HSBC Bank United States v. 2052 Madison LLC
| Decision Date | 06 October 2016 |
| Docket Number | INDEX NO. 850022/2015 |
| Citation | 2016 NY Slip Op 31875 (U) |
| Parties | HSBC BANK USA, NATIONAL ASSOCIATION AS TRUSTEE FOR WELLS FARGO ASSET SECURITIES CORPORATION, MORTGAGE ASSET-BACKED PASS THROUGH CERTIFICATES, SERIES 2008-1, Plaintiff, v. 2052 MADISON LLC, BRIAN J. MACNISH, NEW YORK CITY PARKING VIOLATIONS BUREAU, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, WELLS FARGO BANK, N..A., "JOHN DOES" AND "JANE DOES" said names being fictitious parties intended being possible tenants or occupants of premises and corporations, other entities or persons who claim, or may claim, a lien against the premises , Defendants. |
| Court | New York Supreme Court |
PRESENT: MANUEL J. MENDEZ Justice
MOTION DATE 08-24-2016
Upon a reading of the foregoing cited papers, it is Ordered, that plaintiff's motion pursuant to CPLR §3212 for summary judgment, is granted as stated herein. 2052 Madison LLC and Brian J. MacnIsh's cross-motion pursuant to CPLR §3025 to amend their answer is denied.
2052 Madison LLC, is a limited liability corporation created by Brian J. Macnish, for the ownership of an apartment building located at 349 West 121st Street, New York, New York, Block 1754, Lot 57 (hereinafter referred to as "the property"). On December 1, 2005, 2052 Madison LLC, entered into a mortgage and accepted a note for $700,000.00 with Circle S Funding LLC, Mr. Macnish was guarantor of the loan. On May 8, 2007, Circle S Funding LLC transferred and assigned the December 1, 2005 mortgage to Circle S Capital Corp. (Mot. Exh. 1).
On October 26, 2007, after transferring title to himself, Brian J. Macnish, personally accepted a note and fixed rate mortgage with Wells Fargo Bank, N.A. for $900,000.00. On October 26, 2007, Brian J. Macnish also accepted a consolidated mortgage and consolidated note with Wells Fargo Bank, N.A. adjusting the principal balance of the mortgage debt to incorporate the remaining balance on the December 1, 2005 mortgage and note for the property, for a total of $1,200,000.00. On May 29, 2012, Wells Fargo Bank, N.A. formally transferred and assigned Mr. Macnish's consolidated mortgage and consolidated note to the plaintiff. The transfer and assignment was recorded in the Office of the New York City Register of the City of New York on June 19, 2012 under File No. 2012000239993 (Mot. Exh. 1).
It is alleged that effective September 1, 2010, Mr. Macnish defaulted on the consolidated mortgage and note by failing to tender the full amount of the monthly payment that was due, and failing to tender timely payments thereafter. On May 19, 2014 and October 3, 2014, plaintiff through Wells Fargo Bank N.A. alleges that 90 day notices of default were sent to Brian J. Macnish, stating the amount needed to cure the default . On January 30, 2015, plaintiff commenced this foreclosure action and filed a Notice of Pendency on the property. On February 6, 2015, 2052 Madison LLC was served with the summons and complaint through service on the New York State Secretary of State. On February 7, 2015, Brian J. Macnish was served through service on "Desirie Doe," a person of suitable age and discretion (Mot. Exh. 2).
On February 26, 2015, Brian J. Macnish and 2052 Madison LLC (hereinafter referred to collectively as "defendants") served and filed an Answer to the Complaint asserting seventeen affirmative defenses and "Counterclaims" with eleven (11) numbered paragraphs (Mot. Exh. 3). None of the other named co-defendants appeared or answered in this action.
Plaintiff seeks summary judgment pursuant to CPLR §3212 against the defendants. Plaintiff argues that there was compliance with all the relevant notice requirements and statutes, that defendants have defaulted in payments and that it is entitled to foreclosure as the possessor of the consolidated note and consolidated mortgage.
In order to prevail on a motion for summary judgment pursuant to CPLR §3212, the proponent must make a prima facie showing of entitlement to judgment as a matter of law, through admissible evidence, eliminating all material issues of fact (Klein v. City of New York, 89 N.Y. 2d 833, 675 N.E. 2d 548, 652 N.Y.S. 2d 723 [1996]). Once the moving party has satisfied these standards, the burden shifts to the opponent to rebut that prima facie showing, by producing contrary evidence in admissible form, requiring a trial of material factual issues (Amatulli v. Delhi Constr. Corp., 77 N.Y. 2d 525, 571 N.E. 2d 645; 569 N.Y.S. 2d 337 [1999]).
In a foreclosure action plaintiff establishes prima facie entitlement to summary judgment by providing the mortgage, unpaid note, and proof of the default in payment (U.S. Nat. Ass'n. v. Akande, 136 A.D. 3d 887, 26 N.Y.S. 2d 887 [2nd Dept., 2016]). Plaintiff is also required to prima facie establish standing, when the defendant raises the issue (U.S. Bank, N.A. v. Collymore, 68 A.D. 3d 752, 890 N.Y.S. 2d 578 [2nd Dept., 2009]). In opposition to the motion for summary judgment defendants argue that plaintiff is not an appropriate party to bring this action and lacks standing.
Standing is established in a foreclosure action by proof of physical delivery of the note, or assignment of the note to the plaintiff prior to commencement of the action. The note and not the mortgage is the instrument that conveys standing (Aurora Loan Servs. LLC v. Taylor, 25 N.Y. 3d 355, 34 N.E. 3d 363, 12 N.Y.S. 3d 612 [2015]). A note endorsed in blank does not act as an impediment to plaintiff's standing (Bernabel, 125 A.D. 3d 541, 5 N.Y.S. 3d 372 [1st Dept., 2015]). Assignment or possession of the note prior to the commencement of the foreclosure action is sufficient to establish standing (Bank of New York Mellon Trust Co, N.A. v. Sachar, 95 A.D. 3d 695, 943 N.Y.S. 2d 893 [1st Dept., 2012]). Plaintiff may rely on the original loan file prepared by the assignor in the regular course of business to establish standing (Wells Fargo Bank, N.A. v. Jones, 139 A.D. 3d 520, 32 N.Y.S. 3d 95 [1st Dept., 2016] citing to Landmark Cap. Invs., Inc. V. Li-Shan Wang, 94 A.D. 3d 418, 941 N.Y.S. 2d 144 [1st Dept., 2012]).
Plaintiff annexed a copy of the consolidated mortgage and consolidated note to the motion papers to establish possession (Mot. Seq. 001). The affidavit of Shae Smith the Vice President of Loan Documentation, Wells Fargo Bank, N.A., a person with knowledge, relies on internal records and familiarity with how they are compiled, stating that Wells Fargo Bank, N.A. pursuant to the PSA and Servicer Agreement (Smith Aff. Exh. P), was custodian and servicer of the consolidated mortgage and consolidated note (Mot. Exh. 1), having possession of both (Smith Aff. Exh. Q). Ms. Smith states that the formal assignment and transfer of the consolidated mortgage and consolidated note took placeon May 28, 2012 and was recorded on June 19, 2012 (Mot. Exh. 1). The consolidated note endorsed in blank and the consolidated mortgage were in plaintiff's possession and assigned as of January 1, 2015, the date of commencement of this action, and plaintiff has established standing to bring this action.
Defendants have not established that as non-parties to the PSA agreement they have standing to assert claims related to contractual duty to challenge the validity of the PSA (Barton v. 270 St. Nicholas Ave. Housing Development Fund Corp., 84 A.D. 3d 696, 925 N.Y.S. 2d 433 [1st Dept., 1995] and Wells Fargo Bank N.A. v. Charlaff, 134 A.D.3 d 1099, 24 N.Y.S. 3d 317 [2nd Dept., 2015]).
Defendants in opposing summary judgment argue that plaintiff has not provided sufficient evidence of compliance with RPAPL §1304. Compliance with RPAPL §1304 is a mandatory condition precedent to the commencement of a foreclosure action (Aurora Loan Servs., LLC v. Weisblum, 85 A.D. 3d 95, 923 N.Y.S. 2d 609 [2nd Dept., 2011]). The notices of default sent by plaintiff were properly sent by plaintiff (See affidavit of Shae Smith) the notices establishing a business record and the attorney's affirmation together with printouts from the U.S. Postal Service showing the tracking records (Mot. Exh. 7 and Smith Aff. Exhs. S & T) (See Flagstar Bank, FSB v. Mendoza, 139 A.D. 3d 898, 32 N.Y.S. 3d 278 [2nd Dept., 2016]).
Defendants cross-move pursuant to CPLR §3025 to amend their answer to assert more specific affirmative defenses and counterclaims. The proposed amended answer asserts twenty affirmative defenses and eight counterclaims. Defendants argue that there is no prejudice to plaintiff by the proposed amendments and that the summary relief sought in plaintiff's motion for summary...
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