SSA NE Assets LLC v. Burstyn LLC

Full title: SSA NE ASSETS LLC, Plaintiff, v. BURSTYN LLC, LAUREN BURSTYN GORDON, JOHN…

Court: Supreme Court, New York County

Date published: Apr 2, 2024

2024 N.Y. Slip Op. 31254 (N.Y. Sup. Ct. 2024)

Opinion

Index No. 850423/2023 Motion Seq. No. 001

04-02-2024

SSA NE ASSETS LLC, Plaintiff, v. BURSTYN LLC, LAUREN BURSTYN GORDON, JOHN DOE NO. 1 THROUGH JOHN DOE NO. XXX Defendant.

HON. FRANCIS A. KAHN, III Justice

Unpublished Opinion

DECISION+ ORDER ON MOTION

HON. FRANCIS A. KAHN, III Justice

The following e-filed documents, listed by NYSCEF document number (Motion 001) 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41,42, 43, 44, 45, 46, 47, 48, 51, 52, 53 were read on this motion to/for JUDGMENT - SUMMARY. Upon the foregoing documents, the motion is determined as follows:

The within action is to foreclose on a consolidated and modified mortgage encumbering a parcel of real property located 455 West 20th Street, Unit Mew B, New York, New York. The mortgage, dated August 31, 2022, was given by Defendant Burstyn UUC ("Burstyn'") to Plaintiff. The mortgage secures a loan with an' original principal amount of $5,062,500.00 which is evidenced by a note of the same date as the mortgage. Defendant Lauren Burstyn Gordon ("Gordon") executed the note and mortgage as the sole member of Burstyn. Concomitantly with these documents, Gordon also executed a commercial guaranty of the indebtedness. Plaintiff commenced this action and alleged that Defendants Burstyn and Gordon defaulted in repayment of the indebtedness. Burstyn and Gordon answered jointly and pled seventeen [17] affirmative defenses, including lack of standing and failure to abide by a contractual condition precedent to foreclosure. Now, Plaintiff moves for summary judgment against Defendants Burstyn and Gordon, striking their answer and affirmative defenses, a default judgment against all non-appearing parties, to appoint a Referee to compute and to amend the caption.

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]). Based on the affirmative defenses in the answer, Plaintiff was also required to demonstrate, prima facie, its standing (see eg Wells Fargo Bank, N.A. v Tricario, 180 A.D.3d 848 [2^nd Dept 2020]) and its substantial compliance with any contractual pre-foreclosure notice requirements (see eg Wells Fargo Bank, N.A. v McKenzie, 186 A.D.3d 1582, 1584 [2d 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^stDept 2019]). In support of such a cause of action for foreclosure, 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 particular set of business records must be proffered, as long as 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 by an affidavit from Joseph Cavagnaro ("Cavagnaro"), "an authorized agent" of Plaintiff. Cavagnaro avers that in his "employment, I am responsible for managing and administering the subject mortgage loan, which is more particularly described below and in the Complaint in Foreclosure filed in this action." Further, he states the affidavit was made based upon "my own personal knowledge of the administration of the mortgage loan" as well as Plaintiffs records. Plaintiff posits that this language is sufficient to support its motion for summary judgment. In opposition, Defendants assert that the affidavit and; moving papers are defective as Plaintiff failed to demonstrate Cavagnaro's authority to act on behalf of i Plaintiff.;

Contrary to Plaintiffs assertion, and despite the distinguishable authority relied upon by Defendants¹, p the principle that an affidavit supporting a motion for summary judgment in a foreclosure action must be from -an affiant with "authority to act" is well recognized (see Citibank, N.A. v Herman, 215 A.D.3d 629, 630 [2d Dept 2023]; U.S. Bank N.A. v Tesoriero, 204 A.D.3d 1066, 1068 [2d Dept 2022]; see also Wilmington Sav. Fund y Socy., FSB v Diehl, 219 A.D.3d 781, 783 [2d Dept 2023]). The rationale underlying these decisions, although not expressly stated therein, is clearly founded in the requirements of CPLR §3212[b], noted supra. When such a motion is supported by an affidavit, that document must "by nature and definition, contain information from a person with direct knowledge of the subject matter discussed within the four comers of the document" (Mark C. Dillon, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3212:21). "Personal . . knowledge is not presumed from a mere positive averment of the facts. A court should be shown how the deponent knew or could have known such facts and if there is no evidence from which the inference of personal knowledge can be drawn than it is presumed that such does not exist" (Bova v Vinciguerra, 139 A.D.2d 797, 798 [3d Dept 1988][intemal citations omitted]). In other words, an assertion of facts from which the affiant's personal knowledge may be inferred is an essential and ancient principle (see Castro v N.Y. Univ., 5 A.D.3d 135, 136 [1^st Dept 2004]; see also Jock v Landmark Healthcare Facilities, LLC, 62 A.D.3d 1070, 1072 [3d Dept 2009]; Martin v Aluminum Compound Plate Co., 44 AD 412, 413 [1^st Dept 1899] ["the mere averment of facts as upon personal knowledge is not sufficient, unless the circumstances are such that it can fairly be inferred that the affiant had personal knowledge of the facts so positively stated"]; Wallace v Baring, 21 AD 477 [1st Dept 1897]; Hoormann v Climax Cycle Co., 9 AD 579 [1st Dept 1896]).

1 Defendants' reliance on HSBC Bank USA, N.A. v Betts, 67 A.D.3d 735 [2d Dept 2009] and similar cases where a plaintiff sought a default judgment under CPLR §3215 is misplaced. CPLR §3215[f] requires that "the applicant" shall provide "proof of the' facts constituting the claim ... by affidavit made by the party' and, therefore, proof of an affiant's authority to act on behalf of a plaintiff is required (see e.g. HSBC Bank USA NA v Cooper, 157 A.D.3d 775, 776 [2d Dept 2018]). No similar restriction is contained in CPLR §3212[b] which only requires support by "affidavit, by a copy of the pleadings and by other available proof'. All the other cases cited by Defendants concerned the sufficiency of proof offered to demonstrate a foreclosing party's standing to prosecute the < action, to wit either the action was commenced by the servicer in its representative capacity, or the note was in possession of the | servicer on the Plaintiff s behalf when the action was commenced. In those cases, proof was necessary that the servicing agent was I authorized to act when the action was commenced (see e.g. CW Capital Asset Mgt. v Charney-FPG 114 41 st St., LLC, 84 A.D.3d 506 [1^stDept 2011]) or the note was in the possession of its agent (see eg Tajram v Tajram, 183 A.D.3d 777 [2d Dept 2020]).

In application of these principles, one with a relation to the parties (eg. an employee), to the cause of action or an eyewitness to events, related to the action or otherwise, often constitutes, in and of itself, satisfactory proof of an affiant's knowledge (see Wallace v Baring, supra at 478; see also Klein v Trout Lake Preserve Homeowners' Assn., 179 A.D.2d 967, 968 [3d Dept 1992]). Contrarily, an affiant, even an agent of a party or an employee thereof, who fails to demonstrate personal knowledge is incompetent to proffer an affidavit in support of a motion for accelerated judgment (see eg Barraillier v City of New York, 12 A.D.3d 168 [1^st Dept 2004]; Israelson v Rubin, 20 A.D.2d 668 [2d Dept 1964]). In the present case, Cavagnaro blithely refers to himself as Plaintiffs "agent" without elaboration. No claim is made that he is or was Plaintiffs « employee and no indication of the nature of his agency, direct or through an intermediary, is stated. In the next sentence, Cavagnaro avers that his knowledge was gained from his "employment", which raises the implication of the existence of another, unnamed, entity which he may serve. Under the circumstances, Cavagnaro's affidavit is insufficient to sustain Plaintiffs prima face case for summary judgment on its foreclosure claim. i

To the extent Cavagnaro's knowledge is founded in a review of Plaintiff s documents, his affidavit similarly fails. Where the affiant's knowledge is derived, in whole or in part, from records, the documents themselves are the salient evidence and must be in evidentiary form for the affiant's statements based thereon to be admissible (see eg Bank of N.Y.Mellon v Gordon, 171 A.D.3d 197, 206-207 [2d Dept 2019]). To be |t admissible as business record, a "qualified" witness must lay an appropriate foundation under CPLR §4518 (see Montes v. New York City Tr. Auth., 46 A.D.3d 121. 122 [1^st Dept 2007]). CPLR §4518[a] is silent as to who must provide such a foundation (see People v Kennedy, 68 N.Y.2d 569, 577 [1986]). Neither a custodian of the records nor an employee of a maker of same is required (see Bank of N Y. Mellon v Gordon, supra at 208; Vermont Comm'r of Banking &Ins. v Welbilt Corp., 133 A.D.2d 396 [2d Dept 1987]). Rather, it is necessary that the affiant provide the court with "sufficient indicia of reliability" (see Wells Fargo Bank, N.A. v Jones, 139 A.D.3d 520, 521 [1^st Dept 2016]; One Step Up, Ltd. v Webster Bus. Credit Corp., 87 A.D.3d 1,11 [1^st Dept 2011]). Here, the Court is not persuaded based upon the vague and conclusory statements concerning Cavagnaro's association with Plaintiff that the obligatory proof of reliability has been met (see Doros v City of New York, 216 A.D.2d 196 [1^st Dept 1995]; Sabatino v Turf House, Inc., 76 A.D.2d 945 [3d Dept 1980]; Dan Med., P.C. v. New York Cent. Mut. Fire Ins. Co., 14 Misc.3d 44 [App Term 2d Dept 2006]).

Accordingly, since none of the documentary evidence proffered is in admissible form. Movant failed to establish any of the prima facie elements of the cause of action for foreclosure (see generally Federal Natl. Mtge. Assn, v Allanah, 200 A.D.3d 947 [2d Dept 2021]).

As to the branch of the motion to dismiss Defendants' affirmative defenses, CPLR §3211 [b] provides that "[a] party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit". For example, affirmative defenses that are without factual foundation, conclusory or duplicative cannot stand (see Countrywide Home Loans Servicing, L.P. v Vorobyov, 188 A.D.3d 803, 805 [2d Dept 2020]; Emigrant Bank v Myers, 147 A.D.3d 1027, 1028 [2d Dept 2017]). When evaluating such a motion, a "defendant is entitled to the benefit of every reasonable intendment of its pleading, which is to be liberally construed. If there is any doubt as to the availability of a defense, it should not be dismissed" (Federici v Metropolis Night Club, Inc., 48 A.D.3d 741, 743 [2d Dept 2008]).

As pled, all the affirmative defenses are entirely conclusory and unsupported by any facts in the answer. As such, these affirmative defenses are nothing more than unsubstantiated legal conclusions which are insufficiently pled as a matter of law (see Board of Mgrs. of Ruppert Yorkville Towers Condominium v Hayden, 169 A.D.3d 569 [1^st Dept 2019]; see also Bosco Credit V Trust Series 2012-1 v. Johnson, 177 A.D.3d 561 [1^stDept 2020]; 170 W. Vil. Assoc, v. G &E Realty, Inc., 56 A.D.3d 372 [1st Dept 2008]; see also Becher v Feller, 64 A.D.3d 672 [2d Dept 2009]; Cohen Fashion Opt., Inc. v V& MOpt., Inc., 51 A.D.3d 619 [2d Dept 2008]). To the extent Defendants failed to posit specific legal arguments in support of any particular affirmative defense, those are also deemed abandoned (see U.S. Bank N.A. v Gonzalez, 172 A.D.3d 1273, 1275 [2d Dept 2019]; Flagstar Bank v Bellafiore, 94 A.D.3d 1044 [2d Dept 2012]; Wells Fargo Bank Minnesota, N.A v Perez, 41 A.D.3d 590 [2d Dept 2007]).

The counterclaim for an award of attorney's fees based upon RPL §282 is, at present, viable (see U.S. Bank v Bajwa, 208 A.D.3d 1197 [2d Dept 2022]) and, based upon the reasoning supra, Plaintiff failed to i demonstrate prima facie entitlement to dismissal of the second counterclaim.;

The branch of Plaintiff s motion to amend the caption is granted without opposition (see generally CPLR §3025; JP Morgan Chase Bank, N.A. v Laszio, 169 A.D.3d 885, 887 [2d Dept 2019j).

Accordingly, it is

ORDERED that the branches of Plaintiff s motion for summary judgment on its causes of action for foreclosure and the appointment of a referee are denied, and it is ORDERED that all the affirmative defenses in Defendants' answer are stricken, and it is

ORDERED, that the caption of this action be amended by striking therefrom the Defendants herein as "John Doe No. 1" through "John Doe No. XXX", all without prejudice to the proceedings heretofore had herein; and it is further

ORDERED that the caption shall be amended to read as follows:

SUPREME COURT STATE OF NEW YORK COUNTY OF NEW YORK

SSA NE ASSETS LLC, Plaintiff,

-against-

BURSTYN LLC and LAUREN BURSTYN GORDON, Defendants.

and it is

ORDERED that this matter is set down for a status conference on May 29, 2024 @ 11:40 am via Microsoft Teams.