NAHILDA SULTANA, ABUL KALAMAZAO and EJP CONTRACTING CORP., Plaintiffs,
BANK OF AMERICA CORPORATION, its affiliates, subsidiaries and agents, including but not limited to BAC HOME LOANS SERVICING LP, and TOWER INSURANCE COMPANY OF NEW YORK STATE FARM FIRE AND CASUALTY COMPANY, Defendants. Index No. 650794/10
Craig Blumberg, Esq. Law Office of Craig A. Blumberg For plaintiffs
Suzanne M. Berger, Esq. Omar Shakoor, Esq. Bryan Cave LLP For defendants
DECISION AND ORDER
BARBARA JAFFE, JSC
By notice of motion, defendants Bank of America N. A. (BANA), as successor by merger to BAC Home Loans Servicing, L.P., moves pursuant to CPLR 3212 for an order granting summary judgment to BANA and dismissing plaintiffs' complaint. Only plaintiff EJP Contracting Corp. opposes, as by stipulation dated July 30, 2013, plaintiff homeowners Sultana and Kalamazao (homeowners) discontinued their action with prejudice. (NYSCEF 98).
I. FACTUAL BACKGROUND
On June 24, 2005, the homeowners entered into a consolidation, extension and modification agreement in connection with their mortgage loan for a three-family residence located at 37-45 87th Street, Jackson Heights, New York. (NYSCEF 63). On or about November 5, 2008, Tower issued them an insurance policy covering the property. (Id.). The policy lists the mortgagee, Country Wide Home Loans, and its successors as additional insureds. (Id.). The policy's Mortgagee clause provides as follows:
If the mortgagee is named in this policy, any loss payable under Coverage A or B will be paid to the mortgagee and you, as interests appear. If more than one mortgagee is named, the order of payment will be the same as the order of precedence of the mortgages. If we deny your claim, that denial will not apply to a valid claim of the mortgagee, if the mortgagee:
a. Notifies us of any change in ownership, occupancy or substantial change in risk of which the mortgagee is aware;
b. Pays any premium due under this policy on demand if you have neglected to pay the premium; and
c. Submits a signed, sworn statement of loss within 60 days after receiving notice from us of your failure to do so. Policy conditions relating to Appraisal, Suit Against Us and Loss Payment apply to the mortgagee.
(NYSCEF 89). BANA is the current servicer of the homeowners' mortgage loan and a successor in interest to Country Wide Home Loans. (Id.).
On or about March 20, 2009, while the policy was in effect, the homeowners suffered a fire loss at the property, and EJP agreed to perform repairs for the amount the homeowners expected to receive from the policy. (Id.). However, in May of 2009, Tower denied the homeowners' claim because they had misrepresented the property as a one- or two-family residence when applying for the policy. (Id.). EJP subsequently filed a mechanic's lien on the property in the amount of $226, 696.70. (Id.).
On or about September 25, 2009, BANA notified Tower by letter of its interest as a mortgage loan servicer in the property and in any proceeds, that "any payment for damage to the above mentioned property should include [the servicer], " and that if Tower denied coverage to the homeowners, the letter was to serve as notice of its claim under the mortgagee clause. On or about February 18, 2010, Tower, in response, fruitlessly asked whether BANA intended to pursue the policy on ...