X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

OPINION & ORDER Plaintiffs Leeber Realty LLC (“Leeber”) and Bernard Cohen (“Cohen” and collectively, “Plaintiffs”) brought this Action against Trustco Bank (“Trustco” or “Defendant”), alleging that Defendant breached a commercial lease contract. (Am. Compl. (Dkt. No. 39).) Defendant counterclaimed that Plaintiffs breached the contract by failing to make necessary repairs and that Defendant was constructively evicted. (Am. Answer to Am. Compl. with Counterclaims (“Am. Answer”) 4-7 (Dkt. No. 42).) On June 4, 2018, Plaintiffs’ Motion for Summary Judgment, fees and costs, and dismissal of the counterclaims was granted in part and denied in part, and Defendant’s counterclaims were dismissed. (See Op. & Order on Pls.’ Mot. for Summ. J. (“Summary Judgment Opinion”) (Dkt. No. 75).) Before the Court is Defendant’s Motion To Vacate the Summary Judgment Opinion Pursuant to Rule 60(b), and to dismiss for lack of subject matter jurisdiction (the “Motion”). (Def.’s Not. of Mot. To Vacate (“Def.’s Mot.”) (Dkt. No. 92).) For the reasons discussed below, Defendant’s Motion is denied.I. BackgroundA. Factual BackgroundThe following facts are taken from Defendant’s Memorandum of Law in Support of its Motion and supporting declarations, (Def.’s Mem. of Law in Supp. of Mot. To Vacate (“Def.’s Mem.”) (Dkt. No. 95); Def.’s Decl. in Supp. of Mot. To Vacate (“Def.’s Decl.”) (Dkt. No. 93); Aff. of Joseph A. Maria in Supp. of Mot. To Vacate (“Maria Aff.”) (Dkt No. 94)), Plaintiffs’ Opposition and supporting declaration, (Pls.’ Mem. of Law in Opp’n to Mot. To Vacate (“Pls.’ Mem.”) (Dkt. No. 96); Pls.’ Decl. in Opp’n to Mot. To Vacate (“Pls.’ Decl.”) (Dkt. No. 97)), Defendant’s Reply and supporting declaration, (Def.’s Reply Mem. of Law in Further Supp. of Mot. To Vacate (“Def.’s Reply”) (Dkt. No. 99); Def.’s Reply Decl. in Supp. of Mot. To Vacate (“Def.’s Reply Decl.”) (Dkt. No. 98)), Plaintiffs’ Sur-Reply and supporting declaration, (Pls.’ Sur-Reply in Opp’n to Mot. To Vacate (“Pls.’ Sur-Reply”) (Dkt. No. 102); Pls.’ Sur-Reply Decl. in Opp’n to Mot. To Vacate (“Pls.’ Sur-Reply Decl.”) (Dkt. No. 103)), and Defendant’s Response, (Def.’s Resp. in Supp. of Mot. To Vacate (“Def.’s Resp.”) (Dkt. No. 106)). The Court assumes familiarity with the facts underlying the Court’s June 4, 2018 Summary Judgment Opinion. (See Summary Judgment Opinion 7-15.)On or about December 5, 2005, Plaintiffs granted a mortgage of $550,000 (the “Mortgage”) on real property known as 21 Route 59, Nyack, New York 10960 (the “Property”) to Flushing Bank (“Flushing Bank”), which is not a party in this Action. (See Def.’s Mem. 1.) Section 1.15 of the Mortgage Agreement stated:The Rents of the Mortgaged Property are hereby transferred and assigned to the Mortgagee, and the Mortgagee shall have the right to enter upon the Mortgaged Property for the purpose of collecting the same and to let and operate the Mortgaged Property or any part thereof and to apply the Rents, either in whole or in part, as the Mortgagee elects, to the payment of all charges and expenses of the Mortgaged Property or in reduction of any part of the Debt or other sums due under the Note or this Mortgage. This assignment and grant shall continue in effect until the Debt and all other obligations secured by this Mortgage are paid in full. The Mortgagee hereby waives the right to enter upon the Mortgaged property for the purpose of collecting the Rents and the Mortgagor shall have a license to collect and receive the Rents until an Event of Default hereunder, but such license of the Mortgagor may be revoked by the Mortgagee upon any such Event of Default. From and after the occurrence of an Event of Default hereunder all Rents collected or received by Mortgagor shall be accepted and held for Mortgagee in trust and shall not be commingled with the funds and property of Mortgagor, but shall be promptly paid over to Mortgagee. The Mortgagee may apply all Rents or any part thereof so received hereunder, after the payment of all of its expenses including costs and attorneys’ fees, to the Debt in such manner as it elects or at its option the entire amount or any part thereof so received may be released to the Mortgagor.(Def.’s Decl. Ex. C (“Mortgage Agreement”) §1.15.) On June 6, 2012, Leeber transferred the Property to the Bernard Cohen Revocable Trust (the “Trust”), (see Pls.’ Sur-Reply Decl. 5; Pls.’ Sur-Reply Decl. Ex. 8 (“Deed”)), and on July 23, 2012, the Trust assigned the lease between Leeber and Trustco back to Leeber, (see Pls.’ Sur-Reply Decl. 5; Pls.’ Sur-Reply Decl. Ex. 9 (“Assignment of Lease”)).On March 28, 2017, Plaintiffs received a letter from Defendant, a tenant of the Property, stating that, due to “hazardous environmental conditions,” it planned to terminate its lease as of March 31, 2017 and claim constructive eviction. (See Summary Judgment Opinion 13.) From April 1, 2017, Defendant paid no further rent on its lease, and Leeber was thus unable to pay its Mortgage. (See Pls.’ Mem. 5.) On April 21, 2017, Leeber initiated the instant Action to recover damages from Defendant for breach of the lease. (See Compl. (Dkt. No. 1).) On July 13, 2017, Flushing Bank commenced a foreclosure action in New York Supreme Court, Rockland County against Plaintiffs, captioned Flushing Bank v. Leeber Realty LLC et al., Index No. 033167/2017 (the “Foreclosure Action”). (See Pls.’ Mem. 5; Pls.’ Decl. 5; Pls.’ Decl. Ex. 2 (“Foreclosure Action Docket”).) In an email on August 28, 2017, Flushing Bank informed Plaintiffs that it was aware of this Action against Defendant, (see Pls.’ Decl. 5; Pls.’ Decl. Ex. 1 (“Aug. 28, 2017 Email”), and on September 8, 2017, Defendant’s counsel asked Cohen in his deposition about the Foreclosure Action commenced by Flushing Bank, (see Pls.’ Decl. Ex. 5 (“Cohen Dep. Excerpt”)).On November 5, 2017, Flushing Bank applied for the appointment of a receiver (the “Receiver”) in the Foreclosure Action, which was granted on March 26, 2018. (See Def.’s Mem. 2; Def.’s Decl. Ex. E (“Order Appointing Receiver”); Maria Aff.) On June 1, 2018, this Court granted summary judgment in favor of Plaintiffs on Defendant’s claim of constructive eviction, finding that Defendant failed to provide notice of the alleged hazardous condition. (See Summary Judgment Opinion 31-33.) Defendant did not raise any arguments based on the Foreclosure Action or the Receiver in its summary judgment papers.On June 21, 2018, Defendant substituted its counsel in this Action. (See Consent Order Granting Substitution of Attorney (“Substitution”) (Dkt. No. 82).) On July 17, 2018, the Receiver filed his oath and bond with the state court, (see Pls.’ Decl. Exs. 3 (“Oath of Receiver”), 4 (“Bond of Receiver”)), and on the same day Leeber filed for Chapter 11 bankruptcy protection, (see Pls.’ Decl. Ex. 6 (“Bankruptcy Petition”)). On July 18, 2018, the Receiver filed an affidavit in connection with Defendant’s Motion To Vacate asserting that he is the true party in interest and the only entity entitled to collect rents on the Property. (See Maria Aff.

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now
Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now
Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now
November 27, 2024
London

Celebrating achievement, excellence, and innovation in the legal profession in the UK.


Learn More
December 02, 2024 - December 03, 2024
Scottsdale, AZ

Join the industry's top owners, investors, developers, brokers and financiers for the real estate healthcare event of the year!


Learn More
December 11, 2024
Las Vegas, NV

This event shines a spotlight on how individuals and firms are changing the investment advisory industry where it matters most.


Learn More

Role TitleAssociate General Counsel, Global EmploymentGrade F13Reporting ToSenior Legal Counsel, Global EmploymentProgram/Tool/ Department/U...


Apply Now ›

Ryan & Conlon, LLP, is a boutique firm specializing in insurance defense. We are a small eclectic practice with a busy and fast paced en...


Apply Now ›

INTELLECTUAL PROPERTY PROSECUTION PARALEGAL - NEW JERSEY OR NEW YORK OFFICESProminent mid-Atlantic law firm with multiple regional office lo...


Apply Now ›