Opinion
19944/10
04-07-2015
Madison Acquisition Group, LLC, Plaintiff, v. 7614 Fourth Real Estate Development LLC, et al., Defendants
Plaintiff Attorney: Jerold C. Feuerstein, Esq. Defense Attorney: Yolande I. Nicholson, Esq. Cornicello, Tendler & Baumel-Cornic James Lotito, Esq. Duane Morris, LLP Ragina L. Darby, Esq.
Plaintiff Attorney:
Jerold C. Feuerstein, Esq.
Defense Attorney:
Yolande I. Nicholson, Esq.
Cornicello, Tendler & Baumel-Cornic
James Lotito, Esq.
Duane Morris, LLP
Ragina L. Darby, Esq.
Yvonne Lewis, J.
Plaintiff Madison Acquisition Group, LLC moves for an order granting renewal and reargument of a prior motion, brought by order to show cause, which resulted in an order of this court dated January 27, 2014. Defendant Mousa Khalil moves, by way of order to show cause, for an order awarding him attorneys fees and costs incurred in responding to plaintiff's motion.
Plaintiff commenced this action to foreclose a mortgage encumbering the property at 7614 4th Avenue in Brooklyn. The mortgage and note, dated March 20, 2008, were given by defendant 7614 Fourth Real Estate Development, LLC (7614 Fourth) to secure a loan from Sterling Real Estate Holding Company, Inc. (Sterling) in the amount of $3,530,000.00. As additional security for repayment of the loan, Khalil and defendant Nizar Y. Khoury, members of 7614 Fourth, signed personal guarantees. Plaintiff commenced this action by filing a complaint on August 11, 2010, wherein it alleged, inter alia, that it was assigned the mortgage and note from Sterling "on or about March 29, 2010" and that 7614 Fourth defaulted under the terms of the mortgage and note by failing to pay the entire indebtedness on the maturity date of December 31, 2009. 7614 Fourth and Khoury filed an answer to plaintiff's complaint on October 4, 2010. Khalil, however, failed to appear in this action or answer within the permissible time.
By order dated October 7, 2011, this court granted plaintiff's motion for summary judgment, struck the affirmative defenses and answer of 7614 Fourth and Khoury and, in lieu of appointing a referee to compute, directed the parties to submit a consent judgment of foreclosure. A consent judgment of foreclosure was entered on February 2, 2012. On September 13, 2012, the day of the scheduled foreclosure sale, Khalil moved, by order to show cause, for an order vacating his default in answering, vacating the order granting summary judgment and the consent judgment of sale and permitting Khalil to serve a late answer. Among Khalil's arguments in support of the order to show cause was that his default is excusable insofar as he reasonably believed his interests were being represented by 7614 Fourth. By order dated November 9, 2012, this court vacated the judgment of foreclosure and sale. This order was subsequently appealed to the Appellate Division, Second Department. By order dated November 20, 2013, the Appellate Division reversed this court's November 9, 2012 order, finding that Khalil's proffered excuse for his default was not reasonable and that, "in light of the language of the guaranty that he executed, Khalil failed to demonstrate a potentially meritorious defense" (Madison Acquisition Group, LLC v 7614 Fourth Real Estate Dev., LLC, 111 AD3d 800, 800 [2d Dept 2013]).
Following the Appellate Division's order, a sale was scheduled for December 19, 2013. On the day of the scheduled sale, Khalil moved, by order to show cause, "in his individual capacity and as one of the two managing members of" 7614 Fourth, for an order, inter alia, staying the sale, vacating the prior order granting summary judgment and the judgment of foreclosure and dismissing plaintiff's complaint. The order to show cause was based in substantial part on Khalil's allegation that plaintiff was not the holder or owner of the mortgage and note at the time the action was commenced and thus did not establish proper standing to bring this action.
By order dated January 27, 2014, this court granted Khalil's motion "to the extent the Order of Reference and Judgment of Foreclosure and Sale in this matter are vacated without prejudice to renew such motions upon submission of proper proof meriting such applications including but not limited to an original copy of the note at issue in this matter."
A motion for leave to reargue is permissible if the court misapplied or misapprehended the law or facts (CPLR § 2221[d][2]); Deutsche Bank Natl. Trust Co. v Ramirez, 117 AD3d 674 [2d Dept 2014]). A motion for leave to renew is based upon new or additional facts "not offered on the prior motion that would change the prior determination or [the motion must] demonstrate that there has been a change in the law that would change the prior determination" (CPLR § 2221[e][2]). Because no new facts are offered, nor is a change in law alleged, plaintiff's motion is essentially one for reargument, i.e. that the court "overlooked and misapprehended pertinent facts and law." In its motion for reargument, plaintiff argues that the decision of the Appellate Division constitutes the law of the case and precludes Khalil from once again seeking vacatur of the summary judgment order and judgment of foreclosure. Plaintiff also argues that it has nonetheless established standing to bring this action.
Plaintiff has not demonstrated that this court overlooked or misapplied law or facts. Instead, plaintiff is attempting to present the same arguments previously considered and rejected. A motion to reargue "is not designed to provide an unsuccessful party with successive opportunities to reargue issues previously decided, or to present arguments different from those originally presented" (McGill v Goldman, 261 AD2d 593, 594 [2d Dept 1999]). The Appellate Division determined that Khalil was not entitled to vacatur of his default as he failed to demonstrate a reasonable excuse and a meritorious defense. This court is bound by this decision as the law of the case. However, the order to show cause determined in the January 27, 2014 order was not seeking to vacate Khalil's default in answering, but rather to vacate the summary judgment order and judgment of foreclosure under CPLR 5015 (a)(3) based on misrepresentations in plaintiff's complaint with respect to standing. Further, "[i]n addition to the statutory authority, a court has authority under the common law, in its discretion, to grant relief from a judgment or order in the interest of justice, taking into account the equities of the case and the grounds for the requested relief" ( Mochkin v Mochkin, 120 AD3d 776, 778 [2d Dept 2014]). After considering the prior applications of the parties and the facts presented, this court found that questions exist as to whether plaintiff was the holder or owner of the subject note and thus the proper party to bring this foreclosure action. Significantly, while the court vacated the judgment of foreclosure, it did so without prejudice to plaintiff to re-apply for this relief, at which time it will be able to present proof to establish its standing.
As a result, plaintiff's motion for reargument is denied.
While plaintiff's motion was unsuccessful, the court does not find that it was frivolous or otherwise warranted an award of attorneys fees or costs to Khalil. Accordingly, those parts of Khalil's motion seeking such an award are denied.
The foregoing constitutes the decision and order of the court.
E N T E R,
_______________________________
yvonne lewis, JSC