Summary
In Miller Planning Corp., the court held that "for the purpose of determining usury, the effective annual interest rate... did not exceed the legal maximum."
Summary of this case from Madden v. Midland Funding, LLCOpinion
September 28, 1998
Appeal from the Supreme Court, Kings County (Shaw, J.).
The plaintiff established its entitlement to judgment as a matter of law by submitting proof of the existence of the mortgage and mortgage note, and evidentiary proof of the respondent' default in payment ( see, Kowalski Enters. v. Sem Intl., 250 A.D.2d 648; Lavi v. Hamedani, 234 A.D.2d 428). Accordingly, it was incumbent upon the respondents to demonstrate the existence of a meritorious defense to foreclosure. The respondent' claim that the mortgage was usurious is insufficient to meet this burden.
Applying the traditional method of computing interest for the purpose of determining usury, the effective annual interest rate charged by the lender did not exceed the legal maximum ( see, Hammelburger v. Foursome Inn Corp., 54 N.Y.2d 580; Band Realty Co. v. North Brewster, Inc., 37 N.Y.2d 460; Shifer v. Kelmendi, 204 A.D.2d 300). Furthermore, the defense of usury does not apply where, as here, the terms of the mortgage and note impose a rate of interest in excess of the statutory maximum only after default or maturity ( see, Bloom v. Trepmal Constr. Corp., 29 A.D.2d 951, affd 23 N.Y.2d 730; Shorehaven Assocs. v. King, 184 A.D.2d 764; Klapper v. Integrated Agric. Mgt. Co., 149 A.D.2d 765).
Although the respondents also contend that they were defrauded by the home improvement contractor who received some of the proceeds of the loan, there is no evidence that the plaintiff had any relationship with the contractor. The record is also devoid of proof that the plaintiff participated in or had knowledge of the contractor's scheme. Under these circumstances, the contractor's alleged fraud is not a defense to foreclosure ( see, Chemical Bank v. Bowers, 228 A.D.2d 407; First Family Mtge. Corp. v. Lubliner, 113 A.D.2d 868).
Copertino, J.P., Santucci, Goldstein and Luciano, JJ., concur.