M&T Mtge. Corp. v Foy

[*1] M&T Mtge. Corp. v Foy 2007 NY Slip Op 51199(U) [15 Misc 3d 1148(A)] Decided on June 14, 2007 Supreme Court, Kings County Kramer, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 June 14, 2007
Supreme Court, Kings County

M&T Mortgage Corp., Plaintiff,

against

Jahn K. Foy, Jacob Indurski, M.A. Abromovitch, Mark Indurski, New York City Environmental Control Board, New York City Transit Adjudication Bureau and John Doe, Defendants.



4439/2005



Plaintiff was represented by Charles D. J. Case, Esq., Steven J. Baum, PC, P.O. Box 1291, Buffalo, New York 13240. Defendant Jahn K. Foy was represented by Ravi Batra, Esq., 142 Lexington Ave., NY, NY 10016.

Herbert Kramer, J.

This matter presents novel issues that intersect two current areas of concern the subprime mortgage crisis and the heightened level of national security in the aftermath of the September 11th terrorist attacks.

Plaintiff is the holder of note and mortgage dated July of 2000 to secure a loan on defendant Major Jahn K. Foy's property in the principal sum of two hundred and forty five thousand dollars ($245,000) at an interest rate of nine and one half percent (91/2%) over the course of thirty years. The monthly payment was to have been set at $2060.09. The loan is subject to a late charge for payments made more than fifteen days after they are due of four percent (4%) of the overdue amount of each payment.

Major Jahn K. Foy, a reserve officer, was engaged on active duty, when foreclosure proceedings were initiated against her property. Initially, plaintiff requested an order for service by publication and for the appointment of a guardian ad litem to protect Major Foy's interests. It soon became apparent that service by publication would be improper since Major Foy's whereabouts were known. She was stationed in Japan at the time. A guardian ad litem was appointed and while Major Foy was engaged on a tour of duty, the guardian made several attempts to resolve the matter with the plaintiff and their attorneys. Upon the Major's return to civilian life in New York City, the guardian ad litem was discharged and Major Foy retained the services of an attorney.

Major Foy through counsel now moves pursuant to New York Military Law to reform the mortgage [FN1] claiming, in essence, that her ability to comply with the terms of the 91/2 per cent [*2]mortgage was materially affected by her deployment on several tours of active duty over the course of the past several years such that she was at home for a period of only 141/2 months between October of 2001 and December of 2006.[FN2] Plaintiff contends, inter alia, that Major Foy has not provided sufficient evidence with respect to her income and earnings during the period of her active duty status to substantiate her application.

The New York State Soldiers' and Sailors' Civil Relief Act, Military Law, §300 et seq., and specifically §312 governs the determination herein. [FN3] The purpose of these provisions is to give "members of the armed forces a degree of mental repose and to protect their rights and their remedies and to free them from hardships which might be imposed upon them solely because of the performance of their patriotic duties . . . [but] should not be used where there is no merit to inflict hardship upon others not in the armed forces." Meyers v. Schmidt, 181 Misc. 589(County Co., Columbia County, 1944).

Section 312 provides in pertinent part that "In any proceeding commenced in any court during the period of military service to enforce such obligation arising out of nonpayment of any sum [due under a mortgage] . . . the court may, after hearing, in its discretion, . . . and shall, . . . on application to it by such person in military service . . . unless in the opinion of the court the ability of the defendant to comply with the terms of the obligation is not materially affected by reason of his military service (a)stay the proceedings . . . or (b) make such other disposition of [*3]the case as may be equitable to conserve the interests of all parties."

Many of the decisions governed by this provision or its federal counterpart emanate from the World War II era and some turn on the question of whether the defendant's inability to comply with the terms of the obligation was or was not "materially affected by reason of his [or her] military service." See e.g. Franklin society for Homebuilding and Savings v. Flavin, 265 A.D. 720 (lst Dept. 1943)("The statute is to be liberally administered as an instrument to accomplish substantial justice in order to protect the interest of persons in the military service, but it may not be employed as a means of enabling one who has flouted his obligations in civilian life to obtain indefinite delay or to cancel his just liabilities."). See also Meyers v. Schmidt, supra, 181 Misc 589; Morris Plan Industrial Bank of New York v. Petluck, 187 Misc. 87(NY Sup., 1946).

Here there has been no evidence submitted with respect to the question of whether Major Foy's inability to comply with the terms of the mortgage was materially affected by reason of her military service. Such evidence would need to consist inter alia of specific information detailing income from her jobs over the course of the mortgage as well as any rental or other income she may have received and its source.

Accordingly, the motion is granted to the extent that a hearing is to be conducted addressed to that issue. The parties are to make the arrangements for same within twenty days of the date of this decision by telephoning Mr. Ian Gaynor, the Clerk of Part 13 at 347-296-1588.

This constitutes the decision and order of the Court.

J.S.C. Footnotes

Footnote 1: He requests that all payments that the defendant has already made, including the payments previously assessed as penalties, fees or costs be applied to the initial principal due; that the interest rate on the note be adjusted ab initio to a fixed percentage rate of 6%; that the principal due above the loan be reset to reflect all prior payments, that any deposit payment that the defendant makes at the time of this Court's order be directly applied to the principal balance; that the outstanding principal balance be reset to reflect all prior payments and that the payment term of the mortgage be reset to 30 years beginning with the date of the entry of the requested order. That any previously assessed penalties, costs, and the like be deleted from the account.

Footnote 2:In October of 2001, Major Foy was activated from reserve status and deployed on a one year tour of duty and was discharged in October of 2002. In March of 2003, Major Foy was recalled to active service for a one year period. In June of 2003, Major Foy contacted the plaintiff and sought help in bringing her debt current. In March of 2004, as Major Foy was restored to inactive status, the plaintiff approved her application for a loan modification and notified the defendant that past due interest of $45,153.27 would be built into the loan's principal balance together with an escrow charge of $11,061.85. Additionally, the plaintiff assessed penalties fees, late charges and costs at a total of $22, 706.61 and indicated that it credited all of the $19,497.64 in payments Major Foy had made pursuant to the "loss mitigation program" towards the fees leaving a balance of some $3200 on fees and costs. The monthly payments were now upped nearly by $500 to $2,509.03 a month. In August of 2004 Major Foy defaulted on her mortgage obligation. In December of 2004 Major Foy was deployed for a two year period. In February, 2005 the instant foreclosure proceeding was initiated.

Footnote 3:"The Act of Congress, Soldiers' and Sailors' Civil Relief Act of 1940, as amended, 50 U.S.C.A. Appendix section 501 et seq., and our Military Law (Article XIII) are in similar form, and so far as practicable should have a similar interpretation." Wuster v. Levitt, 266 A.D.926(2d Dept. 1944)