OneWest Bank v. Davies

• Decision Date: 22 February 2013
• Docket Number: No. 16638–11.,16638–11.
• Citation: 967 N.Y.S.2d 868,38 Misc.3d 1230,2013 N.Y. Slip Op. 50341
• Parties: ONEWEST BANK, FSB, Plaintiff, v. Robert DAVIES, Deborah Davies a/k/a Deborah A. Burke a/k/a Deborah Ann Burke, Mortgage Electronic Registration Systems, Inc., as nominee for Indymac Bank, FSB, Capital One Bank (USA) NA, et als, Defendants.
• Court: New York Supreme Court

38 Misc.3d 1230

967 N.Y.S.2d 868

2013 N.Y. Slip Op. 50341

ONEWEST BANK, FSB, Plaintiff,

v.Robert DAVIES, Deborah Davies a/k/a Deborah A. Burke a/k/a Deborah Ann Burke, Mortgage Electronic Registration Systems, Inc., as nominee for Indymac Bank, FSB, Capital One Bank (USA) NA, et als, Defendants.

No. 16638–11.

Supreme Court, Suffolk County, New York.

Feb. 22, 2013.

McCabe, Weisberg & Conway, New Rochelle, Attorneys for Plaintiff.

Ronald D. Hariri, Esq., New York, Attorney for Defendants Davies.

THOMAS F. WHELAN, J.

Upon the following papers numbered 1 to 7 read on this motion for accelerated judgments, deletion and/or substitution of parties and caption amendments to reflect same; and the appointment of a referee to compute; Notice of Motion/Order to Show Cause and supporting papers 1–5; Notice of Cross Motion and supporting papers; Answering Affidavits and supporting papers 6–7; Replying Affidavits and supporting papers; Other; (and after hearing counsel in support and opposed to the motion, it is

ORDERED that this motion (# 001) by the plaintiff for accelerated judgments against the defendants, the appointment of a referee to compute and other incidental relief is considered under CPLR 3212, 3215 and RPAPL 1321 and is granted to the extent set forth below.

The plaintiff commenced this action on May 25, 2011 to foreclose a December 29, 2006 mortgage given by the Davies defendants to secure a mortgage note executed by them on that date in the principal amount of $428,000.00. The plaintiff alleges that the Davies defendants defaulted in their payment obligations in March of 2010. Following service of the summons and complaint, issue was joined by service of a joint answer of the mortgagor defendants dated June 11, 2011. Therein, the Davies defendants deny the material allegations advanced in the plaintiff's complaint and assert ten affirmative defenses thereto, including the plaintiff's purported lack of standing and failures to comply with unspecified conditions precedent.

By the instant motion, the plaintiff moves for an order: (1) awarding it summary judgment against the answering defendants together with a dismissal of the affirmative defenses asserted against the plaintiff; (2) fixing the defaults in answering of the non-answering defendants; (3) identifying and/or substituting certain Joey Davis who was served as defendant John Doe # 1 and deleting as party defendants the remaining unknown defendants; (4) the substitution of a “Deutsche Bank National Trust Company as Trustee for BCAP LLP Trust 2007–AA1” in the place of the named plaintiff and (4) appointing a referee to compute amounts due under the subject mortgage. The motion, together with the opposition served by the Davies defendants, has been considered under CPLR 3215, 3212 and RPAPL § 1321 and it is granted, except those portions wherein the plaintiff seeks substitution of its assignee, for the reasons stated below.

Entitlement to a judgment of foreclosure may be established, as a matter of law, where a mortgagee produces both the mortgage and unpaid note, together with evidence of the mortgagor's default, thereby shifting the burden to the mortgagor to demonstrate, through both competent and admissible evidence, any defense which could raise a question of fact” (Zanfini v. Chandler, 79 AD3d 1031, 912 N.Y.S.2d 911 [2d Dept 2010], quoting HSBC Bank USA v. Merrill, 37 AD3d 899, 900, 830 N.Y.S.2d 598 [2d Dept 2010]; see Bank Natl. Ass'n v. Denaro, 98 AD3d 964, 950 N.Y.S.2d 581 [2d Dept 2012]; Citibank, N.A. v. Van Brunt Prop., LLC, 95 AD3d 1158, 945 N.Y.S.2d 330 [2d Dept 2012]; HSBC Bank v. Shwartz, 88 AD3d 961, 931 N.Y.S.2d 528 [2d Dept 2011]; US Bank N.A. v. Eaddy, 79 AD3d 1022, 1022, 914 N.Y.S.2d 901 [2010] ). Where, as here, an answer served includes the defense of standing or lack of capacity to sue, the plaintiff must further establish its standing to succeed on a motion for summary judgment ( see U.S. Bank, N.A. v. Adrian Collymore, 68 AD3d 752, 890 N.Y.S.2d 578 [2d Dept 2009] ).

Here, the moving papers established the plaintiff's entitlement to summary judgment against the answering defendants as such papers included copies of the mortgage, the unpaid note executed by them on December 29, 2006 together with due evidence of their defaults in payment under the terms of the loan documents ( seeCPLR 3212; RPAPL § 1321; Neighborhood Hous. Serv. of New York City v. Hawkins, 97 AD3d 554, 947 N.Y.S.2d 321 [2d Dept 2012]; Baron Assoc., LLC v. Garcia Group Enter., 96 AD3d 793, 946 N.Y.S.2d 611 [2d Dept 2012]; Citibank, N.A. v. Van Brunt Prop., LLC, 95 AD3d 1158,supra; Archer Capital Fund, L.P. v. GEL, LLC, 95 AD3d 800, 944 N.Y.S.2d 179 [2d Dept 2012]; Swedbank, AB v. Hale Ave. Borrower, LLC., 89 AD3d 922, 932 N.Y.S.2d 540 [2d Dept 2011]; Rossrock Fund II, L.P. v. Osborne, 82 AD3d 737, 918 N.Y.S.2d 514 [2d Dept 2011] ). The moving papers further established, prima facie, that the plaintiff has standing to prosecute its pleaded claims for foreclosure and sale by, among other things, its possession of the mortgage note bearing an indorsement in blank by the original mortgagee at the time of the commencement of this action.

The standing of a plaintiff in a mortgage foreclosure action is measured by its ownership, holder status or possession of the note and mortgage at the time of the commencement of the action ( see U.S. Bank of N.Y. v. Silverberg, 86 AD3d 274, 279, 926 N.Y.S.2d 532 [2d Dept 2011]; U.S. Bank, N.A. v. Adrian Collymore, 68 AD3d 752,supra; Wells Fargo Bank, N.A. v. Marchione, 69 AD3d 204, 887 N.Y.S.2d 615 [2d Dept 2009] ). Because “a mortgage is merely security for a debt or other obligation and cannot exist independently of the debt or obligation” (Deutsche Bank Natl. Trust Co. v. Spanos, 102 AD3d 909, 2013 WL 361084 [2d Dept 2013, internal citations omitted] ), a mortgage passes as an incident of the note upon its physical delivery to the plaintiff. Holder status is established where the plaintiff is the special indorsee of the note or takes possession of a mortgage note that contains an indorsement in blank on the face thereof as the mortgage follows as incident thereto ( seeUCC § 3–202; § 3–204; § 9–203[g] ). Here, the plaintiff established that it took possession of the note, a copy of which was attached to its complaint, prior to the commencement of the action and was the holder thereof as such note contained an indorsement in blank on the face thereof ( see Mortgage Elec. Registration Sys., Inc. v. Coakley, 41 AD3d 674, 838 N.Y.S.2d 622 [2d Dept.2007]; Deutsche Bank Natl. Trust Co. v. Pietranico, 33 Misc.3d 528, 928 N.Y.S.2d 818 [Sup.Ct. Suffolk County 2011], aff'd,102 AD3d 724, 957 N.Y.S.2d 868 [2d Dept 2013] ). The plaintiff thus established, prima facie, its has standing to prosecute this action.

In addition, the record contains evidence that in July of 2008, the original lender failed and its assets were seized and placed into the hand of a receiver by the FDIC. In March of 2009, the assets of the receivership were acquired by and merged into the plaintiff, a new entity formed for that purpose under the terms of the Purchase and Assumption Agreement. Since such agreements have been found to confer upon the purchaser the right to foreclose on a defaulting borrower ( see JP Morgan Chase Bank Natl. Ass'n v. Miodownik, 91 AD3d 546, 937 N.Y.S.2d 192 [1st Dept 2012] ), these circumstances also give rise to a prima facie case of standing on the part of the plaintiff.

It was thus incumbent upon the answering defendants to submit proof sufficient to raise a genuine question of fact rebutting the plaintiff's prima facie showing or in support of the affirmative defenses asserted in their answer or otherwise available to them ( see Flagstar Bank v. Bellafiore, 94 AD3d 1044, 943 N.Y.S.2d 551 [2d Dept 2012]; Grogg Assocs. v. South Rd. Assocs., 74 AD3d 1021, 907 N.Y.S.2d 22 [2d Dept 2010]; Wells Fargo Bank v. Karla, 71 AD3d 1006, 896 N.Y.S.2d 681 [2d Dept 2010]; Washington Mut. Bank v. O'Connor, 63 AD3d 832,supra; J.P. Morgan Chase Bank, N.A. v. Agnello, 62 AD3d 662, 878 N.Y.S.2d 397 [2d Dept 2009]; Aames Funding Corp. v. Houston, 44 AD3d 692, 843 N.Y.S.2d 660 [2d Dept 2007] ). Notably, self-serving and conclusory allegations do not raise issues of fact and do not require plaintiff to respond to alleged affirmative defenses which are based on such allegations ( see Charter One Bank, FSB v. Leone, 45 AD3d 958, 845 N.Y.S.2d 513 [3d Dept 2007]; Rosen Auto Leasing, Inc. v. Jacobs, 9 AD3d 798, 780 N.Y.S.2d 438 [3d Dept 2004] ). Where a defendant fails to oppose some or all matters advanced on a motion for summary judgment, the facts as alleged in the movants' papers may be deemed admitted as there is, in effect, a concession that no question of fact exists ( see Kuehne & Nagel, Inc. v. Baiden, 36 N.Y.2d 539, 369 N.Y.S.2d 667 [1975];see also Madeline D'Anthony Enter., Inc. v. Sokolowsky, 101 AD3d 606, 957 N.Y.S.2d 88 [1st Dept 2012]; Argent Mtge. Co., LLC v. Mentesana, 79 AD3d 1079, 915 N.Y.S.2d 591[2d Dept 2010] ).

In their opposing papers, the Davies defendants re-assert their pleaded affirmative defense that the plaintiff lacks standing to prosecute its claims for foreclosure and sale. They also re-assert their pleaded defenses of unclean hands, bad faith and estoppel. Also asserted are objections as to the sufficiency of proof regarding the amounts alleged to owing from the defendants and the plaintiff's request for a substitution of the plaintiff by the Deutsche Bank National Trust Company as Trustee for BCAP LLP Trust 2007–AA1. The court finds, however, that none of these asserted defenses nor those not asserted on this motion but raised in the answer rebut the plaintiff's prima facie showing of its entitlement to summary judgment.

The Davies defendants contend that a question of fact exists with respect to the plaintiff's standing by reason of its request for a substitution of the Deutsche Bank National Trust Company as Trus...