State of New York Mtge. Agency v Farruggia
Annotate this CaseDecided on February 14, 2017
Supreme Court, Niagara County
State of New York Mortgage Agency, Plaintiff,
against
Sam Robert Farruggia, Michelle M. Farruggia A/K/A Michelle Farruggia, et al., Defendants.
E152275/2014
Todd Schwartz, Esq.
Frankel, Lambert, Weiss, Weisman & Gordon, LLP
Attorneys for Plaintiff
53 Gibson Street
Bay Shore, New York 11706
Thomas J. Caserta, Jr., Esq.
Attorney for Defendant Michelle Farruggia
800 Main Street, Suite 4C
Main Post Office Box 725
Niagara Falls, New York 14302-0725
Ralph A. Boniello III, J.
DECISION & ORDER
The Defendant, Michelle M. Farruggia a/k/a Michelle Farruggia, seeks an Order directing Plaintiff to offer a loan modification individually and solely in her name without co-Defendant Sam Robert Farruggia.
Initially, the Court notes that both parties waived their right to a hearing and requested that the matter be decided on submission.
The record reflects that Michelle and Sam Farruggia were divorced with the granting of a Final Judgment of Divorce by the Hon. John F. O'Donnell, J.S.C., on or about June 13, 2005. A review of the Judgment of Divorce reveals that Michelle Farruggia was awarded "all right, title and interest in the former marital residence located at 255 71st Street, Niagara Falls, New York". Michelle Farruggia was further ordered to be responsible for the mortgage. Subsequently, due to a failure to make the monthly mortgage payments, the Plaintiff herein commenced a foreclosure [*2]action on February 10, 2014.
It is undisputed that the co-Defendant, Sam Farruggia, has not appeared in the foreclosure action nor participated in any of the foreclosure settlement conferences. Michelle Farruggia has diligently sought to retain the property and submitted a loan modification package. After a timely review of the loan modification package by the Plaintiff, a trial modification was offered to the Defendants by letter dated February 29, 2016. Despite the fact that the trial loan modification was approved solely on the basis of Ms. Farruggia's financial information, the proposal was addressed to both Sam and Michelle Farruggia. The only requirement to accept the trial modification was for the Plaintiff to receive the first payment by the due date. Ms. Farruggia successfully completed the three month trial modification without assistance from Sam Farruggia and a permanent modification was offered by the Plaintiff on July 20, 2016. Like the trial modification, the permanent modification offer was addressed to both Defendants. However, both Defendants were now required to sign the documents. Unfortunately, Mr. Farruggia has refused to cooperate and execute the new loan documents.
The co-Defendant, Michelle Farruggia, asserts that it constitutes bad faith for the Plaintiff to demand at the end of the process the signature of Mr. Farruggia when they were aware that he has not appeared nor participated in any of the settlement conferences including the submission of financial information, completing the loan modification package and making the three trial modification payments. Further, Ms. Farruggia points out that the Plaintiff has the first lien position with the mortgage and is completely protected given the current value of the property. As a result, Ms. Farruggia is requesting that the Court direct the Plaintiff to offer her a permanent loan modification in her name alone.
In response, the Plaintiff claims that it has complied with its obligations under CPLR §3408 by attending each conference, accepting a loan modification package, reviewing it timely and offering a loan modification therein. The Plaintiff points out that it attempted to secure an exception with respect to requiring the signature of Mr. Farruggia on the new loan documents but such attempt was not successful. Significantly, the Plaintiff has submitted an email which establishes that Ms. Farruggia was advised prior to her making the monthly trial modification payments that both parties would be required to sign the permanent modification documents (see, Plaintiff's Affirmation in Opposition, Exhibit I). Nevertheless, Plaintiff argues that there is no legal basis that allows the Court to direct Mr. Farruggia to be relieved of his financial obligation under the original Note and Mortgage.
It is well settled that the parties at a mandatory foreclosure settlement conference are required to negotiate in good faith to reach a mutually agreeable resolution (CPLR §3408 [f]). In order to conclude that a party failed to negotiate in good faith, a court must determine that "the totality of the circumstances demonstrates that the party's conduct did not constitute a meaningful effort at reaching a resolution" (PNC Bank, N.A. v Campbell, 142 AD3d 1147 [2nd Dept 2016]; US Bank N.A. v Sarmiento, 121 AD3d 187 [2nd Dept 2014]). While the Court's role in the foreclosure settlement conference part is to further the goal of keeping homeowners in their homes, the parties cannot be forced to reach an agreement (see, Wells Fargo Bank, N.A. v Meyers, 108 AD3d 9 [2nd Dept 2013]). The law is clear that the stability of contract obligations must not be undermined by judicial sympathy Id.
Based upon the facts and circumstances herein, the Court finds that the Defendant, [*3]Michelle Farruggia, has not established that the Plaintiff failed to negotiate in good faith. Specifically, the Defendant has made no showing that the Plaintiff engaged in conduct that improperly hindered the settlement process or needlessly prevented the parties from reaching a mutually agreeable resolution (see, Wells Fargo Bank, N.A. v Van Dyke, 101 AD3d 638 [1st Dept 2012]). Further, the Court notes that CPLR §3408 does not require a plaintiff to make the exact offer desired by a defendant Id.
Accordingly, the Defendant, Michelle M. Farruggia a/k/a Michelle Farruggia, request for an Order directing the Plaintiff to offer a loan modification individually and solely in her name without co-Defendant Sam Robert Farruggia is denied in its entirety.
The signing of this Decision and Order shall not constitute notice of entry under CPLR 2220. Counsel is not relieved from the applicable provisions of this rule with regard to service of notice of entry.
This Decision shall constitute the Order of this Court and shall be filed as such.
Dated: February 14, 2017
Niagara Falls, New York
RALPH A. BONIELLO, III
Supreme Court Justice
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