Deutsche Bank Natl. Trust Co. v Karibandi

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Deutsche Bank Natl. Trust Co. v Karibandi 2017 NY Slip Op 31534(U) July 3, 2017 Supreme Court, Suffolk County Docket Number: 20759/13 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 PR ES ENT: BON. HOWARD H. HECKMAN, JR., J.S.c. INDEX NO.: 20759113 MOTION DATE: 04/05/2017 MOTION SEQ. NO.: 003 MD ----------------------------------------------------------------X DEUTSCHE BANK NATIONAL TRUST CO., Plaintiff: -againstRAMAKRISHNA KARIBANDI, Defendants. ----------------------------------------------------------------X PLAINTIFFS' ATTORNEY: GROSS POLOWY, LLC 25 NORTH POINTE PKY., STE. 25 AMHERST, NY 14228 DEFENDANT'S ATTORNEY: HARVEY SORID, ESQ. 1 EAB PLAZA EAST E UNIONDALE, NY 11553 Upon the following papers numbered I to 15 read on this motion \-4 : Notice of Motion/ Order to Show Cause and supporting papers_: otice of Cross Motion and supporting papers_ : Answering Affidavits and supporting papers.1:..!L; Replying Affidavits and supporting papers _; Other_; (and after hearing counsel in support and opposed to the motion) it is. ORDERED that this motion by defendant Ramakrishna Karibandi brought on by Order to Show Cause dated June 27,2017 seeking an order pursuant to CPLR 2005,3408,5240 & 6301: 1) staying the sale of the foreclosed premises scheduled for July 6,2017 ; 2) vacating the Judgment and Foreclosure and Sale dated AprilS, 2017; and 3) staying further prosecution of this foreclosure action pending the scheduling of a settlement conference for the purpose of granting the defendant a loan modification or to reinstate the existing mortgage loan is denied; and it is further oRD ERED that plaintiff is directed to serve a copy of this order with notice of entry upon all parties who have appeared and not waived further notice pursuant to CPLR 2103(b)(I),(2) or (3) within ten days of the date of this order and to promptly file the affidavits of service with the Clerk of the Court. Plaintiff commenced this action to foreclose a mortgage in the original sum of$644,OOO.OO executed by defendant Karibandi on August 25, 2006 . On the same date the defendant executed a promissory note promising to re-pay the entire amount of the indebtedness to the mortgage lender. The defendant defaulted in making timely monthly mortgage payments beginning August 1, 2012 and continuing to date. Plaintiff commenced this foreclosure action by tiling a summons and complaint with the County Clerk on August 5, 2013. Defendant's counsel served a timely answer dated September 30, 2013 on behalf of defendant Karibandi. The answer set forth one affirmative defense- plaintiff's lack of standing. By short form Order dated April 29,2016, plaintiff's summary judgment motion was granted and a referee was appointed to compute the sums due and owing to the plaintiff. A Judgment of Foreclosure and Sale was granted on AprilS, 2017. The property is scheduled to be sold at auction on July 6, 2017. [* 2] or Dclcudunts motion seeks an order staying the sale of the premises. seating the judgment an I sale. and compelling the parties to appear for a conference so that the mortaauc loan can either he modified or rein .iatcd. In support of the J iotion defendant submits an alTidav~ and <In attorney's affirmation and claims that the mortgage lender has failed to negotiate in good faith and has steadfastly refused to modi fy the mortgage loan in reliance upon inaccurate information used to calculate dcfcndunts monthly income. Defendant claims that the April ~. 2017 Judgment must be vacated on the basis that plaintiff failed to prove that the statutorily required RPAP[. 1304 90-day pre-foreclosure notices of default were never served upon the defendant. Defendant seeks to vacate the .judgment "in the interests of ~ iusticc" clairninu that this defense can he raised "at an time". Defendant also asserts that Karibandi has the financial ability to make modified mortgage payments and requests that. in addition to vacating the foreclosure judgment. the court direct the lender to appear at a conference to either 1110di(y or reinstate the existing loan. foreclosure - .; In opposition. the plaintiff submits an attorney affirmation and claims that no legal basis ex ists to j usti Iy granti ng the defendant's motion. Plainti If contends that the defendant cannot raise an RP APL 1304 defense for the first time where judgment has already been granted and where the defendant had ample opportunity to raise the defense in opposition to the plaintiffs original summary judgment motion and in opposition to plaintiff's motion seeking a judgment of foreclosure and sale. Plaintiflalso claims that the lender has no duty to modify the terms of the underlying note and mortgage, and argues that defendant's desire It)!" a loan modification presents llO viable grounds to either compel an additional settlement conference or to further stay the foreclosure sale. Plaintiff also asserts that the defendant was afforded numerous opportunities for a loan modification. the most recent review having taken place between November l]1h and December 281h, 2016. On each occasion the defendant was determined to be not eligible. The law is clear that to obtain a preliminary injunction. the moving party must establish by clear and convincing evidence: I) a likelihood success on the merits; 2) irreparable injury absent injunctive relief: and 3) that the equities balance in his favor tNohu Next /)001', LLC \'. Fine Arts 1I~>lIsing, Inc.. 4 YJd R39. ROO YS2d 48 (2005)): %o//er \'. nst« Mortgage Corp (USA). 135 AJ)3d 932, 24 NYSJd loR (2"t! Dcpt., 2016): Chase /!O/J/e! Finance, IJC \'. Cartelli. 140 AJ)3d 911. 32 NYS3d 515 (2"<1Dcpt., 2(16)). or In this case. the defendant is not merely seeking to stay the scheduled sale, but also to vacate the Judgment of Foreclosure and Sale granted in April. 20 [7. The reasons asserted by the defendant (0 vacate the Judgment arc primarily based on the "interests ofjustice" and no statutory authority is cited in support of the dcfcndants request with the exception of its newly raised. post-judgment "defense" never asserted in opposition to plaintiffs two prior applications and never set forth in defendant' .. answer. Defendant concedes that the statutory authority lor vacating the judgment (CPI,R 50 [.5) is inapplicable and couches his argument based upon this court's inherent discretionary power. not confined rigidly by well-defined rules, to vacatea prior judgment where the interests of justice require (citing Town ofti arwick' \'. Black Hear COIJII)(JlfI1c/\", 95 AJ)Jd [002. 94J YS2d ()Og (2'1<' Dcpt.. 2(12)). As has been written. a court always retains ..the inherent equitable power to ensure that a sale conducted pursuant to a judgment or foreclosure is not made the "instrument or injustice ..·· (.l!kuiji . t 'elcxtiu! Church ofChrist Calvurv P trisli. 2-~ :'\/)Jd -+ 7(). 477. go~ , 'YS2 I 23() (2".1 Dcpt.. 20()5) quoting Guardian I.oan Co. \'. Eurlv. supra. all). 52())). Put another vvay: "Once equity is invoked. the court's power is as broad as equity and justice require" ((J.,)'. HUIlk. N.A. \'. l.osurr. 145 A J)Jd 935. 44 Y SJd 467 (2"d Dcpt., 20 [()) c itinu Norstar Bank \'. Morabito. 20 [ -'- [* 3] /\D2d )45. 54f. 6()7 YS2d 426 (2I1JDcpt.. 19(4)). The record reveals that the defendant retained counsel who served a timely answer to plaintiff s complaint setting forth only one affirmative defense claiming the plaintifflacked standing 10 maintain this action. Court records indicate that three CPLR 3408 court mandated settlement conferences \V .rc held on February 10. 2014: May 13. 2014: and J lily 18. 2014. Defendant was represented hy counsel during each conference. /\1 the conclusion of the July 1R. 2014 conference. the court attorney/referee responsible to oversee the conference concluded that the action could not bc settled and the action was remanded to continue as an active foreclosure action (although not assigned to an IAS Part). Thereafter. on ovcmbcr 14.2014 plaintiff .ervcd and filed a summary judgment motion. Defendant served opposition papers to the motion on December 2. 2014 and the motion was marked submitted on December II. 2014. The motion remained sub judice until the action and the underlying motion were assigned to this IAS Part by Administrative Order (Hinrichs . .I.) dated June 28. 2016. Upon re-assignment, plaintiff's motion was granted by short form Order dated August 29. 2016. A review of the motion papers submitted by the defendant reveals that the only defense asserted by the defendant was plaintiff's claimed lack of standing. Defendant never raised the plaintiff's alleged failure to serve an RP /\PL 1304 notice defense in opposition to plaintiff'« summary judgment motion. Court records further show that on January 13,2017 plaintiff submitted a motion seeking an order confirming the referee's report and for a judgment of foreclosure and sale. That motion was also opposed by the defendant who submitted opposing papers on January 23 2017. The motion was marked fully submitted on March 28, 2017 and by Order dated April 5. 2017 plaintiffs motion was granted in its entirety. A review of' defendant's opposition papers reveals that defendant's opposition consisted of an attorney's affirmation claiming that plaintiff's counsel's failed to timely serve defendant's counsel s office with a copy of the August 29,2016 Order of Reference which defendant claimed resulted in significant prejudice to defendant's ability to seek leave to appeal that order. Defendant again did not raise plaintiffs alleged failure to serve an RP API, 1304 notice as a defense in opposition to plaintiffs motion. The doctrine of' res judicata prevents a party lrorn litigating a claim which has already been litigated or which ought to have been litigated (see Siegel." cw York Civil Practice" Sections 4442 & 4443. pg. 585). The principle is grounded upon the premise that "once a person has been afforded (I full and lair opportunity to litigate a particular issue. that person may not be permitted to do so aga in" (see Graniatan l lomcs \'. rOI)('::. 46 Y1d 4g4. 484. 4 I4 N YS2d 30g (1979): Davey \'. ./OI7C!S Hirsch ('011110rS & Bull. 1.l~ !\[)3d 4 17. 27 YS3d 867 (PI Dept.. 2(16); Maller o/,/j>J\forg(fJ/ Chus«. U5 A[)3c1702. 2·~ YS3d 667 (2".1 Dcpt.. 2(16)). The related law of the case doctrine is a rule of practice which provides that once an issue is judicially determined either directly or by implication. it is not to he reconsidered hy judges or courts of coordinate jurisdiction in the course ul' the same litigation (see Martin \'. Citv of; 'oboes. 37 NY2d 162.371 YS2d 687 (197')): .I-Mar Scrvic« t 'entcr. inc. I ~ Muhonev, ('0111101' & l lussev. 4') A1)3d 80c). X47 YS2d 130 (2, Dcpt.. 2()07): '·UII,I.UIl/I·t! Tours IJ/c. \'. Town Yorktown. 102 AD2d X6X. 477 'YS2d 40 (1'1<1 cpt.. 19H4): D l lollowav r. ( 'ha I.ctutulrv, lru: .. 97 A D2d 385, 467 NYS2d 834 ( I" Dcpt.. 1(83)). \(1 or The award ofsummary judgment in this ease is the law of the casco In response to plaintiff » summary judgment motion. the defendant was required to lay hare his proof and to assert all relevant defenses he possessed to prove that genuine issues of material fact existed to defeat the ., -.1- [* 4] evidentiary showing made by the plainti II The court's award or summary judgment in plainti If s I~\\ or was a determination that none or the defenses asserted by the defendant were meritorious, and it was incumbent upon the defendant to present all of his defenses in opposition to the motion. Since defendant only raised the defense of standing in opposition to the motion. Karibandi waived his right to assert all other defenses. including an RPAPLlJ04 defense. and the law or the case doctrine precludes consideration of this wai cd defense that was dismissed by this court's August 29, 2016 Order (see Madison Acquisition (;/'0111', 1.1.(' \', 76 f.I Fourth Real Estate /)(')'('IOPIJIC'l/f, l.l.C. 134 J\[)3d ()~U. 20 lYSJd 418 (2l1dDcpt., 2(15): Ccttain Underwriters a/ l.loyds ofI.ondon 1', North Shore Signa/lire I 10111 111('., 125 AD3cl 70Q, 1 YS3d 841 (2"UDcpt.. 2(15)), ('S, Having failed to either seek leave to re-argue the prior order or to appeal it. no legal basis exists to re-consider that prior determination and clearly the defense has been waived. * 1 The defendant's attempt to raise the "condition precedent" RPAPL 1304 defense for the first time in this motion. claiming that such defense is "jurisdictional" and can he asserted "at any time", is not viable, There are no legal grounds to permit the defendant to assert the RP API. 1304 <)()-day pre-foreclosure defense for the first time on the eve of a foreclosure sale, where judgment has been entered and where the defendant has timely answered and never asserted the defense in his answer or in opposition to plaintiff's motions for summary judgment ancl for a judgment of foreclosure and sale, The law is clear that defense counsel's oft-repeated phrase (cited initially in Firs! National Bank of; 'liicago p, Silver, 73 ADJd 162, 163. 89 NYS2d 256 (2nd Dept.. 2(10) and subsequently in II urora roan Services v. Weisblum, 85 AD3c1 95. 923 NYS2d 609 (2ml Dept.. 2(11) & Citi Mortgag«, Inc. v, Espinal. 134 AD3cl 876, 879, 23 NYS3d 251 (211(1 Dept., 2(15». that an RP API, 1304 defense "can be raised at any time" is not an accurate exposition of state law, The phrase's usage has become common-place among foreclosure attorneys given the "strict compliance" mandates that accompany the statute's current requirements, however its application has certain procedural limitations, For example. it is without question that a foreclosure defendant cannot raise this defense 1'01' the first time on appeal (see PI1I1 Mortgage Corporation \, Celestin. 130 !\D3d 703, 11 YS3d 871 c~ndDcpt.. 2(15): Bank ofAnierica \', Barton. 149 AD3d 676. 50 YS3d 546 (2nd Dept., 2017); FJIligmll! Bunk r. Marando. 143 AD3d 856.39 NYS3d 83 Oil" Dcpt.. 2016): FNM·ll', Cappelli, 120 AD3d 621. 990 N YS2d 856 (2lld Dcpt.. 2(14»), Nor can the defense be asserted by a defaulting defendant either in opposition to a default judgment motion, or in opposition to a motion seeking a judgment of foreclosure and sale. in cases where no reasonable excuse has been demonstrated which would provide a basis to vacate the dcfcndants default. In such cases the courts require a showing of' a reasonable explanation for the dclcndants default and, even if the dcfcndants newly asserted I~P 1\ J> L 1304 defense were deemed mcri torious. it is not considered absent a showi ng 0 r a reasonable excuse (see Bank (?/;/tnericct \', Agarwa]. 150 1\ j)3d 65 I , 2017 NY S lip Op 034() 7 (2"" I)cpt.. 2(17): II.)'/J( , Bank (j.)~,1.IV,,./, I', Clavton. 146 J\1)3d 941, 45, YS3d 543 (2"" Dcpt., 2(17): Flags!ul' Hunk \', Jatnbelli. 140 !\l)3d X29. 32 I YS3d 625 (2lld l)epI..1016): II'ossa/heil \', Uhlir,!!" l.l.; " 94 J\IXhl 753. 941 YS2d 679 (2,"1Dcpt.. 1(12): l losten r; Olculap 0 , 44 !\l)3d 100o, X44 NYS2d 417 (2"" Dcpt.. 20(7)), Based upon these rulings the RPJ\PI. 1304 defense is clearly not a 'jurisdictional" defense \ hich. in and 01' itself. can be used to vacate a default judgment (se(' (lS Bunk. .v.. 1', Carcv. \.:17 :\1)," I g<)-L2R NYS3d os (2,,,j Dcpt.. 2(16): Pritchar.l r. CUI'/is, 1OJ :'\!)~d 1502.957 YS2d 440 (3,,1Dcpt.. 2(12)). ----------------------------------------------------------------------------------------------------------------- * I. It should be noted that defendant also failed to raise the defense in opposition to plainriff s -4- [* 5] subsequent motion lor a judgment or foreclosure and sale. which at least in one instance did not result in waiver (see Eniigrant v. Lifshitz. 14~ AD3d 755. 38 Y 3d 822 (2nd Dcpt.. 2016)). I The issue remaining is whether a defendant who has timely answered. and bas had every opportunity to assert all relevant defenses. yet did not do so throughout the contested proceedings up to and including judgment, should be permitted to assert an RPAPL 1304 defense as a post-judgment defense. the effect ofwhich would require vacating the foreclosure judgment hut not the award of summary judgment. Quite simply the answer is no. The CPLR provides the procedural mechanism for cases 10 he litigated. The complaint is opposed by an answer. The answer sets forth defenses and counterclaims which arc required to be proved or disproved during the course of litigation. Upon an award of judgment in favor of a plaintiff: the defenses asserted (and not asserted) are dismissed and defendant's sole recourse is to appeal the judgment. The procedural rules nowhere provide Cor special defenses which can be asserted "at any time" and the defendant cites to no statutory authority which would provide grounds to vacate the judgment (see CPLR 5015). In essence. defendant's sole recourse is for this court to exercise its inherent equitable powers to vacate the judgment on grounds that defendant claims arc required by justice. Defendant's affidavit sets forth the grounds he claims require granting this motion. I Ic claims the bank treated him unfairly by not accepting his monthly income calculations and by refusing to grant him a loan modi Iication based upon those adj usted calculations. I Ie also states that he desperate Iy wants to save his family's home; that his mother became ill in India requiring his presence there to care for her; and that he has paid tuition for his two children. one of whom is in medical school and the other attending YU with a tuition cost of$45.000.00 per year. The evidence submitted shows that defendant promised to re-pay a loan in the sum of $644.000.00 over a period of thirty years beginning with a monthly payment due on October 1.2006. Less than six years later, beginning with the August 1,2012 payment, the defendant defaulted in making timely monthly mortgage payments. The defendant has continued to default in making payments for nearly the past live years. Defendant claims that the bank has treated him unfairly by not granting him a loan modification. However court records indicate that CPLR 3408 court mandated settlement conferences were held on three occasions and during each conference the defendant was represented by counsel. 0 agreement was reached. but more importantly. there is no indication that bank representatives acted in bad faith during these negotiations. The court attorney/referee. whose responsibility includes monitoring and conducting the conferences and making notations during instances of bad faith, made no such reference in this case and uivcn the lact that defendant was represented by counsel the fact that the action was marked "not settled" indicates that despite the efforts of both sides no loan modification could be reached. The test for determining whether a party participated in good faith is one of reasonableness taking into consideration the actions taken h parties engaging in the settlement conference. In this case. there is no relevant. admissible evidence to substantiate the dclcndants claim ofvbad faith". While the defendant seeks "equitable" relief, the law is clear that a foreclosing party has no obligation to modi (y the terms or its loan freely entered into by a borrower and a failure to do so locs not provide a defense to a mortgage foreclosure action « 'it ibunk. H.'/. 1'. ian Brunt Properties. IJ( '. 95 J\[)~d 1158.9--1-5 YS2d ~~O C"d Dcp .. 2(12)). While this court is not unsympathetic to the defendant's situation. the facts clearly show that the defendant. who concedes that he is not without financial resources. entered into an agreement in -5- [* 6] which he promised to re-pay the sum of $644.000.00 to the bank. hy making monthly payments as required and agreed to under the terms of the mortgage loan. The bank. in good faith, loaned the defendant the monies he requested, based upon the condition that the defendant/borrower would abide his promise and re-pay the entire amount of monies he was given by the bank. Defendant docs not dispute that he breached the agreement and has not provided any statement concerning how he intends to re-pay the amount he has borrowed or hov much money he has been able to save in view o r the fact that he has made no payment to the hank for nearly five years. Clearly this court has the equitable authority to prevent a foreclosure sale to ensure that such sale is not made the instrument or injustice. f lowevcr. in this case. the equities weigh heavily in favor of the party who has not breached its agreement and who has not received any consideration for the amount of monies loaned to the borrower for nearly five years. Under these circumstances, no legal basis exists to justify any delay in conducting the sale of the premises since the defendant has failed to make any showing of a likelihood of success on the merits or the balancing of the equities in his favor. or do any legal grounds exist to vacate the April 5.2017 Judgment of Foreclosure ancl Sale. Accordingly. the defendant's motion is denied in its entirety. Hon. Howard H. Heckman Jt, Dated: July 3, 2017 J.S.C'.

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