Williams v. Bayview Loan Servicing, LLC
| Decision Date | 30 May 2019 |
| Docket Number | 14-CV-7427 (KAM)(SJB) |
| Parties | DWIGHT A. WILLIAMS and PATRICIA CLARKE, Plaintiffs, v. BAYVIEW LOAN SERVICING, LLC, and KNUCKLES, KOMOSINSKI & ELLIOTT, LLP, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
On December 22, 2014, pro se plaintiffs Dwight A. Williams and Patricia Clarke ("plaintiffs") commenced an action against Bayview Loan Servicing, LLC ("Bayview" or "defendant") and Knuckles, Komosinski & Elliott, LLP ("Knuckles"), claiming that Bayview and Knuckles employed abusive debt collection practices, in violation of the Fair Credit Reporting Act ("FCRA"), the Fair Debt Collections Practices Act ("FDCPA"), and various New York state laws, while attempting to collect on a purported debt. (ECF No. 1, Complaint ("Compl.").) In their second amended complaint, filed after the court granted in part the defendants' motions to dismiss as to the state law claims, plaintiffs alleged that Bayview violated the FCRA and that Bayview and Knuckles violated the FDCPA. (ECF No. 26, Second Amended Complaint ("SAC").) Currently before the court is Bayview's motion to dismiss or, in the alternative, for summary judgment. For the reasons stated below, Bayview's motion is granted.
The following facts are taken from the parties' Statements of Undisputed Facts Pursuant to Local Rule 56.1, as well as the exhibits cited in and annexed to the parties' motion papers.
On December 14, 2004, Benjamin Beechwood LLC ("BBL") borrowed the principal amount of $269,078 from Fleet National Bank. The loan is memorialized in a note dated December 14, 2004 (the "2004 Note"). (ECF No. 62-1, Defendant Bayview Loan Servicing, LLC's Statement of Undisputed Material Facts Pursuant to Local Civil Rule 56.1 ("Def. 56.1 Statement") ¶ 1.) As security for the 2004 Note, BBL granted Fleet National Bank a mortgage on property located at 7608 Aquatic Drive, Arverne, New York 11692 ("the property"), dated December 14, 2004 (the "2004 Mortgage"). (Id. ¶ 2.) The 2004 Mortgage was assigned by Bank of America, Fleet National Bank's successor by merger, to CitiMortgage Inc. ("CitiMortgage") by an assignment of mortgage dated October 6, 2006. (Id. ¶ 3.) Pursuant to a Bargain and Sale Deed dated October 17, 2006, BBL transferred its interestin the property to plaintiffs Williams and Clarke subject to the 2004 Mortgage. (Id. ¶ 4.)
On October 17, 2006, plaintiffs borrowed the principal amount of $195,232 from CitiMortgage. (Id. ¶ 5.) That loan is memorialized in a note dated October 17, 2006 (the "2006 Note"). (Id.) As security for the 2006 Note, plaintiffs granted CitiMortgage a mortgage on the Property dated October 17, 2006 (the "2006 Mortgage"). (Id.) On October 17, 2006, plaintiffs also executed a Consolidation, Extension, and Modification Agreement (the "CEMA"), consolidating the 2004 Note and 2004 Mortgage with the 2006 Note and 2006 Mortgage to form a single lien in the amount of $464,310 ("the Consolidated Loan"). (Id. ¶ 6.) In connection with the Consolidated Loan, plaintiffs executed a consolidated note dated October 17, 2006 in the principal amount of $464,310 in favor of CitiMortgage (the "Consolidated Note"). As security for the Loan, the plaintiffs executed a consolidated mortgage encumbering the property, dated October 17, 2006 ("Consolidated Mortgage"). (Id. ¶ 7.)
On March 6, 2009, plaintiffs sent CitiMortgage a "Rescission Notice of Promissory Note," attempting to "rescind the Promissory Note executed on October 17, 2006" pursuant to 15 U.S.C. 1635(a) and (b) due to CitiMortgage's "lack of full disclosure." (See ECF No. 62-40, Plaintiffs' Opposition and Dispute to Bayview Loan Servicing, LLC's Statement of UndisputedMaterial Facts & Plaintiffs' Additional Undisputed Material Facts ("Pl. 56.1 Statement") at 2, ¶ 12; ECF No. 68-2, Pl. Ex. 2.) The rescission notice appears to refer to the 2006 Note for $195,000, rather than the Consolidated Note for $464,310. (See ECF No. 68-2, Pl. Ex. 2 ().) Plaintiffs failed to make their monthly payment that became due on January 1, 2011, and entered default status. (ECF No. 62-1, Def. 56.1 Statement ¶ 12.) On May 26, 2011, CitiMortgage notified plaintiffs that they were "still in default" on the mortgage loan. (ECF No. 68-19, Pl. Ex. H.) CitiMortgage referred the defaulted loan to Knuckles to begin foreclosure proceedings. (Id.)
Subsequent to plaintiffs' default, the Consolidated Note and Mortgage were assigned to Bayview and memorialized by an assignment of mortgage dated September 11, 2013, and recorded on October 2, 2013. (ECF No. 62-1, Def. 56.1 Statement ¶ 9.) The original Notes were also physically transferred and delivered to Bayview on July 2, 2013. (Id.) Bayview advised plaintiffs of the transfer of the Loan by letters dated July 23, 2013 and August 8, 2013. (Id. ¶ 10.) Bayview did not receive any inquiry from plaintiffs within 30 days following the Transfer Letters. (Id. ¶ 11.)
Plaintiffs failed to make a monthly payment due as required by the Consolidate Note and Mortgage Loan on January 1, 2011. (Id. ¶ 12.) At some point between May 26, 2011, and April 23, 2013, CitiMortgage initiated a foreclosure action in the Supreme Court of the State of New York, County of Queens, Foreclosure Part, against plaintiffs, which the Knuckles firm handled. (ECF No. 26, Second Amended Complaint ("SAC") ¶¶ 8-10, Pl. Ex. C at 17.) On April 23, 2011, that action was dismissed without prejudice. (Id. Pl. Ex. C at 17.)
By letter dated January 13, 2014, Bayview notified plaintiffs that they were in default of the Consolidated Note and the Mortgage Loan, and that failure to remedy the default would result in acceleration. (ECF No. 62-1, Def. 56.1 Statement ¶ 13.) On June 5, 2014, Bayview provided plaintiffs with a 90-day notice pursuant to New York Real Property and Procedures Law ("RPAPL") § 1304, advising plaintiffs, inter alia, that they were "1251 days in default." (Id. ¶ 14.) No additional default notices were provided to the plaintiffs. (Id. ¶ 15.)
On October 23, 2014, Bayview commenced a foreclosure action against plaintiffs in the Supreme Court of the State of New York, County of Queens (the "Foreclosure Court"), Index No.707826/2014, entitled Bayview Loan Servicing, LLC v. TChet Ab Utcha Ra El a/k/a Dwight A. Williams et al. (the "Foreclosure Action"). (Id. ¶ 16.)
On or about November 24, 2014, plaintiffs in this action1 served Bayview with an "Affidavit of Verified Facts by Defendants in Error." (ECF No. 26, SAC ¶ 16, Pl. Ex. K at 45-47.) The plaintiffs' affidavit demanded that the action be dismissed on the grounds that it was a "false attempt to compel Defendants in error[, i.e. Williams and Clarke,] to answer an alleged claim of debt" and that Bayview's actions were in violation of, inter alia, the FDCPA. (Id.)
On January 20, 2015, plaintiffs filed an Order to Show Cause in the Foreclosure Action arguing, inter alia, lack of standing, lack of capacity, and "defective instrument." (ECF No. 62-1, Def. 56.1 Statement ¶ 18.) By order dated May 1, 2015 and entered on May 15, 2015, the Foreclosure Court found that Bayview submitted sufficient proof to establish its standing. (Id. ¶ 19.) Specifically, Bayview had "offer[ed], among other things, a copy of the consolidated note and allonge, endorsed by CitiMortgage in blank and without recourse . . . ." (Id.) The Foreclosure Court also found plaintiffs' claim that the action should be dismissed based upon a "defective instrument" was"insufficient to establish a ground for dismissal." (ECF No. 62-29, Def. Ex. 6 at 3.)
While plaintiffs' Order to Show Cause in the Foreclosure Action was sub judice, plaintiffs also filed a motion to dismiss the Foreclosure Action arguing, inter alia, that pursuant to Jesinoski v. Countrywide Home Loans, 135 S. Ct. 790 (2015), and the Truth in Lending Act ("TILA"), plaintiffs were entitled to rescind the Mortgage Loan. (ECF No. 62-30, Def. Ex. 7, Aug. 31, 2015 Foreclosure Decision & Order ("Aug. 31, 2015 Order"); ECF No. 62-1, Def. 56.1 Statement ¶ 21.) By order dated August 31, 2015, and entered on September 18, 2015, the Foreclosure Court denied plaintiffs' motion with respect to, inter alia, plaintiffs' Jesinoski argument and found that plaintiffs were not entitled to rescind the Mortgage Loan and had failed to provide evidence of a timely rescission notice. (ECF No. 62-30, Def. Ex. 7, Aug. 31, 2015 Order; ECF No. 62-1, Def. 56.1 Statement ¶ 22.)
On March 31, 2016, Bayview moved for a default judgment in the Foreclosure Action. (ECF No. 62-1, Def. 56.1 Statement ¶ 24.) Plaintiffs cross-moved on April 13, 2016, alleging that the Foreclosure Action should be dismissed because plaintiffs had rescinded the 2006 Note and Mortgage and Bayview thus lacked standing. (Id. ¶ 24.) By decision dated July 19, 2016, the Foreclosure Court granted Bayview's motion in part anddenied plaintiffs' cross-motion in its entirety. (Id. ¶ 25.) On August 16, 2017, Bayview moved again for a default judgment and an order of reference. Plaintiffs opposed the motion, alleging again that they rescinded the Note and Mortgage and that Bayview lacked standing. (Id. ¶ 26.)
By order dated November 20, 2017 and entered December 29, 2017, the Foreclosure Court granted Bayview's motion for a default judgment and an order of reference.2 (Id. ¶ 27.) The Foreclosure Court held that Bayview had "made a prima facie showing of entitlements to judgment as a matter of law by submitting a copy of the subject mortgage, underlying note, and proof of default." (ECF No. 62-34, Def. Ex. 11 at 2.) The court also found that plaintiffs' opposition contained "allegations that [were] either directly refuted by [Bayview's] documentary evidence or [were] insufficient to raise a triable issue of fact and defeat [Bayv...
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