Wells Fargo Bank, N.A. v Farmer
Annotate this CaseDecided on February 4, 2008
Supreme Court, Kings County
Wells Fargo Bank, N.A., as Trustee c/o Litton Loan Servicing, LP, Plaintiff,
against
Hillary Farmer, Jr., et al., Defendants.
27296/07
Tracy M. Fourtner, Esq.
Steven J. Baum, P.C.
Buffalo NY
Defendant:
No Opposition submitted by defendants to plaintiff's reque
Arthur M. Schack, J.
Plaintiff's application, upon the default of all defendants, for an order of reference for the
premises located at 363 Madison Street, Brooklyn, New York (Block 1820, Lot 76, County of
Kings) is denied without prejudice, with leave to renew upon providing the Court with: a copy of
a valid assignment of the instant mortgage and note to plaintiff WELLS
FARGO BANK, N.A., AS TRUSTEE (WELLS FARGO); a satisfactory
explanation to questions with respect to the two December 8, 2004 assignments of the instant
mortgage and note from ARGENT MORTGAGE COMPANY, LLC (ARGENT) to
AMERIQUEST MORTGAGE COMPANY (AMERIQUEST), and then from AMERIQUEST to
plaintiff WELLS FARGO; and satisfactorily answering
certain questions regarding a May 5, 2005 limited power of attorney from WELLS FARGO, as
Trustee, to LITTON LOAN SERVICING, LP, as Servicer.
Background
Defendant
HILLARY FARMER borrowed $460,000.00 from ARGENT on
[*2]
December 3, 2004. The note and mortgage were
recorded in the Office of the City Register, New York City Department of Finance on December
21, 2004 at City Register File Number (CRFN) 2004781656. Five days subsequent, on December
8, 2004, two alleged assignments of the instant mortgage and note took place. First, ARGENT
allegedly assigned the note and mortgage to AMERIQUEST. Then AMERIQUEST allegedly
assigned the note and mortgage to plaintiff WELLS FARGO. For reasons unexplained to the
Court, both of these assignments were not recorded for more than fourteen months. Then, they
were both recorded at that same time and sequentially, on February 6, 2006, at CRFN
2006000100653 and CRFN 2006000100654.
While both
ARGENT and AMERIQUEST list on the assignments offices at
different
locations in Orange, California, both of the assignments were executed by one Jose Burgos, "as
Agent," before the same notary public, in Westchester County, New York. Both of these
assignments failed to have a power of attorney attached. Thus, these assignments are invalid and
plaintiff WELLS FARGO lacks standing to bring the instant foreclosure action.
If plaintiff can cure the assignment defect, the Court needs to know: by what authority did Mr. Burgos act "as Agent" for both ARGENT and AMERIQUEST? ; why is the same person acting on the same day as the assignor and the assignee of two mortgage behemoths? ; and, why do corporations located in Orange, California have assignments executed on the other side of the continent, in Westchester County, New York?
Assuming that plaintiff can provide answers to the above questions, plaintiff has
to then answer various questions about LITTON, its alleged servicer. The instant application for
an order of reference contains an "affidavit of merit and amount due" by Debra Lyman, Vice
President of LITTON, attorney in fact for WELLS FARGO. The Limited Power of Attorney,
dated May 5, 2005, attached to the instant application for an order of reference, states that
WELLS FARGO:
in its capacity as trustee under certain Servicing Agreements relating
to Park Place Securities Inc. Asset Backed Pass through Certificates,
Series 2005-WLL1 dated as of March 1, 2005 (the "Agreement") by
and among Park Place Securities, Inc. as ("Depositor") and Litton
Loan Servicing LP as ("Servicer") and Wells Fargo Bank, N.A. as
Trustee
hereby constitutes and
appoints:
LITTON LOAN SERVICING LP
its true and lawful attorney-in-fact . . . to execute and deliver on
behalf of [WELLS FARGO] any and all of the following instruments
[documents with respect to foreclosures] to the extent consistent with
the terms and conditions of the Agreement [sic].
Since the Court does not know for whom WELLS FARGO
is the Trustee, the Court doesn't know if the above-named March 1, 2005 Agreement refers to the
instant mortgage. A Trustee is defined as "one who, having legal title to property, holds it in trust
for the benefit of another and owes a fiduciary duty to that beneficiary" (Black's Law Dictionary
1519 [7th ed 1999]). Thus, the Court needs to know for whom WELLS FARGO holds the
property in trust for. Further, to determine if Ms. Lyman had the authority to execute her affidavit
on behalf of plaintiff WELLS FARGO, the Court needs to inspect the March 1, 2005 Servicing
Agreement. (EMC Mortg. [*3]Corp. v Batista, 15 Misc 3d
1143 (A), [Sup Ct, Kings County 2007]; Deutsche Bank Nat. Trust Co. v Lewis, 14 Misc
3d 1201 (A) [Sup Ct, Suffolk County 2006]).
Discussion
Plaintiff WELLS FARGO must have "standing" to bring this action. The Court of Appeals (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d, 901, 812 [2003]), cert denied 540 US 1017 [2003]) held that "[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress." In Carper v Nussbaum, 36 AD3d 176, 181 (2d Dept 2006), the Court held that "[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant's request." If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1d Dept 2002]).
In the instant action, the two December 8, 2004 assignments, from ARGENT to AMERIQUEST and then AMERIQUEST to WELLS FARGO, are defective. This affects WELLS FARGO's standing to bring this action. The recorded assignments are both by Jose Burgos "as Agent." The assignments lack any power of attorney granted by either ARGENT or AMERIQUEST to Jose Burgos to act as their agents. Real Property Law (RPL) § 254 (9) states:
Power of attorney to assignee. The word "assign" or other words of
assignment, when contained in an assignment of a mortgage and bond
or mortgage and note, must be construed as having included in their
meaning that the assignor does thereby make, constitute and appoint
the assignee the true and lawful attorney, irrevocable, of the assignor,
in the name of the assignor, or otherwise, but at the proper costs and
charges of the assignee, to have, use and take all lawful ways and means
for the recovery of the money and interest secured by the said mortgage
and bond or mortgage and note, and in case of payment to discharge
the same as fully as the assignor might or could do if the assignment
were not made. [Emphasis added]
Therefore, to have a proper assignment of a mortgage by an authorized agent, a
power of attorney is necessary to demonstrate how the agent is vested with the authority to assign
the mortgage. "No special form or language is necessary to effect an assignment as long as the
language shows the intention of the owner of a right to transfer it
[Emphasis added]." (Tawil v Finkelstein Bruckman Wohl Most &
Rothman, 223 AD2d 52, 55 [1d Dept 1996]; see Suraleb, Inc. v International Trade Club, Inc., 13 AD3d 612 [2d
Dept 2004]).
To foreclose on a mortgage, a party must have title to the mortgage. The instant assignments are both nullities. The Appellate Division, Second Department (Kluge v Fugazy, 145 AD2d 537, 538 [2d Dept 1988]), held that a "foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity." Citing Kluge v Fugazy, the Court (Katz v East-Ville Realty Co., 249 AD2d 243 [1st Dept 1998], held that "[p]laintiff's attempt to foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law or fact."
It is clear that plaintiff WELLS FARGO, with the invalid assignments of the instant
mortgage and note from ARGENT, lacks standing to foreclose on the instant mortgage. The
[*4]Court, in Campaign v Barba, 23 AD3d 327 [2d Dept 2005], held that "[t]o
establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the
existence of the mortgage and the mortgage note, ownership of the mortgage,
and the defendant's default in payment [Emphasis added]." (See Household
Finace Realty Corp. Of New York v Wynn, 19 AD3d 545 [2d Dept 2005]; Sears
Mortgage Corp. v Yahhobi, 19 AD3d 402 [2d Dept 2005]; Ocwen Federal Bank FSB v Miller, 18
AD3d 527 [2d Dept 2005]; U.S.
Bank Trust Nat. Ass'n v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage
Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks Holding,
Inc., 196 AD2d 812 [2d Dept 1993].
Conclusion
Accordingly, it is
ORDERED that the application of plaintiff WELLS FARGO BANK, N.A., AS TRUSTEE, for an order of reference for the premises located at 363 Madison Street, Brooklyn, New York (Block 1820, Lot 76, County of Kings) is denied without prejudice, and it is further
ORDERED that leave is granted to plaintiff WELLS FARGO BANK, N.A., AS TRUSTEE, to renew its application for an order of reference for the premises located at 363 Madison Street, Brooklyn, New York (Block 1820, Lot 76, County of Kings), upon presentation to the Court, within forty-five (45) days of this decision and order of: (1) a proper assignment of the instant mortgage and note to plaintiff, WELLS FARG0 BANK, N.A, AS TRUSTEE, and compliance with the statutory requirements of CPLR § 3215 (f) by an affidavit of facts executed by someone with authority to execute such an affidavit: (2) an affidavit from an officer of plaintiff, WELLS FARG0 BANK, N.A, AS TRUSTEE, explaining for whom WELLS FARGO BANK, N.A. is acting as Trustee, why Jose Burgos acted as both an assignor and assignee on December 8, 2004, and, why the December 8, 2004 assignments were executed in Westchester County, New York, and not Orange, California; and (3), if the affidavit of facts is executed by a loan servicer, a copy of the power of attorney to the loan /servicer and the Servicing Agreement authorizing the affiant to act in the instant foreclosure action.
This constitutes the Decision and Order of the Court.
ENTER
___________________________
Hon. Arthur M. Schack
J.S.C.
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