Benizzi v Bank of the Hudson

[*1] Benizzi v Bank of the Hudson 2006 NY Slip Op 52696(U) [24 Misc 3d 1237(A)] Decided on December 22, 2006 Supreme Court, Sullivan County Ledina, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 December 22, 2006
Supreme Court, Sullivan County

Henry Benizzi and Patricia Benizzi, Plaintiffs,

against

Bank of the Hudson f/k/a MSB Bank, Defendant.



243-99



Collier & Berger, PLLC

Attorneys for Plaintiffs

By: James J. Murray, Esq.

P.O. Box 509

Ellenville, NY 12428

Corbally Gartland and Rappleyea, LLP

Attorneys for Defendant

By: Anthony C. Carlini, Jr., Esq.

35 Market Street

Poughkeepsie, NY 12601

Burton Ledina, J.

The unverified complaint herein, dated January 25, 1999, alleges that in 1992, the plaintiffs allowed Henry and Lillian Benizzi, the parents of plaintiff Henry Benizzi ("parents"), to erect a "double wide home" (home), which the parents had purchased, on a parcel of land the plaintiffs owned located at 164 Cole Road, Hurleyville, New York. It is further alleged that the plaintiffs assisted the placement of the home by, at their own expense, installing a septic and plumbing system, all other utilities, fencing, and a foundation, so that the home became permanently affixed to the property and "became part in parcel or the property" [sic], and obtaining a certificate of occupancy; that there was an understanding between the plaintiffs and [*2]the parents that in return for this, when the parents died, or no longer lived on the property, the home would become the property of the plaintiffs. The parents were to pay the taxes, water, insurance and other expenses connected with the property. The value of the home had been added to the assessment on the property.

The complaint alleges upon information and belief that the parents approached the plaintiffs about putting a mortgage on the property, but that the plaintiffs did not consent to this as being contrary to the prior understandings. The complaint alleges, upon information and belief, that upon such refusal, the parents approached the defendant bank to obtain a mortgage on a parcel of land on Dennison Hill Road in the Town of Fallsburg, which they intended to purchase, and to which they intended to move the home, the mortgage to cover the home and property.

The complaint alleges that the defendant made a mortgage commitment, and subsequently (on or about January 3, 1996 according to the defendant) advanced $40,000.00 to the parents, secured by a mortgage on the Dennison Hill property. However, after the closing it was discovered that the parents did not own the Dennison Hill property, and the mortgage was satisfied. Thereafter, on February 5, 1996, the defendants filed a UCC-1 Financing statement against the parents, of 164 Cole Road, Hurleyville, covering a Commodore BU 182 Mobile Home, Serial No. CR24713AB. The UCC-1 recited that it was filed without the debtor's signature, "under a security agreement signed by the debtor authorizing the secured party to file the statement."

The complaint states that when the plaintiffs later attempted to raise money on the property, their application was denied on the ground that the UCC-1 filing was a lien on the property. The plaintiffs claim that the defendant had no right to file the financing statement against the home without first obtaining the consent of the owners of the property where it was located; that they had priority over the defendant as owners of the property; and that the defendant acted negligently in advising the parents that the home could be removed from the property, and in improperly filing the UCC-1; that the continuance of the filing has damaged them in that they are unable to sell or mortgage their property. They claim that the defendant interfered with the agreement between them and the parents with the effect that the parents stopped paying taxes on the property.

The plaintiffs demand the following relief: 1) that the defendant immediately discharge the UCC-1 filed on the home on February 9, 1996; 2) that the filing be discontinued as it conflicts with their ownership of the property, they having a prior claim to the home; 3) damages for interference with their contract with the parents; 4) attorneys' fees required to clear title when the defendant refused their request to remove the financing statement; 5) punitive damages of $1,000,000.00.

The defendant generally denies the allegations of the complaint, and counterclaims, alleging that it loaned the parents $40,000.00 secured by the home. Although not specifically alleged, the exhibits annexed to the defendant's papers indicate that the loan is in default. The defendant alleges it has attempted to repossess the home in which claims it had a legitimate security interest. It claims that the plaintiffs have refused to grant permission to enter the property to remove the home, and, accordingly, have committed conversion of the home.

The plaintiffs move for summary judgment. The defendant cross-moves for [*3]summary judgment dismissing the complaint for failure to state a cause of action and for judgment on its counterclaim. The plaintiffs have not opposed the cross-motion.[FN1]

The plaintiffs are not entitled to summary judgment. Their motion is based upon the affirmation of their attorney James Murray. Referring to the complaint, he alleges a number of facts, such as the understanding between the plaintiffs and the parents as to the placing of the home on the plaintiffs' property, the details of the installation including the claim that such installation was permanent, and the subsequent transactions with the defendant bank. Annexed to the moving papers are copies of the complaint, a bill of particulars, and response to a demand for documents, none of which is verified. There is no indication as to the source of Mr. Murray's information, and no indication that he has personal knowledge of facts such as those dealing with the details of the installation of the home, the understanding between the plaintiffs and the parents, and the dealings between the parents and the defendant. There are no verified pleadings upon which the motion can rest. Thus, the plaintiffs have failed to produce sufficient evidence, including an ". . . affidavit . . . by a person having knowledge of the facts. . . ." (CPLR 3212[b]) to sustain their application.

Even if Mr. Murray's affirmation were accepted, there are still issues of fact in the plaintiff's case which cannot be determined on the submitted papers and preclude summary judgment: whether the home was permanently affixed to the land so as to have become part of the realty, or whether it is removable, thus being in the nature of personalty (see Fisher v. Baronti, 196 Misc 2d 311); the existence and contents of the alleged agreement between the plaintiffs and the parents with respect to the installation of the home and its ultimate disposition (no writing has been produced on this issue), the details of the mortgage, satisfaction, and any security agreement (no written copies of these documents have been supplied). These unresolved issues of fact preclude granting of the plaintiffs' motion for summary judgment.

Although many of the same issues of fact and procedural problems apply to the defendant's motion for summary judgment,[FN2] it is entitled to partial relief. The defendant argues that the plaintiffs have failed to state a cause of action for it having negligently filed the financing statement. But the claim that the defendant attempted to obtain a security interest in a home permanently affixed to the property of someone other than the creditor to the detriment of the owner of the real property sufficiently states a cause of action for negligence.

However, the defendant's contention that the plaintiffs have failed to state a cause of action for interference with a contractual relationship is correct, and so much of the complaint that claims that the defendant committed that tort will be dismissed. To state a cause of action for interference with a contractual relationship, the complaint must allege that there was a valid contract, that the defendant had knowledge of that contract, that the defendant intentionally procured the breach that contract, and that the plaintiff suffered resulting damages. The complaint (and the motion papers) fail to allege that the defendant knew of the existence of the alleged "understanding" between the plaintiffs and the parents, and thus fails to state a cause of [*4]action for interference with a contractual relationship. Bradbury v. Woller Cope-Schwartz, 20 AD2d 657.

As to the defendant's motion for summary judgment on its counterclaim, it

failed to establish the absence of questions of fact as to whether the home was permanently affixed to the land. The affirmation of the bank's attorney in opposition to the plaintiffs' motion and in support of the defendant's cross-motion refers to a drive-by appraisal that showed that the home was capable of being moved, but that appraisal is not included in the moving papers, and there is no indication that Mr. Carlini has personal knowledge of that assertion. The copy of the UCC-1 annexed to Mr. Carlini's affirmation states that it is signed by the bank only on the basis of the existence of a security agreement signed by the debtor. However, no copy of the security agreement or the mortgage (or the satisfaction thereof) was presented, so there is an unresolved question as to the efficacy of the UCC-1. The defendant is, therefore, not entitled to summary judgment on its counterclaim.

In accordance with the foregoing, it is

ORDERED, that the plaintiffs' motion for summary judgment is hereby denied; and it is further

ORDERED, that the defendant's cross-motion to dismiss the complaint is granted to the extent that so much of the complaint that seeks damages for interference with a contractual relationship is hereby dismissed. The portion of the motion that seeks dismissal of so much of the complaint that alleges that the defendant wrongfully filed the UCC-1 and claims an interest in the home superior to that of the plaintiffs to the plaintiffs' damage, is denied; and it is further

ORDERED, that the defendant's cross-motion seeking summary judgment on its counterclaim is hereby denied.

The foregoing constitutes the decision and order of this Court.

Dated: Monticello, New York

December 22, 2006

E N T E R:

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BURTON LEDINA, A.J.S.C. Footnotes

Footnote 1: See "Papers Considered" infra.

Footnote 2: For instance, neither movant included all of the pleadings in the moving papers as required by CPLR 3212(b).