SUPREME COURT OF THE STATE OF NEW YORK

Appellate Division, Fourth Judicial Department

651 

CA 12-01858 

PRESENT: CENTRA, J.P., FAHEY, CARNI, AND SCONIERS, JJ.

 

 

DASZ, INC., PLAINTIFF-APPELLANT, 

V MEMORANDUM AND ORDER

MERITOCRACY VENTURES, LTD., ARTHUR N. BAILEY, 

U.S. COMMERCIAL HABITAT CO., 

DEFENDANTS-RESPONDENTS,

ET AL., DEFENDANTS. 

 

FIDELITY NATIONAL LAW GROUP, NEW YORK CITY (VANESSA R. ELLIOTT OF

COUNSEL), FOR PLAINTIFF-APPELLANT. 

ARTHUR N. BAILEY & ASSOCIATES, JAMESTOWN, AND FAHRINGER & DUBNO, NEW

YORK CITY (HERALD PRICE FAHRINGER OF COUNSEL), FOR

DEFENDANTS-RESPONDENTS. 

 

Appeal from an order of the Supreme Court, Chautauqua County

(James H. Dillon, J.), entered December 14, 2011. The order denied

plaintiff’s motion for summary judgment. 

It is hereby ORDERED that the order so appealed from is

unanimously reversed on the law without costs and the motion is

granted. 

Memorandum: Plaintiff commenced this foreclosure action after

Meritocracy Ventures, Ltd. (Meritocracy), Arthur N. Bailey, and U.S.

Commercial Habitat Co. (Commercial Habitat) (collectively, defendants)

defaulted on a note executed by Bailey in his individual capacity and

as the sole shareholder of Meritocracy and on a mortgage executed by

Bailey as the president and sole shareholder of Meritocracy. 

Meritocracy transferred the mortgaged properties to Commercial

Habitat. 

We agree with plaintiff that Supreme Court erred in denying its

motion for summary judgment on the complaint. Plaintiff met its

initial burden by submitting the note and mortgage together with an

affidavit of nonpayment (see I.P.L. Corp. v Industrial Power & Light.

Corp., 202 AD2d 1029, 1029; Rochester Community Sav. Bank v Smith, 172

AD2d 1018, 1019, appeal dismissed 78 NY2d 909, rearg dismissed 78 NY2d

1005, rearg granted and lv denied 79 NY2d 887; see also Overseas

Private Inv. Corp. v Nam Koo Kim, 69 AD3d 1185, 1187, lv dismissed 14

NY3d 935).

“The burden then shifted to defendants to attempt to defeat
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CA 12-01858 

summary judgment by production of evidentiary material in admissible

form demonstrating a triable issue of fact with respect to some

defense to plaintiff’s recovery on the note[] and [mortgage]” (I.P.L.

Corp., 202 AD2d at 1029; see Rochester Community Sav. Bank, 172 AD2d

at 1019). Bailey admitted in his affidavit that he signed the note

and mortgage without first reading them, but asserted that only the

signature pages of the documents were made available to him on the day

he signed them and that the attorney who prepared the note and

mortgage fraudulently misrepresented their contents. It is well

settled that “ ‘[a] party is under an obligation to read a document

before he or she signs it, and a party cannot generally avoid the

effect of a [document] on the ground that he or she did not read it or

know its contents’ ” (Cash v Titan Fin. Servs., Inc., 58 AD3d 785,

788; see Gillman v Chase Manhattan Bank, 73 NY2d 1, 11; Pimpinello v

Swift & Co., 253 NY 159, 162-163). Moreover, “[a] signer’s duty to

read and understand that which it signed is not diminished merely

because [the signer] was provided with only a signature page” (Vulcan

Power Co. v Munson, 89 AD3d 494, 495, lv denied 19 NY3d 807 [internal

quotation marks omitted]; see M&T Bank v HR Staffing Solutions, Inc.

[appeal No. 2], 106 AD3d 1498, 1499). 

Defendants have failed to proffer a valid excuse as to why the

complete documents could not have been procured prior to their

signing, and we conclude that the failure of Bailey, who we note is an

attorney and a sophisticated party, to read the note and mortgage

before signing them “prevents him from establishing justifiable

reliance, an essential element of fraud in the execution” (Sorenson v

Bridge Capital Corp., 52 AD3d 265, 266, lv dismissed 12 NY3d 748; see

Morby v Di Siena Assoc., 291 AD2d 604, 605-606; see generally

Verstreate v Cohen, 242 AD2d 862, 863; Chase Lincoln First Bank v Mark

Homes, 170 AD2d 995, 995). In addition, we further note that the

signature page of the mortgage that Bailey admits signing states that

it is a mortgage (see M&T Bank, 106 AD3d at 1500).

Entered: July 5, 2013 Frances E. Cafarell

Clerk of the Court