PATMOS FIFTH REAL ESTATE INC. and Patmos Westbury, LLC, Plaintiffs,
MAZL BUILDING LLC, Raba Haim Abramov, NYA Building Construction Corp., Shimon Wolkowicki, and High Line Holdings, LLC, Defendants. No. 108421/11.
This decision has been referenced in a table in the New York Supplement.
Eduardo Fajardo, Esq., De Lotto & Fajardo LLP, New York, for plaintiff.
Michael J. Halberstam, Esq. Brooklyn, for Wolkowicki.
Steven J. Shore, Esq., Ganfer & Shore, LLP, New York, for all other defendants.
BARBARA JAFFE, J.
Defendants Mazl Building LLC (Mazl), Raba Haim Abramov, NYA Building Construction Corporation (N.Y.A), and High Line Holdings, LLC (High Line) move pursuant to CPLR 3013, 3016, and 3211(a)(1), (4), (5), and (7) for an order dismissing plaintiffs' claims against them. Defendant Shimon Wolkowicki joins. Plaintiffs oppose.
On June 21, 2006, plaintiff Patmos Fifth Real Estate Inc. (Patmos Fifth) purchased from defendant Mazl a multi-unit building located at 214-216 East 52nd Street in Manhattan with a $9,350,000 loan from Mazl secured by a mortgage on the building due to be paid by December 21, 2007 (June mortgage). (EFD 8-1, 8-2). (EFD 8-2).
On December 6, 2006, as Patmos Fifth failed to maintain insurance for or pay taxes on the building, it borrowed $1,000,000 from defendant NYA, secured by a second mortgage on the building (December mortgage). The December mortgage contains terms identical to those set forth in the June mortgage. (EFD 8-3).
On December 7, 2007, plaintiff Patmos Westbury, LLC (Patmos Westbury), an affiliate of Patmos Fifth, purchased a condominium unit in a building located at 15 East 69th Street in Manhattan with a $2,722,500 loan from Citimortgage, secured by a mortgage on the unit (Citi mortgage). (EFD 8, 8-4).
On January 21, 2008, as plaintiffs had defaulted on the June, December, and Citi mortgages, Mazl agreed to extend the time for payment of the June and December mortgages and lent plaintiffs an additional $5,650,000 secured by a mortgage on the building and the condo, due to be paid in full by December 21, 2008 (January mortgage). They also pledged as security their interest in a building at 70 Greene Street in Manhattan. (EFD 8, 8-5). The January mortgage contains terms identical to those set forth in the December and June mortgages. (EFD 8-5).
The same day, and as part of the same transaction, NYA assigned to Mazl the December mortgage, and plaintiffs and Mazl agreed to consolidate the June, December, and January mortgages into a single $16,000,000 mortgage, due to be paid in full by December 31, 2008, and containing terms identical to those sets forth in the December, June, and January mortgages (consolidated mortgage). (EFD 8, 8-6, 8-7).
On September 30, 2008, Wolkowicki lent Patmos Westbury $750,000 in exchange for a mortgage on the condo, with the first payment due on October 30, 2008 (condo mortgage). (EFD 8, 8-8).
Plaintiffs defaulted on the consolidated mortgage, and on February 27, 2009, they executed with Mazl an agreement providing, in pertinent part, that:
WHEREAS, the lender has agreed to an extension of time to repay the [consolidated] mortgage in accordance with the terms and provisions set forth herein;
NOW THEREFORE, it is hereby agreed as follows:
3. Entire Agreement .... This agreement may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement executed by the parties hereto.
4. Maturity Date. Lender agrees to extend the maturity date of the [consolidated] mortgage until October 1, 2009 and further agrees to advance an additional sum of $250,000.00 to be secured by a lien of said mortgage and to be used by borrower to complete the construction of the improvements on the premises. Borrower agrees to pay any additional sums needed to complete the improvements to the point at which it would be possible to obtain a temporary certificate of occupancy ... and to commence sales of individual condominium units....
5. Payment due by October 1, 2009. If the borrower has not completely repaid the loan on or before October 1, 2009 ..., the borrower will have the ability to pay the sum of $2,500,000.00 and lender will grant an additional 9 month extension until June 30, 2010 to repay the loan.
9. Delivery of Deed. Simultaneous with the execution of this agreement, borrower shall deliver an executed deed to the premises to lender conveying the premises to Shimon Wolkowicki, as to 62.5% interest and Mazl ... as to a 37.5% interest. Said deed shall be delivered to lenders counsel [ ] to be held in escrow by [him] and not to be released for filing unless and until borrower shall fail to make any of the payments required hereunder on October 1, 2009 or June 30, 2010.
11. Monthly Interest Payments. Commencing on October 1, 2009, borrower agrees to begin to make monthly interest payments on the then outstanding ...