| Prompt Mtge. Providers of N. Am., LLC v Zarour |
| 2017 NY Slip Op 01723 [148 AD3d 849] |
| March 8, 2017 |
| Appellate Division, Second Department |
[*1]
| Prompt Mortgage Providers of North America, LLC, et al.,Respondents, v Simon Zarour, Appellant, et al., Defendants. |
[Recalled and vacated, see 2017 NY Slip Op 08028.]
Allen A. Kolber, Suffern, NY, for appellant.
David H. Singer & Associates, LLP, New York, NY (Christopher S. McCann ofcounsel), for respondents.
In an action to foreclose a mortgage, the defendant Simon Zarour appeals, as limited by hisbrief, from so much of a judgment of foreclosure and sale of the Supreme Court, RocklandCounty (Walsh II, J.), dated July 20, 2015, as, upon so much of an order of the same court datedOctober 29, 2014, as granted that branch of the plaintiffs' motion which was for summaryjudgment on the complaint and denied that branch of his cross motion which was to extend thetime for discovery, and upon the plaintiffs' application, in effect, to confirm a referee's report andfor leave to enter a judgment of foreclosure and sale, confirmed the report and adopted thereferee's computation of the amount owed.
Ordered that the judgment of foreclosure and sale is affirmed insofar as appealed from, withcosts.
The plaintiffs, Prompt Mortgage Providers of North America, LLC (hereinafter Prompt), aprivately-owned provider of commercial mortgage loans, and Louis Galpern, a member ofPrompt, commenced this action to foreclose a construction mortgage in the sum of $350,000against property owned by the defendant Simon Zarour (hereinafter the defendant), located inRockland County. The defendant executed the construction mortgage, the note it secured, andother related documents on April 29, 2008, the same day that he executed another set ofdocuments regarding a loan in the sum of $650,000, secured by a mortgage against property heowned in Monmouth County, New Jersey.
The plaintiffs moved, inter alia, for summary judgment on the complaint. The defendantopposed the motion, and cross-moved, among other things, to extend the time for discovery. Inan order dated October 29, 2014, the Supreme Court granted that branch of the motion anddenied that branch of the cross motion. Thereafter, upon the plaintiffs' application, in effect, toconfirm a referee's report and for leave to enter a judgment of foreclosure and sale, the courtentered a judgment of foreclosure and sale which, inter alia, confirmed the report and adopted thereferee's computation of the amount owed.
The plaintiffs established their prima facie entitlement to judgment as a matter of law [*2]on the complaint by producing the construction mortgage, theunpaid note, and proof of the defendant's default (see Baron Assoc., LLC v Garcia Group Enters., Inc., 96 AD3d 793,793 [2012]; Wells Fargo Bank, N.A. vCohen, 80 AD3d 753, 755 [2011]; Argent Mtge. Co., LLC v Mentesana, 79 AD3d 1079, 1080[2010]).
The defendant's submissions in opposition were insufficient to demonstrate the existence of atriable issue of fact as to a bona fide defense to the action (see Baron Assoc., LLC v GarciaGroup Enters., Inc., 96 AD3d at 793). The defendant submitted two affirmations in which healleged that the plaintiffs tricked him into unwittingly signing the construction mortgage, the noteit secured, and the related documents. The defendant alleged that, at the closing, which heattended with an attorney, he was handed three sets of documents, and neither he nor his attorneywas given the opportunity to review those documents. He alleged that he signed the documentswithout reviewing them, at the insistence of Galpern and Galpern's attorney, because he regardedGalpern "almost like a father figure," and, in his mind, the closing "was more like a familytransaction than a closing." The defendant further alleged that the note secured by theconstruction mortgage was never funded.
"A party who executes a contract is presumed to know its contents and to assent to them" (Nerey v Greenpoint Mtge. Funding,Inc., 144 AD3d 646, 648 [2016] [internal quotation marks omitted]; see Golden Stone Trading, Inc. v WayneElectro Sys., Inc., 67 AD3d 731, 732 [2009]; Holcomb v TWR Express, Inc., 11 AD3d 513, 514 [2004];Moon Choung v Allstate Ins. Co., 283 AD2d 468, 468 [2001]). Thus, "[a] party whosigns a document without any valid excuse for having failed to read it is conclusively bound byits terms" (Shklovskiy v Khan, 273 AD2d 371, 372 [2000]), "unless there is a showing offraud, duress, or some other wrongful act on the part of any party to the contract" (ReneeKnitwear Corp. v ADT Sec. Sys., Northeast, 277 AD2d 215, 216 [2000]; see BarclaysBank of N.Y. v Sokol, 128 AD2d 492, 493 [1987]). "The elements of a cause of actionsounding in fraud are a material misrepresentation of an existing fact, made with knowledge ofthe falsity, an intent to induce reliance thereon, justifiable reliance upon the misrepresentation,and damages" (JP Morgan Chase Bank,N.A. v Hall, 122 AD3d 576, 579 [2014] [internal quotation marks omitted]; see Eurycleia Partners, LP v Seward &Kissel, LLP, 12 NY3d 553, 559 [2009]; House of Spices [India], Inc. v SMJ Servs., Inc., 103 AD3d 848,850 [2013]; Introna v HuntingtonLearning Ctrs., Inc., 78 AD3d 896, 898 [2010]). Here, the defendant failed to establishthe element of justifiable reliance on alleged misrepresentations of Galpern and Galpern'sattorney, since the documents were provided to him, and he and his attorney could have readthem. Nor has the defendant established any other valid excuse for his purported failure to readthe construction mortgage and related documents before signing them.
The defendant's submissions in opposition to the motion for summary judgment also failed toraise a triable issue of fact as to whether the note secured by the construction mortgage wasfunded. The defendant did not submit any evidence in support of his averment that the $650,000that he admittedly received was not intended to include the funds loaned pursuant to the$350,000 note secured by the construction mortgage. Further, the defendant failed to raise atriable issue of fact concerning alleged violations of Banking Law §§ 590 and6-l. Since construction mortgages are exempt from the requirements of article 12-D of theBanking Law (see 3 NYCRR 39.5 [b]), Banking Law § 590, which iscontained in article 12-D, and which requires entities engaged in the business of makingmortgage loans to be licensed by New York State, does not apply to the subject constructionmortgage. Banking Law § 6-l, which "imposes limitations and prohibits certain'practices for high-cost home loans' " (Aries Fin., LLC v 12005 142nd St., LLC, 127 AD3d 900, 901[2015], quoting Banking Law § 6-l [2]; see Lewis v Wells Fargo Bank, N.A., 134 AD3d 777, 778 [2015]),defines "home loan" as, among other things, a loan that is "secured by a mortgage or deed of truston real estate improved by a one to four family dwelling" (Banking Law § 6-l [1][e] [iv]). Here, it is undisputed that the real estate at issue was unimproved by any structure;indeed, the proceeds of the construction mortgage were to be used to improve the land byconstructing a one- or two-family residence. Accordingly, the construction mortgage was not thetype of loan, i.e., a home loan, to which Banking Law § 6-l applies.
The Supreme Court did not improvidently exercise its discretion in adopting the referee'scomputation of the amount owed by the defendant. "In an action of an equitable nature, [*3]the recovery of interest is within the court's discretion. The exerciseof that discretion will be governed by the particular facts in each case, including any wrongfulconduct by either party" (US Bank N.A.v Williams, 121 AD3d 1098, 1102 [2014] [internal quotation marks omitted]; seeCPLR 5001 [a]; U.S. Bank N.A. vZembova, 137 AD3d 1010, 1011 [2016]; Norwest Bank Minn., NA v E.M.V. Realty Corp., 94 AD3d 835,837 [2012]; Dayan v York, 51AD3d 964, 965 [2008]; Danielowich v PBL Dev., 292 AD2d 414, 415 [2002]).Contrary to the defendant's contention, the conduct of the plaintiffs in this action was not soegregious as to merit the imposition of sanctions against them, in the form of limiting the interestawarded to them or otherwise (see Bankof Am., N.A. v Lucido, 114 AD3d 714, 715 [2014]). Moreover, the referee properlyincluded in the calculation of the amount owed a sum the plaintiffs advanced to RocklandCounty in payment of delinquent real estate taxes owed on the subject property. Contrary to thedefendant's contention, there is no evidence in the record that he had a payment plan with theRockland County Commissioner of Finance to pay off the debt at the time the payment wasadvanced.
The defendant's remaining contentions are without merit. Dillon, J.P., Roman, Hinds-Radixand Barros, JJ., concur.