HSBC Bank USA v Ortega

[*1] HSBC Bank USA v Ortega 2014 NY Slip Op 50246(U) Decided on February 24, 2014 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 February 24, 2014
Supreme Court, Queens County

HSBC Bank USA, National Association, as Trustee for Nomura Asset Acceptance Corporation Mortgage Pass Through Certificates, Series 2005-AP1, Plaintiff,

against

Rafael Ortega a/k/a Rafael M. Ortega; City of New York Environmental Control Board; City of New York Parking Violations Bureau; City of New York Transit Adjudication Bureau, and "JOHN DOE," said name being fictitious, it being the intention of plaintiff to designate any and all occupants of premises being foreclosed herein, and any parties, corporations or entities, if any, having or claiming an interest or lien upon the mortgaged premises, Defendants.



6077/2012

Robert J. McDonald, J.

The following papers numbered 1 to 17 were read on this motion by plaintiff for an order dismissing the answer of the defendant, Rafael Ortega a/k/a Rafael M. Ortega; granting summary judgment in favor of the plaintiff; granting a default judgment against all other non-answering defendants; for an order pursuant to RPAPL § 1321 appointing a referee to ascertain and compute the amount due to the plaintiff; and for an order substituting certain individuals as necessary party-defendants in stead and place of John Doe; and the cross-motion of the defendant for an order dismissing the plaintiff's complaint or granting leave to serve a late amended answer:

Papers

Numbered

Notice of Motion Affidavits-Exhibits..................1 - 7

Cross-Motion-Affirmation in Opposition................8 - 13

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

In this mortgage foreclosure action, plaintiff moves for an order striking the answer of defendant Rafael Ortega a/k/a Rafael M. Ortega; granting summary judgment against said defendant on the ground that the answer contains no valid defense and no triable issue of fact exists; granting a default judgment against the remaining defendants who have not answered; appointing a referee to compute the sum due and owing to plaintiff; and amending the caption. Defendant Ortega cross-moves for an order dismissing the plaintiff's complaint on the ground of lack of standing and predatory lending practices or in the alternative for an order granting the defendant leave to serve a late amended answer.

This foreclosure action pertains to the property located at 108-11 51st Avenue, Corona, New York. Based upon the record before this court, the defendant entered into note and mortgage with Mortgage Enterprise Ltd. on October 1, 2004 in the principal amount of $406,500. The plaintiff asserts that defendant defaulted on his mortgage when he failed to make his monthly mortgage payments beginning August 1, 2011.

The plaintiff subsequently accelerated the defendant's mortgage and brought an action to foreclose its mortgage by filing a lis pendens and summons and complaint on March 21, 2012. The defendant was personally served on March 24, 2012 at his residence with a copy of the summons and complaint and all necessary RPAPL notices. Defendant, pro se, served an answer on April 5, 2012 containing a general denial and asserting that he was currently working on a loan modification.

A foreclosure settlement conference was held on February 28, 2013. At that time the case was no able to be settled and Justice Grays ordered that the plaintiff may proceed with the action. On May 30, 2013 the defendant served an amended answer with counterclaims. However, the answer was rejected by the plaintiff and returned to the defendant on June 14, 2013 as untimely. The matter was referred for a preliminary conference on June 28, 2013. A compliance conference was held on September 4, 2013 and the plaintiff filed a note of issue on December 6, 2013. [*2]

In support of the motion for summary judgment, the plaintiff submits the affirmation of counsel Austin T. Shufelt, Esq., the affidavit of Joseph Aldridge, Vice President, Loan Documentation for Wells Fargo Bank, N.A., the mortgage loan servicing agent of the plaintiff HSBC Bank USA; a copy of the Note and Mortgage; copies of the affidavits of service on all the defendants; a copy of the pleadings; a copy of the mortgage assignment; 90 day notice of intent to foreclose; copy of the RPAPL 1304 notices sent to the defendant with the summons and complaint; and a copy of the attorney affidavit pursuant to the Administrative Order of the Chief Administrative Judge dated May 3, 2012, under AO/548/10, executed by Michael J. Chatwin, Esq.

In his affirmation, plaintiff's counsel, Austin T. Shufelt, Esq., asserts that on October 1, 2004, defendant obtained a mortgage loan from Mortgage Enterprise Ltd. in the principal amount of $406,500.00 in order to finance his purchase of the subject property. The mortgage loan was memorialized by a note and mortgage executed by Mr. Ortega and recorded on February 11, 2005. Counsel states that the loan was subsequently transferred to HSBC Bank USA pursuant to assignment dated February 28, 2011. Counsel asserts that the original note, endorsed in blank was physically delivered to the plaintiff prior to the date this action was commenced. Thus, counsel states that the plaintiff is the current holder of the note and mortgage and was the holder of the note and mortgage on the date the action was commenced. The written assignment of the mortgage was recorded on April 21, 2011. The record contains copies of the indorsed note, mortgage and assignment of mortgage.

The affidavit of Joseph Aldridge, Vice President, Loan Documentation for Wells Fargo Bank, N.A., servicer for the plaintiff HBC Bank, USA, states that based upon his personal review of the bank records, the defendant failed to cure his default and as of June 25, 2013, $395,274.33 in principal remained due and owing on defendant's loan plus interest and fees for a total of $458,758.09. Mr. Aldridge states that defendant defaulted under the terms of the note and mortgage by failing to pay his monthly installment commencing on August 1, 2011 and all subsequent payments thereafter. He also states that his review of the records shows that a 90 day pre-foreclosure notice was sent to the defendant by certified mail.

Plaintiff contends, based upon the evidence submitted, that plaintiff has made a prima facie showing that it is entitled to a judgment of foreclosure and sale. Further, counsel asserts that the plaintiff was lawfully served with a summons and complaint and that the court therefore has personal jurisdiction. In [*3]addition, the plaintiff asserts, contrary to the defendant's contention, that it had standing to bring the action by presenting sufficient evidence of the written assignment and physical transfer of the note and mortgage to the plaintiff prior to the commencement of the action.

PLaintiff contends that the defendant's answer, which does not contain any affirmative defenses, other than loss mitigation efforts, should be dismissed as the defendant as failed to set forth any factual basis or factual assertions of wrongdoing only vague and conclusory allegations. With respect to loss mitigation efforts, counsel contends that the desire to modify the terms and conditions of a mortgage contract offers no defense to an action which seeks to enforce the unmodified original agreement. With respect to the defendant's claim of predatory lending, counsel claims that the defendant's cross-motion does not provide sufficient facts upon which the claim is based. With respect to the claim of lack of standing asserted in the answer, plaintiff contends that it has proven that it had standing by submitting proof that it was the holder of the note and mortgage at the time the action was commenced and moreover, the defendant waived the defense by failing to assert it in his answer or pre-answer motion to dismiss.

It is well settled that a plaintiff in a mortgage foreclosure action establishes a prima facie case of entitlement to summary judgment through submission of proof of the existence of the underlying note, mortgage and default in payment after due demand (see Witelson v Jamaica Estates Holding Corp. I, 40 AD3d 284 [1st Dept. 2007]; Marculescu v Ouanez, 27 AD3d 701 [2d Dept. 2006]; US. Bank Trust National Assoc. v Butti, 16 AD3d 408 [2d Dept. 2005]; Layden v Boccio, 253 AD2d 540 [2d Dept. 1998]; State Mortgage Agency v Lang, 250 AD2d 595(2d Dept.1998]). Upon such a showing, the burden shifts to the defendant to produce evidence in admissible form sufficient to raise a material issue of fact requiring a trial.

This Court finds that the plaintiff's submissions are sufficient to establish its entitlement to summary judgment against defendant mortgagor Rafael Ortega a/k/a Rafael M. Ortega. The moving papers demonstrate, prima facie, that none of the asserted defenses set forth in the answer of defendant are meritorious and plaintiff is entitled to summary judgment on its claims against Ortega (see EMC Mortg. Corp. v Riverdale Assocs., 291 AD2d 370 [2d Dept. 2002]; State of New York v Lang, 250 AD2d 595 [2d Dept. 1998]). As stated above, the complaint herein sufficiently sets forth a valid cause of action for foreclosure. Plaintiff has submitted a copy of the mortgage, note and [*4]affidavit from Mr. Aldridge establishing Ortega's default in payment. The plaintiff demonstrated proper service of the summons and complaint and showed by admissible evidence that it had properly been assigned the note and mortgage as of the date of the commencement of the action. In addition, the plaintiff has submitted sufficient proof to show that notices were served on the defendant in compliance with RPAPL 1303 and 1304. Therefore, the moving papers demonstrated, prima facie, that none of the asserted defenses set forth in the answer of defendant or in the defendant's cross-motion are meritorious and plaintiff is therefore entitled to summary judgment on its claims against Ortega (see State of New York v Lang, 250 AD2d 595).

The burden then shifted to defendant to establish the existence of a triable issue of fact (see State Bank of Albany v Fioravanti, 51 NY2d 638, 647 [1980]). In opposition to the motion, the defendant failed to submit any evidence which would raise a question of fact. Defendant failed to submit sufficient proof of predatory lending practices. In addition, plaintiff waived the issue of standing by not asserting it in his answer (see HSBC Bank USA, N.A. v Taher, 104 AD3d 815[2d Dept. 2013; U.S. Bank N.A. v. Denaro, 98 AD3d 964 [2d Dept. 2012]).

Therefore, defendant's motion for an order dismissing the plaintiff's complaint is denied. Plaintiff's application for an order granting leave to file an amended answer is also denied. Plaintiff has failed to show any meritorious grounds which would support an amended answer and moreover, has failed to annex a copy of the proposed amended answer to the cross-motion.

Accordingly, the plaintiff's motion for summary judgment is granted and the affirmative defense contained in the defendant's answer is stricken. The submissions further reflect that plaintiff is entitled to amend the caption to substitute Jovanny Torres and Manuel Palaguachi in replacement of the John Doe defendant. That branch of the motion for a default judgment against the remaining defendants who have not answered or appeared herein is granted. Plaintiff's further application for the appointment of a referee to compute the amounts due under the subject mortgage is also granted.

Settle order on notice.

Dated: February 24, 2014

Long Island City, NY

[*5]______________________________

ROBERT J. MCDONALD

J.S.C.0