Appellate Division, Fourth Department
Fraud in Execution — Failure to Read the Mortgage and Promissory Note
Dasz, Inc. v. Meritocracy Ventures, LTD, et al.
Appealed from Supreme Court, Chautauqua County
Background: The plaintiff commenced a foreclosure action after the defendants defaulted on a note executed by the defendants. The plaintiff submitted the note and mortgage together with an affidavit of nonpayment. The defendant shareholder of Meritocracy admitted in his affidavit that he signed the note and mortgage without first reading them. He further admitted that only the signature pages were provided to him by his attorney. The plaintiff moved for summary judgment, but was denied.
Ruling: The Appellate Division reversed. The court held that the defendants failed to proffer a valid excuse as to why the complete documents could not have been procured prior to their signing. The failure of the defendants to read the note prior to signing prevents him from establishing justifiable reliance, an essential element of fraud in the execution of the documents.
Vanessa R. Elliott of Fidelity National Law Group for the plaintiff-appellant; Herald Price Fahringer of Arthur N. Bailey & Associates for the defendants-respondents