P'ship v. Franklin Jimanez, Nyc Envtl. Control Bd., All's Well That Ends Well, LLC

• Decision Date: 28 September 2017
• Docket Number: Index No. 17611-2006
• Citation: 2017 NY Slip Op 32888 (U)
• Parties: MURLAR EQUITIES PARTNERSHIP Plaintiff, v. FRANKLIN JIMANEZ, NYC ENVIRONMENTAL CONTROL BOARD, ALL'S WELL THAT ENDS WELL, LLC, MARIZA COLON, and J&J DRY CLEANERS Defendants
• Court: New York Supreme Court

2017 NY Slip Op 32888(U)

MURLAR EQUITIES PARTNERSHIP Plaintiff, v. FRANKLIN JIMANEZ, NYC ENVIRONMENTAL CONTROL BOARD, ALL'S WELL THAT ENDS WELL, LLC, MARIZA COLON, and J&J DRY CLEANERS Defendants

Index No. 17611-2006

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF BRONX IAS PART 4

September 28, 2017

HON. HOWARD H. SHERMAN:

This motion by the plaintiff Murlar Equities Partnership ("Murlar") for an order granting renewal and reargument of this Court's decision dated September 1, 2016, which granted the motion by the defendant Franklin Jimanez for summary judgment dismissing the complaint and vacated the Judgment of Foreclosure and Sale, and upon renewal and reargument, denying defendant's motion, restoring the Summons and Complaint, and the Order of Reference, and directing the Referee to re-compute and ascertain the amounts due under the note and mortgage, and for other relief, is decided as follows:

In its decision dated September 1, 2016, this Court granted the motion by defendant Franklin Jimanez for summary judgment dismissing the complaint, upon the grounds that the underlying mortgage is criminally usurious and unenforceable, and vacating the Judgment of Foreclosure and lis pendens. This decision concluded with a clear and unambiguous directive to "settle order." It appears that no party has settled an order in compliance with the Court's decision. Instead, the counsel for the plaintiff served this decision "with notice of entry" [sic] on September 30, 2016.

This motion to renew and reargue was brought on by order to show cause dated October 6, 2016. The defendant filed opposition, and this motion was submitted on March 16, 2017. Neither party makes reference to the fact that no order was settled or entered pursuant to the Court's decision resolving the prior motion.

Just as no appeal lies from a decision Matteson v. Matteson, 40 A.D. 2d 1079 [4^th Dept 1972]; Wells v. Sinning, 34 A.D. 2d 682 [2^nd Dept 1970]; Thorn v. Sylvester, 237 A.D.2d 430 [2^nd Dept 1997) a motion to reargue or renew pertains to an order, not a decision. CPLR §2221, entitled "Motion Affecting Prior Order" provides in pertinent part:

A motion for leave to renew or to reargue a prior motion, for leave to appeal from, or to stay, vacate or modify, an order shall be made, on notice, to the judge who signed the order, unless he or she is for any reason unable to hear it, except that:

1. if the order was made upon a default such motion may be made, on notice, to any judge of the court; and

2. if the order was made without notice such motion may be made, without notice, to the judge who signed it, or, on notice, to any other judge of the court. [emphasis supplied].

Nonetheless, it is well-settled that the Court has the inherent power, sua sponte or at the behest of one of theparties, to reconsider and amend an earlier decision before issuing an order thereon. Manocherian v. Lenox Hill Hospital, 229 A.D. 2d 197 [1^st Dept 1997]; Hulett v. Niagara Mohawk Power Corp., 1 A.D. 3d 999 [4^th Dept 2003]; Scrithfield v. Perry, 245 A.D. 2d 1054 [4^th Dept 1997]; Rostant v. Swersky, 79 A.D. 3d 456 [1^st Dept 2010]. Under such circumstances, where an order has not yet been issued, the strict requirements of CPLR §2221 with respect to motions affecting a prior order are not applicable. Vinciguerra v. Jameson, 153 A.D. 2d 452 [3^rd Dept 1990] Levinger v. General Motors Corp., 122 A.D. 2d 419 [3^rd Dept 1986].

The parties have had ample opportunity to address the issues raised on this motion to renew and reargue, with no objection having been raised to the failure of any party to settle an order. Since the plaintiff has nonetheless complied with all of the procedural requirements of CPLR §2221 - aside from the submission of an order - the Court will proceed to entertain this motion as if an order had been settled in compliance with its directive, and to reconsider its prior determination in the light of the new materials furnished by the plaintiff.

The Prior Motion

In granting defendant's motion for summary judgment, the Court found the mortgage and note, as documented on that application, to be criminally usurious and unenforceable. Moreover, the defendant's valid usury claim implicated sufficient public policy considerations so as to justify the vacatur of the defendant's default in the interest of justice, and without the need to demonstrate good cause for the defendant's initial failure to timely assert the usury defense:

"In this case, the defendant has moved for vacatur of the judgment of foreclosure on one single ground: namely, that a claim of usury, in and of itself, sufficiently implicates public policy considerations to justify the vacatur of a default in the interest of justice, and without the need to demonstrate good cause. This is the holding in several judicial departments, which have all vacated defaults granted to lenders based upon the usury defense. Rockefeller v. Jeckel, 161 A.D. 2d 1090 [3rd Dept 1990); Vega Capital Corp. v. W.K.R. Dev. Corp., 98 A.D.2d 627 [1^st Dept 1983]; Blue Wolf Capital Fund II, L.P. v. American Stevedoring Inc., 105 A.D. 3d 178 [1^st Dept. 2013]; Mutual Home Dealers Corp. V. Alves, 23 A.D.2d 791 [2^nd Dept 1965]; Anamdi v. Anugo, 229 A.D. 2d 408 [2^nd Dept 1996]. Since the terms of the loan violate the criminal usury law, the loan transaction, and associated note and mortgage are void and unenforceable. General Obligations Law §5-511."

The Court further found that the interest rate of this loan, which had a term of only 6 months, exceeded the criminal usury rate, utilizing the following computation:

"Applying the Band Realty formula [Band Realty Co. v. North Brewster Inc., 37 N.Y.2d 460 [1975] to this matter, one must utilize twice the amount of the discount ($7500 divided by 50% = $15,000.00), and add this amount to the interest incurred over a one year period ($2000 X 12 = $24,000), thus arriving at the sum of $39,000.00.

The net loan funds advanced i.e. the loan principal [$150,000] minus the retained interest [$7500] equals $142,500.00. Expressed as a percentage of the net loan funds advanced, the $39,000 in total annual interest equals approximately 27.5% of $142,500. This percentage is clearly in excess of the legally permissive maximum of 25% as set forth inPenal Law §190.40. The Court therefore concludes that the interest rate of this loan exceeds the criminal usury rate, as contended by defendant."

In moving for renewal and reargument, the plaintiff does not contest the Court's calculation, and it is thus conceded that the interest rate for this mortgage loan, as presented for the Court's review and analysis on the initial motion, exceeded the legally permissible rate set forth in the Penal Law.

New Evidence

The renewal aspect of this motion relies on 'new matter' furnished for the first time by the plaintiff, which consists of a letter of intent ("the side agreement)" executed by the defendant Jimanez, apparently concurrently with the note and mortgage. Paragraph 10 of this side agreement reads as follows:

"10. It is the intention of Lender, Borrower and Guarantor(s) to comply with the usury laws applicable to the Loan and all sums due under the Note, security agreement and...