Deutsche Bank Natl. Trust Co. v Donohue

[*1] Deutsche Bank Natl. Trust Co. v Donohue 2016 NY Slip Op 50222(U) Decided on February 22, 2016 Supreme Court, Suffolk County Whelan, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 February 22, 2016
Supreme Court, Suffolk County

Deutsche Bank National Trust Company, as Trustee of the Residential Asset Securitization Trust 2007-1 under the Pooling and Servicing Agreement dated July 1, 2007, Plaintiff,

against

Diana L. Donohue a/k/a DIANE DONOHUE, RICHARD J. DONOHUE a/k/a RICHARD DONOHUE a/k/a ROBERT J. DONOHUE a/k/a ROBERT DONOHUE, PETRO, INC., NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, NATIONAL CITY BANK and "JOHN DOE #1" to "JOHN DOE #10" the last ten names being fictitious and unknown to plaintiff the persons or parties intended being the persons or parties, if any, having or claiming an interest in or lien upon the mortgaged premises described in the verified complaint, Defendants.



11-8351



HOUSER & ALLISON, APC

Attys. For Plaintiff

60 E. 42nd St. - Ste. 1148

New York, NY 10165

SAMUEL E. KRAMER, ESQ.

Attys. For Defendants Donohue

225 Broadway - Ste. 3300

New York, NY 10007
Thomas F. Whelan, J.

Upon the following papers numbered 1 to 10read on this motion for summary and default judgments, party deletion and an order appointing a referee to compute; Notice of Motion/Order to Show Cause and supporting papers4; Notice of Cross Motion and supporting papers; Opposing papers:5-6; Reply papers:7-8; Other 9-10 (defendants' memorandum of law); (and after hearing counsel in support and opposed to the motion) it is,

ORDERED that those portions of this motion (#002) by the plaintiff for an order awarding it summary judgment against the answering defendants, is considered under CPLR 3212, 3215, 1003, 1024 and RPAPL § 1321 and is granted only to the extent that partial summary judgment in favor of the plaintiff dismissing all of the affirmative defenses set forth in the amended answer of the Donohue defendants, except the Third, Fourth and Eleventh affirmative defenses; and it is further

ORDERED that those portions of this motion wherein the plaintiff seeks default judgments against the remaining known defendants served with process, and an order deleting the unknown defendants is considered under CPLR 1003, 1024 and is granted; and it is further

ORDERED that those portions of this motion wherein the plaintiff seeks an order appointing a referee to compute amounts due under the consolidated note and mortgage is denied without prejudice as premature; and it is further

ORDERED that pursuant to CPLR 3212(g), the court hereby finds that the plaintiff is possessed of the requisite standing to prosecute its claims for foreclosure and sale and that the trial of this action shall be limited to the issue of whether the plaintiff complied with the pre-action ninety day notice requirement imposed upon it by the provisions of RPAPL § 1304; and it is further

ORDERED that a pre-trial conference shall be held in this action on Friday, March 11, 2016, [*2]at 9:30 a.m. in Part 33, at the courthouse located at 1 Court Street - Annex, Riverhead, New York at which counsel are directed to appear.

The plaintiff commenced this action in March of 2011 to foreclose the lien of a consolidated mortgage given by the Donohue defendants on June 15, 2007 in favor of IndyMac Bank to secure a $500,000.00 mortgage note of the same date likewise given to IndyMac Bank. Also executed on that date was a mortgage and mortgage note in the amount of $7,581.08 given by the Donohue defendants in favor of IndyMac Bank and a Consolidation, Extension and Modification Agreement [CEMA] which combined the liens of the $7,581.08 mortgage and a prior mortgage dated August 9, 2005. According to the complaint, the Donohue defendants defaulted in their payment obligations on August 1, 2010, without cure notwithstanding the issuance of contractual and statutory notices of such default and demands for cure.

Defendant, Richard Donohue, appeared in response to the plaintiff's service of the summons and complaint by a verified answer with a cross claim dated May 10, 2011. The remaining defendants served with process defaulted in appearing herein by answer. By stipulation dated August, 2012, the plaintiff consented to an appearance of defendant, Diana Donohue, by the service of a joint amended answer by Richard Donohue and his co-defendant wife, Diana Donohue. The joint amended answer was attached to the August 12, 2012 stipulation and facsimile cover sheet dated August 3, 2012 which was authored by defense counsel for Richard Donohue, who then appeared for both Donohue defendants (see Exhibit F of the moving papers).

By the instant motion (#002), the plaintiff seeks summary judgment dismissing the affirmative defenses set forth in the joint amended answer of the Donohue defendants and an award of summary judgment on its complaint against such defendants. The plaintiff also seeks default judgments against the known defendants and the deletion of the unknown defendants together with a caption amendment to reflect these party deletions. The motion is opposed by the Donohue defendants in papers consisting of an affirmation of their counsel and a memorandum of law, to which the plaintiff has replied.

For the reasons stated below, the motion is granted only to the extent set forth herein.

Entitlement to summary judgment in favor of the foreclosing plaintiff is established, prima facie, by the plaintiff's production of the mortgage and the unpaid note, and evidence of the default in payment (see Wells Fargo Bank, N.A. v Erobobo, 127 AD3d 1176, 9 NYS2d 312 [2d Dept 2015]; Wells Fargo Bank, N.A. v DeSouza, 126 AD3d 965, 3 NYS2d 619 [2d Dept 2015]; OneWest Bank, FSB v DiPilato, 124 AD3d 735, 998 NYS2d 668 [2d Dept 2015]; Wells Fargo Bank, N.A. v Ali, 122 AD3d 726, 995 NYS2d 735 [2d Dept 2014]). Where, the plaintiff's standing has been placed in issue by the defendant's answer, the plaintiff also must establish its standing as part of its prima facie showing (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 12 NYS3d 612 [2015]; Loancare v Firshing, 130 AD3d 787, 2015 WL 4256095 [2d Dept 2015]; HSBC Bank USA, N.A. v Baptiste, 128 AD3d 77, 10 NYS2d 255 [2d Dept 2015]). In addition, where the plaintiff has pleaded compliance with the notice requirements of RPAPL § 1304 or a defendant has properly [*3]asserted non-compliance therewith as a defense, the plaintiff must adduce due proof that the pre-action foreclosure 90 day notice requirements have been satisfied (see Zarabi v Movahedian, ___ AD3d ___, 2016 WL 618580 [2d Dept 2016]; Cenlar v Weisz, ___ AD3d___, 2016 WL 619740 [2d Dept 2016]; Citimortgage v Espipnal, 134 AD3d 876, 23 NYS3d 251 [2d Dept 2016]; Bank of New York v Aquino, 131 AD3d 1186, 16 NYS3d 770 [2d Dept 2015]; cf., PHH Mtge. Corp. v Celestin, 130 AD3d 703, 11 NYS3d 871 [2d Dept 2015]).

A foreclosing plaintiff has standing if it is either the holder or the assignee of the underlying note at the time that the action is commenced (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, supra; Loancare v Firshing, 130 AD3d 787, supra; Emigrant Bank v Larizza, 129 AD3d 904, 13 NYS3d 129 [2d Dept 2015]). "Either a written assignment of the underlying note or the physical delivery of it to the plaintiff prior to the commencement of the action is sufficient to transfer the obligation" (see id., Wells Fargo Bank, NA v Parker, 125 AD3d 848 5 NYS3d 130 [2d Dept 2015]; U.S. Bank NA v Guy, 125 AD3d 845, 5 NYS3d 116 [2d Dept 2015]).

Proof that the plaintiff was in possession of the note on a day certain prior to the commencement of the action is sufficient to establish, prima facie, the plaintiff's possession of the requisite standing to prosecute its claims for foreclosure and sale (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, supra; Loancare v Firshing, 130 AD3d 787, supra; Emigrant Bank v Larizza, 129 AD3d 904, supra). Alternatively, standing may be established by due proof of the particulars of the note delivery to the plaintiff prior to the commencement of the action (see Deutsche Bank Natl. Trust v Weiss, 133 AD3d 704, 21 NYS3d 126 [2d Dept 2015]; HSBC Bank. U.S.A., N.A. v Baptiste, 128 AD3d 773, 10 NYS2d 255 [2d Dept 2015]; cf., Flagstar Bank v Anderson, 129 AD3d 665, 12 NYS2d 118 [2d Dept 2015]; Bank of Am., N.A. v Paulsen, 125 AD3d 909, 6 NYS3d 68 [2d Dept 2015]). Delivery of the note to a custodial agent of the plaintiff on a date prior to the commencement of the action will suffice to establish the standing of a foreclosing plaintiff under the foregoing rule (see Deutsche Bank Natl. Trust Co. v Whalen, 107 AD3d 931, 969 NYS2d 82 [2d Dept 2013]; HSBC Bank USA, Natl. Ass'n v Sage, 112 AD3d 1126, 977 NYS2d 446 [3d Dept 2013]).

In addition, the plaintiff's attachment of a duly indorsed mortgage note to its complaint or to the certificate of merit required by CPLR 3012-b, coupled with an affidavit in which it alleges that it had possession of the note prior to commencement of the action, has been held to constitute due proof of the plaintiff's standing to prosecute its claim for foreclosure and sale (see Nationstar Mtge., LLC v Catizone, 127 AD3d 1151, 9 NYS3d 315 [2015]). Finally, the plaintiff may establish its standing by proof that it is the assignee of the subject note and mortgage under a written assignment of the note by the owner thereof at the time of the execution of the written assignment (see Emigrant Bank v Larizza, 129 AD3d 904, supra; Peak Fin. Partners, Inc. v Brook, 119 AD3d 539, 987 NYS2d 916 [2d Dept 2014]; Chase Home Fin., LLC v Miciotta, 101 AD3d 1307, 956 NYS2d 271 [3d Dept 2012]; Wells Fargo Bank, N.A. v Wine, 90 AD3d 1216, 1217, 935 NYS2d 664 [3d Dept 2011]).

Here, the moving papers established the plaintiff's entitlement to summary judgment on its [*4]complaint to the extent it asserts claims against the answering defendants as it included copies of the mortgage, the unpaid note and due evidence of a default under the terms thereof (see CPLR 3212; RPAPL § 1321; One West Bank, FSB v DiPilato, 124 AD3d 735, 998 NYS2d 668 [2d Dept 2015];

Deutsche Bank Natl. Trust Co. v Islar, 122 AD3d 566, 996 NYS2d 130 [2d Dept 2014]; Plaza Equities, LLC v Lamberti, 118 AD3d 688, 986 NYS2d 843 [2d Dept 2014]; Bank of New York v McCall, 116 AD3d 993, 985 NYS2d 255 [2d Dept 2014]; Jessabell Realty Corp. v Gonzalez117 AD3d 908, 985 NYS2d 897 [2d Dept 2014]; Fairmont Capital, LLC v Laniado, 116 AD3d 998, 985 NYS2d 254 [2d Dept 2014]; W & H Equities LLC v Odums, 113 AD3d 840, 978 NYS2d 910 [2d Dept 2014]). In addition, the moving papers established that the plaintiff, whose standing was challenged in several affirmative defenses in the answer of the mortgagor defendants, was sufficiently possessed of the requisite standing to prosecute its claims for foreclosure and sale in this action due to the plaintiff's possession of each of the three mortgage notes indorsed in blank by delivery to its custodial agent on July 3, 2007, which was well before the commencement of this action. The moving papers further established, prima facie, that the affirmative defenses asserted in the joint amended answer served are without substantive merit (see Citimortgage, Inc. v Chow Ming Tung, 126 AD3d 841, 7 NYS3d 147 [2d Dept 2015]; Bank of New York v McCall, 116 AD3d 993, 985 NYS2d 255 [2d Dept 2014]; Fairmont Capital, LLC v Laniado, 116 AD3d 998, 985 NYS2d 254 [2d Dept 2014]; Becher v Feller, 64 AD3d 672,884 NYS2d 83 [2d Dept 2009]).

It was thus incumbent upon answering defendants opposing the motion to submit proof sufficient to raise a genuine question of fact rebutting the plaintiff's prima facie showing or in support of the affirmative defenses asserted in their answer or otherwise available to them (see Jessabell Realty Corp. v Gonzalez117 AD3d 908, supra; Flagstar Bank v Bellafiore, 94 AD3d 1044, 943 NYS2d 551 [2d Dept 2012]; Grogg Assocs. v South Rd. Assocs., 74 AD3d 1021 907 NYS2d 22 [2d Dept 2010]; Wells Fargo Bank v Karla, 71 AD3d 1006, 896 NYS2d 681[2d Dept 2010]; J.P. Morgan Chase Bank, NA v Agnello, 62 AD3d 662, 878 NYS2d 397 [2d Dept 2009]). Notably, self-serving and conclusory allegations do not raise issues of fact and do not require plaintiff to respond to alleged affirmative defenses which are based on such allegations (see Charter One Bank, FSB v Leone, 45 AD3d 958, 845 NYS2d 513 [3d Dept 2007]; Rosen Auto Leasing, Inc. v Jacobs, 9 AD3d 798, 780 NYS2d 438 [3d Dept 2004]). Where a defendant fails to oppose some or all matters advanced on a motion for summary judgment, the facts as alleged in the movant's papers may be deemed admitted as there is, in effect, a concession that no question of fact exists (see Kuehne & Nagel, Inc. v Baiden, 36 NY2d 539, 369 NYS2d 667 [1975]; see also Madeline D'Anthony Enter., Inc. v Sokolowsky, 101 AD3d 606, 957 NYS2d 88 [1st Dept 2012]; Argent Mtge. Co., LLC v Mentesana, 79 AD3d 1079, 915 NYS2d 591[2d Dept 2010]). In addition, the failure to raise pleaded affirmative defenses in opposition to a motion for summary judgment renders those defenses abandoned and thus subject to dismissal (see New York Commercial Bank v J. Realty F. Rockaway, Ltd., 108 AD3d 756, 969 NYS2d 796 [2d Dept 2013]; Starkman v City of Long Beach, 106 AD3d 1076, 965 NYS2d 609 [2d Dept 2013]).

Here, the opposing papers of the Donohue defendants contain assertions that their pleaded standing defenses and the Third, Fourth and Eleventh affirmative defenses set forth in their amended answer, which are premised upon alleged non-compliance with the pre-action ninety day notice of [*5]default and cure required by RPAPL § 1304, are not subject to dismissal because the plaintiff's proof did not establish that they are without merit as a matter of law. However, the court rejects the defendant's challenges to the quality of the plaintiff's proof on the issue of the plaintiff's standing. That a loan servicer may testify on behalf of a foreclosing plaintiff is clear (see Deutsche Bank Natl. Trust Co. v Abdan, 131AD3d 1001, 16 NYS3d 459 [2d Dept 2015]; Wells Fargo Bank, N.A. v Arias, 121 AD3d 73, 995 NYS2d 118 [2d Dept 2014]; HSBC Bank USA, Natl. Ass'n v Sage, 112 AD3d 1126, supra; Aames Capital Corp. v Ford, 294 AD2d 134, 740 NYS2d 880 [2d Dept 2002]). Moreover, an assignee of the original lender may rely upon the business records of the original lender to establish its claims for recovery of amounts due from the debtor so long as the plaintiff establishes that it relied upon those records in the regular course of its business (see Landmark Capital Inv., Inc. v Li-Shan Wang, 94 ADd3d 418, 941 NYS2d 144 [1st Dept 2012]). As indicated above, the plaintiff's submissions included due proof that the plaintiff possessed all three of the duly indorsed mortgage notes through its custodial agent on July 3, 2007, which was well before the commencement of this action (see Deutsche Bank Natl. Trust Co. v Whalen, 107 AD3d 931, supra; HSBC Bank USA, Natl. Ass'n v Sage, 112 AD3d 1126, supra).

Also rejected is defense counsel's claim that plaintiff's motion must be denied as premature due to outstanding discovery demands that are the focus of defense counsel's affirmation in opposition all of which relate to the issue of the plaintiff's standing. The rule at CPLR 3212(f) which governs such a claim provides that "should it appear from affidavits submitted in opposition to the motion that facts essential to justify opposition may exist but cannot then be stated, the court may deny the motion or make an order of continuance to permit affidavits to be obtained or disclosure to be had and may make such other order as may be just".

Appellate case authorities have long instructed that to avail oneself of the safe harbor this rule affords, the claimant must "offer an evidentiary basis to show that discovery may lead to relevant evidence or that the facts essential to justify opposition to the motion were exclusively within the knowledge and control of the plaintiff" (Martinez v Kreychmar, 84 AD3d 1037, 923 NYS2d 648 [2d Dept 2011]; see Singh v Avis Rent A Car Sys., Inc., 119 AD3d 768, 989 NYS2d 302 [2d Dept 2014]; Williams v Spencer-Hall, 113 AD3d 759, 979 NYS2d 157 [2d Dept 2014]; Seaway Capital Corp. v 500 Sterling Realty Corp., 94 AD3d 856, 941 NYS2d 871 [2d Dept 2012]; Westport Ins. Co. v Altertec Energy Conservation, LLC, 82 AD3d 1207, 921 NYS2d 90 [2d Dept 2011]; Lambert v Bracco, 18 AD3d 619, 795 NYS2d 662 [2d Dept 2005]). In addition, the movant must show that his or her "ignorance was unavoidable and that reasonable attempts were made to discover the facts which would give rise to a triable issue of fact" (Zheng v Evans, 63 AD3d 791, 881 NYS2d 461 [2d Dept 2009]; see KeyBank Natl. Ass'n v Chapman Steamer Collective, LLC, 117 AD3d 991, 986 NYS2d 598 [2d Dept 2014]; Swedbank, AB v Hale Ave. Borrower, LLC, 89 AD3d 922, 932 NYS2d 540 [2d Dept 2011])), as the " mere hope or speculation that evidence sufficient to defeat a motion for summary judgment may be uncovered' by further discovery is an insufficient basis for denying the motion" (Woodard v Thomas, 77 AD3d 738, 740, 913 NYS2d 103 [2d Dept 2010]; see Friedlander Org., LLC v Ayorinde, 94 AD3d 693, 943 NYS2d 538 [2d Dept 2012]). The defendants failed to satisfy the burdens imposed upon then under these appellate case authorities.

The court finds, however, that the supporting affidavit of Paul Myers, is insufficient to establish the plaintiff's compliance with the pre-action ninety day notice requirements of RPAPL§ 1304. Due proof the mailing of the RPAPL § 1304 notice is established by submission of an affidavit of service (see JPMorgan Chase Bank, N.A. v Schott, 130 AD3d 875, 15 NYS3d 359 [2d Dept 2015]; Wells Fargo v Moza, 129 AD3d 946, 13 NYS3d 127 [2d Dept 2015]) or through business records that detail a standard of office practice or procedure designed to ensure that items are properly addressed and mailed (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 729 NYS2d 766 [2d Dept 2001]). In either case, a presumption of receipt arises (see Vivane Etienne Med. Care, P.C. v Country Wide Ins. Co., 25 NY3d 498, 14 NYS3d 283 [2015]; Residential Holding Corp., v Scottsdale Ins. Co., 286 AD2d 679, supra; U.S. Bank Natl. Assoc. v Weinman, 2013 NY Slip Op. 31277, 2013 WL 3172455 [Sup. Ct. Suffolk County 2013]; see also American Tr. Ins. Co. v Lucas, 111 AD3d 423, 974 NYS2d 388 [1st Dept 2013]; Triple Cities Constr. Co., Inc. v State of New York, 161 AD3d 868, 555 NYS2d 916 [3d Dept 1990]).

Here the plaintiff's affiant, Paul Myers, averred that he was familiar with the facts and circumstances set forth in his affidavit based on his review and examination of the records maintained by the plaintiff in the regular course of business and stated that "a ninety (90) day pre-foreclosure notice was sent to Richard J. Donohue and Diana L. Donohue on September 30, 2010 at 5 Gerald Lane, Hampton Bays, New York, 11946 by registered or certified mail on March 11, 2011" (see ¶ 12 of the Myers affidavit in support). However, these unsubstantiated and conclusory statements were insufficient to establish that the 90—day notice required by RPAPL § 1304 was separately mailed to the defendants by first class mail and by registered or certified mail (see Cenlar F.S.B. v Weisz, ___ AD3d ___, 2016 WL 619740 [2d Dept 2016]; Mellon v Aquino, 131 AD3d 1186, supra; Wells Fargo Bank, NA v Burke, 125 AD3d 765, 767; 5 NYS3d 107 [2d Dept 2015]; Deutsche Bank Natl. Trust Co. v Spanos, 102 AD3d 909, 910; 961 NYS2d 200 [2d Dept 2013]).

Under these circumstances, the court awards the plaintiff partial summary judgment dismissing the affirmative defenses asserted in the amended answer of the Donohue defendants except the Third, Fourth and Eleventh affirmative defenses asserted in the amended answer of the Donohue defendants. The plaintiff's demands for summary judgment on its complaint is thus denied, as is its request for an order appointing a referee to compute amounts due, as such request is now premature.

Those portions of the instant motion wherein the plaintiff seeks an order dropping as party defendants the unknown defendants listed in the caption and an amendment of the caption to reflect same are granted.

The moving papers further established the default in answering on the part all defendants except the Donohue defendants, as none the remaining known defendants served answers to the plaintiff's complaint. Accordingly, the defaults of all such defendants are hereby fixed and determined (see U.S. Bank Natl. Ass'n v Wolnerman, 135 AD3d 850, 2016 WL 229319 [2d Dept 2016]; U.S. Bank, N.A. v Razon, 115 AD3d 739, 740, 981 NYS2d 571 [2d Dept 2014]).

In view of the foregoing, and pursuant to CPLR 3212(g), the court hereby finds that the plaintiff is possessed of the requisite standing to prosecute its claims for foreclosure and sale and the issue of standing is hereby resolved in favor of the plaintiff. The court thus directs that the trial of this action shall be limited to the issue of whether the plaintiff complied with the pre-action ninety day notice requirement imposed upon it by the provisions fo RPAPL § 1304.

Counsel are directed to appear ready to confer with the court on the readiness of this matter for the trial on the limited issue framed above at the conference scheduled herein for Friday, March 11, 2016.

DATED: __February 22, 1016___________________________________________

THOMAS F. WHELAN, J.S.C.