Carver Fed. Sav. Bank v. Redeemed Christian Church of God, Int'l Chapel, HHH Parish, Long Island, N.Y., Inc.

Decision Date22 May 2012
Docket NumberNo. 19753–11.,19753–11.
Citation2012 N.Y. Slip Op. 50921,954 N.Y.S.2d 758,35 Misc.3d 1228
PartiesCARVER FEDERAL SAVINGS BANK, Plaintiff, v. The REDEEMED CHRISTIAN CHURCH OF GOD, INTERNATIONAL CHAPEL, HHH PARISH, LONG ISLAND, NEW YORK, INC., New York State Department of Taxation and Finance, Cambridge Home Capital, LLC and John Does “1”-“10” and XYZ Corporation “1”-“10”, said names being fictitious, parties intended being possible tenants or occupants of the premises being foreclosed herein and Michael Oluwafemi, as Guarantor, Defendants.
CourtNew York Supreme Court

35 Misc.3d 1228
954 N.Y.S.2d 758
2012 N.Y. Slip Op. 50921

CARVER FEDERAL SAVINGS BANK, Plaintiff,
v.
The REDEEMED CHRISTIAN CHURCH OF GOD, INTERNATIONAL CHAPEL, HHH PARISH, LONG ISLAND, NEW YORK, INC., New York State Department of Taxation and Finance, Cambridge Home Capital, LLC and John Does “1”-“10” and XYZ Corporation “1”-“10”, said names being fictitious, parties intended being possible tenants or occupants of the premises being foreclosed herein and Michael Oluwafemi, as Guarantor, Defendants.

No. 19753–11.

Supreme Court, Suffolk County, New York.

May 22, 2012.


Platzer, Swergold, Karlin, Levine, Goldberg & Jaslow, LLP, New York City, for Plaintiff.

THOMAS F. WHELAN, J.

In this mortgage foreclosure action, the plaintiff moves (# 001) for an order: (1) awarding it summary judgment against the answering defendants; (2) deleting as party defendants certain named defendants; and (3) appointing a referee to compute amounts due under the subject mortgage. The motion is considered under CPLR 3215, 3212 and RPAPL § 1321 and is granted.

In June of 2011, the plaintiff commenced this action to foreclose a mortgage on real property situated in Amityville, New York given by the defendant The Redeemed Christian Church of God, International Chapel, HHH Parish, Long Island New York, Inc.(hereinafter “Church”) to secure a mortgage note in the amount of $1,340,000.00, dated August 29, 2007. Additional security in the form of a written guaranty of the obligations of the defendant Church, in an amount equal to the value of a certain life insurance policy in a minimum amount of $500,000.00 on the life defendant Michael Oluwafemi, was executed by said defendant. By writing dated December 1, 2009, the note and mortgage were modified to provide a period of interest only payments upon a capitalization of certain delinquent payments. The plaintiff was the lender under the loan documents and alleges that it was the owner and holder of the note and mortgage at the time of the commencement of this action.

Claims for foreclosure and sale and recovery of amounts due from defendant Oluwafemi under the terms of his written guaranty of the Church's obligations under the loan documents are advanced in the two separate causes of action set forth in the plaintiff's complaint. The plaintiff charges that the defendants defaulted in making the monthly payment due on March 1, 2011. By letter dated April 28, 2011, the plaintiff advised that the loan was accelerated and that all amounts due thereunder were payable on or before May 3, 2011. When no such payment was made, the plaintiff followed with the commencement of this action on June 20, 2011.

The Church and its guarantor, defendant Oluwafemi, appeared herein by answer dated December 15, 2011. Therein, these answering defendants deny the material allegations set forth in the plaintiff's complaint and assert ten affirmative defenses and three counterclaims against the plaintiff. By such counterclaims, the answering defendants seek the recovery of money damages from the plaintiff by reason of its purported engagement in predatory lending practices and violations of the Banking Law and of General Business Law § 349. The defendants' affirmative defenses and counterclaims rest upon allegations that the plaintiff's refusal to accommodate the Church's 2009 request for a loan modification, by which the interest rate would be reduced and the plaintiff's preparation of the loan modification agreement of December 1, 2009 providing for a period of interest only payments. Defendants allege that such action on the part of the plaintiff constitutes such bad faith and unconscionable conduct that the plaintiff should be estopped from enforcing its rights to foreclose and adjudged liable to the defendants for money damages as demanded by the defendants on their counterclaims.

By the instant motion (# 001), the plaintiff seeks summary judgment dismissing the affirmative defenses and counterclaims of the answering defendants and summary judgment on its complaint. The plaintiff further seeks an order dropping the unknown defendants as parties and the fixation of the defaults in answering by the remaining defendants. The plaintiff also seeks the issuance of an order of reference in the form of the one attached to the moving papers.

The Church and defendant Oluwafemi oppose the plaintiff's motion. In their opposing papers, the defendants admit that they defaulted in making the payments due on March 1, 2011and those following until July of 2011. However, in July of 2011, the Church defendants paid all past due installments of principal and interest believing that such payments would bring the loan status to “current” and place the Church in a better position to modify the loan ( see ¶ 9;10 of Affidavit of Oluwafemi in Opposition). Continuing, the answering defendants allege that since July of 2011, they have paid all monthly installments. The answering defendants further allege that the “plaintiff induced the church to bring the mortgage current in July 2011 on the premise that they would reinstate the loan” ( see ¶ 9 of Affirmation of Counsel in Opposition). Prior to their July 2011 payment of past due installments, defendant Oluwafemi was advised that the loan had been accelerated “and that we would have to pay the entire principal” ( see ¶ 11 of Affidavit of Oluwafemi in Opposition). Oluwafemi further alleges that “when we spoke to our account officer later that day, she assured us that the issue would be resolved, that late fees would be waived and the foreclosure put on hold, since we were able to bring the loan current” ( see ¶ 12 of Affidavit of Oluwafemi in Opposition). Upon these claims, the defendants urge the court to deny this motion by the plaintiff for accelerated judgment on its complaint.

It is well established that in an action to foreclose a mortgage, a prima facie case is made by the plaintiff's production of the note and mortgage and proof on the part of the defendant/mortgagor and any guarantors of a default in payment or other material terms set forth in the mortgage ( see Garrison Special Opportunities Fund, L.P. v. Arthur, 82 A.D.3d 1042, 918 N.Y.S.2d 894 [2d Dept 2011]; Swedbank, AB v. Hale Ave. Borrower, LLC., 89 A.D.3d 922, 932 N.Y.S.2d 540 [2d Dept 2011]; Rossrock Fund II, L.P. v. Osborne, 82 A.D.3d 737, 918 N.Y.S.2d 514 [2d Dept 2011] ). Here, the plaintiff established its entitlement to summary judgment on its complaint by its production of the note and mortgage, the written guarantee of defendant Oluwafemi, the Modification Agreement dated December 1, 2009 and due evidence of defaults in payment beginning on March 1, 2011 on the part of the answering defendants.

It was thus incumbent upon the answering defendants to submit proof sufficient to raise a genuine question of fact rebutting the plaintiff's prima facie showing or in support of any affirmative defenses ( see Grogg Assocs. v. South Rd. Assocs., 74 A.D.3d 1021, 907 N.Y.S.2d 22 [2d Dept 2010]; Washington Mut. Bank v. O'Connor, 63 A.D.3d 832, 880 N.Y.S.2d 696 [2d Dept 2009] ). A defense not properly stated or one which has no merit is subject to dismissal pursuant to CPLR 3211(b). It thus may be the target of a motion for summary judgment by a plaintiff seeking dismissal of any affirmative defense after the joinder of issue. In order for a defendant to successfully oppose such a motion, the defendant must show his or her possession of a bona fide defense, i.e., one having a plausible ground or basis which is fairly arguable and of substantial character ( see Feinstein v. Levy, 121 A.D.2d 499, 503 N.Y.S.2d 821 [1st Dept 1986] ).

Here, the opposing papers submitted by the answering defendants include the assertion of some of the affirmative defenses contained in their answer. The opposing papers are, however, principally premised on the newly asserted defense of payment and tender. For the reasons stated below, the court rejects these asserted defenses.

It is also well established that once a mortgagor defaults on loan payments, a mortgagee is not required to accept less than the full repayment as demanded ( see EMC Mtge. Corp. v. Stewart, 2 A.D.3d 772, 769 N.Y.S.2d 408 [2d Dept 2003]; First Federal Sav. Bank v. Midura, 264 A.D.2d 407, 694 N.Y.S.2d 121 [2d Dept 1999] ). It is equally well established that “when a mortgagor defaults on loan payments, even if only for a day, a mortgagee may accelerate the loan, require that the balance be tendered or commence foreclosure proceedings, and equity will not intervene” (Home Sav. of Am., FSB v. Isaacson, 240 A.D.2d 633, 659 N.Y.S.2d 94 [2d Dept 1997]; New York Guardian Mortgagee Corp. v. Olexa, 176 A.D.2d 399, 401, 574 N.Y.S.2d 107). Once a default has been declared and a loan's maturity has been accelerated, a mortgagee is not required to accept a tender of less than full repayment as demanded ( see Albertina Realty Co. v. Rosbro Realty Corp., 258 N.Y. 472, 180 N.E. 176 [1932];Home Sav. of Am., FSB v. Isaacson, 240 A.D.2d 633, 659 N.Y.S.2d 94,supra ). Moreover, the mere acceptance of a partial payment of the accelerated debt is not an affirmative act revoking the acceleration, where as here, provisions of the loan documents expressly disavow any waivers by acts or non-acts of the plaintiff and correspondence between it and the borrower expressly states that the borrower remains liable for the balance of the accelerated debt even after the partial payments are accepted ( see UMLIC VP, LLC v. Mellace, 19 A.D.3d 684, 799 N.Y.S.2d 61 [2d Dept 2005]; P.T. Bank Cent. of Asia v. Ho Ho Ho Realty, 273 A.D.2d 212, 709 N.Y.S.2d 116 [2d Dept 2000] ).

Here, the record contains undisputed proof of defaults on the part of the answering defendants in timely making the monthly installments of principal and interest beginning in March 1, 2011. The defendants' claims that these defaults were eradicated, waived or otherwise excused upon the plaintiff's acceptance of the defendants' payments of past due...

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