Opinion
Index 657483/2019
01-24-2022
FLUSHING BANK, Plaintiff, v. LANDER STREET REALTY CORP. and CARLOS CABRERA, Defendants.
Unpublished Opinion
PRESENT: HON. LOUIS L. NOCK Justice
DECISION+ORDER ON MOTION
HON. LOUIS L. NOCK JUSTICE
The following e-filed documents, listed by NYSCEF document number (Motion 001) 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 33, 34, and 35 were read on this motion for SUMMARY JUDGMENT.
Upon the foregoing documents, it is hereby ordered that plaintiff's motion for summary judgment pursuant to CPLR 3212 is granted, based on the following memorandum decision.
Background
In this action to recover on a note and general guarantee, plaintiff Flushing Bank ("plaintiff") moves, pursuant to CPLR 3212, for summary judgment against defendants Lander Street Realty Corp. ("Lander") and Carlos Cabrera ("Cabrera," and collectively "defendants").
Subsequent to the instant motion being submitted to the court, plaintiff filed a stipulation purporting to assign its claims against Lander and Cabrera to nonparty assignee NBNY 91 William LLC, with said assignee to obtain an order from the court effectuating a substitution of parties (NYSCEF Doc. No. 37). No such order was sought or issued.
Pursuant to an Adjustable Rate Mortgage Note (the "Note") and Mortgage dated October 5, 2006, plaintiff loaned defendants $112,875.00, secured by the real property located at 49 Lander Street, Newburgh, New York (the "premises") (NYSCEF Doc. Nos. 16, 34). Relevant to the instant motion, the Mortgage provides that Lander shall:
"maintain the Improvements in good and substantial order and repair and in such fashion that the value and utility of the Mortgaged Property will not be diminished[, ]
"comply, or cause to be complied with, all laws statutes, codes, acts, ordinances, orders, judgments, degrees, injunctions, rules, regulations, permits, licenses, authorization, directions and requirements of all governments . . . which may . . . affect the Mortgaged Property[, ] [and]
"not do or permit any act or thing which is contrary to the requirements or prohibitions of any document of record affecting the Mortgaged Property nor commit or permit any waste of or any nuisance in, at or on the Mortgaged Property[.](NYSCEF Doc. No. 16, ¶¶ 2[a], [c], [e].) Lander would default under the mortgage if, inter alia, it "[did or permitted to be done] anything that may in any way impair . . . the value of the Mortgaged Property" or failed to "perform or comply with any other covenant, agreement or condition of this Mortgage, the Note or any other agreement between [the parties]" (id., ¶ 32[h-i]).
The Note provides that Lander would repay the loan over 360 installments, with yearly interest of 6.25% as adjusted, increasing to 8% on overdue payments (NYSCEF Doc. No. 34, ¶¶ i-ii). Upon acceleration of the loan, the balance accrues yearly interest at the rate of 16% (id., ¶ 10). In addition, the Note incorporated all provisions of the Mortgage (id., ¶ 5). In the event of a default by Lander, the Note provides that plaintiff may accelerate and call the entire outstanding balance of the loan due (id.). Lander also agreed to pay plaintiff's reasonable attorney's fees in the event of a collection or foreclosure action (id., ¶ 11).
Finally, Cabrera, Lander's President, signed a General Guarantee in which he guaranteed "the prompt payment when due of all present and future obligations and liabilities of any and all kinds of [Lander] to [plaintiff]" (NYSCEF Doc. No. 17).
On July 19, 2019, the City of Newburgh declared the building located at the premises to be "vacant and unfit for human habitation and occupancy," and issued a Condemnation Order and Order to Vacate (NYSCEF Doc. No. 18). Upon receipt of the order and related documents, plaintiff advised defendants on September 26, 2019, that Lander was in default under the mortgage for allowing the property to become condemned (NYSCEF Doc. No. 19). When Lander failed to cure the default within 35 days, on November 27, 2019, plaintiff accelerated the remaining balance of $87,640.90 and demanded immediate payment thereof, together with interest and late charges as provided under the Note and the Mortgage (NYSCEF Doc. No. 20).
Plaintiff commenced this action by filing a summons and complaint on December 16, 2019 (NYSCEF Doc. No. 1). Defendants appeared and answered the complaint (NYSCEF Doc. No. 7). Plaintiff now moves for summary judgment against Lander and Cabrera, jointly and severally, in the amount of the remaining balance of the loan, interest, costs, disbursements, and reasonable attorney's fees.
Standard of Review
Summary judgment is appropriate where there are no disputed material facts (Andre v Pomeroy, 35 N.Y.2d 361, 364 [1974]). The moving party must tender sufficient evidentiary proof to warrant judgment as a matter of law (Zuckerman v City of New York, 49 N.Y.2d 557, 562 [1980]). The opposing party must proffer its own evidence to show disputed material facts requiring a trial (id.). However, the reviewing court should accept the opposing party's evidence as true (Hotopp Assoc. v Victoria's Secret Stores, 256 A.D.2d 285, 286-287 [1st Dept 1998]), and give the opposing party the benefit of all reasonable inferences (Negri v Stop & Shop, 65 N.Y.2d 625, 626 [1985]).
Discussion
When seeking to enforce a promissory note or guarantee, a plaintiff establishes entitlement to summary judgment upon submission of the note or guarantee, and proof of the note-holder or guarantor's failure to pay the amount owed when due (Brookman & Brookman, P.C. v Schiavoni, 245 A.D.2d 93 [1st Dept 1997] ["the IAS court properly granted plaintiff summary judgment based on submission of the written guarantee and evidence that due demand was made and payment not forthcoming"]; Coladonato v Tutto Pizza, 243 A.D.2d 330 [1st Dept 1997] ["It is well settled that proof showing due execution and default in payment on a promissory note, which is not disputed here, establishes a prima facie case and plaintiff is entitled to summary judgment unless the defendant submits evidentiary proof sufficient to raise a genuine triable issue of fact with respect to the note"]).
Here, plaintiff submits the Mortgage (NYSCEF Doc. No. 16), the Note (NYSCEF Doc. No. 34), the guarantee (NYSCEF Doc. No. 17), and the affidavit of Walter Kryzminski, plaintiff's Vice President, attesting to the condemnation of the premises, the default notice sent to defendants, and defendants' failure to repay the accelerated balance due (NYSCEF Doc. No. 14, ¶¶ 8-11). Accordingly, plaintiff has established prima facie entitlement to summary judgment (Schiavoni, 245 A.D.2d at 93; Coladonato, 243 A.D.2d at 330). In opposition, defendants fail to raise a triable issue of fact. Defendants assert that plaintiff waived acceleration of the debt by continuing to take partial payments towards the balance of the loan after declaring a default; yet, as their own records show, plaintiff returned all funds tendered once plaintiff declared a default (NYSCEF Doc. No. 31). Moreover, plaintiff is not required to sue under both the Mortgage and the Note, as the Note expressly incorporates all terms of the Mortgage (NYSCEF Doc. No. 34, ¶ 5).
In addition to the overdue balance sought, plaintiff seeks an award of its reasonable attorneys' fees pursuant to the Note (NYSCEF Doc. No. 34, ¶ 11). Plaintiff has satisfied its burden on this motion and, therefore, it is granted per the following decretal paragraphs.
Accordingly, it is hereby, ORDERED that the plaintiff's motion for summary judgment on the complaint herein is granted and the Clerk of the Court is directed to enter judgment in favor of plaintiff Flushing Bank and against defendants Lander Street Realty Corp. and Carlos Cabrera in the amount of $87,640.90, together with interest at the rate of 16 % per annum from the date of November 27, 2019, until the date of the decision and order on this motion, and thereafter at the statutory rate, as calculated by the Clerk, until the date of satisfaction of judgment, together with costs and disbursements to be taxed by the Clerk upon submission of an appropriate bill of costs; and it is further
ORDERED that plaintiff is entitled to its reasonable attorneys' fees incurred in this action in an amount to be heard and determined by a Judicial Hearing Officer ("JHO") or Special Referee at inquest; and, therefore, it is
ORDERED that the issue of such fees is severed and a JHO or Special Referee shall be designated to conduct an inquest and determine the amount of Plaintiff's said fees, which is hereby submitted to the JHO/Special Referee for such purpose; and it is further
ORDERED that the powers of the JHO/Special Referee shall not be limited beyond the limitations set forth in the CPLR; and it is further
ORDERED that this matter is hereby referred to the Special Referee Clerk (Room 119, 646-386-3028 or spref@nycourts.gov) for placement at the earliest possible date upon the calendar of the Special Referees Part (Part SRP), which, in accordance with the Rules of that Part (which are posted on the website of this court at www.nycourts.gov/supctmanh at the "References" link), shall assign this matter at the initial appearance to an available JHO/Special Referee to determine as specified above.
This constitutes the Decision and Order of the court.