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Adam Leitman Bailey, P.C. Wins Post Foreclosure Writ of Assistance; Defeats Prior Owner’s Motion to Vacate Default

Representing the buyer of a commercial property after a foreclosure sale in Suffolk County, New York, Adam Leitman Bailey, P.C. won a motion for a writ of assistance under New York Real Property Law § 221 to evict the prior owner church and to put the firm’s client into possession of the property. Simultaneously, partnering with the foreclosing bank’s counsel, the firm opposed and defeated the prior owner’s motion to vacate its default in the underlying foreclosure action.

In September 2018, after the borrower filed for bankruptcy instead of answering the complaint, and after the bankruptcy stay was lifted, the Supreme Court granted the foreclosing bank’s motion to confirm the referee’s report and for judgment of foreclosure and sale. After two additional bankruptcy filings, the property was sold at a foreclosure sale in November 2019.

The buyer turned to Adam Leitman Bailey, P.C. to evict the prior owner who remained in possession. The firm exhibited the certified deed to the prior owner and demanded possession of the premises, which was refused. It then moved by order to show cause for a writ of assistance to evict the prior owner. In support of the motion, the firm argued that all prerequisites for a post foreclosure writ of assistance were met, namely: (i) the judgment of foreclosure and sale directed that the purchaser be let into possession; (ii) prior to making application for the writ, the deed was exhibited to the person in possession and demand was made for possession; and (iii) the person in possession refused to give over possession.

While the motion was pending, the buyer sold the property to a third-party new owner, which also retained Adam Leitman Bailey, P.C. to represent it in the post-foreclosure proceeding. The firm then moved on behalf of the new owner to substitute it into the proceeding and again for the issuance of a writ of assistance directing a sheriff to place it into possession of the premises.

The borrower then moved to vacate its default in the foreclosure action—its fourth attempt to undo its default after the court declined to sign three previous orders to show cause for the same relief.

The firm investigated the underlying foreclosure file, partnered with the underlying bank’s foreclosure counsel, and aggressively opposed the motion. In opposition, the firm argued that (i) a motion to vacate a default under CPLR 5015 (a) must be made by order to show cause, not by notice of motion; (ii) the motion was untimely having been made more than one year after entry of default judgment; (iii) the identical requested relief had already been denied three times; (iv) the borrower had not offered a reasonable excuse for its default (supported by case law that a litigation strategy (in this case to file bankruptcy instead of answering the complaint) cannot be a reasonable excuse; and (v) when a defendant fails to demonstrate a reasonable excuse for its default, the court need not determine whether a meritorious defense exists.

The firm also cross-moved for sanctions, arguing that the motion to vacate the default (i) was completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (ii) was undertaken primarily to delay and prolong the resolution of the litigation or to harass the firm’s client; and (iii) asserted material factual statements that were false (based on the prior owner’s misrepresentations of the facts surrounding its first three failed applications seeking the same relief).

Finally, relying on case law prohibiting vexatious motions and litigation, Adam Leitman Bailey, P.C. asked the court to enjoin the prior owner from making any more motions without leave of court.

The Supreme Court granted the firm’s application for a writ of assistance pursuant to New York Real Property Law § 221 and denied the prior owner’s motion. While the court did not grant the firm’s cross-motion for sanctions, the court admonished the prior owner, warning it that “any further or continued filings which raise arguments that appear to be completely without merit in law and cannot be supported by a reasonable argument for an extension, modification, or reversal of existing law . . . may be deemed frivolous and subject to a sanctions hearing. Defendant . . . is directed to act accordingly.”

Vladimir Mironenko, partner in Adam Leitman Bailey, P.C.’s landlord-tenant and real estate litigation departments represented the owner.

Published Decision

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