Data Mtge., Inc. v. Money Source, Inc.

Data Mtge., Inc. v Money Source, Inc. 2026 NY Slip Op 05514 September 30, 2026 Appellate Division, Second Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This decision is uncorrected and subject to revision before publication in the Official Reports. Data Mortgage, Inc., etc., respondent-appellant, v Money Source, Inc., appellant-respondent. Supreme Court of the State of New York, Appellate Division, Second Judicial Department Decided on September 30, 2026 2024-08523, (Index No. 612537/21) Angela G. Iannacci, J.P. Deborah A. Dowling Carl J. Landicino Laurence L. Love, JJ. Milman Labuda Law Group PLLC, Lake Success, NY (Michael C. Mulè of counsel), or appellant-respondent. Davis+Gilbert LLP, New York, NY (Ina B. Scher, Daniel D. Dingerson, and Eva M. Jiménez of counsel), for respondent-appellant. [*1] DECISION & ORDER In an action to recover damages for breach of contract and on an account stated, the defendant appeals, and the plaintiff cross-appeals, from an order of the Supreme Court, Suffolk County (James Hudson, J.), dated July 1, 2024. The order, insofar as appealed from, granted that branch of the plaintiff's motion which was for summary judgment on the issue of liability on the first cause of action. The order, insofar as cross-appealed from, denied those branches of the plaintiff's motion which were for summary judgment on the issue of liability on the second, third, and fourth causes of action and dismissing the counterclaim. ORDERED that the order is modified, on the law, by deleting the provision thereof denying that branch of the plaintiff's motion which was for summary judgment dismissing the counterclaim, and substituting therefor a provision granting that branch of the motion; as so modified, the order is affirmed insofar as appealed and cross-appealed from, without costs or disbursements. On September 5, 2017, the plaintiff and the defendant entered into a written agreement for the defendant to subservice the plaintiff's loans (hereinafter the agreement). In July 2021, the plaintiff commenced this action to recover an outstanding balance, alleging that the defendant improperly charged "Transfer Fees" to the plaintiff (first cause of action), that the defendant improperly charged "Manual Set Up" and "Welcome Call" fees (second cause of action), that the defendant breached the agreement by failing to remit tax payments on the plaintiff's loans (third cause of action), and that the plaintiff was entitled to recover on an account stated (fourth cause of action). The defendant asserted, inter alia, a counterclaim alleging that the plaintiff breached the agreement's confidentiality provision. Thereafter, the plaintiff moved for summary judgment on the complaint and dismissing the counterclaim. In an order dated July 1, 2024, the Supreme Court granted that branch of the plaintiff's motion which was for summary judgment on the issue of liability on the first cause of action and denied those branches of the motion which were for summary judgment on the issue of liability on the remaining causes of action and dismissing the counterclaim. The defendant appeals, and the plaintiff cross-appeals. "[T]o recover damages for breach of contract, a plaintiff must demonstrate the [*2]existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of its contractual obligations, and damages resulting from the breach" (Shulamith Sch. for Girls, Inc. v Shulamith Sch. for Girls of Brooklyn, 230 AD3d 822, 823-824 [internal quotation marks omitted]; see Compensation Guidance, Inc. v Ashnu Intl., Inc., 220 AD3d 683, 684). "The fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties' intent and the best evidence of what parties to a written agreement intend is what they say in their writing" (Long Is. Minimally Invasive Surgery, P.C. v MultiPlan, Inc., 228 AD3d 638, 640 [internal quotation marks omitted]; see Greenfield v Philles Records, 98 NY2d 562, 569; Orlando v County of Putnam, 208 AD3d 503, 504). Thus, "[a] written agreement that is complete, clear, and unambiguous on its face must be enforced according to the plain meaning of its terms" (Shulamith Sch. for Girls, Inc. v Shulamith Sch. for Girls of Brooklyn, 230 AD3d at 824 [internal quotation marks omitted]; see Greenfield v Philles Records, 98 NY2d at 569; Compensation Guidance, Inc. v Ashnu Intl., Inc., 220 AD3d at 684). "A contract is unambiguous if the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the agreement itself, and concerning which there is no reasonable basis for a difference of opinion" (Long Is. Minimally Invasive Surgery, P.C. v MultiPlan, Inc., 228 AD3d at 640 [internal quotation marks omitted]; see Greenfield v Philles Records, 98 NY2d at 569; Orlando v County of Putnam, 208 AD3d at 505). "The threshold question of whether a contract is unambiguous, and the subsequent construction and interpretation of an unambiguous contract, are issues of law within the province of the court" (Long Is. Minimally Invasive Surgery, P.C. v MultiPlan, Inc., 228 AD3d at 640 [internal quotation marks omitted]; see 249-251 Brighton Beach Ave., LLC v 249 Brighton Corp., 217 AD3d 809, 812). In interpreting a contract, "[a] court will not imply a term where the circumstances surrounding the formation of the contract indicate that the parties, when the contract was made, must have foreseen the contingency at issue and the agreement can be enforced according to its terms" (Bethea v Thousand, 127 AD3d 798, 799 [internal quotation marks omitted]). A court also "may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing" (Henrich v Phazar Antenna Corp., 33 AD3d 864, 867 [internal quotation marks omitted]). Instead, "[t]he entire contract must be reviewed and '[p]articular words should be considered, not as if isolated from the context, but in the light of the obligation as a whole and the intention of the parties as manifested thereby. Form should not prevail over substance and a sensible meaning of words should be sought'" (Gristede's Operating Corp. v Scarsdale Shopping Ctr. Assoc., LLC, 176 AD3d 1185, 1188 [internal quotation marks omitted], quoting Riverside S. Planning Corp. v CRP/Extell Riverside, L.P., 13 NY3d 398, 404; see Cortlandt St. Recovery Corp. v Bonderman, 31 NY3d 30, 39). Here, the Supreme Court properly determined that the relevant provisions of the agreement regarding the imposition of a "Transfer Fee," when read in context, were clear and unambiguous, and established that, under the circumstances, the defendant was prohibited from imposing a "Transfer Fee" on the plaintiff pursuant to the terms of the agreement (see Greenfield v Philles Records, 98 NY2d at 569). Thus, on its motion, the plaintiff established its prima facie entitlement to judgment as a matter of law on the issue of liability on the first cause of action by submitting, among other things, a copy of the relevant pages of the agreement (see South Shore Eye Care, LLP v Lane, 242 AD3d 792, 794; Chavarria v Bruce Nagel & Partners Architects, P.C., 230 AD3d 1286, 1289; Orlando v County of Putnam, 208 AD3d at 505). In opposition, the defendant failed to raise a triable issue of fact (see Chavarria v Bruce Nagel & Partners Architects, P.C., 230 AD3d at 1289). Accordingly, the Supreme Court properly granted that branch of the plaintiff's motion which was for summary judgment on the issue of liability on the first cause of action. The Supreme Court also properly denied that branch of the plaintiff's motion which was for summary judgment on the issue of liability on the second cause of action. "Extrinsic evidence of the parties' intent may be considered only if the agreement is ambiguous, which is an issue of law for the courts to decide" (Greenfield v Philles Records, 98 NY2d at 569; see Donohue v Cuomo, 38 NY3d 1, 13; Orlando v County of Putnam, 208 AD3d at 505). Specifically, "[w]here, [*3]for example, as here, the terms of the contract are incomplete, parol evidence may be considered in order to ascertain the parties' intent" (Henrich v Phazar Antenna Corp., 33 AD3d at 867). Such evidence "is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous upon its face" (Orlando v County of Putnam, 208 AD3d at 505 [internal quotation marks omitted]; see Long Is. Minimally Invasive Surgery, P.C. v MultiPlan, Inc., 228 AD3d at 640). "Ambiguity in a contract arises when the contract, read as a whole, fails to disclose its purpose and the parties' intent, or when specific language is susceptible of two reasonable interpretations" (Bedford-Carp Constr., Inc. v Brooklyn Union Gas Co., 215 AD3d 907, 909 [internal quotation marks omitted]; see Ellington v EMI Music, Inc., 24 NY3d 239, 244). Here, the agreement did not define the terms "Welcome Call Fee" or "Manual Set Up Fee." As the defendant correctly contends, giving the term "call" in the phrase "Welcome Call Fee" its plain and ordinary meaning results in an ambiguity, as the common dictionary definition of the term supports both parties' competing interpretations of the agreement (see Ragins v Hospitals Ins. Co., Inc., 22 NY3d 1019, 1022; cf. Hansard v Federal Ins. Co., 147 AD3d 734, 737). Although this argument is raised for the first time on appeal, we reach the argument because it presents a pure question of law appearing on the face of the record which would not have been avoided if raised at the proper juncture (see Lopiccolo v Holtsville Fire Dist., 242 AD3d 862, 865; Weidner v Basser-Kaufman 228, LLC, 212 AD3d 684, 685). Moreover, while silence alone does not equate to ambiguity (see Greenfield v Philles Records, 98 NY2d at 569), the parties' intent at formation is unclear (see Henrich v Phazar Antenna Corp., 33 AD3d at 867). Under the circumstances, the submission by both parties of extrinsic evidence as an aid in construction of the agreement did not resolve the ambiguity in the agreement as a matter of law (see State of New York v Home Indem. Co., 66 NY2d 669, 672; Long Is. Minimally Invasive Surgery, P.C. v MultiPlan, Inc., 228 AD3d at 641; Dobbs v North Shore Hematology-Oncology Assoc., P.C., 106 AD3d 771, 772). Contrary to the plaintiff's contention, the doctrine of contra proferentem was inapplicable to the agreement since the record demonstrates that the plaintiff participated in negotiating the agreement's terms (see Kowalak v Keystone Med. Servs. of N.Y., P.C., 197 AD3d 893, 895; Fair Oak, LLC v Greenpoint Fin. Corp., 26 AD3d 458, 459; Coliseum Towers Assoc. v County of Nassau, 2 AD3d 562, 565). In sum, the agreement, read as a whole, fails to disclose the purpose and the parties' intent with regard to the "Welcome Call Fee" and "Manual Set Up Fee," and therefore, the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law on the issue of liability on the second cause of action (see Long Is. Minimally Invasive Surgery, P.C. v MultiPlan, Inc., 228 AD3d at 641; Henrich v Phazar Antenna Corp., 33 AD3d at 867). Accordingly, denial of that branch of the plaintiff's motion which was for summary judgment on the issue of liability on the second cause of action was proper, regardless of the sufficiency of the defendant's opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853). Moreover, the Supreme Court properly denied that branch of the plaintiff's motion which was for summary judgment on the issue of liability on the third cause of action. A spreadsheet summarizing the tax penalties incurred on the loans subserviced by the defendant, submitted by the plaintiff in support of that branch of its motion, was inadmissible, since it was not supported by a factual foundation sufficient to demonstrate its admissibility as a business record (see Dyer v 930 Flushing, LLC, 118 AD3d 742, 742-743; cf. Sager Spuck Statewide Supply Co. v Meyer, 298 AD2d 794, 795). The plaintiff's remaining submissions, including self-serving and conclusory affidavits of the plaintiff's chief servicing officer and director of loan administration, respectively, were insufficient to establish, prima facie, that the defendant was responsible for the failure to remit tax payments on the plaintiff's loans under the terms of the agreement (see Quality Aggregates, Inc. v Prime Mix Corp., 244 AD3d 887, 889; Valerio v City of New York, 238 AD3d 945, 947). The plaintiff's failure to establish its prima facie entitlement to judgment as a matter of law requires the denial of that branch of its motion which was for summary judgment on the issue of liability on the third cause of action, regardless of the sufficiency of the defendant's opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d at 853). For the same reasons, the plaintiff failed to establish, prima facie, the existence of any underlying indebtedness between the parties, as required in order to recover under its cause of action for an account stated (see NY Fuel Distribs., LLC v Eljamal, 162 AD3d 892, 895). Contrary to the [*4]plaintiff's contention, its submissions did not include any evidence showing that the defendant received an invoice that it retained for an unreasonable period of time without objection such that the only reasonable inference would be that it assented to the account items and balance allegedly due (see Styles Brook Homeowners' Assn. v Blasi, 165 AD3d 1004, 1005). Accordingly, the Supreme Court properly denied that branch of the plaintiff's motion which was for summary judgment on the issue of liability on the fourth cause of action, regardless of the sufficiency of the defendant's opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d at 853). However, the Supreme Court erred in denying that branch of the plaintiff's motion which was for summary judgment dismissing the counterclaim due to a perceived defect in the notice of motion. "[W]here, as here, there is no misunderstanding or prejudice, a court may grant relief that is warranted by the facts plainly appearing on the papers on both sides" (Matter of Blauman-Spindler v Blauman, 68 AD3d 1105, 1106 [internal quotation marks omitted]; see Robert v Azoulay Realty Corp., 209 AD3d 781, 785; Tirado v Miller, 75 AD3d 153, 158; cf. Clair v Fitzgerald, 63 AD3d 979, 980). Rather than remitting the matter to the Supreme Court to decide that branch of the plaintiff's motion on the merits, in the interest of judicial economy, we reach the merits (see Pascual v Rustic Woods Homeowners Assn., Inc., 230 AD3d 1248, 1250; Mew Equity, LLC v Sutton Land Servs., LLC, 144 AD3d 874, 877). Here, the plaintiff established its prima facie entitlement to judgment as a matter of law dismissing the counterclaim for breach of the agreement's confidentiality provision by submitting, inter alia, affidavits of its chief loan officer and its chief servicing officer, each of whom averred that no proprietary or confidential information was disclosed in violation of the agreement (see Alvarez v Prospect Hosp., 68 NY2d 320, 326). In opposition, the defendant failed to raise a triable issue of fact. Accordingly, the Supreme Court should have granted that branch of the plaintiff's motion which was for summary judgment dismissing the counterclaim. The parties' remaining contentions either are without merit or need not be reached in light of our determination. IANNACCI, J.P., DOWLING, LANDICINO and LOVE, JJ., concur. ENTER: Darrell M. Joseph Clerk of the Court