Aries Fin., LLC v 12005 142nd St., LLC
Annotate this CaseDecided on October 21, 2009
Supreme Court, Queens County
Aries Financial, LLC, Plaintiff,
against
12005 142ND Street, LLC, et al., Defendants.
28384/08
Jaime Antonio Rios, J.
By Summons and Complaint dated November 21, 2008, plaintiff commenced this action to foreclose on a mortgage securing property at 120-05 142nd Street, Jamaica, New York, which was executed by defendant 12005 142nd Street, LLC in the amount of $243,000.00 on April 27, 2007 and recorded on May 4, 2007. According to plaintiff, 12005 142nd Street, LLC defaulted by failing to make the monthly payments of principal and interest beginning June 1, 2008. Under the terms of the note, plaintiff demanded payment in full. As a result, plaintiff claims that the sum of $243,000.00, plus interest and late fees is due as of May 1, 2008. All defendants were duly served and 12005 142nd Street, LLC and Alexander Tobin and Cynthia Tobin, s/h/a John Doe (defendants), have submitted an answer. In their answer, they denied the material allegations in the complaint and set forth five counterclaims and five affirmative defenses, including, violation of the Federal Truth and Lending Act, violation of the New York State General Business Law and violation of the New York State Property Law 265-a.
Plaintiff currently moves, inter alia, to strike the answer and for summary judgment and to amend the caption by striking the name "John Doe" and replacing it with the names Alexander Tobin and Cynthia Tobin, as they are tenants at the property. Plaintiff submits the affidavit of service for the Tobins.
Plaintiff also moves for an order appointing a referee to ascertain and compute the total amount due plaintiff for unpaid [*2]principal, accrued interest and costs and expenses.
In support of the motion, plaintiff submits two affidavits of its president, Al London, wherein he avers, inter alia, that defendant defaulted by failing to make the monthly payments of principal and interest beginning June 1, 2008. London also notes the lack of issues of fact raised in any answering papers.
Defendants cross move for an order, inter alia, (1) denying the plaintiff's motion, with the exception that the caption be amended by substituting Alexander Tobin and Cynthia Tobin for "John Doe", (2) amending their answer to add the affirmative defense of lack of capacity to sue, and (3) amending their counterclaim to, inter alia, request punitive damages and add causes of action for usury and reformation.
By way of background, defendants explain that the Tobins had taken out a first mortgage on the premises for $130,623.20 and when they were unable to make the monthly payments and faced foreclosure, plaintiff induced them to refinance with a mortgage of $243,000.00 at a rate of 16% with a promise that they would be able to keep the premises and refinance again in a year at an interest rate of 7%. Defendants state that plaintiff was aware that Alexander Tobin was disabled and unemployed and without income and that Cynthia Tobin received only $1,939.00 a month in Workers' Compensation and Disability benefits. Defendants further explain that at the closing on April 27, 2007, at plaintiff's insistence, the defendant corporation 12005 142nd Street, LLC was formed. Defendant Alexander Tobin was designated as the managing member of this new corporation. Defendants note that at the closing, the Tobins transferred title to 12005 142nd Street, LLC, and they claim that this entity was a sham created solely to bypass residential lending laws because plaintiff was not authorized to issue residential mortgages to natural persons. Defendants also note that they were not represented by counsel at the closing, at which an escrow agreement was executed with plaintiff wherein $36,450.00 was set aside as the first 12 months mortgage payments, plaintiff received $5,604.20 in fees, the brokers received $11,812.50, the previous mortgage was paid off, plaintiff's attorneys held $15,000.00 in escrow and the Tobins received $26,457.00. In support of their cross-motion to amend their answer by adding the affirmative defense of lack of capacity to sue, amending their counterclaims to re-plead in further detail, asserting new counterclaims of usury, reformation and a declaration of an equitable mortgage, and requesting punitive damages, they argue that leave should be freely given.
In opposition to the plaintiff's motion for summary judgment, defendants initially argue that Al London's affidavit [*3]is inadmissible under CPLR § 2309 because it was executed outside of New York State and is not accompanied by a certificate of conformity. Defendants also argue that plaintiff did not disprove their counterclaims and questions of fact remain precluding summary judgment.
In opposition to the cross-motion, plaintiff argues, inter alia, the defendants should not be permitted to amend their answer because the claims are spurious and without basis.
Initially, on consent of both parties, the caption shall be amended by striking "John Doe" and replacing it with Alexander and Cynthia Tobin.
Under CPLR 2309, an oath or affirmation taken outside the state may be treated as if taken inside the state "if it is accompanied by such certificate or certificates as would be required to entitle a deed acknowledged without the state to be recorded within the state if such deed had been acknowledged before the officer who administered the oath or affirmation". Such certificate would be a certificate of conformity, required under RPL 299-a[1], "which certifies that the manner in which the acknowledgment or proof was taken conforms with the laws of the appropriate jurisdiction" (Ford Motor Credit Co. v Prestige Gown Cleaning Service, Inc., 193 Misc 2d 262 [Civ Ct., Queens County, 2002]). Under these provisions, for an affidavit that is signed and notarized outside of New York State to be admissible, it must be accompanied by a certificate of conformity (see MBNA America Bank, N.A., v Nelson, 15 Misc 3d 1148(A)[Civ Ct, Richmond County 2007]; DaimlerChrysler Services North America, LLC v Tammaro, 14 Misc 3d 128(A) [App Term, 2d & 11th Jud Dists, 2006]; Citibank N.A. v Suen, 11 Misc 3d 126(A) [App Term, 2d & 11th Jud Dists, 2005]; Discover Bank v Kagan, 8 Misc 3d 134(A) [App Term, 2d & 11th Jud Dists, 2005]). Here, the plaintiff's motion was only supported by affidavits sworn to before a Florida notary. That notwithstanding, due to the lack of the certificate of conformity, the affidavits are, in effect, unsworn. As a result, plaintiff's failure to submit a certificate of conformity renders the affidavits insufficient (see Citibank N.A. v Suen, supra). Without a sworn affidavit, the plaintiff's motion papers are devoid of the sworn factual proof necessary to sustain a motion for summary judgment under CPLR 3212[b] (see Discover Bank v Kagan, supra).
With respect to the cross-motion to amend the answer, CPLR 3025[b] provides that a "party may amend his pleading, or supplement it by setting forth additional or subsequent transactions or occurrences, at any time by leave of court or by stipulation of all parties". Leave [*4]to amend pleadings should be freely given provided that the amendment is not palpably insufficient, does not prejudice or surprise the opposing party, and is not patently devoid of merit" (Gitlin v Chirinkin, 60 AD3d 901 [2d Dept., 2009]). Here, the proposed amendments are neither palpably insufficient nor patently devoid of merit, and plaintiff did not demonstrate prejudice or surprise. Thus, the cross-motion is granted to the extent of permitting the defendants to amend their answer and defendants are directed to file their amended answer within twenty days of entry of this order.
The plaintiff's motion is denied without prejudice to renew after the amended answer is filed
and upon submission of the proper supporting papers.
Dated: October 21, 2009________________________
J.S.C.
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