In a December 7, 2011 decision by Justice Kitzer the court granted a bank’s motion for summary judgment against a corporate borrower and the loan’s guarantors. The bank also sought to amend the caption to replace the named lender with the current lender, who assumed the note under an agreement with the FDIC which acted as receiver for the names plaintiff which had gone out of business. The guarantors raised a number of affirmative defenses and attempted to create issues of fact, all of which the court rejected. This included an argument that a bank employee made oral representations to the guarantors which created a “joint venture.” The court rejected that argument stating “it is well settled under State and Federal Law that borrowers are estopped from asserting claims or defenses that are based on any unwritten or oral agreement by the original lender that would tend to diminish the interest of the FDIC, or its assignee, in any asset (e.g., a loan) acquired by the FDIC.” The court rejected the argument that it could not find that the guarantors were liable under the loan because the amount of the damages have not been ascertained, because the amount of damages could (and would) be determined by a referee after liability was established. The court also granted the motion to change the name of the plaintiff to the current holder of the loan.
La Jolla Bank, FSB v. Whitestone Jewels, LLC et al., Sup Ct, Queens County, December 7, 2011, Kitzes, J, Index No/ 13920/09