Wester Bank, Natl. Assn. v Guglielmi

[*1] Wester Bank, Natl. Assn. v Guglielmi 2010 NY Slip Op 50323(U) [26 Misc 3d 1230(A)] Decided on February 24, 2010 Supreme Court, Queens County McDonald, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 February 24, 2010
Supreme Court, Queens County

Wester Bank, National Association, Plaintiff,

against

Vincenzo Guglielmi, Defendant.



13339/08

Robert J. McDonald, J.

Plaintiff moves for summary judgment pursuant to CPLR 3212.

The instant action involves a Uniform Residential Loan dated July 19, 2006 in which Vincent Gulgielmi (hereafter "Gulgielmi",)the defendant, a resident of Queens County, borrowed $378,900.00 at a fixed rate of 9.3750 payable over 348 months. The loan was for construction of a second home located at 1411 NE 32nd Lane, Cape Coral, FL 33909 (hereafter "property").

The defendant was notified by letter dated January 11, 2007 that he was in default of his mortgage, and pursuant to agreement with defendant's counsel the instant action was filed and commenced on August 6, 2008. Defendant served an answer and counter-claim dated September 5, 2008 to which Webster replied on October 3, 2008.

The defendant failed to serve replies to Webster's Discovery [*2]Demands in violation of the this Court Preliminary Conference Order dated January 14, 2009 and Compliance Conference Order dated May 27, 2009. Notice of Gulgielmi's failure to respond was mailed to defendant's counsel.

Webster moves for summary judgment based on Gulgielmi's failure to timely respond to their demands.

With regard to Gulgielmi's counterclaims the defendant has failed to "produce any response whatsoever to substantiate or corroborate any of Defendant's affirmative defenses or his counterclaims sounding in fraudulent misrepresentations and fraudulent concealment." Therefore, his affirmative defenses and counterclaims should be dismissed.

Plaintiff moves for attorney's fees and expenses of $14,144.28 of which $13,473.28 is for attorney's fees as of November 30, 2009, and additional attorney's fees of $671.00 incurred between December 1, 2009 and January 3, 2010.

Webster also submits the affidavit of the bank's Vice-President for Loan Servicing dated December 29, 2009.

The affirmation in opposition by Gulgielmi's counsel and affidavit of Gulgielmi dated February 2, 2010 were submitted in opposition.

Gulgielmi's affidavit recites that the underlying loan was for a construction loan for a one-family residence in Florida. The entire transaction was "arranged through a developer/real estate office located in Florida named Cozza Investment Group, Inc. (hereafter "Cozza").

Gulgielmi recites that Cozza was involved in the financing of homes in Florida to be constructed by Advantage Home Builders. That Cozza referred the "mortgage brokers and the banks for their customers". That Koala Equity Group "placed the instant loan" with Webster, who extended "a significant number" of loans. Gulgielmi states that he "was not present for the closing and it was completed by the title company". Prior to the closing Webster sent the documents necessary for his signature which he signed and returned to Koala Equity Group. Gulgielmi notes that there is a "Construction Rider" which provides "Lender shall inspect the project".

Gulgielmi continues to state that Advantage Home Builders failed to commence construction and indeed, "work had ceased on all lots in the project." [*3]

Gulgielmi states that "Webster directly or indirectly ... fraudulently and in bad faith, with actual or constructive knowledge that construction on the Cozza development project had completely ceased prior to [sic] approving my loan, and nevertheless approved my loan all to my detriment."

Gulgielmi further represents that the appraised value of the Land prior to June 22, 2006 was $80,000.00 not $114,168.03 at which Webster had appraised the value.

Gulgielmi finally swears that if Webster had notified him of the "termination of construction activities" prior to issuing the loan, he would not have signed the mortgage.

Gulgielmi's counsel represents that summary judgment is not appropriate if there are competing contentions, and that "every favorable inference" must be drawn in Gulgielmi's favor thus depriving Webster of summary judgment.

Gulgielmi's counsel recites that the "Webster Bank loan was to be paid out to the Defendant Borrower in installments as the work is completed and to disburse funds only FOR WORK IN PLACE, based upon inspection.'" This quote from paragraph "2" of "CONSTRUCTION RIDER" fails to portray the full tenor of the agreement. But Gulgielmi's counsel is correct that the closing statement provides at line "811" of the Settlement Statement "Construction Admin. Fee To: Webster Bank, N.A." of $1,894.50.

Gulgielmi's counsel indicates that while it was not Webster' duty to "oversee construction" because this clause "exists in all" of the loans made by Webster for Cozza that Webster "knew that Cozza Investments was wrongfully continuing to take innocent purchasers money."

Gulgielmi's counsel recites that Webster was aware of the fraud and the documents "to corroborate" this "were and continue to be solely in the possession of the plaintiff."

Gulgielmi's counsel represents that because Webster's motions were originally returnable September 3, 2009 which were ultimately "conferenced" on November 12, 2009, that "plaintiff moved for an Order pursuant to CPLR 3124, 3125, and 3126 compelling Defendant's response to the very same Interrogatories and Discovery demands referred to in Plaintiff's Affirmation in Support of the instant motion and further demanding the striking of Defendant's Answer and Counterclaims for failure to comply with scheduling orders." [*4]

Gulgielmi's counsel represents that "Justice Ritholtz found that since Plantiff's motion was made before filing of the Note of Issue, that Plaintiff waived' the discovery and Plaintiff withdrew its motion at said conference." That since Webster withdrew its motion compel, "the implication was that there was no preclusion of either side' and neither plaintiff nor defendant could compel such discovery and the determination' was that the case would proceed to trial without discovery."

Gulgielmi's counsel represents that "there is no dispute to the fact that he entered into a construction loan with Plaintiff Webster Bank and that he subsequently defaulted on that loan."

Summary judgment is a drastic remedy which will be granted solely when the party seeking summary judgment establishes that there are no triable issues of fact (Alvarez v Prospect Hospital, 68 NY2d 329; Andre v Pomeroy, 35 NY2d 361).

The party seeking summary judgment must make a prima facie showing of entitlement to judgment as a matter of law (Alvarez v Prospect Hospital, supra; Zuckerman v City of New York, 49 NY2d 557).

Once a party seeking summary judgment has made a prima facie showing of entitlement to such relief, the burden shifts to the party opposing the motion to establish through proof in evidentiary form that there are triable issues of fact or, that the party has an acceptable excuse for its failure to do so (Zuckerman v City of New York, supra; Davenport v County of Nassau, 279 AD2d 497; Bras v Atlas Construction Corp., 166 AD2d 401).

When deciding a motion for summary judgment, the court must determine whether triable issues of fact exist (Matter of Suffolk Department of Social Services v James M., 83 NY2d 178; Sillman v Twentieth Century Fox Film Corp, 3 NY2d 395). A motion for summary judgment must be denied if the court has any doubt as to the existence of triable issues of fact (Freese v Schwartz, 203 AD2d 513; Groger v Morrison Knudsen Co., Inc, 184 AD2d 620).

The court must view the evidence in a light most favorable to the party opposing the motion for summary judgment and give that party the benefit of every reasonable inference which can be drawn from the evidence (Negri v Stop & Shop, 65 NY2d 625; Gray v New York City Transit Authority, 12 AD3d 638; Louniakow v M.R.O.D. Realty Corp, 282 AD2d 657).

Summary judgment operates to deprive a party of his or her day in [*5]court and, therefore, it may be granted only when the opposing party has failed to adduce competent evidence demonstrating the existence of a genuine issue of fact (Persaud v Darbeau, 13 AD3d 347).

In opposition to the plaintiff's motion with regard to preclusion the defendant's affirmation in Opposition recites that the "issue of preclusion was already before Justice Ritholz who declined to rule claiming discovery was waived' by the plaintiff upon their filing of the Note of Issue."

Other then plaintiff's counsel's letters with regard to discovery dated May 7, 2009 and November 12, 2008 were submitted by both sides. There is no ruling by Mr. Justice Ritholz attached, which is alluded to in the affirmation in opposition regarding waiver.

Accordingly, the plaintiff's motion to preclude the defendant from offering evidence with regard to his affirmative defenses and counter-claims sounding fraudulent misrepresentation and fraudulent concealment is granted to the extent that the defendant is directed to submit such documents as requested in plaintiff's Notice of Discovery and Inspection, as they exist and defendant has failed to disclose, within 30 days from the date of service of this Order on opposing counsel with Notice of Entry.

This Court finds that there are issues raised by the defendant which preclude the granting of summary judgment.

Dated: Long Island City, NY

February 24, 2010

______________________________

ROBERT J. MCDONALD

J.S.C.