Preview
FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023
NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
-------------------------------------- X
BOARD OF MANAGERS OF THE 610 PARK :
AVENUE CONDOMINIUM,
:
Plaintiff,
:
v.
16EF APARTMENT, LLC, MARA :
ENTERPRISES, AND “JOHN DOE” No. 1 Index Nos. 151261/2023
through “JOHN DOE” No. 15, the true name of : (Kahn III, J.)
said defendants being unknown to plaintiff, the
parties intended to be those persons having or :
claiming an interests in the mortgaged premises
as described in the complaint by virtue of being :
tenants, or occupants, or judgment-creditors, or
lienors of any type of nature in all or part of :
said premises.
:
Defendants.
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BANC OF CALIFORNIA, N.A.’S REPLY MEMORANDUM OF LAW
IN SUPPORT OF MOTION TO INTERVENE
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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT...................................................................................................... 1
ARGUMENT .................................................................................................................................. 3
I. BANC IS ENTITLED TO INTERVENTION BY RIGHT ................................................ 3
II. BANC IS ENTITLED TO PERMISSIVELY INTERVENE .............................................. 5
III. THE BOARD’S IRRELEVANT ARGUMENTS CONCERNING NECESSARY
AND PERMISSIVE DEFENDANTS DO NOT IMPACT THE MERIT OF
INTERVENTION ............................................................................................................... 7
CONCLUSION ............................................................................................................................... 8
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TABLE OF AUTHORITIES
Page(s)
Cases
Beltway Cap., LLC v. Soleil,
25 Misc.3d 1233(A), 2009 WL 4263346 (Sup. Ct. Kings County 2009) ..................................5
Brukhman v. Giuliani,
662 N.Y.S.2d 914 (Sup. Ct. N.Y. County 1997) rev’d on other grounds at 678
N.Y.S.2d 45 (1st Dep’t 1998) ................................................................................................6, 7
G & Y Maint. Corp. v. Core Cont’l Constr. LLC
215 A.D.3d 553 (1st Dep’t 2023) ..............................................................................................7
Givens v. Kingsbridge Heights Care Ctr., Inc.,
171 A.D.3d 569, 570 (1st Dep’t 2019) ......................................................................................4
Ladd v. N.Y. Corridors, Inc.,
No. 601813/2017, 2020 WL 13518772 (Sup. Ct. Nassau County 2020) ..................................6
Mauriello v. Battery Park City Auth.,
No. 160687/14, 2021 WL 408236 (Sup. Ct. N.Y. County 2021) ..............................................5
Mittenthal v. Mittenthal,
417 N.Y.S.2d 175, 176 (Sup. Ct. N.Y. County 1979) ...............................................................4
Oneida Indian Nation of Wisc. v. State of New York,
732 F.2d 261 (2d Cir.1984)........................................................................................................5
Poblocki v. Todoro,
865 N.Y.S.2d 448 (4th Dep’t 2008)...........................................................................................6
Resorts Group, Inc. v. Cerberus Capital Management, L.P.,
213 A.D.3d 621 (1st Dep’t 2023) ..............................................................................................3
Wells Fargo Bank, Nat’l Ass’n v. McLean,
70 A.D.3d 676, 894 N.Y.S.2d 487 (2d Dep’t 2010) ..................................................................6
XL Specialty Ins. Co. v. Lakian,
632 F. App’x 667 (2d Cir. 2015) ...............................................................................................5
Other Authorities
CPLR § 1012............................................................................................................................4, 5, 8
CPLR § 1013....................................................................................................................................7
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U.S. Const. art. IV, § 1 (Full Faith and Credit Clause).......................................................... passim
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PRELIMINARY STATEMENT
Plaintiff Board of Managers of the 610 Park Avenue Condominium’s (the “Board”)
opposition brief leaves no doubt as to Banc of California, N.A.’s (“Banc”) right to intervene in this
action. The Board seeks to effectuate the foreclosure and sale of 610 Park Avenue PH16E (the
“Subject Property”), and the disposition of proceeds from that sale. Banc has obtained a
preliminary injunction (the “Preliminary Injunction”) in California Superior Court that prevents
Michael Strauss (“Strauss”), the managing member Defendant 16EF Apartment, LLC, owner of
the Subject Property, from participating in such a sale or from disposing of any ensuing proceeds.
But if the Board succeeds in this foreclosure action, the Subject Property and related proceeds will
have been sold and disposed of without Banc’s involvement, thereby causing significant harm to
Banc. Banc thus properly seeks to intervene.
None of this is substantively contested by the Board. Indeed, it expressly acknowledges
the prospect of Banc being bound by any forthcoming judgment of this Court, and thus potentially
losing its lone opportunity to recoup Strauss’s unpaid debt. One might assume from this admission
that the Board would recognize the appropriateness of intervention. Not so. The Board instead
wrongly focuses on Banc’s claim for declaratory relief, positing that this Court is not required to
enforce the Preliminary Injunction and asserting that Banc cannot be adversely affected in the
event the Preliminary Injunction is contravened. But the Board’s disagreement with Banc’s
requested remedy is not relevant to the issue of whether Banc should be permitted to intervene by
right to present its case—an inquiry narrowly focused on the adverse impact the proposed
intervenor may suffer. And the Board’s argument only proves the point: because the enforcement
of a foreign-issued preliminary injunction is discretionary, Banc stands to be adversely affected in
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the event the Preliminary Injunction is not enforced. Intervention is warranted by right to allow
Banc to first make its case.
The Board’s fleeting discussion of permissive intervention fares no better. The Board aims
to split hairs by focusing on the differing bases for debt owed to it and Banc, claiming that this
precludes a finding of common question of law and fact. But this myopic approach is not the law.
For purposes of permissive intervention, common questions are to be found by broadly examining
similarities between the parties’ claims—a requirement plainly satisfied here by the fact that both
Banc and the Board are seeking to adjudicate the appropriateness of foreclosing the Subject
Property and any ensuing disposition of funds.
The Board spills much ink on its remaining argument—that Banc does not qualify as a
necessary or permissive defendant under New York Real Property Law—despite it being wholly
unrelated to the question at hand. Banc has not sought to be joined as a defendant; indeed, the
only plausible connection this argument has to the action arises from the Board’s own Complaint,
which made as unnamed party defendants any entities that “may have . . . any claim” against the
Subject Property. But the Board cannot walk away from its allegations in later briefing. Nor can
it attempt to invoke one theoretical mechanism for joinder to assert that a wholly distinct basis for
joining Banc—intervention—is unwarranted. The Court should thus reject the Board’s straw-man
argument outright.
Having litigated this matter uncontested to date, the Board’s resistance to the involvement
of another interested party is understandable. But it is axiomatic that intervention is liberally
allowed under New York law, and the Board has failed to rebut a single argument raised by Banc
in support of its request. The Court should thus grant leave to intervene.
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ARGUMENT
I. Banc Is Entitled to Intervention by Right
The Board’s argument against intervention by right rests on a lone premise—namely, that
this Court is not required to enforce a preliminary injunction issued by a court of a sister state
under the Full Faith and Credit Clause, and consequently Banc cannot be adversely impacted by
any ruling issued by this Court that fails to comply with the Preliminary Injunction it obtained.
Opp. at 4; Aff. of Robert T. Holland, Esq., dated June 27, 2023 (the “Holland Aff.”) at ¶ 28.
Relying upon Resorts Group, Inc. v. Cerberus Capital Management, L.P., 213 A.D.3d 621 (1st
Dep’t 2023), the Board claims that New York courts interpret the Full Faith and Credit Clause as
mandating the recognition and enforcement of final judgments, of which a preliminary injunction
is not. Opp. at 4. But this argument misses the point, and in no way precludes Banc’s proposed
intervention here.
Initially, the Board’s assertion that Banc is improperly seeking to “bind” it to the
Preliminary Injunction, issued in a litigation that it did not participate in, is as incorrect as it is
ironic. See Holland Aff. at ¶ 35. As alleged in its Proposed Complaint, Banc is seeking a
declaratory judgment concerning the impact of the Preliminary Injunction, which is binding only
upon Strauss, in the instant action. The Board cites no case law supporting the notion that a claim
for declaratory relief that merely relates to a foreign-issued preliminary injunction implicates the
Full Faith and Credit Clause, and Banc has not relied on any such doctrine. The Court should thus
reject the Board’s mischaracterization of Banc’s proposed Complaint, and its purported import on
the Full Faith and Credit Clause.
But even assuming that the Full Faith and Credit Clause is relevant to the Preliminary
Injunction—which it is not—it does not foreclose intervention here. The Board erroneously
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conflates the fact that this Court is not required to enforce the preliminary injunction with the
inaccurate notion that it is not permitted to do so—or that the Court may not even consider if it can
do so. Whether through invocation of the Full Faith and Credit Clause or general principles of
comity, this Court indisputably possesses the authority to enforce the Preliminary Injunction. See,
e.g., Givens v. Kingsbridge Heights Care Ctr., Inc., 171 A.D.3d 569, 570 (1st Dep’t 2019) (finding
that a non-final order of stay entered by a sister court in proceedings involving an insolvent insurer
is entitled to full faith and credit); Mittenthal v. Mittenthal, 417 N.Y.S.2d 175, 176 (Sup. Ct. N.Y.
County 1979) (“[T]here is nothing in the federal constitution to prevent a state from enforcing a
sister state's judgment which does not attain the level of mandatory full faith and credit standards”).
The Board may prefer that this Court not enforce the Preliminary Injunction, but this does not alter
the fact that it is well within its discretion to do so. And from that discretion arises the risk of Banc
being adversely affected by a ruling against its interests.
The Board pairs its Full Faith and Credit Clause argument with ancillary attacks on the
merits of Banc’s claim. It variously contests that it deserves priority to recoup its debt (Opp. at 5;
Holland Aff. at ¶ 18), that Banc has no “meritorious defense” to the foreclosure action (Opp. at 5,
Holland Aff. at ¶ 20), and that Banc has offered no “evidence” that Strauss is liable to the Board
(Holland Aff. at ¶¶ 25–26). But these assertions only serve to expose an additional flaw in the
Board’s efforts to preclude intervention: arguments on the merits of Banc’s claim are premature.
The inquiry into whether intervention is warranted as of right under CPLR § 1012(a)(3)
focuses on whether a party “may be adversely affected by the judgment” (emphasis added), not
whether a court will necessarily enter judgment against the movant’s favor. Were the Board’s
interpretation to be correct, any motion to intervene would be functionally transformed into a
motion to dismiss and/or for summary judgment, thereby vitiating both the threshold purpose of a
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motion to intervene and the plain language of CPLR § 1012(a)(3). See, e.g., Mauriello v. Battery
Park City Auth., No. 160687/14, 2021 WL 408236, at *10 (Sup. Ct. N.Y. County 2021) (finding
that plaintiff-intervenor was properly granted leave to intervene given chance of adverse impact,
despite later determining that it lacked standing); accord XL Specialty Ins. Co. v. Lakian, 632 F.
App’x 667, 669 (2d Cir. 2015) (“[E]xcept for allegations frivolous on their face, an application to
intervene cannot be resolved by reference to the ultimate merits of the claims which the intervenor
wishes to assert following intervention.”) (quoting Oneida Indian Nation of Wisc. v. State of New
York, 732 F.2d 261, 265 (2d Cir.1984)). Plainly, this is not the case. The Board’s attacks on the
merits of Banc’s claim, and the corresponding need to resolve these issues, only further
demonstrate why intervention is appropriate here.
II. Banc Is Entitled to Permissively Intervene
In challenging the appropriateness of permissive intervention under CPLR § 1013, the
Board erroneously focuses on the distinctions between the debts the Board and Banc are
respectively owed. It argues that common questions of fact and law cannot possibly be found to
exist here, given that the debt owed to Banc arises from loan obligations, whereas the Board is
owed tenant common charges. See Opp. at 6; Holland Aff. at ¶¶ 23–24. But the Board offers no
support for such an interpretation of the common questions standard, and the appropriate analysis
does not involve such a granular parsing of the issues.
To the contrary, and consistent with the principle that intervention is liberally allowed in
New York, courts employ a wide-lensed analysis in assessing the existence of common questions
of fact and law, looking to whether the claims alleged share similar traits. Where—as here—the
legal claims and facts share a single nexus—the potential foreclosure and sale of the Subject
Property—the common questions inquiry is satisfied. See Beltway Cap., LLC v. Soleil, 25 Misc.3d
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1233(A), 2009 WL 4263346 at * 3 (Sup. Ct. Kings County 2009) (granting intervention in
foreclosure action and finding common questions of law and fact concerning “title to the subject
property and the mortgage priorities affecting the subject property”); Ladd v. N.Y. Corridors, Inc.,
No. 601813/2017, 2020 WL 13518772 at *5 (Sup. Ct. Nassau County 2020) (finding common
questions inquiry satisfied where recovery sought by intervenor and plaintiff “arise from the same
underlying occurrence”); see also Wells Fargo Bank, Nat’l Ass’n v. McLean, 70 A.D.3d 676, 678,
894 N.Y.S.2d 487, 489 (2d Dep’t 2010) (finding permissive intervention warranted in foreclosure
action where intervenor had “real and substantial interest in the disbursement of the remaining
insurance proceeds and, thus, in the outcome of the action.”).
In misguided fashion, the Board further suggests that Banc’s proposed intervention will
serve only to delay proceedings and cause it prejudice. See Opp. at 6; Holland Aff. at ¶¶ 30–33.
Nothing could be further from the truth. Just as the Board is concerned with the diminution of the
Subject Property’s value due to the passage of time and the accrual of additional debt, so too is
Banc: both parties have a substantial interest in resolving any dispute concerning the Subject
Property as expeditiously as possible. The claim that Banc seeks to intervene for “no useful
purpose” (Holland Aff. at ¶ 33) but to delay proceedings and prejudice the Board—with whom it
has no preexisting relation—to Banc’s own detriment is both illogical and incredible. Banc has
made assurances that it will not unduly delay proceedings, and the Board’s claim that it will be
prejudiced by “any delay” (Holland Aff. at ¶ 30) misstates the standard by which prejudice is
judged. Poblocki v. Todoro, 865 N.Y.S.2d 448, 449 (4th Dep’t 2008) (holding that party does not
experience prejudice, despite claims of potential delay, where intervenor’s involvement will not
entail additional burdens or increase the liability of the party opposing intervention); Brukhman v.
Giuliani, 662 N.Y.S.2d 914, 916 (Sup. Ct. N.Y. County 1997) (granting leave to intervene and
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ruling that intervention in early stages of litigation does not give rise to undue prejudice) rev’d on
other grounds at 678 N.Y.S.2d 45 (1st Dep’t 1998).
III. The Board’s Irrelevant Arguments Concerning Necessary and Permissive
Defendants Do Not Impact the Merit of Intervention
The Board curiously devotes significant space to the prospect of Banc being named as
either a necessary or permissive defendant under New York’s Real Property Law. Opp. 3–4;
Holland Aff. at ¶ 33. But Banc did not seek leave to be joined as a necessary or permissive
defendant, and any suggestion that intervention somehow turns on satisfying these wholly distinct
statutory definitions is misplaced.
Assuming for the sake of argument that it was not the Board’s intent to conflate these two
separate bases for joinder, the animating source of this discussion appears to be the Board’s own
allegations. In its Complaint, the Board identified as “John Doe” Defendants unknown entities
that “may” have an interest in the Subject Property by virtue of “any claim” they possess. Verified
Complaint, Dkt. 1, at ¶ 18. Plainly, these allegations could be interpreted to encompass Banc as
one such “John Doe” Defendant. The Court need not engage with this issue to determine that
intervention is warranted. But to the extent the Board seeks to alter its complaint through its
opposition brief, the Court should reject any such improper attempt. See G & Y Maint. Corp. v.
Core Cont’l Constr. LLC 215 A.D.3d 553, 554 (1st Dep’t 2023) (“Plaintiff cannot amend its
complaint through [] briefing”).
The Board’s arguments regarding necessary and permissive defendants are wholly
irrelevant, and the Court should reject them outright.
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CONCLUSION
For the foregoing reasons, Banc requests that the Court enter an order granting its motion
to intervene as of right under CPLR § 1012 or, alternatively, an order granting leave to intervene
under CPLR § 1013, and for such other and further relief as this Court deems just and proper.
Dated: July 11, 2023
New York, New York
By: /s/ Martin C. Geagan
Martin C. Geagan
WINSTON AND STRAWN LLP
200 Park Avenue
New York, New York, 10012
Telephone: (212) 294-6700
Facsimile: (212) 294-4700
mgeagan@winston.com
Gregory A. Ellis (pro hac vice forthcoming)
WINSTON AND STRAWN LLP
333 S Grand Ave
Los Angeles, CA 90071
Telephone: (213) 615-1700
Facsimile: (213) 615-1750
gaellis@winston.com
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CERTIFICATE OF COMPLIANCE
1. Pursuant to N.Y.C.R.R. § 202.70(g), Rule 17, Plaintiff specifies that the foregoing
brief was prepared on a computer using Microsoft Word. A proportionally spaced typeface was
used as follows:
Name of Typeface: Times New Roman
Point Size: 12
2. The total number of words in the brief, inclusive of point headings and footnotes
and exclusive of pages containing the caption, table of contents, the table of authorities, the
signature block, and the certificate of compliance, is 2,285 words.
Dated: July 11, 2023 /s/ Martin C. Geagan
New York, New York Martin C. Geagan
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Preview
FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023 NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK -------------------------------------- X BOARD OF MANAGERS OF THE 610 PARK : AVENUE CONDOMINIUM, : Plaintiff, : v. 16EF APARTMENT, LLC, MARA : ENTERPRISES, AND “JOHN DOE” No. 1 Index Nos. 151261/2023 through “JOHN DOE” No. 15, the true name of : (Kahn III, J.) said defendants being unknown to plaintiff, the parties intended to be those persons having or : claiming an interests in the mortgaged premises as described in the complaint by virtue of being : tenants, or occupants, or judgment-creditors, or lienors of any type of nature in all or part of : said premises. : Defendants. -------------------------------------- X BANC OF CALIFORNIA, N.A.’S REPLY MEMORANDUM OF LAW IN SUPPORT OF MOTION TO INTERVENE 1 of 13 FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023 NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023 TABLE OF CONTENTS Page PRELIMINARY STATEMENT...................................................................................................... 1 ARGUMENT .................................................................................................................................. 3 I. BANC IS ENTITLED TO INTERVENTION BY RIGHT ................................................ 3 II. BANC IS ENTITLED TO PERMISSIVELY INTERVENE .............................................. 5 III. THE BOARD’S IRRELEVANT ARGUMENTS CONCERNING NECESSARY AND PERMISSIVE DEFENDANTS DO NOT IMPACT THE MERIT OF INTERVENTION ............................................................................................................... 7 CONCLUSION ............................................................................................................................... 8 i 2 of 13 FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023 NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023 TABLE OF AUTHORITIES Page(s) Cases Beltway Cap., LLC v. Soleil, 25 Misc.3d 1233(A), 2009 WL 4263346 (Sup. Ct. Kings County 2009) ..................................5 Brukhman v. Giuliani, 662 N.Y.S.2d 914 (Sup. Ct. N.Y. County 1997) rev’d on other grounds at 678 N.Y.S.2d 45 (1st Dep’t 1998) ................................................................................................6, 7 G & Y Maint. Corp. v. Core Cont’l Constr. LLC 215 A.D.3d 553 (1st Dep’t 2023) ..............................................................................................7 Givens v. Kingsbridge Heights Care Ctr., Inc., 171 A.D.3d 569, 570 (1st Dep’t 2019) ......................................................................................4 Ladd v. N.Y. Corridors, Inc., No. 601813/2017, 2020 WL 13518772 (Sup. Ct. Nassau County 2020) ..................................6 Mauriello v. Battery Park City Auth., No. 160687/14, 2021 WL 408236 (Sup. Ct. N.Y. County 2021) ..............................................5 Mittenthal v. Mittenthal, 417 N.Y.S.2d 175, 176 (Sup. Ct. N.Y. County 1979) ...............................................................4 Oneida Indian Nation of Wisc. v. State of New York, 732 F.2d 261 (2d Cir.1984)........................................................................................................5 Poblocki v. Todoro, 865 N.Y.S.2d 448 (4th Dep’t 2008)...........................................................................................6 Resorts Group, Inc. v. Cerberus Capital Management, L.P., 213 A.D.3d 621 (1st Dep’t 2023) ..............................................................................................3 Wells Fargo Bank, Nat’l Ass’n v. McLean, 70 A.D.3d 676, 894 N.Y.S.2d 487 (2d Dep’t 2010) ..................................................................6 XL Specialty Ins. Co. v. Lakian, 632 F. App’x 667 (2d Cir. 2015) ...............................................................................................5 Other Authorities CPLR § 1012............................................................................................................................4, 5, 8 CPLR § 1013....................................................................................................................................7 ii 3 of 13 FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023 NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023 U.S. Const. art. IV, § 1 (Full Faith and Credit Clause).......................................................... passim iii 4 of 13 FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023 NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023 PRELIMINARY STATEMENT Plaintiff Board of Managers of the 610 Park Avenue Condominium’s (the “Board”) opposition brief leaves no doubt as to Banc of California, N.A.’s (“Banc”) right to intervene in this action. The Board seeks to effectuate the foreclosure and sale of 610 Park Avenue PH16E (the “Subject Property”), and the disposition of proceeds from that sale. Banc has obtained a preliminary injunction (the “Preliminary Injunction”) in California Superior Court that prevents Michael Strauss (“Strauss”), the managing member Defendant 16EF Apartment, LLC, owner of the Subject Property, from participating in such a sale or from disposing of any ensuing proceeds. But if the Board succeeds in this foreclosure action, the Subject Property and related proceeds will have been sold and disposed of without Banc’s involvement, thereby causing significant harm to Banc. Banc thus properly seeks to intervene. None of this is substantively contested by the Board. Indeed, it expressly acknowledges the prospect of Banc being bound by any forthcoming judgment of this Court, and thus potentially losing its lone opportunity to recoup Strauss’s unpaid debt. One might assume from this admission that the Board would recognize the appropriateness of intervention. Not so. The Board instead wrongly focuses on Banc’s claim for declaratory relief, positing that this Court is not required to enforce the Preliminary Injunction and asserting that Banc cannot be adversely affected in the event the Preliminary Injunction is contravened. But the Board’s disagreement with Banc’s requested remedy is not relevant to the issue of whether Banc should be permitted to intervene by right to present its case—an inquiry narrowly focused on the adverse impact the proposed intervenor may suffer. And the Board’s argument only proves the point: because the enforcement of a foreign-issued preliminary injunction is discretionary, Banc stands to be adversely affected in 1 5 of 13 FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023 NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023 the event the Preliminary Injunction is not enforced. Intervention is warranted by right to allow Banc to first make its case. The Board’s fleeting discussion of permissive intervention fares no better. The Board aims to split hairs by focusing on the differing bases for debt owed to it and Banc, claiming that this precludes a finding of common question of law and fact. But this myopic approach is not the law. For purposes of permissive intervention, common questions are to be found by broadly examining similarities between the parties’ claims—a requirement plainly satisfied here by the fact that both Banc and the Board are seeking to adjudicate the appropriateness of foreclosing the Subject Property and any ensuing disposition of funds. The Board spills much ink on its remaining argument—that Banc does not qualify as a necessary or permissive defendant under New York Real Property Law—despite it being wholly unrelated to the question at hand. Banc has not sought to be joined as a defendant; indeed, the only plausible connection this argument has to the action arises from the Board’s own Complaint, which made as unnamed party defendants any entities that “may have . . . any claim” against the Subject Property. But the Board cannot walk away from its allegations in later briefing. Nor can it attempt to invoke one theoretical mechanism for joinder to assert that a wholly distinct basis for joining Banc—intervention—is unwarranted. The Court should thus reject the Board’s straw-man argument outright. Having litigated this matter uncontested to date, the Board’s resistance to the involvement of another interested party is understandable. But it is axiomatic that intervention is liberally allowed under New York law, and the Board has failed to rebut a single argument raised by Banc in support of its request. The Court should thus grant leave to intervene. 2 6 of 13 FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023 NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023 ARGUMENT I. Banc Is Entitled to Intervention by Right The Board’s argument against intervention by right rests on a lone premise—namely, that this Court is not required to enforce a preliminary injunction issued by a court of a sister state under the Full Faith and Credit Clause, and consequently Banc cannot be adversely impacted by any ruling issued by this Court that fails to comply with the Preliminary Injunction it obtained. Opp. at 4; Aff. of Robert T. Holland, Esq., dated June 27, 2023 (the “Holland Aff.”) at ¶ 28. Relying upon Resorts Group, Inc. v. Cerberus Capital Management, L.P., 213 A.D.3d 621 (1st Dep’t 2023), the Board claims that New York courts interpret the Full Faith and Credit Clause as mandating the recognition and enforcement of final judgments, of which a preliminary injunction is not. Opp. at 4. But this argument misses the point, and in no way precludes Banc’s proposed intervention here. Initially, the Board’s assertion that Banc is improperly seeking to “bind” it to the Preliminary Injunction, issued in a litigation that it did not participate in, is as incorrect as it is ironic. See Holland Aff. at ¶ 35. As alleged in its Proposed Complaint, Banc is seeking a declaratory judgment concerning the impact of the Preliminary Injunction, which is binding only upon Strauss, in the instant action. The Board cites no case law supporting the notion that a claim for declaratory relief that merely relates to a foreign-issued preliminary injunction implicates the Full Faith and Credit Clause, and Banc has not relied on any such doctrine. The Court should thus reject the Board’s mischaracterization of Banc’s proposed Complaint, and its purported import on the Full Faith and Credit Clause. But even assuming that the Full Faith and Credit Clause is relevant to the Preliminary Injunction—which it is not—it does not foreclose intervention here. The Board erroneously 3 7 of 13 FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023 NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023 conflates the fact that this Court is not required to enforce the preliminary injunction with the inaccurate notion that it is not permitted to do so—or that the Court may not even consider if it can do so. Whether through invocation of the Full Faith and Credit Clause or general principles of comity, this Court indisputably possesses the authority to enforce the Preliminary Injunction. See, e.g., Givens v. Kingsbridge Heights Care Ctr., Inc., 171 A.D.3d 569, 570 (1st Dep’t 2019) (finding that a non-final order of stay entered by a sister court in proceedings involving an insolvent insurer is entitled to full faith and credit); Mittenthal v. Mittenthal, 417 N.Y.S.2d 175, 176 (Sup. Ct. N.Y. County 1979) (“[T]here is nothing in the federal constitution to prevent a state from enforcing a sister state's judgment which does not attain the level of mandatory full faith and credit standards”). The Board may prefer that this Court not enforce the Preliminary Injunction, but this does not alter the fact that it is well within its discretion to do so. And from that discretion arises the risk of Banc being adversely affected by a ruling against its interests. The Board pairs its Full Faith and Credit Clause argument with ancillary attacks on the merits of Banc’s claim. It variously contests that it deserves priority to recoup its debt (Opp. at 5; Holland Aff. at ¶ 18), that Banc has no “meritorious defense” to the foreclosure action (Opp. at 5, Holland Aff. at ¶ 20), and that Banc has offered no “evidence” that Strauss is liable to the Board (Holland Aff. at ¶¶ 25–26). But these assertions only serve to expose an additional flaw in the Board’s efforts to preclude intervention: arguments on the merits of Banc’s claim are premature. The inquiry into whether intervention is warranted as of right under CPLR § 1012(a)(3) focuses on whether a party “may be adversely affected by the judgment” (emphasis added), not whether a court will necessarily enter judgment against the movant’s favor. Were the Board’s interpretation to be correct, any motion to intervene would be functionally transformed into a motion to dismiss and/or for summary judgment, thereby vitiating both the threshold purpose of a 4 8 of 13 FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023 NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023 motion to intervene and the plain language of CPLR § 1012(a)(3). See, e.g., Mauriello v. Battery Park City Auth., No. 160687/14, 2021 WL 408236, at *10 (Sup. Ct. N.Y. County 2021) (finding that plaintiff-intervenor was properly granted leave to intervene given chance of adverse impact, despite later determining that it lacked standing); accord XL Specialty Ins. Co. v. Lakian, 632 F. App’x 667, 669 (2d Cir. 2015) (“[E]xcept for allegations frivolous on their face, an application to intervene cannot be resolved by reference to the ultimate merits of the claims which the intervenor wishes to assert following intervention.”) (quoting Oneida Indian Nation of Wisc. v. State of New York, 732 F.2d 261, 265 (2d Cir.1984)). Plainly, this is not the case. The Board’s attacks on the merits of Banc’s claim, and the corresponding need to resolve these issues, only further demonstrate why intervention is appropriate here. II. Banc Is Entitled to Permissively Intervene In challenging the appropriateness of permissive intervention under CPLR § 1013, the Board erroneously focuses on the distinctions between the debts the Board and Banc are respectively owed. It argues that common questions of fact and law cannot possibly be found to exist here, given that the debt owed to Banc arises from loan obligations, whereas the Board is owed tenant common charges. See Opp. at 6; Holland Aff. at ¶¶ 23–24. But the Board offers no support for such an interpretation of the common questions standard, and the appropriate analysis does not involve such a granular parsing of the issues. To the contrary, and consistent with the principle that intervention is liberally allowed in New York, courts employ a wide-lensed analysis in assessing the existence of common questions of fact and law, looking to whether the claims alleged share similar traits. Where—as here—the legal claims and facts share a single nexus—the potential foreclosure and sale of the Subject Property—the common questions inquiry is satisfied. See Beltway Cap., LLC v. Soleil, 25 Misc.3d 5 9 of 13 FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023 NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023 1233(A), 2009 WL 4263346 at * 3 (Sup. Ct. Kings County 2009) (granting intervention in foreclosure action and finding common questions of law and fact concerning “title to the subject property and the mortgage priorities affecting the subject property”); Ladd v. N.Y. Corridors, Inc., No. 601813/2017, 2020 WL 13518772 at *5 (Sup. Ct. Nassau County 2020) (finding common questions inquiry satisfied where recovery sought by intervenor and plaintiff “arise from the same underlying occurrence”); see also Wells Fargo Bank, Nat’l Ass’n v. McLean, 70 A.D.3d 676, 678, 894 N.Y.S.2d 487, 489 (2d Dep’t 2010) (finding permissive intervention warranted in foreclosure action where intervenor had “real and substantial interest in the disbursement of the remaining insurance proceeds and, thus, in the outcome of the action.”). In misguided fashion, the Board further suggests that Banc’s proposed intervention will serve only to delay proceedings and cause it prejudice. See Opp. at 6; Holland Aff. at ¶¶ 30–33. Nothing could be further from the truth. Just as the Board is concerned with the diminution of the Subject Property’s value due to the passage of time and the accrual of additional debt, so too is Banc: both parties have a substantial interest in resolving any dispute concerning the Subject Property as expeditiously as possible. The claim that Banc seeks to intervene for “no useful purpose” (Holland Aff. at ¶ 33) but to delay proceedings and prejudice the Board—with whom it has no preexisting relation—to Banc’s own detriment is both illogical and incredible. Banc has made assurances that it will not unduly delay proceedings, and the Board’s claim that it will be prejudiced by “any delay” (Holland Aff. at ¶ 30) misstates the standard by which prejudice is judged. Poblocki v. Todoro, 865 N.Y.S.2d 448, 449 (4th Dep’t 2008) (holding that party does not experience prejudice, despite claims of potential delay, where intervenor’s involvement will not entail additional burdens or increase the liability of the party opposing intervention); Brukhman v. Giuliani, 662 N.Y.S.2d 914, 916 (Sup. Ct. N.Y. County 1997) (granting leave to intervene and 6 10 of 13 FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023 NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023 ruling that intervention in early stages of litigation does not give rise to undue prejudice) rev’d on other grounds at 678 N.Y.S.2d 45 (1st Dep’t 1998). III. The Board’s Irrelevant Arguments Concerning Necessary and Permissive Defendants Do Not Impact the Merit of Intervention The Board curiously devotes significant space to the prospect of Banc being named as either a necessary or permissive defendant under New York’s Real Property Law. Opp. 3–4; Holland Aff. at ¶ 33. But Banc did not seek leave to be joined as a necessary or permissive defendant, and any suggestion that intervention somehow turns on satisfying these wholly distinct statutory definitions is misplaced. Assuming for the sake of argument that it was not the Board’s intent to conflate these two separate bases for joinder, the animating source of this discussion appears to be the Board’s own allegations. In its Complaint, the Board identified as “John Doe” Defendants unknown entities that “may” have an interest in the Subject Property by virtue of “any claim” they possess. Verified Complaint, Dkt. 1, at ¶ 18. Plainly, these allegations could be interpreted to encompass Banc as one such “John Doe” Defendant. The Court need not engage with this issue to determine that intervention is warranted. But to the extent the Board seeks to alter its complaint through its opposition brief, the Court should reject any such improper attempt. See G & Y Maint. Corp. v. Core Cont’l Constr. LLC 215 A.D.3d 553, 554 (1st Dep’t 2023) (“Plaintiff cannot amend its complaint through [] briefing”). The Board’s arguments regarding necessary and permissive defendants are wholly irrelevant, and the Court should reject them outright. 7 11 of 13 FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023 NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023 CONCLUSION For the foregoing reasons, Banc requests that the Court enter an order granting its motion to intervene as of right under CPLR § 1012 or, alternatively, an order granting leave to intervene under CPLR § 1013, and for such other and further relief as this Court deems just and proper. Dated: July 11, 2023 New York, New York By: /s/ Martin C. Geagan Martin C. Geagan WINSTON AND STRAWN LLP 200 Park Avenue New York, New York, 10012 Telephone: (212) 294-6700 Facsimile: (212) 294-4700 mgeagan@winston.com Gregory A. Ellis (pro hac vice forthcoming) WINSTON AND STRAWN LLP 333 S Grand Ave Los Angeles, CA 90071 Telephone: (213) 615-1700 Facsimile: (213) 615-1750 gaellis@winston.com 8 12 of 13 FILED: NEW YORK COUNTY CLERK 07/11/2023 07:51 PM INDEX NO. 151261/2023 NYSCEF DOC. NO. 52 RECEIVED NYSCEF: 07/11/2023 CERTIFICATE OF COMPLIANCE 1. Pursuant to N.Y.C.R.R. § 202.70(g), Rule 17, Plaintiff specifies that the foregoing brief was prepared on a computer using Microsoft Word. A proportionally spaced typeface was used as follows: Name of Typeface: Times New Roman Point Size: 12 2. The total number of words in the brief, inclusive of point headings and footnotes and exclusive of pages containing the caption, table of contents, the table of authorities, the signature block, and the certificate of compliance, is 2,285 words. Dated: July 11, 2023 /s/ Martin C. Geagan New York, New York Martin C. Geagan 9 13 of 13