Opinion
25176/2018E
05-04-2021
NYCTL 1198-2 TRUST, and The Bank of New York, etc., Plaintiffs, v. QUARRY CROTONA HOMES INC., Defendants.
Upon the foregoing papers, the motions listed above are decided in accordance with the annexed decision and order.
The following papers numbered ____ to ___ were read on these motions (Seq. Nos. 3, 4) noticed on _____ and duly submitted as No. on the Motion Calendar of ________
Sequence No. 3/Doc. Nos.
Notice of Motion — Exhibits and Affidavits Annexed 46-56
Cross Motion — Exhibits and Affidavits Annexed 57-65
NOT CONSIDERED CROSS MOTION MARKED RETURNED FOR CORRECTION
Answering Affidavit and Exhibits, Memorandum of Law
Reply Affidavit
Sequence No. 4/Doc. Nos.
Notice of Motion — Exhibits and Affidavits Annexed 63-70
Cross Motion — Exhibits and Affidavits Annexed
Answering Affidavit and Exhibits, Memorandum of Law 72-80
Reply Affidavit
Upon the foregoing papers, the motions listed above are decided as follows.
This action to foreclose on a tax lien was commenced by NYCTL 1198-2 Trust and the bank of New York Mellon as Collateral Agent and Custodian for the NYCTL 1198-2 Trust against Quarry Crotona Homes Inc., New York City Department of Finance, New York State Department of Taxation and Finance, and The New York Guardian Mortgagee Corp.
This action had proceeded uncontested through the preliminary stages of the foreclosure process and reached the judgment stage without any defendants appearing or raising any objections. In 2019, the Court entered a Judgment of Foreclosure and Sale and held a foreclosure sale.
In Motion Sequence No. 3, the plaintiffs move to vacate the tax lien sale herein, and to refund the bid deposit to the purchasers. Plaintiffs state that the subject property was sold pursuant to the judgment herein to Nison Badalov and Isaak Badalov at auction for the winning bid of $75,000.00, and a bid deposit of $8,000.00 was tendered by said purchasers to the Referee. The purchasers failed to close on or before December 4, 2019, pursuant to the Terms of Sale and Memorandum of Sale. Plaintiffs subsequently mailed a Time of Essence Letter to the purchasers, notifying them of heir default, and setting a closing date of January 3, 2020. The purchasers again failed to close.
Plaintiffs further state "that the Property appears to be a community garden, which may be converted into a public park, and are awaiting a review by the City of New York in this regard."
A cross-motion was interposed. The NYSCEF entry reads "returned for correction." The cross-motion is accordingly not considered.
In Motion Sequence No. 4, non-party movants 748 182nd Street LLC and Eliyahu Rosenberg move to intervene, and to denying the motion made by plaintiffs to vacate the judgment and sale. The non-party movants are assignees of the bid, by virtue of an assignment dated January 9, 2020. They argue that a judicial sale of foreclosure may be set aside only where fraud, collusion, mutual mistake, or exploitive overreaching casts suspicion on the fairness of the sale, all of which is absent here. On January 9, 2020, i.e. after their default, the Purchasers appear to have executed an assignment of the bid to the movants.
In opposition, plaintiffs argue that an assignment of the bid to the movants occurred after the default of the successful bidders. Further, the plaintiffs maintain that the Judgment expressly bars assignments of bids to third parties.
The judgment recites that the Referee shall transfer title only to the successful bidder. Moreover, it is clear that the bid here was purportedly assigned after the original purchaser failed to close, and was declared to be in default. Under these circumstances, neither the bidder nor the purported assignee of the bid has an interest in the bid or the premises. ( Bardi v. Estate of Morgan , 61 AD3d 625, 877 N.Y.S.2d 142 [2d Dept. 2009] ; NYCTL 2015-a Trust v. Masin , 2020 N.Y. Misc. LEXIS 2108, *6-7, 2020 WL 2404947, 2020 N.Y. Slip Op. 31401(U), 5 [Sup. Ct., N.Y. Co.] ["When Badalov failed to close by that date, Referee Glassman advised him that the sale was canceled. Since Badalov never complied with the terms of sale, he never had an interest in the premises to assign to Plotch, and Plotch thus lacks standing to vacate the 11/29/19 order."])
Because neither the successful bidder or the assignee has any interest in the premises, and are in default under the contract, they have no grounds to oppose the vacating of the sale. Moreover, plaintiff asserts that there may be a defect in the lien. Consequently, as the original purchaser is in default, and the alleged assignee acquired the bid after the original purchaser's default, this Court may exercise its general equitable power to set aside the sale in view of possible defects in the sale. 7 Warren's Weed New York Real Property § 75.32 (2021).
Accordingly, it is
Ordered that plaintiffs’ motion (Motion Sequence No. 3) is granted, the sale is vacated, the Referee is directed to refund the down payment, and the cross-motion is denied, and it is
ORDERED that the motion of the non-party movants (Motion Sequence No. 4) is denied. This is the Decision and Order of the Court.