Private Capital Group, LLC v. Private Lender Service Corp.

Appellate Division of the Supreme Court of New York

Private Capital Group, LLC v. Private Lender Service Corp.

93 A.D.3d 493, 939 N.Y.S.2d 852

Appellate Division of the Supreme Court of the State of New York·Decided March 13, 2012·Published

Opinion

Order, Supreme Court, New York County (Bernard J. Fried, J.), entered December 23, 2010, which, to the extent appealed from, granted plaintiffs’ motion for summary judgment on their claims for conversion and replevin, unanimously affirmed, with costs.

The motion court correctly found that Gnosis was not a holder in due course of the mortgages it had acquired using plaintiffs’ funds because its principal, Michael Bode, had actual knowledge, and not merely reason to know, of plaintiffs’ claim (see UCC 3-304 [7]; Hartford Acc. & Indem. Co. v American Express Co., 74 NY2d 153, 162-163 [1989]). Such knowledge was derived from all the attendant circumstances, including Bode’s participation in the underlying diversion of plaintiffs’ funds and his signing of the mortgage transfer documents, and not just from the complaint in a related action.

We have considered appellant’s other contentions and find them unavailing. Concur — Tom, J.P., Saxe, Acosta, DeGrasse and Román, JJ.

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Order, Supreme Court, New York County (Bernard J. Fried, J.), entered December 23, 2010, which, to the extent appealed from, granted plaintiffs’ motion for summary judgment on their claims for conversion and replevin, unanimously affirmed, with costs.

The motion court correctly found that Gnosis was not a holder in due course of the mortgages it had acquired using plaintiffs’ funds because its principal, Michael Bode, had actual knowledge, and not merely reason to know, of plaintiffs’ claim (see UCC 3-304 [7]; Hartford Acc. & Indem. Co. v American Express Co., 74 NY2d 153, 162-163 [1989]). Such knowledge was derived from all the attendant circumstances, including Bode’s participation in the underlying diversion of plaintiffs’ funds and his signing of the mortgage transfer documents, and not just from the complaint in a related action.

We have considered appellant’s other contentions and find them unavailing. Concur — Tom, J.P., Saxe, Acosta, DeGrasse and Román, JJ.

Private Capital Group, LLC v. Private Lender Service Corp., 93 A.D.3d 493, 939 N.Y.S.2d 852 (N.Y. Ct. App. 2012).

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Opinion

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