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Mortgage Elec. Registration Sys., Inc. v Lopez | NYSC “Motion for leave to enter the judgment of foreclosure and sale is denied, Affirmation Fail”

Mortgage Elec. Registration Sys., Inc. v Lopez | NYSC “Motion for leave to enter the judgment of foreclosure and sale is denied, Affirmation Fail”


NOTE: Am I the only person that sees MERS named as the Plaintiff and MERS named as a Defendant in this case?

Guess what, this isn’t the only time, there has been several instances like this case where a NY SUPREME COURT JUDGE BASHES ‘MERS’ FOR SUING ITSELF…OWNS NOTHING!

Can MERS even pursue this… since it issued an announcement on 2/2011 to banks to stop foreclosing in its name?


Decided on March 12, 2012

Supreme Court, Queens County

 

Mortgage Electronic Registration Systems, Inc., Plaintiff,

against

Cesar Lopez; MARIA LOPEZ; CHRISTIAN LOPEZ; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., as nominee for WALL STREET MORTGAGE BANKERS LTD. d/b/a POWER EXPRESS; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; CRIMINAL COURT OF THE CITY OF NEW YORK; UNITED STATES OF AMERICA; CITY OF NEW YORK BY TRANSIT ADJUDICATION BUREAU; CITY OF NEW YORK BY ENVIRONMENTAL CONTROL BOARD; CITY OF NEW YORK BY PARKING VIOLATIONS BUREAU; EMPIRE INSURANCE GROUP A/S/O CLAUDE HAKIM; JAMAICA SEVEN LLC; THE BIG M CORPORATION d/b/a MANDEE; EMPIRE PORTFOLIOS, INC.; PRA III LCC; AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY INC.; STATE FARM MUTUAL AUTOMOBILE INSURANCE, as sub. of ALBERT SPENCER; NY FINANCIAL SERVICES, LLC; PORTFOLIO RECOVERY ASSOCIATES LLC, WORKERS’ COMPENSATION BOARD OF NEW YORK; LIBERTY POINT CORP.; STUYVESANT FUEL SERVICE CORP.; PEOPLE OF THE STATE OF NEW YORK; METRO PORTFOLIOS INC.; ASTRID LOPEZ; KATERA JOHNSON; ARNOLD RIVERS, Defendants.

7439/09

Robert J. McDonald, J.

In this foreclosure action commenced on March 25, 2009, plaintiff previously obtained an order dated July 28, 2009, appointing a referee to ascertain and compute the amount due plaintiff and to examine and report whether the mortgaged premises known as 168 Marvin Street, Far Rockaway, New York can be sold in parcels. The Referee appointed pursuant to such order executed his oath and rendered his report dated September 1, 2009, indicating the sum of $486,471.41 was due plaintiff as of August 13, 2009, and that the mortgaged premises should be sold in one parcel.

Plaintiff previously sought to obtain a judgment of foreclosure and sale, but by order dated April 22, 2010, the application was denied with leave to renew following the holding of a conference, or evidence that the mortgagors failed to appear for a conference. The court determined that a settlement conference had yet to be held in the Residential Foreclosure Settlement Part, plaintiff had failed to provide certain documents, and the proposed judgment lacked a certain provision. After defendants Lopez failed to attend the settlement conference held on August 6, 2010, plaintiff renewed its application, but by order dated November 19, 2010, that application also was denied with leave to renew upon proper papers, including an affirmation by plaintiff’s counsel pursuant to the administrative order of the Chief Administrative Judge of the Court dated October 20, 2010 then in effect (see AO/548/10). Plaintiff asserts that by assignment dated April 4, 2011, it, as nominee for Wall Street Mortgage Bankers Ltd., d/b/ Power Express (Wall Street Mortgage), the mortgagee, assigned the subject mortgage to Vanderbilt.

That branch of the motion by plaintiff for leave to amend the caption as proposed is denied (CPLR 1018). Although substitution is appropriate where the mortgage and note have been assigned to a new party after commencement of a foreclosure action (see Saxon Mortg. [*2]Services, Inc. v Coakley, 83 AD3d 1038 [2011], lv to appeal denied 17 NY3d 708 [2011]), plaintiff has failed to establish that Vanderbilt presently holds the note, which was endorsed by Christine Holman, assistant vice-president of Wall Street Mortgage, in blank and without recourse on behalf of Wall Street Mortgage (see Bank of New York v Silverberg, 86 AD3d 274, 280 [2011]). Thus, plaintiff has failed to show that Vanderbilt rightfully may pursue, or be awarded, a judgment of foreclosure and sale (see id.).

With respect to the cross motion,

“[a] defendant who has failed to timely appear or answer the complaint must provide a reasonable excuse for the default and demonstrate a meritorious defense to the action, when opposing a motion for leave to enter judgment upon its failure to appear or answer and moving to extend the time to answer or to compel the acceptance of an untimely answer (see Juseinoski v Board of Educ. of City of NY, 15 AD3d 353, 356 [2005]; Ennis v Lema, 305 AD2d 632, 633 [2003])” (see Lipp v Port Auth. of NY & N.J., 34 AD3d 649 [2006]).

The determination of what constitutes a reasonable excuse for a default in answering lies within the sound discretion of the court (see Adolph H. Schreiber Hebrew Academy of Rockland, Inc. v Needleman, 90 AD3d 791 [2011]; Maspeth Fed. Sav. & Loan Assn. v McGown, 77 AD3d 889 [2010]; Grutman v Southgate At Bar Harbor Home Owners’ Assn., 207 AD2d 526, 527 [1994]).

Defendants Lopez, appearing by Queens Legal Services, assert that they were victims of predatory lending practices committed by the lender regarding the financing of the purchase of their home from Autumn Equities, LLC (Autumn Equities). They claim that a real estate agent employed by Autumn Equities/United Homes induced them to purchase a two-family house, which was then still under construction, for $579,000.00, without a down payment, advising them, in effect, they could live with defendant Christian Lopez, their adult-aged son, in one of the units, and rent out the other unit, to make the house affordable. They also claim that the agent advised them they would need two mortgage loans to finance the entire $579,000.00 purchase price, and that his office could arrange for them to get two fixed-rate mortgages with a combined monthly payment of approximately $3500.00 per month from Wall Street Mortgage. They further claim that the agent failed to tell them they had the right to hire an independent real estate appraiser or home inspector, or shop for financing from a lender of their own choosing. Defendants Lopez additionally claim that at the suggestion of Wall Street Mortgage, they added defendant Christian Lopez as an applicant to the mortgage application to insure approval of the loans. They assert Wall Street Mortgage failed to disclose to them when they applied for the loans that the primary mortgage loan would have an adjustable interest rate, the initial payments would be sufficient only to pay the interest accruing on the loan, and the monthly mortgage payment would increase significantly once the loan became fully amoritizing. Defendants Lopez also claim that they were represented at the closing by an attorney provided to them by Autumn Equities or United Homes, but still no one disclosed to them the actual loan terms. They further claim that the “Truth in Lending” disclosure form provided to them at the closing fails to [*3]disclose, clearly and conspicuously the proper payment schedule reflecting the terms stated in the note. According to defendants Lopez, they never would have entered into the transaction if they knew the truth about the repayment terms of the primary mortgage loan. They assert they struggled to pay their mortgage payments for two years, but because of illness and financial setbacks, they were no longer able to maintain their payments, and the property fell into foreclosure.

Defendants Lopez state that shortly after they received the summons and complaint, they sought help from the Legal Aid Society at a foreclosure prevention clinic held at the Queens Civil Courthouse. Sumani Lanka, a staff attorney with Legal Aid Society, states she informed defendants Lopez that the Society would not be able to represent them in this case because of the Society’s own limited resources. Defendants Lopez assert they were unaware of the availability of any other free or low-cost legal services, and believed that without legal representation, they could not defend themselves in this action. They state the servicing agent for the lender denied their application for a loan modification, and the servicing agent and Vanderbilt denied their requests to consent to proposed short sales. Defendants Lopez also state that Vanderbilt then contacted them asking them to reapply for a loan modification, which they did. They additionally state that on or about August 11, 2011, they attended a foreclosure clinic at the Queens Civil Courthouse, and met with Franklin Romeo, of counsel to Jennifer Ching, Esq., Queens Legal Services, who informed them that in the event his office was not able to represent them, they had the right to represent themselves in the case, but would need to make a motion since their time to respond to the complaint had expired. Defendants Lopez state that prior to this conversation, they did not realize they could have filed an answer to the complaint without the assistance of an attorney. They state that Mr. Romeo informed them a few weeks later that plaintiff had filed the instant motion. Defendants Lopez assert that Vanderbilt then denied their loan modification application by letter dated August 31, 2011.

The copy of the summons on file in the clerk’s records in this action provided notice of commencement of this suit, but also called upon defendants Lopez to answer the complaint and to serve a copy on plaintiff’s attorney. It warned, in bold type, that failure to respond to the summons and complaint by “serving the answer on the plaintiff for the mortgage company who filed this foreclosure proceeding against you and filing the answer with the court, a default judgment may be entered and you can lose your home.” Furthermore, it advised (again in bold type) defendants Lopez to “[s]peak to an attorney or go to the court where your case is pending for further information on how to answer the summons and protect your property.” It, thus, clearly provided notice that if defendants Lopez did not have an attorney or were unable to obtain legal representation, they could proceed to the court and get help in answering the complaint. In addition, it reiterated, in larger, bold type, “[Y]OU MUST RESPOND BY SERVING A COPY OF THE ANSWER ON THE ATTORNEY FOR THE PLAINTIFF (MORTGAGE COMPANY).” Defendants Lopez make no claim that they were not personally served with a copy of the summons and complaint, or the additional notice provided pursuant to CPLR 3215(g)(3) by service of a copy of the summons by first-class mail (see affidavit of Erin E. DiFrancesca dated May 27, 2009 annexed as Plaintiff’s Exhibit B in opposition). Therefore, [*4]defendants Lopez have failed to show that they reasonably believed they could not defend themselves in the case without an attorney. Defendants Lopez, moreover, make no claim that they were lulled into inaction as a consequence of any negotiations with the servicing agent or Vanderbilt. Under such circumstances, defendants Lopez have failed to demonstrate a reasonable excuse for their failure to timely serve an answer. The cross motion by defendants Lopez to vacate their default in answering and for leave to serve a late answer is denied (see C & H Import & Export, Inc. v MNA Global, Inc., 79 AD3d 784 [2010]; 599 Ralph Ave. Dev., LLC v 799 Sterling Inc., 34 AD3d 726 [2006]; Elite Limousine Plus, Inc. v Allcity Ins. Co., 266 AD2d 259 [1999] ).

That branch of the motion by plaintiff for leave to amend the complaint nunc pro tunc to the time of the commencement of the action to reflect that amount of the claimed monthly installment payment was $2389.24 and the date of the claimed default was December 1, 2008 is granted.

That branch of the motion by plaintiff to confirm the Referee’s report of computation is granted.

To the extent defendants Lopez oppose that branch of the motion by plaintiff for leave to enter a judgment of foreclosure and sale on the ground plaintiff failed to serve them with a copy of the notice of the motion for a judgment of foreclosure and sale, they were not entitled to such notice, because they failed to answer the complaint, or appear and demand such personal service (see Polish Nat. Alliance of Brooklyn, U.S.A. v White Eagle Hall Co., 98 AD2d 400, 404 [1983]).

Defendants Lopez also oppose that branch of the motion by plaintiff for leave to enter a judgment of foreclosure and sale on the ground plaintiff has failed to demonstrate it served them with a notice pursuant to RPAPL 1304. Plaintiff’s counsel previously submitted a statement dated September 10, 2009 to the court indicating that the subject mortgage is neither a subprime home loan nor a high-cost home loan, and that the annual percentage rate at consummation did not exceed three percentage points over the yield on treasury securities as of the fifteenth day of the month in which the loan was consummated. In addition, the subject mortgage is not a “non-traditional home loan” as that phrase was defined in the version of RPAPL 1304 in effect at the time of the commencement of this action (see L 2008, c 472, § 2, eff. Sept. 1, 2008). A nontraditional home loan was defined as “a payment option adjustable rate mortgage or an interest only loan consummated between January first, two thousand three and September first, two thousand eight” (see former RPAPL 1304[5][e]). The subject mortgage is not a “payment option adjustable rate mortgage” because it does not grant the mortgagor an option to make a payment of less than the actual payment of interest and principal necessary to amortize the loan. Nor is it an “interest only” loan insofar as the note calls for interest only for the first ten years of the loan, but principal and interest for the next 20 years. Under such circumstances, plaintiff was under no obligation to serve defendants Lopez with a notice pursuant to RPAPL 1304 as a condition precedent to suit (cf. Aurora Loan Services, LLC v Weisblum, 85 AD3d 95 [2011]). [*5]

Plaintiff’s counsel submits her affirmation dated August 11, 2011, pursuant to the administrative order the Chief Administrative Judge of the Court dated March 11, 2011 (AO 431/11), indicating that she communicated with one “Jackie Mash,” “Legal Affairs Representative,” of plaintiff on June 21, 2011. According to the affirmation, Jackie Mash informed plaintiff’s counsel that she “personally reviewed plaintiff’s documents and records relating to this case for factual accuracy; and … confirmed the factual accuracy of the allegations set forth in the Complaint and any supporting affidavits or affirmations filed with the Court, as well the accuracy of the notarizations contained in the supporting documents filed therewith” (emphasis supplied). Such affirmation, however, is at odds with the other affirmation of plaintiff’s counsel dated June 4, 2011 wherein counsel stated the complaint contained errors as to the date of default and the amount of the monthly payment. Thus, the branch of the motion for leave to enter the judgment of foreclosure and sale is denied without prejudice to renewal based upon proper papers, including an affirmation by plaintiff’s counsel, clarifying this issue, and upon proper service, including service upon defendants Lopez (see Home Sav. Bank v Chiola, 203 AD2d 525 [1994]).

Dated: Long Island City, NY

March 12, 2012

______________________________

ROBERT J. MCDONALD

J.S.C.

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Deutsche Bank Trust Co. Ams. v Day | NYSC Denies Motion For Summary Judgment Due to Lack of Affidavits

Deutsche Bank Trust Co. Ams. v Day | NYSC Denies Motion For Summary Judgment Due to Lack of Affidavits


SUPREME COURT – STATE OF NEW YORK
IAS PART 43 – SUFFOLK COUNTY

DEUTSCHE BANK TRUST COMPANY AMERICAS
AS INDENTURE TRUSTEE FOR THE REGISTERED
HOLDERS OF SAXON ASSET SECURITIES TRUST
2005-3 MORTGAGE LOAN ASSET BACKED NOTES,
SERIES 2005-3,
Plaintiff,

-against-

DENNIS D. DAY, SMI MORTGAGE,
“JOHN DOE #1″ through “JOHN DOE #12″,
the last twelve names being fictitious and unknown to
plaintiff, the persons or parties intended being the
tenants, occupants. persons or corporations, if any,
having or claiming an interest in or lien upon the
premises, described in the complaint,
Defendant, ,

EXCERPT:

The plaintiff alleges in the verified complaint that there has been compliance with RPAPL
§ 1304; however, neither a copy of the purported 90-day notice nor an affidavit of service of the
notice in compliance with RPAPI. § 1304 has been annexed to the moving papers (see, Aurora Loan
Servs., LLC v Weisblum, 85 AD3d 95, supra). Without an affidavit of service from one with
personal knowledge of compliance with the specific service requirements of RPAPI., § 1304 or, in
the alternative, an affidavit sufficient to show why the requirements of § 1304 do not apply, the
Court may not grant an order of reference.

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U.S. Bank N.A.. v Solorin | NYSC Dismisses Complaint “Abandoned, Steven J. Baum PC Plaintiff Attorney Affirmation”

U.S. Bank N.A.. v Solorin | NYSC Dismisses Complaint “Abandoned, Steven J. Baum PC Plaintiff Attorney Affirmation”


Decided on November 10, 2011

Supreme Court, Queens County

 

U.S. Bank National Association, AS TRUSTEE FOR CSMC 2007-4, 3476 Stateview Boulevard, Ft. Mill, SC 29715, Plaintiff,

against

Ramon M. Solorin, ET.AL., Defendant.

5769/10
Attorney for Plaintiff:

Steven J. Baum, PC

900 Merchants Concourse, Ste. 116

Attorney for Defendant:

R. David Marquez, PC

50 Clinton Street, Ste. 98

Hempstead, New York 11550

Phyllis Orlikoff Flug, J.

The following papers numbered 1 to 4 read on this motion

Notice of Motion1 – 2

Affirmation in Opposition3 [*2]

Reply Affirmation4

Defendant, Ramon Solorin, moves to dismiss plaintiff’s Complaint as asserted against him.

This is an action to foreclose a mortgage on the real property located at 23-11 99th Street, in the County of Queens, City and State of New York.

CPLR 3215[c] provide that “[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned . . . unless sufficient cause is shown why the complaint should not be dismissed.”

Plaintiff served the Summons and Complaint on defendant Solorin by substitute service on March 11, 2010. Defendant Solorin filed an answer on May 19, 2010. On May 27, 2010, plaintiff rejected defendant’s answer as untimely, stating that defendant’s time to answer had expired on April 25, 2010.

Although defendant has been in default since April 25, 2010, plaintiff has not yet moved for entry of a default judgment against him. While plaintiff moved on August 3, 2010, for an order appointing a receiver, plaintiff’s notice of motion did not contain any request for a default judgment (See Arriaga v. Michael Laub Co., 233 AD2d 244, 245 [1st Dept. 1996]). In any event, plaintiff voluntarily withdrew that motion on November 18, 2010.

Plaintiff contends that it has demonstrated sufficient cause as to why the complaint should not be dismissed. Specifically, plaintiff contends that its attempts to comply with Administrative Order 548/10 (as amended by AO 431/11) provides a reasonable excuse for its failure to comply with CPLR § 3215[c].

AO 548/10 went into effect on October 20. 2010 and requires that an attorney for plaintiff in a residential foreclosure action certify the accuracy of the papers filed in support of the action by submitting an affirmation from the attorney that he or she communicated with a representative of the plaintiff and was informed that the representative personally reviewed plaintiff’s documents and records relating to the case, reviewed the Summons and Complaint and all other papers filed in support of the foreclosure, and confirmed the accuracy of the court filings and the notarizations contained therein.

As AO 548/10 merely requires that attorneys certify that they have met a minimum standard of diligence, it does not provide plaintiff with a reasonable excuse for delaying approximately sixteen months before moving for default. Indeed, plaintiff’s papers indicate that [*3]they have still been unable to comply with AO 548/10, despite the fact that it had been in effect for nearly ten months at the time of the motion.

Accordingly, defendant’s motion to dismiss is granted, and Plaintiff’s Complaint is dismissed as asserted against him. The parties’ remaining contentions have been rendered moot.

November 10, 2011 ____________________

J.S.C.

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HSBC v. NORTON  [NYSC] “Steven J. Baum PC”, “Plaintiff’s attorney shall supply the supplemental attorney affirmation and plaintiff’s affidavit to the Court”

HSBC v. NORTON [NYSC] “Steven J. Baum PC”, “Plaintiff’s attorney shall supply the supplemental attorney affirmation and plaintiff’s affidavit to the Court”


Decided on November 4, 2011

Supreme Court, Yates County

 

HSBC Bank, USA, National Association, As Trustee for WFHET 2006-2, Plaintiff,

against

William F. Norton, a/k/a William Norton, Michelle L. Norton, Defendants.

2009-0488

Steven J. Baum, P.C.,
John A. Belluscio, Esq., of counsel
Attorneys for Plaintiff,

Barrett Greisberger, LLP,.
Mark M. Greisberger, Esq., of counsel,
Attorneys for Defendant.

W. Patrick Falvey, J.

This is a residential foreclosure proceeding. Plaintiff moves for an order nunc pro tunc validating the court’s January 21, 2010 order of reference, the court’s April 26, 2010 judgment of foreclosure, and substituting nunc pro tunc the affidavit of merit and amount due attached to the motion papers, in place of the affidavit attached to the initial motion papers.

The judgment of foreclosure was executed prior to Chief Administrative Judge Pfau’s Administrative Order 548-10 (revised November 18, 2011) requiring plaintiffs’ attorneys in mortgage foreclosures to confirm the factual accuracy of allegations set forth in the Complaint and any supporting affidavits or affirmations filed with the court, as well as the accuracy of the notarizations contained in the supporting documents filed therewith.

Since the order of reference and judgment predated implementation of AO 548-10, in preparing for the foreclosure sale, plaintiff’s attorney attempted to gather the information required to make the affirmation. In doing so, plaintiff’s attorney could not confirm via the attorney’s contacts with the client, the accuracy of the execution and notarization of the original affidavit of merit and amount due, and so seeks this order.

The plaintiff’s attorney was able to obtain a new affidavit of merit by Kara Dolch, a Vice President of Wells Fargo Bank, the servicer for plaintiff. Ex E. This affidavit confirms:

Plaintiff is the holder of the note and mortgage of record.

There is a default because defendants failed to make the February 1, 2009 payment and subsequent payments.

The 90 day pre-foreclosure notice was sent to borrowers by registered or certified mail and by first class mail to last known address of the borrowers, and if different, to the residence that is the subject of the mortgage.

The 90 day pre-foreclosure notice was mailed prior to February 13, 2010, and there was no filing requirement with the superintendent of banks at that time.

A notice of default was mailed to the mortgagors at the last known address provided by the mortgagors. The default stated in the notice was not cured.

Based on the default, plaintiff elected to call due the entire unpaid principal balance with interest, disbursements, attorney fees, costs.

The amount due as reflected in the complaint is $343,299.46, plus 7.375% interest from 1/1/09, plus late charges, etc.

At the initial return, defendants’ attorney appeared, and informed the court that his clients had recently received a letter from the plaintiff, inviting the defendants to apply for a mortgage modification. The Court then adjourned the matter several times to allow the parties to sort out this new development. At the last appearance date of November 1, 2011, neither of the parties offered any information concerning a modification, and so the court determined that it would decide the motion, and reserved decision.

There are form affidavits and affirmations prepared by the Unified Court System, to cover the information required by Judge Pfau’s order. The attorney’s affirmation in support of plaintiff’s motion by Bridget Faso does not contain all the information contained in this form affirmation, and so the court will not grant the relief requested until Ms Faso, or another attorney from the Baum firm, provides an additional affirmation with the missing information, including:

The date she communicated with which representatives of plaintiff, their names and titles.

Based on her communications with these named representatives, as well as upon her own inspection and other reasonable inquiry under the circumstances, she affirms to the best of her knowledge, information and belief, the summons, complaint and other papers filed or submitted to the court ( with the exception of the prior affidavit of merit) contain no false statements of fact or law. That she understands her continuing obligation to amend the affirmation in light of newly discovered material facts following its filing.

That she is aware of her obligations under 22 NYCRR part 1200 and part 130. [*2]

Additionally, Ms. Dolch’s affidavit does not contain all the information required under the rule, and so the court requires that she, or another officer, with knowledge, on behalf of plaintiff, supplement her affidavit to state, if applicable, that she performed the following actions in order to confirm the truth and veracity of the statements set forth, to wit:

1.That she/he reviewed the summons and complaint to confirm the factual accuracy of the identity of the proper plaintiff, the defaults and the amounts claimed to be due to plaintiff as set forth therein,

2.That she/he confirmed the affidavits executed and submitted by plaintiff together with this application have been personally reviewed by her, that the notary acknowledging the affiant’s signature followed applicable law in notarizing the affiant’s signature, and

3.That she/he is unable to confirm or deny that the underlying documents previously filed with the court have been properly reviewed or notarized.

Upon the foregoing, it is therefore,

ORDERED that plaintiff’s attorney shall supply the supplemental attorney affirmation and plaintiff’s affidavit to the Court and opposing counsel by January 2, 2012; and it is further

ORDERED that if these supplemental papers are not received and served upon opposing counsel by January 2, 2012, or if they do not contain all the information herein required by the court, the court will dismiss the foreclosure action, with prejudice.

Submission of an order by the parties is not necessary. The mailing of a copy of this Order and Judgment by this Court shall not constitute notice of entry.

The foregoing constitutes the Decision, Judgment and Order of this Court.

SO ORDERED.

Dated: November, 2011

________________________________

W. Patrick Falvey

Acting Justice Supreme Court

Yates County

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Downey Sav. & Loan Assn., F.A. v Trujillo | NY Judge Schack Slams Ebenezer Scrooge “Under the penalties of perjury, Deceptive trick and fraud upon the Court, “Bah, humbug!”

Downey Sav. & Loan Assn., F.A. v Trujillo | NY Judge Schack Slams Ebenezer Scrooge “Under the penalties of perjury, Deceptive trick and fraud upon the Court, “Bah, humbug!”


Decided on August 12, 2011

Supreme Court, Kings County

.

Downey Savings and Loan Association, F.A., Plaintiff,

against

Dario Trujillo, et. al., Defendants.


22268/08

Plaintiff

Nicholas E. Perciballi, Esq.

Druckman Law Group, PLLC

Westbury Jericho NY

Arthur M. Schack, J.

Plaintiff’s counsel, in this foreclosure action, engaged in possible sanctionable conduct by affirming “under the penalties of perjury” to a false statement. In her January 7, 2011 affirmation, required by Administrative Order (AO) 548/10 of October 20, 2010, plaintiff’s counsel, Margaret E. Carucci, Esq., of DRUCKMAN LAW GROUP PLLC (DRUCKMAN), was required to confirm the accuracy of the subject foreclosure papers, documents and notarizations. Ms. Carucci stated that she confirmed the accuracy by communicating, on December 24, 2010, with Tammy Denson, an “Officer of Downey Savings and Loan.” While Ms. Carucci might have communicated with Tammy Denson on Christmas Eve 2010, plaintiff DOWNEY SAVINGS AND LOAN ASSOCIATION, F.A. (DOWNEY) ceased to exist on November 21, 2008. (See Federal Deposit Insurance Company Press Release 124-2008 of November 21, 2008). [*2]DOWNEY, on December 24, 2010, resided with the Ghost of Christmas Past. Tammy Denson, until November 21, 2008 may have been employed by DOWNEY, but is now employed by DOWNEY’s successor in interest, U.S. BANK NATIONAL ASSOCIATION (US BANK). This Court, as will be explained, gave DRUCKMAN an opportunity to correct their AO 548/10 affirmation, in my May 9, 2010 order, but DRUCKMAN failed to do so. Therefore, because DRUCKMAN violated AO548/10 with a false affirmation and my subsequent May 9, 2010 order, the instant foreclosure action, for procedural reasons, is dismissed with prejudice.

Ms. Carucci affirmed “under the penalties of perjury” that she communicated on Christmas Eve 2010 with an officer of a defunct financial institution. This is a deceptive trick and fraud upon the Court. It cannot be tolerated. This Christmas Eve conduct, in the words of Ebenezer Scrooge, is “Bah, humbug!”

Conduct is frivolous if it “asserts material factual statements that are false,” an apt definition for “humbuggery.” Therefore, Margaret E. Carucci, Esq. and DRUCKMAN LAW GROUP PLLC, will be given an opportunity to be heard why this Court should not sanction them for making a “frivolous motion,” pursuant to 22 NYCRR §130-1.1.

Background

Plaintiff DOWNEY commenced this foreclosure action for the premises located at 70 Somers Street, Brooklyn, New York (Block 1542, Lot 21, County of Kings), on July 31, 2008, by filing the summons, complaint and notice of pendency with the Kings County Clerk’s Office. Defendant DARIO TRUJILLO (TRUJILLO) never answered. I issued an order of reference for the subject premises on July 15, 2010. Then, plaintiff DOWNEY’s counsel, DRUCKMAN, filed with the Kings County Clerk’s Office, on January 26, 2011, a motion for a judgment of foreclosure and sale.

At the May 9, 2011 oral arguments, on the motion for a judgment of foreclosure and sale, I discovered that the subject TRUJILLO mortgage and note had been assigned to U.S. BANK NATIONAL ASSOCIATION (US BANK) by the Federal Deposit Insurance Company (FDIC) as Receiver for DOWNEY. The FDIC seized DOWNEY’s assets on November 21, 2008 and assigned them to US BANK. Svetlana Kaplun, Esq., of DRUCKMAN, in her January 21, 2011 affirmation in support of the motion for a judgment of foreclosure and sale, stated, in ¶ 13:

The mortgage at issue has been assigned to US BANK NATIONAL

ASSOCIATION, AS SUCCESSOR IN INTEREST TO THE FEDERAL

DEPOSIT INSURANCE CORPORATION AS RECEIVER FOR DOWNEY SAVING AND LOAN ASSOCIATION, F.A. Accordingly, it is

respectfully requested that name of plaintiff be amended to US BANK NATIONAL ASSOCIATION, AS SUCCESSOR IN INTEREST TO THE FEDERAL DEPOSIT INSURANCE CORPORATION AS RECEIVER FOR DOWNEY SAVING AND LOAN ASSOCIATION, F.A. A copy of

the assignment is attached hereto and made a part hereof.

An executed copy of the April 20, 2009 assignment and assumption of interests and obligations from assignor FDIC as Receiver for DOWNEY to assignee US BANK was attached to the motion.

Also attached to the motion was the January 7, 2011 affirmation of Ms. Carucci, as per AO 548/10. According to the October 20, 2010 Office of Court Administration’s press release [*3]about the filing requirements of AO 548/10:

The New York State court system has instituted a new filing

requirement in residential foreclosure cases to protect the integrity

of the foreclosure process and prevent wrongful foreclosures. Chief

Judge Jonathan Lippman today announced that plaintiff’s counsel in

foreclosure actions will be required to file an affirmation certifying

that counsel has taken reasonable steps — including inquiry to banks

and lenders and careful review of the papers filed in the case —

to verify the accuracy of documents filed in support of residential

foreclosures. The new filing requirement was introduced by the Chief

Judge in response to recent disclosures by major mortgage lenders

of significant insufficiencies — including widespread deficiencies in

notarization and “robosigning” of supporting documents — in residential

foreclosure filings in courts nationwide. The new requirement is

effective immediately and was created with the approval of the

Presiding Justices of all four Judicial Departments.

Chief Judge Lippman said, “We cannot allow the courts in

New York State to stand by idly and be party to what we now know

is a deeply flawed process, especially when that process involves

basic human needs — such as a family home — during this period

of economic crisis. This new filing requirement will play a vital role

in ensuring that the documents judges rely on will be thoroughly

examined, accurate, and error-free before any judge is asked to take

the drastic step of foreclosure.” [Emphasis added]

(See Gretchen Morgenson and Andrew Martin, Big Legal Clash on

Foreclosure is Taking Shape, New York Times, Oct. 21, 2010; Andrew

Keshner, New Court Rules Says Attorneys Must Verify Foreclosure Papers,

NYLJ, Oct. 21, 2010).

Ms. Carucci, in her January 7, 2011 AO 548/10 affirmation, affirmed “under the penalties of perjury”:

2. On December 24, 2010, I communicated with the following

representative or representatives of Plaintiff, who informed me that

he/she/they (a) personally reviewed plaintiff’s documents and records [*4]

relating to this case for factual accuracy; and (b) confirmed the

factual accuracy and allegations set forth in the Complaint and

any supporting affirmations filed with the Court, as well as the

accuracy of the notarizations contained in the supporting documents

filed therewith.

NameTitle

Tammy DensonOfficer of Downey Savings and Loan

949-798-6052

3. Based upon my communication with Tammy Denson, as well

as upon my inspection and reasonable inquiry under the circumstances,

I affirm that, to the best of my knowledge, information, and belief, the

Summons and Complaint, and other papers filed or submitted to the

Court in this matter contain no false statements of fact or law . . .

4. I am aware of my obligations under New York Rules of

Professional Conduct (22 NYCRR Part 1200) and 22 NYCRR Part 130.

[Emphasis added]

The Court is concerned that Ms. Carucci affirmed to a falsehood, namely, that Ms. Denson is an Officer of defunct DOWNEY. In the presence of Svetlana Kaplun, Esq., who appeared on behalf of plaintiff’s counsel, DRUCKMAN, I called the above-listed telephone number for Tammy Denson. Ms. Denson did not answer the phone, but a voice mail message stated that she was an officer of US BANK, not DOWNEY. Therefore, I denied the motion for a judgment of foreclosure and sale, and issued, at the May 9, 2011 oral arguments, the following short-form order:

Plaintiff’s motion for a judgment of foreclosure and sale is

denied without prejudice to renew within sixty (60) days of this

decision and order. Plaintiff’s counsel claims to represent plaintiff

Downey, a defunct financial institution. Further it appears that

Margaret E. Carucci, Esq., an attorney for plaintiff possibly filed a

false affirmation with the Court. Ms. Carucci affirms under penalty of

perjury that a Tammy Denson is an officer of plaintiff Downey S & L,

which did not exist on 12/24/10, when she signed a sworn statement

as an “officer.”

The Court called Ms. Denson in the presence of Svetlana

Kaplun, Esq. today and Ms. Denson, in her voice mail, stated she is [*5]

a loan official of US Bank, not Downey S & L.

Plaintiff has 60 days to file an affirmation from an officer

with the officer’s title with US Bank, if it is the true owner of

the subject mortgage and note, as well as a renewed motion for a

judgment of foreclosure and sale.

Then, I received a letter, dated July 8, 2011 (the 60-day deadline for the affirmation from an officer of US BANK and the renewed motion), from Nicholas E. Perciballi, Esq. of DRUCKMAN, about the instant action. Mr. Perciballi stated “[t]his office represents the Plaintiff . . . Please advised that Margaret E. Carucci, Esq. is no longer employed with this firm. With regard to your Short From Order dated May 9, 2011, we respectfully request an additional 60 days so that we may work with our client to produce the documents needed to comply with your Order [sic].” The Court has no idea why DRUCKMAN waited until the last possible day to send me the July 8, 2011-letter. The termination of Ms. Carucci’s employment is not an acceptable excuse for delay. I gave DRUCKMAN, on May 9, 2011, sixty days to file a correct AO 548/10 affirmation. It is a waste of judicial resources to grant plaintiff “an additional 60 days so that we may work with our client to produce the documents needed to comply with your Order.” Court orders are not issued to be flouted.

Moreover, according to the Office of Court Administration’s Attorney Registry, Margaret E. Carucci, Esq., still lists her business address as DRUCKMAN LAW GROUP PLLC, in Westbury, New York. If she is no longer employed by DRUCKMAN, she might be in violation of 22 NYCRR 118.1 (f). This requires an attorney who changes the business address in his or her registration to “file an amended statement within 30 days of such change.”

Dismissal of the instant action

Plaintiff’s counsel, Mr. Perciballi, in his July 8, 2011-letter, did not present a reasonable excuse for the Court to grant a sixty-day extension to produce the documents required in my May 9, 2011 order. The Court does not work for US BANK and cannot wait for the multibillion dollar financial behemoth US BANK, to “produce the documents need to comply with” my May 9, 2011 order. The failure of plaintiff’s counsel, DRUCKMAN LAW GROUP PLLC to comply with two court orders, Chief Administrative Judge Pfau’s October 20, 2010 AO 548/10 and my May 9, 2011 order, demonstrates delinquent conduct by DRUCKMAN LAW GROUP PLLC. This mandates, for procedural reasons, the dismissal with prejudice of the instant action. Failure to comply with court-ordered time frames must be taken seriously and not ignored. There are consequences for ignoring court orders. The Court of Appeals, in Gibbs v St. Barnabas Hosp. (16 NY3d 74, 81 [2010]), instructed:

As this Court has repeatedly emphasized, our court system is

dependent on all parties engaged in litigation abiding by the rules of

proper practice (see e.g. Brill v City of New York, 2 NY3d 748 [2004];

Kihl v Pfeffer, 94 NY2d 118 [1999]). The failure to comply with

deadlines not only impairs the efficient functioning of the courts and [*6]

the adjudication of claims, but it places jurists unnecessarily in the

position of having to order enforcement remedies to respond to the

delinquent conduct of members of the bar, often to the detriment of

the litigants they represent. Chronic noncompliance with deadlines

breeds disrespect for the dictates of the Civil Practice Law and Rules

and a culture in which cases can linger for years without resolution.

Furthermore, those lawyers who engage their best efforts to comply

with practice rules are also effectively penalized because they must

somehow explain to their clients why they cannot secure timely

responses from recalcitrant adversaries, which leads to the erosion

of their attorney-client relationships as well. For these reasons, it

is important to adhere to the position we declared a decade ago that

[i]f the credibility of court orders and the integrity of our judicial

system are to be maintained, a litigant cannot ignore court orders

with impunity [Emphasis added].” (Kihl, 94 NY2d at 123).

“Litigation cannot be conducted efficiently if deadlines are not taken seriously, and

we make clear again, as we have several times before, that disregard of deadlines should not and will not be tolerated (see Miceli v State Farm Mut. Auto Ins. Co., 3 NY3d 725 [2004]; Brill v City of New York, 2 NY3d 748 [2004]; Kihl v Pfeffer, 94 NY2d 118 [1999]) [Emphasis added].” (Andrea v Arnone, Hedin, Casker, Kennedy and Drake, Architects and Landscape Architects, P.C., 5 NY3d 514, 521 [2005]).As we made clear in Brill, and underscore here, statutory time frames —like court-order time frames (see Kihl v Pfeffer, 94 NY2d 118 [1999]) — are not options, they are requirements, to be taken seriously by the parties. Too many pages of the Reports, and hours of the courts,

are taken up with deadlines that are simply ignored [Emphasis added].” (Miceli, 3 NY3d at 726-726).

Further, the dismissal of the instant foreclosure action requires the

cancellation of the notice of pendency. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property.” The Court of Appeals, in 5308 Realty Corp. v O & Y Equity Corp.[*7] (64 NY2d 313, 319 [1984]), commented that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.”

CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:

The Court,upon motion of any person aggrieved and upon such

notice as it may require, shall direct any county clerk to cancel

a notice of pendency, if service of a summons has not been completed

within the time limited by section 6512; or if the action has been

settled, discontinued or abated; or if the time to appeal from a final

judgment against the plaintiff has expired; or if enforcement of a

final judgment against the plaintiff has not been stayed pursuant

to section 551. [emphasis added]

The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. “Abatement” is defined as “the act of eliminating or nullifying.” (Black’s Law Dictionary 3 [7th ed 1999]). “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains (2A Carmody-Wait 2d § 11.1).” (Nastasi v Nastasi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that the “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR § 6501 (see 5303 Realty Corp. v O & Y Equity Corp., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the dismissal of the instant complaint must result in the mandatory cancellation of plaintiff’s notice of pendency against the subject property “in the exercise of the inherent power of the court.”

Possible frivolous conduct by plaintiff’s counsel

Ms. Carucci affirmed “under the penalties of perjury,” on January 7, 2011, to the factual accuracy of the foreclosure papers by communicating with a representative of the defunct plaintiff DOWNEY. The filing of the motion for a judgment of foreclosure and sale by plaintiff’s counsel, with Ms. Carucci’s false statement, appears to be frivolous. 22 NYCRR § 130-1.1 (a) states that “the Court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, which shall be payable as provided in section 130-1.3 of this Subpart.” Further, it states in 22 NYCRR § 130-1.1 (b), that “sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated.”

22 NYCRR § 130-1.1 (c) states that:

For purposes of this part, conduct is frivolous if:

(1) it is completely without merit in law and cannot be supported

by a reasonable argument for an extension, modification or

reversal of existing law;

(2) it is undertaken primarily to delay or prolong the resolution of

the litigation, or to harass or maliciously injure another; or

(3) it asserts material factual statements that are false.

It is clear that Ms. Carucci’s January 7, 2011 affirmation “asserts material factual statements that are false.” Further, Ms. Carucci’s January 7, 2011 affirmation, with its false statement, may be a cause for sanctions.

Several years before the drafting and implementation of the Part 130 Rules for

costs and sanctions, the Court of Appeals (A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 6 [*8][1986]) observed that “frivolous litigation is so serious a problem affecting the

proper administration of justice, the courts may proscribe such conduct and impose sanctions in this exercise of their rule-making powers, in the absence of legislation to the contrary (see NY Const, art VI, § 30, Judiciary Law § 211 [1] [b] ).”

Part 130 Rules were subsequently created, effective January 1, 1989, to give the

courts an additional remedy to deal with frivolous conduct. These stand beside Appellate Division disciplinary case law against attorneys for abuse of process or malicious prosecution. The Court, in Gordon v Marrone (202 AD2d 104, 110 [2d Dept 1994], lv denied 84 NY2d 813 [1995]), instructed that:

Conduct is frivolous and can be sanctioned under the court rule if

“it is completely without merit . . . and cannot be supported by a

reasonable argument for an extension, modification or reversal of

existing law; or . . . it is undertaken primarily to delay or prolong

the resolution of the litigation, or to harass or maliciously injure

another” (22 NYCRR 130-1.1[c] [1], [2] . . . ).

In Levy v Carol Management Corporation (260 AD2d 27, 33 [1st Dept 1999]), the Court stated that in determining if sanctions are appropriate the Court must look at the broad pattern of conduct by the offending attorneys or parties. Further, “22 NYCRR

130-1.1 allows us to exercise our discretion to impose costs and sanctions on an errant party . . .” Levy at 34, held that “[s]anctions are retributive, in that they punish past conduct. They also are goal oriented, in that they are useful in deterring future frivolous conduct not only by the particular parties, but also by the Bar at large.”

The Court, in Kernisan, M.D. v Taylor (171 AD2d 869 [2d Dept 1991]), noted that the intent of the Part 130 Rules “is to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics (cf. Minister, Elders & Deacons of Refm. Prot. Church of City of New York v 198 Broadway, 76 NY2d 411; see Steiner v Bonhamer, 146 Misc 2d 10) [Emphasis added].” The instant action, with DRUCKMAN asserting false statements, is “a waste of judicial resources.” This conduct, as noted in Levy, must be deterred. In Weinstock v Weinstock (253 AD2d 873 [2d Dept 1998]) the Court ordered the maximum sanction of $10,000.00 for an attorney who pursued an appeal “completely without merit,” and holding, at 874, that “[w]e therefore award the maximum authorized amount as a sanction for this conduct (see, 22 NYCRR 130-1.1) calling to mind that frivolous litigation causes a substantial waste of judicial resources to the detriment of those litigants who come to the Court with real grievances [Emphasis added].” Citing Weinstock, the Appellate Division, Second Department, in Bernadette Panzella, P.C. v De Santis (36 AD3d 734 [2d Dept 2007]) affirmed a Supreme Court, Richmond County $2,500.00 sanction, at 736, as “appropriate in view of the plaintiff’s waste of judicial resources [Emphasis added].”

In Navin v Mosquera (30 AD3d 883 [3d Dept 2006]) the Court instructed that when considering if specific conduct is sanctionable as frivolous, “courts are required to

examine whether or not the conduct was continued when its lack of legal or factual basis was apparent [or] should have been apparent’ (22 NYCRR 130-1.1 [c]).” The Court, in Sakow ex rel. Columbia Bagel, Inc. v Columbia Bagel, Inc. (6 Misc 3d 939, 943 [Sup Ct,

New York County 2004]), held that “[i]n assessing whether to award sanctions, the Court must [*9]consider whether the attorney adhered to the standards of a reasonable attorney (Principe v Assay Partners, 154 Misc 2d 702 [Sup Ct, NY County 1992]).”

“Nothing could more aptly be described as conduct completely without merit in

. . . fact’ than the giving of sworn testimony or providing an affidavit, knowing the same to be false, on a material issue.” (Sanders v Copley, 194 AD2d 85, 88 [1d Dept 1993]). The Court, in Joan 2000, Ltd. v Deco Constr. Corp. (66 AD3d 841, 842 [2d Dept 2009]), instructed that “[c]onduct is frivolous it . . . asserts material factual statements that are false.”In Curcio v J.P. Hogan Coring & Sawing Corp. (303 AD2d 357 [2d Dept 2003]), plaintiff’s counsel falsely claimed that the parties orally stipulated to a settlement of an employee discrimination case. The Curcio Court, at 358, held that “the conduct of [plaintiff’s counsel] was frivolous because it was without merit in law and involved the assertion of misleading factual statement to the Clerk of the Supreme Court (see 22 NYCRR 130-1.1 [c] [1], [3]).” (See Gordon v Marrone, supra; In re Ernestine R., 61 AD3d 874 [2d Dept 2009]; Glenn v Annunziata, 53 AD3d 565 [2d Dept 2008]; Miller v Dugan, 27 AD3d 429 [2d Dept 2006]; Greene v Doral Conference Center Associates, 18 AD3d 429 [2d Dept 2005]; Ofman v Campos, 12 AD3d 581 [2d Dept 2004]; Intercontinental Bank Limited v Micale & Rivera, LLP, 300 AD2d 207 [1d Dept 2002]; Tyree Bros. Environmental Services, Inc. v Ferguson Propeller, Inc., 247 AD2d 376 [2d Dept 1998]).

Therefore, the Court will examine the conduct of Margaret E. Carucci, Esq. and DRUCKMAN LAW GROUP PLLC in a hearing, pursuant to 22 NYCRR § 130-1.1, to: determine if Margaret E. Carucci, Esq. and DRUCKMAN LAW GROUP PLLC engaged in frivolous conduct; and, allow Margaret E. Carucci, Esq. and DRUCKMAN LAW GROUP PLLC a reasonable opportunity to be heard.

Conclusion

Accordingly, it is ORDERED, that the instant complaint, Index No. 22268/08, is dismissed with prejudice; and it is further

ORDERED, that the Notice of Pendency filed with the Kings County Clerk on July 31, 2008, by plaintiff, DOWNEY SAVINGS AND LOAN ASSOCIATION,

F.A., in an action to foreclose a mortgage for real property located at 70 Somers Street, Brooklyn, New York (Block 1542, Lot 21, County of Kings), is cancelled and discharged; and it is further

ORDERED, that it appearing that Margaret E. Carucci, Esq. and DRUCKMAN LAW GROUP PLLC engaged in “frivolous conduct,” as defined in the Rules of the Chief Administrator, 22 NYCRR § 130-1 (c), and that pursuant to the Rules of the Chief Administrator, 22 NYCRR § 130.1.1 (d), “[a]n award of costs or the imposition of sanctions may be made . . . upon the court’s own initiative, after a reasonable opportunity to be heard,” this Court will conduct a hearing affording Margaret E. Carucci, Esq. and DRUCKMAN LAW GROUP PLLC “a reasonable opportunity to be heard” before me in Part 27, on Monday, September 12, 2011, at 2:30 P.M., in Room 479, 360 Adams Street, Brooklyn, NY 11201; and it is further

ORDERED, that Ronald David Bratt, Esq., my Principal Law Clerk, is directed to serve this order by first-class mail, upon: Margaret E. Carucci, Esq., Druckman Law Group PLLC, 242 Drexel Avenue, Suite 2, Westbury, NY 11590; and, DRUCKMAN LAW GROUP PLLC, 242 Drexel Avenue, Suite 2, Westbury, NY 11590. [*10]

This constitutes the Decision and Order of the Court.

ENTER

___________________________

HON. ARTHUR M. SCHACK

J.S.C.

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NYSC Orders All Witnesses To Be Present, All Documents Demonstrating Exactly When Bank Acquired Possession of the Note and Mortgage

NYSC Orders All Witnesses To Be Present, All Documents Demonstrating Exactly When Bank Acquired Possession of the Note and Mortgage


Bayview Loan Servicing, LLC

v

Bozymowski

00296-2010

Rosicki, Rosicki & Associates
Attorneys for Plaintiff
26 Harvester Avenue
Batavia, New York 14020

Lydia Bozymowski
Defendant Pro Se
8 Hofstra Drive
Greenlawn, New York 11740-1908

Peter H. Mayer, J.

Upon the reading and filing of the following papers in this matter: (1) Notice of Motion by the plaintiff, dated May 21, 2010, and supporting papers; and (2) prior Order of this Court, dated November 1, 2010; and now

UPON DUE DELIBERATION AND CONSIDERATION BY THE COURT of the foregoing papers, the motion is decided as follows: it is

ORDERED that the plaintiff’s application (seq. #001) in this foreclosure action is hereby denied for the reasons set forth herein; and it is further

ORDERED that plaintiff shall appear for a hearing on May 13, 2011, 10:00 a.m., at which time the Court will conduct an inquiry of the plaintiff’s witnesses concerning the information and documents submitted by the plaintiff in connection with this foreclosure action, and will determine what, if any, sanction to impose upon the plaintiff and/or the plaintiff’s attorney; and it is further

ORDERED that at the time of the hearing, the plaintiff shall produce the following witnesses to provide testimony under oath in response to all inquiries by the Court: (1) Margaret Burke Tarab, Esq., the attorney from plaintiff’s counsel’s firm who executed the December 13, 2010 attorney affirmation, which is purportedly compliant with the October 20, 2010 Order of the Chief Administrative Judge of the State of New York; (2) Karen Griffith, Vice President of plaintiff Bayview Loan Servicing, LLC, the individual who executed the February 2, 2010 affidavit in support of plaintiff’s application for an order of reference; and (3) Robert D. Repass, plaintiff’s Senior Vice President, identified in Ms. Tarab’s December 13, 2010 affirmation as the plaintiff’s representative with whom she communicated for purposes of executing her said affirmation; and it is further

ORDERED that at the time of the hearing, the plaintiff shall produce for Court inspection all of the documents and records reviewed by plaintiff’s counsel and plaintiff’s other representatives for purposes of submitting its application for an order of reference, including but not limited to the original note and mortgage, and all documents demonstrating exactly when the plaintiff acquired possession of the note and ownership of the mortgage in this case; and it is further

ORDERED that the plaintiff shall promptly serve, via first class mail, a copy of this Order upon the homeowner-defendant(s) at all known addresses, as well as upon all appearing parties (or upon their attorney[s] if represented by counsel), and shall promptly thereafter file the affidavit(s) of such service with the County Clerk; and it is further

ORDERED that failure to comply with any of the directives set forth herein shall result in [*2]the Court issuing any sanction the Court deems appropriate under the CPLR and/or Court Rules, including but not limited to waiver of any interest, attorneys fees and costs to which the plaintiff claims entitlement, as well as dismissal of the plaintiff’s complaint with prejudice.

In this foreclosure action, the plaintiff filed a summons and complaint on January 12, 2010. The complaint essentially alleges that the defendant-homeowner, Lydia Bozymowski, defaulted in payments with regard to the subject mortgage, dated April 22, 2004, in the principal amount of $225,000.00, for the premises located at 8 Hofstra Drive, Greenlawn, New York 11740. The original lender, Florida Bank, N.A. d/b/a Florida Bank Mortgage (“Florida Bank”), is alleged to have had the mortgage assigned to the plaintiff, Bayview Loan Servicing, LLC (“Bayview Loan”), by assignment dated November 25, 2009. The assignment was purportedly executed by Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for Florida Bank. In its application (001), the plaintiff requested a default order of reference and amendment of the caption to remove the “Doe” defendants as parties.

By Order dated November 1, 2010, this Court referred the plaintiff’s application to a conference with the Court on December 15, 2010. As part of that Order, the plaintiff’s counsel was instructed to review the pending application prior to the conference “to determine whether or not such application is fully compliant with all foreclosure-related statutes, case law and Court Rules.” If so, counsel was to then “execute and submit to the Court at the conference the requisite attorney affirmation mandated by the October 20, 2010 Administrative Order of the Chief Administrative Judge for the State of New York.” With regard to such attorney affirmation, this Court’s November 1, 2010 Order stated that, “[i]f plaintiff’s counsel is unable for personal or professional reasons to execute the necessary affirmation, the pending application may be withdrawn without prejudice and with leave to resubmit upon proper papers, including the mandatory attorney affirmation.” The November 1, 2010 Order also warned counsel that “with regard to any scheduled court conferences or future applications, if the Court determines that such conferences have been attended, or such applications have been submitted, without proper regard for the applicable statutes, case law and Court Rules, or without regard for the required proofs delineated herein, the Court may, in its discretion, strike the non-compliant party’s pleadings or deny such applications with prejudice and/or impose sanctions pursuant to 22 NYCRR §130-1, and may deny those costs and attorneys fees attendant with the filing of such future applications.”

On December 15, 2010, a conference was held and plaintiff’s counsel submitted an attorney affirmation. Initially, the Court notes the plaintiff’s failure to submit proof of compliance with RPAPL §1304. For those actions commenced on or after September 1, 2008 and prior to January 14, 2010, RPAPL §1304 requires that, with regard to a “high-cost home loan” (as defined in Banking Law §6-l), or a “subprime home loan” or a “non-traditional home loan” (as defined in RPAPL §1304), at least 90 days before a lender or mortgage loan servicer commences a foreclosure action against the borrower, the lender or mortgage loan servicer must give the borrower a specific, statutorily prescribed notice. In essence, the notice warns the borrower that he or she may lose his or her home because of the loan default, and provides [*3]information regarding available assistance for homeowners who are facing financial difficulty. The specific language and type-size requirements of the notice are set forth in RPAPL §1304(1).

Pursuant to RPAPL §1304(2), the requisite 90-day notice must be “sent by the lender or mortgage loan servicer to the borrower, by registered or certified mail and also by first-class mail to the last known address of the borrower, and if different, to the residence which is the subject of the mortgage. Notice is considered given as of the date it is mailed.” The notice must also contain a list of at least five housing counseling agencies approved by the U.S. Department of Housing and Urban Development, or those designated by the Division of Housing and Community Renewal, that serve the region where the borrower resides, as well as the counseling agencies’ last known addresses and telephone numbers.

This action was commenced on January 12, 2010. Therefore, barring any statutorily stated exceptions, if the subject loan being foreclosed upon qualifies as a “high-cost home loan,” a “subprime home loan,” or “non-traditional home loan,” the pre-commencement notice requirements of RPAPL §1304 will apply. Plaintiff, however, has failed to submit evidentiary proof, including an affidavit from one with personal knowledge, as to whether or not this action involves such a loan and, if so, proof of compliance with the applicable pre-commencement requirements of RPAPL §1304 or, in the alternative, an affidavit sufficient to show why such requirements do not apply. Such failure requires denial of plaintiff’s application for an order of reference. The boilerplate language in paragraph 4(c) of the complaint regarding compliance with RPAPL §1304 “if the underlying mortgage qualifies,” is ambiguous and is, therefore, insufficient to affirmatively show such compliance, particularly where, as here, the complaint is not verified by the plaintiff.

Plaintiff has also failed to submit a properly sworn affidavit in support of the requested relief. In this regard, CPLR §2309(b) requires that an “oath or affirmation shall be administered in a form calculated to awaken the conscience and impress the mind of the person taking it in accordance with his religious or ethical beliefs.” Accordingly, for affidavits to have sufficient validity, a notary public witnessing signatures must take the oaths of the signatories or obtain statements from them as to the truth of the statements to which they subscribe their names (see, Matter of Helfand v Meisser, 22 NY2d 762, 292 NYS2d 467 [1968]; Matter of Imre v Johnson, 54 AD3d 427, 863 NYS2d 473 [2d Dept 2008]; Matter of Leahy v O’Rourke, 307 AD2d 1008, 763 NYS2d 508 [2d Dept 2003]).

In support of its application for an order of reference, the plaintiff submits an affidavit from Karen Griffith, Vice President of plaintiff Bayview Loan; however, there is no showing that the notary who witnessed Ms. Griffith’s signature took an oath from Ms. Griffith, and no statement by Ms. Griffith attesting to the truth of the statements contained in her affidavit. Instead, there is a statement disguised to appear as a proper oath. Rather than swearing to the truth of the statements contained in her affidavit, Ms. Griffith merely attests in paragraph 12 to the truth of the contents of “the [plaintiff’s] complaint” (emphasis added). Such statement is insufficient to satisfy the form of oath required by CPLR §2309(b) with regard to Ms. Griffith’s [*4]affidavit. This is particularly pertinent here because additional submissions by the plaintiff raise questions as to the reliability of Ms. Griffith’s affidavit, as well as the plaintiff’s standing to bring this action.

A plaintiff has standing to maintain the action only where the plaintiff is the proper assignee of the mortgage and the underlying note at the time the foreclosure action was commenced (U.S. Bank, N.A. v Collymore, 68 AD3d 752, 890 NYS2d 578 [2d Dept 2009]; Federal Natl. Mtge. Assn. v Youkelsone, 303 AD2d 546, 755 NYS2d 730 [2d Dept 2003]; Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 887 NYS2d 615 [2d Dept 2009]; First Trust Natl. Assn. v Meisels, 234 AD2d 414, 651 N.Y.S.2d 121 [2d Dept 1996]). It remains settled that foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity (U.S. Bank, N.A. v Collymore, supra; Kluge v Fugazy, 145 AD2d 537, 536 NYS2d 92 [2d Dept 1988]). Furthermore, a plaintiff has no foundation in law or fact to foreclose upon a mortgage in which the plaintiff has no legal or equitable interest (Wells Fargo Bank, N.A. v Marchione, supra; Katz v East-Ville Realty Co., 249 AD2d 243, 672 NYS2d 308 [1st Dept 1998]). Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident (U.S. Bank, N.A. v Collymore, supra).

To support its contention that Bayview had proper standing to commence this action, Ms. Griffith’s alleges in paragraph 6 of her affidavit that “[t]he loan was acquired by and in the possession of the Plaintiff on April 22, 2004″ (emphasis added). Notably, this is the same date the mortgage documents were executed by the defendant-borrower to the original lender, Florida Bank. Even if this nebulous statement by Ms. Griffith were construed to mean that Bayview was in possession of the “note and mortgage” on April 22, 2004, such statement fails to show that the plaintiff was the holder of the note and mortgage when the action was commenced, nearly six years later (see U.S. Bank, N.A. v Collymore, supra; Federal Natl. Mtge. Assn. v Youkelsone, supra; Wells Fargo Bank, N.A. v Marchione, supra; First Trust Natl. Assn. v Meisels, supra). On the one hand, Ms. Griffith alleges in paragraph 6 of her affidavit that the loan was in the possession of the plaintiff on April 22, 2004. On the other hand, in the same paragraph of her affidavit she states that the mortgage “instruments were assigned to [the Plaintiff] by [assignment] dated November 25, 2009.” Compounding this confusion is the handwritten statement on the assignment, asserting that it was “effective as of: 7/1/09.”

Despite these inconsistent statements of fact in support of ownership, there is an additional submission that suggests the true owner is or may be CitiMortgage, Inc. (“CitiMortgage”), a non-party to this action. In this regard, affixed to the last page of the note is an undated indorsement from Florida Bank to CitiMortgage. This indorsement, which was executed by Jacqueline Ring as Florida Bank’s Vice President, specifically states, “WITHOUT RECOURSE PAY TO THE ORDER OF CITIMORTGAGE, INC.” Thus, the plaintiff’s assertion that it possessed “the loan” on the same date it was executed by the borrower, and the inconsistent assertion that plaintiff obtained the mortgage instruments by assignment dated [*5]November 25, 2009, is rebutted by the fact that when the note was indorsed to CitiMortgage, the mortgage passed to CitiMortgage as an inseparable incident (U.S. Bank, N.A. v Collymore, 68 AD3d 752, 890 NYS2d 578 [2d Dept 2009]. Therefore, without the valid transfer of the note to the plaintiff, the assignment of the mortgage to the plaintiff was a nullity (id.; Kluge v Fugazy, 145 AD2d 537, 536 NYS2d 92 [2d Dept 1988]). Curiously, evidence of the indorsement to CitiMortgage by Florida Bank was not in the plaintiff’s affidavit or attorney affirmation.

The plaintiff has also failed to comply with this Court’s November 1, 2010 Order regarding submission of an attorney affirmation in the form and with the language required by the October 20, 2010 Administrative Order of Hon. Ann Pfau, New York’s Chief Administrative Judge. As explained in this Court’s November 1, 2010 Order, “[p]ursuant to the Administrative Order of the Chief Administrative Judge for the State of New York, dated and effective October 20, 2010, plaintiff’s counsel in foreclosure actions must file with the court in all such actions an affirmation in a form prescribed by the Order.” It remains clear from the language of Judge Pfau’s October 20, 2010 Order, as well from the language of the official mandatory affirmation and its preamble, that the intent of the new Rule is to assure accountability for and accuracy of all court filings in foreclosure actions.

With the intent of the new Rule in mind, this Court requires that after October 20, 2010, the mandatory affirmation must accompany all applications made at any and all stages of foreclosure proceedings. Obviously, a mere single filing at only one phase of the case would not comport with the intent of Judge Pfau’s Order. Indeed, if compliance were sufficient by filing the requisite affirmation at only one phase, improper or untruthful papers could be filed at other phases with virtual impunity. Therefore, plaintiff’s failure to submit the official mandatory affirmation in the form and with the language prescribed by Judge Pfau’s October 20, 2010 Order must result in denial of the requested relief.

In relevant part, the Court’s November 1, 2010 Order also included, with italicized emphasis, the warning set forth in the last sentence of the preamble paragraph of the official mandatory affirmation, which states: “The wrongful filing and prosecution of foreclosure proceedings which are discovered to suffer from these defects may be cause for disciplinary and other sanctions upon participating counsel” (emphasis added). Despite this language required by the official mandatory affirmation, and despite this Court’s emphasis of that language in its November 1, 2010 Order, the December 13, 2010 affirmation signed by plaintiff’s attorney, Margaret Burke Tarab, Esq., does not include such language. Also, as required by paragraph 3 of the official mandatory affirmation, the plaintiff’s attorney must affirm that “[b]ased upon my communication with [plaintiff’s representative], as well as upon my own inspection of the papers filed with the Court and other diligent inquiry, I certify that, to the best of my knowledge, information, and belief, the Summons and Complaint and all other documents filed in support of this action for foreclosure are complete and accurate in all relevant respects . . .” (emphasis added). In counsel’s December 13, 2010 affirmation, the word “diligent” was omitted and replaced with the word “reasonable.” In addition, as required by paragraph 4 of the official mandatory affirmation, the plaintiff’s attorney must acknowledge that he or she understands “that [*6]the Court will rely on this Affirmation in considering the [plaintiff’s] application.” In paragraph 4 of counsel’s affirmation, however, she omitted the specific mandatory language and replaced it with a generic acknowledgment, that “I am aware of my obligations under New York Rules of Professional Conduct (22 NYCRR Part 1200) and 22 NYCRR Part 130.”

Although the Court has heard several attorneys for plaintiff banks informally question Judge Pfau’s authority to have issued the October 20, 2010 Order in the first instance, this Court gives full deference to her Honor’s Order (see NY Const, art VI, § 28). Counsel for plaintiff banks have also claimed that the attorney affirmation required by Judge Pfau’s Order was unofficially amended on November 18, 2010 and posted on the internet in amended form. Counsel, however, has failed to submit an order by Judge Pfau executed after her October 20, 2010 Order, or any other legitimate legal authority, in which the language of the official mandatory affirmation was modified. Therefore, this Court requires counsel to submit an attorney affirmation in the specific form and with the specific language originally mandated by her Honor’s Order of October 20, 2010.

In this Court’s November 1, 2010 Order, the Court warned of potential sanctions, pursuant to 22 NYCRR §130-1, if a party submits an application “without proper regard for the applicable statutes, case law and Court Rules.” Indeed, although the plaintiff’s December 13, 2010 attorney affirmation does not include certain language mandated by Judge Pfau’s October 2010 Order, the affirmation does, nevertheless, state at paragraph 4 that counsel is “aware of [her] obligations under New York Rules of Professional Conduct (22 NYCRR Part 1200) and 22 NYCRR Part 130.” With regard to sanctions, 22 NYCRR §130-1.1 states, in pertinent part that:

(a) . . . [T]he court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, which shall be payable as provided in section 130-1.3 of this Part. . . .

(b) The court, as appropriate, may . . . impose such financial sanctions against either an attorney or a party to the litigation or against both. Where the . . . sanction is against an attorney, it may be against the attorney personally or upon a partnership, [or] firm . . . that has appeared as attorney of record. The . . . sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated.

(c) For purposes of this Part, conduct is frivolous if:

(1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law;

(2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or

(3) it asserts material factual statements that are false. [*7]

. . . In determining whether the conduct undertaken was frivolous, the court shall consider, among other issues the circumstances under which the conduct took place, including the time available for investigating the legal or factual basis of the conduct, and whether or not the conduct was continued when its lack of legal or factual basis was apparent, or should have been apparent, or was brought to the attention of counsel or the party.

(d) An . . . imposition of sanctions may be made . . . upon the court’s own initiative, after a reasonable opportunity to be heard. The form of the hearing shall depend upon the nature of the conduct and the circumstances of the case.

At the December 15, 2010 conference, plaintiff’s counsel represented to the Court that the plaintiff’s submitted application was, in fact, fully compliant with all applicable statutes, case law and Court Rules. Counsel then tendered to the Court Ms. Burke Tarab’s December 13, 2010 affirmation, which is purported to be compliant with the requirements of Judge Pfau’s Order of October 20, 2010. In counsel’s affirmation, she identifies Robert D. Repass, plaintiff’s Senior Vice President, as the representative with whom she communicated on December 10, 2010 for purposes of executing her affirmation.

According to paragraph 2 of the affirmation, Mr. Repass reportedly informed Ms. Tarab that he “personally reviewed plaintiff’s documents and records relating to this case for factual accuracy.” He also allegedly “confirmed the factual allegations set forth in the Complaint and any supporting affirmations filed with the court, as well as the accuracy of the notarizations contained in the supporting documents (Plaintiff’s Affidavit[s]) filed therewith.” Neither the proofs submitted in support of the order of reference, nor the mandatory attorney affirmation are sufficient to grant an order of reference.

Based on the foregoing, the plaintiff’s application for an order of reference is denied. The nature of the proofs provided by the plaintiff, from all sources, compels the Court to order hearing in accordance with 22 NYCRR §130-1 to determine if the conduct undertaken by the plaintiff and/or plaintiff’s counsel was “frivolous” as defined in 22 NYCRR §130-1.1(c) and what, if any, sanction should be imposed.

This constitutes the Order of the Court.

Dated:February 17, 2011

PETER H. MAYER, J.S.C.

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Judge Schack Rips Into “Debt Collector” Steven J. Baum P.C., Cancels Notice of Pendency WELLS FARGO v. ZELOUF

Judge Schack Rips Into “Debt Collector” Steven J. Baum P.C., Cancels Notice of Pendency WELLS FARGO v. ZELOUF


Wells Fargo Bank, N.A., Plaintiff,

against

David Zelouf, et. al., Defendants.

17524/09

Plaintiff

Michael Joblonski, Esq.

Steven J. Baum, PC

Buffalo, NY

Defendant

The defendant did not answer.

Arthur M. Schack, J.

In this foreclosure action, plaintiff, WELLS FARGO, N.A. (WELLS FARGO), moved for summary judgment and an order of reference and related relief for the premises located at 14 Stockholm Street, Brooklyn, New York (Block 3253, Lot 13, County of Kings). The Court received a notice of withdrawal of the instant motion, dated February 18, 2010, from plaintiff’s counsel. There was no valid explanation or reason given by plaintiff’s counsel for his request to withdraw the motion.

Further, plaintiff’s counsel states in his notice of withdrawal, “[t]he Plaintiff will not be discontinuing the above referenced action.” Moreover, in his cover letter to myself, plaintiff’s counsel states that “[t]he law firm of Steven J. Baum, P.C. and the attorneys whom it employs are debt collectors who are attempting to collect a debt. Any information obtained by them will be used for that purpose.” Since this statement was in a cover letter to me and does not appear to be preprinted on the letterhead of the Baum firm, the Court would like to know what debt it [*2]personally owes to the Baum firm or its clients? This statement borders upon frivolous conduct, in violation of 22 NYCRR § 130-1.1. Was it made to cause annoyance or alarm to the Court? Was it made to waste judicial resources? Rather than answer the above rhetorical questions, counsel for plaintiff is directed never to place such a foolish statement in a cover letter to this Court. If this occurs again, the firm of Steven J. Baum, P.C. is on notice that this Court will have the firm and the attorney who wrote this nonsensical statement appear to explain why the firm and the individual attorney should not be sanctioned for frivolous conduct.

With respect to the request of plaintiff’s counsel to withdraw the instant motion for summary judgment and an order of reference, the Court grants the request to withdraw the motion. However, since plaintiff is not discontinuing the instant foreclosure action, the Court, to prevent the waste of judicial resources, dismisses the instant foreclosure action without prejudice. If plaintiff’s counsel chooses to renew the instant motion and restore the instant case, plaintiff’s counsel must comply with the new Rule, promulgated by the Chief Administrative Judge on October 20, 2010, requiring an affirmation by plaintiff’s counsel that he communicated on a specific date with a named representative of plaintiff WELLS FARGO who informed him that he or she:

(a) has personally reviewed plaintiff’s documents and records relating

to this case for factual accuracy; and (b) confirmed the factual

accuracy of the allegations set forth in the Complaint and any

supporting affirmations filed with the Court as well as the accuracy

of the notarizations contained in the supporting documents filed

therewith.

Further, plaintiff’s counsel, based upon his or her communication with plaintiff’s representative or representatives, “as well as upon my own inspection and reasonable inquiry under the circumstances, . . . affirm that, to the best of my knowledge, information, and belief, the Summons, Complaint and other papers filed or submitted to the Court in this matter contain no false statements of fact or law.”

Counsel is reminded that the new standard Court affirmation form states that “I am aware of my obligations under New York Rules of Professional Conduct (22 NYCRR Part 1200) and 22 NYCRR Part 130.” These Parts deal with disciplinary standards and sanctions for frivolous conduct.

Discussion

Real Property Actions and Proceedings Law (RPAPL) § 1321 allows the Court in a foreclosure action, upon the default of the defendant or defendant’s admission of mortgage payment arrears, to appoint a referee “to compute the amount due to the plaintiff.” In the instant action, plaintiff WELLS FARGO’s application for an order of reference is a preliminary step to obtaining a default judgment of foreclosure and sale against defendant ZELOUF. (Home Sav. of Am., F.A. v Gkanios, 230 AD2d 770 [2d Dept 1996]). Plaintiff’s request to withdraw its motion is granted. However, to allow this action to continue without seeking the ultimate purpose of a foreclosure action, to obtain a judgment of foreclosure and sale, makes a mockery of and wastes judicial resources. Continuing the instant action without moving for a judgment of foreclosure and sale is the judicial equivalent of a “timeout,” and granting a “timeout” to plaintiff WELLS FARGO is a waste of judicial resources. Therefore, the instant action is dismissed without [*3]prejudice.

Further, the dismissal of the instant foreclosure action requires the cancellation of the notice of pendency. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property.” The Court of Appeals, in 5308 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 319 [1984]), commented that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.”

CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:

The Court,upon motion of any person aggrieved and upon such

notice as it may require, shall direct any county clerk to cancel

a notice of pendency, if service of a summons has not been completed

within the time limited by section 6512; or if the action has been

settled, discontinued or abated; or if the time to appeal from a final

judgment against the plaintiff has expired; or if enforcement of a

final judgment against the plaintiff has not been stayed pursuant

to section 551. [emphasis added]

The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. “Abatement” is defined as “the act of eliminating or nullifying.” (Black’s Law Dictionary 3 [7th ed 1999]). “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains (2A Carmody-Wait 2d § 11.1).” (Nastasi v Nastasi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that the “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR § 6501 (see 5303 Realty Corp. v O & Y Equity Corp., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the dismissal of the instant complaint must result in the mandatory cancellation of plaintiff WELLS FARGO’s notice of pendency against the subject property “in the exercise of the inherent power of the court.”

Last, if plaintiff WELLS FARGO’s counsel moves to restore the instant action and motion, plaintiff’s counsel must comply with the new filing requirement to submit, under penalties of perjury, an affirmation that he or she has taken reasonable steps, including inquiring of plaintiff WELLS FARGO and reviewing all papers, to verify the accuracy of the submitted documents in support of the instant foreclosure action. According to the October 20, 2010 Office of Court Administration press release about the new filing requirement, Chief Judge Lippman said:

We cannot allow the courts in New York State to stand by idly and

be party to what we now know is a deeply flawed process, especially

when that process involves basic human needs — such as a family home — [*4]

during this period of economic crisis. This new filing requirement will

play a vital role in ensuring that the documents judges rely on will be

thoroughly examined, accurate, and error-free before any judge is asked

to take the drastic step of foreclosure.

(See Gretchen Morgenson and Andrew Martin, Big Legal Clash on Foreclosure is Taking Shape, New York Times, Oct. 21, 2010; Andrew Keshner, New Court Rules Says Attorneys Must Verify Foreclosure Papers, NYLJ, Oct. 21, 2010).

Conclusion

Accordingly, it is

ORDERED, that the request of plaintiff, WELLS FARGO BANK, N. A., to withdraw its motion for an order of reference, for the premises located at 14 Stockholm Street, Brooklyn, New York (Block 3253, Lot 13, County of Kings), is granted; and it is further

ORDERED, that the instant action, Index Number 17524/09, is dismissed without prejudice; and it is further

ORDERED, that the notice of pendency in the instant action, filed with the Kings County Clerk on July 14, 2009, by plaintiff, WELLS FARGO BANK, N. A., to foreclose a mortgage for real property located at 14 Stockholm Street, Brooklyn, New York (Block 3253, Lot 13, County of Kings), is cancelled; and it is further

ORDERED, that if plaintiff, WELLS FARGO BANK, N.A., moves to restore the instant foreclosure action and motion for an order of reference for real property located at 14 Stockholm Street, Brooklyn, New York (Block 3253, Lot 13, County of Kings, counsel for plaintiff must comply with the new Court filing requirement, announced by Chief Judge Jonathan Lippman on October 20, 2010, and ordered by Chief Administrative Judge Ann T. Pfau on October 20, 2010, by submitting an affirmation, using the new standard Court form, pursuant to CPLR Rule 2106 and under the penalties of perjury, that counsel for plaintiff, WELLS FARGO BANK, N. A.: has personally reviewed plaintiff’s documents and records in the instant action; confirms the factual accuracy of plaintiff’s court filings; and, confirms the accuracy of the notarizations in plaintiff’s documents.

This constitutes the Decision and Order of the Court.

ENTER

________________________________
HON. ARTHUR M. SCHACK

J. S. C.

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[NYSC] Judge Spinner “Plaintiff’s Papers Raises Disturbing Issues”, “Appears To Run Counter To New York’s Statute of Frauds” BENEFICIAL HOMEOWNER SERV. CORP v. STEELE

[NYSC] Judge Spinner “Plaintiff’s Papers Raises Disturbing Issues”, “Appears To Run Counter To New York’s Statute of Frauds” BENEFICIAL HOMEOWNER SERV. CORP v. STEELE


2011 NY Slip Op 50015(U)

BENEFICIAL HOMEOWNER SERVICE CORPORATION, Plaintiff,
v.
STEPHEN STEELE, SUSAN STEELE, OCEAN BANK FSB, “JOHN DOE” AND “MARY ROE” (SAID NAMES BEING FICTITIOUS, IT BEING THE INTENTION OF PLAINTIFF TO DESIGNATE ANY AND ALL OCCUPANTS OF THE PREMISES BEING FORECLOSED HEREIN), Defendants.

2010-01996.Supreme Court, Suffolk County.

Decided January 7, 2011.Jonathan D. Pincus, Esq, 95 Allens Creek Road, Rochester, New York 14618, Attorneys for Plaintiff.

Steven Tekulsky, Esq., 113 Cedar Street, East Hampton, New York 11937, Attorneys for Defendants Steele.

JEFFREY ARLEN SPINNER, J.

Plaintiff has commenced this action pursuant to Real Property Actions and Proceedings Law Article 13, claiming foreclosure of a mortgage which encumbers real property located at 634 Stephen Hands Path, East Hampton, Suffolk County, New York. In both its Verified Complaint both and the present motion papers, Plaintiff alleges that it is the owner and holder of a Loan Agreement executed by STEPHEN STEELE and SUSAN STEELE dated October 26, 2006 in the principal amount of $92,696.60 which is secured by a Mortgage of the same date and executed by both STEPHEN STEELE and SUSAN STEELE, recorded with the Suffolk County Clerk in Liber 21410 of Mortgages at Page 639. Plaintiff further alleges that Defendants STEELE are in default of their obligations under the Loan Agreement (though the nature and extent of the default is nowhere specified) and it is claimed that the principal sum of $91,614.34 is due and owing, together with interest at the rate of 5.250% per annum as computed from October 1, 2008. Defendants STEELE, through counsel, have timely appeared and have interposed an Answer consisting of general denials as to the allegations of the Plaintiff’s Complaint together with eight affirmative defenses.

Plaintiff has moved for summary judgment in accordance with the provisions of CPLR 3212, having filed a Notice of Motion and supporting papers dated May 18, 2010 and containing a CPLR § 2214(b) seven day notice as well as a request for appointment of a Referee pursuant to RPAPL § 1921. Curiously and in direct derogation of the mandatory provisions of 22 NYCRR § 202.7, Plaintiff has failed to specify or insert a return date for the application and has apparently served its papers with no return date. Not surprisingly, counsel for Defendants has neither answered nor responded thereto, presumably due to the lack of both a stated return date and appropriate notice. The Clerk of the Court apparently scheduled the motion for June 10, 2010, which was administratively adjourned by the Court to November 17, 2010. In the interim period, mandatory foreclosure settlement conferences in accordance with CPLR § 3408 were convened on September 2, 2010 and November 9, 2010 respectively. Thereafter and on December 22, 2010, the Court received an Affidavit from Plaintiff’s counsel which purports to comply with the provisions of Administrative Order no. AO548/10.

It is settled law in New York that the initial burden is placed upon the proponent of an application for summary judgment as to making a prima facie case for entitlement to the relief sought, Norwest Bank Minnesota N.A. vs. Sabloff, 297 AD2d 722 (2nd Dept. 2002). Where Plaintiff comes forward with the mortgage at issue together with the underlying note or bond coupled with evidence of the alleged default, it establishes its prima facie right to judgment as a matter of law, Household Finance Realty Corporation of New York vs. Winn, 19 AD3d 544 (2nd Dept. 2005), Fleet National Bank vs. Olasov, 16 AD3d 374 (2nd Dept. 2005), leave to appeal dismissed 5 NY3d 849 (2005), Gateway State Bank vs. Shangri-La Private Club For Women, 113 AD2d 791 (2nd Dept. 1985), aff’d 67 NY2d 627 (1986). Once such a prima facie showing has been made, the burden shifts to the party opposing the application to come forward with sufficient evidence to controvert the summary judgment motion by demonstrating the existence of a genuine triable issue of fact, Barcov Holding Corp. vs. Bexin Realty Corp., 16 AD3d 282 (1st Dept. 2005). For the reasons hereinafter set forth, the Court finds that Plaintiff has failed to satisfy its burden of setting forth a prima facie case for entitlement to the relief it seeks.

The copy of the mortgage appended to Plaintiff’s moving papers bears the signatures of both STEPHEN STEELE and SUSAN STEELE and contains an acknowledgment by a notary public. However, the copy of the Loan Agreement that is appended to Plaintiff’s papers raises disturbing issues. That instrument bears the date of October 26, 2006 and recites a principal amount of $92,696.60. The Loan Agreement clearly reflects Defendant STEPHEN STEELE as the sole obligor thereunder but, most glaring of all, the Loan Agreement bears no signature whatsoever. General Obligations Law § 5-701 requires promises such as those contained in the Loan Agreement to be both in writing and signed by the party to be charged [G.O.L. § 5-701(a)(1)]. This Court must question how, under the circumstances presented here, Plaintiff can, with unbridled temerity, demand enforcement of the Loan Agreement against Defendant STEPHEN STEELE, who has not executed that instrument and against Defendant SUSAN STEELE, who is not even a party to that agreement. The most cursory reading of these instruments reveal the obvious facts as set forth above. This posture by Plaintiff strains credulity and causes the Court to seriously question Plaintiff’s good faith in commencing this action.

Distilled to its essence, a mortgage is a conveyance of an interest in land that is expressly intended to constitute security for some obligation, most commonly an indebtedness, Burnett v. Wright 135 NY 543, 32 NE 253 (1895). It follows logically then that in order for a mortgage to be valid and subsisting, there must be an underlying obligation that is to be secured by an interest in the real property, owed by the obligor to the obligee, which contains both the right of the obligee to foreclose and the right of the obligor to redeem, Baird v. Baird 145 NY 659, 40 NE 222 (1895), R.H. Macy & Co. v. Bates 280 AD 292, 114 NYS 2d 143 (3rd Dept. 1952). Absent these essential elements, a valid mortgage cannot exist because it is the underlying obligation which gives rise to the validity of the mortgage as a lien upon the real property. Here, the Loan Agreement that has been presented to the Court facially appears to run counter to New York’s Statute of Frauds, G.O. L. § 5-701. Since there has been presented to this Court no valid underlying obligation and no further explanation, the mortgage appears to fail as a matter of law.

This situation is all the more disturbing when it is considered that the sworn statements contained in the both the Complaint and the Affidavit in Support Of the Motion for Summary Judgment expressly and falsely assert that Defendant SUSAN STEELE executed the Loan Agreement. This is compounded by the sworn statement of Shana Richmond, Plaintiff’s foreclosure specialist, which is dated April 28, 2010 and which contains the same painfully obvious mis-statements of fact. Going further, Plaintiff’s counsel has submitted an Affirmation dated December 2, 2010 which purports to comply with Administrative Order no. AO548/10 in which he ratifies and confirms, in essence, the incorrect assertions in the Complaint and the Summary Judgment application. Aside from the papers themselves, it appears that counsel’s affirmation runs afoul of the provisions of 22 NYCRR § 130-1.1.

An action claiming foreclosure of a mortgage is a suit in equity, Jamaica Savings Bank v. M.S. Investment Co. 274 NY 215 (1937), and the very commencement of the proceeding invokes the equity jurisdiction of the Supreme Court. Thus, in order to obtain equitable relief, the applicant must come before the Court with clean hands, else such relief will be denied. Thus, where a party comes before the Court and is shown to have acted in a manner which is offensive to good conscience, fairness and justice, that party will be completely without recourse in a court of equity, no matter what his legal rights may be, York v. Searles 97 AD 331 92nd Dept. 1904), aff’d 189 NY 573 (1907). Stated a bit differently, in order to obtain equity, one must do equity.

Here, it is irrefutable that Defendant SUSAN STEELE was not a party to the Loan Agreement and certainly did not execute the same. It is equally indubitable that Defendant STEPHEN STEELE did not execute the Loan Agreement that has been presented on this application. Nonetheless, Plaintiff has vigorously prosecuted this action, demanding foreclosure of the mortgage as well as money damages against both named Defendants. Under these circumstances, the Court is compelled to conduct a hearing to determine whether or not Plaintiff has proceeded in good faith and what sanction, if any should be imposed should the Court find a lack of good faith.

It is, therefore,

ORDERED that the Plaintiff’s application for summary judgment and other relief is hereby denied; and it is further

ORDERED that a hearing shall be held in this matter, at which all counsel and parties shall appear, which shall not be adjourned except by the Court; and it is further

ORDERED that said hearing shall be held on March 16, 2011 at 2:30 p.m. in Courtroom 229-A, Supreme Court, 1 Court Street, Riverhead, New York; and it is further

ORDERED that Plaintiffs’ counsel shall, within ten days after entry hereof, serve a copy of this Order with Notice of Entry upon all parties in this action as well as all counsel who have appeared in this action.

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NY Emergency Order To Show Cause, HSBC Stayed CO-OP Auction Shares

NY Emergency Order To Show Cause, HSBC Stayed CO-OP Auction Shares


According to records:
Attorney/Firm For Defendant: STEVEN J. BAUM, P.C.

Attorney Type: Attorney Of Record Atty. Status: Active

220 NORTHPOINTE PKWY SUITE G
AMHERST, NEW YORK 14228
716-204-2400

excerpt…

NOW, IT IS ORDERED THAT EXECUTION OF ANY PUBLIC SHARES OF PLAINTIFF’S PROPERTY, LOCATED AT 135 OCEAN PARKWAY, UNIT 16-D, BROOKLYN, NEW YORK, 11218, SHALL BE STAYED PENDING THE HEARING OF THIS MOTION, AND SPECIFICALLY THAT DEFENDANT HSBC BANK USA, N.A. BE STAYED FROM EXECUTING A PUBLIC SALE OF PLAINTIFF’S SHARE OF STOCK ON JANUARY 13, 2011 at 2:OO P.M.

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[NYSBK] Circa:08 JUDGE BLASTS BAUM, CHASE HOME FINANCE, PILLAR PROCESSING “ORDER TO SHOW CAUSE” In Re: SCHUESSLER

[NYSBK] Circa:08 JUDGE BLASTS BAUM, CHASE HOME FINANCE, PILLAR PROCESSING “ORDER TO SHOW CAUSE” In Re: SCHUESSLER


EXCERPTS:

On November 28, 2007, several months after this Court scheduled an evidentiary hearing and directed Chase Home Finance to submit the Policy Affidavit, a letter was filed on the Court docket in this case addressed to the Clerk of the Court from a legal assistant acting on behalf of “Pillar Processing, LLC,” an entity unknown to the Court that appeared to have no connection with this case or these Debtors. The letter stated:

Dear Sir or Madam:

Respecting captioned bankruptcy matter, please be advised that the 362 motion scheduled for December 7, 2007, at 10:30am [sic] has been
withdrawn.

Very Truly Yours,
PILLAR PROCESSING, LLC.
By: Robin L. Brown
Legal Assistant

ECF Docket No. 23. Though no relationship was identified or explained in the body or
letterhead, Pillar Processing and Chase Home Finance’s bankruptcy counsel, Steven J.
Baum, P.C., share the same address and telephone number, and ECF reflects that the
letter was filed using a password issued to “Dennis Jose [a Steven J. Baum, P.C. attorney]
on behalf of CHASE HOME FINANCE, LLC.” Chase Home Finance’s bankruptcy
counsel, Steven J. Baum, P.C., has made no effort to address or explain this act, or the
propriety of this action on the record.

<SNIPS>

Finally, the Attorney Affirmation made no effort to explain the relationship between the Steven J.
Baum, P.C. law firm and Pillar Processing, LLC, the non-legal entity that attempted to
withdraw the Lift-Stay Motion.

<SNIP>

The Court will issue a separate order denying the Lift-Stay motion and directing
that neither Chase Home Finance, the current holder or owner of the note and mortgage,
nor any of their successors-in-interest shall in any way seek or charge any attorneys’ fees
or other charges against Debtors, their property, or the mortgage, whether now or at the
end of the mortgage, if such fees or charges are in any manner connected with the Lift-
Stay Motion, the Order to Show Cause, or the Evidentiary Hearing.

This decision is published as a warning, not just to Chase Home Finance and
other mortgage servicers, but to all individuals and entities involved in the process, along
the line – analysts, supervisors and other personnel employed by mortgage servicers;
third-party vendors; regional law firms; and local counsel – that the conduct identified
here, in this Court’s view, constitutes an abuse of process. Although the Court’s focus in
this case was on the mortgage servicer’s conduct and did not order all of the participants
to appear and respond to this Order to Show Cause, they will be included in future orders
if such abusive conduct continues, and the Court will assume familiarity with this
decision.

The Lift-Stay motion, which originated with a notation on an analyst’s computer
screen, has generated a 60-page decision and stress on the Debtors for the nine-month
period that the Lift-Stay Motion was pending. The Court is not compensated according
to time spent on a particular case, but this Order to Show Cause has drawn time and
resources away from other, meritorious cases. Judicial resources do not permit such a
thorough examination of every case. This decision sanctions Chase Home Finance only
for the actual costs incurred by the Debtors. In the Court’s view, the sanction is an
extremely mild one, because the Supreme Court instructs that a bankruptcy court should
exercise its Section 105 powers with restraint and discretion. The Court does not regard
the exercise of restraint in this case to be a limitation on the sanctions that might be
imposed in the future against Chase Home Finance or another mortgage servicer if this
abuse occurs again. If Chase Home Finance, other mortgage servicers and any
employees, third-party vendors, or any attorneys involved in the process at any level
exhibit the same type of abusive conduct in the future, this Court believes that Section
105(a) authorizes sanctions of increasing severity.

Dated: Poughkeepsie, New York
April 10, 2008

/s/ Cecelia Morris .
. CECELIA G. MORRIS
UNITED STATES BANKRUPTCY JUDGE

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Posted in STOP FORECLOSURE FRAUDComments (3)


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