Opinion ID: 2560072
Heading Depth: 2
Heading Rank: 1

Heading: Battista Loan

Text: Joseph Alessandro, an attorney with more than 30 years of experience in private practice, entered the race for Westchester County Court Judge in 2003. Salvatore LoBreglio, the director of the Westchester Independence Party, suggested that Barbara Battista serve as Joseph's campaign manager and treasurer. Battista, a retired nurse, had some experience working on election campaigns. Previously, Joseph had paid Battista to prepare his (ultimately unsuccessful) application for an interim appointment to County Court. In August 2003, Battista proposed that Joseph undertake a massive mailing of campaign literature. Joseph had already contributed more than $140,000 of his personal funds to the campaign, and told Battista that he was not prepared to spend additional money. Battista then offered to lend Joseph $250,000. According to Battista, she made it very clear that there had to be an end date for it to be paid back. Joseph accepted, and the parties orally agreed that Joseph would repay the loan by July 2004. Between late August and mid-September 2003, using money borrowed against her retirement funds in a brokerage account, Battista paid a print company $185,000 toward the cost of Joseph's campaign literature, and paid an additional $57,000 into Joseph's campaign account. [1] Joseph and Francis Alessandro co-signed a handwritten note reflecting Joseph's $250,000 indebtedness to Battista. Dated August 31, 2003, the note provided a fixed annual interest rate of 1.5% and a term of 30 days, with the principal due and payable on September 31, 2003. To secure the note, the brothers co-signed a handwritten mortgage on their jointly-owned property in Valhalla, New York. Battista did not record the handwritten mortgage at that time. Soon thereafter, campaign attorney John Ciampoli informed Joseph, Battista and LoBreglio that Battista's payments to the print company and the campaign account would violate statutory campaign contribution limits if not repaid by Election Day. Ciampoli therefore advised Joseph to assume the campaign's debt to Battista personally. As a consequence, Joseph and Battista signed a typewritten promissory note, dated November 3, 2003, which acknowledged the $250,000 indebtedness. The note provided for a 15-year term and a variable interest rate, equal to the interest rate charged by Battista's brokerage account, that was initially set at 2.86%. Joseph also signed a typewritten mortgage, dated October 23, 2003, which secured the loan with the brothers' jointly-owned Valhalla property. Francis did not sign either the typewritten note or the typewritten mortgage. Battista recorded the typewritten mortgage on November 5, 2003. [2] Joseph was elected to County Court in November 2003. For the next year, he made interest payments to Battista as required by the typewritten promissory note. In the spring and summer of 2004, Battista inquired about repayment of the loan. Joseph repeatedly assured her that he was attempting to secure financing to repay her. In September 2004, Joseph told Battista that he had a mortgage guy working to obtain a loan, and showed her a document that appeared to be an unsigned mortgage application or commitment. Meanwhile, in June 2004, Joseph and Francis had paid more than $300,000 in cash to purchase property in Seaside Heights, New Jersey. They obtained the money by taking a loan against a joint brokerage account. There is no documentary evidence or testimony of an impartial witness to support Joseph's claim that he was trying to repay the Battista loan. In October 2004, Battista enlisted attorney Harvey Kaminsky to help her recover the loan. According to Kaminsky, Battista told him that she felt she was getting the runaround, and . . . she sort of felt intimidated calling the judge because she was calling him in his chambers saying she needed the money. Kaminsky contacted Joseph, who acknowledged the debt, and said that he had applied for a mortgage on a property he owned in New Jersey and expected to have the money within a few weeks. At Kaminsky's request, Joseph sent Kaminsky copies of unsigned mortgage applications he had completed. Later that month, Joseph told Kaminsky that, in order to obtain financing, he needed a document indicating that he was current on the interest payments due on the mortgage Battista held on the Valhalla property. Although Kaminsky didn't quite understand why it was important for a New Jersey piece of property that was being put up for refinancing, he promptly obtained the letter from Battista and faxed it to Joseph. Soon thereafter, Joseph informed Kaminsky that his title company was troubled by the two mortgages on the Valhalla property. As a result, Joseph claimed, he needed a document clarifying that the typewritten mortgage was the only mortgage on the Valhalla property and that the handwritten mortgage was null and void since it was unrecorded. Kaminsky told Joseph that his request created a difficult situation because he believed that the handwritten mortgage afforded Battista more protection. Joseph replied that unless we got rid of the first mortgage, he could not get the loan. Kaminsky subsequently prepared for Battista's signature an affidavit stating that the typewritten mortgage replaced the handwritten mortgage. Kaminsky called Joseph after sending him the signed affidavit, at which point Joseph told Kaminsky to speak to his attorney, Edward Koester. Ultimately, Kaminsky referred Battista to another attorney for potential litigation against Joseph. In January 2005, Battista recorded the handwritten mortgage, thereby creating a $500,000 lien against the Valhalla property. In February 2005, she commenced an action against Joseph and Francis to foreclose on the handwritten mortgage. Joseph moved to dismiss the complaint, relying on the affidavit in which Battista stated that the 15-year typewritten mortgage (not yet due on its face) replaced the handwritten mortgage. When the motion to dismiss was denied, Joseph filed a verified answer denying that he and Francis owed Battista $250,000 under the handwritten note and mortgage. In February 2006, Joseph, Francis and Battista settled the lawsuit for $273,000 ($250,000 plus $23,000 in attorneys' fees).