Opinion
2019–03615 Index No. 613648/18
12-15-2021
Michael ADLER, appellant, v. Joanne MARZARIO, et al., respondents, et al., defendants.
Richard A. Rosensweig, Esq., P.C., Staten Island, NY, for appellant. Charles A. Termini, Oceanside, NY, for respondents.
Richard A. Rosensweig, Esq., P.C., Staten Island, NY, for appellant.
Charles A. Termini, Oceanside, NY, for respondents.
REINALDO E. RIVERA, J.P., ANGELA G. IANNACCI, WILLIAM G. FORD, DEBORAH A. DOWLING, JJ.
DECISION & ORDER
In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Nassau County (Julianne T. Capetola, J.), entered April 4, 2019. The order, insofar as appealed from, granted the cross motion of the defendants Joanne Marzario and Paul Marzario, in effect, for summary judgment dismissing the complaint insofar as asserted against them and deeming the mortgage void on the ground that the loan was usurious.
ORDERED that the order is affirmed insofar as appealed from, with costs.
The plaintiff commenced this action against Joanne Marzario and Paul Marzario (hereinafter together the defendants), among others, to foreclose a mortgage on real property owned by Joanne Marzario. The mortgage was given as security for a note signed by the defendants, promising to repay the principal sum of $75,000, with interest at a rate of 20% per annum. In their answer to the complaint, the defendants asserted the defense of usury.
In response to the plaintiff's motion, inter alia, for summary judgment on the complaint insofar as asserted against the defendants, the defendants cross-moved, in effect, for summary judgment dismissing the complaint insofar as asserted against them and deeming the mortgage void on the ground that the loan was usurious. In an order entered April 4, 2019, the Supreme Court, among other things, granted the cross motion, and the plaintiff appeals.
General Obligations Law § 5–501(2) prohibits any person from charging, taking, or receiving any money as interest on a loan at a rate exceeding the maximum permissible interest rate (see Roopchand v. Mohammed, 154 A.D.3d 986, 988, 62 N.Y.S.3d 514 ). Under the civil usury statute, the maximum permissible interest rate is 16% per annum (see General Obligations Law § 5–501[1] ; Banking Law § 14–a[1] ). "A usurious contract is void and relieves the borrower of the obligation to repay principal and interest thereon" ( Roopchand v. Mohammed, 154 A.D.3d at 988, 62 N.Y.S.3d 514 [internal quotations marks omitted]; see General Obligations Law § 5–511 ; Abraham v. American Gardens Co., 189 A.D.3d 741, 744, 136 N.Y.S.3d 148 ).
Here, the loan agreement is usurious on its face, and thus the loan and mortgage are void on the ground of usury, as a matter of law (see Roopchand v. Mohammed, 154 A.D.3d at 988–989, 62 N.Y.S.3d 514 ; Oliveto Holdings, Inc. v. Rattenni, 110 A.D.3d 969, 972, 973 N.Y.S.2d 321 ). Contrary to the plaintiff's contention, his characterization of the loan as a business or investment loan, as opposed to a consumer loan, does not make it non-usurious (see Oliveto Holdings, Inc. v. Rattenni, 110 A.D.3d at 971, 973 N.Y.S.2d 321 ). Moreover, contrary to the plaintiff's further contention, "a clause in the subject promissory note purporting to reduce the rate of interest to a non-usurious rate if the rate originally imposed was found to be usurious could not save the note from being usurious" ( Fred Schutzman Co. v. Park Slope Advanced Med., PLLC, 128 A.D.3d 1007, 1008, 9 N.Y.S.3d 682 ; see also Bakhash v. Winston, 134 A.D.3d 468, 469, 19 N.Y.S.3d 887 ; Simsbury Fund, Inc. v. New St. Louis Assoc., 204 A.D.2d 182, 611 N.Y.S.2d 557 ).
Accordingly, the Supreme Court properly granted the defendants’ cross motion, in effect, for summary judgment dismissing the complaint insofar as asserted against them and deeming the mortgage void.
RIVERA, J.P., IANNACCI, FORD and DOWLING, JJ., concur.