TRUSTCO BANK NATIONAL ASSOCIATION v. VICTORIA ASSOCIATES (1998)

Plaintiff bank appeals from an order in this foreclosure action that denied its motion seeking summary judgment on the complaint and dismissal or severance of the counterclaims.

 Plaintiff met its burden of establishing its entitlement to a judgment of foreclosure as a matter of law by submitting proof of the existence of the mortgage, defendants' default in payment, and written notice to defendants of the default, as required by the mortgage (see, Mahopac Natl. Bank v. Baisley, 244 A.D.2d 466, 664 N.Y.S.2d 345;  Chase Lincoln First Bank v. Dietrick, 184 A.D.2d 1032, 584 N.Y.S.2d 357;  see also, Trustco Bank v. Allison Assocs., 249 A.D.2d 911, 671 N.Y.S.2d 379).   Defendants concede that the mortgage has been unpaid since September 1, 1995.   They contend in their counterclaims, however, that the default was caused by plaintiff's unclean hands and unconscionable conduct, based upon plaintiff's alleged misapplication of insurance proceeds received as a result of a fire at the apartment complex owned by defendant Victoria Associates.   By the terms of the mortgage, plaintiff was contractually entitled to apply the insurance proceeds to the indebtedness, as it did.   Thus, plaintiff also met its burden of establishing entitlement to judgment dismissing the counterclaims, and defendants failed to raise an issue of fact requiring a trial (see, Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718).

We therefore reverse the order, grant the motion and remit the matter to Supreme Court to appoint a Referee to compute the amount due.

Order unanimously reversed on the law without costs, motion granted and matter remitted to Supreme Court for further proceedings.

MEMORANDUM: