W. Coast 2014-7, LLC v. Tolson, 15-cv-6306(ADS)(GRB)
| Decision Date | 07 August 2017 |
| Docket Number | 15-cv-6306(ADS)(GRB) |
| Parties | WEST COAST 2014-7, LLC, Plaintiff, v. DONALD TOLSON a/k/a DONALD P. TOLSON; DLJ EQUITIES LLC; BOARD OF DIRECTORS OF COVENTRY MANOR TOWNHOUSES HOMEOWNERS ASSOCIATION; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; THE CLERK OF THE SUFFOLK COUNTY DISTRICT COURT; and JOHN DOE "1" through "12" 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 | U.S. District Court — Eastern District of New York |
APPEARANCES:
The Margolin & Weinreb Law Group, LLP
Attorneys for the Plaintiff
Syosset, NY 11791
By: Alan H. Weinreb, Esq., Of Counsel
33 Davidson Lane East
West Islip, NY 11795
By: Christopher H. Thompson, Esq., Of Counsel
Taylor Eldridge, P.C.
Donald Tolson a/k/a Donald P. Tolson
Defendant
On November 4, 2015, the Plaintiff West Coast 2014-7, LLC commenced this diversity mortgage foreclosure action under Article 13 of the New York Real Property Actions and Proceedings Law ("RPAPL"), seeking to foreclose an alleged security interest in a parcel of real property owned by the Defendant DLJ Equities, LLC ("DLJ Equities"), located at 18 Amesworth Court in Middle Island, New York (the "Middle Island Residence").
On December 22, 2015, DLJ Equities, by counsel, filed an answer to the complaint, substantially denying the Plaintiff's allegations and asserting numerous affirmative defenses. Among these were defenses based on the Plaintiff's lack of standing and failure to comply with conditions precedent to bringing suit.
In addition to DLJ Equities, the complaint named as a Defendant the original borrower, namely, Donald Tolson, also known as Donald P. Tolson ("Tolson"), who, as described more fully below, remains the obligor under the relevant note and mortgage despite no longer owning or occupying the Middle Island Residence. The complaint also named the Board of Directors of Coventry Manor Townhouses Homeowners Association (the "Homeowners Association"); the New York State Department of Taxation and Finance ("NYDTF"); and the Clerk of the Suffolk County District Court ("District Court Clerk"), each of whom is alleged to be the holder of one or more junior liens against the Middle Island Residence. Finally, the complaint named twelve "John Doe" Defendants, whose identities were apparently unknown to the Plaintiff, but who are alleged to be individuals and entities with a potential interest in the Middle Island Residence, possessory or otherwise.
On January 13, 2016, after the above-named Defendants failed to answer or otherwise appear, the Clerk of the Court noted their default.
On January 19, 2016, counsel for the Homeowners Association filed a Notice of Appearance. However, since then, counsel has not answered the complaint; sought to vacate the Clerk's entry of default; or otherwise participated in this action.
On February 15, 2017 and March 29, 2017, respectively, the Plaintiff and DLJ Equities cross-moved for summary judgment under Federal Rule of Civil Procedure ("Fed. R. Civ. P.") 56(a). The Plaintiff also moved under Fed. R. Civ. P. 55 for the entry of default judgments against the non-appearing Defendants.
For the reasons that follow, the Court grants the Plaintiff's motion for summary judgment, dismissing with prejudice the affirmative defenses of DLJ Equities; grants the Plaintiff's motion for default judgments extinguishing any potential interest that the non-appearing Defendants may have in the Middle Island Residence; and denies the cross-motion by DLJ Equities for summary judgment in its favor.
The Plaintiff is a California corporation with a principal place of business in that state. As discussed more fully below, on January 21, 2015, by way of a written assignment, the Plaintiff allegedly acquired and took possession of the note and mortgage forming the basis of this case.
The Defendant DLJ Equities is a New York corporation with a principal place of business in Farmingdale. On October 3, 2014, DLJ Equities acquired the deed to the Middle Island Residence from an entity known as IPA Asset Management, LLC ("IPA"). On December 22, 2014, the deed of sale was duly recorded in the Office of the Suffolk County Clerk in liber D00012801, at page 288.
Previously, following a lawsuit between the Homeowners Association and Tolson to foreclose a separate lien on the Middle Island Residence, IPA acquired the property in a judicial sale. As noted above, the relevant Referee's Deed indicates that IPA, and therefore DLJ Equities, took the property subject to Tolson's continuing obligations under the Note and Mortgage.
The Homeowners Association is located in Great Neck and allegedly holds six judgment liens representing unpaid common charges against the Middle Island Residence.
The NYDTF, a government agency headquartered in Albany, allegedly holds a tax warrant filed against the Middle Island Residence.
The District Court Clerk, a government official with a principal place of business in Central Islip, is alleged to be a judgment creditor by virtue of a Suffolk County judgment filed against the Middle Island Residence.
It is alleged that any interest these Defendants have in and to the Middle Island Residence is subordinate to the Plaintiff's first-priority Mortgage lien.
Finally, two individuals sued in this action as John Doe "1" and John Doe "2" were later identified as tenants residing at the Middle Island Residence, namely, Crystal Hayes and David Felton. To date, neither of these individuals has appeared in this case.
There is no factual dispute regarding the existence or validity of the underlying note and mortgage in this case.
All parties agree that on July 18, 2007, Tolson obtained a home loan from non-party Countrywide Bank, FSB ("Countrywide") in the principal sum of $114,000. In exchange, he executed a promissory note (the "Note") in favor of Countrywide in the same amount, which was secured by a mortgage (the "Mortgage") on the Middle Island Residence.
On August 27, 2007, the Note and Mortgage were duly recorded in the Office of the Suffolk County Clerk in liber M00021592, at page 605.
There also is no factual dispute regarding Tolson's default under the Note and Mortgage: apparently in violation of the terms of those instruments, Tolson failed to make his regularly-scheduled mortgage payment on July 1, 2012, and has not made any payments since that date.
While not disputing the underlying Note and Mortgage, DLJ Equities disputes whether the Plaintiff has sufficiently shown itself to be the current owner and holder of those instruments, so as to confer standing to foreclose.
In support of its standing, the Plaintiff sets forth the following seemingly unbroken chain of assignments originating with the original lender.
On April 3, 2012, Countrywide, through its nominee Mortgage Electronic Registration Systems, Inc., apparently assigned the Mortgage to Bank of America, N.A., as successor by merger to BAC Home Loans Servicing LP, formerly known as Countrywide Home Loans Servicing LP ("Bank of America").
On April 18, 2012, a written Assignment of Mortgage to Bank of America purporting to transfer the Mortgage, "together with the note(s) and obligations therein described and the money due to become due thereon with interest and all rights accrued or to accrue under said security instrument," was duly recorded in the Suffolk County Clerk's office in liber M00022193, at page 600.
Thereafter, on January 11, 2013, Bank of America apparently assigned the Mortgage to Wells Fargo Bank, National Association, as successor to Wachovia Bank, National Association, formerly known as First Union National Bank ("Wells Fargo").
On March 18, 2013, a written Assignment of Mortgage to Wells Fargo, again purporting to transfer the Mortgage, "together with the note(s) and obligations therein described and the money due to become due thereon with interest and all rights accrued or to accrue under said security instrument," was duly recorded in the Suffolk County Clerk's office in liber M00022316, at page 880.
Finally, on January 21, 2015, Nationstar Mortgage, LLC, as attorney-in-fact for Wells Fargo, apparently assigned the Mortgage to the Plaintiff.
On May 5, 2015, a written Assignment of Mortgage to the Plaintiff West Coast 2014-7, LLC, purporting to transfer the Mortgage, "[t]ogether with the note(s) and obligations therein describedor referred to, the money due and to become due thereon, with interest, and all rights accrued or to accrue under said document," was duly recorded in the Suffolk County Clerk's office in liber M00022589, at page 444.
The Plaintiff alleges, and its corporate Vice President of Operations Glenn Ohno asserts in a supporting affidavit, that the Plaintiff is in physical possession of the original Note and Mortgage and has been in such possession since prior to the commencement of this action.
On February 6, 2015, pursuant paragraph 22 of the Mortgage, counsel for the Plaintiff sent a letter to Tolson entitled Notice of Default (the "30-Day Notice").
Consistent with the terms of the Mortgage, the 30-Day Notice: (1) identified the address of the Middle Island Residence and a loan number; (2) stated that the loan in question was $32,158.72 in arrears, representing unpaid monthly installments plus interest; (3) stated that, within 30 days, or by ...
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