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Avon Group LLC and Cc of R LLC v. Mosdos Chofetz Chaim Inc.

July 13, 2012

AVON GROUP LLC AND CC OF R LLC, PLAINTIFFS,
v.
MOSDOS CHOFETZ CHAIM INC., YESHIVA CHOFETZ CHAIM, UNITED STATES OF AMERICA, B&Z DEVELOPMENT, INC., CCU LLC, CERTIFIED LUMBER CORPORATION, PRECAST CONCRETE SALES COMPANY, MICHAEL HAKIM, ORANGE & ROCKLAND UTILITIES, MARTY AND DOROTHY SILVERMAN FOUNDATION, VILLAGE OF CHESTNUT RIDGE, VILLAGE OF MONTEBELLO, VILLAGE OF POMONA, VILLAGE OF WESLEY HILLS, MILTON SHAPIRO, SONYA SHAPIRO, COLD SPRING GRANITE CO., AND "JOHN DONE 1" TO "JANE DOE 100, INCLUSIVE, THE LAST ONE HUNDRED NAMES BEING UNKNOWN TO PLAINTIFF, THE DEFENDANT LAST NAMED IN THE QUOTATION MARKS BEING PARTIES ALL OF : WHOM CLAIM SOME RIGHT OR INTEREST IN THE MORTGAGED PREMISES AS TENANTS FOR A PERIOD OF MORE THAN ONE YEAR OR OTHERWISE, DEFENDANTS.



The opinion of the court was delivered by: Ramos, D.J.:

ORDER

Plaintiffs Avon Group LLC and CC of R LLC filed this foreclosure action in the Supreme Court of Rockland County, New York on February 15, 2012, seeking to foreclose two mortgages valued at $12,800,000 (the "Avon Mortgage") and $203,000 (the "CC of R Mortgage"). Nachum Brody, who claimed to be a John Doe Defendant as defined in the Complaint, removed to this Court on various bases. (Doc. 1). Plaintiffs, by order to show cause, seek to have the case remanded. (Doc. 3). They also seek an award of costs and actual expenses, including attorney fees. The Court holds that the removal was improper and REMANDS the case to state court. The Court further holds that Mr. Brody lacked an objectively reasonable basis to remove this case and therefore awards Plaintiffs costs and actual expenses, including attorney fees.

BACKGROUND Parties

Plaintiffs brought this action to foreclose on a 60-unit residential property ("the Property") in the Town of Ramapo, New York. Compl. ¶ 29, 28. Plaintiffs Avon Group LLC and CCR of R LLC each hold separate notes and mortgages on the Property. Id. ¶¶ 59, 38. Defendant Mosdos Chofetz Chaim, Inc. ("Mosdos") owns the Property. Id. ¶ 11. Plaintiffs allege that Mosdos is in default on both of the Mortgages. Id. ¶¶ 68, 44.

The other named Defendants all have an alleged interest in the Property. Defendant Yeshiva Chofetz Chaim ("YCC") is a guarantor on the Avon Mortgage and Mosdos' note to Avon. Id. ¶ 12. Defendants B&Z Development, Inc., CCU LLC, Certified Lumber Corporation, Precast Concrete Sales Company, Michael Hakim, Orange & Rockland Utilities, and the Marty and Dorothy Silverman Foundation all hold judgments against Mosdos or YCC. Id. ¶¶ 14-20. Defendants Milton Shapiro and Sonya Shapiro and the municipal Defendants-the Villages of Chestnut Ridge, Montebello, Pomona, and Wesley Hills-all are plaintiffs in a state lawsuit against Mosdos "challenging the zoning and use of [the Property] by Mosdos." Id. ¶ 21. Defendant Cold Spring Granite Co. holds a mechanics lien on the Property. Id. ¶ 22.

The United States waived sovereign immunity and allowed itself to be named as a Defendant due to tax liens the government has on the Property. Id. ¶ 23. The John and Jane Doe Defendants are individuals "who may have interests in [the Property as tenants,] including leasehold interests in excess of one year." Id. ¶ 25.

Procedural History

Plaintiffs filed their complaint in the Supreme Court of Rockland County, New York on February 15, 2012. On the next day, the state court appointed a temporary receiver who was empowered to collect rents on the Property for the benefit of the foreclosing Plaintiffs. See Def.'s Notice of Removal Ex. A (Order Appointing Temporary Receiver at 3).

The Parties were to appear again before the state court on May 17, 2012. Pl.'s Mem. at 1. At that time three fully briefed motions in this matter were pending before that court. Silverberg Aff. ¶ 5. Not long before the conference, on May 9, 2012, the court had also received a letter from the Receiver, who expressed frustration with Mosdos' failure to cooperate with his requests. See Zalantis Aff. Ex. N.

But on May 14, Nachum Brody, who resides at the Property and claims to qualify as a John Doe Defendant, filed a Notice of Removal in this Court, thereby causing the cancellation of the May 17 conference in state court. Notice of Removal ¶¶ 2-3. On May 18, by an Order to Show Cause, Plaintiffs sought an order remanding this case to state court and awarding them costs and actual expenses, including attorney fees.

DISCUSSION

Plaintiffs argue this Court lacks jurisdiction over this case and, therefore, removal was improper. See Pl.'s Mem. at 1. They also assert that because Mr. Brody was not a named defendant in the state court action and does not qualify as one of the John Doe Defendants, he could not remove the case.*fn1 See id. Finally, they contend that even if Mr. Brody had standing to remove the case and the Court had jurisdiction over the case, the removal was improper because he did not obtain the consent of all Defendants.

Removal Jurisdiction

Mr. Brody's Notice of Removal offers three bases for subject matter jurisdiction. First, it claims federal question jurisdiction on the ground that the Plaintiffs' complaint "states a potential claim for relief arising under the Supremacy Clause of the United States Constitution" because it relies on a federal bankruptcy court order. Def.'s Notice of Removal ΒΆΒΆ 5-6. Second, it claims that the state case is removable as ...


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