Citimortgage, Inc. v Ivey

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Citimortgage, Inc. v Ivey 2013 NY Slip Op 31953(U) August 5, 2013 Sup Ct, Suffolk County Docket Number: 11-14385 Judge: Thomas F. Whelan 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] I M0 DECISION s( ORDER INDEX NO. 11-14385 SUPREME COURT - STATE OF NEW YORK I.A.S. PART 33 - SUFFOLK c o w n PRESENT: MOTION DATE 6/7/13 ADJ. DATES 6/2 1113 Mot. Sea. # 001 - MOTD CDISP?N x Hon. ~ H O M A S WHELAN F. Justice of the Supreme Court X CITIMORTGAGE, INC., Plaintiff, -againstLEON H. IVEY, DENISE TYSON dWa DENISE : SANDS, ERIN CAPITAL MANAGEMENT, LLC, : UNITED STATE OF AMERICA ACTING THROUGH THE IRS and JOHN DOE and MARY DOE (said names being fictitious, it being: : the intention of Plaintiff to designate any and all occupants, tenants, persons or corporations, if any, : having or claimiing an interest or lien upon the premises being foreclosed herein.) DAVIDSON FINK, LLP Attys. For Plaintiff 28 East Main St. Rochester, NY 146 14 LEON H. IVEY Defendant Pro Se 72 Tenth Ave. Huntington Station, NY 1 1746 Upon the following papers numbered I to I O read on this motion by the plaintiff for accelerated iudgments, substition andor deof party defendants and the appointment of a referee to compute ; Notice of MotioniOrder to Show Cause and supporting papers 1- 5 ; 6-7 ; Notice of Cross Motion and supporting papers > Answering Affidavits and supporting papers 8-9 ; Reply papers ; Other I O (various reports and correspondence submitted on behalf of defendant Ivev ( :( b -)the instant motion, it is, ORDERED that this motion (#001) by the plaintiff for accelerated judgments on its complaint and an order of reference is considered under CPLR 32 12, 32 15 and RPAPL fj I32 1 and is granted to the extent set forth below. The plaintiff commenced this action in April of 201 1 to foreclose a May 24, 2007 mortgage given on real property situated in Suffolk County by defendant, Leon H. Ivey, to secure a mortgage note of the same date executed by such defendant in favor of FBM, LLC. The plaintiff alleges that a default in payrncnt occurred on September 1, 2009 and that such default continues to date. [* 2] Citimortgage. [nc. I Ivey, et. al. Index No. 143;35/2011 Page 2 Issue was joined by service ofan answer by the defendant mortgagor in May of201 1 by his then counsel, Andrew M. Doftosky P.C. Therein, defendant Ivey asserts but one affirmative defense, namely, that the plaintiff lacks standing to maintain this action. In September of 20 1 1, the defendant changed attorneys under a consent form, pursuant to which, the Litvin Law Firm of Brooklyn, New York was substituted for the Doftosky firm. On December 27,201 1, the law firm of Davidson & Fink was substituted for the plaintiffs attorney of record. On June 20,20 13, one day prior to the submission of this motion, defendant Ivey appeared herein in a self represented capacity, via a substitution executed by him and the Litvin Law Firm. By the instant motion, the plaintiff, by its counsel, moves for summary judgment dismissing the answer of defendant Ivey and for summary judgment on its complaint against him. The plaintiff further seeks an order substituting its purported assignee, PennyMac C o p , for itself as plaintiff in this action pursuant to CPLR 10 1 8and the deletion of the unknown defendants together with the appointment of a referee to compute pursuant to RPAPL 132 1. Defendant lvey opposes the motion on various grounds including his pleaded defense of a lack of standing on the part of the plaintiff. In letter objections, the plaintiff challenges defendant Ivey s pro se opposition due to his appearance herein by counsel. However, the court rejects these arguments, since the plaintiff improperly served the moving papers upon defendant Ivey s original counsel of record. Morever, the plaintiffs receipt of defendant Ivey s opposing papers, coupled with the filing of the substitution of Mr. Ivey for his attorneys of record prior to the submission of this motion and the court s receipt of reply papers in which no further objections to defendant Ivey s pro se opposition papers were advanced, all warrant rejection of the plaintiffs procedural objections to defendant Ivey s submissions. Upon review of the parties submission and for the reasons stated, the motion is granted to the extent set forth below. Entitlement to a .judgment of foreclosure may be established, as a matter of law, where a mortgagee produces both the mortgage and unpaid note, together with evidence of the mortgagor s default, thereby shifting the burden to the mortgagor to demonstrate, through both competent and admissible evidence, any defense which could raise a question of fact (Zanfini v Chandler, 79 AD3d 103 1, 91 2 NYS2d 91 1 [2d Dept 20 IO], quoting HSBC Bank USA v Merrill, 37 AD3d 899,900,830 NYS2d 598 [2d Dept 20101; see Bank Natl. ASS N vDenaro, 98 AD3d 964,950 NYS2d 581 [2d Dept 20121; HSBC Bank v Slzwartz, 88 AD3d 961, 931 NYS2d 528 [2d Dept 20111; US Bank N.A. v Eaddy, 79 AD3d 1022, 1022,914 NYS2d 901 [2010]). Where, as here, an answer served includes the defense ofstandjng or lack of capacity to sue, the plaintiff must further establish its standing to succeed on a motion for summaryjudgment (see US .Bank, N.A. v Collymore, 68 AD3d 752,890 NYS2d 578 [2d Dept 20091; Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239,242,837 NYS2d 247 12d Dept 20071). The standing o f a plaintiff in a mortgage foreclosure action is measured by its ownership, holder status or possession of the note and mortgage at the time of the commencement of the action (see US Bank of NY v Silverberg, 86 AD3d 274, 279, 926 NYS2d 532 [2d Dept 201 11; Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204,887 NYS2d 6 15 [2d Dept 20091; US Bank, N.A. v Collymore, 68 AD3d 752. szipro). Because a mortgage is merely security for a debt or other obligation and cannot [* 3] Citimortgage, Ihc. v Ivey, et. ul Index No. 14385/2011 Page 3 exist independently of the debt or obligation (US Bank of NY v Silverberg, 86 AD3d 274, supvu), a mortgage passes as an incident of the note upon its written assignment, physical delivery or indorsement and delivery (see Deutsche Bank Natl. Trust Co. v Whalen, 107 AD3d 93 I , 20 13 WL 3 198 184 12d Dept 20131; USBankNatl.Ass n vCange,96AD3d825,947NYS2d522 [2dDept2012]; GRPLoan, LLC v Taylor, 95 AD3d 1172, 945 NYS2d 336 [2d Dept 20121; Deutsclze Bank Trust Co. Am. v Codio, 94 AD3dL 1040,943 NYS2d 545 [2d Dept 201 11). However, a transfer or assignment of only the mortgage without the debt is a nullity and no interest is acquired by it, since a mortgage is merely security for a debt and cannot exist independently of it (U.S.Bank N.A. v Dellarmo, 94 AD3d 746,748, 942 NYS2d 122 [2d Dept 20121; see HSBCBank USA v Hernandez, 92 AD3d 843,939 NYS2d 120 [2d Dept 201211 Citimortgage, Inc. v Stosel, 89 AD3d 887, 888, 934 NYS2d 182 [2d Dept 20121; Deutsche Bank Natl. Trust Co. v Barnett, 88 AD3d 636,93 1 NYS2d 630 [2d Dept 20121; Bank ofNY vSilverberg, 86 AD3d274, supra; USBankNatl. Ass n vMadero, 80AD3d 751,915NYS2d 612 [2d Dept 201 I]). Holder status is established where the plaintiff possesses the mortgage note which bears, on its face or by allonge, a special indorsement payable to the order of the plaintiff or where it takes possession of a imortgage note that contains an indorsement in blank likewise affixed, to which note, the mortgage follows as incident thereto (see UCC $1-201 [20]; $3-202; $3-204; 39-203 [g]; Spielman vManufacturersHanover TrustCo., 60NY2d221,469NYS2d69 [1983]; DeutscheBank Trust Co. A m v Codio, 94 AD3d 1040, supra; Mortgage Elec. Registration Sys., Inc. v Coakley, 4 1 AD3d 674, 838 NYS2d 622 [2d Dept. 20071; First Trust Natl. Ass n vMeisels, 234 AD2d 414,651 NYS2d 121 [2d Dept 19961; Deutsclze Bank Natl. Trust Co. v Pietranico, 33 Misc3d 528,928 NYS2d 818 [Sup. Ct. Suffolk County 2011], a f d , 102 AD3d 724, 957 NYS2d 868 [2d Dept 20131). New York s IJniform Commercial Code (UCC) Ij 1-201(20) defines holder as a person who is in possession of a document of title, an instrument or an investment security drawn, issued or indorsed to him or to his order or to bearer or in blank. A person becomes the holder of an instrument through its negotiation to him or her (see UCC §3-202[1]). Where the instrument is payable to order, it is negotiated by delivery and all necessary indorsements and where it is payable to bearer by virtue of an indorsement in blank or otherwise., delivery alone is sufficient (see id.). Delivery is defined as the voluntary transfer of possession and is thus an act of volition (UCC ?j 1 [ 141). Constructive delivery of an instrument 1-20 such as a promissory note to an agent has long been recognized as constituting a valid transfer by delivery (see Deutsclze Bank Natl. Trust Co. v Whelan, 107 AD3d 93 1,2013 WL 3 198184 [2d Dept 20 131 supvu; Depew Dev, ?ne. v AT & A Trucking Corp, 2 I O AD2d 974,62 1 NYS2d 242 [4th Dept 19941; Worfin vSeciirity Bank, 170 App.Div. 519, 156 NYS 474,476 [1915]; see also Corporacion Venezolancl de Fomento v Vintero Sales Corp., 452 F.Supp. 1108 [SDNY 19781). The essential element of a constructive delivery is that it be made with the unmistakable intention of transferring title to the instrument (see i at 1 1 17). d It appears from the record adduced on this motion that plaintiff Citimortgage, Inc. is no longer prosecuting its pleaded claims in this action and that such prosecution has been taken up by PennyMac, Loan Services, LLC , on behalf PennyMac, Corp., the assignee of the mortgage under the terms of an assignment by Citimortgage, Inc., dated October 23,201 2. It is upon this assignment which PennyMac Corp. relies to support its demands for its substitution for the named plaintiff and caption amendment to reflect same (see CPLR 1018). A review of said written assignment reveals, however, that while it contains an assignment ofthe mortgage, it does not contain an assignment ofthe underlying note or the [* 4] Citimortgage. lnc. v Ivey. et. a1 Index No. 14385/2011 Page 4 underlying indebtedness secured thereby. This assignment is thus insufficient to transfer ownership of the note and mortgage to PannyMac Corp., as assignee of the named plaintiff, Citimortgage, Inc. (see Blink of NY v Silverberg, 86 AD3d 274, supra; US Bank Natl. Ass n v Madero, 80 AD3d 75 1, supra; cf:, Clzase Home Fin., LLC v Miciotta, 101 AD3d 1307, 956 NYS2d 271 [3d Dept 20121). Those portions of the instant motion wherein the plaintiff, through its counsel and its purported assignee, seeks to substitute PennyMac Corp. as the plaintiff in this action are thus denied. Such denial is, however. without pre-judice to a further application for the same relief upon due proof ofthe plaintiffs transfer of the note and mortgage to PennyMac Corp, by assignment or otherwise, and due proof of the retention of plaintiffs counsel s by PennyMac Corp., for purposes of pursing this action. The remaining portions of the instant motion are granted. According to the affidavit of merit attached to the moving papers, PennyMac s servicer through its default specialist, the plaintiff, Citimortgage. allegedly acquired the note and mortgage by delivery prior to the commencement of the action as evidenced by an Assignment of Mortgage dated September 28,2008 that was recorded in the office of the Suffolk County Clerk on October 27, 2008 (see 7 7 of the affidavit of Spencer Nagy, Default Specialist for PennyMac Loan Servicers, LLC , attached to the moving papers). The assertion is predicated upon Mr. Nagy s personal knowledge of the plaintiff or the plaintiffs servicing agent s records, including, the mortgage account ledgers, in which all payments are received and posted and in which acts, transactions occurrences and events material to the loan are recorded by those duty bound to record such things an maintain in the ordinary course of business (see id., 77 4;5;8). These allegations are not challenged by defendant Ivey and they support counsel s claim that the note was tendered to the plaintiff prior to the commencement of this action in accordance with the allonge attached to the note which bears a special indorsement payable to the order of the plaintiff, Citimortgage, Inc. This uncontroverted proof renders moot any discussion of the effectiveness of the assignment of the mortgage by a nominee of the original lender to the plaintiff some six months prior to the commencement of this action (see Deutsche Bank Natl. Trust Co. v Whalen, 107 AD3d 93 1, .supra). In any event, such assignment may be considered further evidence of the original lender s tender of the specially endorsed note to the plaintiff, Citimortgage, Inc., prior to commencement of this action (see Deutsche Bank Trust Co. Am. v Codio, 94 AD3d 1040, supra; Mortgage Elec. Registration Sys., Inc. v Coakley, 41 AD3d 674, supra). The court thus finds that the plaintiffs moving papers established, prima facie, the plaintiffs entitlement to the summary judgment demanded by it against defendant, Leon H. Ivey. It was thus incumbent upon answering defendant Ivey to submit proof sufficient to raise a genuine question of fact rebutting the plaintiff s prima facie showing or in support of an affirmative defense asserted in his answer or otherwise available to him (see Flagstar Bank v Bellafiore, 94 AD3d 1044,943 NYS2d 55 1 [2d Dept 20121; Grogg vSoutlz Rd. Assocs., 74 AD3d 1021. 907 NYS2d 22 [2d Dept 20101; Wells Fargo Bank v Karla, 71 AD3d 1006, 896 NYS2d 681 [2d Dept 20101; Aames Funding Corp. v Houston, 44 AD3d 092, 843 NYS2d 660 [2d Dept 20071). Notably, self-serving and conclusory allegations do not raise issues of fact and do not require plaintiff to respond to alleged affirmative defenses which are based on such allegations (see Charter One Bank, FSB v Leone, 45 AD3d 958,845 NYS2d 513 [3d Dept 20071; Rosen Auto Leasing, Inc. v Jacobs, 9 AD3d 798, 780 NYS2d 438 [3d Dept 20041). Where a defendant fails to oppose some or all matters advanced on a motion for summary judgment. the facts as alleged in the movant s papers may be deemed admitted as there is, in effect, a concession that no question of fact exists (see Kuelzne & Nagel, Inc. v Baiden, 36 NY2d 539, 369 [* 5] Citimortgage. Inc. v Ivey, et ul. Index No. 143,85/2011 Page 5 NYS2d 667 [1975]; see ulso Madeline D'Anthony Enter., Inc. v Sokoiowsky, 101 AD3d 606, 957 NYS2d 88 [lst Ilept 20121;ArgentMtge. Co., LLCvMentesana, 79AD3d 1079,915 NYS2d 591[2d Dept 20 101). Here, defendant failed to raise any question of fact regarding his pleaded defense as to the purported lack of standing on the part of the plaintiff. His claims that the note and mortgage were securitized and iransjerred to a trust prior to the commencement of this action are unsupported by any evidence in admissible form. Defendant Ivey's further claims that the plaintiffs prosecution of this action is stayed by a settlement of claims in other jurisdictions or because he is allegedly engaged in loan modification discussions with representatives of PennyMac, Corp. or its loan servicer are rejected as unmeritorious (see Deutsche Bank Natl. Trust Co. v Gutierrez, 102 AD3d 825,958 NYS2d 472 [2d Dept 201 31; Bank of New York Meilon v Izzmirigil, 88 AD3d 930, 93 1 NYS2d 667 [2d Dept 201 I]; US Bank Natl. .4ssn. vslavinski, 78 AD3d 1167, 912 NYS2d 285 [2d Dept 20101). Defendant Ivey's claim of an entitlement to a mortgage loan modification is equally unavailing. While the parties to a mortgage are required to enter into good faith negotiations aimed at reaching a mutual resolution, including a loan modification, if possible (see CPLR 3408), there is no obligation to modifji a mortgage loan that is imposed upon a foreclosing plaintiff under the law of this state (see Graf v Hope Bldg. Corp., 254 NY 1,4-5, 171 NE 884 [1930]; Wells Fargo Bank, NA vlneyers, __ AD3d ,966 NYS2d 108 [2d Dept 20131; Wells Fargo Bank, N.A. v Van Dyke, 101 AD3d 638,958 N Y S 2 n 3 1 [lst Dept 20121; Key Intern. Mfg. Inc. v Stillman, 103 AD2d 475,480 NYS2d 528 [2d Dept 19841; JP Morgan Chase Bank Natl. Assn. v Iiardo, 36 Misc.3d 359,940 NYS2d 829 [Sup.Ct. Suffolk County 20 121). In this regard, the court notes that four settlement conferences were calendared and held before quasi-judicial personnel assigned to the specialized mortgage foreclosure conference part and that thle action was released therefrom in January of 20 12 without any settlement or loan modification having been reached. The court has considered the remaining contentions advanced by defendant Ivey in his opposing affidavit, including his attacks on the validity of the affirmation submitted by plaintiff pursuant to Administrative (Order 548- 10 and find them all to be without merit (see LaSalle Bank, N.A. v Pace, 100 AD3d 970.955 NYS2d 161 [2d Dept 20121). Those portions of the plaintiffs motion wherein it seeks an order dropping as party defendants the unknowns d'efenclants listed in the caption are granted, as they were never joined herein by service of process (see CPLR 1003). The caption ofthis action is hereby amended to reflect these changes and all future proceedings shall be captioned accordingly. The moving papers further established the defaults in answering on the part of the remaining defendants. Accordingly, the defaults of all such defendants are hereby fixed and determined. Since the plaintiff has been awarded summary judgment against the answering defendant and has established a default in answering by the remaining defendants, the plaintiff is entitled to an order appointing a referee to compute amounts due under the subject note and mortgage (see RPAPL tj 132 1 ;Bank of East Asia, Ltd. v Smith, 20 1 AD2d 522,607 NYS2d 43 1 [2d Dept 19941;Vermont Fed. Bank v Chase, 226 AD2d 1034.641 NYS2d 440 [3d Dept 19961; LaSaiie Bank, NA pace, 3 1 Misc3d 627,919 NYS2d 794 [Sup. Ct. Siiffollc County 201 I], uff'd, 100 AD3d 970, 955 NYS2d 161 12d Dept 20121). [* 6] Citimortgage, Inc. v Ivey, et. al. Index No Page 6 In view of the foregoing, the instant motion (#001) by the plaintiff for, among other things, the appointment of a referee to compute amounts due under the mortgage for which foreclosure is sought in this action is granted to the extent indicated herein. The proposed order appointing a referee, as modified by the court to reflect the terms of this order, has been signed simultaneously herewith. t -

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