Preview
FILED: QUEENS COUNTY CLERK 06/13/2022 10:43 AM INDEX NO. 712364/2022
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/13/2022
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS
CENTRAL PENN CAPITAL MANAGEMENT LLC, Index No:
Plaintiff,
vs.
82-02 45TH AVE. CORP., JAMES KWANG LEE, SUMMONS
SOON LEE, NEW YORK CITY DEPARTMENT OF
FINANCE, NEW YORK STATE DEPARTMENT OF
TAXATION AND FINANCE, CRIMINAL COURT
OF THE CITY OF NEW YORK, NEW YORK CITY
ENVIRONMENTAL CONTROL BOARD, and
JOHN DOES 1-10 and JANE DOES 1-10,
Defendants.
TO THE ABOVE-NAMED DEFENDANTS:
YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve
a copy of your answer, or, if the complaint is not served with this summons, to serve a notice of
appearance, on the plaintiff's attorney(s) within 20 days after the service of this summons,
exclusive of the date of service (or within 30 days after the service is complete if this summons
is not personally delivered to you within the State of New York); and in case your failure to
appear or answer, judgment will be taken against you by default for the relief demanded in the
complaint.
Queens County is designated as the place of trial on the basis that the real property which
is the subject of this action is situated therein.
Dated: June 13, 2022
New York, New York
CHIESA SHAHINIAN & GIANTOMASI PC
Attorneys for Plaintiff,
Central Penn Capital Management LLC
By: /s/ Michael R. Caruso
Michael R. Caruso, Esq.
(Pursuant to 22 NYCRR 130-1.1(a))
Eleven Times Square, 31st Floor
New York, New York 10036
Tel: (973) 530-2109
E-mail: mcaruso@csglaw.com
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Defendant name and address: 82-02 45TH AVE. CORP.
19 Gilbert Road
Great Neck, New York 11024
JAMES KWANG LEE
19 Gilbert Road
Great Neck, New York 11024
SOON LEE
19 Gilbert Road
Great Neck, New York 11024
NEW YORK CITY DEPARTMENT OF FINANCE
100 Church Street
New York, New York 10007
NEW YORK STATE DEPT. OF TAXATION & FINANCE
Attn: Office of Counsel
Bldg 9, WA Harriman Campus
Albany, New York 12227
CRIMINAL COURT OF THE CITY OF NEW YORK
120-55 Queens Blvd.
Queens, New York 11415
NEW YORK CITY ENVIRONMENTAL CONTROL
BOARD
9 Bond Street
Brooklyn, New York 11201
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS
CENTRAL PENN CAPITAL MANAGEMENT LLC,
Index No:
Plaintiff,
vs.
82-02 45TH AVE. CORP., JAMES KWANG LEE, VERIFIED COMPLAINT
SOON LEE, NEW YORK CITY DEPARTMENT OF FOR FORECLOSURE OF A
FINANCE, NEW YORK STATE DEPARTMENT OF COMMERCIAL MORTGAGE
TAXATION AND FINANCE, CRIMINAL COURT AND FOR RELATED RELIEF
OF THE CITY OF NEW YORK, NEW YORK CITY
ENVIRONMENTAL CONTROL BOARD, and
JOHN DOES 1-10 and JANE DOES 1-10,
Defendants.
CENTRAL PENN CAPITAL MANAGEMENT LLC ( “Plaintiff” or “Lender”), by and
through its undersigned attorneys, by way of complaint against the Defendants, alleges and states:
NATURE OF THE ACTION
1. This is an action pursuant to New York Real Property Actions and Proceedings
Law for foreclosure of a defaulted commercial mortgage in the original principal amount of
$6,100,000.00 million encumbering real property commonly known as 82-02 45 th Avenue,
Elmhurst, New York, Block 1536, Lot 201 as shown on the Queens County Tax Map of the City
Register of the City of New York, State of New York, including all improvements thereon (the
“Mortgaged Property”).
2. The Mortgaged Property is a low-rise, single story retail commercial building of
approximately 16,500 square feet of net rentable area (and building area) situated at the corner
of 82nd Street and 45th Avenue in Elmhurst, New York.
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3. The Mortgaged Property is master leased to a food hall operator. The perimeter
of the main food court area, known as “Hong Kong Food Court”, contains retail units for food
vendor sub-tenants. Upon information and belief, most of the sub-tenant units are vacant and
unoccupied. Upon further information and belief, the Mortgaged Property generates
approximately $60,000.00 in rental income and revenue each month under one or more written
leases.
THE PARTIES, JURISDICTION, AND VENUE
4. Plaintiff is a Pennsylvania limited liability company headquartered in Lancaster,
Pennsylvania. Plaintiff is authorized to conduct business in New York.
5. Defendant 82-02 45TH AVE. CORP. is a New York domestic business
corporation with an address at 19 Gilbert Road, Great Neck, New York 11024.
6. Defendants JAMES KWANG LEE and SOON LEE, husband and wife, are
individuals with an address at 19 Gilbert Road, Great Neck, New York 11024.
7. Defendants 82-02 45TH AVE. CORP., JAMES KWANG LEE and SOON LEE
(individually and collectively, the “Borrower”) are joined as defendants because they are, jointly
and severally, the Borrower under the Loan Documents. Defendant 82-02 45TH AVE. CORP. is
the record owner of the Mortgaged Property.
8. Defendant NEW YORK CITY DEPARTMENT OF FINANCE (the “City”), has
an address at 100 Church Street, New York, New York 10007. The City is joined as a defendant
in order to extinguish any interest itmay have in and to the Mortgaged Property by virtue of
unpaid New York City corporate business taxes, fines and/or fees, if any, that are due or may
become due from the Borrower during the pendency of this action, which taxes, fines and/or fees
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constitute subordinate liens upon the Mortgaged Property under the Tax Law of the State of New
York.
9. Defendant NEW YORK STATE DEPARTMENT OF TAXATION AND
FINANCE (the “State”) has an address at c/o Office of Counsel, Building 9, WA Harriman
Campus, Albany, New York 12227. The State is joined as a defendant in order to extinguish any
interest it may have in and to the Mortgaged Property by virtue of unpaid New York state
corporate franchise taxes, fines and/or fees, if any, that are due or may become due from the
Borrower during the pendency of this action, which taxes, fines and/or fees constitute subordinate
liens upon the Mortgaged Property under the Tax Law of the State of New York.
10. Defendant CRIMINAL COURT OF THE CITY OF NEW YORK has an address
at 120-55 Queens Blvd, Queens, New York 11415 and is joined as a defendant in order to
extinguish any interest it may have in and to the Mortgaged Property by virtue of a Queens
County Criminal Court Judgement lien against Defendant 82-02 45TH AVE. CORP., which lien
constitutes a subordinate lien upon the Mortgaged Property.
11. Defendant NEW YORK CITY ENVIRONMENTAL CONTROL BOARD has an
address at 9 Bond Street Brooklyn, New York 11201 and is joined as a defendant in order to
extinguish any interest itmay have in and to the Mortgaged Property by virtue of the unpaid
Environmental Control Board liens against Defendant 82-02 45TH AVE. CORP., which liens
are subject and subordinate to the lien of Plaintiff’s Mortgage (as defined below).
12. Defendants JOHN DOES 1-10 and JANE DOES 1-10 are fictitious names
representing one or more persons whose identities are presently unknown to Plaintiff and are
joined as defendants in order to extinguish any right, title and interest that they have or may have
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in and to the Mortgaged Property with respect to their liens, leaseholds, possessory interests or
otherwise, all of which are subject and subordinate to the lien of Plaintiff’s Mortgage.
13. The Court has personal jurisdiction over Defendant 82-02 45TH AVE. CORP. as
it maintains and conducts business in the State of New York.
14. The Court has personal jurisdiction over Defendants JAMES KWANG LEE and
SOON LEE as they are residents of the State of New York.
15. Venue is proper in the County of Queens pursuant to CPLR § 507 since that is the
county where the Mortgaged Property is situated.
BACKGROUND RELEVANT TO ALL COUNTS
A. The Loan
16. On or about May 31, 2018, Lender’s predecessor-in-interest agreed to make a loan
to the Borrower in the original principal amount of $6,100,000.00 (the “Loan”).
17. The Loan consolidated and extended certain prior existing indebtedness owed by
the Borrower and secured by the Mortgaged Property.
18. To evidence the consolidated and extended indebtedness under the Loan, on May
31, 2018, the Borrower executed and delivered a certain Amended, Restated and Consolidated
Promissory Note (the “Note”) of even date in favor of Lender’s predecessor-in-interest in the
original principal amount of $6,100,000.00, together with interest thereon.
19. A copy of the Note is attached hereto as Exhibit A.
20. The Note provides for the accrual of interest at the regular contract rate of 4.50%
per annum, calculated on a 365/360 basis, and a maturity date of June 1, 2028.
21. On May 31, 2018, to secure the repayment of the Note, Borrower executed and
delivered an Amended, Restated and Consolidated Mortgage, Assignment of Leases and Rents,
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Security Agreement and Fixture Filing (the “Mortgage”) in favor of Lender’s predecessor-in-
interest.
22. A copy of the recorded Mortgage is attached hereto as Exhibit B, inclusive of the
metes and bounds description of the Mortgaged Property that was made a part of the recorded
Mortgage.
23. The Mortgage was recorded in Office of the City Register of the City of New
York on July 2, 2018, as City Register File No. (“CRFN”) 2018000218654.
24. The Mortgage encumbers the Mortgaged Property as a consolidated first
mortgage lien securing the consolidated indebtedness of the Loan as evidenced by the Note.
25. The Mortgage is not a purchase money mortgage.
26. The Mortgage includes a Uniform Commercial Code security agreement in favor
of Lender’s predecessor-in-interest creating a security interest in, among other things and without
limitation, all right, title and interest of the Borrower in and to all present and future Equipment,
Building Equipment, Intangibles, Awards, Insurance Policies, Leases and Agreements, Income
and Rents, Accounts Receivable, Securities, Deposits and Plans (each as defined in the
Mortgage), personal property, whether tangible or intangible in nature, including all proceeds of
any of the foregoing, related to, attached to, contained within, derived from or used in connection
with the Mortgaged Property (collectively, the “Collateral”).
27. To perfect its interests in the Collateral, Lender’s predecessor-in-interest filed a
UCC-1 Financing Statement in Office of the City Register of the City of New York on September
24, 2018, as CFRN 2018000318351 (the “County UCC-1”). The County UCC-1 names Lender’s
predecessor-in-interest as the secured party and Borrower as the debtor.
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28. To further perfect its interests in the Collateral, Lender’s predecessor-in-interest
filed a UCC-1 Financing Statement, Number 201806210288192, with the New York State
Department of State, Uniform Commercial Code Division, on June 21, 2018. (the “State UCC-
1” and together with the County UCC-, the “UCCs”). The State UCC-1 names Lender’s
predecessor-in-interest as the secured party and Borrower as the debtor.
29. The recorded and filed UCCs are attached collectively hereto as Exhibit C.
30. To further secure repayment of the Note, on May 31, 2018, Borrower executed
and delivered an Assignment of Leases and Rents (the “AOLR”) in favor of Lender’s
predecessor-in-interest.
31. The AOLR was recorded in Office of the City Register of the City of New York
on July 2, 2018 as CFRN 2018000218655 and is attached hereto as Exhibit D.
32. The AOLR, and the Mortgage at Sections 10 and 19(e), provide that Borrower
assign, transfer, grant and set over to Lender’s predecessor-in-interest all of their right, title and
interest in and to present and future Leases at the Mortgaged Property together with the present
and continuing right of Borrower to collect, receive and retain all of the Rents arising or issuing
from the Leases or from the Mortgaged Property subject, however, to a revocable license granted
by Lender’s predecessor-in-interest to Borrower to collect and receive the Rents so long as there
is no Event of Default under the Loan Documents.
33. The AOLR at Section 8, and the Mortgage at Sections 10, 19(e) and (f), provide
that upon the occurrence and during the continuance of an Event of Default under the Loan
Documents, Lender’s predecessor-in-interest shall have the right to revoke the license granted to
Borrower to collect the Rents, and thereafter, take possession, in its own name or through a
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receiver, to collect, receive, and retain the Rents and apply same toward payment of the secured
Loan in such manner as Lender’s predecessor-in-interest shall determine.
B. Assignment of the Loan to Plaintiff
34. As of March 30, 2022, by a certain Allonge affixed to the Note (the “Allonge”),
Lender’s predecessor-in-interest endorsed and delivered the original Note to Lender. A copy of
the Allonge is attached hereto as Exhibit E.
35. By virtue of the Allonge, Lender became the holder and owner of the Note with
respect to the Loan. Lender is in possession of the original Note and Allonge.
36. As of March 30, 2022, the Lender’s predecessor-in-interest executed and
delivered an Assignment of Mortgage (the “Assignment of Mortgage”) in favor of Lender, thus
transferring all right, title and interest in and to the Mortgage to Lender. A copy of the Assignment
of Mortgaged is attached hereto as Exhibit F.
37. By virtue of the Assignment of Mortgage, Lender became the holder and owner
of the Mortgage with respect to the Loan. Lender is in possession of the original Mortgage.
38. The Assignment of Mortgage was recorded in the Office of the City Register of
the City of New York on May 25, 2022, as CFRN 2022000213585.
39. As of March 30, 2022, Lender’s predecessor-in-interest executed and delivered
an Assignment of Assignment of Leases and Rents (the “Assignment of AOLR”) in favor of
Lender, thus transferring all right, title and interest in and to the AOLR to Lender. A copy of the
Assignment of AOLR is attached hereto as Exhibit G.
40. The Assignment of AOLR was recorded in the Office of the City Register of the
City of New York on May 25, 2022, as CFRN 2022000213586.
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41. As of March 30, 2022, Lender’s predecessor-in-interest executed and delivered
an Assignment of Loan Documents (the “Assignment”) in favor of Lender, thus transferring all
right, titleand interest in and to the Mortgage, Note, AOLR, and other Loan Documents to
Lender. A copy of the Assignment is attached hereto as Exhibit H.
42. Lender’s predecessor-in-interest has assigned the UCCs to Lender by separate
UCC-3 Assignments filed in the Office of the City Register of the City of New York on May 25,
2022, as CFRN 2022000213587 and filed with the New York State Department of State,
Uniform Commercial Code Division, on May 30, 2022 as Number 202205308254208,
respectively (together, the “UCC Assignments”, attached hereto as Exhibit I).
43. The Note, Mortgage, UCCs, AOLR, Allonge, Assignment of Mortgage,
Assignment of AOLR, Assignment, UCC Assignments, and all related documents executed in
connection with the Loan shall be referred to collectively herein as the “Loan Documents.” All
capitalized terms not otherwise defined in this Complaint shall have the same meaning as in the
Loan Documents.
44. Lender is the current holder and owner of the Loan Documents and is in
possession of the original Note and original Mortgage.
C. The Borrower’s Defaults Under the Loan Documents
45. The Loan Documents provide that if Borrower breaches any covenant therein,
such failure or breach shall constitute an Event of Default, and all amounts due thereunder shall,
at the option of Lender, become due and payable in full.
46. The Loan Documents further provide that upon the occurrence of an Event of
Default as defined therein, the indebtedness outstanding under the Note shall bear interest at a
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default rate of twenty-four (24%) percent per annum, or the maximum rate allowed to be charged
by law, whichever is lower, and shall be secured by the Mortgage.
47. The Loan Documents further provide that upon the occurrence of an Event of
Default thereunder, the holder of the Mortgage shall be entitled to, among other things and
without limitation, obtain a judicial decree foreclosing Borrower’s interests in all or any part of
the Mortgaged Property and manage the Mortgaged Property and collect the Rents and profits
therefrom, either in its own name or by and through a court-appointed receiver.
48. The Loan Documents further provide that upon the occurrence of an Event of
Default, Borrower shall be liable for all reasonable costs and expenses incurred by Lender in the
exercise of its rights, remedies, or powers under any of the Loan Documents, including all
reasonable amounts paid to attorneys and other advisors employed by Lender.
49. The Loan Documents further provide that upon the occurrence of an Event of
Default, Borrower shall pay to Lender, in addition to the entire unpaid principal balance of the
Note outstanding at the time of default and acceleration, all accrued interest and other sums due
and payable to Lender under the Note, Mortgage, and the other Loan Documents.
50. Section 3(t) of the Mortgage requires Borrower to maintain a minimum debt
service coverage ratio (“Minimum DSCR”) of 1.30:1.00 for the Mortgaged Property.
51. The Borrower is in default under the Loan Documents because of its failure to
meet and maintain the required Minimum DSCR of 1.30:1.00 for the Mortgaged Property for
fiscal year 2020.
52. Section 6 of the Mortgage provides that Borrower shall at all times keep in force
policies of insurance applicable to the Mortgaged Property that shall list Lender as the first
mortgagee, loss payee, and where applicable, additional insured.
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53. The Borrower is in default under the Loan Documents because of its failure to
place new or updated insurance on the Mortgaged Property, satisfactory to Lender in all respects,
naming “Central Penn Capital Management, LLC” as first mortgagee, loss payee, and where
applicable, additional insured, in accordance with Section 6 of the Mortgage.
54. The Borrower’s breach and default of the insurance provision of Section 6 of the
Mortgage has compelled Lender to procure, at Borrower’s sole cost and expense, a “forced place”
policy of insurance.
55. Section 13 of the Mortgaged provides that “Borrower shall cause the Property to
be maintained in good condition and repair…”
56. The Borrower is default under the Loan Documents by failing to address and
remedy several maintenance and repair issues at the Mortgaged Property, including water
leakages in multiple areas of the interior ceiling throughout the building; graffiti markings strewn
across the entirety of the front and side exterior façade; and, sidewalk trash littered along the
building’s front and side elevations. Upon information and belief, the Mortgaged Property is
under construction, which has been on-going since 2018.
57. Section 18(f) of the Mortgage provides that “…a material adverse change in the
financial condition of Owner [i.e., Defendant 82-02 45th Ave. Corp.] as reasonably determined
by Lender” shall constitute the occurrence of an Event of Default under the Loan Documents.
58. The Borrower is in default under the Loan Documents because of the prolonged
absence of a master tenant at the Mortgaged Property for most of 2021 resulting in a material
adverse change in the financial condition of Borrower.
59. Section 26 of the Mortgage provides that “Lender and its agents shall have the
right to enter and inspect the Property or any part thereof at all reasonable times and upon
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reasonable notice to Borrower.”
60. The Borrower is in default under the Loan Documents by having refused for
several weeks in 2021 to grant access to the Mortgaged Property for an inspection by the agent
of Lender’s predecessor-in-interest. After several weeks of refusal, Borrower ultimately allowed
access.
61. By five (5) separate letters dated September 27, 2021, November 16, 2021, April
12, 2022, May 6, 2022, and June 1, 2022 (each a “Default Notice” and, collectively, the “Default
Notices”, all of which are attached hereto as Exhibit J), Lender and Lender’s predecessor-in-
interest provided notice to Borrower of the occurrence of the Events of Default.
62. The Borrower never responded in writing to the Default Notices and never timely
cured any default.
63. As a result of Borrower’s uncured defaults under the Loan, Lender’s predecessor-
in-interest elected to impose interest at the default rate, accelerate the Loan, and revoke that
portion of the license granted to the Borrower pursuant to the Loan Documents to collect and
receive all Rents, issues and profits due from and generated by the Mortgaged Property, including
under the Leases at the Mortgaged Property.
64. By the separate Default Notices dated November 16, 2021, and June 1, 2022,
demand was made on Borrower for all Rents due from and generated by the Mortgaged Property
to be directed, turned over, and paid to Lender.
65. To date, Borrower has failed and refused to pay the accelerated debt, failed and
refused to place new or updated insurance on the Mortgaged Property, and failed and refused to
turnover Rents generated by the Mortgaged Property.
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66. Borrower’s continued use and possession of the Rents constitutes a conversion
and misappropriation of Plaintiff’s collateral.
67. To date, Borrower remains in default and material breach of its monetary and non-
monetary covenants in the Loan Documents.
68. As of June 3, 2022, there is no less than $6,490,989.72 due, owing, and payable
by Borrower to Lender under the Loan Documents inclusive of unpaid principal, interest, which
continues to accrue at the default rate of 24% per annum ($3,743.42 per diem), late charges,
attorneys’ fees, costs, and expenses, and all other sums that are due and may become due to
Lender under the Loan Documents on account of the defaults.
D. Joinder of the Defendants
69. The State and City are joined as defendants for the reasons set forth herein at ¶¶
7 and 8 supra.
70. A title search of the Mortgaged Property reveals the following parties with
judgments, liens and/or interests that appear of record against Borrowers and the Mortgaged
Property, which judgments, liens and/or interests are subordinate and subject to the lien of
Lender’s Mortgage:
a. Defendant NEW YORK CITY ENVIRONMENTAL CONTROL BOARD as
holder of an unpaid Environmental Control Board lien recorded against
Borrower and the Mortgaged Property; and,
b. Defendant CRIMINAL COURT OF THE CITY OF NEW YORK as holder
of a Queens County Criminal Court judgment lien recorded against Defendant
82-02 45TH AVE. CORP. docketed in the amount of $5,000.00.
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71. Any lien or interest which any of the Borrowers, State, City, New York City
Environmental Control Board, Criminal Court of the City of New York, and/or John Does 1-10
and Jane Does 1-10 (collectively, the “Defendants”) have or claim to have in or upon the
Mortgaged Property, Collateral or some part thereof is subject and subordinate to the Mortgage
and lien(s) of the Lender.
FIRST COUNT
(Foreclosure)
72. Plaintiff repeats and incorporates the foregoing allegations as if the same were set
forth at length herein.
73. The Borrower has defaulted under the Loan Documents as set forth above.
74. As of June 3, 2022, there is no less than $6,490,989.72 due, owing, and payable
to Plaintiff under the Loan Documents inclusive of unpaid principal, interest, which continues to
accrue, and late charges, attorneys’ fees, costs and expenses, and all other sums that may become
due to Plaintiff under the Loan Documents on account of Borrower’s defaults.
75. As a result of the occurrence of the Events of Default, Plaintiff is authorized to
foreclose the Mortgage under the terms of the Mortgage and applicable law.
76. To protect the lien and security represented by the Mortgage during the pendency
of this foreclosure action, Plaintiff may be compelled to pay insurance premiums, taxes,
assessments, water charges, sewer charges, attorneys’ fees, repairs and other expenses or charges
affecting the Mortgaged Property. Plaintiff asks that any amount so paid and expended directly
by it, and/or indirectly through payments made by the Plaintiff for the operation and management
of the Mortgaged Property, during the pendency of this foreclosure action be added, pursuant to
the Mortgage, to its claim and be repaid to Plaintiff from the proceeds of the sale of the Mortgaged
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Property, together with interest thereon from the date that such expenditures are made, and the
same be added to the amounts due Plaintiff and secured by the Mortgage.
77. The Mortgage being foreclosed is not a “high-cost home loan” or “subprime home
loan” as such terms are defined in §§ 6(l)1 and 6(m) of the N.Y. Banking Law and is not a “home
loan” for purposes of section §1304 of the N.Y. Real Property Actions and Proceedings Law
(“RPAPL”). Accordingly, the requirements of CPLR 3408 and RPAPL §§ 1302 and 1304 are
not applicable to this action.
WHEREFORE, Plaintiff demands judgment:
(a) Fixing the amount due to Plaintiff pursuant to the Loan Documents and Mortgage;
(b) Directing that Plaintiff be paid the amounts due pursuant to the Loan Documents
and Mortgage, with interest, advances, other charges, attorneys’ fees and costs;
(c) Adjudging that the Mortgaged Property be sold according to law, in whole or in
parts, to satisfy the amount due Plaintiff;
(d) Barring and foreclosing the Defendants from all equity of redemption in and to
the Mortgaged Property;
(e) Decreeing that the Defendants with liens recorded subsequent to the Mortgage
and all persons claiming by, through or under the Defendants subsequent to the
filing of a Notice of Pendency to be filed in this action, and every other person or
entity whose right, title, conveyance or encumbrance is subordinate to, subsequent
to or recorded after those of Plaintiff, be barred and forever foreclosed of all right,
claim, lien, interest or equity of redemption in and to said Mortgaged Property;
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(f) Directing that Plaintiff be granted the right to immediate possession of the
Mortgaged Property, and to collect Rents, issues, and profits of the Mortgaged
Property; and
(g) Awarding such other relief as the Court may deem just and proper.
SECOND COUNT