Freedom Mtge. Corp. v Akther

[*1] Freedom Mtge. Corp. v Akther 2013 NY Slip Op 51015(U) Decided on June 27, 2013 Supreme Court, Queens County McDonald, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 27, 2013
Supreme Court, Queens County

Freedom Mortgage Corp., Plaintiff,

against

Rima Akther, if living or if either or all be dead, their wives, husbands, heirs-at law, next of kin, distributees, executors, administrators, assignees, lienors and generally all persons having or claiming under, by or through said RIMA AKTHER by purchase, inheritance, lien or otherwise, of any right, title or interest in and to the premises described in the complaint herein, and the respective husbands, wives, widow or widowers of them, if any, all of whose names are unknown to plaintiff; MOHAMMED HOSSAIN, if living, or if either or all be dead, their wives, husbands, heirs-at-law, next of kin, distributees, executors, administrators, assignees, lienors and generally all persons having or claiming under by or through said MOHAMMED HOSSAIN by purchase, inheritance, lien or otherwise, of any right, title or interest in and to the premises described in the complaint herein, and the respective husbands, wives, widow or widowers of them, if any, all of whose names are unknown to plaintiff; MOHAMMED K. ALAM, if living, or if either or all be dead, their wives, husbands, heirs-at-law, next of kin, distributees, executors, administrators, assignees, lienors and generally all persons having or claiming under by or through said MOHAMMED K. ALAM, by purchase, inheritance, lien or otherwise, of any right, title or interest in and to the premises described in the complaint herein, and the respective husbands, wives, widow or widowers of them, if any, all of whose names are unknown to plaintiff; RIMA AKTHER; MOHAMMED HOSSAIN; MOHAMMED K. ALAM; ABIR MIAH; AMERICAN EXPRESS; AMERICAN EXPRESS CENTURION BANK; ASAP EXPEDITING CORP.; CADLEROCK JOINT VENTURE LP; CAPITAL ONE BANK; CARD SERVICES INC.; CHASE BANK USA, N.A.; ERIN CAPITAL MANAGEMENT LLC; ERIN SERVICES CO., LLC; FIARMONT FUNDING LTD; FCC NATIONAL BANK; FORMA GLASS CORP.; GREAT SENECA FINANCIAL CORP.; HERITAGE ASSET MGT., INC; HSBC BANK NEVADA N.A.; JP MORGAN CHASE BANK NA; LVNV FUNDING LLC; MELROSE CREDIT UNION; MIDLAND CREDIT MANAGEMENT INC; MIDLAND FUNDING LLC; MOHAMMED HASAN; MOHAMMED KAMRUJJAMAN; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE AND MORTGAGEE OF RECORD; MRC RECEIVABLES CORP; PALISADES COLLECTION LLC; PORTFOLIO RECOVERY ASSOCIATES, LLC; PRIME TIME TRANSPORTATION INC; RAB PERFORMANCE RECOVERIES LLC; RAM DULARI; RETAILERS NATIONAL BANK/TARGET VISA; S & P CAPITAL INVESTMENTS INC., ETC; SARASOTA, CCM, INC.; UNIFUND CCR PARTNERS A/O FIRST USA BANK; VELOCITY INVESTMENT, LLC; VICKY GROCERY INC.; WORLDWIDE ASSET PURCHASING, LLC; CRIMINAL COURT OF THE CITY OF NEW YORK; NEW YORK CITY DEPARTMENT OF FINANCE; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; NEW YORK CITY PARKING VIOLATIONS BUREAU; NEW YORK CITY TRANSIT ADJUDICATION BUREAU; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; UNITED STATES OF AMERICA - INTERNAL REVENUE SERVICE; WORKERS COMPENSATION BOARD OF NEW YORK STATE; STATE OF NEW YORK; UNITED STATES OF AMERICA; "JOHN DOES" and "JANE DOES", said names being fictitious, parties intended being possible tenants or occupants of premises, and corporations, other entities or persons who claim, or may claim, a lien the premises, Defendants.



FREEDOM MORTGAGE CORP., Plaintiff, - -

against

CENTURION CAPITAL CORPORATION, Defendant.



15637/08

Robert J. McDonald, J.

The following papers numbered 1 to 17 were read on this motion by plaintiff, FREEDOM MORTGAGE CORP., for an order striking the answer and granting summary judgment against the answering defendant MOHAMMED HOSSAIN; awarding plaintiff a default judgment against all remaining non-answering and non-appearing defendants; appointing a referee to compute; amending the caption; and consolidating the two above-captioned cases; and the cross-motion of defendant MOHAMMED ALAM for an order pursuant to CPLR 3215(c) dismissing the plaintiff's complaint on the ground that the plaintiff failed to take proceedings for the entry of judgment within one year after defendant ALAM's default; or in the alternative for an order vacating the defendant's default and compelling plaintiff to accept the answer of defendant ALAM:

Papers

Numbered

Notice of Motion-Affirmation-Exhibits............ ....1 - 6

Defendant Alam's Notice of Cross-Motion...............7 - 10 [*2]

Affirmation in Opposition to Cross-Motion............11 - 13

Reply Affirmation-Exhibits...........................14 - 17

_________________________________________________________________

This foreclosure action pertains to the property located at 37-03 63rd Street, Woodside, New York. The action was commenced by the filing of a summons and complaint and notice of pendency on June 24, 2008. A supplemental summons and amended complaint and amended notice of pendency were filed with the Queens County Clerk on September 25, 2009. According to the complaint, on June 2, 2005, RIMA AKTHER executed a note on the property in favor of Fairmont Funding in the amount of $347,200.00. The note provided for monthly installment payments of $2,137.77, beginning on August 1, 2005. As collateral security for the payment of the note, defendants RIMA AKTHER, MOHAMMED HOSSAIN, and MOHAMMED K. ALAM executed a mortgage dated June 2, 2005. The mortgage was assigned to plaintiff FREEDOM MORTGAGE COMPANY by MERS as Nominee for Fairmont Funding, LTD on June 26, 2008. The complaint asserts that plaintiff is still the owner and holder of the note and mortgage which is secured by a lien against the defendant's residence. It is alleged that the defendants defaulted on the mortgage beginning on December 1, 2007 when they failed to make the monthly mortgage payments.

Plaintiff subsequently accelerated the defendants' mortgage and brought the instant action to foreclose. Plaintiff asserts that the summons contained the required notice pursuant to RPAPL § 1320. On September 16, 2011, a second action was commenced by the plaintiff under Index Number 21672/2011 against defendant CENTURION CAPITAL CORPORATION. This action is based upon a debt owed by defendant Alam in the amount of $2,231.58 which was docketed in the Queens County Clerk's Office.

Plaintiff's counsel asserts that as the borrowers do not reside at the foreclosed premises, which is a one to four family dwelling, that a mandatory settlement conference is not required pursuant to RPAPL § 3408.

In support of the motion for summary judgment, the plaintiff submits the affirmation of counsel, Richard Fay, Esq., the affidavit of Iris McLane, Vice President of Loancare, a division of FNF Servicing, the holder and servicer of the subject loan; a copy of the note and mortgage, copies of the affidavits of service on all the defendants; a copy of the pleadings; copies of the assignments of the note and mortgage; a copy of the 90 day notice of intent to foreclose; copy of the RPAPL § 1304 notices sent to the defendant with the summons and complaint. [*3]

Plaintiff contends that all defendants were duly served with a copy of the summons and complaint with the notices required by RPAPL §§ 1303 and 1304. RIMA AKTHER, MOHAMMED HOSSAIN, and MOHAMMED K. ALAM were served by publication pursuant to the order of this court dated June 22, 2009. Counsel states that all defendants are in default except ERIN CAPITAL MANAGEMENT LLC; FORMA GLASS CORP; ERIN SERVICES CO., LLC; WORKERS COMPENSATION BOARD OF THE STATE OF NEW YORK who appeared by their attorney and waived notice of further applications. Defendant MOHAMMED HOSSAIN submitted an answer through his attorney consisting only of general denials. The guardian ad litem Dominic A. Villoni, Esq., appointed for RIMA AKTHER, MOHAMMED HOSSAIN, and MOHAMMED K. ALAM submitted a report dated June 27, 2010 in which he states that "there is no question that the plaintiff is entitled to bring the instant action to foreclose its mortgage and that defendants RIMA AKTHER, MOHAMMED HOSSAIN, and MOHAMMED K. ALAM would have no defense to the action." He states that he has no objection to the appointment of a referee to compute the sums due and owing and for entry of a final judgment of foreclosure.

In her affidavit dated May 5, 2011, Ms. McLane states that the note and mortgage executed by the defendants on June 2, 2005 were assigned to plaintiff by instrument dated June 26, 2008. She states that despite due demand defendants Rima Akther, Mohammed Hosain and Mohammed K Alam breached their obligation under the note and mortgage by failing to tender monthly installments commencing January 1, 2008. She states that despite due demand sent to the borrowers on April 17, 2008, defendants failed to cure their default and there is presently due an owing $423,754.71.

Plaintiff asserts that the evidence demonstrates that Rima Akther signed the note and Rima Akther, Mohammed Hossain and Mohammed K. Alam, signed the mortgage and failed to pay the installments as provided in the note and mortgage. Counsel asserts that plaintiff is entitled to summary judgment against Hossain and is entitled to a default judgment against the remaining defendants as he has shown, prima facie, that the plaintiff is the assignee and holder of a note and mortgage for which the defendants are in default (see Bancorp v Pompee, 918 NYS2d 574[2d Dept. 2011]; Wells Fargo Bank v Cohen, 80 AD3d 753 [2d Dept. 2011]). Likewise, plaintiff asserts the 90 day notice was sufficient pursuant to RPAPL §1304 and was properly served upon the defendants' last known address pursuant to RPAPL § 1304(2).

Counsel for defendants, Mohammed Alam and Mohammed Hossain submits an affirmation in opposition to the plaintiff's motion [*4]for summary judgment and cross-moves on behalf of defendant Alam to dismiss the complaint pursuant to CPLR 3215(c) on the ground that Alam never answered the summons and complaint and was in default and plaintiff did not move for a default judgment or move for an order of reference since the time of the defendant's default more than one year ago. Defendant asserts that pursuant to CPLR 3215(c) the plaintiff's action for foreclosure must be dismissed as abandoned as plaintiff has failed to take proceedings for the entry of a judgment within one year after the defendant's default. Alam was served by publication in October 2009 and failed to answer the summons and complaint. Plaintiff submits an affidavit of publication dated July 7, 2010. Defendant asserts that the plaintiff, in the more than 3 years between Alam's default and the time of the service of this motion in January 2013 has not taken any steps to move for a default judgment or order of reference. Counsel asserts that the plaintiff has not provided a reasonable excuse for the delay nor a meritorious cause of action. Defendant contends that the plaintiff's papers do not demonstrate that Freedom Mortgage Corp was the assigneee or holder of the Mortgage and Note on the date of the commencement of the action. In fact, defendant alleges that the documents indicate that the assignment was made to plaintiff on June 26, 2008, two days after the action was commenced by the filing of a summons and complaint. Further counsel asserts that summary judgment must be denied as the plaintiff does not assert that the plaintiff is the physical holder of the note or was the holder of the note at the time of the commencement of the action. In the alternative, defendant Alam cross-moves for an order compelling the plaintiff to accept his answer.

In response to the cross-motion, plaintiff asserts that the plaintiff has a meritorious cause of action and the delay in bringing the motion "resulted from forces beyond plaintiff's control." Plaintiff states that it had a great deal of trouble locating all necessary parties and joining said defendants as party-defendants which was not completed until mid to late 2010 with the appearance of the guardian ad litem. Plaintiff contends that an order of publication and appointment of a guardian ad litem was necessary as the defendants could not located despite due diligence. Plaintiff contends that it could not move for an order of reference because plaintiff could not file an affirmation attesting to the veracity of the allegations contained in the filings pursuant to AO/431/11 because plaintiffs current systems were not designed so that the information needed to comply with the Administrative Order was readily available. Plaintiff states that it was required to formulate and implement new procedures and protocols designed to comply with the rigors [*5]of AO/548/10 and AO/431/11 which did not occur until December 28, 2012. Counsel states that immediately upon receipt of the plaintiff's verification the instant motion was prepared. Counsel states that plaintiff never intended to abandon the action but instead did everything it could to comply with the newly imposed requirements for plaintiff to prosecute the mortgage foreclosure action.

Upon review and consideration of the defendant's motion, plaintiff's affirmation in opposition and the defendant's reply thereto, this court finds that the defendant's motion for an order dismissing the complaint of the non-answering defendants as abandoned pursuant to CPLR 3215(c) is granted.

CPLR 3215(c) provides:

"If the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed."

In Giglio v NTIMP, Inc., 86 AD3d 301[2d Dept. 2011], the Appellate Division stated that "the language of CPLR 3215(c) is not, in the first instance, discretionary, but mandatory, inasmuch as courts "shall" dismiss claims (CPLR 3215 [c]) for which default judgments are not sought within the requisite one-year period, as those claims are then deemed abandoned....The one exception to the otherwise mandatory language of CPLR 3215(c) is that the failure to timely seek a default on an unanswered complaint may be excused if "sufficient cause is shown why the complaint should not be dismissed." The courts have interpreted that provision as requiring both a reasonable excuse for the delay in timely moving for a default judgment and a demonstration

that the cause of action is potentially meritorious (see Sicurella v 111 Chelsea, LLC, 67 AD3d 996 [2d Dept. 2009]; Staples v Jeff Hunt Developers, Inc., 56 AD3d 459 [2d Dept. 2008]; Durr v New York Community Hosp., 43 AD3d 388 [2d Dept. 2007]).

Here, defendant Alam has been in default over two years since the guardian ad litem filed his report in June 2010. Plaintiff has not provided the court with any reason for its failure to move for a default judgment in that time other than stating that it had not yet been able to prepare an affirmation in compliance with Administrative Order 431/11 of the Chief Administrative Judge of the Courts. However, plaintiff has not [*6]provided a sufficient and substantiated reason for not being able to review its records within that time period to confirm the accuracy of its pleadings so as to comply with the administrative order (see Costello v Reilly, 36 AD3d 581 [2d Dept. 2007] [unsubstantiated excuse proffered by plaintiff's counsel not deemed reasonable]; BAC Home Loans Servicing, LP v Musa, 35 Misc 3d 1241A [Sup. Ct., Dutchess Cty., 2012] [action dismissed where not moved into foreclosure settlement part in two and half years]; Onewest Bank, FSB v Ryes, 37 Misc 3d 1202A [Sup. Ct. Queens Cty. 2012]; U.S. Bank N.A. v Solorin, 34 Misc 3d 292 [Sup. Ct Queens Cty. 2011]).

Therefore, as plaintiff has failed to take proceedings for the entry of judgment within one year after the default, the motion by defendant MOHAMMED ALAM to dismiss the plaintiff's complaint as abandoned is granted (see CPLR 3215(c); Van Hoesen v Dolen, 94 AD3d 1264 [3rd Dept. 2012]; Kohn v Tri-State Hardwoods, Ltd., 92 AD3d 642 [2d Dept. 2012]; Ryant v Bullock, 77 AD3d 811 [2d Dept. 2010]; Solano v Castro, 72 AD3d 932 [2d Dept. 2010]; Costello v Reilly, 36 AD3d 581 [2d Dept. 2007]). For the same reason the motion for a default judgment against the remainder of the defaulting parties is likewise denied.

That branch of the plaintiff's motion for an order amending the caption to substituting "JOHN DOES" and "JANE DOES" with HECTOR ORTIZ and MARIA ORTIZ and striking defendants ABIR MIAH, MOHAMMED HASAN, MOHAMMED KAMRUJJAMAN and RAM DULARI and consolidating the two above captioned cases for trial is granted. Index No. 21672/11 shall be consolidated under Index No. 15637/08.

The Clerk upon being served with a certified copy of this order with notice of entry is directed to transfer all papers filed un Index No. 21672/11 to the file of Index No. 15637/08.

The amended and consolidated caption shall read as follows:

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF QUEENS -

- - - - - - - - - - - - - - - - - - - - X

FREEDOM MORTGAGE CORP.,Index No. 15637/08

Plaintiff,

- against - [*7]

RIMA AKTHER, if living or if either or all

be dead, their wives, husbands, heirs-at law, next of kin, distributees, executors, administrators, assignees, lienors and generally all persons having or claiming under, by or through said RIMA AKTHER by purchase, inheritance, lien or otherwise, of any right, title or interest in and to the premises described in the complaint herein, and the respective husbands, wives, widow or widowers of them, if any, all of whose names are unknown to plaintiff; MOHAMMED HOSSAIN, if living, or if either or all be dead, their wives, husbands, heirs-at-law, next of kin, distributees, executors, administrators, assignees, lienors and generally all persons having or claiming under by or through said MOHAMMED HOSSAIN by purchase, inheritance, lien or otherwise, of any right, title or interest in and to the premises described in the complaint herein, and the respective husbands, wives, widow or widowers of them, if any, all of whose names are unknown to plaintiff; MOHAMMED K. ALAM, if living, or if either or all be dead, their wives, husbands, heirs-at-law, next of kin, distributees, executors, administrators, assignees, lienors and generally all persons having or claiming under by or through said MOHAMMED K. ALAM, by purchase, inheritance, lien or otherwise, of any right, title or interest in and to the premises described in the complaint herein, and the respective husbands, wives, widow or widowers of them, if any, all of whose names are unknown to plaintiff; RIMA AKTHER; MOHAMMED HOSSAIN; MOHAMMED K. ALAM; AMERICAN EXPRESS; AMERICAN EXPRESS CENTURION BANK; ASAP EXPEDITING CORP.; CADLEROCK JOINT VENTURE LP; CAPITAL ONE BANK; CARD SERVICES INC.; CHASE BANK USA, N.A.; ERIN CAPITAL MANAGEMENT LLC; ERIN SERVICES CO., LLC; FIARMONT FUNDING LTD; FCC NATIONAL BANK; FORMA GLASS CORP.; GREAT SENECA FINANCIAL CORP.; HERITAGE ASSET MGT., INC; HSBC BANK NEVADA N.A.; JP MORGAN CHASE BANK NA; LVNV FUNDING LLC; MELROSE CREDIT UNION; MIDLAND CREDIT MANAGEMENT INC; MIDLAND FUNDING LLC; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE AND MORTGAGEE OF RECORD; MRC RECEIVABLES CORP; PALISADES COLLECTION LLC; PORTFOLIO RECOVERY ASSOCIATES, LLC; PRIME TIME TRANSPORTATION INC; RAB PERFORMANCE RECOVERIES LLC; RETAILERS NATIONAL BANK/TARGET VISA; S & P CAPITAL INVESTMENTS INC., ETC; SARASOTA, CCM, INC.; UNIFUND CCR PARTNERS A/O FIRST USA BANK; VELOCITY INVESTMENT, LLC; VICKY GROCERY INC.; WORLDWIDE ASSET PURCHASING, LLC; CRIMINAL COURT OF THE CITY OF NEW YORK; NEW YORK CITY DEPARTMENT OF FINANCE; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; NEW YORK CITY PARKING VIOLATIONS BUREAU; NEW YORK CITY TRANSIT ADJUDICATION BUREAU; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; UNITED STATES OF AMERICA - INTERNAL REVENUE SERVICE; WORKERS COMPENSATION BOARD OF NEW YORK STATE; STATE OF NEW YORK; UNITED STATES OF AMERICA; HECTOR ORTIZ, MARIA ORTIZ and CENTURIAN CAPITAL CORPORATION,Defendants. [*8]-

- - - - - - - - - - - - - - - - - - - - - x

That branch of the plaintiff's motion for an order striking the answer of defendant Mohammed Hossain and granting summary judgment in favor of the plaintiff against said defendant is granted. Plaintiff established its prima facie entitlement to judgment as a matter of law by submitting a mortgage, an unpaid note, and an affidavit of its employee, who averred that she reviewed the relevant papers and attested to the defendant's default (see Wachovia Bank, Natl. Assn. v Carcano, 2013 NY Slip Op 3082 [2d Dept. 2013]; Citibank, NA v Van Brunt Props, LLC, 95 AD3d 1158 [2nd Dept 2012]; Flagstar Bank v Bellafiore, 94 AD3d 1044 [2d Dept. 2012]; HSBC Bank USA, NA v Schwartz, 88 AD3d 961 [2d Dept. 2011]). Defendant failed to raise any triable issues of fact in his answer and waived the defense of lack of standing, having failed to assert the defense in his answer or to file a timely pre-answer motion raising that defense (see US Bank N.A. v Eaddy, 79 AD3d 1022 [2d Dept. 2010]; Countrywide Home Loans, Inc. v Gress, 68 AD3d 709 [2d Dept. 2009]).

This constitutes the decision and order of the Court.

Dated: June 27, 2013

Long Island City, NY

______________________________

ROBERT J. MCDONALD

J.S.C.