The following papers numbered read on this motion:Papers Numbered

Notice of Motion/Order to Show Cause/Petition/

Cross Motion and Affidavits(Affirmations)Annexed1

Opposing Affidavits (Affirmations)3

Reply Affidavits(Affirmations)4

Affidavits(Affirmations)

Other Papers (Memoranda of Law)2

Plaintiff ECI Financial Corporation ("ECI"), a private lender with a principal place of business in California, moves for summary judgment in this foreclosure action against defendants Resurrection Temple of Our Lord, Inc. ("Resurrection"), a non profit corporation, and Bishop Wesley J. Wiley ("Wiley").

BACKGROUND

On or about November 6, 2006, plaintiff ECI loaned $400,000 to the defendant pursuant to a mortgage agreement (the "Loan" and the "Mortgage", respectively). The Mortgage incorporated several riders, an assignment of rents, and a commercial deed of trust (the "Deed of Trust"). Resurrection, the borrower, is a non-profit corporation that operates a church on the mortgaged property described as 784-786-788 Rogers Avenue in Brooklyn, New York 11226 (the "Premises"). To evidence the indebtedness, the defendants executed a commercial note on November 6, 2006 (the "Note"). Plaintiff asserts that Bishop Wesley J. Wiley, a defendant in this action, signed and executed the Mortgage, Note, and Deed of Trust on behalf of Resurrection and as the personal guarantor. However, Wiley states in his affidavit (the "Wiley Affidavit") that he firmly denies the authenticity of the signature on the Note and that he does not believe it to be his signature.

The Note provides for monthly payments of $4,667 for one year after disbursement and then a balloon payment including all remaining principal and interest one year from the date of disbursement of the funds. According to the affidavit of Edward Choi, the president and CEO of ECI ("Choi Affidavit"), Resurrection defaulted by failing to make payments beginning on July 1, 2007 or at any time thereafter. The Note states that upon an event of default, ECI may accelerate the loan, collect all amounts owing from the borrower or the guarantor, file suit and obtain judgment, take possession of any collateral, or sell, lease, or otherwise dispose of any collateral. On September 21, 2012, ECI sent a notice of default and acceleration to Resurrection, giving Resurrection until October 26, 2012 to pay all past due amounts. Following Resurrection's failure to pay, ECI filed a summons and complaint on October 31, 2012.

Defendants then filed a Verified Answer in which they raised fifteen affirmative defenses. Plaintiff now moves for summary judgment and to strike the affirmative defenses. In their opposing affidavits, defendants assert that Resurrection sought the Loan in order to undergo [*2]renovation and expansion of the Premises and met with a contractor, AJM Management ("AJM"). According to Wiley, he and Resurrection were introduced to ECI by AJM. The defendants further contend that the $400,000 from ECI was disbursed in increments directly to AJM and no funds were ever disbursed to Resurrection. Defendants also contend that approximately $28,000 in six months of pre-paid interest was remitted to ECI. Wiley further claims that AJM never completed the work on the Premises and abandoned the project before completion.

On July 15, 2011, Resurrection and ECI entered into a Consent Decree and Stipulation of Settlement pursuant to a federal proceeding that was brought by Resurrection in the Eastern District of New York against ECI, (Index No. 08-CV-1604 (CBA) (CLP)) (the "Federal Action"). Although AJM is never mentioned in any of the loan documents, AJM was a third party defendant in the Federal Action. In the Consent Decree, the parties to the Federal Action stipulated and agreed that the $400,000 loan from ECI to Resurrection would have priority and agreed to correct a recording error by directing the City Register of Kings County to record the Note and Mortgage with an effective date of recording as November 6, 2006. Most importantly, in the Consent Decree, Resurrection stipulates that ECI "made a loan to [Resurrection] in the original principal face amount of Four Hundred Thousand and 00/100 Dollars ($400,000) which Loan was evidenced by that certain Commercial Note and Mortgage of Loan number 55760061." This loan number matches that on the loan documents provided in the motion papers.

In order to obtain summary judgment, the movant must establish its cause of action or defense sufficiently to warrant a court's directing judgment in its favor as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact (Zuckerman v City of New York, 49 NY2d 557, 562 [1980] CPLR 3212 [b]). "To establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and mortgage note, ownership of the mortgage, and the defendant's default in payment" (Campaign v Barba, 23 AD3d 327 [2d Dept 2005]). Where the proponent of the motion makes a prima facie showing of entitlement to summary judgment, the burden shifts to the party opposing the motion to demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action (Vermette v Kenworth Truck Co., 68 NY2d 714, 717 [1986]). The parties' competing contentions are viewed in the light most favorable to the party opposing the motion (Marine Midland Bank, N.A. v Dino & Artie's Automatic Transmission Co., 168 AD2d 610 [2d Dept 1990]).

Plaintiff has successfully established a prima facie case by demonstrating ownership of the Note and Mortgage and the defendant's default in payment. Plaintiff has provided copies of the Note and Mortgage and has established default through the Choi Affidavit. Pursuant to CPLR 3212(b), "[a] motion for summary judgment shall be supported by affidavit ... The affidavit shall be by a person having knowledge of the facts; it shall recite all the material facts; and it shall show that there is no defense to the cause of action or that the cause of action or defense has no merit." The defendants challenge the validity of the Choi Affidavit and argue that Choi lacks personal knowledge of the operative facts. However, the cases that defendants cite all involve affidavits of attorneys who lacked personal knowledge, and are therefore irrelevant to this case (see Winter v Black, 95 AD3d 1208 [2d Dept 2012] Currie v Wilhouski, 93 AD3d 816 [*3][2d Dept 2012]; Bronson v Algonquin Lodge Assoc., 295 AD2d 681 [3d Dept 2002] Sturtevant v Home Town Bakery, 192 AD2d 904 [3d Dept 1993]). The Choi Affidavit states that Edward Choi is the President and CEO of ECI and that he has personal knowledge of the facts relating to the instant action based on books and records maintained by himself and his staff. A review of books and records maintained in the ordinary course of business is sufficient to support the Choi Affidavit and this motion for summary judgment (see HSBC Bank USA v Sage, 112 AD3d 1126 [3d Dept 2013]). Defendants also challenge Choi's credibility and whether he is actually the President and CEO of ECI. However, "[c]redibility is generally not relevant in determining a motion for summary judgment" (Ebasco Constructors, Inc. v Aetna, 260 AD2d 287, 291 [1st Dept 1999]). Lastly, defendants challenge the Choi Affidavit because it was signed and notarized in California and no certificate of conformity is provided by the plaintiff pursuant to CPLR 2309(c). However, this type of defect is not fatal to the consideration of the affidavit on summary judgment (see Rajkumar v Markham Gardens, L.P., 41 Misc 3d 1205(A) [Sup Ct, Kings County 2013]) and has been cured in an attachment to plaintiff's reply.

Defendants also argue that plaintiff does not have standing to sue because the Note provides that it is secured by the Deed of Trust and bears no connection to the Mortgage. This argument is unavailing because the Mortgage and the Deed of Trust were executed at the same time, clearly reference each other, and are both referring to the same loan. A deed of trust is an instrument for the security of indebtedness and is an additional authority to the grantee or mortgagee to exercise its power of sale (see Bell Silver and Copper Mining Co. v First National Bank of Butte, 156 US 470 [1895]). The grantee or mortgagee can choose to foreclose by the ordinary methods provided by law or can proceed under the power of sale (see id.). "If there is a power of sale, whether in the creditor or in some third person to whom the conveyance is made for that purpose, it is still in effect a mortgage, though in form a deed of trust, and may be foreclosed by sale in pursuance of the terms in which the power is conferred, or by suit in chancery" (Shillaber v Robinson, 97 US 68, 78 [1877]). Here, the Deed of Trust named ECI as trustee and granted to ECI a power of sale in addition to the right of judicial foreclosure. ECI certainly has standing to collect on the Note through the court. "[A] plaintiff has standing where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action commenced" (Bank of New York v Silverberg, 86 AD3d 274, 279 [2d Dept 2011]). ECI is the original lender and the holder of the Mortgage and the underlying Note, with additional rights under the Deed of Trust.

Wiley's contention that his alleged signature on the loan documents is inauthentic is also insufficient to defeat this motion for summary judgment. In his affidavit, Wiley states: "I firmly deny the authenticity of the signature on the uncertified Note. The best of my knowledge and belief this is not my signature" (Wiley Aff. ¶ 14). Wiley also asserts that his signature is unlike the signature that appears on the Note, Mortgage, and Deed of Trust and that he never signs his name with the title of "Bishop", as it appears on these documents. This assertion is insufficient to defeat summary judgment because "[s]omething more than a bald assertion of forgery is required to create an issue of fact contesting the authenticity of a signature" (Banco Popular North America v Victory Taxi Management, Inc., 1 NY3d 381, 384 [2004]). Wiley has not provided any other evidence to suggest that the signature on the loan documents is inauthentic, nor has he unequivocally denied signing the documents. [*4]

Defendants also contend that this motion for summary judgment is premature because discovery is incomplete. Based on Wiley's affidavit, defendants claim that ECI is not the true creditor because the loan funds were provided by an undisclosed third party whose identity is unknown to the defendants. Based on these alleged facts, defendants argue that discovery is required to identify the true source of the funds. CPLR 3212(f) allows a party opposing summary judgment to obtain further discovery when it appears that facts supporting that party's position exist but cannot be stated (see Global Minerals & Metals Corp. v Holme, 35 AD3d 93 [1st Dept 2006]). "The party invoking [CPLR 3212(f)] must provide a proper evidentiary basis supporting its request for further discovery" (Id. at 103). Wiley's bare allegation that the funds were provided by a mysterious third party, without any further information or evidentiary support, is insufficient to defeat a summary judgment motion or to allow for further discovery. "Allegations of mere hope that the discovery will reveal something helpful. . . provide[s] no basis for postponing the determination of the plaintiff's motion" (Bryan v City of New York, 206 AD2d 448, 448 [2d Dept 1994]).

Defendants also argue that they are not liable on this loan because the $400,000 in funds was allegedly disbursed directly to AJM. However, there is no documentary evidence whatsoever to back up this assertion. Defendants are unable to argue that there was a lack of consideration because Wiley admits that "$400,000 was disbursed in parts by ECI directly to AJM" (Wiley Aff. ¶ 10). Even if the loan funds were disbursed directly to Resurrection's contractor, as opposed to Resurrection directly, this would not relieve Resurrection from liability to pay back the money they borrowed since defendants have admitted that they received the benefit of the contractor's services.

Indeed, defendants are barred from contesting the validity of the Loan altogether because of the Consent Decree in the Federal Action, which was so ordered by Judge Carol Bagley Amon on July 14, 2011. The doctrine of res judicata, or claim preclusion, bars successive litigation based on the same transaction or series of transactions if there is a judgment on the merits rendered by a court of competent jurisdiction and the party against whom the doctrine is invoked was a party to the previous action (see State of New York v Applied Card Systems, Inc., 11 NY3d 105, 122 [2008]). Resurrection was the party that initiated the Federal Action and the fifth paragraph of the Consent Decree states: "This herein decree being the final judgment of the Court on the merits." Resurrection stipulated to the validity of the Loan in the Consent Decree and is thereby precluded from challenging it in the instant action.^[FN1]

In addition to their arguments in opposition to the summary judgment motion, the defendants have also raised fifteen affirmative defenses in their Answer, most of which are conclusory and fail to raise a triable issue of fact, and the rest of which are based on the law of residential foreclosure, which does not apply to the commercial mortgage at issue in the instant action. "Conclusory assertions will not defeat summary judgment . . . [t]he opponent of a properly made summary judgment motion must present evidentiary facts sufficient to raise a [*5]triable issue of fact" (Freedman v Chemical Construction Corp., 43 NY2d 260, 264 [1977]).

Defendants' first affirmative defense of lack of personal jurisdiction is stricken because defendants failed to plead any facts to support their contention of lack of proper service and have offered nothing to rebut the affidavits of service provided by plaintiff in this motion (see Town House St., LLC v New Fellowship Full Gospel Baptist Church, 29 AD3d 893 [2d Dept 2006]). The second affirmative defense pleading lack of standing is also stricken because, as discussed above, plaintiff has established that it is the holder of the Mortgage and the Note, and defendants have not offered any facts in rebuttal.

As for the third affirmative defense, defendants claim that collateral source payments were made to ECI in the amount of $28,000. To support this contention, defendants provide a copy of the specific closing instructions for the loan, which does nothing to demonstrate that any amounts were paid to ECI. Defendants have not met the burden of proving the affirmative defense of payment, and so this defense is stricken (see CIT Group v Supermarkets Gen. Corp., 183 AD2d 454 [1st Dept 1992]). However, defendants will have the opportunity to present evidence of any payments in reduction of the amount due to the Referee to Compute. The fourth, fifth, sixth, eighth, ninth, and fifteenth affirmative defenses for failure to state a cause of action, for failure to join necessary parties, for illegal charges and fees, fraud, unclean hands, and for failure to plead capacity to sue are also stricken as conclusory because defendants have failed to plead any evidentiary facts. It is well settled that defenses which state bare allegations without supporting facts are insufficient and should be stricken (see Petracca v Petracca, 305 AD2d 566, 567 [2d Dept 2003]).

The seventh, tenth, eleventh, twelfth, thirteenth, and fourteenth affirmative defenses all invoke statutes that apply to residential mortgages, and are therefore inapplicable to this commercial mortgage foreclosure. Based on the plain language of the Mortgage, Note and Deed of Trust, this is a commercial mortgage and is, therefore, not subject to the additional protections afforded to residential loans (see Independence Bank v Valentine, 113 AD3d 62 [2d Dept 2013]).

This constitutes the decision and order of the court.

E N T E R :

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J.S.C.