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  • Shaul Kopelowitz v. Toby Moskowitz, Michael A/K/A Yechiel Lechtenstein Commercial - Contract document preview
  • Shaul Kopelowitz v. Toby Moskowitz, Michael A/K/A Yechiel Lechtenstein Commercial - Contract document preview
  • Shaul Kopelowitz v. Toby Moskowitz, Michael A/K/A Yechiel Lechtenstein Commercial - Contract document preview
  • Shaul Kopelowitz v. Toby Moskowitz, Michael A/K/A Yechiel Lechtenstein Commercial - Contract document preview
  • Shaul Kopelowitz v. Toby Moskowitz, Michael A/K/A Yechiel Lechtenstein Commercial - Contract document preview
  • Shaul Kopelowitz v. Toby Moskowitz, Michael A/K/A Yechiel Lechtenstein Commercial - Contract document preview
  • Shaul Kopelowitz v. Toby Moskowitz, Michael A/K/A Yechiel Lechtenstein Commercial - Contract document preview
  • Shaul Kopelowitz v. Toby Moskowitz, Michael A/K/A Yechiel Lechtenstein Commercial - Contract document preview
						
                                

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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