Preview
INDEX NO. 151261/2023
NYSCEF DOC. NO. 69 RECEIVED NYSCEF 08/21/2023
SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY
PRESENT: HON. FRANCIS A. KAHN, Ill PART 32
Justice
-- X INDEX NO. 151261/2023
BOARD OF MANAGERS OF THE 610 PARK AVENUE
MOTION DATE
CONDOMINIUM,
Plaintiff, MOTION SEQ. NO. 003
=V=
16EF APARTMENT, LLC,MARA ENTERPRISES, JOHN DECISION + ORDER ON
DOE NO. 1 THROUGH JOHN DOE NO. 15, MOTION
Defendant.
a - X
The following e-filed documents, listed by NYSCEF document number (Motion 003) 37, 38, 39, 40, 41,
42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52
were read on this motion to/for MISCELLANEOUS
Upon the foregoing documents, the motion is determined as follows:
This is an action to foreclose on a lien for unpaid common charges on a condominium unit
located at 610 Park Avenue, Apt. 16E, N, New York, New York. The unit owner, 16EF Apartment,
LLC, defaulted in appearing. Plaintiff's motion for a default judgment and an order of reference was
granted without opposition by order of this Court dated May 17, 2023. Now, non-party Banc of
California, NA (“Banc”) moves to intervene in this action. Plaintiff opposes the motion.
As to Banc’s purported interest in this action, it claims to be a plaintiff in litigation pending in
California commenced against Sprout Mortgage Corporation, Sprout Mortgage LLC, Sprout Mortgage
Asset Trust, Recovco Mortgage Management and Michael Strauss (“Strauss”). None of these business
entities or Strauss are Defendants herein. Banc claims that Strauss is the managing member of 16EF
Apartment, LLC. In the California litigation, Banc obtained a preliminary injunction from the Superior
Court of the State of California, Orange County, dated May 1, 2023, prohibiting Strauss from selling the
apartment, either individually or through Defendant 16EF Apartment, LLC. In its proposed complaint,
Banc seeks a declaratory judgment that the California “Preliminary Injunction bars the sale of the
Subject Property, by Defendant 16EF Apartment, LLC or otherwise, and that, for the duration of the
Preliminary Injunction, Plaintiff Board of Managers is barred from obtaining its requested relief, namely
the sale of the Subject Property and the disposition of proceeds from that sale”.
Generally, “[iJntervention is liberally allowed by courts, permitting persons to intervene in
actions where they have a bona fide interest in an issue involved in that action” (Yuppie Puppy Pet
Prods., Inc. v Street Smart Realty, LLC, 77 AD3d 197, 201 [1 Dept 2010]). “Distinctions between
intervention as of right and discretionary intervention are no longer sharply applied” (Matter of HSBC
Bank U.S.A., 135 AD3d 534, 534 [1st Dept 2016]). “In exercising its discretion, the court shall consider
151261/2023 BOARD OF MANAGERS OF THE 610 PARK AVENUE CONDOMINIUM vs. 16EF Page 1 of 3
APARTMENT, LLC ET AL
Motion No. 003
1 of 3
INDEX NO. 151261/2023
NYSCEF DOC. NO. 69 RECEIVED NYSCEF: 08/21/2023
whether the intervention will unduly delay the determination of the action or prejudice the substantial
tights of any party” (Wells Fargo Bank, Natl. Assn. v McLean, 70 AD3d 676, 677 [2d Dept 2010]).
CPLR §1012 authorizes a non-party to intervene in an action as a matter of right when, inter
alia, “the representation of the person’s interest by the parties is or may be inadequate and the person is
or may be bound by the judgment” (CPLR §1012[a][2]) or when “the action involves the disposition or
distribution of, or the title or a claim for damages for injury to, property and the person may be affected.
adversely by the judgment” (CPLR §1012[a][3]). Permissive intervention in the discretion of the court
is permitted “when a statute of the state confers a right to intervene in the discretion of the court, or
when the person’s claim or defense and the main action have a common question of law or fact” (CPLR
§1013).
To intervene as of right, “a party must have an injury in fact, i-e., an actual legal stake in the
matter being adjudicated” (Lyman Rice, Inc. y. Albion Mobile Homes, Inc., 89 AD3d 1488 [4th Dept
2011]). Stated differently, the issues the intervenor seeks to raise must before the court in the action (see
Atlas MF Mezzanine Borrower, LLC v Macquarie Tex. Loan Holder LLC, 173 AD3d 608 [1st Dept
2019]). Ultimately, it is “the potentially binding nature of the judgment on the proposed intervenor is
the most heavily weighted factor in determining whether to permit intervention” (Yuppie Puppy Pet
Prods., Inc. v Street Smart Realty, LLC, supra [1st Dept 2010]).
Here, by statutory definition, Banc is neither a necessary nor permissive party to this foreclosure
action (CPLR §1311, §1313). It is a stranger to the note and mortgage and can raise no defenses herein
(see US Bank N.A. v Carrington, 179 AD3d 743 [2d Dept 2020]). The proposed claim is neither based
on a filed lien nor a docketed judgment sufficient to entitle it to claim any surplus monies (see Warwick
Sav. Bank v Long Is. Chap. K. of C. Social Serv., Inc., 253 App Div 276, 277 [2d Dept 1938]; Sadow v
Poskin Realty Corp., 63 Misc 2d 499 [Sup Ct Queens Cty 1970]). Asa result, Banc has no real and
substantial interest in this litigation since its proposed claims will remain entirely unaffected by a
judgment of foreclosure herein (see Acadia Realty L.P. v Ringel, 129 AD3d 511 [1st Dept 2015]). That
Plaintiff's lien may be paid before Banc’s claim is indirect and not a basis for intervention (id. at 512;
see also Taw International Leasing, Inc. v Overseas Private Inv. Corp., 57 AD2d 799 [1st Dept 1977]).
As a discretionary matter, any amounts that Banc claims it is owed bares no relation to whether
Plaintiff may foreclose its mortgage or the amount it is owed thereunder (see JP Morgan Chase Bank
Natl. Assoc. v Greene, Misc3d , 2013 NY Slip Op 31137[U][Sup Ct NY Cty 2013]). No claim
of equitable subordination is pled, nor would any such claim appear viable (see RPL §339-aa). Further,
adjudicating such claims would have an unduly complicating effect on Plaintiff's action (see CPLR
§1013; Ocelot Capital Mgt., LLC v Hershkovitz, 90 AD3d 464 [1° Dept 2011]).
To the extent Movant may be relying on the principle of comity for recognition of the California
injunction, that is also unavailing. Generally, “[t]o impose a stay in one action pending the resolution of
arelated action, there must be a complete identity of parties, claims, and reliefs sought in the two
actions” (Green Tree Fin. Servicing Corp. v Lewis, 280 AD2d 642, 643 [2d Dept 2001]). Nevertheless,
it has “also [been] held that a stay may be warranted when there is substantial identity between state and
federal actions” (Asher v Abbott Labs., 307 AD2d 211 [1 Dept 2003]). Justification of the latter
instance is based upon “comity, orderly procedure, and judicial economy” (id.).
Comity “is not a rule of law, but one of practice, convenience and expediency” (Mast, Foos &
Co. v Stover Mfg. Co., 177 US 485, 488 [1900]). It is designed to avoid unseemly conflicts that might
151261/2023 BOARD OF MANAGERS OF THE 610 PARK AVENUE CONDOMINIUM vs. 16EF Page 2 of 3
APARTMENT, LLC ET AL
Motion No. 003
2 of 3
INDEX NO. 151261/2023
NYSCEF DOC. NO. 69 RECEIVED NYSCEF: 08/21/2023
result from conflicting rulings between courts of concurrent jurisdiction over the same subject matter
(see State by Abrams v Thwaites Place Assoc., 155 AD2d 3, 7 [1% Dept 1990]). Resultantly, “[i]t does
not of its own force compel a particular course of action. Rather, it is an expression of one [court’s]
entirely voluntary decision to defer to the policy of another” (Ehrlich-Bober & Co. v University of
Houston, 49 NY2d 574, 580 [1980]). “While the principle of comity requires the courts of this State to
defer to Federal courts in matters peculiarly within their jurisdiction, it does not extend to permitting a
party--or an entity allied in interest with a party--to avail itself of a jurisdictional void in order to evade
consideration of a central issue by the appropriate tribunal” (Manufacturers Hanover Trust Co. v
Crossland Sav., FSB, 177 AD2d 78 [1° Dept 1992]).
The present action and the California case do not share any commonalities in parties, claims or
relief sought. The issues in this action, including the priority of liens, will have to be concluded
irrespective of the outcome of the California action (see Grand Cent. Bldg., Inc. v New York & H. R.
Co., 59 AD2d 207; [18 Dept 1977]; see also Tribeca Lending Corp. v Crawford, 79 AD3d 1018, 1020
[2d Dept 2010)).
Accordingly, it is
ORDERED that non-party Banc of California, NA’s motion is denied in its entirety.
8/18/2023
Dae =
HON tSENET AARGSH
NS.
DATE
CHECK ONE: CASE DISPOSED POSITION J
GRANTED [x] DENIED GRANTED IN PART OTHER
APPLICATION: SETTLE ORDER SUBMIT ORDER
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT LJ REFERENCE
151261/2023_ BOARD OF MANAGERS
APARTMENT, LLC ET AL.
OF THE 610 PARK AVENUE CONDOMINIUM vs. 16EF Page 3 of 3
Motion No. 003
3 of 3
Preview
INDEX NO. 151261/2023 NYSCEF DOC. NO. 69 RECEIVED NYSCEF 08/21/2023 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. FRANCIS A. KAHN, Ill PART 32 Justice -- X INDEX NO. 151261/2023 BOARD OF MANAGERS OF THE 610 PARK AVENUE MOTION DATE CONDOMINIUM, Plaintiff, MOTION SEQ. NO. 003 =V= 16EF APARTMENT, LLC,MARA ENTERPRISES, JOHN DECISION + ORDER ON DOE NO. 1 THROUGH JOHN DOE NO. 15, MOTION Defendant. a - X The following e-filed documents, listed by NYSCEF document number (Motion 003) 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52 were read on this motion to/for MISCELLANEOUS Upon the foregoing documents, the motion is determined as follows: This is an action to foreclose on a lien for unpaid common charges on a condominium unit located at 610 Park Avenue, Apt. 16E, N, New York, New York. The unit owner, 16EF Apartment, LLC, defaulted in appearing. Plaintiff's motion for a default judgment and an order of reference was granted without opposition by order of this Court dated May 17, 2023. Now, non-party Banc of California, NA (“Banc”) moves to intervene in this action. Plaintiff opposes the motion. As to Banc’s purported interest in this action, it claims to be a plaintiff in litigation pending in California commenced against Sprout Mortgage Corporation, Sprout Mortgage LLC, Sprout Mortgage Asset Trust, Recovco Mortgage Management and Michael Strauss (“Strauss”). None of these business entities or Strauss are Defendants herein. Banc claims that Strauss is the managing member of 16EF Apartment, LLC. In the California litigation, Banc obtained a preliminary injunction from the Superior Court of the State of California, Orange County, dated May 1, 2023, prohibiting Strauss from selling the apartment, either individually or through Defendant 16EF Apartment, LLC. In its proposed complaint, Banc seeks a declaratory judgment that the California “Preliminary Injunction bars the sale of the Subject Property, by Defendant 16EF Apartment, LLC or otherwise, and that, for the duration of the Preliminary Injunction, Plaintiff Board of Managers is barred from obtaining its requested relief, namely the sale of the Subject Property and the disposition of proceeds from that sale”. Generally, “[iJntervention is liberally allowed by courts, permitting persons to intervene in actions where they have a bona fide interest in an issue involved in that action” (Yuppie Puppy Pet Prods., Inc. v Street Smart Realty, LLC, 77 AD3d 197, 201 [1 Dept 2010]). “Distinctions between intervention as of right and discretionary intervention are no longer sharply applied” (Matter of HSBC Bank U.S.A., 135 AD3d 534, 534 [1st Dept 2016]). “In exercising its discretion, the court shall consider 151261/2023 BOARD OF MANAGERS OF THE 610 PARK AVENUE CONDOMINIUM vs. 16EF Page 1 of 3 APARTMENT, LLC ET AL Motion No. 003 1 of 3 INDEX NO. 151261/2023 NYSCEF DOC. NO. 69 RECEIVED NYSCEF: 08/21/2023 whether the intervention will unduly delay the determination of the action or prejudice the substantial tights of any party” (Wells Fargo Bank, Natl. Assn. v McLean, 70 AD3d 676, 677 [2d Dept 2010]). CPLR §1012 authorizes a non-party to intervene in an action as a matter of right when, inter alia, “the representation of the person’s interest by the parties is or may be inadequate and the person is or may be bound by the judgment” (CPLR §1012[a][2]) or when “the action involves the disposition or distribution of, or the title or a claim for damages for injury to, property and the person may be affected. adversely by the judgment” (CPLR §1012[a][3]). Permissive intervention in the discretion of the court is permitted “when a statute of the state confers a right to intervene in the discretion of the court, or when the person’s claim or defense and the main action have a common question of law or fact” (CPLR §1013). To intervene as of right, “a party must have an injury in fact, i-e., an actual legal stake in the matter being adjudicated” (Lyman Rice, Inc. y. Albion Mobile Homes, Inc., 89 AD3d 1488 [4th Dept 2011]). Stated differently, the issues the intervenor seeks to raise must before the court in the action (see Atlas MF Mezzanine Borrower, LLC v Macquarie Tex. Loan Holder LLC, 173 AD3d 608 [1st Dept 2019]). Ultimately, it is “the potentially binding nature of the judgment on the proposed intervenor is the most heavily weighted factor in determining whether to permit intervention” (Yuppie Puppy Pet Prods., Inc. v Street Smart Realty, LLC, supra [1st Dept 2010]). Here, by statutory definition, Banc is neither a necessary nor permissive party to this foreclosure action (CPLR §1311, §1313). It is a stranger to the note and mortgage and can raise no defenses herein (see US Bank N.A. v Carrington, 179 AD3d 743 [2d Dept 2020]). The proposed claim is neither based on a filed lien nor a docketed judgment sufficient to entitle it to claim any surplus monies (see Warwick Sav. Bank v Long Is. Chap. K. of C. Social Serv., Inc., 253 App Div 276, 277 [2d Dept 1938]; Sadow v Poskin Realty Corp., 63 Misc 2d 499 [Sup Ct Queens Cty 1970]). Asa result, Banc has no real and substantial interest in this litigation since its proposed claims will remain entirely unaffected by a judgment of foreclosure herein (see Acadia Realty L.P. v Ringel, 129 AD3d 511 [1st Dept 2015]). That Plaintiff's lien may be paid before Banc’s claim is indirect and not a basis for intervention (id. at 512; see also Taw International Leasing, Inc. v Overseas Private Inv. Corp., 57 AD2d 799 [1st Dept 1977]). As a discretionary matter, any amounts that Banc claims it is owed bares no relation to whether Plaintiff may foreclose its mortgage or the amount it is owed thereunder (see JP Morgan Chase Bank Natl. Assoc. v Greene, Misc3d , 2013 NY Slip Op 31137[U][Sup Ct NY Cty 2013]). No claim of equitable subordination is pled, nor would any such claim appear viable (see RPL §339-aa). Further, adjudicating such claims would have an unduly complicating effect on Plaintiff's action (see CPLR §1013; Ocelot Capital Mgt., LLC v Hershkovitz, 90 AD3d 464 [1° Dept 2011]). To the extent Movant may be relying on the principle of comity for recognition of the California injunction, that is also unavailing. Generally, “[t]o impose a stay in one action pending the resolution of arelated action, there must be a complete identity of parties, claims, and reliefs sought in the two actions” (Green Tree Fin. Servicing Corp. v Lewis, 280 AD2d 642, 643 [2d Dept 2001]). Nevertheless, it has “also [been] held that a stay may be warranted when there is substantial identity between state and federal actions” (Asher v Abbott Labs., 307 AD2d 211 [1 Dept 2003]). Justification of the latter instance is based upon “comity, orderly procedure, and judicial economy” (id.). Comity “is not a rule of law, but one of practice, convenience and expediency” (Mast, Foos & Co. v Stover Mfg. Co., 177 US 485, 488 [1900]). It is designed to avoid unseemly conflicts that might 151261/2023 BOARD OF MANAGERS OF THE 610 PARK AVENUE CONDOMINIUM vs. 16EF Page 2 of 3 APARTMENT, LLC ET AL Motion No. 003 2 of 3 INDEX NO. 151261/2023 NYSCEF DOC. NO. 69 RECEIVED NYSCEF: 08/21/2023 result from conflicting rulings between courts of concurrent jurisdiction over the same subject matter (see State by Abrams v Thwaites Place Assoc., 155 AD2d 3, 7 [1% Dept 1990]). Resultantly, “[i]t does not of its own force compel a particular course of action. Rather, it is an expression of one [court’s] entirely voluntary decision to defer to the policy of another” (Ehrlich-Bober & Co. v University of Houston, 49 NY2d 574, 580 [1980]). “While the principle of comity requires the courts of this State to defer to Federal courts in matters peculiarly within their jurisdiction, it does not extend to permitting a party--or an entity allied in interest with a party--to avail itself of a jurisdictional void in order to evade consideration of a central issue by the appropriate tribunal” (Manufacturers Hanover Trust Co. v Crossland Sav., FSB, 177 AD2d 78 [1° Dept 1992]). The present action and the California case do not share any commonalities in parties, claims or relief sought. The issues in this action, including the priority of liens, will have to be concluded irrespective of the outcome of the California action (see Grand Cent. Bldg., Inc. v New York & H. R. Co., 59 AD2d 207; [18 Dept 1977]; see also Tribeca Lending Corp. v Crawford, 79 AD3d 1018, 1020 [2d Dept 2010)). Accordingly, it is ORDERED that non-party Banc of California, NA’s motion is denied in its entirety. 8/18/2023 Dae = HON tSENET AARGSH NS. DATE CHECK ONE: CASE DISPOSED POSITION J GRANTED [x] DENIED GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT LJ REFERENCE 151261/2023_ BOARD OF MANAGERS APARTMENT, LLC ET AL. OF THE 610 PARK AVENUE CONDOMINIUM vs. 16EF Page 3 of 3 Motion No. 003 3 of 3