SHORT FORM ORDER SUPREME COURT - STATE OF NEW YORK Present: HON. ALLAN L. WINICK, Justice DYCK-O NEAL, INC., -against- Plaintiff, TRIAUIAS, PART 10 NASSAU COUNTY MOTION DATE: July 25,200O MOTION SEQUENC~E:. 001,002 INDEX NO. 24370/99 DAR10 NUNEZ AND VALERIE A. NUNEZ f/k/a VALERIE A. MARACICH, Defendant(s). The following papers read on this motion: Notice of Motion/ Order to Show Cause Answering Affidavits Replying Affidavits Briefs: Plaintiff s/petitioner s Defendants/Respondent s Motion by plaintiff for an order striking defendants answer and awarding it summary judgment on its six causes of action is granted to the limited extent that defendants first, second, third and fourth affirmative defenses are dismissed, and denied~ as to the remainder. Cross-motion by defendants for leave to amend their answer is also denied. Plaintiff, a Texas corporation that may be considered to be acting as a debt collector, commenced this action to recover a deficiency that resulted after plaintiff sold defendant Dario Nunez s former interest in a cooperative apartment. Defendant Dario Nunez had _ borrowed $55,000 from Dime Savings,Bank ( Dime ) in 1988 and given Dime a security
interest in the shares of stock issued to him by the cooperative corporation, a well as in the proprietary lease. When Dario Nunez failed to make his loan payments a default W& declared, and the entire loan indebtedness of $52,242.86 was accelerated. At the public auction on July 21, 1998 Dime was the only bidder and purchased the shares of stock and proprietary lease for $100. Dime assigned its interest in the stock and lease to Federal National Mortgage Assn. ( FNMA ) on September 22,1998. Thereafter, FNMA assigned its interest to plaintiff on October 13, 1998. Plaintiff s interest in the shares.of stock and the lease were conveyed to a third party on January 29, 1999 for $28,000. Plaintiff claims that the net proceeds of the sale were $31,959.20 plus interest from July $24,229.33, and now seeks a deficiency judgment of 21,1998. Plaintiff commenced this action in September 1999 and now moves for summary judgment on its six causes of action for various measures of relief including a deficiency judgment, attorneys fees, and relief under sections of the Debtor and Creditor Law. At the outset, the co.urt must address defendants affirmative defenses.. The first affirmative defense of lack of standing must be dismissed as plaintiff has established through documentary evidence that it was assigned all rights to the promissory note executed by Dario Nunez and all interest in any claim for a deficiency thereunder. The second affirmative defense, that plaintiff cannot sue in the courts of this state as it is a foreign corporation not authorized to do business here pursuant to Business Corporation Law 1312, must also be dismissed as lacking merit; BCL 1312 constitutes a bar to the maintenance of an action by a foreign corporation found to be doing business in New York without the required authorization to do business here. (Airline Exchange, Inc. v Bag, 266 AD2d 4 74; S& Tf3ank v Spectrum Cabinet Sales, 247 AD2d 373.) Its purpose is to regulate foreign corporations doing business in this state and not to enable avoidance 2
of contractual obligations. (S&TBank, supra.) Defendants have failed to show that plaintiff is doing business in this state and consequently BCL 1312 is inapplicable. (Airline Exchange, Inc., supra; S& T Bank, supra.) The third affirmative defense is that the assignment to plaintiff violates Judiciary Law 5 489. This statutory prohibition against champer-ty requires that the foundational intent to sue on that claim must at least have been the primary purpose for,. if not the sole motivation behind, entering into the transaction. (Bluebird v First Fid. @a&9,4 NYd 726, 736.) Here documentary evidence establishes plaintiffs efforts to obtain payment without a lawsuit. Consequently defendants cannot show the foundational intent required under Judiciary Law 489, and the third affirmative defense must be dismissed. The fourth affirmative defense of [aches is equally unavailing. As demonstrated below, plaintiff s deficiency judgment claim is governed by UCC 9-504. As such it falls within CPLR 214 (2) which requires that an action to recover upon a liability imposed by statute be commenced within 3 years. (Cf. Sumner v Century Nat Bank, 92 Misc2d 726.) Lathes cannot be a defense in an action brought within the applicable statute of limitations. (Gonzalez v Chalpin, 159 AD2d 553, affd 77 NY2d 74.) In the fifth affirmative defense defendants challenge the alleged deficiency as excessive. This affirmative defense requires analysis of the disposition of collateral involved. A disposition of collateral by a secured<party after a default must be commercially reasonable in every aspect. Uniform Commercial Code g-504(3). It is the burden of the secured party seeking a deficiency judgment to show that the sale of collateral was made in a commercially reasonable manner. (BancAmerica Private Brands, Inc. v Marine Ga llery, Inc., 157 AD2d 813; Mack Fin Corp. v Knoud, 98 AD2d 713.) Here plaintiff s sole 3
proof of the commercial reasonableness of the sale is an unsworn appraisal report setting forth an appraised value of $20,000 as of July 26, 1998 (Exhibit P to the moving papers). Yet the true sale at issue took place more than six months later on January 29, 1999 when the market for such a cooperative apartment could have changed. Furthermore, no information whatsoever is provided as to plaintiff s efforts to sell the collateral after plaintiff acquired it from FNMA, or the circumstances surrounding the ultimate sale. It is well settled that the proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law. (Alvarez VProspect Hosp., 68 NY2d 320; Zuckerman v City of NY, 49 NY2d 557.) The failure to make such a showing requires denial of the motion regardless of the sufficiency of the opposing papers. (Winegrad v NY Univ Med. Ctr., 64 NY2d 851.) Here plaintiff has failed to meet its burden on this motion and consequently summary judgment dismissing the fifth affirmative defense and granting judgment on the first cause of action for a deficiency judgment must be denied. (Ford Motor Credit. Co. v Hernandez, 210 AD2d 656; Mack Fin Corp., supra.) This determination renders a decision on plaintiff s other five causes of action premature. Unless and until plaintiff establishes its right to a deficiency judgment, its claim for attorneys fees, and its claims under the Debtor and Creditor Law are not ripe for determination. Consequently summary judgment on plaintiff s other chuses five bf action is also denied. Finally, defendants request leave to amend their answer to add an affirmative defense and/or counterclaim alleging a violation by plaintiff under the Fair Debt Collection Practices Act ( FDCPA ),found at 15 USC 1692 et Defendants seq. attorney argues that a serious question exists as to whether discovery will uncover a violation under FDCPA. Terranova affidavit dated June 15, 2000, par: 7. Defendants base their argument on the 4
fact that three letters from plaintiff to defendants stated that the outstanding debt was $16 288.53, while a later letter advised that an error was made and the amount due was $31 959.20. While leave to amend a pleading should be freely given (CPLR 3025 (b); Edenwald Contr. Co. v City of N V, 60 NY2d 957) the proponent of the amendment must allege a prima facie cause of action or defense. (Daniels v Empire-Orr Inc., 151 AD2d 370; see also Konrad v 736 East 64 Street Corp., 246 AD2d 324.) On this record defendants have failed to allege a prima facie affirmative defense or counterclaim for violation of FDCPA. Speculation as to what discovery may reveal does not suffice. For this reason the crossmotion for leave to amend the answer is denied. This constitutes the order of the court. Dated: September 6, 2000 Allan L. Winick J.S.C..~... 5