Preview
FILED: KINGS COUNTY CLERK 08/23/2022 11:58 AM INDEX NO. 524444/2022
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/23/2022
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
----------------------------------------------------------------------X Index No.:
Date Summons filed:
ZENG QIANG GUO, YU SHU RANG,
LING QIONG LIU, TINA SHAO, and
YAU MAN LAM,
Plaintiffs, SUMMONS
-against-
QI YAO CHEN, a.k.a. QI YOU CHEN,
DAN YAN CHEN, and
SHUN FENG NO.1 LLC,
Defendants.
_____________________________________________________________________Ç
To The Above-Named Defendants:
YOU ARE HEREBY SUMMONED to appear in this Supreme Court of the
State of New York, County of Kings, at 360 Adams St #4, Brooklyn, NY 11201, within
twenty (20) days of the service of the Summons, exclusive of the day of service, or
within thirty (30) days after the service is complete if this Summons is not personally
delivered to you within the State of New York, and to answer this Summons and the
allegations set forth in the annexed Verified Complaint with the Clerk, and serve a true
copy thereof upon the attorney for Plaintiffs. If you fail to appear and answer the within
Summons and Complaint, a judgment will be entered against you by default for the relief
demanded in the Complaint, together with interest, costs, and disbursements
action.
DATED: August , 2022
Queens, New York
d5fan S. Yang, Esq.
Law Offices of Brian S. Yang
Attorneys for Plaintiffs
38-08 Union Street, Unit 6E
Flushing, NY 11354
(718) 939-6066
To: QI YAO CHEN, a.k.a. QI YOU CHEN
4914 9th Ave
Brooklyn, NY 11220
DAN YAN CHEN
4914 9th Ave
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Brooklyn, NY 11220
SHUN FENG NO.1 LLC
4914 9th Ave
Brooklyn, NY 11220
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS Index No.: ________________
----------------------------------------------------------------------X Date Summons filed: ________
ZENG QIANG GUO, YU SHU JIANG,
LING QIONG LIU, TINA SHAO, and
YAU MAN LAM,
Plaintiffs, VERIFIED
-against- COMPLAINT
QI YAO CHEN, a.k.a. QI YOU CHEN,
DAN YAN CHEN, and
SHUN FENG NO.1 LLC,
Defendants.
----------------------------------------------------------------------X
Plaintiffs, ZENG QIANG GUO, YU SHUJIANG, YAU MAN LAM, TINA SHAO, and
LING QIONG LIU (hereinafter jointly as the “Plaintiff Lenders”) by their attorney, Brian S.
Yang, ESQ., as and fortheir Verified Complaint, respectfully allege, upon information and belief:
1. At all times hereinafter mentioned, Plaintiff ZENG QIANG GUO was and still is a
resident Kings County, State of New York.
2. At all times hereinafter mentioned, Plaintiff YU SHU JIANG was and still is a resident
New York County, State of New York.
3. At all times hereinafter mentioned, Plaintiff LING QIONG LIU was and still is a resident
Kings County, State of New York.
4. At all times hereinafter mentioned, Plaintiff TINA SHAO was and still is a resident of
Queens County, State of New York.
5. At all times hereinafter mentioned, Plaintiff YAU MAN LAM was and still is a resident
of Queens County, State of New York.
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6. At all times hereinafter mentioned, Defendant QI YAO CHEN, a.k.a. QI YOU CHEN
was and still is a resident of Kings County, State of New York.
7. At all times hereinafter mentioned, Defendant DAN YAN CHEN was and still is a
resident of Kings County, State of New York.
8. At all times hereinafter mentioned, Defendant SHUN FENG NO.1 LLC was and still is a
limited liability company duly organized and transacted business in Kings County, State
of New York.
JURISDICTION AND VENUE
9. This Court has jurisdiction over Defendants pursuant to CPLR § 301 since at all relevant
times, upon information and belief, Defendants QI YAO CHEN, a.k.a. QI YOU CHEN,
and DAN YAN CHEN (hereinafter jointly as the “Defendant Borrowers”)residewithin
the Kings County, State of New York. Moreover, Defendant SHUN FENG NO.1 LLC
was and still is a limited liability company duly organized and transacted business in
Kings County, State of New York. Specifically, and the real estate property at issue
herein is located within the Kings County, State of New York. Thus this Court is the
proper venue in which to adjudicate this case, pursuant to CPLR § 503(c).
STATEMENT OF FACTS
10. On or about on May 11, 2021, the Plaintiff Lenders and the Defendant Borrowers entered
into a secured loan agreement in the amount of $500,000 with the interest rate of 2%
monthly (6% quarterly) and the maturity date of May 11, 2022 (hereinafter the “First
Loan Agreement”). Please see Exhibit A. First Loan Agreement.
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11. The First Loan Agreement has been properly executed and notarized between the
Plaintiff Lenders and the Defendant Borrowers.
12. Then on or about June 28, 2021, the Plaintiff Lenders and the Defendant Borrowers
entered into a second secured loan agreement in the amount of $300,000 with the interest
rate of 1.25% monthly (15% yearly) and the maturity date of June 27, 2022 (hereinafter
the “Second Loan Agreement”). Please see Exhibit B. Second Loan Agreement.
13. Then on or about September 7, 2021, the Plaintiff Lenders and the Defendant Borrowers
entered into a third secured loan agreement in the amount of $100,000 with the interest
rate of 1.25% monthly (15% yearly) and the maturity date of September 6, 2022
(hereinafter the “Third Loan Agreement”). Please see Exhibit C. Third Loan
Agreement.
14. Please take notice that all three loan agreements have been secured by all the interest
owned by the Defendant Borrowers in Shun Feng No. 1 LLC (hereinafter the
“Company”), which owns the real property located at 4914 9th Ave. Brooklyn, NY
11220 (hereinafter the “Property”). For this purpose, ON 05/17/2021, 07/08/2021 and
09/14/2021, several UCC-1 with Schedule A was filed with New York State Department.
See Exhibit D. UCC-1 Financing Statements.
15. In addition, to further secure the loans, on three different dates (05/11/2021, 06/28/2021
and 09/07/2021), Qi Yao Chen and Dan Yan Chen signed in front of notaries three
absolute, unconditional and irrevocable PERSONAL GUARANTY, in favor of the
plaintiff lenders herein. Please see Exhibit E. PERSONAL GUARANTY.
16. On or about May 10, 2022, due to Defendant Borrowers’ financial difficulty, the Plaintiff
Lenders and the Defendant Borrowers agreed to extend the maturity date for the First
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Loan agreement to November 11, 2021, and the Second Loan Agreement to December 27,
2021.
17. Moreover, on October 24, 2021, the Plaintiff Lenders agreed to adjust the interest rates of
the first loan to 1.25% monthly (while monthly interest of the second and second loan
stays the same), starting with the payment of October 11, 2021.
18. As of today, Defendant Borrowers are unable to complete the payment of the loans.
19. As of now, the Defendant Borrowers owe the Plaintiff Lenders interests totaling $54,000.
20. Moreover, the Defendant Borrowers have failed to pay the renewal fee as required by the
amendment(s) later duly signed between parties.
21. As per properly signed loan agreements, for all extension and renewal efforts, Defendant
Borrowers shall be responsible for Plaintiff Lenders’ attorney fee of $1,425.00.
22. Please also note that all three loan agreements specifically provide that Defendant
Borrowers should be responsible for any and all attorneys’ fees incurred by the Plaintiff
Lenders related to the default and/or collection of the loan.
23. However, the check of from the Defendant Borrowers for such attorney fee payment
bounced and Defendant Borrowers have failed to provide a replacement check and/or
make the payment after multiple written requests from the Plaintiff Lenders’ attorney's
office.
24. Up and till the filing of this Verified Complaint, Defendant Borrowers have failed and
refused to repay the principal, interest and penalties they owe to Plaintiff Lenders.
25. Thus, Defendant Borrowers are indebted to Plaintiff Lenders for the principal, interest,
fees and penalties until payment in full.
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FIRST CAUSE OF ACTION
(Breach of Contract)
26. Plaintiffs repeat and reassert the allegations of paragraphs 1 through 25 as though fully
set forth herein.
27. On or about on May 11, 2021, the Plaintiff Lenders and the Defendant Borrowers entered
into a secured loan agreement in the amount of $500,000 with the interest rate of 2%
monthly (6% quarterly) and the maturity date of May 11, 2022. Please see Exhibit A.
First Loan Agreement.
28. The First Loan Agreement has been properly executed and notarized between the
Plaintiff Lenders and the Defendant Borrowers.
29. Then on or about June 28, 2021, the Plaintiff Lenders and the Defendant Borrowers
entered into a second secured loan agreement in the amount of $300,000 with the interest
rate of 1.25% monthly (15% yearly) and the maturity date of June 27, 2022. Please see
Exhibit B. Second Loan Agreement.
30. Then on or about September 7, 2021, the Plaintiff Lenders and the Defendant Borrowers
entered into a third secured loan agreement in the amount of $100,000 with the interest
rate of 1.25% monthly (15% yearly) and the maturity date of September 6, 2022. Please
see Exhibit C. Third Loan Agreement.
31. Please take notice that all three loan agreements have been secured by all the interest
owned by the Defendant Borrowers in Shun Feng No. 1 LLC (the “Company”), which
owns the real property located at 4914 9th Ave. Brooklyn, NY 11220 (the “Property”).
32. In addition, all three loan agreements are further backed up, secured and guaranteed by
Qi Yao Chen and Dan Yan Chen individually.
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33. On or about May 10, 2022, due to Defendant Borrowers’ financial difficulty, the Plaintiff
Lenders and the Defendant Borrowers agreed to extend the maturity date for the First
Loan agreement to November 11, 2022, and the Second Loan Agreement to December 27,
2022.
34. Moreover, on October 24, 2021, the Plaintiff Lenders agreed to adjust the interest rates of
the first loan to 1.25% monthly (while interest of the second and second loan stays the
same, which is 1.25% monthly), starting with the payment of October 11, 2021.
35. As of today, Defendant Borrowers are unable to complete the payment of the loans.
36. As of now, the Defendant Borrowers owe the Plaintiff Lenders interests totaling $54,000.
37. Moreover, the Defendant Borrowers have failed to pay the renewal fee as required by the
amendment(s) later duly signed between parties.
38. As per properly signed loan agreements, for all extension and renewal efforts, Defendant
Borrowers shall be responsible for Plaintiff Lenders’ attorney fee of $1,425.00.
39. However, the check of from the Defendant Borrowers for such attorney fee payment
bounced and Defendant Borrowers have failed to provide a replacement check and/or
make the payment after multiple written requests from the Plaintiff Lenders’ attorney's
office.
40. As of today, Defendant Borrowers are unable to complete the payment of the loans.
41. Defendant Borrowers have never objected to loan agreement whenever Plaintiff Lenders
mentioned the loan to Defendant Borrowers in multiple occasions.
42. ThereforeDefendant Borrowers are obligated to Plaintiff Lenders for all three loans and
be ordered to liable for Plaintiff Lenders for the principal, interest, fees and penalties to
indemnify Plaintiffs for the loans.
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SECOND CAUSE OF ACTION
(Unjust Enrichment)
43. Plaintiffs repeat and reassert the allegations of paragraphs 1 through 42 as though fully
set forth herein.
44. On or about on May 11, 2021, the Plaintiff Lenders and the Defendant Borrowers entered
into a secured loan agreement in the amount of $500,000 with the interest rate of 2%
monthly (6% quarterly) and the maturity date of May 11, 2022. Please see Exhibit A.
First Loan Agreement.
45. The First Loan Agreement has been properly executed and notarized between the the
Plaintiff Lenders and the Defendant Borrowers.
46. Then on or about June 28, 2021, the Plaintiff Lenders and the Defendant Borrowers
entered into a second secured loan agreement in the amount of $300,000 with the interest
rate of 1.25% monthly (15% yearly) and the maturity date of June 27, 2022. Please see
Exhibit B. Second Loan Agreement.
47. Then on or about September 7, 2021, the Plaintiff Lenders and the Defendant Borrowers
entered into a third secured loan agreement in the amount of $100,000 with the interest
rate of 1.25% monthly (15% yearly) and the maturity date of September 6, 2022. Please
see Exhibit C. Third Loan Agreement.
48. Please take notice that all three loan agreements have been secured by all the interest
owned by the Defendant Borrowers in Shun Feng No. 1 LLC (the “Company”), which
owns the real property located at 4914 9th Ave. Brooklyn, NY 11220 (the “Property”).
49. In addition, all three loan agreements are further backed up, secured and guaranteed by
Qi Yao Chen and Dan Yan Chen individually.
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50. On or about May 10, 2022, due to Defendant Borrowers’ financial difficulty, the Plaintiff
Lenders and the Defendant Borrowers agreed to extend the maturity date for the First
Loan agreement to November 11, 2022, and the Second Loan Agreement to December 27,
2022.
51. Moreover, on October 24, 2021, the Plaintiff Lenders agreed to adjust the interest rates of
the first loan to 1.25% monthly (while interest of the second and second loan stays the
same, which is 1.25% monthly), starting with the payment of October 11, 2021.
52. As of today, Defendant Borrowers are unable to complete the payment of the loans.
53. As of now, the Defendant Borrowers owe the Plaintiff Lenders interests totaling $54,000.
54. Moreover, the Defendant Borrowers have failed to pay the renewal fee as required by the
amendment(s) later duly signed between parties.
55. As per properly signed loan agreements, for all extension and renewal efforts, Defendant
Borrowers shall be responsible for Plaintiff Lenders’ attorney fee of $1,425.00.
56. However, the check of from the Defendant Borrowers for such attorney fee payment
bounced and Defendant Borrowers have failed to provide a replacement check and/or
make the payment after multiple written requests from the Plaintiff Lenders’ attorney's
office.
57. Defendant Borrowers are clearly indebted to Plaintiff Lenders for the principal $900,000
plus interest and penalties as agreed by the parties. Defendant Borrowers would be
unjustly enriched if they are not ordered to pay Plaintiff Lenders back the total amount
they owe to Plaintiff Lenders.
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58. Therefore Defendant Borrowers are obligated to Plaintiff Lenders for all three loans and
be ordered to liable for Plaintiff Lenders for the principal, interest, fees and penalties to
indemnify Plaintiffs for the loans.
THIRD CAUSE OF ACTION
(Fraud and Misrepresentation)
59. Plaintiffs repeat and reassert the allegations of paragraphs 1 through 58 as though fully
set forth herein.
60. On or about on May 11, 2021, the Plaintiff Lenders and the Defendant Borrowers entered
into a secured loan agreement in the amount of $500,000 with the interest rate of 2%
monthly (6% quarterly) and the maturity date of May 11, 2022. Please see Exhibit A.
First Loan Agreement.
61. The First Loan Agreement has been properly executed and notarized between the
Plaintiff Lenders and the Defendant Borrowers.
62. Then on or about June 28, 2021, the Plaintiff Lenders and the Defendant Borrowers
entered into a second secured loan agreement in the amount of $300,000 with the interest
rate of 1.25% monthly (15% yearly) and the maturity date of June 27, 2022. Please see
Exhibit B. Second Loan Agreement.
63. Then on or about September 7, 2021, the Plaintiff Lenders and the Defendant Borrowers
entered into a third secured loan agreement in the amount of $100,000 with the interest
rate of 1.25% monthly (15% yearly) and the maturity date of September 6, 2022. Please
see Exhibit C. Third Loan Agreement.
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64. Please take notice that all three loan agreements have been secured by all the interest
owned by the Defendant Borrowers in Shun Feng No. 1 LLC (the “Company”), which
owns the real property located at 4914 9th Ave. Brooklyn, NY 11220 (the “Property”).
65. On or about May 10, 2022, due to Defendant Borrowers’ financial difficulty, the Plaintiff
Lenders and the Defendant Borrowers agreed to extend the maturity date for the First
Loan agreement to November 11, 2022, and the Second Loan Agreement to December 27,
2022.
66. Moreover, on October 24, 2021, the Plaintiff Lenders agreed to adjust the interest rates of
the first loan to 1.25% monthly (while interest of the second and second loan stays the
same, which is 1.25% monthly), starting with the payment of October 11, 2021.
67. As of today, Defendant Borrowers are unable to complete the payment of the loans.
68. As of now, the Defendant Borrowers owe the Plaintiff Lenders interests totaling $54,000.
69. Moreover, the Defendant Borrowers have failed to pay the renewal fee as required by the
amendment(s) later duly signed between parties.
70. As per properly signed loan agreements, for all extension and renewal efforts, Defendant
Borrowers shall be responsible for Plaintiff Lenders’ attorney fee of $1,425.00.
71. However, the check of from the Defendant Borrowers for such attorney fee payment
bounced and Defendant Borrowers have failed to provide a replacement check and/or
make the payment after multiple written requests from the Plaintiff Lenders’ attorney's
office.
72. Please note that the collateral Property located at 4914 9th Ave. Brooklyn, NY 11220 has
a loan/lien on it by Cathay Bank for $1,800,000.00.
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73. Prior to the execution of the loans, Defendant Borrowers represented to Plaintiff Lenders
that the appraisal value for the Property is $3,800,000.00.
74. However, unknown to Plaintiff lenders prior to this Complaint, the Defendant Borrowers
used fake leases to jack up and inflate the appraisal value of the Property to defraud the
creditors, including Cathay Bank and Plaintiff Lenders.
For instance, on 07/19/2022, in the middle of negotiating a solution in event of the
defendant’s default, in front of four witnesses (Tina Shao, Zeng Qiang Guo, Yau Man
Lam, and Ling Qiong Liu), the defendant Qi Yao Chen admitted that the rent reported to
the Cathay bank were inflated. The rental income of $5400 per month reported to the
bank should have been: $2800 month. $3600 per month should have been $3100 per
month and $3700 per month should have been around $3150.
75. If the creditors had known the real value of the building, they would not have made the
loan(s).
76. Upon information and belief, if Cathay Bank’s $1,800,000.00 lien/loan attached to the
Property is paid, and if all violations, mechanic lien and other related costs/expenses
relating to the Property are paid in full, the Property would barely has any positive
residual value left.
77. Plaintiff Lenders were informed and lead to believe, that the Property appraisal value was
$3,800,000.00, which is contrary to the later discovered information.
78. Plaintiff Lenders did not begin to discover Defendant Borrowers’ fraud and
misrepresentation until August 2022.
79. Plaintiff Lenders have been harmed by Defendant Borrowers’ fraud and
misrepresentations.
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80. Defendant Borrowers’ fraud and representation were willful and malicious. As a result,
Plaintiff Lenders are entitled to punitive damages, in additional to the principal, interest
fees and penalties of the loan.
FOURTH CAUSE OF ACTION
(Declaratory Judgment)
81. Plaintiffs repeat and reassert the allegations of paragraphs 1 through 80 as though fully
set forth herein.
82. An actual controversy has arisen and exists between the parties, and Plaintiff Lenders
now seek a declaratory judgment from the Court as to the rights and obligations of the
parties under the three loan agreements, and to have the same declared valid and binding
upon the parties.
83. On or about on May 11, 2021, the Plaintiff Lenders and the Defendant Borrowers entered
into a secured loan agreement in the amount of $500,000 with the interest rate of 2%
monthly (6% quarterly) and the maturity date of May 11, 2022. Please see Exhibit A.
First Loan Agreement.
84. The First Loan Agreement has been properly executed and notarized between the
Plaintiff Lenders and the Defendant Borrowers.
85. Then on or about June 28, 2021, the Plaintiff Lenders and the Defendant Borrowers
entered into a second secured loan agreement in the amount of $300,000 with the interest
rate of 1.25% monthly (15% yearly) and the maturity date of June 27, 2022. Please see
Exhibit B. Second Loan Agreement.
86. Then on or about September 7, 2021, the Plaintiff Lenders and the Defendant Borrowers
entered into a third secured loan agreement in the amount of $100,000 with the interest
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rate of 1.25% monthly (15% yearly) and the maturity date of September 6, 2022. Please
see Exhibit C. Third Loan Agreement.
87. Please take notice that all three loan agreements have been secured by all the interest
owned by the Defendant Borrowers in Shun Feng No. 1 LLC (the “Company”), which
owns the real property located at 4914 9th Ave. Brooklyn, NY 11220 (the “Property”).
88. On or about May 10, 2022, due to Defendant Borrowers’ financial difficulty, the Plaintiff
Lenders and the Defendant Borrowers agreed to extend the maturity date for the First
Loan agreement to November 11, 2022, and the Second Loan Agreement to December 27,
2022.
89. Moreover, on October 24, 2021, the Plaintiff Lenders agreed to adjust the interest rates of
the first loan to 1.25% monthly (while interest of the second and second loan stays the
same, which is 1.25% monthly), starting with the payment of October 11, 2021.
90. As of today, Defendant Borrowers are unable to complete the payment of the loans.
91. As of now, the Defendant Borrowers owe the Plaintiff Lenders interests totaling $54,000.
92. Moreover, the Defendant Borrowers have failed to pay the renewal fee as required by the
amendment(s) later duly signed between parties.
93. As per properly signed loan agreements, for all extension and renewal efforts, Defendant
Borrowers shall be responsible for Plaintiff Lenders’ attorney fee of $1,425.00.
94. However, the check of from the Defendant Borrowers for such attorney fee payment
bounced and Defendant Borrowers have failed to provide a replacement check and/or
make the payment after multiple written requests from the Plaintiff Lenders’ attorney's
office.
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95. Plaintiff Lenders now seek a declaratory judgment from the Court as to the validity,
rights and obligations of the parties under the three loan agreements.
96. A judicial determination of the issues and the respective duties of Plaintiff Lenders and
Defendant Borrowers is necessary and appropriate at this time under the circumstances to
prevent any further harm to Plaintiffs.
97. The undisputed facts establish that Plaintiffs are entitled to declaratory judgment as a
matter of law, and if the Court determines that the three loan agreements are valid and
binding upon the parties, then Plaintiffs are entitled to receive from the sale proceeds of
the Property the amount Defendant Borrowers owes to them, including but not limited to
the principal, interest fees and penalties of the loan.
FIFTH CAUSE OF ACTION
(Lien)
98. Plaintiffs repeat and reassert the allegations of paragraphs 1 through 97 as though fully
set forth herein.
99. Plaintiff Lenders also seek an equitable relief from the Court to place a lien on the
Property under the three loan agreements, to protect their interest and to prevent
Defendant Borrowers from more scheme(s) or fraudulent misconduct.
100. On or about on May 11, 2021, the Plaintiff Lenders and the Defendant Borrowers
entered into a secured loan agreement in the amount of $500,000 with the interest rate of
2% monthly (6% quarterly) and the maturity date of May 11, 2022. Please see Exhibit A.
First Loan Agreement.
101. The First Loan Agreement has been properly executed and notarized between the
the Plaintiff Lenders and the Defendant Borrowers.
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102. Then on or about June 28, 2021, the Plaintiff Lenders and the Defendant
Borrowers entered into a second secured loan agreement in the amount of $300,000 with
the interest rate of 1.25% monthly (15% yearly) and the maturity date of June 27, 2022.
Please see Exhibit B. Second Loan Agreement.
103. Then on or about September 7, 2021, the Plaintiff Lenders and the Defendant
Borrowers entered into a third secured loan agreement in the amount of $100,000 with
the interest rate of 1.25% monthly (15% yearly) and the maturity date of September 6,
2022. Please see Exhibit C. Third Loan Agreement.
104. Please take notice that all three loan agreements have been secured by all the
interest owned by the Defendant Borrowers in Shun Feng No. 1 LLC (the “Company”),
which owns the real property located at 4914 9th Ave. Brooklyn, NY 11220 (the
“Property”).
105. On or about May 10, 2022, due to Defendant Borrowers’ financial difficulty, the
Plaintiff Lenders and the Defendant Borrowers agreed to extend the maturity date for the
First Loan agreement to November 11, 2022, and the Second Loan Agreement to
December 27, 2022.
106. Moreover, on October 24, 2021, the Plaintiff Lenders agreed to adjust the interest
rates of the first loan to 1.25% monthly (while interest of the second and second loan
stays the same, which is 1.25% monthly), starting with the payment of October 11, 2021.
107. As of today, Defendant Borrowers are unable to complete the payment of the
loans.
108. As of now, the Defendant Borrowers owe the Plaintiff Lenders interests totaling
$54,000.
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109. Moreover, the Defendant Borrowers have failed to pay the renewal fee as required
by the amendment(s) later duly signed between parties.
110. As per properly signed loan agreements, for all extension and renewal efforts,
Defendant Borrowers shall be responsible for Plaintiff Lenders’ attorney fee of $1,425.00.
111. However, the check of from the Defendant Borrowers for such attorney fee
payment bounced and Defendant Borrowers have failed to provide a replacement check
and/or make the payment after multiple written requests from the Plaintiff Lenders’
attorney's office.
112. Thus Plaintiff Lenders now seek an equitable relief from the Court to place a lien
on the Property to notify all potential interested third parties of the disputed ownership of
the Property and collection of any sale proceeds based on the three loan agreements
entered between the parties.
113. If the Court determines that the three loan agreements are valid and binding upon
the parties, then Plaintiffs are entitled to repossess the Property and receive from the sale
proceeds of the Property the amount Defendant Borrowers duly owes to them, including
but not limited to the principal, interest fees and penalties of the loan.
SIXTH CAUSE OF ACTION
(Constructive Trust)
114. Plaintiffs repeat and reassert the allegations of paragraphs 1 through 113 as
though fully set forth herein.
115. On or about on May 11, 2021, the Plaintiff Lenders and the Defendant Borrowers
entered into a secured loan agreement in the amount of $500,000 with the interest rate of
2% monthly (6% quarterly) and the maturity date of May 11, 2022. Please see Exhibit A.
First Loan Agreement.
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116. The First Loan Agreement has been properly executed and notarized between the
the Plaintiff Lenders and the Defendant Borrowers.
117. Then on or about June 28, 2021, the Plaintiff Lenders and the Defendant
Borrowers entered into a second secured loan agreement in the amount of $300,000 with
the interest rate of 1.25% monthly (15% yearly) and the maturity date of June 27, 2022.
Please see Exhibit B. Second Loan Agreement.
118. Then on or about September 7, 2021, the Plaintiff Lenders and the Defendant
Borrowers entered into a third secured loan agreement in the amount of $100,000 with
the interest rate of 1.25% monthly (15% yearly) and the maturity date of September 6,
2022. Please see Exhibit C. Third Loan Agreement.
119. Please take notice that all three loan agreements have been secured by all the
interest owned by the Defendant Borrowers in Shun Feng No. 1 LLC (the “Company”),
which owns the real property located at 4914 9th Ave. Brooklyn, NY 11220 (the
“Property”).
120. On or about May 10, 2022, due to Defendant Borrowers’ financial difficulty, the
Plaintiff Lenders and the Defendant Borrowers agreed to extend the maturity date for the
First Loan agreement to November 11, 2022, and the Second Loan Agreement to
December 27, 2022.
121. Moreover, on October 24, 2021, the Plaintiff Lenders agreed to adjust the interest
rates of the first loan to 1.25% monthly (while interest of the second and second loan
stays the same, which is 1.25% monthly), starting with the payment of October 11, 2021.
122. As of today, Defendant Borrowers are unable to complete the payment of the
loans.
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123. As of now, the Defendant Borrowers owe the Plaintiff Lenders interests totaling
$54,000.
124. Moreover, the Defendant Borrowers have failed to pay the renewal fee as required
by the amendment(s) later duly signed between parties.
125. As per properly signed loan agreements, for all extension and renewal efforts,
Defendant Borrowers shall be responsible for Plaintiff Lenders’ attorney fee of $1,425.00.
126. However, the check of from the Defendant Borrowers for such attorney fee
payment bounced and Defendant Borrowers have failed to provide a replacement check
and/or make the payment after multiple written requests from the Plaintiff Lenders’
attorney's office.
127. Defendant Borrowers owe Plaintiff Lenders fiduciary duties of good faith, candor,
loyalty and care because Plaintiffs are the intended beneficiaries of the rent and sale
proceeds of the Property upon auction/foreclosure.
128. It is just and equitable that the Court impress a constructive trust to attach to the
Property in addition to an equitable lien under the principles of equity.
129. Defendants would be unjustly enriched if permitted to retain the Property and
freely collect the rent and sale proceeds of the Property upon auction/foreclosure without
reimbursing Plaintiffs based on the three loan agreements entered between the parties.
130. Plaintiffs have no adequate remedy at law and permitting Defendants to retain the
Property and/or the rent and sale proceeds of the Property upon auction/foreclosure is
unfair and unjust, henceforth the totality of the circumstances warrants imposing a
constructive trust under equitable principles of New York law.
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131. Plaintiffs pray for an order impressing a constructive trust upon the Property and
ordering that any rental income and sale proceeds of the Property upon
auction/foreclosure shall be apportion to Plaintiffs based on the three loan agreements.
WHEREFORE, Plaintiffs pray for a judgment against Defendants as follows:
1. For damages in the amount equal to the unpaid principal, interest, fees and penalties
based on the three loan agreements;
2. For a declaratory judgment as to the validity, rights and obligations of the parties under
the three loan agreements;
3. For punitive damages attributed to Defendants willful and malicious fraud and
misrepresentation;
4. For an equitable relief that Plaintiffs are entitled to repossess the Property based on the
three loan agreements, UCC statements and personal guaranty;
5. For an equitable relief to impress a constructive trust upon the Property and apportion the
income and/or sale proceeds upon auction/foreclosure to Plaintiffs.
6. Reasonable attorneys’ fees and cost of suit herein incurred;
7. Such other and further relief as the Court may deem just and proper.
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