| Millennium BCPBank, N.A. v Kal-Pak Realty, LLC |
| 2012 NY Slip Op 07092 [99 AD3d 976] |
| October 24, 2012 |
| Appellate Division, Second Department |
| Millennium BCPBank, N.A., Formerly Known as BCPBank, N.A.,Appellant-Respondent, v Kal-Pak Realty, LLC, Respondent-Appellant, et al.,Defendants. |
—[*1] Donald Pearce, New York, N.Y., for respondent-appellant.
In an action to foreclose a consolidated mortgage, the plaintiff appeals, as limited by its brief,from so much of an order of the Supreme Court, Queens County (Kitzes, J.), entered June 24,2011, as denied its cross motion for summary judgment dismissing the third affirmative defenseand the first and second counterclaims of the defendant Kal-Pak Realty, LLC, and the defendantKal-Pak Realty, LLC, cross-appeals, as limited by its brief, from so much of the same order asdenied that branch of its motion which was for summary judgment dismissing the complaintinsofar as asserted against it.
Ordered that the order is affirmed insofar as appealed and cross-appealed from, without costsor disbursements.
The defendant Kal-Pak Realty, LLC (hereinafter Kal-Pak), is the owner of record of thesubject commercial real property, which is located in Queens. The property was at one timeowned by William Kalpakis (hereinafter William) and George Kalpakis (hereinafter George) astenants-in-common. Following George's death in 1995, his interest in the property passed byoperation of law to his four children, Lythia A. Rousseas, Barbara M. Kalpakis (hereinafterBarbara), Mark G. Kalpakis (hereinafter Mark), and the defendant James G. Kalpakis (hereinafterJames). In 2004, a deed bearing the signatures of William and George was executed, purportedlyconveying the property to Kal-Pak. Thereafter, Kal-Pak allegedly gave several mortgages on theproperty to secure various loans and, in 2006, entered into a consolidation, modification, andextension agreement with the plaintiff Millennium BCPBank, N.A., formerly known asBCPBank, N.A. (hereinafter Millennium), consolidating the mortgages into one mortgagesecuring the repayment of the principal loan amount of $535,000. All of the mortgages weresigned by James, as managing member of Kal-Pak. In April 2010, Kal-Pak defaulted on the loan.In August 2010, Millennium commenced this action to foreclose on the consolidated mortgage.
Prior to the completion of discovery, Kal-Pak moved for summary judgment dismissing thecomplaint insofar as asserted against it and for judgment on its counterclaims seeking [*2]to cancel all the mortgages and declaring the mortgages void. Insupport of its motion, Kal-Pak submitted the affidavit of Rousseas, who attested that her fatherGeorge's signature on the deed was forged, that the forgery was apparently committed by herbrother James, who, following George's death, had represented to her that he would undertakeproper legal arrangements regarding George's property, and would administer the estate and theproperty. Rousseas further asserted that she, her sister Barbara, and her brother Mark (hereinaftercollectively the siblings) only became aware of the forgery and the mortgages in the autumn of2009. Rousseas further stated that, upon being confronted with the forged deed, James agreed totransfer his interest in Kal-Pak to the siblings and promised to continue servicing theconsolidated loan. In September 2009, James executed an assignment of his 50% membershipinterest in Kal-Pak to the siblings.
Millennium cross-moved for summary judgment dismissing Kal-Pak's two counterclaims, aswell as Kal-Pak's third affirmative defense, which alleged that the forged deed is void.Millennium argued that Kal-Pak is estopped from disaffirming title to the property due to therepeated representations made in the mortgages as to the validity of the title, and that Kal-Pak,through the siblings, ratified James's acts.
The Supreme Court denied both the motion and the cross motion.
The submission of George's death certificate demonstrated that his signature on the deed wasa forgery, and established Kal-Pak's prima facie entitlement to judgment as a matter of lawdismissing the complaint insofar as asserted against it (see Winegrad v New York Univ. Med.Ctr., 64 NY2d 851, 853 [1985]). In opposition, Millennium raised a triable issue of fact as to"whether the deed was subject to ratification" (Cashel v Cashel, 94 AD3d 684, 687 [2012]), and whether thesiblings ratified James's acts by accepting his ownership interest in Kal-Pak and agreeing to haveJames make partial payments towards the satisfaction of the consolidated loan (see De Tata vTress, 4 AD2d 748 [1957]; see also Rothschild v Title Guar. & Trust Co., 204 NY458 [1912]).
Contrary to Millennium's contention, the Supreme Court properly denied its cross motion,which was based on the theory of ratification. To the extent that Millennium established, primafacie, that the siblings ratified James's acts and accepted the benefits of acquiring an ownershipinterest in Kal-Pak, Rousseas raised a triable issue of fact as to whether Kal-Pak retained thebenefit of James's unauthorized transaction with knowledge of the underlying material facts,specifically asserting that Kal-Pak did not actually retain any of the disputed funds, but was amere conduit through which James and other wrongdoers unlawfully obtained those funds (see 39 Coll. Point Corp. v Transpac CapitalCorp., 12 AD3d 664 [2004]; Hewett v Marine Midland Bank of SoutheasternN.Y., 86 AD2d 263 [1982]).
Millennium's contention that it was entitled to partial foreclosure is raised for the first timeon appeal and, therefore, is not properly before this Court.
The parties' remaining contentions are without merit. Eng, P.J., Rivera, Hall and Sgroi, JJ.,concur.