[*1]
Ponce De Leon Fed. Bank v Grameen Nobel Realty, LLC
2015 NY Slip Op 50026(U) [46 Misc 3d 1209(A)]
Decided on January 9, 2015
Supreme Court, Queens County
Flug, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on January 9, 2015
Supreme Court, Queens County


Ponce De Leon Federal Bank, Plaintiff(s), -

against

Grameen Nobel Realty, LLC, MOHAMMED M. RAHMAN AND MOHAMMED A. RAHMAN, RAHMANIA PROPERTIES, LLC, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, AND "JOHN DOE" No.1-10, "MARY DOE" #1-10, AND "JANE DOE" #1-10, the names being fictitious, their true names being unknown to plaintiff, persons intended being persons in possession of portions of the premises described in the complaint in this action, Defendant(s).




702507 2012
Phyllis Orlikoff Flug, J.

In this action to foreclose a commercial mortgage, plaintiff's assignee 74th Street Funding Inc. (74th Street Funding) seeks an order appointing a receiver for the benefit of the plaintiff of all of the rents and profits now due and unpaid or to become due during the pendency of this action with respect to the mortgaged premises known as 40-32/34/36 74th Street, Elmhurst, New York (Block 1305, Lots 44, 45 and 46). Defendants Grameen Nobel Realty LLC, (Grameen) Mohammed A. Rahman, and Rahmania Properties LLC cross move in opposition, and seek an order granting summary judgment dismissing the complaint on their sixth, eight and ninth affirmative defenses and cancelling the notice of pendency.



On May 17, 2007, defendant Mohammed A. Rahman, as president of defendant Grameen, applied to Ponce De Leon Federal Bank (Ponce) for a commercial loan in the sum of $750,000.00, in order to facilitate the purchase of real property known as 40-36 74th Street, Elmhurst, New York (Block 1305, Lot 46). At the same time, Mr. Rahman, on behalf of [*2]Grameen applied to the same lender for a commercial loan on the sum of $750,000.00, in order to facilitate the purchase of real property known as 40-32, 74th Street, Elmhurst, New York (Block 1305 Lot 44). On June 12, 2007, Grameen acquired title to Lot 46, and executed and delivered to Ponce a note in the principal sum of $750,000.00, and executed and delivered to said lender a mortgage with respect to Lot 46.On the same day, Grameen acquired title to Lot 44, and executed and delivered to Ponce a note in the principal sum of $750,000.00, and a mortgage with respect to Lot 46. The respective mortgages have been recorded with the City Register. In connection with said loans and mortgages, defendants Mohammed M. Rahman and Mahammed A. Rahman executed personal guaranties of said purchase money mortgages.



Shortly after acquiring these properties, Grameen commenced activities in connection with the development of the demolition of the existing structures situated on said properties and the construction of three new attached buildings each consisting of commercial space on the ground and cellar floors, and two apartments on each of the second and third floors. On January 15, 2008, Grameen applied to Ponce for a construction loan and permanent financing in the amount of $2,460,000.00. The Rahman guarantors also completed separate loan applications for said amount. On February 13, 2008, Ponce issued a commitment, and Grameen and the guarantors executed final applications for the construction loan to permanent financing in the amount of $2,460,000.00. On February 27, 2008, Grameen executed and delivered to Ponce a Building Loan Agreement, which incorporated the existing mortgage liens with Ponce, together with Collateral Assignments of Plans and Specifications, Permits and Contracts. Grameen executed a mortgage loan agreement for the construction financing in the sum of $965,490.04, and said instrument was recorded in the office of the City Register. Grameen also executed and delivered to Ponce a Consolidated Note in the principal sum of $965,490.04, which was to pay for the construction with permanent financing after a term of one year. The Consolidated Note provides for interest only payments during the construction period. As collateral security, Grameen executed and delivered to Ponce a Spreader With Consolidation, Extension and Modification Agreement, in the consolidated amount of $2,460,000.00, and said instrument was recorded in the office of the City Register. Grameen simultaneously executed an Estoppel Certificate which provides for no offsets or defenses to the consolidation agreement and the Rahmans executed and delivered personal guaranties.



On June 26, 2009, Ponce distributed the balance of the construction financing in the sum of $71,585.35, and the loan converted to permanent financing, at which time the monthly payments were adjusted to amortize principal and interest payments. Grameen defaulted under the Consolidated Note on May 18, 2011. Ponce issued several notices to Grameen, and Grameen made payments in less than the amount due. Grameen failed to tender payment in response to a final notice dated July 19, 2012, and Ponce in a letter dated July 31, 2012 notified Grameen that as it had failed to cure the arrears, it would commence a foreclosure action.



Grameen transferred title to the mortgaged property to Rahmania Properties, (Rahmania) pursuant to a deed dated February 26, 2010, and recorded on March 3, 2010. Neither Grameen nor Rahmania has paid the real estate taxes for the mortgaged properties.



On October 16, 2012, Ponce commenced the within commercial foreclosure action, thereby accelerating the balance due. Grameen, Mohammed A. Rahman and Rahmania served a verified answer and interposed forty two affirmative defenses and seven counterclaims. Defendant Mahammed M. Rahman has served a verified answer, and interposed eight affirmative defenses and six counterclaims.



On December 2, 2013, Ponce assigned all right, title, and interest in the subject mortgage loan to 74th Street Funding, and said instrument was recorded with the office of the City Register.



74th Street Funding, as assignee of Ponce, now seeks the appointment of a receiver of the subject mortgaged property.Defendants Grameen, Mohammed A. Rahman, and Rahmania cross move in opposition, and seek an order granting summary judgment dismissing the complaint on their sixth affirmative defense of failure to comply with RPAPL 1302, 1303 and 1305; the eighth affirmative defense of that "any purported acceleration of the purported note and mortgage is improper and in violation of the terms of the same"; and the ninth affirmative defense that plaintiff "failed to satisfy a condition precedent prior to the commencement of the within foreclosure action", and cancellation of the notice of pendency.



Defendants' cross motion for an order granting summary judgment dismissing the complaint and cancelling the notice of pendency, is denied in its entirety. With respect to the sixth affirmative defense, the pleading requirements of RPAPL 1302 and the notice provisions of RPAPL 1304 are inapplicable here, as the subject mortgage is a construction mortgage loan, and not a home loan (see Mendel Group Inc. v Prince, 114 AD3d 732 [2d Dept 2014]; Horizons Invs. Corp v Brecevich, 104 AD3d 475 [2d Dept 2013]). The provisions of RPAPL 1305 are also inapplicable here, as said section is a predicate to a notice to vacate prior to the commencement of a holdover proceeding under RPAPL 713(5). Finally, the documentary evidence e-filed herein establishes that all of the individuals occupying the subject premises were served with the RPAPL 1303 notice.



With respect to the eighth affirmative defense, absent language in a mortgage to the contrary, there is no requirement in New York that a defaulting commercial borrower be given written notice of the default, or the opportunity to cure the default prior to the lender's commencing a foreclosure action (see, 1-4 Bergman on New York Mortgage Foreclosures, § 4.04A ["The general rule is that demand for payment is not a prerequisite to commencement of a mortgage foreclosure action"]). Here, the Consolidated Note provides, in relevant part, that: "If am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of principal which has not been paid and all the interest that I owe on that amount. That date must be at least 30 days after the date on which the [*3]notice is delivered or mailed to me." Contrary to defendants' assertion, this provision is not ambiguous, and gave Ponce the option of providing written notice. In the event that written notice was given, then the borrower would have 30 days from the date of delivery or mailing in which to pay the amount due. Ponce, however, was not required to provide the defendants with a demand for payment prior to commencing this action.



Moreover, defendants explicitly waived the right to receive notice. The Consolidated Note contains a waiver provisions which states, in relevant part, that "I and any other person who has obligations under this Note waive the rights of presentment and notice of dishonor. "Presentment" means the right to require the Note Holder to demand payment of amounts due. "Notice of dishonor" means the right to require the Note Holder to give notice to other persons that amounts due have not been paid...".



The Consolidation Agreement incorporated all of the provisions of the new mortgage, and the new mortgage specifically provides at Section 2.03(a) that if a default event occurred, "then upon written demand of the Mortgagee, the Mortgagor will pay to the Mortgagee the whole amount which then shall have become due and payable on the Note, for principal and interest or both... or any other sums due under any of the Documents, as the case may be, and after the happening of said Event of Default will also pay to the Mortgagee interest at the Default Rate on the then unpaid principal of the Note...[and i]n the event that the Mortgagor shall fail forthwith to pay such amounts upon such demand, the Mortgagee shall be entitled and empowered to institute such action or proceedings in law or equity...".



Here, Grameen defaulted under the terms of the mortgage, and Ponce sent notices to Grameen demanding payment. As Grameen did not make the requested payments, Ponce pursuant to the terms of the Consolidated Agreement, elected to accelerate the balance due upon the service of the pleadings in the within action. The summons and complaint in this case thus provided legally sufficient notice of the default (Clayton Nat'l Inc. v Guldi, 307 AD2d 982 [(2d Dept 2003]; First Am. Intl. Bank v Spoiled Trucks & Cars Corp., 34 Misc 3d 1242 [A],[Sup Ct, Queens County 2012]).



With respect to the ninth affirmative defense, defendants have failed to establish that plaintiff has failed to met any conditions precedent to the commencement of this action. As stated above, the provisions of RPAPL 1302 and 1305 are inapplicable here, and 1303 notices were served on the occupants of the premises. In addition, Ponce issued default notices and demand for payment, and was not required to provide the mortgagor with a 30 day notice to cure, as the defendants expressly waived notice of presentment.



Turning now to 74th Street Funding's motion for the appointment of a receiver, defendants' claim that the movant lacks standing to seek the appointment of receiver is rejected. The assignment dated December 2, 2013, provided for the assignment of the mortgage, "together with the bond or note or obligation described in said mortgage, and the moneys due and to grow due thereon with interest" by Ponce to 74th Street Funding. Contrary to defendants' assertions, said quoted language was sufficient to assign the note underlying the subject mortgage along with the mortgage to 74th Street Funding (see Matter [*4]of Stralem, 303 AD2d 120 [2d Dept 2003]). The mortgage agreement at issue includes a provision expressly authorizing, in an action to foreclose the mortgage, the appointment of a receiver "as a matter of right, if it shall so elect, without the giving of notice to any other party and without regard to the adequacy or inadequacy of any security for the mortgage indebtedness...". Thus, plaintiff is entitled to appointment of a temporary receiver without regard to the adequacy of the security for the loan, and "regardless of proving the necessity for the appointment" (Naar v Litwak & Co., 260 AD2d 613, 614 [2d Dept 1999]; see Real Property Law § 254[10]; see also GECMC 2007-C1 Ditmars Lodging, LLC v Mohola, LLC, 84 AD3d 1311 [2d Dept 2011]). In any event, it appears that defendants have failed to make payment of outstanding real estate taxes for the premises, and the appointment of a temporary receiver is necessary for the protection of plaintiff's interest in the subject premises and well-being of the tenants.



Accordingly, 74th Street Funding's motion for the appointment of a temporary receiver, is granted, and defendant's cross motion to dismiss the complaint and to cancel the notice of pendency, is denied in its entirety.



Settle order.



January 9, 2015.............................



J.S.C.