25TH STREET MULTIFAMILY LLC v. Criminal Court of the City of New York, et al., Defendants. (2024)

Amended order and judgment (one paper), Supreme Court, New York County (Francis A. Kahn, III, J.), entered June 13, 2024, which granted plaintiff's motion to confirm the referee report and for a judgment of foreclosure and sale and denied defendant's cross-motion to reject the referee report and for a hearing, unanimously affirmed, without costs.

Defendants’ contention that issues of fact exist as to whether plaintiff's foreclosure on the mortgaged premises was unconscionable is unavailing.  This case does not present a situation where there was “a good faith mistake, promptly cured by the party in default with no prejudice to the creditor” (Fifty States Mgt. Corp. v. Pioneer Auto Parks, Inc., 46 N.Y.2d 573, 576–577, 415 N.Y.S.2d 800, 389 N.E.2d 113 [1979];  see DiMatteo v. North Tonawanda Auto Wash, Inc., 101 A.D.2d 692, 693, 476 N.Y.S.2d 40 [4th Dept. 1984], appeal dismissed 63 N.Y.2d 675 [1984];  Domus Realty Corp. v. 3440 Realty Co., Inc., 179 Misc. 749, 754, 40 N.Y.S.2d 69 [Sup. Ct., N.Y. County 1943], affd 266 A.D. 725, 41 N.Y.S.2d 940 [1st Dept. 1943]).  Defendants first addressed their defaults in September—73 days after the July installment was due on July 10, 2021, 42 days after the August installment was due on August 10, 2021, and 41 days after the loan had been accelerated.  Requiring “[p]ayment in accordance with contractual terms, in and of itself, does not constitute an injustice” (Chiampou Travis Besaw & Kershner, LLP v. Pullano, 194 A.D.3d 1480, 1482, 148 N.Y.S.3d 783 [4th Dept. 2021] [internal quotation marks omitted]).

Based on these undisputed facts, Supreme Court correctly dismissed defendants’ affirmative defenses based on bad faith conduct as “belied by the facts.”  Nor did Supreme Court err in denying defendants’ request to replead their affirmative defenses, as their request, contained within a single sentence, in a footnote within their memorandum of law, failed to properly seek leave to amend pursuant to CPLR 3025(b) (see e.g. Ran v. Weiner, 170 A.D.3d 425, 426, 93 N.Y.S.3d 562 [1st Dept. 2019]).

The Referee's report was correctly confirmed based on plaintiff's business records, which attached plaintiff's loan documents, payment ledgers, and interest calculations (see U.S. Bank, N.A. v. Kim, 219 A.D.3d 1207, 1207, 196 N.Y.S.3d 407 [1st Dept. 2023]).  Supreme Court was not required to direct a hearing, as defendants had the opportunity to submit information to the court for consideration at the time the court considered the motion to confirm (see Board of Mgrs. of Nolita Place Condominium v. Texas Entertainment LLC, 222 A.D.3d 577, 578, 203 N.Y.S.3d 5 [1st Dept. 2023]).  Plaintiff submitted a spreadsheet detailing the protective advances made and proof of payment via Federal Reference wire transfer confirmations for “forced-place” insurance to NFP, Inc. also known as Lenders Risk Services and Great American Insurance Group also known as Overby–Seawell;  insurance invoices and proof of payment for insurance periods 2021–2023;  and invoices for other protective advances, including for Donald B. Blaikie (Receiver's bond), Door Master (repairs), Titlevest Agency (title issues), and Federal Express (notices to defendants and tenants at the mortgaged premises).

Supreme Court's award of attorneys’ fees, which reduced the fees from $597,049.79 to $515,000, was reasonable and supported by the affirmation of counsel, which described the services rendered, detailed contemporaneous time records, and provided proof of payment of the invoices via bank statements and Federal Reference wire transfer confirmations (see Jordan v. Freeman, 40 A.D.2d 656, 656, 336 N.Y.S.2d 671 [1st Dept. 1972]).