| Prompt Mtge. Providers of N. Am., LLC v Zarour |
| 2017 NY Slip Op 08028 [155 AD3d 912] |
| November 15, 2017 |
| Appellate Division, Second Department |
[*1]
| Prompt Mortgage Providers of North America, LLC, et al.,Respondents, v Simon Zarour, Appellant, et al., Defendants. |
Allen A. Kolber, Suffern, NY, for appellant.
David H. Singer & Associates, LLP, New York, NY (Christopher S. McCann ofcounsel), for respondents.
Motion by the appellant for leave to reargue an appeal from a judgment of foreclosure andsale of the Supreme Court, Rockland County, dated July 20, 2015, which was determined bydecision and order of this Court dated March 8, 2017.
Upon the papers filed in support of the motion and the papers filed in opposition thereto, itis
Ordered that the motion is granted and, upon reargument, the decision and order of this Courtdated March 8, 2017 (see Prompt Mtge.Providers of N. Am., LLC v Zarour, 148 AD3d 849 [2017]), is recalled and vacated, andthe following decision and order is substituted therefor:
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 (hereinafter the New York property). The defendant executed the constructionmortgage, the note it secured, and other related documents on April 29, 2008, the same day thathe executed another set of documents regarding a loan in the sum of $650,000, secured by amortgage [*2]against property he owned in Monmouth County,New Jersey (hereinafter the New Jersey property).
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 on thecomplaint by producing the construction mortgage, the unpaid note, and proof of the defendant'sdefault (see Baron Assoc., LLC v GarciaGroup Enters., Inc., 96 AD3d 793, 793 [2012]; Wells Fargo Bank, N.A. v Cohen, 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 a triable issue of fact concerning alleged violations ofBanking Law §§ 6-l and 590. Since construction mortgages are exempt fromthe requirements of article 12-D of the Banking Law (see 3 NYCRR 39.5 [b]), BankingLaw § 590, which is contained in article 12-D, and which requires entities engagedin the business of making [*3]mortgage loans to be licensed byNew York State, does not apply to the subject construction mortgage. Furthermore, the plaintiffswere not "lender[s]" as defined in Banking Law § 6-l (1) (i), and they do not fallwithin the definition of any other category to which the provisions of Banking Law§ 6-l apply (see Balsam vFioriglio, 123 AD3d 750, 751-752 [2014]). Therefore, the prohibitions, obligations, andrequirements prescribed by that section did not apply to the plaintiffs (see Banking Law§§ 1, 6-l [1] [i]; Balsam v Fioriglio, 123 AD3d at 752).
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, therecovery of interest is within the court's discretion. The exercise of that discretion will begoverned by the particular facts in each case, including any wrongful conduct by either party" (US Bank N.A. v Williams, 121 AD3d1098, 1102 [2014] [internal quotation marks omitted]; see CPLR 5001 [a]; U.S. Bank N.A. v Zembova, 137 AD3d1010, 1011 [2016]; Norwest BankMinn., NA v E.M.V. Realty Corp., 94 AD3d 835, 837 [2012]; Dayan v York, 51 AD3d 964, 965[2008]; Danielowich v PBL Dev., 292 AD2d 414, 415 [2002]). Contrary to thedefendant's contention, the conduct of the plaintiffs in this action was not so egregious as to meritthe imposition of sanctions against them, in the form of limiting the interest awarded to them orotherwise (see Bank of Am., N.A. vLucido, 114 AD3d 714, 715 [2014]). Moreover, the referee properly included in thecalculation of the amount owed a sum the plaintiffs advanced to Rockland County in payment ofdelinquent real estate taxes owed on the subject property. Although the defendant entered into apayment plan with the County of Rockland in March 2012 to pay off the delinquent real estatetaxes, the defendant failed to establish that he had fully performed pursuant to the terms of thatagreement at the time the payment was advanced by the plaintiffs.
The defendant's remaining contentions are without merit. Dillon, J.P., Roman, Hinds-Radixand Barros, JJ., concur.