State of N.Y. Mtge. Agency v. 936-938 Cliffcrest Hous. Dev. Fund Corp.

State of N.Y. Mtge. Agency v 936-938 Cliffcrest Hous. Dev. Fund Corp. 2024 NY Slip Op 34560(U) December 23, 2024 Supreme Court, New York County Docket Number: Index No. 850011/2013 Judge: Debra A. James 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.

FILED: NEW YORK COUNTY CLERK 12/23/2024 04:41 PM INDEX NO. 850011/2013 NYSCEF DOC. NO. 1584 RECEIVED NYSCEF: 12/23/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. DEBRA A. JAMES PART 59 Justice ---------------------------------------------------------------------------------X INDEX NO. 850011/2013 STATE OF NEW YORK MORTGAGE AGENCY, MOTION DATE 11/22/2024 Plaintiff, MOTION SEQ. NO. 031 032 036 -v- 936-938 CLIFFCREST HOUSING DEVELOPMENT FUND CORPORATION, THE DEPARTMENT OF THE CITY OF NEW YORK, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK STATE DEPARTMENT DECISION + ORDER ON OF TAXATION AND FINANCE, NEW YORK CITY DEPARTMENT OF FINANCE, MOTION Defendants.

First party action dismissed by Order dated June 29, 2018 (Madden, J.) (NYSCEF Doc No 1108) ---------------------------------------------------------------------------------X

936-938 CLIFFCREST HOUSING DEVELOPMENT FUND Third-Party CORPORATION, Index No. 595322/2014 Plaintiff, -against- THE WAVECREST MANAGEMENT TEAM LTD., SHUHAB HOUSING DEVELOPMENT FUND CORPORATION, COMMUNITY CAPITAL BANK, LEE WARSHAVSKY, JOHN AND JANE DOES 11-20, and THE DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT OF THE CITY OF NEW YORK, Defendants. --------------------------------------------------------------------------------X The following e-filed documents, listed by NYSCEF document number (Motion 031) 1443, 1444, 1445, 1446, 1447, 1448, 1449, 1450, 1451, 1452, 1453, 1454, 1455, 1456, 1457, 1458, 1459, 1460, 1461, 1462, 1463, 1466, 1467, 1468, 1469, 1470, 1471, 1472, 1473, 1474, 1475, 1476, 1477, 1478, 1482, 1483, 1484, 1485, 1486, 1487, 1488, 1489, 1490, 1535, 1536, 1537, 1538, 1539, 1540, 1575 were read on this motion to/for DISCOVERY .

The following e-filed documents, listed by NYSCEF document number (Motion 032) 1491, 1492, 1493, 1494, 1495, 1496, 1497, 1498, 1499, 1500, 1501, 1502, 1530, 1531, 1532, 1533, 1534, 1545, 1546, 1548, 1552, 1556, 1557, 1558, 1559, 1560, 1576 were read on this motion to/for DISCOVERY .

850011/2013 938 ST. NICHOLAS AVENUE vs. 936-938 CLIFFCREST HOUSING Page 1 of 6 Motion No. 031 032 036

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The following e-filed documents, listed by NYSCEF document number (Motion 036) 1569, 1570, 1571, 1572, 1573, 1574, 1577, 1578, 1579, 1580 were read on this motion to/for CONSOLIDATE/JOIN FOR TRIAL .

ORDER Upon the foregoing documents, it is ORDERED that the motion of third party plaintiff, pursuant to CPLR § 602(b), brought by show cause order dated November 22, 2024, to consolidate the summary proceeding entitled Burroughs v Cliffcrest Housing Development Fund Co, LT 316385/2022 (NYC Civil Court, NY Co) with the herein action (motion sequence number 036) is dismissed, as moot, in light of the dismissal of such summary proceeding by order dated December 3, 2024 (LT 316385/2022 NYSCEF Doc No 71)1, and the interim stay therein is lifted and vacated; and it is further ORDERED that the motion brought by order to show cause dated January 1, 2024, pursuant to CPLR 3126, of third party defendant City of New York to compel discovery and for a protective order, and the cross motion of third party plaintiff to strike the pleadings of third party defendant City of New

FILED: NEW YORK COUNTY CLERK 12/23/2024 04:41 PM INDEX NO. 850011/2013 NYSCEF DOC. NO. 1584 RECEIVED NYSCEF: 12/23/2024

York for its failure to disclose (mot seq no 031) are denied; and it is further ORDERED that the motion of third party defendant City of New York to compel discovery (mot seq no 032) is denied; and it is further ORDERED that the note of issue and certificate of readiness shall be filed no later than January 24, 2025.

DECISION A brief procedural history of this action follows.

Nearly twelve years ago, the first party action, a foreclosure action brought by Peny & Co, as plaintiff, was commenced against 936-938 Cliffcrest Development Fund Corporation (hereinafter “Cliffcrest HDFC”), as defendant. Nine months later, defendant Cliffcrest HDFC served an answer with counterclaims and a third party complaint alleging, in connection with renovation financing of and construction work performed on the Mortgaged Premises, fraud, conspiracy to commit fraud, and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USC 1961, et seq., against third party defendants The Wavecrest Management Team LT, Shubab Housing Development Fund Corporation, Lee Warshavsky, and the City of New York (NYSCEF Doc No 80).

A receiver was appointed “to take charge and enter into possession of the Mortgaged Premises” by Order dated March 17, 850011/2013 938 ST. NICHOLAS AVENUE vs. 936-938 CLIFFCREST HOUSING Page 3 of 6 Motion No. 031 032 036

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2015. (NYSCEF Doc No 329). In April 2015, such Receiver entered into a Management Agreement with Finger Management Corp. (NYSCEF Doc No 335), and retained the law firm of Newman Ferrara LLP for legal services (NYSCEF Doc No 336).

By Order dated June 29, 2018 (NYSCEF Document No 113), after an evidentiary hearing, the court (Madden, JSC) dismissed the first party mortgage foreclosure action for plaintiff’s failure to establish compliance with the notice of foreclosure requirements of RPAPL § 1303(b).2 By Order dated July 3, 2019, the court approved the final accounting of the Receiver, which in light of four intermediate account, comprised total legal fees in excess of $150,000 paid to counsel Newman Ferrara and successor counsel Borah Goldstein, Altschuler, Nahins & Goidel, P.C.

In the remaining third party-action, on November 3, 2023, third party defendant City of New York amended its third party- answer to interpose counterclaims for, inter alia, foreclosure of its mortgage (NYSCEF Doc No 1395).

FILED: NEW YORK COUNTY CLERK 12/23/2024 04:41 PM INDEX NO. 850011/2013 NYSCEF DOC. NO. 1584 RECEIVED NYSCEF: 12/23/2024

By Stipulation dated January 18, 2023, third party plaintiff Cliffcrest HDFC discontinued, with prejudice, its third party action as against third party defendants The Wavecrest Management Team LT, Shubab Housing Development Fund Corporation and Lee Warshavsky (NYSCEF Doc No 1314). Such Stipulation was not so-ordered by this court as it was not signed by third party defendant City of New York as required pursuant to CPLR 3217(a)(2).

More than a dozen discovery conferences have been held over the course of this litigation, including several before the undersigned.3 Reviewing the docket, and given this court’s own supervision of discovery since having been assigned this case in April 2021, this court finds that the parties have had ample time to complete discovery over the twelve years since this action was commenced.4 In such vein, this court determines that counsel on each side, however well intentioned, have been extremely dilatory in carrying out their exchange of documents and taking of examinations before trial, despite multiple

FILED: NEW YORK COUNTY CLERK 12/23/2024 04:41 PM INDEX NO. 850011/2013 NYSCEF DOC. NO. 1584 RECEIVED NYSCEF: 12/23/2024 discovery conference orders directing them to do so, and their multiple motions to compel discovery, over the past decade.

Therefore, with respect to depositions and any other remaining paper discovery, the court holds that the parties have each waived any further rights to do so. See Butler v General Motors Corp, 37 AD2d 957 (1st Dept 1971). This case shall be placed on the trial calendar forthwith, upon e-filing of the Note of Issue and Certificate of Readiness, within the thirty days of entry of this order.

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12/23/2024 DATE DEBRA A. JAMES, J.S.C. CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION

□ □ GRANTED X DENIED GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

□ CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE

850011/2013 938 ST. NICHOLAS AVENUE vs. 936-938 CLIFFCREST HOUSING Page 6 of 6 Motion No. 031 032 036