Learn About the Law
Get help with your legal needs
FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.
DASZ, INC., PLAINTIFF–APPELLANT, v. MERITOCRACY VENTURES, LTD., ARTHUR N. BAILEY, U.S. COMMERCIAL HABITAT CO., DEFENDANTS–RESPONDENTS, ET AL., DEFENDANTS.
MEMORANDUM AND ORDER
It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs and the motion is granted.
Memorandum: Plaintiff commenced this foreclosure action after Meritocracy Ventures, Ltd. (Meritocracy), Arthur N. Bailey, and U.S. Commercial Habitat Co. (Commercial Habitat) (collectively, defendants) defaulted on a note executed by Bailey in his individual capacity and as the sole shareholder of Meritocracy and on a mortgage executed by Bailey as the president and sole shareholder of Meritocracy. Meritocracy transferred the mortgaged properties to Commercial Habitat.
We agree with plaintiff that Supreme Court erred in denying its motion for summary judgment on the complaint. Plaintiff met its initial burden by submitting the note and mortgage together with an affidavit of nonpayment (see I.P.L. Corp. v Industrial Power & Light. Corp., 202 A.D.2d 1029, 1029; Rochester Community Sav. Bank v Smith, 172 A.D.2d 1018, 1019, appeal dismissed 78 N.Y.2d 909, rearg dismissed 78 N.Y.2d 1005, rearg granted and lv. denied 79 N.Y.2d 887; see also Overseas Private Inv. Corp. v Nam Koo Kim, 69 AD3d 1185, 1187, lv dismissed 14 NY3d 935).
“The burden then shifted to defendants to attempt to defeat summary judgment by production of evidentiary material in admissible form demonstrating a triable issue of fact with respect to some defense to plaintiff's recovery on the note[ ] and [mortgage]” (I.P.L. Corp., 202 A.D.2d at 1029; see Rochester Community Sav. Bank, 172 A.D.2d at 1019). Bailey admitted in his affidavit that he signed the note and mortgage without first reading them, but asserted that only the signature pages of the documents were made available to him on the day he signed them and that the attorney who prepared the note and mortgage fraudulently misrepresented their contents. It is well settled that “ ‘[a] party is under an obligation to read a document before he or she signs it, and a party cannot generally avoid the effect of a [document] on the ground that he or she did not read it or know its contents' “ (Cash v. Titan Fin. Servs., Inc., 58 AD3d 785, 788; see Gillman v. Chase Manhattan Bank, 73 N.Y.2d 1, 11; Pimpinello v. Swift & Co., 253 N.Y. 159, 162–163). Moreover, “[a] signer's duty to read and understand that which it signed is not diminished merely because [the signer] was provided with only a signature page” (Vulcan Power Co. v. Munson, 89 AD3d 494, 495, lv denied 19 NY3d 807 [internal quotation marks omitted]; see M & T Bank v HR Staffing Solutions, Inc. [appeal No. 2], 106 AD3d 1498, 1499).
Defendants have failed to proffer a valid excuse as to why the complete documents could not have been procured prior to their signing, and we conclude that the failure of Bailey, who we note is an attorney and a sophisticated party, to read the note and mortgage before signing them “prevents him from establishing justifiable reliance, an essential element of fraud in the execution” (Sorenson v. Bridge Capital Corp., 52 AD3d 265, 266, lv dismissed 12 NY3d 748; see Morby v. Di Siena Assoc., 291 A.D.2d 604, 605–606; see generally Verstreate v. Cohen, 242 A.D.2d 862, 863; Chase Lincoln First Bank v. Mark Homes, 170 A.D.2d 995, 995). In addition, we further note that the signature page of the mortgage that Bailey admits signing states that it is a mortgage (see M & T Bank, 106 AD3d at 1500).
Frances E. Cafarell
Clerk of the Court
A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes visit FindLaw's Learn About the Law.
Docket No: CA 12–01858
Decided: July 05, 2013
Court: Supreme Court, Appellate Division, Fourth Department, New York.
Search our directory by legal issue
Enter information in one or both fields (Required)
Harness the power of our directory with your own profile. Select the button below to sign up.
Learn more about FindLaw’s newsletters, including our terms of use and privacy policy.
Get help with your legal needs
FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.
Search our directory by legal issue
Enter information in one or both fields (Required)