Opinion
2012-03-13
PRIVATE CAPITAL GROUP, LLC, et al., Plaintiffs–Respondents, v. PRIVATE LENDER SERVICE CORP., et al., Defendants,Gnosis LLC, Defendant–Appellant.
Law Offices of Ira Bierman, Syosset (Ira Bierman of counsel), for appellant. Alston & Bird LLP, New York (Michael P. De Simone of counsel), for respondents.
Law Offices of Ira Bierman, Syosset (Ira Bierman of counsel), for appellant. Alston & Bird LLP, New York (Michael P. De Simone of counsel), for respondents.
Order, Supreme Court, New York County (Bernard J. Fried, J.), entered December 23, 2010, which, to the extent appealed from, granted plaintiffs' motion for summary judgment on their claims for conversion and replevin, unanimously affirmed, with costs.
The motion court correctly found that Gnosis was not a holder in due course of the mortgages it had acquired using plaintiffs' funds because its principal, Michael Bode, had actual knowledge, and not merely reason to know, of plaintiffs' claim ( see Uniform Commercial Code § 3–304[7]; Hartford Acc. & Indem. Co. v. American Express Co., 74 N.Y.2d 153, 162–163, 544 N.Y.S.2d 573, 542 N.E.2d 1090 [1989] ). Such knowledge was derived from all the attendant circumstances, including Bode's participation in the underlying diversion of plaintiffs' funds and his signing of the mortgage transfer documents, and not just from the complaint in a related action.
*853 We have considered appellant's other contentions and find them unavailing.