New Horizons Investors, Inc. v. Marine Midland Bank, N.A.
| Decision Date | 09 March 1998 |
| Citation | 248 A.D.2d 449,669 N.Y.S.2d 666 |
| Parties | , 1998 N.Y. Slip Op. 2022 NEW HORIZONS INVESTORS, INC., et al., Respondents, v. MARINE MIDLAND BANK, N.A., Appellant. |
| Court | New York Supreme Court — Appellate Division |
Cahn Wishod & Lamb, L.L.P., Melville (Robert H. Cohen, of counsel), for appellant.
Meiselman, Boland, Reilly & Fugazzi, Mineola (David T. Reilly, of counsel), for respondents.
Before O'BRIEN, J.P., and SULLIVAN, FRIEDMANN and GOLDSTEIN, JJ.
MEMORANDUM BY THE COURT.
In an action to recover damages for alleged lender liability, the defendant appeals from an order of the Supreme Court, Nassau County (DiNoto, J.), dated January 9, 1997, which denied its motion for summary judgment dismissing the complaint on the ground of res judicata and for the imposition of sanctions against the plaintiffs pursuant to 22 NYCRR 130-1.1.
ORDERED that the order is modified, on the law, by deleting the provision thereof denying that branch of the defendant's motion which was for summary judgment and substituting therefor a provision granting that branch of the motion; as so modified, the order is affirmed, with costs to the defendant, and the complaint is dismissed.
In 1986, New Horizons Investors, Inc. (hereinafter New Horizons), became indebted to the defendant, Marine Midland Bank, N.A. (hereinafter the bank), in the principal sum of $1,200,000, in order to acquire and renovate a commercial building in Garden City. The individual plaintiffs, Vincent Marino, Thomas L. Costa, and Donald Gallagher, were investors in New Horizons and personal guarantors of the debt, which was secured by a mortgage. In 1991 the bank commenced an action to foreclose the mortgage. The complaint in the foreclosure action named the guarantors as defendants and alleged that they were jointly and severally liable for any deficiency judgment. New Horizons and Marino defaulted, Costa answered with a general denial, and Gallagher served a notice of appearance. In May 1993 the bank's motion for summary judgment of foreclosure and sale was granted without opposition, a judgment of foreclosure was entered, and the property was sold at public auction the following July.
The judgment of foreclosure permitted the bank to recover a deficiency judgment from the guarantors. The bank's motion for a deficiency judgment was ultimately denied, however, on the ground that there was no deficiency between the market value of the premises and the amount owed to the bank (see, Marine Midland Bank v. New Horizons Investors, 236 A.D.2d 523, 653 N.Y.S.2d 685).
While the motion for a deficiency judgment was pending in the foreclosure action, the plaintiffs commenced the action at bar against the bank in which they alleged, inter alia, that the bank breached its contractual obligations on the loan and violated its obligation to act in good faith. Specifically, the plaintiffs alleged that the bank refused to grant a reasonable extension of the...
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