| HSBC Bank USA, N.A. v Prime, L.L.C. |
| 2015 NY Slip Op 01017 [125 AD3d 1307] |
| February 6, 2015 |
| Appellate Division, Fourth Department |
[*1]
| HSBC Bank USA, National Association, Respondent, vPrime, L.L.C., et al., Appellants, et al., Defendants. |
McMahon, Kublick & Smith, P.C., Syracuse (Jan S. Kublick of counsel), fordefendants-appellants.
Phillips Lytle LLP, Rochester (Mark J. Moretti of counsel), forplaintiff-respondent.
Appeal from an order of the Supreme Court, Jefferson County (James P. McClusky,J.), entered December 18, 2013. The order, inter alia, granted summary judgment toplaintiff.
It is hereby ordered that the order so appealed from is unanimously affirmed withoutcosts.
Memorandum: Plaintiff commenced this foreclosure action after Prime, L.L.C.(Prime) and Philip J. Simao (collectively, defendants) defaulted on a note executed byPrime and guaranteed by Simao. Defendants appeal from an order that granted plaintiff'smotion for, inter alia, summary judgment on the complaint pursuant to CPLR 3212,dismissal of defendants' counterclaims and the appointment of a referee to computeplaintiff's damages. We reject at the outset defendants' contention that Supreme Courtshould have treated plaintiff's motion for summary judgment pursuant to CPLR 3212 as amotion to dismiss based upon documentary evidence pursuant to CPLR 3211 (a) (1).Contrary to defendants' contention, the mere fact that plaintiff relies on documentaryevidence, i.e., a forbearance agreement containing a release, in support of its motion doesnot alter the fact that it is a motion for summary judgment (see e.g. Bronson v Hansel, 16NY3d 850, 851 [2011]). Defendants' contention that plaintiff's motion should havebeen treated as a CPLR 3211 motion to dismiss because issue had not been joined withrespect to plaintiff's affirmative defense of release is raised for the first time in their replybrief and thus is not properly before us (see Turner v Canale, 15 AD3d 960, 961 [2005], lvdenied 5 NY3d 702 [2005]).
We likewise reject defendants' contention that the court erred in granting plaintiff'smotion before discovery was complete. Defendants "failed to demonstrate that factsessential to oppose the motion were in plaintiff's exclusive knowledge and possessionand could be obtained by discovery" (Franklin v Dormitory Auth. of State ofN.Y., 291 AD2d 854, 854 [2002]; see CPLR 3212 [f]; Avraham v Allied RealtyCorp., 8 AD3d 1079, 1079 [2004]), and the " 'mere hope that somehow[defendants] will uncover evidence that will prove [their] case is not sufficient to defeat amotion for summary judgment' " (Rowland v Wilmorite, Inc., 68 AD3d 1770, 1771[2009]).
We conclude with respect to the merits of that part of plaintiff's motion for summaryjudgment on the complaint that plaintiff "established [its] prima facie entitlement tosummary judgment as a matter of law by submitting the mortgage, the underlying note,and evidence of a default" (Ferriv Ferri, 71 AD3d 949, 949 [2010]), and defendants "failed to 'demonstrate theexistence of a triable issue of fact regarding a bona fide defense to the action' "(Ekelmann Group, LLC v Stuart [appeal No. 2], 108 AD3d 1098, 1099 [2013];see Dasz, Inc. v MeritocracyVentures, Ltd., 108 AD3d 1084, 1084 [2013]). Contrary to defendants'contention, there is no issue of fact concerning its [*2]defense that plaintiff breached the implied covenant of fairdealing by increasing the interest rate on the note by three percent retroactively to thedate of the default. Here, the note expressly provided that upon default the interest ratewould increase by three percent, and "[n]o obligation can be implied . . .[that] would be inconsistent with other terms of the contractual relationship" (Murphyv American Home Prods. Corp., 58 NY2d 293, 304 [1983]; see Marine MidlandBank v Yoruk, 242 AD2d 932, 933 [1997]).
Also contrary to defendants' contention, the court properly considered plaintiff'sdefense of release in granting that part of plaintiff's motion to dismiss the counterclaimsdespite the fact that the defense was not pleaded in plaintiff's reply. " '[A] courtmay grant summary judgment based upon an unpleaded defense where[,] [as here,]reliance upon that defense neither surprises nor prejudices the [other party]' " (Schaefer v Town of Victor, 77AD3d 1346, 1347 [2010]; see Syracuse Equip. Co. v Lebis Contr., 255AD2d 992, 993 [1998]). Defendants failed to establish any prejudice or surprise withrespect to the unpleaded defense of release (see Schaefer, 77 AD3d at 1347). Wefurther conclude that, contrary to defendants' contention, they "failed to raise a triableissue of fact with respect to their claim that the release is void based on fraud"(Marlowe v Muhlnickel, 294 AD2d 830, 831 [2002]; see generally Centro EmpresarialCempresa S.A. v América Móvil, S.A.B. de C.V., 17 NY3d 269,276 [2011]).
Finally, defendants' contention that their counterclaims should have been severedfrom plaintiff's foreclosure action is not properly before us inasmuch as it is raised for thefirst time on appeal (see Ciesinski v Town of Aurora, 202 AD2d 984, 985[1994]). Present—Scudder, P.J., Fahey, Peradotto, Carni and Whalen, JJ.