Sig Ore 2023 Venture LLC v. Elizabeth Blue N.Y.C., LLC

• Docket Number: Index No. 850255/2024,Motion Seq. No. 003
• Decision Date: 03 October 2025
• Citation: Sig Ore 2023 Venture LLC v. Elizabeth Blue N.Y.C., LLC, 2025 NY Slip Op 33994(U), Index No. 850255/2024, Motion Seq. No. 003 (N.Y. Sup. Ct. Oct 03, 2025)
• Parties: SIG ORE 2023 VENTURE LLC, Plaintiff, v. ELIZABETH BLUE NYC, LLC, AMARJIT BHALLA, BOARD OF MANAGERS OF 131 GREENE STREET CONDOMINIUM, JOHN DOE NO. I THROUGH JOHN DOE NO. XXX, INCLUSIVE, THE LAST THIRTY NAMES BEING FICTITIOUS AND UNKNOWN TO PLAINTIFF, THE PERSONS OR PARTIES INTENDED BEING THE TENANTS, OCCUPANTS, PERSONS OR CORPORATIONS, IF ANY, HAVING OR CLAIMING AN INTEREST IN OR LIEN, Defendant.
• Court: New York Supreme Court

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2025 NY Slip Op 33994(U)

SIG ORE 2023 VENTURE LLC, Plaintiff, v. ELIZABETH BLUE NYC, LLC, AMARJIT BHALLA, BOARD OF MANAGERS OF 131 GREENE STREET CONDOMINIUM, JOHN DOE NO. I THROUGH JOHN DOE NO. XXX, INCLUSIVE, THE LAST THIRTY NAMES BEING FICTITIOUS AND UNKNOWN TO PLAINTIFF, THE PERSONS OR PARTIES INTENDED BEING THE TENANTS, OCCUPANTS, PERSONS OR CORPORATIONS, IF ANY, HAVING OR CLAIMING AN INTEREST IN OR LIEN, Defendant.

Index No. 850255/2024, Motion Seq. No. 003

Supreme Court, New York County

October 3, 2025

Unpublished Opinion

DECISION+ ORDER ON MOTION

Francis A. Kahn III Judge n The following e-filed documents, listed by NYSCEF document number (Motion 003) 76, 77, 78, 79, 80, 81, 82, 83, 84, 85 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100 101, 102, 103, 104, 105, 106, 107, 108, 109 were read on this motion to/for _JUDGMENT - DEFAULT. Upon the foregoing papers, the motion is determined as follows:

This is an action to foreclose on a mortgage, extension modification and security agreement encumbering two parcels of real property located at 131 Greene Street, Units 1 and 2, New York, New York. The mortgage secures a loan in the original principal amount of $21,500,000.00 given by Defendant Elizabeth Blue NYC LLC ("Blue") to non-party Signature Bank ("Signature") and memorialized by a restated note the same date as the mortgage. The loan documents are dated December 13, 2018, and were executed by Defendant Amarjit S. Bhalla ("Bhalla") as President of Blue. Concomitantly with these documents, Defendant Bhalla executed a guaranty of recourse obligations. One of the purposes of this transaction was, as stated in the precatory language in the mortgage, to "coordinate and modify the liens of the Existing Mortgages and to modify and extend the terms thereof so that hereafter they shall constitute in law one mortgage which shall be a single first lien". The two prior mortgages were dated December 12, 2011, and October 24, 2014, and secured two loans of $4,795,000.00 and $18,223,760.41, respectively.

Plaintiff commenced this action and pled in its amended complaint, inter alia, that Defendants defaulted in repayment of the loan. Defendants Blue and Bhalla answered and pled ten affirmative defenses, including lack of standing. Now, Plaintiff moves for inter alia summary judgment against Blue and Bhalla, for a default judgment against the non-appearing parties, striking the appearing Defendants' affirmative defenses, appointing a referee to compute and to amend the caption. Defendants oppose the motion.

In moving for summary judgment, Plaintiff was required to establish prima facie entitlement to judgment as a matter of law though proof of the mortgage, the note, and evidence of Defendants' default in repayment (see U.S. Bank, N.A. v James, 180 A.D.3d 594 [ 1^st Dept 2020]; Bank of NY v Knowles, 151 A.D.3d 596 [1^st Dept 2017]; Fortress Credit Corp, v Hudson Yards, LLC, 78 A.D.3d 577 [1^st Dept 2010]). Proof supporting a prima facie case on a motion for summary judgment must be in admissible form (see CPLR §3212[b]; Tri-State Loan Acquisitions III, LLC v Litkowski, 172 A.D.3d 780 [1^st Dept 2019]). Also, based on the affirmative defenses pled, Plaintiff was required to demonstrate its standing (see eg Wells Fargo Bank, N.A. v Tricario, 180 A.D.3d 848 [2^nd Dept 2020]). Proof supporting a prima facie case on a motion for summary judgment must be in admissible form (see CPLR §3212[b]; Tri-State Loan Acquisitions III, LLC v Litkowski, 172 A.D.3d 780 [1^st Dept 2019]). A plaintiff may rely on evidence from persons with personal knowledge of the facts, documents in admissible form and/or persons with knowledge derived from produced admissible records (see eg U.S. Bank N.A. v Moulton, 179 A.D.3d 734, 738 [2d Dept 2020]). No specific business records must be proffered, provided the admissibility requirements of CPLR 4518[a] are fulfilled and the records evince the facts for which they are relied upon (see eg Citigroup v Kopelowitz, 147 A.D.3d 1014, 1015 [2d Dept 2017]).

Plaintiffs motion was supported with an affirmation from Neil Minott, ("Minott"), Asset Manager for Rialto Capital Advisors, LLC ("Rialto"), the servicer for Plaintiff. Minott avers that his submission was based upon a review of the records of Plaintiff and Rialto, as well as knowledge of its record keeping practices. Minott's affidavit laid a proper foundation for the admission of the records of Plaintiff and Rialto into evidence under CPLR §4518 by sufficiently showing that the records relied upon "reflect[ed] a routine, regularly conducted business activity, and that it be needed and relied on in the performance of functions of the business", "that the record [was] made pursuant to established procedures for the routine, habitual, systematic making of such a record" and "that the record [was] made at or about the time of the event being recorded" (Bank of N.Y.Mellon v Gordon, 171 A.D.3d 197, 204 [2d Dept 2019]; see also Bank of Am v Brannon, 156 A.D.3d 1 [1st Dept 2017]). The records of prior servicers, like Signature, were also admissible since Minott established that those records were received from the makers and incorporated into the records Rialto kept and that it routinely relied upon such documents in its business (see eg U.S. Bank N.A. v Kropp-Somoza, 191 A.D.3d 918 [2d Dept 2021]). Further, the records referenced by Minott were annexed to the moving papers (cf. Deutsche Bank Natl. Trust Co. v Kirschenbaum, 187 A.D.3d 569 [1^st Dept 2020]). Rialto's authority to act on Plaintiffs behalf was established with submission of a power of attorney dated November 5, 2024 (see U.S. Bank N.A. v Tesoriero, 204 A.D.3d 1066 [2d Dept 2022]; Deutsche Bank Natl. Trust Co. v Silverman, 178 A.D.3d 898 [2d Dept 2019]; US Bank N.A. v Louis, 148 A.D.3d 758 [2d Dept 2017]).

Proof of the loan documents, including the note and mortgage, was established in the first instance through the affirmation of Minott and the annexed documents (cf. 938 St. Nicholas Ave. Lender LLC v 936-938 Cliffcrest Hous. Dev. Fund Corp., 218 A.D.3d 417 [1^st Dept 2023]). A defendant's default, "is established by (1) an admission made in response to a notice to admit, (2) an affidavit from a person having personal knowledge of the facts, or (3) other evidence in admissible form" (Deutsche Bank Natl. Trust Co. v McGann, 183 A.D.3d 700, 702 [2d Dept 2020]). Minott's affidavit and the loan history demonstrated the mortgagor's default in repayment under the note (see eg ING Real Estate Fin. (USA) LLC v Park Ave. Hotel Acquisition, LLC, 89 A.D.3d 506 [1^st Dept 2011]; see also Bank of NY v Knowles, supra; Fortress Credit Corp, v Hudson Yards, LLC, supra).

As to standing in a foreclosure action, it is established in one of three ways: [1] direct privity between mortgagor and mortgagee, [2] physical possession of the note prior to commencement of the action that contains an indorsement in blank or bears a special indorsement payable to the order of the plaintiff either on its face or by allonge, and [3] assignment of the note to Plaintiff prior to commencement of the action (see eg Wells Fargo Bank, N.A. v Tricario, 180 A.D.3d 848 [2d Dept 2020]; Wells Fargo Bank, NA v Ostiguy, 127 A.D.3d 1375 [3d Dept 2015]). Standing is evaluated when an action is commenced, not thereafter (see eg IS REO Opportunity 1, LLC v Harlem Premier Residence, LLC, 234 A.D.3d 401 [1^st Dept 2025]) and may not be cured retroactively (see U.S. Bank N.A. v Dellarmo, 94 A.D.3d 746 [2d Dept 2012]).

It is undisputed that Plaintiff is not the originator of any of the loans or the named obligee on the notes. Standing via possession of the note, referred to as holder status "is established where the plaintiff possesses a note that, on its face or by allonge, contains an indorsement in blank or bears a special indorsement payable to the order of the plaintiff' (Wells Fargo Bank, NA v Ostiguy, 127 A.D.3d 1375, 1376 [2d Dept 2015] [citations omitted]). The indorsement must be made either on the face of the note or on an allonge "so firmly affixed thereto as to become a part thereof' (UCC §3-202[2]). "The attachment of a properly endorsed note to the complaint may be sufficient to establish, prima facie, that the plaintiff is the holder of the note at the time of commencement" (Deutsche Bank Natl. Trust Co. v Webster, 142 A.D.3d 636, 638 [2d Dept 2016]; cf. JPMorgan Chase Bank, N.A. v Grennan, 175 A.D.3d 1513 [2d Dept 2019]). However, "mere physical possession of a note at the commencement of a foreclosure action is insufficient to confer standing or to make a plaintiff the lawful holder of a negotiable instrument for the purposes of enforcing the note" (U.S. Bank N.A. v Moulton, 179 A.D.3d 734, 737 [2d Dept 2020]).

Here the two indorsements of the note given to Signature are contained on an allonges on separate pages. The copy of the note attached to the complaint did not reveal any indicia of firm annexation of the allonges upon visual inspection (cf. U.S. Bank v Hunte, 215 A.D.3d 887 [2d Dept 2023]). Resultantly, Plaintiff was required, but failed, to establish that each allonge was "firmly affixed" to the note (see IS REO Opportunity 1, LLC v Harlem Premier Residence, LLC, 234 A.D.3d 401, 403 [1^st Dept 2025]; 938 St. Nicholas Ave. Lender LLC v 936-938 Cliffcrest Hous. Dev. FundCorp., 218 A.D.3d417 [1^st Dept 2023]). Not every attachment can satisfy UCC §3-202[2] and Minott offered no description of the nature of the attachment (see IS REO Opportunity 1, LLC v Harlem Premier Residence, LLC, supra at 402; HSBC Bank, USA, N.A. v Roumiantseva, 130 A.D.3d 983 [2d Dept 2015]; cf U.S. Bank N.A. v Mave Hotel Invs. LLC, 231 A.D.3d 607 [1^st Dept 2024]), nor did he indicate ''when [he, if ever,] reviewed the copy of the note and allonge" (Wells Fargo Bank,...