Williams v Depietro

[*1] Williams v Depietro 2009 NY Slip Op 51834(U) [24 Misc 3d 1240(A)] Decided on August 25, 2009 Supreme Court, Kings County Rivera, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on August 25, 2009
Supreme Court, Kings County

Floyd Williams, Plaintiff,

against

John Depietro, Defendant.



19434/07



Counsel:

Plaintiff:

Samuel Ehrenfeld

30 East 29th Street, Suite 204

New York, NY 10016

212-686-1515

Defendant:

Ira Goldman

153 Keating Place

Staten Island, NY 10314

Francois A. Rivera, J.

Pursuant to an order of this court, dated July 22, 2008, and CPLR §3212(c), a factual hearing was conducted on January 20, 2009 and February 13, 2009 to determine whether or not plaintiff had demanded and defendant had complied with a written pay off statement letter in accordance with RPL §274-a. The action was brought by the plaintiff against the defendant to recover for damages caused by the failure of the defendant to issue a written pay-off statement on a mortgage held by defendant, in contravention of Section 274-a of the Real Property Law and paragraph 7 of the mortgage /note. On February 13, 2009, the court ordered parties to submit proposed findings of fact by April 17, 2009. Both parties submitted their proposed findings.

THE HEARING[*2]

At the hearing, plaintiff, Floyd Williams, testified on his own behalf and called Michael Mondschein, Esq., as witness. Defendant, John Depietro, testified on his own behalf, and did not call any other witnesses. The following documents were submitted as evidence by the plaintiff in support of his claim: Exhibit 1 was the Contract of Sale dated May 2005. Exhibit 2 was a Letter from Mondschein to Depietro demanding written pay-off statement, dated 6/13/2005. Exhibit 3 was a Letter from Mondschein returning the contract down payment. Exhibit 4 was a Copy of the Mortgage/Note. Exhibit 5 was an Affidavit of John Depietro. Exhibit 6 was the Summons/Complaint in an action for damages against plaintiff by contract vendee for failure to consummate on the contract. Exhibit 7 was a Second Contract of Sale entered by plaintiff in 2006 but could not be consumated because of the lack of a pay-off statement from defendant. Exhibit 8 was a Letter dated July 31, 2006 from Steve Okenwa, ESQ.,demanding a pay-off letter from defendant.

Defendant did not offer any documentary evidence.

FINDINGS OF FACT

On December 21st, 1994, Plaintiff purchased the premises known as 2179 Utica Avenue, Brooklyn NY (hereinafter "the subject premises") from the defendant. In consideration of the purchase price, defendant took a purchase money mortgage in the sum of $77, 000.00 and secured same with subject premises.

A copy of the mortgage /note was tendered and admitted into evidence during the hearing . Both plaintiff and defendant acknowledged signing the mortgage instrument. Paragraph 7 of the mortgage/note provides that the mortgagee shall provide a written pay-off statement of the mortgage to the mortgagor within ten (10) days of mortgagor's demand.

Unrebutted evidence adduced at hearing show that plaintiff desired to sell the subject premises to a third party in 2005 and retained the services of an attorney, Michael Mondschein, for that purpose. Mr. Mondshein testified that on June 13, 2005, he sent a letter demanding a written pay-off statement from the defendant. That letter was offered into evidence and admitted as Plaintiff's Exhibit 2. In his testimony, defendant admitted receiving said letter. The letter did not identify either of the mortgagors or the mortgagee. It did not include the date of the mortgage or the date the mortgage was recorded. Also, the letter did not include the proposed payoff date or date of assignment of the mortgage. The letter also failed to state in large capital letters, "THIS DEMAND IS MADE UNDER SECTION 274-a OF THE REAL PROPERTY LAW. FAILURE TO COMPLY WITH THIS DEMAND MAY RESULT IN SEVERE PENALTIES."

Mr. Mondschien further testified that when defendant failed to respond to his demand for a written pay-off statement, he contacted the defendant by telephone on October 19th, 2005, and October 20, 2005, and demanded that the defendant furnish the written statement, all to no avail. Mr. Mondschien also testified that he contacted the defendant again by telephone on November 10, 2005 and November 17, 2005, without success. On December 19, 2005, Mr. Mondschien met with the defendant in his office [*3]wherein he reiterated his demand for a written pay-off statement. When asked if he ever received a written pay -off statement from the defendant pursuant to his several demands, Mr Mondschien answered in the negative.

Defendant also admitted that a further demand for a written pay-off statement was made by the office of C. Steve Okenwa, plaintiff's counsel, on behalf of the plaintiff, on July 31, 2006. A copy of the written demand was admitted into evidence as " Plaintiff's Exhibit 8". The demand letter of July 31, 2006 identified Plaintiff Floyd Williams as the mortgagor but did not mention Gina Williams as a mortgagor. The letter did not identify defendant as the mortgagee. It did not include the date of the mortgage or the date the mortgage was recorded, and it did not include the proposed payoff date or date of assignment of the mortgage. The letter also did not include in capital letters the following statement: "THIS DEMAND IS MADE UNDER SECTION 274-a OF THE REAL PROPERTY LAW. FAILURE TO COMPLY WITH THIS DEMAND MAY RESULT IN SEVERE PENALTIES." Defendant admitted that he did not furnish any pay-off statement written or unwritten, pursuant to the demand of July 31, 2006.

LAW AND APPLICATION

Section 274 -a of the Real Property Law, provides in pertinent that a " mortgagee is required to furnish a Statement of the balance of the mortgage to the mortgagor within twenty (20) days of the mortgagor's demand". RPL 274-a (2) further provides that a mortgagee shall deliver within thirty (30)days, any mortgage documents to an authorized individual making a bonafide written demand for such documents. If the mortgagee fails to deliver the mortgage-related documents, the mortgagee shall be liable for the actual damages to the mortgagor by reason of such failure. The Section further defines "mortgage-related documents" as a pay-off statement setting forth the balance of the mortgage, including principal, interest and other charges assessed pursuant to the loan documents, together with a per diem rate for interest accruing after the date to which the balance has been calculated.

RPL §274-a (iii) requires that a bonafide written demand include the names of the mortgagor and mortgagee, the address of the mortgaged property, loan number, the date of the mortgage or the date it was recorded, the mortgage related documents demanded and the proposed payoff date or date of assignment of the mortgage, if applicable. Such demand shall include the following in capital letters:

"THIS DEMAND IS MADE UNDER SECTION 274-a OF THE REAL PROPERTY LAW. FAILURE TO COMPLY WITH THIS DEMAND MAY RESULT IN SEVERE PENALTIES."

Plaintiff's letters demanding a pay-off were not bonafide written demands as required by RPL §274-a as they failed to properly identify the mortgagors and mortgagee, failed to propose payoff dates, and omitted the required phrase, "THIS DEMAND IS MADE UNDER SECTION 274-a OF THE REAL PROPERTY LAW. FAILURE TO COMPLY WITH THIS DEMAND MAY RESULT IN SEVERE PENALTIES." [*4]

Plaintiff never made a bona fide written demand for a pay-off statement from the defendant in accordance with RPL §274-a. As a result, plaintiff's application for damages pursuant to RPL §274-a based on defendant's alleged failure to comply must be denied and the complaint dismissed. The foregoing constitutes the decision and order of this court.

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J.S.C.