HSBC Bank USA v Demir

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HSBC Bank USA v Demir 2013 NY Slip Op 31079(U) May 10, 2013 Supreme Court, Suffolk County Docket Number: 21503-11 Judge: Jerry Garguilo Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] COPY INDEX N O .21503-1 1 SUPREME COURT - STATE OF NEW YORK IAS PART 21 - SUFFOLK COUNTY PRESENT: HON. JERRY GARGUILO Supreme Court HSBC Bank USA, National Association as trustee on behalf of the holders of the OPTEMAC Asset-Backed Pass-Through Certificates, Series 2006- 1, Plaintiff, -againstArslan Demir, Mortgage Electronic Registration Systems. Inc. acting solely as nominee for Opteum Financial Services, LLC: its successors and assigns and JOHN DOE # 1 through JOHN DOE # I O , the last ten names being fictitious and unknown to the plaintiff, the person or parties intended being the person or parties, if any., having or claiming an interest in or lien upon the Mortgaged premises described in the Complaint, MOTION DATE: 8-27-12 ADJ. DATE: MOT. SEQ. # 001 MotD #003 XMD FRENKEL, LAMBERT, WEISS, WEISMAN & GORDON, LLP Attorneys for Plaintiff 20 West Main Street Bay Shore, N .Y. 1 1706 JANUS LAW, P.C. Attorney for Defendant Arslan Demir 825 East Gate Blvd., Suite 308 Garden City, N. Y . 1 1530 Defendants - Upon the follouing papers numbered 1 to 27 read on this motion for summary iudgment and order of reference; Notice of Motion Order to Show Cause and supporting papers 1 - 18 ; Notice of Cross Motion and supporting papers 19 - 25 ; ; Replying Affidavits and supporting papers 26 27; ljF ON DUE IlELIBER4 TION AND CONSIDERATION BY THE COURT of the foregoing papers, the motion is decided as t;ollows: i t is ORDERED that the court, .si111 Aponte, recalls and vacates its prior decision rendered in this matter dated hfarch 1 I , 20 13. ORDERED that this motion (001) by plaintiff HSBC Bank USA, National Association as trustee on belialf ot the holders of the OP I EMAC Asset-Hacked Pass-Through Certificates, Series 2006- 1 (HSBC), pursuant to CPJ,R 3212 fbr summary judgment on its verified complaint against defendant Arslan Demir (Tlemir), to strike the answer of the defendant Demir, for leave to amend the caption of this action pursuant to C PLR 3025 ( b ) by substituting the names of ALI DEMIR for JOHN DOE # 1 , GIZEN DEMIR for JOHN [* 2] DO1 #2 and SAFINAZ DEMIR for JOHN DOE #3 and by striking the names of defendants JOHN DOE #4 through JOHN DOE #1 O , granting a default judgment against those non-appearing defendants, to reform the legal demiption in the underlying mortgage and for an order of reference appointing a referee to compute pursuant to Real Property Actions and Proceedings Law I$ 132 1, is hereby determined as follows; and i t is hereby ORDERED that the branch of the motion (001) by plaintiff HSBC pursuant to CPLR 3212 for summary judgment on its verified complaint against defendant Demir, to strike his answer and, for an order of reference appointing a referee to compute pursuant to Real Property Actions and Proceedings Law 6 132 1, is denied without prejudice to resubmit upon proper papers as set forth, including but not limited to a copy of the papers submitted with this application, a copy of this order and evidence of physical delivery of the note or written assignment of the note to plaintiff HSBC. Should plaintiff rest on the assignment of the mortgage and note dated June 15, 2010 as evidence of Mortgage Electronic Registration Systems, Inc s. (MERS) transfer to HSBC, plaintiff is granted leave, as set forth above, to submit to the Court written proof granting such authority from the original mortgagee IndyMac to its nominee, ME:RS to ,assign the subject mortgage and note along with proof that MERS physically possessed the note prior to its transfer; and it is further ORDERED that the branch of the motion (001) by plaintiff seeking leave to reform the legal description in the underlying mortgage to conform to the legal description contained in the bargain and sale deed dated November 22, 2005 which conveyed title of the subject premises to the defendant is granted; and it is further ORDERED that the branch of the motion (001) by plaintiff seeking a default judgment as to the remaining non-appearing defendants is granted; and it is further ORDERED 1:hat the branch of plaintiffs motion (001) seeking leave to amend the caption of this action pursuant to CPLR 3025 (b), is granted; and it is further ORDERED that the caption is hereby amended by substituting the names of ALI DEMIR for .JOHN DOE #1 C[ZEN DEMIR for JOHN DOE #2 and SAFINAZ DEMIR for JOHN DOE #3 and by striking from the caption the names of JOHN DOE #4 through JOHN DOE #lo ; and it is fiirther I, ORDERED that the caption of this action hereinafter appear as follows: SUPREME COURT OF THE STATE OF NEW YORK COUNTY 0F SUFFOLK HYBC Baiih U5A. National Association as trustee on behalf of the holders of the OI Ik h l 4 C Asset-Backed Pass-ThroLtgh Certificates, Series 2006- I , Plaintiff. -against;2rslaii Deiiiir. Mortgage Electronic Registration Systems, Inc. acting solelq as nominee for Opteum Financial Services, LLC its successors and assigns. Ali Deinir. Gizen De~~iiir Safinaz Demir, and De fen dan t s . [* 3] HSBC Hank v Demir Index No. 1 1-2 1503 Page No. 3 ORDERED that the branch of this cross motion (003) by defendant Demir for an order pursuant to CPLR 32 1 1 (a) dismissing the complaint on the grounds that plaintiff does not have the standing to bring the action is denied. This I S an action to foreclose a mortgage on premises known as 122 Arbour Street, West Islip, Ne\\ York. On November 22, 2005, defendant Demir executed an adjustable rate note in favor of Opteum Financial Services, LLC (Opteum) agreeing to pay the sum of $358,440.00 at the starting yearly rate of 5 759 percent. On November 22, 2005, defendant Demir also executed a mortgage in the principal sum of$358,440.00 on his home. The mortgage indicated Opteum to be the lender and Mortgage Electronic Registration Systems, Inc. (MERS) to be the nominee of Opteum as well as the mortgagee of record for the purposes of recording the mortgage. The mortgage was recorded on December 6, 2005 in the Suffolk County Clerk s Office. Thereafter, on June 15,2010, the note and mortgage were purportedly transferred by assignment of mortgage from MERS to HSBC and recorded on July 15, 2010 with the Suffolk County Clerks Office. HSBC asserts that it is the holder of the note, which was indorsed in blank by Michelle Waldron, assistant vice president to Opteum. Midland Mortgage Co. Delinquency Assistance Center, sent a notice of default dated May 3, 201 1 to defendant Demir stating that he had defaulted on his mortgage loan and that the amount past due was $5 1,790.75. As a result of defendant s continuing default, plaintiff commenced this foreclosure action on July 1 1 , 20 1 1. In its complaint, plaintiff alleges in pertinent part that defendant breached his obligations under the terms of the note and mortgage by failing to make the monthly payments commencing with the January 1, 201 0 payment. Defendant interposed an answer with twelve affirmative defenses. The Court s computerized records indicate that a foreclosure settlement conference was held on January 19, 20 12 at which time this matter was referred as an IAS case since a resolution or settlement had not been achieved. Thus, there has been compliance with CPLR 3408 and no further settlement conference is required. Plaintiff now inoves for summary judgment on its complaint contending that it is the holder of the note and mortgage; that defendant Demir failed to comply with the terms of the loan agreement and mortgage by failing t o make monthly payments commencing with the January 1, 2010 payment; that noticc of default was :sent on May 3, 201 1; that thc defendant has not cured the default; and, that defendant Demir s answer neither raises issues offact for trial nor a meritorious defense. In support of its motion, plaintiff submits among other things: the sworn affidavit of Josh Mills, senior foreclosure litigation specialist for MidFirst Bank, the servicer and attorney in fact for plaintiff HSBC; the affirmation in support for summary judgment of Margaret Burke Tarab, Esq.; the summons and complaint. the defendant s answer; the note, mortgage and assignment; a notice of default; notices pursuant to RPAPL, $Cj 1320. 1303 and 1304; affidavits of service for the summons and complaint; an aftidavit of sen ice of the instant summary judgment motion upon defendant s counsel; and a proposed order appointing a referee to compute. Defendant has submitted a cross motion opposing plaintiffs motion and seehing an order dismissing the complaint on the grounds that plaintiff does not have standi ti g . [* 4] HSBC Bank \ Demir Indek No. 1 1-2 1503 Page No. 4 [Iln an action to foreclose a mortgage, a plaintiff establishes its case as a matter of law through the production of the mortgage, the unpaid note, and evidence of default (see Republic Natl. Bank o f N. Y. v O Kane, 308 AD2d 482, 482, 764 NYS2d 635 [2d Dept 20031; Village Bank v Wild Oaks Holditzg. 196 AD2d 8 12, 60 1 NYS2d 940 [2d Dept 19931). Once a plaintiff has made this showing, the burden then shifts to defendant to produce evidentiary proof in admissible form sufficient to require a trial oftheir defenses (see Aames Funding Corp. v Houston, 44 AD3d 692, 843 NYS2d 660 [2d Dept 20071; Household Fin. Realty Corp. o New York v Winn, 19 AD3d 545, 796 NYS2d 533 [2d Dept f 20051). Where, as here, standing is put into issue by the defendant, the plaintiff is required to prove it has standing in order to be entitled to the relief requested (see Deutsclze Bank Natl. Trust Co. v H d e r , 100 AD3d 680,954 NYS2d 55 1 [2d Dept 201 I]; US Bank, NA v Collymore, 68 AD3d 752,890 NYS2d 578 [2d Dept 20091; Wells Fargo Bank Minn., NA v Mastropaolo, 42 AD3d 239, 837 NYS2d 247 [2d Dept 20071). In a mortgage foreclosure action [a] plaintiff has standing where it is the holder or assignee of both the subject morlgage and of the underlying note at the time the action is commenced (HSBCBank USA v Hernandez, 92 AD3d 843,939 NYS2d 120 [2d Dept 20121; US Bank, NA v CofLymore,68 AD3d at 753; Countrywide Home Loans, Znc. v Gress, 68 AD3d 709, 888 NYS2d 914 [2d Dept 20091). *Eithera written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation (HSBC Bavlk USA v Hernandez, 92 AD3d at 844). In the matter ilt hand, plaintiff failed to establish, prima facie, that it had standing to commence this action. The evidlence submitted by the plaintiff in support of its motion did not demonstrate that the note was physically dlelivered or assigned to it prior to the commencement of the action. The affidavit from plaintiff-s assistant secretary, Josh Mills, did not provide any factual details of a physical delivery or assignment of the note and thus, failed to establish possession of the note prior to commencing this action (HSBC Bank USA v Hernandez, 92 AD3d 843; Citimortgage, Znc. v Stosel, 89 AD3d 887, 934 NYS2d 182 [2d Dept 201 11). Conclusory boiler plate statements such as [pllaintiff is the holder of the note will not suffice when standing is raised as a defense (see Deutsche Bank Natl. Trust Co. v Bnrnett. 88 AD3d 636, 93 1 NYS2d 630 [2d Dept 201 11; Aurora Loan Services, LLC v Weisbfuvn,85 AD3d 95. 923 NYS2d 609 [2d Dept 201 11). While plaintiff does provide an assignment of mortgage dated June 15, 2010 from MERS to IISl33c purportcdlj transferring the mortgage and note to the plaintiff. there is no evidence that MERS, as the nominee for Opteum, had authority to assign the mortgage and note. In addition, assuming arguendo, that MEKS had authority to transfer the note and mortgage, there is no evidence to suggest that MERS e\er p h j sically possessed the note. Accordingly, plaintiffs application for summary judgment and an order of reference is denied. Defendant Llcrnir cross-moves to dismiss the complaint based on improper service and lack of his standing. B J ~ affidavit, defendant Demir contends that service was made on his son and did not contain the RP4PI4 S; 1303 notice, that the mortgage contains an incorrect legal description of the property. and that plaintiff lacks standing. [* 5] IHSBC Rank 1, Demir Indey N o . 1 1-21503 Page No. 5 I n opposition, plaintiff submits a copy of the affidavit of service upon defendant Demir indicating service pursuant to CPLR 308 (2) which, included a copy of the Homeowners Foreclosure Notice as required by RPAPL $1303. Plaintiff also argues that a discrepancy in a mortgage s property description does not invalidate a mortgage and reasserts that it has standing to commence this action. Defendant s assertion that he did not receive notice as required under RPAPL 5 1303 is rejected hp the court. EIere, the process server s affidavit of service constituted prima facie evidence of proper service upon defendant Demir pursuant to CPLR 308 (2) and defendant s unsubstantiated denial of receipt of same is insufficient to rebut the presumption of proper service created by said affidavits (see, Beneficial Homeowner Service Corp. v Girault, 60 AD3d 984, 875 NYS2d 8 15 [2d Dept 2009l). I ,i kewise, defendant s assertion that a discrepancy in the mortgage s property description invalidates the mortgagc and accordingly requires dismissal of the action is unsupported in law and accordingly rejected. A review of the legal description oi the subject property attached to the mortgage reveals that the lower portion of the metes and bounds description contained in Schedule A is missing. However, defendant admits that he purchased the home located at 122 Arbour Street, West Islip, New York on November 22, 2005 and executed a note and mortgage in favor of Opteum. Here, the mortgage became a lien upon the property on the date it was made, November 22, 2005 (see Sullivan v Corn Exchange Bank. 154 AD 292, 139 NYS 97 [2d Dept 19121; Dime Sav. Bank, FSB v Roberts, 563 NYS2d 253, 167 AD2d 674 [3d Dept 19901). As such, the discrepancy in the property description contained in the f mortgage did not invalidate the mortgage (see Savings & Loan Assoc. O Kingston v Berberich, 24 AD 187, 264 NYS2d 989 [3d Dept 19651). As to defendant s assertion that plaintiff lacks standing to commence this actioin, at this juncture, it is unclear from the submissions before the court whether or not plaintiff has standing. As such, the court denies such application. Accordingly, the motion for summary judgment, and order of reference, and related relief as reflected herein, and the cross motion seeking dismissal of the complaint are denied. Plaintiff is directed to serve a copy of this order amending the caption of this action upon the Calendar Clerk of this Court. FINAL DISPOSITION

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