By order to show cause dated June 19, 2013, plaintiff Altshuler Shaham Provident Funds, Ltd. ("Altshuler") made alternative requests for relief in this commercial foreclosure action. The court heard oral argument on December 18, 2013 and reserved decision.

I. BACKGROUND

At issue is the foreclosure sale of a 15-floor tower at 101-131 Onondaga Street in Syracuse that was formerly part of the Hotel Syracuse. Plaintiff loaned $10 million to defendants GML Tower LLC, GML Addis LLC and Ameris Holdings Ltd. (collectively, "GML") for the purchase and renovation of both the tower and a five-floor former department store at 449-453 Salina Street in Syracuse. Plaintiff acquired a mortgage on the properties to secure its interest. The $10 million loan consisted of a $5.5 million acquisition mortgage and a $4.5 million building loan.

Altshuler commenced the foreclosure action by summons and complaint dated December 4, 2008. In addition to the GML defendants, the complaint named a partial guarantor and contractors who filed mechanics liens against the 101-131 Onondaga Street property. Also on December 4, 2008, plaintiff filed a notice of pendency.

In a decision dated May 17, 2010, this court held that Altshuler's $10 million loan was subordinate to the mechanics liens of Hayner Hoyt, Pike Company and other subcontractors because plaintiff failed to file a March 2007 loan agreement in violation of Section 22 of New York's Lien Law. Altshuler Shaham Provident Funds, Ltd. v. GML Tower LLC, 28 Misc 3d 475 (Onondaga Cty. 2010). The Appellate Division, Fourth Department, affirmed the decision by order dated April 29, 2011. Altshuler Shaham Provident Funds, Ltd. v. GML Tower LLC, 83 AD3d 1563 (4th Dep't 2011).

This court signed a judgment of foreclosure on October 26, 2011. Lederman Aff. Ex. C. The foreclosure contained a 40-day stay provision to allow plaintiff to pursue an appeal with the Court of Appeals. Plaintiff moved for leave to appeal to the Court of Appeals on November 21, 2011, but the court denied leave on February 9, 2012, declining to apply the exception to the finality rule for irreparable injury. The next month, plaintiff moved for leave to reargue in the Court of Appeals, and the court denied the motion on May 3, 2012.

On March 29, 2012 this court signed a stipulated order removing the 40-day stay language from the judgment of foreclosure. Agati Aff. Ex. 15. The foreclosure sale took place on June 6, 2012. Hayner Hoyt was the successful bidder with a bid of nearly $1.4 million. Agati Aff. Ex. 18. The sale proceeds satisfied the subcontractors' outstanding mechanics liens and expenses of the sale. Plaintiff did not bid at the sale. A referee's deed conveyed the property to Hayner Hoyt. By deed filed June 20, 2012, Hayner Hoyt conveyed the property to Symphony Tower LLC. Agati Aff. Ex. 17.

This court issued an order dated July 12, 2012 confirming the referee's report of sale. Agati Aff. Ex. 18. Plaintiff did not seek a stay of this order pursuant to CPLR Section 5519(c).The Court of Appeals granted leave to hear the appeal of this now-final order. On June 11, 2013, the Court of Appeals issued a decision modifying the lower courts' decisions. Altshuler Shaham Provident Funds, Ltd. v. GML Tower LLC, 21 NY3d 352 (2013). The Court of Appeals held that plaintiff's $5.5 million acquisition loan was not subordinate to the mechanics liens of Hayner Hoyt and the subcontractors. The Court of Appeals also remitted the [*2]matter to Supreme Court "to be proceeded upon according to law." Lederman Aff. Ex. A.

On June 18, 2013, plaintiff filed a "Successive Notice of Pendency in Foreclosure Action." Agati Aff. Ex. 24. This was plaintiff's only filing related to the original notice of pendency, which had expired on December 4, 2011. In July 2013, plaintiff moved before the Court of Appeals for clarification of its decision, and the court denied the motion on September 3, 2013.

On this motion, Altshuler seeks to unwind the June 6, 2012 foreclosure sale. Specifically, plaintiff seeks an order (1) modifying the judgment of foreclosure to give plaintiff $5.5 million priority over the mechanic's liens; (2) vacating the order confirming the referee's report of sale; (3) setting aside the referee's deed to Hayner Hoyt and the deed from Hayner Hoyt to Symphony Tower LLC; and (4) ordering a new foreclosure sale. In the alternative, plaintiff seeks an order modifying the judgment of foreclosure so that the property remains subject to the $5.5 million acquisition mortgage. Hayner Hoyt, Syracuse Merit Electric and Symphony Tower LLC each opposed the motion.

II. DISCUSSION

Plaintiff asks this court to exercise its equitable powers to unwind the prior sale, arguing that there is no prejudice to Hayner Hoyt, Symphony Tower LLC or any other party. According to plaintiff, Hayner Hoyt bought the property knowing that Altshuler intended to pursue an appeal. Plaintiff also argues that the money Hayner Hoyt paid to satisfy mechanics liens on the property was money the general contractor owed its subcontractors anyway. Finally, Altshuler contends that the current property owner, Symphony Tower LLC, is not a bona fide purchaser but merely an affiliate of Hayner Hoyt.

"[T]he court may exercise its inherent equitable power over a sale made pursuant to its judgment or decree to ensure that it is not made the instrument of injustice." Guardian Loan Co., Inc. v. Early, 47 NY2d 515, 520 (1979). This power exists to relieve a party of "oppressive or unfair conduct." Id. at 520-21. In characterizing this power, the Second Department held that a court "may exercise its equitable powers to set aside a foreclosure sale only where fraud, collusion, mistake, or misconduct casts suspicion on the fairness of the sale." Intervest Nat'l Bank v. Ashburton 70, LLC , 87 AD3d 617, 618 (2d Dep't 2011); see also Fleet Fin., Inc. v. Gillerson, 277 AD2d 279, 280 (2d Dep't 2000) (same). The Court of Appeals noted that "this power should be exercised sparingly and with great caution." Guardian Loan, 47 NY2d at 520.

There is no allegation of oppression, fraud, collusion or misconduct. The court rejects plaintiff's assertion that a "mistake" was present because Hayner Hoyt made its bid believing its mechanics lien to have priority over the acquisition mortgage. That was no mistake but the state of facts at the time of the foreclosure sale.

Altshuler's fundamental plea to this court is one of fairness. Altshuler contends that it was caught in a "Catch-22" and "procedural perfect storm," helpless to act as the sale proceeded. Pl. Repl. Mem. at 4, 1. This case took a winding path as it traveled to resolution. That path, however, did not leave plaintiff without means to protect its interests.

In fact, plaintiff failed to avail itself of the most basic step in preserving its claim, and that was maintaining a valid notice of pendency on the property. There is no dispute that plaintiff allowed its notice of pendency to lapse and never moved for an extension pursuant to CPLR [*3]Section 6513. At the time the original notice of pendency expired on December 4, 2011, this case was in active litigation. Plaintiff's motion for leave to appeal was pending in the Court of

Appeals, and the foreclosure sale was months away. Nowhere in its papers does plaintiff explain why it failed to extend its notice of pendency.

In the absence of that simple, yet crucial, step this court is compelled to apply the principles outlined by the Court of Appeals in DaSilva v. Musso, 76 NY2d 436 (1990). A purchaser with actual knowledge of a pending appeal affecting title is a good faith purchaser where there is no outstanding notice of pendency or stay. DaSilva, 76 NY2d at 440-441. That is situation before the court, and plaintiff's attempts to distinguish DaSilva are unavailing. Plaintiff's filing of a successive notice of pendency more than a year after the foreclosure sale was of no effect. Cf. CPLR Section 6516(a) (permitting filing of successive notice of pendency in a foreclosure action to comply with NY RPAPL § 1331, which in turn requires filing of a notice of pendency at least 20 days before a final judgment directing a foreclosure sale).

The Court of Appeals indicated in its June 11, 2013 decision that because plaintiff only challenged the priority of rights to the foreclosure sale proceeds, plaintiff failed to establish irreparable injury. Altshuler, 21 NY3d at 361-62. It appears that plaintiff made a strategic calculation that its chances of success at the appellate level were slim and did not warrant the additional economic risk of posting an undertaking or taking other action to halt the sale or preserve the status quo. Plaintiff failed to seek a stay after this court confirmed the referee's report of sale and did not seek to put the sale proceeds into escrow pending an appeal.

There is some irony in the fact that the current state of affairs stems first from plaintiff's failure to file the March 2007 loan agreement and then from its failure to extend its timely-filed notice of pendency. The court is not unsympathetic that plaintiff's current remedies are limited. However, the court does not view this case as one of oppression, injustice or fundamental unfairness. The court therefore declines to exercise its discretionary equitable powers to unwind the foreclosure sale or otherwise modify the judgment of foreclosure.

III. CONCLUSION

For the foregoing reasons, the order to show cause is DENIED in its entirety. Counsel for Hayner Hoyt is directed to prepare a proposed order on notice in accordance with this decision. The proposed order shall attach and incorporate therein a copy of this decision.

DATED: ___________________________________________________________

Syracuse, New YorkHON. DEBORAH H. KARALUNAS

SUPREME COURT JUSTICE