FILED: NEW YORK COUNTY CLERK 04/03/2017 10:10 AM
`FILED: NEW YORK COUNTY CLERK 04m2017 10:10 AM
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`NYSCEF DOC. NO. 89
`NYSCEF DOC. NO. 89
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`150479/2016
`INDEX NO. 150479/2016
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`EXHIBIT 10
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`FILED: NEW YORK COUNTY CLERK 04/03/2017 10:10 AM
`FILED: NEW YORK COUNTY CLERK 04m2017 10:10 AM
`NYSCEF DOC. NO. 89
`NYMEDC. NEW8YORK COUNTY CLERK osmzols 05:38 P I
`NYSCEF DOC. NO. 65
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`INDEX NO. 150479/2016
`IND-3X NO~ ”0479/2016
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`RECEIVED NYSCEF: 04/03/2017
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`RECEIVED NYSCEF: 05/06/2016
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`Index No. 150479/2016
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`AFFIDAVIT IN FURTHER
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`SUPPORT OF PLAINTIFF'S
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`MOTION FOR THE APPOINTMENT
`OF A TEMPORARY RECEIVER AND
`IN OPPOSITION TO CROSS-MOTION
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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
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`ALEXANDER CONDOMINIUM, BY ITS
`BOARD OF MANAGERS,
`.
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`Plaintiff,
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`—against-
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`AB FUNDING CORPORATION, CFC
`SPECIALTY PROGRAM MANAGERS, LLC,
`BIG APPLE FIRE SPRINKLER CO., INC,
`NEW YORK STATE DEPARTMENT OF
`TAXATION & FINANCE, NEW YORK CITY
`DEPARTMENT OF FINANCE, ALEXANDER
`GUREVICH, ELLA GUREVICH, MITCHELL
`GUREVICH, “John Doe” and “Jane Doe,” the
`true names of said defendants being unknown to
`plaintiff, the parties intended to be the persons or
`entities having or claiming an interest in the
`premises described in the complaint by virtue of
`being a tenant or occupant in all or part of said
`premises,
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`Defendants.
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`
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`55.:
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`) )
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`STATE OF NEW YORK
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`COUNTY OF NEW YORK )
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`KATHRYN M. QUIGLEY, being duly sworn deposes and says:
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`1.
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`I am the president of plaintiff Alexander Condominium, By its Board of
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`Managers and I have served as president since March 2015. I have also served as a member of
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`the Board of Managers since January 2014. I am personally familiar with the facts and
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`circumstances set forth below.
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`2.
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`I respectfiflly submit this affidavit in further support ofthe Board’s motion for the
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`appointment of a temporary receiver for unit 25PHC (the “Unit”) and in opposition to the motion
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`of defendant AB Funding Corporation ("AB Funding“) for an Order dismissing this action for
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`t
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`lOf'i‘
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`FILED: NEW YORK COUNTY CLERK 04/03/2017 10:10 AM
`FILED: NEW YORK COUNTY CLERK 04m2017 10:10 AM
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`NYSCEF DOC. NO. 89
`NYSCEF DOC. NO. 89
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`INDEX NO. 150479/2016
`INDEX NO~ ”0479/2016
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`RaCaIVaD VYSCEF: 04/03/2017
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`1805370
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`failure to join 250 East Borrower, LLC (the "Sponsor") as a necessary party, or, in the
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`alternative, for an Order granting leave to add the Sponsor as a defendant to this action.
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`A TEMPORARY RECEIVER SHOULD BE'APPOINTED
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`3.
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`As discussed in the accompanying affirmation of Maria I. Beltrani, an Order
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`appointing a temporary receiver is appropriate because Real Property Law (“RPL”) § 339-aa
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`unequivocally entitles the Board to a receiver when the Condominium’s bylaws likewise provide
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`for the appointment of a temporary receiver in a lien foreclosure action, which is the case here.
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`4.
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`Contrary to the representations made in the affirmation of Ryan Kaupelis, dated
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`April 15, 2016 (the “Kaupelis Affirmation”) and the affidavit of Gene Kiselman on behalf of
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`defendant AB Funding, sworn to April 15, 2016 (the “Kiselman Affidavit”), under RPL 339-aa,
`the appointment of a receiver is appropriate regardless ofthe amount of equity the owner has in
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`the unit and regardless of whether the condominium can demonstrate irreparable loss and the
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`need to conserve the property and to protect the parties’ interests, as may be required under
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`CPLR § 6401.
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`5.
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`But even if the Court were to apply the heightened standard set forth in CPLR §
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`6401, the Board meets that standard because, for one thing, contrary to the representations in
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`paragraph 36 ofthe Kaupelis Affirmation, AB Funding is not paying the real estate taxes on the
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`unit, which has resulted in a tax lien foreclosure action entitled, NYCTL 2015—A Trust and The
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`Bank ofNew York Mellon, as Collateral Agent and Custodian 1:. AB Funding Corporation, at.
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`al, which is pending in this Court under index no. 152816/2016 (the “Tax Lien Foreclosure
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`Action”). Under RPL § 339—2, the tax lien that is being foreclosed in the Tax Lien Foreclosure
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`Action has a statutory priority over the Condominium’s lien for unpaid common charges, which
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`FILED: NEW YORK COUNTY CLERK 04/03/2017 10:10 AM
`FILED: NEW YORK COUNTY CLERK 04m2017 10:10 AM
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`NYSC3F DOC. NO. 89
`NYSCEF DOC. NO. 89
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`means that the Condominium’s lien is in danger of being extinguished. In order for the
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`Condominium to protect its lien, it must satisfy the tax lien. Thus, a receiver must be appointed
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`to rent the unit, generate rental proceeds and pay off the tax lien in order to avoid irreparable loss
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`to the Condominium and to conserve the property.
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`6.
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`Furthermore, contrary to the representations set forth in paragraph 36 ofthe
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`Kaupelis Affirmation, AB Funding’s failure to pay common charges does detrimentally affect
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`the Condominium’s finances in that coupled with the substantial common charge arrears owed
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`on unit 24PHAB, which currently owes in excess of $467,000, the Condominium has
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`experienced very real cash flow problems which has lefi the Board with no alternative but to
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`assess all unit owners. More specifically, three assessments have been levied on unit owners to
`cover revenue shortfalls and expenses ofthe Condominium: $590,000 in November 2013,
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`$625,000 in September 2014 and $1,250,000 in April 2016. To date, AB Funding has not paid
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`any ofthe assessments it owes for the Unit. Thus, a receiver is most certainly needed in order to
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`protect the Condominium’s interests and to preserve its limited resources. Simply put, the non-
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`defaulting unit owners in the Ccndominium should not have to shoulder the burden of AB
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`Funding’s non-payment, particularly when a receiver can be appointed to rent the unit and pay
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`the outstanding common charges.
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`7.
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`It is completely untrue that the Board has refused to permit AB Funding to pay
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`current common charges. See Kaupelis Affirmation at 1] 37 and Kiselman Affidavit at 11 7. What
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`the Board has said is that it will not permit AB Funding to dictate how its payments will be
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`credited and all payments received will be applied to the oldest debt in accordance with sound
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`accounting principles.
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`30f?
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`FILED: NEW YORK COUNTY CLERK 04/03/2017 10:10 AM
`FILED: NEW YORK COUNTY CLERK 04m2017 10:10 AM
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`NYSCEF DOC. NO. 89
`NYSCEF DOC. NO. 89
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`8.
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`It is also untrue that the Sponsor paid $140,000 in common charges that has not
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`been credited. See Kiselrnan Affidavit at '[I 7 and the Kaupelis Affinnation at 1[ 11. All of the
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`Sponsor's payments for the Unit have been credited and are reflected in Exhibit "B" to the
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`Condominium's motion.
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`9.
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`Likewise, it is untrue that the common charges on the Unit were current when AB
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`Funding acquired it in July 2013. See Kiselman Affidavit at 1“] 3-6. AB Funding would have
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`the Court believe that common charges were currentIn July 2013 due to credits given to Sponsor
`for advances allegedly made by the Sponsor and that after AB Funding acquired the Unit the
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`Board denied the credits to the Sponsor and back-charged the Unit for the unpaid common
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`charges. These are specious allegations.
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`10.
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`As reflected in the account history (Exhibit "B") maintained by Taube
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`Management (“Taube”), the managing agent hired by the Sponsor and which the Sponsor
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`controlled, the credits the Sponsor is now claiming have never been substantiated as confirmed
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`in the accompanying affidavit of Carl Cesarano (the “Cesarano Affidavit”), the Condominium’s
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`auditor, and were never applied to the Unit or any other unit owned by the Sponsor. As reflected
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`in Exhibit "B", in July 2013, when the Unit was transferred to AB Funding from the Sponsor,
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`there was a balance on the account in the amount of $9,977.48 in unpaid common charges. That
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`amount should have been considerably more given the late fees and interest to which the
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`Condominium was entitled, but Taube failed for years to record the late fees and interest due
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`from the Sponsor.
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`11.
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`As is also reflected in Taube’s account history, after AB Funding acquired the
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`Unit in July 2013, it, too, failed to pay common charges without justification. Thus when the
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`FILED: NEW YORK COUNTY CLERK 04/03/2017 10:10 AM
`FILED: NEW YORK COUNTY CLERK 04m2017 10:10 AM
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`NYSCEF DOC. NO. 89
`NYSCEF DOC. NO. 89
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`Condominium’s residents took control ofthe Board in March 2015, the account was reviewed
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`and the late fees and interest authorized under theCondorninium’s bylaws were rightfully added
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`to the account. Accordingly, today AB Funding owes the Condominium the sum of $71 ,339.9 1.
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`12.
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`Significantly, AB Funding offers no excuse for its failure to pay common charges
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`once it acquired the Unit in July 2013. Clearly, AB Funding’s unjustified refusal to pay common
`charges from the time'it acquired the Unit confirms the necessity for a temporary receiver, who
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`can compel AB Funding to pay market rent or who can rent the Unit to a third party ifAB
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`Funding continues to refiise to abide by the Condominium’s bylaws and RPL § 339-aa.
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`TI-[E SPONSOR IS NEITHER A NECESSARY,
`NOR PROPER PARTY TO THIS ACTION
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`13.
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`AB Funding’s cross-motion to dismiss for failure to name the Sponsor as a party ‘
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`defendant or to compel the Condominium to include the Sponsor should be recognized for what
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`it is---a simple ploy to unnecessarily complicate and delay the Condominium’s lien foreclosure
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`action and must be denied.
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`14‘.
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`First, as discussed in the Cesarano Affidavit, the Sponsor has never substantiated
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`any of its claims with respect to advances it purportedly made on behalfof the Condominium
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`despite the fact that it first asserted such claims three years ago and the Condominium's financial
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`statements make that very clear. See Cesarano Affidavit and Exhibit "L" hereto. ,
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`15.
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`Furthermore, the Sponsor’s attempt to persuade the Court of the merit of its claim
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`by including 294 pages of checks is just another ploy. As explained in the Cesarano Affidavit,
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`without the corresponding invoices, contracts and other supporting documentation, it is not
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`possible to substantiate the Sponsor’s claims. Significantly, although three years have gone by
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`FILED: NEW YORK COUNTY CLERK 04/03/2017 10:10 AM
`FILED: NEW YORK COUNTY CLERK 04m2017 10:10 AM
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`NYSCEF DOC. NO. 89‘
`NYSCEF DOC. NO. 89
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`since the Sponsor first asserted its claims, the Sponsor has never provided the Condominium or
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`its auditors with any supporting documentation.
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`16. Moreover, a review of the voluminous stack of checks annexed to AB Funding’s
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`motion reveals that many of the included checks on their face do not support Sponsor’s claims
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`and were included to deceive the Court. For example, all checks dated prior to May 18, 2010,
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`the date of the first unit sale, are the Sponsor’s responsibility for the development of the
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`property. In addition, there are numerous checks payable to Sponsor’s own employees (Andrei
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`Ignat, Ilona Mukhsinova, Maria Torai, Eleanor Dahan, Nancy Rozewicz, Jacqueline Pine and
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`Elena Pryenchikova) who marketed and sold the Sponsor’s units. Checks for real estate taxes are
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`also the Sponsor’s reSponsibility for Sponsor owned units. These are just a few examples ofthe
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`checks that very clearly do not support the Sponsor’s claims. What is apparent, however, is that
`the Sponsor admittedly improPerly commingled its finances with that ofthe Condominium and is
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`now claiming credits to which it is not entitled —an issue that is better left addressed in the
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`recent action commenced by the Condominium against the Sponsor.
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`17.
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`More specifically, instead of attempting to litigate its unsubstantiated claims in
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`this action, where the Sponsor is not a party, the Sponsor can now assert any such claims in the
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`action titled, Alexander Condominium, by Its Board ofManagers 12. East 49"1 Street Development
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`II, LLC, et. a1, pending in this Court under index no. 153813/2016, which the Condominium
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`recently commenced to recover of the Sponsor damages for, among other things, fraud, wrongful
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`distribution of assets, breach of coutract and breach offiduciary duty in connection with the
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`Sponsor’s construction, sale, marketing, repair, operation and management of the Condominium.
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`See Exhibit “K” hereto.
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`60f?
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`FILED: NEW YORK COUNTY CLERK 04/03/2017 10:10 AM
`FILED: NEW YORK COUNTY CLERK 04 EH 2017 10:10 AM
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`NYSCEF DOC. NO. 89
`NYSCEF DOC. NO. 89
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`150479/2016
`INDEX NO. 150479/2016
`INDEX NO~
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`RfiCaIVaD VYSCEF:
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`18.
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`In short, as the Sponsor is neither a necessary, nor proper party in this lien
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`foreclosure action, AB Funding’s cross~motion to dismiss or to include the Sponsor should be
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`denied.
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`WHEREFORE, plaintiff’s motion for the appointment of a receiver should be
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`granted in all respects and defendant AB Funding Corporation's cross—motion denied.
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`KATHRYN M. QUIGI},
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`Sworn to before me this
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`éflr day ofMay, 2016
`m/%
`31 Public
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`N
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`MARIA! BELTHANI
`Notary Public State of NewYork
`LIc. #O2BE623931D
`Qualified In Queens County I?
`Commlsslon Expires April 18, 20..
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`70f?
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