| Hoffinger Indus., Inc. v Alabama Ave. Realty, Inc. |
| 2009 NY Slip Op 09189 [68 AD3d 818] |
| December 8, 2009 |
| Appellate Division, Second Department |
| Hoffinger Industries, Inc., Appellant, v Alabama AvenueRealty, Inc., et al., Respondents, et al., Defendants. |
—[*1] Barr, Post & Associates, PLLC, Spring Valley, N.Y. (Harvey S. Barr of counsel), forrespondents.
In an action to foreclose a mortgage, the plaintiff appeals from so much of an order of theSupreme Court, Kings County (Allman, Ct. Atty. Ref.), dated August 27, 2008, as, upon adecision of the same court, also dated August 27, 2008, made after a nonjury trial, directed theclerk to enter judgment in its favor in the principal sum of only $727,866.94.
Ordered that on the Court's own motion, the notice of appeal is treated as an application forleave to appeal, and leave to appeal is granted (see CPLR 5701 [c]); and it is further,
Ordered that the order is affirmed insofar as appealed from; and it is further,
Ordered that one bill of costs is awarded to the respondents.
On or about November 17, 1998 the plaintiff conveyed real property located at 966-988Alabama Avenue in Brooklyn (hereinafter the premises) to the defendant Alabama AvenueRealty, Inc. (hereinafter Alabama). The purchase was financed in part by a mortgage with a riderand a mortgage note executed on November 19, 1998 by Alabama, which required monthlypayments to be made through November 19, 2018 to the plaintiff. The rider provided, inter alia,that Alabama waived its right to interpose any defenses or setoffs whatsoever. The defendantJoseph Berkovitz, also known as Joseph Berkowitz (hereinafter Berkovitz), the sole stockholderand officer of Alabama, executed a guaranty on November 19, 1998 in connection with themortgage and the note. Berkovitz and the plaintiff also executed a "possession agreement" onNovember 19, 1998 that allowed the plaintiff to keep certain equipment on the premises for astated duration and required the plaintiff to pay rent to Alabama after the equipment was on thepremises for six months. According to the possession agreement, any equipment remaining aftertwo years "shall be removed at cost of [the plaintiff] which may be offset against mortgagepayments to [the plaintiff]." Alabama admittedly defaulted on the mortgage by failing to makepayments.
The plaintiff commenced this mortgage foreclosure action and Alabama and Berkovitz(hereinafter collectively the defendants) counterclaimed, seeking an offset against the balancedue on the mortgage for unpaid rent for the equipment remaining on the premises. Thecounterclaim was amended [*2]to conform to the proof at thenonjury trial, allowing them to seek an offset for the cost of removing the equipment thatremained on the premises. The plaintiffs and the defendants stipulated that the last paymentmade by Alabama or Berkovitz towards the mortgage was on September 2, 2004 and the balanceowed on the mortgage was $821,976.24. The Supreme Court awarded the plaintiff the principalsum of $727,866.94, which included an offset for the cost of removing the equipment in theamount of $220,000, interest at the rate of 16% on the balance due on the mortgage at the time ofthe default, legal fees, and late fees, and awarded the plaintiff interest at the rate of 9% fromAugust 27, 2008 until the obligation was satisfied pursuant to CPLR 5004.
Contrary to the plaintiff's contention, the Supreme Court properly determined that thedefendants were entitled to an offset. Even though the defendants waived their right to interposean offset in the rider annexed to the mortgage agreement, the rider must be viewed together withthe possession agreement, which provided for an offset, since these documents were executed onthe same day, by the same parties, and for the same purpose (see White Rose Food vSaleh, 292 AD2d 377, 378 [2002], affd 99 NY2d 589 [2003]; TBS Enters. vGrobe, 114 AD2d 445, 447 [1985]; BWA Corp. v Alltrans Express U.S.A., 112AD2d 850, 852 [1985]).
"In reviewing a trial court's findings of fact following a nonjury trial, this Court's authority'is as broad as that of the trial court' and it may 'render the judgment it finds warranted by thefacts, taking into account in a close case the fact that the trial judge had the advantage of seeingthe witnesses' " (JP Morgan Chase Bankv Whitmore, 41 AD3d 433, 434 [2007], quoting Northern Westchester ProfessionalPark Assoc. v Town of Bedford, 60 NY2d 492, 499 [1983]). Moreover, where the trial courtis called to assess the credibility and weight to be accorded to divergent expert opinions, itsfactual determination should not be lightly cast aside (see Matter of Winston, 39 AD3d 765 [2007]). Here, where thedefendants' expert and the plaintiff's expert provided conflicting testimony as to the cost ofremoving the equipment, the trial court acted within its discretion in agreeing with the opinionoffered by the defendants' expert that it would cost $220,000 to remove the equipment and itsdetermination should not be set aside (see JP Morgan Chase Bank v Whitmore, 41 AD3dat 434).
The Supreme Court acted within its discretion and in accordance with the terms of the riderannexed to the mortgage agreement when it calculated the default interest owed, and when itawarded the plaintiff interest at the statutory rate of 9% from the date the order was issued untilthe obligation is satisfied (see CPLR 5001 [a]; Dayan v York, 51 AD3d 964, 965 [2008]; Danielowich v PBLDev., 292 AD2d 414, 415 [2002]). Furthermore, the Supreme Court properly deducted theoffset from the principal amount due prior to calculating the default interest owed since theobligation to remove the equipment arose before the defendants defaulted on the mortgage byfailing to make payments. Mastro, J.P., Florio, Balkin and Leventhal, JJ., concur.