| SSJ Dev. of Sheepshead Bay I, LLC v AmalgamatedBank |
| 2015 NY Slip Op 03824 [128 AD3d 674] |
| May 6, 2015 |
| Appellate Division, Second Department |
[*1]
| SSJ Development of Sheepshead Bay I, LLC, et al.,Appellants, v Amalgamated Bank, Respondent. |
Jonathan E. Neuman, Fresh Meadows, N.Y., for appellants.
Nixon Peabody, LLP, New York, N.Y. (Daniel J. Hurteau, Leah Threatte Bojnowski,and Nicole Mastropieri of counsel), for respondent.
In an action to recover damages for breach of contract, fraud, breach of fiduciaryduty, and unjust enrichment, the plaintiffs appeal from an order of the Supreme Court,Kings County (Graham, J.), dated February 10, 2014, which granted the defendant'smotion pursuant to CPLR 3211 (a) (5) to dismiss the complaint as barred by the doctrinesof res judicata and collateral estoppel.
Ordered that the order is affirmed, with costs.
The plaintiffs entered into three loan agreements with the defendant, pursuant towhich the defendant agreed to finance the purchase and construction of three real estateprojects. Under the agreements, the contractors selected by the plaintiffs to perform thework were required to be affiliated with the AFL-CIO or had to be approved by thedefendant. The contractors selected by the plaintiffs were not affiliated with theAFL-CIO and the defendant refused to approve the contracts. The plaintiffs subsequentlydefaulted on their loan obligations, and the defendant successfully foreclosed threemortgages related to the real estate projects. The plaintiffs then commenced this actionagainst the defendant to recover damages for breach of contract, fraud, breach offiduciary duty, and unjust enrichment. The plaintiffs alleged that the defendant's conductin rejecting the contractors selected by the plaintiffs caused delays and prevented themfrom fulfilling their obligations under the agreements.
The defendant moved to dismiss the complaint on the grounds that the plaintiffs'claims are barred by the doctrines of res judicata and collateral estoppel, as the issueswere already addressed in the prior mortgage foreclosure action commenced by thedefendant against the plaintiffs. The Supreme Court granted the defendant's motion,ruling that, in the foreclosure action, the court had specifically addressed the claims thatwere asserted in the instant complaint, and that the prior decision as to those claims wasnot merely dicta that was superfluous to the court's determination that the defendant wasentitled to summary judgment and foreclosure.
The Supreme Court correctly determined that this action is barred under the doctrinesof res judicata and collateral estoppel. The doctrine of res judicata provides that "once aclaim is [*2]brought to a final conclusion, all other claimsarising out of the same transaction or series of transactions are barred, even if based upondifferent theories or if seeking a different remedy" (O'Brien v City of Syracuse,54 NY2d 353, 357 [1981]; seeDupps v Betancourt, 121 AD3d 746, 747 [2014]). The doctrine of res judicatabars a party from relitigating any claim which could have been or should have beenlitigated in a prior proceeding (see County of Nassau v New York State Pub. Empl.Relations Bd., 151 AD2d 168, 185 [1989], affd 76 NY2d 579 [1990]).Therefore, under res judicata, or claim preclusion, a valid final judgment will bar futureactions between the same parties involving the same cause of action (see Matter ofReilly v Reid, 45 NY2d 24, 27 [1978]).
The claims asserted by the plaintiffs in this case concern the parties' rights andobligations under the mortgage agreements between the plaintiffs and the defendant. Assuch, those claims needed to be—and, in fact, were—raised by the plaintiffsin defending against the foreclosure action, and thus the plaintiffs are barred fromrelitigating those claims in this action (see New Horizons Invs. v Marine MidlandBank, 248 AD2d 449 [1998]; see also Mittelman v GE Capital Mtge. Servs.,265 AD2d 311 [1999]; Mony Credit Corp. v Colt Container Servs., 169 AD2d760 [1991]). Moreover, a judgment of foreclosure and sale entered against a defendant"is final as to all questions at issue between the parties, and concludes all matters ofdefense which were or might have been litigated in the foreclosure action" (Long Is.Sav. Bank v Mihalios, 269 AD2d 502, 503 [2000]), and granting the plaintiffs therelief they seek in the present action would destroy or impair the rights established by thejudgment of foreclosure in the prior action (see Ryan v New York Tel. Co., 62NY2d 494, 500 [1984]; Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY304 [1929]). Thus, the plaintiffs' claims are barred by the doctrine of res judicata.
The plaintiffs' claims are also barred by the doctrine of collateral estoppel. Collateralestoppel, or issue preclusion, precludes a party from relitigating in a subsequentproceeding or action an issue that was raised in a prior action or proceeding and decidedagainst that party or those in privity (see Ryan v New York Tel. Co., 62 NY2d at500). For the bar to apply, the issue must have been material to the first action and"essential to the decision rendered therein," and it must be the point that is to bedetermined in the second action, such that "a different judgment in the second woulddestroy or impair rights or interests established by the first" (id. at 500, 501). Inaddition, the party against whom preclusion is sought must have had a "full and fairopportunity to contest the matter in the prior action" (Strough v Incorporated Vil. of W. Hampton Dunes, 78 AD3d1037, 1039 [2010]).
In this case, the claims sought to be relitigated are identical to those that weredecided against the plaintiffs in the foreclosure action. These claims were material to theaction and were essential to the decision rendered. Moreover, the plaintiffs had a full andfair opportunity to contest the prior determination (see Leung v Suffolk Plate Glass Co., Inc., 78 AD3d 663,663-664 [2010]). Indeed, the plaintiffs have conceded that the allegations they arepresenting in this action were previously before the Supreme Court and that the courtrejected those allegations. Accordingly, the plaintiffs are collaterally estopped frompursuing this action.
The plaintiffs' remaining contentions are without merit. Chambers, J.P., Dickerson,LaSalle and Barros, JJ., concur. [Prior Case History: 2014 NY Slip Op30913(U).]