Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

CANTRADE PRIVATE BANK LAUSANNE LTD. v. TORRESY

February 27, 1995

CANTRADE PRIVATE BANK LAUSANNE LTD., Plaintiff, against MARIA S. TORRESY a/k/a MARY S., TORRESY, Defendant.

Peter K. Leisure, U.S.D.J.


The opinion of the court was delivered by: PETER K. LEISURE

LEISURE, District Judge:

 This is an action brought by Cantrade Private Bank Lausanne Ltd. ("Cantrade") against Maria S. Torresy, a/k/a Mary S. Torresy ("Torresy"), seeking payments allegedly due on three loans made to corporations controlled by Torresy. Plaintiff asserts that defendant personally guaranteed repayment and granted a security interest in cooperative apartments owned by her. Plaintiff now moves for summary judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure, for an order holding Torresy liable for payment on the three outstanding loans and dismissing Torresy's affirmative defenses and counterclaims. Defendant, in turn, moves for summary judgment dismissing all but one of plaintiff's claims for relief and for partial summary judgment on her counterclaim. For the reasons stated below, plaintiff's motion is granted in part and denied in part and defendant's motion is also granted in part and denied in part.

 BACKGROUND

 Plaintiff Cantrade is a Swiss banking corporation with its principal offices in Lausanne, Switzerland. Memorandum of Law in Support of Plaintiff's Motion for Summary Judgment ("Plaintiff Mem.") at 2. Defendant Torresy resides at 322 East 57th Street, New York, New York, a Sutton Place cooperative apartment building where she owned two apartments: a duplex apartment (the "Duplex") and a triplex apartment (the "Triplex"). Id. Cantrade has asserted several claims against Torresy in connection with several different loan transactions.

 In 1984 and 1985, Chemical Bank loaned $ 1,000,000 to a company called Mafra, Inc. (the "Mafra Loan"). Id. The principals of Mafra, Inc. ("Mafra"), Torresy and her husband Frank Torresy, both signed unconditional guaranties for this loan and gave a first lien against the Duplex. Id. at 3. In 1988, Chemical Bank transferred all of its right, title and interest in and to the Mafra loan and to Torresy's Mafra guaranty to Cantrade. Id. Mafra failed to pay the remaining principal balance on the Mafra loan, $ 738,696, when it became due on April 12, 1991. Id. Cantrade sold Torresy's interest in the Duplex at an auction to a corporate affiliate, Cantrade 57th Street, Inc., for $ 900,000. Id. at 4.

 The Mafra Loan funds were used to capitalize a glass company called Empire Glass, Inc. ("Empire Glass") of which Torresy was president. Plaintiff Mem. at 4. In 1989, Empire Glass became involved in litigation with Tamglass, Inc. ("Tamglass"), and in settlement of that litigation, Tamglass reduced the amount of Empire Glass's debt to $ 1,000,000 and accepted a new note and letter or credit for that amount. Id. at 4-5. The $ 1,000,000 letter of credit (the "Letter of Credit") was issued by Cantrade and secured Empire Glass's debt to Tamglass. Id. at 5. Plaintiff alleges that Torresy promised to file a mortgage against the Triplex as security for the Letter of Credit. Id. at 5-6. On June 16, 1992, upon default by Empire Glass of its obligations under the settlement agreement with Tamglass, Tamglass drew down the full amount of the Letter of Credit plus interest accrued to that date, $ 1,010,082. Id. at 6-7.

 On February 8, 1991, Torresy, as president of Empire Glass, executed a promissory note (the "Promissory Note") evidencing a loan made by Cantrade to Empire Glass in the amount of $ 250,000. Plaintiff Mem. at 7. This loan was secured by an endorsement on the Promissory Note, signed by Torresy in favor of Cantrade. Id. It is conceded that Empire Glass failed to pay the principal balance of the Promissory Note when it became due and payable. Id.

 DISCUSSION

 I. The Standard for Summary Judgment

 Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Lang v. Retirement Living Pub. Co., 949 F.2d 576, 580 (2d Cir. 1991). Summary judgment "is appropriate only 'after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.'" Thornton v. Syracuse Sav. Bank, 961 F.2d 1042, 1046 (2d Cir. 1992) (quoting Celotex, 477 U.S. at 322); accord Irvin Indus., Inc. v. Goodyear Aerospace Corp., 974 F.2d 241, 245 (2d Cir. 1992).

 "In deciding whether to grant summary judgment all inferences drawn from the materials submitted to the trial court are viewed in a light most favorable to the party opposing the motion. The nonmovant's allegations are taken as true and it receives the benefit of the doubt when its assertions conflict with those of the movant." Cruden v. Bank of New York, 957 F.2d 961, 975 (2d Cir. 1992). "Only when no reasonable trier of fact could find in favor of the nonmoving party should summary judgment be granted." Id.; accord Taggart v. Time, Inc., 924 F.2d 43, 46 (2d Cir. 1991); see also Lang, 949 F.2d at 580 ("In determining how a reasonable jury would decide, the court must resolve all ambiguities and draw all inferences against the moving party."); Binder v. Long Island Lighting Co., 933 F.2d 187, 191 (2d Cir. 1991) ("Viewing the evidence produced in the light most favorable to the nonmovant, if a rational trier could not find for the nonmovant, then there is no genuine issue of material fact and entry of summary judgment is appropriate.").

 The substantive law governing the case will identify those facts that are material, and "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248. "The judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id., 477 U.S. at 249.

 The party seeking summary judgment "bears the initial responsibility of informing the district court of the basis for its motion," and identifying which materials "it believes demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323. Once a motion for summary judgment properly is made, however, the burden then shifts to the nonmoving party, which "'must set forth specific facts showing that there is a genuine issue for trial.'" Anderson, 477 U.S. at 250 (quoting Fed. R. Civ. P. 56(e)); accord Brass v. American Film Technologies, Inc., 987 F.2d 142 (2d Cir. 1993). "The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson, 477 U.S. at 247-48 (emphasis in original). "Conclusory allegations will not suffice to create a genuine issue. There must be more than a 'scintilla of evidence,' and more than 'some metaphysical doubt as to the material facts.'" Delaware & Hudson Ry. Co. v. Conrail, 902 F.2d 174, 178 (2d Cir. 1990) (quoting Anderson, 477 U.S. at 252, and Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986)), cert. denied, 111 S. Ct. 2041 (1991). "The non-movant cannot escape summary judgment merely by vaguely asserting the existence of some unspecified disputed material facts, or defeat the motion through mere speculation or conjecture." Western World Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 (2d Cir. 1990) (citations and quotation omitted); see also Gnazzo v. G.D. Searle & Co., 973 F.2d 136, 138 (2d Cir. 1992) (the court must "consider the record in the light most favorable to the non-movant. However, the non-movant may not rest upon the mere allegations or denials of [her] pleading, but must set forth specific facts showing that there is a genuine issue for trial.") (quotation and citations omitted). The Court draws all reasonable inferences in favor of the nonmoving party only after determining that such inferences are reasonable, considering all the evidence presented. See, e.g., Apex Oil Co. v. Di Mauro, 822 F.2d 246, 252 (2d Cir.), cert. denied, 484 U.S. 977 (1987).

 II. The Mafra Loan

 There is no dispute as to the validity of Torresy's guarantee of the Mafra Loan, Cantrade's lien against the Duplex, or Cantrade's security interest in the Duplex. It is also undisputed that Torresy defaulted on the Mafra Loan and that Cantrade provided written notice of the default to Torresy. Section 9-504(1) of the New York Uniform Commercial Code (McKinney 1990 and Supp. 1994) ("UCC") provides that after a default, a secured party may "sell, lease, or otherwise dispose of any or all collateral." Torresy does not contest Cantrade's right to sell the Duplex. Cantrade sent notification of the sale of the Duplex both to Torresy and to her attorney. *fn1" Plaintiff Mem. at 10. Moreover, her attorney was present at the auction. Id. at 11.

 A. Commercial Reasonableness of Sale

 Defendant does not contest the fact that plaintiff imparted notice of the foreclosure sale to her. Instead, Torresy maintains that Cantrade cannot establish the commercial reasonableness of "every aspect of the disposition including the method, manner, time, place and terms." See Reply Memorandum of Law of Defendant Maria S. Torresy in Further Support of her Motion for Summary Judgment and Related Relief ("Defendant Reply") at 15 (quoting UCC § 9-504(3)).

 Torresy argues that particularly close scrutiny of the sale is mandated in the instant case because (1) there is a large discrepancy between the sale price and the fair market value of the Duplex; and (2) an affiliate of Cantrade purchased the Duplex. Torresy maintains that the foreclosure sale was unreasonable because (1) Cantrade failed to make arrangements to afford interested parties an opportunity to view the Duplex prior to the foreclosure sale; and (2) Cantrade has not shown that it made any attempt to target its pre-sale marketing and advertising efforts at those who could afford and would be interested in the Duplex.

 Cantrade contends that the disposition of the Duplex was commercially reasonable. It notes that it hired a licensed auctioneer who conducted a public auction of the Duplex. Plaintiff Mem. at 12. It further observes that it advertised the sale of the Duplex in both the Wall Street Journal and in the New York Times. The advertisement was only published once in the Wall Street Journal, but it ran for three consecutive weeks in the New York Times. Id. Cantrade also points out that no fewer than seventeen parties attended the auction and that there was active bidding among at least four of those in attendance. Id. at 13. Cantrade further argues that Torresy has presented no admissible evidence demonstrating that the Duplex was sold for less than its fair market value. See Memorandum of Law in Opposition to Defendant's Motion for Summary Judgment ("Plaintiff Opp.") at 3. Moreover, asserts Cantrade, the UCC clearly provides that price alone cannot render unreasonable an otherwise commercially reasonable sale. *fn2"

 Cantrade also notes that (1) Torresy was on the cooperative corporation's board of directors at the time of the foreclosure, (2) Cantrade requested that the Duplex be shown to prospective buyers prior to the auction; and (3) the cooperative corporation's board of directors denied access to the apartment. In addition, continues Cantrade, there is no legal requirement that a secured creditor arrange for potential purchasers to view collateral prior to a foreclosure sale. As a result, Cantrade concludes, the circumstances of the auction preclude any claim that sale of the Duplex was not commercially reasonable.

 This Court finds that the sale of the Duplex was commercially reasonable. Cantrade provided Torresy with reasonable notification of the sale of the Duplex, and Torresy's attorney was present at the auction. The auction was public and was conducted by a professional auctioneer. In addition, the sale was advertised in both the Wall Street Journal and the New York Times. Moreover, there were seventeen ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.