Gifford v. United N. Mortg. Bankers, Ltd.
| Decision Date | 08 July 2019 |
| Docket Number | 18 Civ. 6324 (PAE)(HBP) |
| Parties | ORINTHIA GIFFORD, Plaintiff, v. UNITED NORTHERN MORTGAGE BANKERS, LTD., et al., Defendants. |
| Court | U.S. District Court — Southern District of New York |
REPORT AND RECOMMENDATION
By notice of motion, defendants M&T Mortgage Corporation ("M&T"), United Northern Mortgage Bankers, Ltd. ("United Northern"), Aurora Loan Services LLC ("Aurora"), Mortgage Electronic Registration Systems, Inc. ("MERS"), Nationstar Mortgage LLC ("Nationstar") and Knuckles, Komosinski & Elliot ("KKE") (collectively, the "defendants") move to dismiss plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction and Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted (Notice of Motion, dated Aug. 24, 2018 (Docket Item ("D.I.") 23); Memorandum of Law, dated Sept. 5, 2018 (D.I. 27) ("United Memo."); Notice of Motion to Dismiss, dated Sept. 17, 2018 (D.I. 43); Notice of Motion, dated Nov. 7, 2018 (D.I. 59)).
For the reasons set forth below, I respectfully recommend that defendants' motions be granted.
On October 20, 1998, plaintiff executed a promissory note in favor of United Northern for $251,700.00 . This promissory note was secured by a mortgage given to United Northern encumbering plaintiff's real property located at 4160 Digney Avenue, Bronx, New York 10466 (the "Property") (Compl. ¶ 3; PAC ¶ 10). Under the terms of the promissory note, plaintiff was required to make 360 installment payments of $2,025.24 to United Northern from December 1, 1998 through November 1, 2028 (PAC ¶ 10).
United Northern then assigned plaintiff's mortgage and note to M&T, and it was recorded by the Bronx County Clerk on June 30, 1999 (PAC ¶¶ 10, 14). In or about October 1999, plaintiff experienced financial hardship and defaulted on her loan payments to M&T (PAC ¶¶ 15-16).
On November 17, 1999, plaintiff's mortgage and note were assigned to MERS which elected to accelerate plaintiff's debt based on her default (PAC ¶ 18). MERS filed a foreclosure action against plaintiff on or about April 25, 2000 in Bronx County Supreme Court (PAC ¶ 18). Plaintiff defaulted in that foreclosure action and on April 13, 2006, the Honorable Paul A. Victor, Justice of the Supreme Court, entered judgment against plaintiff for $430,085.89 and ordered that the Property be sold as a single parcel at a foreclosure sale (Judgment of Foreclosure and Sale, dated Apr. 5, 2006, annexed to the Declaration of Scott W. Parker, Esq. ("Parker Decl.") as Ex. 2 (D.I. 23-3)). Plaintiff moved to vacate this judgment on May 8, 2007; Justice Victor denied that motion on February 29, 2008 (Order, dated Feb. 29, 2008, annexed to Parker Decl. as Ex. 4 (D.I. 23-5)).
On December 12, 2007, MERS acquired title to the Property and a referee's deed was subsequently issued to it on February 23, 2009 (Referee's Deed, dated Feb. 23, 2009, annexed to Parker Decl. as Ex. 5 (D.I. 23-6)). However, four days earlier, on February 19, 2009, MERS assigned its bid in theforeclosure to Aurora which instituted a holdover proceeding against plaintiff (Assignment of Bid, dated Feb. 19, 2009, annexed to Parker Decl. as Ex. 6 (D.I. 23-7)). This holdover proceeding was resolved on May 26, 2010 when plaintiff consented to a judgment and warrant for possession of the Property in favor of Aurora (Stipulation of Settlement, dated May 26, 2010, annexed to Parker Decl. as Ex. 8 (D.I. 23-9)).
Plaintiff has mounted numerous challenges in state court to the foreclosure action and the related proceedings. Plaintiff filed an Order to Show Cause on February 13, 2012 seeking to stay all eviction proceedings against her and to vacate the judgment of the foreclosure action claiming that MERS "had no standing to bring [the] action against [her] because [her] mortgage may not have been properly assigned to them" (Affirmation in Support, dated Feb. 13, 2012, annexed to Parker Decl. as Ex. 9 (D.I. 23-10)). This motion was denied by the Honorable Stanley Green, Justice of the Supreme Court, on May 15, 2012 who found that plaintiff "never raised the issue of [MERS'] standing previously and thus [had] waived any objection thereto" (Order, dated May 15, 2012, annexed to Parker Decl. as Ex. 10 (D.I. 23-11)).
Plaintiff filed a nearly identical motion in October 2012 which was again denied by Justice Green for substantially the same reasons:
The motion by defendant to vacate the judgment of the foreclosure and sale, etc is denied. This case is thirteen years old. Defendant has resided in and conducted a business in the premises without paying mortgage payments or rent all these years. This case has been litigated for many years, with many motions, and multiple eviction proceedings have been brought in the Civil Court. Defendant has successfully remained in the premises for free. The issue of standing of MERS was resolved long ago. The judgment in this case was issued prior to any determination in other cases that MERS lacked standing to bring foreclosure actions. Defendant did not timely raise this issue and this Court has already ruled, by order dated May 15, 2012, that defendant had waived the issue.
(Order, dated Apr. 17, 2013, annexed to Parker Decl. as Ex. 11 (D.I. 23-12)). Plaintiff appealed this decision to the First Department, which affirmed Justice Green's ruling and found that "Gifford . . . did not demonstrate entitlement to vacatur . . . since she did not demonstrate a reasonable excuse for her default or move within one year[,] [n]or did she demonstrate grounds for vacatur based on fraud or misrepresentation." Mortgage Elec. Registration Sys., Inc. v. Gifford, 133 A.D.3d 429, 431, 20 N.Y.S.3d 9, 11 (1st Dep't 2015).
Plaintiff commenced this action pro se against defendants United Northern, Aurora, MERS, Nationstar, M&T and KKE onJuly 13, 2018 alleging violations of 42 U.S.C §§ 1983 and 1985 because defendants unlawfully deprived her of her constitutional right to her property, a "refusal or neglect to prevent the deprivation" of her property rights, "abuse of process" with respect to the foreclosure action, obstruction of justice and denial of due process, conspiracy, fraud and fraud on the court (Compl. ¶¶ 52-79).
Specifically, plaintiff alleges that United Northern unconscionably separated her mortgage from the promissory note by assigning the mortgage and that "trading her [n]ote as an investment security in a [t]rust on Wall Street" unlawfully "materially altered" the agreement (Compl. ¶¶ 11-12). Plaintiff appears to argue that because of this alleged separation, the mortgage was unenforceable and, thus, defendants had no right to foreclose on or evict her from the Property (Compl. ¶¶ 11-21). Plaintiff also once again argues that United Northern and MERS "did not have [s]tanding to invoke the Bronx County Supreme Court's jurisdiction" (Compl. ¶¶ 27-29). Finally, plaintiff alleges that because she was not aware that her mortgage was being assigned or securitized and because defendants did not have standing to bring the foreclosure action, defendants' actions amounted to fraud (Compl. ¶¶ 28, 30-41).
Although plaintiff's eight counts are asserted against all defendants, her complaint does not explain who defendantsM&T, Aurora, Nationstar or KKE are, and what role, if any, they specifically played in the transactions and proceedings at issue (see generally Compl.). My understanding of their roles is derived from the documents identified in footnote 1.
Defendants now move to dismiss plaintiff's complaint for lack of subject matter jurisdiction based on the Rooker-Feldman doctrine, res judicata and collateral estoppel, and for failure to state a claim )3. Plaintiff did not submit any opposition papers to defendants' motions to dismiss; rather, she moved for leave to file an amended complaint (Notice of Motion, dated Dec. 6, 2018 (D.I. 54)). Plaintiff's motion to amend is addressed in a separate Opinion and Order that is being filed contemporaneously with this Report and Recommendation.
Where, as here, a defendant seeks dismissal of the complaint on multiple Rule 12(b) grounds, a court should ordinarily address the movant's jurisdictional arguments before considering whether the complaint states a claim. Arrowsmith v. United Press Int'l, 320 F.2d 219, 221 (2d Cir. 1963) (Friendly, Cir. J.); see also Prout v. Vladeck, 18 Civ. 260 (JSR), 2018 WL 6332898 at *2 (S.D.N.Y. Nov. 1, 2018) (Rakoff, D.J.); Backus v. U3 Advisors, Inc., 16 Civ. 8990 (GHW), 2017 WL 4600430 at *10 (S.D.N.Y. Aug. 18, 2017) (Woods, D.J.); Artists Rights Enf't Corp. v. Jones, 268 F. Supp. 3d 491, 495 (S.D.N.Y. 2017) (Marrero, D.J.). If the court concludes that subject matter jurisdiction is lacking, it should not consider any remaining grounds asserted for dismissal. See Arrowsmith v. United Press Int'l, supra, 320 F.2d at 221.
To continue reading
Request your trial