HSBC Bank USA v Sandoval

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HSBC Bank USA v Sandoval 2017 NY Slip Op 32443(U) November 17, 2017 Supreme Court, Rockland County Docket Number: 031782/2015 Judge: Thomas E. Walsh II Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [*FILED: ROCKLAND COUNTY CLERK 11/20/2017 11:28 AM 1] NYSCEF DOC. NO. 99 INDEX NO. 031782/2015 RECEIVED NYSCEF: 11/20/2017 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF ROCKLAND ______________________________________________________ ------------X HSBC BANK USA, NATIONAL ASSOCIATION AS TRUSTEE FOR MERRILL LYNCH ALTERNATIVE NOTE ASSET TRUST, SERIES 2007-A2 DECISION Index AND ORDER No.: 031782/2015 Motion #2 - M D Motion #3 - M D DC - N Adj: 1/25/18 Plaintiff, - against - MORRIS SANDOVAL, DAISY SANDOVAL, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. AS NOMINEE F:ORWEICHERT FINANCIAL SERVICES, Defendants. ------------------------------------------------------------------x Thomas E. Walsh II, J.S.C. The Court (Motion 3211(b) judgment has considered #2) filed by Plaintiff and 9 3211(b) pursuant the following seeking AN Order pursuant granting the following answer as a limited 9 to Civil Practice Law and Rules notice of appearance entitling 9 and notice of surplus appoint a Referee to determine 3211(b) previous proceedings deemed in default money proceedings, whether if any, that this court the premises Carlos "Doe", may be Mr. Marleny, and non-answering be fixed and determined, 1 of 10 to treat the MORRIS SANDOVAL through in place of "John Doe" without 1 in prior notice, a copy of the notice of sale, in this case, that all non-appearing and the defaults summary defenses asserted and for permission the amount due and to ascertain as party Defendants (a) order granting the Defendant sold in parcels, and that the caption be amended to substitute Marleny and Ruth "Doe", 9 to Civil Practice Law and Review 3212, (b) dismissing his attorney Joseph M. Becker, Esq, to receive, without notice of discontinuance, 1- 4 on the Notice of Motion to the movant: to Civil Practice Law and Rule the answer pursuant papers that the caption prejudice Mrs. to the def~ndants be be amended to [*FILED: ROCKLAND COUNTY CLERK 11/20/2017 11:28 AM 2] INDEX NO. 031782/2015 NYSCEF DOC. NO. 99 reflect RECEIVED NYSCEF: 11/20/2017 the Plaintiff as HSBC Bank USA National Association Mortgage Investors Inc. Mortgage Pass-Through Certificates other and further Defendant's as Trustee for Merrill Mana Series 2007-A2 and for such relief as to the Court may deem just and proper; the Court also considered Notice of Cross Motion (Motion #3) for an Order (a) denying the relief requested by Plaintiff in its Notice of Motion against Defendant MORRIS SANDOVAL, (b) granting judgment statute in favor of Defendant of limitations summary MORRIS SANDOVAL holding that this action is barred by the and dismissing theactiori with prejudice, further relief as this Court deems just and proper, together ofthis Lynch (c) and for such other and with the costs and disbursements Motion: PAPERS NUMBER Notice of Motion (Motion #2)/Affirmation of Alexandra Exhibits (A-O)/Memorandum of Law in Support Notice of Cross Motion (Motion #3)/Affirmation Exhibits (A-G) Affirmation 1 of Joseph M. Becker, Esq.j 2 of Laura M. Strauss, Esq. in Opposition/Exhibits Reply Affirmation 3 (A-O) 4 of Joseph M. Becker, Esq. By way of history, the underlying York 10977 is the subject Summons R. Heaney, Esq.j and Verified of a foreclosure Complaint property, 47 West Hickory Street Ramapo, New action which was commenced on April 23, 2015. Defendants by the filing of a MORRIS SANDOVAL and DAISY SANDOVAL were served pursuant to Civil Practice Law and Rules.~ 308(4) at the subject premises on May 9, 2015. Defendant se Answer on July 25, 2015. affirmative defenses The Answer submitted including: Summons and Complaint, MORRIS SANDOVAL joined issue with the filing of a pro (1) by MORRIS SANDOVAL raised seven (7) lack of standing to sue, (2) (3) Failure to give Notice of Default and/or (4) Failure to comply with Real Property Actions and Proceedings comply with Real Property improper Actions and Proceedings 2 2 of 10 service of the Notice fo Acceleration, Law ~ 1303, (5) Failure to Law ~ 1304, (6) Violation of General [*FILED: ROCKLAND COUNTY CLERK 11/20/2017 11:28 AM 3] INDEX NO. 031782/2015 NYSCEF DOC. NO. 99 RECEIVED NYSCEF: 11/20/2017 Business Law 9349 and (7) The Certificate Rules 9 3012-b. as untimely Plaintiff of Merit does not comply with Civil Practice Law and rejected Defendant MORRIS SANDOVAL's Answer on July 31, 2015 since it was filed after Defendant's Plaintiff filed an ex-parte time to answer had expired on June 28, 2015. motion for summary judgment and order of reference and Defendant filed a Notice of Motion to dismiss the action pursuant to Civil Practice Law and Rules 93211(a)(8). Upon consideration motion and granted Defendant's to re-serve the Defendant Decision and Order. Motion to Dismiss. within Defendant of both parties motions the Court denied Plaintiff's ex-parte However, the Plaintiff was granted one hundred twenty leave (120) days of the date of this Court's MORRIS SANDOVAL interposed a new ANSWER on January 11, 2017 asserting nine (9) affirmative defenses: (1) lack of standing, (2) unconscionability ofthe terms and conditions of the mortgage and note, (3) failure to comply with Real PropertvActions and Proceedings its regulations Law 99 1304 and 1306, (4) failure to comply with Banking and Banking Law 9 6-1 and 9 6-m, (5) statute General Business Law 9 349, (7) failure to provide requisite under the mortgage, Law and Rules 9 3212, granting compute the sums due Plaintiff, a default judgment compute the amount Notice of Motion seeking an Order, pursuant summary striking to Plaintiff judgment notice required as to all other Defendants, In Plaintiff's motion for summary judgment authority, appointing motion for summary SANDOVAL asserts the following (Memorandum reasons the Plaintiff's 3 of 10 of Law), MORRIS SANDOVAL evidence to show their lack of merit. judgment. 3 a referee to relief as to the Court defense raised by Defendant and documentary to Civil Practice defenses by Defendants, MORRIS SANDOVAL filed a cross motion for summary opposed the Plaintiff's of an Order of Reference to the answers and affirmative Plaintiff addresses each and every affirmative Defendant to Plaintiff, due, related relief, and for such other and further may seem just and proper. and offers arguments, pre-foreclosure (6) violation (8) lack of capacity to sue and (9) failure to state a claim. Plaintiff filed the instant awarding of limitations, Law 9 595-a and In his opposition judgment and also Defendant MORRIS motion for summary judgment should [*FILED: ROCKLAND COUNTY CLERK 11/20/2017 11:28 AM 4] INDEX NO. 031782/2015 NYSCEF DOC. NO. 99 RECEIVED NYSCEF: 11/20/2017 be denied: that (1) Plaintiff's it has standing Proceedings Law opposition 9 claim is barred by statute and (3) Plaintiff failed of limitations, to prove that 1304 notice was properly mailed. papers does Defendant Additionally, Real Property Actions MORRIS SANDOVAL deny the fact that the underlying Defendants in January 2017 and has abandoned limitations) the failed to prove and The Court will note that at no point in the and mortgage was executed by him, that the obligation payments. (2) Plaintiff note to pay was his, or that he defaulted raised seven (9) affirmative in defenses in his Answer filed all of those except the 1st (standing), and a portion of the 3'd (failure to comply with RPAPL 9 the 5th (statute of 1304). Where a defendant fails to oppose some or all matters advanced on a motion for summary judgment, the facts as alleged in the movant's papers may be deemed admitted as there is, in effect, a concession that no question 20100]. of fact exists. [Argent Further, the failure to raise pleaded affirmative to a motion for summary judgment efficacy. [New York Commercial 2013)]. Mtge. Co., LLC v. Mentesana, The Court, defenses or counterclaims renders those defenses abandoned Bank v. J. Realty F Rockaway, therefore 79 AD 3d 1079 (2d Dept dismisses all the affirmative in opposition and thus without any Ltd., 108 AD 3d 756 (2d Dept defenses raised by Defendant MORRIS SANDOVAL except the 1st, 5th and a portion of the 3'd. It is well-settled its case as a matter that a plaintiff of law through evidence of the default. [Village in an action to foreclose a mortgage the production of the mortgage, Bank v. Wild Oaks Holding, 1993); Home Sav. Bank v. Schorr Bros. Development 1995)]. Once a plaintiff does that, it is incumbent Inc., the unpaid note, and 196 AD2d 812 (2d Dept Corp., 213 AD2d 512, 512-13 upon the defendant which could properly raise a viable question of fact as to his default. Holding, Inc., establishes (2d Dept to assert any defenses [Village Bank v. Wild Oaks 196 AD2d 812 (2d Dept 1993); Home Sav. Bank v. Schorr Bros. Development Corp., 213 AD2d 512, 512-13 (2d Dept 1995)]. evidentiary form sufficient proof in admissible of fact. [Hecht v. Vanderbilt Associates, Further, to demonstrate a defendant is required the existence 141 AD2d 696, 699 (2d Dept 1988)]. 4 4 of 10 to offer of a triable issue Conclusoryand [*FILED: ROCKLAND COUNTY CLERK 11/20/2017 11:28 AM 5] INDEX NO. 031782/2015 NYSCEF DOC. NO. 99 RECEIVED NYSCEF: 11/20/2017 unsubstantiated defeat assertions that are not supported a plaintiff's Development motion for summary by competent judgment. [Home evidence are insufficient Sav. Bank v. Schorr in the lawsuit that the law will recognize as a sufficient request.'" issue of standing, a plaintiff New York v. Silverberg, 86 AD 3d 274, 279 (2d Dept 2011); Plaintiff must demonstrate that in order to establish standing Inc. v. Stosel, 89 68 AD 3d 752, 753 (2d in a foreclosure Citimortgage, U.S. Bank, N.A. v. Adrian Collymore, Either a written assignment of the underlying Inc. v. Stosel, 89 68 AD 3d 752, 753 (2d [U.S. Bank, N.A. v. Adrian Aurora Loan Servs., KondaurCapitalCorporation v. McCaryetal., LLC v. Weisblum, of mortgage admissible The validity is not relevant to the issue of the Plaintiff's standing passes as an incident to the note. [Wells Fargo Bank N.A. v. CharIa ft, 134 AD 3d 1099 (2d Dept. 2015); LNV Corporation Additionally, 923 981 NYS2d 547 (2d Dept 2014); Aurora Loan Servs., LLC v. Taylor, 25 NY3d 355, 361-362 (2d Dept 2015)]. because the mortgage [Bank of of the foreclosure action is sufficient to transfer the obligation, 68 AD 3d 752, 754 (2d Dept 2009); of a purported assignment action, a note or the physical delivery of the and the mortgage passes with the debt as an inseparable incident. NYS2d 609, 618 (2011); to relief. [Bank of note at the time the action is commenced. 86 AD 3d 274, 279 (2d Dept.2011); note prior to the commencement Collymore, raises the that it is both the holder or assignee, of the subject mortgage and AD3d 887, 888 (2d Dept 2011); Dept 2009)]. Citimortgage, U.S. Bank, N.A. v. Adrian Collvmore, the holder or assignee of the underlying New York v. Silverberg, Where a defendant must prove its standing in order to be entitled It is well-settled the issue at 86 AD 3d 274, 279 (2d Dept 2011) 36 AD 3d 176 (2d Dept 2006)]. AD3d 887, 888 (2d Dept 2011); has an interest predicate fordetermining [Bank of New York v. Silverberg, quoting Caprer v. Nussbaum, Dept 2009)]. Bros. Corp., 213 AD2d 512, 513 (2d Dept 1995)]. "The issue of standing requires an inquiry into whether a litigant the litigant's to v. Francois, 22 NYS3d 543 (2d Dept. 2015)]. where the exact date of delivery of the note to the Plaintiff evidence then there is no further detail 5 5 of 10 is demonstrated necessary for the Plaintiff by to establish [*FILED: ROCKLAND COUNTY CLERK 11/20/2017 11:28 AM 6] INDEX NO. 031782/2015 NYSCEF DOC. NO. 99 standing. RECEIVED NYSCEF: 11/20/2017 [Aurora Loan Servs., LLC v. Tavlor, 980 NYS2d 475, 477 (2d Dept 2014)]. Here the Plaintiff produced the mortgage, evidence of default through Specialized Loan Servicing, the Affidavit of Cynthia Wallace, LLC the Servicer for Plaintiff, The Court finds that Affidavit unpaid note and attempted of Merit submitted Plaintiff's by the Plaintiff's moving servicer, The affidavit submitted compilations, Wallace's affidavit the assumption Specialized Loan Servicing, to their veracity. application electronically papers are insufficient and specifically imaged documents action. and others." relied upon by Specialized the statements LLC which Based on Ms. of Specialized can attest Notice were issued by another were incorporated in prosecution within from prior servicers Ms. into Specialized's of the instant foreclosure made by Ms. Wallace fail to full under the business records exception to hearsay rule and since Ms. Wallace did not attest that she was personally with the record-keeping of by Plaintiff in support of their There is also no reference that the records of the prior servicer(s) Therefore, SLS's records Loan Servicing, LLC and that as such she as an employee that the Notice of Default and the 90-day records and subsequently based on the is that the records have all been made by employees servicer, ACS, for which Ms. Wallace is not employed. Wallace's Affidavit of as to those documents into the servicer, by Specialized However, a review of the documents submitted indicate President by Ms. Wallace indicates that her statements are based on the review of the records maintained includes "data Vice HSBC Bank USA, N.A. referenced by Ms. Wallace that must have been incorporated from the prior servicers. Second to produce practice and procedures of the prior servicers were incorporated into Specialized's familiar or that the documents records and relied upon by them. [Wells Fargo Bank, N.A. v. Talley, 59 NYS3d 743, 745 (2d Dept 2017); Arch Bay Holdings, LLC v. Albanese, 138 146 AD 3d 849,853 (2d Dept 2017); Aurora Loan Services, LLC v. Mercius, AD 3d 650, 652 (2d Dept 2016); Aurora Loan Services, LLC v. Komarovsky, 151 AD 3d 924, 926 (2d Dept 2017); HSBC Morta. Services, Inc. v. Royal, 142 AD3d 952 (2d Dept 2017)]. the Plaintiff's Motion for Summary Judgment is denied with leave to re-file. 6 6 of 10 As such, [*FILED: ROCKLAND COUNTY CLERK 11/20/2017 11:28 AM 7] INDEX NO. 031782/2015 NYSCEF DOC. NO. 99 RECEIVED NYSCEF: 11/20/2017 Turning now to the Defendant's argument in their cross motion that the action should be dismissed because it is barred by the statute of limitations, the threshold between the parties is when and if the mortgage in this action was accelerated. concedes that the applicable statute of limitations for a mortgage years and that even though a mortgage issue raised foreclosure is payable in installments AD2d 604, 605 (2d Dept 2001)]. S 213(4); Ernc Mortgage that acceleration borrower is provided "clear and unequivocal begins to run on the Corporation v. Patella, 279 letter can accelerate is defined as occurring when the notice of the note holder's election to accelerate the loan. Defendant asserts that a summons and complaint Default Notice sent to Defendants debt is Further, Defendant submits citing Wells Fargo Bank, N.A. v. Burke, 94 AD 3d 980, 983 (2d Dept 2012), but rather a demand action is six (6) once a mortgage accelerated the entire amount comes due and the Statute of Limitations entire debt. [Civil Practice Law and Rules Defendant a loan. is not needed to accelerate a loan, In this vein, Defendant argues that the on March 22, 2009 states three (3) separate times that the if the Defendant does not cure the default by April 21, 2009 that the loan "will be" accelerated. As such, Defendant argues that the Plaintiff's March 22, 2009 Notice fo Default accelerated the mortgage in the instant action and that the Statute of Limitations began to run at that time. In opposition Plaintiff submits that the 2010 foreclosure action (Index # 2600/2010) voluntarily discontinued by Plaintiff by Order signed by the honorable Victor J. Alfieri, AJSC on October 2, 2014 and that action revoked the election to accelerate commencement of that action. of the 2010 foreclosure substantial prejudice made at the time of the Further, Plaintiff asserts that upon the voluntary action, the statutory in allowing continues stating that a voluntary action is an affirmative the Plaintiff to revoke its election discontinuance, act that is sufficient argues that the new acceleration discontinuance period is halted unless a mortgagor can show to accelerate. Plaintiff as was done in 2014 in the prior foreclosure to revoke acceleration, citing NMNT Realtv Corp. V. Knoxville 2012 Trust, 2017 NY Slip Op 05230 (2d Dept June 28, 2017). Plaintiff was notices 7 7 of 10 sent to the Defendants Additionally, in the the instant [*FILED: ROCKLAND COUNTY CLERK 11/20/2017 11:28 AM 8] INDEX NO. 031782/2015 NYSCEF DOC. NO. 99 RECEIVED NYSCEF: 11/20/2017 foreclosure action in 2014 only sought payment of the arrears and late charges, allowed the Defendant to bring the loan current and did not require payment bring the loan current. by the voluntary of the entire amount due to As such, the Plaintiff submits that the original acceleration discontinuance was revoked of the prior foreclosure action halting the statue of limitations and that as a result the instant action is not barred by the statute of limitations. The six year statute of limitations the due date of each unpaid installment in a mortgage foreclosure unless the debt has been accelerated; has been accelerated by a demand or commencement and the statute Rules 9 of limitations 213(4); Enterprises, Loicano v. Goldberg, [Civil Practice Law and 240 AD2d 476, 477 (2d Dept 1977); 289 AD2d 770, 771 (3d Dept 2001); Kashipour v. Wilmington Dept 2016); Mtge, LLC v. Weisblum, Saini v. Cinelli Say. Fun Socy, FSB, 143 AD3d 866, 867 (2d EMC Mtge. Corp v. Patella, 279 AD2d 604, 605 (2d Dept 2001)]. revoke its election to accelerate a mortgage by an affirmative the six (6) year period subsequent to the initiation. AD2d 892, 894 (2d Dept 1994); Kashipour acceleration An affirmative and actions v. Wilmington such as a sua sponte The acceleration affirmative Say. Fund. SOCy., FSB, 144 AD 3d at dismissal acts. [Kashipour, EMC Mtge. Corp v. Patella, 279 or a dismissal [Steward of the due to personal 144 AD3d at 987; Clayton, begins at the filing of a summons and complaint pendency, as long as the summons and complaint accelerate the mortgage. act of revocation occurring during act is one that will notify the borrower of the revocation are not considered AD2d at 982]. A lender can [Federal Natl. Mtge. Assn. v. Mebane, 208 987; Clayton Nat. v. GuIdi, 307 AD2d 982 (2d Dept 2003); AD2d at 606]. once the debt of an action, the entire sum becomes due begins to run on the entire mortgage. 144 AD3d 985, 986 (2d Dept 2016); Nationstar jurisdiction action begins to run from clearly demonstrate 307 and notice of the plaintiff's intent to Title Ins. Co. v. Bank of New York Mellon, 2017 NY Slip Op 06929 (2d Dept 2017); Beneficial Homeowner Servo Corp v. Tovar, 2017 NY Slip Op 03471 (2d Dept 2017)]. The Court finds that Plaintiff's distinct intention 8 8 of 10 to discontinue the prior foreclosure [*FILED: ROCKLAND COUNTY CLERK 11/20/2017 11:28 AM 9] NYSCEF DOC. NO. 99 RECEIVED NYSCEF: 11/20/2017 action (Index #2600/2010) was an affirmative act of revocation upon issuance of the Order dated October 2, 2009. Further, Defendant in 2009 does not contain a clear and unequivocal entire INDEX NO. 031782/2015 mortgage debt was being accelerated .. which decelerated the demand letter sent to the notice to the Defendants Specifically, the letter the loan that the states "(u]nless the payments on your loan can be brought current by April 21, 2009, it will become necessary to accelerate your mortgage of Trust." Note and pursue the remedies provided for in your Mortgage or Deed It is clear t~at the March 22, 2009 did not accelerate the mortgage, warning to the Defendants that if they did not come current on their mortgage could accelerate the loan. upon the commencement by the discontinuance Therefore, the original acceleration dismissal due to expiration of the mortgage Therefore, of the statute of limitations Accordingly, Defendant's only occurred was revoked cross-motion for is denied in its entirety. it is hereby ORDERED that the Plaintiff's to re-file within the time frame allotted entirety; that the Plaintiff of the first foreclosure action in 2010. That acceleration signed on October 2, 2009. ORDERED but stood as a that the that this Notice of Motion (Motion #2) is denied with leave by the Court; and it is further Defendant's Cross Motion (Motion #3) is denied in its and it is further ORDERED JANUARY 25,2018 is scheduled for a conference on THURSDAY at 9:30 a.m .. No appearances are required on that date if an application for Order of Reference and Summary prior to that date. matter If an application Judgment has been e-filed through for Summary Judgment/Order the NYSCEF system of Reference has not been e-filed through the NYSCEF system prior to that date, and the date has not been adjourned the Court, then appearances an explanation for the delay. consider dismissing are required and Plaintiff's counsel will be required to provide If the Court is not satisfied with the explanation, the matter without prejudice; by the Court will and it is further ORDERED that the Plaintiff is to serve a copy of the Decision and Order in the instant action on all named parties within thirty The foregoing constitutes (30) days of the date hereof. the Decision and Order of this Court on Motions #2 and #3. 9 9 of 10 [*FILED: ROCKLAND COUNTY CLERK 11/20/2017 11:28 AM 10] NYSCEF DOC. NO. 99 Dated: INDEX NO. 031782/2015 RECEIVED NYSCEF: 11/20/2017 New City, Ne,lt'~ York November~, 2017 ~HON. THOMAS E. WALSH II Justice of the Supreme TO: GROSS POLOWY, P.e. Attorney for Plaintiff (via e-file) JOSEPH M. BECKER, ESQ. ZERILLI & ASSOCIATES, P.e. Attorney for Defendant MORRIS SANDOVAL (via e-file) 10 10 of 10 Court

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