Leviton v. East Atl. Prop., LLC, 2009 NY Slip Op 33182(U) (N.Y. Sup. Ct. 12/21/2009), 003430-09.
| Decision Date | 21 December 2009 |
| Docket Number | No. 003430-09.,Motion Seq. No: 1.,003430-09. |
| Citation | 2009 NY Slip Op 33182 |
| Parties | MARTHA LEVITON, Plaintiff, v. EAST ATLANTIC PROPERTIES, LLC and "JOHN DOE #1" through "JOHN DOE #12," the last twelve 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. |
| Court | New York Supreme Court |
This matter is before the court on the motion by Plaintiff Martha Leviton ("Leviton" or "Plaintiff'), filed on May 13, 2009 and submitted November 16, 2009. For the reasons set forth below, the Court grants the motion, and directs that a trial will be conducted before a Special Referee to determine 1) the amount that Defendant owes Plaintiff, pursuant to the mortgage documents, in principal and interest, 2) the amount of attorney's fees that Defendant owes Plaintiff, pursuant to the mortgage documents, to compensate Plaintiff for counsel fees it has incurred in pursuing this action, and 3) whether the premises in question can be sold in parcels.
Plaintiff moves for an Order 1) pursuant to CPLR §§ 3211(a)(1) and (7), dismissing the counterclaim of Defendant East Atlantic Properties ("East Atlantic" or "Defendant"); 2) pursuant to CPLR § 3212, granting summary judgment to Plaintiff; and 3) granting Plaintiff an award of attorney's fees pursuant to the terms of the mortgage. East Atlantic opposes Plaintiffs motion.
Plaintiff commenced this foreclosure action as the assignee1 of a mortgage between Defendant East Atlantic, the mortgagor, and Macleben Company, LLC ("Macleben"), the mortgagee ("Mortgage"). Defendant affirms that Theodore Leviton, Plaintiff's husband, manages Macleben. The Mortgage served as security for a loan to East Atlantic in the sum of $190,250, which was the subject of a mortgage note ("Note") executed by East Atlantic which provided that East Atlantic would make monthly payments in the amount of $2,410.01. East Atlantic executed the Mortgage, as collateral security for the payment of the Note, with respect to premises known as 538 West Walnut Street, Long Beach, New York ("Premises"). Plaintiff alleges that East Atlantic defaulted under the terms of the Mortgage and Note by failing to make the monthly installment payment of $2,410.10 beginning January, 2008, or subsequent payments, despite Plaintiffs due demand. Additionally, Plaintiff alleges that East Atlantic violated the terms of the Mortgage by failing to provide proof of insurance coverage naming Plaintiff as additional insured, as required by paragraphs 2 and 10 of the Mortgage.
In response to Plaintiffs September 17, 2008 Default Notice demanding payment in the amount of $21,690.09, representing nine outstanding loan installments plus accrued interest, and the Notice of Acceleration dated October 10, 2008, East Atlantic attempted, on December 16, 2008, to tender payment in the amount of $16,870, which East Atlantic contends represented full satisfaction of the amount it owes under the Mortgage and Note. Specifically, in a letter dated December 16, 2008 (Ex. G to P's Mot.), East Atlantic's counsel advised Plaintiffs counsel that East Atlantic disputed Plaintiffs claim that East Atlantic owed $32,103.36, and asserted that East Atlantic owed only $16,870.07. Counsel for East Atlantic tendered payment of $16,870.07, in the form of a check payable to Plaintiff, delivered to counsel for Plaintiff in escrow (underlining in original). East Atlantic's counsel advised Plaintiffs counsel, further, that the terms of the tender required East Atlantic's attorney to retain the check in escrow. Upon East Atlantic's receipt of a satisfaction of the Mortgage, as well as the original Note and Mortgage marked "paid," he would authorize release of the check to Plaintiff.
By letter dated March 4, 2009, Plaintiff rejected that tender. In that letter (Ex. H to P's Mot.), Plaintiffs counsel advised East Atlantic's attorney that 1) he was returning East Atlantic's check because Plaintiff "rejects [East Atlantic's] attempt to satisfy the mortgage obligation for less than is owed[;]" and 2) although Plaintiff would be willing to review her records, East Atlantic's "outright refusal to document the alleged discrepancies leaves [Plaintiff] with no alternative but to accept her records, which she believes to be complete and accurate." This litigation ensued.
In opposition to Plaintiffs motion, Defendant provides an Affidavit of Scott Unger ("Unger"), a managing Member of East Atlantic. Unger submits that there are questions of fact that make summary judgment inappropriate. Unger refers to correspondence between counsel for Plaintiff and counsel for East Atlantic, including the letters referred to supra, and suggests that this documentation raises factual issues as to whether East Atlantic is in default. He also disputes Unger's calculation of interest in reaching the sum that she demanded of East Atlantic. Unger also submits that there is an issue of fact with respect to his counterclaim alleging that Plaintiff charged a usurious rate on the loan. Notably, Unger does not affirm that East Atlantic, in fact, made the payments for which Plaintiff now seeks judgment, or provide documentary proof establishing that East Atlantic made any of those payments.
In its Reply Affidavit, Plaintiff submits that the documentation that Unger provides in support of East Atlantic's opposition, with the exception of the correspondence that Plaintiff herself provided in support of her motion, is irrelevant. Plaintiff argues that East Atlantic has made "vague allegations that it has not defaulted since 2000 and appears to be of the impression that this Court will sift [through] these documents and miraculously find something on its own that will forestall this proceeding" (Reply Aff. at ¶ 3). Plaintiff also submits that, after she declared East Atlantic in default and accelerated the loan pursuant to the terms of the relevant agreements, she was not obligated to accept East Atlantic's tender of less than the full payment owed. Plaintiff also submits that Defendant's claims of usury, or miscalculation of the interest owed, are baseless because a mortgage may impose a rate of interest in excess of the statutory maximum after default.
With respect to Plaintiffs application for counsel fees, the Rider to the Mortgage provides, inter alia:
In the event counsel is employed to foreclose this mortgage or to collect the debt, or to defend the lien, the mortgagor hereby agrees to pay a sum equal to fifteen percent (15%) of the unpaid balance secured by this mortgage, but not less than the sum of $750.00, as and for legal fees.
Plaintiff submits that she is entitled to summary judgment because she has submitted proof of the existence of the Note, Mortgage and Assignment, as well as the Defendant's default in payment. Plaintiff submits, further, that Defendant is in default of the Mortgage because he failed to provide evidence of insurance coverage naming the Plaintiff as an additional insured, as required by the terms of the Mortgage. Plaintiff also requests counsel fees, pursuant to the applicable provisions in the Mortgage Rider. Plaintiff submits that the Court should dismiss Defendant's counterclaim alleging that Plaintiff charged a usurious rate on the loan. Plaintiff contends that the defense of usury is inapplicable to the imposition of an interest rate in excess of the statutory maximum after default, as is the case here.
Defendant opposes Plaintiffs motion submitting, inter alia, that 1) Plaintiff has miscalculated the interest rate; and 2) Plaintiff charged a usurious interest rate.
A complaint may be dismissed based upon documentary evidence pursuant to CPLR § 3211(a)(1) only if the factual allegations contained therein are definitively contradicted by the evidence submitted or a defense is conclusively established thereby. Yew Prospect, LLC v. Szulman, 305 A.D.2d 588 (2d Dept. 2003); Sta-Bright Services, Inc. v. Sutton, 17 A.D.3d 570 (2d Dept. 2005).
In addition, it is well settled that a motion interposed pursuant to CPLR §3211 (a)(7), which seeks to dismiss a complaint for failure to state a cause of action, must be denied if the factual allegations contained in the complaint constitute a cause of action cognizable at law. Guggenheimer v. Ginzburg, 43 N.Y.2d 268 (1977); 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144 (2002). When entertaining such an application, the Court must liberally construe the pleading. In so doing, the Court must accept the facts alleged as true and accord to the plaintiff every favorable inference which may be drawn therefrom. Leon v. Martinez, 84 N.Y.2d 83 (1994). However, on such a motion, the Court will not presume as true bare legal conclusions and factual claims which are flatly contradicted by the evidence. Palazzolo v. Herrick, Feinstein, 298 A.D.2d 372 (2d Dept. 2002).
The party seeking summary judgment must establish an entitlement to judgment as a matter of law. Alvarez v. Prospect Hosp., 68 N.Y.2d 320 (1986); Zuckerman v. City of New York, 49 N.Y.2d 557 (1980). If the party moving for summary judgment fails to establish a prima facie entitlement to judgment as a matter of law, the motion must be denied. Winegrad v. New York University Medical Center, 64 N.Y.2d 851 (1985); Widmaier v. Master Products, Mfg., 9 A.D.3d 362 (2d Dept. 2004); and Ron v. New York City Housing Auth., 262 A.D.2d 76 (1st Dept. 1999). CPLR § 3212(b) further requires that, in ruling on a motion for summary judgment, the court must determine if the movant's papers justify holding as a matter of law "that there is no defense to the cause of action or...
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