ColFin FCSB Funding A, LLC (ColFin FCSB), as successor by assignment to First Central Savings Bank, moves for an Order: (i) substituting "ColFin FCSB Funding A, LLC" in [*2]the title of this action in the place and stead of the presently named plaintiff "First Central Savings Bank" in all further proceedings, and directing that the caption of this action be amended to reflect said substitution, pursuant to CPLR 3025; (ii) granting summary judgment against defendants 1467 Bedford Ave., LLC, 1467 Bedford Avenue TCB Corp. and Kelvin Liles, pursuant to CPLR 3212; (iii) granting a default judgment against defendants The State of New York, The City of New York, New York State Department of Taxation and Finance, The City of New York Environmental Control Board, Naziemul Safi, Atlantic & Pacific Oil Co. Inc., Home Heating Oil Corp., and John Doe #1 through John Doe No.13, pursuant to CPLR 3215; and (iv) appointing a Referee to compute the sum due to plaintiff.

I.Procedural Background

This foreclosure action was commenced by First Central Savings Bank (First Central) on October 7, 2011, by the filing of a summons and verified complaint (and notice of pendency). The complaint seeks to recover the amounts owed to First Central by defendant 1467 Bedford Ave., LLC (1467 Bedford), by foreclosing on a mortgage lien encumbering the real property located at 1467 Bedford Avenue, Brooklyn, New York, Block:1239, Lot: 5, County of Kings (the Property) (first cause of action); and to enforce defendant Kelvin Liles (Liles)' obligations under a Guaranty (second cause of action), which among other things, authorizes First Central to obtain a deficiency judgment against Liles, if, after the application of the net proceeds of a foreclosure sale, any amounts remain due and owing. See affirmation of Jeffrey A. Gangemi, dated October 26, 2012 (Gangemi aff.), Ex. 1.

Defendants 1467 Bedford, 1467 Bedford Avenue TCB Corp. (1467 Bedford TCB) and Liles (collectively, the answering defendants) interposed a verified answer with affirmative defenses, dated January 26, 2012. Id., Ex. 3.

By Order dated January 9, 2012, the Court granted First Central's ex parte application for an Order appointing a Temporary Receiver for the Property. Id., Ex. 15.

II.Discussion

In a mortgage foreclosure action, a plaintiff establishes its entitlement to summary judgment as a matter of law by submitting proof of the existence of the mortgage and associated note, and proof of the mortgagee's default in payment. Capital One, N.A. v Brooklyn Flatiron, LLC, 85 AD3d 837, 837 (2d Dept 2011); Miller Planning Corp. v Wells, 253 AD2d 859, 859 (2d Dept 1998). The burden then shifts to the defendant to demonstrate the existence of a meritorious defense to foreclosure. Capital One, N.A. v Brooklyn Flatiron, LLC, 85 AD3d at 837. Moreover, it is well settled that a deficiency judgment may be obtained against a guarantor who signs or executes an agreement binding himself to be liable for a mortgage debt. Votta v Votta Enters., 249 AD2d 536, 537 (2d Dept 1998); CIT Group/Bus. Credit, Inc. v Walentas, 28 AD3d 224, 224 (1st Dept 2006).

According to movant, it has proven its entitlement to summary judgment against the answering defendants by submitting the sworn affidavit of Thomas J. Stevens (Stevens), Vice President and Chief Lending Officer of First Central and copies of all of the relevant loan documents. In his affidavit, Stevens states that, aside from his review of books and records maintained in the regular course of business of First Central, he is fully familiar with the facts and circumstances relating to the instant action as he was "one of the bankers who has worked on the instant loan." See affidavit of Thomas J. Stevens, sworn to September 28, 2012 (Stevens [*3]aff.), ¶ 1.

The Stevens affidavit further details, inter alia, that:

1.On August 12, 2008, 1467 Bedford, for the purpose of evidencing an indebtedness in the sum of $1,200,000.00 to First Central, duly executed, acknowledged and delivered to First Central, a mortgage note, dated August 12, 2008 (the Note).

2.On August 12, 2008, for the purpose of securing payment for the said indebtedness, 1467 Bedford, as mortgagor, executed a certain mortgage (the Mortgage), whereby 1467 Bedford mortgaged to First Central, as mortgagee, the Property.

3.The Mortgage was recorded on September 8, 2008 in the Office of the City Register of the City of New York, in CRFN No.: 2008000355688.

4.On August 12, 2008, in order to further collaterally secure the obligation to First Central, 1467 Bedford duly executed, acknowledged and delivered to First Central a Collateral Assignment of Leases and Rents.

5.On August 12, 2008, in order to further collaterally secure the obligation to First Central, Liles executed a Guaranty.

6.1467 Bedford failed to comply with the terms and provisions of the Mortgage and Note by, among other things, failing and omitting to pay the monthly payments which became due on the first day of April 1, 2009, and monthly payments due thereafter.

7.By written notice to the Mortgagor, dated April 7, 2009 (the Default Notice), First Central declared the Note and Mortgage to be in default and that First Central elected to declare immediately due and payable the entire unpaid balance of principal plus accrued interest, and all other charges due under the Note and Mortgage.

8.On August 20, 2009, First Central and 1467 Bedford entered into a Forbearance Agreement (the Forbearance Agreement). Thereafter, 1467 Bedford failed to comply with the terms and provisions of the Forbearance Agreement by, among other things, failing and omitting to make the monthly payment which became due on the first day of December 1, 2010, and monthly payments due thereafter.

9.On February 13, 2012, ColFin FCSB purchased from First Central the Note and Mortgage, together with all of the other related loan documents and this action. Among other things, on February 13, 2012, First Central delivered to ColFin FCSB an Assignment of Mortgage, Endorsement and Allonge to Promissory Note, Assignment of Contract Rights and Assignment of Assignment of Rents and Leases.

10.At all times prior to February 13, 2012, First Central Savings Bank was the owner and holder of the Note, Mortgage, Guaranty, and other related loan documents. [*4]

11.As of the date of the complaint (October 6, 2011) through the date of assignment to ColFin FCSB, there was due and owing under the loan documents the principal sum of $1,192,002.59 with interest thereon from December 1, 2010 at the default rate of 24% per annum, together with legal fees, advances for taxes, costs and disbursements of the action, no part of which had been paid.

In further support of its prima facie case, ColFin FCSB submits the affidavit of Ryan R. Riemer (Riemer), manager of ColFin FCSB. Riemer confirms that, on February 13, 2012, ColFin FCSB acquired, among other things, the subject Note, Mortgage, Guaranty, and related loan documents from First Central. See affidavit of Ryan R. Riemer, sworn to October 22, 2012 (Riemer aff.), ¶ 3. Riemer states that he was personally involved in the transaction, and as such, is fully familiar with the loan whose collection is being enforced by this action. Id., ¶ 1. Based on his involvement, Reimer avers that:

1.The Assignment of Mortgage, the Allonge to Mortgage Note, the Assignment of Contract Rights, and other loan documents were delivered by First Central to ColFin FCSB on February13, 2012.

Given this showing, ColFin FCSB has established a prima facie case entitling it to the relief it seeks in the first two branches of its motion: (i) substitution of "ColFin FCSB Funding A, LLC" as plaintiff in the title of this action in the place of "First Central Savings Bank" and amendment of the caption to reflect such substitution; and (ii) summary judgment against defendants 1467 Bedford and Liles.^[FN1]

In opposition, defendants 1467 Bedford and Liles (the opposing defendants) do not dispute that they executed and delivered to First Central the subject Note, Mortgage, Guaranty, Forbearance Agreement and other loan documents, or that they materially defaulted under the subject loan documents. Instead, through their attorney's affirmation, opposing defendants make a number of arguments in an effort to meet their burden of demonstrating the existence of a [*5]meritorious defense to foreclosure. However, for the reasons set forth more fully below, none of these arguments are sufficient to raise a triable issue of fact that would preclude granting these branches of ColFin FCSB's motion.

Asa threshold issue, opposing defendants disputeColFin FCSB's standing to bring this action. In this regard, opposing defendants challenge ColFin FCSB's claim that it is possession of the Note and Mortgage pursuant to an assignment and that, in accordance therewith, it has the right to foreclose on the Property. More specifically, opposing defendants argue that the subject assignment does not contain express and unambiguous assignment language under which the relevant loan documents held by First Central were assigned to ColFin FCSB. As such, opposing defendants contend that ColFin FCSB has failed to proffer any evidence or documentation demonstrating its right to foreclose on the Property.

However, contrary to opposing defendants' assertion otherwise, the evidence in the record conclusively demonstrates that First Central sold and assigned the subject Note and Mortgage to ColFin FCSB. Both the Stevens and Riemer affidavits clearly testify that ColFin FCSB purchased the subject Note and Mortgage from First Central, and that First Central, in fact, assigned and transferred the Note and Mortgage to ColFin FCSB. See Stevens aff., ¶¶ 15-17; Riemer aff., ¶¶ 3-5.

In addition, the documentary evidence further establishes the assignment of the Note and Mortgage by First Central to ColFin FCSB. With respect to the Note, the Endorsement and Allonge to Promissory Note, executed by Joseph Pistilli, Chairman and CEO of First Central, provides:

"This endorsement and allonge to be attached to and made an integral part of the instrument described below:

PAY to the order of ColFin FCSB Funding A, LLC, without warranty, representation or recourse of any kind, that certain mortgage note dated August 12, 2008, in the original principal sum of $1,200,000.00 executed by 1467 Bedford Ave., LLC, a New York limited liability company, together with any and all amendments and modifications thereof, if any."

Furthermore, the Assignment of Mortgage, executed on February 13, 2012, clearly provides for the assignment of both the Mortgage and Note, as follows:

"First Central Savings Bank (the "Assignor") . . . for and consideration of the sum of TEN DOLLARS . . . paid to it by ColFin FCSB Funding A, LLC (the "Assignee") . . . has granted, bargained, sold, assigned, transferred and set over . . . unto the Assignee . . . all of the Assignor's right, title, and interest in and to that (i) certain mortgage instrument dated August 12, 2008, given and executed by 1467 Bedford Ave., LLC to Assignor . . . and recorded . . . on September 8, 2008 in CRFN# 2008000355688 . . . and also the Note or other obligations recited in the said Mortgage and thereby intended to be secured, and all monies, whether [*6]principal interest or otherwise, due and to become due thereon."

Likewise, an Assignment of Contract Rights, executed on February 13, 2012, specifically states that First Central "has granted bargained, sold, assigned, transferred and set over . . . all of

First Central's "right, title and interest in" the Forbearance Agreement. Id., Ex. 14.^[FN2]

In short, opposing defendants' assertion that "the aforesaid [assignment] agreement is inherently defective on its face and as a result thereof the Plaintiff does not have standing to bring the within action before the Court ..." (see affirmation of Henry Kohn, dated February 8, 2013 [Kohn aff.], ¶ 8), is belied by clear and unambiguous documentary evidence to the contrary.Next, opposing defendants assert that summary judgment should be denied because the Riemer affidavit is deficient, insofar as it fails to satisfy the statutory requirement (CPLR 3212[b]) that the affiant be "a person having knowledge of the facts." See Kohn aff., ¶ 16. In making this argument, opposing defendants claim that Riemer, "in his capacity as Manager is clearly not a person with personal knowledge of the status of the file and balance due on the Note." Id. However, in making this argument, opposing defendants overlook that portion of Riemer's testimony, in which he states that:

"I was personally involved in the transaction involving ColFin FCSB Funding A, LLC's purchase of the subject Note, Mortgage, and instant Cause of Action from First Central Savings Bank. As such, I am fully familiar with the instant action and the loan whose collection is being enforced hereby, and personally familiar with ColFin LLC's acquisition of the subject Note, Mortgage, and instant Cause of Action from First Central Savings Bank on or about February 13, 2012."

Opposing defendants also claim that Riemer's affidavit is inherently defective, in that it "only bears a notary stamp, without the jurat acknowledgment by the notary, and additional certification or authentication as required by [CPLR 2309(c)]." Kohn aff., ¶ 20. However, the failure to provide a certificate of conformity for oaths taken out of this state is not a fatal defect and "authentication of the oathgiver's authority can be secured later, and given nunc pro tunc effect if necessary." Matapos Tech. Ltd. v Compania Andina de Comercio Ltda, 68 AD3d 672, 673 (1st Dept 2009); Raynor v Raynor, 279 AD 671, 671 (2d Dept 1951).

Here, ColFin FCSB has provided, by way of its reply, a copy of the notary certification of Elizabeth Ashley Palumbo, the notary for the Riemer affidavit, establishing her authority as the oathgiver and the sufficiency of the oath given in Riemer's affidavit. See reply affidavit of Ryan A. Riemer, sworn to March 28, 2013, Ex. 2. Therefore, there is no basis to invalidate the Riemer [*7]affidavit.^[FN3]

Opposing defendants also argue that ColFin FCSB does not address the affirmative defenses contained in their verified answer, including: (i) whether proper notice of default and acceleration were given to defendants prior to commencement of the action; (ii) whether plaintiff failed to provide defendants with Truth in Lending disclosure forms;^[FN4] and (iii) whether service of process upon opposing defendants was properly effectuated.

Putting aside the issue that the affirmative defenses, as plead, do not raise a triable issue of fact), opposing defendants knowingly and voluntarily waived their right to assert any affirmative defenses when they entered the Forbearance Agreement, which provides, in relevant part, that:

"1467 Bedford LLC hereby reaffirms all obligations contained within the Note and Mortgage and hereby agrees that there are no offsets, defenses, claims (asserted or unasserted) or counterclaims against First Central arising out of any transaction with [] First Central concerning the Note and/or Mortgage, and hereby waives any and all offsets, defenses, claims (asserted or unasserted) or counterclaims against First Central. In addition, 1467 Bedford LLC hereby reaffirms and agrees that the Note and Mortgage are in full force and effect, and acknowledges that neither the Note nor the Mortgage have been modified and otherwise novated. Kelvin Liles reaffirms all obligations contained within the Guaranty and hereby agrees that there are no offsets, defenses, claims (asserted or unasserted) or counterclaims against First Central arising out of any transaction with the First Central concerning the Guaranty of Payment, Note and/or Mortgage, and hereby waives any and all offsets, defenses, claims (asserted or unasserted) or counterclaims against First Central. Furthermore, Kelvin Liles hereby reaffirms and agrees and agrees that the Guaranty is in full force and effect, and acknowledges that neither the Guaranty, Note, or the Mortgage have been modified and otherwise novated."

Consequently, the defenses that opposing defendants assert are insufficient to raise a triable issue of fact. See Inland Mortg. Capital Corp. v Realty Equities NM, LLC, 71 AD3d [*8]1089, 1090 (2d Dept 2010) (defenses raised by mortgagor and its guarantor in opposing summary judgment on issue of their liability under notes and guaranty did not raise triable issue of fact where mortgagor and guarantor "effectively waived their right," pursuant to forbearance agreement with mortgagee, to assert defenses with respect to notes).

In any event, none of the defenses raised by opposing defendants constitute a meritorious defense. Opposing defendants' alleged defense that they were not provided with "proper notice of default and notice of acceleration . . . prior to the commencement of the action," as required by the Mortgage (see Kohn aff., ¶ 5.A), is without basis. That is because documentary evidence in the form of the Default Notice (annexed as Ex. 4 to the verified complaint) demonstrates that 1467 Bedford was sent a notice of default and acceleration prior to the institution of this action. To the extent opposing defendants are really arguing that under the loan documents First Central was obligated to send a demand notice prior to acceleration, the subject Mortgage is conspicuously devoid of any such requirement. Indeed, the court's review of paragraph 7 of the Mortgage, entitled "Default," makes no mention of any required notice for defaults in payment of any installment of principal or any interest. Instead, that provision specifically reserves the requirement of a notice and demand for defaults on other payments, e.g., payment of tax, water rate, or sewer rate. In addition, paragraph 36 of the Mortgage provides that "except as expressly" provided in the Mortgage, "no notice shall be required to be given by Mortgagee."

Further, the terms of the Mortgage are consistent with the terms of the Note with respect to there being no requirement for the mortgagee to serve a notice of default with demand prior to acceleration. Specifically, the Note provides in pertinent part, under Section 3, entitled "Default": "If an event of Default occurs, then all amounts owing under this Note shall forthwith become due and payable at the option of Bank without notice or demand." Id., Ex. 6.

Likewise, the Forbearance Agreement has no requirement for the mortgagee to serve a notice of default and acceleration, let alone an advance notice with demand. As follows:

"The occurrence of anyone or more of the following events with regard to the Borrower shall constitute an "Event of Default" by the Borrower under this Agreement:

a. If the Borrower shall default in the timely payment of any of the sums payable with respect to this Agreement, including but not limited to the payments due to the Bank as provided herein in paragraphs 3 and 4 above, or in the performance of any of the other terms or conditions of any of the provisions of this Agreement, or any of the affirmative or negative covenants contained in this Agreement...

Upon the occurrence of anyone or more of the aforementioned Events of Default unless affirmatively waived by the Bank in writing, or otherwise provided for in this Agreement, the Forbearance Period shall terminate and the Bank may immediately proceed with legal action at the earliest date allowable under law."

In view of the foregoing, First Central was not required by the Note, Mortgage or [*9]Forbearance Agreement to serve a notice of default prior to acceleration or commencing this action.^[FN5]

To the extent that opposing defendants invoke the Truth in Lending Act (TILA) to bar summary judgment (see n 4, supra), a defense based on the requirements of that Act has no basis in the instant case. It is well settled that TILA applies only to consumer credit transactions, and does not apply to credit transactions primarily for business or commercial purposes. See Capital One, N.A. v Margiotta, 36 Misc 3d 1227(A), 2012 NY Slip Op 51526(U), *7 (Sup Ct, Kings County 2012) (citation and inner quotation marks omitted); State Bank of Albany v Roarke, 91 AD2d 1093, 1095 (3d Dept 1983).

Here, the borrower, 1467 Bedford, is a New York limited liability company, and thus, not a natural person subject to TILA. See 15 USC § 1602 (i) ("The adjective consumer,' used with reference to a credit transaction, characterizes the transaction as one in which the party to whom credit is offered or extended is a natural person, and the money, property, or services which are the subject of the transaction are primarily for personal, family, or household purposes") (emphasis added); Margiotta, at *7 ("Since TILA is designed to protect consumers, extensions of credit for business and commercial transactions are expressly exempted from [its] protections"). Moreover, the Mortgage contains numerous provisions which address the collection of income and rent from tenants of the Property, further supporting the conclusion that the loan transaction was commercial in nature. See Gangemi aff., Ex. 8, ¶¶ 25-28, 50. Absent from the allegations supporting this defense is any claim by opposing defendants that the loan transaction was directed to "personal, family, or household purposes." In short, as a matter of statutory law, opposing defendants were not entitled to any disclosures pursuant to TILA.

For much the same reason, defendants' affirmative defense based on usury, is similarly groundless. It is well settled that the defense of usury is not available to a corporate defendant, except for a limited exception when the corporation's principal asset is the ownership of a one or two family dwelling. Simoni v Time-Line, Ltd., 272 AD2d 537, 538 (2d Dept 2000) (citing New York General Obligation Law § 5-521). In the case at bar, the Property is not a one or two family dwelling, but rather a mixed-use property consisting of 12 residential units, and 1 commercial unit. This fact was undisputed by opposing defendants when this court issued an Order appointing a Temporary Receiver of the rents and profits of the Property. Nor is the defense of usury available to a guarantor of the corporate obligation. Id. Therefore, as a matter of fact and law, defendants are not entitled to assert such a defense.

Opposing defendants' purported defense of "[w]hether service upon the Defendant were properly effectuated as per the CPLR," is unsupported by any affidavit of a person with personal knowledge. As such, in light of the affidavits of service submitted by ColFin FCSB demonstrating that the opposing defendants were properly served (see Gangemi aff., Ex. 2), defendants' mere denial, unsupported by sworn testimony, cannot raise a triable issue of fact as matter of law. See Trini Realty Corp. v Fulton Ctr. LLC, 53 AD3d 479, 479-80 (2d Dept 2008) [*10](affidavits of service constitute prima facie evidence that process was properly served).

In any event, CPLR 3211(e) provides that "an objection that the summons and complaint . . . was not properly served is waived if, having raised such an objection in a pleading, the objecting party does not move for judgment on that ground within sixty days after serving the pleading." Opposing defendants purportedly challenged the sufficiency of process in their verified answer dated January 6, 2012, which was served by first class mail on February 1, 2012. Thus, defendants had sixty days from the service of their verified answer to move for a judgment based on lack of personal jurisdiction. Defendants failed to make any such motion within sixty days of service of the verified answer (or at anytime thereafter), and therefore, any such defense has been waived as a matter of law.^[FN6]

In summary,plaintiff has sufficiently established its entitlement to judgment as a matter of law on the causes of action in the complaint against defendants 1467 Bedford (as mortgagor) and Liles (as guarantor) based on the testimony in the Stevens and Riemer affidavits and by submitting proof in the form of the Note and Mortgage, the Forbearance Agreement, and evidence of nonpayment by these defendants under those agreements.

In addition, based on the testimony in the Stevens and Riemer affidavits and the documents referenced therein, ColFin FCSB has established that it has acquired the subject Note, Mortgage, Assignment of Leases and Rents, and Guaranty, from First Central and should be substituted in the title of this action in the place and stead of First Central Savings Bank in all further proceedings, and that the caption of this action be amended to reflect said substitution.

Consequently, to the extent otherwise indicated (see n 1, supra), these branches of ColFin FCSB's motion, are granted.

Likewise, based on ColFin FCSB's showing (see Gangemi aff., ¶ 6.B-D and Ex. 2 [affidavits of service]), it is entitled to a default judgment against defendants The State of New York, The City of New York, New York State Department of Taxation and Finance, The City of New York Environmental Control Board, Naziemul Safi, Atlantic & Pacific Oil Co. Inc., Home Heating Oil Corp., and the John Doe Defendants, and accordingly, this branch of the instant motion, is granted.

As the motion for summary judgment against opposing defendants is granted, that branch of the motion, which seeks the appointment of a Referee to compute the sum due to plaintiff, is also granted. See Ocwen Federal Bank FSB v Miller, 18 AD3d 527, 527 (2d Dept 2005).

Accordingly, it is

ORDERED that ColFin FCSB Funding A, LLC's motion for summary judgment against defendants 1467 Bedford Ave., LLC and Kelvin Liles is granted (and as to defendant 1467 Bedford Avenue TCB Corp., see n 1, supra); and it is further

ORDERED that ColFin FCSB Funding A, LLC's motion for a default judgment against defendants The State of New York, The City of New York, New York State Department of Taxation and Finance, The City of New York Environmental Control Board, Naziemul Safi, [*11]Atlantic & Pacific Oil Co. Inc., Home Heating Oil Corp., and John Doe #1 through John Doe #13 is granted; and it is further

ORDERED that "ColFin FCSB Funding A, LLC" is substituted in the title of this action in the place and stead of the presently named plaintiff "First Central Savings Bank" in all further proceedings, without prejudice to any of the proceedings heretofore had herein, or to be had herein, to read as follows:

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF KINGS: ———————————
51;———————————& #151;——————————-

X

COLFIN FCSB FUNDING A LLC,

Plaintiff,Index No. 22837/11

-against-

1467 BEDFORD AVE., LLC, KELVIN LILES, 1467

BEDFORD AVENUE TCB CORP., THE STATE OF

NEW YORK, THE CITY OF NEW YORK, NEW YORK

STATE DEPARTMENT OF TAXATION AND

FINANCE, THE CITY OF NEW YORK

ENVIRONMENTAL CONTROL BOARD, NAZIEMUL

SAFI, ATLANTIC & PACIFIC OIL CO. INC.,

HOME HEATING OIL CORP., AND "JOHN DOE" #1

THROUGH "JOHN DOE" #20, THE NAMES OF THE

LAST 20 DEFENDANTS BEING UNKNOWN, THE

PARTIES INTENDED BEING TENANTS OR PERSONS

IN POSSESSION OF THE PREMISES DESCRIBED

HEREIN OR HAVING AN INTEREST OR LIEN UPON

THE PREMISES, DESCRIBED IN THE COMPLAINT,

Defendants. ———————————
51;———————————& #151;——————————— ;

X

and it is further

ORDERED that a Referee shall be appointed to compute the sum due to plaintiff.

Dated: November 29, 2013

ENTER:

______________________J.S.C.