Golbar Properties, Inc. v. North American Mortgage Investors

Judgment Supreme Court, New York County, entered October 24, 1979 and amended November 15, 1979 which, inter alia, dismissed the claims of all plaintiffs other than Citibank, entered judgment severally against 10 defendants and in favor of Citibank and dismissed Citibank’s claims against Lee National Corporation and Republic National Bank of New York and James Talcott, Inc., insofar as appealed from, affirmed, without costs or disbursements. We affirm the judgment on the comprehensive and thorough opinion of Justice Helman at Trial Term. We' deem it appropriate, however, in view of the position taken by our dissenting brother, to comment briefly on the need to hold a new trial on the sole issue of the value of the Citibank mortgage on the leasehold. The claim of the defendants is that Citibank should have foreclosed on the leasehold mortgage in order to mitigate the loss incurred. The findings made at Trial Term, relevant to this issue included the fact that by the end of 1974 there were no tenants who had leased, space in the premises in question; that there was a large surplus of unrented, commercial office space in New York City; and that on the foreclosure of the mortgage on the fee interest in the premises which was held in 1976 no one entered a bid except the mortgagee. In addition, no viable buyers for the premises were found. In view of these facts, the Trial Term property concluded that there was no value to the Citibank mortgage on the leasehold. Furthermore, it is to be noted that the burden of proving that Citibank failed to mitigate or avoid damages was upon the defendants (Cornell v T. V. Dev. Corp., 17 NY2d 69, 79; 13 NY Jur, Damages, §26). In this case, the facts as found by the trial court lead readily to the conclusion that the leasehold mortgage had no value and the defendants did not sustain the burden of coming forward with proof to the contrary. Concur—Birns, J. P., Markewich and Carro, JJ.