Fremont Investment & Loan v. Laroc, 2008 NY Slip Op 32748(U) (N.Y. Sup. Ct. 10/8/2008)
| Decision Date | 08 October 2008 |
| Docket Number | Motion Seq. No. 2,10776/2007,Motion Cal. Number 8 |
| Parties | FREMONT INVESTMENT & LOAN, Plaintiff, v. REGINALD LAROC; ELAINE NASTA; CHRISTINA PLOUMIS; DIMITRIOS PLOUMIS; DENISE PLOUMIS; Defendants. |
| Court | New York Supreme Court |
Upon the foregoing papers it is ordered that the motion is determined as follows:
Plaintiff commenced this foreclosure action alleging it is the holder, pursuant to an assignment, of a mortgage dated October 13, 2006, executed, acknowledged and delivered by defendants Laroc and Nasta, the fee owners of the premises known as 57-29 160th Street, Fresh Meadows, to Fremont Investment & Loan, to secure repayment of a note, evidencing a loan in the principal amount of $585,000.00, with interest. Plaintiff alleged that defendants Laroc and Nasta defaulted under the terms of the mortgage and note by failing to make the monthly installment payment of interest due and owing on December 1, 2006, and that as a consequence, it elected to accelerate the entire mortgage debt.
Plaintiff obtained a judgment of foreclosure and sale dated January 15, 2008 against defendants Laroc and Nasta based upon their default in answering the complaint. Defendants Laroc and Nasta seek to stay the foreclosure sale, vacate the judgment of foreclosure and sale, and for leave to serve a late answer. They assert that their default in answering the complaint is excusable and that they have meritorious defenses based upon fraud, coercion, lack of standing, and violations of Banking Law § 6-1 and General Obligations Law § 349.
Plaintiff opposes this motion.
To the extent defendants Laroc and Nasta seek to vacate the judgment of foreclosure and sale, the affidavits of service presented by plaintiff constitute prima facie evidence of proper service upon defendants Laroc and Nasta in accordance with CPLR 308(2) and CPLR 308(1), respectively (see Skyline Agency, Inc. v. Ambrose Coppotelli, Inc., 117 AD2d 135, 139 [1986]). In addition, defendants Laroc and Nasta appeared in the action, insofar as their former counsel served and filed a notice of appearance on their behalf, and the notice of appearance did not contest jurisdiction. Generally, (Skyline Agency v. Ambrose Coppotelli, Inc., 117 AD2d at 140) (see National Loan Investors, L.P. v. Piscitello, 21 AD3d 537 [2005]). Defendants Laroc and Nasta claim that they relied upon their attorney to represent them in defense of the action, and were unaware that the attorney did not assert any defenses on their behalf. However, they do not contest that plaintiff properly effected service of process upon them. Thus, that branch of the motion by defendants Laroc and Nasta to vacate the judgment of foreclosure and sale pursuant to CPLR 5015(a) (4) is denied.
Defendants Laroc and Nasta make no claim that they did not personally receive notice of the summons in time to defend (see CPLR 317). That branch of the motion by defendants Laroc and Nasta to vacate the judgment of foreclosure and sale pursuant to CPLR 317 is denied.
With respect to that branch of the motion by defendants Laroc and Nasta to vacate the judgment based upon CPLR 5015(a) (1), a defendant seeking to vacate a default in answering a complaint must demonstrate a justifiable excuse for the default and a meritorious defense to the action (see CPLR 5015[a] [1]; White v. Daimler Chrysler Corp., 44 AD3d 651 [2007]; Fekete v. Camp Skwere, 16 AD3d 544 [2005]; Caputo v. Peton, 13 AD3d 474 [2004]; Glibbery v. Cosenza & Assoc., 4 AD3d 393 [2004]). Defendants Laroc and Nasta state that their former attorney merely attempted to negotiate with plaintiff's assignee for permission to sell the premises with a short payoff of the mortgage loan. They further assert that they have learned from their present attorney, that they are the victims of fraudulent and predatory lending practices committed by plaintiff and its agents, in violation of Banking Law § 6-1 and General Business Law § 349, and that plaintiff lacked standing to bring this suit.
Although a court has the discretion to accept law office failure as a reasonable excuse (see CPLR 2005), a conclusory, undetailed, and uncorroborated claim of law office failure does not amount to a reasonable excuse (see Matter of ELRAC v. Holder, 31 AD3d 636 [2006]; McClaren v. Bell Atl., 30 AD3d 569 [2006]; Solomon v. Ramlall, 18 AD3d 461 [2005]). Here, the uncorroborated and inadequately-explained excuse for failing to answer by defendants Laroc and Nasta does not constitute a reasonable excuse. In fact, the record supports the conclusion that defendants Laroc and Nasta purposely embarked upon a course of "willful default and neglect" (Santiago v. New York City Health & Hosps. Corp., 10 AD3d 393, 394 [2004]; Kolajo v. City of New York, 248 AD2d 512 [1998]). Defendants Laroc and Nasta were in default in answering before they retained their former attorney. Moreover, they make no claim that their former attorney failed to advise them properly regarding their potential defenses, and have presented no proof that such attorney failed to serve an answer as an oversight or under a misapprehension that negotiations with plaintiff's alleged assignee extended the time to answer.
In addition, defendants Laroc and Nasta have failed to demonstrate a meritorious defense to the action.
To the extent defendants Laroc and Nasta raise lack of standing, "[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant's request" (Carper v. Nussbaum, 36 AD3d 176, 181 [2006]). A plaintiff seeking to foreclose upon a mortgage must establish that it has legal or equitable interest in the mortgage and underlying debt (see Katz v. East-Ville Realty Co., 249 AD2d 243 [1998]; Kluge v. Fugazy, 145 AD2d 537 [1988]; see also First Trust Nat. Assn. v. Meisels, 234 AD2d 414 [1996]). Thus, it is self-evident that if the plaintiff establishes it is the lawful holder of the mortgage and note when the action was commenced, it has standing to sue for foreclosure (see Mortgage Electronic Registration Systems, Inc. v. Coakley, 41 AD3d 674 [2007]; Federal Natl. Mtge. Assn. v. Youkelsone, 303 AD2d 546 [2003]).
Defendants Laroc and Nasta claim that plaintiff did not have any interest in the subject mortgage and underlying note at the time of the commencement of this action.
The subject mortgage names Fremont Investment & Loan as the lender, and Mortgage Electronic Registration Systems, Inc. (MERS) as the nominee for the lender and the lender's successors and assigns, and as the mortgagee of record. The note was executed in favor of Fremont Investment & Loan, as the lender which advanced the mortgage loan proceeds to defendants Laroc and Nasta. The subject mortgage and note permit transference by the lender as of right, without permission of the borrower. Cynthia Can Patten, a vice-president on behalf of MERS, acting as nominee for Fremont Investment & Loan, executed the assignment of mortgage on May 24, 2007, purporting to assign the subject mortgage, together with the underlying obligation, from MERS to plaintiff. The assignment states that it is "[e]ffective as of March 20, 2007."
A mortgage may be assigned by the delivery of the note and mortgage by the assignor to the assignee with the intention that all ownership interest be thereby transferred (see Levy v. Louvre Realty Co., 222 NY 14, 20 [1917]; Curtis v. Moore, 152 NY 159 [1897]; Fryer v. Rockefeller, 63 NY 268 [1875]; Flyer v. Sullivan, 284 AD 697 [1954]; see also Becker v. Wells, 297 NY 275 [1948]), or by a written instrument of assignment (see generally Deutsche Bank Trust Co. Americas v. Peabody, 2008 WL 2548733, 2008 NY Misc LEXIS 3690). One court has taken the position that a written assignment of a mortgage and underlying note to a plaintiff seeking foreclosure, which is dated after the commencement date, is ineffective to establish standing, even where the assignment recited an effective date earlier than the commencement date (see e.g. Countrywide Home Loans, Inc. v. Taylor, 17 Misc 3d 595 [2007]; Countrywide Home Loans, Inc. v. Hovanec, 15 Misc 3d 1115(A) [2007]; see generally Deutsche Bank Trust Co. Americas v. Peabody, 2008 WL 2548733, 2008 NY Misc LEXIS 3690, supra). This court, however, is of the opinion that a written assignment may convey a legal interest, and also may serve to acknowledge an equitable interest which was transferred at earlier time by reciting that the assignment took effect at date prior to the date of its execution (see e.g. Penske Truck Leasing Co., L.P. v. Home Ins. Co., 251 AD2d 478 [1998]; Tenzer, Greenblatt, Fallon & Kaplan v. Abbruzzese, 57 Misc 2d 783 [1968]). Such earlier transference of the equitable interest, if accomplished by physical delivery of the note and mortgage to a plaintiff, prior to initiation of the action (see Bankers Trust Co. v. Hoovis, 263 AD2d 937 [1999]; see also Deutsche Bank Trust Co. Americas v. Peabody, 2008 WL 2548733, 2008 NY Misc LEXIS 3690, supra), can provide the requisite standing for bringing foreclosure (see Katz v. East-Ville Realty Co., 249 AD2d 243 [1998], supra; Kluge v. Fugazy, 145 AD2d 537 [1988], supra; see also First Trust Nat. Assn. v. Meisels, 234 AD2d 414 [1996], supra).
In this instance, it is undisputed that Fremont Investment & Loan was the holder of the mortgage and note from the outset and...
To continue reading
Request your trial