Opinion
Index No. 657142/2020
11-16-2021
NATIONAL CREDIT UNION ADMINISTRATION BOARD, Acting in its Capacity as Liquidating Agent for First Jersey Credit Union, Plaintiff, v. Shahzad AHMED, Defendant.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 were read on this motion to/for JUDGMENT - DEFAULT.
In this action to recover on a promissory note, plaintiff National Credit Union Administration Board (NCUA), acting in its capacity as liquidating agent for First Jersey Credit Union (First Jersey), moves, pursuant to CPLR 3215, for leave to enter a default judgment against defendant Shahzad Ahmed. Defendant has not submitted any opposition.
Background
On or about May 13, 2013, defendant executed and delivered a promissory note (the Note) in favor of lender First Jersey in the principal amount of $800,800.00 with interest payable at 3.40% per annum (NY St Cts Elec Filing [NYSCEF] Doc No. 13, Joshua Cash [Cash] affirmation, exhibit F, ¶¶ 3 and 5). Defendant agreed to pay the interest and principal in consecutive installments due the first day of every month until the maturity date of June 1, 2016, when the unpaid balance of the principal and accrued interest were to be paid in full (NYSCEF Doc No. 8, Kempe C. Hayes [Hayes] aff, exhibit A at 1). Defendant also executed a security agreement dated May 13, 2013 (the Security Agreement) in which he pledged as collateral for the loan all his right, title and interest in "New York City Taxi Medallion No. 7D14, and all property rights, subscription rights, contract rights, and license rights appurtenant thereto, together with all taxicab vehicles, roof lights, taxi meters and all other items of property used in conjunction-with Debtor's operation of taxicab vehicles," and other items (NYSCEF Doc No. 10, Hayes aff, exhibit C at 1-2 [§§ 2(a) and 3]). First Jersey filed a UCC-1 financing statement with the Secretary of State to perfect its security interest in the collateral (NYSCEF Doc No. 13, ¶ 8; NYSCEF Doc No. 11, Hayes aff, exhibit D at 1).
An "Event of Default" for purposes of the Note and the Security Agreement includes the failure to pay any installment of principal or interest when due (NYSCEF Doc No. 8 at 2; NYSCEF Doc No. 10 at 4-5 [§ 6(a)]). If an "Event of Default Occurs," plaintiff:
"shall have the right, in addition to and in connection with any other rights it may have under the Note, this Agreement, the Uniform Commercial Code and otherwise at law or in equity (b) to enter upon Debtor's premises peaceably by Secured Party's own means or with legal process and take possession of the Collateral, and Debtor agrees not to resist or interfere and (d) to sell, assign and deliver the Collateral at public or private sale, for cash, on credit or future delivery ..."
(NYSCEF Doc No. 10 at 5-6 [§ 7]). The Note also provides that defendant shall be liable:
"for all costs of enforcement and collection of this Note incurred by Lender or any other holder of this Note, including but not limited to reasonable attorneys’ fees, disbursements and court costs. In addition, in the event of a default hereunder, Borrower shall pay all reasonable attorneys’ fees and disbursements incurred by Lender in obtaining advice as to its rights and remedies in connection with such default"
(NYSCEF Doc No. 8 at 3). On December 23, 2016, defendant executed a loan extension agreement (the Extension Agreement) to extend the maturity date to November 1, 2017 (NYSCEF Doc No. 13, ¶ 6). The unpaid principal balance as of December 12, 2016 was $742,726.88 (NYSCEF Doc No. 9, Hayes aff, exhibit B at 1).
Defendant failed to make the requisite payments when due, including the balance of the principal and accrued interest on November 1, 2017 (NYSCEF Doc No. 13, ¶ 9). On December 7, 2020, counsel for plaintiff sent a "Notice of Default/Notice of Intent to Foreclose on New York City Taxicab Medallion" to defendant by certified mail, return receipt requested (NYSCEF Doc No. 12, Hayes aff, exhibit E at 1). The notice advised defendant that the principal and interest due on the Note as of September 1, 2020 was $705,438.94 and further advised defendant that he could request a final, updated payoff amount (id. at 2). Defendant did not respond.
Plaintiff commenced this action on December 18, 2020 by filing a summons and complaint asserting five causes of action for: (1) breach of contract; (2) an account stated; (3) unjust enrichment; (4) replevin; and (5) attorneys’ fees, costs and disbursements. Plaintiff now moves for a default judgment on the first and fourth causes of action. In the event this court grants the motion, plaintiff submits that it will waive its remaining claims and its request for attorneys’ fees (NYSCEF Doc No. 7, Cash affirmation, ¶ 24).
Discussion
It is well settled that an application for a default judgment must be supported with "proof of service of the summons and the complaint[,] proof of the facts constituting the claim, [and] the default" ( CPLR 3215 [f] ). " ‘[B]y defaulting, a defendant admits all traversable allegations contained in the complaint, and thus concedes liability, although not damages’ " ( HF Mgt. Servs. LLC v Dependable Care, LLC , ––– AD3d ––––, 2021 NY Slip Op 05459, *1 [1st Dept 2021] [citation omitted]; Rokina Opt. Co. v Camera King , 63 NY2d 728, 730 [1984] ). Plaintiff has met its burden.
First, plaintiff has demonstrated that defendant was served with the summons and complaint and that his time to answer or otherwise appear in the action has expired. According to the affidavit of service sworn to December 30, 2020, plaintiff served defendant pursuant to CPLR 308(2) by delivering the summons and complaint to his nephew, "Israr," a person of suitable age and discretion on December 29, 2020 at defendant's usual place of abode located at 8792 21st Avenue, Brooklyn, New York 11214 (NYSCEF Doc No. 14, Cash affirmation, exhibit G at 1). A copy of the pleadings was also mailed to defendant at that address (id. ). A search of the Department of Defense Manpower Data Center run on September 9, 2021 for defendant's name and social security number reveals that defendant is not on active duty in the military (NYSCEF Doc No. 16, Cash affirmation, exhibit I; NYSCEF Doc No. 7, Cash affirmation, ¶ 2). Plaintiff has also satisfied the additional notice requirement set forth in CPLR 3215 (g) (3) (i) (NYSCEF Doc No. 15, Cash affirmation, exhibit H).
A cause of action for action for breach of contract requires the plaintiff to plead the existence of a contract, the plaintiff's performance, the defendant's breach and damages (see Alloy Advisory, LLC v 503 W. 33rd St. Assoc., Inc. , 195 AD3d 436, 436 [1st Dept 2021] ). Hayes’ affidavit and the supporting exhibits are sufficient to establish the merits of this claim (see Quadrant Mgt. Inc. v Hecker , 102 AD3d 410, 410 [1st Dept 2013] ). Hayes, an agent at NCUA, avers that NCUA is the liquidation agent for First Jersey, which had been placed into liquidation on February 28, 2018 by the New Jersey Department of Banking and Insurance (NYSCEF Doc No. 6, Hays aff, at 1 n). Hayes avers that, based on his review of First Jersey's records, defendant was required to remit 36 successive monthly installments of $3,551.40 through the maturity date on the Note, when a final payment was due (id. , ¶ 6). Hayes avers that defendant failed to pay the outstanding balance due on the Note on November 1, 2017, the date the Note matured on its own terms (id. , ¶ 12). He avers that as of September 1, 2021, there remains an unpaid principal balance of $693,490.06 and interest of $34,737.40, exclusive of late charges, attorneys’ fees and costs (id. , ¶ 14). In addition, defendant has failed to turn over the collateral to First Jersey (id. , ¶ 15).
As to the cause of action for replevin, the "plaintiff must demonstrate that he or she owns specified property, or is lawfully entitled to possess it, and that the defendant has unlawfully withheld the property from the plaintiff" ( Stewart Family LLC v Stewart , 184 AD3d 487, 490 [1st Dept 2020] ). Stated another way, the plaintiff "must establish that the defendant is in possession of certain property of which the plaintiff claims to have a superior right" ( Nissan Motor Acceptance Corp. v Scialpi , 94 AD3d 1067, 1068 [2d Dept 2012] ). Uniform Commercial Code (UCC) § 9-609 provides that, after a default, a secured party may take possession of the collateral with or without judicial process. Here, the Security Agreement provides that in the "Event of Default," defendant is required to assemble the collateral and that plaintiff may take possession of it. Plaintiff perfected its security interest in the collateral by filing the UCC-1 statement (see UCC § 9-310 ), and Hayes avers that defendant has not turned over the Collateral despite plaintiff's September 3, 2020 demand (NYSCEF Doc No. 6, ¶ 15). As such, plaintiff has a right to possession and delivery of the collateral identified in the Security Agreement and the UCC-1 statement.
Accordingly, it is
ORDERED that the motion brought by plaintiff National Credit Union Administration Board, acting in its capacity as liquidating agent for First Jersey Credit Union, for a default judgment against defendant Shahzad Ahmed (motion sequence no. 001) is granted, without opposition, to the extent of granting judgment on the first and fourth causes of action; and it is further
ORDERED that the Clerk is directed to enter judgment in favor of plaintiff in the sum of $693,490.06, together with accrued interest of $34,737.40, and with interest at the contractual rate of 3.40% per annum from September 1, 2021 until entry of judgment, and at the statutory rate thereafter, together with costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further
ORDERED that within 20 days of this order, plaintiff National Credit Union Administration Board, acting in its capacity as liquidating agent for First Jersey Credit Union, shall serve a copy of this order upon defendant Shahzad Ahmed, at his last known address by regular and certified mail, return receipt requested; and it is further
ORDERED that within 20 days of service of a copy of this order with written notice of entry, defendant Shahzad Ahmed shall assemble and deliver to plaintiff National Credit Union Administration Board, acting in its capacity as liquidating agent for First Jersey Credit Union, the collateral identified in the Security Agreement dated May 13, 2013, which includes "New York City Taxi Medallion No. 7D14, and all property rights, subscription rights, contract rights, and license rights appurtenant thereto, together with all taxicab vehicles, roof lights, taxi meters and all other items of property used in conjunction-with Debtor's operation of taxicab vehicles," and in the UCC-1 financing statement annexed to the moving papers as exhibit D.