FILED: SUFFOLK COUNTY CLERK 12/05/2017 02:48 PM
`FILED: SUFFOLK COUNTY CLERK 12m2017 02:48 PM
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`NYSCEF DOC. NO. 17
`NYSCEF DOC. NO. 17
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`INDEX NO. 614639/2017
`INDEX NO~ “4639/2017
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`RaCaIVaD uYSCEF: 12/05/2017
`RECEIVED NYSCEF: 12/05/2017
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`SUPREME COURT OF THE STATE OF NEW YORK
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`COUNTY OF SUFFOLK
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`________________________________________________________________________X
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`NEW YORK COMMUNITY BANK,
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`Plaintiff,
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`— against -
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`163-165 BRIDGE ROAD LLC, ET AL.,
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`Index No. 614639/2017
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`AFFIRMATION IN
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`SUPPORT OF ORDER
`SUBSTITUTING PLAINTIFF
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`AND APPOINTING RECEIVER
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`IN A MORTGAGE
`FORECLOSURE ACTION
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`Defendants.
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`RICHARD J. PILSON, an attorney at law duly admitted to practice before the Courts of
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`the State of New York, affirms the following to be true under penalties of perjury:
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`l.
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`I am a partner in the firm of Berliner & Pilson Esqs., attorneys for the
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`Plaintiff in the within action, and as such am fully familiar with the facts, circumstances and
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`proceedings herein.
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`2.
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`This action is brought to foreclose a certain Mortgage (hereafter, the
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`“_Mortgage”), bearing the date October 9, 2007, executed by 163—165 Bridge Road, LLC to
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`Plaintiff, New York Community Bank, to secure the sum of $1,450,000.00, recorded in the
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`Office of the Clerk of the County of Suffolk on October 24, 2007 in Liber 21624, Page 616
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`covering the Premises known as and by the street addressl 63 Bridge Road, Hauppauge, NY
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`11788 a/k/a 163-165 Bridge Road, Hauppauge, NY 11788 a/k/a 163 Bridge Road, Islandia, NY
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`11749 a/k/a 163-165 Bridge Road, Islandia, NY 11749, and more fully described in Exhibit “A”
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`annexed hereto. My firm was substituted as attorney in place of the original attorney for New
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`York Community Bank, Stagg, Terenzi, Confusione & Wabnik, LLP by Assignment of Action
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`FILED: SUFFOLK COUNTY CLERK 12/05/2017 02:48 PM
`FILED: SUFFOLK COUNTY CLERK 12m2017 02:48 PM
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`NYSCEF DOC. NO. 17
`NYSCEF DOC. NO. 17
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`INDEX NO. 614639/2017
`INDEX NO~ 614639/2017
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`RaCaIVaD vYSCEF: 12/05/2017
`RECEIVED NYSCEF: 12/05/2017
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`and Stipulation Substituting Plaintiffs and Attorneys for Plaintiff dated August 25, 2017, duly e-
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`filed with the Court (Exhibit “B”).
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`3.
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`The Mortgage lien is a first mortgage lien. The entire amount owing 0n
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`the Mortgage lien is past due and the present unpaid principal balance is $1,249,087.32, plus
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`interest from March 1, 2017, plus advances made for real estate taxes and legal fees incurred
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`pursuant to the Mortgage.
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`4.
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`The Summons, Complaint and Notice of Pendency of this action were
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`filed in the Office of the County Clerk of Suffolk County on August 2, 2017 (see Exhibit “C”).
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`5.
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`The interest of the Plaintiff in said Property more fully appears in the
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`Complaint, a copy of which, along with a copy of the Notice of Pendency, are hereto annexed as
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`Exhibit “C” and incorporated by referenced with the same force and effect as if set forth at length
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`herein.
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`6.
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`A copy of the Mortgage is annexed hereto as Exhibit “D”. A copy of the
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`Mortgage Note, along with Allonge endorsing same to AV CAPITAL FUNDING LLC, is
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`annexed as Exhibit “E”. Said Mortgage contains, among other provisions, the following express
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`paragraph:
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`“30. Upon default, the holder of this Mortgage, at its option
`is entitled to commence either a judicial or a non-judicial
`foreclosure proceeding pursuant to Article 14 of the New York
`Real Property Actions and Proceedings Law. In any action to
`foreclose the Mortgagee shall be entitled to the appointment of a
`Receiver without notice and without regard to the adequacy of any
`security for the debt. Should the Mortgagor be an occupant of the
`mortgaged premises and a Receiver is appointed, the Mortgagor
`will pay rent equal to the fair market rent at the time the Receiver
`commenced their duties. Mortgagor agrees that the Receiver may
`evict the Mortgagor should the Mortgagor fail to make payments as
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`FILED: SUFFOLK COUNTY CLERK 12/05/2017 02:48 PM
`FILED: SUFFOLK COUNTY CLERK 12m2017 02:48 PM
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`NYSCEF DOC. NO. 17
`NYSCEF DOC. NO. 17
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`INDEX NO. 614639/2017
`INDEX NO~ 614639/2017‘
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`RaCaIVaD vYSCEF: 12/05/2017
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`demanded. In the event of a foreclosure sale the mortgaged
`property may be sold in one parcel.”
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`7.
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`A copy of the Assignment of Mortgage, dated August 22, 2017, whereby
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`New York Community Bank assigned the Mortgage to AV CAPITAL FUNDING LCC, and
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`Assignment of Assignment of Leases and Rents, also dated August 22, 2017, which Assignment
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`were recorded with the Suffolk County Clerk on November 3, 2017 at Liber 22870, Page 953
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`(Assignment of Mortgage) and Liber 12936, Page 617 (Assignment of Assignment of Leases and
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`Rents), and are annexed hereto as Exhibits “F” and “G”, respectively.
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`8.
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`Upon information and belief, and a search of public records, the present
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`fee owner of the said Mortgaged Premises is Defendant 163-165 Bridge Road, LLC.
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`9.
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`That Plaintiff is entitled to the appointment of a receiver, without notice, is
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`made absolutely clear both by the express language of Article 30 of the Mortgage (Exhibit “D”)
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`as set forth above and by the statutory construction of the above-quoted Mortgage provision as
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`set forth in RPL§254(10).1 Moreover, this issue has been litigated and the Courts have held that
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`the language in the Subject Mortgage does indeed mean the Plaintiff is entitled to the
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`appointment of a receiver without notice. In this regard, the Court’s attention is respectfully
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`invited to the rulings in the following cases: Clinton Capital Corp. v. One Tiffany Place
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`Developers, Inc., 112 A.D.2d 911, 492 N.Y.S.2d 427 (2d Dept. 1985); Kestenberg v. Platinum
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`Properties Corp, 112 A.D.2d 268, 491 N.Y.S.2d 670 (2d Dept. 1985); Holmes v. Gravenhorst,
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`1 RPL§254(10) construes said paragraph 5 as follows: “10. Mortgagee entitled to appointment of a receiver. A
`covenant “that the holder of this mortgage, in any action to foreclose it, shall be entitled to the appointment of a
`receiver’, must be construed as meaning that the mortgagee, his heirs, successors or assigns, in any action to
`foreclose the mortgage, shall be entitled, without notice and without regard to adequacy of any security of the debt,
`to the appointment of a receiver of the rents and profits of the premises covered by the mortgagee; and the rents and
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`FILED: SUFFOLK COUNTY CLERK 12/05/2017 02:48 PM
`FILED: SUFFOLK COUNTY CLERK 12m2017 02:48 PM
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`NYSCEF DOC. NO. 17
`NYSCEF DOC. NO. 17
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`INDEX NO. 614639/2017
`INDEX NO~ “4639/2017
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`RaCaIVaD VYSCEF: 12/05/2017
`RECEIVED NYSCEF: 12/05/2017
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`‘
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`{
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`238 AD. 313, 263 N.Y.S. 738, reversed on other grounds, 263 N.Y. 148, 188 NE. 258, 91
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`A.L.R. 1230 (2d Dept. 1933); Home Title Ins. Co. V. Isaac Scherman Holding Corp, 240 AD.
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`851, 267 N.Y.S. 84 (2d Dept. 1933); Febbraro v. Febbraro, 70 A.D.2d 584, 416 N.Y.S.2d 59 (2d
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`Dept. 1979); Mandel v. Nero, 52 Misc. 2d 604, 277 N.Y.S.2d 247 (1967); Wolf v. 120
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`Middleton Realty Corp, 221 N.Y.S.2d 110 (1961); Ardeb Realty Corp. v. East Estates, Inc., 12
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`Misc. 2d 167, 178 N.Y.S.2d 972 (1957). Not incidentally, this ex parte aspect has also resisted
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`constitutional. See, Friedman v. Gerax Realty Associates, 100 Misc. 2d 820, 420 N.Y.S.2d 247
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`(1979); Massachusetts Mut. Life Ins. V. Avon Associates Inc., 83 Misc. 2d 829, 373 N.Y.S.2d
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`464 (1975); Cit; Partners Ltd. BMG v. Jamaica Savings Bank, 454 F. Supp. 1269(E.D.N.Y.
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`1978).
`I
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`10.
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`Upon information and belief, the Mortgaged Premises is a stone and gravel
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`yard which 163—165 Bridge Road, LLC rents out. While the Plaintiff is not privy to any lease
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`agreements with possible tenants, the mortgagor 163-165 Bridge Road LLC executed a Springing
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`Lease agreement with Borrower’s Principals, Rose Migliore and Donna Migliore Brown, as
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`collateral for the within mortgage loan calling for rent payments totaling $227,212.00 per year or
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`$18,934.33 per month, which, as a result of the mortgage defaults of the Borrower Defendant,
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`has “sprung” into effect. A copy of said Springing Lease is annexed hereto as Exhibit “H”.
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`11.
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`To protect Plaintiff s lien and interest in the aforesaid Mortgaged
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`Premises, it is necessary that a receiver be appointed by the Court to collect all rents and be
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`authorized to make necessary disbursements for the maintenance of the Premises, payment of
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`taxes, interest on mortgages, water and sewer rates, meter charges and insurance, as these
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`profits in the event of any default or defaults in paying the principal, interest, and taxes.”
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`FILED: SUFFOLK COUNTY CLERK 12/05/2017 02:48 PM
`FILED: SUFFOLK COUNTY CLERK 12m2017 02:48 PM
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`NYSCEF DOC. NO. 17
`NYSCEF DOC. NO. 17
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`INDEX NO. 614639/2017
`INDEX NO~ 614639/2017
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`RaCaIVaD vYSCEF: 12/05/2017
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`payments become due.
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`12.
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`I fin’ther submit this Affidavit in support of AV CAPITAL FUNDING
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`LLC (“AV”) application to substitute AV as the Plaintiff in this action, pursuant to CPLR 1018
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`and 1021, on the grounds that, effective on August 22, 2017, AV acquired from New York
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`Community Bank (NYCB) (a) the Mortgage, which is the subject of this action (“Mortgage”),
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`made by 163-165 Bridge Road, LLC (“Borrower”), and (b) the Borrower’s Promissory Note
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`(“Note”) secured by the Mortgage.
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`13.
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`NYCB supports this Motion as it has assigned all of its interest in the
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`subject Mortgage and Note to AV and no longer has any interest in this matter. A copy of the
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`Assignment and other documents evidencing the transaction by which AV acquired the Mortgage
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`and Note from NYCB are annexed as Exhibit “1” to this Affirmation.
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`14.
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`No party will be prejudiced by this relief. There is no claim alleged in this
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`action personal to New York Community Bank. All of NYCB’s right, title and interest in the
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`Mortgage and Note at issue have been sold and transferred to AV, such that NYCB has no
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`remaining interest in the subject of this action. Moreover, NYCB assigned its Cause of Action to
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`AV.
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`15.
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`NYCB and AV are entitled to the relief sought herein. See generally,
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`Community Lumber Co. v. Albans Holding Corp, 257 AD. 850, 12 N.Y.S.2d 398 (2d Dep’t
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`1939).
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`1018 (p. 222):
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`As Professor Alexander states in his Practice Commentary to McKinney‘s CPLR
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`“CPLR 1018 addresses the situation in which a party
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`FILED: SUFFOLK COUNTY CLERK 12/05/2017 02:48 PM
`FILED: SUFFOLK COUNTY CLERK 12m2017 02:48 PM
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`NYSCEF DOC. NO. 17
`NYSCEF DOC. NO. 17
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`INDEX NO. 614639/2017
`INDEX NO~ 614639/2017
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`RaCaIVaD vYSCEF: 12/05/2017
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`transfer her interest in the subject matter of the action to another
`person while the action is pending, as, for example, by assignment
`of the claim or conveyance of the relevant property. . .. The statute
`is applicable throughout the course of the action, including appeals.
`See, e.g., Udell V. McFadyen, 20 N.Y.2d 862, 285 N.Y.S.2d 93
`(NY. 1967).”
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`“Assuming substitution is desired, CPLR 1021 provides
`that the motion may be made by the assignee/transferee or any
`current party in the action.”
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`I
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`See also, 3 Weinstein, Korn & Miller, New York Civil Practice w 1018.00,
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`1018.04, 1018.08 (Ferstendig ed. 2005) at pp. 10—242, 245—46.
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`“The substitution of an assignee after an assignment is
`generally appropriate because the assignor, having no interest in
`the claim, should not be burdened with it.”
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`*
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`*
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`=1:
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`“If a person has no interest in a litigation because, for
`example, he has assigned his claim then an action cannot be
`commenced by or against him. The proceeding is moot because
`there is no right that can be affected by making him a party. In
`addition, our adversarial system assumes a real and personal
`interest in the outcome of the litigation by all parties. This is the
`driving force behind adequate representation of individual rights
`and the establishment of sound rules of law as a basis for stare
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`'
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`decisis. The court’s obligation to protect the adversarial system
`may require it to order substitution on its own motion.”
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`*
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`*
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`“So long as the action is not delayed, the assignee should
`not be kept out of the case on objection of one of the parties.”
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`*
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`*'
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`*
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`“The assignor, having no interest in the claim, should not
`be burdened with it when he wishes to withdraw. The assignee,
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`FILED: SUFFOLK COUNTY CLERK 12/05/2017 02:48 PM
`FILED: SUFFOLK COUNTY CLERK 12m2017 02:48 PM
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`NYSCEF DOC. NO. 17
`NYSCEF DOC. NO. 17
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`INDEX NO. 614639/2017
`INDEX NO~ “4639/2017-
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`RaCaIVaD vYSCEF: 12/05/2017
`RECEIVED NYSCEF: 12/05/2017
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`who may fear that his rights will not be adequately protected,
`should normally be permitted to enter and control the litigation.
`Except where laches, neglect or estoppel prevent reopening of a
`judgment and substitution, the court should exercise its discretion
`to afford the real party in interest an opportunity to show that there
`is merit in its claim or defense.”
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`16.
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`In addition to substituting AV as Plaintiff, AV's counsel of choice,
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`Berliner & Pilson, Esqs., have already been substituted as counsel of record for Plaintiff, and, if
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`not already accomplished, NYCB’S firm, of Stagg, Terenzi, Confusione & Wabnik, LLP, should
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`be removed as counsel of record. A copy of the Assignment of Action and Stipulation
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`Substituting Plaintiff and Attorneys for Plaintiff, already filed with the County Clerk, is annexed
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`hereto as Exhibit “B.”
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`17.
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`AV’s application should be granted in all respects. AV should be
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`substituted for NYCB as Plaintiff, the caption should be amended accordingly, and Berliner &
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`Pilson, Esqs. should be substituted as counsel of record for the new Plaintiff. A combined
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`proposed Order Appointing a Receiver and Substitution of Plaintiff effecting the above is here
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`annexed to these moving papers for the Court’s convenience.
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`18.
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`Affidavits of Service upon the various Defendants, including service of the
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`corporation Defendant 163-165 Bridge Road, LLC by service upon the New York Secretary of
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`State, are filed with the Court, and copies thereof are annexed as Exhibit “J.” No answer has
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`been filed or served by any of the Defendants herein, including the Borrower and, upon granting
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`of this application, a Motion for default seeking an Order of Reference will be made, as the time
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`to answer has in each case expired.
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`19.
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`No previous application for the relief herein prayed for or any other
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`FILED: SUFFOLK COUNTY CLERK 12/05/2017 02:48 PM
`FILED: SUFFOLK COUNTY CLERK 12m2017 02:48 PM
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`NYSCEF DOC. NO. 17
`NYSCEF DOC. NO. 17
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`614639/2017
`INDEX NO. 614639/2017
`INDEX NO~
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`RaCaIVaD vYSCEF:
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`provisional remedy has been secured or sought in this action, including the remedy of seizure of a
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`chattel in an action to recover a chattel.
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`WHEREFORE, Plaintiff respectfully requests an Order by reaSOn of the circumstances
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`aforesaid appointing a Receiver of the rents and profits for the benefit of the Plaintiff pending in
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`this action, with the usual powers and duties of receivers in such cases.
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`Dated: Great Neck, New York
`November friff) 2017
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`RICHARD J. PILSON, ESQ.
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