MEMORANDUM AND ORDER Plaintiff Axos Bank brings this action seeking to enforce a promissory note against defendant 64-03 Realty LLC and a guaranty against defendants Wing Fung Chau and Wendy Chau. Before the Court are non-party Randall Funding LLC’s motion to intervene and Axos Bank’s motion for summary judgment against Wing Fung Chau and Wendy Chau.1 For the reasons set forth below, Randall Funding’s motion to intervene is denied, and Axos Bank’s motion for summary judgment is granted as to liability but not as to the amount due. BACKGROUND I. Factual Background The following facts — taken from the parties’ Rule 56.1 statements, depositions, and evidentiary filings — are uncontradicted by other evidence unless noted. Wing Fung Chau and Wendy Chau deny several facts set forth in Axos Bank’s Rule 56.1 statement on the basis that the relevant “information was never disclosed to [them],” see, e.g., Defs.’ Rule 56.1 Counterstatement (“Defs.’ Statement”) 1 (Dkt. #85-1), that Axos Bank’s recitation of the facts “is argumentative and conclusive,” see, e.g., id. 9, or that they lack “enough information or documents to deny or admit” them, see, e.g., id. 55. But because Wing Fung Chau and Wendy Chau do not “properly controvert[]” those facts “ with a specific and relevant citation to evidence in the record,” they are admitted “to the extent that they are adequately supported with record evidence.” Zaniewska v. City of New York, No. 11-CV-2446 (RRM) (VVP), 2013 WL 3990751, at *1 n.3 (E.D.N.Y. Aug. 5, 2013); see Giannullo v. City of New York, 322 F.3d 139, 140 (2d Cir. 2003) (“If the opposing party…fails to controvert a fact so set forth in the moving party’s Rule 56.1 statement, that fact will be deemed admitted.”) (citing Local R. 56.1(c)). Axos Bank is a federal savings association located in California with a branch in Nevada. Pl.’s Rule 56.1 Statement (“Pl.’s Statement”)
1-2 (Dkt. #84-1). 64-03 Realty is a company based in New York whose sole member is Wing Fung Chau. Defs.’ Statement 3. Wendy Chau is Wing Fung Chau’s adult daughter. Id. 15. In November 2019, Wing Fung Chau sought a $2 million business loan from World Business Lenders, LLC, Pl.’s Statement 21, a company based in New Jersey, Defs.’ Statement 2. World Business Lenders “either lend[s] money on its own or arrange[s] for business loans to be made by Axos, which are then serviced by” World Business Lenders. Pl.’s Statement 21. While negotiating the terms of the loan, Wing Fung Chau “primarily dealt with” a representative of World Business Lenders. Defs.’ Statement 22. During negotiations with World Business Lenders, Wing Fung Chau agreed to secure the loan with a residential building owned by 64-03 Realty. See Pl.’s Statement 4, 21. Wendy Chau owned a condominium unit inside the building. Id. 16. According to Axos Bank, Wing Fung Chau “committed to” World Business Lenders “that he would get [Wendy Chau] to provide personal financial information and to sign the loan document,” id. 27, though Wing Fung Chau and Wendy Chau dispute that he made such a commitment, Defs.’ Statement 27. In December 2019, Wing Fung Chau, Wendy Chau, and a representative of World Business Lenders met at Wing Fung Chau’s office to finalize the loan agreement. See Pl.’s Statement 33; Defs.’ Statement 33. The parties’ accounts of the meeting differ. Axos Bank alleges that Wing Fung Chau “was not under any time pressure…to close the loan.” Pl.’s Statement 34. Axos Bank cites Wing Fung Chau’s deposition, in which he testified that he had an opportunity to read the documents before he signed them. Decl. of Alexander Malyshev (“Malshev Decl.”) (Dkt. #84-2), Ex. 4 (“Wing Fung Chau Dep.”) 125:04-06 (Dkt. #84-6). Wing Fung Chau and Wendy Chau, however, allege that no one “explained the contents of the loan documents,” that they “did not have time to review the loan documents,” and that they “were pressured to close the loan.” Defs.’ Statement Counterstatement 34. They further allege that World Business Lender’s representative told Wing Fung Chau “it would be quicker if [he] used her lawyer” rather than “a lawyer of [his] own choice.” Decl. of Wing Fung Chau (“Wing Fung Chau Decl.”) 9 (Dkt. #85-2). Ultimately, the meeting culminated in the execution of the following documents: Loan Agreement. Wing Fung Chau and Wendy Chau executed a loan agreement on behalf of 64-03 Realty. Decl. of Robert Pardes (“Pardes Decl.”) (Dkt. #84-12), Ex. B (“Loan Agreement”), at 10 (ECF Pagination) (Dkt. #84-14). The agreement is on Axos Bank letterhead. See ibid. It designates Axos Bank as the lender and 64-03 Realty as the borrower. Id. 1. It states that 64-03 Realty “promise[s] to pay to the order of Axos Bank…two million dollars…plus interest” and that “the proceeds are disbursed” by Axos Bank. Ibid. (capitalization altered). It also specifies that 64-03 Realty should make payments to Axos Bank “at its offices” in “Las Vegas” or “at such other location or in such other manner as designated by” Axos Bank. Ibid. It sets forth an annual interest rate of 24 percent until June 26, 2020, at which point the interest rate increases to 36.99 percent. Id. 2. And it provides that, in the “event of default…, payment of principal and interest shall be deemed a prepayment,” subject to a “prepayment premium equal to the greater of (a) [15 percent ] of the amount of the unpaid principal as of the date of such prepayment [or] (b) the aggregate amount required to be repaid by borrower to lender…reduced by the sum of (i) the aggregate amount of any payments made by borrower to lender pursuant to [the payment schedule] before such prepayment and (ii) the amount of unpaid principal as of the date of such prepayment.” Id. 4 (capitalization altered). It further provides that the loan agreement “will be governed by federal law applicable to an FDIC insured institution and to the extent not preempted by federal law, the laws of the state of Nevada without regard to conflict of law rules.” Id. 16(c) (capitalization altered). Finally, it clarifies that the loan agreement itself, along with “all related agreements,…including, without limitation any guaranty…, constitutes the entire understanding and agreement between or among” Axos Bank, 64-03 Realty, and “any guarantor.” Id. 16(t) (capitalization altered). Guaranty. Wing Fung Chau and Wendy Chau executed a guaranty on behalf of themselves and 64-03 Realty. Pardes Decl., Ex. K (“Guaranty”), at 6-8 (ECF Pagination) (Dkt. #84-23). Like the loan agreement, the guaranty is on Axos Bank letterhead. See ibid. It designates Axos Bank as the lender, 64-03 Realty as the borrower, and “the undersigned” as the guarantors. Id. at 1. It provides that 64-03 Realty, Wing Fung Chau, and Wendy Chau “jointly and severally guarantee[] payment of…all debts, obligations and liabilities of borrower to lender arising out of credit previously granted, credit contemporaneously granted, or granted in the future by lender to borrower.” Ibid. (capitalization altered). It grants Axos Bank “a security interest in any personal property tangible or intangible now owned or hereafter acquired by the guarantor[s], including…general intangibles including any equitable interest in business entities, personal properties, or investments.” Ibid. (capitalization altered). It further provides for the payment of “costs, expenses and attorneys’ fees…incurred…in endeavoring to collect all or part of any of the obligations” guaranteed by Wing Fung Chau and Wendy Chau. Ibid. (capitalization altered). Finally, it provides that the guaranty “will be governed by federal law applicable to an FDIC insured institution and to the extent no preempted by federal law, the laws of the state of Nevada without regard to conflict of law rules.” Id. at 3 (capitalization altered). Mortgage Agreement. Wing Fung Chau and Wendy Chau executed an agreement mortgaging the residential building owned by 64-03 Realty and the unit inside that building owned by Wendy Chau. Pardes Decl., Ex. L (“Mortg. Agreement”), at 27-28 (Dkt. #84-24). The agreement lists 64-03 Realty and Wendy Chau as the mortgagors and Axos Bank as the mortgagee. Id. at 1. It provides that the mortgaged property “secure[s] the payment of all obligations which may or shall become due under the loan agreement and/or under any of the other documents evidencing, securing or executed in connection with the loan.” Id. at 1 (capitalization altered). Business Loan Summary. Wing Fung Chau executed a business loan summary on behalf of 64-03 Realty. Pardes Decl., Ex. M (“Business Loan Summary”), at 2-3 (ECF Pagination) (Dkt. #84-25). It refers to 64-03 Realty as the borrower and Axos Bank as the lender. Id. at 2. It lists the “loan amount” as $2,000,000 but clarifies that the “disbursement amount” is $1,685,479.96 to account for $105,598 in “processing fees” and $208,922.04 in “adjustments.” Ibid. (capitalization altered). It also included an “itemization” of the fees and adjustments. Id. at 4 (capitalization altered). The itemization of the adjustments includes $110,465.76 in “funds to be released upon satisfaction of escrow condition(s)” and $85,000 in “payoff for escrow for taxes.” Ibid. (capitalization altered). Finally, the summary provides that the “borrower may make a full prepayment of unpaid principal at any time accompanied by a prepayment premium.” Id. at 2 (capitalization altered). Escrow Agreements. Two escrow agreements were executed on behalf of 64-03 Realty, though it is unclear whether the signatures on those agreements belong to Wing Fung Chau or Wendy Chau. See Pardes Decl., Ex. N (“First Escrow Agreement”), at 2 (ECF Pagination) (Dkt. #84-26); Pardes Decl., Ex. O (“Second Escrow Agreement”), at 2 (ECF Pagination) (Dkt. #84-27). Both agreements list 64-03 Realty as the borrower and Axos Bank as the lender. First Escrow Agreement 2; Second Escrow Agreement 2. The first escrow agreement provides that Axos Bank will hold $85,000 in escrow pending Axos Bank’s “receipt and acceptance of the payoff statement from the tax authority relative to the delinquent New York City real property taxes on the [c]ollateral property.” First Escrow Agreement 2. The second escrow agreement provides that Axos Bank will hold $110,465.76 in escrow to cover the first twelve payments due on the loan agreement. First Escrow Agreement 2. Business Loan Purpose Affidavit. Wing Fung Chau and Wendy Chau executed an affidavit stating that “the proceeds of the loan agreement…will be used for business purposes only, and not for personal, consumer, family or household purposes or to purchase personal, consumer, family or household goods.” Pardes Decl., Ex. J (“Business Loan Purpose Aff.”), at 2 (ECF Pagination) (Dkt. #84-22) (capitalization altered). Wing Fung Chau and Wendy Chau do not dispute that they executed the documents described above, but they claim that they “reluctantly signed the loan documents without knowing [their] contents under economic stress.” Defs.’ Statement
