VFC Partners 19, LLC v. Romaz Props., Ltd.

• Citation: 5 N.Y.S.3d 330 (Table)
• Decision Date: 04 December 2014
• Docket Number: No. 10985/2013.,10985/2013.
• Parties: VFC PARTNERS 19, LLC, Plaintiff, v. ROMAZ PROPERTIES, LTD., Robert Romeo, Carmella Holland, Metropics, New York, LLC., and New York Department of Taxation and Finance, “John Doe # 1” through “John Doe # 50” the last fifty names being fictitious and unknown to, PC plaintiff, the persons or parties intended being the tenants, occupants, persons or corporation, if any, having or claiming an interest in or lien upon the premises, described in the complaint, Defendants. Romaz Properties, Ltd., Robert Romeo and Carmella Maria Holland, Third–Party Plaintiffs, Hudson Valley Bank, Third–Party Defendant.
• Court: United States State Supreme Court (New York)

5 N.Y.S.3d 330 (Table)

VFC PARTNERS 19, LLC, Plaintiff
v.
ROMAZ PROPERTIES, LTD., Robert Romeo, Carmella Holland, Metropics, New York, LLC., and New York Department of Taxation and Finance, “John Doe # 1” through “John Doe # 50” the last fifty names being fictitious and unknown to, PC plaintiff, the persons or parties intended being the tenants, occupants, persons or corporation, if any, having or claiming an interest in or lien upon the premises, described in the complaint, Defendants. Romaz Properties, Ltd., Robert Romeo and Carmella Maria Holland, Third–Party Plaintiffs, Hudson Valley Bank, Third–Party Defendant.

No. 10985/2013.

Supreme Court, Suffolk County, New York.

Dec. 4, 2014.

Certilman, Balin, Adler, Hauppauge, Attys. for Plaintiff.

Michael Kohl, PC, Bohemia, Atty. for Romaz Prop., Romero & Holland.

Clifford J. Petroske, PC, Bohemia, Joseph Law Group, LLP, New York, Attys. for T–Mobile.

Garfunkle, Wild, PC, Great Neck, Attys. for University Assoc.

Belkin, Burden, Wenig, New York, Attys. for Hudson Valley Bank.

Opinion

THOMAS F. WHELAN, J.

Upon the following papers numbered 1 to 11 read on this motion by the third party defendant for summary judgment dismissing the third party complaint; Notice of Motion/Order to Show Cause and supporting papers 1–4; Notice of Cross Motion and supporting papers; Answering papers 5–7; Reply papers 8–9; 10–11; Other; (and after hearing counsel in support and opposed to the motion) it is,

ORDERED that those portions of this motion (# 003) by the third-party defendant, Hudson Valley Bank, NA, for an order granting it summary judgment, is considered under CPLR 3212 and is granted; and it is

ORDERED that the remaining portions of this motion by the third-party defendant for an order awarding it costs and counsel fees and/or imposing monetary sanctions against the third-party plaintiff and its counsel by reason of their engagement in frivolous conduct is denied.

In April of 2013, the plaintiff, VFC Partners 19, LLC commenced the main action captioned first above against defendants, Romaz Properties Ltd. (“Romaz”), Robert Romeo (“Romeo”), Carmella Holland (“Holland”), and two other entities for a judgment foreclosing the lien of a consolidated mortgage in the amount of $2,800,000.00 and other relief. The consolidated mortgage loan bundled several prior mortgages given by Romaz on commercial property located in Bohemia, New York with a September 29, 2006 Gap mortgage in the amount of $1,157,500.00 given by Romaz to secure the Hudson Valley Bank lien. As further security, Hudson Valley Bank accepted written guarantees of the obligations of Romaz from defendants Romeo and Holland. The $2, 800, 000.00 consolidated mortgage formed the single lien in the amount $2, 800, 000, 00 in favor of Hudson Valley who thereafter assigned the underlying notes mortgages to the plaintiff. The main action was settled in October of this year, although it has not yet proceeded to judgment.

Following the joinder of issue in the main action, defendants Romaz, Romeo and Holland commenced the second action above captioned which is styled as a third-party action of the type contemplated by CPLR 1007. The three causes of action asserted therein charge the third-party defendant Hudson Valley Bank [hereinafter “Hudson Valley”] with breaching obligations purportedly arising under the terms of the September 29, 2006 consolidated mortgage note indenture which afforded Romaz an option to renew the note for an additional five year term thereby extending its maturity date beyond the October 1, 2011 maturity date set forth in such note. By virtue of this purported breach of a contractual obligation, Hudson is alleged to be responsible for Romaz's default under the terms of the consolidated mortgage that is the subject of the main action and for damages directly recoverable by Romaz and its guarantors, including litigation costs.

By the instant motion, Hudson Valley seeks summary judgment dismissing the third-party complaint and an award of costs, including counsel fees or sanctions, due to conduct on the part of the third-party plaintiffs and/or their counsel that allegedly constitutes frivolous conduct within the purview of the rules at 22 NYCRR Part 130–1. For the reasons stated, the motion is granted to the extent that summary judgment is awarded.

It is well established that the essential elements of a cause of action to recover damages for breach of contract are as follows: the existence of a contract, the plaintiff's performance under the contract, the defendant's breach of that contract, and resulting damages (see Elisa Dreier Reporting Corp. v. Global NAPs Networks, 84 AD3d 122, 921 N.Y.S.2d 329 [2d Dept 2011] ; JP Morgan Chase v. J.H. Elec. of NY, Inc., 69 AD3d 802, 893 N.Y.S.2d 237 [2d Dept 2010] ; Palmetto Partners, L.P. v. AJW Qualified Partners, 83 AD3d3d 804, 921 N.Y.S.2d 260 [2d Dept 2011] ). Allegations that are vague, conclusory, and indefinite as to the alleged breach of one or more provisions of the agreement are insufficient as a matter of law (see Island Surgical Supply Co. v. Allstate Ins. Co., 32 AD3d 824, 820 N.Y.S.2d 854 [2d Dept 2006] ). Moreover, viable claims for breach of contract must rest upon controversies that are within the scope of the subject matter of the contract allegedly breached (see Simon v. Granite Bldg. 2, LLC, 114 AD3d 749, 980 N.Y.S.2d 489 [2d Dept 2014] ; Countrywide Home Loans, Inc. v. United General Title Ins. Co., 109 AD3d 950, 971 N.Y.S.2d 353 [2d Dept 2013] ; Kaprall v. WE: Women's Entertainment, LLC, 74 AD3d 1151, 904 N.Y.S.2d 721 [2d Dept 2010] ).

Here, the moving papers established prima facie that none of the third-party plaintiffs' pleaded claims for relief, all of which sound in purported breaches of contractual obligations imposed upon Hudson Valley under the terms of the September 29, 2006 note, are without merit. The third-party plaintiffs failed to allege, let alone establish, any of the elements necessary for the successful prosecution of a breach of contract claim as no provision of the subject note nor any of the other loan documents are alleged to have been breached by Hudson Valley. The option provision of the note about which Romaz and its guarantors complain inured to the benefit of Romaz and imposed upon it certain obligations for the successful exercise of such option. Since there is an admitted failure on the part of Romaz to exercise the contractual option of renewal on the part of Romaz, and in light of its admitted breach of its payment obligations under the terms of the note and mortgage, its claims of breach on the part of Hudson Valley are insufficient as a matter of law.

The attempt by Romaz to defeat Hudson Valley's prima facie showing of its entitlement to the summary judgment demanded by Romaz's assertion of an unpleaded claim of fraud is rejected. While modern practice permits a plaintiff to successfully oppose a motion for summary judgment by relying on an unpleaded claim (see Alvord and Swift v. Stewart M. Muller Constr. Co., Inc., 46 N.Y.2d 276, 413 N.Y.S.2d 309 [1978] ), any such opposition must be supported by evidentiary submissions which establish the elements of the unpleaded claim in a manner sufficient to give rise to questions of fact as to its plausibility and the adverse party's entitlement to the summary judgment demanded by it (see Begley v. City of New York, 111 AD3d 5, 972 N.Y.S.2d 48 [2d Dept 2013] ; Comsewogue Union Free School Dist. v. Allied–Trent Roofing Sys., 15 AD3d 523, 790 N.Y.S.2d 220 [2d Dept 2005] ). To make out a claim for fraud in the inducement or a defense premised on it, the claimant must...