Antoine v. Am. Sec. Ins. Co.
| Decision Date | 07 February 2020 |
| Docket Number | 18-CV-05850(KAM)(VMS) |
| Parties | JEAN BAPTISTE ANTOINE AND BSD 260 LLC, Plaintiffs and Counter-Defendants, v. AMERICAN SECURITY INSURANCE COMPANY, WELLS FARGO N.A. AS TRUSTEE FOR OPTION ONE MORTGAGE LOAN TRUST 2007-5 ASSET-BACKED CERTIFICATES, SERIES 2007-5, AND WELLS FARGO BANK N.A. AS ASSIGNEE OF OCWEN LOAN SERVICING, LLC, Defendants, WELLS FARGO, Counter-Claimant. |
| Court | U.S. District Court — Eastern District of New York |
On February 20, 2019, the court directed plaintiffs and counter-defendants, BSD 260 LLC ("BSD"), a New York limited liability company, and Jean Baptiste Antoine ("Antoine") (collectively, "plaintiffs") and defendants and counter-claimants Wells Fargo N.A. as Trustee for Option One Mortgage Loan Trust 2007-5 Asset-Backed Certificates, Series 2007-5, and Wells Fargo Bank N.A. as Assignee of Ocwen Loan Servicing, LLC ("Ocwen") (collectively, "Wells Fargo" or "defendant") to brief a preliminary issue that bears on the underlying action. Specifically, the parties dispute (i) which party is entitled to insurance proceeds from an insurance policy that Wells Fargo's predecessor, Ocwen, purchased because Antoine failed to comply with his obligation to purchase such insurance, pursuant to the mortgage that secured the mortgagee's interest in real property that had sustained fire damage, located at 560 Fountain Avenue, Brooklyn, New York 11208 (the "Property") and (ii) whether the Power of Attorney ("POA") at issue is valid and enforceable. (Dkt. Order dated 2/20/2019.) Presently before the court is plaintiffs' "motion to compel the acceptance of the December 4, 2014 Power of Attorney," which defendant opposes.1 (ECF No. 26; ECF No. 27.)
Specifically, Antoine, through Joseph Katz ("Katz"), who purports to act on behalf of Antoine, asserts that Antoine had granted Katz a valid POA granting Katz "broad powers to act on his behalf 'for the purpose of litigating, selling, and conveying concerning [sic] the property located at 560 Fountain Avenue, Brooklyn, NY 11208." (ECF No. 26, Pl. Mem. 3.) Should the court find that the POA is valid and enforceable, then Katz will be considered Antoine's representative for purposes of these proceedings. On March 12, 2019, plaintiffs submitted their memorandum. (See ECF No. 26-1, Plaintiffs' Memorandum of Law in Support of the POA ("Pl. Mem.").) On March 29, 2019, Wells Fargo filed its opposition. (See ECF No. 27, Opposition re: Declaration ("Def. Mem.").) On April 4, 2019, plaintiffsfiled their reply memorandum. (See ECF No. 29-2, Memorandum in Further Support of the POA ("Reply Mem.").)
For the reasons stated below, and based on the admissible evidence proffered by the parties, the court grants plaintiffs' Rule 56 motion for partial summary judgment (the "Motion") that the POA is valid and enforceable. Thus, Katz is authorized to represent Antoine's interests in this litigation. The court expressly reserves decision as to which party or parties are the rightful beneficiaries of the insurance proceeds at issue because numerous disputes of material fact remain, as set forth below.
This case concerns insurance proceeds, currently held by defendant American Security Insurance Company ("ASIC"), which are payable under the ASIC insurance policy to Antoine and Wells Fargo as a result of a fire that allegedly occurred on Antoine's property on June 27, 2014. At the time of the fire, Antoine allegedly owned the Property, subject to a note and secured by a mortgage. Much of the relevant factual background predates the fire but is excessively murky, disputed by the parties, and/or unsubstantiated by admissible evidence or documentation.
On April 16, 2007, Antoine executed a note in the amount of $495,000.00 (the "Note") whereby he agreed to repay that principal sum, plus interest to the lender, Option One Mortgage Corporation ("Option One"). (ECF No. 27-2, Ex. 1, Note.) The lender secured the Note through a mortgage on the Property, which agreement provided that the borrower, Antoine, was obligated to maintain property insurance or repay the lender for amounts paid for such insurance (the "Mortgage" or "Mortgage Agreement"). .) In addition, both the Note and the Mortgage securing the Note provide that the lender "may require immediate payment in full of all Sums Secured by this Security Instrument if all or any part of the Property, or if any right in the Property, is sold or transferred without Lender's prior written permission." (Id. ¶ 17; ECF No. 27-2, Ex. 1, Note ¶ 11.) Further, the Mortgage Agreement requires Antoine to obtain hazard or property insurance to cover loss or damage caused by fire or other hazards, and permitted the Lender to obtain insurance to protect the Lender's rights in the property. The Mortgage Agreement also provides: "If there is a loss or damage to the Property, I [Antoine] will promptly notify the insurance company and Lender." .)
Under the ASIC insurance policy, the "Named Insured (Mortgagor)" under the policy is "Jean B Antoine," and the"Mortgagee" is "Ocwen Loan Servicing, LLC," and "Its Successors and/or Assigns." (ECF No. 26-3, Ex. B, at 6.) In addition, clause 15 of the ASIC insurance policy provides:
According to the Complaint, Antoine received a notice of default on his Mortgage in October 2007. Thereafter, Antoine failed to cure the default, causing all outstanding principal and interest to be accelerated pursuant to the terms of the Note. (ECF No. 27-2, Ex. 1, Note ¶ 7(B).) Option One commenced a foreclosure action against Antoine on December 13, 2007. (Compl. ¶ 19; ECF No. 27, Def. Mem. ¶ 6; Option One Mortg. Corp. v. Antoine, No. 45568/2007 ("Foreclosure Action").) In early 2008, Option One assigned Antoine's defaulted Mortgage to Wells Fargo. (Compl. ¶ 21.) Wells Fargo's failure to prosecute the Foreclosure Action led to its dismissal on February 27, 2014. (ECF No. 13-5, Ex. E, Order of Dismissal.)
Ocwen purchased a residential property policy from ASIC, which was effective between July 8, 2013 until July 8, 2014 to insure the Property up to the liability limit of $494,460. (ECF No. 26-3, Ex. B, Insurance Policy 6.) Ocwen obtained the insurance after Antoine failed to do so, in accordance with the terms of the Mortgage Agreement, and Ocwen paid the premium amount of $4,153.00. (Id. at 4, 6.)2 Under the Mortgage Agreement, Antoine was obligated to take out hazard or property insurance and/or to repay the lender for the cost of such insurance on the Property. On or about June 27, 2014, while the Policy was effective, a fire allegedly occurred on the Property. Although there is no supporting evidence before the court, defendant asserts that Antoine purportedly filed a claim with ASIC to collect insurance proceeds under the Insurance Policy on March 31, 2015, approximately nine months after the fire allegedly occurred. (ECF No. 27, Def. Mem. ¶ 10.) Plaintiffs dispute the claim date in their reply memorandum, but provide no evidence on the issue. (ECF No. 29, Reply Mem. 4.) In apparent violation of Antoine's obligation under the ASIC policy and the Mortgage Agreement, it appears that Antoine did not "immediately" or "promptly notify"ASIC and Ocwen of the fire occurring on the Property. .) Neither party has presented evidence from ASIC regarding the claim.
Furthermore, on December 4, 2014, apparently without requesting and obtaining written permission from Wells Fargo as required pursuant to the Mortgage Agreement, Antoine sold the property to BSD pursuant to a Contract of Sale. (Id. ¶ 17.) According to the Contract of Sale, BSD agreed to pay $30,000 to Antoine, and $495,000 constituted the unpaid principal on the existing mortgage. (ECF No. 13-8, Ex. H, Deed Transfer from Antoine to BSD at 2; ECF No. 26-4, Ex. C, Contract 2-3). Although the Contract of Sale apparently indicates that BSD, as the purchaser, assumed the "principal amount unpaid on the existing mortgage on the date hereof," i.e. $495,000, there is no indication that BSD actually assumed the existing mortgage or, as noted above, notified or obtained authorization from the lender of the purported sale. (ECF No. 26-4, Ex. C, Contract 2-3.) Indeed, Antoine's inadmissible "Affidavit," which is not submitted under penalty of perjury, but is discussed further below, states that "by selling the deed [Antoine is] still liable for the mortgage between [Antoine] and the bank." (ECF No. 26-7, Ex. F, Antoine Affidavit.)
Plaintiffs' submissions are inconsistent and confusing with respect to the purchase price of the Property.
In addition to executing a Contract of Sale with BSD, on December 4, 2014, Antoine also allegedly executed (1) a statutory short form POA designating Katz as his agent, authorizing Katz to conduct all enumerated...
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