Stewart v Banque Portfolio Corp.

[*1] Stewart v Banque Portfolio Corp. 2013 NY Slip Op 50553(U) Decided on April 11, 2013 Supreme Court, Kings County Schack, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 April 11, 2013
Supreme Court, Kings County

Loveta Stewart and MAGDELENE RENAUD, , Plaintiffs,

against

Banque Portfolio Corp., PRIVATE CAPITAL GROUP and PETER KAMRAN, Defendants.



19362/12



Appearances:

Plaintiff

Alan Drezin, Esq.

Brooklyn NY

Defendant

Concepcion A. Montoya, Esq.

Hinshaw and Culbertson, LLP

NY NY

Arthur Schack, J.

The following papers numbered 1 to 4 read on this motion:Papers Numbered:

Order to Show Cause and Exhibits ______________________1

Notice of Cross-Motion and Exhibits2

Amended Affirmation of Defense Counsel ________________3

Memoranda of Law___________________________________4

________________________________________________________________________

This instant proceeding is the latest in a long and tangled history of legal actions involving a two-family house located at 2027 Strauss Street, Brooklyn, New York (Block 3555, Lot 20, County of Kings). Plaintiffs LOVETA STEWART (STEWART) and MAGDALENE RENAUD (RENAUD) allege that, after a series of real estate transactions for the premises [*2]including plaintiff STEWART's conveyance of the premises to plaintiff RENAUD to stop a foreclosure sale of the premises in National City Bank of Indiana v Renaud, et. al., Index No. 5767/05, plaintiff RENAUD, on October 13, 2005, was fraudulently induced to execute documents to sell the premises to defendant BANQUE PORTFOLIO CORP. (BPC), when both plaintiffs believed they were refinancing the premises. Plaintiffs commenced the instant action on September 25, 2012, based upon the alleged October 13, 2005-fraudulent conveyance. Plaintiffs seek: to declare null and void the October 13, 2005-deed; $10,000,000 in compensatory damages for the alleged fraud committed against them; and, $10,000,000 in punitive damages for the alleged fraud committed against them.

Plaintiffs'instant order to show cause is to declare null and void the October 13, 2005-deed by which plaintiff RENAUD transferred the subject premises to defendant BPG. Defendants BPC and PRIVATE CAPITAL GROUP (PCG) cross-move to dismiss the complaint in its entirety, pursuant to CPLR Rule 3211 (a) (1), (7) and (10), claiming: the statute of limitations for fraud claims bars plaintiffs' complaint; plaintiffs have not pled fraud with particularity, pursuant to CPLR Rule 3016 (b); or, in the alternative, if plaintiffs' fraud claims are sufficient for pleading purposes, documentary evidence refutes such claims; and, plaintiff STEWART lacks standing because she is not in privity with defendants BPC and PCG.

For the reasons to follow, the Court denies plaintiffs' order to show cause to declare null and void the October 13, 2005-deed by which plaintiff RENAUD transferred the subject premises to defendant BPG and grants the cross-motion of defendants BPC and PCG to dismiss the complaint in its entirety. It is clear that the instant action was commenced on September 27, 2012, which was more than six years after October 13, 2005, the date that defendants BPC and PCG allegedly committed fraud upon plaintiffs.

Background

Plaintiff STEWART owned the property located at 2027 Strauss Street, Brooklyn,

New York 11212. On July 24, 2003, plaintiff STEWART, to avoid foreclosure on a 2000 mortgage originally given by AAMES FUNDING CORPORATION, conveyed the subject premises to her friend RENAUD for $290,000. The deed was recorded on January 27, 2004 in the New York City Department of Finance City Register at City Register File Number (CRFN) 2004000049002. At the July 24, 2003 closing, plaintiff RENAUD executed a mortgage and note for $232,000 with lender FIRST FRANKLIN FINANCIAL CORP.(FFFC). This mortgage was recorded on January 27, 2004 in the New York City Department of Finance City Register at CRFN 2004000049003. GRP LOAN, LLC, a subsequent assignee of the AAMES FUNDING CORPORATION mortgage, recorded the satisfaction of this mortgage on March 9, 2004 in the New York City Department of Finance City Register at CRFN 2004000272298.

The RENAUD mortgage with FFFC was subsequently assigned by FFFC to NATIONAL CITY BANK OF INDIANA (NCBI). After RENAUD defaulted in her payments, NCBI commenced the above-mentioned foreclosure action, Index No. 5767/05, on February 25, 2005. On July 22, 2005, Justice Wayne Saitta issued a judgment of foreclosure and sale for the subject premises.

While facing a foreclosure sale of the subject premises, plaintiffs' instant complaint alleges that plaintiff STEWART was informed by "a Mr. Hill whom she knew from the neighborhood" [¶ 11 of complaint] that a mortgage company he knew could help her. Mr. Hill, [*3]according to ¶ 12 of the complaint, took both plaintiffs on September 15, 2005 to the office of defendant BPC, where they met defendant PETER KAMRAN, who allegedly told them that "he would assist her [RENAUD] in refinancing the property." Plaintiffs allege that after a series of phone calls and negotiations, Mr. Hill drive them back to defendant BPC office on October 13, 2005 [¶ 14 of complaint] and they "were escorted into a conference room. At this point a pile of papers were put in front of Magdalene Renaud. She was told to sign them. Neither Magdalene Renaud not Loveta Stewart read the papers [emphasis added]." Plaintiffs allege, in ¶'s 13 -18 of the complaint, that they were told that they would receive $20,000 to repair the premises and that plaintiff STEWART would pay defendant BPG $1,000 per month and had to continue to pay real estate taxes, utilities and make repairs. Plaintiffs allege, in ¶16 of the instant complaint, that "[t]hey then signed the papers and received a check in the amount of $20,000, which was made out to Magdalene Renaud."

At the October 13, 2005-closing, plaintiff RENAUD entered into a Stipulation and Agreement with defendant BPC [exhibit A of order to show cause and exhibit H of cross-motion], signing it before a notary public. It states, in ¶ 1, that plaintiff RENAUD "will convey clear title" to the subject premises for which BPC "will pay $20,000.00 in consideration for the . . . conveyance." Plaintiff RENAUD agreed to pay $1,000 per month for use and occupancy [¶ 3]. Further, plaintiff RENAUD, in ¶ 11, agreed that to purchase back the premises she had to pay to defendant BPC $378,000 on or before November 15, 2006. In ¶ 17, it states that defendant BPC "will use its best efforts to acquire, satisfy or reinstate the existing mortgage on the Premises up to a sum of $265, 000.00 . . . If THE COMPANY [BPC] is unable to perform the aforementioned condition, THE COMPANY will notify the OCCUPANT [RENAUD] within thirty (30) days from the date thereof and have the right to terminate this Agreement [emphasis added]." Further, in ¶ 6, plaintiff RENAUD consented to the issuance of a writ of assistance, stayed until November 15, 2006 if she has not defaulted under the Agreement and, in ¶ 8, plaintiff RENAUD agreed that "[f]ailure by the OCCUPANT to comply with the terms, stipulation and conditions set forth in this agreement shall be deemed a material defect and shall entitle THE COMPANY to immediate execution and/or enforcement of the Writ of Assistance set forth above." Further, in ¶ 12, plaintiff RENAUD agreed that "in the event of default . . . including, but not limited to, the failure to make any of the payments called for hereunder on a timely basis, THE COMPANY may immediately proceed to schedule an eviction upon five (5) days prior written notice" to plaintiff RENAUD. Also, at the October 13, 2005-closing, plaintiff RENAUD executed other documents consistent with transferring ownership rights to BPC including the Deed, the Smoke Detector Affidavit of Compliance, the New York City Real Property Transfer Tax Return and the New York State Real Property Transfer Tax Return [exhibit I of cross-motion].

Subsequently, an attorney representing both defendant PCG and plaintiff

RENAUD reached an agreement with NCBI that the FFFC mortgage, assigned to NCBI,

would be satisfied for $264,677.47 [exhibit N of cross-motion]. A satisfaction of the FFFC mortgage was recorded on January 12, 2006 in the New York City Department of Finance City Register at CRFN 2006000050189.

Plaintiffs, in 2006, subsequently commenced a pro se action, Loveta Stewart Stewart and Magdalene Renaud v Banque Protfolio Corp., Index No. 36365/06, claiming fraud and misrepresentation [exhibit Q of cross-motion] against defendants. Ultimately, plaintiffs [*4]defaulted in this action and the action was removed from the Court's calendar [exhibit R of cross-motion].

Defendant BPC alleges that it served plaintiff RENAUD with a 90-day notice to quit, for violation of the October 13, 2005 Stipulation and Agreement, on January 11, 2012, which was followed by service of a Holdover Petition in the Housing Part of Civil Court on May 15, 2012. The eviction proceedings were pending when plaintiffs commenced the instant action on September 27, 2012.

Discussion

In adjudicating the instant order to show cause of plaintiffs STEWART and

RENAUD and the instant cross-motion of defendants BPC and PCG, both matters can be resolved by addressing the branch of defendants' cross-motion to dismiss based upon a statute of limitations violation. The Court of Appeals instructed in Sargiss v Magarelli

(12 NY3d 527, 532 [2009]) that, pursuant to CPLR § 213 (8), a fraud action must becommenced "the greater of six years from the date the cause of action accrued or two years from the time the plaintiff or the person under whom the plaintiff claims discovered the fraud, or could with reasonable diligence have discovered it." Further, the Appellate Division, Second Department, held in Vilsack v Meyer, 96 AD3d 827, 828 [2012]:

" On a motion to dismiss a complaint . . . on statute of limitations

grounds, the moving defendant must establish, prima facie, that the

time in which to commence the action has expired. The burden then

shifts to the plaintiff to raise an issue of fact as to whether the statute

of limitations is tolled or is otherwise inapplicable'" (Zaborowski v

Local 75, Serv. Empls. Int. Union, AFL-CIO, 91 AD3d 768, 768-769,

quoting Baptiste v Harding-Marin, 88 AD3d 752).

(See Brooks v AXA Advisors, LLC, 104 AD3d 1178 [4d Dept 2013]).

Plaintiffs' fraud allegations, in the instant action, are based upon events which occurred on October 13, 2005. Thus, pursuant to CPLR § 213 (8), plaintiffs' fraud claims had to be commenced no later than October 13, 2011. Plaintiffs commenced the instant action on September 27, 2012, more than six years after the alleged fraud.

Thus, plaintiffs make a prima facie case to dismiss the instant action because it is time-barred by the statute of limitations. The burden now shifts to plaintiffs "to raise an issue of fact as to whether the statute of limitations is tolled or is otherwise inapplicable."

(Vilsack v Meyer, supra). Plaintiffs fail to do so. Further, this is not the first action brought by plaintiffs against defendants claiming fraud from the same underlying facts. Plaintiffs, as mentioned above, commenced a pro se action in this Court, Loveta Stewart Stewart and Magdalene Renaud v Banque Protfolio Corp., et. al., Index No. 36365/06, on November 28, 2006. Thus plaintiffs cannot contend that they did not discover fraud until recently in light of the 2006 action.

Therefore, the instant action is time barred, pursuant to CPLR § 213 (8), and is dismissed. With the dismissal of the instant action for violation of the statute of [*5]

limitations, the Court does not have to address the other branches of defendants' motion

to dismiss or the plaintiffs' instant order to show cause.

Conclusion

Accordingly, it is

ORDERED, that the instant order to show cause of plaintiffs LOVETA STEWART and MAGDELENE RENAUD to declare null and void the October 13, 2005-deed by which plaintiff RENAUD transferred the subject premises to defendant BANQUE PORTFOLIO CORP. is denied, and it is further

ORDERED, that the cross-motion of defendants BANQUE PORTFOLIO CORP. and PRIVATE CAPITAL GROUP (PCG) to dismiss the complaint in its entirety, pursuant to CPLR Rule 3211 (a), is granted because the instant complaint, pursuant to CPLR § 213 (8), is time-barred by the statute of limitations.

This constitutes the Decision and Order of the Court.

ENTER

________________________________HON. ARTHUR M. SCHACKJ. S. C.