CitiMortgage, Inc. v. Sultan

• Decision Date: 29 October 2014
• Docket Number: 23303/2010
• Citation: 2014 N.Y. Slip Op. 24411,6 N.Y.S.3d 393,47 Misc.3d 626
• Parties: CITIMORTGAGE, INC., Plaintiff, v. Andre SULTAN aka Andre Sulton aka Andre L. Sulton, et al., Defendants.
• Court: New York Supreme Court

47 Misc.3d 626

6 N.Y.S.3d 393

2014 N.Y. Slip Op. 24411

CITIMORTGAGE, INC., Plaintiff

v.Andre SULTAN aka Andre Sulton aka Andre L. Sulton, et al., Defendants.

23303/2010

Supreme Court, Kings County, New York.

Oct. 29, 2014.

Robert Link Esq., Sweeney Gallo Reich & Bolz LLP, attorneys for Plaintiff.

Jorge Delgado, Esq., Law Offices of Carl E. Person, attorneys for Defendant Andre Sultan.

Opinion

LARRY D. MARTIN, J.

Plaintiff CitiMortgage, Inc. (“plaintiff” or “Citi”) moves this Court for an order permitting plaintiff to voluntarily discontinue the instant action without prejudice. Defendant cross-moves for an order dismissing the action with prejudice, cancellation of the notice of pendency for failing to prosecute the action in good faith, and reimbursement of payments defendant made to plaintiff under the theory of unjust enrichment. The action was also referred to this Part pursuant to the directive of Referee Noreen Soto–Fier, Esq. dated June 28, 2013 for a hearing on bad faith (the “ Directive”).

BACKGROUND

On or about March 26, 2008, the defendant-borrower, Andre Sulton (“defendant” or “borrower” or “Sulton”), executed a note in the amount of $618,750.00 in favor of Carnegie Mortgage LLC (“Carnegie”), simultaneously with a mortgage securing the premises located at 2105 Bergen Street in Brooklyn, New York, which names Mortgage Electronic Recording System, Inc. (“MERS”) as nominee for the lender, Carnegie. The copy of the note submitted with plaintiff's opposition papers has an undated allonge, endorsing the note to U.S. Mortgage Corporation; and another undated allonge, endorsing the note to plaintiff Citi. Plaintiff claims that the note was allegedly received on or about April 21, 2008; and the mortgage was assigned to Citi two years later by written assignment from MERS dated September 8, 2010.

It is not clear when defendant initially defaulted on this obligation—but in late 2009, plaintiff and defendant apparently discussed foreclosure alternatives. Particularly, plaintiff offered a Home Affordable Modification Trial Period Plan, with an effective date of January 1, 2010 (the “HAMP Trial”), which defendant signed on December 20, 2009 (Plaintiff's Affirmation in Opposition to Defendant's Motion to Dismiss and Reply in Support of Plaintiff's Motion to Discontinue Without Prejudice dated December 23, 2013 [hereinafter “Link opp.”], exhibit D). Defendant alleges (and plaintiff does not dispute) that, in accordance with the agreement, defendant made seven payments in the amount of $2,775.50 beginning November 23, 2009 through April 27, 2010, totaling $19,468.50.¹ Defendant then received a letter dated May 21, 2010, stating that the loan was in default. Defendant was notified thereafter, by letter dated September 3, 2010, that the HAMP Trial was not approved because the property is not occupied as the owner's primary residence.

Plaintiff then commenced this action on or about September 21, 2010. The verified complaint alleges that the defendant defaulted on the note by failing to pay a monthly payment due on February 1, 2010.² Filings made with the County Clerk indicate that process was served on defendant at his residence (not the subject mortgaged premises, which is used as a residential investment property). Defendant, then-appearing pro se, filed a verified answer dated October 1, 2010, asserting general denials, and did not assert any defenses or counterclaims.

The case laid dormant for about one and one-half years. Plaintiff filed a Request for Judicial Intervention (“RJI”) on April 10, 2012, triggering an appearance in the Foreclosure Pre–Settlement Conference Part for screening on July 17, 2012. The first conference in the Foreclosure Settlement Conference Part (“FSCP”) took place on October 23, 2012.³ Plaintiff alleges that he made an application to remove the matter to an I.A.S. Part, which was allegedly rejected over counsel's objection.⁴ At oral argument, plaintiff similarly alleges that, at this first FSCP Conference, he asked defendant Sultan if he would consent to a discontinuance of the entire action without prejudice, which was allegedly rejected; and then told the Referee that he wanted to discontinue the action, which was similarly allegedly rejected (Transcript of oral argument and hearing held January 14, 2014 [hereinafter “Tr.”] at 8:6–9:3). Defendant alleges that he went to the conference and asked plaintiff's counsel to see the front and back of the original note; he also submitted his own proposal to modify the loan dated October 23, 2012 (Sulton Affidavit, exhibit G). Additionally, defendant alleges that he sent the first of two Qualified Written Requests (“QWR”), which indicated that the request was being made pursuant to the “Federal Servicer Act, which is a part of the Real Estate Settlement Procedures Act, 12 U.S.C. 2605(e) ” (Reply Affidavit of Andre Sultan dated January 13, 2014 [hereinafter “Sulton Reply”] at ¶ 4). The first Request asked for, inter alia, a “complete and itemized statement of the loan history from the date of the loan to the date of this letter” and was sent to plaintiff's counsel's firm, Sweeney, Galo, Reich & Bolz, LLP (“Sweeney Gallo”),⁵ on October 23, 2012 (Sulton Reply, exhibit A). Defendant alleges that plaintiff's counsel did not show him the note; and he did not receive any response to the QWR. It is unclear whether Citi responded to defendant's proposal, but then defendant received another trial modification plan and agreement on or about December 20, 2012 (the “Second Mod”).

The next conference was held on January 7, 2013. Defendant signed the Second Mod agreement the day before, on January 6, 2013, and advised plaintiff and the Referee at the conference that a notary public would not sign the acknowledgment section because it was on a separate page that was immediately after the page where the borrower signed. Defendant alleges that he requested an accounting of the previous HAMP Trial payments at this conference because he did not see those payments reflected in the Second Mod agreement.

Defendant e-mailed counsel for plaintiff, Mr. Robert Link of Sweeney Gallo, about the Second Mod, and Mr. Link advised that the bank received the contract, but that it would have to be notarized (Plaintiff's Affirmation in Support of CPLR 3408 Compliance dated November 18, 2013 [hereinafter “Link 3408 aff.”], exhibit G). Defendant then had the agreement notarized on January 30, 2013 with the notary's signature and stamp placed next to the borrower's signature in an empty space on the same page; the following acknowledgment page was left unsigned. He sent it to Mr. Link by e-mail dated January 31, 2013. Mr. Link replied on the same day,⁶ stating “Thanks ... but I don't think they can accept it like this”; and noted that the notary's signature has to be on the same date as the borrower's, to show that the notary witnessed the borrower sign; he additionally stated that the separate notary page (the acknowledgment page) would have to be filled out (Link 3408 aff., exhibit H). Mr. Link then sent another modification agreement the next day, February 1, 2013, and advised defendant to fill it out in accordance with the instructions (Link 3408 aff., exhibit I).

Meanwhile, in accordance with the Second Mod agreement, defendant made four payments in the amount of $3,552.80 beginning January 22, 2013 with the last payment made April 29, 2013—totaling $14,211.20. Additionally, defendant sent a second QWR directly to plaintiff Citi on February 20, 2013 with a copy of the first request, indicating that the first QWR was not answered to sufficiently or timely. In this request, Mr. Sulton specifically added a request to see the front and back of the original note (Sulton Reply, exhibit B), and alleges he did not receive any response.

Defendant appeared with counsel, Mr. Jorge Delgado, Esq. of the Law Office of Carl E. Person, at the next conference held March 1, 2013. Defendant claims that no accounting of the previous HAMP Trial payments was given at that time. According to defendant, counsel for plaintiff allegedly represented that they would present the notarized agreement to Citi for its consideration, but could not guarantee that Citi would accept it. Additionally, Mr. Delgado, recounting his first conference in a letter, wrote that counsel appearing on behalf of Mr. Link's office stated the borrower's signature page was unacceptable; and then advised that this issue would be further investigated (Link 3408 aff, exhibit P). By contrast, Mr. Link's attorney affirmation alleges he “very clearly asked Mr. Delgado whether the notary format, as previously described as problematic, needed to be changed to facilitate a settlement. In response, Mr. Delgado unequivocally stated the notary page was no longer an issue” (Link 3408 aff., ¶ 21).⁷ Further, Mr. Link avers that, at this conference, Mr. Delgado only raised a concern about indemnification language in Section L of the Second Mod.

After the March 1, 2013 conference, the parties exchanged e-mail correspondence about the status of the modification. On April 18, 2013, Mr. Delgado e-mailed Mr. Link asking whether the modification agreement is in place; and requested a breakdown of his client's payment history (Link 3408 aff., exhibit J). Mr. Link replied that the he asked defendant for his attorney's contact information over a month ago and is glad they are finally in contact; he also stated that the bank never received the signed agreement (Link 3408 aff., exhibit K). Mr. Delgado re-sends the signed agreement, asking for plaintiff to confirm that the modification is in place, along with a notice of appearance; Mr. Link replied that the acknowledgment page is not signed and stated “I thought this was no longer an issue?” (Link 3408 aff., exhibit L).

At the next conference on May 21, 2013, defendant claims that plaintiff, once more, did not provide an accounting of the previous payments. Defendant also claims that plaintiff's counsel allegedly stated it...