Court Opinion

ID: 9960246
Source: CourtListenerOpinion
Date Created: 2024-04-15 20:07:30.495649+00
Date Added: 2024-06-11T08:19:19.253727
License: Public Domain

Wilmington Trust, N.A. v 597 Scribner LLC
               2024 NY Slip Op 31238(U)
                     April 10, 2024
           Supreme Court, New York County
        Docket Number: Index No. 650806/2023
                  Judge: Andrea Masley
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
                                                                                                                        INDEX NO. 650806/2023
  NYSCEF DOC. NO. 180                                                                                             RECEIVED NYSCEF: 04/10/2024

            SUPREME COURT OF THE STATE OF NEW YORK
            COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 48
            ----------------------------------------------------------------------------------- X

             WILMINGTON TRUST, NATIONAL ASSOCIATION, AS                                             INDEX NO.         650806/2023
             TRUSTEE, FOR THE BENEFIT OF THE HOLDERS OF
             COMM 2014-UBS4 MORTGAGE TRUST COMMERCIAL
             MORTGAGE PASS-THROUGH CERTIFICATES, ACTING                                             MOTION DATE
             BY AND THROUGH ITS SPECIAL SERVICER, and LNR
             PARTNERS LLC,                                                                          MOTION SEQ. NO.        004

                                                          Plaintiff,
                                                                                                     DECISION+ ORDER ON
                                                - V -                                                      MOTION
             597 SCRIBNER LLC, JOSEPH J. SITT, NOUVEAU
             ELEVATOR INDUSTRIES, LLC, NEW YORK CITY
             ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY
             DEPARTMENT OF FINANCE, NEW YORK STATE
             DEPARTMENT OF TAXATION AND FINANCE, and JOHN
             DOES,

                                                          Defendants.
            ----------------------------------------------------------------------------------- X

            HON. ANDREA MASLEY:

            The following e-filed documents, listed by NYSCEF document number (Motion 004) 117, 118, 119, 120,
            121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140,
            141,142,143,165,166,176,177
            were read on this motion to/for                                              JUDGMENT - DEFAULT

                      In motion seq. no. 005, plaintiff moves , pursuant to CPLR 3215, for (1) a default

            judgment against defendants 597 Scribner LLC, Nouveau Elevator Industries, LLC, the

            New York City Environmental Control Board, the New York City Department of Finance,

            and the New York State Department of Taxation and Finance on its claim to foreclose

            on the mortgage; (2) attorneys' fees, costs and expenses as provided for under the

            Loan Documents; (3) appointment of a referee to ascertain and compute the amount

            due under the loan at issue, pursuant to RPAPL § 1321; and (4) amendment of the

            caption to remove defendants "John Doe #1-50."

             650806/2023 WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE                                    Page 1 of 9
             BENEFIT OF THE HOLDERS OF COMM 2014-UBS4 MORTGAGE TRUST COMMERCIAL
             MORTGAGE PASS-THROUGH CERTIFICATES, ACTING BY AND THROUGH ITS SPECIAL
             SERVICER, LNR PARTNERS LLC vs. 597 SCRIBNER LLC ET AL
             Motion No. 004

[* 1]                                                                       1 of 9
                                                                                              INDEX NO. 650806/2023
  NYSCEF DOC. NO. 180                                                                  RECEIVED NYSCEF: 04/10/2024

            Background

                     This action concerns the foreclosure of a mortgage lien on 597-599 Fifth Avenue,

            New York, NY 10017 and 3 East 48 th Street, New York, NY 10017 (Property). On June

            5, 2014, nonparty and original lender UBS Real Estate Securities Inc. (UBS) made a

            loan to defendant 597 Scribner LLC (Scribner) in the principal amount of $105,000,000

            (Loan); in connection with the Loan, UBS and Scribner entered in a Consolidated,

            Amended and Restated Promissory Note (Note). (NYSCEF Doc. No. [NYSCEF] 119,

            Complaint    ,m 11-12; NYSCEF 120, Note.) The Loan is secured by a Consolidated,
            Amended and Restated Mortgage and Security Agreement (Mortgage), encumbering

            the Property; the Mortgage was recorded in the land records of the City Register of New

            York (CRFN 2014000202214). (Id.        ,m 15-18; NYSCEF 121, Mortgage.) UBS and
            Scribner also entered into an Assignment of Leases and Rents (ALR), which was

            recorded in the land records of the City Register of New York (CRFN 2014000202215).

            (Id.   ,m 20, 23; NYSCEF 122, ALR.) On July 31, 2014, UBS transferred its interest in the
            Note to plaintiff. (Id. ,i 34; NYSCEF 120, Note at 11 [Allonge].) UBS also transferred its

            interests in the Mortgage and ALR to plaintiff. (Id. ,i,i 37, 40; NYSCEF 125, Mortgage

            Assignment; NYSCEF 126, ALR Assignment.) Pursuant to a General Assignment, UBS

            assigned to plaintiff "all right, title and interest of [UBS] in and to the Loan (as defined

            below) and all other agreements, including but not limited to guaranty agreements, and

            certificates and documents entered into or delivered in connection with the Loan (as the

            same may have been amended, modified, restated, supplemented, renewed or

            extended)." (NYSCEF 127, General Assignment.)

             650806/2023 WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE          Page 2 of 9
             BENEFIT OF THE HOLDERS OF COMM 2014-UBS4 MORTGAGE TRUST COMMERCIAL
             MORTGAGE PASS-THROUGH CERTIFICATES, ACTING BY AND THROUGH ITS SPECIAL
             SERVICER, LNR PARTNERS LLC vs. 597 SCRIBNER LLC ET AL
             Motion No. 004

[* 2]                                                    2 of 9
                                                                                             INDEX NO. 650806/2023
  NYSCEF DOC. NO. 180                                                                  RECEIVED NYSCEF: 04/10/2024

                   On May 11, 2020, due to defaults, plaintiff, Scribner, and defendant Joseph J.

            Sitt, as Guarantor, entered into a Loan Modification Agreement, effective April 6, 2020.

            (NYSCEF 129, Loan Modification Agreement.) Plaintiff alleges that, despite the loan

            modification, Scribner has been in default since August 2020 and has failed to cure the

            past due amounts owed as specified in plaintiff's demand notice. (NYSCEF 119,

            Complaint   ,m 56-67.)
                   On February 10, 2023, plaintiff filed a summons and complaint against Scribner,

            Joseph J. Sitt, Nouveau Elevator Industries, LLC, the New York City Environmental

            Control Board, the New York City Department of Finance, and the New York State

            Department of Taxation and Finance and John Doe Nos. 1 through 50. (NYSCEF 1,

            Summons; NYSCEF 2, Complaint.) Plaintiff served the summons and complaint on 597

            Scribner LLC, Nouveau Elevator Industries, LLC, the New York City Department of

            Finance, and the New York State Department of Taxation and Finance on February 15,

            2023 and on Sitt and the New York City Environmental Control Board on February 16,

            2023. (See NYSCEF 16-21, Affidavits of Service.) To date, the defendants have failed

            to answer. Scribner and Sitt have appeared by counsel, Alan Zuckerbrod. (NYSCEF

            53, Notice of Appearance.) In response to this motion, Scribner and Sitt submitted a

            response whereby they inform the court that Scribner and Sitt do not object to a default

            against the specific parties named in the Notice of Motion (defendants Scribner,

            Nouveau Elevator Industries, LLC, the New York City Environmental Control Board, the

            New York City Department of Finance, and the New York State Department of Taxation

            and Finance). (NYSCEF 166, Zuckerbrod aff.) However, Scribner and Sitt inform the

            court that no claims are asserted against Sitt and he was only named to preserve

             650806/2023 WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE         Page 3 of 9
             BENEFIT OF THE HOLDERS OF COMM 2014-UBS4 MORTGAGE TRUST COMMERCIAL
             MORTGAGE PASS-THROUGH CERTIFICATES, ACTING BY AND THROUGH ITS SPECIAL
             SERVICER, LNR PARTNERS LLC vs. 597 SCRIBNER LLC ET AL
             Motion No. 004

[* 3]                                                    3 of 9
                                                                                             INDEX NO. 650806/2023
  NYSCEF DOC. NO. 180                                                                  RECEIVED NYSCEF: 04/10/2024

            plaintiff's right "to seek and adjudicate a deficiency judgment against [Sitt as] Guarantor

            ... for which he may be liable ... under the Guaranty. (Id.; NYSCEF 119, Complaint ,i 3.)

            Discussion

                    "On a motion for a default judgment under CPLR 3215 based upon a failure to

            answer the complaint, a plaintiff demonstrates entitlement to a default judgment against

            a defendant by submitting: (1) proof of service of the summons and complaint; (2) proof

            of the facts constituting its claim; and (3) proof of the defendant's default in answering or

            appearing." (Medina v Sheng Hui Realty LLC, 2018 WL 2136441, *6-7 [Sup Ct, NY

            County 2018] [citations omitted].)

                    CPLR 3215 (f) requires a plaintiff to submit "proof of the facts constituting the

            claim, the default and the amount due ... by affidavit made by the party." "Where a

            verified complaint has been served, it may be used as the affidavit of the facts

            constituting the claim and the amount due; in such case, an affidavit as to the default

            shall be made by the party's attorney." (CPLR 3215 [f].) Plaintiff submits the affidavit of

            Dmitry Sulsky, an asset manager with LNR Partners LLC, which is the special servicer

            for the loan at issue; Sulsky avers that he has personal knowledge of the loan because

            he has been overseeing its administration and servicing. (NYSCEF 118, Sulsky aff ,i,i

            1-2.)

            Scribner and Sitt

                    Scribner, through its counsel, does not oppose this motion. Thus, a default

            judgment is granted against defendant Scribner. As to defendant Sitt, plaintiff is not

            moving for a default against him.

             650806/2023 WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE         Page 4 of 9
             BENEFIT OF THE HOLDERS OF COMM 2014-UBS4 MORTGAGE TRUST COMMERCIAL
             MORTGAGE PASS-THROUGH CERTIFICATES, ACTING BY AND THROUGH ITS SPECIAL
             SERVICER, LNR PARTNERS LLC vs. 597 SCRIBNER LLC ET AL
             Motion No. 004

[* 4]                                                    4 of 9
                                                                                             INDEX NO. 650806/2023
  NYSCEF DOC. NO. 180                                                                  RECEIVED NYSCEF: 04/10/2024

            Nouveau Elevator Industries, LLC

            Proof of Service

                   Plaintiff served Nouveau, via the New York Secretary of State, in accordance

            with LLC Law§ 303. (NYSCEF 18, Aff of Service.) "[P]laintiff did not need to

            demonstrate [its] compliance with the additional notice requirement of CPLR 3215 (g)

            (4). By its express terms, the notice requirement is limited to situations where a default

            judgment is sought against a 'domestic or authorized foreign corporation' which has

            been served pursuant to Business Corporation Law§ 306 (b), and does not pertain to a

            limited liability company .... " (Jian Hua Tan v AB Capstone Dev., LLC, 163 AD3d 937,

            939 [2d Dept 2018] [internal quotation marks and citations omitted].)

            Proof of Claim

                   "RPAPL 1311 (3) also provides, in relevant part, that a party seeking to foreclose

            on a mortgage must join '[e]very person having any lien or incumbrance upon the real

            property which is claimed to be subject and subordinate to the lien of the plaintiff' as a

            party defendant." (RREF IV - D DLI GS, LLC v HFZ E. 51 st St. Retail Owner LLC, 79

            Misc 3d 1201 [A], 2023 NY Slip Op 5051 0[U], *4 [Sup Ct, NY County 2023] .) Here,

            plaintiff alleges that Nouveau has a lien on the property which is subordinate to the

            Mortgage lien. (NYSCEF 119, Complaint ,i 4.) Plaintiff has also established that the

            mechanic's lien filed by Nouveau is post-date (6/10/2022) and subordinate to the

            mortgage recorded on June 12, 2014. (RREF IV - D DLI GS, LLC v HFZ E. 51st St.

            Retail OwnerLLC, 79 Misc 3d 1201[A], 2023 NY Slip Op 50510[U], *4; NYSCEF 141,

            Title Report.) Thus, plaintiff has demonstrated proof of its claim against Nouveau.

             650806/2023 WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE         Page 5 of 9
             BENEFIT OF THE HOLDERS OF COMM 2014-UBS4 MORTGAGE TRUST COMMERCIAL
             MORTGAGE PASS-THROUGH CERTIFICATES, ACTING BY AND THROUGH ITS SPECIAL
             SERVICER, LNR PARTNERS LLC vs. 597 SCRIBNER LLC ET AL
             Motion No. 004

[* 5]                                                    5 of 9
                                                                                             INDEX NO. 650806/2023
  NYSCEF DOC. NO. 180                                                                  RECEIVED NYSCEF: 04/10/2024

            Proof of Default

                     Nouveau has not answered (or otherwise appeared) in this action. (NYSCEF

            134, Kapoor aff ,i 11.)

            New York City Environmental Control Board

            Proof of Service

                     Plaintiff served the Environmental Control Board in accordance with CPLR 311

            (a)(2). (NYSCEF 19, Aff of Service.)

            Proof of Claim

                     Plaintiff alleges that there are violations issued by the Environmental Control

            Board which may result in subsequent liens against the property. (NYSCEF 119,

            Complaint ,i 5; NYSCEF 141, ECB Violations.) Plaintiff has sufficiently alleged that any

            lien filed by the Environmental Control Board would be post-date and subordinate to the

            mortgage recorded on June 12, 2014. Thus, plaintiff has demonstrated proof of its

            claim.

            Proof of Default

                     The Environmental Control Board has not answered (or otherwise appeared) in

            this action. (NYSCEF 134, Kapoor aff ,i 11.)

            NYC Department of Finance and New York State Department of Taxation and Finance

                     Plaintiff bases its claim against these government agencies "upon information

            and belief." When the allegations supporting the claim are solely on upon information

            and belief, the default motion shall be denied. (Zelnik v Bidermann Indus. U.S.A., 242

            AD2d 227, 228 [1st Dept 1997].) Plaintiff submits no proof these agencies' interest in

            the property to support its claim.

             650806/2023 WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE         Page 6 of 9
             BENEFIT OF THE HOLDERS OF COMM 2014-UBS4 MORTGAGE TRUST COMMERCIAL
             MORTGAGE PASS-THROUGH CERTIFICATES, ACTING BY AND THROUGH ITS SPECIAL
             SERVICER, LNR PARTNERS LLC vs. 597 SCRIBNER LLC ET AL
             Motion No. 004

[* 6]                                                    6 of 9
                                                                                              INDEX NO. 650806/2023
  NYSCEF DOC. NO. 180                                                                  RECEIVED NYSCEF: 04/10/2024

            John Does

                    Finally, plaintiff seeks to remove John Doe No. 1 to John Doe No. 50 from the

            caption on the ground that none of these defendants have been identified or served.

            Upon application to the court, it is within the court's sound discretion to permit plaintiff to

            voluntarily discontinue the action. (CPLR 3217 [b].) "While the determination upon

            such an application is generally within the sound discretion of the court, a party

            ordinarily cannot be compelled to litigate and, absent special circumstances, such as

            prejudice to adverse parties, a discontinuance should be granted." (Bank of America,

            National Association v Douglas, 110 AD3d 452, 452 [1st Dept 2013] [citations omitted].)

            No special circumstance has been shown here, and thus, the action is discontinued

            against John Doe No. 1 to John Doe No. 50 and they shall be removed from the

            caption.

            Attorneys' Fees, Costs and Expenses

                    Pursuant to the Mortgage documents, plaintiff is entitled to attorneys' fees, costs,

            and expenses as a result of Scribner's default. (NYSCEF 123, Loan Agreement§§

            10.3, 11.13, 11.24; NYSCEF 121, Mortgage§§ 1.3, 9; NYSCEF 129, Modification

            Agreement § 7.)

            Appointment of Referee

                    Plaintiff seeks appointment of a referee to compute the amount due under the

            loan documents, including attorneys' fees, costs and expenses.

                    Real Property and Actions and Proceedings Law§ 1321 provides, in relevant

            part,

                    "[i]f the defendant fails to answer within the time allowed or the right of the
                    plaintiff is admitted by the answer, upon motion of the plaintiff, the court
             650806/2023 WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE          Page 7 of 9
             BENEFIT OF THE HOLDERS OF COMM 2014-UBS4 MORTGAGE TRUST COMMERCIAL
             MORTGAGE PASS-THROUGH CERTIFICATES, ACTING BY AND THROUGH ITS SPECIAL
             SERVICER, LNR PARTNERS LLC vs. 597 SCRIBNER LLC ET AL
             Motion No. 004

[* 7]                                                    7 of 9
                                                                                             INDEX NO. 650806/2023
  NYSCEF DOC. NO. 180                                                                  RECEIVED NYSCEF: 04/10/2024

                      shall ascertain and determine the amount due, or direct a referee to
                      compute the amount due to the plaintiff and to such of the defendants as
                      are prior incumbrancers of the mortgaged premises, and to examine and
                      report whether the mortgaged premises can be sold in parcels and, if the
                      whole amount secured by the mortgage has not become due, to report the
                      amount thereafter to become due."

            Plaintiff's request is granted.

                      Accordingly, it is

                      ORDERED that plaintiff's motion for default judgment against defendants 597

            Scribner LLC, Nouveau Elevator Industries, LLC, and the New York City Environmental

            Control Board is granted.; and it is further

                      ORDERED that portion of the motion seeking a default judgment against

            defendants the New York City Department of Finance and the New York State

            Department of Taxation and Finance is held in abeyance. Plaintiff has 30 days from the

            date of this decision to supplement the record in accordance with the foregoing decision

            and/or present a legal argument as proof of claim against these defendants; and it is

            further

                      ORDERED that the action is discontinued against defendants "John Doe No. 1 to

            John Doe No. XXX"; and it is further

                      ORDERED that the action shall bear the following caption:

                            WILMINGTON TRUST, NATIONAL ASSOCIATION, AS
                            TRUSTEE FOR THE BENEFIT OF THE HOLDERS OF
                            COMM 2014-UBS4 MORTGAGE TRUST COMMERCIAL
                            MORTGAGE PASS-THROUGH CERTIFICATES, acting
                            by and through its special servicer, LNR Partners LLC

                                                              Plaintiff,

                                                      - V -

             650806/2023 WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE         Page 8 of 9
             BENEFIT OF THE HOLDERS OF COMM 2014-UBS4 MORTGAGE TRUST COMMERCIAL
             MORTGAGE PASS-THROUGH CERTIFICATES, ACTING BY AND THROUGH ITS SPECIAL
             SERVICER, LNR PARTNERS LLC vs. 597 SCRIBNER LLC ET AL
             Motion No. 004

[* 8]                                                         8 of 9
                                                                                                    INDEX NO. 650806/2023
  NYSCEF DOC. NO. 180                                                                         RECEIVED NYSCEF: 04/10/2024

                            597 SCRIBNER LLC, JOSEPH J SITT, NOUVEAU
                            ELEVATOR INDUSTRIES, LLC, NEW YORK CITY
                            ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY
                            DEPARTMENT OF FINANCE, and NEW YORK STATE
                            DEPARTMENT OF TAXATION AND FINANCE,

                                                            Defendants.
            and it is further

                    ORDERED that counsel for the moving party shall serve a copy of this order with

            notice of entry upon the County Clerk and the Clerk of the General Clerk's Office, who

            are directed to mark the court's records to reflect the amended caption; and it is further

                    ORDERED that such service upon the County Clerk and the Clerk of the General

            Clerk's Office shall be made in accordance with the procedures set forth in the Protocol

            on Courthouse and County Clerk Procedures for Electronically Filed Cases (accessible

            at the "E-Filing" page on the court's website at the address

            (www.nycourts.gov/supctmanh)]; and it is further

                    ORDERED that plaintiff is entitled to attorneys' fees, costs, and expenses to be

            determined by the appointed referee; and it is further

                    ORDERED that plaintiff shall submit a proposed Order of Reference.

                    4/10/2024
                      DATE                                                        ANDREA MASLEY, J.S.C.

                                     ~
             CHECK ONE:                  CASE DISPOSED                    NON-FINAL DISPOSITION

                                         GRANTED         □ DENIED         GRANTED IN PART          □ OTHER
             APPLICATION:                SETTLE ORDER                     SUBMIT ORDER

             CHECK IF APPROPRIATE:       INCLUDES TRANSFER/REASSIGN       FIDUCIARY APPOINTMENT    □ REFERENCE

             650806/2023 WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE                Page 9 of 9
             BENEFIT OF THE HOLDERS OF COMM 2014-UBS4 MORTGAGE TRUST COMMERCIAL
             MORTGAGE PASS-THROUGH CERTIFICATES, ACTING BY AND THROUGH ITS SPECIAL
             SERVICER, LNR PARTNERS LLC vs. 597 SCRIBNER LLC ET AL
             Motion No. 004

[* 9]                                                      9 of 9