SUPREME COURT - STATE OF NEW YORK TRI/IS PART

Transcription

1 SHORT FORM ORDER SUPREME COURT - STATE OF NEW YORK Present: HON. EDWAR G. MC CABE Justice TRI/IS PART FUNDEX CAPITAL CORPORATION Index No. 0929/03 Plaintiff Motion Sequence No. -against- KOTCHEK REALTY INC. a/a KOTCHEK REALTY CO., INC. PEGGY -, INC., FLEET NATIONAL BANK NEW YORK STATE DEPARTMENT OF TAXTION AN FINANCE KENNETH KOTCHEK, RICHAR KOTCHEK JOHN DOE and JANE DOE" numbers though 10 inclusive, the last named defendants being unown to plaintiff, the paries intended being unown to plaintiff, the paries intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest or lien upon the premises described in the complaint Defendants.. The following papers were read on ths.application: Notice of Motion for Sumar Judgment... Ex Pare Order Appointing A Receiver of Rent... Memorandum of Law in Support of Plaintiffs Motion for Sumar Judgment... Memorandum of Law of Kotchek Defendants in Opposition to Sumar Judgment... Supplemental Affrmation of Plaintiffs Counsel... Reply Affrmation in Support of Motion for Sumar Judgment......"....

2 The Plaintiff, Fundex Capital Corporation, submits an application for an order a. pursuant to CPLR 3212, granting sumar judgment in favor of Plaintiff against the Defendants including Fleet, for the relief demanded in the complaint; b.) appointing a Referee to compute amounts due and owing under the mortgage being foreclosed herein; c. ) pursuant to CPLR 1024 fuer amending the caption of the action to strke the names of "John Doe and Jane Doe Number 2 though Number 1 0" along with such other and fuher relief as the Cour deems appropriate. Four of the Defendants, Kotchek Realty, Inc., Peggy-, Inc., Kenneth Kotchek and Richard Kotchek oppose sumar judgment claiing a.) the default rate in the mortgage note is usurious and therefore void and unenforceable under g5-511 of the General Obligations Law and ) the mortgage clause providing for reasonable attorneys fees which "shall be at least twenty percent of the then outstading obligations" is unconscionable and thus constitutes a device to fuer increase the interest rate beyond the criminal usur limits. The subject provision ofthe paries secured installment promissory note reads as follows: This Secured Installment Promissory Note shall bear interest computed from the date hereof at the rate of 12% per anum except that post-matuty interest shall accrue and be payable at the rate of 7% per anum above the face rate of ths Promissory Note, and on each Monthy installment due hereunder not paid when due. In addition interest shall be computed on the unpaid principal amount at the rate of 7% per anum above the face rate of ths Promissory Note in the event of default or post matuty interest. " Plaintiff argues the default rate in the note is only 19% interest and not the 26% interest alleged by the Kotchek Defendants. Plaintiff submits an affidavit of the President of Fundex confrmng Plaintiff s interpretation of the default rate to be 19% interest per year and that they have no intention of attempting to collect any higher rate of interest. The agreement itself refers to interest on unpaid principal amount. par asserting the defense of usur must establish it by clear evidence as to all the elements thereto. "The Cour wil not assume that the paries entered into an unawf agreement. On the contrar, when the terms of the agreement are in issue, and the evidence is conflcting, the lender is entitled to a presumption that he did not make a loan at an usurous rate. See People s National Ban of Rockland County vs. Arkady Kogan, 120 A.D. 2d N.Y.S. 2d 777 (2 (2d Dept., 1992) Dept. 1986); La Greco vs. Pafdi, 181 A.D. 2d N.Y.S. 2d 462 At best, it could be said that the subject default interest rate terms could have been more clearly defined. The Defendant has not met its' burden of establishing ths agreement as a

3 .., usurous loan or of raising a trable issue of fact with respect thereto. See Zuckerman vs. City of New York, 66A.D. 2d N. Y. 2d 557; Giventer vs. Arow, 37 N.Y. 2d 305, 309, 372 S. 2d 665 (1984) and Freitas vs. Geddes Savings & Loan Assoc., 63 N.Y. 2d 254, 481 Y.S. 2d 665 (1984). Additionally, the Defendant' s objection to the attorneys fees provision of the note is raised prematuely and has no legal merit. The subject note provision states the paries agree that reasonable attorneys fees will be at least twenty percent of the then outstanding obligation. In Re Coastline Steel Products. Inc, 93 Misc. 2d255, 402N.Y.S. 2d 947, the Cour found such a provision is not binding on the Cour, it only sets a cap and only reasonable fees can be recovered. Despite the paries agreement or stipulation to the reasonableness of attorneys fees, the judge can make an independent determination based upon quantu meruit. See Bentley, 116 Misc. 2d 34, 455 N. Y.S. 2d 62. A vco Financial Services Trust vs. The Defendants failed to persuade this Cour that the "twenty percent reasonable attorney fee" provision should be added to the interest rate of the loan, in order to find the loan usurious and void ab initio. Neverteless, the Defendants' interests with respect to this issue are protected to the extent they wil have an opportty to review the Plaintiff s application for reasonable attorneys fees and submit any oppositionthereto, prior to any award by the Cour. The Defendants' objections to Ut1iietermined attorneys fees at this time is thus prematue and not a defense to an application for suiat judgment. The Defendant, Fleet National Ban, has not opposed ths application and the uncontradicted record reflects Plaintiffs mortgage, recorded June 7, 2000, has priority over Fleet' s subsequently recorded UCC- 1 (recorded Januar ). Furermore, Plaintiffs mortgage and note is an interest secured in realty, as opposed to Fleet' s secured interest in personalty. Accordingly, based upon all of the foregoing and upon the Sunons herein, dated July , the Complaint herein verified on July 1, 2003, and the Notice of Pendency of Action herein dated July 1, 2003, all filed on, or about July 14, 2003, and on reading and filing the anexed afdavits of service, showing service with the State ofn ew York of the Sumons and Complaint herein on the defendants, the affidavit of Marin E. Val, Esq. ard the afdavit of Lawrence ' J; Linksman, President of Plaintiff, Fundex Capital Corporation, sworn to on Nov from which it appears that this action was brought to foreclose a mortgage on real propert situted in the Cotmty of NASSAU in the State of New York, that the whole amount secured thereby is due and that each and all of the Defendants have been duly served with the Sumons and Complaint herein more than twenty (20) days since, except the Defendants, John Doe and Jane Doe, Numbers 1 though 10 inclusive, as against whom ths action is hereinafer discontinued without prejudice, and that all the Defendants herein have failed to raise a valid defense or triable issue of fact with respect to the Complaint herein, and that none of the defendants is an infant, incompetent or absentee and that the Notice of Pendency of this action, containng correctly and trly all the pariculars required by law to be stated

4 in such notice, was filed more than twenty (20) days since, in the Offce of the NASSAU County Clerk, that since the filing of such notice, the Sumons and Complaint herein has not been amended by making new paries to ths action, or so as to afect premises described in said notice, or so as to extend the claim of the Plaintiff against the mortgaged premises and that the Defendants, John Doe and Jane Doe, Numbers 1 though 10 inclusive, are not necessar paries hereto and on all of the pleadings and papers herein filed and proceedings had herein and due deliberation having been had NOW, ON MOTION OF Marin E. Valk, Esq., of Granoff, Walker & Forlenza, P. attorneys for the Plaintiff herein, it is hereby, the ORDERED, that the Plaintiffs motion for sumar judgment, in favor of the Plaintiff and against the Defendants, for the relief demanded in the mortgage foreclosure complaint is hereby granted; and it is fuer ORDERED, that pursuant to CPLR g1024, the caption of this foreclosure action is hereby amended to delete the names of John Doe and Jane Doe Numbers 1 though 10 inclusive, together with the descriptive words following their names and that ths action is discontinued as to such Defendants, without prejudice to any of the proceedings had herein; and it is fuer ORDltRED., that the amended caption shall read as follows: FUNDEX CAPITAL CORPORATION -against- Plaintiff, KOTCHEK REALTY, INC. a/a KOTCHEK REALTY CO., INC., PEGGY-, INC., FLEET NATIONAL BAN NEW YORK STATE DEPARTMENT OF TAXTION AN FINANCE KENNETH KOTCHEK RICHA KOTCHEK Fip.J Defendants. ORDERE, tht ths action is hereby referr to 'I I.. tjt (7/8) cg 7 'B 5D g 7- ff d!fg/- /.Jf? I/ I A u) J(,,6 r;.". lib 7" as Referee to ascertain and compute the amount due to the Plaitiff for principal and interest or otherwse, on the note and mortgage set fort in the Complait herein, to examine and report

5 whether the mortgaged premises can be sold in parcels and said Referee make his/her report to this Cour, and it is fuer ORDERED, that the Plaintiffis directed to submit the Judgment of Foreclosure and Sale on Notice afer the Referee s Report is complete; and it is fuer ORDERED, that Plaintiff s application for an order appointing a Receiver of Rents has been withdrawn. This constitutes the order and decision of the Cour. Dated: Mineola, NY June 29, 2004 ENTER: ENTERED JUL i.ij COUNTY C :UN CLERK' OFFICE

6 FAXIL TO: 1. Marin E. Valk, Esq. Attorney for Plaintiff Granoff, Walker & Forlenza, P. 747 Third Ave., Suite 4C New York, NY Tele: (212) Fax: (212) Scheichet & Davis, P. Attorneys for Defendants Kotchek Realty, Peggy-, Inc. Kenneth and Richard Kotchek 800 Third Avenue New York, NY Tele: (212) Fax: (212) Peter Seideman Esq. Attorney for Defendant, Fleet 20 Vanderventer Avenue, Suite 103W Port Washigton, NY Tele: (516) Fax: (516)