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NY Commercial Case Compendium A Searchable Database of Court Decisions Issued by New York’s Commercial Division

Failure to Serve Notice of Default Not a Proper Ground for Dismissal under CPLR 3211: Old Rock Assoc. v BDG Yapshank, LLC

Posted in Commercial Real Property, Condition Precedent, CPLR 3211, CPLR 3215, Deficiency Judgment, Documentary Evidence, Failure to State a Claim, Industry: real estate, Justice Whelan, Thomas, Mortgages, Suffolk

In a September 16, 2011, decision by Justice Whelan, the court denied in part and granted in part defendant’s motion to dismiss plaintiff’s mortgage-foreclosure action and demand for a deficiency judgment in connection with the purchase of certain commercial real property. Defendant argued that plaintiff failed to comply with the default provisions of the mortgage, which allegedly constituted a condition precedent to defendant’s performance under the mortgage and entitled it to dismissal of plaintiff’s complaint. Citing CPLR 3215, the court found that “compliance with the contractual conditions precedent is not an element of a plaintiff’s claim for foreclosure and sale of mortgaged premises” and denied defendant’s motion on this ground. As to plaintiff’s demand for a judgment for the deficiency in the net amount of the proceeds of the public sale of the premises, however, the court agreed with defendant’s argument that the mortgage expressly limited plaintiff’s remedies, finding that defendant’s “moving papers sufficiently demonstrated that the plaintiff has no cause of action for recovery of a deficiency judgment against the moving defendant because the nonrecourse provisions specifically limit the remedies of the plaintiff to the mortgaged premises.”  

Old Rock Assoc. v BDG Yapshank, LLC, Sup Ct, Suffolk County, September 16, 2011, Whelan, J., Index No. 16221/11