Firststorm Partners 2, LLC v. Vassel

• Decision Date: 21 February 2013
• Docket Number: 10-CV-2356(KAM)(RER)
• Parties: FIRSTSTORM PARTNERS 2, LLC, Plaintiff, v. KAYE VASSEL and PAUL VASSEL, Defendants
• Court: U.S. District Court — Eastern District of New York

FIRSTSTORM PARTNERS 2, LLC, Plaintiff,

v.KAYE VASSEL and PAUL VASSEL, Defendants

10-CV-2356(KAM)(RER)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

Dated: February 21, 2013

MEMORANDUM AND ORDER

KIYO A. MATSUMOTO, United States District Judge:

On May 24, 2010, Greystone Bank ("Greystone") commenced this action against defendants Kaye Vassel and Paul Vassel (together, "defendants" or the "Vassels") to foreclose on a first mortgage lien on certain real property designated as Block 10188, Lot 45 with an address of 109-18 Merrick Boulevard, Jamaica, New York (the "Property"). (See generally ECF No. 1, Complaint filed 5/24/10 ("Compl.").) Pursuant to a scheduling order of this court, on September 22, 2011, Greystone filed a motion for summary judgment, which defendants did not oppose. (ECF No. 30, Motion for Summary Judgment filed 9/22/11.) Following the acquisition of the Note and Mortgage at issue in this action by FirstStorm Partners 2, LLC ("FirstStorm" or "plaintiff"), FirstStorm was substituted for Greystone as plaintiff in the action. (Order Granting Motion to Substitute Party dated 10/26/11.)

On March 8, 2012, Magistrate Judge Reyes issued a Report and Recommendation recommending that the court grant plaintiff's unopposed motion for summary judgment, and ordered that any objections to the Report and Recommendation be submitted by March 26, 2012. (ECF No. 39, Report and Recommendation dated 3/8/12 ("R&R").) On May 23, 2012, after receiving no objections from defendants, the court issued an order adopting Judge Reyes' Report and Recommendation dated March 8, 2012, ordering plaintiff to submit additional documentation setting forth the amounts due and owing, and allowing defendants until June 8, 2012 to respond to plaintiff's submission. (ECF No. 41, Order Adopting Report and Recommendation dated 5/23/12.) Plaintiff made its submission and defendants did not respond. (See ECF Nos. 42-43.) On August 15, 2012, the court granted plaintiff's motion setting the amounts due and owing, and issued an order and judgment of foreclosure and sale of the Property in favor of defendants, which was entered the same day. (ECF No. 44-45, 47, Order and Judgment of Sale dated 8/15/12.) As discussed in greater detail below, the foreclosure sale of the Property occurred outside the doors of the Eastern District courthouse on September 13, 2012, as provided by the Amended Notice of Sale served on defendants and their counsel. (ECF No. 56, Referee's Report of Sale dated 10/2/12, at Ex. 1 (Amended Notice of Sale and accompanyingAffidavit of Service dated 8/17/2012).)

Presently before the court is the motion to vacate the court's August 15, 2012 order and judgment of sale filed by pro se defendants¹ Paul and Kaye Vassel. (ECF No. 50 ("Mot. to Vacate").) For the reasons that follow, defendants' pro se motion must be denied in its entirety.

BACKGROUND

As noted above, pro se defendants Paul and Kaye Vassel filed the instant motion to vacate in response to the court's order and judgment of sale dated August 15, 2012 permitting the foreclosure sale of the Property. (See Mot. to Vacate, at 1.) On August 17, 2012, plaintiff served the court's August 15, 2012 order and judgment of sale via regular mail upon defendants at their current residence; defendants' counsel of record was served via the ECF system. (ECF No. 48, Affidavit of Service dated 8/17/12.) Also on August 17, 2012, plaintiff served an Amended Notice of Sale² for the Property ("Amended Notice of Sale") upon defendants at their residence (as well as upon their counsel of record, via ECF), specifying that the Property "will sell at auction to the highest bidder outside the front doors ofthe U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, N.Y. on Thursday, September 13, 2012 at 10:00 a.m." (ECF No. 56, Referee's Report of Sale dated 10/2/12 ("Report of Sale"), at Ex. 1 (Amended Notice of Sale and accompanying Affidavit of Service dated 8/17/2012); see also ECF No. 52, Plff. Opp. dated 9/14/12 at 1, n.2.)

On September 12, 2012, defendants Paul and Kaye Vassel submitted a pro se motion, pursuant to Rule 60 of the Federal Rules of Civil Procedure, to vacate the court's August 15, 2012 order and judgment permitting the foreclosure sale. (ECF No. 50 ("Mot. to Vacate").) The Vassels also submitted a "Notice of Lis Pendens" in connection with the Property on September 12, 2012. (ECF No. 49.) Because the Vassels' September 12, 2012 motion to vacate and Notice of Lis Pendens were not entered onto the court's docket, however, until September 14, 2012, the day after the foreclosure sale was held, the court was not immediately aware of the September 12, 2012 filings when they were submitted. (See ECF No. 50, notation by pro se clerk dated 9/14/12.) The court will deem the Vassels' pro se motion to vacate the court's order and judgment of sale and Notice of Lis Pendens to have been made on September 12, 2012. The court nonetheless finds defendants' applications to be without legal merit and respectfully denies their motion to vacate for the reasons set forth herein.

According to the Report of Sale dated October 2, 2012 and prepared by the court-appointed referee, Michael King, Esq., the sale of the Property took place on September 13, 2012, "outside the front doors" of the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York. (ECF No. 56, Report of Sale ¶¶ 2-3.) Mr. King averred that he conducted this sale on September 13, 2012 in person, and that:

[A] few minutes after 10:00 a.m. on September 13, 2012, I made a loud announcement in the lobby of the U.S. Courthouse at 225 Cadman Plaza East, Brooklyn, New York, that a foreclosure sale would be conducted outside the front doors of the Courthouse. At approximately 10:15 a.m., I again announced the sale outside the front doors of the U.S. Courthouse and read aloud the terms of the sale. The only individuals present outside the courthouse were a U.S. Marshal and Plaintiff's counsel. At one point, an individual who later identified himself as a federal judge visiting from Louisiana interrupted the reading of the terms of sale to inquire about the proceedings. Apart from those individuals, I did not observe anyone else standing in the area outside the courthouse doors. After reading the terms of sale, I called for bids.

(Id. ¶ 3.) Subsequently, plaintiff FirstStorm Partners 2 LLC became the winning bidder with a bid of $250,000.00. (Id. ¶ 4.) Plaintiff assigned its foreclosure bid to FirstStorm Properties 2 LLC that same day, and Mr. King "made, executed, and delivered" the deed. (Id. ¶¶ 5-6.) As reflected in publicly available property records, the market value of the Property atthe time of the foreclosure sale was $324,000.00.³

As noted above, the Vassels' motion to vacate was not entered onto the court's docket until September 14, 2012. After receiving defendants' motion to vacate, plaintiff filed a letter in opposition to the motion on September 14, 2012. (ECF No. 52, Plff. Opp. dated 9/14/12.) Plaintiff's opposition letter informed the court that the foreclosure sale was noticed for and took place on September 13, 2012, that the deed had already been delivered to plaintiff's assignee, and that defendants had been on notice of the sale for more than three weeks. (Id. at 1.)

On September 24, 2012, the Vassels replied via letter to plaintiff's opposition. (ECF No. 53, Def. Reply dated 9/24/12.) In addition to alerting the court of several serious allegations against their then-attorney, Farrel Donald, Esq., discussed below in further detail, defendants acknowledged that they received the Amended Notice of Sale on August 19, 2012. (Id. at 1-3.) Mr. Vassel also conceded that he received the court's August 15, 2012 order and judgment of sale of the Property. (Id. (noting that Mr. Vassel inquired of his attorney why Mr. Donald "did not opposed to [sic] the summary judgmentmotion as stated in the notice from Rachel Kramer").) Mr. Vassel further stated that "[p]rior to the sale date, I contacted Michael King," but "Michael King refused to give me any information of the sale of the property. I also faxed him document of pending litigation [sic], but he ignored my calls and my letter." (Id. at 3.) Importantly, Mr. Vassel stated that "I went to the court on September 13, 2012, along with a witness Fabian Facey. No one at the court included [sic] the clerk of the court was aware of any sale going on at the court located at 255 [sic] Cadman Plaza East, Brooklyn, NY as noted in the notice of sale." (Id.)

Subsequently, on October 1, 2012, plaintiff submitted a letter to correct certain factual statements made the Vassels in their September 24, 2012 letter to the court. (ECF No. 54 Plff. Ltr. dated 10/1/12.) According to plaintiff's counsel, Rachel Kramer, Esq., she and her colleague, Barry Felder, Esq., (also counsel for plaintiff),

arrived outside the front doors of the Courthouse a few minutes before 10:00 a.m. The Referee, Michael King, arrived shortly after 10:00, announced the sale inside the Courthouse lobby, made a second, loud announcement outside the front doors of the Courthouse, and then proceeded (at approximately 10:15 a.m.) to read aloud the terms of sale and call for bids. Mr. Vassel, whom I know by sight from our several meetings in Magistrate Judge Reyes' courtroom, did not appear; nor did I see him in the Courthouse lobby.

(Id. at 1.) Ms. Kramer also stated that the only people who approached during the sale was a U.S. Marshal stationed at the door, and United States District Judge Tucker Melancon, a visiting judge from the Western District of Louisiana, who stopped on his way into the courthouse to inquire about the nature of the auction proceeding. (Id. at 1-2.) Thus, according to plaintiff, the foreclosure sale of the Property took place at the noticed time and place in accordance with the Amended Notice of Sale. (Id. at 2.)

On October 23, 2012, the court held a status conference to address defendants' allegations in their ...