2027 Deerfield, Ltd. v Homecomings Fin., LLC
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2027 Deerfield, Ltd. v Homecomings Fin., LLC 2016 NY Slip Op 30172(U) January 25, 2016 Supreme Court, Suffolk County Docket Number: 07159/2015 Judge: Thomas F. Whelan Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] SHORT FORM ORDER corY INDEX No. J)7159/2015 SUPREME COURT - STATE OF NEW YORK I.A.S. PART 33 - SUFFOLK COUNTY PRESENT: Hon. THOMAS F. WHELAN Justice of the Supreme Court ---------------------------------------------------------------)( 2027 DEERFIELD, LTD., Plaintiff, -againstHOMECOMINGS FINANCIAL, LLC f/k/a : HOMECOMfNGS FINANCIAL NETWORK, fNC.,: RESIDENTIAL FUNDING COMPANY, LLC and CREATIVE RESIDENTIAL CONSTRUCTION, INC., MOTION DATE: 11/17/15 SUBM1TDATE: Wll/15 Mot. Seq.# 001 - MD ~=---Mot. Seq.# 002 - XMI: CDISP: Y _ N_x__ IRWIN POPKIN, ESQ. Atty. For Plaintiff 445 Broad Hollow Rd. · Ste. 25 Melville, NY 11747 HINSHAW & CULBERTSON, LLP Attys. For Defendants 800 Third Ave. New York, NY 10022 Defendants. : ---------------------------------------------------------------)( Upon the following papers numbered I to 10 read on this motion by the plaintiff for lccelerated jud1.,rmcnts on its complaint and cross motion to stay this action ; Notice of Motion/Ord ~r to Show Cause and supporting papers -1...:.1_; Notice of Cross Motion and supporting papers 5-7 ; Am wering Affidavits and supporting papers ; Replying Affidavits and supporting papers 8-9 ; Other I 0 (Defendants' Memorandum of Law) ; (imd ttfk1 hca1 i11g cotrnscl in st1pport and opposed to the 1notio11) it is, ORDERED that this motion (#001) by the plaintiff for accelerated judgments on its complaint for a judgment cancelling a recorded mortgage and two deeds of record and declariug that the plaintiff is the owner in fee of certain real property in Watermill, New York is considered under CPLR 3001 and is denied; and it is further ORDERED that the cross motion (#002) by defendant, I Iomecomings Fir ancial, LLC, f/k/a Homecomings Financial Newt work, Inc., for an order staying this action until a representative of the estate of Walter E. Guidi, has been appointed is considered under CPLR 2001 and CP ...RI 003 and EPTL § 11-1.3 and is denied. At issue in this action is a parcel of residential real property located in Watermill, New York that was the subject of a conveyance by Gladys Ellner to Walter E. Guidi under a deed dated August 6, 2004 [* 2] 2027 Deerfield, LTD., v Homecomings Financial, LLC Index No. 07 159/2015 Page 2 executed by her attorney-in-fact, Ethan Ellner. The parcel was also the subject ) fa $1,500,000.00 mortgage given on August 6, 2004 to Greenpoint Mortgage Funding, Inc., by Walte · E. Guldi, to secure a mortgage note in that amount likewise given. Both the deed conveying title to Gultfi and the mortgage he gave to Greenpoint Mortgage Funding, Inc., was recorded in the office of the Suffolk County Clerk on September 30, 2004. On November 10, 2004, Walter E. Guidi conveyed the premises to the I laintiff. The deed containing such conveyance was recorded in the office of the Suffolk County Clerk at 12:00.17 P.M. on February 7, 2005 according to the face page of the Records Office Recording Page al· hough the itemized second page thereof containing the Suffolk County Recording & Endorsement page is not attached (see Exhibit E of the moving papers). Also recorded with the Suffolk County Clerk at 12:00.17 P.M. on February 7, 2005, was a January 30, 2005 deed by Gladys Ellner to defendant Creative Residential Construction, Inc. (see Exhibit I attached to the moving papers following the affida' it of service). This deed was denominated as one "intended to correct the grantee" under the deed t)f August <;i, 2004, recorded on September 30, 2004, by which Gladys Ellner, through her attorney-in-fa:t, conveyed title to Walter E, Guidi, thereby enabling him to encumber the premises with the 1.5 million dollar mortgage loan from Greenpoint Mortgage Funding, Inc., of the same date. In this "correction deed'', Creative Residential Construction, Inc., was substituted as the grantee in the place and stead of Walter E. Guldi under the terms of the August 6, 2004 deed. As indicated above, this correction deed by Ellner was recorded simultaneously with Guildi' s November 10, 2004 deed conveying the premises to the plaintiff. The August 2004 mortgage by Guidi to Greenpoint went into default in Decerr .ber of2004, a mere four months after its origination and less than one month from Guldi's conveyance oJ 'the premises to the plaintiff. Mortgage Electronic Registration Systems, Inc., [MERS], as nominee ofthe lender, Greenpoint Mortgage Funding, Inc,. commenced a foreclosure action against Walter E. Guildi ald others in May of 2005. On February 8, 2006, MERS assigned the mortgage to Homecomings Finarcial Network, Inc., who is now known as Homecomings Financial, LLC, and is the first named defend.mt in this action. MERS continued to prosecute the foreclosure action in its own name as norr inee of the original lender, Greenpoint Mortgage Funding Inc. until Walter E. Guildi died in Novembe1 of2007 and a stay of the foreclosure action arose by operation of law. By order dated April 30, 2008, the stay was lifted as the foreclosing plaintiff, MERS, was granted leave to substitute George 0. Guidi, as administrator ofthe estate_ Walter E. Guldi, the deceased obligor/mortgagor. MERS was further grantd leave to add more of defendants, including 2027 Deerfield Ltd., the plaintiff in this action and the ovmer of the subject premises under the deed dated November 20, 2004 together with Rescomm Holdmgs No. 2, LLC, a purported subordinate mortgagor. In addition, Homecomings Financial was substituted in the place and stead of MERS as the plaintiff in the foreclosure action. On February 10, 2009, the appointment of George 0 . Guidi as administralor of the Estate of Walter E. Guildi was revoked as a last will and testament of his deceased father hac been propounded. On February 18, 2009, Kathryn Showers and George 0. Guidi were appointed co-ex(·cutors of the estate [* 3] 2027 Deerfield, LTD., v Homecomings Financial, LLC Index No. 07159/2015 Page 3 of the deceased Walter E. Guldi, but they never appeared nor were they substituted as party defendants in the foreclosure action in the place of George 0. Guidi as administrator of the estat ! of Water E. Guidi. ln February of201 l, George 0. Guidi was convicted of one or more felonies Those convictions rendered him ineligible to further serve as executor or other personal representativ< of the estate of his deceased father (see SCPA 707) and resulted in his disbarment from the practice oj law as of February 16, 2011. Notwithstanding these circumstances, George 0. Guldi continued to prosE cute defenses to the foreclosure action as administrator of the estate of Walter E. Guidi and as counsel fo r one or more of the corporate defendants, even though he was without authority and capacity to so proceed. By order dated May 19, 20 I 0, Homecomings was awarded summary judgm1:nt on its complaint against Guidi, 2027 Deerfield Ltd., and default judgments against the others servec with process. The motion was opposed by Guidi on, among other things, the standing defense asserted i1 t the answer served. A judgment of foreclosure and sale issued on May 23, 2012 that was entered in favc r of Homecomings Financial on June 20, 2012. Guldi filed an appeal from, among other things, that judgment offoreclosure and sale. While the appeal was pending, the premises were sold at public auction on~ :eptember 12, 2012 by the referee named in the judgment of foreclosure and sale to the plaintiff, Homecomings Financial, who assigned its bid to Residential Funding Company, LLC on October 18, 2012. By deed dated, October 19, 2012, the referee conveyed the premises to Residential Funding, Comi:any, LLC and such deed was recorded in the office of the Suffolk County Clerk on January 7, 2013. On July 3, 2013, the Appellate Division, Second Department reversed the judg nent offoreclosure and sale and the underlying award of summary judgment in favor of the plain iff, Homecomings Financial, finding that the original plaintiff, MERS, was without standing to prosecute its claims for foreclosure and sale as there was no proof that it was the owner or holder of the note at the time of the commencement of the action or that it had the authority to assign nt to the plaintiff, Homecomings. In an unusual move, the Appellate Division went on to award reverse summary judgment to Guldi as administrator of the estate of his deceased father, a capacity which had been lost to Guidi upon the revocation of his letters of administration in February of 2009 as described above . The foreclosure complaint was thus dismissed, but such dismissal was made expressly without prejudice (see Homecoming Fin., LLC v Guidi, 108 AD3d 506, 969 NYS2d 470 [2d Dept 2013)> In April of 2015, the plaintiff filed this action seeking a declaration that t 1e August 6, 2004 mortgage in favor of Greenpoint Mortgage Banking, Inc., the January 30, 2005 corrc< tion deed in which Creative Residential Construction, Inc., was substituted as grantee in the place and stead of Walter E. Guidi, under the prior Gladys Ellner deed of August 6, 2004, and the October 19, 2C 12 deed by referee of sale, Stephen A. Grossman, Esq., are null and void as are the interests of those nan ed therein and that such mortgage and the deeds should be expunged of record and the plaintiff declare d the owner in fee of the subject premises. In response to the plaintiffs service of the summons and c011plaint, defendant, Homecomings Financial, and its bid assignee, defendant, Residential Funding Compat y LLC, the grantee of title under the October 19, 2012 deed of the referee of sale, filed a joint answ< r containing eight [* 4] 2027 Deerfield, LTD., v Homecomings Financial, LLC Index No. 07159/2015 Page 4 affirmative defenses and a demand for dismissal of the complaint. Creative Residential Construction Company, Inc., defaulted in appearing herein by answer. By the instant motion, the plaintiff seeks summary judgment on its co nplaint against the answering defendants and a default judgment against the non-appearing defendant, 1~reative Residential Construction, Inc. The motion is opposed by the answering defendants, Homeco1-iings Financial and Residential Funding, who jointly cross move for a stay of this action pending the appointment of the personal representative of the estate of Walter E. Guidi, the grantor of the plaintiffs title. For the reasons stated, the plaintiffs motion (#001) is denied as is the cross r 10tion (#002) by the answering defendants for a stay of this action. The plaintiff's claim for cancellation of the August 6, 2004 mortgage by Wal erO. Guidi in favor ofGreenpoint Funding, is premised upon allegations that the six year statute oflimit~ tions has run on any claim for foreclosure of the lien of such mortgage, and accordingly, the plaint ff is entitled to an expungement ofrecord of such mortgage lien pursuant to RP APL 150 I (4). Howeve ·, the plaintiff failed to demonstrate, prima facie, its entitlement to such relief. It is well settled law that an indebtedness secured by a mortgage accrues ls each installment becomes due unless the mortgage debt is duly accelerated by unequivocal notic( of acceleration or commencement of an action (see Koeppel v Carlandia Corp., 21 AD3d 884, 800 N YS2d 607 [2d Dept 2005); Loiacono v Goldberg, 240 AD2d 476, 658 NYS2d 138 [2d Dept 1997]; see a.so Goldman Sac/ts Mtge. Co. vMares, _AD3d _ , 2016 WL 155488 [3d Dept2016]). Accordingl)' , the six year statute oflimitations will serve as a complete bar to the prosecution of a claim to foreclose th e lien of a mortgage debt payable in installments, some of which were not due at the time of the default, mly where the debt was duly accelerated so as to make all unpaid amounts due and payable applic•.ble to a claim for foreclosure of a lien arising on a secured debt (see Wells Fargo Bank, N.A. v Cohen 80 AD3d 753, 915 NYS2d 569 [2d Dept 2010); Saini v Cinelli Enter., Inc. , 289 AD2d 770, 733 N"S2d 824 [3d Dept 2001]). Where a claim for discharge of a mortgage on statute oflimitations grounds i~ premised upon the dismissal of a prior foreclosure action, the plaintiff must demonstrate that such di ;missal was on the merits and that the statute of limitations on any re-commencement has run (see Ca 'iguri v JPMorgan Cl1ase Bank, N.A. , 121AD3d1030, 996 NYS2d 73 (2d Dept 20141). A dismissal 1•remised on lack of standing is not a dismissal on the merits for res judicata purposes (see Landau P.C. v LaRossa, Mite/tell & Ross, 11 NY3d 8, 13 n. 3, 862 NYS2d 316 [2008]; Caliguri v JPMorgan Clta.•e Bank, N.A., 121 AD3d I 030, supra). Moreover, in the absence of a valid acceleration of a mortgage debt by one having authority to do so, the statute of limitations does not expire with respect to unpaid nstallments which accrue within the six year period immediately prior to the commencement of a fon: closure action (see Wells Fargo,N.A. vBurke, 94 AD3d 980, 943 NYS2d 540 [2d Dept 2012];EMCMt?e. Corp. vSuarez, 49 AD3d 592, 852 NYS2d 791 [2d Dept 2011 ]). [* 5] 2027 Deerfield, LTD., v Homecomings Financial, LLC Index No. 07159/2015 Page 5 Here, the plaintiff claims an entitlement to a recorded discharge of the /\ugu ;t 6, 2004 mortgage by Guidi to Greenpoint Mortgage Banking, Inc., due to the dismissal of the prior m :>rtgage foreclosure action commenced by MERS as nominee of Grecnpoint that was later prosec 1ted by defendant, Homecomings Financial, and the purported running of the statute oflimitations. Ho' vever, the mere fact that the prior foreclosure action was dismissed due to a lack of standing on the Jart of the original plaintiff in that action, which was commenced in 2005 on a mortgage loan that '1ent into default in December of2004, docs not warrant a discharge of the recorded mortgage or the lie: l arising therefrom. The dismissal on standing grounds is not a dismissal on the merits which would preclude a second foreclosure action and the plaintiff failed to demonstrate that the debt was proper!~ accelerated by the filing of the foreclosure complaint by MERS, an entity that was not the owner of the mortgage note and thus without authority to accelerate the mortgage debt. Indeed, the Appellate Divisic n's dismissal of the MERS foreclosure complaint was made expressly, without prejudice. The plai 1tiff thus failed to demonstrate an entitlement to summary judgment against Homecomings Financ al and Residential Funding on those portions ofthe complaint wherein the plaintiff seeks a discharge ofr ~cord ofthe August 6, 2004 mortgage. Nor did the plaintiff establish any grounds for an award of summary judgn .ent in favor of the answering defendants on the plaintiff's claims for a discharge of record of the refere :'s deed of October 19, 2012 or of the January 30, 2005 correction deed by Gladys Ellner in favor of c efendant, Creative Residential Construction, Inc. It is well established that in actions to quiet the plai itiff s title or other interest in real property, the plaintiff cannot succeed by relying upon defects in the fr le or the interest of the defendant, but instead, must establish good title in itself (see LaSala v Terstiege, '. '.76 AD2d 529, 713 NYS2d 76 [2d Dept 2000]; Bridgehampton Natl. Bank v Schaffner, 4 7 AD2d 3 51, t 67 NYS2d 93 8 [2d Dept 1998]; Town ofN. Hempstead v Bonner, 77 AD2d 567, 429 NYS2d 739 [2d I >ept 1980]). Here, there was no mention, let alone showing, of the plaintiffs superior title and/or inte ·est to those of the answering defendants under the referee's deed or the plaintiffs superior title to cefendant, Creative Residential Construction, Inc., under the correction deed which was recorded at the sa ne moment in time as that of the plaintiff's deed according to the recording documents attached to 1he instant motion. Summary judgment on the claims to extinguish the referee's deed of October 19, 201: and the correction deed is thus denied. In addition, the court denies the plaintiffs demands for a default judgment against defendant, Creative Residential Construction, Inc., on the plaintiffs pleaded claims, only one cf which appears to target said defendant directly, namely, those last claim wherein the plaintiff seeks a c .ischarge of record the January 30, 2005 correction deed conveying title to the subject premises to said d :fendant. It is well established that entitlement to a default judgment rests upon a showing of due servi :e of the summons and complaint, a default in answering and facts constituting the plaintiffs claim ag~ inst the defaulting defendant (see CPLR 3215[f]; Todd v Green, 122 AD3d 831, 997 NYS2d 155 [2< Dept 2014]; Oak Hollow Nursing Ctr. vStumbo, 117 AD3d 698, 985 NY2d 269 l2d Dept2014]; U.S. Bank,Nat/.Ass'n v Razon, 115 AD3d 739, 981 NYS2d 571 [2d Dept 2014]). The plaintiffs possessi Jn of a cognizable claim for relief is thus required for entry of a default judgment against any defendan duly joined in the action. [* 6] 2027 Deerfield, LTD., v Homecomings Financial, LLC Index No. 07159/2015 Page 6 As indicated above, a quiet title claim, such as the one interposed against iefendant Creative Residential Construction, Inc., is dependent upon a showing by the plaintiff of good title in itself rather than any defect in the title or interest of such defendant. A review of the movinf papers and of the complaint reveals that the plaintiff failed to establish a superior title and a legal bas s for the discharge of the January 30, 2005 deed in favor of Creative Residential Construction, Tr c. or of the other instruments of record that are the subject of the complaint. No facts constituting le ~al grounds for the expungement ofsaid instruments including the correction deed in favor of defendant Crcative Residential Construction, Inc., were advanced in the complaint or the moving papers. The pla ntiff thus failed to demonstrate its possession of a cognizable claim for the discharge ofrccord of the co Tection deed dated January 30, 2005 by Gladys Ellner to defendant, which was recorded with the Suffo k County Clerk on February 7, 2005, at the very same moment as the recording of the plaintiffs deed. Those portions of the plaintiffs motion wherein its seekS a default judgment against defendant, C:·e ative Residential Construction, Inc., are thus denied. The court also denies the cross motion (#002) of the answering defendants for :i stay of this action pending the appointment of a "new" personal representative of the estate of the deceased obligor/mortgagor, Walter E. Guldi. There is no evidence that there is no acting, duly 1ppointed personal representative of the estate of the deceased mortgagor. Co-executors of such estate w ~re appointed upon the admission of Mr. Guldi's last will and testament to probate in February of2009 an j only one, George 0. Guidi, is known to be disqualified from serving as such. The necessity of a stay of :his action pending the appointment of a "new" personal representative has thus not been shown to have any basis in law or in fact. Nor have the defendants demonstrated an entitlement to a stay premised on th•:ir pleaded defense that the plaintiff failed to join a necessary party to this action, such as the personal representative of the estate ofthe deceased obligor/mortgagor. There are no direct claims against the estate of Walter E. Guidi in any of the pleadings put before the court on these motions and none of the pleade1 l claims have been shown to have an adverse impact upon the rights and interests ofthe estate. Accordingly, the court denies the cross motion for a stay of all proceedings in this action as demanded by the cross n ioving defendants. DATED J 1~~o l
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