Teachers Fed. Credit Union v Sanders

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Teachers Fed. Credit Union v Sanders 2012 NY Slip Op 32116(U) July 31, 2012 Sup Ct, Nassau County Docket Number: 11157-11 Judge: Arthur M. Diamond Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. .................................. ............. [* 1] SUPREME COURT - STATE OF NEW YORK Present: HON. ARTHUR M. DIAMOND Justice Supreme Court --------------------------------------------------------------------- x TEACHERS FEDERAL CREDIT UNION, TRIAL PART: 10 NASSAU COUNTY INDEX NO: 11157- Plaintiff, -againstMOTION SEQ NO. : 1,2,3 MARK H. SANDERS, WESTBURY JEEP CHRYSLER DODGE, INC., aIa WESTBURY JEEP EAGLE, INC., LOUIS A. NAVIASKY, TD BANKNORTH TD BANK, N. A., and the NEW YORK STATE DEPARTMENT OF MOTOR VEHICLES, Defendants. aIa SUBMIT DA TE:07/03/12 ------------------------------------------------------------------ x The following papers having been read on this motion: Notice of Motion............................ Notice of Cross Motion.............. Notice of Cross Motion................ Op positi 0 D.......................... .......... .. Rep Iy Defendant Westbur Jeep Chrsler Dodge , Jeep ) moved for sumar judgment pursuat to Inc. (hereinafter referred to as " CPLR 3212. Plaintiff, Westbur Teachers Federal Credit Union (hereinafer referred to as " Teachers Federal"), cross-moved for parial sumar judgment pursuant to CPLR 3212 in relation to the second and third causes of action enumerated in its Verified Complaint. Defendant Sanders then submitted a cross-motion to dismiss the sumons and complaint in its entirety as against him. Westbur Jeep s motion for sumar judgment is denied. Plaintiff s cross-motion is denied in par and granted in par. Sanders ' motion to dismiss claims against him is denied in its entirety for the reasons herein. Plaintiff filed a Sumons and Verified Complaint on June 25, 2011. (Teachers Federal Notice of Cross- Motion , Exhibit 1). In this sumons and verified complaint plaintiff sought relief for the causes of action stated herein. Immediately following, defendant Westbur Jeep fied the instat motion to dismiss the verified complaint based on sumar judgment. [* 2] Defendant Sanders served a Verified Answer upon ' plaintiff on September 27 , 2011. Sanders asserted , Westbur Jeep, inter alia , that he did not in fact enter but instead entered into a lease agreement into a financing agreement with with leasing representative Rick Cohen. (Teachers Federal Notice of Cross- Motion , Exhibit 2). Additionally, Sanders claims that he made payments for the vehicle until it was returned to Rick Cohen , who then informed him no fuher payments were due. FACTS Plaintiff, Teachers Federal Credit Union , a financial institution , entered into an indirect lending agreement with defendant Westbur Jeep to provide financing for the sale of a motor vehicle to co- defendant Mark H. Sanders. Defendant Westbur Jeep submitted to plaintiff for approval an application for financing naming Sanders as the prospective buyer of a 2009 Jeep Cherokee. The application was approved and (Teachers Federal Notice of Cross- Motion , an agreement was executed on February 27 2002. Exhibit 3). Sanders made continuous payments on the balloon loan from March 2009 until June 2010 , when he ceased making payments. (Teachers Federal Notice of Cross- Motion , Exhibit 10). Plaintiff instituted this action against both defendant Westbur Jeep and defendant Sanders (as well as Louis A. Naviasky, TD Ban, N. and the New York State Deparment of Motor Vehicles) claiming inter alia that Westbury Jeep breached its signed agreement because the Loan Contract was not accurate and did not reflect the complete agreement between the buyer of the Federal Notice of Cross- Motion, Exhibit I). motor vehicle and Westbury Jeep. (Teachers Plaintiff also claims Westbur Jeep breached its agreement with respect to its obligation to repurchase the instrent plus pay a stipulated balance in the event plaintiff so demands. The complaint states that as per the agreement, as a result of a dispute initiated by Sanders , which was not resolved within 30 days , Westbury Jeep wil be obligated to pay $26 464. 59 plus interest together with attorney s fees and costs to recoup Sanders ' failure to payoff the loan. A third cause of action set forth by plaintiff against Westbur Jeep states that as per Paragraph 3 of the Dealer Agreement , the car dealership must indemnify plaintiff credit union for the fees and costs incurred in conjunction with any dispute defense or counter claim made by the buyer arising out of any " Instrment or the underlying transaction. " (Teachers Federal Notice of Cross- Motion , Exhibit 3). Additionally, plaintiff asserts three causes of action against defendant Sanders and one cause of action against the New York State Deparment of Motor Vehicles (hereinafter referred [* 3] to as NYSDMV). The three claims against defendant Sanders are as follows: 1) as a result of Sanders failure to make payments as provided in the Loan Contract he now owes plaintiff $26 464. 59 plus interest and late fees; 2) Sanders ' bre ached the contract as a result of sellng the vehicle without paying off the loan to plaintiff; 3) Sanders is responsible for collection costs including reasonable attorney s fees and costs. (Teachers Federal Notice of Cross- Motion Exhibit 1). The final claim asserts that NYSDMV is in possession of a faulty document , more specifically a first lien , and that it should issue a new Certificate of Title. DISCUSSION The proponent of a summary judgment motion must make a prima facie showing entitlement to judgment as a matter material issues of fact from the case. of of law , tendering suffcient evidence to eliminate any (Winegradv. New York Univ. Med Center N.y. 2d 851 64 853). Once plaintiff has met its burden , the burden of proof shifts to the defendants to rebut the inference of entitlement to summary judgment. (Zuckerman v. City of New York 49 N. Y. 2d 557). Defendant Westbur Jeep has not demonstrated entitlement to summary judgment because it has not presented any documentary evidence that refutes the three claims set forth by plaintiff. Specifically, defendant must put forth evidence breached waranties , contradicting the claims that failed to abide by the repurchase clause in the agreement and failed to indemnify plaintiff. Within the agreement with plaintiff, defendant Westbury Jeep promised that all instruments submitted would be accurate and reflect the complete agreement between defendant Sanders and defendant Westbur Jeep. (Teachers Federal Notice of Cross- Motion , Exhibit 3). It must first be determined whether or not Sanders is credible in his claim that he has had no contact with Westbury Jeep before a decision regarding a breach by Westbury Jeep can be made which is the subject of plaintiff s first cause of action. If the cour finds that Sanders did in fact sign the agreement , and his claims that he did not are false , it wil follow that Westbury Jeep clearly did not breach its waranty to submit instruments that were accurate and that reflected a complete agreement. On a motion for summary judgment the cour must not weigh the credibilty unless it clearly appears that the issues are feigned and not genuine of witnesses (Jericho Realty Corp. AutoZone, Inc. 27 AD3d 447 449). The truthfulness of Sanders ' claims is a material issue offact [* 4] to be decided at trial , which wil then determine defendant Westbury Jeep the issue of breach of warranty. Therefore s claim for summar judgment on the first cause of action for breach of warranty must be denied , because there is a substantial and genuine issue of fact that turns on the credibilty of defendant Sanders. The second cause of action asserted by plaintiff claims that defendant Westbur Jeep failed to abide by its obligation to repurchase the loan from plaintiff after defendant Sanders raised a claim. Both plaintiff and defendant have not shown that they are entitled to summar judgment on this cause of action under Paragraph 3 or Paragraph 6 of the dealer agreement. Paragraph 3 , in relevant portion , states: Company hereby agrees to indemnify Credit Union and hold it harless against any claim or legal action by any Buyer(s), Co- Buyer(s) or Guarantor(s) arising out of any Instrument or the underlying transaction , including any claiming or State Law , rule or regulation , whether interposed violation of any Federal directly against Credit Union or Company or by way of defense , dispute or counterclaim... " (Teachers Federal Notice of Cross- Motion , Exhibit 3). This portion of the agreement indicates that claims of a legal action interposed directly against the Credit Union or by way of defense , dispute or counterclaim wil trigger the indemnification clause. However , the interposing of " a defense , dispute or counterclaim " is not applicable to the subsequent portion of Paragraph 3 that refers to the issue of repurchasing the instrent. It is the cour' s understanding that the aforementioned language does not apply to the repurchase clause of the agreement because such language is absent as a conditiDn precedent to exercising repurchase. The repurchase clause , in pertinent par , provides as follows: Company furher agrees that if such claim or legal action is not resolved within 30 days after its institution Company agrees to repurchase the instruent from the Credit Union for the amount of the then unpaid balance , plus accrued but unpaid interest to the date of repurchase , plus the dealer 1 % fee pro-rated to the unpaid balance. Repurchase is made without recourse or warranty from Credit Union as attorney in fact for the dealer. " (Teachers Federal Notice of CrossMotion , Exhibit 3). The court must deny summar judgment in relation to the repurchase clause , because there have been no claims or legal action brought forward by either of the defendants , Westbur Jeep or Sanders. The original suit by Teachers Federal canot repurchase clause set forward in this paragraph. be used in order to trigger the [* 5] Paragraph 6 of the Dealer Agreement executed on Februar 27 , 2002 is not a valid basis for summar judgment in the case at bar because a breach of waranty must be established first in order to trigger the repurchase clause. The agreement states , in relevant portion , that " if the Company has breached any warranty or representation set forth in the agreement... otherwise in default under the agreement , then , upon demand by" or is , Westbur Jeep plaintiff should repurchase the instruments and pay the Credit Union the " amount unpaid plus I % of the unpaid principal balance less unearned interest charges. " (Teachers Federal Notice of Cross- Motion , Exhibit 3). Because Westbury Jeep s obligation to repurchase hinges on the existence of a breach , and the fact that there has not yet been a determination regarding whether or not defendant did in fact breach the waranty, summar judgment by both plaintiff and Westbury Jeep must be denied on this cause of action. The third cause of action states that Westbur Jeep is obligated to indemnify plaintiff. The duty to indemnify is to be waived only if it is established as a matter of law that there is no (Rhodes possible factual or legal basis on which indemnification might be necessar. Mut. Ins. Co. 67 AD3d 881 , 883) quoting Allstate Ins. Co. v. Zuk , 78 (N. Y.2d 41 , v. Liberty 45). Plaintiff and defendant Westbur Jeep both seek summar judgment on this issue of indemnification. In Paragraph 3 of the Dealer Agreement , Westbury Jeep promises to both " indemnify and hold harmless " plaintiff against any claim or . legal action brought by any buyer in relation to an Instrument or other portion of the underlying transaction. This clause also made " by way of defense , dispute or counterclaim states that claims " wil trigger the indemnification clause. Westbury agreed to notify plaintiff within 30 days of the claim s institution. Sanders ' includes in his cross-motion submitted on June 22 2012 defenses of fraud , and his subsequent fiing of a complaint with the Nassau County District Attorney Notice of Cross- Motion, s Offce. (Sanders Exhibit A). It is clear from the dates that Sanders ' claim has not been resolved within the stipulated 30- day period. As a result , summary judgment is hereby granted in favor of plaintiff, which must now be indemnified by Westbury Jeep for any future relief that is granted to Sanders. Accordingly, Westbury Jeep s motion for summary judgment is dismissed in its entirety. Parial summar judgment is granted on plaintiff s cross-motion on the third cause of action for indemnification but denied on the second cause of action with relation to the repurchase clause [* 6] of the agreement. Sanders ' cross-motion is hereby denied. Settle Judgment on Notice. This constitutes the decision and order of this court. ENTER DATED: July 31 2012 t2/ 1"" HON. ARTHUR M. DIAMOND ENTERED AUG 03 2012 NASSAU COUNTY To: COUN CLIRJ' . OFfIC! Attorney for Plaintiff Attorney for Defendant CHRISTINE SULLIVAN, ESQ. TANENBAUM ASSOCIATES, LLP. 2000 Deer Park A venue 43-29 Bell Blvd. Deer Park, New York 11729 O. Box 500 Bayside, New York 11361 LAW OFFICE OF MARC J. KANTER, ESQ. 151 West Carver Street Huntington , New York 11743 ZEICHNER, ELLMAN & KRUSE LLP. 575 Lexington Avenue New York , New York 10022 [* 7] I r KAPLAN BELSKY ROSS BARTELL, LLP. 666 Old Countr Road Garden City, New York 11530 NEW YORK STATE DEPARTMENT OF MOTOR VEHICLES 200 Old Country Road , Suite 240 Mineola, New York 11501

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