Case Law Summaries

Bank Building Associates, L.P. v. Metlife Capital Financing Corporation

• Opinion Date: June 14, 2001
• Real Property Law
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FORECLOSURE; MORTGAGES; BREACHES—Not every breach of a mortgage entitles a lender to foreclose and attorneys fees may not be awarded where a court feels the parties reach a “draw” in the litigation.

A mortgagee sought a judgment of foreclosure against its mortgagor for breaching its obligation to “repair or replace, as necessary, the roof on the mortgaged premises” leased by the mortgagor’s predecessor in title to a long-term tenant. The mortgagor’s suit was filed a few months after the foreclosure proceeding had begun, and it sought damages against the mortgagee, the tenant, and the roofing company. Against the mortgagee, it sought net rents it had collected from the tenant as well as a declaration, inter alia, that it had not defaulted on its mortgage. The lower court found a breach of the mortgage, but not the existence of a default sufficient to support a foreclosure judgment. It ordered that the roof be repaired or replaced using escrowed funds paid and to be paid by the long-term tenant. The lower court also concluded that neither side was entitled to counsel fees as the matter had ended in a “draw.” Both sides eventually decided to settle the claims of the mortgagor against the mortgagee, and the mortgagee then filed an appeal from the rulings it disputed. The Appellate Division felt that the lower court’s “rulings challenged on appeal were manifestly correct,” and affirmed.

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