Countrywide Home Loans Servicing, LP v Depinto

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Countrywide Home Loans Servicing, LP v Depinto 2017 NY Slip Op 31082(U) May 9, 2017 Supreme Court, Suffolk County Docket Number: 20470/2009 Judge: Howard H. Heckman 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 SUPREME COURT - STATE OF NEW YORK IAS PART 18- SUFFOLK COUNTY PRESENT: HON. HOWARD H. HECKMAN JR., J.S.C. -----------~-------------------------------------------~------}( COUNTRY WIDE l IOME LOAN SERVICING, LP, Plaintiffs, -against- INDEX NO.: 20470/2009 MOTION DATE: 12/12/2013 MOTION SEQ. NO.: 002 MG 003MD PLAINTIFFS' ATTORNEY: GROSS POLOWY LLC 1775 WEHRLE DR, STE. 100 WILLIAMSVILLE, NY 14221 JOSEPH DEPINTO, et al., CO-COUNSEL FOR PLAINTIFF: Defendants. ----------------------------------~----------------------------}( SANDELANDS EYET LLP 1545 US IDGHWAY 206, STE. 304 BEDMINISTER, NJ 07921 DEFENDANTS' ATTORNEYS: TOMAO AND MARANGAS, ESQS. 1225 FRANKLIN A VE., STE. 325 GARDEN CITY, NY 11530 Upon lhe following papers numbered I to 29 read on this motion : Notice of Motion/ Order to Show Cause and supponing papers I- 9 (#002) 10-23 (#003) : Notice of Cross Motion and supponing papers_: Answering Affidavits and ; Other 28-29 : (and after hearing counsel in suppo11ing papers 24-25 : Replying Affidavits and supporting papers 26-27 support and opposed to the motion) it is. ORDERED that this motion by plaintiff Countrywide Home Loans Servicing, L.P. seeking an order: 1) vacating the Order (Blydenburgh, J.) dated April 19, 2010 granting the appointment of a referee; 2) relieving and discharging the previously appointed referee; 3) resettling an order granting a default judgment against the defendants: 4) substituting Nationstar Mortgage LLC as the named party plaintiff in place and stead of Countrywide Home Loans Servicing, L.P. ; 5) substituting '·John" Depinto as a named party defendant in place and stead of a defendant designated as "John Doe# l" and discontinuing the action against remaining defendants designated as "John Doe #2'" through "John Doe #25"; 6) amending nunc pro tune the summons and complaint to correct the defendants· date of default in making timely monthly mortgage payments to July 1, 2008 and to correct the interest due date to June l , 2008, and to reflect that the correct name of the original lender was l\rnerican Home Mortgage; 7) deeming all non-appearing defendants in default; 8) amending the caption; and 9) appointing a referee to compute the sums due and owing to the plaintiff in this mortgage foreclosure action is granted; and it is further ORDERED that the cross motion by defendants Joseph Depinto and Mary Ellen Depinto seeking an order pw-suant to CPLR 3012(d), 3215(c), 3408 & 501.5 dismissing plaintiff's complaint as abandoned or, in the alternative, vacating the defendants default in appearing and granting defendants leave to serve a late answer and remanding this action to the foreclosure settlement part [* 2] for an additional courl settlement conference is denied: and it is further ORO fi~ RF:D that plaintiff is directed to serve a copy of this order umenc.ling the caption upon the Calendar Clerk of the Court: and it is further ORDERED lhut plaintiff is c.lircctctl to serve a copy of this order with notice of entry upon all parties who have appeared and not waived further notice pursuant to C'Pl.R 2103(h)(I ).(2) or{]) within thirty days of the date or this order and to promptly file the atlidavits or service w ith the Clerk orthe Court. Plaintiffs action seeks lo l<>reclose a mo11gagc in the original sum of $500,000.00 executed by ckfendants Joseph Depinto and Mary Ellen Depinto on January 13, 2006 in favor of American l lome Mortgage. On that same date defendant Joseph Depinto executed a promissory note promising to re-pay the entire amount of the indebtedness to the mortgage lender. A conso lidatcd mortgage agreement was signed by the defendants on December 4, 2006 forming a si ngle lien in the sum or $648.000.00. I3y assignment dated February 19. 2009 the mo11gagc was assigned to Countrywide Home Loans Servicing. L.P. and by merger the mortgage and promissory note was acquired by Bank of America. N.A. Thereafter by assignment dated December 8. 2014 Bank of America, N.A. assigned the mo11gage to Nationstar Mortgage LLC. Plaintiff claims that the defendants defaulted in making timely monthly mortgage payments under the terms of the note and mortgage since July I. 2008. Plaintiffs motion seeks an order vacating the prior Order (Blydenburgh, J.) dated April 19. 20 I 0 and resettling an order granting a default judgment and for the appointment of a referee. Defendants' cross motion seeks an order dismissing plaintiffs action as abandoned or. in the alternative granting leave to serve a late answer, vacate their default in appearing and remanding lhe action for an additional court mandated settlement conference. In support of the cross motion and in opposition to plaintiffs motion, the defendants each submit uffidavits together with two affirmations of counsel and claim that plaintifrs action should be dismissed as abandoned hasc<l upon the mortgage knder" s fo11y month delay in seeking judgment. Defendants claim that they have a viable excuse for their default in answering the complaint based upon their understanding that the lender" s oiler of a trial loan modification in September, 2009 obviated the need to serve an answer and discontinued the liti gat ion. Defendants cla im that they made monthly trial payments beginning October, 2009 through .lum:. 20 I 0 but were misled by hank representatives who unilatcrnlly cancelled the loan modification and continued to misrepresent the identity or the entity that owned the mortgage and provided 110 guidance for the borrowers. Ikf<..·ndants maintain that they heard nothing about the pending foreclosure action from October. 2009 until October 31. 2013 when they received a copy or plainti rrs motion. Defendants also deny having been notified or the September 16, 2013 foreclosure conference. lklendants claim that they should be permitled to vacate their tlefault and to serve a late ans"vcr and contend that the} have meritorious dclcnses to this foreclosure a<.:lion including plaintiffs Jack or stand ing. plaintiffs failure to ti111cly serve a pre-foreclosure notice or defaul t in accordancc with mortgage rcquiremcnts and plaintiffs failure to negotiate in good foith. Defendants also claim that the law firm n:prcscnting the plaintiff has a cnnllict of'intere~t since it nlsn represents one of the named deli.:ndants. In reply. the plaintiff suhm its an attorney·s unirmation and argues that no basis exists to dismiss thi; complaint as ahandonctl since the plaintiff made application for the entry of judgment within one year of the defendants · default. Plaintiff also claims that defendants· applicntion seeking [* 3] leave to serve a late answer must be denied since lhe defendants have failed to submit a reasonable explanation for their failure to timely serve an answer and have failed to demonstrate an arguably meritorious defonse to the plaintiff's complaint. Plaintiff claims that it has standing to prosecute the action based upon having physical possession of the duly endorsed promissory note prior to commencing the action and contends that no other defense asserted by the defendants has merit. Plaintiff also contends that this motion is neccsscu-y based upon the attorney aflirmation requirements set forth pursuant lo the Admini strative Orders of the ChierAdmjnistrativc Judge (A.O. 548/10 & 431 I I I) so that the affidavit of facts can be substituted as required since counsel was unable to verify the affidavit of merit originally submitted by prior counsel. The proponent of a summary judgment motion must make a prima facie showing or entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate m1y material question of fact from the case. The grant of summary judgment is appropriate only when it is clear that no material and triable issues of fact have been presented (,<. ;/Iman v. Twentieth Ce111wy-Fox ; Film C·orp., 3 NY2d 395 (I 957)). The moving party bears the initial burden of proving entitlement to summary judgment (Winegrad v. NYU Medical Center. 64 NY2d 851 (1985)). Once such proof has been proffered. the burden shilts to the opposing party who, to defeat the motion, must offer evidence in admissible form, and must set forth facts sufficient to require a trial of any issue o[ fact (CPLR 3212(b): Zuckerman'" City <?/Neir York, 49 NY2d 557 0980)). Summary judgment shall only be grant<:d when there are no issues or material fact and the evidence requires the court to direct a judgment in favor of the movant as a matter of Jaw (Friends of Animals''· Associated Fur Ml11111fi.1cturers, 46 NY2<l 1065 ( 1979)). Entitlement to summary judgment in favor of the foreclosing plaintiff is established. prima focic by the plaintiffs production or the mortgage and the unpaid note. and evidence of default in payment (see Wells Forgo Bank N.,,1. '" lirahoha. l 27 AD3d I I 76, 9 NYS3d 312 (21111 Dept .. 2015 ): Wells Fwgo /Junk NA. 1·. A li, 122 AD3d 726, 995 NYS2d 735 (211d Dept.. 2014)). Where the plaintiffs standing is placed in issue by the dcfcndanr s answer, the plaintiff must also establish its standing as part or its prima facie showing (Aurora Loan Sen·ices· r. Taylor. 15 NY3d 355, 12 NYS3d 612 (2015): f,ooncare v. Firshing. 130 /\D3d 787. 14 NYS3d 410 (2"'1 Dept.. 20 15): !!SBC /Jank U.~~4. . N.A. '" Baptiste, 128 AD3d 77, 10 NYS3d 255 (211.i Dept.. 2015)). In a foreclosure action. a plaintiff has standing ir it is either the holder of, or the assignee of. the underlying note at the time that the action is commenced (Aurora Loan Sen·ices '" 1'c1ylor. Slf/lrn.: Emigrant Bank 1·. f,uri::::a. 129 AD3d 94. 13 NYS3d 129 (2"J Dept.. 2015)). Either a wri tten assignment or the note or the physica l transrer of the note to the plaintiff prior to commencement of the action is sunicicnl ln translcr the obligation and to provide standing (Wells Fargo /Jank. N.A. '" Parker. 125 AD3cl 848. 5 NYS3d 130 (2"J Dept.. 2015); U.5.'. Hunk 1·. Guy. 125 /\D3d 845. 5 NYS3d 116 (2"J Dept., 20 15 )). CPLR 32 1S(c) provides that ··irthe plaintiff fails to take proceedings Cor the entry or judgment within one year alter a default, the court shall not enter judgment hut shall dismiss the complainl as abandoned. without costs, upon its own initiative or on motion unless sufficient cause is shown why the complaint should not be dismissed:· It is. however. not necessary for a plaintiff to actually obtain a <..kl~llllt judgment within one year to avoid dismissal but rather it is enough that the plainti IT t imdy takes prd iminary steps toward a clefoult j udgmcnl of foreclosure and sale by moving for an order of reference to establish that it initiated proceed ings 17or entry of judgment (CPLR Y215(d): JJ'ells Fargo Uonk. NA. v. Co111hs. 128 AD3d 812. 10 NYS3J 121 (2 11<1 Dept., 2015)). ··As long as proceedings arc being taken \.vhich manilCst an intent not to abandon the case but to seek a .... - _) - [* 4] judgment, the action should not be subject to dismissal" (Brown v. Rosedale Nurseries. 259 AD2d 256, 686 NYS2d 22 (I $t OcpL 1999): Aurora Loan Services. LL(' v. Gross. 139 AD3d 771, NYS3d (2 11u Dept., 2016)). Plaintiff has submitted sufficient evidence to justify vacating the original order or reference and for a new order or reference. Plaintiff filed the summons and complaint in the Suft()lk County Clerk ' s Oflice on June I, 2009 and served the summons and complaint upon the defendants on June G. 2009. Defendants defaulted in appearing . n the action and thereafter plaintiff's motion for un i order granting a default judgment was granted by Order (Blydenhurgh, J .) of Reference dated April 19, 2010. Based upon this record, the plaintiff complied with the terms of the statute by taking proceedings for the entry of judgment within one year of the defendant's default. Moreover, the plaintiff demonstrated that the affidavit of merit submitted in support of the original motion for an order of reference could not be verified and therefore the reason for the delay in resettling this order was caused by its good faith attempt to comply with A.O. 548/ 11. & 431111 (see US Bank. NA . v. Ahmed. 137 /\D3d 1106, 29 NYS3d 33 (2 110 Dept., 2016); Deutsche Bank National Trust Co. v. 1 \1/eah. 120 AD3d 465, 991 NYS2d 92 (2nd Dept., 2014)). Additionally, the plaintiff has submitted evidence that the defendants failed to answer the complaint and also submitted the mortgage, the unpaid note, proof of default of the defaulting mortgagors and demonstrated that based upon these circumstances the appointment or a referee to compute the amount owed in a new order of rcfCrencc would be proper (LaSalle Bank, N. A. ''· Jagoo. I 4 7 /\D3d 746, 46 NYS3d 216 (2 110 Dept.. 20 J7): U.S. Bank. NA. v. Ahmed. supra.)). With respect to defendant's application seeking leave to vacate their default and to serve a late answer, a defendant seeking to vacate his/her default in appearing in an action and seeking leave to serve a late answer pursuant to CPLR 5015(a) and 3012(d) must provide a reasonable excuse for the default and a potentially meritorious ddcnse to the underlying complaint (see Eugene Dilore1r::.o. inc. v. A.C. Duffon Lhr.. Co. , 67 NY2d 138, 50 1 NYS2d 8 (1986); Deutsche Bank Nutional 7i-11st Co. r. Gwierrf.!::.. 102 AD3d 825, 958 NYS2d 472 (2nu Dept.. 2013)). Among the relevant factors 1o he considered are the extent of the delay. whether there has been prejudice to the opposing party, whether there has been wilfulness. the public policy in favor or resolving cases on the merits and whether the untimely answer sets forth an arguably meritorious defense (Dinsther 1•. Allstate !11s11ra11ce Company. 75 /\03d 957, 906 NYS2d 636 (3'J Dept.. 20 I 0): Montgomery r. Crlll1f.!.I'. Inc.. 50 J\D3d 81 , 855 NYS2d 68 1 (2°11 Dept.. 2008)). The defendants h<ivc failed to provide any reasonable excuse for their default in answering the cornpl<iint and to submit an arguably meritorious defense. Defendants' claim that since the lender offered a trial modification they understood that the foreclosure action had been ..discontinued·· is neither credible nor rational. The record shows that the defendants did nothing to contest plaintirf"s pro::;ccution of these proceed ings from the time they were initial ly served wi th the summons and complaint. and never sought to wntest the plaintiffs subsequent default judgment motion. ll was not until nearly four years alter the action had been commenced and solely in response to plain ti IT's October. 2013 motion, that the defendants first attempted to address the underl ying fon.:closure action hy submitting their own cross motion. Under these circumstances the dcrendant have provided no reasonable explanation for their continuing ckfoult in serving an allswcr and therefore their cross motion seeking leave to vacate their dcfauh and to serve a late answer must be denied. It should be noted that in view ol"thc dc!cndants· railurc to submit any reasonable excuse for their default in appearing. it is unnecessary to con::;idcr whether the defendants have demonstrated -4- [* 5] the existence or an arguably meritorious defense to the foreclosure complaint (Deutsche Bank National Trust Co. 1·. Rudman. 80 AD3d 651. 914 NYS2d 672 (2"<l Dept., 201 I); Deutsche Bunk National Trust Co. v. Gutierrez. supra. : Deutsche Bank National Ji-ust Co. v. Pietranico, 102 AD3d 724. 957 NYS2d 868 (2"d Dept., 2013); Wells Fario Bank. NA. v. Russell. I 0 l AD3d 860. 955 YS2d 654 (2"J Dept., 2012)). Moreover. even were the court to consider the proposed defenses sought to be asse11cd, none of the affirmative defenses is meritorious since the defendants have clearly waived their lack of standing defense by defaulting in serving an answer (see RAC lfome l,oans. LP v. Reardon. 132 /\.D3d 790. 18 NYS3d 664 (2"c.1 Dept.. 2015): Wells Fargo Bank Minn. NA.''· Mastropaolo, 42 AD3d 239, 837 NYS2d 247 (211d Dept., 2007)) and since any alleged failure to comply with preforeclosurc notice requirements set forth in the mo1tgage is not a jurisdictional defect which would provide grounds for a defaulting defendant to vacate their default (see I'HH Mortgage Corp. v. Celestin, 130 AD3d 703. 11 NYS3d871 (2nd Dept., 2015); Pritchurdv. Curtis, 101AD3d1502. 957 NYS2d 440 (3".J Dept., 2012); Deutsche Bank National Trust Co. v. Posner, 89 AD3d 674, 933 NYS2d 52 (2"d Dept.. 2011 )). In addition, the plaintiff has submitted suf11cient evidence to establish that it has standing by its possession of the duly endorsed promissory note prior to commencing this action (see Aurora Loan Services v. Taylor. supra.)). Also, it should be noted that the issue raised by the defendants concerning attorney disqualification is moot, as cou1t records indicate that plaintifrs counsel has been substituted on May 27. 20154 by incoming counsel identified as Gross, Polowy & Orlans. Esqs/ finally. defendants ' claim that the mortgage lender did not act in good faith is not supported by sufficient credible evidence to provide grounds to defeat plaintiff's motion. Court records indicate that a cou;t settlement conference was held on September 16, 2013 and that these motions remained sub judice until submission on this court's motion submission calendar on March 21, 2 I07. Although the defendants contend that they were never notified of the September, 2013 conference date. there is no evidence that the mortgage lender acted in bad faith, and given the fact that nearly 8 and one-half years has gone by since a timely payment has been made or even attempted, this court of equity finds no reason to permit any further delay. Accordingly the defendants' cross motion is denied and the plaintiffs motion is granted in its entirety. Tbc proposed order for the appointment or a referee has been signed simultaneously with the execution this order. or Hon. Howard H. llcckn1an Jr. ) Dnted: May 9. 2017 J.S.C. -5-

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