Preview
FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009
NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
-- ------------- x
Deutsche Bank National Trust Company as Trustee for
American Home Mortgage Assets Trust 2006-6
Mortgage-Backed Pass-Through Certificates, Series Index Nos: 105818/2009
2006-6, 107029/2009
Plaintiff,
-against- AFFIRMATION
IN OPPOSITION
Royal Blue Realty Holdings, Inc.; et at.
Defendants.
____________________-x
Deutsche Bank National Trust Company as Trustee for
American Home Mortgage Assets Trust 2007-1
Mortgage-Backed Pass-Through Certificates, Series Index Nos: 105819/2009
2007-1, 107017/2009
107028/2009
Plaintiff, 107030/2009
107031/2009
-against- 110570/2010
Royal Blue Realty Holdings, Inc.; et al.,
Defendants.
_
_____________________________ _________ ----------------------x
Deutsche Bank National Trust Company as Trustee for
American Home Mortgage Assets Trust 2007-1
Mortgage-Backed Pass-Through Certificates, Series
2007-1, Index No.: 850071/2016
Plaintiff,
-against-
Unknown Heirs of the Estate of Serge J. Souto, Royal
Blue Realty Holdings, Inc., et al.,
Defendants.
----- -- ------------------------- x
Martin Shaw an attorney duly admitted to practice in the Courts of the State of New York
affirms the following to be true under penalties of perjury:
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1. I am a partner of Lester Bleckner & Shaw LLP, attorneys for defendant/third
party plaintiff Royal Blue Realty Holdings. Inc. ("Royal Blue") and, as such, am fully familiar
with the facts and circumstances of this action. This affirmation is submitted in opposition to the
motion by plaintiff to disqualify defense counsel.
2. The motion should be denied insofar as plaintiff has failed to sustain its
heavy burden of establishing that disqualification is warranted. The conclusory claim that defense
counsel is a necessary witness is without even a hint of evidentiary support.
3. Plaintiff makes its motion based on the absurd notion that my firm's
testimony is somehow needed in order to adjudicate one of Royal Blue's affirmative defenses: i.e.,
that plaintiff's mortgage loans are unenforceable because a foreclosure sale of the subject
properties would violate the Martin Act. Whether Royal Blue's affirmative Martin Act defense
suffices to defeat plaintiff's claim is purely a legal question that requires an application of the
pertinent legal principles to the uncontested facts. The uncontested facts are established by the
record.1
documentary proof in the
Specifically, Royal Blue has clearly demonstrated that no offering plan was ever accepted
by the Department of Law of the New York State Attorney General's Office ("NYAG") for the
sale of any of the premises encumbered by plaintiff's loans. That uncontroverted fact is established
by public records on filewith the NYAG.
Under Section 352(e) of the New York State General Business Law ("GBL"), no offering
or sale may be made of any real estate security (i.e.,a cooperative apartment or condominium unit)
in New York unless and until an offering plan for such security has been accepted for filing by the
NYAG. In addition, under the GBL, in order for a condominium offering plan to be accepted for
filing, the underlying property must first be created as a legal condominium in accordance with
the terms of Real Property Law Section 339, which includes, among other things, a requirement
under Real Property Law Section 339-p that floor plans be filed in the office of the recording
officer setting forth dimensions and other information relative to the unit being created.
The existence, or lack thereof, of an accepted offering plan for the subject property and
filed floor plans required to create a valid condominium unit is a simple matter of public record.
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4. Plaintiff has failed to even remotely identify how any projected testimony
by counsel for Royal Blue, as a potential witness, could alter the undisputed facts at hand regarding
Act.2
Royal Blue's failure to comply with the Martin
5. I can unequivocally state that other than documentation obtained from the
NYAG and the New York City Office of the Register and the documentation that I have previously
provided to plaintiff, I have no information, documentation or insights that might, in any way,
bolster or challenge the foregoing affirmative defenses.
6. The disqualification motion has been made in bad faith, is devoid of
substance, and is designed solely to harass Royal Blue and drain itsresources. That motion must
be summarily denied.
Factual Background
7. Plaintiff seeks to foreclose on nine (9) mortgages purportedly secured by
nine (9) different tax lots.
8. In 2000, Royal Blue acquired the comniercial unit (the "Commercial Unit")
of the 130 Barrow Street Condominium (the "Barrow Street Condominium"). The Commercial
Unit had, upon information and belief, previously been used for one or more retail stores, and in
2002, it was apparently renovated and subdivided into twelve (12) apartments (each an
"Apartment"
and collectively, the "Apartments").
No amount of testimony from counsel or any other person is ñêêded to confirm that which is in
the public domain.
2
It should also be noted that plaintiff's assertions in itsmotion are extraordinarily vague and
things"
obtuse when referring to Royal Blue's counsel needing to testify as to "among other
noncompliance with the Martin Act. Rather, plaintiff is only capable of putting forth unfounded
fact"
and unsubstantiated claims that such testimony relates to "significant issues of without detail
or specificity, but only with conjecture.
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9. The Barrow Street Condominium was formed in or about 1982 with respect
to the sale of eighty-three (83) residential condominium units (the "Residential Units"). The
Residential Units were offered for sale to the public pursuant to an offering plan (the "Barrow
Street Plan") dated April 8, 1982 and restated and amended from time to time. The Barrow Street
Plan, accepted for filing by the NYAG, expressly excluded the Commercial Unit from the offering.
The Barrow Street Plan was amended fifteen (15) times over the intervening years, but none of the
amendments offered the Commercial Unit (nor any Apartment therein) for sale.
10. As noted above, under New York law, neither the entire Commercial Unit,
nor any Apartment therein may be offered for sale or sold to the public unless and until an offering
plan permitting such sale has first been accepted for filing by the NYAG.
11. There is nothing my firm could possibly testify to that can change or would
change the simple and uncontroverted facts underpinñing Royal Blue's affirmative defense that a
foreclosure sale of the premises would violate the Martin Act: i.e.,without an accepted offering
plan that complies with the GBL and NYAG regulations (as well as with the Real Property Law),
the Commercial Unit and/or any part thereof (including the Apartments) are prohibited from being
marketed for sale in any mamier or offered for sale or sold to the public.
12. Itis undisputed that in or about 2002, Royal Blue did, in fact, seek to amend
the Barrow Condominium Offering Plan in order to offer the Apartments (i.e., the subdivided
spaces within the Commercial Unit) for sale to the public.
13. On or about approxi1ñately January 22, 2003, the proposed amendment was
rejected by the NYAG because itdid not comply with various regulations promulgated by the
NYAG as occupied and tenanted apartments
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14. As noted above, a simple search of the NYAG's records clearly shows that
no amendment to the Barrow Street Offering Plan and no new or other offering plan relating to the
Commercial Unit or offering the Commercial Unit or an part thereof for sale was ever accepted
for filing by the NYAG so as to legalize the offering or sale of the Commercial Unit or Apartments
to the public. There is simply nothing else my firm or I can possibly add to this fact.
15. All pertinent records and information with respect to the offering and sale
of condominiums under the Barrow Street Plan and the failed attempt to allow Apartments within
the Commercial Unit to be sold under the Barrow Street Offering Plan or other offering plan are
available to the public through the NYAG's office.
16. The Barrow Street Condominium was created by the filing of (x) a
declaration dated on or about December 21, 1982 (the "Declaration") and (y) Floor Plans certified
by Stephen B. Jacobs and Associates, Architects, on February 25, 1982, and filed with the Real
Property Assessment Department of the City of New York on January 26, 1983 as Condominium
Plan No. 79 and also filed in the City Register's Office on January 26, 1983 as Condominium Map
No. 8300-4147 (the "Floor Plans").
17. Although Royal Blue divided the Commercial Unit into the twelve (12)
Apartments with twelve separate tax lot numbers, Royal Blue never obtained approval from the
NYAG to amend the Barrow Street Plan which is required by the New York City Department of
Finance in order to file and record an amendment or revision to the Floor Plans necessary to
actually convert those tax lots into legal, valid and separate condominium units in accordance with
Real Property Law Section 339-p. There is nothing my firm or I can testify to that would modify
or change the facts supported by the public record.
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18. Plaintiff alleges, in the actions commenced in 2009 and 2010 that (i) in
2006 Royal Blue entered into multiple mortgage loans secured by the Apartments with Americañ
Home Mortgage ("AHM"), (ii)plaintiff acquired such loans from AHM, (iii)the Apartments are
(supposedly) legal condominium units, and (iv) Royal Blue defaulted in the indebtedness
paying
under the loans, which resulted in the commencement of these actions. As previously noted, Royal
Blue has timely answered and asserted numerous affirmative defenses, an affirmative
including
defense alleging that the actions are defective insofar as the premises are not legal condominium
units, and an affirmative defense that even if the Apartments were legal condominium units,they
stillcannot legally be sold at foreclosure, or otherwise, due to the fact that there is no offering plan
or amendment to an offering plan accepted for filing by the NYAG, thereby prohibiting their sale
as violative of the Martin Act (i.e.,a foreclosure sale of the premises would be patently illegal).
19. Now, approximately ten (10) years after the commencement by plaintiff of
most of the actions, plaintiff now moves for disqualification asserting that defense counsel is a
necessary witness. As noted above, there is simply nothing relevant that defense counsel as a
witness can add to what is shown in the public records, and as demonstrated below, the motion
lacks an evidentiary or legal basis and must be denied. Furthermore, Royal Blue is entitled to
sanctions, including all costs, as the disqualification motion is a blatant attempt by plaintiff to
harass and intimidate Royal Blue.
The Disqualification Motion Is Meritless And Should Be
Denied In Its Entirety
20. The right to choose one's own counsel is a valued right and any restrictions
must be carefully scrutinized. Ullmann-Schneider v. Lacher & Lovell-Taylor. P.C., 110 A.D.3d
(1"
469, 973 N.Y.S.2d 57 Dep't 2013); Advent Associates. LLC v. Voet Family Inv. Partners,
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L.P., 56 A.D.3d 1023, 867 N.Y.S.2d 569 (3d Dep't 2008). Moreover, where the rules relating to
professional conduct are invoked not at a disciplinary but in the context of an
proceeding ongoing
lawsuit, disqualification can create a strategic advantage of one party over another. Homar v.
American Home Mortg. Acceptance, Inc., supra. A party's entitlement to be represented by
counsel of his or her choice should not be abridged absent a clear that disqualification is
showing
warranted. Luciano v. Kennedy, 151 A.D.3d 957, 54 N.Y.S.3d 708 (2d Dep't 2017); Homar v.
American Home Mortg. Accentance, Inc., 119 A.D.3d 901, 990 N.Y.S.2d 250 (2d Dep't 2014).
21. In order to disqualify counsel on the ground that he or she may be called as
a witness, the party moving for disqualification has the burden of that (1) the
demonstrating
testimony of the opposing party's counsel is necessary to his or her case and (2) such testimony
would be prejudicial to the opposing party. Homar v. Americañ Home Morts. Accentance. Inc.,
supra. Speculation does not suffice. Goldberger v. Eisner, 21 A.D.3d 401, 799 N.Y.S.2d 778 (2d
Dep't 2005).
22. A finding of necessity must take into account such factors as the
significance of the matters, the weight of the testimony and the availability of other evidence.
Advent Associates, LLC v. Vogt Family Inv. Partners. L.P., supra; W_olfson v. Posner, 57 A.D.3d
979, 869 N.Y.S.2d 804 (2d Dep't 2008). A witness whose testimony is,at best, cumulative, isnot
a necessary witness. Orbco Advisors LLC v. 400 Fifth Realty LLC, 134 A.D.3d 448, 19 N.Y.S.3d
(1st
745 Dep't 2015).
23. The foregoing settled legal principles demonstrate that plaintiff's
disqualification motion is utterly baseless and asserted solely to gain an illegitimate strategic
advantage, while trying to deplete Royal Blue's financial resources (in much the same manner as
plaintiff's pending motions for the appointment of a receiver).
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defense3
24. Plaintiff claims that an affirmative alleging a violation of the
Martin Act somehow disqualifies defense counsel merely because counsel represented Royal Blue
in "its efforts to have its amendment to the Barrow Offering Plan approved by the NYAG and the
NYAG"
submission thereafter of a new Plan to the (see Plaintiff s memorandum of law
Offering
at 10).
25. Furthermore, plaintiff has attempted to use an out-of-context, off-the-record
and confidential conversation during a side-bar conference in order to accuse me, as defense
counsel, of misconduct and/or fraud in connection my representation of Royal Blue. The side-bar
conversation involved events that occurred approximately fifteen (15) years ago and is now being
used as a pretext for disqualification.
26. As previously noted, all facts related to this affirmative defense that the
Com mercial Unit and any parts thereof may not be sold or even marketed for sale are available
from public records. Simply put, those records clearly disclose the fact that no offering plan or
amendment has ever been accepted by the NYAG permitting the sale of the Commercial Unit or
Apartments.
27. Furthermore, the history of Royal Blue's failed effort to have a plan or
amendment accepted is wholly irrelevant to the legal issues set forth by Royal Blue in itsanswer
setting forth affirmative defenses. Whether Royal Blue's affirmative defense of a violation of the
Martin Act suffices to defeat plaintiff's claim is a legal question which requires an application of
applicable legal principles to the uncontested facts. No testimony from the NYAG, my firm, or
3
The affirmative defense was interposed, by Royal Blue's prior counsel about ten (10) years
ago, in 2010, when Royal Blue filed its answer to the plaintiff's initial complaint.
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anyone else can, in any way, alter the public record or châñge the fact that there is no offering plan
and no amendment to an offering plan that allows for the offer or sale of the subject premises.
law"
28. Indeed, plaintiff contends that, "as a matter of the notes and mortgage
at issue are valid and subject to foreclosure regardless of whether the units were allegedly not
legally formed under the Martin Act (see Plaintiff's memorandum of law at 1 fn.3).
29. Defense counsel's prior representation of Royal Blue has no bearing on
whether the condominium complies with the Martin Act. The question of whether a witness ought
issue.4
to testify is not alone determined by the fact that he was involved in the transaction at S&S
Hotel Ventures Limited Partnershio v. 777 S.H. Coro. 69 N.Y.S.2d 437, 515 N.Y.S.2d 735 (1987).
30. The uncontested facts are established by the documentary proof in the
record. Plaintiff concedes that ithas received documents that detail the rejection of Royal Blue's
amendment to the Barrow Offering Plan indicating that the individual units could not be mortgaged
(see Plaintiff's memorandum of law at 3).
31. Any additional testimony is redundant and cumulative. The documentary
proof in plaintiff's possession details Royal Blue's inability to comply with the Martin Act.
Defense counsel is not a necessary fact witness concerning the legal issue of whether the Martin
Act would be violated by a foreclosure sale of the subject premises or whether plaintiff's
foreclosure actions are defective.
32. Plaintiff's unfounded speculation regarding conversations that defense
counsel may have had with non-parties, sometime between ten (10) to eighteen (18) years ago,
does not suffice to sustain plaintiff's heavy burden of proving that defense counsel is a necessary
4
Notably, plaintiff does not allege that defense counsel was involved in securing the loans
at issue in these foreclosure actions, and has conceded that, in fact, defense counsel was n_ot the
attorney of record or involved in securing the loans at issue.
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witness. Speculation, conjecture and conclusory allegations do not amount to proof. Goldberger
v. Eisner, supra; Haberman v. City of Long Beach, 298 A.D.2d 497, 748 N.Y.S.2d 397 (2d Dep't
2002). In any event, these hypothetical conversations are not relevant to any issue in the
foreclosure actions.
33. It appears that plaintiff is frivolously and actionably accusing defense
counsel of misconduct or fraud in connection with a prior representation, taken out of context at
an off-the-record sidebar. Plaintiff speculates and surmises that defense counsel and Royal Blue
conspired to avoid payment of the loans. Royal Blue's intentions are not relevant to plaintiff's
burden in connection with itsforeclosure action. S_ee, JP Morgan Chase Bank v. Wenegieme, 162
A.D.3d 876, 81 N.Y.S.3d 54 (2d Dep't 2018).
34. Given the long history of fraud and deceptive practices perpetrated by
plaintiff and its loan servicers, trying to cast aspersions about Royal Blue or its counsel is trulythe
pot calling the kettle black. In addition, as one of the largest, most prolific lenders in the country,
American Home Mortgage (plaintiff's alleged predecessor) geñerated billions of dollars of
mortgages annually and had teams of lawyers and other professionals on hand to review loan
applications and conduct due diligence. The facts that there was no offering plan perniitting the
sale of the subject premises, and that the premises were not legal condominiums were readily
available to American Home Mortgage and the title companies that insured these loans at the time
the loans were made.
35. As noted above, defense counsel's testimony is not necessary to prove or
disprove the elements of plaintiff's case, the facts of which are all available through public records.
Testimony from counsel or any other person would in fact be wholly irrelevant. Moreover, Royal
Blue's defense to the foreclosure actions is not dependent on testimony from defense counsel. The
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disqualification motion is frivolous and devoid of merit. S_ee, Balboaa Land Development Inc. v.
Morris, 201 A.D.2d 850, 608 N.Y.S.2d 536 (3d Dep't 1994).
36. Plaintiff's conclusory allegations about defense counsel are baseless and, in
any event, irrelevant to the legal question of whether the failure to comply with the Martin Act
precludes these actions. Bald conclusory allegations of misconduct, which are unsupported by
evidentiary proof, do not satisfy plaintiff's heavy burden of establishing that misconduct is
warrañted. Indeed, in light of the absence of any evidentiary support for plaintiff's motion, it is
evident that the motion has been made to attempt to achieve a strategic advantage.
37. More importantly, even if there was misconduct on the part of defense
counsel and/or Royal Blue (which we vehemently deny), that misconduct would have no bearing
whatsoever on Royal Blue's affirmative defenses. The relevant issues with respect to the foregoing
affirmative defenses are (i)whether the subject premises are legal condominiums capable of being
mortgaged under the New York Real Property Law and (ii)whether the premises can legally be
sold at foreclosure sale without an extant offering plan under the Martin Act.
38. The facts needed to decide those issues reside solely in the public record:
i.e., the lack of recorded floor plans needed to be filed with the New York City Department of
Finance in order to create a condominium, and the lack of an offering plan permitting the marketing
and/or sale of a de jure or de facto condominium. Nothing defense counsel can say or produce can
possibly change the public record. Any argument by plaintiff to the contrary is pure fabrication,
made in bad faith to harass and intimidate Royal Blue.
39. The defects in plaintiff's foreclosure actions as detailed in Royal Blue's
answer, counterclaims and third-party action, are not dependent on, or elucidated by testimony
from defense counsel. The facts are well-documented by the public record. The validity of Royal
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Blue's affirmative defenses is resolved by an analysis of the relevant statutes as applied to the
uncontested facts. The affirmative defenses are not proven or disproven by defense counsel's
testimony. Significantly, plaintiff fails to identify, specify or detail any testimony available from
defense counsel or any other testimony that would be prejudicial to Royal Blue in connection with
this case.
40. It iswell settled that the disqualification under the advocate-
party seeking
witness rule is required to identify the projected testimony of the witness and show that itwould
be so adverse to the factual assertion or account of events offered on behalf of the client as to
(4th
warrant his or her disqualification. In re Will of Bodkin, 128 A.D.3d 1526, 9 N.Y.S.3d 510
(1st
Dep't 2015); Broadwhite Associates v. Truong, 237 A.D.2d 162, 654 N.Y.S.2d 144 Dep't
(1st
1997); Martinez v. Suozzi, 186 A.D.2d 378, 588 N.Y.S.2d 175 Dep't 1992). Plaintiff's failure
to make such a showing, at bar, confirms that it is simply seeking a strategic advantage by the
disqualification of Royal Blue's attorney of long standing, a result which denies Royal Blue the
valued right to representation by counsel of its choice. Broadwhite Associates v. Truong, supra.
41. Plaintiff's accusations, hyperbole and speculation do not sustain itsburden
of identifying conceivable, projected testimony that would be adverse to Royal Blue's interests.
Plaintiff's failure to identify any projected testimony that would be adverse to Royal Blue's
interests and/or relevant to this action establishes that the motion must be denied. Transcontinental
Const. Services, Ltd. v. McDonough. Marcus. Cohn & Tretter, P.C., 216 A.D.2d 19, 627 N.Y.S.2d
(lst
636 Dep't 1995).
42. The purported availability of capable independent co-counsel referenced in
plaintiff's memorandum of law at paragraph 12, who is not intimately familiar with the matter, is
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disqualification.5
not a factor weighing in favor of A party's entitlement to be represented by
counsel of his or her choice should not be abridged absent a clear showing that disqualification is
warranted. Luciano v. Kennedy, supra.
43. Plaintiff has not come remotely close to sustaining its heavy burden of
that disqualification of Royal Blue's counsel is warranted. The alleged of co-
proving availability
counsel does not favor disqualification where, as here, plaintiff is merely seeking a strategic
advantage in this litigation. Courts adjudicating disqualification motions must be mindful of the
possibility that the motion is made for improper reasons, to stall and derail the proceediñgs,
redounding to the strategic advantage of the one party over another. Stroñgback Corp. v. N.E.D.
(1st
Cambridge Ave. Development Corp., 32 A.D.3d 793, 823 N.Y.S.2d 357 Dep't 2006).
44. To reiterate what is patently obvious and detailed above, except for
information available to the public through the NYAG's office and New York City land records
filed with the Office of the Register, there is no information that might be uncovered through
testimony by my firm or any other entity needed for this Court to decide Royal Blue's affirmative
defenses that (i) a foreclosure sale of the subject premises would be patently illegal as violative of
the Martin Act, and (ii) plaintiff does not have a mortgage lien on real property because the
premises were never converted to condominiums under Real Property Law Section 339 due, in
part, to the fact that floor plans for condominium units were never filed in accordance with the
Real Property Law.
more"
decade or (emphasis added) is,simply put, a lie. Mr. Gamñierman has been of counsel to
me or my firm on these foreclosure cases starting sometime in 2015, when I was substituted as the
attorney for Royal Blue. I became Royal Blue's counsel in these cases because, upon information
and belief, its original attorney made a motion to resign due to a conflict of interest: he allegedly
represented Ocwen, which would not waive the conflict.
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45. The relevant facts are quite simple and have already been presented to the
Court: no offering plan has ever been accepted for filing that would permit the offer or sale of the
subject premises to the public through foreclosure or otherwise; and no floor plans have been filed
to legally convert the premises to condominiums capable of being mortgaged or sold.
46. Similar to plaintiff's pending motions for the appointment of a receiver,
plaintiff's motives and intent in bringing this motion are patently obvious and suspect.
ethically
This motion is a poorly masqüeraded attempt to burden Royal Blue with the never-ending costs
and delays of frivolous and unfounded motion practice.
Sanctions Should be Awarded, Including Reasonable
Attorneys'
Fees and Costs As Against Plaintiff and Its Attorney_s
47. Inasmuch as this motion has no substantive basis and is made solely to
achieve a strategic advantage, costs and sanctions should be imposed against plaintiff and its
counsel.
48. The Rules of the Chief Administ1ative Judge 22 NYCRR §130-1.1. provide,
in part, that:
(a) The court, in its discretion, may award to any party or
attorney in any civil action or proceeding before the court, except
where prohibited by law, costs in the form of reimbursement for
actual expenses reasonably incurred and reasonable attorney's fees,
resulting from frivolous conduct as defined in this Part. In addition
to or in lieu of awarding costs, the court, in itsdiscretion may impose
financial sanctions upon any party or attorney in a civil action or
proceeding who engages in frivolous conduct as defined in this Part.
49. It is well settled that a party's abuse of the judicial process is frivolous
conduct supporting an award of costs or the
Preview
FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK -- ------------- x Deutsche Bank National Trust Company as Trustee for American Home Mortgage Assets Trust 2006-6 Mortgage-Backed Pass-Through Certificates, Series Index Nos: 105818/2009 2006-6, 107029/2009 Plaintiff, -against- AFFIRMATION IN OPPOSITION Royal Blue Realty Holdings, Inc.; et at. Defendants. ____________________-x Deutsche Bank National Trust Company as Trustee for American Home Mortgage Assets Trust 2007-1 Mortgage-Backed Pass-Through Certificates, Series Index Nos: 105819/2009 2007-1, 107017/2009 107028/2009 Plaintiff, 107030/2009 107031/2009 -against- 110570/2010 Royal Blue Realty Holdings, Inc.; et al., Defendants. _ _____________________________ _________ ----------------------x Deutsche Bank National Trust Company as Trustee for American Home Mortgage Assets Trust 2007-1 Mortgage-Backed Pass-Through Certificates, Series 2007-1, Index No.: 850071/2016 Plaintiff, -against- Unknown Heirs of the Estate of Serge J. Souto, Royal Blue Realty Holdings, Inc., et al., Defendants. ----- -- ------------------------- x Martin Shaw an attorney duly admitted to practice in the Courts of the State of New York affirms the following to be true under penalties of perjury: 1 of 16 FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 1. I am a partner of Lester Bleckner & Shaw LLP, attorneys for defendant/third party plaintiff Royal Blue Realty Holdings. Inc. ("Royal Blue") and, as such, am fully familiar with the facts and circumstances of this action. This affirmation is submitted in opposition to the motion by plaintiff to disqualify defense counsel. 2. The motion should be denied insofar as plaintiff has failed to sustain its heavy burden of establishing that disqualification is warranted. The conclusory claim that defense counsel is a necessary witness is without even a hint of evidentiary support. 3. Plaintiff makes its motion based on the absurd notion that my firm's testimony is somehow needed in order to adjudicate one of Royal Blue's affirmative defenses: i.e., that plaintiff's mortgage loans are unenforceable because a foreclosure sale of the subject properties would violate the Martin Act. Whether Royal Blue's affirmative Martin Act defense suffices to defeat plaintiff's claim is purely a legal question that requires an application of the pertinent legal principles to the uncontested facts. The uncontested facts are established by the record.1 documentary proof in the Specifically, Royal Blue has clearly demonstrated that no offering plan was ever accepted by the Department of Law of the New York State Attorney General's Office ("NYAG") for the sale of any of the premises encumbered by plaintiff's loans. That uncontroverted fact is established by public records on filewith the NYAG. Under Section 352(e) of the New York State General Business Law ("GBL"), no offering or sale may be made of any real estate security (i.e.,a cooperative apartment or condominium unit) in New York unless and until an offering plan for such security has been accepted for filing by the NYAG. In addition, under the GBL, in order for a condominium offering plan to be accepted for filing, the underlying property must first be created as a legal condominium in accordance with the terms of Real Property Law Section 339, which includes, among other things, a requirement under Real Property Law Section 339-p that floor plans be filed in the office of the recording officer setting forth dimensions and other information relative to the unit being created. The existence, or lack thereof, of an accepted offering plan for the subject property and filed floor plans required to create a valid condominium unit is a simple matter of public record. 2 2 of 16 FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 4. Plaintiff has failed to even remotely identify how any projected testimony by counsel for Royal Blue, as a potential witness, could alter the undisputed facts at hand regarding Act.2 Royal Blue's failure to comply with the Martin 5. I can unequivocally state that other than documentation obtained from the NYAG and the New York City Office of the Register and the documentation that I have previously provided to plaintiff, I have no information, documentation or insights that might, in any way, bolster or challenge the foregoing affirmative defenses. 6. The disqualification motion has been made in bad faith, is devoid of substance, and is designed solely to harass Royal Blue and drain itsresources. That motion must be summarily denied. Factual Background 7. Plaintiff seeks to foreclose on nine (9) mortgages purportedly secured by nine (9) different tax lots. 8. In 2000, Royal Blue acquired the comniercial unit (the "Commercial Unit") of the 130 Barrow Street Condominium (the "Barrow Street Condominium"). The Commercial Unit had, upon information and belief, previously been used for one or more retail stores, and in 2002, it was apparently renovated and subdivided into twelve (12) apartments (each an "Apartment" and collectively, the "Apartments"). No amount of testimony from counsel or any other person is ñêêded to confirm that which is in the public domain. 2 It should also be noted that plaintiff's assertions in itsmotion are extraordinarily vague and things" obtuse when referring to Royal Blue's counsel needing to testify as to "among other noncompliance with the Martin Act. Rather, plaintiff is only capable of putting forth unfounded fact" and unsubstantiated claims that such testimony relates to "significant issues of without detail or specificity, but only with conjecture. 3 3 of 16 FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 9. The Barrow Street Condominium was formed in or about 1982 with respect to the sale of eighty-three (83) residential condominium units (the "Residential Units"). The Residential Units were offered for sale to the public pursuant to an offering plan (the "Barrow Street Plan") dated April 8, 1982 and restated and amended from time to time. The Barrow Street Plan, accepted for filing by the NYAG, expressly excluded the Commercial Unit from the offering. The Barrow Street Plan was amended fifteen (15) times over the intervening years, but none of the amendments offered the Commercial Unit (nor any Apartment therein) for sale. 10. As noted above, under New York law, neither the entire Commercial Unit, nor any Apartment therein may be offered for sale or sold to the public unless and until an offering plan permitting such sale has first been accepted for filing by the NYAG. 11. There is nothing my firm could possibly testify to that can change or would change the simple and uncontroverted facts underpinñing Royal Blue's affirmative defense that a foreclosure sale of the premises would violate the Martin Act: i.e.,without an accepted offering plan that complies with the GBL and NYAG regulations (as well as with the Real Property Law), the Commercial Unit and/or any part thereof (including the Apartments) are prohibited from being marketed for sale in any mamier or offered for sale or sold to the public. 12. Itis undisputed that in or about 2002, Royal Blue did, in fact, seek to amend the Barrow Condominium Offering Plan in order to offer the Apartments (i.e., the subdivided spaces within the Commercial Unit) for sale to the public. 13. On or about approxi1ñately January 22, 2003, the proposed amendment was rejected by the NYAG because itdid not comply with various regulations promulgated by the NYAG as occupied and tenanted apartments 4 4 of 16 FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 14. As noted above, a simple search of the NYAG's records clearly shows that no amendment to the Barrow Street Offering Plan and no new or other offering plan relating to the Commercial Unit or offering the Commercial Unit or an part thereof for sale was ever accepted for filing by the NYAG so as to legalize the offering or sale of the Commercial Unit or Apartments to the public. There is simply nothing else my firm or I can possibly add to this fact. 15. All pertinent records and information with respect to the offering and sale of condominiums under the Barrow Street Plan and the failed attempt to allow Apartments within the Commercial Unit to be sold under the Barrow Street Offering Plan or other offering plan are available to the public through the NYAG's office. 16. The Barrow Street Condominium was created by the filing of (x) a declaration dated on or about December 21, 1982 (the "Declaration") and (y) Floor Plans certified by Stephen B. Jacobs and Associates, Architects, on February 25, 1982, and filed with the Real Property Assessment Department of the City of New York on January 26, 1983 as Condominium Plan No. 79 and also filed in the City Register's Office on January 26, 1983 as Condominium Map No. 8300-4147 (the "Floor Plans"). 17. Although Royal Blue divided the Commercial Unit into the twelve (12) Apartments with twelve separate tax lot numbers, Royal Blue never obtained approval from the NYAG to amend the Barrow Street Plan which is required by the New York City Department of Finance in order to file and record an amendment or revision to the Floor Plans necessary to actually convert those tax lots into legal, valid and separate condominium units in accordance with Real Property Law Section 339-p. There is nothing my firm or I can testify to that would modify or change the facts supported by the public record. 5 5 of 16 FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 18. Plaintiff alleges, in the actions commenced in 2009 and 2010 that (i) in 2006 Royal Blue entered into multiple mortgage loans secured by the Apartments with Americañ Home Mortgage ("AHM"), (ii)plaintiff acquired such loans from AHM, (iii)the Apartments are (supposedly) legal condominium units, and (iv) Royal Blue defaulted in the indebtedness paying under the loans, which resulted in the commencement of these actions. As previously noted, Royal Blue has timely answered and asserted numerous affirmative defenses, an affirmative including defense alleging that the actions are defective insofar as the premises are not legal condominium units, and an affirmative defense that even if the Apartments were legal condominium units,they stillcannot legally be sold at foreclosure, or otherwise, due to the fact that there is no offering plan or amendment to an offering plan accepted for filing by the NYAG, thereby prohibiting their sale as violative of the Martin Act (i.e.,a foreclosure sale of the premises would be patently illegal). 19. Now, approximately ten (10) years after the commencement by plaintiff of most of the actions, plaintiff now moves for disqualification asserting that defense counsel is a necessary witness. As noted above, there is simply nothing relevant that defense counsel as a witness can add to what is shown in the public records, and as demonstrated below, the motion lacks an evidentiary or legal basis and must be denied. Furthermore, Royal Blue is entitled to sanctions, including all costs, as the disqualification motion is a blatant attempt by plaintiff to harass and intimidate Royal Blue. The Disqualification Motion Is Meritless And Should Be Denied In Its Entirety 20. The right to choose one's own counsel is a valued right and any restrictions must be carefully scrutinized. Ullmann-Schneider v. Lacher & Lovell-Taylor. P.C., 110 A.D.3d (1" 469, 973 N.Y.S.2d 57 Dep't 2013); Advent Associates. LLC v. Voet Family Inv. Partners, 6 6 of 16 FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 L.P., 56 A.D.3d 1023, 867 N.Y.S.2d 569 (3d Dep't 2008). Moreover, where the rules relating to professional conduct are invoked not at a disciplinary but in the context of an proceeding ongoing lawsuit, disqualification can create a strategic advantage of one party over another. Homar v. American Home Mortg. Acceptance, Inc., supra. A party's entitlement to be represented by counsel of his or her choice should not be abridged absent a clear that disqualification is showing warranted. Luciano v. Kennedy, 151 A.D.3d 957, 54 N.Y.S.3d 708 (2d Dep't 2017); Homar v. American Home Mortg. Accentance, Inc., 119 A.D.3d 901, 990 N.Y.S.2d 250 (2d Dep't 2014). 21. In order to disqualify counsel on the ground that he or she may be called as a witness, the party moving for disqualification has the burden of that (1) the demonstrating testimony of the opposing party's counsel is necessary to his or her case and (2) such testimony would be prejudicial to the opposing party. Homar v. Americañ Home Morts. Accentance. Inc., supra. Speculation does not suffice. Goldberger v. Eisner, 21 A.D.3d 401, 799 N.Y.S.2d 778 (2d Dep't 2005). 22. A finding of necessity must take into account such factors as the significance of the matters, the weight of the testimony and the availability of other evidence. Advent Associates, LLC v. Vogt Family Inv. Partners. L.P., supra; W_olfson v. Posner, 57 A.D.3d 979, 869 N.Y.S.2d 804 (2d Dep't 2008). A witness whose testimony is,at best, cumulative, isnot a necessary witness. Orbco Advisors LLC v. 400 Fifth Realty LLC, 134 A.D.3d 448, 19 N.Y.S.3d (1st 745 Dep't 2015). 23. The foregoing settled legal principles demonstrate that plaintiff's disqualification motion is utterly baseless and asserted solely to gain an illegitimate strategic advantage, while trying to deplete Royal Blue's financial resources (in much the same manner as plaintiff's pending motions for the appointment of a receiver). 7 7 of 16 FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 defense3 24. Plaintiff claims that an affirmative alleging a violation of the Martin Act somehow disqualifies defense counsel merely because counsel represented Royal Blue in "its efforts to have its amendment to the Barrow Offering Plan approved by the NYAG and the NYAG" submission thereafter of a new Plan to the (see Plaintiff s memorandum of law Offering at 10). 25. Furthermore, plaintiff has attempted to use an out-of-context, off-the-record and confidential conversation during a side-bar conference in order to accuse me, as defense counsel, of misconduct and/or fraud in connection my representation of Royal Blue. The side-bar conversation involved events that occurred approximately fifteen (15) years ago and is now being used as a pretext for disqualification. 26. As previously noted, all facts related to this affirmative defense that the Com mercial Unit and any parts thereof may not be sold or even marketed for sale are available from public records. Simply put, those records clearly disclose the fact that no offering plan or amendment has ever been accepted by the NYAG permitting the sale of the Commercial Unit or Apartments. 27. Furthermore, the history of Royal Blue's failed effort to have a plan or amendment accepted is wholly irrelevant to the legal issues set forth by Royal Blue in itsanswer setting forth affirmative defenses. Whether Royal Blue's affirmative defense of a violation of the Martin Act suffices to defeat plaintiff's claim is a legal question which requires an application of applicable legal principles to the uncontested facts. No testimony from the NYAG, my firm, or 3 The affirmative defense was interposed, by Royal Blue's prior counsel about ten (10) years ago, in 2010, when Royal Blue filed its answer to the plaintiff's initial complaint. 8 8 of 16 FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 anyone else can, in any way, alter the public record or châñge the fact that there is no offering plan and no amendment to an offering plan that allows for the offer or sale of the subject premises. law" 28. Indeed, plaintiff contends that, "as a matter of the notes and mortgage at issue are valid and subject to foreclosure regardless of whether the units were allegedly not legally formed under the Martin Act (see Plaintiff's memorandum of law at 1 fn.3). 29. Defense counsel's prior representation of Royal Blue has no bearing on whether the condominium complies with the Martin Act. The question of whether a witness ought issue.4 to testify is not alone determined by the fact that he was involved in the transaction at S&S Hotel Ventures Limited Partnershio v. 777 S.H. Coro. 69 N.Y.S.2d 437, 515 N.Y.S.2d 735 (1987). 30. The uncontested facts are established by the documentary proof in the record. Plaintiff concedes that ithas received documents that detail the rejection of Royal Blue's amendment to the Barrow Offering Plan indicating that the individual units could not be mortgaged (see Plaintiff's memorandum of law at 3). 31. Any additional testimony is redundant and cumulative. The documentary proof in plaintiff's possession details Royal Blue's inability to comply with the Martin Act. Defense counsel is not a necessary fact witness concerning the legal issue of whether the Martin Act would be violated by a foreclosure sale of the subject premises or whether plaintiff's foreclosure actions are defective. 32. Plaintiff's unfounded speculation regarding conversations that defense counsel may have had with non-parties, sometime between ten (10) to eighteen (18) years ago, does not suffice to sustain plaintiff's heavy burden of proving that defense counsel is a necessary 4 Notably, plaintiff does not allege that defense counsel was involved in securing the loans at issue in these foreclosure actions, and has conceded that, in fact, defense counsel was n_ot the attorney of record or involved in securing the loans at issue. 9 9 of 16 FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 witness. Speculation, conjecture and conclusory allegations do not amount to proof. Goldberger v. Eisner, supra; Haberman v. City of Long Beach, 298 A.D.2d 497, 748 N.Y.S.2d 397 (2d Dep't 2002). In any event, these hypothetical conversations are not relevant to any issue in the foreclosure actions. 33. It appears that plaintiff is frivolously and actionably accusing defense counsel of misconduct or fraud in connection with a prior representation, taken out of context at an off-the-record sidebar. Plaintiff speculates and surmises that defense counsel and Royal Blue conspired to avoid payment of the loans. Royal Blue's intentions are not relevant to plaintiff's burden in connection with itsforeclosure action. S_ee, JP Morgan Chase Bank v. Wenegieme, 162 A.D.3d 876, 81 N.Y.S.3d 54 (2d Dep't 2018). 34. Given the long history of fraud and deceptive practices perpetrated by plaintiff and its loan servicers, trying to cast aspersions about Royal Blue or its counsel is trulythe pot calling the kettle black. In addition, as one of the largest, most prolific lenders in the country, American Home Mortgage (plaintiff's alleged predecessor) geñerated billions of dollars of mortgages annually and had teams of lawyers and other professionals on hand to review loan applications and conduct due diligence. The facts that there was no offering plan perniitting the sale of the subject premises, and that the premises were not legal condominiums were readily available to American Home Mortgage and the title companies that insured these loans at the time the loans were made. 35. As noted above, defense counsel's testimony is not necessary to prove or disprove the elements of plaintiff's case, the facts of which are all available through public records. Testimony from counsel or any other person would in fact be wholly irrelevant. Moreover, Royal Blue's defense to the foreclosure actions is not dependent on testimony from defense counsel. The 10 10 of 16 FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 disqualification motion is frivolous and devoid of merit. S_ee, Balboaa Land Development Inc. v. Morris, 201 A.D.2d 850, 608 N.Y.S.2d 536 (3d Dep't 1994). 36. Plaintiff's conclusory allegations about defense counsel are baseless and, in any event, irrelevant to the legal question of whether the failure to comply with the Martin Act precludes these actions. Bald conclusory allegations of misconduct, which are unsupported by evidentiary proof, do not satisfy plaintiff's heavy burden of establishing that misconduct is warrañted. Indeed, in light of the absence of any evidentiary support for plaintiff's motion, it is evident that the motion has been made to attempt to achieve a strategic advantage. 37. More importantly, even if there was misconduct on the part of defense counsel and/or Royal Blue (which we vehemently deny), that misconduct would have no bearing whatsoever on Royal Blue's affirmative defenses. The relevant issues with respect to the foregoing affirmative defenses are (i)whether the subject premises are legal condominiums capable of being mortgaged under the New York Real Property Law and (ii)whether the premises can legally be sold at foreclosure sale without an extant offering plan under the Martin Act. 38. The facts needed to decide those issues reside solely in the public record: i.e., the lack of recorded floor plans needed to be filed with the New York City Department of Finance in order to create a condominium, and the lack of an offering plan permitting the marketing and/or sale of a de jure or de facto condominium. Nothing defense counsel can say or produce can possibly change the public record. Any argument by plaintiff to the contrary is pure fabrication, made in bad faith to harass and intimidate Royal Blue. 39. The defects in plaintiff's foreclosure actions as detailed in Royal Blue's answer, counterclaims and third-party action, are not dependent on, or elucidated by testimony from defense counsel. The facts are well-documented by the public record. The validity of Royal 11 11 of 16 FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 Blue's affirmative defenses is resolved by an analysis of the relevant statutes as applied to the uncontested facts. The affirmative defenses are not proven or disproven by defense counsel's testimony. Significantly, plaintiff fails to identify, specify or detail any testimony available from defense counsel or any other testimony that would be prejudicial to Royal Blue in connection with this case. 40. It iswell settled that the disqualification under the advocate- party seeking witness rule is required to identify the projected testimony of the witness and show that itwould be so adverse to the factual assertion or account of events offered on behalf of the client as to (4th warrant his or her disqualification. In re Will of Bodkin, 128 A.D.3d 1526, 9 N.Y.S.3d 510 (1st Dep't 2015); Broadwhite Associates v. Truong, 237 A.D.2d 162, 654 N.Y.S.2d 144 Dep't (1st 1997); Martinez v. Suozzi, 186 A.D.2d 378, 588 N.Y.S.2d 175 Dep't 1992). Plaintiff's failure to make such a showing, at bar, confirms that it is simply seeking a strategic advantage by the disqualification of Royal Blue's attorney of long standing, a result which denies Royal Blue the valued right to representation by counsel of its choice. Broadwhite Associates v. Truong, supra. 41. Plaintiff's accusations, hyperbole and speculation do not sustain itsburden of identifying conceivable, projected testimony that would be adverse to Royal Blue's interests. Plaintiff's failure to identify any projected testimony that would be adverse to Royal Blue's interests and/or relevant to this action establishes that the motion must be denied. Transcontinental Const. Services, Ltd. v. McDonough. Marcus. Cohn & Tretter, P.C., 216 A.D.2d 19, 627 N.Y.S.2d (lst 636 Dep't 1995). 42. The purported availability of capable independent co-counsel referenced in plaintiff's memorandum of law at paragraph 12, who is not intimately familiar with the matter, is 12 12 of 16 FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 disqualification.5 not a factor weighing in favor of A party's entitlement to be represented by counsel of his or her choice should not be abridged absent a clear showing that disqualification is warranted. Luciano v. Kennedy, supra. 43. Plaintiff has not come remotely close to sustaining its heavy burden of that disqualification of Royal Blue's counsel is warranted. The alleged of co- proving availability counsel does not favor disqualification where, as here, plaintiff is merely seeking a strategic advantage in this litigation. Courts adjudicating disqualification motions must be mindful of the possibility that the motion is made for improper reasons, to stall and derail the proceediñgs, redounding to the strategic advantage of the one party over another. Stroñgback Corp. v. N.E.D. (1st Cambridge Ave. Development Corp., 32 A.D.3d 793, 823 N.Y.S.2d 357 Dep't 2006). 44. To reiterate what is patently obvious and detailed above, except for information available to the public through the NYAG's office and New York City land records filed with the Office of the Register, there is no information that might be uncovered through testimony by my firm or any other entity needed for this Court to decide Royal Blue's affirmative defenses that (i) a foreclosure sale of the subject premises would be patently illegal as violative of the Martin Act, and (ii) plaintiff does not have a mortgage lien on real property because the premises were never converted to condominiums under Real Property Law Section 339 due, in part, to the fact that floor plans for condominium units were never filed in accordance with the Real Property Law. more" decade or (emphasis added) is,simply put, a lie. Mr. Gamñierman has been of counsel to me or my firm on these foreclosure cases starting sometime in 2015, when I was substituted as the attorney for Royal Blue. I became Royal Blue's counsel in these cases because, upon information and belief, its original attorney made a motion to resign due to a conflict of interest: he allegedly represented Ocwen, which would not waive the conflict. 13 13 of 16 FILED: NEW YORK COUNTY CLERK 02/25/2020 05:40 PM INDEX NO. 107030/2009 NYSCEF DOC. NO. 217 RECEIVED NYSCEF: 02/25/2020 45. The relevant facts are quite simple and have already been presented to the Court: no offering plan has ever been accepted for filing that would permit the offer or sale of the subject premises to the public through foreclosure or otherwise; and no floor plans have been filed to legally convert the premises to condominiums capable of being mortgaged or sold. 46. Similar to plaintiff's pending motions for the appointment of a receiver, plaintiff's motives and intent in bringing this motion are patently obvious and suspect. ethically This motion is a poorly masqüeraded attempt to burden Royal Blue with the never-ending costs and delays of frivolous and unfounded motion practice. Sanctions Should be Awarded, Including Reasonable Attorneys' Fees and Costs As Against Plaintiff and Its Attorney_s 47. Inasmuch as this motion has no substantive basis and is made solely to achieve a strategic advantage, costs and sanctions should be imposed against plaintiff and its counsel. 48. The Rules of the Chief Administ1ative Judge 22 NYCRR §130-1.1. provide, in part, that: (a) The court, in its discretion, may award to any party or attorney in any civil action or proceeding before the court, except where prohibited by law, costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct as defined in this Part. In addition to or in lieu of awarding costs, the court, in itsdiscretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part. 49. It is well settled that a party's abuse of the judicial process is frivolous conduct supporting an award of costs or the