MLCFC 2007-9 ACR Master SPE, LLC v. Camp Waubeeka, LLC , 999 N.Y.S.2d 202 ( 2014 )

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: December 11, 2014 518504
518713
________________________________
MLCFC 2007-9 ACR MASTER SPE,
LLC,
Appellant,
v
CAMP WAUBEEKA, LLC,
Defendant
and Third-
Party
Plaintiff-
Respondent,
and
ROBERT C. MORGAN et al., MEMORANDUM AND ORDER
Respondents,
et al.,
Defendants;
LNR PARTNERS, LLC,
Third-
Party
Defendant-
Appellant.
(Action No. 1.)
__________________________________
MLCFC 2007-9 ACR MASTER SPE,
LLC,
Appellant,
v
AMERICAN CAMPING RESORT, LLC,
Defendant
and Third-
Party
Plaintiff-
Respondent,
and
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ROBERT C. MORGAN et al.,
Respondents,
et al.,
Defendant;
LNR PARTNERS, LLC,
Third-
Party
Defendant-
Appellant.
(Action No. 2.)
________________________________
Calendar Date: October 6, 2014
Before: Lahtinen, J.P., McCarthy, Egan Jr., Devine and
Clark, JJ.
__________
Herrick, Feinstein LLP, New York City (Scott T. Tross of
counsel), for appellant and third-party defendant-appellant.
Cole, Schotz, Meisel, Forman & Leonard, P.A., New York City
(Joseph Barbiere of counsel), for defendants and third-party
plaintiffs-respondents and respondents.
__________
Egan Jr., J.
Appeals (1) from an order of the Supreme Court (Mott, J.),
entered January 17, 2014 in Columbia County, which, in action No.
1, denied motions by plaintiff and third-party defendant for,
among other things, summary judgment, and (2) from an order of
said court (Ferradino, J.), entered February 6, 2014 in Saratoga
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County, which, in action No. 2, denied motions by plaintiff and
third-party defendant for, among other things, summary judgment.
In 2007, Countrywide Commercial Real Estate Finance, Inc.
entered into a $38 million loan agreement with, among others,
defendant Camp Waubeeka, LLC, defendant American Camping Resort,
LLC, Echo Farms RV Resort, LLC and certain of the entities
affiliated therewith. The loan was secured by a series of
mortgages upon properties located throughout the United States,
including – insofar as is relevant here – a mortgage in the
amount of $9.5 million encumbering a recreational vehicle
(hereinafter RV) park owned by Camp Waubeeka, LLC in the Town of
Moreau, Saratoga County and a mortgage in the amount of $8.45
million encumbering a RV park owned by American Camping Resort,
LLC in the Town of Copake, Columbia County. Through a series of
allonges and assignments, the relevant loan documents were
transferred to various entities before purportedly being assigned
to plaintiff in 2013.
Following an alleged default, plaintiff commenced these
mortgage foreclosure actions against, among others, Camp
Waubeeka, LLC (action No. 1) and American Camping Resort, LLC
(action No. 2) (hereinafter collectively referred to as
defendants). In conjunction therewith, plaintiff also commenced
a foreclosure action against Echo Farms RV Resort, LLC, which
owned a RV park located in New Jersey. Each defendant answered
in each action, asserting various affirmative defenses and
counterclaims, and each commenced a third-party action against
LNR Partners, LLC, a special servicer of the subject loan. In
May 2013, plaintiff and third-party defendant moved for, among
other things, summary judgment in action No. 2 and, in June 2013,
sought similar relief in the context of action No. 1. By order
dated July 23, 2013, Supreme Court (Mott, J.) denied the motion
in action No. 1, finding that questions of fact existed as to
whether plaintiff actually owned the underlying loan and, hence,
had standing to maintain the foreclosure action. Shortly
thereafter, Supreme Court (Ferradino, J.) reached a similar
conclusion in action No. 2 and denied the requested relief.
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In the interim, plaintiff moved for the appointment of a
receiver in the Echo Farms' litigation in New Jersey. By order
entered April 11, 2013, the Superior Court of New Jersey granted
plaintiff's application; in so doing, the court concluded that
there had been no break in the chain of assignment of the subject
note and mortgage and, therefore, plaintiff had standing to
maintain the underlying foreclosure action. The New Jersey
court's April 2013 order and related findings (as set forth in
the underlying bench decision) were expressly incorporated by
reference in its June 2013 bench decision awarding plaintiff
summary judgment in that action, which was reduced to an order
and entered on June 27, 2013.
After a final judgment of foreclosure in the New Jersey
action was rendered in November 2013, plaintiff and third-party
defendant again moved for summary judgment in action Nos. 1 and
2, contending that the New Jersey court's rulings should be
accorded preclusive effect here. By order entered January 17,
2014, Supreme Court (Mott, J.) denied the motion in action No. 1
finding, among other things, that neither the New Jersey court's
April 2013 order nor its June 2013 decision and resulting order
constituted newly discovered evidence for purposes of permitting
a successive motion for summary judgment.1 Thereafter, by order
entered February 6, 2014, Supreme Court (Ferradino, J.) denied
the motion in action No. 2 for similar reasons.2 These appeals
by plaintiff and third-party defendant ensued.
We affirm. "Generally, successive motions for summary
judgment should not be entertained, absent a showing of newly
1
Alternatively, Supreme Court (Mott, J.) found that
plaintiff failed to establish that the relevant parties in the
New Jersey action were in privity with the relevant parties in
action No. 1 and, therefore, plaintiff was not entitled to
summary judgment based upon res judicata/collateral estoppel.
2
Although briefed by the parties, Supreme Court
(Ferradino, J.) did not address the merits of the underlying
motion, including whether privity had been established.
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discovered evidence or other sufficient cause" (Tingling v
C.I.N.H.R., Inc., 120 AD3d 570, 570 [2014] [citations omitted];
accord Vinar v Litman, 110 AD3d 867, 868 [2013]; see Keating v
Town of Burke, 105 AD3d 1127, 1128 [2013]). In this regard,
"evidence is not 'newly discovered' simply because it was not
submitted on the previous motion. Rather, the evidence that was
not submitted in support of the previous summary judgment motion
must be used to establish facts that were not available to the
party at the time it made its initial motion for summary judgment
and which could not have been established through alternative
evidentiary means" (Vinar v Litman, 110 AD3d at 868-869
[citations omitted]). Hence, if the facts or arguments now
advanced could have been submitted in support of the original
motion for summary judgment, the successive motion should not be
permitted (see id. at 869).
We agree that the New Jersey court's various rulings do not
constitute newly discovered evidence. The New Jersey court's
April 2013 order resolving plaintiff's ownership of the loan and
its standing to maintain the foreclosure action was entered two
months before plaintiff and third-party defendant originally
moved for summary judgment in action No. 1 and one month before a
similar motion was made in action No. 2. Further, the record
reflects that counsel for plaintiff and third-party defendant
expressly apprised Supreme Court (Mott, J.) via a reply affidavit
of the New Jersey court's award of summary judgment to plaintiff
in June 2013, provided Supreme Court with a copy of the resulting
order and argued that Supreme Court "should follow" the New
Jersey court's decision. Accordingly, plaintiff and third-party
defendant had ample opportunity to tender – and, in action No. 1,
did in fact provide – the New Jersey court's prior rulings and to
argue that Supreme Court should reach the same substantive
conclusions here. Under these circumstances, and absent any
other indication of sufficient cause for advancing the successive
motions for summary judgment, plaintiff and third-party
defendant's applications were properly denied (see Keating v Town
of Burke, 105 AD3d at 1128; Pavlovich v Zimmet, 50 AD3d 1364,
1365 [2008]; see also Capuano v Platzner Intl. Group, 5 AD3d 620,
621 [2004]). Plaintiff and third-party defendant's argument that
they could not bring the instant motions until after the final
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judgment of foreclosure was rendered in the New Jersey action in
November 2013 misses the mark, as plaintiff and third-party
defendant were well aware of the New Jersey court's April 2013
and June 2013 rulings long before that date. Indeed, it was the
New Jersey court's April 2013 bench decision, upon which the
April 2013 and June 2013 orders were based, that contained the
substantive analysis and resolution of the very standing and
assignment issues upon which plaintiff and third-party defendant
now seek to invoke the principles of res judicata/collateral
estoppel.
Moreover, even assuming that the successive motions for
summary judgment should have been permitted, we nonetheless
conclude that such motions were properly denied. "[R]es
judicata, or claim preclusion, bars successive litigation based
upon the same transaction or series of connected transactions if:
(i) there is a judgment on the merits rendered by a court of
competent jurisdiction, and (ii) the party against whom the
doctrine is invoked was a party to the previous action [or
proceeding], or in privity with a party who was" (Matter of
Starla D. v Jeremy E., 121 AD3d 1221, 1223 [2014] [internal
quotation marks and citations omitted]; see Valenti v Clocktower
Plaza Props., Ltd., 118 AD3d 776, 778 [2014]). Similarly,
collateral estoppel, or issue preclusion, "precludes a party from
relitigating in a subsequent action or proceeding an issue raised
in a prior action or proceeding and decided against that party or
those in privity" (Weston v Cornell Univ., 116 AD3d 1128, 1129
[2014] [internal quotation marks and citation omitted]; see State
of New York v Zurich Am. Ins. Co., 106 AD3d 1222, 1223 [2013]).
"In addressing privity, courts must carefully analyze whether the
party sought to be bound and the party against whom the litigated
issue was decided have a relationship that would justify
preclusion, and whether preclusion, with its severe consequences,
would be fair under the particular circumstances. Doubts should
be resolved against imposing preclusion to ensure that the party
to be bound can be considered to have had a full and fair
opportunity to litigate" (Buechel v Bain, 97 NY2d 295, 304-305
[2001], cert denied 535 U.S. 1096 [2002]; see State of New York v
Zurich Am. Ins. Co., 106 AD3d at 1223).
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Here, the record reflects that defendants and Echo Farms RV
Resort, LLC each are owned by a number of limited partnerships
and/or limited liability companies that, in turn, are owned by
certain partnerships, individuals or family members related
thereto. While it appears that defendants and Echo Farms indeed
may share some common ownership, neither the affidavit tendered
by third-party defendant's asset manager on this point nor the
documentary evidence appended thereto is sufficient to establish
the privity required to invoke the principles of res judicata or
collateral estoppel – particularly given the complex nature of
the underlying transactions. As plaintiff and third-party
defendant failed to tender sufficient admissible proof to satisfy
the element of privity as a matter of law, their motions for
summary judgment were properly denied.
Lahtinen, J.P., McCarthy, Devine and Clark, JJ., concur.
ORDERED that the orders are affirmed, with costs.
ENTER:
Robert D. Mayberger
Clerk of the Court