Cmty. Nat'l Bank v. Teresa's Family Cleaning, Inc.
| Citation | 2014 NY Slip Op 32171 (U) |
| Decision Date | 11 July 2014 |
| Docket Number | INDEX No. 17191/13 |
| Court | United States State Supreme Court (New York) |
| Parties | COMMUNITY NATIONAL BANK, Plaintiff, v. TERESA'S FAMILY CLEANING, INC., KEVIN PETER WARD, TERESA MARY DEBARI WARD, ROCKY SHORES VETERINARY HOSPITAL, PC, "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, Defendants. |
MOTION DATE 3/27/14
ADJ. DATES 6/13/14
Mot. Seq. # 003 - Mot D
CDISP Y ___ N X
JASPAN SCHLESINGER, LLP
Attys. For Plaintiff
Kevin Ward and Teresa Ward
1 Old Country Rd.
Carle Place, NY 11514
PAMELA J. SANDMEIER, ESQ.
Atty. For Def. Rocky Shores Veterinary
135 Curtis Dr.
ORDERED that this motion (#003) by the plaintiff for summary judgment against the answering defendants on certain of the plaintiff's' its causes of action, an order dropping certain persons as party defendants and an order appointing a referee to compute is considered under CPLR Article 32 and RPAPL Article 13 and is granted as indicated below.
The plaintiff commenced this action to foreclose two mortgages of unequal priorities given by the corporate defendant whose obligations thereunder were guaranteed in writing by the individual Ward defendants. The First mortgage for which foreclosure is demanded is one dated March 6, 2008in the amount of $380,000.00. The plaintiff also seeks foreclosure of a subordinate, second mortgage in the amount of $50,000.00 that was likewise given by the corporate defendant and guaranteed by the Ward defendants. Although said mortgage was executed on the same date as the First, the second states expressly that it is second and subordinate to the first mortgage.
The complaint served and filed herein contains seven causes of action. Foreclosure of the First mortgage is set forth in the First cause of action while the foreclosure of the second mortgage is the subject of the Second cause of action. A deficiency judgment against the obligor defendants is demanded in the Third cause of action and a demand for possession of rents under a separate security agreement is demanded in the Fourth. The Fifth cause of action is entitled "Right to Foreclosure" and it sets forth a demand for a declaration that the first and second mortgages "be declared as first, second and prior liens on the property and that plaintiff be granted immediate possession of the property". The Sixth cause of action contains a claim for recovery of counsel fees. In the Seventh cause of action, the plaintiff demands, in effect, a judgment declaring the First and Second mortgages to be of equal priority upon a consolidation thereof solely for purposes of conducting a single foreclosure sale. Alternatively, the plaintiff demands in its final cause of action, incorrectly denominated as "FIFTH", that the court direct two separate, consecutive sales of the property, the first of which would represent the foreclosure of the Second mortgage with the second representing the foreclosure of the First mortgage.
Issue was joined by service of a joint answer by the corporate and guarantor defendants who therein assert ten affirmative defenses including, estoppel, waiver and a lack of standing on the part of the plaintiff. A separate joint answer was served by defendant, Rocky Shores Veterinary Hospital, P.C., in which it was joined by two individuals apparently having interests in Rocky Shores. Therein, these answering parties assert one affirmative defense in which they claim a prior leasehold interest in the premises that is allegedly superior to the liens of the plaintiff and thus not subject to extinguishment.
By the instant motion, the plaintiff seeks an order dropping as party defendants, the unknown defendants listed in the caption and an order of reference upon the granting of summary judgment against the answering defendants. The mortgagor/guarantor answering defendants oppose upon equitable grounds such as waiver, estoppel and unclean hands but do not contest the validity of the mortgage loans nor their defaults in payment. The Rocky Point defendants have not opposed the plaintiff's motion. For the reasons set forth below, the motion is granted to the extent set forth below.
It is now well settled that a prima facie case for foreclosure and sale is established by the plaintiff's production of the mortgage, the unpaid note and due evidence of a default under the terms thereof (see CPLR 3212; RPAPL § 1321; Key Bank Natl. Ass'n v Chapman Steamer Collective, LLC, 117 AD3d 991, 986 NYS2d 598 [2d Dept 2014]; Independence Bank v Valentine, 113 AD3d 62, 64, 976 NYS2d 504 [2d Dept 2014]; Emigrant Mtge. Co., Inc. v Beckerman, 105 AD3d 895, 964 NYS2d 548 [2d Dept 2013]; Solomon v Burden, 104 AD3d 839, 961 NYS2d 535 [2d Dept 2013]; Baron Assoc., LLC v Garcia Group Enters., Inc., 96 AD3d 793, 793, 946 NYS2d 611 [2d Dept 2012]). To establish prima facie entitlement to judgment as a matter of law on the issue of liability with respect to a guaranty, a plaintiff must submit proof of the underlying note, a guaranty, and the failure of the defendant to make payment in accordance with the terms of those instruments (see Griffon V, LLC v 11 East 36th, LLC, 90 AD3d 705, 934 NYS2d 472 [2d Dept 2011]; Baron Assoc., LLC v Garcia Group Enter., Inc., 96 AD3d 793, supra).
Here, the moving papers included copies of the loan documents that are the subject of the plaintiff's First and Third causes of action including the consolidated note and mortgage of June 11, 2007 and the written guarantees of the obligations of the mortgagor thereunder. The moving papers also included due proof that the mortgagor/guarantor defendants defaulted on the payment obligations under the terms of both mortgage loans and that neither the mortgagor defendant nor the guarantor defendants have cured the defaults in payment. The plaintiff thus established its entitlement to summary judgment on its First, Second, Third and Sixth causes of action set forth in the complaint, in which the plaintiff seeks foreclosure of the first and second mortgages, deficiency judgments against the mortgagor/guarantor defendants and an award of counsel fees from such defendants.
The moving papers further established a prima facie showing of an entitlement to summary judgment with respect to the plaintiff's Seventh cause of action sounding in declaratory relief that would effect a consolidation of the First and Second mortgages as to priority. The moving papers established, prima facie, the plaintiff's entitlement to such relief by virtue of the commonality of the date of the execution of the two mortgages, the absence of intervening encumbrancers and the absence of opposition to the plaintiff's demands for such relief by any party, including, the mortgagor/guarantor defendants who alone opposed this motion. The court thus awards summary judgment to the plaintiff on its Seventh cause of action for declaratory relief and declares the Second mortgage to be consolidated with the First mortgage so as to have equal priority with that of the First mortgage, thereby allowing both to be sold at but one public auction of the premises. The last cause of action, incorrectly denominated as a second "Fifth' cause of action for separate sales of the premises which is posited in the alternative to the Seventh cause of action is dismissed as the same was conditionally withdrawn by the plaintiff upon the granting of judgment on the Seventh cause of action.
Those portions of the plaintiff's motion wherein it seeks summary judgment on its Fifth cause of action entitled "Right to Foreclosure" is denied as no showing of any entitlement to accelerated judgments thereon under CPLR Article 32 was advanced in the moving papers. The Fifth cause of action, together with the Fourth seeking rents under a separate security instrument, which was not addressed in the moving papers, are severed from all others set forth in the complaint. The severance of these two causes of action must be reflected in the judgment issued thereon, if any.
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 of its entitlement to summary judgment on its First, Second Third, Sixth and Seventh causes of action due to their possession of some bona fide defense asserted in their answer or otherwise possessed by them (see Flagstar Bank v Bellafiore, 94 AD3d 1044, 943 NYS2d 551 [2d Dept 2012]; Grogg Assocs. v South Rd. Assocs., 74 AD3d 1021, 907 NYS2d 22 [2d Dept 2010]; Washington Mut. Bank v O'Connor, 63 AD3d 832, 880 NYS2d 696 [2d Dept 2009]; J.P. Morgan Chase Bank, NA v Agnello, 62 AD3d 662, 878 NYS2d 397 [2d Dept 2009]). The Rocky Point defendants failed to oppose the motion and thus raised no question of fact. Summary judgment on these causes of action is thus awarded to the plaintiff to the extent asserted against the Rocky Point defendants.
In their opposing papers, the mortgagor/obligor defendants do not challenge the validity of the loan documents, their execution thereof or their defaults in payment under the terms thereof. Theirchallenges to the plaintiff's motion encompass two procedural...
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