Court Opinion

ID: 9942006
Source: CourtListenerOpinion
Date Created: 2024-02-20 14:07:23.827918+00
Date Added: 2024-06-11T13:47:35.150639
License: Public Domain

Wells Fargo Bank, N.A. v 24 W. 57 APF LLC
               2024 NY Slip Op 30483(U)
                   February 13, 2024
           Supreme Court, New York County
        Docket Number: Index No. 850014/2024
               Judge: Francis A. Kahn III
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                                                                                                                     INDEX NO. 850014/2024
  NYSCEF DOC. NO. 53                                                                                       RECEIVED NYSCEF: 02/13/2024

                              SUPREME COURT OF THE STATE OF NEW YORK
                                        NEW YORK COUNTY
           PRESENT:          HON. FRANCIS A. KAHN, Ill                                 PART                                  32
                               Justice
           --------------------X                                                       INDEX NO.               850014/2024
            WELLS FARGO BANK, NATIONAL ASSOCIATION,
                                                                                       MOTION DATE
                                                 Plaintiff,
                                                                                       MOTION SEQ. NO. _ _ _0_0_2_ _
                                          -v-
            24 WEST 57 APF LLC,CRIMINAL COURT OF THE CITY
            OF NEW YORK, CITY OF NEW YORK ENVIRONMENTAL
            CONTROL BOARD, NEW YORK STATE DEPARTMENT
            OF TAXATION AND FINANCE, NEW YORK CITY                                        DECISION + ORDER ON
            DEPARTMENT OF FINANCE, NEW YORK CITY                                                MOTION
            DEPARTMENT OF TRANSPORTATION, JOHN DOES 1-
            10, JANE DOES 1-10

                                                 Defendant.
           --------------------X

           The following e-filed documents, listed by NYSCEF document number (Motion 002) 35, 36, 37, 38, 39,
           40,41,42,43,44,45,46,47,48,49,50,51
           were read on this motion to/for                                          MISCELLANEOUS
                                                       I
                   Upon the foregoing documents, the motion is detennined as follows:

                  In this action to foreclose on a mortgage encumbering commercial real property located at 24/26
           West 57th Street, New York, New York (Block 1217, Lot 20), Plaintiff moves, by ex parte motion.1,
           pursuant to RPL §254[10] and RP APL §1325 for the appointment of a temporary receiver of the rents of
           the mortgaged premises. Defendants submitted opposition to the motion.

                   In section 8.1 [g] of the Mortgage at issue it is provided that upon the occurrence of an event of
           default, the mortgagee may:            I
                                                       I

                   apply for the appointment of a receiver, trustee, liquidator or conservator of the
                   Property, without notice to Borrower, which notice Borrower expressly waives, and
                   without regard for the adequacy of the security for the Debt and without regard for the
                   solvency of Borrower, any guarantor or indemnitor under the Loan or any other Person
                   liable for the payment of the Debt and whose appointment Borrower expressly consents
                   to take possession of and to operate the Property and to collect the Rents and to otherwise
                   protect and preserve the Property

                   Under Real Property Law §254 [ 1O], the appointment of a receiver in the event of a default is
            proper where the parties to the mortgage agree to same even without notice or without regard to the
--~-su-ff;"""1~c~ie~n-cy-ofsecunty (see ADHY Advisors LLC. v 530 W. 152nd St. LLC, 82 AD3d 619 [1 st Dept
                                                       I
           1 A prior ex parte motion for the same relief was denied by order of this Court dated January 26, 2024.

            850014'2024 WELLS FARGO BANK, NATIONAL ASSOCIATION vs. 24 WEST 57 APF LLC ET AL                     Page1 of4
            Motion No. 002

                                                                      1 of 4
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                                                                                                       INDEX NO. 850014/2024
  NYSCEF DOC. NO. 53                                                                           RECEIVED NYSCEF: 02/13/2024

           2011 ]; 366 Fourth St. Corp. v Foxfire Enters., 149 AD2d 692 [2 nd Dept 1989]). Despite the parties'
           assent, the appointment is not perfunctory and the Court, in the exercise of its equitable power, retains
           the discretion to deny the appointment of a receiver (see ADHY Advisors LLC. v 530 W. 152nd St. LLC,
           supra; Nechadim Corp. v Simmons, 171 AD3d 1195, 1197 [2d Dept 2019D.
                      I                   .    .   I
                    In the present case, it is undisputed that the parties' mortgage provides that Plaintiff may apply
           for the appointment of a receiver regardless of the adequacy of the property as security and Plaintiff pled
           that Defendants defaulted in repayment Accordingly, Plaintiff established its entitlement to the
           appointment of a receiver of the mortgaged premises (see eg SKW Hillside Bleeker Lender LLC v 145
           Bleeker LLC, 217 DD3d 536 [t st Dept 2023 ]; CSFB 2004-C3 Bronx Apts LLC v Sinckler, Inc., 96 AD3d
           680 [1 st Dept 2012]).

                     In opposition, Defendants have not demonstrated that denial of the appointment of a receiver is
           an appropriate exercise of the Court's discretion (see id.; US Bank, NA. v Rufai, 202 AD3d 719, 721 [2d
           Dept 2022]; Shaw Funding, LP v Bennett, 185 AD3d 857, 858 [2 nd Dept 2020]). The cases relied on by
           Defendants regarding what circumstances must exist before a court exercises its discretion to appoint a
           referee are inapposite. The cited authority predominantly concerns appointment of a receiver absent an
           express agreement to same pursuant to CPLR §6401 (see eg Groh v Halloran, 86 AD2d 30 [1 st Dept
           1982]), The Appellate Division cases are clear that where, as here, the mortgage contains a provision
           that a lender may ''without notice and without regard for the adequacy of the security for the Debt and
           without regard for the solvency of Borrower'", under RPL §254[10], that provision denotes that a
           mortgagee may apply for a receiver '"regardless of proving the necessity for the appointment"' (see
           GECMC 2007-Cl Ditmars Lodging, LLC v Moho/a, LLC, 84 AD3d 1311, 1312 [2d Dept 2011], citing
           Naar v. IJ Litwak & Co., 260 AD2d 613 [2d Dept 1999]; see also SKW Hillside Bleeker Lender LLC v
           145 Bleeker LLC, supra).

                     Accordingly, it is

                     ORDERED that the motion for the appointment of a Temporary Receiver is granted; and it is
           further

                   ORDERED that Kenneth A. Kanfer, Esq. ofKanfer & Holtzer LLP is hereby appointed with
           the usual powers and directions of a Temporary Receiver for the benefit of Plaintiff of all the rents and
           profits now due and unpaid or become due during the pendency of this action and issuing out the
           mortgaged property mentioned in the complaint, known by the street addresses as: 24/26 West 57th
           Street, New York, New York (Block 1217, Lot 20); and it is further

                   ORDERED that the Temporary Receiver is authorized to take charge and enter into possession
           of the property; and it is further
                                                   I
                   ORDERED that before entering her/his duties, the Temporary Receiver shall be sown to fairly
           and faithfully discharge the duties committed to him and shall execute to the People of the State of New
           York and file with the Clerk of the Court an undertaking in the sum of$300.000.00 conditioned for the
           faithful discharge of the duties of Temporary Receiver; and it is further

                      ORDERED that the Temporary Receiver is hereby directed to demand, collect and receive from
-·--------- - the-occupa:iits,-teriaiits·ancffic-e6eeiTripi5ssession of said premises, or other persons liable therefor,
              inclusive of the mortgagor, all the rents and license fees thereof now due or unpaid or hereafter that
            850014/2024 WELLS FARGO BANK, NATIOILASSOCIATION vs. 24 WEST 57 APF LLC ET AL          Page 2 of4
            Motion No. 002

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                                                                                                  INDEX NO. 850014/2024

 NYSCEF DOC. NO. 53                                                                       RECEIVED NYSCEF: 02/13/2024

        become fixed or due and the Temporary Receiver is authorized to institute and carry on all legal
        proceedings necessary for the protection of said premises or to recover possession of the whole, or any
        part thereof, and apply to this Court to fix reasonable rental value and license fee value and to compel
        the tenants and occupants to attom to the Temporary Receiver; and it is further
                                             I

                                             I
                ORDERED that the Temporary Receiver may institute and prosecute suits for the collection of
        rent, license fees and other charges now due or hereafter to become due and fixed, and summary
        proceedings for the removal of any t~nants or licensees or other persons therefrom; and it is further
                                             I
                ORDERED that pursuant to the General Obligation Law section 7-105, anybody holding
        any deposits or advances of rental as security under any lease or license agreement affecting space in the
        premises affected by this action shall tum same over to said Temporary Receiwr 1.vithin five (5) days
        after said Temporary Receiver shall be qualified; and thereupon the said Temporary Receiver shall hold
        such security subject to such disposition thereof as shall be provided in an Order of the Court to be made
        and entered in this action; and it is further

                 ORDERED that anybody in possession of same shall tum over to said Temporary Receiver all
        rent lists, orders, unexpired and expired leases, agreements, correspondence, notices and registration
        statements relating to rental spaces or facilities in the premises; and it is further

                ORDERED that notwithstanding anything to the contrary contained in this order, the
        Temporary Receiver shall not, without the further, prior order of this Court, upon prior notice to the
        plaintiff, make improvements or substantial repairs to the property at a cost in excess of$2,000.00,
        except that in an emergency, if funds need to be expended in excess of$2,000.00 or would otherwise
        require Court intervention, no Court approval will be necessary if counsel for plaintiff agrees in vvriting
        that the receiver may make such disbursement; and it is further

                 ORDERED that the Tempodzy Receiver shall deposit all monies received by her/him into any
        FDIC-insured bank where she has an account for this purpose and such account shall show the name of
        this action and the Temporary Receiver shall furnish plaintiff's attorneys with monthly statements of the
        receipts and expenditures of the Receivership together with a photocopy of the monthly statements
        received from said depository and no withdrawals shall be made therefrom except as directed by the
        Court or on a draft or check signed by the Temporary Receiver; and it is further

                 ORDERED that the Temporary Receiver is authorized from time to time to rent and lease any
        part of the premises for terms not exceeding five (5) years or such longer terms as may be required by
        applicable laws or regulations; to keep the premises insured against loss by damage or fire; to pay the
        taxes, assessments, water rates, sewer rates, vault rents, salaries of employees, supplies and other
        charges; to comply with all lawful requirements of any municipal department or other authority of the
        municipality in which the mortgaged premises are situated and to procure such fire, liability and other
        insurance as may be reasonably necessary; and it is further

                ORDERED, that the tenants, licensees or other persons in possession of said premises attom to
        the Temporary Receiver and pay over to the Temporary Receiver all rents, license fees, and other
        charges of such premises now due and unpaid or that may hereafter become due; and that the defendants
        be enjoined and restrained from collecting the rents, license fees and other charges of said premises from
        interfering in any manner with the property or its possession; and from transferring, removing or in any
        way disturbing and of the occupants or employees; and that all tenants, occupants, employees and
         850014/2024 WELLS FARGO BANK, NATIONAL ASSOCIATION vs. 24 WEST STAPF LLC ET AL       Page 3of4
         Motion No. 002

                                                           3 of 4
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                                                                                                     INDEX NO. 850014/2024

  NYSCEF DOC. NO. 53                                                                         RECEIVED NYSCEF: 02/13/2024

         licensees of the premises and other persons liable for the rents be and hereby are enjoined and restrained
         from paying any rent or license fees or other charges for such premises to the defendants, their agents 1
                    I     .       . .         I
         servants or attorneys; and it is further

                 ORDERED that the Temporary Receiver is prohibited from incurring obligations in excess of the
         monies in her hands without further Order of this Court or written consent of Plaintiff's attorney and
         Plaintiff may advance money, which can be recouped in this litigation; and it is further

                 ORDERED that the Owner turn over to the Temporary Receiver all rents collected from and
         after the date of this Order; and it is further

                 ORDERED that all persons now and hereafter in possession of said premises, or any part
         thereof, and not holding such possession under valid and existing leases or tendencies, do forthwith
         surrender such possession to the T cmporary Receiver, subject to emergency laws, if any, and it is further

                 ORDERED that the Temporary Receiver after paying the expenses of the management and care
         of the said premises as above provided retain the balance of the monies which may come into his hands
         until the sale of the said premises under the judgment to be entered in this action and/or until further
         Order of this Court, and it is further

                   ORDERED that the Temporary Receiver, or any party hereto, may at any time, on proper notice
         to all parties who have appeared in this action, apply to the Court for further and other instructions or
         powers necessary to enable the Temporary Receiver to properly fulfill her duties or for interim fee
         payments; and it is further

                ORDERED that the appointed named herein shall comply with Section 35a of the Judiciary Law,
         Sections 6401-6404 of the CPLR, Section 1325 ofRPAPL and Rule 36 of the Chief Judge; and it is
         further

                 ORDERED that notwithstanding any other provision of this order, the Temporary Receiver shall
         not appoint an attorney, managing agent, appraiser, auctioneer or accountant without prior order of this
         Court, and that the receiver shall apply to the court and file a separate application for appointment of a
         managing agent, attorney or other managing services pursuant to 36.1 of the Uniform Court Rules.

                    2/13/2024
                      DATE                                                       FRANCIS A. KAHN, Ill, A.J.S.C.

                                    §
          CHECK ONE:                    CA.SE DISPOSED                     NON-ANAL DISPOSITION

                                        GRANTED          □ DENIED          GRANTED lN PART             □ OTHER
          APPLlCATION:                  SETTLE ORDER                       SUBMIT ORDER

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

          850014/2024 WELLS FARGO BANK, NATIONAL ASSOCIATION vs. 24 WEST 57 APF LLC ET AL          Page4of4
          Motion No. 002

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