SRP 2014 18 LLC v. LLC (2026)

DECISION & ORDER

In an action to foreclose a mortgage, nonparty Babylon Capital, LLC, as assignee of the plaintiff, appeals from an order of the Supreme Court, Kings County (Noach Dear, J.), dated December 16, 2019.  The order, insofar as appealed from, denied the plaintiff's motion, inter alia, for summary judgment on the complaint insofar as asserted against the defendant Majorie Songui and for an order of reference.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the matter is remitted to the Supreme Court, Kings County, for a new determination of the plaintiff's motion, inter alia, for summary judgment on the complaint insofar as asserted against the defendant Majorie Songui and for an order of reference.

The plaintiff commenced this action to foreclose a mortgage against, among others, the defendant Majorie Songui (hereinafter the defendant).  In March 2019, the plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendant and for an order of reference.  The defendant opposed the motion, arguing, among other things, that the plaintiff lacked capacity to maintain an action in New York, the plaintiff failed to comply with the notice requirements of RPAPL 1304, and the plaintiff lacked standing.  In an order dated December 16, 2019, the Supreme Court, inter alia, denied the plaintiff's motion solely on the ground that “[i]ssues of fact remain as to ․ Plaintiff's capacity to sue in [New York].” Nonparty Babylon Capital, LLC, as assignee of the plaintiff, appeals, asserting that the court erred in finding that the plaintiff lacked the capacity to sue and that the matter should be remitted for a new determination of the plaintiff's motion.

Initially, the defendant's contention that the appeal should be dismissed as untimely is not properly before this Court, since it is based on matter dehors the record (see U.S. Bank N.A. v. USA Brooklyn Enters., Inc., 232 A.D.3d 647, 648, 221 N.Y.S.3d 637).

“A foreign limited liability company doing business in New York without ‘a certificate of authority to do business in this state may not maintain any action, suit or special proceeding in any court of this state unless and until such limited liability company shall have received a certificate of authority in this state’ ” (Muzio v. Alfano–Hardy, 202 A.D.3d 1093, 1095, 163 N.Y.S.3d 244, quoting Limited Liability Company Law § 808[a] ).  Cases regarding Business Corporation Law § 1312(a), “an analog of Limited Liability Company Law § 808(a)” (Matter of Mobilevision Med. Imaging Servs., LLC v. Sinai Diagnostic & Interventional Radiology, P.C., 66 A.D.3d 685, 686, 885 N.Y.S.2d 631), have held that a “party relying upon this statutory barrier bears the burden of proving that the corporation's business activities in New York were not just casual or occasional, but so systematic and regular as to manifest continuity of activity in the jurisdiction” (JPMorgan Chase Bank, N.A. v. Didato, 185 A.D.3d 801, 802–803, 128 N.Y.S.3d 520 [internal quotation marks omitted];  see Forethought Life Ins. Co. v. 1442, LLC, 244 A.D.3d 1076, 1077, 247 N.Y.S.3d 450;  Highfill, Inc. v. Bruce & Iris, Inc., 50 A.D.3d 742, 743, 855 N.Y.S.2d 635).  “[A]bsent proof establishing that the plaintiff is doing business in New York, it is presumed that the plaintiff is doing business in its State of incorporation and not in New York” (Airline Exch. v. Bag, 266 A.D.2d 414, 415, 698 N.Y.S.2d 694;  see JPMorgan Chase Bank, N.A. v. Didato, 185 A.D.3d at 803, 128 N.Y.S.3d 520).

Here, the defendant failed to establish that the plaintiff “conducted continuous activities [in New York] essential to its corporate business” (JPMorgan Chase Bank, N.A. v. Didato, 185 A.D.3d at 803, 128 N.Y.S.3d 520 [internal quotation marks omitted];  see Forethought Life Ins. Co. v. 1442, LLC, 244 A.D.3d at 1077, 247 N.Y.S.3d 450;  cf.  Highfill, Inc. v. Bruce & Iris, Inc., 50 A.D.3d at 744, 855 N.Y.S.2d 635).  Therefore, the presumption that the plaintiff does business in its State of incorporation, and not in New York, has not been overcome (see Forethought Life Ins. Co. v. 1442, LLC, 244 A.D.3d at 1077, 247 N.Y.S.3d 450;  JPMorgan Chase Bank, N.A. v. Didato, 185 A.D.3d at 803, 128 N.Y.S.3d 520).  Consequently, the Supreme Court erred in denying the plaintiff's motion on the ground of lack of capacity to sue in New York.

Accordingly, we remit the matter to the Supreme Court, Kings County, for a new determination of the plaintiff's motion, among other things, for summary judgment on the complaint insofar as asserted against the defendant and for an order of reference (see Wells Fargo Bank, N.A. v. Manno, 241 A.D.3d 1397, 1400, 242 N.Y.S.3d 651).

GENOVESI, J.P., WARHIT, LOVE and QUIRK, JJ., concur.