| Imperial Capital Bank v 11-13-15 Old Fulton D, LLC |
| 2011 NY Slip Op 07004 [88 AD3d 652] |
| October 4, 2011 |
| Appellate Division, Second Department |
| Imperial Capital Bank, Plaintiff/CounterclaimDefendant-Appellant, v 11-13-15 Old Fulton D, LLC, et al., Respondents, and 11-13-15Old Fulton N, LLC, Defendant/Counterclaim Plaintiff-Respondent. Robert Yiu et al., AdditionalCounterclaim Defendants-Appellants. |
—[*1] Snitow Kanfer Holtzer & Millus, LLP, New York, N.Y. (Virginia K. Trunkes and ElliotRosner of counsel), for defendants-respondents 11-13-15 Old Fulton D, LLC, and DavidDeutsch. Herzfeld & Rubin, P.C., New York, N.Y. (Miriam Skolnik and Herbert Rubin of counsel),for defendant/counterclaim plaintiff-respondent and defendants-respondents Rick Kaminer, alsoknown as Enrique Kaminer, and Aaron Wexler.
In an action to recover on a promissory note and an individual guaranty, theplaintiff/counterclaim defendant and the additional counterclaim defendants appeal from so muchof an order of the Supreme Court, Kings County (Lewis, J.), dated April 23, 2010, as denied thatbranch of the motion of the plaintiff/counterclaim defendant, made jointly with the additionalcounterclaim defendants, which was for summary judgment on the complaint, and those branchesof their motion which were pursuant to CPLR 3211 (a) to dismiss the counterclaims of thedefendant 11-13-15 Old Fulton N, LLC.
Ordered that the order is modified, on the law, (1) by deleting the provision [*2]thereof denying that branch of the motion of theplaintiff/counterclaim defendant and the additional counterclaim defendants which was forsummary judgment on the complaint, and substituting therefor a provision granting that branchof the motion, (2) by deleting the provisions thereof denying those branches of the motion whichwere pursuant to CPLR 3211 (a) to dismiss the first counterclaim based on the doctrine ofpromissory estoppel, and the second counterclaim alleging fraud, to the extent that thosecounterclaims are premised on conduct occurring before the execution of the promissory noteand individual guaranty, and substituting therefor provisions granting those branches of themotion, (3) by deleting the provisions thereof denying those branches of the motion which werepursuant to CPLR 3211 (a) to dismiss the third counterclaim alleging breach of contract, and thefifth counterclaim alleging a violation of General Business Law § 349, and substitutingtherefor provisions granting those branches of the motion; as so modified, the order is affirmedinsofar as appealed from, with one bill of costs payable to the plaintiff/counterclaim defendantand the additional counterclaim defendants by the defendants appearing separately and filingseparate briefs.
In this action to recover on a promissory note and an individual guaranty thereof, theplaintiff/counterclaim defendant, Imperial Capital Bank (hereinafter Imperial), jointly with theadditional counterclaim defendants Robert Yiu, Bach Yen Cheryl Ta, John Drennan, Ruth Nebo,and Brian Benson, moved, inter alia, for summary judgment on the complaint. Imperialdemonstrated its prima facie entitlement to judgment as a matter of law by establishing theexistence of the note and the guaranty, and the defendants' failure to make payments according tothe terms of those documents (hereinafter the loan documents) (see Signature Bank v Galit Props., Inc.,80 AD3d 689 [2011]; Gullery vImburgio, 74 AD3d 1022 [2010]; Verela v Citrus Lake Dev., Inc., 53 AD3d 574, 575 [2008]; Northport Car Wash, Inc. v Northport CarCare, LLC, 52 AD3d 794 [2008]; Governor & Co. of Bank of Ireland v DromolandCastle, 212 AD2d 759 [1995]). Since Imperial satisfied its initial burden, "[t]he burden thenshifted to the defendant[s] to establish by admissible evidence the existence of a triable issue offact with respect to a bona fide defense" (Gullery v Imburgio, 74 AD3d at 1022; seeSignature Bank v Galit Props., Inc., 80 AD3d at 689; Verela v Citrus Lake Dev., Inc.,53 AD3d at 575). The defendants failed to do so. Accordingly, the Supreme Court should havegranted that branch of Imperial's motion, made jointly with the additional counterclaimdefendants, which was for summary judgment on the complaint.
In the same motion, Imperial and the additional counterclaim defendants also movedpursuant to CPLR 3211 (a) to dismiss the counterclaims of the defendant 11-13-15 Old Fulton N,LLC, that were asserted against them. The Supreme Court should have granted that branch of themotion which was pursuant to CPLR 3211 (a) to dismiss the first counterclaim based on thedoctrine of promissory estoppel (seegenerally AHA Sales, Inc. v Creative Bath Prods., Inc., 58 AD3d 6, 20-21 [2008]; NGR, LLC v General Elec. Co., 24AD3d 425 [2005]), but only to the extent that the first counterclaim was premised onconduct occurring before the execution of the loan documents. To the extent that the firstcounterclaim was premised on conduct occurring before the execution of the loan documents,there could be no reasonable reliance on any promise to provide a subsequent construction loanin light of the merger and waiver-of-defense provisions in the loan documents. However, thesecontractual provisions do not preclude reasonable reliance on promises made after the loandocuments were executed (cf. National Oil Well Maintenance Co. v Fortune Oil & Gas,Inc., 2004 WL 1886293, 2004 US Dist Lexis 16765 [SD NY 2004]). Also, the SupremeCourt should have granted that branch of the motion which was pursuant to CPLR 3211 (a) todismiss the second counterclaim alleging fraud (see generally Lama Holding Co. v SmithBarney, 88 NY2d 413, 421 [1996]), but only to the extent that the second counterclaim waspremised on conduct occurring before the [*3]execution of theloan documents. To the extent that the second counterclaim was premised on conduct occurringbefore the execution of the loan documents, it was not pleaded with the requisite particularitymandated by CPLR 3016 (b). Further, the Supreme Court should have granted those branches ofthe motion which were pursuant to CPLR 3211 (a) to dismiss the third counterclaim alleging abreach of contract (see JaymerCommunications, Inc. v Associated Locksmiths of Am., Inc., 84 AD3d 888 [2011]), andthe fifth counterclaim alleging a violation of General Business Law § 349 (see Shaw v Club Mgrs. Assn. of Am.,Inc., 84 AD3d 928 [2011]).
Although the remaining counterclaims are viable, the plaintiff's foreclosure cause of action isnot so inextricably interwoven with those counterclaims as to preclude an award of summaryjudgment to the plaintiff on that cause of action (see Fleet Bank v Pine Knoll Corp., 290AD2d 792, 794 [2002]; Banco do Estado de Sao Paulo v Mendes Jr. Intl. Co., 249 AD2d137, 138 [1998]; see also Malsin v Stockman, 265 AD2d 533 [1999]). Rivera, J.P.,Florio, Leventhal and Roman, JJ., concur.