Opinion
2001-05816
Argued May 30, 2002.
September 10, 2002.
In an action to recover on a note, the plaintiffs appeal from so much of an order of the Supreme Court, Kings County (G. Aronin, J.), dated June 25, 1997, as, upon granting the defendants' motion for leave to reargue, vacated a prior order of the same court, dated June 26, 1996, granting their motion for summary judgment, granted their motion for summary judgment only to the extent of awarding them the sum of $147,000, without interest, and directed that $8,000 of the amount owed on the mortgage note be held in escrow pending determination of the action.
Charles P. Gallo, Astoria, N.Y. (John Meglio of counsel), for appellants.
Certilman Balin Adler Hyman, LLP, East Meadow, N.Y. (Robert Connolly and Sebastian M. Alia of counsel), for respondents.
Before: CORNELIUS J. O'BRIEN, J.P., HOWARD MILLER, ROBERT W. SCHMIDT, BARRY A. COZIER, JJ.
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and, upon reargument, the original determination in the order dated June 26, 1996, is adhered to, the counterclaim is severed, and the matter is remitted to the Supreme Court, Kings County, for entry of an appropriate judgment.
A note required the defendants to pay the plaintiffs the principal sum of $155,000 in full by May 31, 1994. The plaintiffs made a prima facie showing of entitlement to judgment as a matter of law by proving the existence of the subject note and nonpayment according to its terms (see Gregorio v. Gregorio, 234 A.D.2d 512). The burden was therefore on the defendants to establish the existence of a triable issue of fact (see Neuhaus v. McGovern, 293 A.D.2d 727, 728; Gregorio v. Gregorio, supra).
Contrary to the defendants' contention, they failed to establish that they made a valid tender in August 1994 of the full amount due plus interest to the time of the tender (see National Sav. Bank v. Hartmann, 179 A.D.2d 76). Furthermore, to stop the running of interest, a tender of payment must be unconditional (see Matter of Jeffrey Towers v. Strauss, 31 A.D.2d 319, 325, affd 26 N.Y.2d 812) . Although the defendants did not dispute that they owed $147,000 of the principal amount, they sought to impose a condition that the plaintiffs place the remaining $8,000 of the principal in escrow pending resolution of a dispute over real estate transfer taxes. As the defendants did not unconditionally tender the full amount due on the note, the Supreme Court erred in concluding that the plaintiffs were not entitled to interest on $147,000 of the principal.
Furthermore, the Supreme Court erred in its determination that the defendants' claim for real estate transfer taxes presented a valid setoff to the amount due on the mortgage note. The note did not require such payment by the plaintiffs as a condition precedent to the defendants' repayment obligation, and the counterclaim is not inextricably intertwined with, or inseparable from, the defendants' obligation on the note (see Neuhaus v. McGovern, supra; Banco do Estado de Sao Paulo v. Mendes Jr., Intl. Co., 249 A.D.2d 137) . Accordingly, summary judgment should have been granted to the plaintiffs and the counterclaim severed.
O'BRIEN, J.P., H. MILLER, SCHMIDT and COZIER, JJ., concur.