Wells Fargo Bank, N.A. v. Pena
| Decision Date | 06 January 2016 |
| Citation | 51 Misc.3d 241,24 N.Y.S.3d 865 |
| Parties | WELLS FARGO BANK, N.A., a National Banking Association, Successor–By–Merger to Wachovia Bank, National Association, Plaintiff, v. Yolanda P. PENA a/k/a Yolanda P. Plasencia and Donasia Pena, Defendants. |
| Court | New York Supreme Court |
Melissa A. Pena, Esq., New York, attorney for plaintiffs.
Quenten E. Gilliam, Esq., White Plains, attorney for defendants.
In this action by plaintiff Wells Fargo Bank, N.A., a National Banking Association, successor-by-merger to Wachovia Bank, National Association (plaintiff) to recover payment on two promissory notes against defendants Yolanda P. Pena a/k/a Yolanda P. Plasencia (Yolanda) and Donasia Pena (Donasia) (collectively, defendants), defendants move, under motion sequence number two, to dismiss plaintiff's complaint against them in its entirety with prejudice, or, in the alternative, to stay this action pending the outcome of a New Jersey foreclosure action commenced against them by plaintiff.
On August 16, 2007, Yolanda, as the borrower, in consideration for a loan to purchase investment commercial property, executed and delivered to Wachovia Bank (Wachovia), a note in the principal amount of $300,000 (Note I). Pursuant to the terms of Note I, Yolanda was obligated to pay to Wachovia consecutive monthly payments of principal and interest in the amount of $2,390.62, commencing on September 16, 2007 and continuing on the same day of each month thereafter until fully paid. Interest was to accrue on the unpaid principal balance on the note in the amount of 7.25% per annum from the date of the note. Note I further provided that all principal and accrued interest would be due and payable on August 16, 2012. Note I also provided that Yolanda agreed to pay a late charge of five percent of any payment not received by Wachovia within 10 days after the payment was due, costs, charges, and expenses incurred, including reasonable attorneys' fees and disbursements incurred by Wachovia to collect the amount due under Note I, and default interest at the interest rate plus three percent.1
Also on August 16, 2007, in order to induce Wachovia to extend loans to Yolanda, Donasia, as the guarantor, executed and delivered to Wachovia an Unconditional Guaranty (the Unconditional Guaranty), under which Donasia unconditionally guaranteed the timely payment and performance of all liabilities and obligations of Yolanda to Wachovia, including all obligations under any notes. Donasia, under the Unconditional Guaranty, further agreed to pay all expenses incurred by Wachovia to enforce the guaranty, including attorneys' fees and costs.
In order to secure the payment of Note 1, Yolanda and Donasia, as mortgagors, executed and delivered to plaintiff a Mortgage and Assignment of Rents (Mortgage I) dated August 16, 2007 (the same date as Note I) conveying to Wachovia, in fee, the land and premises located at 293 Hall Avenue a/k/a 293–295 Hall Avenue, City of Perth Amboy, New Jersey 08861 (the mortgaged property) on the express condition that such conveyance would be void if payment were made in accordance with the terms of Note I. Mortgage I was a purchase money mortgage that was used to purchase the mortgaged commercial property. Mortgage I was recorded in the Office of the Middlesex County Clerk in New Jersey on September 13, 2007.
On August 6, 2008, in consideration for a loan in the amount of $50,000 Yolanda executed and delivered to Wachovia a second promissory note in that principal amount (the August 2008 Note). Under the August 2008 Note, Yolanda was obligated to pay Wachovia consecutive monthly payments of principal and interest in the amount of $486.18, commencing on September 6, 2008, and continuing on the same day of each month thereafter until fully paid. The August 2008 Note provided that all principal and accrued interest was due and payable on August 6, 2011.
Thereafter, effective as of March 20, 2010, Wachovia merged into plaintiff. On March 21, 2013, plaintiff agreed to renew the loan under Note I as a term loan with certain modifications, as set forth in a Business Lending Confirmation Letter. Under the terms of this Business Lending Confirmation Letter, Yolanda promised to pay the principal amount then due on the loan of $254,441.97, together with interest at the fixed rate of 7.250%, and to pay the amount of $2,390.60, commencing on April 16, 2013 and continuing on the same day of each month thereafter until the maturity date of November 14, 2013. Yolanda further agreed to pay a late charge of $15 or five percent of any payment not received by plaintiff, whichever was greater, within 15 days after the payment was due. Also on March 21, 2013, Donasia executed a Commercial Guaranty (the Commercial Guaranty), under which Donasia agreed to give a continuing guaranty of all past, present, and future indebtedness of Yolanda to plaintiff. On December 10, 2013, Yolanda and plaintiff executed a Modification Agreement to Note I, which extended the maturity date on the loan to November 14, 2014. On August 18, 2011, Yolanda executed and delivered to plaintiff a new promissory note, which renewed, extended, and modified the August 2008 Note (Note II). Note II was in the principal amount of $44,432.69, with interest thereon at seven percent per annum on the unpaid principal balance. Note II provided that payment would be due and payable in consecutive monthly payments of principal and interest in the amount of $401.02, commencing on September 6, 2011 and continuing on the same day of each month thereafter until fully paid. Note II further provided that all principal and accrued interest was due and payable on August 6, 2016. Under Note II, interest was to accrue on the unpaid principal balance of the note at the rate of seven percent. Note II also provided that Yolanda agreed to pay a late charge of five percent of any payment not received by plaintiff within 10 days after the payment was due, costs, charges, and expenses incurred, including reasonable attorneys' fees and disbursements incurred by plaintiff to collect the amount due under Note II, and default interest at the interest rate plus three percent. According to plaintiff, the loan documents under Note II included Note I, and under the terms of Note II (the cross default provision), a default occurred when there was a failure of timely payment and default of the obligations under Note II or under any other Loan Document, including Note I.
Also on August 18, 2011 (the same date as Note II), in order to secure the payment of Note II, defendants executed and delivered to plaintiff a Mortgage and Assignment of Rents (Mortgage II), thereby conveying to plaintiff, in fee, the mortgaged property, on the express condition that such conveyance would be void if payment were made in accordance with the terms as Note II.
Yolanda failed to pay the amounts due under Note I by its November 14, 2014 maturity date. By a December 1, 2014 letter, plaintiff demanded payment under Note I. According to plaintiff, as of April 20, 2015, $246,553.47 remains due under Note I, consisting of $235,982.87 in principal, $5,941.90 in interest, and $4,628.70 for appraisal, environmental costs, and other costs, with interest continuing to accrue.
By a letter also dated December 1, 2014, plaintiff notified Yolanda that based on the cross default provision of Note II, she was in default under Note II due to her failure to pay all sums outstanding under Note I (which it designated therein as the "cross collateralized real estate loan") by its maturity date. Plaintiff alleges that as of April 20, 2015, the amount due under Note II is $39,604.66, which consists of $38,276.38 in principal, $1,228.03 in interest, and $100.25 in late fees, with interest continuing to accrue.
On January 12, 2015, plaintiff filed a mortgage foreclosure action in the Superior Court of New Jersey, Chancery Division, Middlesex County, to foreclose on the mortgaged property which secures the loans evidenced by Note I and Note II (Wells Fargo Bank v. Pena, Docket No. F–001167–15) (the New Jersey action). Defendants, as the mortgagors of the property, along with Gregorio Duarte, Emilio Jerez, Maria J. Jerez, and Los Primos Grocery Store, who are all tenants of the mortgaged property, are named as defendants in the New Jersey action. The first cause of action of plaintiff's complaint in the New Jersey action seeks a judgment against defendants fixing the amount due on the mortgage, barring and foreclosing defendants and all other parties having an interest in the mortgaged property of all equity of redemption in and to the mortgaged property, terminating all leasehold or possessory interests in the mortgaged property, directing plaintiff be paid the amount due on Mortgage I and Mortgage II (collectively, the Mortgages), and adjudging that the mortgaged property be sold according to law to satisfy the amount due to plaintiff on the Mortgages. The second cause of action of plaintiff's complaint in the New Jersey action seeks possession of the mortgaged property, and the third cause of action of plaintiff's complaint in the New Jersey action seeks the appointment of a rent receiver. Yolanda has appeared and interposed an answer in the New Jersey action.
On January 23, 2015, plaintiff commenced this action against defendants by filing a summons and motion for summary judgment in lieu of complaint pursuant to CPLR 3213, seeking to collect on Note I and Note II (collectively, the Notes) from Yolanda, as the borrower, and Donasia, as the guarantor of both of these notes. On April 13, 2015, defendants interposed opposition papers to plaintiff's motion. On April 29, 2015, the parties appeared for oral argument and the court denied plaintiff's motion and ordered plaintiff to serve a complaint within 20 days. On May 18, 2015, plaintiff mailed defendants' counsel its complaint.
Plaintiff's complaint alleges a first cause of action for breach of...
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