| Confidential Lending, LLC v Nurse |
| 2014 NY Slip Op 05941 [120 AD3d 739] |
| August 27, 2014 |
| Appellate Division, Second Department |
[*1]
| Confidential Lending, LLC, Appellant, v ViolaNurse, Respondent, et al., Defendants. |
Aronauer, Re & Yudell, LLP, New York, N.Y. (John C. Re of counsel), forappellant.
Vernita Charles, Brooklyn, N.Y., for respondent.
In an action to foreclose a mortgage, the plaintiff appeals from so much of an orderof the Supreme Court, Kings County (Edwards, J.), dated September 19, 2012, as grantedthe cross motion of the defendant Viola Nurse for leave to amend her answer to assert thedefense of lack of standing and additional allegations in support of her defense andcounterclaims sounding in fraud and alleging violations of General Business Law§ 349 and Real Property Law § 440-a, and, upon renewal,denied those branches of its motion which were for summary judgment on the complaintand dismissing the affirmative defenses and counterclaims asserted by the defendantViola Nurse or, alternatively, to sever her counterclaims, for leave to enter a defaultjudgment against the defendants Caryn Nurse, the New York City EnvironmentalControl Board, Charles Laing, and Iris Laing, and to appoint a referee to compute theamount due the plaintiff.
Ordered that the order is modified, on the law, on the facts, and in the exercise ofdiscretion, (1) by deleting the provisions thereof, upon renewal, denying those branchesof the plaintiff's motion which were for summary judgment dismissing the defense andcounterclaims asserted by the defendant Viola Nurse sounding in fraud and allegingviolations of General Business Law § 349 and Real Property Law§ 440-a, and for leave to enter a default judgment against the defendant theNew York City Environmental Control Board, and substituting therefor a provisiongranting those branches of the plaintiff's motion, and (2) by deleting the provisionthereof granting that branch of the cross motion of the defendant Viola Nurse which wasfor leave to amend her answer to assert additional allegations in support of her defenseand counterclaims sounding in fraud and alleging violations of General Business Law§ 349 and Real Property Law § 440-a, and substitutingtherefor a provision denying that branch of the cross motion; as so modified, the order isaffirmed insofar as appealed from, with costs payable to the plaintiff by the defendantViola Nurse.
Contrary to the plaintiff's contention, it failed to establish, prima facie, that it hadstanding to commence this foreclosure action. Accordingly, the Supreme Court, uponrenewal, correctly denied that branch of its motion which was for summary judgment onthe complaint insofar as asserted against the defendant Viola Nurse (hereafter Nurse) (see HSBC Bank USA vHernandez, 92 AD3d 843, 844 [2012]; see generally RPAPL 1302 [1];Deutsche Bank Natl. Trust Co. vSpanos, 102 AD3d 909 [2013]).
However, we agree with the plaintiff's contention that, upon renewal, the Supreme[*2]Court erred in denying that branch of its motionwhich was for summary judgment dismissing Nurse's defense and counterclaim soundingin fraud. Upon renewal, the plaintiff demonstrated, prima facie, that Nurse ratified thesubject note, mortgage, and collateral mortgage by making payments thereon to theplaintiff without protest, while she remained aware of the circumstances forming thebasis of her defense and counterclaim sounding in fraud. In so doing, Nurse waived allsuch defenses and counterclaims (see Moweta v Citywide Home Improvements ofQueens, 267 AD2d 438 [1999]; see also Wujin Nanxiashu Secant Factory v Ti-Well Intl. Corp.,14 AD3d 352 [2005]; Davis & Davis v Morson, 286 AD2d 584, 585[2001]). In opposition, Nurse failed to raise a triable issue of fact.
We also agree with the plaintiff's contention that, upon renewal, the Supreme Courterred in denying that branch of its motion which was for summary judgment dismissingNurse's counterclaim alleging a violation of General Business Law § 349.In opposition to the plaintiff's prima facie showing that the underlying transaction wasprivate in nature, and that the allegedly deceptive acts were not aimed at the public atlarge (see New York Univ. v Continental Ins. Co., 87 NY2d 308, 320 [1995]),Nurse failed to raise a triable issue of fact.
Further, upon renewal, the Supreme Court should have granted that branch of theplaintiff's motion which was for summary judgment dismissing Nurse's counterclaimalleging a violation of Real Property Law § 440-a, since the allegation thatcertain nonparties unlawfully held themselves out as real estate brokers without therequisite license is irrelevant to the circumstances surrounding Nurses's execution of theunderlying mortgage, note, guaranty, and collateral mortgage. In any event, Nurse'sconclusory allegations that certain persons allegedly violated Real Property Law§ 440-a by virtue of their failure to secure the requisite real estate brokers'license were insufficient, upon renewal, to defeat that branch of the plaintiff's motionwhich was for summary judgment dismissing Nurse's counterclaim alleging a violationof Real Property Law § 440-a.
The Supreme Court improvidently exercised its discretion in granting Nurse leave toamend her answer to the extent that she sought to assert additional allegations in supportof her defense and counterclaims sounding in fraud and alleging violations of GeneralBusiness Law § 349 and Real Property Law § 440-a. Leave toamend a pleading should be freely given absent prejudice or surprise, and a court shouldnot examine the merits or legal sufficiency of the proposed amendment unless it ispalpably insufficient or patently devoid of merit on its face (see Greco v Christoffersen, 70AD3d 769, 770 [2010]; Rosicki, Rosicki & Assoc., P.C. v Cochems, 59 AD3d512, 514 [2009]). The determination whether to grant such leave is within theSupreme Court's broad discretion, and the exercise of that discretion will not be lightlydisturbed (see Greco v Christoffersen, 70 AD3d at 770). Here, the proposedallegations supporting the defense and counterclaims sounding in fraud and allegingviolations of General Business Law § 349 and Real Property Law§ 440-a were palpably insufficient and patently devoid of merit (see Bank of Smithtown v 219 SaggMain, LLC, 107 AD3d 654, 656 [2013]; Bloom v Lugli, 102 AD3d 715, 718 [2013]).
Upon renewal, the Supreme Court properly denied that branch of the plaintiff'smotion which was for leave to enter a default judgment against the defendants CarynNurse, Charles Laing, and Iris Laing. Although service upon the defaulting defendants ofthe notice of motion to renew was not required since the plaintiff moved for leave toenter a default judgment within one year of the defendants' default (see Stoltz vPlayquest Theater Co., 257 AD2d 758, 759 [1999]; Milman & Shwergold vChase Manhattan Bank, 105 AD2d 652, 653 [1984]; Q.P.I. Rests. v Slevin,93 AD2d 767, 768 [1983]), the Supreme Court properly determined that the plaintifffailed to comply with the additional notice requirement of CPLR 3215 (g) (3) (i) (seeTsiporin v Ziegel, 203 AD2d 451 [1994]; see also Bunch v Dollar Budget, Inc., 12 AD3d 391 [2004];Schilling v Maren Enters., 302 AD2d 375, 376 [2003]; Rafa Enters. v PigandMgt. Corp., 184 AD2d 329 [1992]). However, in seeking a default judgment againstthe defendant the New York City Environmental Control Board (hereinafter the ECB),the plaintiff was not required to comply with the additional notice requirement of CPLR3215 (g) because the ECB is neither a "natural person" (CPLR 3215 [g] [3] [i]), nor "adomestic or authorized foreign corporation" that had been served with process pursuantto Business Corporation Law § 306 (b) (CPLR 3215 [g] [4] [i]).Accordingly, the Supreme Court erred in denying that branch of the plaintiff's motionwhich was for leave to enter a default judgment against the ECB. The plaintiff'sremaining contentions either are without merit or need not be addressed in light of ourdetermination. Skelos, J.P., Lott, Roman and Cohen, JJ., concur.