Aurora Loan Serv. LLC v Serrano
Annotate this CaseDecided on September 13, 2013
Supreme Court, Queens County
Aurora Loan Service LLC, Plaintiff,
against
Edwin Serrano, et. al., Defendants.
15963/11
Bernice D. Siegal, J.
Defendant, Edwin Serrano ("Serrano" or "Defendant"), moves for an Order to enforce the "Modification Contract" executed by defendant dated October 17, 2012 and/or in the alternative dismissing plaintiff's complaint and/or scheduling this matter for a bad faith hearing, pursuant to CPLR § 3408 and NYCRR § 202.12-a(c)(4).
Facts
On or about August 20, 2004, the Defendant executed an delivered to Lend America a Note in the amount of $460,800 ("First Note"). As collateral the Defendant acknowledged and delivered to Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee for Lend America, a Mortgage ("First Mortgage") granting Lend America a mortgage lien on the real property located at 82-64 88th Place, Glendale, New York ("Premises"). The First Mortgage was recorded on November 4, 2004. [*2]
On or about November 22, 2006, the Defendant delivered to Lehman Brothers Bank, FSB ("Lehman") a second note in the amount of $24,546.21 ("Second Note"). As collateral for repayment of the Second Note the Defendant delivered to MERS, as nominee for Lehman a mortgage ("Second Mortgage").
The Defendant and Lehman entered into a Consolidation, Extension and Modification Agreement, dated November 22, 2006 ("CEMA") which consolidated the First Note and Second Note into a single loan in the amount of $485,325 ("Consolidated Note"). In addition, the First Mortgage and Second Mortgage were likewise consolidated into one mortgage ("Consolidated Mortgage").
On September 9, 2010, the Consolidated Note and Consolidate Mortgage were assigned to Aurora.
The defendant defaulted in making the monthly payments on August 1, 2010 pursuant to the terms of the Consolidated Note.
Plaintiff commenced the within action by filing a Summons and Complaint on July 1, 2011. Defendant filed an answer on July 11, 2011.
After commencement of the within action the Consolidated Note and Mortgage were transferred to Nationstar by an assignment dated June 28, 2012.
Defendant contends that attempts to enter into a loan modification began in May of 2010 and that trial payments began in October of 2010 and continued through April of 2011. Aurora ultimately denied the modification.
Defendant also contends that on March 14, 2012, the bank informed him that he was approved for a modification. Defendant was allegedly required to make 3 payments, which he did, but on July 5, 2012, the Consolidated Mortgage was sold to Nationstar.
Defendant contends that after some dispute Nationstar sent Defendant a new Loan Modification agreement which Serrano signed. Defendant contends that Nationstar now refuses to comply with the terms agreed to in the loan modification.
Discussion
Enforce the Loan Modification
Initially, the court will address Serrano's request to enforce the terms of a "trial period" and Loan Modification he signed. ( Exhibit F, Defendant's Motion.) However, the Loan Modification was signed by the Defendant but not the Plaintiff/Nationstar. Defendant fails to cite to any case law or statutory provision that would permit this court to enforce the terms of the trial period of a proposed Loan Modification or a Loan Modification signed by only one party. The imposition of the terms of the "trial period" or the terms of a "Loan Modification" signed by only one party as the new, binding terms of the agreement between Serrano and Plaintiff is "unauthorized and inappropriate" and violates the Plaintiff's rights under the Contract Clause of the Constitution and due process rights. (Wells Fargo Bank, N.A. v. Meyers, 108 AD3d 9, 22 [2nd Dept 2013][reversing a lower court ruling that imposed the terms of a so called "original modification agreement proposed by the plaintiff and accepted by the defendants" as the new, binding terms of the agreement between the parties].) Accordingly, Defendant's motion to enforce the terms of the Loan Modification is denied.
Motion to Dismiss
Defendant also seeks an order dismissing the within action based on Plaintiff's failure to enter [*3]into a Loan Modification agreement. Essentially, Defendant seeks dismissal based on Plaintiff's failure to act in good faith. However, the Second Department, in Meyers went on to say that CPLR §3408 is silent with respect to appropriate sanctions or other remedies where a party violates its obligation to negotiate in good faith. (Id.) The court, in the absence of a specifically authorized sanction or remedy in the statutory scheme, is left to use its discretion to tailor a remedy that best fits the circumstances of the given action. (Id.)
Furthermore, the court will operate under the assumption that the Defendant was moving to dismiss pursuant to CPLR §3211(a)(1)[FN1]. "A CPLR §3211(a)(1) motion to dismiss a complaint on the ground that a defense is founded on documentary evidence may be appropriately granted where the documentary evidence utterly refutes the plaintiff's allegations, conclusively establishing a defense as a matter of law." (Peter Williams Enterprises, Inc. v. New York State Urban Development Corp., 90 AD3d 1007, 1008 [2nd Dept 2011].)
In order to be considered documentary evidence within the meaning of CPLR §3211(a)(1), the evidence "must be unambiguous and of undisputed authenticity." (Fontanetta v. John Doe 1, 73 AD3d 78, 86 [2nd Dept 2010].) "In order to be considered documentary evidence within the meaning of CPLR 3211(a)(1), the evidence must be unambiguous and of undisputed authenticity.'" (Rabos v. R & R Bagels & Bakery, Inc., 100 AD3d 849, 850 [2nd Dept 2012]; Fontanetta v. Doe, 73 AD3d 78, 86 [2nd Dept 2010].) "Materials that clearly qualify as "documentary evidence" include "documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable.' " (Sands Point Partners Private Client Group v. Fidelity Nat. Title Ins. Co., 99 AD3d 982 [2nd Dept 2012] citing Fontanetta v. Doe, 73 AD3d 78, 86 [2nd Dept 2010].)
Serrano submits a Loan Modification that is only signed by the Defendant. Accordingly, Serrano failed to submit documentary evidence sufficient to "utterly refute" the Plaintiff's allegations, conclusively establishing a defense as a matter of law . ( See Rabos v. R & R Bagels & Bakery, Inc., 100 AD3d 849, 851 citing Goshen v Mutual Life Ins. Col. of NY, 98 NY2d 314, 326 {2002}.)
For the reasons set forth above, Defendant's motion to dismiss is denied.
Bad Faith Hearing
Serrano also seeks an Order scheduling a bad faith hearing pursuant to CPLR §3408. However, Plaintiff has yet to file a Request for Judicial Intervention and therefore the time for a mandatory Settlement Conference has not yet occurred. Accordingly, the Plaintiff cannot have acted in "Bad Faith" pursuant to CPLR § 3408.
Conclusion
For the reasons set forth above, Defendant's motion is denied in its entirety.
Dated:September 13 , 2013___________________________
Bernice D. Siegal, J. S. C.
Footnotes
Footnote 1:The court notes that the Defendant's papers are silent as to the which section of CPLR §3211 he is seeking dismissal.
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