Bank of Am. v. Scher

• Decision Date: 25 May 2022
• Docket Number: 2019-01368,Index No. 519232/17
• Citation: 2022 NY Slip Op 03365
• Parties: Bank of America, N.A., respondent, v. Zelda Scher, et al., defendants, Johar Equity, LLC, et al., appellants.
• Court: New York Supreme Court — Appellate Division

2022 NY Slip Op 03365

Bank of America, N.A., respondent, v. Zelda Scher, et al., defendants, Johar Equity, LLC, et al., appellants.

2019-01368, Index No. 519232/17

Supreme Court of New York, Second Department

May 25, 2022

Perry Balagur, Brooklyn, NY, for appellants.

Fidelity National Law Group, New York, NY (Donald G. Davis of counsel), for respondent.

FRANCESCA E. CONNOLLY, J.P., LINDA CHRISTOPHER, LARA J GENOVESI, DEBORAH A. DOWLING, JJ.

DECISION & ORDER

In an action, inter alia, pursuant to RPAPL 1501(4) to cancel and discharge of record certain mortgages and for related declaratory relief, the defendants Johar Equity, LLC, and Mew Equity, LLC, appeal from an order and judgment (one paper) of the Supreme Court, Kings County (Francois A. Rivera, J.) dated November 30, 2018. The order and judgment, insofar as appealed from, granted those branches of the plaintiff's motion which were for summary judgment on the first and second causes of action insofar as asserted against the defendants Johar Equity, LLC, and Mew Equity, LLC, denied those branches of the cross motion of the defendants Johar Equity, LLC, and Mew Equity, LLC, which were for summary judgment dismissing the first and second causes of action insofar as asserted against them, canceled and discharged of record two mortgage modification, extension, and spreader agreements dated May 10, 2006, in the principal sums of $750, 000 and $1, 600, 000 as against the subject property, directed the Kings County Clerk to cancel and discharge from the record against the subject property the two subject mortgage modification, extension, and spreader agreements, and declared that a mortgage dated May 29, 2007, encumbering the subject property in the initial principal sum of $392, 000 given by the defendant Zelda Scher to the plaintiff is free from and not subject to any mortgages that the defendants Johar Equity, LLC, and Mew Equity, LLC, may hold against the subject property and had priority over any alleged liens of the defendants Johar Equity, LLC, and Mew Equity, LLC, upon the subject property.

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

On May 10, 2006, the defendants Johar Equity, LLC, and Mew Equity, LLC (hereinafter together the Johar defendants), obtained, inter alia, two mortgage modification, extension, and spreader agreements, one in the principal sum of $750, 000 and the other in the principal sum of $1, 600, 000 (hereinafter the spreader mortgages), encumbering multiple properties, including a certain condominium unit located on Skillman Street in Brooklyn (hereinafter the unit). The spreader mortgages were given by the properties' owners at the time, which included the defendant Franskill Development, LLC (hereinafter Franskill). The spreader mortgages provided that Franskill, among others, was required to make a lump-sum balloon payment on the specified maturity date of January 5, 2008.

By deed dated January 31, 2007, Franskill transferred title to the unit to a nonparty, and by deed dated May 29, 2007, that nonparty transferred title to the unit to the defendant Zelda Scher. On May 29, 2007, Scher executed a note in favor of the plaintiff, Bank of America, N.A. (hereinafter BANA), in the sum of $392, 000, which was secured by a mortgage encumbering the unit.

In December 2008, pursuant to arbitration provisions in the spreader mortgages, the Johar defendants, among others, commenced an arbitration proceeding before the Beth Din of Kollel Harabbonim (hereinafter the Beth Din), a rabbinical court, to collect on the notes secured by the spreader mortgages. In August 2012, the Beth Din issued an award against Franskill and others in favor of the Johar defendants, among others. In an order dated January 30, 2014, the Supreme Court, among other things, confirmed the award of the Beth Din as modified. On May 27, 2017, the court entered a judgment in favor of, among others, the Johar defendants against, among others, Franskill.

On December 27, 2013, the Johar defendants commenced an action, inter alia, to foreclose the spreader mortgage in the sum of $750, 000 and a separate action to foreclose the spreader mortgage in the sum of $1, 600, 000. In January 2015, the Johar defendants voluntarily discontinued the foreclosure actions.

In October 2017, BANA commenced this action against the Johar defendants, among others, inter alia, pursuant to RPAPL 1501(4) to cancel and discharge of record the spreader mortgages as against the unit and for related declaratory relief. BANA thereafter moved, among other things, for summary judgment on the first and second causes of action which sought, pursuant to RPAPL 1501(4), to cancel and discharge of record the spreader mortgage in the sum of $750, 000 and the spreader mortgage in the sum of $1, 600, 000, respectively, as against the unit, insofar as asserted against the Johar defendants. BANA contended, inter alia, that the statute of limitations for the Johar defendants to commence foreclosure actions on the spreader mortgages had expired. The Johar defendants opposed the motion and cross-moved, inter alia, for summary judgment dismissing the first and second causes of action insofar as asserted against them. In an order and judgment dated November 30, 2018, the Supreme Court, among other things, granted those branches of BANA's motion which were for summary judgment on the first and second causes of action insofar as asserted against the Johar defendants, denied those branches of the Johar defendants' cross motion which were for summary judgment dismissing the first and second causes of action insofar as asserted against them, canceled and discharged of...