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HSBC Guyerzeller Bank AG v. Chascona N.V.
Citations: 66 A.D.2d 488; 887 N.Y.S.2d 43
Court: Appellate Division of the Supreme Court of the State of New York; October 13, 2009; New York; State Appellate Court
The Supreme Court of New York County, under Justice Herman Cahn, issued an order on June 3, 2008, affirming the denial of a motion by defendants CIBC Mellon Trust Company and Chrysler Canada, Inc. to dismiss the amended complaint filed by substituted plaintiff Samuel Montagu Co. Ltd. The court previously ruled that Montagu's 2003 assignment of a loan agreement to its affiliated bank, HSBC Guyerzeller Bank AG, was ineffective concerning the debtor Hotel Mora Corp. Consequently, the mortgage reverted to Montagu, establishing its right to proceed with foreclosure. The court found that documentary evidence did not definitively prove that Montagu received full payment of the loan from Guyerzeller at the time of the assignment. Instead, Guyerzeller's payment was made for the assignment, and Montagu agreed to return this payment following the ineffective assignment declaration under a restoration agreement. Chrysler's argument that the Court of Appeals' decision in Reliance Ins. Co. v. PolyVision Corp. questioned Montagu's substitution as the foreclosure plaintiff was rejected. The Reliance case addressed a specific issue under CPLR 205(a) regarding corporate entities related to the original plaintiff, whereas Montagu was substituted under CPLR 1018, which permits continuation of an action upon any transfer of interest. The court also affirmed that substitution could be justified on a relation-back theory under CPLR 203(f). The court dismissed Chrysler's contention regarding the misapplication of English law concerning the assignment's validity and the implications of Mora's lack of consent. The law had been thoroughly analyzed in the prior appeal, where both parties presented expert opinions supporting their positions regarding the assignment's validity. The order was unanimously affirmed by Justices Saxe, Nardelli, Buckley, Acosta, and Freedman.