109 Misc. 2d 546 | N.Y. Sup. Ct. | 1981
OPINION OF THE COURT
The threshold question to be determined on this motion for a deficiency judgment is — do the provisions of RPAPL 1371 apply to the Federal Deposit Insurance Corporation (FDIC) in its capacity as the liquidator-assignee of the obligations of an insolvent bank?
There appears to be little or no Federal or State law directly on this point. The court must, therefore, at the outset determine whether Federal or State law applies.
In this real estate foreclosure action, plaintiff obtained a judgment to foreclose a mortgage with respect to real property in Westbury, New York. The mortgage had previously been deposited as collateral for a loan with plaintiff’s predecessor, Franklin National Bank, which has since been declared insolvent. The mortgage having been foreclosed and the property sold, a deficiency judgment is
The plaintiff, Federal Deposit Insurance Corporation, contends that, in its capacity as a Federal agency, it is not subject to the provisions of New York State’s RPAPL 1371 in seeking a deficiency judgment, and that it is entitled to recover the entire deficiency regardless of whether or not the market value of the property exceeded the sale price at the foreclosure sale.
The statute creating the Federal Deposit Insurance Corporation (US Code, tit 12, § 1811 et seq.) and permitting it to act as the receiver or liquidating agent of an insolvent bank is silent as to whether State law or Federal law should apply in cases where, following foreclosure of a mortgage, a deficiency exists, and it is also silent as to whether an appraisal is required. While the plaintiff has cited several cases involving the VA, FHA, FNMA or SB A seeking a deficiency judgment, and the Federal law was held to apply (United States v Walker Park Realty, 383 F2d 732; United States v Merrick Sponsor Corp., 294 F Supp 1048, affd 421 F2d 1076; Branden v Driver, 441 F2d 1171; United States v Allgeyer, 466 F2d 1195; United States v McIntyre Veneer, 343 F Supp 1095), those cases involved national loan programs. In view of Congress having enacted a fairly comprehensive scheme of regulation, it was clear that questions relating to the duties, privileges and liabilities of such government agencies in those cases must be governed by Federal rules to prevent local State laws from defeating the Federal interest in uniformity in enforcing these national policies. The plaintiff also cited D’Oench, Duhme & Co. v Federal Deposit Ins. Corp. (315 US 447) where Federal law was applied in an action by the FDIC as an insurer-assignee of a bank against the maker
The instant application is not concerned with enforcement of a national housing policy, or a uniform national small business loan program, or a situation where the FDIC is entitled to a Federal rule protecting it against misrepresentations as to the financial condition of the bank it insures. Here, the Franklin National Bank acquired in an ordinary good faith commercial transaction the promissory note of Lamb Associates, which was personally guaranteed by the defendants, Alfred E. Gluckstal and Miriam Gluckstal. Both the Lamb Associates note and the Gluckstal guarantee provided therein that the note and guarantee “shall be governed by and construed in accordance with the laws of the State of New York”. Except for the privilege conferred under title 12 (§ 1823, subd [e]) of the United States Code, which is not applicable here, the FDIC as liquidator of an insolvent bank succeeds only to those rights the bank possessed in its assets, i.e., it steps into the shoes of the assignor. (Federal Deposit Ins. Corp. v Glickman, 450 F2d 416, 418; Federal Deposit Ins. Corp. v Rockelman, 460 F Supp 999; Federal Deposit Ins. Corp. v First Mtge. Investors, 485 F Supp 445; DeLorenzo v Federal Deposit Ins. Corp., 259 F Supp 193.) As stated by Justice Jackson in a concurring opinion iuD’Oench, Duhme & Co. v Federal Deposit Ins. Corp. (315 US 447, 474, supra): “No doubt many questions as to the liability of parties to commercial paper which comes into the hands of the Corporation will best be solved by applying the local law with reference to which the makers and the insured bank presumably contracted. The Corporation would succeed only to the rights which the bank itself acquired where ordinary and good-faith commercial transactions are involved.”
Defendants’ objections to the interest rate have no merit. The 60-day note dated November 4, 1974, in the sum of $80,000, executed by Lamb Associates, Inc., was issued at a discount rate of 13 /4%, and further provided that, “Interest after the maturity (whether by acceleration or otherwise) shall be payable upon demand at a rate of 3% per annum in excess of the interest on discount rate in effect at maturity.”
While it is true that the note provides for attorney’s fees of 15%, a hearing is necessary to determine the reasonableness of the amount thereof. (See Franklin Nat. Bank v Wall St. Commercial Corp., 21 AD2d 878.) Thus, this matter and the motion by plaintiff for an order confirming the referee’s report of salé and granting leave for plaintiff to enter a deficiency judgment are referred to Special Term, Part II, for hearing and determination on August 10, 1981, provided service and filing of a note of issue and payment of the required fee and a copy of the order to be submitted herein is made upon the calendar clerk on or before July 10, 1981.