HSBC Bank USA, N.A. v Campos

[*1] HSBC Bank USA, N.A. v Campos 2017 NY Slip Op 50695(U) Decided on May 15, 2017 Supreme Court, Queens County Velasquez, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 May 15, 2017
Supreme Court, Queens County

HSBC Bank USA, N.A., as Trustee for NAAC Mortgage Pass-Through Certificates, Series 2007-1, Plaintiff,

against

Marta Campos, Mortgage Electronic Registration Systems, Inc., as Nominee For Axiom Financial Services, et al., Defendants.



6210/ 2009



For Plaintiff:

Hogan Lovells US LLP

875 Third Avenue

New York, NY 10022

For Defendant:

Queens Legal Services

by: Aisha Baruni, Esq.

89-00 Sutphin Boulevard

Jamaica, NY 11435
Carmen R. Velasquez, J.

The following papers read on this motion by plaintiff for summary judgment against defendant Marta Campos, to dismiss the answer of defendant Campos, including affirmative defenses and counterclaims and set-offs asserted therein, with prejudice, for leave to appoint a referee to ascertain and compute the sums due and owing plaintiff and to examine and report whether the mortgaged premises can be sold in more than one parcel, for leave to treat the answer of defendant Campos as a limited notice of appearance, for leave to amend the caption, substituting Victor Campos in place and stead of "John Doe No.1," for leave to enter a default judgment against defendants Mortgage Electronic Registration Systems, Inc., as nominee for Axiom Financial Services, New York City Environmental Control Board, New York City Parking Violations Bureau, New York City Transit Adjudication Bureau and Victor Campos [*2]s/h/a "John Doe #1" and for an award of reasonable attorneys' fees and costs associated with this action.

Pages Numbered

Notice of Motion - Affidavits - Exhibits 1-8

Answering Affidavits - Exhibits 9-16

Reply Affidavits 17-21

Upon the foregoing papers it is ordered that the motion is determined as follows:

Plaintiff HSBC Bank USA, N.A., as Trustee for NAAC Mortgage Pass-Through Certificates, Series 2007-1 commenced this action on March 13, 2009, seeking foreclosure of a mortgage given by defendant Marta Campos on the real property known as 31-16 103rd Street, East Elmhurst, New York, to secure a note evidencing a loan from Axiom Financial Services (Axiom) in the principal amount of $384,000.00, plus interest. In its complaint, plaintiff alleges it is the owner and holder of the note and mortgage, the mortgage was assigned to it by assignment dated March 10, 2009 and that defendant Marta Campos defaulted in paying the monthly mortgage installment due on November 1, 2008. Plaintiff also alleges that as a consequence thereof, it elects to declare the balance of the mortgage debt to be immediately due and payable.

Defendant Marta Campos served an answer, asserting various affirmative defenses, including lack of standing, and three counterclaims. Defendant Marta Campos seeks a judgment awarding damages based upon alleged violation of General Business Law § 349, aiding and abetting fraud, and civil trespass. Plaintiff Trustee served a reply, and asserted various affirmative defenses, including the expiration of the statute of limitations. Defendants Mortgage Electronic Registration Systems, Inc. as nominee for Axiom Financial Services, New York City Environmental Control Board, New York City Parking Violations Bureau, New York City Transit Adjudication Bureau and Vincent Campos s/h/a defendant "John Doe" are in default in appearing or answering.

A residential foreclosure conference was held on June 18, 2009, at which defendant Campos defaulted in appearing. By order of the same date, the Court Attorney Referee noted the case had not settled and directed that it proceed by order of reference or motion. Thereafter, by preliminary conference order, dated June 11, 2015, directed that any motion for summary judgment be made no later than 120 days after the filing of the note of issue. The compliance conference order dated September 17, 2015, directed plaintiffs to serve and file a note of issue and certificate of readiness on or before March 18, 2016. The note of issue was filed on March 18, 2016. Plaintiff's motion is timely, having been made on Monday, July 18, 2016 (see CPLR 3212[a]; General Construction Law § 25-a; see Vazquez v Flesor, 128 AD3d 808 [2d Dept 2015]). Defendant Campos opposes the motion on the ground that plaintiff failed to establish prima facie entitlement to summary judgment against her. She contends that plaintiff failed to demonstrate standing to bring the action. The remaining defendants have not appeared in relation to the motion.

That branch of the motion by plaintiff for leave to amend the caption substituting Victor Campos in place and stead of defendant John Doe is granted.

It is ORDERED that the caption shall read as follows:

SUPREME COURT OF THE STATE OF NEW YORK

QUEENS COUNTY

X

Index No. 701887/2015

HSBC BANK USA, NATIONAL ASSOCIATION AS TRUSTEE FOR NAAC MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-1,

Plaintiff,

against-

MARTA CAMPOS; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. AS NOMINEE FOR AXIOM FINANCIAL SERVICES, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY PARKING VIOLATIONS BUREAU, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, and VICTOR CAMPOS,

Defendants

X.

With respect to that branch of the motion by plaintiff for summary judgment against defendant Marta Campos, it is well established that the proponent of a summary judgment motion "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact" (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, 49 NY2d 557 [1980]). Where the plaintiff is not the original lender and standing is at issue, the plaintiff seeking summary judgment must also submit evidence that it received both the mortgage and note by a proper assignment, which can be established by the production of a written assignment of the note (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361 [2015]; Homecomings Fin., LLC v Guldi, 108 AD3d 506 [2d Dept 2013]), or by physical delivery to the plaintiff of the note (see Kondaur Capital Corp. v McCary, 115 AD3d 649 [2d Dept 2014]; Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95, 108 [2d Dept 2011]). "Holder status is established where the plaintiff possesses a note that, on its face or by allonge, contains an indorsement in blank or bears a special indorsement payable to the order of the plaintiff" (Wells Fargo Bank, NA v Ostiguy, 127 AD3d 1375, 1376 [3d Dept 2015]) (see US Bank, N.A. v Zwisler, ___ AD3d ___, 2017 WL 422317, 2017 NY App Div LEXIS 679 [2d Dept 2017]).

In support of its motion, plaintiff offers, among other things, an affirmation of regularity by its counsel, copy of the pleadings, affidavits of service, the mortgage, note, allonge, a pooling and servicing agreement (PSA) dated April 1, 2007, "Servicer, Appointment, Assumption and Amendment Agreement" dated as of July 2, 2007 (the Servicing Agreement) and a custodial agreement dated April 1, 2007 (the Custodial Agreement). Plaintiff also offers the affidavit dated July 15, 2016 of Michael Warren Dickhaut, a vice president of loan documentation for Wells Fargo Bank, N.A. (Wells Fargo) d/b/a ACS, plaintiff's loan servicer and custodian.

Plaintiff contends that it had standing to bring this action as assignee by written assignment, and also as the holder of the note by physical possession. Plaintiff asserts that subsequent to the note's execution, pursuant to the PSA, the mortgage loan was made part of the Nomura Asset Acceptance Corporation Mortgage Pass-Through Certificates, Series 2007-1, a residential mortgage-backed securitization trust (the Trust). Plaintiff also contends that the Trust became the assignee of the mortgage loan pursuant to the PSA. Plaintiff further contends that pursuant to the PSA, Servicing Agreement and Custodial Agreement, the note and mortgage were delivered and deposited with Wells Fargo, as custodian for the Trust, and that Wells Fargo, as custodian for the Trust, was in physical possession of the original note on April 1, 2007 and remained so at all material times, including March 13, 2009, the date the action was commenced. [*3]The note is made payable to Axiom, and the allonge bears an undated blank endorsement by Rashel L. Morris, as assistant secretary of Axiom.

To the extent plaintiff relies upon the assignment of mortgage from Mortgage Electronic Registration Systems, Inc. (MERS) dated March 10, 2009 to establish standing, that assignment does not specifically assign the note. Rather, it assigns the mortgage only and consequently, it is inadequate to demonstrate that the note also was assigned at that time (see Deutsche Bank Nat. Trust Co. v Weiss, 133 AD3d 704 [2d Dept 2015]; Flagstar Bank, FSB v Anderson, 129 AD3d 665, 666 [2d Dept 2015]; Wells Fargo Bank, NA v Burke, 125 AD3d 765, 767 [2d Dept 2015]; US Bank N.A. v Faruque, 120 AD3d 575, 577 [2d Dept 2014]). To the extent plaintiff relies upon the PSA, it is insufficient to demonstrate the existence of a written assignment of the note (see U.S. Bank N.A. v Weinman, 123 AD3d 1108, 1110 [2d Dept 2014]).

To the extent plaintiff submits the July 15, 2016 affidavit of Mr. Dickhaut and copies of the PSA, the Custodial Agreement, and a computer printout (see plaintiff's Exhibit "O"), to establish that Wells Fargo, as custodian for the Trust, had physical possession of the note prior to commencement of the action, such evidence is insufficient to show that the note and allonge were in the physical possession of Wells Fargo and the allonge was firmly affixed to the note at the time of the commencement of this action (see UCC 3—202[2], Comment 3; Slutsky v Blooming Grove Inn, 147 AD2d 208, 212 [2d Dept 1989]; HSBC Bank USA, Nat. Assn. v Roumiantseva, 130 AD3d 983 [2d Dept 2015]). Mr. Dickhaut's knowledge of the facts, relating to the custody of the loan documents is based upon his familiarity with the Wells Fargo custodial records. Such records are not clear, and as to the computer printout, there are unexplained references therein, including to "Location Move," "Transfer Out," "Release (Int. to Ext.)," "Reinstate (Ret. To On Hand)," etc.[FN1] Although Mr. Dickhaut states in his July 15, 2015 affidavit that "[b]y an allonge firmly affixed to the [n]ote, Axiom ... endorsed the [n]ote in blank," he does not state that the allonge was so affixed at the time of the bringing of the action. Nor does he represent in his July 15, 2015 affidavit that he examined the original note and allonge at the time of the institution of the action.

Furthermore, in opposition to the motion, defendant Marta Campos offers the affirmation dated September 27, 2016 of Franklin H. Romeo, an attorney affiliated with her counsel, Queens Legal Services, and copies of two photographs. In his affirmation, Mr. Romeo states that or about June 15, 2015, he inspected the original note at the law offices of plaintiff's attorney and at such time, the note did not bear an allonge firmly affixed to it. He also states that the allonge was not stapled or "permanently attached" to the note. Mr. Romeo further states that he took the two photographs during the inspection, and the photographs are true and accurate depictions of the note at the time of the inspection.

Plaintiff cannot rely on the affirmation of Jeffrey A. Dougherty, Esq., an attorney affiliated with its co-counsel, and the October 10, 2015 affidavit of Mr. Dickhaut, to meet its [*4]prima facie burden since the affirmation and affidavit are improperly submitted for the first time in its reply papers (see HSBC Bank USA, N.A. v Roumiantseva, 130 AD3d 983, 985). In addition, such affirmation and affidavit fail to address the issue of whether the allonge was firmly affixed to the note at the time of the commencement. The evidence regarding whether the note and allonge had been secured by metal brackets to the file folder in the collateral file prior to the note inspection in June 2015 is not relevant (cf. Wells Fargo Bank, NA v Freed, Docket No. 5—12—01, 2012 WL 6562819, 2012 Ohio App. LEXIS 5129 [Ohio App., December 17, 2012]).

Under such circumstances, plaintiff has failed to establish, prima facie, that it had standing to commence this action (see Deutsche Bank Nat. Trust Co. v Webster, 142 AD3d 636 [2d Dept 2016]; U.S. Bank, N.A. v Collymore, 68 AD3d 752 [2d Dept 2016]). That branch of plaintiff's motion pursuant to CPLR 3212 for summary judgment against defendant Marta Campos is denied.

With respect to that branch of the motion by plaintiff to dismiss the affirmative defenses asserted by defendant Marta Campos, plaintiff bears the burden of demonstrating that the affirmative defense is "without merit as a matter of law" (Vita v New York Waste Servs., LLC, 34 AD3d 559 [2d Dept 2006]; see Ramanathan v Aharon, 109 AD3d 529, 531 [2d Dept 2013]).

That branch of the motion by plaintiff to dismiss so much of the first defense asserted by defendant Marta Campos based upon lack of standing is denied (see supra at 3-5).

That branch of the motion by plaintiff to dismiss so much of the first defense asserted by defendant Marta Campos based upon lack of capacity is granted. Although standing and capacity to sue are related, they are distinguishable legal concepts (see Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239 [2d Dept 2007]), and defendant Marta Campos makes no claim that plaintiff, as a federal savings bank, lacks empowerment to sue. Rather, her claim of lack of capacity is predicated upon her allegation that plaintiff is not the owner or holder of the note and mortgage, i.e. a claim of lack of standing.

That branch of the motion by plaintiff to dismiss the second defense asserted by defendant Marta Campos based upon failure to state a cause of action is denied. A motion by a plaintiff does not lie under CPLR 3211(b) to strike the defense of failure to state a cause of action, "as this amounts to an endeavor by the plaintiff to test the sufficiency of his or her own claim" (Butler v Catinella, 58 AD3d 145, 150 [2d Dept 2008]; Mazzei v Kyriacou, 98 AD3d 1088 [2d Dept 2012]; see CPLR 3211[a][7]).

The third defense and first counterclaim are based upon an alleged violation of the General Business Law § 349 in connection with the origination of the mortgage loan. General Business Law § 349 prohibits deceptive business practices and acts. Plaintiff claims that defense and counterclaim are time barred insofar as the applicable statute of limitations is three years (see CPLR 214[2]). "[C]laims and defenses that arise out of the same transaction as a claim asserted in the complaint are not barred by the Statute of Limitations, even though an independent action by defendant might have been time-barred at the time the action was commenced" (Bloomfield v Bloomfield, 97 NY2d 188, 193 [2001]; see CPLR 203[d]). In the instant matter, the subject counterclaims and defenses all arise from the transactions and occurrences upon which the complaint depends (see Delta Funding Corp. v Murdaugh, 6 AD3d 571 [2d Dept 2004]). Because the defense and counterclaim for a violation of section 349 of the General Business Law accrued less than three years after the action was commenced, they are not time-barred.

A viable claim pursuant to General Business Law § 349 is predicated upon allegations [*5]that (1) the challenged conduct was consumer-oriented, (2) the conduct or statement was materially misleading, and (3) the consumer sustained damages (see Lum v New Century Mtge. Corp., 19 AD3d 558, 559 [2d Dept 2005]; see Blue Cross & Blue Shield of N.J., Inc. v Philip Morris USA Inc., 3 NY3d 200, 205 [2004]; Stutman v Chemical Bank, 95 NY2d 24, 29 [2000]; Gaidon v Guardian Life Ins. Am., 94 NY2d 330, 344 [1999])" (Emigrant Mortg. Co., Inc. v Fitzpatrick, 95 AD3d 1169 [2d Dept 2012]). An act is deceptive if it is likely to mislead a reasonable consumer acting reasonably under the circumstances (see Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20, 26 [1995]). The act need not constitute common-law fraud to be actionable (see Stutman v Chemical Bank, 95 NY2d at 29).

Although an individual mortgagor who has been the victim of misleading practices by a mortgagee has been held to have a remedy under General Business Law § 349 (see e.g. Popular Financial Services, LLC v Williams, 50 AD3d 660 [2d Dept 2008]; Delta Funding Corp. v Murdaugh, 6 AD3d 571 [2d Dept 2004]), here, the claim by defendant Marta Campos is predicated upon allegations that plaintiff, or its predecessor in interest, fraudulently induced her to purchase the subject property and finance it with two mortgage loans from Axiom. Defendant Marta Campos alleges that the subject mortgage loan was the primary loan of a two-mortgage loan package originated by Axiom, and the secondary loan was in the amount of $96,000.00. She also alleges that the purchase price of the home was equal to the combined principal balance of the two loans financing the purchase, and that due to the poor condition of the property, the fair market value of the property was substantially less than the purchase price, and the appraised value was inflated. She further alleges plaintiff and its predecessors in interest knew or should have known the property was worth substantially less than the mortgage loans extended to her, and the mortgage loan was unaffordable to her at its inception. Defendant Marta Campos additionally alleges that plaintiff and its predecessors in interest hid the true cost of the mortgage loan, supplied her with loan documents printed only in English, a language she does not speak or read with fluency, and failed to provide her with a HUD-1 statement with proper disclosures in violation of the RESPA.

It well settled that an assignee of a mortgage takes it subject to the equities attending the original loan transaction (see Lapis Enterprises. Inc. v Intl. Blimpie Corp., 84 AD2d 286 [2d Dept 1981]). However, in the absence of an allegation or proof that plaintiff assumed the tort liability of Axiom, was consolidated or merged with Axiom or a mere continuation of Axiom or that the transaction was entered into fraudulently to escape such obligations (see Nationwide Mut. Fire Ins. Co. v. Long Island A.C., Inc., 78 AD3d 801, 801 [2d Dept 2010]), plaintiff cannot be required to answer in damages pursuant to General Business Law § 349 for alleged deceptive conduct committed by Axiom in connection with the making of the mortgage loan (see Emigrant Mortg. Co., Inc. v Fitzpatrick, 95 AD3d 1169, 1172).

Furthermore, the factual allegations made by defendant Marta Campos do not amount to conduct which has an impact on the public at large. Defendant Marta Campos alleges that Axiom originated 18 (primary) mortgage loans in Queens County in 2006 (the same year as the subject mortgage loan was originated), of which 14 loans subsequently fell into foreclosure, but she has failed to allege or prove that these non-performing loans were the product of deceptive or misleading acts by Axiom. To the extent she alleges that Axiom engaged in poor underwriting practices adversely impacting the public, a prudent lender considers the ability of a mortgagor to repay the loan and refuses to loan money to a person of marginal financial means or ability. The Legislature, in reaction to some lenders' failure to adhere to strong underwriting standards, and [*6]with the intention of protecting consumers against abuses in the subprime lending market, enacted Banking Law § 6-l (2) (k), which prohibits a lender from making a high-cost home loan without due regard to repayment ability (see L 2002, c 626, § 1, eff April 1, 2003). However, the version of Banking Law § 6-l in effect on November 14, 2006 when the subject mortgage loan was made (see L 2002, ch 626, § 4), was inapplicable to home loans in a principal amount in excess of $300,000.00 (see former Banking Law § 6-l[1][e][I] [B] [L 2002, ch 626, § 1]), and therefore did not bind Axiom vis-a-vis the subject mortgage loan. The court is unaware of any other statute which requires a lender to take into account the borrower's ability to repay when making a loan, and provides a remedy to the borrower for the lender's failure to meet such requirement.

As a consequence, the allegations of defendant Marta Campos are insufficient to state a cause of action for, or a defense based upon, violation of General Business Law § 349 (see Flax v Lincoln Natl. Life Ins. Co., 54 AD3d 992 [2d Dept 2008]; Brooks v Key Trust Co. N.A., 26 AD3d 628 [3d Dept 2006]). That branch of the motion by plaintiff to dismiss the third defense and first counterclaim asserted by defendant Marta Campos based upon violation of General Business Law § 349 is granted.

With respect to the branch of the motion by plaintiff to dismiss the fourth defense and second counterclaim asserted by defendant Marta Campos based upon her claim of aiding and abetting fraud, her counsel has advised the court that she is no longer pursuing such defense and counterclaim (see Memorandum of Law of Defendant Marta Campos, at 15, n 10). Under such circumstances, that branch of the motion by plaintiff to dismiss the fourth defense and second counterclaim asserted by defendant Marta Campos based upon her claim of aiding and abetting fraud is denied as moot.

The fifth defense asserted by defendant Marta Campos is based upon her claim that the subject mortgage loan is substantively and procedurally unconscionable.

" 'In general, an unconscionable contract has been defined as one which is so grossly unreasonable as to be unenforcible because of an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party' (King v Fox, 7 NY3d 181, 191; see Gillman v Chase Manhattan Bank, 73 NY2d 1, 10; Simar Holding Corp. v GSC, 87 AD3d 688, 689; FGH Contr. Co. v Weiss, 185 AD2d 969, 970-971). 'Substantive elements of unconscionability appear in the content of the contract per se; procedural elements must be identified by resort to evidence of the contract formation process' and meaningfulness of the choice (Matter of Friedman, 64 AD2d at 85; see Gillman v Chase Manhattan Bank, 73 NY2d at 10-11; Simar Holding Corp. v GSC, 87 AD3d at 689). ... '[I]n general, it can be said that procedural and substantive unconscionability operate on a "sliding scale"; the more questionable the meaningfulness of choice, the less imbalance in a contract's terms should be tolerated and vice versa' (State of New York v Wolowitz, 96 AD2d at 68, quoting Eddy, On the "Essential" Purposes of Limited Remedies: The Metaphysics of UCC Section 2-719[2], 65 Cal L Rev 28, 41-42, n 56; see Simar Holding Corp. v GSC, 87 AD3d at 690)" (Emigrant Mtge. Co., Inc. v Fitzpatrick, 95 AD3d 1169, 1169-1170).

According to defendant Marta Campos, she immigrated to the United States in 1983, and is a native Spanish speaker, with a sixth-grade education completed in El Salvador. She alleges she is a financially unsophisticated borrower, who did not fully and accurately understand the terms in the loan documents, and did not realize the loan was not fully amortizing until after the [*7]loan had been originated. She claims that prior to her purchase of the property, she had never purchased or financed the purchase of any real property before, but instead, had rented an apartment in Queens. She also claims that in 2006, she was self-employed, selling accessories and small household goods, and earned only a modest amount. She further claims that she was not provided with a meaningful opportunity to negotiate the terms of the mortgage loan with Axiom, insofar as she was provided with the loan documents, which were written in the English language, for the first time at the closing. Defendant Marta Campos asserts the mortgage loan terms unreasonably favor the lender, insofar as the subject first mortgage loan, is a subprime, 30-year loan, which has risky and predatory terms and features, including a high, adjustable rate of interest, a period of 10 years of payment of interest only, a prepayment penalty equivalent to six months of interest, and the amortization of payments at the end of the interest-only period over the remaining 20-year period of the loan. She also alleges the terms of the second mortgage are more expensive than the subject loan, and includes a balloon payment. She asserts she would not have agreed to consummate the loan, had she been aware of the interest-only feature of the subject mortgage.

Defendant Marta Campos testified that she did not read the loan documents, or ask for a translation of the documents, or an opportunity to review them, prior to her signing them. She admitted that she attended the closing with a bilingual attorney of her own choosing and in whom she placed her trust, but did not ask him, to explain the documents or translate them into Spanish for her before she signed them. Instead, she testified that she relied upon her attorney to read and translate the documents, and that she signed the documents without asking what they meant, because she looked at the "figures that they had given me before. That's why I signed it. Because I knew it was a closing." Under such circumstances, the defense based upon the unconscionability of the subject loan is without merit. That branch of the motion by plaintiff to dismiss the fifth defense asserted by defendant Marta Campos is granted.

The sixth defense and third counterclaim asserted by defendant Marta Campos is based upon civil trespass. Defendant Marta Campos alleges that a representative of Wells Fargo, as the servicer for plaintiff, entered into the subject property without her permission or justification in October or November 2009, and that the entry was witnessed by her friend and "housemate" Ciro Moran.

A claim of trespass does not constitute a defense to foreclosure. With respect to the counterclaim by defendant Marta Campos for trespass, "[t]he essential elements of a cause of action sounding in trespass are the intentional entry onto the land of another without justification or permission" (Reyes v Carroll, 137 AD3d 886, 888 [2d Dept 2016]). Entry upon mortgaged premises by a mortgagee must be legal in its inception, and, if not, entry constitutes trespass (see Herrmann v Cabinet Land Co., 217 NY 526 [1916]; Gomez v Bobker, 124 AD2d 703 [2d Dept 1986]; Dime Savings Bank of Brooklyn v Altman, 249 AD 174 [2d Dept 1936], affd 275 NY 62 [1937]).

Plaintiff contends that no trespass occurred because its agent had the right to enter the property under the terms of the mortgage, and perform an inspection of it, including the interior of the home. It cites paragraph 7(b) of the subject mortgage which permits "Lender, and others authorized by Lender" to "enter and inspect the [p]roperty" and "will do so in a reasonable manner and at reasonable times." That paragraph also provides that "[i]f it has a reasonable purpose, Lender may inspect the inside of the home or other improvements on the [P]roperty. Before or at the time an inspection is made, Lender will give me notice stating a reasonable [*8]purpose for such interior inspection."

In view of the open question of whether plaintiff has standing in this action, a question of fact also exists as to whether plaintiff can rely upon the mortgage's terms as the basis for its claim that it had permission to enter the property. Furthermore, the mortgage provides that notices required under the mortgage and given by the lender in connection it, be in writing (see paragraph 15 of the subject mortgage). Plaintiff makes no claim that it provided defendant Marta Campos with written notice stating a reasonable purposed for the interior inspection either before, or at the start, of such inspection.

Plaintiff has failed to demonstrate prima facie that its entry onto the property was justified, and defendant Marta Campos has raised a triable issue of fact as to whether the purported reason of winterization of the house there given by the Wells Fargo representative to Ciro Moran was a justifiable reason. To the extent plaintiff contends that plaintiff suffered no injury as a consequence of the entry onto the property, nominal damages are presumed from a trespass even where the property owner has suffered no actual injury to his or her possessory interest (see Hill v Raziano, 63 AD3d 682 [2d Dept 2009]; Burger v Singh, 28 AD3d 695, 698 [2d Dept 2006]; Shiffman v Empire Blue Cross & Blue Shield, 256 AD2d 131 [2d Dept 1998]).

That branch of the motion by plaintiff to dismiss the sixth defense asserted by defendant Marta Campos based upon trespass is granted. That branch of the motion by plaintiff to dismiss the third counterclaim based upon trespass is denied.

Those branches of the motion by plaintiff for an order of reference and an award of attorneys' fees and costs associated with this action are denied at this juncture. That branch of the motion by plaintiff to deem defendants Mortgage Electronic Registration Systems, Inc., as Nominee for Axiom Financial Services, New York City Environmental Control Board, New York City Parking Violations Bureau, New York City Transit Adjudication Bureau, and Victor Campos to be in default in appearing or answering is granted.

Dated: May 15, 2017

CARMEN R. VELASQUEZ, J.S.C. Footnotes

Footnote 1: To the extent plaintiff's counsel makes reference in its memorandum of law and reply memorandum of law to certain pages of the transcript of the deposition testimony of Beverly DeCaro and to an exhibit (No. 34) annexed thereto, the papers submitted to the court do not include such pages of the transcript or the exhibit. The only pages of that transcript provided to the court are pages numbered 160, 161, 163-167) (see plaintiff's Exhibit "C," annexed to reply affirmation of Jeffrey A. Dougherty, Esq., dated October 10, 2016).