Motion for Child Support in Flushing Bank, Successor By Merger To Empire National Bank v. 1198 Decatur, Llc, New York State Department Of Taxation And Finance, New York City Department Of Finance, Frimy Goldberger, New York City Housing Authority, New York City Environmental Control Board, Karthik Muralidharan, Dianel Zarate, Josephine Rappa| Trellis.Law

On August 04, 2021 a Motion-Secondary was filed involving a dispute between Flushing Bank, Successor By Merger To Empire National Bank, and 1198 Decatur, Llc, Dianel Zarate, Frimy Goldberger, John Doe No. I To John Doe No. Xxx, Inclusive, The Last Thirty Names Being Fictitious And Unknown To Plaintiff, The Persons Or Parties Intended Being The Tenants, Occupants, Persons Or Corporations, If Any, Having Or Claiming An Interest In Or Lien Upon The Premises Described In The Complaint,, Josephine Rappa, Karthik Muralidharan, New York City Department Of Finance, New York City Environmental Control Board, New York City Housing Authority, New York State Department Of Taxation And Finance, for Real Property - Mortgage Foreclosure - Commercial in the District Court of Kings County.

Preview
FILED: KINGS COUNTY CLERK 04/07/2023 09:11 AM INDEX NO. 519496/2021
NYSCEF DOC. NO. 116 RECEIVED NYSCEF: 04/07/2023

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
---------------------------------------------------------------------------X
FLUSHING BANK, SUCCESSOR BY MERGER TO
EMPIRE NATIONAL BANK,

Plaintiff,

-against- Index No. 519496/2021

1198 DECATUR, LLC;
NEW YORK DEPARTMENT OF TAXATION AND
FINANCE;
NEW YORK CITY DEPARTMENT OF FINANCE;
FRIMY GOLDBERGER;
NEW YORK CITY HOUSING AUTHORITY;
NEW YORK CITY ENVIRONMENTAL CONTROL BOARD;
KARTHIK MURALIDHARAN; DIANEL ZARATE; AND
JOSEPHINE RAPPA;
Defendants.
---------------------------------------------------------------------------X

MEMORANDUM OF LAW OF DEFENDANTS
1198 DECATUR LLC AND FRIMY GOLDBERGER
IN OPPOSITION TO PLAINTIFF’S MOTION
TO CONFIRM THE REFEREE’S REPORT AND FOR
A JUDGMENT OF FORECLOSURE AND SALE
AND IN SUPPORT OF DEFENDANTS’ CROSS-MOTION

ROSENBERG FORTUNA & LAITMAN, LLP
Attorneys for Defendants
1198 Decatur LLC and Frimy Goldberger
666 Old Country Road, Suite 810
Garden City, New York 11530
(516) 228-6666

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TABLE OF CONTENTS

Page

PRELIMINARY STATEMENT……………………………………………………………….….1

STATEMENT OF FACTS………………………………………………………………………...2

POINT I

PLAINTIFF FAILS TO SUPPORT ITS MOTION
WITH EVIDENCE IN ADMISSIBLE FORM
AND, HENCE, THE REFEREE’S REPORT
IS NOT SUBSTANTIALLY
SUPPORTED BY THE RECORD………………………………………………………..2
.
A. Plaintiff Fails To Lay A Foundation For
Its Purported “Business Records”…………………………………………….……2

B. Plaintiff Fails To Lay An Evidentiary Foundation
For The Admissibility Of The Records Of Its
Alleged Predecessor, Empire National Bank……………………………………...5

POINT II

SINCE PLAINTIFF FAILED TO SUBMIT
EVIDENCE IN ADMISSIBLE FORM OF THE
AMOUNT OF ITS DAMAGES, THE COURT
SHALL DIRECT ENTRY OF A
JUDGMENT OF FORECLOSURE IN FAVOR OF
PLAINTIFF FOR THE NOMINAL SUM OF $1.00…………………………..…………7

CONCLUSION…………………………………………………………………………………..12

APPENDIX………………………………………………………………………………………13

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TABLE OF AUTHORITIES

Case Page(s)

Bank of New York Mellon v Gordon,
171 AD3d 197 [2d Dept 2019] ............................................................................................... 4, 5, 6
Berley Industries, Inc. v City of New York,
45 NY2d 683 [1978] ................................................................................................................... 7
Christiana Trust v Barua,
184 AD3d 140 [2d Dept 2020] ................................................................................................... 7
Citimortgage, Inc. v Kidd,
148 AD3d 767 [2d Dept 2017] ................................................................................................... 2
Corsi v Town of Bedford,
58 AD3d 225 [2d Dept 2008] ..................................................................................................... 4
Estate of Rothko,
84 Misc2d 830 [Sur Ct New York County 1975] ..................................................................... 10
Freund v Washington Square Press, Inc.,
34 NY2d 379 [1974] ............................................................................................................... 7, 8
Galiber v Previte,
40 NY2d 882 [1976] ................................................................................................................... 9
HSBC Bank USA, NA v Delgado,
211 AD3d 920 [2d Dept 2022] ............................................................................................... 2, 5
JNG Constr., Ltd v Roussopoulos,
170 AD3d 1136 [2d Dept 2019] ............................................................................................... 11
Johnson v Lutz,
253 NY, 124 [1930] .................................................................................................................... 4
Judge v Neponsit Property Owners’ Ass’n,
209 AD 905 [2d Dept 1924] ....................................................................................................... 9
Kronos, Inc. v AVX Corp.,
81 NY2d 90 [1993] ..................................................................................................................... 7
Lewin v Levine,
146 AD3d 768 [2d Dept 2017] ................................................................................................... 7
Magu Realty Company v Spartan Concrete Corp.,
239 AD2d 469 [2d Dept 1997] ................................................................................................... 7
Matter of Leon RR,
48 NY2d 117 [1979] ................................................................................................................... 4
Murray v Donlan,
77 AD2d 337, 433 NYS2d 184 ................................................................................................... 4
Nationstar Mtge., LLC v Durane-Bolivard,
175 AD3d 1308 [2d Dept 2019] ............................................................................................. 5, 6
Oparaji v 245-02 Merrick Blvd, LLC,
149 AD3d 1092 [2d Dept 2017] ................................................................................................. 9
PennyMac Corp. v Pryce,
211 AD3d 1029 [2d Dept 2022] ............................................................................................. 2, 5
People v Patterson,
28 NY3d 544 [2016] ................................................................................................................... 4

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Perry v Kone, Inc.,
147 AD3d 1091 [2d Dept 2016] ................................................................................................. 9
Rocco v Ahmed,
146 AD3d 836 [2d Dept 2017] ................................................................................................... 9
Ross v Sherman,
95 AD3d 1100 [2d Dept 2012] ................................................................................................... 7
Smith v Rudolph,
151 AD3d 58 [1st Dept 2017]..................................................................................................... 9
Structural Concrete Corp. v Campbell Assoc. Corp.,
224 AD 2d 516 [2d Dept 1996] ................................................................................................ 10
Trimarco v Data Treasury Corp.,
146 AD3d 1008 [2d Dept 2017] ............................................................................................... 10
Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co.,
114 AD3d 33 [2d Dept 2013] affd 25 NY3d 498 [2015]............................................................ 4
Wells Fargo Bank, NA v Gonsalves,
44 Misc3d 531 [Sup Ct Westchester County 2014].................................................................. 11

Rules

CPLR 3101(d)(1)(i) ........................................................................................................................ 9
CPLR 4320...................................................................................................................................... 8
CPLR 4320(a) ................................................................................................................................. 8
CPLR 4403...................................................................................................................... 8, 9, 10, 11
CPLR 4404.................................................................................................................................. 8, 9
CPLR 4404(b) ................................................................................................................................. 9
CPLR 4518.................................................................................................................................. 1, 3
CPLR 4518[a] ................................................................................................................................. 4

Other Authorities

1-2 Bergman on New York Mortgage Foreclosures……………………………………………………....11
Prince, Richardson on Evidence §8–307 [Farrell 2008] ................................................................. 4
Weinstein Korn Miller, New York Civil Practice P4403.07……………………………………………...8
Weinstein Korn Miller, New York Civil Practice P4404.27-29………………………………………..12

iii

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PRELIMINARY STATEMENT

The Referee’s Report of Amount Due is not “substantially supported by the record”

and, hence, cannot be confirmed. Plaintiff fails to lay an evidentiary foundation for the admission

into evidence of the payment records appended to the Affidavit of Amount Due which the Referee

reviewed in making his computation. Hence, these records fail as “business records” within the

meaning of CPLR 4518 and are nothing more than inadmissible hearsay. Plaintiff fails to allege

that the “informant” of the so-called records was under a business duty to report the act or event

to the “entrant” of the so-called records, as is required by binding Court of Appeals’ precedent to

lay a foundation for the admissibility of a document as a “business record”. Additionally, Plaintiff

fails to lay an evidentiary foundation for the admissibility of payment records of its so-called

predecessor Empire National Bank (the payee under the 2017 Consolidated Note). Plaintiff fails

to allege that it incorporated Empire’s records into its records and routinely relied upon Empire’s

records in the conduct of Plaintiff’s business. Hence, the records are inadmissible for this separate

reason. Under these circumstances, Plaintiff has failed to demonstrate its prima facie entitlement

to a judgment of foreclosure and sale or to the confirmation of the Referee’s Report of Amount

Due. Plaintiff’s motion must be denied in all respects.

With respect to Defendants’ cross-motion, since nominal damages are always

available for an action in nature of a breach of contract, and since Plaintiff failed to submit evidence

in admissible form constituting proof of the amount due, the Court should direct entry of a

judgment of foreclosure and sale for Plaintiff for nominal damages of $1.00 together with

Plaintiff’s reasonable attorneys’ fees.

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STATEMENT OF FACTS

For a statement of facts pertinent to this Memorandum of Law, the Court’s attention

is respectfully directed to the Affirmation of Anthony R. Filosa, Esq. dated April 7, 2023 together

with the exhibits annexed thereto (the “Filosa Affirmation”), which is submitted herewith. 1

POINT I

PLAINTIFF FAILS TO SUPPORT ITS MOTION
WITH EVIDENCE IN ADMISSIBLE FORM
AND, HENCE, THE REFEREE’S REPORT
IS NOT SUBSTANTIALLY
SUPPORTED BY THE RECORD

A. Plaintiff Fails To Lay A Foundation For
Its Purported “Business Records”.

The Court should deny Plaintiff’s motion to confirm the Referee’s Report of

Amount Due and for a judgment of foreclosure, since the Referee’s Report is not substantially

supported by the record. “The Referee’s findings and recommendations are advisory only and

have no binding effect on the court, which remains the ultimate arbiter of the dispute”.

Citimortgage, Inc. v Kidd, 148 AD3d 767, 768 [2d Dept 2017]. A referee’s report may be

confirmed only where the Referee’s findings “are substantially supported by the record”. Kidd,

148 AD3d at 768; see PennyMac Corp. v Pryce, 211 AD3d 1029, 1030 [2d Dept 2022]; HSBC

Bank USA, NA v Delgado, 211 AD3d 920, 921 [2d Dept 2022]. Here, the Referee’s findings with

respect to the total amount due upon the note and mortgage were not substantially supported by

the record since the Referee’s computation was premised upon inadmissible records for which no

“business records” foundation was laid.

1
All capitalized terms which are not defined herein shall have the same meaning as ascribed to them in the Filosa
Affirmation.
2

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The Referee’s Report reveals that the Referee reviewed the Affidavit of Cono Mea,

sworn to on January 12, 2023 (the “Mea Affidavit”). See NYSCEF Doc. No. 105 at pdf p. 2 of

237.

Mr. Mea, a vice-president of Plaintiff, purports to have access to the so-called

“business records” of Plaintiff. See NYSCEF Doc. No. 105 at pdf p. 10 of 237 at ¶2. Moreover,

Mr. Mea purports that his Affidavit is based upon his review of those so-called “business records”.

See NYSCEF Doc. No. 105 at pdf. p. 10 of 237 at ¶2.

Mr. Mea alleges the following with respect to these so-called “business records”:

I have access to the business records of Flushing,
including the business records for, and relating to, the
Loan. I make this affidavit based upon my review of
those records relating to the Loan, and from my own
personal knowledge of how they are made, kept and
maintained. The records for the Loan of the
Borrower, including computerized records indicating
sums loaned to and payments made by the Borrower,
are maintained by Flushing in the course of its
regularly conducted business activities and are made
at or near the time of the occurrence of the events
which they reflect, by or from information
transmitted by a person with knowledge. It is the
regular practice of Flushing to keep such records in
the ordinary course of a regularly conducted business
activity.

NYSCEF Doc. No. 105 at pdf p. 2 of 237 at ¶2.

The foregoing allegations of Mr. Mea fail to lay the evidentiary foundation for the

appended loan records as “business records” within the meaning of CPLR 4518 and, hence, these

records are inadmissible. The Second Department has explained both the statutory and common

law requirements which must be satisfied before a document may be admitted into evidence as a

“business record”:

[T]o establish a foundation for the admission of a
business record, the proponent of the record must
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satisfy the requirements identified in the statute
(see CPLR 4518[a]).

***

In addition to these statutory requirements, the Court
of Appeals has held that “[u]nless some other hearsay
exception is available, admission may only be
granted where it is demonstrated that the informant
has personal knowledge of the act, event or condition
and he [or she] is under a business duty to report it
to the entrant” (Matter of Leon RR, 48 NY2d 117,
123, 421 NYS2d 863, 397 N.E.2d 374 [citation
omitted]; see **294 People v Patterson, 28 NY3d
544, 550, 46 NYS3d 511, 68 NE3d 1242; Johnson v
Lutz, 253 N.Y. at 127–128, 170 NE 517; Murray v
Donlan, 77 AD2d 337, 346, 433 NYS2d 184).

Bank of New York Mellon v Gordon, 171 AD3d 197, 205 [2d Dept 2019] (emphasis added).

“Thus, not only must the entrant be under a business duty to record the event, but

the informant must be under a contemporaneous business duty to report the occurrence to

the entrant as well” (Matter of Leon RR, 48 NY2d at 122–123, 421 NYS2d 863, 397 NE2d

374; see Prince, Richardson on Evidence §8–307 [Farrell 2008] ). “[T]he statement is inadmissible

hearsay if any of the participants in the chain is acting outside the scope of a business duty” (Matter

of Leon RR, 48 NY2d at 123, 421 NYS2d 863, 397 NE2d 374). Viviane Etienne Med. Care, P.C.

v Country-Wide Ins. Co., 114 AD3d 33, 53 [2d Dept 2013], affd, 25 NY3d 498 [2015]; Corsi v

Town of Bedford, 58 AD3d 225, 229 [2d Dept 2008] (“To these statutory requirements, the case

law has added that “not only must the entrant be under a business duty to record the event, but the

informant must be under a contemporaneous business duty to report the occurrence to

the entrant as well”).

Nothing in Mr. Mea’s affidavit indicates that the “informant” is under a business

duty to report the act or event to the “entrant”. See NYSCEF Doc. No. 105 at pdf p. 10 of 237 at

¶2. Therefore, the Plaintiff failed to lay a proper foundation for the payment records appended to
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the Mea Affidavit upon which the Referee purported to rely in computing the amount alleged to

be due to the Plaintiff. See Gordon, 171 AD3d at 205; see also Nationstar Mtge., LLC v Durane-

Bolivard, 175 AD3d 1308, 1311 [2d Dept 2019] (denying motion for judgment of foreclosure and

sale and for confirmation of Referee’s Report of Amount Due were “the plaintiff failed to lay a

proper foundation for the business records on which [the affiant] relied with respect to the amount

due to the plaintiff”).

Where, as here, a Referee’s conclusions with respect to the amount due is based

upon inadmissible hearsay, the Referee’s Report shall not be confirmed. See Durane-Bolivard,

175 AD3d at 1311; see Pryce, 211 AD3d at 1030; Delgado, 211 AD3d at 921. Hence, Plaintiff’s

motion for a judgment of foreclosure and sale and for confirmation of the Referee’s Report of

Amount Due must be denied. See id.

B. Plaintiff Fails To Lay An Evidentiary Foundation
For The Admissibility Of The Records Of Its
Alleged Predecessor, Empire National Bank.

Plaintiff (Flushing Bank) is not the payee under the 2017 Consolidated Note. See

Filosa Affirmation at ¶7; NYSCEF Doc. No. 3. Rather, the 2017 Consolidated Note is payable to

“Empire Savings Bank” (“Empire”). See NYSCEF Doc. No. 3. Plaintiff contends that Plaintiff

is the successor to Empire due to an October 31, 2020 merger between Plaintiff and Empire which

resulted in a successor bank under the name “Flushing Bank”. See NYSCEF Doc. No. 105 at pdf

p. 13 of 237 at ¶11.

Since Flushing did not become the owner or holder of the note (if at all) until the

October 2020 merger, the payment record attached to the Mea Affidavit necessarily includes

information/data it obtained from Empire (or whomever was serving the loan before the October

2020 merger). Flushing could not have created entries for payments made or interest/charges

accrued before it allegedly became the owner or holder of the note in October 2020, without having
5

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received records from Empire or Empire’s loan servicer. Flushing would not have personal

knowledge of payments made or charges and interest accrued before it allegedly became the

owner/holder of the note in October 2020. Payments made on or before the October 2020 merger

and the unpaid principal balance as of the October 2020 merger is information which Flushing

necessarily would not have personal knowledge of, but rather would have been obtained from the

records maintained by Empire/Empire’s loan servicer prior to the October 2020 merger.

However, Mr. Mea, an officer of Flushing, failed to lay an evidentiary foundation for the

admissibility of Empire’s payment records.

Where, as here, a successor attempts to introduce into evidence the records of its

predecessor, the successor must submit sworn evidence that “the records provided by the maker

were incorporated into the plaintiff's records and routinely relied upon by the plaintiff in its own

business”. Durane-Bolivard, 175 AD3d at 1311; see Gordon, 171 AD3d at 209–210.

Mr. Mea makes no such allegation in his affidavit that Empire’s records were

“incorporated into the plaintiff’s records and routinely relied upon by the plaintiff is its own

business”. See NYSCEF Doc. No. 105 at pdf pages 10 to 14 of 237. “[A]s a general rule,

the mere filing of papers received from other entities, even if they are retained in the regular course

of business, is insufficient to qualify the documents as business records”. Citibank, N.A. v Potente,

210 AD3d 861, 862 [2d Dept 2022], quoting Gordon, 171 AD3d at 209.

For this additional reason, Plaintiff fails to prove the amount allegedly due under

the Note and Mortgage with evidence in admissible form and the Referee’s Report cannot be

confirmed. See Durane-Bolivard, 175 AD3d at 1311; see Gordon, 171 AD3d at 209-210.

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POINT II

SINCE PLAINTIFF FAILED TO SUBMIT
EVIDENCE IN ADMISSIBLE FORM OF THE
AMOUNT OF ITS DAMAGES, THE COURT
SHALL DIRECT ENTRY OF A
JUDGMENT OF FORECLOSURE IN FAVOR OF
PLAINTIFF FOR THE NOMINAL SUM OF $1.00

Mortgage foreclosures actions “are a unique hybrid of contract (the note) and equity

(foreclosure on the premises)”. Christiana Trust v Barua, 184 AD3d 140, 149 [2d Dept 2020],

abrogated on other grounds by Freedom Mtge. Corp. v Engel, 37 NY3d 1 [2021]. The burden of

proof is on Plaintiff to establish damages. See Berley Industries, Inc. v City of New York, 45 NY2d

683, 687 [1978] (“It is fundamental to the law of damages that one complaining of injury has the

burden of proving the extent of the harm suffered”); Lewin v Levine, 146 AD3d 768, 769 [2d Dept

2017] (“It is fundamental to the law of damages that one complaining of injury has the burden of

proving the extent of the harm suffered, must demonstrate actual damages, and must lay a basis

for a reasonable estimate of the extent of the harm”).

Since New York law permits nominal damages for breach of contract claims, the

Court should direct the entry of a judgment of foreclosure and sale in Plaintiff’s favor for $1.00.

“Nominal damages are always available in breach of contract actions”. Barua, 184 AD3d at 149,

quoting Kronos, Inc. v AVX Corp., 81 NY2d 90, 95 [1993]; see Freund v Washington Square

Press, Inc., 34 NY2d 379, 381 [1974] (author which established liability for breach of contract to

publish book failed to establish amount of actual damages and, thus, could recover nominal

damages only); Ross v Sherman, 95 AD3d 1100, 1100 [2d Dept 2012] (“The Supreme Court

properly awarded the plaintiffs only nominal damages on their cause of action alleging breach of

contract. The plaintiffs failed to submit sufficient evidence to demonstrate actual damages as a

result of the defendants’ breach of contract”); Magu Realty Company v Spartan Concrete Corp.,
7

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239 AD2d 469, 470 [2d Dept 1997] (“[A]lthough the plaintiffs have failed to demonstrate that they

incurred any actual damages resulting from the alleged breach of contract by [the defendants], they

may still be entitled to nominal damages to vindicate their rights arising from the alleged breach

of contract”). In these circumstances, nominal damages are awarded “as a formal vindication of

plaintiffs’ right to compensation which has not been given certain monetary valuation”. Freund,

34 NY2d at 384.

The Court appointed a referee to compute in its September 22, 2022 Order. See

NYSCEF Doc. No. 91. An order of reference to report leads to a proceeding conducted like a

trial. See CPLR 4320(a) (“A referee to report shall conduct the trial in the same manner as a court

trying an issue without a jury”). Where a plaintiff in an action for breach of contract fails to prove

the amount of its actual damages at the trial, the result is the direction of entry for judgment for

nominal damages. See Freund, 34 NY2d at 385 (modifying award of damages to the extent of

reducing breach of contract damage award of $10,000.00 to nominal damages of $.06). A plaintiff

in a trial without a jury who simply fails to prove its actual damages is not entitled to a new trial

— the proverbial second bite of the apple to correct the failure with its proof of damages.

CPLR 4320 provides that upon the reference of a matter to a special referee, the

referee must conduct the trial in the same manner as a court trying an issue without a jury. See

CPLR 4320. Since the referee to report must conduct the trial in the same manner as a court trying

an issue without a jury, it is useful to look to CPLR Article 44 ⸻ which governs trial motions ⸻to

determine when it is appropriate for a court to order a new hearing under CPLR 4403. A leading

treatise of the CPLR—New York Civil Practice (Weinstein Korn Miller) — confirms that one

shall resort to CPLR 4404 for guidance when a new hearing or trial may be ordered under CPLR

4403. See 8 Weinstein-Korn-Miller, New York Civil Practice: CPLR P 4403.07 (attached to the

Appendix hereto) (“The court has the power, under CPLR 4403, to order a new trial or hearing
8

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upon the motion of any party or on its own initiative. Retrial may be on any separate cause of

action or separable issue. See the discussion of CPLR 4404(b)”. (Emphasis added). 2

CPLR 4404(b) permits a court which tried a matter or issue without a jury to order

a new trial, much like CPLR 4403 permits a court to order a new hearing following a referee’s

hearing. See CPLR 4404(b); CPLR 4403. CPLR 4404 provides for a new trial where the court has

committed prejudicial error or some misconduct on the part of counsel or a litigant has affected

the outcome of the trial. See, e.g., Rocco v Ahmed, 146 AD3d 836, 837 [2d Dept 2017] (new trial

ordered due to trial court's error in allowing expert testimony on a theory of causation that was not

adequately disclosed in the expert's CPLR 3101(d)(1)(i) statement); Perry v Kone, Inc., 147 AD3d

1091, 1094 [2d Dept 2016] (new trial ordered due to trial court's error in excluding a witness from

the courtroom and prohibiting the witness from communicating with defense counsel); Smith v

Rudolph, 151 AD3d 58, 63 [1st Dept 2017] (new trial ordered due to counsel's pervasive pattern

of misconduct). Notably, a party’s failure to sustain its burden of proof ⸻ or to present evidence

of its damages in admissible form ⸻ is not a basis for a new trial under CPLR 4404. See Oparaji

v 245-02 Merrick Blvd, LLC, 149 AD3d 1092, 1093 [2d Dept 2017] (plaintiffs failed to set forth

grounds warranting vacatur of judgment in favor of defendants who appeared at damages inquest

after default judgment against them where plaintiffs failed to present evidentiary proof of their

alleged damages); Judge v Neponsit Property Owners’ Ass’n, 209 AD 905, 906 [2d Dept 1924]

(holding where plaintiff failed to prove the cause of action pleaded and submitted to the jury, and

no other cause of action was pleaded, proved, suggested, or submitted, plaintiff's claim that such

a cause of action exists was no justification for the granting of a new trial).

2
Weinstein-Korn-Miller’s commentary of CPLR 4403 has been cited by the Court of Appeals. See Galiber v
Previte, 40 NY2d 882, 824 [1976].
9

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Moreover, Plaintiff did not request a new hearing under CPLR 4403. See CPLR

4403. This telling omission is a tacit concession that Plaintiff fails to satisfy the grounds for a new

hearing under CPLR 4403 to submit so-called new or additional evidence. It has long been the

law that in order to obtain a new trial or hearing to submit additional or new evidence, the movant

must demonstrate that it could not, with reasonable diligence, have obtained such evidence for use

on the first trial. See generally Trimarco v Data Treasury Corp., 146 AD3d 1008, 1009-1010 [2d

Dept 2017] (denying motion for new trial which was based upon “additional evidence that was

available at the time of trial”; movant failed to “explain why the evidence could not have been

produced prior to trial and the entry of judgment with the exercise of due diligence”); Structural

Concrete Corp. v Campbell Assoc. Corp., 224 AD 2d 516, 517 [2d Dept 1996] (“[T]he moving

party must prove that the evidence proffered could not have been discovered earlier through the

exercise of due diligence”; denying motion for new trial and relief from judgment where defendant

failed to proffer any evidence to support such a finding); see also 8 Weinstein-Korn-Miller, New

York Civil Practice: CPLR P4404.27-4404.29 (attached to the Appendix hereto).

Even assuming without conceding that such “new” or “additional” evidence even

exists solely for the purpose of this argument, Plaintiff has not made the requisite showing of why

such evidence could not have been introduced to the referee at the first hearing/computation with

the exercise of diligence. For the Court to sua sponte assume that such new or additional evidence

even exists and that the same could not have been presented by the Plaintiff to the referee had

Plaintiff exercised diligence on this barren record would be an abuse of discretion. See Estate of

Rothko, 84 Misc2d 830 [Sur Ct New York County 1975], modified on other grounds, 56 AD2d

499 [1st Dept 1977], affd, 43 NY2d 305 [1977] (petitioner’s motion for new trial to produce

assertedly new evidence that had emerged from abroad was denied as untimely because this

evidence was discoverable during preceding protracted trial) (citing Weinstein, Korn & Miller).
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A judgment here awarding only nominal damages would be consistent with the

Court’s authority under CPLR 4403. Under CPLR 4403, the judge required to decide the issue

may confirm or reject, in whole or in part, the report of a referee to report or may make new

findings with or without taking additional testimony. See CPLR 4403. As demonstrated in POINT

I above, the Referee’s recommended findings should be rejected as not supported by the record.

See JNG Constr., Ltd v Roussopoulos, 170 AD3d 1136, 1141-1142 [2d Dept 2019]. Thus, in JNG

Constr., Ltd., the Court held that the referee’s finding that $71,500.00 was the total amount

borrowed under a loan agreement between the parties was not substantially supported by the

record. Rather, since the testimony reflected that only $55,500.00 was actually loaned by the

plaintiff to the defendant, the Court held that the referee’s report should have been confirmed only

to the extent of awarding the plaintiff $55,000.00 with interest and should otherwise have been

rejected. See id. at 1141-1142.

The logic of JNG Constr., Ltd. applies with equal force here. As demonstrated in

POINT I above, since the Referee’s findings are not substantially supported by the record, the

Referee’s recommendation that Plaintiff be awarded a judgment of foreclosure for $1,479,370.35

as of December 30, 2022 must be rejected. Liability has been determined by this Court’s

interlocutory summary judgment order [see NYSCEF Doc. No. 91]. See Wells Fargo Bank, NA

v Gonsalves, 44 Misc3d 531, 536-37 [Sup Ct Westchester County 2014] (“[T]he Court has already

granted an order of reference upon Gonsalves's default, which is the procedural equivalent of a

liability finding”), citing 1–2 Bergman on New York Mortgage Foreclosures §2.01[1] (describing

the liability phase of a foreclosure action as follows: “Order to appoint referee to compute (if

default) or motion for summary judgment, or trial, if contested by submission of answer”) . Thus,

the Court should simply find that Plaintiff is entitled to nominal damages only under Freund and

its progeny, with Plaintiff having failed to sustain its burden of proof of actual damages.
11

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CONCLUSION

The Referee’s Report of Amount Due is based upon inadmissible hearsay, since

Plaintiff failed to lay an evidentiary foundation for the payment records upon which the Referee

relied with respect to its computation of the amount alleged to be due to Plaintiff. Thus, the

Referee’s Report is not “substantially supported by the record” and cannot be confirmed.

With respect to Defendants’ cross-motion, since nominal damages are always

available for an action in nature of a breach of contract, and since Plaintiff failed to submit evidence

in admissible form constituting proof of the amount due, the Court should direct entry of a

judgment of foreclosure and sale for Plaintiff for nominal damages of $1.00 together with

Plaintiff’s reasonable attorneys’ fees.

Dated: Garden City, New York
April 7, 2023

ROSENBERG FORTUNA &
LAITMAN, LLP

By: Anthony R. Filosa
ANTHONY R. FILOSA
Attorneys for Defendants
1198 Decatur LLC and
Frimy Goldberger
666 Old Country Road, Suite 810
Garden City, New York 11530
(516) 228-6666

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APPENDIX

8 Weinstein-Korn-Miller, New York Civil Practice: CPLR P4403.07
8 Weinstein-Korn-Miller, New York Civil Practice: CPLR P4404.27-4404.9

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8 New York Civil Practice: CPLR P 4403.07
New York Civil Practice: CPLR > ARTICLE 44 TRIAL MOTIONS > R4403 Motion for new trial or
to confirm or reject or grant other relief after reference to report or verdict of advisory jury >
4403 ANALYSIS of CPLR 4403

¶ 4403.07 Flexible Procedure

If the questions submitted to the referee or advisory jury, together with the facts admitted by the pleadings, cover
the whole case, the court may render decision on all issues in the action and direct entry of judgment at the same
time that it grants a motion to confirm or reject. For a discussion of problems concerning entry of judgment, see
CPLR 5016(c). If the trial of specific issues by an advisory jury or referee to report was preliminary to the
determination of other issues by the court, the judge may make new findings with or without additional testimony.
The judge may modify, confirm or reject, in whole or in part, the verdict or report either before further trial or in the
judge’s decision on the entire action. The judge may also order a new trial or hearing.

The court has the power, under CPLR 4403, to order a new trial or hearing upon the motion of any party or on its
own initiative. Retrial may be on any separate cause of action or separable issue. See the discussion of CPLR
4404(b).

New York Civil Practice: CPLR
Copyright 2022, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

End of Document

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8 New York Civil Practice: CPLR P 4404.27
New York Civil Practice: CPLR > ARTICLE 44 TRIAL MOTIONS > R4404 Post-trial motion for
judgment and new trial. > 4404 ANALYSIS of CPLR 4404

¶ 4404.27 Motion for New Trial Based on Newly Discovered Evidence Must
Satisfy Several Criteria

The motion for a new trial on the ground of newly-discovered evidence is not favorably regarded and imposes a
heavy burden on the proponent.1 The exercise of the power of the court to accept newly discovered evidence is not
governed by any well defined rules, but depends in a great degree upon the peculiar circumstances of each case,
and upon whether substantial justice has been done.2 However, in the interest of ending litigation, the courts have
formulated the following rules to govern their discretion in passing upon such motions; “(a) the evidence must have
been discovered since the trial; (b) it must be shown that such evidence could not have been discovered with
proper diligence before the trial; (c) the evidence must be material; (d) it must be sufficiently cogent to render it
reasonable to suppose that the conclusions of the Court or jury might have been otherwise had it been
presented”—e.g., it must not be merely cumulative or impeaching.3 These rules apply to the findings of quasi-
judicial hearings.4 However, the rules formulated by the courts for the granting of new trials are not “hard and fast.”
Thus, in McCarthy v. Port of New York,5 even though the additional evidence adduced by the defendant was merely
corroborative and was available, or could have been available by diligent effort, at the time of the trial, it was
considered on a motion for a new trial because it was conclusive evidence that the plaintiff, through perjured
testimony, perpetrated a gross fraud upon the court. So too, where the qualifications of an expert witness were
wholly false and the jury obviously placed great reliance upon the testimony of such witness in arriving at its verdict,
the court set aside the verdict and ordered a new trial, even though newly discovered evidence going only to
credibility is generally not a basis for setting aside a verdict.6

A party who moves for a new trial on the ground of newly-discovered evidence must do so promptly or adequately
explain any delay.7

1H & Y Realty Co. v. Baron, 193 A.D.2d 429, 597 N.Y.S.2d 343 (1st Dep’t 1993); Buckman v. Perry’s Taxi, Inc., 24 A.D.2d 913,
264 N.Y.S.2d 694 (3d Dep’t 1965) (defendants’ motion for new trial on grounds of newly-discovered evidence was denied
notwithsta

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April 07, 2023

Case Filing Date

August 04, 2021

County

Parties

1198 DECATUR, LLC Defendant
DELL'AMORE, FRANK C Attorney for the Plaintiff
Dianel Zarate Defendant
DONOHUE, ANTONIA M Attorney for the Plaintiff
FILOSA, ANTHONY RUDY Attorney for the Defendant
FLUSHING BANK, SUCCESSOR BY MERGER TO EMPIRE NATIONAL BANK Plaintiff
Frimy Goldberger Defendant
ISAK DAVID MARYL, COURT APPOINTED TEMPORARY RECEIVER Non Party
JOHN DOE NO. I to JOHN DOE NO. XXX, inclusive, the last thirty names being fictitious and unknown to plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises described in the complaint, Defendant
Josephine Rappa Defendant
Karthik Muralidharan Defendant
KELLY, VICTORIA ROSE Attorney for the Plaintiff
NEW YORK CITY DEPARTMENT OF FINANCE Defendant
NEW YORK CITY ENVIRONMENTAL CONTROL BOARD Defendant
NEW YORK CITY HOUSING AUTHORITY Defendant
NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE Defendant
PATRICK, RACHEL L Attorney for the Plaintiff
SCHWARTZ, JOSEPH J Attorney for the Defendant
SURI, VIVEK S Attorney
TORDESILLAS, BERNARD JAMES Attorney for the Defendant
MARK LONGO Attorney
VICTORIA KELLEY Attorney
JOSEPH JACOBS Attorneys for Defendants
MARC DONOHUE Attorney
BERNARD JAFFE Attorneys for Defendants
VALERIE SMITH Attorney

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