| HSBC Bank, USA v Pugkhem |
| 2011 NY Slip Op 07002 [88 AD3d 649] |
| October 4, 2011 |
| Appellate Division, Second Department |
| HSBC Bank, USA, Appellant, v Tretorn Pugkhem et al.,Defendants, and Antonios Feggoudakis, Respondent. |
—[*1] Weber Law Group, LLC, Melville, N.Y. (Jaret S. Weber of counsel), forrespondent.
In an action to foreclose a mortgage, the plaintiff appeals, as limited by its brief, from somuch of an order of the Supreme Court, Nassau County (Adams, J.), entered July 12, 2010, asgranted that branch of the motion of the defendant Antonios Feggoudakis which was pursuant toCPLR 3211 (a) to dismiss the complaint insofar as asserted against him, and denied its crossmotion, inter alia, for summary judgment dismissing the answer of the defendant AntoniosFeggoudakis.
Ordered that the order is modified, on the law, by deleting the provision thereof granting thatbranch of the motion of the defendant Antonios Feggoudakis which was pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against him, and substituting therefor a provisiondenying that branch of the motion; as so modified, the order is affirmed insofar as appealed from,with costs payable by the defendant Antonios Feggoudakis to the plaintiff.
In 2002 the defendants Tretorn Pugkhem and Sumarin Pugkhem obtained from the plaintiffbank a home equity line of credit in the amount of $125,000, which was secured by a mortgageon the subject property, which was then owned by the Pugkhems. In 2005 the defendant AntoniosFeggoudakis purchased the subject property from the Pugkhems, and Feggoudakis's closingagent, Thomas Coogan, sent a check to the plaintiff to pay off the balance of the line of credit.The plaintiff received and negotiated the check, but did not close the line of credit. In 2008 thePugkhems withdrew new funds from the line of credit. When the Pugkhems failed to timelyrepay the new balance owed, the plaintiff commenced this action to foreclose on the mortgage on[*2]the subject property.
Feggoudakis moved, inter alia, pursuant to CPLR 3211 (a) to dismiss the complaint insofaras asserted against him, arguing that the plaintiff was obligated to close the line of credit in 2005when the Pugkhems paid the outstanding balance in full. In support of his motion, Feggoudakissubmitted, among other things, an affidavit from Coogan stating that his "custom practice[sic] for closings is to send to the mortgagee a cover letter setting forth the attachedrelevant payoff letter and corresponding payoff check as well as a request that the mortgage beclosed and a subsequent satisfaction of mortgage be filed." Feggoudakis also submitted a copy ofa letter from the plaintiff to Tretorn Pugkhem with instructions as to how to pay off the balanceof the line of credit (which included an instruction that, "[t]o close your account and obtain asatisfaction of mortgage, please include with your payoff check a letter requesting this beclosed"), and a copy of a bank check payable to the plaintiff in an amount sufficient to pay offthat balance. Feggoudakis, however, did not submit a copy of any communication from Cooganto the plaintiff requesting that the line of credit be closed. The plaintiff cross-moved for summaryjudgment dismissing Feggoudakis's answer. The Supreme Court, inter alia, granted that branch ofFeggoudakis's motion which was pursuant to CPLR 3211 (a) to dismiss the complaint insofar asasserted against him and denied the plaintiff's cross motion.
The Real Property Actions and Proceedings Law provides, with respect to a credit linemortgage, that: "After payment of authorized principal, interest and any other amounts duethereunder or otherwise owed by law has actually been made, and . . . on writtenrequest, a mortgagee of real property situate in this state . . . must execute. . . a satisfaction of mortgage" (RPAPL 1921 [1] [emphasis added]). A letterrequesting that a mortgagee close a credit line and send a satisfaction of the mortgage (seeMerrill Lynch Equity Mgt. v Kleinman, 246 AD2d 884, 885 [1998]), or the transmission tothe mortgagee of a satisfaction of mortgage accompanied by a request to execute it and return itto a title company for recording (see Barclay's Bank of N.Y. v Market St. Mtge. Corp.,187 AD2d 141, 144 [1993]) will satisfy the statutory requirement of a written request for asatisfaction of mortgage. However, " '[t]he mere reduction to zero of the outstanding balance of acredit line mortgage during the term of the mortgage does not constitute payment of the mortgagefor the purposes of determining whether the mortgagee must execute a satisfaction upon request'" (Matter of Reitman v Wachovia Natl.Bank, N.A., 49 AD3d 759, 760 [2008], quoting Barclay's Bank of N.Y. v Market St.Mtge. Corp., 187 AD2d at 144). Moreover, the mere transmission of a check in the amountnecessary to pay the entire outstanding balance of a line of credit, accompanied by a cover letterwhich does not state that the payment is intended to satisfy the credit line mortgage, or requestthat the mortgagee send a satisfaction of mortgage, or otherwise indicate that the borrowerintends to close the credit line, does not require the mortgagee to close the line of credit or issue asatisfaction of mortgage pursuant to RPAPL 1921 (1) (see Matter of Reitman v WachoviaNatl. Bank, N.A., 49 AD3d at 760).
Here, contrary to Feggoudakis's contention, the allegations of the complaint are clearlysufficient to state a cause of action for foreclosure of the mortgage, and Feggoudakis's motionpapers failed to establish any basis for invoking the doctrine of laches. With respect to thatbranch of Feggoudakis's motion which was to dismiss the complaint pursuant to CPLR 3211 (a)(1), the only evidence submitted by Feggoudakis in support of his contention that a writtenrequest to close the credit line was made was the assertion in Coogan's affidavit that his "custompractice" was to send to the mortgagee a request that the mortgage be closed. An affidavit doesnot constitute documentary evidence for purposes of CPLR 3211 (a) (1) (see Fontanetta v John Doe 1, 73 AD3d78, 85 [2010]; Berger [*3]v Temple Beth-El of GreatNeck, 303 AD2d 346, 347 [2003]). In addition, Feggoudakis did not submit a copy of anywritten request to the plaintiff to close the line of credit. Thus, Feggoudakis failed to presentdocumentary evidence that "utterly refute[d] plaintiff's factual allegations, conclusivelyestablishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. of N.Y., 98NY2d 314, 326 [2002]). Accordingly, that branch of Feggoudakis's motion which was pursuantto CPLR 3211 (a) to dismiss the complaint insofar as asserted against him should have beendenied.
In support of its cross motion, inter alia, for summary judgment dismissing Feggoudakis'sanswer, the plaintiff made a prima facie showing that no request to close the line of credit wasmade. In opposition, Feggoudakis demonstrated that Coogan's usual practice was to send themortgagee a written request to close the line of credit, thereby raising a triable issue of fact as towhether such a written request was sent to the plaintiff in this case. Thus, the Supreme Courtproperly denied the plaintiff's cross motion, inter alia, for summary judgment dismissingFeggoudakis's answer. Prudenti, P.J., Rivera, Austin and Roman, JJ., concur.