Private Capital Group, LLC v Private Lender Serv. Corp.

Private Capital Group, LLC v Private Lender Serv. Corp. 2012 NY Slip Op 01781 Decided on March 13, 2012 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on March 13, 2012
Tom, J.P., Saxe, Acosta, DeGrasse, Román, JJ.
7087 650338/07

[*1]Private Capital Group, LLC, et al., Plaintiffs-Respondents,

v

Private Lender Service Corp., et al., Defendants, Gnosis LLC, Defendant-Appellant.




Law Offices of Ira Bierman, Syosset (Ira Bierman of counsel),
for appellant.
Alston & Bird LLP, New York (Michael P. De Simone of
counsel), for respondents.

Order, Supreme Court, New York County (Bernard J. Fried, J.), entered December 23, 2010, which, to the extent appealed from, granted plaintiffs' motion for summary judgment on their claims for conversion and replevin, unanimously affirmed, with costs.

The motion court correctly found that Gnosis was not a holder in due course of the mortgages it had acquired using plaintiffs' funds because its principal, Michael Bode, had actual knowledge, and not merely reason to know, of plaintiffs' claim (see Uniform Commercial Code § 3-304 [7]; Hartford Acc. & Indem. Co. v American Express Co., 74 NY2d 153, 162-163 [1989]). Such knowledge was derived from all the attendant circumstances, including Bode's participation in the underlying diversion of plaintiffs' funds and his signing of the mortgage transfer documents, and not just from the complaint in a related action.

We have considered appellant's other contentions and find them unavailing.

THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: MARCH 13, 2012

CLERK