FILED: KINGS COUNTY CLERK 06/13/2016 10:14 PM INDEX NO. 507535/2013 NYSCEF DOC. NO. 73 RECEIVED NYSCEF: 06/13/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS ----------------------------------------------------------------x DAVID AMRUSI, Index No. 507535/2013 Plaintiff, -against- SECOND CHOICE LLC, DAVID VAKNIN, DAVID BUCHNIK, THE BANK OF NEW YORK MELLON, NEW YORK STATE DEPARTMENT OF FINANCE, NEW YORK CITY PARKING VIOLATIONS BUREAU, And NEW YORK CITY ENVIRONMENTAL CONTROL, BOARD, and JOHN DOE #1 through JANE DOE #5, AFFIDAVIT IN REPLY Defendants ---------------------------------------------------------------x DAVID AMRUSI, being duly sworn, deposes and says: 1. I am the Plaintiff in the within action. I am fully aware of the underlying action, as well as the papers and proceedings heretofore had herein. I submit this Affidavit in Reply to the Opposition submitted by defendant, Second Choice LLC to my motion for summary judgment and related relief (the Motion ) and in Opposition to Defendant Second Choice LLC s Cross-Motion for summary judgment (the Opposition and Cross-Motion ). 2. I further submit this Affidavit to address the false and inconsistent statements made throughout the Opposition and Cross-Motion and specifically included in the Nwaukoni Affidavit sworn to on the 11th day of May 2016 (the Nwaukoni Affidavit ). 3. It is initially noted for the Court that defendant Second Choice has abandoned its affirmative defenses of improper service, statute of limitations, statute of frauds, unclean hands, and laches. 4. The only remaining affirmative defense, which also serves as the basis for the Cross- Motion, is Unclean Hands, Actual Knowledge Constructive Knowledge (the Catch All Affirmative 1 1 of 12
Defense ). See the Answer attached as Exhibit M to the Moving Affidavit of David Amrusi, sworn to on March 1, 2015 (the Amrusi Moving Affidavit ). 5. The sum and substance of the Catch-All Affirmative Defense, as set forth in the Opposition and Cross-Motion, is alleged by Second Choice under two theories of what possibly transpired at the closing on April 8, 2005. The first is that I was somehow under the belief, on the Closing Date, that Second Choice was to retain ownership of 25% of the Subject Property and the Mortgage was only to attach to the remaining 75% of the Subject Property. 6. The second theory is that on the Closing Date, I was aware of the Subdivision Agreement and the terms thereof, and therefore, the properly recorded Mortgage is subject to Second Choice s purported and unrecorded interest derived from the Subdivision Agreement. 7. Through conclusory statements and unsupported allegations, Second Choice is attempting to falsely impute knowledge to me in an effort to defeat my status as a bona fide mortgagee for value. The Opposition and Cross-Motion fail to identify any specific facts or details revealing how and when I acquired said knowledge. 8. As set forth below, Second Choice has submitted unsubstantiated false statements and incorrectly characterized my deposition testimony in an effort to raise an issue of fact sufficient to defeat the Motion for Summary Judgment for Foreclosure. 9. Additionally, after abandoning all but one of its affirmative defenses, and failing to provide any evidentiary support for its remaining claim, Second Choice claims that summary judgment should not be granted because discovery has not been obtained in this action. (See, Memorandum of Law in Opposition and in Support of Cross-Motion, Point 4.) 2 2 of 12
10. For the reasons set forth below, Second Choice s attempt to defeat the Motion for Summary Judgment based upon its meritless claims should not be awarded and the Motion for Summary Judgment should be granted in its entirety. I. SECOND CHOICE HAS FAILED TO SUBMIT EVIDENCE TO PROVE THAT THE MORTGAGE WRONGLY ATTACHED TO THE ENTIRE SUBJECT PROPERTY 11. As set forth in the Moving Memorandum of Law, the documentary evidence, including the deed from Second Choice to Vaknin and Buchnik (the Deed ) and corresponding notes clearly establish that the entire Subject Property was included in the sale from Second Choice to Vaknin and Buchnik. (See Plaintiff s Memorandum of Law in Support of Motion for Summary Judgment Against Defendant Second Choice LLC and Default Judgment Against all Non-Answering Defendants, dated March 3, 2016, Point I.D.1.) 12. Additionally, the corresponding notes indicate that the entire Subject Property was pledged as security for repayment of the mortgage loan. Further, there is no mention in any of the aforementioned documents of Second Choice retaining any interest in the Subject Property. Id. 13. Second Choice falsely alleges that I was aware that it was supposed to retain an ownership interest in 25% of the Subject Property and therefore I (or my predecessors-in-interest, Mendel and Kimmel), wrongly encumbered the entire Subject Property with the Mortgage. (See Nwaukoni Affidavit, 14 and 18-20.) 14. Additionally, paragraph 8 of the Nwaukoni Affidavit falsely states that I along with the Borrowers and other mortgagees were made aware that only 75% of interest of interest in the subject property is being transferred to Defendants Vaknin and Buchnik, with Second Choice retaining 25% of interest containing the restaurant, and two offices. (error in original) (See Nwaukoni Affidavit, 8.) 3 3 of 12
15. However, Second Choice fails to provide any details, whatsoever, of how I was made aware of the purported retention of 25% ownership interest or by whom. Additionally, Second Choice fails to explain how the other mortgagees, whose interest I acquired by assignment, were supposedly made aware of Second Choice s purported retention of 25% of the ownership interest. 16. Furthermore, Second Choice s disingenuous and unsupported account of the entire transaction, is evidenced by the contradiction between paragraph 8 of the Nwaukoni Affidavit (quoted supra 14) and paragraph 12 of the Nwaukoni Affidavit. 17. In paragraph 12 Ms. Nwaukoni states that [u]nder the terms of [the Subdivision Agreement], It [sic] was agreed that upon the completion of the subdivision, the lien of the first loan made to Kimmel and Mendel Group, as nominee shall be lifted/extinguished from lot 23, and lot 23 shall be transferred to Second Choice, L.L.C by bargain and sale with covenant against grantor s acts. See, Exhibit A [Subdivision Agreement]. Nwaukoni Affidavit, 12; compare Nwaukoni Affidavit, 8 with Nwaukoni Affidavit, 12. 18. Absent from Second Choice s recitation of the terms of the Subdivision Agreement is the last paragraph thereof that provides that [i]n the event of default under the said first Mortgage [the Mortgage], Second Choice, LLC will have the right of the first refusal to purchase the abovereferenced property. (Nwaukoni Affidavit, Subdivision Agreement, Exhibit A.) 19. Incredibly the very same Subdivision Agreement that Second Choice attempts to use to prove its claim that Lot 23 was not subject to the Mortgage clearly indicates that on April 8, 2005, Vaknin and Buchnik were the owners of the entire Subject Premises and, more importantly, that entire Subject Property secured the Mortgage. (Nwaukoni Affidavit, Subdivision Agreement, Exhibit A.) 4 4 of 12
20. Thus, there is absolutely no credible reason to accept Second Choice s argument that the entire Subject Property was not pledged as security for the Mortgage. 21. Despite the clear documentary evidence, indicating that the entire Subject Property was sold to Vaknin and Buchnik and pledged as security for the Mortgage, Second Choice alleges it was really supposed to retain 25% ownership of the Subject Property at the time of the closing, and the Mortgage lien was not intended to attach to its portion of the Subject Property. (Nwaukoni Affidavit 12.) More incredulously, Second Choice also wants this Court to believe that Plaintiff was somehow aware of this recently created interpretation of the loan transaction. 22. At the closing, it is my estimation that hundreds of pages of paper passed hands. I was not asked to review any documents other than the Mortgage I was involved in. I had no reason to review any of the other documents. The Subdivision Agreement was not presented to me and I never participated in any discussion regarding the ensuing subdivision. 23. Second Choice further infers that since that the Borrowers attorney drafted the Subdivision Agreement and Note C, that I must have been familiar with the Subdivision Agreement. I have absolutely no knowledge of what documents the Borrowers attorney drafted in relation to the closing on April 8, 2005, except Note C executed in my favor. For Second Choice to infer, at paragraph 13 of the Nwaukoni Affidavit, that since the same attorney (representing some other party) drafted both documents, that I somehow had knowledge of the contents of both, is both absurd and entirely false. 24. However, and notwithstanding my lack of knowledge at the closing, the Subdivision Agreement confirms that the entire Subject Property was transferred to the Borrowers and was consequently secured by the Mortgage. (Nwaukoni Affidavit, Exhibit, A.) 5 5 of 12
25. Through its manipulation and mischaracterization of facts, Second Choice is attempting to have this Court hold Plaintiff responsible for Vaknin and Buchnik s obligation to transfer Lot 23, unencumbered to Second Choice. (Nwaukoni Affidavit, 16.) However, there is no legal basis to do so and Second Choice does not have a valid claim against Plaintiff. 26. In a desperate attempt to defeat summary judgment, Second Choice further attempts to attack my character and question my credibility before this Court. 27. Second Choice alleges that during my non-party deposition in the Subdivision Action I did not deny that I had encumbered the Subject Premises illegally. (Nwaukoni Affidavit, 19.) Paragraph 19 of the Nwaukoni Affidavit is both false and misleading. In actuality, as can readily be learned from the transcript, during the deposition I was presented with a question that seemed to ask for a legal conclusion. I didn t understand the question and felt intimidated by the line of questioning. Therefore, I responded that I needed to speak with an attorney. (Nwaukoni Affidavit, Transcript, pages 39-30, Exhibit B.) 28. Contrary to Second Choice s allegations, my response in no way admitted that I engaged in any illegal or wrongful activity. 29. To further advance its theory that I knew, that Second Choice purportedly retained an ownership interest in the property Second Choice, once again, misconstrues my deposition testimony in paragraph 21 of the Nwaukoni Affidavit. Second Choice claims that I gave a loan to Ms. Nwaukoni in May 2007 based upon my belief, that she owned 25% of the Subject Property (the Nwaukoni Loan ). 1 1 It is noted for the Court that the loan referred to is the subject of a separate action commenced under Index no. 702518/2016. Ms. Nwaukoni is in default of her repayment obligations, which necessitated commencement of the aforementioned action. 6 6 of 12
misleading. 30. However, Second Choice s representation of the deposition transcript is entirely 31. Specifically, I testified as follows: A. The reason I give to Joyce Nwaukoni that loan, she was the owner of the - - what do you call them - - LLC, whatever that s what I know. She s there. Here name was - - she s the - - present me some paper that can show it. Her name, LLC name - - the same together on the same page. Q. On the same paper? A. Same paper. That s what she present me. That s the reason I gave her the loan. Q. When you say that she showed you a document showing that she was the - - she was part of the LLC, do you mean that she showed you a document indicating that she had an ownership interest in the restaurant? A. That s it, correct. Q. so it s the restaurant that - - it was her ownership in the restaurant - - A. Correct. (Nwaukoni Affidavit, Transcript p. 17, Exhibit B.) 32. Additionally, through misinterpretation of my deposition testimony, Second Choice attempts to create an issue of fact where none exists by questioning the disbursements of the loan proceeds of the Nwaukoni Loan. (Nwaukoni Affidavit 23.) 33. At my deposition in the Subdivision Action, I testified that a portion of the loan proceeds were disbursed to Vaknin and Buchnik, for back taxes owed on the Subject Property. As the lender I was asked to disburse the loan proceeds in accordance with Ms. Nwaukoni s instructions. At 7 7 of 12
her request a portion of the loan proceeds were paid to Vaknin and Buchnik, as landlord. (Nwaukoni Affidavit, Transcript p. 27-28, Exhibit B.) 34. The aforementioned loan disbursement to Vaknin and Buchnik further supports the only credible conclusion that at the time of the closing in April 2005 and at least through the closing of the Nwaukoni Loan, that Vaknin and Buchnik owned the entire Subject Property, including Lot 23, containing the restaurant belonging to Second Choice. 35. It is unclear to me what point Second Choice is trying to make by discussing the loan proceeds from the May 9, 2007 loan. However, what is clear, is that whatever transpired on May 9, 2007 cannot be used to impute knowledge to me two years earlier. The Mortgage was granted on April 8, 2005 and that is when the security interest attached. Whatever may or may not have transpired after that time is irrelevant to the grant of the Mortgage on the entire Subject Property in 2005. 36. All that is established by paragraphs 21-23 of the Nwaukoni Affidavit and my deposition transcript cited therein, is that in May, 2007 I believed that Ms. Nwaukoni was a member of Second Choice LLC, and as a result she had an ownership interest in the restaurant located on the Subject Property. (Nwaukoni Affidavit, Transcript page 17, Exhibit B.) The allegations therein do not lead to the conclusion that I was aware of anything in April 2005 that could serve to defeat the validity of the Mortgage. 37. At no point did I testify that I believed that Second Choice was retaining 25% ownership interest in the Subject Property as a result of the transaction in April 2005. 38. To further convince this Court of its unfounded theory that I was aware that Second Choice was to retain ownership of Lot 23, Second Choice fabricated the claim that Vaknin and 8 8 of 12
Buchnik and I are business partners. I affirmatively stated in my deposition that we were never business partners. (Nwaukoni Affidavit, Transcript p. 10, Exhibit B.) 39. Additionally, Second Choice s conspiracy theory that I was working with Vaknin and Buchnik in contradictory to its own position. If I conspired with them at the closing in 2005 to defraud Second Choice of their interest in the Subject Property, and was included in their decision to fail to subdivide the Subject Property, why would I believe in 2007 that Second Choice was then the owner Lot 23? 40. Moreover, Second Choice fails to provide any specific facts to support the purported comment from Vaknin and Buchnik that I am the boss. No details are provided such as the context of the statement, when it was said, by whom or to whom. (Nwaukoni Affidavit at 24.) 41. Second Choice doesn t even allege that I was present when this statement was made. Moreover, not only am I not the boss with regard to Vaknin and Buchnik but we maintain opposing interests as I am also seeking to foreclose their interest in the Subject Property. 42. Additionally, Second Choice has also failed to offer credible evidence to suggest Mendel and/or Kimmel had any knowledge of Second Choice s purported retention of Lot 23. Nwaukoni Affidavit at 15. 43. Vaknin and Buchnik s contractual obligations to Second Choice are theirs alone. Although Second Choice may not be satisfied with the outcome in the Subdivision Action, Vaknin and Buchnik s obligations do not transfer to me, and Second Choice has not established a credible reason to deny the Motion for Summary Judgment or grant Second Choice s Cross-Motion. II. PLAINTIFF WAS NOT AWARE OF THE SUBDIVISION AGREEMENT AT THE TIME OF THE CLOSING OF THE LOAN 9 9 of 12
44. Notwithstanding the clear documentary evidence, Second Choice repeatedly alleges in its Opposition and Cross-Motion that I was aware of the Subdivision Agreement in April 2005, and therefore the mortgage should not attach to Lot 23 subsequently transferred to Second Choice. 45. The Subdivision Agreement was entered into between Vaknin and Buchnik and Second Choice. I was not a party to that agreement, and at the time of the closing in April 2005 I was unaware of its existence. More importantly, the Subdivision Agreement does not create any obligation for me to subdivide the Subject Property or transfer Lot 23 unencumbered to Second Choice. (Nwaukoni Affidavit, Exhibit B.) 46. The Subdivision Agreement, although it purports to be an agreement related to the transfer of real property, was never recorded in the Kings County Clerk s Office. 47. The Mortgage, which is the subject of this foreclosure action was dated April 8, 2005 and recorded May 3, 2005. (Amrusi Moving Affidavit, Exhibit E.) I am informed that based upon the law in New York that any change in the ownership interest in the Subject Property that transpired after April 8, 2005 is subject to the recorded Mortgage. (See Reply Memorandum of Law submitted herewith.) 48. Although the Opposition repeatedly states that I was aware of the Subdivision Agreement Second Choice provides no direct evidence of my knowledge and merely states in conclusory terms that I knew of the agreement. 49. More importantly, even if I was aware of the Subdivision Agreement in April 2005, the terms of said agreement do not alter the terms of the Deed and corresponding notes all of which confirm that the closing in April 2005 served to transfer the entire Subject Property to Vaknin and Buchnik and that the Mortgage was secured by the entire Subject Property. 10 10 of 12
50. Based upon the foregoing, it is respectfully submitted that Defendant Second Choice has failed to establish that an issue of fact exists with regard to Plaintiff s knowledge of the Subdivision Agreement sufficient to defeat summary judgment. III. THE MOTION SHOULD NOT BE DENIED SIMPLY BECAUSE DISCOVERY HAS NOT BEEN COMPLETED 51. In Point 4 of Second Choice s Memorandum of Law, it asks this Court to deny the Motion for Summary Judgment because discovery is not complete. (Memorandum of Law in Opposition and in Support of its Cross-Motion, Point 4.) 52. Second Choice has not referred to any specific information it hopes to gain by conducting discovery. It merely claims that an issue of fact exists regarding Plaintiff s actual or constructive knowledge of Second Choice s prior lien. (Memorandum of Law in Opposition and in Support of Cross-Motion at page 14, Point 4.) However, as set forth above and in the accompanying Reply Memorandum of Law, my knowledge of the Subdivision Agreement is irrelevant to the outcome of this action. 53. Furthermore, Second Choice has not identified upon whom it seeks to serve discovery and what documents it needs to review. It is noted that this action has been pending since 2013 and Second Choice has yet to serve discovery demands upon Plaintiff or any non-party to this action. 54. It is submitted that no discovery is needed and despite Second Choice s contrary unsubstantiated conclusion, Plaintiff has properly set forth its prima facie entitlement to summary Judgment. 55. Based upon the foregoing, and as more fully set forth in the accompanying Reply Memorandum of Law, Second Choice has not offered evidence sufficient to defeat Plaintiff s Motion for Summary Judgment and Foreclosure. 11 11 of 12
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