated the upset price of the property—the lowest amount the seller would accept (see Clinton Hill Holding 1, LLC v. Kathy & Tania, Inc., 142 A.D.3d 631, 633, 36 N.Y.S.3d 732 )—to $1.8 million, which exceeded the value of the property by at least $600,000. In the order appealed from, the Supreme Court granted that branch of Daskal's motion which was for leave to intervene in the foreclosure action for the limited purpose of moving to vacate the foreclosure sale, but denied that branch of the motion which was to vacate the foreclosure sale. Daskal appeals.

Within one year after a foreclosure sale, the court is authorized to set aside the sale for failure to comply with statutory requirements as to the notice, time, or manner of such sale, if a substantial right of a party was prejudiced by the defect (see CPLR 2003 ; RPAPL 231[6] ; Guardian Loan Co. v. Early, 47 N.Y.2d 515, 520, 419 N.Y.S.2d 56, 392 N.E.2d 1240 ; Emigrant Mtge. Co., Inc. v. Hartman, 173 A.D.3d 975, 976, 104 N.Y.S.3d 667 ). Additionally, "[a] court may, in the exercise of its equitable powers, set aside a foreclosure sale where there is evidence of fraud, collusion, mistake, or misconduct" ( Nationstar Mtge., LLC v. Brignol, 181 A.D.3d 881, 882, 119 N.Y.S.3d 882 ; Northern Blvd Corona, LLC v. Northern Blvd Prop., LLC, 157 A.D.3d 895, 896, 69 N.Y.S.3d 866 ). "In order...