On or about October 27, 2007, defendant New Day Financial, LLC (hereinafter defendant) issued a loan to plaintiffs Craig A. Bosley and Tracey M. Bosley (hereinafter plaintiffs) in the amount of $214,200.00.^[FN1] This loan was evidenced by a promissory note and secured by a mortgage on certain real property located in the Town of Mooers, Clinton County. The holder of the mortgage was Mortgage Electronic Registration Systems, Inc. (hereinafter MERS) as nominee for defendant. MERS subsequently assigned the mortgage to Bank of America, N.A. on March 17, 2012. Plaintiffs then defaulted in their payments and, on September 18, 2012, Bank of America commenced action No. 1, a foreclosure action. On November 13, 2012, the mortgage was assigned from Bank of America to defendant Nationstar Mortgage, LLC (hereinafter Nationstar). Plaintiffs then commenced action No. 2 in October 2013 (action No. 2), alleging two causes of action against defendant: (1) fraudulent inducement; and (2) failure to comply with Banking Law § 6-l.^[FN2] Actions No. 1 and 2 were consolidated by Stipulation and Order dated December 31, 2014. Presently before the Court is defendant's pre-answer motion to dismiss in action No. 2 based upon, inter alia, the [*2]failure to state a cause of action (see CPLR 3211 [a] [7]).^[FN3]

"On a motion to dismiss for failure to state a cause of action, [the Court] must afford the pleadings a liberal construction, accept the facts alleged therein as true, accord the plaintiff the benefit of every possible inference and determine whether the facts alleged fit within any cognizable legal theory'" (Nelson v Capital Cardiology Assoc., P.C., 97 AD3d 1072, 1073 [2012], quoting Matter of Upstate Land & Props., LLC v Town of Bethel, 74 AD3d 1450, 1452 [2010]).

Beginning with the first cause of action asserted against defendant, to state a claim for fraud a plaintiff must allege " that defendant[ ] knowingly misrepresented a material fact with the intent to deceive plaintiff and, after having justifiably relied upon such misrepresentation, plaintiff experienced pecuniary loss'" (Clearmont Prop., LLC v Eisner, 58 AD3d 1052, 1056 [2009], quoting State of New York v Industrial Site Servs., Inc., 52 AD3d 1153, 1157 [2008] [citations omitted]). "However, if the facts represented are not matters peculiarly within the party's knowledge, and the other party has the means available to him [or her] of knowing, by the exercise of ordinary intelligence, the truth . . . of the representation, he [or she] must make use of those means, or he [or she] will not be heard to complain that he [or she] was induced to enter into the transaction by misrepresentations'" (Clearmont Prop., LLC v Eisner, 58 AD3d at 1056, quoting Schumaker v Mather, 133 NY 590, 596 [1892]; see Tanzman v La Pietra, 8 AD3d 706, 707 [2004]; Cohen v Colistra, 233 AD2d 542, 543 [1996]).

Here, plaintiffs allege that defendant made several misrepresentations including, inter alia, that plaintiffs would be reimbursed for a $415.00 appraisal fee, that plaintiffs would not be responsible for closing costs and, finally, that plaintiffs would receive a disbursement in the amount of $720.61. Plaintiffs further allege that, "as a consequence of [these] misrepresentations [they] were fraudulently induced to enter into the [loan] transaction" and that they "have suffered actual and consequential damages, including attorneys fees[,] paying an APR of over 8.4% when lower interest loans were available[ and] suffering a foreclosure proceeding[.]"

Even affording the pleadings a liberal construction and accepting the facts alleged as true, the Court nonetheless finds that plaintiffs have failed to state a claim for fraudulent inducement. Plaintiffs readily admit in their respective affidavits that they were given an opportunity to review all of the loan documents, but failed to do so — instead relying upon defendant "to treat [them] fairly." Had plaintiffs reviewed the documents, they would have known that they were responsible for both the appraisal fee and closing costs. Indeed, the "Application Disclosure" form plainly stated that a "non-refundable" appraisal fee estimated at $415.00 was "being charged in connection with the processing of [the] loan application." This form further stated that "[o]ther fees not shown . . . may be payable later and are shown on the Good Faith Estimate of Closing Costs." The HUD-1 form then included the actual amount of the appraisal fee — namely, $350.00 — as well as the amount of the closing costs. Plaintiffs undisputedly had the means available to know the truth of defendant's alleged misrepresentations as to the appraisal fee and closing costs and, as such, they cannot now complain that they were induced by defendant's misrepresentations to enter into the loan transaction.

Insofar as the $720.61 disbursement is concerned, this disbursement was listed on the HUD-1 [*3]form given to plaintiffs at the closing in October 2007. Again, plaintiffs admit that they did not review the form and, as such, were not aware of the disbursement until approximately 6 years later when they retained legal counsel to represent them in the related foreclosure proceeding and he reviewed the form. Plaintiffs certainly cannot allege reliance on a disbursement they were not even aware of until long after the transaction took place. Defendant's motion to dismiss is therefore granted as to the first cause of action in the complaint.

Turning now to the second cause of action, plaintiffs allege that the loan is a high-cost home loan, as that term is defined under Banking Law § 6-l, because "[t]he total points and fees [charged] exceed[ed] five percent of the total loan amount" (Banking Law § 6-1 [1] [g] [ii]). Specifically, plaintiffs allege that defendant charged a total of $10,464.47 in points and fees, which amount is comprised of $9,328.86 in "Lender Fees" — as set forth in the "Acknowledgment of Loan Terms and Net Tangible Benefit Disclosure" form signed by them at the closing — as well as the $415.00 appraisal fee paid by them and the $720.61 disbursement they never received. Inasmuch as the " [t]otal loan amount' means the principal of the loan minus [the] points and fees" (Banking Law § [1] [h]), plaintiffs further allege that the total loan amount is $203,735.53 ($214,200.00 — $10,464.47), and because $10,464.71 exceeds 5% of $203,735.53 — or $10,186.78 — the loan is high-cost home loan. Plaintiffs then allege that defendant "did not make the disclosures and notices required by [Banking Law §] 6-l."

Affording the pleadings a liberal construction and accepting the facts as true, the Court finds that plaintiffs have succeeded in stating a claim for violation of Banking Law § 6-1. Incidentally, defendant concedes that it did not provide the requisite disclosures and notices under Banking Law § 6-l (see Banking Law § 6-1 [2] [1], [2-a]). With that said, however, defendant contends that the loan in question is not a high-cost home loan. Specifically, defendant contends that the appraisal fee charged does not constitute points and fees, as that term is defined under Banking Law § 6-1 (1) (f). The Court, however, is not persuaded. Banking Law § 6-1 (1) (f) provides that all charges for items listed under 12 CFR 226.4 (c) (7) constitute points and fees if the lender receives direct or indirect compensation in connection with the charge or the charge is paid to an affiliate of the lender. 12 CFR 226.4 (c) (7) then includes "[p]roperty appraisal fees or fees for inspections to assess the value or condition of the property" as one of the items listed (12 CFR 226.4 [c] [7] [iv]). To the extent that the appraisal was set up by defendant and conducted by an appraiser of defendant's choice, the Court cannot find as a matter of law that the appraisal fee does not constitute points and fees under Banking Law § 6-1 (1) (f) — at least not at this juncture.^[FN4] A similar conclusion is reached relative to the $720.61 disbursement, which defendant also contends does not constitute points and fees. Defendant may be correct, but under Banking Law § 6-l (1) (f) (iii) "[a]ll compensation paid directly or indirectly to a mortgage broker" is included as points and fees and, here, plaintiffs allege that the $720.61 was paid to defendant. Further discovery is necessary. Under the circumstances, the Court denies defendant's motion to dismiss as to the second cause of action.

Briefly, to the extent that defendant contends that it is entitled to dismissal of the second cause of action based upon documentary evidence (see CPLR 3211 [a] [1]), the Court finds this contention to be unavailing as well. "A motion to dismiss on the ground that the action is barred by documentary evidence . . . may be appropriately granted only where the documentary evidence utterly refutes [the] plaintiff's factual allegations, conclusively establishing a defense as a matter of law'" (Mason v First Cent. Natl. Life Ins. Co. of NY, 86 AD3d 854, 855 [2011], quoting Goshen v Mutual Life Ins. Co. of NY, 98 NY2d 314, 326 [2002]; see Leon v Martinez, 84 NY2d 83, 88 [1994]). Here, none of the loan documents conclusively establish that the loan is not a high-cost home loan under Banking Law § 6-l. Rather, the HUD-1 statement appears to complicate the matter further, enumerating $16,164.71 in "settlement charges" — many of which appear to constitute points and fees under Banking Law § 6-l (1) (f).

To the extent the parties' remaining contentions have not been rendered academic, they have been examined and found to be without merit.

Based upon the foregoing, defendant's motion is granted to the extent that the first cause of action in the complaint in action No. 2 is dismissed and the motion is otherwise denied.

Therefore, having considered the Affirmation of Donald W. Biggs, Esq. with exhibits attached thereto, dated July 23, 2014, submitted in support of the motion; Memorandum of Law of Donald W. Biggs, Esq., dated July 23, 2014, submitted in support of the motion; Affidavit of Tracy M. Bosley with exhibits attached thereto, sworn to September 10, 2014, submitted in opposition to the motion; Affidavit of Craig A. Bosley with exhibits attached thereto, sworn to September 10, 2014, submitted in opposition to the motion; Memo in Opposition of Douglas K. McGivney, Esq., dated September 11, 2014, submitted in opposition to the motion; and Reply Memorandum of Law of Donald W. Biggs, Esq., dated September 18, 2014 , it is hereby

ORDERED that defendant's motion is granted to the extent that the first cause of action in the complaint in action No. 2 is dismissed and the motion is otherwise denied.

The original of this Amended Decision and Order is returned to counsel for plaintiffs for filing and service with notice of entry. The Notice of Motion dated July 23, 2014 has been filed by the Court together with the above-referenced submissions.