Preview
INDEX NO. 806264/2022E
NYSCEF DOC. NO. 187 RECEIVED NYSCEF: 04/03/2024
SUPREME COURT OF THE STATE OF
NEW YORK COUNTY OF BRONX
--.
NY 2015 BOAT LLC,
Index No. 806264/2022E
Plaintiff,
Hon. Fidel E. Gomez
-against-
NOTICE OF APPEAL
2435 KINGSLAND LLC, et al.,
Defendant(s).
wenn enn n een ee eee eee eens,
PLEASE TAKE NOTICE that defendants Eric and Steven Shapiro, by and through their
counsel, Kasowitz Benson Torres LLP, hereby appeal to the Appellate Division of the Supreme
Court of the State of New York, First Judicial Department, from each and every part of the
Decision and Order on Motion of the Honorable Fidel E. Gomez of the Supreme Court of the State
of New York, County of the Bronx, dated February 21, 2024, and entered in the Office of the
Bronx County Clerk on February 26, 2024 (NYSCEF Doc. No. 183) (the “Decision and Order’).
A true and correct copy of the Decision and Order with the notice of entry served on March 4,
2024 (NYSCEF Doc. No. 184) is annexed hereto as Exhibit A.
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Dated: April 3, 2023
New York, New York
KASOWITZ BENSON TORRES LLP
By: /s/ David J. Abrams
David J. Abrams
Fria R. Kermani
Jacob Benson
1633 Broadway
New York, New York 10019
Telephone: (212) 506-1700
THE LEGAL AID SOCIETY
Oda Friedheim, Of Counsel
153-01 Jamaica Avenue
Jamaica, New York 11432
Telephone: (646) 340-1957
Attorneys for Defendants—Appellants
Eric Shapiro and Steven J. Shapiro
TO:
Clerk of Court
Supreme Court of the State of New York
County of the Bronx
851 Grand Concourse, Room 118
Bronx, New York 10451
Michal Falkowski
Richland & Falkowski, PLLC
28-07 Jackson Avenue, Sth Fl.
Long Island City, NY 11101
(212)-390-8872 — Phone
mfalkowski@rflegal.net
Attorneys for Plaintiff—-Respondent
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Exhibit A
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF BRONX
aa. aa. -X
NY 2015 BOAT LLC, Index No.: 806264/2022E
Plaintiff,
NOTICE OF ENTRY
-against-
Hon. Fidel E. Gomez
2435 KINGSLAND LLC et al.,
Mot. Seq. No. 007
Defendants.
aa. aa. nanan.
PLEASE TAKE NOTICE that the within is a true copy of a Decision and Order of the
Hon. Fidel E. Gomez duly dated February 21, 2024 and entered in the Office of the Clerk of the
Supreme Court of the State of New York, County of Bronx, on February 26, 2024.
Dated: March 4, 2024
Long Island City, New York
Richland & Falkowski, PLLC
Michal Falkow: Se
28-07 Jackson Avenue, “5 FL,
Long Island City, NY 11101
Ph. 212-390-8872
mfalkowski@rflegal.net
Attorneys for Plaintiff
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NEW YORK SUPREME COURT - COUNTY OF BRONX
PART 32
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF THE BRONX
a=. --X
NY 2015 BOAT LLC,
Index No. 806264/2022E
Plaintiff,
Hon. FIDEL E. GOMEZ
- against - Justice
2435 KINGSLAND LLC, ET AL.,
Defendants.
a=. --X
The following papers numbered | to 1, Read on this Motion noticed of 01/03/24, and duly
submitted as no. 7 on the Motion Calendar of 1/03/24.
PAPERS NUMBERED
Notice of Motion - Order to Show Cause — 1
Exhibits and Affidavits Annexed
Answering Affidavit and Exhibits
Replying Affidavit and Exhibits
Notice of Cross-Motion - Affidavits and Exhibits
Pleadings - Exhibit
Stipulation(s) - Referee’s Report - Minutes
Filed Papers- Order of Reference
Memorandum of Law
Defendants’ motion is decided in accordance with the Decision and Order annexed hereto.
Dated:
2/21/24
1.CHECK ONE O CASE DISPOSED
2. MOTION/CROSS-MOTION IS. O GRANTED (MOTIC
X GRANTED IN PAR’
3. CHECK IF APPROPRIATE. O SETTLE ORDER _
O SUBMIT ORDER Oo RE REE ‘APPOIN TMENT
O DO NOT POST CO NEXT APPEARANCE DATE:
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF THE BRONX
X
NY 2015 BOAT LLC,
Plaintiff,
-against- DECISION AND ORDER
Index No. 806264/2022E
2435 KINGSLAND LLC, ERIC SHAPIRO, STEVEN
J. SHAPIRO, CITY OF NEW YORK
DEPARTMENT OF FINANCE, CITY OF NEW
YORK ENVIRONMENTAL CONTROL BOARD
AND “JOHN DOE NO. 1 THROUGH JOHN DOE
NO. 99,” SAID NAMES BEING FICTITIOUS,
PARTIES INTENDED BEING POSSIBLE TENANTS
OR OCCUPANTS OF PREMISES, AND
CORPORATIONS, OTHER ENTITIES OR
PERSONS WHO CLAIM, OR MAY CLAIM, A
LIEN AGAINST THE PREMISES,
Defendants.
ween ene eee eee een en enenen ene,
Defendants Eric Shapiro (Eric) and Steven J. Shapiro (Steven) move by Order to Show
Cause (OSC) for an Order, pursuant to CPLR § 2221, granting them leave to reargue this Court’s
Decision and Order, dated November 3, 2023 (the prior decision), which granted plaintiff's
summary judgment motion; and upon leave, denying said motion; or, alternatively, pursuant to
CPLR § 5519(c), an Order staying all pending proceedings to enforce the Decision and Order
pending resolution of defendants’ appeal by the Appellate Division, First Department.
For the reasons set forth below, defendants’ motion for leave to reargue is granted and,
upon reargument, defendants’ motion is denied.
BACKGROUND
This is an action to foreclose a commercial mortgage which encumbers real property
located at 2435 Kingsland Avenue, Bronx, New York 10469. The complaint alleges, inter alia,
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as follows: On February 11, 2021, defendant 2435 Kingsland LLC (Kingsland) executed and
delivered a promissory note to plaintiff whereby it promised to pay the principal sum of
$300,000 plus interest. On that same date, defendants Eric and Steven executed a guaranty to
plaintiff guaranteeing Kingsland’s repayment of the note. As collateral security for repayment
of the note, Kingsland executed and delivered a mortgage in the principal sum of $300,000.
Plaintiff is the holder of the note and was in possession of the note and mortgage at the time this
action was commenced. Pursuant to the note, Kingsland promised to make consecutive monthly
payments of principal and/or interest on the first day of each month commencing on April 1,
2021 and on the first day of each succeeding month up to and including November 11, 2022, at
which time the remaining principal amount and accrued interest became due and payable.
Kingsland defaulted on its obligations under the terms of the note by failing and omitting to pay
plaintiff
the amounts due on April 1, 2021 and each and every month thereafter. By the filing of
the complaint, plaintiff has elected to declare the entire unpaid principal balance, unpaid interest
and other amounts due and payable.
In the prior decision, this Court granted plaintiff's motion for: (1) summary judgment on
its foreclosure claim against 2435 Kingsland LLC, Eric and Steven; (2) a default judgment
against all non-appearing defendants; (3) an order of reference; and (4) striking John Doe’s from
the caption and amending the complaint accordingly.
Notably, in opposition to plaintiff's summary judgment motion, defendants Eric and
Steven argued that: (1) there were triable issues of fact as to whether the mortgage at issue was
procured by fraud and whether plaintiff was on notice of and/or knowingly facilitated the fraud;
and as to whether defendants were fraudulently induced into signing the closing documents, both
of which would render the mortgage voidable and preclude plaintiff's foreclosure action; (2) the
note and underlying mortgage at issue were unenforceable because the terms are usurious; and
(3) summary judgment was premature because there has been no discovery.
In support of the instant motion, defendants contend that the Court overlooked and/or
misapprehended the following: (1) defendants have not waived the affirmative defenses of
fraudulent inducement and usury; (2) defendants have provided sufficient detail to state the
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defense of fraudulent inducement; (3) even a facially unconditional guaranty is void if the
underlying loan contains a usurious interest rate or if it was fraudulently induced; (4) summary
judgment should have been denied on the foreclosure and guaranty claims due to issues of fact
regarding the defenses of usury and fraud; and (5) defendants are entitled to take discovery to
prove the affirmative defenses of fraudulent inducement and usury.
Plaintiff opposes and asserts that: (1) defendants improperly attempt to argue, for the
first time, that their seventeenth affirmative defense, unconscionability, actually constitutes a
usury defense and that their guaranty is void ab initio because the underlying loan was
criminally usurious; (2) defendants’ fraudulent inducement claims fail to raise a triable issue of
fact as the defendants admitted to all the underlying facts, including the execution of all the
closing documents; (3) defendants fail to articulate what additional information or evidence they
would seek to uncover during discovery; and (4) defendants request for a stay must be denied as
they have failed to demonstrate a likelihood of success on the merits, irreparable harm, or that
equity warrants a stay.
HOR Ok
“A motion for leave to reargue is addressed to the sound discretion of the Supreme
Court” (Rides Unlimited of New York, Inc. v Engineered Energy Solutions, LLC, 184 AD3d 695,
695 [2d Dept 2020]; Bueno v Allam, 170 AD3d 939, 940 [2d Dept 2019]; Foley v Roche, 68
AD2d 558, 567 [Ist Dept 1979]).
“A motion for reargument, addressed to the discretion of the court, is designed to afford a
party an opportunity to establish that the court overlooked or misapprehended the relevant facts,
or misapplied any controlling principle of law. Its purpose is to serve as a vehicle to permit the
unsuccessful party to argue once again the very questions previously decided. However,
reargument may not serve to provide a party an opportunity to advance arguments different from
those tendered on the original application. Nor may it be employed as a device for the
unsuccessful party to assume a different position inconsistent with that taken on the original
motion. .. . ‘A motion for reargument is not an appropriate vehicle for raising new questions a9
(Foley at 567-568; see also DeSoignies v Cornasesk House Tenants’ Corp., 21 AD3d 715, 718
3-
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[1st Dept 2005] [““Reargument is not available where the movant seeks only to argue ‘a new
theory of liability not previously advanced’”’]).
DISCUSSION
As discussed in the prior decision, plaintiff met its prima facie burden on its motion for
summary judgment by establishing the existence of the guaranty, the underlying debt and the
guarantor’s failure to perform under the guaranty (Cooperatieve Centrale Raiffeisen-
boerenleenbank, B.A. at 492; Davimos v Halle, 35 AD3d 270, 272 [1st Dept 2006]; City of New
York v Clarose Cinema Corp., 256 AD2d 69, 71 [lst Dept 1998]). In opposition, defendants
failed to raise a triable issue of fact.
On reargument, defendants claim that the Court overlooked or misapprehended the law in
finding that defendants waived their affirmative defenses of usury and fraudulent inducement,
and in granting summary judgment without permitting further discovery. Defendants also
contend that the Court erred in finding that the complaint failed to sufficiently allege a fraudulent
inducement affirmative defense. As to the latter, in the prior decision, that Court found that to
the extent that defendants’ fortieth affirmative defense can be construed as a fraudulent
inducement defense, the mere allegations that plaintiff engaged in conduct to transfer the
property from the individual defendants to an LLC without their knowledge, and that “it is
unknown who the members of the LLC are” was insufficient to state a fraudulent inducement
affirmative defense (CPLR § 3016[b] ; Friedman v Anderson, 23 AD3d 163, 166 [1st Dept.
2005][“a plaintiff seeking to recover for fraud and misrepresentations is required to set forth
specific and detailed factual allegations that the defendant personally participated in or had
knowledge of any alleged fraud.”]). In this regard, the Court correctly found that there were “
specific allegations that plaintiff had any involvement in either the creation of the LLC or the
transfer of the real property to the LLC.”' Significantly, the alleged misrepresentations
‘In their memorandum of law, through counsel, defendants correctly point out that in
footnote | of the prior decision, the Court misquotes the defendants in stating: “Indeed, in their
affidavits, Eric and Steven state that they are ‘unfamiliar with the lender NY 2015 Boat LLC.’”
That sentence should read: “Indeed, in paragraph 30 of his affidavit, Eric states ‘We have no
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defendants cite in support of the instant motion were allegedly made by nonparty Larry Jonathan
(Jonathan), the broker Eric states he found on the internet, not the plaintiff. Therefore, the Court
did not err in finding that defendants failed to plead the affirmative defense of fraudulent
inducement.
Waiver of Affirmative Defenses
Defendants contend that the Court misapprehended the law in finding that defendants had
waived their affirmative defenses of usury and fraudulent inducement by not pleading them in
their answer, and that defendants did not retract that waiver through their opposition to plaintiff's
motion for summary judgment.”
An affirmative defense, as defined by CPLR § 3015(b) is waived if not pleaded in an
answer (Butler v Catinella, 58 AD3d 145, 150 [2d Dept 2008] [Affirmative defenses, such as
those set forth in CPLR 3018(b), as a general rule, would be deemed waived if not raised in the
pleadings.”]); Surlak v Surlak, 95 AD2d 371, 383 [2d Dept 1983] [“The general rule is that an
affirmative defense is deemed waived if not raised in the pleadings.”]). In the prior decision, the
court stated:
However, when a defendant fails to plead an affirmative
defense, as required by CPLR § 3211(e) and CPLR § 3018(b), but
nevertheless asserts that defense in connection with a motion for
summary judgment, the waiver is said to be retracted and the court
can grant, when the defendant is the movant, or deny, when the
defendant is the opponent, summary judgment based upon the
unpleaded affirmative defense ( Lerwick v Kelsey, 24 AD3d 918,
919-920 [3d Dept 2005]; Allen v Matthews, 266 AD2d 782, 784
[3d Dept 1999]; Adsit v Quantum Chem. Corp.,199 AD2d 899, 900
[3d Dept 1993]). The threshold inquiry is whether in considering
the unpleaded defense, the opponent of the defense is prejudiced
thereby ( BMX Worldwide v Coppola, 287 AD2d 383, 384 [lst
Dept 2001]; Allan at 784; Seaboard Sur. Co. v Nigro, Bros., 222
idea who the actual lender is. All we know is that NY 2015 Boat LLC is listed as c/o Mavrides,
Moyal, Packman and Sadkin LLC.’”
°To the extent that defendants now argue that their unconscionability defense sufficiently
states an affirmative defense of usury, since the defendants failed to raise that argument in
opposition to plaintiff's summary judgment motion, it is improperly raised on reargument.
5.
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AD2d 574, 574 -575 [2d Dept 1995]; Rogoff v San Juan Racing
Assn. Inc., 77 AD2d 831, 832 [1st Dept 1980, affd, 54 NY2d 883
[1981]). Such prejudice, however, is ameliorated when the
defense was previously raised on a prior motion or during
discovery (id.), or when the opponent of the motion, where
defendant seeks summary judgment based upon said defense, is
given an opportunity to fully respond to the motion for summary
judgment (Sheils v County of Fulton, 14 AD3d 919, 921 [3d Dept
2005], /v denied 4 NY3d 711[2005]; Kirilescu v American Home
Prods. Corp., 278 AD2d 457, 457-458 [2d Dept 2000], /v denied
96 NY2d 933 [2001]; McSorley v Philip Morris, Inc. , 170 AD2d
440, 441 [2d Dept 1991], appeal dismissed 77 NY2d 990 [1991];
International Fid. Ins. Co. v Robb, 159 AD2d 687, 689 [2d Dept
1990).
In the prior decision, the Court found that Eric and Steven had not retracted their waiver
in failing to plead fraud and usury as affirmative defenses because they did not seek affirmative
relief, but rather, merely opposed the motion for summary judgment. However, under the
caselaw cited by the Court, an affirmative defense is not waived by a defendant who fails to raise
the defense in its answer if that defendant raises it in opposition to summary judgment and the
opposing party has an opportunity to fully respond. Here, defendants raised the fraud and usury
defenses in opposition to plaintiff's summary judgment motion, and plaintiff
had an opportunity,
and did, respond to those defenses in its reply papers. As such, defendants have not waived
those defenses by failing to raise them as affirmative defenses in their answer. Nevertheless, for
the reasons set forth below, defendants may not avail themselves of either of those defenses.
The Guaranty
As plaintiff notes, defendants now raise, for the first time, the argument that even a
facially unconditional guaranty is void if the underlying loan contains a usurious interest rate or
if it was fraudulently induced. Defendants also, for the first time, assert that the guaranty is void
ab initio because Steven’s signature was forged. Significantly, defendants did not address the
guaranty in opposition to plaintiff's summary judgment motion. Rather, their arguments were
limited to the underlying loan. As such, defendants’ arguments concerning the guaranty are
improperly raised in support of the instant motion.
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In the prior decision, the Court found that Eric and Steven were precluded from raising
fraud as a defense based on the absolute and unconditional language in the guaranty that “no set-
off, counterclaim, reduction or diminution of any obligation, or any defense of any kind or
nature which Guarantor has or may have against Lender . . . shall be available hereunder to
Guarantor in respect of any matter arising out of this Guaranty, except payment in full of all
obligations of Borrower under the Loan Documents.” Indeed, as the Court noted, guaranties
containing such language have been consistently upheld by New York courts (Cooperative
Centrale Raiffeisen-Boerenleenbank, B.A. v Navarro, 25 NY3d 485, 492-493 [2015]; Citibank v
Plapinger, 66 NY2d 90 [1985]; Chemical Bank v Sepler, 60 NY2d 289 [1983]; United Orient
Bank v Bao Lee, 233 AD2d 500 [1st Dept 1996]). And, contrary to defendants’ contention, a
fraudulent inducement defense can be waived in a guaranty agreement (Cooperatieve Centrale
Raiffeisen-Boerenleenbank, B.A. v Navarro, 25 NY3d 485 [2015] Citibank v Plapinger, 66
NY2d 90, 93-95 [1985]). As such, the Court did not err in finding that defendants waived their
fraudulent inducement defense.
In the prior decision, the Court found that Eric and Steven were also precluded from
raising usury as a defense under the broad and unconditional language of the guaranty. In this
regard, significantly, a limited liability company, such as the borrower here, may only assert a
defense of criminal usury, that is, an interest rate in excess of 25% (Limited Liability Law §
1104[a]; Penal Law § 190.40). And, the Court acknowledges that a criminal usury defense may
not be waived as it is contrary to public policy (Hammelburger v Foursome Inn Corp., 76 AD2d
646, 649-650 [2d Dept 1980]. Thus, the guaranty does not preclude defendants from raising a
criminal usury defense. To successfully raise the defense of usury, a debtor must allege and
prove by clear and convincing evidence that a loan requiring interest in violation of a usury
statute was charged by the holder or payee with the intent to take interest in excess of the legal
rate (Blue Wolf Capital Fund II, L.P. v American Stevedoring Inc., 105 AD3d 178, 183 [1st Dept
2013]). Here, defendants assert in conclusory fashion that the “effective interest rate” for the
subject loan is “at least 18%” and the default rate is “at least 36%.” Notably, in New York, the
default interest rate is not considered in determining whether a loan is usurious (72" Ninth LLC v
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753 Ninth Ave Realty LLC, 168 AD3d 597, 598 [1st Dept 2019]; Bryan L. Salamone, P.C. v
Russo, 129 AD3d 879, 881 [2d Dept 2015]; Kraus v Mendelsohn, 97 AD3d 641, 641 [2d Dept
2015]). As such, by defendants’ own account, the loan is not criminally usurious.
Discovery
Defendants contend that the Court overlooked and misapprehended matters of fact and
law in ruling that defendants failed to proffer any reason to suggest that additional discovery
may lead to relevant evidence. In this regard, defendants point to their opposition to plaintiff's
summary judgment motion, wherein they stated that they will seek discovery as to
communications demonstrating that plaintiff and Jonathan had a business relationship and
worked in concert to defraud defendants, documents demonstrating that plaintiff was aware that
the property was residential and owner-occupied and not commercial, and communications
demonstrating that plaintiffs attorneys had knowledge of and facilitated the fraud on the Shapiro
bothers. Significantly, as discussed above, defendants waived a fraudulent inducement defense.
As such, the foregoing discovery will serve no purpose.
Stay Pending Appeal - CPLR § 5519(c)
Alternatively, defendants seek a stay of all proceedings in this case, pursuant to CPLR §
5519(c), pending defendants’ appeal to the First Department. CPLR § 5519(c) provides that
“Tt]he court from or to which an appeal is taken or the court of original instance may stay all
proceedings to enforce the judgment or order appealed from pending an appeal.” Under CPLR §
5519(c), “there is no entitlement to a stay and, indeed, the court considering the stay application
may consider the merits of the appeal” (Da Silva v Musso, 76 NY2d 436, 443 n4 [1990]; 64B
Venture v American Realty Co., 179 AD2d 374, 375-376 [1st Dept 1992][“Likewise, it was
within the IAS court’s discretion to deny a stay pending appeal of the prior action, if, in its view,
which was borne out by our subsequent decision, respondents failed to show sufficient merit to
that appeal.”]; Wilkinson v Sukiennik, 120 AD2d 989, 989 [4th Dept 1986][“Plaintiff
has
demonstrated that his appeal from Justice Joslin’s order may have merit . . . Thus, plaintiff is
entitled to a stay of enforcement of the order of Justice Joslin entered April 24, 1986, pending
appeal.”]). Here, for the reasons stated herein and in the prior decision, defendants have not
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shown sufficient merit to their appeal to warrant a stay. As such, defendants motion for a stay of
all proceedings in this action pending an appeal, pursuant to CPLR § 5519(c), is denied.
Accordingly, it is hereby
ORDERED that defendants shall serve a copy of this Decision and Order upon all
parties, with Notice of Entry, within thirty (30) days of the date hereof.
This constitutes the Decision and Order of this Court.
Dated: Bronx, New York
February 21, 2024
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Supreme Court of the State of New York
Appellate Division: First [udicial Department
Informational Statement (Pursuant to 22 NYCRR 1250.3 [a]) - Civil
rt Ne fit cr at HMMS eTe rest M Te] ST enineas iG) For Court of Original Instance
my a fit Cy
NY 2015 BOAT LLC
Date Notice of Appeal Filed
- against -
2435 KINGSLAND LLC, ERIC SHAPIRO, STEVEN J. SHAPIRO, CITY OF
For Appellate Division
NEW YORK DEPARTMENT OF FINANCE, CITY OF NEW YORK
ENVIRONMENTAL CONTROL BOARD
eran Pool thread Bye
Civil Action 1 CPLR article 78 Proceeding | im Appeal O Transferred Proceeding
oO CPLR article 75 Arbitration C1 Special Proceeding Other C1 Original Proceedings OC CPLR Article 78
C1 Habeas Corpus Proceeding C1 CPLR Article 78 C1 Executive Law § 298
CO Eminent Domain CO CPLR 5704 Review
CO Labor Law 220 or 220-b
CO Public Officers Law § 36
CO Real Property Tax Law § 1278
DE TAT YM) Mol ea QU Cerel mE OM COM ESV ucLeMOy MUG CO) Conta teemerctKeyexoyu
Comma shel sm Leta Cosd (cel UNCC AT-TULI CRON [Meron
CO) Administrative Review O Business Relationships CO Commercial OC Contracts
0 Declaratory Judgment OC Domestic Relations O Election Law C Estate Matters
0) Family Court Mortgage Foreclosure C Miscellaneous O Prisoner Discipline & Parole
0 Real Property O Statutory O Taxation Torts
(other than foreclosure)
Informational Statement - Civil
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EN eyel-r-1)
Paper Appealed From (Check one only): If an appeal has been taken from more than one order or
judgment by the filing of this notice of appeal, please
indicate the below information for each such order or
judgment appealed from on a separate sheet of paper.
CO Amended Decree C Determination fm Order CO Resettled Order
Co Amended Judgement O Finding O Order
& Judgment O Ruling
CO Amended Order OH Interlocutory Decree O Partial Decree Oi Other (specify):
O Decision O interlocutory Judgment C Resettled Decree
CO Decree OD Judgment O Resettled Judgment
Court: Supreme Court EI County: Bronx EJ
Dated: 02/21/2024 Entered: 02/26/2024
Judge (name in full):Fidel E. Gomez Index No.:806264/2022E
Stage: Interlocutory C1 Final CO Post-Final Trial: OO Yes mi No IfYes: O Jury O Non-Jury
Prior Unperfected Appeal and Related Case Information
Are any appeals arising in the same action or proceeding currently pending in the court? Byes O No
If Yes, please set forth the Appellate Division Case Number assigned to each such appeal.
2023-06530
Where appropriate, indicate whether there is any related action or proceeding now in any court of this or any other
jurisdiction, and if so, the status of the case:
olariinr-macerest-te lla)
Commenced by: Oo Order to Show Cause OJ Notice of Petition C1 Writ of Habeas Corpus Date Filed:
Statute authorizing commencement of proceeding in the Appellate Division:
| Court: Choose Court
[aelect-tel
le Me lailae-te Mele SUr1t) a ced Oa wees\0)-1(-3)
County: Choose Countv
Judge (name in full): Order of Transfer Date:
oT Sy (0S mol ara Oke
Court: Choose Court County: Choose Countv
Judge (name in full): Dated:
| BIg ola Le) ol-¥-] Pudge -i-Xol [ay Mel meV 9) ©) eccla(elaW-Vave MS) lc clunt
1a mel a CUTor
Description: If an appeal, briefly describe the paper appealed from. If the appeal is from an order, specify the relief
requested and whether the motion was granted or denied. If an original proceeding commenced in this court or transferred
pursuant to CPLR 7804(g), briefly describe the object of proceeding. If an application under CPLR 5704, briefly describe the
nature of the ex parte order to be reviewed.
Defendants request that the appellate division reverse the Supreme Court's ruling granting Defendants’
motion to reargue, but upon reargument adhering to its prior decision, and denying Defendants' motion
for a stay pending resolution of the pending appeal of the Supreme Court's grant of summary judgment.
Informational Statement - Civil
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Issues: Specify the issues proposed to be raised on the appeal, proceeding, or application for CPLR 5704 review, the grounds
for reversal, or modification to be advanced and the specific relief sought on appeal.
The court erred by granting the motion to reargue but nevertheless adhering to its previous grant of
summary judgment, holding that Defendants were prohibited from raising the defense of fraud based on
the waiver of defenses contained in guarantees of payment allegedly signed by Defendants. The court
further erred in holding that the defense of civil usury could not be raised by the Defendants and that the
loan was not usurious. Additionally, the court erred in denying defendant's motion for a stay pending
resolution of an appeal.
NACHE}
Instructions: Fill in the name of each party to the action or proceeding, one name per line. If this form is to be filed for an
appeal, indicate the status of the party in the court of original instance and his, her, or its status in this court, if any. If this
form is to be filed for a proceeding commenced in this court, fill in only the party’s name and his, her, or its status in this
court.
No. Party Name Original Status Appellate Division Status
ERIC SHAPIRO Defendant Appellant
STEVEN J. SHAPIRO Defendant Appellant EJ
2435 KINGSLAND LLC None None
CITY OF NEW YORK DEPARTMENT OF FINANCE None None
NY 2015 BOAT LLC Plaintiff Respondent
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Informational Statement - Civil
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iD: AR ONX OUN NK 04 70 DV INDEX NO. 806264/2022E
NYSCEF BOC. NO. 187 RECEIVED NYSCEF: 04/03/2024
Nolan Moat}
Instructions: Il in the names of the attorneys or firms for the respective parties. If this form is to be filed with the
notice of petition or orderto show cause by which a special proceeding is to be commenced in the Appellate Division,
only the name of the attorney for the petitioner need be provided. In the event that a litigant represents herselfor
himself, the box marked “Pro Se” must be checked and the appropriate information for that litigant must be supplied
in the spaces provided.
Attorney/Firm Name: David J. Abrams/Kasowitz Benson Torres LLP
Address: 1633 Broadway
City: New York l State: New York | Zip: 10019 | Telephone No: (212) 506-1701
E-mail Address: dabrams@kasowitzcom
Attorney Type: m Retained [Assigned [1 Government CO Pro Se C1 Pro Hac Vice
Party or Parties Represented (set forth party number(s) from table above): 1,2
Attorney/Firm Name: Fria R. Kermani/Kasowitz Benson Torres LLP
Address: 1633 Broadway
City: New York l State: New York | Zip: 10019 | Telephone No: (212) 506-1887
E-mail Address: fkermani@kasowitz.com
Attorney Type:
Preview
INDEX NO. 806264/2022E NYSCEF DOC. NO. 187 RECEIVED NYSCEF: 04/03/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF BRONX --. NY 2015 BOAT LLC, Index No. 806264/2022E Plaintiff, Hon. Fidel E. Gomez -against- NOTICE OF APPEAL 2435 KINGSLAND LLC, et al., Defendant(s). wenn enn n een ee eee eee eens, PLEASE TAKE NOTICE that defendants Eric and Steven Shapiro, by and through their counsel, Kasowitz Benson Torres LLP, hereby appeal to the Appellate Division of the Supreme Court of the State of New York, First Judicial Department, from each and every part of the Decision and Order on Motion of the Honorable Fidel E. Gomez of the Supreme Court of the State of New York, County of the Bronx, dated February 21, 2024, and entered in the Office of the Bronx County Clerk on February 26, 2024 (NYSCEF Doc. No. 183) (the “Decision and Order’). A true and correct copy of the Decision and Order with the notice of entry served on March 4, 2024 (NYSCEF Doc. No. 184) is annexed hereto as Exhibit A. 1 of 20 INDEX NO. 806264/2022E NYSCEF DOC. NO. 187 RECEIVED NYSCEF: 04/03/2024 Dated: April 3, 2023 New York, New York KASOWITZ BENSON TORRES LLP By: /s/ David J. Abrams David J. Abrams Fria R. Kermani Jacob Benson 1633 Broadway New York, New York 10019 Telephone: (212) 506-1700 THE LEGAL AID SOCIETY Oda Friedheim, Of Counsel 153-01 Jamaica Avenue Jamaica, New York 11432 Telephone: (646) 340-1957 Attorneys for Defendants—Appellants Eric Shapiro and Steven J. Shapiro TO: Clerk of Court Supreme Court of the State of New York County of the Bronx 851 Grand Concourse, Room 118 Bronx, New York 10451 Michal Falkowski Richland & Falkowski, PLLC 28-07 Jackson Avenue, Sth Fl. Long Island City, NY 11101 (212)-390-8872 — Phone mfalkowski@rflegal.net Attorneys for Plaintiff—-Respondent 2 of 20 iD: AR ONX OUN NK 04 70 DV INDEX NO. 806264/2022E NYSCEF BOC. NO. 187 RECEIVED NYSCEF: 04/03/2024 Exhibit A 3 of 20 INDEX NO. 806264/2022E NYSCEF DOC. NO. 187 RECEIVED NYSCEF: 04/03/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF BRONX aa. aa. -X NY 2015 BOAT LLC, Index No.: 806264/2022E Plaintiff, NOTICE OF ENTRY -against- Hon. Fidel E. Gomez 2435 KINGSLAND LLC et al., Mot. Seq. No. 007 Defendants. aa. aa. nanan. PLEASE TAKE NOTICE that the within is a true copy of a Decision and Order of the Hon. Fidel E. Gomez duly dated February 21, 2024 and entered in the Office of the Clerk of the Supreme Court of the State of New York, County of Bronx, on February 26, 2024. Dated: March 4, 2024 Long Island City, New York Richland & Falkowski, PLLC Michal Falkow: Se 28-07 Jackson Avenue, “5 FL, Long Island City, NY 11101 Ph. 212-390-8872 mfalkowski@rflegal.net Attorneys for Plaintiff 4 of 20 A BRO OU ERI 65 03:5 el INDEX NO. 806264/2022E NYSCEF BOC. NO. 182 RECEIVED NYSCEF: 04/08/2024 NEW YORK SUPREME COURT - COUNTY OF BRONX PART 32 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF THE BRONX a=. --X NY 2015 BOAT LLC, Index No. 806264/2022E Plaintiff, Hon. FIDEL E. GOMEZ - against - Justice 2435 KINGSLAND LLC, ET AL., Defendants. a=. --X The following papers numbered | to 1, Read on this Motion noticed of 01/03/24, and duly submitted as no. 7 on the Motion Calendar of 1/03/24. PAPERS NUMBERED Notice of Motion - Order to Show Cause — 1 Exhibits and Affidavits Annexed Answering Affidavit and Exhibits Replying Affidavit and Exhibits Notice of Cross-Motion - Affidavits and Exhibits Pleadings - Exhibit Stipulation(s) - Referee’s Report - Minutes Filed Papers- Order of Reference Memorandum of Law Defendants’ motion is decided in accordance with the Decision and Order annexed hereto. Dated: 2/21/24 1.CHECK ONE O CASE DISPOSED 2. MOTION/CROSS-MOTION IS. O GRANTED (MOTIC X GRANTED IN PAR’ 3. CHECK IF APPROPRIATE. O SETTLE ORDER _ O SUBMIT ORDER Oo RE REE ‘APPOIN TMENT O DO NOT POST CO NEXT APPEARANCE DATE: 5 of 20 INDEX NO. 806264/2022E NYSCEF DOC. NO. 182 RECEIVED NYSCEF: 04/08/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF THE BRONX X NY 2015 BOAT LLC, Plaintiff, -against- DECISION AND ORDER Index No. 806264/2022E 2435 KINGSLAND LLC, ERIC SHAPIRO, STEVEN J. SHAPIRO, CITY OF NEW YORK DEPARTMENT OF FINANCE, CITY OF NEW YORK ENVIRONMENTAL CONTROL BOARD AND “JOHN DOE NO. 1 THROUGH JOHN DOE NO. 99,” SAID NAMES BEING FICTITIOUS, PARTIES INTENDED BEING POSSIBLE TENANTS OR OCCUPANTS OF PREMISES, AND CORPORATIONS, OTHER ENTITIES OR PERSONS WHO CLAIM, OR MAY CLAIM, A LIEN AGAINST THE PREMISES, Defendants. ween ene eee eee een en enenen ene, Defendants Eric Shapiro (Eric) and Steven J. Shapiro (Steven) move by Order to Show Cause (OSC) for an Order, pursuant to CPLR § 2221, granting them leave to reargue this Court’s Decision and Order, dated November 3, 2023 (the prior decision), which granted plaintiff's summary judgment motion; and upon leave, denying said motion; or, alternatively, pursuant to CPLR § 5519(c), an Order staying all pending proceedings to enforce the Decision and Order pending resolution of defendants’ appeal by the Appellate Division, First Department. For the reasons set forth below, defendants’ motion for leave to reargue is granted and, upon reargument, defendants’ motion is denied. BACKGROUND This is an action to foreclose a commercial mortgage which encumbers real property located at 2435 Kingsland Avenue, Bronx, New York 10469. The complaint alleges, inter alia, -l- 6 of 20 INDEX NO. 806264/2022E NYSCEF DOC. NO. 182 RECEIVED NYSCEF: 04/08/2024 as follows: On February 11, 2021, defendant 2435 Kingsland LLC (Kingsland) executed and delivered a promissory note to plaintiff whereby it promised to pay the principal sum of $300,000 plus interest. On that same date, defendants Eric and Steven executed a guaranty to plaintiff guaranteeing Kingsland’s repayment of the note. As collateral security for repayment of the note, Kingsland executed and delivered a mortgage in the principal sum of $300,000. Plaintiff is the holder of the note and was in possession of the note and mortgage at the time this action was commenced. Pursuant to the note, Kingsland promised to make consecutive monthly payments of principal and/or interest on the first day of each month commencing on April 1, 2021 and on the first day of each succeeding month up to and including November 11, 2022, at which time the remaining principal amount and accrued interest became due and payable. Kingsland defaulted on its obligations under the terms of the note by failing and omitting to pay plaintiff the amounts due on April 1, 2021 and each and every month thereafter. By the filing of the complaint, plaintiff has elected to declare the entire unpaid principal balance, unpaid interest and other amounts due and payable. In the prior decision, this Court granted plaintiff's motion for: (1) summary judgment on its foreclosure claim against 2435 Kingsland LLC, Eric and Steven; (2) a default judgment against all non-appearing defendants; (3) an order of reference; and (4) striking John Doe’s from the caption and amending the complaint accordingly. Notably, in opposition to plaintiff's summary judgment motion, defendants Eric and Steven argued that: (1) there were triable issues of fact as to whether the mortgage at issue was procured by fraud and whether plaintiff was on notice of and/or knowingly facilitated the fraud; and as to whether defendants were fraudulently induced into signing the closing documents, both of which would render the mortgage voidable and preclude plaintiff's foreclosure action; (2) the note and underlying mortgage at issue were unenforceable because the terms are usurious; and (3) summary judgment was premature because there has been no discovery. In support of the instant motion, defendants contend that the Court overlooked and/or misapprehended the following: (1) defendants have not waived the affirmative defenses of fraudulent inducement and usury; (2) defendants have provided sufficient detail to state the -2- Z of 20 INDEX NO. 806264/2022E NYSCEF DOC. NO. 182 RECEIVED NYSCEF: 04/08/2024 defense of fraudulent inducement; (3) even a facially unconditional guaranty is void if the underlying loan contains a usurious interest rate or if it was fraudulently induced; (4) summary judgment should have been denied on the foreclosure and guaranty claims due to issues of fact regarding the defenses of usury and fraud; and (5) defendants are entitled to take discovery to prove the affirmative defenses of fraudulent inducement and usury. Plaintiff opposes and asserts that: (1) defendants improperly attempt to argue, for the first time, that their seventeenth affirmative defense, unconscionability, actually constitutes a usury defense and that their guaranty is void ab initio because the underlying loan was criminally usurious; (2) defendants’ fraudulent inducement claims fail to raise a triable issue of fact as the defendants admitted to all the underlying facts, including the execution of all the closing documents; (3) defendants fail to articulate what additional information or evidence they would seek to uncover during discovery; and (4) defendants request for a stay must be denied as they have failed to demonstrate a likelihood of success on the merits, irreparable harm, or that equity warrants a stay. HOR Ok “A motion for leave to reargue is addressed to the sound discretion of the Supreme Court” (Rides Unlimited of New York, Inc. v Engineered Energy Solutions, LLC, 184 AD3d 695, 695 [2d Dept 2020]; Bueno v Allam, 170 AD3d 939, 940 [2d Dept 2019]; Foley v Roche, 68 AD2d 558, 567 [Ist Dept 1979]). “A motion for reargument, addressed to the discretion of the court, is designed to afford a party an opportunity to establish that the court overlooked or misapprehended the relevant facts, or misapplied any controlling principle of law. Its purpose is to serve as a vehicle to permit the unsuccessful party to argue once again the very questions previously decided. However, reargument may not serve to provide a party an opportunity to advance arguments different from those tendered on the original application. Nor may it be employed as a device for the unsuccessful party to assume a different position inconsistent with that taken on the original motion. .. . ‘A motion for reargument is not an appropriate vehicle for raising new questions a9 (Foley at 567-568; see also DeSoignies v Cornasesk House Tenants’ Corp., 21 AD3d 715, 718 3- 8 of 20 INDEX NO. 806264/2022E NYSCEF DOC. NO. 182 RECEIVED NYSCEF: 04/08/2024 [1st Dept 2005] [““Reargument is not available where the movant seeks only to argue ‘a new theory of liability not previously advanced’”’]). DISCUSSION As discussed in the prior decision, plaintiff met its prima facie burden on its motion for summary judgment by establishing the existence of the guaranty, the underlying debt and the guarantor’s failure to perform under the guaranty (Cooperatieve Centrale Raiffeisen- boerenleenbank, B.A. at 492; Davimos v Halle, 35 AD3d 270, 272 [1st Dept 2006]; City of New York v Clarose Cinema Corp., 256 AD2d 69, 71 [lst Dept 1998]). In opposition, defendants failed to raise a triable issue of fact. On reargument, defendants claim that the Court overlooked or misapprehended the law in finding that defendants waived their affirmative defenses of usury and fraudulent inducement, and in granting summary judgment without permitting further discovery. Defendants also contend that the Court erred in finding that the complaint failed to sufficiently allege a fraudulent inducement affirmative defense. As to the latter, in the prior decision, that Court found that to the extent that defendants’ fortieth affirmative defense can be construed as a fraudulent inducement defense, the mere allegations that plaintiff engaged in conduct to transfer the property from the individual defendants to an LLC without their knowledge, and that “it is unknown who the members of the LLC are” was insufficient to state a fraudulent inducement affirmative defense (CPLR § 3016[b] ; Friedman v Anderson, 23 AD3d 163, 166 [1st Dept. 2005][“a plaintiff seeking to recover for fraud and misrepresentations is required to set forth specific and detailed factual allegations that the defendant personally participated in or had knowledge of any alleged fraud.”]). In this regard, the Court correctly found that there were “ specific allegations that plaintiff had any involvement in either the creation of the LLC or the transfer of the real property to the LLC.”' Significantly, the alleged misrepresentations ‘In their memorandum of law, through counsel, defendants correctly point out that in footnote | of the prior decision, the Court misquotes the defendants in stating: “Indeed, in their affidavits, Eric and Steven state that they are ‘unfamiliar with the lender NY 2015 Boat LLC.’” That sentence should read: “Indeed, in paragraph 30 of his affidavit, Eric states ‘We have no -4- 9 of 20 INDEX NO. 806264/2022E NYSCEF DOC. NO. 182 RECEIVED NYSCEF: 04/08/2024 defendants cite in support of the instant motion were allegedly made by nonparty Larry Jonathan (Jonathan), the broker Eric states he found on the internet, not the plaintiff. Therefore, the Court did not err in finding that defendants failed to plead the affirmative defense of fraudulent inducement. Waiver of Affirmative Defenses Defendants contend that the Court misapprehended the law in finding that defendants had waived their affirmative defenses of usury and fraudulent inducement by not pleading them in their answer, and that defendants did not retract that waiver through their opposition to plaintiff's motion for summary judgment.” An affirmative defense, as defined by CPLR § 3015(b) is waived if not pleaded in an answer (Butler v Catinella, 58 AD3d 145, 150 [2d Dept 2008] [Affirmative defenses, such as those set forth in CPLR 3018(b), as a general rule, would be deemed waived if not raised in the pleadings.”]); Surlak v Surlak, 95 AD2d 371, 383 [2d Dept 1983] [“The general rule is that an affirmative defense is deemed waived if not raised in the pleadings.”]). In the prior decision, the court stated: However, when a defendant fails to plead an affirmative defense, as required by CPLR § 3211(e) and CPLR § 3018(b), but nevertheless asserts that defense in connection with a motion for summary judgment, the waiver is said to be retracted and the court can grant, when the defendant is the movant, or deny, when the defendant is the opponent, summary judgment based upon the unpleaded affirmative defense ( Lerwick v Kelsey, 24 AD3d 918, 919-920 [3d Dept 2005]; Allen v Matthews, 266 AD2d 782, 784 [3d Dept 1999]; Adsit v Quantum Chem. Corp.,199 AD2d 899, 900 [3d Dept 1993]). The threshold inquiry is whether in considering the unpleaded defense, the opponent of the defense is prejudiced thereby ( BMX Worldwide v Coppola, 287 AD2d 383, 384 [lst Dept 2001]; Allan at 784; Seaboard Sur. Co. v Nigro, Bros., 222 idea who the actual lender is. All we know is that NY 2015 Boat LLC is listed as c/o Mavrides, Moyal, Packman and Sadkin LLC.’” °To the extent that defendants now argue that their unconscionability defense sufficiently states an affirmative defense of usury, since the defendants failed to raise that argument in opposition to plaintiff's summary judgment motion, it is improperly raised on reargument. 5. 1 of 20 INDEX NO. 806264/2022E NYSCEF DOC. NO. 182 RECEIVED NYSCEF: 04/08/2024 AD2d 574, 574 -575 [2d Dept 1995]; Rogoff v San Juan Racing Assn. Inc., 77 AD2d 831, 832 [1st Dept 1980, affd, 54 NY2d 883 [1981]). Such prejudice, however, is ameliorated when the defense was previously raised on a prior motion or during discovery (id.), or when the opponent of the motion, where defendant seeks summary judgment based upon said defense, is given an opportunity to fully respond to the motion for summary judgment (Sheils v County of Fulton, 14 AD3d 919, 921 [3d Dept 2005], /v denied 4 NY3d 711[2005]; Kirilescu v American Home Prods. Corp., 278 AD2d 457, 457-458 [2d Dept 2000], /v denied 96 NY2d 933 [2001]; McSorley v Philip Morris, Inc. , 170 AD2d 440, 441 [2d Dept 1991], appeal dismissed 77 NY2d 990 [1991]; International Fid. Ins. Co. v Robb, 159 AD2d 687, 689 [2d Dept 1990). In the prior decision, the Court found that Eric and Steven had not retracted their waiver in failing to plead fraud and usury as affirmative defenses because they did not seek affirmative relief, but rather, merely opposed the motion for summary judgment. However, under the caselaw cited by the Court, an affirmative defense is not waived by a defendant who fails to raise the defense in its answer if that defendant raises it in opposition to summary judgment and the opposing party has an opportunity to fully respond. Here, defendants raised the fraud and usury defenses in opposition to plaintiff's summary judgment motion, and plaintiff had an opportunity, and did, respond to those defenses in its reply papers. As such, defendants have not waived those defenses by failing to raise them as affirmative defenses in their answer. Nevertheless, for the reasons set forth below, defendants may not avail themselves of either of those defenses. The Guaranty As plaintiff notes, defendants now raise, for the first time, the argument that even a facially unconditional guaranty is void if the underlying loan contains a usurious interest rate or if it was fraudulently induced. Defendants also, for the first time, assert that the guaranty is void ab initio because Steven’s signature was forged. Significantly, defendants did not address the guaranty in opposition to plaintiff's summary judgment motion. Rather, their arguments were limited to the underlying loan. As such, defendants’ arguments concerning the guaranty are improperly raised in support of the instant motion. -6- 1 of 20 INDEX NO. 806264/2022E NYSCEF DOC. NO. 182 RECEIVED NYSCEF: 04/08/2024 In the prior decision, the Court found that Eric and Steven were precluded from raising fraud as a defense based on the absolute and unconditional language in the guaranty that “no set- off, counterclaim, reduction or diminution of any obligation, or any defense of any kind or nature which Guarantor has or may have against Lender . . . shall be available hereunder to Guarantor in respect of any matter arising out of this Guaranty, except payment in full of all obligations of Borrower under the Loan Documents.” Indeed, as the Court noted, guaranties containing such language have been consistently upheld by New York courts (Cooperative Centrale Raiffeisen-Boerenleenbank, B.A. v Navarro, 25 NY3d 485, 492-493 [2015]; Citibank v Plapinger, 66 NY2d 90 [1985]; Chemical Bank v Sepler, 60 NY2d 289 [1983]; United Orient Bank v Bao Lee, 233 AD2d 500 [1st Dept 1996]). And, contrary to defendants’ contention, a fraudulent inducement defense can be waived in a guaranty agreement (Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A. v Navarro, 25 NY3d 485 [2015] Citibank v Plapinger, 66 NY2d 90, 93-95 [1985]). As such, the Court did not err in finding that defendants waived their fraudulent inducement defense. In the prior decision, the Court found that Eric and Steven were also precluded from raising usury as a defense under the broad and unconditional language of the guaranty. In this regard, significantly, a limited liability company, such as the borrower here, may only assert a defense of criminal usury, that is, an interest rate in excess of 25% (Limited Liability Law § 1104[a]; Penal Law § 190.40). And, the Court acknowledges that a criminal usury defense may not be waived as it is contrary to public policy (Hammelburger v Foursome Inn Corp., 76 AD2d 646, 649-650 [2d Dept 1980]. Thus, the guaranty does not preclude defendants from raising a criminal usury defense. To successfully raise the defense of usury, a debtor must allege and prove by clear and convincing evidence that a loan requiring interest in violation of a usury statute was charged by the holder or payee with the intent to take interest in excess of the legal rate (Blue Wolf Capital Fund II, L.P. v American Stevedoring Inc., 105 AD3d 178, 183 [1st Dept 2013]). Here, defendants assert in conclusory fashion that the “effective interest rate” for the subject loan is “at least 18%” and the default rate is “at least 36%.” Notably, in New York, the default interest rate is not considered in determining whether a loan is usurious (72" Ninth LLC v -7- Y of 20 INDEX NO. 806264/2022E NYSCEF DOC. NO. 182 RECEIVED NYSCEF: 04/08/2024 753 Ninth Ave Realty LLC, 168 AD3d 597, 598 [1st Dept 2019]; Bryan L. Salamone, P.C. v Russo, 129 AD3d 879, 881 [2d Dept 2015]; Kraus v Mendelsohn, 97 AD3d 641, 641 [2d Dept 2015]). As such, by defendants’ own account, the loan is not criminally usurious. Discovery Defendants contend that the Court overlooked and misapprehended matters of fact and law in ruling that defendants failed to proffer any reason to suggest that additional discovery may lead to relevant evidence. In this regard, defendants point to their opposition to plaintiff's summary judgment motion, wherein they stated that they will seek discovery as to communications demonstrating that plaintiff and Jonathan had a business relationship and worked in concert to defraud defendants, documents demonstrating that plaintiff was aware that the property was residential and owner-occupied and not commercial, and communications demonstrating that plaintiffs attorneys had knowledge of and facilitated the fraud on the Shapiro bothers. Significantly, as discussed above, defendants waived a fraudulent inducement defense. As such, the foregoing discovery will serve no purpose. Stay Pending Appeal - CPLR § 5519(c) Alternatively, defendants seek a stay of all proceedings in this case, pursuant to CPLR § 5519(c), pending defendants’ appeal to the First Department. CPLR § 5519(c) provides that “Tt]he court from or to which an appeal is taken or the court of original instance may stay all proceedings to enforce the judgment or order appealed from pending an appeal.” Under CPLR § 5519(c), “there is no entitlement to a stay and, indeed, the court considering the stay application may consider the merits of the appeal” (Da Silva v Musso, 76 NY2d 436, 443 n4 [1990]; 64B Venture v American Realty Co., 179 AD2d 374, 375-376 [1st Dept 1992][“Likewise, it was within the IAS court’s discretion to deny a stay pending appeal of the prior action, if, in its view, which was borne out by our subsequent decision, respondents failed to show sufficient merit to that appeal.”]; Wilkinson v Sukiennik, 120 AD2d 989, 989 [4th Dept 1986][“Plaintiff has demonstrated that his appeal from Justice Joslin’s order may have merit . . . Thus, plaintiff is entitled to a stay of enforcement of the order of Justice Joslin entered April 24, 1986, pending appeal.”]). Here, for the reasons stated herein and in the prior decision, defendants have not -8- 18 of 120 INDEX NO. 806264/2022E NYSCEF DOC. NO. 182 RECEIVED NYSCEF: 04/08/2024 shown sufficient merit to their appeal to warrant a stay. As such, defendants motion for a stay of all proceedings in this action pending an appeal, pursuant to CPLR § 5519(c), is denied. Accordingly, it is hereby ORDERED that defendants shall serve a copy of this Decision and Order upon all parties, with Notice of Entry, within thirty (30) days of the date hereof. This constitutes the Decision and Order of this Court. Dated: Bronx, New York February 21, 2024 -9- 14 of 20 iD: AR ONX OUN NK 04 70 DV INDEX NO. 806264/2022E NYSCEF BOC. NO. 187 RECEIVED NYSCEF: 04/03/2024 Supreme Court of the State of New York Appellate Division: First [udicial Department Informational Statement (Pursuant to 22 NYCRR 1250.3 [a]) - Civil rt Ne fit cr at HMMS eTe rest M Te] ST enineas iG) For Court of Original Instance my a fit Cy NY 2015 BOAT LLC Date Notice of Appeal Filed - against - 2435 KINGSLAND LLC, ERIC SHAPIRO, STEVEN J. SHAPIRO, CITY OF For Appellate Division NEW YORK DEPARTMENT OF FINANCE, CITY OF NEW YORK ENVIRONMENTAL CONTROL BOARD eran Pool thread Bye Civil Action 1 CPLR article 78 Proceeding | im Appeal O Transferred Proceeding oO CPLR article 75 Arbitration C1 Special Proceeding Other C1 Original Proceedings OC CPLR Article 78 C1 Habeas Corpus Proceeding C1 CPLR Article 78 C1 Executive Law § 298 CO Eminent Domain CO CPLR 5704 Review CO Labor Law 220 or 220-b CO Public Officers Law § 36 CO Real Property Tax Law § 1278 DE TAT YM) Mol ea QU Cerel mE OM COM ESV ucLeMOy MUG CO) Conta teemerctKeyexoyu Comma shel sm Leta Cosd (cel UNCC AT-TULI CRON [Meron CO) Administrative Review O Business Relationships CO Commercial OC Contracts 0 Declaratory Judgment OC Domestic Relations O Election Law C Estate Matters 0) Family Court Mortgage Foreclosure C Miscellaneous O Prisoner Discipline & Parole 0 Real Property O Statutory O Taxation Torts (other than foreclosure) Informational Statement - Civil 15 of 20 iD: AR ONX OUN NK 04 70 Div INDEX NO. 806264/2022E NYSCEF BOC. NO. 187 RECEIVED NYSCEF: 04/03/2024 EN eyel-r-1) Paper Appealed From (Check one only): If an appeal has been taken from more than one order or judgment by the filing of this notice of appeal, please indicate the below information for each such order or judgment appealed from on a separate sheet of paper. CO Amended Decree C Determination fm Order CO Resettled Order Co Amended Judgement O Finding O Order & Judgment O Ruling CO Amended Order OH Interlocutory Decree O Partial Decree Oi Other (specify): O Decision O interlocutory Judgment C Resettled Decree CO Decree OD Judgment O Resettled Judgment Court: Supreme Court EI County: Bronx EJ Dated: 02/21/2024 Entered: 02/26/2024 Judge (name in full):Fidel E. Gomez Index No.:806264/2022E Stage: Interlocutory C1 Final CO Post-Final Trial: OO Yes mi No IfYes: O Jury O Non-Jury Prior Unperfected Appeal and Related Case Information Are any appeals arising in the same action or proceeding currently pending in the court? Byes O No If Yes, please set forth the Appellate Division Case Number assigned to each such appeal. 2023-06530 Where appropriate, indicate whether there is any related action or proceeding now in any court of this or any other jurisdiction, and if so, the status of the case: olariinr-macerest-te lla) Commenced by: Oo Order to Show Cause OJ Notice of Petition C1 Writ of Habeas Corpus Date Filed: Statute authorizing commencement of proceeding in the Appellate Division: | Court: Choose Court [aelect-tel le Me lailae-te Mele SUr1t) a ced Oa wees\0)-1(-3) County: Choose Countv Judge (name in full): Order of Transfer Date: oT Sy (0S mol ara Oke Court: Choose Court County: Choose Countv Judge (name in full): Dated: | BIg ola Le) ol-¥-] Pudge -i-Xol [ay Mel meV 9) ©) eccla(elaW-Vave MS) lc clunt 1a mel a CUTor Description: If an appeal, briefly describe the paper appealed from. If the appeal is from an order, specify the relief requested and whether the motion was granted or denied. If an original proceeding commenced in this court or transferred pursuant to CPLR 7804(g), briefly describe the object of proceeding. If an application under CPLR 5704, briefly describe the nature of the ex parte order to be reviewed. Defendants request that the appellate division reverse the Supreme Court's ruling granting Defendants’ motion to reargue, but upon reargument adhering to its prior decision, and denying Defendants' motion for a stay pending resolution of the pending appeal of the Supreme Court's grant of summary judgment. Informational Statement - Civil 16 of 20 iD: AR ONX OUN NK 04 70 DV INDEX NO. 806264/2022E NYSCEF BOC. NO. 187 RECEIVED NYSCEF: 04/03/2024 Issues: Specify the issues proposed to be raised on the appeal, proceeding, or application for CPLR 5704 review, the grounds for reversal, or modification to be advanced and the specific relief sought on appeal. The court erred by granting the motion to reargue but nevertheless adhering to its previous grant of summary judgment, holding that Defendants were prohibited from raising the defense of fraud based on the waiver of defenses contained in guarantees of payment allegedly signed by Defendants. The court further erred in holding that the defense of civil usury could not be raised by the Defendants and that the loan was not usurious. Additionally, the court erred in denying defendant's motion for a stay pending resolution of an appeal. NACHE} Instructions: Fill in the name of each party to the action or proceeding, one name per line. If this form is to be filed for an appeal, indicate the status of the party in the court of original instance and his, her, or its status in this court, if any. If this form is to be filed for a proceeding commenced in this court, fill in only the party’s name and his, her, or its status in this court. No. Party Name Original Status Appellate Division Status ERIC SHAPIRO Defendant Appellant STEVEN J. SHAPIRO Defendant Appellant EJ 2435 KINGSLAND LLC None None CITY OF NEW YORK DEPARTMENT OF FINANCE None None NY 2015 BOAT LLC Plaintiff Respondent 10 11 12 13 14 15 16 17 18 19 20 Informational Statement - Civil 17 of 20 iD: AR ONX OUN NK 04 70 DV INDEX NO. 806264/2022E NYSCEF BOC. NO. 187 RECEIVED NYSCEF: 04/03/2024 Nolan Moat} Instructions: Il in the names of the attorneys or firms for the respective parties. If this form is to be filed with the notice of petition or orderto show cause by which a special proceeding is to be commenced in the Appellate Division, only the name of the attorney for the petitioner need be provided. In the event that a litigant represents herselfor himself, the box marked “Pro Se” must be checked and the appropriate information for that litigant must be supplied in the spaces provided. Attorney/Firm Name: David J. Abrams/Kasowitz Benson Torres LLP Address: 1633 Broadway City: New York l State: New York | Zip: 10019 | Telephone No: (212) 506-1701 E-mail Address: dabrams@kasowitzcom Attorney Type: m Retained [Assigned [1 Government CO Pro Se C1 Pro Hac Vice Party or Parties Represented (set forth party number(s) from table above): 1,2 Attorney/Firm Name: Fria R. Kermani/Kasowitz Benson Torres LLP Address: 1633 Broadway City: New York l State: New York | Zip: 10019 | Telephone No: (212) 506-1887 E-mail Address: fkermani@kasowitz.com Attorney Type: