Deutsche Bank Natl. Trust Co. v Harris

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Deutsche Bank Natl. Trust Co. v Harris 2017 NY Slip Op 32675(U) January 23, 2017 Supreme Court, Albany County Docket Number: 900159/2016 Judge: Michael H. Melkonian Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: ALBANY COUNTY CLERK 02/14/2017 11:56 AM 1] ·. INDEX NO. 900159/2016 I NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 02/14/2017 . i· ·t \ STATE OF NEW YORK SUPREME COURT COUNTY OF ALBANY I DEUTSCHE BANK NATIONAL TRUST COMPANY I • AS TRUSTEE FOR BCAP TRUST LLC 2007-AA4,i Plaintiff, -ag~inst- DECISION AND ORDER i I - I THOMAS LEE HARRIS AIK/A THOMAS L. HARRIS AIK/A THOMAS HARRIS, NEW YORK STATE . . , I AFFORDABLE HOUSING CORPORATION, ALBANY COMMUNITY DEVELOPMENT AGENCY, PEO:l:rLE OF THE STATE OF NEW YORK, VANES SA HARRIS and JOHN DOE, I Defendartts. · • . • • ' 1 . I . . :::::= .. ~.:>· ::< -., ~ V'- . I (Supreme Court, Albany County, Motion Term, October 28, 2016) • I Index No. 900159/2016 I . (RJI No.·Ol-16.:120517) (Acting Just.ice Michael H. Melkonian, Presiding) APPEARANCES: Woods Aviate Gilman, LLP I Attorneys for PlaintifL· · I (Tammy L. Garcia-Klipfel, Es:q., of Counsel) 700 Crossroads Building i . 2 State Street Rochester, New York 14614 iI , I The Legal Project :Attorneys for Defendant Thorhas Harris (Michelle F. Lee, Esq., of Corlnsel) 24 Aviation Road [ Suite 101 I Albany, New YJrk 12205 I. -1- 1 of 9 / ' [*FILED: ALBANY COUNTY CLERK 02/14/2017 11:56 AM 2] NYSCEF DOC. NO. 39 INDEX NO. 900159/2016 RECEIVED NYSCEF: 02/14/2017 MELKONIAN, J.: Defendant Thomas Lee Harris ("defendant") rrioves pursuant to CPLR §§ 3025 and I I 3120, for leave to serve an Amended Answer and Cqunterclaims in the form annexed as 1 Exhibit A to his motion. Plaintiff opposes: Plaintiff commenced this action on February 1, 2016 to foreclose a mortgage . ' encumbering the real property known as 72 First Street, Albany, New York 12210 !?iiveti by defendant to Chevy Chase Bank, F.S.B. (plaintiffs1 "predecessor"), ·as security for the payment of a note executed and delivered by defend_ant, evidencing an obligation in the principal amount of $144,000.00 plus interest. In th~ complaint, plaintiff alleges it is the . owner and holder of the note and mortgage by ass~gnment dated December 31, 2014, I defendant defaulted under the note and mortgage by nbnpayment of monthly installment of principal and interest on July 1, 2015, and it elected to accelerate the entire mortgage debt. Issue was joined by service of defendant's answer dated March 11, 2016. By his ' . . ' answer, defendant generally denied all. of the ' allega~ions in the complaint, and _asserted 1 thirteen ( 13) affirmative defenses /seven (7) countercl~ims. 1 In response, plaintiff served a 1 In defendant's answer, he asserted affirmative defenses based on (1) lack of standing; (2) plaintiff failed to 'comply with NY RPAPL; (3) plaintiff failed to comply with conditions precedent; (4) plaintiff failed to mitigate damages; (5) unclean hands; (6) plaintiff violated the Real Estate Settlement procedur~s Act Early Intervention and PreF oreclosure Review Requirements; (7) plaintiff failed Ito state a caus~ of action; (8) · ' certificate of merit requirements; (9) unjust enrichment; (10) breach of contract; (11) plaintiff breached the implied covenant of good faith and fair dealing; (12) conversion and failure to properly credit payments; and (13) plaintiff violated the.Federal Fair Debt Collections Practices Act. Defendant also asserted seven (7) counterclaims, the first -2- 2 of 9 [*FILED: ALBANY COUNTY CLERK 02/14/2017 11:56 AM 3] INDEX NO. 900159/2016 NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 02/14/2017 reply answer on or about March 23, 2016. 1 Defendant states that his motion for leave to amend his answer to include certain othet . I . unconsc~onability; defenses not previouslf interposed, e.g., (1) . . . . . : . ". . (2) unilateral mistake; (3) I . • . I . . violation ofNew York General Business Law§ 349;_C4) plaintiff failed to comply with the provisions of the Truth in Lending Act, 15 l!SC § · 1fo1 et seq. ("TILA"); (5) fraud; (6) · . . . . . I . . negligent misrepresentation 9n the part ofplaintiff; and: (7) promissory estoppel. Defendants I · also seek to interpose six (6) additional counterclaim~ based on an alleged violation of the. . ,- I f ' . I New York General Business Law § 349, an alleged: violation of TILA, cfraud, negligent misrepresentation, promissory estoppel, and .equitable I. 'modification. Defendarit argues that . . . . . i his motion should be granted because his defenses and counterclaims are "meritorious." In . . .· . .. ~ . I I the proposed amended answer, defendant alleges, am01j1g other things; that wheri he received . i i his loan, plaintiffs predecessor misled him into believ~ng he was receiving a fixed rate loan, . . ' ' I I ratherthan an adjustable rate loan.·· . In i op~osition to the instant motion, plai~tiff con~ends that defendant's m~tion should . . . I be denied bec'ause his proposed additional affirmative defenses and/or counterclaims are not . . I I meritorious and also because he, has not provided a rea~onable excuse for his delay in failing I to file and amended answer as of right within the: allohed time period under the. CPLR. I I I based on unjust enrichment, the second based on br~abh of contract, the third based on . breach of th~· implied covenant of good faitl:i and fair dealing, the fourth based on · conversion and failure to properly credit payments, thf fifth based on violatic:m of the , Federal Fair Debt Collections i;>ractices Act, the sixth jbased on declaratory judgment, and I · · the seventh based on attorney fees under Real Property Law§ 282. -3- 3 of 9 ! [*FILED: ALBANY COUNTY CLERK 02/14/2017 11:56 AM 4] INDEX NO. 900159/2016 .. NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 02/14/2017 It is well settled .that leave to amend pleadings ~hall be freely given in the absence of . I . prejudice to the opponent, unless the proposed amendmbnt is palpably insufficient as a matter . , . I I . . of law, or is totally devoid of m·erit (see, CPLR § 302:5[b]; Edenwald Contr. Co. v City of New York, 60 NY2d 957 [1983]; Mccaskey, Davies and Assocs .. Inc v New York City ·Health & Hospitals Corp., 59 NY2d 755 [1983]). The Court also should consider how long the amending party was aware .of the facts upon which the motion was predicated and whether a reasonable excuse for the delay was offered (Murray-Gardner Management Inc. v Iroquois Gas Transmission System L.P., 251AD2d954 [3rd Dept. 1998]). Defendant's motion must be denied inasmuch as the affirmative defenses set forth in the defendant's proposed amended answer and the· counterclaims asserted therein are unmeritorious (see, generally, Blueberry Investors Co. vIlana Realty Inc., 184 AD2d 906 [3rd Dept. 1992]). As a proposed ninth affirmative defense, defendant claims that the subject mortgage loan was unconscionable inasmuch as there was a great disparity in bargaining power between him and plaintiffs predecessor. First, this claim is untimely based on the six-year limitations period under CPLR § 213 (Heritage v Mance, 265 AD2d 657, 659 [3rd Dept. 1999]). Sec.and, unconscionability is generally not a defense (Emigrant Mtge. Co, Inc. v Fitzpatrick, 95 AD3d 169, 945 NYS2d 697 [2d Dept 2012)). Here, defendant has failed to show an absence of meaningful choice on his part (see, Matter of State ofNew York v Avco Fin. Serv. of N.Y., 50 NY2d 383, 389 [1980]; Baron Associates, LLC v Garcia Group -4- 4 of 9 ' [*FILED: ALBANY COUNTY CLERK 02/14/2017 11:56 AM 5] NYSCEF DOC. NO. 39 INDEX NO. 900159/2016 RECEIVED NYSCEF: 02/14/2017 - . I - Enterprises. Inc., 96 AD3d 793 [2nd Dept. 2012]). Def~ndant also has failed to demonstrate the terms of the mortgage and note were unconscionable, or that plaintiff's predecessor acted unconscionably in the transaction (see, Zuckerman v City ofNew York, 49 NY2d 557, 562; Argent Mtge. Co., LLC v Mentesana, 79 AD3d 1079, 1081 [2nd Dept. 2010]; Quest. ·commercial, LLC v Rovner, 35 AD3d 576, 577 [2nd Dept. 2006]). Accordingly, defendant's motion to amend his answer to assert an affirmative defense based upon unconscionability is denied. In his proposed ninth (sic) affirmative defense, defendant asserts ·a· claim for "unilateral mistake" in that there was n9 mutual understanding of the terms of the loan contract, and, as a result, plaintiff should not be allowed to enforce it. As a general rule, the signer of a written agreement is deemed to be conclusively bound by its terms, in the absence of a showing of fraud, duress or some other wrongful act I by a party to the contract (see, Pimpinello v Swift & Co., 253 NY 159 [1930]; Columbus Trust Co. v Campolo, 110 AD2d 616 [ 1985]). Here, defendant admittedly signed documents ' for an adjustable rate mortgage. To the extent defendant signed the mortgage application at the closing, without reading it,. and thus was unaware the application was for an adjustable rate mortgage rather than a fixed rate mortgage, he risked that plaintiffwo1:1ld be induced to give him a loan. :with terms he could not afford: Defendant makes no\ claim that he requested ( and was refused an opportunity to read the papers, consult with an attorney or someone else, have the documents explained to him, or adjourn the closing. Defendant is therefore bound -5- 5 of 9 [*FILED: ALBANY COUNTY CLERK 02/14/2017 11:56 AM 6] INDEX NO. 900159/2016 NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 02/14/2017 by the terms of the instrument he signed (see, Pimpinello v Swift & Co., 253 NY 159 I .. ·. [1930]). · . . · . I - That branch of defendant's motion which is tp amend his answer to interpose an I ' - affirmative defense alleging that plaintiffs predecessor engaged in deceptive business· - - i practices in violation of General Business Law § 349 is denied inasmuch as a claimed I I I violation of General Business Law § 349 and claimed deceptive business practices do not I . constitute affirmative defenses to a foreclosure: actiqn (see, La Salle Bank Nat. Assn. v Kosarovich, 31 AD3d 904 [3rd -Dept. 2006]). Furtherkore, claimed -~iolations of General - I Business Law§ 349 does not generally give rise to clhims against a lender ]. , ' . ,• (B~ron Assoc .. - I . LLC v Garcia Group Enters., 96 AD3d 793 [2nd Dept. 2012]). To assert a viable ciaim under ! - - - - i General Business-Law § 349(a), a.party must plead ~ ~hat . (1) the challenged conduct was consumer-oriented, (2) the conduct or statement was baterially misleading, and (3) [he or - - - I I , - I - she sustained] damages (Emigrant Mortg. Co .. Inc. v Fitzpatrick, 95 AD3d 1169 [2nd Dept. - - . 2012]). Insofar as defendant asserts he was fraudulently indlJCed to enter into the mortgage - I - I . - , transaction by plaintiffs predecessor, this conduct doe~ not "amount to conduct affecting the consuming public at_ large" and "is outside the ambit of [the] statute" (Brooks v Key Trust - ' : - Co. Nat. Assn., 26 AD3d 628 [3rd Dept. 2006]). ', '' ! Notwithstanding, the loan instruments submitted by the. plaintiff in opposition to . . ! I defendant's motion demonstrate that the term's of the :sal]le w~re fully set forth in_the loan I documents. -6- 6 of 9 1_ [*FILED: ALBANY COUNTY CLERK 02/14/2017 11:56 AM 7] NYSCEF DOC. NO. 39 INDEX NO. 900159/2016 RECEIVED NYSCEF: 02/14/2017 I Accordingly, that branch of defendant's moti?n to amend his answer to assert a counterclaim alleging violations of General Business Law § 349 is also denied~ In his sixteenth affirmative defense and seventh counterclaim asserting violations· of the Truth-in-Lending Act, plaintiff submitted proof that defendant executed a TILA statement on March 2, 2007, the closing date for the loan, and, i:r:i any event, the counterclaim a alleging such violation is time-barred(15 USC§ 1640 [e]). To the degree the proposed eighth counterclaim.is based upon fraud, it is untimely \ . (see, CPLR § 213[8]). Notwithstanding, the loan instruments submitted by plaintiff in opposition to defendant's motion, which included, among other things, the adjustable rate note, mortgage, and adjustable rate rider demonstrate that the terms of the same were fully set forth in the loan documents. To the extent the seventeenth affirmative defense and eighth counterclaim is based up_on fraudulent inducement, defendant makes no allegation that plaintiffs predecessor made any misrepresentations regarding the_ loan terms even at the closing - just that the representative remained silent when defendant to his wife remarked ' I how glad he was that he had received a fixed rate loan. The loan documents sufficiently disclosed the terms of the loan, and defendant, who admittedly failed to read the documents prior to signing them, makes no claim that plaintiff falsified the loan application, or the loan documents. To the degree. defendant moves to assert an affirmative defense or proposed . counterclaim based upon negligent misrepresentation, the affirmative defense or proposed -7- 7 of 9 [*FILED: ALBANY COUNTY CLERK 02/14/2017 11:56 AM 8] INDEX NO. 900159/2016 NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 02/14/2017 • I . . I • counterclaim is defective. The relationship between pLntiff and defendant is a contractual, . , I . . one, and a claim upon a negligently performed cont~act does not state a claim iri the absence ! · of a breach of a fiduciary duty. Defendant has failed tb allege or demonstrate any special or . I I . I • I · fiduciary relationship existed between he and plaintiff to support a claim basyd upon I . , I negligent misrepresentation (see, Fresh Direct. LLC v IBlue .Martini Software, Inc., 7 AD3d . . I . 487 [2004 ]). Thus, that branch_ of defendant's motion for leave to amend his answer to assert an affirmative defense or counter'claim based ·upon negligent misrepresentation is denied. r I. . _ The eighteenth affirmative defense and tenth cdunterCiaim ·asserted by defendant are . .! I • bas.ed upon promissory estoppel. The elements of a cJuse of action based upon promissory ) . . i . aclear and unambiguous pro~i.se, reasotj.able and foreseeable reliance by the estoppel are I . . i . party to whom the promise is made, and an injury susta~ned in reliance on that promise (Eleet -. - . . I . .. Bank v Pine ~611 Corp., 290 AD2d 792 [3rd Dept. 2~02]). Here, qefendant alleges that he "received a promise that he had been 'approved' wben. he requested a fixed rate loan." . I i Inasmu~h . I as the loan documents establish that. defendant applied for and received an adjustable rate mortgage, this proposed affirmative d~ense/counterclaim fails (Naugatuck . Sav. Bank·v Gross, 214. AD2d549 [2nd Dept. 1995] [u~substantiated allegations off~cts are I • ! insufficient to raise a triable-Issue of fact with respect t6 an estoppel defense]). Accordingly, . . I I , - th~t branch of defendant's motion to am~nd his answe~I to assert an afflrmati:Ye defense. and . ' ! . c~unterclaim based upon promissory estoppel is denidd. ' As to the eleventh counterclaim for equitable jodification, <!efendant has pointed to . . . - ,· . . ' I I I -8- I . I I 8 of 9 ; ' - [*FILED: ALBANY COUNTY CLERK 02/14/2017 11:56 AM 9] INDEX NO. 900159/2016 NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 02/14/2017 no provision in the loan documents·that require plaintHito modify his loan. Moreover, the documents submitted by plaintiff in opposition to defendant's. motion d~monstrate that plaintiff did rev:iew defendant for a modification option during the settlement conferences part, which ultimately resulted in a denial due to unaffordability. Accordingly, defendant's motion for leave to amend his answer is denied. This constitutes the Decision and Order of the ~ourt. This Decision and Order is returned to the attorneys for the plaintiff. All other papers are delivered to the County Clerk. The signing of this Decision and Order shall not constitute entry or filing under CPLR2220. Counsel is not relieved from the applicable provisions of this rule with regard to filing, entry and Notice of Entry. SO ORDERED. ENTER. Dated: Troy, New York January 23, 2017 MICHAEL H. MELKONIAN Acting Supreme Court Justice .,,.---:.::~ ~~Clc9<(~? _?-- . . 1y..; r1 ~ Papers Considered: (1) (2) (3) (4) (5) ..r·•·""-"';"'"~:7 Notice of Motion dated August 30, 2016; Affirmation of Michelle F. Lee, Esq., dated August 30, 2013, with . . exhibits annexed; Affidavit of Thomas Harris dated August 26, 2016; Memorandum of Law dated August 30, 2016; Affirmation of Tammy L. Garcia"'Klipfel, Esq., dated October 21, 2016, with exhibits annexed. -9- 9 of 9

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