Preview
FILED: KINGS COUNTY CLERK 04/22/2021 09:46 AM INDEX NO. 527036/2019
NYSCEF DOC. NO. 154 RECEIVED NYSCEF: 04/22/2021
EXHIBIT 3
FILED: KINGS COUNTY CLERK 01/30/2020
04/22/2021 05:41
09:46 PM
AM INDEX NO. 527036/2019
NYSCEF DOC. NO. 38
154 RECEIVED NYSCEF: 01/30/2020
04/22/2021
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
--------------------------------------------------------------x
SHAUL KOPELOWITZ,
Index No. 527036/2019
Plaintiff,
NOTICE OF ENTRY
- against -
TOBY MOSKOWITZ and MICHAEL a/k/a
YECHIEL LICHTENSTEIN,
Defendants.
---------------------------------------------------------------x
PLEASE TAKE NOTICE, that annexed hereto is a copy of a Decision and Order of
Hon. Leon Ruchelsman, J.S.C., dated January 28, 2020 and entered in the Office of the Clerk of
the County of Kings on January 29, 2020.
Dated: New York, New York
January 30, 2020
LAW OFFICE OF JEFFREY FLEISCHMANN, P.C.
By: /s/ Jeffrey Fleischmann
Jeffrey Fleischmann, Esq.
150 Broadway, Suite 900
New York, New York 10038
Tel: (646) 657-9623
Fax: (646) 351-0694
jf@lawjf.com
Attorneys for Plaintiff Shaul Kopelowitz
1 of 8
FILED:
FILED: KINGS
KINGS COUNTY
COUNTY CLERK
CLERK 01/30/2020
04/22/2021
01/29/20201 05:41
09:46 PM
AM INDEX
INDEX NO.
NO. 527036/2019
527036/2019
NYSqEF
NYSCEF DOC.
DOS. NO.
NO. 37
38
154 RECEIVED
RECEIVED NYSCEF:
NYSCEF: 01/30/2020
04/22/2021
01/30/2020
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS : CIVIL TERM: COMMERCIAL 8
------------------------------------------x
SHAUL KOPELOWITZ,
Plaintiff, Decision and order
- against - Index No. 527036/19
TOBY MOSKOVITZ & MICHAEL A/K/A YECHIEL
LICHTENSTEIN,
Defendants, January 28, 2020
------------------------------------------x
PRESENT: HON. LEON RUCHELSMAN
The defendants have moved seeking to vacate a confession of
judgement. The plaintiff opposes the motion. Papers were
submitted by the parties and arguments held. After reviewing all
the arguments this court now makes the following determination.
The defendants Toby Moskovitz and Michael Lichtenstein
together with the plaintiff Shaul Kopelowitz invested money in an
entity entitled 564 St Johns Holdings LLC. Kopelowitz invested
$6,000,000 through an entity he owned, SK 564 LLC although there
is a dispute whether the investment was intended to be a loan or
a capital contribution. Further, Kopelowitz assisted in helping
the defendants obtain refinancing for an overall loan on the
property in the amount of $97,250,000 from an entity called Arbor
Realty Sr. Inc. Arbor sought personal guarantees from the three
investors. Pursuant to Section 21(d) of the operating agreement
which states that "it is acknowledged and agreed that SK member
guarantees"
shall not be obligated to provide any such (id)
Kopelowitz nevertheless agreed to provide a personal guarantee on
condition the operating agreement was amended to reflect certain
1
2 of
of 86
FILED:
FILED: KINGS
KINGS COUNTY
COUNTY CLERK
CLERK 01/30/2020
04/22/2021
01/29/20201 05:41
09:46 PM
AM INDEX
INDEX NO.
NO. 527036/2019
527036/2019
NYSCEF
NYSCEF DOC.
DOC. NO.
NO. 38
154
37 RECEIVED
RECEIVED NYSCEF:
NYSCEF: 01/30/2020
04/22/2021
01/30/2020
rights accruing to Kopelowitz and on condition the defendants
signed a confession of judgement guaranteeing Kopelowitz's
$6,000,000 investment. Further, the defendants and Kopelowitz
entered into an escrow agreement which provided that the escrow
agent would maintain possession of the confession of judgement.
The escrow agreement stated that if the "defendants either
default personally or on behalf of 564 St Johns LLC under that
certain loan of $97,250,000 made by Arbor Realty Trust to 564 St
Johns LLC...or if defendants default any provision of the
Operating Agreement of 564 St Johns LLC or the Addendum to
Operating Agreement...then escrowee is authorized immediately and
without any further notice to file the Confession of Judgement
Clerk"
with the County (id).
Upon satisfaction of all the conditions the defendants
obtained refinancing. The property was sold pursuant to the
amended operating agreement affording such powers to Kopelowitz.
The proceeds of the sale amounted to $7,586,808.22 of which
$4,886,808.22 was taken by Kopelowitz. Since the sale had taken
place and the full amount of the investment had not been
returned, he duly filed the confession of judgement for reduced
amounts. Specifically, Kopelowitz argues the $4,886,808.22 he
received did not reduce the full amount of the confession of
judgement since he loaned an additional $1,036,000 and other fees
further reduced the amount of the judgement. Thus, Kopelowitz
2
2
3 of
of 86
FILED:
[FILED: KINGS
KINGS COUNTY
COUNTY CLERK
CLERK 01/30/2020
04/22/2021
01/29/20201 05:41
09:46 PM
AM INDEX
INDEX NO.
NO. 527036/2019
527036/2019
NYSCEF
NYSCEF DOC.
DOC. NO.
NO. 38
154
37 RECEIVED
RECEIVED NYSCEF:
NYSCEF: 01/30/2020
04/22/2021
01/30/2020
filed a judgement in the amount of $2779,233.11.
The defendants have now moved seeking to vacate the
confession of judgement on the grounds the investment was not a
loan and more importantly that Kopelowitz received in excess of
the investment amount and consequently there was no basis upon
which to file the confession of judgement. The plaintiff opposes
the motion arguing his actions seeking to secure his investment
by filing the confession of judgement was proper in all respects
and the motion should be denied.
Conclusions of Law
It is well settled that to vacate a judgement based upon a
confession of judgement a plenary action must generally be
commenced (Regency Club at Wallkill LLC v. Beinish, 95 AD3d 879,
942 NYS2d 894 [2d Dept., 2012]). There are cases that hold a
plenary action need not be commenced where "the entry of
defendants'
judgement is so unfair as to violate the due process
rights"
(see, Funding Metrics. LLC v. D and V Hosoitality Inc.,
62 Misc3d 966, 91 NYS3d 678 [Supreme Court Westchester County
2019]). Although the defendants have not alleged any due process
violations, in the interests of efficiency and resolution of the
important legal issues raised the court will entertain the
motion.
Substantively, there is scant basis upon which to vacate the
confession of judgement. First, regardless of whether the
3
4
3 of
of 86
FILED:
[FILED: KINGS
KINGS COUNTY
COUNTY CLERK
CLERK 01/30/2020
04/22/2021
01/29/2020| 05:41
09:46 PM
AM INDEX
INDEX NO.
NO. 527036/2019
527036/2019
NYSCEF
NYSCEF DOC.
DOC. NO.
NO. 37
38
154 RECEIVED
RECEIVED NYSCEF:
NYSCEF: 01/30/2020
04/22/2021
01/30/2020
original investment can be characterized as an investment or a
loan there can be no dispute the confession of judgement clearly
concerned a loan. Indeed, the affirmation of confession of
judgement states that the confession of judgement arises from the
following facts: "Plaintiff loaned $6,000,000.00 plus interest
and fees...to Defendants...which loan amount under agreement has
matured and Plaintiff [sic] has failed to pay back the loan plus
fees"
all interest and (mma, Affirmation of Confession of
Judgement, §5). The defendants Moskovitz and Lichtenstein signed
the confession of judgement and had full knowledge of the nature
'loan'
of the to which they confessed. To be sure, there would
be no reason to agree to sign a confession of judgement if the
sums provided was merely an investment. Second, while the actual
amount of the confession of judgement that was filed will be
discussed presently, there can be no dispute that Kopelowitz was
not provided with the full amount of his loan. While the net
proceeds of the sale amounted to $7,586,808.22 and that amount
was wired to the escrow agent, Ms. Moskovitz concedes that
Kopelowitz only received $4,886,808.22 (sag, Affidavit of Toby
Moskovitz, 9 14). There is no specific indication where the
remaining funds were forwarded, however, it is clear that
Kopelowitz did not receive the full amount of the loan.
Likewise, Kopelowitz acknowledges that he received a portion of
the loan and thus has only moved seeking to confess the
4
4
5 of
of 86
FILED:
FILED: KINGS
KINGS COUNTY
COUNTY CLERK
CLERK 01/30/2020
04/22/2021
01/29/20201 05:41
09:46 PM
AM INDEX
INDEX NO.
NO. 527036/2019
527036/2019
NYSCEF
NYSCEF DOC.
DQC. NO.
NO. 38
154
37 RECEIVED
RECEIVED NYSCEF:
NYSCEF: 01/30/2020
04/22/2021
01/30/2020
remainder. Therefore, there is no basis upon which to vacate the
confession of judgement and the motion seeking such vacateur is
denied.
However, an analysis of the actual amounts being confessed
require further consideration. As noted, there is no dispute
Kopelowitz received $4,886,808.22. Kopelowitz deducted
$1,036,000 based upon another loan that occurred after the
confession of judgement was signed. As noted by Kopelowitz's
counsel "Kopelowitz agreed to accept the repayment of the
$1,036,000 loan out of the $4,886,808.22 received as proceeds
property"
from the sale of the (.see, Affirmation of Jeffrey
Fleischmann, % 80). This was permitted, argues Kopelowitz
because "that obligation was also secured by the Property, so of
course, it needed to be repaid to [sic] in order for the parties
to close on the sale of the Property (Id at 1 79). However, the
confession of judgement pre-dated the mortgage and note
concerning this later loan in the amount of $1,036,000. Thus,
there are questions of fact whether that amount should have been
deducted from the $4,886,808.22 reducing the amount of the
confession of judgement. Further, in Paragraph 84 of the
Fleischmann affidavit, it states that a further $360,833.33 was
reduced to pay interest on the loan without providing any
documentary support concerning that amount or why that amount
should reduce the amount of the confession of judgement.
5
6
5 of
of 86
FILED:
FILED: KINGS
KINGS COUNTY
COUNTY CLERK
CLERK 01/30/2020
04/22/2021
01/29/20201 05:41
09:46 PM
AM INDEX
INDEX NO.
NO. 527036/2019
527036/2019
NYSCEF
NYSCEF.DQC.DOC. NO.
NO. 38
154
37 RECEIVED
RECEIVED NYSCEF:
NYSCEF: 01/30/2020
04/22/2021
01/30/2020
Moreover, even considering these amounts the court could not
determine the precise amount confessed and the underlying
evidence supporting the amount confessed. Therefore, the court
is continuing the stay of execution of the confession of
judgement until such time as the court can determine the precise
amount of the confession. The court hereby appoints Daniel D.
Kuhn Esq. of 1 Edgewater Street, suite #206, Staten Island New
York 10305 as referee to conduct a hearing regarding all the
above noted issues concerning the precise amount of the
confession of judgement. The hearing must take place within two
weeks of receipt of this order unless consented to by all
parties. The defendants are required to post a bond in the
amount of one millions dollars or alternatively place one million
dollars in an escrow account of their counsel. Further, the
referee shall be paid a fee of $300 per hour to be split between
the plaintiff and defendants. Upon receipt of a report by the
referee the court will remove the stay and allow enforcement of
the confession of judgement for the amount to be determined.
So ordered.
DATED: January 28, 2020
Brooklyn N.Y. Hon. Leon Ruchelsman
JSC
6
76 of
of 86
FILED: KINGS COUNTY CLERK 01/30/2020
04/22/2021 05:41
09:46 PM
AM INDEX NO. 527036/2019
NYSCEF DOC. NO. 38
154 RECEIVED NYSCEF: 01/30/2020
04/22/2021
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
--------------------------------------------------------------x
SHAUL KOPELOWITZ,
Index No. 527036/2019
Plaintiff,
- against -
TOBY MOSKOWITZ and MICHAEL a/k/a
YECHIEL LICHTENSTEIN,
Defendants.
---------------------------------------------------------------x
AFFIRMATION OF SERVICE
JEFFREY FLEISCHMANN, an attorney admitted to practice before the courts of the
State of New York, affirms under the penalty of perjury as follows:
1. I am over 18 years of age and reside in Brooklyn, New York.
2. On January 30, 2020, I served a true copy of the foregoing: (i) Notice of Entry;
with (ii) Decision and Order, dated January 28, 2020 and entered in the Office of the Clerk of the
County of Kings on January 29, 2020, upon all parties via the e-file system.
Dated: New York, New York
January 30, 2020
/s/ Jeffrey Fleischmann
Jeffrey Fleischmann, Esq.
8 of 8
FILED: KINGS COUNTY CLERK 04/22/2021 09:46 AM INDEX NO. 527036/2019
NYSCEF DOC. NO. 154 RECEIVED NYSCEF: 04/22/2021
FILED: KINGS COUNTY CLERK 02/18/2020
04/22/2021 03:01
09:46 PM
AM INDEX NO. 527036/2019
NYSCEF DOC. NO. 50
154 RECEIVED NYSCEF: 02/18/2020
04/22/2021
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
--------------------------------------------------------------x
SHAUL KOPELOWITZ,
Index No. 527036/2019
Plaintiff,
NOTICE OF ENTRY
- against -
TOBY MOSKOWITZ and MICHAEL a/k/a
YECHIEL LICHTENSTEIN,
Defendants.
---------------------------------------------------------------x
PLEASE TAKE NOTICE, that annexed hereto is a copy of a Decision and Order of
Hon. Leon Ruchelsman, J.S.C., dated January 31, 2020 and entered in the Office of the Clerk of
the County of Kings on February 6, 2020.
Dated: New York, New York
February 18, 2020
LAW OFFICE OF JEFFREY FLEISCHMANN, P.C.
By: /s/ Jeffrey Fleischmann
Jeffrey Fleischmann, Esq.
150 Broadway, Suite 900
New York, New York 10038
Tel: (646) 657-9623
Fax: (646) 351-0694
jf@lawjf.com
Attorneys for Plaintiff Shaul Kopelowitz
1 of 3
FILED:
FILED : KINGS
KINGS COUNTY
COUNTY CLERK
CLERK 02/18/2020
04/22/2021
02 /0 6/20201 03:01
09:46 PM
AM INDEX
INDEX NO.
NO . 527036/2019
527036/ 2019
NYSCEF
NYSCEF DOC.
DOC. NO.
NO. 50
154
49 RECEIVED
RECEIVED NYSCEF:
NYSCEF : 02/18/2020
04/22/2021
02/ 14/2020
COUNTY CLERh
pwGS
R.ED
2010FEB-6 is 8:58
Gm I.A.S. Trial Term, Part Y of the Supreme
Court of the State of New York, held in and for the
County of Kings, at the Courthouse, located at
Civic Center, Borough of Brooklyn, City and State
of New York, on the y day of JAN 20 O
Hon. 5 p
Justice
Cal. No.
6 Plaintiff(s) Index No.
- against-
Defendant(s)
The following papers ==mbared 1 to read on this motion Papers Numbered
Notice ofMotion - Orderto Show Cause
and AmdaWs Annexed
(Affirmations)
Answering Affidavit(Affirmation)
Reply Affidavit(Affirmation)
Affidavit(Affirmation)
- Exhibits
Picadir.gs ____
- Minutes
Stipulations
FiledPapers
For Clerks use only
MG__
MD_
Motion Seq. #
E N T E R
.S.C.
EJV-revil-04
HON. LEON RUCHELSMAN
21 of
of 31
FILED: KINGS COUNTY CLERK 02/18/2020
04/22/2021 03:01
09:46 PM
AM INDEX NO. 527036/2019
NYSCEF DOC. NO. 50
154 RECEIVED NYSCEF: 02/18/2020
04/22/2021
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
--------------------------------------------------------------x
SHAUL KOPELOWITZ,
Index No. 527036/2019
Plaintiff,
- against -
TOBY MOSKOWITZ and MICHAEL a/k/a
YECHIEL LICHTENSTEIN,
Defendants.
---------------------------------------------------------------x
AFFIRMATION OF SERVICE
JEFFREY FLEISCHMANN, an attorney admitted to practice before the courts of the
State of New York, affirms under the penalty of perjury as follows:
1. I am over 18 years of age and reside in Brooklyn, New York.
2. On February 18, 2020, I served a true copy of the foregoing: (i) Notice of Entry;
with (ii) Decision and Order, dated January 31, 2020 and entered in the Office of the Clerk of the
County of Kings on February 6, 2020, upon all parties via the e-file system.
Dated: New York, New York
February 18, 2020
/s/ Jeffrey Fleischmann
Jeffrey Fleischmann, Esq.
3 of 3