Opinion
8220 Index 850009/16
01-29-2019
72ND NINTH LLC, Plaintiff–Respondent, v. 753 NINTH AVE REALTY LLC, et al., Defendants–Appellants, New York State Department of Taxation and Finance, et al., Defendants.
Kishner Miller Himes, P.C., New York (Ryan O. Miller of counsel), for appellants. Kriss & Feuerstein LLP, New York (Greg A. Friedman of counsel), for respondent.
Kishner Miller Himes, P.C., New York (Ryan O. Miller of counsel), for appellants.
Kriss & Feuerstein LLP, New York (Greg A. Friedman of counsel), for respondent.
Friedman, J.P., Gische, Kapnick, Gesmer, Moulton, JJ.
Order, Supreme Court, New York County (Ellen M. Coin, J.), entered April 20, 2017, and amended May 26, 2017, which, to the extent appealed from as limited by the briefs, granted plaintiff's motion for summary judgment on its complaint against defendants-appellants and dismissed the affirmative defenses of usury and failure to comply with CPLR 3408, unanimously affirmed, without costs.
Construing the clear and unambiguous terms of CPLR 3408 and RPAPL 1304 so as to give effect to their plain meaning and to effectuate the intent of the Legislature (see Commonwealth of the N. Mariana Is. v. Canadian Imperial Bank of Commerce, 21 N.Y.3d 55, 60, 967 N.Y.S.2d 876, 990 N.E.2d 114 [2013] ), we conclude that the loan at issue is not a "home loan" covered by CPLR 3408 (see Independence Bank v. Valentine, 113 A.D.3d 62, 66, 976 N.Y.S.2d 504 [2d Dept. 2013] ).
Appellants' usury defense was properly dismissed since the loan was made to a corporation. A civil usury defense may not be invoked by a corporation ( General Obligations Law § 5–521[1] ), or the individual guarantor of a corporation's debt ( Bankers Trust Co. v. Braten, 184 A.D.2d 239, 586 N.Y.S.2d 749 [1st Dept. 1992], lv denied 81 N.Y.2d 702, 594 N.Y.S.2d 716, 610 N.E.2d 389 [1993] ). Appellants have failed to raise an issue of fact as to whether the corporate form was used to conceal a usurious loan to the individual guarantor, Evanthia Koustis (see Schneider v. Phelps, 41 N.Y.2d 238, 241–242, 391 N.Y.S.2d 568, 359 N.E.2d 1361 [1977] ). Rather, the record demonstrates that Evanthia Koustis transferred her ownership of the residential property to defendant 212 East 72nd Street LLC in connection with obtaining a prior loan (see Cohen v. Gateway Bldrs. Realty, Inc., 43 Misc.3d 1228[A], at *5, 2014 WL 2437704 [Sup. Ct., Kings County, May 27, 2014] ).
The applicable interest rate was well below the 16% statutory maximum interest rate ( General Obligations Law § 5–501[1] ; Banking Law § 14–a[1] ), and the interest rate applicable upon default does not fall within the prohibition of the usury statute (see Bryan L. Salamone, P.C. v. Russo, 129 A.D.3d 879, 881, 15 N.Y.S.3d 344 [2d Dept. 2015] ; Kraus v. Mendelsohn, 97 A.D.3d 641, 948 N.Y.S.2d 119 [2d Dept. 2012] ). In addition, the usury statute does not apply to loans, like the one at issue in this case, that are for amounts greater than $2.5 million ( General Obligations Law § 5–501[6][b] ).