CSMC 2007-C1 Oswego Road, LLC v. Kimbrook Route 31, LLC

Appeal from an order of the Supreme Court, Onondaga County (Deborah H. Karalunas, J), entered July 10, 2013. The order, inter alia, granted those parts of the motion of plaintiff seeking partial summary judgment, and seeking to sever the counterclaim, and denied the cross motion of defendants-appellants to compel the disclosure of documents.

It is hereby ordered that the order so appealed from is unanimously affirmed without costs.

Memorandum: Plaintiff commenced this commercial foreclosure action against Kimbrook Route 31, LLC (Kimbrook) and

The court properly granted that part of plaintiffs motion for partial summary judgment in appeal No. 1. We note at the outset that the court properly rejected defendants’ contention that plaintiffs motion was premature insofar as plaintiff sought partial summary judgment. “Although a motion for summary judgment may be opposed on the ground ‘that facts essential to justify opposition may exist but cannot then be stated’ (CPLR 3212 [f]), ‘the opposing party must make an evidentiary showing supporting this conclusion, mere speculation or conjecture being insufficient’ ” (Preferred Capital v PBK, Inc., 309 AD2d 1168 , 1169 [2003]), and defendants failed to make that showing.

On the merits, we conclude that plaintiff met its initial burden of establishing its “entitlement to judgment as a matter of law by submitting the mortgage, unpaid note, and proof of defendant’s default” (Cassara v Wynn [appeal No. 2], 55 AD3d 1356 , 1356 [2008], lv dismissed 11 NY3d 919 [2009]). Defendants contend that plaintiff was not entitled to partial summary judgment because defendants raised a meritorious defense (see Lawler v KST Holdings Corp., 115 AD3d 1196 , 1198-1199 [2014]), i.e., plaintiffs wrongful refusal to release certain escrow funds that allegedly precipitated the foreclosure action, and plaintiffs misconduct in misleading defendants during subsequent negotiations to modify the loan. We reject that contention. With respect to plaintiffs failure to release the escrow funds, the record establishes that defendants were in default on the mortgage for failing to make a March 1, 2010 payment, and defendants did not request the escrow funds until March 25, 2010. The loan agreement provided that the escrow funds would not be returned to defendants if they were in default under the loan agreement, and defendants therefore have failed to establish that plaintiffs conduct in not releasing the funds caused the default (see generally Trustco Bank, Natl. Assn. v Allison Assoc., 249 AD2d 911 , 912 [1998]). With respect to plaintiffs conduct during the negotiations to modify the loan, we note that the negotiation letter agreement provides that any negotiations were not binding on the parties in the absence of a written modification of the loan agreement, which never occurred.

Next, we reject defendants’ contention in appeal No. 1 that the court erred in granting that part of plaintiff’s motion to sever their counterclaim. Where, as here, the “counterclaim seeks damages and does not affect the validity of the mortgage, the appropriate remedy is to sever it from the foreclosure action” (First Union Mtge. Corp. v Fern, 298 AD2d 490 , 491 [2002]). We further reject defendants’ contention in appeal No. 1 that the court erred in denying their cross motion to compel disclosure of documents. Plaintiff established that it turned over all documents in its possession, thereby warranting the denial of the cross motion (see Hawley v Hasgo Power Equip. Sales, 269 AD2d 804 , 804 [2000]).

We have reviewed defendants’ remaining contentions with respect to appeal Nos. 1 and 2 and conclude that they are without merit.

Present — Scudder, P.J., Smith, Centra, Fahey and Peradotto, JJ.