KRUSCH v. AFFORDABLE HOUSING LLC

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Supreme Court, Appellate Division, First Department, New York.

Joseph KRUSCH, et al., Plaintiffs-Respondents-Appellants, v. AFFORDABLE HOUSING LLC, et al., Defendants-Appellants-Respondents.

Decided: November 23, 1999

WILLIAMS, J.P., RUBIN, SAXE and FRIEDMAN, JJ. Betsy R. Malik, for Plaintiffs-Respondents-Appellants. Mark R. Kook, for Defendants-Appellants-Respondents.

Order, Supreme Court, New York County (Barry Cozier, J.), entered April 6, 1999, which, to the extent appealed and cross-appealed from as limited by the briefs, denied that branch of defendants' motion pursuant to CPLR 3211(a)(7) seeking dismissal of plaintiffs' first cause of action for fraud, and granted that branch of the same motion seeking dismissal of plaintiff's second cause of action alleging champerty, unanimously affirmed, without costs.

 Under the circumstances at bar, where the particulars of the alleged wrongdoing are peculiarly within defendants' knowledge, plaintiffs' complaint and supporting affidavit sufficiently stated a cause of action against defendants for fraud (see, Fed. Ins. Co. v. Specialty Paper Box Co., 222 A.D.2d 254, 635 N.Y.S.2d 196).   Plaintiffs' champerty cause of action, however, even if permissibly asserted as an affirmative claim for damages, and not, as it is ordinarily, as an affirmative defense, was properly dismissed, since plaintiffs do not allege that the challenged notes were acquired primarily for the purpose of bringing an action thereon.   We note in this last connection that defendants did not immediately sue upon the subject promissory notes but instead afforded plaintiffs an opportunity to cure their defaults (see, 1015 Gerard Realty Corp. v. A & S Improvements Corp., 91 A.D.2d 927, 457 N.Y.S.2d 821).

MEMORANDUM DECISION.