Golden Bridge LLC v. Queensway Builders LLC

• Docket Number: 22-CV-3551 (AMD) (TAM)
• Decision Date: 10 August 2023
• Parties: GOLDEN BRIDGE LLC, doing business as GOLDEN BRIDGE FUNDING LLC, Plaintiff, v. QUEENSWAY BUILDERS LLC; LAST CHANCE FUNDING INC.; NEW ERA LUMBER, INC., doing business as NEW ERA LUMBER INDUSTRIES; NEW YORK CITY DEPARTMENT OF FINANCE; ROC FUNDING GROUP; HFH CAPITAL FUNDING LLC; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; ATTIQUE REHMAN; JOHN ZURITA; and 2S 2J CORP., Defendants.
• Court: U.S. District Court — Eastern District of New York

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GOLDEN BRIDGE LLC, doing business as GOLDEN BRIDGE FUNDING LLC, Plaintiff, v. QUEENSWAY BUILDERS LLC; LAST CHANCE FUNDING INC.; NEW ERA LUMBER, INC., doing business as NEW ERA LUMBER INDUSTRIES; NEW YORK CITY DEPARTMENT OF FINANCE; ROC FUNDING GROUP; HFH CAPITAL FUNDING LLC; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; ATTIQUE REHMAN; JOHN ZURITA; and 2S 2J CORP., Defendants.

No. 22-CV-3551 (AMD) (TAM)

United States District Court, E.D. New York

August 10, 2023

REPORT AND RECOMMENDATION

TARYN A. MERKL, United States Magistrate Judge:

Golden Bridge LLC, doing business as Golden Bridge Funding LLC (“Plaintiff”), initiated this action on June 16 2022, against Defendants Queensway Builders LLC (“Queensway”); Last Chance Funding Inc.; New Era Lumber, Inc., doing business as New Era Lumber Industries New York City Department of Finance; ROC Funding Group; HFH Capital Funding LLC; New York City Environmental Control Board; Attique Rehman; John Zurita; and 2S 2J Corp. (Complaint (“Compl.”), ECF No. 1.) Plaintiff seeks to foreclose on mortgages encumbering two properties 33 Hale Avenue, Brooklyn, New York 11208 (also known as Block 3916, Lot 3 on the Kings County Tax Map) (referred to herein as “33 Hale”), and 118-49 Farmers Blvd., Saint Albans, New York 11412 (also known as Block 12603, Lot 54 on the Queens County Tax Map) (referred to herein as “118-49 Farmers”), pursuant to the New York Real Property Actions and Proceedings Law (“RPAPL”) § 1301 et seq. (Id. ¶ 1.)^[1] Specifically, Plaintiff seeks the foreclosure and sale of the two properties to satisfy Plaintiff's damages, which it alleges consist of $1,775,000 in principal balance owed, plus accrued interest. (Mem. of Law in Supp. of Pl.'s Mot. for Default J. of Foreclosure and Sale (“Pl.'s Mem.”), ECF No. 14-2, at 7; Aff. of Amounts Due, ECF No. 14-6, ¶¶ 6-7.)

Currently pending before this Court is Plaintiff's motion for default judgment, which the Honorable Ann M. Donnelly referred to the undersigned magistrate judge for a report and recommendation. (See Mot. for Default J., ECF No. 14; Dec. 14, 2022 ECF Order.) For the reasons set forth below, this Court respectfully recommends that Plaintiff's motion for default judgment be granted.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

I. Factual Background^[2]

A. Loans Secured by Notes and Mortgages

This case arises out of various loans, secured by notes and mortgages taken out by Defendant Queensway between January 14, 2020, and June 4, 2020, related to real properties in New York. On January 14, 2020, Queensway executed a note (“Note 1”), secured by a mortgage (“Mortgage 1”), to repay Bayport Funding LLC (“Bayport”) $415,000 plus interest. (Compl., ECF No. 1, ¶ 33.) Mortgage 1 was recorded in Kings County, with City Register File Number (“CRFN”) 2020000041509. (Id.; Ex. D, 415K Mortgage, ECF No. 1-15.) Note 1 and Mortgage 1 were transferred and assigned to Plaintiff on May 12, 2020, and recorded on June 3, 2020. (Compl., ECF No. 1, ¶ 34; Ex. E, Assignments of Mortgage (“AOM”) 415K, ECF No. 1-16.) Note 1 and Mortgage 1 relate to the 33 Hale property. (Ex. D, 415K Mortgage, ECF No. 1-15.)

Also on January 14, 2020, Queensway executed another note (“Note 2”) to Bayport for $235,000 plus interest, which was secured by another mortgage (“Mortgage 2”). (Compl., ECF No. 1, ¶ 35.) Mortgage 2 was dated January 14, 2020, and was recorded on January 31, 2020, in Kings County, with CRFN 2020000041510. (Id.; Ex. F, 235K Mortgage, ECF No. 1-17.) Mortgage 2 was also secured by the 33 Hale property. (Compl., ECF No. 1, ¶ 35.) Note 2 and Mortgage 2 were transferred and assigned to Plaintiff on May 12, 2020, and recorded on June 3, 2020, under CRFN 2020000162366. (Id. ¶ 36; Ex. G, AOM 235K, ECF No. 1-18.)

On January 30, 2020, Queensway executed a third note (“Note 3”) to repay Bayport $525,000 plus interest. (Compl., ECF No. 1, ¶ 37.) Note 3 was secured by a mortgage (“Mortgage 3”) dated January 30, 2020, and recorded on March 4, 2020, in Queens County, with CRFN 2020000083144. (Id.; Ex. H, 525K Mortgage, ECF No. 1-19.) Mortgage 3 was secured by a property located at 144-34 256th Street, Rosedale, New York (also known as Block 13586, Lot 50 on the Queens County Tax Map) (referred to herein as “144-34 256th”). (Compl., ECF No. 1, ¶ 37; Ex. H, 525K Mortgage, ECF No. 119.) Note 3 and Mortgage 3 were transferred and assigned to Plaintiff on May 12, 2020, and recorded on June 3, 2020, in Queens County, with CRFN 2020000162360. (Id. ¶ 38; Ex. I, AOM 525K, ECF No. 1-20.)

Also on January 30, 2020, Queensway executed a fourth note (“Note 4”) to repay Bayport $100,000 plus interest. (Compl., ECF No. 1, ¶ 39.) Note 4 was secured by a mortgage (“Mortgage 4”) dated January 30, 2020, and was recorded on March 4, 2020, in Queens County, under CRFN 2020000083145. (Id.; Ex. J, 100K Mortgage, ECF No. 1-21.)^[3]Note 4 and Mortgage 4 were transferred and assigned to Plaintiff on May 12, 2020, and recorded on June 3, 2020, in Queens County, with CRFN 2020000162359. (Compl., ECF No. 1, ¶ 40; Ex. K, AOM 100K, ECF No. 1-22.)^[4] Mortgage 4 was secured by the 144-34 256th property. (Ex. J, 100K Mortgage, ECF No. 1-21; Ex. K, AOM 100K, ECF No. 1-22.)

On January 9, 2020, Queensway executed a fifth note (“Note 5”) to repay Bayport $644,000 plus interest. (Compl., ECF No. 1, ¶ 41.) Note 5 was secured by a mortgage (“Mortgage 5”) dated January 9, 2020, and recorded on February 7, 2020, in Queens County, with CRFN 2020000050569. (Id. ¶ 41; Ex. L, 644K Mortgage, ECF No. 1-23.) Mortgage 5 was secured by the 118-49 Farmers property. (Compl., ECF No. 1, ¶ 41; Ex. L, 644K Mortgage, ECF No. 1-23.) Note 5 and Mortgage 5 were transferred and assigned to Plaintiff on May 12, 2020, and recorded on June 3, 2020, in Queens County, with CRFN 20200000162362. (Id. ¶ 42; Ex. M, AOM 644K, ECF No. 1-24.)^[5]

On May 15, 2020, Queensway executed a Note (“Note 6”) to Plaintiff, whereby Queensway agreed to repay Plaintiff $166,000 plus interest. (Compl., ECF No. 1, ¶ 43.) Note 6 was secured by a mortgage (“Mortgage 6”) in the amount of $166,000, executed on May 15, 2020, recorded on June 3, 2020, in Kings and Queens Counties, with CRFN 2020000162367. (Id. ¶ 43; Ex. N, 166K Mortgage, ECF No. 1-25.) Mortgage 6 was secured by three properties: (1) 118-49 Farmers; (2) 144-34 256th; and (3) 33 Hale. (Compl., ECF No. 1, ¶ 44; Ex. N, 166K Mortgage, ECF No. 1-25.)

B. Other Financial Agreements Between Golden Bridge and Queensway

In addition to Note 6 and Mortgage 6, on May 15, 2020, Queensway executed an amended, restated and consolidated secured promissory note (“Consolidated Note”) in the amount of $1,840,000 plus interest, payable to Plaintiff. (Compl., ECF No. 1, ¶ 45; Ex. O, Consolidated Note, ECF No. 1-26.) As security for the Consolidated Note, Queensway executed a “Consolidation, Extension and Modification Agreement” (“CEMA”), which consolidated Mortgages 1 through 6 to form a single lien, totaling $1,840,000. (Compl., ECF No. 1, ¶ 46.) The CEMA was recorded in Kings and Queens Counties, with CRFN 2020000162368, and was recorded against all three properties (118-49 Farmers, 144-34 256th, and 33 Hale). (Id.; Ex. P, CEMA 1840, ECF No. 1-27.)^[6]Also on May 15, 2020, Queensway executed an “Assignment of Leases and Rents” (“ALR 1”) in favor of Plaintiff, which was recorded on June 3, 2020, against all three properties (118-49 Farmers, 144-34 256th, and 33 Hale), in Kings and Queens Counties, with CRFN 2020000162374. (Compl., ECF No. 1, ¶ 47; Ex. Q, ALR 1.84MM, ECF No. 128.)

On June 4, 2020, Queensway executed a “Building Loan Note” (“BLN”) in the amount of $625,000 in favor of Plaintiff. (Compl., ECF No. 1, ¶ 48; Ex. R, BLN - 625K Note, ECF No. 1-29.) As security for the BLN, Queensway also executed a “Building Loan Mortgage” (“BLM”) for $625,000, which was recorded in Kings and Queens Counties on June 23, 2020, with CRFN 2020000179427. (Compl., ECF No. 1, ¶ 49; Ex. S, 625K BLM, ECF No. 1-30.) The BLM is “subject to and subordinate to Plaintiff's CEMA.” (Compl., ECF No. 1, ¶ 49.) Also on June 4, 2020, Queensway executed another “Assignment of Leases and Rents” (“ALR 2”) in favor of Plaintiff, against the three properties (118-49 Farmers, 144-34 256th, and 33 Hale), which was recorded on June 23, 2020, in Kings and Queens Counties, with CRFN 2020000179428. (Id. ¶ 50; Ex. T, ALR 2, ECF No. 1-31.)

On March 2, 2022, releases were recorded for the property at 144-34 256th, and recorded in Queens County, under CRFNs 2022000093553, 2022000093554, and 2022000093555. (Compl., ECF No. 1, ¶ 51; Ex. U, Releases, ECF No. 1-32.)^[7] Plaintiff made clear in the complaint that since “releases were filed, the property known as 144-34 256th Street, Rosedale, New York was released and is not subject to this foreclosure action.” (Compl., ECF No. 1, ¶ 51 n.1.) On March 2, 2022, a UCC termination was also filed, with CRFN 2022000093559. (Id. ¶ 51; see also N.Y.C. Dep't of Finance, Office of the City Register, Automated City Register Info. Sys. (“ACRIS”), Block 13586 Lot 50 in Queens, UCC3 Termination filed on Mar. 3, 2022.)^[8]

II. Parties

Plaintiff Golden Bridge is a limited liability company organized under the laws of the State of Delaware, and its members are citizens of Israel. (Compl., ECF No. 1, ¶¶ 2-3.) Plaintiff alleges Defendant Queensway is a necessary party because Queensway:

(i) was present at the time of the execution and did execute an Amended, Restated, and Consolidated Secured Promissory Note (“Consolidated Note”) (as such terms are defined below); (ii) executed, acknowledged and delivered a Consolidation, Extension and Modification Agreement and Amended, Restated and Consolidated Mortgage (“CEMA”), Assignment of Leases and Rents (“ALR 1”), Spreader and Security Agreement;

(iii)

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