Respondent Signature Parking Corp. ("Signature") operates a parking facility at petitioner's premises pursuant to a written lease, dated June 4, 1997. In or about 2001, New York Community Bank ("NYCB") provided loans and financing to respondent and received a leasehold mortgage as its source of collateral. NYCB claims that the leasehold mortgage was duly approved and authorized by the landlord's predecessor according to a Consent to Assignment of Lease and Mortgage, dated November 19, 2001. NYCB recorded its leasehold mortgage.

Petitioner commenced the instant non-payment action in April 2004. A stipulation dated August 13, 2004 was entered into by the parties. Signature agreed to the jurisdiction of this Court and owing petitioner rent and additional rent through August 31, 2004 in the amount of $66,738.38. Signature consented to the entry of a final judgment and the immediate issuance of a warrant. The execution of the [*2]warrant was stayed to give it the opportunity to make payments to satisfy the judgment. Payments were to be applied first to current rent and additional rent due an owing, and then applied toward satisfying the judgment. Signature failed to comply with the terms of the stipulation and moved by Order to Show Cause on or about September 28, 2004 for relief from the warrant of eviction. That Order to Show Cause was made returnable on October 5, 2004.

Signature then filed a voluntary petition under Chapter 11 Bankruptcy Code on October 4, 2004. The Office of the United States Trustee moved to convert or dismiss the Chapter 11 case by motion dated December 3, 2004. That motion was returnable on January 12, 2004. The Bankruptcy Court issued a "Consent Order", dated December 2, 2004, by which the subject lease was rejected.

Signature, again proceeding by Order to Show Cause, seeks a stay of the execution of the warrant of eviction, and for additional time to become current under a stipulation of settlement dated August 13, 2004. In addition, a third party, New York Community Bank ("NYCB") cross-moves by Notice of Motion dated December 14, 2004, to intervene as a party-respondent, for leave to interpose an answer to the petition, for an order vacating the August 13, 2004 stipulation, vacating the judgment and warrant of eviction, and dismissing the instant action. Petitioner "cross moves" for an Order denying NYCB's motion to intervene, and urges this Court to leave in place the judgment and warrant.

Petitioner also moves pursuant to CPLR §601[sic] to consolidate this proceeding with a foreclosure action brought by NYCB in the Supreme Court, New York County, so that issues involving allegedly forged documents can be determined in one action. NYCB commenced its foreclosure proceeding in the Supreme Court against Signature in or about late October 2003. A Notice of Pendency, dated September 5, 2003 was served upon both Signature and petitioner and other parties, and filed prior to the commencement of that action. Petitioner filed an answer in that case in which it claims, among other things, that the signature of its principle acknowledging the leasehold mortgage is a forgery.

NYCB argues that they are a chattel mortgagee of the subject lease interest. As such, NYCB claims to be the assignee of respondent Signature Parking Corp. by operation of law and by agreement. NYCB posits that it is the true party in interest and that therefore it was entitled to notice of the rent default, and should have been [*3]made a party to this action. NYCB asserts that respondent had no right to enter into the August 13, 2004 stipulation without its express consent. Finally NYCB argues that it became the true tenant under the lease by operation of law upon tenant's default according to the mortgage agreement between it and Signature, and that Signature occupied the premises only as agent of NYCB.

Petitioner opposes this motion, and points out that the written consent to the mortgage put forth by NYCB is a forgery. In response, NYCB claims that even if petitioner did not consent to the leasehold mortgage, it nevertheless received actual notice of NYCB's rights in and to the leasehold as of October 2003, when NYCB commenced its foreclosure action in Supreme Court, and petitioner filed an answer joining issue.

Article 45 of the parties' lease entitled Assignment, Subletting & Mortgaging, provides, that,

"45.01 Except as otherwise provided in this Article 45, neither this lease....nor the interest of the Tenant...shall be assigned, mortgaged.....or otherwise transferred by Tenant...by operation of law or otherwise...without the prior consent of Owner in each case, which consent shall not be unreasonably withheld or delayed." (Emphasis added)

With respect to assignment, Article 45 provides that

"...Any assignee shall assume, by written, recordable instrument, the due performance of all of Tenant's obligations under this Lease including any accrued obligations at the time of the assignment. A fully executed original of the assignment and assumption agreement, both in form and content satisfactory to Landlord, fully executed and acknowledged by the Tenant and the assignee, together with a certified copy of a properly executed corporate resolution (if the assignee be a corporation) authorizing such assumption agreement, shall be sent to Landlord within ten (10) days from the effective date of such assignment..." (Emphasis added)

The "Consent to Assignment of Lease and Mortgage" recites that petitioner's [*4]predecessor in interest consents to the "assignment of the leasehold interest to Signature Parking Corp.", from Village Parking Corp., "assignor". Petitioner's predecessor also consented to NYCB's mortgage "in the approximate amount of $900,000". Finally, the Consent recites that,

"Neither this Consent nor the Assignment shall operate to waive, modify, release or in any manner affect Assignor's liability under the Lease. Landlord's consent and permission herein granted shall not be deemed to be a consent, permission or approval for any other or further assignment of the Lease or mortgage of the Lease."

This Court is cognizant of the fact that the issues regarding respondent's alleged default of the subject leasehold mortgage and the validity of petitioner's alleged acknowledgment and consent to the leasehold mortgage are currently sub judice before the Supreme Court, New York County. As such, this Court shall not determine whether NYCB is the true party in interest in this matter to the exclusion of respondent. However, "CPLR 1001(a) mandates joinder of a party in two situations: (1) where that party is necessary if complete relief is to be accorded between the persons who are parties to the action; or (2) where the unnamed party might be inequitably affected by a judgment in the action. See, Castaways Motel v. CVR Schuyler, 24 NY2d 120, 125, 247 N.E.2d 124, 127, 299 N.Y.S2d 148, 152 (1969) (non-parties are 'indispensable' where the determination of the court will adversely affect their rights). 'As to the later requirement, '[t]he possibility that a judgment rendered without [the omitted party] could have an adverse practical effect [on that party] is enough to indicate joinder.' ' Hitchcock v. Boyack, 256 AD2d 842, 844, 681 N.Y.S.2d 659, 661 (3d Dep't 1998)." New York County Lawyers A'ssn v. State, 192 Misc 2d 424, 427 (Sup. Ct. NY Cty 2002) There is no question the forfeiture of the leasehold deprives NYCB of the only collateral securing its $900,000 loan.

Based on the foregoing standard, NYCB's Order to Show Cause is granted to the extent of permitting it to intervene as a party-respondent. The proposed answer attached to NYCB's cross-motion at Exhibit D shall be deemed served and filed.

It follows, therefore, that the August 13, 2004 stipulation and the warrant of eviction that issued shall be vacated. Generally, stipulations of settlement are [*5]favored by the courts and are not lightly cast aside, especially when they are entered into in "open court". Only where there is a sufficient reason to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation. See, McCoy v. Feinman, 99 NY2d 295, 302 (2002). To preserve the subject stipulation, to which NYCB was not a party, will unduly harm and otherwise impede NYCB's rights in this forum. Indeed, NYCB may be the true party in interest in this matter. Again, the totality of NYCB's rights under the circumstances, which may be pivotal, must be decided by the Supreme Court.

Petitioner's motion pursuant to CPLR §601[sic] is inapplicable here and is denied without prejudice to petitioner making a motion pursuant to CPLR §602(b) in the Supreme Court.

This Court directs respondents Signature Parking and NYCB to continue to pay on-going use and occupancy. This matter shall appear on the Part 52 Calendar, Room 1166 on February 10, 2005 for trial.

This constitutes the Decision and Order of this Court. All other relief requested herein is denied.

Dated: January 27, 2004

___________________________

Eileen A. Rakower

J.C.C.