Clarke v Parkway Vil. Equities Corp.
Annotate this CaseDecided on April 18, 2011
Supreme Court, Queens County
Michael Clarke and MURIEL CLARKE a/k/a MURIEL POWELL, Plaintiffs,
against
Parkway Village Equities Corp., CITICORP N.A. d/b/a/ CITICORP MORTGAGE, INC., CITIMORTGAGE, INC., Defendants.
28283/2010
Robert J. McDonald, J.
The facts of this case as set forth in this court's decision dated March 7, 2011, granting plaintiff's motion for a preliminary injunction are as follows: [*2]
Plaintiffs MICHAEL CLARKE and MURIEL CLARKE a/k/a MURIEL POWELL commenced an action against defendants PARKWAY VILLAGE EQUITIES CORP ("Parkway") and CITICORP N.A. d/b/a/ CITICORP MORTGAGE, INC., and CITIMORTGAGE, INC. ("CitiMortgage"), by service of an order to show cause together with the summons and complaint on November 10, 2010.
Parkway is a cooperative corporation consisting of approximately 675 residential units located at 144-17 Grand Central Parkway, Kew Gardens Hills, New York. The plaintiffs are the holders of 119 shares of stock entitling them to use Unit 67GA. The shares were purchased by the plaintiffs in April 1988. The plaintiffs have a loan with CitiMortgage secured against the corporation shares held by them. The plaintiff is responsible for maintenance payments of approximately $988.00 per month. Parkway contends that the plaintiffs' account went into arrears in March, 2007.
CitiMortgage contends that pursuant to the cooperative loan security agreement, it has the right to advance payment, without the borrower's consent, in order to defend the lender's security interest and then seek reimbursement from the borrower. In November 1999, CitiMortgage paid Parkway the sum of $24,093.33 to cover the plaintiffs' arrears. In July 2010, a second payment was made by CitiMortgage in the amount of $9,744.70 on account of additional arrears. Plaintiffs' account with CitiMortgage was debited in the total amount of $33,527.07.
In his affidavit in support of the request for a preliminary injunction, dated November 4, 2010, plaintiff Michael Clarke stated that since 2007 he has had problems with Parkway regarding the payment of maintenance fees and the arrears allegedly owed. Clarke states that he did not owe the amount of $3,650.65 which was set forth in the August 2010 "Notice to Cure" as he payed all that he owed. He states that he has never been provided with a financial accounting despite numerous requests and despite a requirement contained in the offering plan that the cooperative is to provide a periodic accounting. Clarke states that the inadequate record keeping of Parkway has caused him to unfairly accumulate late fees.
The plaintiffs' complaint sets forth five causes of action against Parkway for (1)a complete accounting of plaintiffs' account since 2007; (2)unjust enrichment in the amount of $33,527, the amount allegedly overpaid to Parkway by CitiMortgage; (3)negligence in the processing and crediting of the plaintiffs' account for maintenance; (4)breach of fiduciary obligation to the plaintiffs in failing to properly account for [*3]charges owed to Parkway; and (5)breach of a contractual obligation to the plaintiffs.
The complaint alleges two causes of action against CitiMortgage. The first is for wrongfully debiting the plaintiffs' account in the amount of $33,527.07 for paying sums to Parkway which the plaintiffs claim they did not owe without first consulting or getting the consent of the plaintiffs. The second cause of action alleged against CitiMortgage is for negligence in charging $33,527.07 against plaintiffs' account without notice to the plaintiffs. The plaintiffs claim that the sums paid by CitiMortgage are in excess of the sums due and owing.
Defendant CitiMortgage moves for an order pursuant to CPLR 3211(a)(1) and (7) dismissing the complaint against CitiMortgage for failure to state a cause of action.
In support of the motion, CitiMortgage submits the affidavit of Cassie Bishop, a legal support specialist of CitiMortgage dated January 7, 2011. In her affidavit, Ms. Bishop states that on December 26, 2003, the plaintiffs refinanced their cooperative apartment, and in connection with the refinancing, executed a "Recognition Agreement" and a loan note and security agreement in the principal amount of $74,220.00 as well as an assignment of proprietary lease and stock power and certificate of shares.
Ms. Bishop contends that based upon a notice to cure for arrears due sent by Parkway to the plaintiffs as well as a notice of termination and notice of intent to foreclose, "on or about October 30, 2009, CitiMortgage elected to pay the arrears alleged by the cooperative corporation pursuant to the account ledger dated October 23, 2009." Citimortgage contends that the security agreement permits CitiMortgage to make payments on behalf of the plaintiffs by reason of their default under the lease. Ms. Bishop also states that the security agreement does not require CitiMortgage to obtain the plaintiff's consent prior to the payment of sums due under the Lease.
Further, CitiMortgage contends that pursuant to the security and recognition agreements executed by plaintiffs in conjunction with a refinancing of the mortgage in December 2003, CitiMortgage is entitled to defend its interest in the cooperative shares which includes making payments of amounts due under the lease without the plaintiffs consent. CitiMortgage claims that as the security agreement provides that the lender is entitled to advance payment under the lease and seek reimbursement from the borrower, that the documentary evidence is sufficient to show [*4]that defendants complaint fails to state a cause of action and should be dismissed.
Counsel submits copies of the recognition and security agreements and contends that section 11 of the security agreement provides for the lender's right to defend its rights under the security agreement and any money paid by the lender shall be added to the amount owed by the plaintiffs to the lender. Counsel contends that "based upon the undisputable terms of the security agreement" that plaintiffs have failed to state a claim for damages against CitiMortgage. Counsel contends that the plaintiffs' sixth cause of action should be dismissed since defendant had the legal right to tender payment for the maintenance arrears owed to Parkway when the plaintiffs failed to resolve the dispute with Parkway. Counsel also contends that the seventh cause of action for negligence is wholly without merit as there is no duty other than by contract.
In opposition, plaintiffs' contend that the amounts which Parkway claimed were owed were inaccurate and that they never authorized Citimortgage to debit their account in the total amount of $33,527.07 for arrears in maintenance. Counsel contends that even if the documentary evidence shows that CitiMortgage is entitled to make payments on account of plaintiffs' arrears, the money debited by CitiMortgage was in excess of what was owed.
Plaintiffs' counsel contends that the plaintiffs are seeking an accounting from Parkway Village and that further discovery is necessary to obtain the documents in the possession of CitiMortgage which will tend to show whether CitiMortgage debited the correct amount from the plaintiff's account.
In addition, plaintiffs' contend that the complaint states a valid cause of action as the plaintiff has provided documents showing that the debit made by CitiMortgage was in excess of what was owed by them to Parkway. In addition counsel argues that CitiMortgage is a necessary party to the action in the event the Court finds that the transaction should be reversed or that the amount paid by CitiMortgage was incorrect.
"A motion to dismiss a complaint pursuant to CPLR 3211(a)(1) may be granted only if the documentary evidence submitted by the moving party utterly refutes the factual allegations of the complaint and conclusively establishes a defense to the claims as a matter of law" (Kopelowitz & Co., Inc. v Mann, 2011 NY Slip Op 3037 [2d Dept. 2011]; see Goshen v Mutual Life Ins. Co. of NY, 98 NY2d 314 [2002]; Granada Condominium III Assn. v Palomino, 78 AD3d 996 [2d Dept. 2010]; Fontanetta v John Doe 1, 73 AD3d 78 [2d Dept. 2010]). The documentary evidence must resolve all factual [*5]issues as a matter of law and conclusively [dispose] of the plaintiff's claim" (Palmetto Partners, L.P. v AJW Qualified Partners, LLC, 2011 NY Slip Op 3043 [2d Dept. 2010]; Paramount Transp. Sys., Inc. v Lasertone Corp., 76 AD3d 519 [2d Dept. 2010]).
Here, although the documents submitted by CitiMortgage specify their entitlement to pay the plaintiffs' arrears so as to defend their security interest in the premises, the documents which they utilized to determine the amount of the payment on arrears such as "Occupant Ledger" submitted as Exhibit F to their motion is determinative as to how the amounts which were paid by CitiMortgage were calculated. As stated in this court's prior decision, "Although it is clear that the plaintiffs were in substantial arrears since March 2007, the plaintiffs are entitled to an adequate record of payment stating how the arrears and the amounts paid by CitiMortgage were calculated." Therefore, this court finds that CitiMortgage is not entitled to dismissal of the sixth cause of action contained in the complaint pursuant to CPLR 3211(a)(1). The documentary evidence submitted by defendant failed to utterly refute the plaintiffs' allegations that the arrears were not calculated properly and, therefore, failed to conclusively establish a defense as a matter of law (see Rietschel v Maimonides Med. Ctr., 2011 NY Slip Op 3045 [2d Dept. 2011]; Granada Condominium III Assn. v Palomino, 78 AD3d 996 [2d Dept. 2010]; Fontanetta v John Doe 1, 73 AD3d 78 [2d Dept. 2010]).
"On a motion to dismiss for failure to state a cause of action pursuant to CPLR 3211(a)(7), the sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law, a motion for dismissal will fail" (Kopelowitz & Co., Inc. v Mann, 2011 NY Slip Op 3037 [2d Dept. 2011] quoting Guggenheimer v Ginzburg, 43 NY2d 268 [1977]; Leon v Martinez, 84 NY2d 83 [1994]; Hense v Baxter, 79 AD3d 814 [2d Dept. 2010]; Sokol v Leader, 74 AD3d 1180 [2d Dept. 2010]).
The plaintiff's seventh cause of action, based upon negligence, fails to state a cause of action as the defendant has no duty to the plaintiff other than through the security agreement and therefore, the relationship between plaintiff and defendant herein is contractual in nature (see Dobroshi v Bank of Am., N.A., 65 AD3d 882 [1st Dept. 2009]; Vought v. Teachers College, Columbia University, 127 AD2d 654 [2d Dept. 1987][once a contractual relationship was entered into between the parties, [*6]that contract defined the scope of the duties owed to the plaintiff, and, without a special relationship out of which a separate and distinct legal duty sprang, the plaintiff cannot maintain a separate tort cause of action"]).
Accordingly, based upon the foregoing it is hereby,
ORDERED, that the defendant's motion to dismiss the sixth cause of action pursuant to CPLR 3211(a)(1) and CPLR 3211(a)(7) is denied, and it is further
ORDERED, that the defendant's motion to dismiss the seventh cause of action pursuant to CPLR 3211(a)(7) is granted.
This constitutes the decision and order of this Court.
Dated: April 18, 2011
Long Island City, NY
______________________________
ROBERT J. MCDONALD
J.S.C.
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