In Emigrant Mtge. Co. Inc. v Corcione, Justice Spinner slams Emigrant Mtge. Co. and its counsel for "unconscionable, shocking or egregious" behavior with an extraordinary array of exemplary damages. These damages included the following:
(1) that Emigrant be forever barred and prohibited from collecting any of the claimed interest accrued on the loan between the date of default and March 1, 2010;
(2) that Emigrant be barred and prohibited from recovering any claimed legal fees and expenses as well as any and all claimed advances to date;
(3) that Emigrant 's debt be determined at this time to be no more than the principal balance of $ 301,721.58; and
(4) exemplary damages in the sum of $ 100,000.00, recoverable by Defendants from Emigrant .
In particular, Justice Skinner justifies his imposition of exemplary damages by citing, inter alia, the bad faith with which Plaintiff's counsel conducted itself during a foreclosure settlement conference. Justice Skinner in his decision cites a decidedly one-sided "Loan Modification Agreement" proffered by Emigrant's counsel which contained such provisions as follows:
(1) that Defendants would waive their right to reorganize under the US Bankruptcy Code and that the Defendants waive their right to the protection of the Bankruptcy stay as against Emigrant;
(2) waive of any claim, counterclaim, right of recoupment, affirmative defenses or set-off of any kind;
(3) waive of an jurisdictional defenses or any defenses based on Emigrant's failure to satisfy any conditions precedent;
(4) that any payments made pursuant to the agreement are made without prejudice to the loan acceleration or pending foreclosure and that payment shall not constitute a waiver of Emigrant's right to foreclose; and
(5) all payments are due on the first of the month without any grace period, and failure to pay would entitle Emigrant to immediately resume its foreclosure action.
Justice Spinner was particularly perturbed by the waiver of the right to seek relief under the Bankruptcy Code, and posited that such a waiver would be unenforceable and void as against public policy.
Justice Spinner has a track record of punishing banks for overreaching in the foreclosure context. In an extreme case, Spinner has been known to void mortgages altogether. See article in NY Post: Judge blasts bad bank, erases 525G debt