Mejias v Premium Capital Funding, LLC

[*1] Mejias v Premium Capital Funding, LLC 2009 NY Slip Op 50752(U) [23 Misc 3d 1115(A)] Decided on April 7, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 April 7, 2009
Supreme Court, Richmond County

Yolanda Mejias, Plaintiff,

against

Premium Capital Funding, LLC D/B/A TOPDOT MORTGAGE, and WELLS FARGO BANK, N.A., Defendants.



102930/08

Thomas P. Aliotta, J.

Plaintiff's application (No. 2169) by order to show cause dated July 8, 2008 for a preliminary injunction is denied, as is her further motion (No. 3517) to consolidate a related foreclosure proceeding pending against her under Index No. 103999/08 with this action; the motion (No. 3628) of defendant Wells Fargo Bank, N.A. (hereinafter "Wells Fargo") to dismiss the complaint pursuant to CPLR 3211(a)(7) is granted, as is the cross motion (No. 055) for summary judgment of defendant Premium Capital Funding, LLC d/b/a Topdot Mortgage.

The underlying action to, inter alia, void a mortgage, arises out of a real estate transaction wherein plaintiff Yolanda Mejias (hereinafter "plaintiff") and nonparty Elsie Mejias purchased residential premises located at 260 Targee Street, Staten Island, New York 10304. Plaintiff asserts two causes of action, the first as against defendant Topdot, for its alleged "predatory lending violations" of Banking Law §6-l, and a second as against both defendants for their respective failures to exercise due care and diligence in granting her a loan to purchase the above premises.

Certain facts are undisputed: (1) the purchase price of the subject premises was $399,500.00 on which plaintiff made a downpayment of $1,000.00; (2) at the closing on February 13, 2008, an FHA mortgage loan was given to plaintiff and Elsie Mejias by defendant Premium Capital Funding, LLC d/b/a Topdot Mortgage (hereinafter "Topdot") in the principal amount $393,327 at a fixed rate of interest of 7.125% for 30 years; (3) the homebuyers (Yolanda and Elsie Mejias) received a "Nehemiah" grant in the amount of $7,970.00 applicable to the downpayment and closing costs; (4) the buyers were granted a "seller's concession" in the sum of $16,705.62 towards the borrowers' settlement charges; and (4) on September 19, 2008, the subject mortgage was assigned to codefendant Wells [*2]Fargo.

In support of her application for injunctive relief to, e.g., bar defendants from demanding the periodic payments of her mortgage and assess late fees, penalties and interest attributable to her non-payment, plaintiff maintains that she was the victim of predatory lending practices prohibited by section 6-l of the Banking Law, entitled "High-cost home loans". In particular, she alleges that the defendants violated Banking Law §§6-l(2)(k) and 6-l(2)(l)(i), respectively, by (1) failing to undertake a due diligence investigation to assess whether she had the financial ability to repay the subject loan based upon an analysis of her income, resources and expenses, and (2) failing to provide her with "counseling disclosure" and a list of "approved" credit counselors. Notably, all "high-cost home loans" as defined in Banking Law §6-l are subject to the foregoing regimen.

According to the plaintiff/mortgagor, at the time of the closing she was employed by the City of New York as a case worker for Department of Social Services/Human Resources Administration earning approximately $38,000.00 per year. She claims that the defendant lenders "never advised [her] that [she] would not have the financial ability considering [her] income to make the mortgage payments nor did they provide [her] with a list of any licensed New York State credit counselors" with whom she could consult. She also contends that defendants should have known, based on her salary, that she could not afford to make the mortgage payments of approximately $3,000.00 per month.

In opposition, and in support of their motions to dismiss and for summary judgment, defendants argue that they did not violate the so-called "High-Cost Home Loan Law" since the mortgage loan that was granted to plaintiff and Elsie Mejias was not a "high-cost home loan" as defined in section 6-l of Banking Law, but rather, a fixed-rate loan that satisfied all FHA guidelines. More specifically, defendants maintain that the subject loan satisfied both the "APR Test" (pursuant to which the Annual Percentage Rate of a loan may not exceed the yield on comparable Treasury securities by more than 8%) and the "Fees Test" (wherein the total points and fees may not exceed 6% of the total loan amount) as delineated in Banking Law §6-l. In this regard, defendants have submitted documents pertinent to the alleged "high-cost" aspect of this loan, along with a detailed attorney's affidavit. Also submitted as proof that the loan was issued in accordance with FHA guidelines are the closing documents relating to this transaction, e.g., the contract of sale, a property appraisal, a purported lease relating to an apartment in the subject premises, the deed, the mortgage and note, and employment and earnings verifications, along with various financial/credit statements for both borrowers, a Mortgage Credit Analysis Worksheet, a Uniform Underwriting and Transmittal Summary, the Mortgage Commitment and Pre-Application Disclosure form and the HUD Settlement Statement (HUD-1).

In addition, addressing plaintiff's second cause of action for negligence, defendants point out that the foregoing documents also demonstrate that they conducted a due diligence inquiry in processing the loan application by examining both borrowers' income, resources, [*3]expenses and debts. According to defendants, the borrowers' combined annual income was $86, 694.00, and the anticipated rental income generated by the apartment would amount to an additional $11,940.00 annually. Defendant Wells Fargo also maintains that since the assignment of Topdot's contractual rights under the subject note and mortgage occurred after the loan was negotiated and closed, the assignee owed plaintiff no common-law duty to exercise due care.

In view of the foregoing, it is this Court's opinion that defendant Topdot has established its prima facie entitlement to judgment as a matter of law, and that plaintiff has failed to raise a triable issue of fact with regard to either of her purported causes of action (see Zuckerman v City of New York, 49 NY2d 557, 562).[FN1] Plaintiff's "mere conclusions, expressions of hope, [and] unsubstantiated allegations or assertions [submitted in opposition to summary judgment] are insufficient" for this purpose (id.).

Turning to the motion by defendant Wells Fargo to dismiss the cause of action asserted against it for failure to state a cause of action (see CPLR 3211[a][7]), it is well settled that the operative standard for deciding such a motion is "whether the factual allegations taken from the four corners of the complaint manifest any cognizable cause of action" (Klepetko v Reisman, 41 AD3d 551). Although in this process the pleaded facts are generally accepted as true and accorded the benefit of every favorable inference (see Leon v Martinez, 84 NY2d 83), "bare legal conclusions and factual claims which are flatly contradicted by the evidence are not presumed to be true" (Parsippany Constr. Co., Inc. v Clark Patterson Assoc. P.C., 41 AD3d 805, 806, citing Meyer v Guinta, 262 AD2d 463, 464 [internal quotation marks omitted]).

Consonant with these principles, it is the opinion of this Court that even according plaintiff the benefit of every favorable inference possible, the allegations against codefendant Wells Fargo fail to set forth a factual basis for attributing to it any duty of care towards plaintiff. Neither are plaintiff's affidavit and the other evidentiary material before the Court sufficient to remedy this pleading defect (see Rovello v Orofino Realty Co., 40 NY2d 633, 636).

In any event, even if the complaint could be found to "state" a cause of action for negligence against Wells Fargo, upon searching the record (see CPLR 3212[b]), it is [*4]apparent that no triable issue of fact exists as to its liability on plaintiff's second cause of action. On either basis, dismissal of the complaint as against Wells Fargo is appropriate.

Accordingly, it is

ORDERED, that plaintiff's application for a preliminary injunction is denied in its entirety; and it is further

ORDERED, that the motion for summary judgment of defendant Premium Capital Funding, LLC d/b/a Topdot Mortgage is granted; and it is further

ORDERED, that the motion to dismiss pursuant to CPLR 3211(a)(7) of defendant Wells Fargo Bank, N.A. is granted; and it is further

ORDERED, that the complaint is dismissed; and it is further

ORDERED, that plaintiff's motion for consolidation is denied as academic; and it is further

ORDERED, that the Clerk enter judgment accordingly.

E N T E R,

Dated: April 7, 2009/s/_________________________

Hon. Thomas P. Aliotta

J.S.C. Footnotes

Footnote 1: The sole irregularity appearing in defendants' papers relates to the acceleration of the mortgage debt by Wells Fargo which did not comply with the terms of the subject mortgage (see Mortgage, par 18). Specifically, the requisite notice of default issued to the borrowers on July 6, 2008 was a nullity (see EMC Mtge. Corp. v Suarez, 49 AD3d 592, 593) since the subject mortgage and note had not yet been assigned to this defendant. Accordingly, it lacked the authority to accelerate the debt at that point in time (id.) However, this does not preclude the Court from dismissing the complaint in this action based on plaintiff's failure to demonstrate any legal basis upon which to void the subject mortgage.