Bank of Am., N.A. v Hempstead Auto Co., Inc.

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Bank of Am., N.A. v Hempstead Auto Co., Inc. 2012 NY Slip Op 31531(U) June 1, 2012 Supreme Court, Nassau County Docket Number: 5454/11 Judge: Denise L. Sher 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] SCAN SHORT FORM ORDER SUPREME COURT OF THE STATE OF NEW YORK PRESENT: HON. DENISE L. SHER Acting Supreme Cour Justice TRIAL/IAS PART 31 NASSAU COUNTY BANK OF AMERICA , N. Index No. : 5454/11 Motion Seq. No. : 01 Plaintiff - against - Motion Date: 03/22/12 HEMPSTEAD AUTO CO., INC. d//a JAGUAR OF GREAT NECK/OSL YN Defendant. The followin papers have been read on this motion: Papers Numbered Notice of Motion Affrmation Affidavits and Exhibits Affidavit in O osition and Exhibits and Memorandum of Law Reply Affirmation and Exhibits Upon the foregoing papers , it is ordered that the motion is decided as follows: Plaintiff moves , pursuant to CPLR 3212 , for an order dismissing the first through ninth affrmative defenses of defendant and granting summar judgment in its favor against defendant in the sum of$94 188. 99 and other expenses associated with the action including attorney fees costs , and disbursements. Defendant opposes the motion. The instant motion arises from an underlying breach of contract action commenced by plaintiff by the filing of a Sumons and Complaint on or about April 11 , 2011. See Plaintiff s Affirmation in Support Exhibit G. Defendant , in its Answer , asserted the following affirmative ,.... [* 2] defenses: that the Complaint fails to state a cause of action; that the Complaint fails to state a claim for breach of the retail agreement as against defendant; that defendant has acted in good faith and in accordance with reasonable commercial standards applicable to its business; that the Complaint is bared , in whole or in par , under principles of waiver, laches and/or estoppel; that the allegations in the Complaint concerning specific waranties and representations made defendant in the retail agreement that- were breached were not sufficiently paricular to give notice of the alleged occurences to be proven or the material elements of the allegations in the Complaint; that plaintiff has failed to reasonably mitigate or seek to mitigate its damages; that any damages or injures sustained by plaintiff were , in whole or in par , the result ofthe conduct actions or inactions of non- paries Clean Corp. , defendant; and that any damages or injures NY Co. and/or Randy A. Spencer , and not sustained by plaintiff were , in whole or in par , the result of the carelessness , recklessness , and negligence of plaintiff, Clean Corp. NY Co. and Randy A. Spencer and not of defendant. See Plaintiffs Affirmation in Support Exhibit 1. In Februar 2009 , plaintiff and defendant entered into an agreement where plaintiff would purchase retail instalment contracts regarding the purchases of defendant' s motor vehicles. The agreement at issue contained certain provisions which are set forth herein in relevant par: 4. Representation and Warranties. is true and accurate and the credit application completed by the Buyer is true, complete and accurate to the best of Dealer s knowledge; (5) All information by the Dealer concernng the Buyer (7) The Contract is valid and enforceable according to its terms evidences a bonafide sale of the Unit, and Buyer did not induce Dealer to enter into the Contract by any fraudulent scheme... [* 3] (8) The Unit covered by the Contract has been delivered to the Buyer named in the Contract and all necessar steps have been taken to ensure that Ban will have a properly perfected security interest in such Unit.... (14) The Buyer is who he, she or it purports to be; (15)The Buyer has not fraudulently used the identity of another person to purchase the Unit.. 7. Repurchase of Contracts. Ban may provide Dealer written notice to repurchase any assigned Contract with respect to any assigned Contract if Bank reasonably determines that there is a breach of any of Dealer representations of warranties with respect to the Contract, the Unit or the Contract (1) Agreement... (emphasis added)" See Plaintiffs Affirmation in Support Exhibit H. In July 2009, defendant entered into a retail installment contract with non-paries Clean Corp. , NY Co. and Randy A. Spencer , regarding the purchase and fmance of a new 2010 Jaguar XFR. See Plaintiffs Affirmation in Support Exhibit A. Pursuant to said agreement , defendant sold and assigned the contract to plaintiff. The amount financed was $105 937. 82 and the vehicle was registered and titled under the name of non-par Clean Corp. , NY Co. Plaintiff was listed on the title as a lienholder. As non-paries Clean Corp. , NY Co. and Randy A. Spencer defaulted in making the monthly installment payments required under the contract , plaintiff attempted to exercise its rights regarding its secured interest in and its lien on the vehicle. During such attempt, plaintiff uncovered that the paries engaged in fraudulent activity that resulted in depriving plaintiff of the collateral securng the contract. Specifically, non-pary Clean Corp. , NY Co. allegedly engaged in identity theft in that it alleged that non-par Randy A. Spencer was the principal and CEO of its business entity. The application also reported that non- pary Randy A. Spencer resided in Jericho , New York. Upon plaintiffs investigation , it discovered that the actual Randy A. Spencer was not affiiated with non-par Clean Corp., NY [* 4] Co. , that he did not live in Jericho , New York but rather in Westhampton , New York and that after ' a long ilness , Randy A. Spencer died on September 8 , 2009. The subject vehicle was eventually located at a dealer in Florida; however , plaintiffs name was no longer on the title since non-par Clean Corp. , NY Co. allegedly had it removed by submitting fraudulent documentation to the New York State Deparment of Motor Vehicles. As of August 2010 , plaintiff contends that the sum of$96 788. 76 was due and owing to it , with interest continuing to accrue. Plaintiff issued its written demand to repurchase to defendant who , in response , refued to do so. Plaintiff argues that the information submitted by defendant was not tre and accurate that non-par Randy A. Spencer did not execute the contract, the subject vehicle was not delivered to non-par Randy A. Spencer and non-par Randy A. Spencer s identity was fraudulently used to facilitate the purchase. Additionally, defendant failed to verify non- Randy A. Spencer s identity and did it record the registration number ofthe vehicle. As par such the Clean Corp. , NY Co. and Randy A. Spencer transaction was not a bonafde sale and plaintiff is entitled to the remedy of repurchase by defendant. In addition to the pleadings , plaintiff submits , as supporting evidence , a copy of the Retail Dealer Agreement between itself and defendant, copies of New York State Deparent of Motor Vehicles documentation regarding the subject motor vehicle , an Affidavit of Jean Spencer, non-par Randy A. Spencer s widow, attesting that non-par Randy A. Spencer signature was fraudulent, that he had been il for five years and that he did not own the subject vehicle , a letter dated February 14 2011 from plaintiff demanding repurchase of the Clean Corp. , NY Co. /Randy A. Spencer contract , the pleadings and Orders from various Supreme Cours in New York State , with plaintiff as the named plaintiff in actions seeking similar relief [* 5] as in the instant case and evincing similar facts and circumstances, including an Order of the Queens Supreme Cour by Hon. Orin R. Ortiz , in the matter captioned Hilside Cycles, Bank of America, NA. Inc. d/b/a! Hilside Honda Index No. 27617/09 , and a copy of the decision of the AppellateDivision of the Second Deparment , modifying that Cour' s Order , an Order of the Nassau County Supreme Cour , issued by Hon. Anthony Parga , in the matter captioned America, NA. v. Bank of J. P. T. Automotive, Inc. , d/b/a Victory Toyota of Five Towns Index No. 13104/08 , and an Order of the Supreme Cour of the County of Westchester , issued by Hon. Mar M. Smith in the matter captioned Bank of America v. Biltmore Motors, Inc. IndexNo. 15751/08 , a Carfax report indicating ownership of the vehicle and attorney biling records. In its Reply Affrmation , plaintiff submits , as fuher supporting evidence , a copy of a . Social Security Death Index indicating the last four digits of non-pary Randy A. Spencer Social Security number and his date of death as September 8 , 2009., a registration record expansion record indicating that the subject car was registered to non-par Randy copy of non"' par Randy A. Spencer s drivers license , a payment history A. Spencer, a sumar indicating that the installment payments were made by Paymode and the New York State Deparent of State web page entries indicating that North Shore Motor Group, Inc. accepts service at the same address where Clean Corp. , NY Co. listed its address. In opposition , defendant argues that the evidence in the record is insuffcient to indicate identity theft in that plaintiff kept a ruing log of direct communication between it and the borrowers/purchasers regarding late payments , that plaintiff and its witness , Ms. Spencer, failed to provide documentation indicating Randy A. Spencer s actual signature and/or photo identification and that there is motivation for Ms. Spencer to allege that her deceased husband was the victim of identity theft. [* 6] It is well settled that " (0 In a motion for sumar judgment pursuant to CPLR 3212 , the . proponent must make a prima facie showing of entitlement to judgment as a matter of law See tendering sufficient evidence to demonstrate the absence of any material issues of fact." v. Silman v. Twentieth Century- Fox Film Corp. Prospect Hospital 68 N. Y.2d 320 508 N. Y.S. 2d 923 (1986); York, 49 N. Y.2d 557 , 427 N. Y.S. 2d 595 (1980); Bhatti Y.S. 2d 1020 (2d Dept. 1988). Failure to make such v. Zuckerman 601 N. prima fade Barrera Dept. 2008); 2008); Breland v. David 2d 463 (1993); v. v. City of New Roche 140 AD. 2d 660 528 the motion , regardless of the suffciency of the opposing papers. Y.2d 1062 Alvarez 3 N. Y.2d 395 165 N. Y.S. 2d 498 (1957); showing requires a denial of v. See Ayotte Gervasio Bryon 56 AD. 3d 413 , 867 N. Y.S. 2d v. MTA Long Island Bus 52 ADJd 136 (2d 446 859 N. Y.S. 2d 483 (2d Dept. Karnak Corp. 50 ADJd 613 854 N. Y.S.2d 765 (2d Dept. 2008). Once the movant's burden is met , the burden shifts to the opposing par to establish the existence of a material issue of fact. See Alvarez v. Prospect Hospital, supra at 324. The evidence presented by the opponents of summar judgment must be accepted as tre and they must be given the benefit of every reasonable inference The elements of a breach of contract are: the existence of a contract, plaintiff s performance under the contract , defendants ' breach of that contract and resulting damages. Furia v. Furia, 116 AD.2d 694 , 498 N. See S.2d 12 (2d Dept. 1986). Pursuant to plaintiffs agreement with defendant and defendant' s retail installment contract with the alleged purchasers, defendant is obligated to repurchase the contract at plaintiffs plaintiff inter alia reasonably determines that there is a breach of any of Dealer s representations of warranties with respect to the Contract, the Unit or the Contract Agreement See request if Plaintiffs Affirmation in Support Exhibit H (emphasis added). [* 7] The record indicates that plaintiff exercised due diligence in uncovering facts and inter alia that the circumstances giving rise to identity theft and in reasonably concluding, Buyer was not who it purported to be. Under the agreement , there are no triable issues of material fact as to plaintiffs contract. entitlement to defendant's repurchase of the retail installment See North Fork Bankv. Guo 2002 WL 1539533 , Reported in N. Y.S. 2d; Bank of America, NA. v. N. Sup. App. Term , 2002 , Not Hilside Cycles, Inc. 89 A. D3d 653 , 932 S.2d 128 (2d Dept. 2011). Defendant' s opposition is replete with speculation and does not refute the facts as set forth in the instant motion. Moreover, implicit in defendant' s arguments is that it is plaintiffs responsibility to identify the fraudulent purchaser; however, the retail dealer agreement clearly see places this responsibility on defendant based on the wording of the agreement's provisions. Bank of America, NA. v. J.P. T. Automotive, Inc. 52 AD.3d 553 861 N. Y.S. 2d 681 (2d Dept 2008). The first and second affirmative defenses which state respectively that the Complaint fails to state a cause of action and the Complaint fails to state a cause of action for breach of the . retail agreement as against defendant must be dismissed. Plaintiff demonstrated its prima facie entitlement to judgment as a matter of law by atleging causes of action to recover for breach of contract and seeking recovery based on the breach of the agreement , both of which allege cognizable causes of action. In opposition , defendant failed to raise a triable issue of fact. Stim Warmuth, P. c. v. Hayes 72 ADJd 795 898 N. See 2d 653 (2d Dept 2010). Furher , the reason for the breach of the underlying retail agreement between the purchaser and defendant forms the basis for the breach of the agreement between defendant and plaintiff. In light of the foregoing, the affirmative defense that the allegations in the Complaint concerning specific waranties and representations made by defendant in the retail agreement [* 8] that were breached were not sufficiently paricular to give notice of the alleged occurences to be proven or the material elements of the allegations in the Complaint , plaintiff also established entitlement to of the affirmative defense. The Complaint is plead with suffcient dismissal paricularity and such defense is similar to the first and second affirmative defense. As to the affirmative defense that the defendant acted in good faith , such conduct is not at issue. Defendant' s good faith actions or lack thereof are not required to invoke the provisions under the agreement. All plaintiff has to do , under 8 of the agreement , is to indicate that it made a reasonable determination that there was breach of the representations under the contract. Based on the evidence in the record , it is reasonable to determine that the par purchasing the vehicle was not Randy A. Spencer. Such determination does not rely on whether the defendant acted in good faith. The branch ofplaintiffs affirmative defense is another way, laches , granted motion which seeks sumar judgment dismissing the fourh as these equitable defenses are not applicable to this action. Said estoppel and waiver are doctrines peculiarly applicable to suits in equity; it does not operate to bar actions at law. Thus , the equitable defenses are no defense to an action at law commenced withn the period fixed by the statute of limitations. Corp. 57 AD.2d 911 394 N. Y.S. 2d 894 (2d Dept. 1977); Fade See Blum v. Pugliani/Fade, v. Good Humor 8 ADJd 612 568 N. Y.S.2d 568 (2d Dept. 2004). The fifth affrmative defense that specific waranties and representations made 'by defendant in the retail agreement were not sufficiently paricular to give notice of the alleged occurrences to be proven or the material elements of the Complaint is also without merit. To the contrar, the Complaint is rather detailed. It is noted that the Court can properly regard this affrmative defense as one that should be set forth in a Motion to Dismiss under CPLR ~ 3211. , " ... [* 9] Notwithstanding, the basic requirement of a Complaint is that the pleading be sufficiently paricular to give ' notice ' to the other side of the transactions or occurences as seen by the pleader. As long as the pleading may be said to give such notice , in whatever terminology it chooses, and that the material elements are somewhere verbalized within the four corners of the Complaint , plaintiff has met the requirements of a sufficiently pleaded Complaint. v. See Gershon Goldberg, 30 A. D.3d 372 817 N. Y.S.2d 322 (2d Dept. 2006); CPLR ~ 3013. As to the branch of plaintiff s motion seeking sumar judgment dismissing the sixth affrmative defense that plaintiff failed to mitigate its damages , plaintiff investigated and ultimately located the vehicle , but was , however , bared from securing it as its name was removed from the title. befendant' s unsubstantiated and speculative assertion that plaintiff could have done something more to mitigate damages is insufficient to rebtit plaintiffs facie showing of entitlement to dismissal damages and failure to locate and safeguard the vehicle. prima of the affirmative defenses of failure to mitigate See Bank of America, NA. v. J.P. Automotive, Inc. , supra. Defendant's remaining affirmative defenses are unavailing in that there is no factual evidence to support these apparent boilerplate and specious assertions. Accordingly, plaintiffs motion to for sumar judgment as to the seventh , eighth and ninth affirmative defenses is also hereby granted. In sum , the agreement between plaintiff and defendant contains two relevant warranty provisions (tJhe Buyer is who he , she or it purports to be... (andJ (tJhe Buyer has not fraudulently used the identity of another person to purchase the Unit.. " Nowhere in the agreement does it require that plaintiff resolve that issue. Plaintiffs investigation uncovered that the owners are not who and what they purported to be and defendant has only disputed the [* 10] findings with speculative scenarios. The evidence in the record overwhelmingly supports the reasonableness ofplaintiffs determination and that is all that is required for defendant to repurchase the contract. Finally, plaintiff established its entitlement to judgment as a matter of law prima facie on the cause of action to recover damages for breach of contract, offering sufficient evidence to demonstrate the absence of any material issue of fact as to whether there was a bonafde sale the vehicle , whether the purchasers were who they represented they were at the time of the sale and whether defendant complied with its contractual obligation to verify the identity of the purchaser of the vehicle and repurchase the security contract upon the plaintiffs demand. In opposition , defendant' s unsubstantiated and speculative allegations are insufficient to defeat sumar judgment. See Bank of America, NA. v. J.P. T. Automotive, Inc. , supra. Accordingly, plaintiffs motion, pursuant to CPLR ~ 3212 , for an order dismissing the first through ninth affirmative defenses of defendant and granting sumar judgment in its favor against defendant is hereby GRANTED. The issue of damages is respectfully referred to the Calendar Control Par (CCP) for an Inquest. The matter is hereby set down for an Inquest , for an assessment of damages , to be held before the Calendar ControlPar (CCP) on the 30th day of July, 2012 , at 9:30 a. Plaintiff shall fie a Note ofIssue on or before July 14 2012. A copy ofthis Order shall be served upon the County Clerk when the Note ofIssue is filed. Failure to fie a Note ofIssue or appear as directed shall be deemed an abandonment of the claim giving rise to the Inquest. A copy of this Order shall be served upon the defendant by July 14 , 2012. 10- [* 11] The directive with respect to an Inquest is subject to the right of the Justice presiding in CCP to refer the matter to a Justice , Judicial Hearing Officer or a Cour Attorney/Referee as he or she deems appropriate. This constitutes the Decision and Order of this Court. 'c. DENISE L. SHER, A. Dated: Mineola, New York June 1 ENTERED 2012 JUN 0 5 2012 NASSAU COUNTY COUNTY CLERK' S OFFICE 11-

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