SUPREME COURT OF THE STATE OF NEW YORK

Appellate Division, Fourth Judicial Department

264 

CA 11-01570 

PRESENT: SMITH, J.P., FAHEY, LINDLEY, AND MARTOCHE, JJ. 

 

 

ERNEST P. THOMPSON AND WENDY J. THOMPSON, 

PLAINTIFFS-RESPONDENTS, 

V MEMORANDUM AND ORDER

TINA M. NAISH, ALSO KNOWN AS TINA M. GERNATT, 

DEFENDANT-APPELLANT, 

ET AL., DEFENDANTS.

 

SOUTHERN TIER LEGAL SERVICES, A DIVISION OF LEGAL ASSISTANCE OF

WESTERN NEW YORK, INC., JAMESTOWN (TODD M. THOMAS OF COUNSEL), FOR

DEFENDANT-APPELLANT. 

CLARK & WHIPPLE, LLP, FREDONIA (RICHARD F. WHIPPLE, JR., OF COUNSEL),

FOR PLAINTIFFS-RESPONDENTS. 

 

Appeal from an order of the Supreme Court, Chautauqua County

(James H. Dillon, J.), entered April 4, 2011 in a foreclosure action. 

The order vacated a previous order setting aside a judgment of

foreclosure and reinstated said judgment. 

It is hereby ORDERED that the order so appealed from is

unanimously affirmed without costs. 

Memorandum: As limited by her brief, Tina M. Naish, also known

as Tina M. Gernatt (defendant), appeals from an order, entered

following a nonjury trial, determining that defendant was in default

on a mortgage issued by plaintiffs, and reinstating a previously

vacated judgment of foreclosure. Contrary to defendant’s contention,

Supreme Court did not err in concluding that she had defaulted on the

mortgage. Plaintiffs established that defendant did not pay the

mortgage for the final six months of its term, nor did she pay it

within the month after that term expired. Plaintiffs’ attorney then

wrote defendant a letter demanding payment within seven days, and

defendant failed to respond within that time, or within the month

after the expiration of that seven-day grace period. 

We agree with defendant that “[o]f particular importance is a

fundamental principle that has informed the law of agency and

corporations for centuries; namely, the acts of agents, and the

knowledge they acquire while acting within the scope of their

authority are presumptively imputed to their principals” (Kirschner v

KPMG LLP, 15 NY3d 446, 465; see Henry v Allen, 151 NY 1, 9). Thus,

the payment that she belatedly provided to plaintiffs’ attorney is
-2- 264 

CA 11-01570 

deemed received by plaintiffs at that time. Given that a month had

passed between the final date set in plaintiffs’ demand letter and the

time she sent that payment, however, and given that additional accrued

interest was added to the mortgage balance pursuant to the terms of

the mortgage contract, her payment did not constitute full payment of

the outstanding balance of the loan. Furthermore, we agree with the

court that plaintiffs acted in good faith to protect their investment

when they paid the outstanding three-year tax bill on the mortgaged

property without actual knowledge that defendant had paid part of her

balance due on the mortgage. That payment was also added to the

mortgage balance pursuant to the terms of the contract. Inasmuch as

defendant owed plaintiffs far more than the minimal interest on the

unpaid balance (cf. Matter of County of Ontario [Middlebrook], 59 AD3d

1065), the court did not abuse its discretion in concluding that she

was in default on the mortgage.

Contrary to defendant’s further contention, she “failed to show

that the equities indisputably favor [her]” position (Citibank, N.A. v

Grant, 21 AD3d 924). Defendant is correct that, “ ‘[o]nce equity is

invoked, the court’s power is as broad as equity and justice 

require’ ” (Mortgage Elec. Regis. Sys. v Horkan, 68 AD3d 948, 948). 

Here, however, equity does not require a different result. Although

defendant tendered the amount demanded by plaintiffs, she did so more

than a month after the date upon which plaintiffs indicated that they

would accept payment in lieu of commencing a foreclosure action, and

failed to include any payment for the interest that accrued in the

interim. In addition, she was still in default on the property’s

taxes. She failed to contact plaintiffs to notify them that she was

sending payment, and in fact the payment was sent to plaintiffs’

attorney while he was on vacation. Thus, the court did not abuse its

discretion in balancing the equities in favor of plaintiffs, and

declining to overlook defendant’s default.

Entered: March 16, 2012 Frances E. Cafarell

Clerk of the Court