The opinion
Valley Natl. Bank v W29 534 Highline Owners LLC
2025 NY Slip Op 30062(U)
January 7, 2025
Supreme Court, New York County
Docket Number: Index No. 850126/2024
Judge: Margaret A. Chan
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
Op 30001(U), are republished from various New York
State and local government sources, including the New
York State Unified Court System's eCourts Service.
This opinion is uncorrected and not selected for official
publication.
INDEX NO. 850126/2024
NYSCEF DOC. NO. 69 RECEIVED NYSCEF: 01/07/2025
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 49M
---------------------------------------------------------X
VALLEY NATIONAL BANK, SUCCESSOR BY MERGER INDEX NO. 850126/2024
TO BANK LEUMI USA,
Plaintiff, MOTION DATE 09/30/2024,
- V - MOTION SEQ. NO. 002
W29 534 HIGHLINE OWNERS LLC, RUBY GABSI, RAN
BELINKIS, CLARENDON NATIONAL INSURANCE, NEW DECISION+ ORDER ON
YORK CITY ENVIRONMENTAL CONTROL BOARD, CAS MOTION
CONSTRUCTION INC.,MAY CONSTRUCTION GROUP
INC.,PTS GENERAL CONSTRUCTION LLC,S&F
ELECTRICAL SERVICES INC., and JOHN DOE NO. 1 To
50,
Defendants.
---------------------------------- -----X
HON. MARGARET A. CHAN:
The following e-filed documents, listed by NYSCEF document number (Motion 002) 52, 53, 54, 55, 56,
57, 58, 59, 60, 61
were read on this motion to/for JUDGMENT - DEFAULT
In this commercial foreclosure action, plaintiff Valley National Bank,
successor by merger to Bank Leumi USA (plaintiff) moves pursuant to CPLR 3215
for an order (1) granting default judgment against defendants W29 534 Highline
Owners (Borrower), Rudy Gabsi s/h/a Ruby Gabsi, Ran Belinkis (Belinkis, and
together with Gabsi, Guarantors), Clarendon National Insurance, New York City
Environmental Control Board, Cas Construction Incorporated s/h/a/ Cas
Construction Inc., May Construction Group Inc., PTS General Construction LLC,
and S&F Electrical Service, Inc. s/h/a S&F Electrical Services Inc. (collectively
defendants), (2) amending the caption of this action to remove defendants "John
Doe No. 1 to 50," and (3) appointing a referee to compute the amount due to plaintiff
under the mortgages that are the subject of this foreclosure action (NYSCEF # 52).
The motion is unopposed.
Pursuant to CPLR 3215, plaintiff may move for default judgment "[w]hen a
defendant has failed to appear, plead or proceed to trial of an action" (CPLR 3215
[a]). Generally, a movant seeking default judgment must submit the following
materials: (1) proof of service of the summons and complaint or summons with
notice; (2) an affidavit of facts constituting the claim and the amount due; and (3)
an affidavit showing the default in answering or appearing (id. 3215 [f]; see also
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Woodson v Mendon Leasing Corp., 100 NY2d 62, 70·71 [2003]). As explained below,
plaintiff has established its entitlement to default judgment and for the
appointment of a special referee to determine the amounts owed under the loan and
mortgage documents.
To start, plaintiff submits proof of service of the summons and verified
complaint, a notice of pendency, and an affirmation attesting to defendants' default
in answer or otherwise appearing in this action. Plaintiff commenced this
foreclosure action by filing summons and verified complaint on April 15, 2024
(NYSCEF #s 1·29). That same day, plaintiff filed a Notice of Pendency regarding
this action (NYSCEF # 30). Plaintiff later submitted proof that a copy of the
summons and verified complaint were served upon Borrower, Guarantors, and the
remaining defendants between April 25, 2204 and May 22, 2024 (NYSCEF # 55
,r,r 6-7; NYSCEF #s 32·33, 35·36; see also NYSCEF # 59). 1 Then, on June 11, 2024,
plaintiff served Guarantors with an additional copy of the summons pursuant to
CPLR 3215(g)(3) in a first-class, post·paid sealed envelope addressed to Guarantors
(NYSCEF # 55 ,r 8; NYSCEF #s 47, 59). Finally, upon making this motion, plaintiff
submitted an affidavit of service of the notice of motion and supporting papers by
first class mail and international mail on September 6, 2024 (NYSCEF # 61). To
date, none of the defendants have answered the Complaint or otherwise appeared in
this ation (see NYSCEF # 55 ,r,r 9, 12).
Plaintiff also submits sufficient proof of facts constituting the claim against
defendants. In its verified complaint, plaintiff seeks to foreclose on four mortgages
encumbering the real property known as 534 West 29th Street, New York, New
York 10001 (the Premises) in an aggregate amount of $13,000,000.00 (NYSCEF # 1
,r 8). Plaintiff asserts a cause of action for foreclosure on the mortgages, a cause of
action seeking remedies under the Uniform Commercial Code, and a cause of action
for breach of certain guaranties entered into by the Guarantors (id. ir,r 47·66).
Plaintiff name defendants Clarendon National Insurance, Cas Construction
Incorporated s/h/a/ Cas Construction Inc., New York City Environmental Control
Board, May Construction Group Inc., PTS General Construction LLC, and S&F
Electrical Service, Inc. s/h/a S&F Electrical Services Inc. in the event of any claims,
judgments, or liens they may have on the Premises (id. ,I 5). 2 Those claims are then
supported by the detailed affirmation of Jennifer M. Marcus (Marcus), Senior Vice
President of plaintiff (NYSCEF # 54).
1 Plaintiff also filed an affidavit attesting that the subject property located at 534 West 29th Street,
New York, NY 10001 is vacant (NYSCEF # 55 iJ 6; NYSCEF # 34).
2 Although Cas Construction Incorporated s/h/a/ Cas Construction Inc. is not included in plaintiffs
list at paragraph 5 of its Complaint, it is presumably named as a defendant for the same reason as
the other remaining defendants (see generallycompl ,i,i 5, 47·66).
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As set forth in the Marcus affirmation, there are four separate loans by Bank
Leumi 3 to Borrower made on February 9, 2016, and March 25, 2019, as well as
corresponding mortgages encumbering the Premises and any improvements,
personal property, and appurtenances thereon and thereto (together with the
Premises, the Property):
1) A loan in the principal sum of $8,766,373.00 (the Building Loan), as
evidenced by a Building Loan Note, dated February 9, 2016 (the
Building Note), and secured by a Building Loan Mortgage and
Security Agreement, dated February 9, 2016 (the Building
Mortgage) encumbering the Property;
2) A loan in the principal sum of $371,984.00 (the Additional Building
Loan), evidenced by an Additional Building Loan Note (the
Additional Building Note) and secured by an Additional Building
Loan Mortgage and Security Agreement, dated March 25, 2019 (the
Additional Building Mortgage) encumbering the Property;
3) A loan in the principal sum of $3,233,627.00 (the Project Loan),
evidence by a Project Loan Note and secured by Project Loan
Mortgage and Security Agreement, dated February 9, 2016 (the
Project Mortgage) encumbering the Property; and
4) A loan in the principal sum of $628,016.00 (the Additional Project
Loan), evidence by an Additional Project Note and secured by an
Additional Project Loan Mortgage and Security Agreement, dated
March 25, 2019 (the Additional Project Mortgage) encumbering the
Property
(NYSCEF # 54 ,r,r 6-7, 15-16, 24-25, 30-31; NYSCEF #s 4-5, 12-13, 18-19, 23-24).
These loans' maturity dates were extended to July 9, 2022, by Amendment No. 9 to
the Building Loan Note, dated May 9, 2022, Amendment No. 9 to the Project Loan
Note, dated May 9, 2022, Amendment No. 6 to Additional Building Note, dated May
9, 2022, and Amendment No. 6 to the Additional Project Loan Note (NYSCEF # 54
,r,r 13, 18, 28, 33).
To further induce Bank Leumi to make these loans, Guarantors executed and
delivered Guaranty of Payment, dated February 9, 2016, in which Guarantors
jointly and severally, irrevocably, unconditionally, and absolutely guaranteed to
Bank Leumi, and its successors and assigns, prompt performance and payment
when due on an obligations of Borrower to Bank Leumi up to the "Maximum
3On April 1, 2022, Bank Leumi merged into Valley National Bank with Valley National Bank
becoming the surviving entity (NYSCEF # 5411 23, 37). Valley National Bank is the present owner
and holder of the loan documents at issue in this action (id. 11 23, 38).
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Guaranteed Principal Amount" of $6,000,000.00 plus all interest thereon (NYSCEF
# 54 ,r,r 8, 26; NYSCEF # 6). Guarantors also executed additional guaranties, such
as a Guaranty of Interest and Expenses, a certain Guaranty of Completion, and a
Bad Acts Guaranty (see NYSCEF # 54 ,r,r 9·11, 26; NYSCEF #s 7, 8, 9). Guarantors
later executed Amendment No. 1 to the Guaranty of Payment, dated March 25,
2019, pursuant to which Guarantors agreed to increase the Maximum Guaranteed
Principal Amount to $6,500,000, and otherwise ratified and reaffirmed the Payment
Guaranty (the Payment Guaranty Amendment) (NYSCEF # 54 ,r 19). In addition to
this amendment to the Payment Guaranty, Guarantors also executed a
Reaffirmation of Guaranties and Indemnification Agreement, dated March 25, 2019
(the 2019 Reaffirmation), which acknowledged amendments and/or modifications as
to the amount of the Loan and the maturity date, and reaffirmed the Payment
Guaranty, Interest Guaranty, Completion Guaranty, and Bad Acts Guaranty
(NSYCEF # 54 ,r 20). Later, on May 9, 2019, Guarantors executed and delivered a
Reaffirmation of Guaranties and Indemnification Agreement, as well as the
Payment Guaranty, Interest Guaranty, Completion Guaranty, Bad Acts Guaranty,
the Payment Guaranty Amendment, the 2019 Reaffirmation, and intervening
reaffirmation of guaranties and indemnification agreements (NYSCEF # 54 ,r 34;
NYSCEF # 26).
Borrower ultimately failed to pay all outstanding amounts due under the
loans' various documentation (the Loan Documents) upon the maturity date of July
9, 2022 (NYSCEF # 54 ,r 44). Guarantors likewise failed to make payment upon
Borrower's maturity date pursuant to their payment guaranties (id. ,r 45).
Accordingly, by letters dated March 6, 2024, Valley National Bank notified
Borrower and Guarantors of Borrower's event of default under the Loan Documents
(the Demand Notices) (id. ,r,r 46·47; NYSCEF #s 28·29). As explained in the
Demand Notices, Valley National Bank had elected to exercise its right to increase
the interest rate to the Default Rate of 18% under the Building Note, Additional
Building Note, Project Note, and Additional Project Note (the Notes) (NYSCEF # 54
,r,r 46·47). Valley National Bank then demanded an aggregate amount due, as of
March 6, 2024, of $11,871,768.62 in connection with the Building Loan 4 and
Additional Building Loan, and $5,033,651.65 in connection with the Project Loan
and Additional Project Loan 5 (id.).
Despite receiving the Demand Notices, Borrower and Guarantors again failed
to make any payment pursuant to the Loan Documents (NYSCEF # 54 ,r 48).
Marcus also affirms that, pursuant ot Section 6.6(a) of the Building Mortgage,
Additional Building Mortgage, Project Mortgage, and Additional Project Mortgage,
Borrower was obligated to pay all real estate taxes, yet they have failed to do so
since January 1, 2022 (id. ,r,r 49·50). As a result, Marcus concludes, Borrowers are
4
The outstanding principal amount for these loans at the time of the Demand Notices was $9,107,609.22
(NYSCEF # 54 1 46).
5
The outstanding principal amount for these loans at the time of the Demand Notices was $3,861,643.00
(NYSCEF # 54147)
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now indebted to Valley National Bank in the aggregate amount of $12,969,252.22,
together with accrued and unpaid interest, default interest, late charges,
prepayment consideration, escrow advances, actual or contingent amounts arising
out of the Building Loan Agreement and Guaranty of Completion, and such other
costs and expenses set forth in the Loan Documents (the Outstanding Debt)
(id. ,r 51).
Based on the foregoing, plaintiff has sufficiently demonstrated facts
constituting their claim that Borrower and Guarantor defaulted on their obligations
under the Loan Documents through their failure to pay the Outstanding Debt (see
Woodson, 100 NY2d at 71 [without the benefit of discovery, the affidavit need only
allege enough facts to enable a court to determine that a viable cause of action
exists]). And when considering this showing in conjunction with the proof of service
of the summons and verified complaint, as well as plaintiffs affirmation attesting to
defendants' default in answering or otherwise appearing, plaintiff has sufficiently
demonstrated its entitlement to default judgment as to liability on its claims for
foreclosure and breach of the guaranties.
Accordingly, it is hereby,
ORDERED that plaintiffs motion for default judgment is granted and default
judgment in favor of plaintiff and against defendants is granted as to all of
plaintiffs claims; and it is further
ORDERED that the issue of the amount due and owing, including principal,
interest, and other fees and debts set forth in the Loan Documents is severed and
referred to a Special Referee to hear and report with recommendations; and it is
further
ORDERED that counsel for plaintiff shall, within 30 days from the date of
this order, serve a copy of this order with notice of entry, together with a completed
Information Sheet, upon the Special Referee Clerk in the General Clerk's Office
(Room 119), who is directed to place this matter on the calendar of the Special
Referee's part; and it is further
ORDERED that such service upon the Special Referee Clerk shall be made in
accordance with the procedures set forth in the Protocol on Courthouse and County
Clerk Procedures for Electronically Filed Cases (accessible at the "E· Filing" page on
the court's website at the address www.nycourts.gov/supctmanh); and it is further
ORDERDED that plaintiffs motion to amend the caption is granted, and the
caption shall be amended by (1) deleting "Ruby Gabsi" and inserting "Rudy Gabsi,"
(2) deleting "Cas Construction Inc." and inserting "Cas Construction Incorporated,"
(3) deleting "S&F Electrical Services Inc." and inserting "S&F Electrical Service,
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Inc," and (4) deleting John Doe No. 1 to 50 without prejudice to the proceedings
heretofore had herein as to "John Doe No. 1 to 50" only; and it is further
ORDERED that the amended caption to this action shall read as follows:
------ -- -- ---- --- ------ ------ -- --- --- -- --- --- -- ----- -- -- ---- ------- -- X
VALLEY NATIONAL BANK, successor by merger to
Bank Leumi USA,
Plaintiff,
-against-
W29 534 HIGHLINE OWNERS LLC, RUDY GABS!,
RAN BELINKIS, CLARENDON NATIONAL Index No. 850126/2024
INSURANCE, NEW YORK CITY ENVIRONMENTAL
CONTROL BOARD, CAS CONSTRUCTION
IN CORPORATED, MAY CONSTRUCTION GROUP
INC., PTS GENERAL CONSTRUCTION LLC,
and S&F ELECTRICAL SERVICE, INC.,
Defendants.
--- ----- ----- --------------------- --- ---- ------ ----------- -- --- ------- X
and it is further
ORDERED that plaintiff shall serve a copy of this order with notice of entry
on the General Clerk's Office and the County Clerk, who are directed to mark the
court records to reflect the amendment in the caption; and it is further
ORDERED that, within 20 days of the e-filing of this order, a copy of this
Decision and Order, together with Notice of Entry, shall be served upon defendants
by plaintiffs counsel via NYSCEF and by overnight mail, return receipt requested,
with proof of service e·filed on NYSCEF.
1/07/2025
DATE MARGARET A. CHAN, J.S.C.
CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION
GRANTED □ DENIED GRANTED IN PART □ OTHER
APPLICATION: SETTLE ORDER SUBMIT ORDER
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE
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