Ocwen Loan Servicing, LLC v. Pacheco

• Decision Date: 23 December 2021
• Docket Number: Index 850228/2015
• Citation: 2021 NY Slip Op 32959 (U)
• Court: New York Supreme Court
• Parties: OCWEN LOAN SERVICING, LLC, Plaintiff, v. CARMEN PACHECO, CARMEN PACHECO, AKAM ASSOCIATES INC, CITY OF NEW YORK TRANSIT AUTHORITY TRANSIT ADJUDICATION BUREAU, CITY OF NEW YORK ENVIRONMENTAL CONTROL BOARD, HSBC MORTGAGE CORPORATION (USA), DSS & DIVISION OF LIENS AND RECOVERY, JOHN DOE #1 THROUGH JOHN DOE #12 Defendant.

2021 NY Slip Op 32959(U)

OCWEN LOAN SERVICING, LLC, Plaintiff,
v.
CARMEN PACHECO, CARMEN PACHECO, AKAM ASSOCIATES INC, CITY OF NEW YORK TRANSIT AUTHORITY TRANSIT ADJUDICATION BUREAU, CITY OF NEW YORK ENVIRONMENTAL CONTROL BOARD, HSBC MORTGAGE CORPORATION (USA), DSS & DIVISION OF LIENS AND RECOVERY, JOHN DOE #1 THROUGH JOHN DOE #12 Defendant.

Index No. 850228/2015

Supreme Court, New York County

December 23, 2021

Unpublished Opinion

MOTION SEQ. NO. 002

PRESENT: HON. FRANCIS KAHN, III JUSTICE

DECISION + ORDER ON MOTION

HON. FRANCIS KAHN, III JUSTICE

The following e-filed documents, listed by NYSCEF document number (Motion 002) 64, 65, 66, 67, 68, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 127, 128, 129, 130, 131, 132, 133, 134, 135, 140, 141, 301 were read on this motion to/for JUDGMENT - SUMMARY.

Upon the foregoing documents, the motion and cross-motion are determined as follows:

The relevant facts and procedural posture of this case was laid out by the Court in its decision of this date on Motion Seq. Nos. 5 and 6.

Presently before the Court is Plaintiffs motion for, inter alia, summary judgment pursuant to CPLR §3212 (Motion Seq No 2) on both causes of action, striking out the Pachecos' answer and to appoint a referee to compute. The Pachecos' cross-moved for: [1] summary judgment dismissing Plaintiffs complaint, [2] dismissal of Plaintiff s complaint based on lack of standing to foreclose on the satisfied mortgage, [3] dismissal of Plaintiff s complaint for lack of capacity to sue because Plaintiff was not a holder of the satisfied mortgage, [4] dismissal of Plaintiff s complaint as barred by the statute of limitations, [5] "[p]ursuant to §§201, 213 [4] dismissing plaintiffs cause of action as time-barred" [sic]; [6] "[dismissing plaintiffs complaint for lack of capacity to sue, failure to state a cause of action, and for lack of documentary evidence pursuant to CPLR §§ 3211(3), (5), (1)" [sic]; [7] dismissing Plaintiffs complaint for failure to provide disclosure and [8] precluding Plaintiff from introducing certain evidence at trial based upon failure to provide disclosure. Subsequently, Pachecos filed an amended cross-motion asserting a ninth request for relief, to wit dismissal of "plaintiff s complaint for failure to timely file motion for summary judgment within ninety days of Order of May 19, 2016" [sic].

This motion was first submitted in 2017 and Justice Judith McMahon issued an interim decision dated February 13, 2018, which directed the parties to appear before a Referee "to determine if Plaintiff

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has [sic] possession of the note at the time the of commencement of this action." In a decision dated September 27, 2019, the Referee answered the question in the affirmative (NYSCEF Doc No 201). Based on that finding, and the above referenced papers, the Court determines the motions as follows:

Plaintiff was required on the branch of its motion for summary judgment to establish prima facie proof of the mortgage, the note, and evidence of the borrower's default (see U.S. Bank, N.A., v James, 180 A.D.3d 594 [1st Dept 2020]; Bank of NY v Knowles, 151 A.D.3d 596 [1st Dept 2017]; Fortress Credit Corp. v Hudson Yards, LLC, 78 A.D.3d 577 [1st Dept 2010]). Proof supporting a prima facie case on a motion for summary judgment must be in admissible form (see CPLR §3212[b]; Tri-State Loan Acquisitions III, LLC v Litkowski, 172 A.D.3d 780 [1st Dept 2019]). Plaintiff was also required to demonstrate its standing since Defendants raised this affirmative defense in their answer (see eg Wells Fargo Bank, NA. v Tricario, 180 A.D.3d 848 [2nd Dept 2020]; Wells Fargo Bank, N.A. v McKenzie, 186 A.D.3d 1582 [2d Dept 2020]). Additionally, based on the affirmative defenses raised, Plaintiff was obliged to demonstrate its compliance with RPAPL §1303, §1304 and the requisites under paragraph 22 of the 2003 consolidated mortgage (see US. Bank, NA v Nathan, 173 A.D.3d 1112 [2d Dept 2019]; HSBC Bank USA_} NA. v Bermudez, 175 A.D.3d 667, 669 [2d Dept 2019]).

With the Referee's finding Plaintiff physically possessed the note when the action was commenced, Plaintiff established its standing (see generally Wells Fargo Bank, N.A. v Tricario, supra). As a result, any arguments regarding the validity and timing of the mortgage assignments are unavailing (see JPMorgan Chase Bank, NA. v Weinberger, 142 A.D.3d 643, 645 [2d Dept 2016]).

In support of the branch of the motion for summary judgment, Plaintiff submitted the affidavit of Michael Bennett ("Bennett"), an Assistant Secretary employed by Rushmore Loan Services ("Rushmore"). Bennett averred that Rushmore was the servicer and attorney-in fact for Wilmington Savings Fund Society, FSB, d/b/a Christina Trust, not individually, but as Trustee for Carlsbad Funding Mortgage Trust ("Wilmington"). Bennett states that after commencing the action, Ocwen transferred the note and mortgage at issue to Wilmington, whom he refers to as the Movant. Also annexed to the Plaintiffs moving papers was an affirmation from Fernando C. Rivera-Maissonett, Esq., an associate at the firm acting as attorney of record for Plaintiff, Ocwen Loan Servicing, LLC. While not specifically stated, it appears Wilmington is prosecuting this action in the name of the assignor Ocwen (see CPLR §1018; Lincoln Sav. Bank, FSB v Wynn, 7 A.D.3d 760 [2d Dept 2004]; Central Fed. Sav., FSB v 405 West 45th St., Inc., 242 A.D.2d 512 [1st Dept 1997]).

"A default is established by (1) an admission made in response to a notice to admit, (2) an affidavit from a person having personal knowledge of the facts, or (3) other evidence in admissible form" (Deutsche Bank Natl Trust Co. v McGann, 183 A.D.3d 700, 702 [2d Dept 2020]). As Bennett's knowledge is not based upon personal knowledge of Pacheco's account, but through the review of documents, those business records must be proffered in admissible form for the statements regarding the note, mortgage, default and compliance with RPAPL §§1303, 1304 to be established (see eg Wells Fargo Bank, NA. v Yesmin, 186 A.D.3d 1761, 1762 [2d Dept 2020]).

Bennett's affidavit laid a proper foundation for the admission of Rushmore's records (see Bank of NY Mellon v Gordon, 171 A.D.3d 197 [2d Dept 2019]). The records of other entities were also admissible since Bennett sufficiently established that those records were received from the makers and incorporated into the records Rushmore which routinely relied upon such documents in its business (see U.S. Bank NA. v Kropp-Somoza, 191 A.D.3d 918 [2d Dept 2021]). Further, the records Bennett relied on

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were referenced and annexed to the motion (cf. Deutsche Bank Natl. Trust Co. v Kirschenbaum, 187 A.D.3d 569 [1st Dept 2020]).

Plaintiff established with the affidavits of Dionne Laboy, an employee of Plaintiff s counsel who performed the mailings, that strict compliance with RPAPL §1304 was accomplished prior to commencement of the action and that it substantially complied with the notice requirement under paragraph 22 of the mortgage (see HSBC Bank USA, N.A. v Bermudez, 175 A.D.3d 667, 670 [2d Dept 2019]; HSBC Bank USA, N.A. v Ozcan, 154 A.D.3d 822 [2d Dept 2017]). The affidavit of service of the process server demonstrated that Plaintiff fulfilled the requirements of RPAPL §1303 (see U.S. Bank, N.A. v Nathan, 173 A.D.3d 1112, 1114 [2d Dept 2019]).

With respect to proof of the note, Plaintiff acknowledges that the instrument, dated July 11, 2003 and originally payable to American Home Mortgage in the principal amount of $200, 000.00, is lost. Pursuant to UCC 3-804, the owner of a lost instrument may still recover from the person liable thereunder "upon due proof of his [or her] ownership, the facts which prevent his [or her] production of the instrument and its terms." Here, Plaintiff attempts to satisfy this burden with an affidavit from William L. Wright, a Collateral Control Team Lead for Seterus, Inc. However, the affidavit is insufficient as the affiant does not explain who conducted the search for the lost note and when or how it was lost (see Capital One, N.A. v. Gokhberg, 189 A.D.3d 978, 979 [2d Dept 2020]).

As to the Pacheco's alleged default, rather than proffer the payment records as required, Plaintiff relied on the default notice prepared by Plaintiffs counsel and sent to the Pachecos which is insufficient (see U.S. Bank NA v Rowe, 194 A.D.3d 978 [2d Dept 2021]). The business records are the evidence of the facts asserted and, absent the documents, an affiant's statements in a foundational affidavit regarding the contents of same is hearsay (Bank of N Y. Mellon v Gordon, supra at 205).

Accordingly, the branch of Plaintiff s motion for summary judgment on its foreclosure cause of action and for an order of reference is denied for failure to establish a prima facie case.

Plaintiff also seeks summary judgment on its second cause of action to set aside a purported erroneous satisfaction, dated August 27, 2003, of a mortgage, dated June 6, 1995, given by the Pachecos to secure a loan of $65, 600.00. The 1995 note and mortgage were consolidated when the Pachecos borrowed an additional $150, 000.00 from Wells Fargo November 2, 2001. A second consolidation was executed by the Pachecos on July 11, 2003 when Carmen A. Pacheco borrowed additional funds from American Home Mortgage. Both these events are noted in the satisfaction at issue.

"'A mortgagee may have an erroneous discharge of mortgage, without concomitant satisfaction of the underlying mortgage debt, set aside, and have the mortgage reinstated where there has not been detrimental reliance on the erroneous recording'" (Deutsche Bank Trust Co. v Stathakis, 90 A.D.3d 983, 984 [2d Dept 2011], citing New York Community Bank v...