Flushing Bank v. Philomen Realty Corp.

Unpublished Opinion

DECISION AND ORDER

HON. FIDEL E. GOMEZ JUSTICE.

The following papers numbered 1 to 2, Read on this motion noticed on 1/10/22, and duly submitted as no. 1 on the Motion Calendar of 12/08/22.

PAPERS NUMBERED
Notice of Motion - Order to Show Cause - Exhibits and Affidavits Annexed	1
Answering Affidavit and Exhibits
Replying Affidavit and Exhibits
Notice of Cross-Motion - Affidavits and Exhibits
Pleadings - Exhibit
Stipulation(s) - Referee's Report - Minutes
Filed Papers-Order and Order Appointing a Receiver and Granting Related Relief
Memorandum of Law	2

Plaintiff's motion is decided in accordance with the Decision and Order annexed hereto.

In the instant foreclosure action, non-party LFC Acquisition 4, LLC (LFC) seeks an order granting it summary judgment^[1] on its complaint pursuant to CPLR § 3212, default judgment against non-answering defendants pursuant to CPLR § 3215, the appointment of a referee pursuant

to RPAPL § 1321, amendment of the caption, and striking the affirmative defenses^[2] in the verified answer submitted by PHILOMEN REALTY CORP. (Philomen) and URY A. LEID (Leid). For the reasons that follow hereinafter, LFC's motion is granted, on default and without opposition.

SUMMARY JUDGMENT

LFC asserts that it should be granted summary judgment on its cause of action for foreclosure and sale of the mortgaged property. This Court agrees. Significantly, LFC establishes that it owns and holds the note and mortgage between the parties, that Philomen and Leid defaulted under the terms thereunder, and that foreclosure is remedy under the agreements.

Pursuant to CPLR § 3212, "any party may move for summary judgment in any action, after issue has been joined." The proponent seeking summary judgment must establish prima facie entitlement to such relief by affirmatively demonstrating, with evidence, the merits of the claim or defense, and not merely by pointing to gaps in plaintiffs proof (Mondello v. DiStefano, 16 A.D.3d 637, 638 [2d Dept 2005]; Peskin v. New York City Transit Authority, 304 A.D.2d 634, 634 [2d Dept 2003]). There is no requirement that the proof be submitted by affidavit, but rather that all evidence proffered be in admissible form (Muniz v. Bacchus, 282 A.D.2d 387, 388 [1st Dept 2001], revd on other grounds Ortiz v. City cf New York, 67 A.D.3d 21, 25 [1st Dept 2009]).

Upon a moving party's demonstration of its entitlement to summary judgment, the opposing party must establish, with admissible evidence, the existence of a triable issue of material fact (Washington Mid. Bank v. Valencia, 92 A.D.3d 774, 774 [2d Dept 2012]; Zuckerman v. City cf New York, 49 N.Y.2d 557, 562 [1980] ["We have repeatedly held that one opposing a motion for

summary judgment must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which he rests his claim or must demonstrate acceptable excuse for his failure to meet the requirement of tender in admissible form; mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient."]). General denials are insufficient to raise an issue of fact (Marine Midland Bank, N.A. v. Micheli Contracting Corp., 95 A.D.2d 946, 947 [3d Dept 1983]; Pathmark Graphics Inc. v. J. M. Fields, Inc., 53 A.D.2d 531, 531 [1st Dept 1976]). The defendant's assertions shall be supported by evidentiary proof or based on personal knowledge and any affirmative defenses asserted, must not be vague or conclusory (One W. Bank, FSB v. Rosenberg, 189 A.D.3d 1600, 1602 [2d Dept 2020] ["Specifically, the defendant's sixth affirmative defense generally and conclusorily alleged that the 'plaintiff has failed to comply with all conditions precedent to commencement of this action.' This Court has held such language to be insufficient to raise the issue of the plaintiffs compliance with either statutory or contractual notice requirements."]; U.S. Bank Tr. Nat. Ass'n Tr. v. Butti, 16 A.D.3d 408, 408 [2d Dept 2005]; Marton Assocs. v. Vitale, 172 A.D.2d 501, 502 [2d Dept 1991] ["The vague assertions and unsupported statements made by Alaska Associates do not raise issues of fact relative to the failure to make the payments as required under the mortgage and note."]; Iandoli v. Lange, 35 A.D.2d 793, 794 [1st Dept 1970]).

In a foreclosure action, a plaintiff moving for summary judgment establishes its prima facie case by producing the mortgage, unpaid note, and evidence of default (Deutsche Bank Nat. Tr. Co. v. Brewton, 142 A.D.3d 683, 684 [2d Dept 2016]; Washington Mut. Bank v. Valencia, 92 A.D.3d 774, 774 [2d Dept 2012]; Wells Fargo Bank, N.A. v. Webster, 61 A.D.3d 856, 856 [2d Dept 2009] ["Here, the plaintiff bank sustained its initial burden of demonstrating its entitlement to judgment as a

matter of law by submitting proof of the existence of the note, mortgage, and consolidation agreement, and the defendants' default in payment."]).

Here, LFC submits the Amended, Consolidated and Restated Note (note), dated November 30, 2018, wherein Philomen agreed to repay plaintiff a loan totaling $550,000. LFC also submits the Mortgage Consolidation, Extension, and Modification Agreement (mortgage), dated November 30,2018, wherein Philomen pledged premises located at 958 Anderson Avenue, Bronx, NY, as security for the note. LFC submits the General Guaranty (guaranty), dated November 30, 2018, executed by defendant Leid in favor of plaintiff, wherein Leid agreed to personally guarantee Philomen's obligations under the note. Per the note, Philomen was required to repay the loan in 120 monthly installments each totaling $3,336.55. Paragraph 8 of the note states that the entire principal under the note would become due in the event of a default as defined by the mortgage. Section 2.1.1(a) of the mortgage defines a default as, inter alia, a "default in the payment of any installment of principal or interest as provided in the Note." Section 2.2(iii) of the mortgage, authorizing the initiation of a foreclosure action upon default states that upon default plaintiff could "[i]nstitute proceedings for the complete foreclosure of this Mortgage, in which case the Mortgaged Property may be sold for cash or credit in one or more parcels, and in such order as the Mortgagee shall determine."

LFC also submits an Assignment of Mortgage (ASM), dated September 28, 2021, wherein plaintiff assigns the mortgage in this action to LFC.

LFC also submits an affidavit, dated September 28, 2021, by Joanne Orelli (Orelli), plaintiffs Senior Vice President, wherein she lays a business record^[3] foundation for the note, mortgage, and guaranty appended to the instant motion.

LFC submits an affidavit, dated November 10, 2021 by Ari Schwartz (Schwartz), LFC's Manager and Authorized Signatory, of LFC Acquisitions 4 LLC, dated November 10, 2021. Schwartz states that on September 28, plaintiff assigned the mortgage to LFC and also delivered the note and guaranty, which LFC now owns and holds. In addition to laying a business records foundation for the note, mortgage and ASM, Schwartz states that Philomen defaulted under the terms of the note and mortgage by failing to make a payment on March 1, 2021.

Based on the foregoing, LFC establishes prima facie entitlement to summary judgement on the cause of action seeking foreclosure on the mortgage between plaintiff and Philomen and the sale of the premises. Significantly, the evidence tendered establishes that...