Furman v. Wells Fargo Home Mortg., Inc.

• Decision Date: 10 April 2013
• Citation: 105 A.D.3d 807,2013 N.Y. Slip Op. 02374,964 N.Y.S.2d 169
• Parties: Maryann FURMAN, respondent, v. WELLS FARGO HOME MORTGAGE, INC., appellant, et al., defendants.
• Court: New York Supreme Court — Appellate Division

105 A.D.3d 807

964 N.Y.S.2d 169

2013 N.Y. Slip Op. 02374

Maryann FURMAN, respondent,

v.WELLS FARGO HOME MORTGAGE, INC., appellant, et al., defendants.

Supreme Court, Appellate Division, Second Department, New York.

April 10, 2013.

Hogan Lovells U.S. LLP, New York, N.Y. (Chava Brandriss and David Dunn of counsel), for appellant.

Karasik Law Group, P.C., Brooklyn, N.Y. (Alexander Karasik of counsel), for respondent.

RANDALL T. ENG, P.J., REINALDO E. RIVERA, PLUMMER E. LOTT, and ROBERT J. MILLER, JJ.

In an action, inter alia, for specific performance of a loan reinstatement agreement and to recover damages for breach of contract, the defendant Wells Fargo Home Mortgage, Inc., appeals (1), as limited by its brief, from so much of an order of the Supreme Court, Kings County (Lewis, J.), dated March 18, 2011, as granted the plaintiff's motion to confirm a referee's report (Marano, J.H.O.) dated August 6, 2010, made after a hearing, that the plaintiff's loan should be reinstated, and denied those branches of its motion which were pursuant to CPLR 3211(a)(1) to dismiss the causes of action asserted against it for specific performance and to recover damages for breach of contract, and (2) from an order of the same court dated August 9, 2011, which, sua sponte, directed it to reinstate the plaintiff's loan on certain terms and conditions.

ORDERED that the order dated March 18, 2011, is modified, on the law, by deleting the provision thereof granting the plaintiff's motion to confirm the referee's report that the plaintiff's loan should be reinstated, and substituting therefor a provision denying that motion and rejecting the report; as so modified, the order dated March 18, 2011, is affirmed insofar as appealed from, without costs or disbursements; and it is further,

ORDERED that on the Court's own motion, the notice of appeal from the order dated August 9, 2011, is deemed to be an application for leave to appeal from that order, and leave to appeal is granted ( seeCPLR 5701[c] ); and it is further,

ORDERED the order dated August 9, 2011, is reversed, on the law, without costs or disbursements; and it is further,

ORDERED that the matter is remitted to the Supreme Court, Kings County, for further proceedings on the complaint.

In 2003, the plaintiff and her mother-in-law, Galina Zhigun, obtained a loan in the sum of $180,000 from the defendant Wells Fargo Home Mortgage, Inc. (hereinafter Wells Fargo). The loan was secured by the borrowers' right, title, and interest in the shares allocated to, and the proprietary lease referable to, their cooperative apartment in Brooklyn. In August 2008, the plaintiff and Zhigun defaulted on the loan by failing to make their required loan payments. After the plaintiff and Zhigun failed to cure their default, Wells Fargo notified them that a public sale of their cooperative shares and proprietary lease was scheduled for February 19, 2009. The public sale was thereafter rescheduled several times.

Subsequently, in late July or early August 2009, the plaintiff and Wells Fargo allegedly entered into a “Partial Reinstatement/Repayment Agreement,” which provided that Wells Fargo would reinstate the loan on certain terms, which included an initial payment in the sum of $482, and an additional payment in the sum of $19,521.37 by October 1, 2009. Although the plaintiff made the initial $482 payment, Wells Fargo alleges that she and her co-borrower Zhigun never accepted the terms of the loan reinstatement agreement by timely executing it. Wells Fargo subsequently sold the cooperative shares and proprietary lease relating to the subject apartment at a public auction on September 3, 2009.

Approximately one month later, on October 9, 2009, the plaintiff commenced this action seeking, inter alia, to vacate the sale of the cooperative shares based on alleged violations of the Uniform Commercial Code, specific performance of the alleged loan reinstatement agreement, and damages for breach of contract. Upon commencement of the action, the plaintiff simultaneously moved to vacate the sale of the cooperative shares, reinstate her proprietary lease, and temporarily stay the transfer of the cooperative shares pending determination of her motion. In lieu of answering, Wells Fargo countered by moving pursuant to CPLR 3211(a)(1) to dismiss the complaint insofar as asserted against it, arguing, among other things, that it had a defense founded in documentary evidence because the plaintiff had not timely signed and returned the loan reinstatement agreement, and that agreement had never been signed by the co-borrower Zhigun.

In an order dated March 24, 2010, the Supreme Court granted that branch of Wells Fargo's motion which was to dismiss the plaintiff's cause of action, asserted against it, to vacate the sale of the cooperative shares based on alleged violations of the Uniform Commercial Code. However, the court held in abeyance both the plaintiff's motion, and those branches of Wells Fargo's motion which were to dismiss the causes of action for specific performance and to recover damages for breach of contract, which were asserted solely against Wells Fargo, pending a hearing to determine whether the plaintiff had complied with the terms of the loan reinstatement agreement, and whether she was ready, willing, and able to remit the sum of $19,521.37 to Wells Fargo. The Supreme Court appointed a judicial hearing officer as referee to hear and report on these framed issues. Although the referee conducted a hearing on the two framed issues identified by the March 2010 order, he made no specific findings of fact at the conclusion of the hearing, and did not prepare a written report as required by 22 NYCRR 122.9. Instead, at the conclusion of the hearing, the referee asked the plaintiff's attorney, “What's your application here?” The plaintiff's attorney indicated that he was seeking a determination that the plaintiff's loan should be “reinstated with the bank,” and the referee then granted the application.

The plaintiff subsequently moved to confirm the referee's report that her loan should be reinstated. In an order dated March 18, 2011, the Supreme Court granted the plaintiff's motion, and denied those branches of Wells Fargo's motion which were pursuant to CPLR 3211(a)(1) to dismiss the specific performance and breach of contract causes of action. Several months later, after a conference with counsel f...