Millien v Citigroup Inc.

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[*1] Millien v Citigroup Inc. 2012 NY Slip Op 52224(U) Decided on December 6, 2012 Supreme Court, Kings County Rivera, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 December 6, 2012
Supreme Court, Kings County

Tamara Millien, Petitioner,

against

Citigroup Inc., CITIBANK, N.A, CITIMORTGAGE, INC., ADAM PLOTCH, JOHN DOE 1 and JOHN DOE 2, Respondents.



11264/2012



Yolande I. Nicholson, P.C.

26 Court Street, Suite 603

Brooklyn, New York 11242

(347) 707-1212

Attorney for Respondents

Eric M. Levine, Esq.

Jordan M. Smith, Esq.

Akerman Senterfitt LLP

335 Madison Avenue - Suite 2600

New York, New York 10017-4636

(212) 880-3800

Adam Plotch - Pro-se

95 West 95th Street, Apt. 29E

New York, New York 10025

Francois A. Rivera, J.



By order to show cause and petition filed with the Kings County Clerk's office on May 31, 2012, under motion sequence number one, petitioner Tamara Millien (Millien) commenced the instant action seeking among other things a preliminary injunction and an order annulling a non judicial sale of the cooperative shares of her cooperative apartment located at 1655 Flatbush Avenue, Apartment 1408, Brooklyn, New York (the subject shares).

By notice of motion filed on July 13, 2012, under motion sequence number two, Citigroup Inc., Citibank, N.A, and Citimortgage, Inc., (hereinafter the Citi respondents) have jointly moved to dismiss the petition pursuant to CPLR 3211(a)(1) and (7). No respondent has answered the petition. [*2]

Millien has opposed Citi respondents' motion.

BACKGROUND

By order to show cause and petition filed with the Kings County Clerk's office on May 31, 2012, Millien commenced the instant action for a declaratory judgment and damages. The first, second, third and fourth cause of action seeks a judgment declaring that the sale of the subject shares is null and void. The fifth cause of action alleges that the Citi respondent's were negligent. The sixth cause of action alleges that respondents violated the Deceptive Practices Act.

MOTION PAPERS

Millien's papers consist of an order to show cause, three affirmations of counsel, Millien's affidavit and the petition. The petition contains three attached documents labeled 1 through 3. Exhibit 1 is described as a notice of public auction. Exhibit 2 is described as the terms of sale of the notice of public auction. Exhibit 3 is described as a certificate of sale and fact. Also annexed to Millien's motion papers and marked exhibits 4 and 5 are a letter from CitiMortgage addressed to Millien and a memorandum pertaining to RPAPL 1303, 1304 and 1305.

The Citi respondents' motion to dismiss includes a memorandum of law and an affirmation of their counsel which refers to six annexed exhibits labeled A through F. Exhibit A is described as a "Fannie Mae" frequently asked questions guide. Exhibit B is described as a Treasury Department Supplemental Directive. Exhibit C is a copy of Millien's petition. Exhibit D is described as an affidavit of publication of the notice of sale of the subject shares. Exhibit E is a copy of Millien's affidavit. Exhibit F is an affidavit of Adam Ganter, the business analyst of Citimortgage, Inc.

Adam Ganter's affidavit references thirteen annexed exhibits labeled A through M. Exhibit A is described as the note. Exhibit B is described as the security agreement. Exhibit C is described as a delinquency notice. Exhibit D is described as additional delinquency notices. Exhibit E, F, G, H and I are copies of letters from the Citi respondents to Millien. Exhibit J is described as a copy of a UCC 9-611(f) allegedly sent to Millien. Exhibit K is described as a notice of sale and notice of public auction. Exhibit L is described as a copy of the terms of sale. Exhibit M is described as a copy of the certificate of sale and fact.

Millien opposed the Citi respondent's motion to dismiss with an affirmation of her counsel and an annexed order of this court dated June 12, 2012.

LAW AND APPLICATION

A motion to dismiss based on documentary evidence pursuant to CPLR 3211(a)(1) may be appropriately granted "only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law" (Rabos v R & R Bagels & Bakery, Inc., - AD3d , 2012 NY Slip Op 07974, 2012 WL 5870676 [2nd Dept 2012] citing Goshen v Mutual Life Ins. Co. of NY, 98 NY2d 314, 326 [2002]).

In order to be considered documentary evidence within the meaning of CPLR 3211(a)(1), the evidence "must be unambiguous and of undisputed authenticity"

(Fontanetta v John Doe 1, 73 AD3d 78, 86 [2nd Dept 2010]), that is, it must be "essentially unassailable" (Suchmacher v Manana Grocery, 73 AD3d 1017 [2nd Dept 2010]).

The Citi respondents offered the affirmation of its counsel and the affidavit of Adam Gatner in support of their motion to dismiss the petition pursuant to CPLR 3211(a)(1). The [*3]affirmation of counsel references to six documents and contains no allegations of fact pertaining to the sale of subject shares. The sixth document is Gatner's affidavit which references thirteen exhibits. The Citi respondents state that Gatner's affidavit is being used solely to authenticate documents.

Gatner's affidavit does not qualify as documentary evidence within the scope of CPLR 3211(a)(1) (see Fontanetta v John Doe 1, 73 AD3d 78, 86 [2nd Dept 2010]). Furthermore, exhibits C, D, E, F, G, H and I which he described as letters purportedly sent by the Citi respondents to Millien are not documents of undisputed authenticity. All of the documents collectively submitted in the Citi respondent's motion papers do not directly prove a defense to the petition as a matter of law. Therefore the motion to dismiss the petition pursuant to CPLR 3211(a)(1) must be denied.

"In late 2009, Governor Patterson signed a bill into law requiring certain notice to residential homeowners of cooperative apartments, intended for the homeowner's protection, prior to disposition of collateral shares (L. 2009, Ch. 507). The purpose of the notice is to afford protection to homeowners similar to that provided to the owners of real property under the Home Equity Theft Prevention Act" (see Stern-Obstfeld v Bank of America, 30 Misc 3d 901 [NY Sup 2011]).

RPAPL 1304 provides with regard to a home loan, that, inter alia, at least ninety days before a lender begins an action against a borrower to foreclose on a mortgage the lender must provide notice to the borrower that the loan is in default and his home is at risk. ( See, Aurora Loan Services, LLC v Weisblum, 85 AD3d 95 [2nd Dept 2011]). Proper service of the RPAPL 1304 notice containing the statutorily-mandated content is a condition precedent to the commencement of the foreclosure action." (see Aurora Loan Services, LLC v Weisblum, supra, 103).

The notice requirement, codified in section 611 of UCC article 9, is similar to the HETPA notice requirements associated with judicial foreclosure proceedings. Under UCC 9—611(f), a secured party must send a specific type of notice to a homeowner 90 days prior to the sale or other disposition of cooperative shares held as collateral. The lender must also send the homeowner a notice 10 days prior to the disposition. The 90—day notice is very particular in its requirements, and provides information about counseling services and other matters that may assist cooperative apartment homeowners in obtaining help when faced with the potential loss of a home (see Stern-Obstfeld v Bank of America, 30 Misc 3d 901 [NY Sup 2011]).

"The Second Department has held that the HETPA notice requirement is a condition precedent to the commencement of a judicial foreclosure action (First Natl. Bank of Chicago v Silver, 73 AD3d 162, [2nd Dept. 2010]). The reasoning applies with equal force to the UCC 9—611(f) notice ( see Matthews v. Matthews, 240 NY 28, 34, 147 N.E. 237 [1925] ."(Stern-Obstfeld v Bank of America, 30 Misc 3d 901 [NY Sup 2011]).

"On a motion to dismiss the complaint pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the court must afford the pleading a liberal construction, accept all [*4]facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Rabos v R & R Bagels & Bakery, Inc., - AD3d , 2012 NY Slip Op 07974, 2012 WL 5870676 [2nd Dept 2012] citing Breytman v Olinville Realty, LLC, 54 AD3d 703, 703—704 [2nd Dept 2008]; and Leon v Martinez, 84 NY2d 83, 87 [1994]). Where evidentiary material is submitted and considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), and the motion is not converted into one for summary judgment, the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one, and unless it has been shown that a material fact as claimed by the plaintiff to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate (see Guggenheimer v Ginzburg, 43 NY2d 268, 274—275 [1977]; Norment v Interfaith Ctr. of NY, 98 AD3d 955 [2nd Dept 2012]).

The court has not converted the motion into one for summary judgment. Petitioner's first four causes of action seeks a judgment declaring that the sale of the subject shares is null and void for various reasons. The fifth cause of action alleges that the Citi respondent's were negligent and the sixth cause of action alleges that respondents violated the Deceptive Practice Act.

UCC 9—610 governs non judicial foreclosure sales in New York State (LI Equity Network, LLC v Village in the Woods Owners Corp., 79 AD3d 26 [2nd Dept 2010]). The first cause of action alleges in pertinent part that the Citi respondents failed to comply with the provisions of UCC 9-611 by failing to serve Millien with a ten day notice of sale of the shares of her cooperative apartment. The court recognizes the first cause of action to state a cognizable claim. The second cause of action alleges in pertinent part that the Citi respondents failed to comply with the provisions of UCC 9-613(a)(4) by not specifying that the petitioner is entitled to an accounting of the unpaid indebtedness. The court recognizes the second cause of action to state a cognizable claim (see Coxall v Clover Commercial Corp., 4 Misc 3d 654, 781 [NY City Civil Ct. 2004]). The third cause of action alleges in pertinent part that the Citi respondents failed to conduct the sale in a commercially reasonable manner contrary to UCC 9-610(b) and alleges certain facts about the conduct of the sale. UCC 9—610(a) states that when a debtor defaults on a security agreement, the secured party "may sell, lease, license, or otherwise dispose of any or all of the collateral" (UCC 9—610[a] ). UCC 9—610(b) mandates that: "[e]very aspect of a disposition of collateral, including the method, manner, time, place, and other terms, must be commercially reasonable (see LI Equity Network, LLC v Village in the Woods Owners Corp., 79 AD3d 26 [2nd Dept 2010]). The court recognizes the third cause of action to state a cognizable claim.

With regard to the first three causes of action, the Citi respondent's have not shown that a material fact as claimed by the plaintiff is not a fact at all. Although they contend, among other things, that they sent appropriate notices to Millien, and conducted the sale [*5]of her shares in a commercially reasonable manner, it can not be said that no significant dispute exists regarding these claims. Inasmuch as the Citi respondents have sought an order dismissing the petition in its entirety and the court finds that at least the first three causes of action survive the motion, it is clear that the petition will not be dismissed. Therefore, for the sake of judicial economy, the Court will not address the forth and fifth cause of action.

The Citi respondent's motion to dismiss the petition pursuant to CPLR 3211(a)(1) and (7) is denied.

The Citi respondents are directed to serve and file their answer to the petition in twenty days.

The foregoing constitutes the decision and order of this Court.

Enter:_____________________________

J.S.C.

Enter Forthwith:_____________________________

J.S.C.

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