Isopo v Giambanco
Decided on March 8, 2011
Supreme Court, Nassau County
Mario Isopo, Plaintiff,
Salvatore Giambanco, ANTONIA GIAMBANCO, DEUTSCHE BANK NATIONAL TRUST COMPANY, as TRUSTEE FOR ARGENT SECURITIES INC. ASSET-BACKED PASS- THROUGH CERTIFICATES SERIES 2005- W5, UNDER THE POOLING AND SERVICING AGREEMENT DATED DECEMBER 1, 2005, JULIUS DRINKWATER, THE COCA-COLA BOTTLING COMPANY OF NEW YORK, INC., STEVEN HEISINGER, NYS DEPT. OF TAXATION & FINANCE, and HECTOR GONZALES, Defendants.
Steven M. Jaeger, J.
Defendant, Deutsche Bank National Trust Company, as Trustee for Argent Securities Inc. Asset-Backed Pass-Through Certificate Series 2005-W5 (hereinafter "Deutsche Bank") moves to dismiss Plaintiff's complaint pre-answer pursuant to CPLR §3211(a)(7) alleging laches and that Plaintiff's complaint is devoid of any facts sufficient to establish a cause of action. Plaintiff counters that Defendant has not satisfied the
requirements for laches to bar the claim and that the facts presented are sufficient to establish a cause of action.
Defendant's motion is denied. [*2]
In reviewing a motion to dismiss for failure to state a cause of action pursuant to CPLR §3211(a)(7), the Court is to accept all facts alleged in the complaint as being true, accord Plaintiff the benefit of every possible favorable inference, and determine only whether the alleged facts fit within any cognizable legal theory. Delbene v. Estes, 52 AD3d 647 (2nd Dept. 2008); see also 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 NY2d 144 (2002). Pursuant to CPLR §3026, the complaint is to be liberally construed. See Leon v. Martinez, 84 NY2d 83 (1994). It is not the Court's function to determine whether plaintiff will ultimately be successful in proving the allegations. Aberbach v. Biomedical Tissue Services, 48 AD3d 716 (2nd Dept. 2008); see also EBCI, Inc. v. Goldman Sachs & Co., 5 NY3d 11 (2005).
In an action for fraudulent inducement, the Plaintiff must establish a misrepresentation or omission of a material fact which the Defendant knew was false, that the misrepresentation was made to induce the Plaintiff's reliance, the Plaintiff's justifiable reliance on the misrepresentation or material omission, and a resulting injury. Hense v. Baxter, 79 AD3d 814 (2nd Dept. 2010); see also Lama Holding Co. v. Smith Barney Inc., 88 NY2d 413 (1996). In viewing the complaint liberally, accepting all facts to be true, and according Plaintiff the benefit of every possible inference, it is apparent that plaintiff has sufficiently established a cause of action for fraudulent inducement.
Plaintiff, inter alia, alleges that when Defendant, Salvatore Giambanco, provided Plaintiff with a check to satisfy the mortgage Plaintiff held, he misrepresented that the bank on which the check was drawn had sufficient funds. This misrepresentation was allegedly made to induce Plaintiff into providing Defendant with a satisfaction of this mortgage. Plaintiff allegedly relied upon this misrepresentation to provide Defendant with the satisfaction of mortgage. Plaintiff has allegedly sustained injury because he did not receive the funds from the check as the bank upon which it was drawn did not have sufficient funds. These facts sufficiently state a cause of action for fraudulent inducement. Whether Plaintiff can provide sufficient evidence to substantiate these facts and ultimately prevail is not at issue.
As to Defendant's claim that Plaintiff's complaint should be dismissed due to laches, it should first be noted that laches is a defense and is not to be used affirmatively. Short v. Rapping, 135 AD2d 624 (2nd Dept. 1987). Thus, it is not an appropriate basis for a motion to dismiss for failure to state a cause of action. However, even if laches were a proper basis for moving to dismiss for failure to state a cause of action, Defendant has failed to satisfy the elements required to prove laches.
In order to demonstrate laches, four elements must be established. There must be conduct of an offending party giving rise to the situation complained of, delay by the complainant in asserting the claim for relief in spite of an opportunity to do so, lack of knowledge or notice on the part of the offending party that the complainant would assert the claim, and injury or prejudice to the offending party in the event that the relief is accorded the complainant. See, Dwyer by Dwyer v. Mazzola, 171 AD2d 726 (2nd Dept. 1991). All elements are required, with the most essential being that the delay is prejudicial to the opposing party. Burns v. Egan, 117 AD2d 38 (3rd Dept. 1986). Laches will bar enforcement of a right where there has been an unreasonable, and inexcusable delay that results in prejudice to a party. See Skrodelis v. Norbergs, 272 AD2d 316 (2nd Dept. 2000). [*3]
Here, the facts alleged by plaintiff establish the first three elements. The alleged "bad check" written by Defendant, Salvatore Giambanco, gave rise to the situation. Plaintiff has clearly delayed commencing the action as the check was returned to him for insufficient funds on October 20, 2005 and the Summons and Complaint was not filed until July 29, 2010. While Deutsche Bank was unaware that Plaintiff would assert a claim, Deutsche Bank has not established that it would suffer any prejudice should Plaintiff ultimately be successful and the satisfaction of mortgage canceled.
According to the relevant facts as alleged in the complaint, Defendant gave a mortgage to Argent Securities, Inc. (hereinafter "Argent") on October 7, 2005. Defendant, Giambanco, provided Plaintiff with the check to satisfy the mortgage with Plaintiff on October 17, 2005, and the check was returned for insufficient funds on October 20, 2005. Argent assigned its mortgage to Deutsche Bank in February 2009. Although it is alleged that Giambanco told Plaintiff that he needed the satisfaction of mortgage in order to obtain the mortgage with Argent, there has been no proof submitted that Argent relied on this satisfaction of mortgage in order to close on its mortgage ten (10) days earlier. The fact that the closing of Argent's mortgage occurred ten days prior to the check being presented to satisfy the mortgage with Plaintiff seems to indicate that it was not a precondition.
Based on the timing of the closing of the mortgage with Argent and the presentment of the check to satisfy the mortgage with Plaintiff, should the satisfaction of mortgage with Plaintiff be canceled and the mortgage reinstated, Deutsche Bank will have the same priority as Argent had at the time of closing on the Argent mortgage. Although Deutsche Bank will have lower priority than at the time the mortgage was assigned, Deutsche Bank is stepping into the shoes of Argent. See Federal Financial Co. v. Levine, 248 AD2d 25 (2nd Dept. 1998); Trisingh Enterprises, Inc. v. Kessler, 249 AD2d 45 (1st Dept. 1998). Thus, priority relates back to the date of closing on the Argent mortgage, and Deutsche Bank will not suffer any prejudice should the mortgage with plaintiff be reinstated. Deutsche Bank can only have those rights that would have been available to its assignor, Argent.
As Plaintiff has sufficiently alleged facts to make out a cause of action for fraudulent inducement and Defendant has failed to prove laches, dismissal of Plaintiff's complaint is not warranted. Desser v. Schatz, 182 AD2d 478 (1st Dept. 1992). Further, Defendant has not established that Plaintiff has an "adequate" remedy at law by any facts other than conclusory statements. This defense cannot support a dismissal unless it includes ultimate facts showing the adequacy of a remedy at law. See, Becher v. Fuller, 19 Misc 3d 1138(A) (Sup. Ct. Kings Cty. 2008), citing, Levan v. American Safety Table Co., 222 AD 110 (1st Dept. 1927); see also, Schiff v. Schiff, 270 AD 845 (2d Dept. 1946). Accordingly, the motion is denied.
Defendant Deutsche Bank shall serve and file its Answer within ten (10) days of service of a copy of this order with notice of entry.
All parties are directed to appear for a preliminary conference at the Courthouse on Wednesday, May 25, 2011, at 9:30 a.m.
This constitutes the Decision and Order of the Court.
Dated: March 8, 2011 [*4]
STEVEN M. JAEGER, A.J.S.C.