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 |
I. Introduction
By notice of motion dated December 7, 2018 , plaintiff moves for leave to file an amended complaint. For the reasons set forth below, plaintiff's motion is denied.
II. Background1
On October 20, 1998, plaintiff executed a promissory note in favor of defendant United Northern Mortgage Bankers, Ltd.("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 defendant M&T Mortgage Corporation ("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 was assigned to Mortgage Electronic Registration Systems, Inc. ("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 the foreclosure to defendant Aurora Loan Services LLC ("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, M&T, Nationstar Mortgage LLC ("Nationstar") and Knuckles, Komosinski & Elliot ("KKE") on July 13, 2018 alleging violations of 42 U.S.C §§ 1983 and 1985 because defendants unlawfully deprived her of her constitutional right to her property, "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 alleged that United Northern unconscionably separated her mortgage from the promissory note by assigning the mortgage and that "trading her [n]ote as an invest-ment security in a [t]rust on Wall Street" unlawfully "materially altered" the agreement (Compl. ¶¶ 11-12). Plaintiff appeared to argue that because of this alleged separation, the mortgage was unenforceable and, thus, defendants had no right to collect on, foreclose on or evict her from the Property (Compl. ¶¶ 11-21). Plaintiff also argued that United Northern and MERS "did not have [s]tanding to invoke the Bronx County Supreme Court's jurisdiction" (Compl. ¶¶ 27-29). Finally, plaintiff alleged 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).
Defendants moved to dismiss plaintiff's complaint for lack of subject matter jurisdiction and for failure to state a claim (Memorandum of Law in Support of Defendant's Motion to Dismiss, dated Aug. 24, 2018 (D.I. 23-1) ("M&T Memo."); Memorandum of Law, dated Sept. 5, 2018 (D.I. 27) ("United Memo."); Memorandum of Law in Support of Defendants' Motion to Dismiss the Complaint with Prejudice, dated Sept. 17, 2018 (D.I. 44) ("MERS Memo.")2; Declaration of John E. Brigandi, Esq., dated Nov. 7, 2018 (D.I. 59) ("Bigandi Decl."))3. For the reasons set forth inmy Report and Recommendation, I respectfully recommended that defendants' motions to dismiss be granted.
Plaintiff did not submit any opposition papers to defendants' motions to dismiss; rather, she moved for leave to file an amended complaint.
In her proposed amended complaint, plaintiff omits defendants MERS and KKE from the action (Gifford Decl. ¶ 8; PAC). Plaintiff also appears to have abandoned her claims alleging violations of Section 1983 and 1985, a refusal or neglect to prevent deprivation of her rights, abuse of process, obstruction of justice and denial of due process claims and, instead, asserts 16 new claims (PAC ¶¶ 39-118).
Plaintiff's proposed amended complaint sets out additional details with respect to the time line of her mortgage loan and the underlying foreclosure action, especially with respect to defendants M&T, Aurora and Nationstar. While plaintiff's initial complaint did not contain any specific factual assertions with respect to M&T, Aurora or Nationstar, her proposed amended complaint explains that United Northern assigned her mortgage to M&T prior to the foreclosure action filed by MERS, that thereferee's deed to the Property was eventually assigned by MERS to Aurora and that Aurora prosecuted the holdover proceeding against plaintiff, and that on December 8, 2017, Aurora assigned the Property to Nationstar by a "quitclaim deed" (PAC ¶¶ 14-19, 23, 31).
Plaintiff's proposed amended complaint is predicated on the same facts as her initial complaint; however, plaintiff now appears to be arguing that United Northern, M&T and Aurora were really the parties who prosecuted the foreclosure and holdover proceedings against her and that they falsely represented that MERS was the owner of the mortgage (PAC ¶ 5, 18, 23). This assertion flows from plaintiff's allegation (1) that "the purported transfer of the 'mortgage loan' in dispute from . . . M&T to . . . MERS . . . was not recorded and remains unrecorded to present date", (2) that the "assignment of mortgage" documenting M&T's assignment of plaintiff's mortgage to MERS was "forged" and "concealed from" the state court in the foreclosure action and (3) a finding in an unrelated Nebraska state court case that "MERS is contractually prohibited from taking any action on 'mortgage loans'" (PAC ¶¶ 18, 23).
Plaintiff further alleges that the purportedly original promissory note that either M&T or Aurora presented the state...
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