Deutsche Bank Natl. Trust Co. v Fitzworme

[*1] Deutsche Bank Natl. Trust Co. v Fitzworme 2009 NY Slip Op 50426(U) [22 Misc 3d 1134(A)] Decided on January 12, 2009 Supreme Court, Richmond County Aliotta, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 12, 2009
Supreme Court, Richmond County

Deutsche Bank National Trust Company As Trustee for HSI Asset Securitization Corporation 2005-opti Mortgage Pass- Through Certificates, Series 2005 OPTI, Plaintiff,

against

McGregor Fitzworme; Gina Mooney, Defendants.



102765/07

Thomas P. Aliotta, J.

Upon the foregoing papers, the applications (Nos. 1271 and 2106, respectively) of defendants McGregor Fitzworme and Gina Mooney are denied in their entirety.

In this foreclosure action involving certain premises known as 218 Finley Avenue in Staten Island, New York, the defendants McGregor Fitzworme and Gina Mooney move separately by order to show cause to, inter alia, vacate and/or modify a default Judgement of Foreclosure and Sale dated February 20, 2008. Additionally, defendant Mooney seeks a preliminary injunction staying a holdover proceeding (Index No. 50537/08) commenced against her by defendant Fitzworme in Richmond County Civil Court and defendant Fitzworme seeks to stay the foreclosure sale for a reasonable time to allow him to exercise his right of redemption.

In support of their motions, both movants claim that they have been "victimized." More particularly, without setting forth any specifics, defendant Fitzworme asserts misconduct, negligence and fraud on the part of an unnamed, nonparty real estate broker who led him to participate in the underlying real estate transaction. As alleged, it is claimed that Fitzworme agreed to purchase Brian and Gina Mooney's property at its purported fair market value, i.e., $470,000.00, and to permit them to remain in possession as tenants for a period of ten months after the closing (in August 2005) to allow them, e.g., to obtain a mortgage and repurchase the premises at the end of the ten month period. According to Fitzworme, although ten months of mortgage payments were held in escrow and paid to his mortgagee by the Mooneys' closing attorney, Marc Kallman, Esq., the Mooneys failed to exercise their option to purchase the premises, and further failed either to pay rent or vacate the premises. Defendant Fitzworme claims to have made the required monthly mortgage [*2]payments for six months following the expiration of the ten-month period, but subsequently defaulted when no money was forthcoming. This foreclosure action against Fitzworme and the Civil Court eviction proceedings against the Mooneys ensued.

In support of their application, the Mooneys claim that the above transaction constituted a fraudulent "mortgage rescue scheme" that was orchestrated by defendant Fitzworme and certain unnamed nonparties to deprive them of their equity in the property. More particularly, Ms. Mooney alleges that in order to avoid losing her residence in foreclosure, she and her husband entered into an agreement with co-defendant Fitzworme (a self proclaimed "foreclosure prevention expert"), believing that her mortgage would be satisfied by "essentially refinancing through defendant Fitzworme or one of his partners until [she] could remove [him] from the deed." Notwithstanding that she was represented by separate counsel at the closing, Ms. Mooney further alleges that $128,000.00 of the mortgage proceeds has not been satisfactorily accounted for, as it was purportedly paid to certain unknown entities without her knowledge or consent.

Turning first to defendant Mooney's attempt to vacate the default judgment for lack of personal jurisdiction, the affidavit of service submitted by plaintiff Deutsche Bank National Trust Company (the plaintiff/ mortgage-holder) constitutes prima facie evidence that this defendant was properly served pursuant to CPLR 308(4) (see Rosario v Beverly Rd. Realty Co., 38 AD3d 875; Household Fin. Realty Corp. of NY v Brown, 13 AD3d 340, 341). Thus, the process server attests that he affixed a copy of the summons and complaint to the door of the subject premises described as "2 story white and beige residence/brown door and glass *** having verified defendant's dwelling house with a neighbor at No.220 " after having attempted to serve Ms. Mooney on three prior occasions[FN1]. As it is well settled that in order to rebut this presumption defendant Mooney was required to come forward with a sworn denial containing detailed and probative facts sufficient to overcome the affidavit of service and create an issue of fact (see Rosario v Beverly Rd. Realty Co., 38 AD3d at 875; Bankers Trust Co. of Cal. v Tsoukas, 303 AD2d 343, 344), it is the opinion of this Court that Gina Mooney's unsubstantiated, conclusory allegations that the summons and complaint "were never delivered to [her], were never left with a person at [her] residence, nor affixed to [her] door" is legally insufficient to accomplish its intended purpose. Hence, no hearing is required (see Cavalry Portfolio Services, LLC v Faigy Reisman, __ AD3d __, 865 NYS2d 286 {55 AD3d 524} ; Rosario v Beverly Rd. Realty Co., 38 AD3d at 875; General Motors Acceptance Corp. v Grade A Auto Body, Inc., 21 AD3d 447; Household Fin. Realty Corp. of NY v Brown, 13 AD3d at 341; Carrenard v Mass, 11 AD3d 501; NYCTL 1997-1 Trust v Nillas, 288 AD2d 279; Wieck v Halpern, 255 AD2d 438; Remington Invs. v Seiden, 240 AD2d 647). In addition, since defendant Mooney has failed to demonstrate that she did not personally receive notice of the summons in time to defend, relief pursuant to CPLR 317 is unavailable (see General Motors [*3]Acceptance Corp. v Grade A Auto body, Inc., 21 AD3d at 447; 96 Pierrepont v Mauro, 304 AD2d 631), as is relief pursuant to CPLR 5015 (a)(1), which requires a reasonable excuse for her default (see 425 E. 26th St. Owners Corp. v Beaton, 50 AD3d 845, 846).

Of further significance under CPLR 5015(a)(1) is Mooney's failure to establish that a meritorious defense to the foreclosure action exists. In opposition to both applications, plaintiff has submitted a detailed explanation of the disbursement of the mortgage proceeds at the closing, along with supporting documentation, e.g., an affidavit from the lender's attorney, the revised HUD-1 Settlement Statement and copies of the cancelled checks. Also present before the Court are photocopies of these same checks submitted by defendant Fitzworme in support of his and plaintiff's proposition that Mooney's claim of an "unaccounted sum" of $128,000.00 is devoid of merit. In view of this documentary evidence rebutting the only tangible "proof" of fraud tendered by Ms. Mooney, this Court can only conclude that a meritorious defense of, e.g., fraud, has not been demonstrated.

Furthermore, it is well established under Real Property Law §266, that "a bona fide purchaser or encumbrancer for value is protected in his or her title unless he or she had previous notice of the alleged prior fraud by the immediate seller" (Karan v Hoskins, 22 AD3d 638). Consonant with this principle, and notwithstanding any allegations of fraud as between codefendants Fitzworme and Mooney, neither has sufficiently raised a colorable claim that plaintiff is not a bona fide encumbrancer for value. Stated otherwise, there is no evidence before the Court that plaintiff had notice of Mooney, the equity seller's, purported "continuing right to, or equity in, the property prior to the acquisition of...[the] encumbrance, or of any violation of [Real Property Law §265-a] by the equity purchaser [Fitzworme] as related to the subject property" (Real Property Law §265-a(2)(a) [L 2006, c 308 §3], eff February 1, 2007); see Miner v Edwards, 221 AD2d 934).

Finally, it is worthy to note that although CPLR 5015(a)(4) does not require proof of a meritorious defense or an excusable default, a lack of jurisdiction over either defendant has not been sufficiently established to warrant a traverse hearing in this case (see Rosario v Beverly Rd. Realty Co., 38 AD3d at 875; Wells Fargo Bank N.A. v McGloster, 48 AD3d 457; cf. Bankers Trust Co. of Cal. v Tsoukas, 303 AD2d at 344).

Defendant Fitzworme's entitlement to exercise his right of redemption is not in jeopardy at this stage of the proceedings.

Accordingly, it is

ORDERED, that the applications are denied; and it is further [*4]

ORDERED, that the stays contained in the respective orders to show cause are vacated.

E N T E R,

Dated: January 12, 2009__/S/______________________

Thomas P. Aliotta

J.S.C. Footnotes

Footnote 1: These attempts at personal service are alleged to have been made on July 24, 2007 at 1:56 p.m., July 26, 2007 at 7:14 p.m., and July 28, 2007 at 8:00 a.m.