Opinion
2015-02-06
HSBC BANK USA, National Association, Plaintiff–Respondent, v. PRIME, L.L.C., Philip J. Simao, Defendants–Appellants, et al., Defendants.
McMahon, Kublick & Smith, P.C., Syracuse (Jan S. Kublick Of Counsel), for Defendants–Appellants. Phillips Lytle LLP, Rochester (Mark J. Moretti Of Counsel), for Plaintiff–Respondent.
McMahon, Kublick & Smith, P.C., Syracuse (Jan S. Kublick Of Counsel), for Defendants–Appellants. Phillips Lytle LLP, Rochester (Mark J. Moretti Of Counsel), for Plaintiff–Respondent.
PRESENT: SCUDDER, P.J., FAHEY, PERADOTTO, CARNI, AND WHALEN, JJ.
MEMORANDUM:
Plaintiff commenced this foreclosure action after Prime, L.L.C. (Prime) and Philip J. Simao (collectively, defendants) defaulted on a note executed by Prime and guaranteed by Simao. Defendants appeal from an order that granted plaintiff's motion for, inter alia, summary judgment on the complaint pursuant to CPLR 3212, dismissal of defendants' counterclaims and the appointment of a referee to compute plaintiff's damages. We reject at the outset defendants' contention that Supreme Court should have treated plaintiff's motion for summary judgment pursuant to CPLR 3212 as a motion to dismiss based upon documentary evidence pursuant to CPLR 3211(a)(1). Contrary to defendants' contention, the mere fact that plaintiff relies on documentary evidence, i.e., a forbearance agreement containing a release, in support of its motion does not alter the fact that it is a motion for summary judgment ( see e.g. Bronson v. Hansel, 16 N.Y.3d 850, 851, 922 N.Y.S.2d 266, 947 N.E.2d 157). Defendants' contention that plaintiff's motion should have been treated as a CPLR 3211 motion to dismiss because issue had not been joined with respect to plaintiff's affirmative defense of release is raised for the first time in their reply brief and thus is not properly before us ( see Turner v. Canale, 15 A.D.3d 960, 961, 790 N.Y.S.2d 347, lv. denied5 N.Y.3d 702, 799 N.Y.S.2d 773, 832 N.E.2d 1189).
We likewise reject defendants' contention that the court erred in granting plaintiff's motion before discovery was complete. Defendants “failed to demonstrate that facts essential to oppose the motion were in plaintiff's exclusive knowledge and possession and could be obtained by discovery” (Franklin v. Dormitory Auth. of State of N.Y., 291 A.D.2d 854, 854, 736 N.Y.S.2d 816; seeCPLR 3212[f]; Avraham v. Allied Realty Corp., 8 A.D.3d 1079, 1079, 778 N.Y.S.2d 648), and the “ ‘mere hope that somehow [defendants] will uncover evidence that will prove [their] case is not sufficient to defeat a motion for summary judgment’ ” (Rowland v. Wilmorite, Inc., 68 A.D.3d 1770, 1771, 891 N.Y.S.2d 840).
We conclude with respect to the merits of that part of plaintiff's motion for summary judgment on the complaint that plaintiff “established [its] prima facie entitlement to summary judgment as a matter of law by submitting the mortgage, the underlying note, and evidence of a default” (Ferri v. Ferri, 71 A.D.3d 949, 949, 896 N.Y.S.2d 890), and defendants “failed to ‘demonstrate the existence of a triable issue of fact regarding a bona fide defense to the action’ ” (Ekelmann Group, LLC v. Stuart [Appeal No. 2], 108 A.D.3d 1098, 1099, 969 N.Y.S.2d 638; see Dasz, Inc. v. Meritocracy Ventures, Ltd., 108 A.D.3d 1084, 1084, 969 N.Y.S.2d 653). Contrary to defendants' contention, there is no issue of fact concerning its defense that plaintiff breached the implied covenant of fair dealing by increasing the interest rate on the note by three percent retroactively to the date of the default. Here, the note expressly provided that upon default the interest rate would increase by three percent, and “[n]o obligation can be implied ... [that] would be inconsistent with other terms of the contractual relationship” (Murphy v. American Home Prods. Corp., 58 N.Y.2d 293, 304, 461 N.Y.S.2d 232, 448 N.E.2d 86; see Marine Midland Bank v. Yoruk, 242 A.D.2d 932, 933, 662 N.Y.S.2d 957).
Also contrary to defendants' contention, the court properly considered plaintiff's defense of release in granting that part of plaintiff's motion to dismiss the counterclaims despite the fact that the defense was not pleaded in plaintiff's reply. “ ‘[A] court may grant summary judgment based upon an unpleaded defense where[, as here,] reliance upon that defense neither surprises nor prejudices the [other party]’ ” (Schaefer v. Town of Victor, 77 A.D.3d 1346, 1347, 909 N.Y.S.2d 258; see Syracuse Equip. Co. v. Lebis Contr., 255 A.D.2d 992, 993, 680 N.Y.S.2d 338). Defendants failed to establish any prejudice or surprise with respect to the unpleaded defense of release ( see Schaefer, 77 A.D.3d at 1347, 909 N.Y.S.2d 258). We further conclude that, contrary to defendants' contention, they “failed to raise a triable issue of fact with respect to their claim that the release is void based on fraud” (Marlowe v. Muhlnickel, 294 A.D.2d 830, 831, 740 N.Y.S.2d 906; see generally Centro Empresarial Cempresa S.A. v. América Móvil, S.A.B. de C.V., 17 N.Y.3d 269, 276, 929 N.Y.S.2d 3, 952 N.E.2d 995).
Finally, defendants' contention that their counterclaims should have been severed from plaintiff's foreclosure action is not properly before us inasmuch as it is raised for the first time on appeal ( see Ciesinski v. Town of Aurora, 202 A.D.2d 984, 985, 609 N.Y.S.2d 745).
It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.