U.S. Bank v. BJ Org. of N.Y.
| Docket Number | Index No. 150232/2021 |
| Decision Date | 24 May 2023 |
| Citation | 2023 NY Slip Op 50556 (U) |
| Parties | U.S. Bank National Association, AS TRUSTEE FOR VELOCITY COMMERCIAL CAPITAL LOAN TRUST 2016-1, Plaintiff, v. BJ Organization of New York, Inc. et al, Defendant. |
| Court | New York Supreme Court |
Unpublished Opinion
Attorney for the Plaintiff Daniel Norris Young, Esq. SCHILLER, KNAPP, LEFKOWITZ & HERTZEL, LLP
Attorney for the Defendant BJ Eric Nelson, Esq. ERIC NELSON ESQ.
Attorney for the Defendant Ishola Steven Bruce Rabitz, Esq. GnS Industries Inc.
The following e-filed documents listed on NYSCEF (Motion #003) numbered 63-80, 84-85 and (Motion #004) numbered 81-83, and 86-88 were read on this motion.
Upon the foregoing documents, and after argument conducted on April 27, 2023, Motion Sequence #003 and Motion Sequence #004 are resolved and therefore, it is hereby, ORDERED, that Defendant's Motion Sequence #004 pursuant to CPLR § 3215 [c] for an order dismissing with prejudice and without leave to replead the Plaintiff's complaint as abandoned is DENIED, with prejudice, and it is further;
ORDERED that Plaintiff's Motion Sequence #003 pursuant to RPAPL § 1321, CPLR R § 3212, CPLR § 1003, and CPLR § 3215 is GRANTED, with prejudice, and it is further;
ORDERED, that the Clerk of the Court shall enter judgment accordingly.
Memorandum DecisionOn or about February 3, 2021, Plaintiff filed a summons, complaint and notice of pendency alleging that Defendants defaulted under a commercial mortgage and commercial note by failing to make payments due. Plaintiff filed Motion Sequence #003 by notice of motion on February 22, 2023 seeking (1) to strike the answer and each affirmative defense asserted by the defendant, Ahmed Nagi H. Mohamed (hereinafter referred to as "Mohamed") on the merits and with prejudice, and directing that the stricken answer be treated as a notice of appearance; (2) summary judgment in favor of the Plaintiff and against Defendant Mohamed for the relief demanded in the complaint; and (3) default judgment in favor of the Plaintiff and against Defendant Mohamed and each non-answering Defendant. Plaintiff further seeks (4) the striking the names of defendants "JOHN DOE #1-#50" and "MARY ROE #1-#50" from the caption; (5) the appointment of a referee to compute the amounts due on the subject mortgage; and (6) other such relief as this Court deems appropriate.
Defendant Mohamed filed Motion Sequence #004 by notice of cross motion on March 16, 2023, seeking (1) to dismiss Plaintiff's complaint as abandoned for failure to take proceedings for entry of judgment within one year after the default pursuant to CPLR § 3215 [c]; and (2) such other, further, and different relief as the Court deems just and proper. Plaintiff filed a combined opposition to Motion Sequence #004 and reply to Motion Sequence #003 on April 20, 2023. Defendant Mohamed filed reply on Motion Sequence #004 on April 24, 2023. Oral argument was heard by the Court on both motions on April 27, 2023.
This is a foreclosure action whereby Plaintiffs seek to divest Defendants of their equitable interest in the premises known as 264 Lander Avenue, Staten Island, New York 10314 due to a default on the accompanying mortgage note. On or about May 12, 2015, Defendant BJ Organization of New York, Inc., executed a commercial mortgage with Velocity Commercial Capital, LLC in the amount of $234,000.00 on what the instrument describes as 264 Lander Avenue, Staten Island, New York 10314. (NY St Cts Filing [NYSCEF] Doc No. 76).
Plaintiff alleged it is the owner and holder of the Semi-Annual Adjustable Term Note Commercial Note, when this foreclosure action was commenced on February 03, 2021 and has been the holder of the note since then (NY St Cts Filing [NYSCEF] Doc No. 74). Plaintiff maintains that it is the owner of the subject Commercial Mortgage and Commercial Note and is the mortgagee of record, as the Assignment of Mortgage expressly assign both the Commercial Note and Mortgage to the Plaintiff. (NY St Cts Filing [NYSCEF] Doc No. 76). Plaintiff contends the transfer of the loan from Velocity Commercial Capital, LLC to U.S. Bank National Association is further memorialized by the Commercial and Assignment of Collateral Agreements and Other Loan Documents expressly assigns the Note to the Plaintiff. (NY St Cts Filing [NYSCEF] Doc No. 66).
On April 01, 2020, BJ Organization of New York, Inc. defaulted under the note and mortgage by failing to make the payments due. (NY St Cts Filing [NYSCEF] Doc No. 74). The default was not cured and on February 3, 2021, Plaintiff commenced this action. Plaintiff maintains that each Defendant was served with a summons and complaint, in the appropriate form and manner. Plaintiff contends that the time for each Defendant to appear, answer or otherwise move with respect to the complaint has expired and has not been extended by stipulation, order of the court or otherwise, and no defendant appeared, answered, or otherwise moved with respect to the complaint, except Mohamed, who served an answer through counsel, and BJ Organization of New York, Inc. and Emmanuel Ishola, which served a Notice of Appearance through counsel.
Pursuant to CPLR § 3215 [c] "The language of the statute is strictly construed, as it is mandatory that the court 'shall' dismiss such claims" (see Bank of NY Mellon v. Toscano, 2023 NY A.D. LEXIS 2357 [2d Dept 2023] quoting Deutsche Bank Natl. Trust Co. v. Allenstein, 201 A.D.3d 783 [2d Dept 2022], quoting CPLR § 3215 [c]; citing Ibrahim v Nablus Sweets Corp., 161 A.D.3d 961 [2d Dept 2018]).
"'Failure to take proceedings for entry of judgment may be excused, however, upon a showing of sufficient cause,' which requires the plaintiff to 'demonstrate that it had a reasonable excuse for the delay in taking proceedings for entry of a default judgment and that it has a potentially meritorious action'" (see Bank of Am., N.A. v Rice, 155 A.D.3d 593 [2d Dept 2017] quoting Aurora Loan Servs., LLC v Hiyo, 130 A.D.3d 763 [2d Dept 2015] citing HSBC Bank USA, N.A. v Grella, 145 A.D.3d 669 [2d Dept 2016]; Pipinias v. J. Sackaris & Sons, Inc., 116 A.D.3d 749 [2d Dept 2014])."Moreover, '[t]he mere fact that the legislative intent underlying CPLR § 3215 [c] was to prevent the plaintiffs from unreasonably delaying the determination of an action, does not foreclose the possibility that a defendant may waive the right to seek a dismissal pursuant to the section by his or her conduct'" (see id quoting Myers v. Slutsky, 139 A.D.2d 709 [2d Dept 1988]).
"[A] defendant may waive the right to seek dismissal pursuant to CPLR § 3215 [c] by serving an answer or taking 'any other steps which may be viewed as a formal or informal appearance'" (see OneWest Bank, FSB v Lara, 192 A.D.3d 695 [2d Dept 2021] quoting Bank of Am., N.A. v Rice, 155 A.D.3d 593 [2d Dept 2017]; quoting Myers v. Slutsky, 139 A.D.2d 709 [2d Dept 1988]). A party waives their right to seek dismissal of the complaint pursuant to CPLR § 3215 [c] by filing a notice of appearance (see Bank of Am., N.A. v. Lichter, 192 A.D.3d 957 [2d Dept 2021] citing CPLR § 320 [a]; U.S. Rof III Legal Tit. Trust 2015-1 v John, 189 A.D.3d 1645 [2d Dept 2020]; Wilmington Sav. Fund Socy., FSB v Chishty, 179 A.D.3d 1147 [2d Dept 2020]; US Bank N.A. v Gustavia Home, LLC, 156 A.D.3d 843 [2d Dept 2017]; Bank of Am., N.A. v Rice, 155 A.D.3d 593 [2d Dept 2017]).
The one-year timeframe was further tolled by the COVID-19 Emergency Protect our Small Businesses Act of 2021 which provide a 60-day stay of commercial foreclosure actions. "Any action to foreclose a mortgage pending on the effective date of this act, including actions filed on or before March 7, 2020, or commenced within thirty days of the effective date of this act shall be stayed for at least sixty days, or to such later date that the chief administrative judge shall determine is necessary to ensure that courts are prepared to conduct proceedings in compliance with this act and to give mortgagors an opportunity to submit the hardship declaration pursuant to this act." (see 2021 NY ALS 73).
The earliest served and thereafter defaulting defendants, New York City, Environmental
Control Board (NY St Cts Filing [NYSCEF] Doc No. 5) and Department of Finance (NY St Cts Filing [NYSCEF] Doc No. 4), were each served on February 16, 2021, with their time to answer expiring, at the earliest, 20 days thereafter on March 8, 2021. The one-year time to move for judgment would have expired on March 8, 2022, but for the 60-day tolling provided by the COVID-19 Emergency Protect our Small Businesses Act of 2021 stay. The 60-day tolling moved the CPLR § 3215 [c] deadline to May 7, 2022, which is one year and 60 days from March 8, 2022. All other defendants' default dates would have been after March 8, 2021 and therefore the deadline to undertake proceedings for the entry of judgment would have been later than May 7, 2022.
Plaintiff's Motion Sequence #001 motion filed May 4, 2022, (NY St Cts Filing [NYSCEF] Doc No. 19) was within the one-year, post default timeframe provided by CPLR § 3215 [c] for all non-appearing defendants in the action. Plaintiff did not abandon the action and the...
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