US Bank Natl. Assn. v Mizell

[*1] US Bank Natl. Assn. v Mizell 2013 NY Slip Op 51065(U) Decided on June 25, 2013 Supreme Court, Kings County Joseph, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 25, 2013
Supreme Court, Kings County

US Bank National Association, AS SUCCESSOR TRUSTEE FOR BANK OF AMERICA, NATIONAL ASSOCIATION, (SUCCESSOR BY MERGER TO LASALLE BANK NATIONAL ASSOCIATION) AS TRUSTEE FOR MORGAN STANLEY LOAN TRUST 2007-8XS, Plaintiff,

against

Sheryll Mizell, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, P.C.F.S., MICHELLE MIZELL, OPHELIA MIZELL, ROBERT PRICE, Defendant(s).



11315/2009



Attorney Information:

Charles Termini, Esq. (Attorney for Co-Defendant Ophelia Mizell)

825 Fairview Avenue

Oceanside, NY 11572

Co-Defendant Sheryll Mizell (Pro Se)

Frankel Lambert Weiss Weisman & Gordon, LLP (Attorney for Plaintiff)

20 West Main Street

Bayshore, New York 11706

Ingrid Joseph, J.

Recitation, as required by CPLR §2219 (a), of the papers

considered in the review of this Motion

PapersNumbered

Notice of Motion and Affidavits Annexed .1-2; 3-4 [*2]

Cross Motion and Affidavits Annexed...............5 -6

Opposition to Motion /Answering Affidavits .7;8

Opposition to Cross Motion/Answering Affidavits....9

Replying Affidavits/Supplemental Affidavits....10

In this foreclosure proceeding, defendant Sheryll Mizell filed two motions, on May 25, 2012 and December 28, 2012, to vacate a prior order, compel discovery, dismiss the proceeding, and for other relief pursuant to Civil Practice Law and Rules §§ 5015 (a) 1), (2), (3) and (4); 3013; 3018 (a); 3042 ( c), (d); 3101 (a) (1), (2), (4) and (d); 4518 (a); 4101 (1); and 3211 (a)(1), (2), (3), (7) and (10). Co-defendant Ophelia Mizell, who is the mother of Sheryll Mizell, filed a cross-motion, on December 13, 2012, to vacate and set aside her default in answering. She also seeks leave to interpose a late answer, for discovery and inspection, and for a stay in this proceeding pending a hearing on the validity of the deed for the premises known as 649 Essex Street, Brooklyn, New York.

Plaintiff US Bank National Association, as Successor Trustee for Bank of America, National Association, (Successor by Merger to LaSalle Bank National Association) as Trustee for Morgan Stanley Loan Trust 2007-8XS ("Plaintiff") submitted separate opposition papers in response to Sheryll Mizell's motion and Ophelia Mizell's cross motion. Essentially, the plaintiff contends that Sheryll Mizell's motion lacks merit and should be denied on res judicata grounds. Plaintiff asserts that the cross-motion should be denied on the ground that Ophelia Mizell failed to include a proposed answer and based upon its contention that she failed to satisfy either prong for relief under CPLR § 5015(a)(1).

Plaintiff commenced this proceeding by the filing the Summons and Complaint on May 8, 2009 and recording the Notice of Pendency at Instrument No. 2007000042926. Sheryll Mizell interposed an answer

(a general denial) and an amended answer on June 25, 2009 and July 27, 2009, respectively. Plaintiff then moved by notice of motion for summary judgment and an order of reference on or about May 12, 2010, and Sheryll Mizell submitted written opposition to that motion on or about June 7, 2010. The motion was held in abeyance during the conferencing stage, until Referee Jeffrey Amster referred the matter to I.A.S. Part 18 (Hon. Bernadette Bayne) by directive dated September 16, 2010. At that time, the plaintiff's motion for summary judgment and order of reference was returnable on November 5, 2010. Sheryll Mizell submitted opposition to the motion but failed to appear on the return date. Thereafter, on November 26, 2010, Justice Bayne rendered an order ("November 26th order"), which awarded plaintiff summary judgment; designated a referee to compute the amount due and owing to the plaintiff; and ordered that defendant Sheryll Mizell's amended answer be stricken and treated as a limited notice of appearance.

Sheryll Mizell has filed five motions since the November 26th decision. On March 16, 2011, she filed a motion seeking relief pursuant to CPLR §§ 2002, 2218, 2221 (a), 3013, and 5015 (a)(1), (2) and (3). However, that motion was denied on the return date based upon Sheryll Mizell's nonappearance. She then filed an Order to Show cause, on April 8, 2011, wherein she sought, inter alia, an order compelling discovery and another motion, on August 12, 2011, for relief under CPLR §§ 2218, 3013, 3018, 3042 ( c), (d), 3101 (a)(1), (2), (4), and (d), 4518 (a), 4101(1), and 3211 (a)(1), (2), (3), (7) and (10). After oral argument, the court denied both motions in their entirety by order dated May 18, 2012 ("May 18th order"). Seven days later, on May 25, 2012, Sheryll Mizell filed a fourth motion for relief under CPLR § 5015(a)(2), (3), and (4). Contemporaneous with the filing of that motion, this foreclosure matter was re-assigned to I.A.S. Part 83 (Hon. Ingrid Joseph). This court set [*3]out a briefing schedule for submission of opposition to the May 25th motion. Ophelia Mizell, through her attorney, appeared for the first time in this matter at the November 5, 2012 conference, and the court granted her attorney's oral application for leave to file a cross-motion. Five days after Ophelia Mizell's cross-motion was filed, on December 13, 2012, Sheryll Mizell filed a fifth motion, on December 18, 2012, to compel discovery, to dismiss or vacate the November 26th order and for relief pursuant to CPLR §§ 3211 (a)(1), (2), (3), (7), and (10) and 5015 (a)(1), (2), (3), and (4).

The fourth and fifth motions seek essentially the same relief that was previously sought in the Order to Show Cause and prior motion that was reviewed and denied in the May 18th order. In accordance with the law of the case doctrine, this court is bound by the prior court's determinations (Northbay Const. Co., Inc. v Bauco Const. Corp., 64 AD3d 548, 549 [2d Dept 2009][requires a court to follow court of coordinate jurisdiction]). Therefore, this court will not reexamine Sheryll Mizell's request to compel discovery and for relief pursuant to CPLR §§ 2218; 3013; 3018; 3042 ( c) and (d); 3101 (a)(1), (2), (4), and (d); 4518 (a); 4101 (1); 3211 (a)(1), (2), (3), (7) and (10).

The only request included in the instant motions and not addressed on the merits in Sheryll Mizell's prior applications is her prayer for relief from the November 26th order pursuant to CPLR § 5015 (a)(1) through (4). Under those sections, a court may relieve a party from an order upon the following grounds: (1) excusable default, if such motion is made within one year after service of a copy of the judgment or order with written notice of its entry upon the moving party; (2) newly discovered evidence which, if introduced at the trial, would probably have produced a different result; (3) fraud, misrepresentation or other misconduct of an adverse party; or (4) if the court lacked jurisdiction to render the judgment or order.

CPLR § 5015 (a)(1) is not an applicable section of the law for Sheryll Mizell to utilize to challenge the November 26th order. CPLR § 5015(a)(1) contemplates a situation in which an order or judgment is entered on default and a party has not had an opportunity to be heard on the merits. However, Sheryll Mizell submitted written opposition to the plaintiff's motion for summary judgment and order of reference on June 7, 2010. Consequently, the November 26th order, with respect to Sheryll Mizell, was not issued on default (see generally Omega Diagnostic Imaging, P.C. v MVAIC, 30 Misc 3d 143(A) [App Term 2d, 11th, § 13th Jud. Dist. 2011]; M & C Bros., Inc. v Torum, 75 AD3d 869 [3d Dept 2010]).

Sheryll Mizell has also failed to set forth arguments or proffer any evidence that would warrant relief from the November 26th order under CPLR § 5015 (a)(2), (3), or (4). Her argument that the decision was "arbitrary and capricious" is misplaced, because the arbitrary and capricious standard of review is generally utilized by courtswhen evaluating the rationality, or lack thereof, of certain forms of administrative determinations (Halperin v City of New Rochelle, 24 AD3d 768 9 [2d Dept 2005]). Sheryll Mizell's moving papers included challenges to the substantive legal underpinnings of the decision and allegations that the court was not fair and impartial. However, this court is without the authority or is precluded as a matter of law from addressing those issues.

The grounds for relief provided in Ophelia Mizell's cross-motion are inartfully stated, but it appears that she is requesting vacatur of the November 26th order pursuant to CPLR § 5015 (a)(4), or, alternatively, 5015 (a)(1). Ophelia Mizell is also requesting that the court set aside her default in appearing in the action and that the court schedule a hearing to give her an opportunity to establish that the deed, upon which the mortgage is based, is void. [*4]

CPLR § 5015 (a)(4) provides relief from an order upon a showing that the court was without jurisdiction to render the judgment or order. When the court's jurisdiction is in issue, the plaintiff has the burden of proving by a preponderance of the evidence that personal jurisdiction was acquired over a defendant (Wells Fargo Bank, NA v Chaplin, 65 AD3d 588 [2dDept 2009] citing Bankers Trust Co. of California, N.A. v Tsoukas, 303 AD2d 343, 344 [2d Dept 2003]; Frankel v Schilling, 149 AD2d 657, 659 [2d Dept 1989]). A process server's affidavit of service establishes prima facie proof of the method of service and gives rise to a presumption of proper service (US Consults v APG, Inc., 82 AD3d 753 [2d Dept 2011]; Bank of New York v Segui, 68 AD3d 908 [2d Dept 2009]; Household Fin. Realty Corp. of NY v Brown, 13 AD3d 340 [2d Dept 2004]). The presumption of proper service of process may be rebutted and a plaintiff may be required to establish jurisdiction at a hearing by a preponderance of the evidence when there is a sworn denial containing specific facts showing that a defendant was not served with process (Wells Fargo Bank, NA v Chaplin, 65 AD3d 588 [2dDept 2009]; Mortgage Access Corp. v Webb, 11 AD3d 592 [2d Dept 2004; Bankers Trust Co. of California, N.A. v Tsoukas, 303 AD2d 343, 344 [2d Dept 2003]). A defendant who fails to swear to specific facts that rebut the statements in the process server's affidavit is not entitled to a hearing on the issue of service (Chichester v Alal-Amin Grocery & Halal Meat, 100 AD3d 8210 [2d Dept 2012]; US Bank v Arias, 85 AD3d 1014 [2d Dept 2011]; Countrywide Home Loans Servicing, LP v Albert, 78 AD3d983 [2d Dept 2010]; Scarano v Scarano, 63 AD3d 716 [2d Dept 2009]).

The record reveals that the original caption in the Summons and Complaint did not include defendant Ophelia Mizell by name. Plaintiff inserted the fictitious name, "John Doe," which is generally the procedure used when the mortgagee serves unknown or unnamed individuals entitled to notice in a foreclosure action. Plaintiff's process server, John Medina ("Mr. Medina"), indicated in the notarized affidavit of service that Ophelia Mizell was served by "personal delivery as John Doe" at the mortgaged premises on May 12, 2009 at 12:09 p.m. Mr. Medina described Ophelia Mizell as "over 65 years of age, 100 to 124 lbs, 5-0 to 5-3ft in height, female, grey hair, and black skin." These statements in the affidavit of service give rise to a presumption that Ophelia Mizell was served with process, personally, pursuant to CPLR § 308(1).

After carefully examining Ophelia Mizell's affidavit, the court finds that she has failed to set forth any facts to challenge any of the statements set forth in the affidavit, or even allege that she did not receive a copy of the summons and complaint. The only information provided to rebut the presumption of proper service is Ophelia Mizell's bare, conclusory statement that she "just became aware" of this action and "received no papers in this matter." Those statements alone, are insufficient to rebut the showing of valid service created by Mr. Medina's affidavit. In her reply to plaintiff's opposition to the motion, Ophelia Mizell provided a second affidavit in which she states that she went to the door on the alleged date of service and stood behind her long time companion, Robert Price, "when a man came looking for Sheryll Mizell." She averred further that "he did not give either Mr. Price nor myself any papers in respect to this action." Submitting evidence for the first time in reply papers is improper (Hayes v Barroga-Hayes, 103 AD3d 777 [2d Dept 2013]), but even if the evidence had been properly submitted, the court would find that the additional information is inadequate to rebut the presumption of proper service.

The court will now address Ophelia Mizell's prayer for relief from the November 26th order pursuant to CPLR § 5015 (a)(1). A motion for relief from an order issued on default must be made within one year after service of a copy of the order with notice of entry, and it is well established [*5]that the moving party must also demonstrate a reasonable excuse for its delay in appearing and answering the complaint and a meritorious defense to the action (CPLR § 5015 (a)(1); US Nat. Bank Ass'n as Trustee v Melton, 90 AD3d 742 [2d Dept 2011]) .Although dated November 26, 2010, the order was entered in the clerk's office on January 18, 2011. Plaintiff's attorney submitted an affidavit of service to establish that a copy of the order with notice of entry was served upon Ophelia Mizell at the subject premises via U.S. Postal Service on March 1, 2011. A copy of that notice was filed in the clerk's office two days later, on March 3, 2011. Approximately one year and nine months later, on December 13, 2012, Ophelia Mizell filed the instant cross-motion. However, based on this time line, relief under 5015 (a)(1) is precluded as untimely.

Even if the motion was timely, the court finds that Ophelia Mizell's excuse is not reasonable. The excuse provided by Ophelia Mizell is that she did not receive "any papers" in this matter. That excuse is vague and ambiguous, and is not supported by specific facts. Nor does it rebut the plaintiff's showing that notice of the decision was duly served upon her at the subject premises. Additionally, Ophelia Mizell provided insufficient information for the court to determine whether her defense is meritorious. The cross-motion fails to identify the basis upon which vacatur of the motion is being sought. However, the court extrapolates from Ophelia Mizell's papers that she is seeking to prevent the plaintiff from foreclosing on the subject premises on the ground that the mortgage is based upon a fraudulent deed.

It is well settled that the remedy of foreclosure is equitable in nature and may be denied in cases of estoppel, bad faith, fraud, or oppressive or unconscionable conduct (Nassau Trust Co. v Montrose Concrete Prods. Corp., 56 NY2d 175, 183 [1982]; Fifty States Management Corp. v Pioneer Auto Parks, Inc., 46 NY2d 573, 577-578 [1979]; Ferlazzo v Riley, 278 NY 289 [1938]). That is, a plaintiff-mortgagee may be prevented from foreclosing when the defendant-mortgagor's title to the mortgaged premises is derived from a forged deed or otherwise void transaction (Wargo v Jean, 77 AD3d 919, 921 [2d Dept 2010]; Johnson v Melnikoff, 65 AD3d 519 [2d Dept 2009]). There are two equitable remedies based upon fraud that may be relevant in this case (fraud in the factum and fraud in the inducement). Neither defense is available to an individual who comes to court with unclean hands (Brown v Lockwood, 76 AD2d 721 [2d Dept 1980]); however, depending on which defense applies, the deed upon which a mortgage is based may be deemed either void ab initio or voidable. Fraud in the factum occurs when a deed is forged or obtained from an individual who was induced to sign something completely different than what he or she thought they were signing (false pretenses) (GMAC Mtge. v Chan, 56 AD3d 521 [2d Dept 2008]; Dalessio v Kressler, 6 AD3d 57, 61-61 [2d Dept 2004] citing First Nat. Bank of Odessa v Fazzari, 10 NY2d 394 [1961]). When fraud in the factum applies, a deed may be deemed void ab initio and any mortgage that was obtained based upon such a deed is invalid. By contrast, the defense of fraud in the inducement may render a deed voidable, and that defense may be based upon facts that occurred prior to or subsequent to the execution of a deed (Dalessio, 6 AD3d at 60 [2d Dept 2004]). The elements required for fraud in the inducement include misrepresentation of a material fact, made with knowledge of the falsity and intent to induce reliance thereon, and damages (Introna v Huntington Learning Centers, Inc., 78 AD3d 896, 898 [2d Dept 2010]).

Ophelia Mizell, a seventy-five year old woman, claimed she owned the subject premises free and clear of any mortgages. Ophelia Mizell stated that she was not aware that Sheryll Mizell took out multiple mortgages on the property, and she did not receive any of the proceeds from said [*6]mortgages. She also averred that she did not authorize, or knowingly sign documents, to transfer the subject property to Sheryll Mizell. These statements contain words that can give rise to fraud in the factum or fraud in the inducement, which lead to different results in a foreclosure context. The court cannot ascertain which of the two defenses Ophelia Mizell intends to utilize. There is no proposed answer annexed to the cross-motion, and Ophelia Mizell failed to outline when and under what circumstances Sheryll Mizell acquired fee simple title to the property. Ophelia Mizell did not even state affirmatively whether she knowingly or unknowingly affixed her signature to the deed. Consequently, Ophelia Mizell has failed to meet the meritorious defense prong of CPLR § 5015 (a)(1).

Nevertheless, under principles of equity, the remedy of foreclosure may not be available to the plaintiff in this matter if fraud in the factum occurred (First Nat. Bank of Nevada, Williams, 74 AD3d 740, 742 [2d Dept 2010] quoting Cruz v Cruz, 37 AD3d 754 [2d Dept 2007]), because any transaction involving the deed would be void ab initio. "Once equity is invoked, the court's power is as broad as equity and justice require" (Norstar Bank v Morabito, 201 AD2d 545 [2d Dept 1994]). The court sitting in equity looks to the substance and intent as to the merits of the transaction, rather than its mere legal form (Id.). That is, this court is concerned with the substance of the transference of the deed between Ophelia and Sheryll Mizell more than the mere fact that the deed itself purports that Ophelia Mizell conveyed the property to Sheryll Mizell.

Attached to Ophelia Mizell's papers are copies of two deeds. The first deed (dated December 19, 2002), which is notarized, transfers title from Ophelia Mizell alone to Sheryll Mizell and Ophelia Mizell. The second deed (dated May 7, 2004), which is not notarized, transfers title from Ophelia Mizell and Sheryll Mizell to Sheryll Mizell alone. Despite the purported transference of title, Ophelia Mizell stated, unequivocally, that she "did not authorize or sign documents, knowingly to transfer [her] home to [Sheryll Mizell]." That statement coupled with the fact that one deed is notarized and the other is not raises issues as to the integrity of the transference of deed between Ophelia and Sheryl Mizell. Also significant is the fact that Sheryll Mizell, who has been very diligent in filing and responding to motions in this case, failed to address Ophelia Mizell's motion or any of the allegations therein. In light of the gravity of the relief that the plaintiff is seeking in this foreclosure matter, the court determines that these factors warrant a hearing on the issue of whether the deed was forged or obtained under false pretenses and whether a late answer or any other relief should be allowed at this stage of the proceeding.

Accordingly, it is hereby

ORDERED that Opheila Mizell's cross-motion is granted to the extent that the parties shall appear for a hearing to be held on August 9, 2013 at 141 Livingston Street, Room 604, Brooklyn, New York 11201 to determine whether fraud in the factum occurred in the transference of the deed from Ophelia Mizell and Sheryll Mizell to Sheryll Mizell alone; it is further

ORDERED that all other requests for relief in the cross-motion are stayed pending the outcome of the hearing; it is further

ORDERED that any and all actions on the part of the plaintiff, its attorneys, agents, successors in interest, or assigns, and the Referee duly appointed is hereby stayed, pending the outcome of said hearing, and, it is further

ORDERED that Sheryll Mizell's motions filed on May 23, 2012 and December 17, 2012 are denied in their entirety. [*7]

In light of the foregoing, the parties remaining contentions are academic.

This constitutes the decision and order of the court.

_____________________________

Hon. Ingrid Joseph

ASCJ