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FILED: NEW YORK COUNTY CLERK 02/22/2023 03:22 PM INDEX NO. 602374/2009
NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 02/22/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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STREET SNACKS, LLC, Index No.: 602374/09
Plaintiff, Motion Seq. No. 008
-against- AFFIRMATION IN
FURTHER SUPPORT OF
BRIDGE ASSOCIATES OF SOHO, INC., PLAINTIFF’S MOTION
ADAM D. LUCKNER, MIDWAY HOLDINGS CORP., AND IN OPPOSITION TO
YORK RESOURCES LLC, STERLING NATIONAL DEFENDANTS’ CROSS
BANK, NEW YORK STATE DISTRICT ATTORNEY, MOTION TO DISMISS
STATE OF NEW YORK, CITY OF NEW YORK, NEW
YORK CITY ENVIRONMENTAL CONTROL BOARD,
NEW YORK CITY DEPARTMENT OF FINANCE,
Defendants.
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STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
AMY D. CARLIN, an attorney duly admitted to practice law before the courts and the
State of New York, hereby affirms under penalty of perjury as follows:
1. I am a member of LaRocca Hornik Rosen & Greenberg LLP, attorneys for plaintiff
Street Snacks, LLC (“Street Snacks”). As such I am personally familiar with the facts and
circumstances stated herein. I submit this affirmation in further support of Street Snacks’ motion
and in opposition to the cross motion of defendants Bridge Associates of Soho, Inc. (“Bridge
Associates”), Adam D. Luckner (“Luckner”), and Midway Holdings Corp. (“Midway”) (Bridge
Associates, Luckner, and Midway are hereinafter collectively referred to as the “Luckner
Defendants”) to dismiss the complaint.
2. The Luckner Defendants seek to avoid and delay paying a substantial debt by
belatedly raising the defense that Street Snacks alleged failed to comply with the 90-day notice
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requirement under RPAPL §1304. However, RPAPL §1304 is inapplicable because Street Snacks
is not a “lender or mortgage loan servicer” for purposes of the statute and the subject commercial
mortgage loan is not a “home loan.” The Luckner Defendants provide no other defense or
objections to the Referee’s computation of the amount due. As such, Street Snacks’ motion to
confirm the Referee’s Report of Amount Due and for a judgment of foreclosure and sale should
be granted in its entirety.
BACKGROUND AND PROCEDURAL HISTORY
3. This action was commenced on August 3, 2009 to foreclose a commercial mortgage
based on the nonpayment of a matured commercial loan (the “Loan”) in the principal amount of
$1,600,000 secured by the properties located at: (a) 533 Greenwich Street (a/k/a 99 Vandam
Street), New York, New York (the “NYC Property”);1 (b) 619 Bridge Street, Woodmere, New
York (the “Woodmere Property”) and (c) 62 Clark Street, Long Beach, New York (the “Long
Beach Property”).
4. The Loan is a commercial, business obligation of Bridge Associates and does not
constitute a loan that was incurred for personal, family, or household purposes. Indeed, Luckner
affirmed these basic facts under oath during his deposition. The transcript of Luckner’s June 2,
2017 deposition is annexed hereto as Exhibit A
5. On May 16, 2005, the Loan was made by First Central Savings Bank (“FCSB”) to
Bridge Associates. The Loan refinanced and extended Bridge Associates’ then existing debt owed
1
On or about March 4, 2020, the NYC Property was sold at public auction pursuant to a Judgment of Foreclosure and
Sale issued in the tax lien foreclosure action entitled NYCTL 2013-A Trust, et. al. v. Bridge Associates of Soho, Inc.,
et al., Supreme Court, New York County, Index No. 154799/14. The sale of the NYC Property did not produce any
surplus monies.
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to FCSB in the principal amount of $1,188,000.2 In connection with the Loan, Bridge Associates
executed a Substituted and Restated Mortgage Note (the “Note”) as the sole “borrower.” See
Exhibit B, annexed to the Affirmation in Support of Plaintiff’s Motion to Confirm Referee Report
and for Judgment of Foreclosure and Sale of Amy D. Carlin dated December 14, 2022 (the “Carlin
Moving Affirm.”), ¶36.
6. Simultaneous with the execution of the Note, and as security for its payment, Bridge
Associates and Luckner executed the Consolidation, Modification and Extension Agreement (the
“Mortgage”) that is the subject of this action. Carlin Moving Affirm., Exhibit B, ¶43. In the
Mortgage, Bridge Associates and Luckner are referred to as “the party of the second part.” The
Mortgage does not identify Luckner as a “borrower” under the terms of the Mortgage or the
underlying the Note.
7. At his deposition, Luckner testified that Bridge Associates incurred the Loan for
the purpose of extending the maturity date of Bridge Associates’ existing debt to FCSB. Luckner
further testified that Bridge Associates used the proceeds of the Loan to pay taxes and insurance.
See Exhibit A, 79:24-25, 80:2-21. See also, Carlin Moving Affirm., Exhibit B, ¶58 and Exhibit
X.
8. Simultaneous with the execution of the Note and Mortgage, Luckner, individually,
and Midway executed a Guaranty (the “Guaranty”) that was an absolute and unconditional
guaranty of payment of all sums owed by Bridge Associates and performance of all obligations of
Bridge Associates under the Note and the Mortgage. Carlin Moving Affirm., Exhibit B, ¶49.
2
On January 9, 2003, Bridge Associates took out a commercial mortgage loan with FCSB in the principal amount of
$1,200,000. Luckner testified that Bridge Associates used the loan proceeds to partially fund Bridge Associates’
satisfaction of a $2,000,000 tax lien on the NYC Property. See Exhibit A, 23:13-25, 24:2-8, 33:11-21. Luckner further
testified that Bridge Associates refinanced the loan in 2004 because FCSB “only gave us one-year periods for this
mortgage so it was just to renew that prior mortgage, the 1.2 million.” Id., 48:7-20.
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9. On November 3, 2008, FCSB sold, assigned and transferred all its right, title and
interest to the Note, the Mortgage, the Guaranty, and the underlying Loan documents to Street
Snacks. Carlin Moving Affirm. Exhibit B, ¶¶53-56; Exhibit C, ¶¶10-15.
10. On June 14, 2022, Street Snacks moved for summary judgment, an order of
reference, and related relief. In its opposition to the motion (NYSCEF Doc. Nos. 110, 111 and
112), the Luckner Defendants did not contest Street Snacks’ allegations that the loan is a
commercial mortgage and that RPAPL §1304 is inapplicable. See the Affirmation in Support of
Amy D. Carlin dated June 14, 2022 (NYSCEF Doc. No. 41), ¶49.3
11. Street Snacks’ motion was granted by this Court’s Decision and Order on Motion
dated August 19, 2022 and entered in the Supreme Court, New York County Clerk’s Office on
August 22, 2022, a copy of which is annexed to the Carlin Moving Affirm. as Exhibit K.
RPAPL §1304 DOES NOT APPLY
TO THIS FORECLOSURE ACTION
A. RPAPL is inapplicable because Street Snacks is not a “lender”
for purposes of the statute.
12. In a last-ditch attempt to further delay the inevitable foreclosure sale of the Long
Beach Property and the Woodmere Property, the Luckner Defendants seek dismissal of this action,
arguing that Street Snacks allegedly failed to comply with RPAPL §1304. However, the notice
required by the statute applies only to certain types of lenders and certain types of loans, neither
…
3
In the interest of brevity, Street Snacks respectfully incorporates the referenced moving and opposition papers by
reference.
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of which apply here.4
13. It is very clear that only a “lender or mortgage loan servicer” was required to
comply with the version of RPAPL §1304 that was in effect at the time this action was commenced
on August 3, 2009. See RPAPL former §1304, as added by L.2008, c. 472, §2. The statute
provided in pertinent part, that “with regard to a high-cost home loan, as such term is defined in
section six-l of the banking law, a subprime home loan or a non-traditional home loan, at least
ninety days before a lender or a mortgage loan servicer commences legal action against the
borrower, including mortgage foreclosure, the lender or mortgage loan servicer shall give notice
to the borrower.” RPAPL §1304(1) (emphasis added).
14. When this action was commenced, RPAPL §1304(5)(g) unambiguously set forth
the definition of a “lender” as “a mortgage banker as defined in paragraph (f) of subdivision one
of section five hundred ninety of the banking law or an exempt organization as defined in
paragraph (e) of subdivision one of section five hundred ninety of the banking law.”
15. When this action was commenced, Banking Law §590(1)(f) defined a “mortgage
banker” to be a person or entity licensed pursuant to §591(a) of Article 12D of the Banking Law
to engage in the business of making mortgage loans in New York.
16. Under Banking Law §590(2)(a) then in effect, a person or entity was required to
have a license if they were engaged in the business of making five or more mortgage loans in any
one calendar year. See Banking Law former §590, as added by L.2008, c. 472, §§ 7, 8.
4
The Luckner Defendants waived any defenses under RPAPL §1304 by failing to dispute Street Snacks’ contentions
in its summary judgment motion that the Loan is a commercial mortgage and that RPAPL §1304 is inapplicable. See
e.g., Pritchard v. Curtis, 101 A.D.3d 1502 (3rd Dep’t. 2012) (RPAPL §1304 is not jurisdictional and can be waived);
Pennymac, Corp. v. DiPrima, 54 Misc.3d 990 (Sup. Ct., Suffolk Cty. 2016) (mortgagors made judicial admissions as
to issue of mortgagee’s compliance with statutory notice and thus waived defense of non-compliance, where
mortgagee stated in complaint that it had complied with notice requirements and mortgagors failed to deny any of
those allegations in their answer and failed to allege facts from which challenges to mortgagee’s compliance with
notice provisions of statute were discernable).
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17. Under Banking Law §590(1)(e) then in effect, an “exempt organization” included
any insurance company, banking organization, foreign banking corporation licensed by the
superintendent or the comptroller of the currency to transact business in New York, national bank,
federal savings bank and loan association, federal credit union, or any bank, trust company, savings
bank, savings and loan association, or credit union organized in another state, or any
instrumentality created by the United States or any other state to make mortgage loans.
18. Under Banking Law §590(1)(h) then in effect, a “mortgage loan servicer” was
defined as a “a person or entity registered pursuant to subdivision two of this section to engage in
the business of servicing mortgage loans for property located in this state.”
19. Under Banking Law §590(1)(i) then in effect, “servicing mortgage loans” meant
“receiving any scheduled periodic payments from a borrower pursuant to the terms of any
mortgage loan…and making the payments to the owner of the loan or other third parties of
principal and interest and such other payments with respect to the amounts received from the
borrower as may be required pursuant to the terms of the mortgage service loan documents or
servicing contract.”
20. Street Snacks has never been a “mortgage banker” as defined in §590(1)(e) of the
Banking Law, subject to licensing by the New York State Superintendent of Banks. Street Snacks
is a privately owned limited liability company that has never given any residential mortgage loans.
See the Affidavit of Thomas Makkos in Further Support of Plaintiff’s Motion and in Opposition
to Defendants’ Cross-Motion, sworn to on February 14, 2023 and submitted herewith, ¶3. The
only commercial loan Street Snacks has ever given or taken by assignment is the Loan that is the
subject of this action. Id.
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21. Street Snacks has never been a “mortgage loan servicer” because it is the owner of
the Loan.
22. Moreover, Street Snacks has never been one of the entities set forth in Banking Law
§590(1)(e) as “exempt organization.” Therefore, it is not subject to licensing by Superintendent
of Banks, and is not a “lender” for purposes of RPAPL §1304.
23. Thus, because Street Snacks was not a “lender” or a “mortgage loan servicer,”
Street Snacks was not required to comply with the notice provisions of RPAPL §1304. See
Manitoli, LLC v. Hartwell, 140 A.D.3d 710 (2 Dep’t 2016) (private lender was not a “mortgage
loan servicer” subject to registration requirements or to requirement that 90–day notice be served
prior to commencement of foreclosure action relating to home loan); Carmike Holding I, LLC v.
Smith, 180 A.D.3d 744, 748 (2d Dep’t 2020) (mortgagee was exempt from the Banking Law’s
licensing provision and was not a lender within the meaning of the Banking Law provisions
governing high-cost and subprime home loans); Balsam v. Fioriglio, 123 A.D.3d 750 (2d Dep’t
2014) (an individual who makes a single loan is not a “lender” to whom RPAPL §1304 applies).
B. RPAPL §1304 is inapplicable because the Loan is a commercial loan.
24. Where the applicability of RPAPL §1304 is in dispute, the burden shifts to the
defendant to demonstrate that the underlying transaction is a home loan. US Bank Nat. Ass'n v.
Richard, 151 A.D.3d 1001 (2d Dept., 2017) (finding where the borrower obtained the loan for
business or commercial purposes, it was not a home loan under RPAPL §1304). Here, the Luckner
Defendants have utterly failed to set forth proof in competent and credible admissible form that
the underlying loan was, in fact, a “home loan.” See Meyerson Capital X LLC v. Kats, 33 Misc.3d
1017 (Sup. Ct., Kings Cty. 2011).
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1. Adam D. Luckner is not a “Borrower” under the Loan Documents.
25. At the time this action was commenced, RPAPL §1304(5)(b), defined a “home
loan” as a “home loan, including an open-end credit plan, other than a reverse mortgage
transaction,” in which:
(i) The principal amount of the loan at origination did not exceed the
conforming loan size that was in existence at the time of origination
for a comparable dwelling as established by the federal national
mortgage association;
(ii) The borrower is a natural person;
(iii) The debt is incurred by the borrower primarily for personal,
family, or household purposes;
(iv) The loan is secured by a mortgage or deed of trust on real estate
upon which there is located or there is to be located a structure or
structures intended principally for occupancy of from one to four
families which is or will be occupied by the borrower as the
borrower’s principal dwelling; and
(v) The property is located in this state.
26. The Loan is a commercial loan that was made to Bridge Associates, a corporation.
Luckner acted solely as the guarantor of the Note in using the Woodmere Property as collateral
security for the Loan made to Bridge Associates. Although Luckner may have resided at the
Woodmere Property, it does not change the fact that Luckner is not a “borrower” or even
mentioned in the Note, facts which the Luckner Defendants concede. See the Affirmation in
Opposition to Plaintiff’s Motion for a Judgment and in Support of Defendant’s Cross Motion to
Dismiss Plaintiff’s Complaint of Peter K. Kamran dated January 30, 2023 (NYSCEF Doc. No
191), ¶7.
27. The facts presented in this action are strikingly similar to those presented to the
Second Department in Independence Bank v. Valentine, 113 A.D.3d 62 (2d Dep’t 2013). In
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Independence Bank, the lender sought to foreclosure a mortgage, given by an individual guarantor,
to secure a commercial loan made to a corporation for the purpose of purchasing machinery and
equipment, and to fund other various startup, closing, and construction costs associated with
developing a restaurant. Although the loan was collateralized by a residential building, the Second
Department clearly and unambiguously determined that the loan did not constitute a “home loan”
under RPAPL §1304(5) and held that the Supreme Court properly rejected the guarantor’s
contention that it was entitled to a mandatory settlement conference, stating:
Here, the plaintiff made a loan to Roz-Valt, a corporation, not
Valentine, a natural person. Valentine simply acted as the guarantor
of Roz-Valt’s loan. Valentine used her own primary residence in
Queens to secure her obligations as guarantor of the mortgage.
Therefore, Valentine acted only as the guarantor of this loan, not a
borrower, in using her own home as collateral security. This
mortgage was not given to secure or collateralize the note, but rather,
Valentine gave the plaintiff a subordinate lien on her primary
residence as Roz-Valt’s guarantor. Accordingly, since a mortgagor
is only entitled to a mandatory settlement conference under CPLR
3408 for a home loan that falls under the definition outlined in
RPAPL 1304(5) (see Wells Fargo Bank, N.A. v. Meyers, 108 A.D.3d
at 18, 966 N.Y.S.2d 108; Aurora LoanServ., LLC v. Weisblum, 85
A.D.3d 95, 104-105, 923 N.Y.S.2d 609), and the loan here does not
fall within the ambit of that statute, the Supreme Court properly
rejected Valentine’s argument and granted those branches of the
plaintiffs motion which were for summary judgment on the
complaint insofar as asserted against Valentine and for an order of
reference.
Independence Bank, 113 A.D.3d 66-67. See also The Provident Bank v. Shah, 2018 WL 5267154
*5-6 (Sup. Ct. N.Y. Cty. October 22, 2018) (individuals acted as guarantors of loan to corporation,
not as borrowers, in using their own home as collateral security). Compare, Bank of New York
Mellon v. Forman, 176 A.D.3d 663, 665 (2d Dep’t 2019) (wife of deceased mortgagee was deemed
to be a “borrower” for purposes of RPAPL §1304 in action to foreclose home loan where wife was
identified, along with her husband, as “Borrower” on first page of mortgage instrument and was
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also designated as “Borrower” under her signature on the signature page); Deutsche Bank National
Trust Company v. Weininger, 206 A.D.3d 882 (2d Dep’t 2022) (homeowner defendant was
referred to as a “borrower” in the mortgage instrument).
2. Bridge Associates did not incur the Loan primarily for
personal, family, or household purposes.
28. Luckner offers no evidence whatsoever that: (a) refutes that the Loan was incurred
by Bridge Associates for business purposes; or (b) supports Luckner’s bald assertion that a portion
of the proceeds of the Loan was spent on expenses incurred by his family for household living
expenses.5 Indeed, the record on in this matter tells a far different story than Luckner’s self-serving
claims raised for the first time in the cross motion.
29. Clearly, the Loan was not incurred by Bridge Associates primarily for “personal,
family or household use.” Indeed, Luckner previously testified under oath that: (a) the Loan was
incurred by Bridge Associates to extend the maturity date of its existing debt; and (b) Bridge
Associates used the proceeds to pay insurance and taxes. Exhibit A, 79:24-25, 80:2-21. See
Sharestates Investments Dacl, LLC v. 158AT128TH LLC, 2022 WL 4117305 *4 (Sup. Ct. N.Y
Cty. September 9, 2022) (Kahn, J.) (RPAPL §1304 was inapplicable where borrower was a limited
liability company and the debt was incurred for commercial purposes); U.S. Bank Nat. Ass’n v.
Del Rosario, 2022 WL 4484139, *2 (Sup. Ct. N.Y. Cty. September 27, 2022) (Kahn, J.) (RPAPL
§1304 was inapplicable where the debt was not for strictly personal, family or household
purposes); Vanderbilt Mortgage and Finance, Inc. v. Ammon, 179 A.D.3d 1138, 1141 (2d Dep’t
2020) (RPAPL §1304 is inapplicable where the purpose of the subject loan was a refinancing of a
5
Moreover, Luckner has not submitted any evidence that the Woodmere Property was his primary residence when the
action was commenced. It should be noted that at his deposition in 2017, Luckner testified, “My mother resides there;
I'm sometimes there.” See Exhibit A, 40:11-16.
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multi-unit rental/investment property).
30. Even assuming, arguendo, that Luckner ultimately may have used a portion of the
proceeds from Bridge Associates’ commercial Loan to pay his family’s household living expenses,
it is of no moment because there is simply no question that RPAPL §1304 does not apply to the
case at bar.
CONCLUSION
31. The Luckner Defendants ask this Court to reject the Referee’s Report of Amount
Due, but they fail to set forth which part of the Report, if any, is purportedly incorrect. Nor do the
Luckner Defendants offer an alternative computation of the amount due and owing from the
Luckner Defendants to Street Snacks.
32. As the Luckner Defendants clearly have absolutely no evidence upon which to
dispute the Referee’s Report of Amount Due, and they provide no other defense to the mortgage
foreclosure action other than their meritless defense under RPAPL §1304, Street Snacks’ motion
should be granted in its entirety.
WHEREFORE, deponent respectfully requests that this Court grant Plaintiff’s motion for
(a) for an Order confirming the Referee’s Report; (b) a judgment of foreclosure and sale; and (c)
such other and further relief as this Court determines is just and proper, and deny Defendant’s
cross motion in its entirety.
Dated: New York, New York
February 22, 2023
/s/ Amy D. Carlin
Amy D. Carlin
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WORD COUNT CERTIFICATION
Pursuant to Section 202.8-b of the Uniform Rules for the Supreme Court
I, Amy D. Carlin, an attorney duly admitted to practice law before the courts of the State
of New York, hereby certify that this affirmation complies with the word count limit and that the
total number of words in the affirmation, inclusive of point headings and footnotes is 3,047. In
preparing this certification, I have relied on the word count of the word processing system used to
prepare this affirmation.
Dated: New York, New York
February 22, 2023
/s/ Amy D. Carlin
Amy D. Carlin
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FILED: NEW YORK COUNTY CLERK 02/22/2023 03:22 PM INDEX NO. 602374/2009 NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 02/22/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK --------------------------------------------------------------------X STREET SNACKS, LLC, Index No.: 602374/09 Plaintiff, Motion Seq. No. 008 -against- AFFIRMATION IN FURTHER SUPPORT OF BRIDGE ASSOCIATES OF SOHO, INC., PLAINTIFF’S MOTION ADAM D. LUCKNER, MIDWAY HOLDINGS CORP., AND IN OPPOSITION TO YORK RESOURCES LLC, STERLING NATIONAL DEFENDANTS’ CROSS BANK, NEW YORK STATE DISTRICT ATTORNEY, MOTION TO DISMISS STATE OF NEW YORK, CITY OF NEW YORK, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY DEPARTMENT OF FINANCE, Defendants. --------------------------------------------------------------------X STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) AMY D. CARLIN, an attorney duly admitted to practice law before the courts and the State of New York, hereby affirms under penalty of perjury as follows: 1. I am a member of LaRocca Hornik Rosen & Greenberg LLP, attorneys for plaintiff Street Snacks, LLC (“Street Snacks”). As such I am personally familiar with the facts and circumstances stated herein. I submit this affirmation in further support of Street Snacks’ motion and in opposition to the cross motion of defendants Bridge Associates of Soho, Inc. (“Bridge Associates”), Adam D. Luckner (“Luckner”), and Midway Holdings Corp. (“Midway”) (Bridge Associates, Luckner, and Midway are hereinafter collectively referred to as the “Luckner Defendants”) to dismiss the complaint. 2. The Luckner Defendants seek to avoid and delay paying a substantial debt by belatedly raising the defense that Street Snacks alleged failed to comply with the 90-day notice Z:\Shared\rwdocs\18222.03\Judgment Motion\Plaintiff Reply\Carlin Opp Affirm 2.22.23.docx 1 of 12 FILED: NEW YORK COUNTY CLERK 02/22/2023 03:22 PM INDEX NO. 602374/2009 NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 02/22/2023 requirement under RPAPL §1304. However, RPAPL §1304 is inapplicable because Street Snacks is not a “lender or mortgage loan servicer” for purposes of the statute and the subject commercial mortgage loan is not a “home loan.” The Luckner Defendants provide no other defense or objections to the Referee’s computation of the amount due. As such, Street Snacks’ motion to confirm the Referee’s Report of Amount Due and for a judgment of foreclosure and sale should be granted in its entirety. BACKGROUND AND PROCEDURAL HISTORY 3. This action was commenced on August 3, 2009 to foreclose a commercial mortgage based on the nonpayment of a matured commercial loan (the “Loan”) in the principal amount of $1,600,000 secured by the properties located at: (a) 533 Greenwich Street (a/k/a 99 Vandam Street), New York, New York (the “NYC Property”);1 (b) 619 Bridge Street, Woodmere, New York (the “Woodmere Property”) and (c) 62 Clark Street, Long Beach, New York (the “Long Beach Property”). 4. The Loan is a commercial, business obligation of Bridge Associates and does not constitute a loan that was incurred for personal, family, or household purposes. Indeed, Luckner affirmed these basic facts under oath during his deposition. The transcript of Luckner’s June 2, 2017 deposition is annexed hereto as Exhibit A 5. On May 16, 2005, the Loan was made by First Central Savings Bank (“FCSB”) to Bridge Associates. The Loan refinanced and extended Bridge Associates’ then existing debt owed 1 On or about March 4, 2020, the NYC Property was sold at public auction pursuant to a Judgment of Foreclosure and Sale issued in the tax lien foreclosure action entitled NYCTL 2013-A Trust, et. al. v. Bridge Associates of Soho, Inc., et al., Supreme Court, New York County, Index No. 154799/14. The sale of the NYC Property did not produce any surplus monies. 2 2 of 12 FILED: NEW YORK COUNTY CLERK 02/22/2023 03:22 PM INDEX NO. 602374/2009 NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 02/22/2023 to FCSB in the principal amount of $1,188,000.2 In connection with the Loan, Bridge Associates executed a Substituted and Restated Mortgage Note (the “Note”) as the sole “borrower.” See Exhibit B, annexed to the Affirmation in Support of Plaintiff’s Motion to Confirm Referee Report and for Judgment of Foreclosure and Sale of Amy D. Carlin dated December 14, 2022 (the “Carlin Moving Affirm.”), ¶36. 6. Simultaneous with the execution of the Note, and as security for its payment, Bridge Associates and Luckner executed the Consolidation, Modification and Extension Agreement (the “Mortgage”) that is the subject of this action. Carlin Moving Affirm., Exhibit B, ¶43. In the Mortgage, Bridge Associates and Luckner are referred to as “the party of the second part.” The Mortgage does not identify Luckner as a “borrower” under the terms of the Mortgage or the underlying the Note. 7. At his deposition, Luckner testified that Bridge Associates incurred the Loan for the purpose of extending the maturity date of Bridge Associates’ existing debt to FCSB. Luckner further testified that Bridge Associates used the proceeds of the Loan to pay taxes and insurance. See Exhibit A, 79:24-25, 80:2-21. See also, Carlin Moving Affirm., Exhibit B, ¶58 and Exhibit X. 8. Simultaneous with the execution of the Note and Mortgage, Luckner, individually, and Midway executed a Guaranty (the “Guaranty”) that was an absolute and unconditional guaranty of payment of all sums owed by Bridge Associates and performance of all obligations of Bridge Associates under the Note and the Mortgage. Carlin Moving Affirm., Exhibit B, ¶49. 2 On January 9, 2003, Bridge Associates took out a commercial mortgage loan with FCSB in the principal amount of $1,200,000. Luckner testified that Bridge Associates used the loan proceeds to partially fund Bridge Associates’ satisfaction of a $2,000,000 tax lien on the NYC Property. See Exhibit A, 23:13-25, 24:2-8, 33:11-21. Luckner further testified that Bridge Associates refinanced the loan in 2004 because FCSB “only gave us one-year periods for this mortgage so it was just to renew that prior mortgage, the 1.2 million.” Id., 48:7-20. 3 3 of 12 FILED: NEW YORK COUNTY CLERK 02/22/2023 03:22 PM INDEX NO. 602374/2009 NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 02/22/2023 9. On November 3, 2008, FCSB sold, assigned and transferred all its right, title and interest to the Note, the Mortgage, the Guaranty, and the underlying Loan documents to Street Snacks. Carlin Moving Affirm. Exhibit B, ¶¶53-56; Exhibit C, ¶¶10-15. 10. On June 14, 2022, Street Snacks moved for summary judgment, an order of reference, and related relief. In its opposition to the motion (NYSCEF Doc. Nos. 110, 111 and 112), the Luckner Defendants did not contest Street Snacks’ allegations that the loan is a commercial mortgage and that RPAPL §1304 is inapplicable. See the Affirmation in Support of Amy D. Carlin dated June 14, 2022 (NYSCEF Doc. No. 41), ¶49.3 11. Street Snacks’ motion was granted by this Court’s Decision and Order on Motion dated August 19, 2022 and entered in the Supreme Court, New York County Clerk’s Office on August 22, 2022, a copy of which is annexed to the Carlin Moving Affirm. as Exhibit K. RPAPL §1304 DOES NOT APPLY TO THIS FORECLOSURE ACTION A. RPAPL is inapplicable because Street Snacks is not a “lender” for purposes of the statute. 12. In a last-ditch attempt to further delay the inevitable foreclosure sale of the Long Beach Property and the Woodmere Property, the Luckner Defendants seek dismissal of this action, arguing that Street Snacks allegedly failed to comply with RPAPL §1304. However, the notice required by the statute applies only to certain types of lenders and certain types of loans, neither … 3 In the interest of brevity, Street Snacks respectfully incorporates the referenced moving and opposition papers by reference. 4 4 of 12 FILED: NEW YORK COUNTY CLERK 02/22/2023 03:22 PM INDEX NO. 602374/2009 NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 02/22/2023 of which apply here.4 13. It is very clear that only a “lender or mortgage loan servicer” was required to comply with the version of RPAPL §1304 that was in effect at the time this action was commenced on August 3, 2009. See RPAPL former §1304, as added by L.2008, c. 472, §2. The statute provided in pertinent part, that “with regard to a high-cost home loan, as such term is defined in section six-l of the banking law, a subprime home loan or a non-traditional home loan, at least ninety days before a lender or a mortgage loan servicer commences legal action against the borrower, including mortgage foreclosure, the lender or mortgage loan servicer shall give notice to the borrower.” RPAPL §1304(1) (emphasis added). 14. When this action was commenced, RPAPL §1304(5)(g) unambiguously set forth the definition of a “lender” as “a mortgage banker as defined in paragraph (f) of subdivision one of section five hundred ninety of the banking law or an exempt organization as defined in paragraph (e) of subdivision one of section five hundred ninety of the banking law.” 15. When this action was commenced, Banking Law §590(1)(f) defined a “mortgage banker” to be a person or entity licensed pursuant to §591(a) of Article 12D of the Banking Law to engage in the business of making mortgage loans in New York. 16. Under Banking Law §590(2)(a) then in effect, a person or entity was required to have a license if they were engaged in the business of making five or more mortgage loans in any one calendar year. See Banking Law former §590, as added by L.2008, c. 472, §§ 7, 8. 4 The Luckner Defendants waived any defenses under RPAPL §1304 by failing to dispute Street Snacks’ contentions in its summary judgment motion that the Loan is a commercial mortgage and that RPAPL §1304 is inapplicable. See e.g., Pritchard v. Curtis, 101 A.D.3d 1502 (3rd Dep’t. 2012) (RPAPL §1304 is not jurisdictional and can be waived); Pennymac, Corp. v. DiPrima, 54 Misc.3d 990 (Sup. Ct., Suffolk Cty. 2016) (mortgagors made judicial admissions as to issue of mortgagee’s compliance with statutory notice and thus waived defense of non-compliance, where mortgagee stated in complaint that it had complied with notice requirements and mortgagors failed to deny any of those allegations in their answer and failed to allege facts from which challenges to mortgagee’s compliance with notice provisions of statute were discernable). 5 5 of 12 FILED: NEW YORK COUNTY CLERK 02/22/2023 03:22 PM INDEX NO. 602374/2009 NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 02/22/2023 17. Under Banking Law §590(1)(e) then in effect, an “exempt organization” included any insurance company, banking organization, foreign banking corporation licensed by the superintendent or the comptroller of the currency to transact business in New York, national bank, federal savings bank and loan association, federal credit union, or any bank, trust company, savings bank, savings and loan association, or credit union organized in another state, or any instrumentality created by the United States or any other state to make mortgage loans. 18. Under Banking Law §590(1)(h) then in effect, a “mortgage loan servicer” was defined as a “a person or entity registered pursuant to subdivision two of this section to engage in the business of servicing mortgage loans for property located in this state.” 19. Under Banking Law §590(1)(i) then in effect, “servicing mortgage loans” meant “receiving any scheduled periodic payments from a borrower pursuant to the terms of any mortgage loan…and making the payments to the owner of the loan or other third parties of principal and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the terms of the mortgage service loan documents or servicing contract.” 20. Street Snacks has never been a “mortgage banker” as defined in §590(1)(e) of the Banking Law, subject to licensing by the New York State Superintendent of Banks. Street Snacks is a privately owned limited liability company that has never given any residential mortgage loans. See the Affidavit of Thomas Makkos in Further Support of Plaintiff’s Motion and in Opposition to Defendants’ Cross-Motion, sworn to on February 14, 2023 and submitted herewith, ¶3. The only commercial loan Street Snacks has ever given or taken by assignment is the Loan that is the subject of this action. Id. 6 6 of 12 FILED: NEW YORK COUNTY CLERK 02/22/2023 03:22 PM INDEX NO. 602374/2009 NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 02/22/2023 21. Street Snacks has never been a “mortgage loan servicer” because it is the owner of the Loan. 22. Moreover, Street Snacks has never been one of the entities set forth in Banking Law §590(1)(e) as “exempt organization.” Therefore, it is not subject to licensing by Superintendent of Banks, and is not a “lender” for purposes of RPAPL §1304. 23. Thus, because Street Snacks was not a “lender” or a “mortgage loan servicer,” Street Snacks was not required to comply with the notice provisions of RPAPL §1304. See Manitoli, LLC v. Hartwell, 140 A.D.3d 710 (2 Dep’t 2016) (private lender was not a “mortgage loan servicer” subject to registration requirements or to requirement that 90–day notice be served prior to commencement of foreclosure action relating to home loan); Carmike Holding I, LLC v. Smith, 180 A.D.3d 744, 748 (2d Dep’t 2020) (mortgagee was exempt from the Banking Law’s licensing provision and was not a lender within the meaning of the Banking Law provisions governing high-cost and subprime home loans); Balsam v. Fioriglio, 123 A.D.3d 750 (2d Dep’t 2014) (an individual who makes a single loan is not a “lender” to whom RPAPL §1304 applies). B. RPAPL §1304 is inapplicable because the Loan is a commercial loan. 24. Where the applicability of RPAPL §1304 is in dispute, the burden shifts to the defendant to demonstrate that the underlying transaction is a home loan. US Bank Nat. Ass'n v. Richard, 151 A.D.3d 1001 (2d Dept., 2017) (finding where the borrower obtained the loan for business or commercial purposes, it was not a home loan under RPAPL §1304). Here, the Luckner Defendants have utterly failed to set forth proof in competent and credible admissible form that the underlying loan was, in fact, a “home loan.” See Meyerson Capital X LLC v. Kats, 33 Misc.3d 1017 (Sup. Ct., Kings Cty. 2011). 7 7 of 12 FILED: NEW YORK COUNTY CLERK 02/22/2023 03:22 PM INDEX NO. 602374/2009 NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 02/22/2023 1. Adam D. Luckner is not a “Borrower” under the Loan Documents. 25. At the time this action was commenced, RPAPL §1304(5)(b), defined a “home loan” as a “home loan, including an open-end credit plan, other than a reverse mortgage transaction,” in which: (i) The principal amount of the loan at origination did not exceed the conforming loan size that was in existence at the time of origination for a comparable dwelling as established by the federal national mortgage association; (ii) The borrower is a natural person; (iii) The debt is incurred by the borrower primarily for personal, family, or household purposes; (iv) The loan is secured by a mortgage or deed of trust on real estate upon which there is located or there is to be located a structure or structures intended principally for occupancy of from one to four families which is or will be occupied by the borrower as the borrower’s principal dwelling; and (v) The property is located in this state. 26. The Loan is a commercial loan that was made to Bridge Associates, a corporation. Luckner acted solely as the guarantor of the Note in using the Woodmere Property as collateral security for the Loan made to Bridge Associates. Although Luckner may have resided at the Woodmere Property, it does not change the fact that Luckner is not a “borrower” or even mentioned in the Note, facts which the Luckner Defendants concede. See the Affirmation in Opposition to Plaintiff’s Motion for a Judgment and in Support of Defendant’s Cross Motion to Dismiss Plaintiff’s Complaint of Peter K. Kamran dated January 30, 2023 (NYSCEF Doc. No 191), ¶7. 27. The facts presented in this action are strikingly similar to those presented to the Second Department in Independence Bank v. Valentine, 113 A.D.3d 62 (2d Dep’t 2013). In 8 8 of 12 FILED: NEW YORK COUNTY CLERK 02/22/2023 03:22 PM INDEX NO. 602374/2009 NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 02/22/2023 Independence Bank, the lender sought to foreclosure a mortgage, given by an individual guarantor, to secure a commercial loan made to a corporation for the purpose of purchasing machinery and equipment, and to fund other various startup, closing, and construction costs associated with developing a restaurant. Although the loan was collateralized by a residential building, the Second Department clearly and unambiguously determined that the loan did not constitute a “home loan” under RPAPL §1304(5) and held that the Supreme Court properly rejected the guarantor’s contention that it was entitled to a mandatory settlement conference, stating: Here, the plaintiff made a loan to Roz-Valt, a corporation, not Valentine, a natural person. Valentine simply acted as the guarantor of Roz-Valt’s loan. Valentine used her own primary residence in Queens to secure her obligations as guarantor of the mortgage. Therefore, Valentine acted only as the guarantor of this loan, not a borrower, in using her own home as collateral security. This mortgage was not given to secure or collateralize the note, but rather, Valentine gave the plaintiff a subordinate lien on her primary residence as Roz-Valt’s guarantor. Accordingly, since a mortgagor is only entitled to a mandatory settlement conference under CPLR 3408 for a home loan that falls under the definition outlined in RPAPL 1304(5) (see Wells Fargo Bank, N.A. v. Meyers, 108 A.D.3d at 18, 966 N.Y.S.2d 108; Aurora LoanServ., LLC v. Weisblum, 85 A.D.3d 95, 104-105, 923 N.Y.S.2d 609), and the loan here does not fall within the ambit of that statute, the Supreme Court properly rejected Valentine’s argument and granted those branches of the plaintiffs motion which were for summary judgment on the complaint insofar as asserted against Valentine and for an order of reference. Independence Bank, 113 A.D.3d 66-67. See also The Provident Bank v. Shah, 2018 WL 5267154 *5-6 (Sup. Ct. N.Y. Cty. October 22, 2018) (individuals acted as guarantors of loan to corporation, not as borrowers, in using their own home as collateral security). Compare, Bank of New York Mellon v. Forman, 176 A.D.3d 663, 665 (2d Dep’t 2019) (wife of deceased mortgagee was deemed to be a “borrower” for purposes of RPAPL §1304 in action to foreclose home loan where wife was identified, along with her husband, as “Borrower” on first page of mortgage instrument and was 9 9 of 12 FILED: NEW YORK COUNTY CLERK 02/22/2023 03:22 PM INDEX NO. 602374/2009 NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 02/22/2023 also designated as “Borrower” under her signature on the signature page); Deutsche Bank National Trust Company v. Weininger, 206 A.D.3d 882 (2d Dep’t 2022) (homeowner defendant was referred to as a “borrower” in the mortgage instrument). 2. Bridge Associates did not incur the Loan primarily for personal, family, or household purposes. 28. Luckner offers no evidence whatsoever that: (a) refutes that the Loan was incurred by Bridge Associates for business purposes; or (b) supports Luckner’s bald assertion that a portion of the proceeds of the Loan was spent on expenses incurred by his family for household living expenses.5 Indeed, the record on in this matter tells a far different story than Luckner’s self-serving claims raised for the first time in the cross motion. 29. Clearly, the Loan was not incurred by Bridge Associates primarily for “personal, family or household use.” Indeed, Luckner previously testified under oath that: (a) the Loan was incurred by Bridge Associates to extend the maturity date of its existing debt; and (b) Bridge Associates used the proceeds to pay insurance and taxes. Exhibit A, 79:24-25, 80:2-21. See Sharestates Investments Dacl, LLC v. 158AT128TH LLC, 2022 WL 4117305 *4 (Sup. Ct. N.Y Cty. September 9, 2022) (Kahn, J.) (RPAPL §1304 was inapplicable where borrower was a limited liability company and the debt was incurred for commercial purposes); U.S. Bank Nat. Ass’n v. Del Rosario, 2022 WL 4484139, *2 (Sup. Ct. N.Y. Cty. September 27, 2022) (Kahn, J.) (RPAPL §1304 was inapplicable where the debt was not for strictly personal, family or household purposes); Vanderbilt Mortgage and Finance, Inc. v. Ammon, 179 A.D.3d 1138, 1141 (2d Dep’t 2020) (RPAPL §1304 is inapplicable where the purpose of the subject loan was a refinancing of a 5 Moreover, Luckner has not submitted any evidence that the Woodmere Property was his primary residence when the action was commenced. It should be noted that at his deposition in 2017, Luckner testified, “My mother resides there; I'm sometimes there.” See Exhibit A, 40:11-16. 10 10 of 12 FILED: NEW YORK COUNTY CLERK 02/22/2023 03:22 PM INDEX NO. 602374/2009 NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 02/22/2023 multi-unit rental/investment property). 30. Even assuming, arguendo, that Luckner ultimately may have used a portion of the proceeds from Bridge Associates’ commercial Loan to pay his family’s household living expenses, it is of no moment because there is simply no question that RPAPL §1304 does not apply to the case at bar. CONCLUSION 31. The Luckner Defendants ask this Court to reject the Referee’s Report of Amount Due, but they fail to set forth which part of the Report, if any, is purportedly incorrect. Nor do the Luckner Defendants offer an alternative computation of the amount due and owing from the Luckner Defendants to Street Snacks. 32. As the Luckner Defendants clearly have absolutely no evidence upon which to dispute the Referee’s Report of Amount Due, and they provide no other defense to the mortgage foreclosure action other than their meritless defense under RPAPL §1304, Street Snacks’ motion should be granted in its entirety. WHEREFORE, deponent respectfully requests that this Court grant Plaintiff’s motion for (a) for an Order confirming the Referee’s Report; (b) a judgment of foreclosure and sale; and (c) such other and further relief as this Court determines is just and proper, and deny Defendant’s cross motion in its entirety. Dated: New York, New York February 22, 2023 /s/ Amy D. Carlin Amy D. Carlin 11 11 of 12 FILED: NEW YORK COUNTY CLERK 02/22/2023 03:22 PM INDEX NO. 602374/2009 NYSCEF DOC. NO. 198 RECEIVED NYSCEF: 02/22/2023 WORD COUNT CERTIFICATION Pursuant to Section 202.8-b of the Uniform Rules for the Supreme Court I, Amy D. Carlin, an attorney duly admitted to practice law before the courts of the State of New York, hereby certify that this affirmation complies with the word count limit and that the total number of words in the affirmation, inclusive of point headings and footnotes is 3,047. In preparing this certification, I have relied on the word count of the word processing system used to prepare this affirmation. Dated: New York, New York February 22, 2023 /s/ Amy D. Carlin Amy D. Carlin 12 12 of 12