Opinion
No. 30798/10.
2012-05-30
EAST WEST BANK, successor in interest to United Commercial Bank, Plaintiff, v. 32 TOWER, LLC, et. al., Defendants.
Peter Janovsky and David S.S. Hamilton, New York, for Plaintiff East West Bank. Mark D. Mermel, Lake Success, for Defendants 32 Tower, Miriam Chan and Henry Y.S. Chan.
Peter Janovsky and David S.S. Hamilton, New York, for Plaintiff East West Bank. Mark D. Mermel, Lake Success, for Defendants 32 Tower, Miriam Chan and Henry Y.S. Chan.
SYLVIA O. HINDS–RADIX, J.
Upon the foregoing papers, plaintiff East West Bank, successor in interest to United Commercial Bank moves for an order, pursuant to CPLR 2221(e), granting leave to renew a decision of this court, dated November 9, 2011, and upon renewal, granting plaintiff's prior motion for summary judgment against defendants Miriam Chan, Henry Y.S. Chan and Kenneth Y.K. Chan (guarantors) and denying the prior cross motion of the guarantors or, in the alternative, an order, pursuant to CPLR 2221(d), granting plaintiff leave to reargue the prior decision and, upon reargument, granting plaintiff's motion for summary judgment against the guarantors and denying the cross motion of the guarantors.
Plaintiff commenced this action on December 20, 2010 to foreclose a commercial mortgage encumbering the subject property at 32–42 India Street in Brooklyn. The mortgage was executed by defendant 32 Tower LLC on March 30, 2006 to secure a note from United Commercial Bank (UCB) in the amount of $6,910,000.00. As additional security for the loan, personal guaranties for the repayment of Tower's obligations to UCB were signed by the guarantors. On November 6, 2009, UCB was closed by the California Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) was named receiver of UCB's assets. Certain assets of UCB were thereafter transferred to plaintiff under a purchase and assumption agreement with the FDIC. As evidenced by a written assignment document dated November 18, 2010, submitted by plaintiff in support of its prior motion, the FDIC assigned to plaintiff the following instruments:
1. The mortgage and related documents recorded in the State of New York described in Exhibit A attached hereto (collectively, the “Mortgages”) encumbering the premises commonly known as 32–42 India Street, Brooklyn, New York 11222, as more particularly described in Exhibit B attached hereto, and
2. All promissory notes(s), note consolidation and/or modification agreements, and related unrecorded documents evidencing indebtedness secured by the Mortgages, and all sums payable under the foregoing (collectively, the “Notes”).
In the prior November 9, 2011 order, this court granted plaintiff's motion for summary judgment as against the borrower, 32 Tower LLC, but denied that part of the motion which sought summary judgment over the guarantors on the ground that plaintiff did not establish ownership of the guarantees and thus lacked standing. Consequently, the court granted the cross motion of the guarantors for dismissal of the action as against them. On the prior motion, plaintiff argued that the guaranties were “unrecorded documents of indebtedness” and therefore assigned by way of the November 18, 2010 assignment instrument. This court disagreed, stating that a guaranty is not evidence of indebtedness but is an agreement collateral to the debt.
On the instant motion to renew and/or reargue, plaintiff submits, for the first time, a document entitled “assignment of loan documents,” dated November 17, 2010, whereby the FDIC assigned to plaintiff “[a]ll rights, title and interest in all notes, security documents, and other documents ... in connection with the [subject] loan ... including without limitation all ... guaranties.” Plaintiff also submits, for the first time on this motion, a complete copy of the purchase and assumption agreement with the FDIC.
A motion pursuant to CPLR 2221 to renew “must be (1) based upon new facts not offered on the prior motion that would change the prior determination, and (2) set forth a reasonable justification for the failure to present such facts on the prior motion” (Matter of Nelson v. Allstate Ins. Co., 73 AD3d 929, 929 [2010] ). “The requirement that a motion for renewal be based on new facts is a flexible one, and it is within the court's discretion to grant renewal upon facts known to the moving party at the time of the original motion if the movant offers a reasonable excuse for the failure to present those facts on the prior motion' “ (Gonzalez v.. Vigo Constr. Corp., 69 AD3d 565, 566 [2010], quoting Matter of Surdo v. Levittown Pub. School Dist., 41 AD3d 486, 486 [2007] ). Nevertheless, “[a]lthough a court has the discretion to grant renewal upon facts known to the movant at the time of the original motion, a motion for leave to renew is not a second chance freely given to parties who have not exercised due diligence in making their first factual presentation” (Huma v. Patel, 68 AD3d 821, 822 [2009][citations and internal quotation marks omitted] see Doviak v. Finkelstein & Partners, LLP, 90 AD3d 696, 700–701 [2011] ).
There is no dispute that the “assignment of loan documents” was known by and within the possession and control of plaintiff at the time of the original motion. This court does not find that plaintiff's excuse of “inadvertence” is a reasonable under the circumstances or that the court must now consider the document in the “interest of justice.” In the foreclosure arena, courts have been particularly vigilant and exacting when reviewing papers to insure that the party asserting a claim against a borrower or a borrower's property pursuant to loan documents establishes clearly that it has ownership of the documents at the time the action is commenced. The attention to standing issues ensued in large part from the haphazard practices of many lenders, particularly the failure to keep proper track of loan transfers and assignments between them. While the instant action is a commercial foreclosure, plaintiff is seeking to hold individuals (i.e. the guarantors) personally liable for the commercial borrower's debt. Where an individual's personal finances are targeted by a lender, it is important that the lender set forth clear entitlement to its claim. Courts cannot simply assume that a plaintiff has standing to enforce a personal guaranty just because it assumed the related mortgage and note. Thus, particular diligence is required of a foreclosing plaintiff to submit competent proof of ownership of all loan documents forming the basis of its claim, including copies of all relevant assignments it has in its possession. Plaintiff here has not exercised due diligence in making the prior motion, and should not be afforded successive opportunities to make a proper factual presentation.
Further, there is no indication that justice or equity requires reinstatement of the claims against the guarantors. Plaintiff has elected to recover the debt through a foreclosure action. The guarantors would be personally liable only in the event of a deficiency following the sale of the property. Plaintiff has already established entitlement to summary judgment against the borrower, and there is no allegation that the debt would not be fully or substantially satisfied as the result of a sale.
Accordingly, the court declines to exercise its discretion to grant renewal to plaintiff.
“A motion for leave to reargue “shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion” (CPLR 2221[d][2] ). A motion for leave to reargue is not designed to provide an unsuccessful party with successive opportunities to reargue issues previously decided, or to present arguments different from those originally presented ( see Haque v. Daddazio, 84 AD3d 940, 942 [2011];Mazinov v. Rella, 79 AD3d 979, 980 [2010] ). Plaintiff has not demonstrated that the court overlooked or misapprehended and facts or law in determining the prior motion.
As a result, plaintiff's motion for leave to renew and/or reargue is denied in all respects.
The foregoing constitutes the decision and order of the court.