Federal Natl. Mtge. Assn. v Rico
Annotate this CaseDecided on November 14, 2017
Supreme Court, Warren County
Federal National Mortgage Association ("Fannie Mae"), a Corporation Organized and Existing under the Laws of the United States of America, Plaintiff,
against
Martin Rico, Kathryn Rico, Board of Directors of the Crystal Lake Preserve Homeowners Association and John Doe, Defendants.
2014-60180
Gross Polowy, LLC, Williamsville (Amber A. Jurek of counsel), for plaintiff.
The Clements Firm, Glens Falls (Thomas G. Clements of counsel), for defendant Linda Stemler.[FN1]
Robert J. Muller, J.
Defendant Linda Stemler (hereinafter defendant) has resided at 11 Summit Road in Brant Lake, Warren County continuously since 1994. She owned the property until 2007, at which time she deeded it to defendants Kathryn Rico and Martin Rico, her daughter and son-in-law.[FN2] In August 2010, the Ricos borrowed $192,800.00 from Bank of America, N.A. This loan was evidenced by a promissory note and secured by a mortgage on the property, which mortgage was subsequently assigned to plaintiff.
The Ricos made monthly payments relative to the loan until October 1, 2013, at which time they defaulted. Plaintiff then commenced this foreclosure action on May 9, 2014. The Ricos and defendant Board of Directors of the Crystal Lake Preserve Homeowners Association have not answered or otherwise appeared. Defendant served an answer on January 4, 2016, which answer included, inter alia, the affirmative defense of standing. While initially rejected by plaintiff as untimely, defendant's answer was ultimately accepted by stipulation of the parties [*2]dated July 7, 2016 and entered on July 12, 2016.
Defendant served omnibus discovery demands with her answer in January 2016 and thereafter served plaintiff with an amended demand for a bill of particulars on August 2, 2016. In her omnibus discovery demands defendant requested, inter alia, "[t]he original ink signature [n]ote" and "[a] certified copy of any assignment of the [n]ote." In her amended demand for a verified bill of particulars, defendant then requested that plaintiff "[s]tate each and every basis for . . . alleging that [it] is the current owner of the [p]romissory [n]ote," as well as "each and every basis for . . . alleging that [it] was the owner of the [p]romissory note . . . , specifically the location and custodian of the original note on May 19, 2014."
After receiving no responses to the demands, counsel for defendant sent correspondence to counsel for plaintiff on September 13, 2016 in a good faith effort to compel responses (see 22 NYCRR 202.7 [a] [2]; [c]). A conference was then held on November 28, 2016 and the Court issued a Preliminary Conference Stipulation and Order (PCSO) on January 9, 2017. The PCSO provided, in pertinent part:
"A [b]ill of [p]articulars shall be served by [p]laintiff within 30 days after service of this Order with [n]otice of [e]ntry on [p]laintiff, and failing that [p]laintiff's [c]omplaint will be dismissed."The PCSO further provided:
"Plaintiff shall respond to [d]efendant's [o]mnibus [d]iscovery [d]emands dated January 4, 2016, within 30 days after service of this Order with [n]otice of [e]ntry on [p]laintiff, and failing that [p]laintiff's [c]omplaint will be dismissed."The PCSO was served on plaintiff with notice of entry on January 17, 2017 and responses were served on defendant within the 30-day time frame. Plaintiff, however, did not provide any of the information requested relative to the promissory note, instead stating as follows:
"Plaintiff objects to [these] demands as . . . vague, overbroad, unduly burdensome and overreach[ing] the proper objective of seeking the production of information which is relevant to the subject matter involved in this action. Furthermore, [d]efendant . . . is not an obligor on the [n]ote, nor a [m]ortgagor, and is not entitled to any information regarding the subject loan. Defendant . . . has no standing to challenge [p]laintiff's standing."Presently before the Court is defendant's motion to dismiss the complaint.
CPLR 3126 (3) provides as follows:
"If any party . . . refuses to obey an order for disclosure or wilfully fails to disclose information which the court finds ought to have been disclosed pursuant to this article, the court may make such orders with regard to the failure or refusal as are just, among them . . . an order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or any part thereof, or rendering a judgment by default against the disobedient party."In support of the motion, defendant contends that she is entitled to dismissal of the complaint based upon plaintiff's willful failure to comply with the PCSO. Specifically, defendant contends that plaintiff failed to provide complete responses to her omnibus discovery demands and amended demand for a bill of particulars within the time frame set forth in the PCSO. Defendant further contends that plaintiff's objections to the demands are improper, as she is a [*3]"named [d]efendant" and "most certainly has standing to defend her possession of the property."
In opposition, plaintiff contends that its responses were served well within the time frame set forth in the PCSO. Plaintiff further contends that defendant has no authority to challenge its standing because she is not a party to either the note or mortgage and, as such, its objections were appropriate.
At the outset, the Court finds that plaintiff's objections relative to standing are supported by neither statutory nor case law. Under RPAPL 1311 (3), "[e]very person having an estate or interest in possession, or otherwise, in the property as tenant" shall be made a party defendant to the action (see 6820 Ridge Realty v Goldman, 263 AD2d 22, 25-26 [1999]; Polish Natl. Alliance of Brooklyn v White Eagle Hall Co., 98 AD2d 400, 403-404 [1983]). Further, it has been expressly recognized that a tenant — as a necessary party under RPAPL 1311 — has "standing to contest the validity of the . . . mortgage" (Tornatore v Bruno, 12 AD3d 1115, 1117 [2004]; see Wellington v Financial Freedom Acquisition LLC, 132 AD3d 506, 507 [2015]).
It must also be noted that the several cases cited by plaintiff in support of its objections are inapposite. Each of these cases stands for the proposition that "[a] non-party to a contract . . . lacks standing to enforce the agreement in the absence of terms that 'clearly evidence[] an intent to permit enforcement by the third party' in question" (Premium Mtge. Corp. v Equifax, Inc., 583 F3d 103, 108 [2d Cir 2009], quoting Fourth Ocean Putnam Corp. v Interstate Wrecking Co., 66 NY2d 38, 45 [1985]; see State of Cal. Pub. Employees' Retirement Sys. v Shearman & Sterling, 95 NY2d 427, 434-435 [2000]; 767 Third Ave. LLC v ORIX Capital Mkts., LLC, 26 AD3d 216, 218 [2006], lv denied 8 NY3d 803 [2007]). Here, defendant is not seeking to enforce the note. Rather, she is inquiring whether plaintiff has standing to enforce the note — as she is entitled to do as a necessary party under RPAPL 1311 (3).
Although plaintiff's objections relative to standing are without merit,[FN3] it does not appear that the objections were made in bad faith — nor that plaintiff willfully failed to disclose the requested information relative to its ownership of the promissory note. Further, plaintiff's responses — while incomplete — were nonetheless served within the time frame set forth in the PCSO. Under the circumstances, the Court finds that a conditional Order of dismissal is the appropriate remedy.
Briefly, during oral argument plaintiff asserted that defendant is not in fact a tenant of the property. With that said, this argument was raised for the first time at oral argument and, as such, is not properly before the Court (see Rinzler v Rinzler, 97 AD3d 215, 217 n 2 [2012]; see also Gonzalez v Sun Moon Enters. Corp., 53 AD3d 526, 526 [2008]).[FN4]
Based upon the foregoing, defendant's motion is granted to the extent that the complaint shall be dismissed if plaintiff fails to provide substantive responses to demand No. 10 of defendant's omnibus discovery demands and demand Nos. 1 and 2 of defendant's amended [*4]demand for a verified bill of particulars within thirty (30) days of service of this Decision and Order with notice of entry thereon, and defendant's motion is otherwise denied.
Therefore, having considered the Affidavit of Thomas G. Clements, Esq. with exhibits attached thereto, sworn to March 9, 2017, submitted in support of the motion; Affirmation in Opposition of Amber A. Jurek, Esq. with exhibits attached thereto, sworn to April 26, 2017, submitted in opposition to the motion; and Affidavit in Reply of Thomas G. Clements, Esq. with exhibits attached thereto, sworn to May 2, 2017, and oral argument having been held on November 8, 2017 with Bridget Bidonde, Esq. appearing on behalf of plaintiff and Thomas G. Clements, Esq. appearing on behalf of defendant, it is hereby
ORDERED that defendant's motion is granted to the extent that the complaint shall be dismissed if plaintiff fails to provide substantive responses to demand No. 10 of defendant's omnibus discovery demands and demand Nos. 1 and 2 of defendant's amended demand for a verified bill of particulars within thirty (30) days of service of this Decision and Order with notice of entry thereon, and defendant's motion is otherwise denied.
The above constitutes the Decision and Order of this Court.
The original of this Decision and Order has been filed by the Court together with the submissions enumerated above. Counsel for defendant is hereby directed to promptly obtain a filed copy of the Decision and Order for service with notice of entry in accordance with CPLR 5513.
Dated: November 14, 2017
Lake George, New York
ROBERT J. MULLER, J.S.C. Footnotes
Footnote 1: Defendant Linda Stemler is sued herein as "John Doe."
Footnote 2:Defendant did not retain a life estate in the property.
Footnote 3:The Court also finds plaintiff's objections to the demands as "vague, overbroad, unduly burdensome and overreaching" to be without merit.
Footnote 4:In fact, contrary to plaintiff's position at oral argument, defendant was "referred to as 'Tenant'" throughout its opposition papers.
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