Citizens Bank v. O'Neal

• Docket Number: Index No. 59193/2022
• Decision Date: 20 July 2023
• Citation: 2023 NY Slip Op 50738 (U)
• Parties: Citizens Bank, N.A., Plaintiff, v. Pamela O'Neal as Executrix of the Estate of Max H. McComb, deceased, late of the Borough of Rouseville, County of Venango, and Commonwealth of Pennsylvania, and individually as devisee under the Last Will and Testament of Max H. McComb dated November 29, 2011; MALCOLM POTTER individually as devisee under the Last Will and Testament of Max H. McComb dated November 29, 2011; PEOPLE OF THE STATE OF NEW YORK; UNITED STATES OF AMERICA; and "JOHN DOE #1" through "JOHN DOE #12", the last Twelve names being fictitious and unknown to the Plaintiff's 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 the complaint, Defendants.
• Court: New York Supreme Court

2023 NY Slip Op 50738(U)

Citizens Bank, N.A., Plaintiff, v. Pamela O'Neal as Executrix of the Estate of Max H. McComb, deceased, late of the Borough of Rouseville, County of Venango, and Commonwealth of Pennsylvania, and individually as devisee under the Last Will and Testament of Max H. McComb dated November 29, 2011; MALCOLM POTTER individually as devisee under the Last Will and Testament of Max H. McComb dated November 29, 2011; PEOPLE OF THE STATE OF NEW YORK; UNITED STATES OF AMERICA; and "JOHN DOE #1" through "JOHN DOE #12", the last Twelve names being fictitious and unknown to the Plaintiff's 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 the complaint, Defendants.

Index No. 59193/2022

Supreme Court, Westchester County

July 20, 2023

Unpublished Opinion .

Attorneys for Plaintiff Citizens Bank, N.A.

Cooper Erving & Savage LLP

Matthew E. Minniefield, Esq.

Attorneys for defendant Pamela O'Neal, in her capacity as Executrix of the Estate of Max H. McComb

Reich Reich & Reich, P.C.

Jeffrey A. Reich, Esq.

HON WILLIAM J. GIACOMO, J.S.C.

In this underlying foreclosure action, defendant Pamela O'Neal, in her capacity as Executrix of the Estate of Max H. McComb, moves, pursuant to CPLR 3212, for summary judgment dismissing the complaint and for summary judgment on her counterclaim seeking entry of a declaratory judgment against plaintiff Citizen's Bank, N.A., voiding the Credit Line and the Mortgage (motion sequence 001). In motion sequence 002, plaintiff moves, for summary judgment on its complaint and to strike defendant's answer. The motions are consolidated herein for disposition.

Papers Considered NYSCEF DOC NO. 19-59.

1. Notice of Motion/ Affirmation of Jeffrey A. Reich, Esq./Affidavit of Pamela O'Neal/ Exhibits A-G/Memorandum of law in support/Foreclosure addendum

2. Notice of Cross Motion/ Affirmation of Matthew E. Minniefield, Esq. in support/ Exhibits A-L/ Affidavit of Debbie. L. Biddle/Exhibits A-B/ Memorandum of Law

3. Affirmation of Jeffrey A. Reich Esq. in opposition/ Exhibits A-E

4. Memorandum of Law in Reply

FACTUAL AND PROCEDURAL BACKGROUND

This is an action to foreclose on a mortgage lien against property located at 7 McKinley Avenue, Mt. Pleasant, New York (mortgaged premises). ^[1] On or about December 12, 2012, Max McComb (McComb) entered into a Home Equity Line of Credit Agreement and a Credit Line Mortgage with plaintiff, in the amount of $180,000.00. This loan was secured by the mortgaged premises, which was solely owned by McComb. The mortgage was recorded in the Westchester Office of the County Clerk on January 4, 2013. McComb set up an automatic withdrawal from his bank accounts to pay the mortgage. McComb died on September 7, 2013. The monthly mortgage payments were made until April 14, 2016, when payment stopped. On April 13 2022, plaintiff commenced this action to foreclose on the mortgage by filing, among other things, a summons and a complaint and a notice of pendency.

Defendant, who is McComb's step-daughter and the Executrix of the Estate of Max McComb, filed an amended answer and counterclaim on January 26, 2023 seeking a declaratory judgment to quiet title and void the mortgage entered into by McComb as he was under the auspices of a court appointed guardian at the time. Defendant asserted five affirmative defenses. The first affirmative defense states that plaintiff's claims against the defendant are barred and plaintiff's mortgage lien is dischargeable and void. Among other things, the remaining affirmative defenses allege that the claim is time barred and also barred by laches, ratification, and waiver.

Defendant now moves for summary judgment. In support of the motion, defendant submits an affidavit and exhibits regarding the guardianship proceeding. Defendant states that she was issued Letters Testamentary on January 19, 2022, in the pending probate proceeding for the Last Will and Testament of Max McComb dated November 29, 2011. Defendant asserts that, on July 11, 2012, she filed an application in the Supreme Court for the State of New York, Westchester County, for the appointment of a Guardian for Max McComb. The Court found that McComb was in immediate need of a Temporary Guardian of his Person and Property in order to prevent him harm. On August 14, 2012, Pauline M. Galvin, Esq. (Galvin) was appointed as temporary guardian of the person and property, pending a hearing on the matter.

The parties appeared before the Honorable J. Emmett Murphy on September 20, 2012. Pursuant to an order dated October 24, 2012, Galvin was appointed to act as a Temporary Limited Guardian of the Property for one year from the date the order was signed. Among other things, the Order provided Galvin with the authority to marshal all income, and assets, except as to a Wells Fargo checking account. McComb was allowed to retain control of the Wells Fargo account, which had up to $5000 deposited each month, as he was responsible for the payment of household and other bills from his Wells Fargo account. Galvin was responsible for paying the property tax and homeowner's insurance, and had authority to review the bank statements. The Temporary Guardianship was to remain in affect pending a final order and Judgment of the Court in a proceeding. The Order also read as follows, in relevant part

"pending a final order and judgment of this Court in this proceeding, Max McComb shall not place any encumbrances, liens, mortgages or confessing any judgment upon or transfer titled to any of the real, personal and tangible property and any other assets owned by Max McComb; and it is further

Ordered, that Max McComb shall not sign and/or co-sign any mortgages, loans and/or promissory notes nor shall he execute any new powers of attorney...."

NYSCEF Doc. 25 at 6-7.

On November 7, 2012, Galvin issued a "Statement Identifying Real Property" that stated McComb's property may not be sold, mortgaged or liened without prior court permission from the Article 81 Judge. This was filed with the Westchester County Clerk on November 15, 2012. Defendant states, "Notwithstanding the Recorded Statement, on or about December 13, 2012, McComb obtained a Home Equity Line of Credit with RBS Citizens N.A. in the amount of $180,000.00 (the "Credit Line") [and executed] a Credit Line Mortgage (the "Mortgage") [against the property to secure] the Credit Line." NYSCEF Doc. No. 21, ¶ 10. Defendant's counterclaim alleges that, prior to issuing the Credit Line, plaintiff conducted a title search on the property and was on notice of the Statement Identifying Real Property.

The record indicates that Judge Murphy ordered the termination of the guardianship proceeding by Order dated April 3, 2013. The Order stated, in relevant part, that the "Temporary Guardianship of Max McComb, made on consent by Max McComb, and who has subsequently withdrawn said consent, is terminated, as Max McComb has moved out of the jurisdiction of this court and is no longer residing in or domiciled in the State of New York."

Defendant's Motion for Summary Judgment (motion sequence 001)

Defendant now moves for summary judgment seeking to void the Home Equity Line of Credit Agreement and Credit Line mortgage granted by McComb to plaintiff against the real property. According to the defendant, the Guardianship Order was filed with the Westchester County Clerk's Office and provided notice that Max McComb was not to place any encumbrances, liens or mortgages on the Property. In addition, Galvin's filed Statement provided similar notice when it expressly stated that the Property was not to be sold, mortgaged or liened without permission from the Article 81 Judge. Plaintiff entered into the subject mortgage on December 12, 2012, after these Orders and notice were executed and filed.

As a result, defendant argues that the documentary evidence establishes that plaintiff had actual and/or constructive notice that McComb was not able to enter into the Credit Line agreement and/or grant him a mortgage securing the Credit Line, and therefore these must be determined to be and declared void, ab initio.

Plaintiff's Opposition and Motion for Summary Judgment (motion sequence 002)

Plaintiff opposes defendant's motion and argues that it has established its right to summary judgment. Plaintiff also requests the defendant's answer be stricken. Plaintiff is seeking an order of reference, including among other things, a judgment decreeing the amount due to plaintiff, for the mortgaged premises to be ordered to be sold; for a referee to be appointed to compute the sums due to plaintiff on its note, and for the Court to adjudge and decree that defendants be barred and forever foreclosed of and from all lien and equity of redemption of, in and to the mortgaged premises. Plaintiff states that it has provided the mortgage, unpaid note and competent evidence of the defendant borrower's default on the loan, to establish that there are no triable issues of fact. Plaintiff submits an affidavit from Debbie Biddle, a foreclosure operations manager who reviewed McComb's account. Biddle stated that "[m]y review of the attached payment history shows the mortgage loan is due for the April 14, 2016 installment and all subsequent installments, and by reason thereof, the Note and Mortgage are in default." NYSCEF Doc. No. 47, ¶ 6.

In opposition to defendant's motion, plaintiff argues that the first affirmative defense and counterclaim fail as a matter of law because the underlying mortgage has been ratified by defendant. Defendant contends that plaintiff has conflated the doctrines of void and voidable. She argues that where, as here, the mortgage was signed by someone who...