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Emigrant Funding Corp. v. Kensington Realty Group Corp.
Citation: 2019 NY Slip Op 9255Docket: 2017-01187
Court: Appellate Division of the Supreme Court of the State of New York; December 23, 2019; New York; State Appellate Court
Original Court Document: View Document
In Emigrant Funding Corp. v. Kensington Realty Group Corp., the Appellate Division, Second Department affirmed a July 31, 2014 order from the Supreme Court of Kings County that granted summary judgment in favor of Emigrant Funding Corporation for mortgage foreclosure against Kensington Realty Group Corporation and Victoria Stennett-Bailey. The case stemmed from a mortgage note executed by Kensington in 2006 for $950,000, secured by properties at 109 Amersfort Place and 2408 Clarendon Road. After a fire in 2008 destroyed the Amersfort property, which was uninsured, Emigrant received $193,569.52 from forced place insurance. Stennett-Bailey requested to use these funds for repairs but objected to conditions imposed by Emigrant, leading to no agreement being reached. The defendants defaulted on their mortgage in November 2010, prompting Emigrant to file for foreclosure in July 2011. The defendants' counterclaims were responded to, and Emigrant moved for summary judgment and an order of reference. The court consolidated this action with another and granted the motion. The defendants' appeal, claiming a lack of due process and that their opposing documents were overlooked, was rejected as the court determined they were not deprived of due process. The court confirmed that there is no indication that it disregarded the defendants' opposing papers. It noted that while CPLR 2219(a) requires motions to list supporting papers, the lack of such a recital is a common irregularity that can be remedied through resettlement even post-appeal. The plaintiff successfully established its entitlement to an order of reference by providing the mortgage, unpaid note, and proof of default. The defendants did not raise any triable issues of fact in opposition. The court found no bad faith on the part of the plaintiff regarding the handling of insurance proceeds, clarifying that Real Property Law § 254(4) does not require a mortgagee to advance insurance funds before repairs are made. Consequently, the plaintiff was justified in retaining and distributing the insurance proceeds as restoration work progressed. The defendants’ claims of bad faith and challenges to evidence, raised for the first time in their reply brief and on appeal, respectively, were deemed improperly before the court.