Onewest Bank, FSB v Demers

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Onewest Bank, FSB v Demers 2018 NY Slip Op 30823(U) May 2, 2018 Supreme Court, Suffolk County Docket Number: 39220/09 Judge: Thomas F. Whelan 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. [* 1] (.~f)Py '>H< 1RT r Uk;>.I (JRDER fNDEX No. 392201 09 SUPRE\1£ COURT - S"lATE OF i\E\\' YORK fAS PART 33 - SUFFOLK COUNTY PRESENT: Hon. THOMAS F. WHELA ' Justice of the Supreme Court ---------------------------------------------------------------X ONEWEST BANK. FSB . Plaintitl MOTION DA TE 2/22/ 18 SUBMIT DATE 4/ 6118 Mot. Seq. # 003 - MotD Mot. Seq. # 004 - XMD Mot. Seq. # 005 - MG Pre-T rial Conference: May 25. 20 18 N __lL CDIS P Y_ GREENBERG TRAURIG, LLP Attys. For Plaintiff 200 Park Ave . . ewYork.NY!Ol66 -againstELS IE H. DEMERS, WASHINGTON MUTUAL f3ANK FA. "JEO DOE" said name being fictitious. it being the intention of plaintiff to designate any and all occupants of the premisses being foreclosed herein and any corporations or : entities. if any, having or claiming an interest or lien : upon the mortgaged premises, MILLER, ROSADO & ALGIOS, LLP Attys. For Defendant Demers 320 Old Country Rd. - Ste. 103 Garden City. NY 11530 Defendants. ---------------------------------------------------------------)( Upon the following papers numbered I to 21 read on this motion to appoint a referee to compute ainon!! other things, motion for summary judgment and cross motion to dismiss : Notice of Motion/Order to Show Cn usc and supporting p;:ipers I- 4· 5-7: 12-1 4 : Notice of Cross Motion and supporting papers: ~8-~I~I_ __ Opposing papers: 15-1 6 : Reply papers 17-18 : Other 19-20 (memorandum ): 7 I (memorandum) ! ,ind ,1fte1 ht't11 i11g counsel in ~uppo11 t111d oppo~ed to the 111otit>n ) it is. ORDERED that those pn11 ions ol'th is motion (#003) by the plaintiff fo r an order awnr<ling it sununary judgment dismissing the affirmati,·e defenses asserted in the ans\Yer of defendant. Emily Demers. is granted to the extent that the pl a inti ff is awarded pa11ial summary j udgmcnt dismissing the first. Third, Fifth and Sixth through Thirteenth affirmative defenses set for th in the answer: and it is further ORDERED that those portions or this motion (#003) by the plaintiff for an order awarding it s ummary _iudgmcnt dismissing the Second and Fourth affirmative defenses in E ls ie Demers· answer ch::i.Jlc.nging ..the pLaintif[s standingis denied: a nd il is further [* 2] Onewest Bank v Demers Index No. 39220109 Page 2 ORDERED that the remaining portions of the plaintiffs motion (#003) wherein it seeks summary judgment on its complaint against the answering defendant. default judgments against the remaining defendants served with process. and a caption amendment together with an order appointing a referee to compute is denied without prcj udice: and it is furthe r ORDERED that the cross motion ( #004) by answering defendant Elsie Demers. for an order denying the plaintiffs motion pursuant to CPLR 3212(1) is denied: and it is further ORDERED that the motion (#005) by the plaintiff seeking to supplement its motion (#003) for summary judgment is granted. and that submission has been considered herein: and it is further ORDERED that pursuant to CPLR 3212(g). the court hereby declares that the trial of this acti on, if any. shall be limited to the unreso lved issue framed by the terms of this order, name ly, the plaintiff's standing; and it is further ORDERED that counsel for the respective parties shall appear for a pre-trial conference on May 25. 2018. at 9:30 a.m .. in the courtroom of the undersigned located at 1 Cou1t Street - Annex. Riverhead, New Yo rk, at which, the Court shall issue directives necessa1y to ready this matt(!r for a trial on the limi ted. unresolved issue of the plaintiff's standing; and it is further ORDERED that the portion of plaintiffs motion (#003) seeking \'acatur of the Order of Rcti:n:nce dated June 24, 2010 is granted. and said Order is hereby vacated: and it is further ORDERED that plaintiff is directed to file a notice of entry within five days of receipt of this Order pursuant to 22 NYCRR § 202.5-b(h)(J) This forec losure action was commenced by filing on October 5. 2009. In essence, on June 23. 2006. defendant Elsie Demers borrowed $568,000.00 from the plai ntifTs predecessor-in-interest and executed a promissory note and a mortgage. Since Apri l 1. 2009. the defendant has failed to pay the monthly installments due and owing. By Order dated June 24, 2010, the plaintiff was granted a default judgment as against all defendants and the appoinnnent of a referee. The pinint iff now seeks to vacate that Order, noting that the motion (#00 I ) was proccdurally improper as the defendant LJlt:d an Answer dated October 30. 2009 containing thirteen affirmative defenses. Upon \'acatur. the plaintiffthen seeks sununary judgment dismissing the affirmative defenses asserted in the defendant's ans,,·er. a default judgment as against the remaining non-answering defendants. the appointment of a referee to compute. and the amendment of the caption. The defendant consents to the vacatur or the prior order. opposes the remainder of the motion. and cross mo\'es (#00-0 for dismissal challenging plaintiffs standing to commence the action. The plaintiff opposes the cross motion in papers that further sen·e as a reply to the defendant"s opposition to the plaintiffs motion-in-chief. Additionally. the plaintiff filed an additional motion (#005) seeking to supplement irs origi nal motion (#003) and j udicial notice. The defendant has oppnsed same. Firsl. as plainl!ff\vas not l:lltitkd to a default j udgmenl against the answering defendant (st>e CPLR 5015(a]f3] and l4]). the Court grants those branches of the par1ies· motions seeking to \'acate the prior Order. [* 3] Onewcst Bank \' Demers Index ;\o. 39220 09 Page 3 \\'ith rt!spect to plaintiffs summary judgment motion (#003 ). the Court finds that the plaintiff has refuted the First. Third, Fifth_and Seventh through Thirteenth Affirmati\'e Defenses of the ans\ver and, thus. satisfied its prima facic burden on those allegations (see HSBC Bank USA, Natl. Assn. v Espinal. 137 AD3d 1079, 28 NYS3d 107 [2d Oept 2016]: U.S. Ba11k Natl. Assn. v Cox, 148 AD3d 692. 49 NYS3d 527 [2d Dept 201 7]). The burden then shills to defendant (see Bank ofAmerica, N.A. 1• DeNardo , 151 AD3d 1008. 58 NYS3d 469 [2d Dept 20 17] ) and it was incumbent upon the answering defendant to submit proof sutticient to raise a genuine question of fact rebutting plaintiffs prima focie showing or in support of the affirmative defonses asserted in the answer or otherwise avai lable to defendant (see Flagstar Bank v Bellafiore, 94 AD3d 1044. 943 NYS2d 551 [2d Dept 20121: GroggAssocs. vSouth Rd. Assocs.. 74 AD3d 1021. 907 NYS2d 22 [2d Dept 2010]; Wells /?argo Ba11k v Karla, 71 AD3d I 006, 896 NYS2d 681 [2d Dept 201 OJ; Was/1i11gto11 Afut. Ba11k 1· O'Connor. 63 AD3d 832,880 NYS2d 696 [2d Dept 2009]; J.P. Jli/ organ Chase Bank, NA vAgnello, 62 AD3d 662, 878 NYS2d 397 [2d Dept 2009]; A ames Fu11ding Corp. v Houston , 44 AD3d 692, 843 NYS2d 660 [2d Dept 2007]). Notably. affirmative defenses predicated upon legal conclusions that are not substantiated with allegations of fact are subject to dismissal (see CPLR 3013, 30l8fbj; Katz v Miller. 120 AD3d 768. 991 ' YS2d 3-+6 [2d Dept 2014J: Becher v Feller, 64 ADJ 672, 677. 884 NYS2d 83 [2d Dept 2009]; Coh en Fashion Opt., /Jtc. v V & !);/Opt., Ille .. 51 AD3d 619. 858 KYS2d 260 [2d Dept 2008]). 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 of fact exists (see Kuehne & Nagel, Ille. v Bair/en , 36 NY2d 539, 369 NYS2d 667 [1975]; see also Afadeline D 'A11t/1011y Enter., Inc. v Sokolowsky, 101 AD3d 606, 957 NYS2d 88 [1st Dept 20 12]; Argent Mtge. Co., LLC v Mentesaua , 79 AD3d l 079, 915 NYS2d 591 [2d Dept 201 O]). Additionally. the fai lure to raise pleaded affirmative defenses in opposition to a motion for summary judgment renders those defenses abandoned and thus without any etlicacy (see New York Commercial Bank v J. Realty F Rockaway, Ltd., 108 AD3d 756, 969 NYS2d 796 [2d Dept 20 13]; Starkman v City f~j'lo11g Beach. 106 AD3d 1076. 965 NYS2d 609 [2d Dept 20131). The Jcfcndant 's opposition and cross motion challenge plaintiff's standing and plaintiffs mailing of the notice of default as required by the terms of the mortgage. The Comt addresses each of these all egations herein. however, in accordance wi th the above. the claims raised in the answer and not addressed in the opposition and cross motion, speciiically the First. Third, Fifth. and Seventh through Thirteenth affirmative defenses. are dismissed as abandoned. \\'here the plaintiffs standing has been placed in issue by the defendant"s answer. the plaintiff must also establish its standing as pait of its prima facie showing (see Aurora Loan Servs. , LLC v Taylor. 25 1 Y3d 355. 12 NYS3d 612 (2015]: US Bank NA 1• Ballin. 158 AD3d 786, 787. 2018 WL 988836 f2d Dept 2018) citing Deutsche Bank Natl. Trust Co. 1• ldarecis, 133 AD3d 702. 703. 21 YS3d 26 l [2d Dept 2015]: Wells Fargo Bank, J\~A. 1• Arias. 121 A03d 973. 9951\YS2d 118 [2d Dept 201-+J: U.S. Bank, N.A . 1• Col(rmore. 68 AD3d 752. 890 1\YS2d 578 f2cl Dept 2009]). '"A plaintiff cstablishes its standing in a mortgage foreclosure action \\here it is the holder or assignee of the underlying note at the time the action is commenced .. (US Baul< NA v Ballin. I58 AD3d at 788. su1wa, citing LNi'C01p. v Fnmcois. 134 AD3d 1071. 1072. 22 NYS3d 543 [2d Dept 2015]). ··Either o written ;;1ssignmcnt of the L1ndei1/ing note o r the physical delivery of the note is sufficient to transfer the obi igation. and the mortgage passes with the debt as an inseparable incident" (US Ba11k NA v Ballin. 158 AD3d at 788, supra, citing US Bank, N.A. v Col~l'lllOre, 68 AD3d 752, 754, 890 NYS2d [* 4] Onewest Bank ,. Demers 09 Index No. 392201 Page 4 57812d Dept 2009J; see also Wells Fargo Bank, NA v Frankson . 157 AD3d 844. 66 ~YS3d 529 [2d Dept 2018]; U.S. Bank v Eltre11feld, 1:+4 AD3d 893. -1-1. YS3d 269 r2d Dept 2016] : JP1 lforga11 Cltase Bank, Natl. Assn. v Jl'einberger. 142 A03d 6-B. 37 i\YS3d 286 [2cl Dept 2016); Citimortgage, Ju e. l' Klein . 140 AD3d 913. 33 NYS3d 432 (2d Dept 2016]; U.S. Bank Natl. Assn. v Godwin . 137 AD3d 1260. 28 NYS3d 45 0 (2d Dept 20161; Wells Fargo Bank, N.A. vJosep/1, 137 AD3d 896, 26 NYSJd 583 [2d Dept 2016]: Emigrant Bank vLarizza. 119 A03d 904, 13 NYS3d 129 ['.2d Dept 20 15J; Deutsclte Bank Natl. Trust Co. v Wltale11 . I07 ADJd 931. 969 NYS2d 82 [2d Dept 20 131). One of the vari ous methods that standing may be established is by due proof that the plaintiff or its custodial agent was in possession of the note prior to the commencement of the action. The production· of such proof is sufficient to establish, prima facie. the plaintiffs possession of the requisite standing to prosecute its claims for foreclosure and sale (see Aurora Loan Servs., LLC v Taylor. 25 NY3d 355. supra; Wells Fargo Bank, NA v Fm11kso11. 157 AD3d 844, supra; U.S. Bank v Eltre11feld, 144 ADJd 893. supra; JPMorgan Cltase Bank, Natl. Assn. v Weinberger. 142 AD3d 643, supra: Citimortgage, Inc. v Klein. 140 AD3d 913. supra: U.S. Bank Natl. Assn. v Godwin. 137 AD3d 1260, supra: Wells Fargo Bank, N.A. v Joseplt , 13 7 A03d 896. supra; Emigrant Bank v Larizza. 129 AD3d 904. supra: Deutsclte Bank Natl. Trust Co. v Whalen , l 07 AD3d 93 l. supra]). A S\\'Orn affidavit of the plaintiffs loan servicer. based on a review of business records. is sufficient to sho\\' physical delivery or possession (Tribeca Lending Corp. v Lawson. 159 AD3d 936, 2018 WL 1403815 (2d Dept 2018]: US Bank Natl. Assn. v Ehrenfeld, 144 AD3d 893. supra). The plaintiff has submitted the affidavit of Katherine Ortwcrth. who is an employee of Ocwen. the loan servicer and attorney-in-fact fo r U.S. Bank National Association as Trustee for Lehman XS Trust Mortgage Pass-Through Certificates, Series 2006- 12N (hereinafter, the "Trust"), 1 which is the successor in interest to plaintiff One West Bank. FSB. Ms. Ortwerth's avcrments were made based upon her review of Ocwen' s business records. which are maintained in its regular course of business. She avers that she has personal knowledge of Ocwen's procedures for creating and maintaining these reco rds. l\ifs. O rtwerth further notes that s h e was previ0usly e mployed by the current plaintiff. OneWest Bank. FSB. and that she is familiar with the process by which OneWest Bank. FSB's business records are created and maintained. Additionally. she attests that the business records created by OneWcst Bank. whi ch include the records for the loan at issue. were integrated into Ocwen·s business records and verified in accordance with Ocwen 's policies and procedures. These records, she notes. arc kept and relied upon as regular business records in Ocwen 's ordinary course of business as loan servicer. I\ ls Ortwcrth ·s averments adequately set forth the basis of her knowledge and establish the admissibility of the documents appended to the affidavit as business records. and comports "·ith the dictates of HSBC Bank USA 1· Ozcan. 15-1- AD3d 822. 6-1- 'YS3d 38 (2d Dept ~017) (see also O(rmpus America, Inc. ,, Beverfr Hills Surgical Inst .. 110 l\03d I 0-1-8. 974 NYS2d 89 [2d Dept .2013): DeLeo11 v Port Autlt. ofN.Y. & N. J. , 306 AD2d 1-1-6. 761NYS2d54 [2d Dept 2003]). and satisfies the admissibility requirements of CPLR 45 l 8(a) (sc!e Stewart Title Ins. Co. v Bank of New 1 f\1s. Ortwerth improperly refers to the Trust throughout the anida\'i t as "pin intiff.'. Whi le the motion seeks L rnncnd the caption to reflect the Trust as the plaintiff. One West Bank. FSB. remains the curren t plainciffuntil o furthe r ordered by this Court. [* 5] Oncm::st Bank v Demers Index ~o. 39220109 Page 5 154 AD3d 656. 61 NYS3d 634 [2d Dept 2017]: Citigroup v Kopelowitr, , 14 7 AD3d 1014. I 015. 48 NYS3d 223 [2d Dept 2017] : see genera/~, . Citimortgage, Inc. v Espinal. 134 AD3d 876, 23 NYS3d 251 pd Dept 2015] ). .lfe/1011. Not withstanding the admissibi lity ofthe affidavit. Ms. Ortwerth · s affidavit fai ls to demonstrate plaintiffs prima focie standing. l\1fs. Or:twerrh avers that Deutsche Bank, as custodian for the Trust. was in possession of the note at the time the action was commenced, hO\·vever One West Bank. FSB was th e plaintiff at commencement and attested to its status as owner and holder of the note in the comp laint. Ms. Ortwcrth's reply affidavit attempts to clarify the issue by noting that One West Bank, fSB was the loan servicer at the time the action was commenced, however, the servicing agreement provided notes that Aurora Loan Services, LLC is the serv icer and master servicer of the Trust, with no mention of One West Bartle FSB. Notably. plaintiff attempts to again clarify One West Bank, FSB · s position as plaintiff in its motion for judicial notice and to supplement its papers. This submission also falls short. The power of attorney authorizing One West Bank. FSB to act on behalf of the Trustee is dated over one year after commencement ofthe instant action. Additionally. the powerofattorney authorizing IndyMac Federal Bank. FSB (Onc\Vcst Bank, FSB's predecessor in interest) fails to demonstrate its appiicarion to the Trust or subject loan. In this case. the plaintiffs submissions failed to demonstrate. prima facie, that the plaintiff has standing to prosecute its claims for foreclosure and sale (see Arch Bay Holdi11gs, LLC v Albanese. 146 AD3d 853.45 NYS3d 506 [2d Dept 2017]; HSBC Aftge. Serv., Ju e. v Royal, 142 AD3d 952. 37 NYS3d 32 1 [2d Dept 20 16) : Deutsc!te Bank Natl. Trust Co. v C111111i11glu1111, 142 AD3d 634, 36 NYS3d 726 [2d Dept 2016); Deutsclze Bank Natl. Trust Co. v Brewton , 142 AD3d 683. 37 NYS3d 25 pd Dept 2016.1: JPMorgan v Kutclt , 142 AD3d 536, 36 NYS3d 235 l2d Dept 2016]; Ceular, FSB v Censor. 139 AD3d 781 , 32 NYS3d 228 [2d Dept 20 l6]; Ce11/ar, FSB v Weisz, 136 AD3d 855, 25 NYS3d 308 (2d Dept 20 16]; Citibank, NA v Cabrera, 130 AD3d at 861, 14 NYS3d 420 [2d Dept 2016] ). Pla intiff thus fai led to demonstrate that the ~ccond nnd Fou rth Atlirmati ve Defenses are without merit and thus subject to dismissal pursuant to CPLR 32 I2(b). Those portions of this motion wherein the plaintiff seeks such relief is denied. Likewise. as the defendant failed to make a prim a fac i1.: showing that plaintiff Jacked standing, cletendant's cross motion is denied (see Oue West Bank I' Beri110. 158 AD3d 8 1 L 20 18 WL 1075715 [2d Dept 20 18 J. citing Fi/au v Del/aria, 14.+ AD3d 967. 975. 43 NYS3d 353 ["2d Dept 2016]: Deutsclte Bank Tmst Co. A ms. 1 Vite/las. 131AD3d52, 59-60. 13 >JYS3d 163 [2d Dept 2015] ). 1 Defendant's remaining contentions regarding plaintiffs mai 1ing or the default notice is \\"ithout merit. As discussed abm·e. Ms. Onwerth · s a\·ers in her affida\ it that Ocwen · s business records incorporate those of One West Bank. FSB. including the loan at issue. She notes that the default notice was sent to the ddendant on June 3, 2009. and attaches copies of the letters. In her reply affidavit. she describes the standing mailing practice ofindyMac Mortgage Sen·ices. a Division of One West Bank. FSB. \\"hich mailed the letters on behalf of One West Bank. FSB. That fm1her evidence of the mailing \\'as produced in a reply affidavit is of no consequence. as defendant \\"as provided an opportunity to ·further n:spond to this issue (see Zemitsky 1• S!turka. 94 AD3d 875. 941 NYS2cl 8.+8 [2d Dept 2012): ci ting T11rt11rm " City ofNe11• York, 77 ADJcl 732. 734-735. 908 NYS2d 738 (:2d Depf TOI OJ; il1Iafler (~l Wltittaker 11 Ne w York City Bd. of Educ .. 71 AD3d 776. 778. 896 NYS2d 17 1 [2d Dept 201 O]; Valure 1• Ce11t111:r 21Grand,35 AD3d 59 1, 591. 826 NYS2cl 4 18 l2d Dept 20061; Ho.ffimm v Kes.<;/er, [* 6] One\vest Bank \ Demers Index No. 39220/09 Page 6 28 AD3d 718. 718- 719. 816 NYS2d 481 [2d Dept 2006]: Guameri vSt. JolI11. 18 AD3d 813. 814. 795 1'\YS2d 462 (2d Dept 2005] J. The remaining portions of the plaintiffs motion wherei n it seeks an award of summary judgment on its complaint against answering defendant. Elsie Demers. default judgments against the remaining defendants served 'vVith process and the appointment of a referee to compute, are premature in light oCthc existence of a potentially meritorious defense that is not subject to dismissal pursuant to CPLR 32 12(b). Accordingly. those demands for relief are deni ed. Accordingly, plaintiff's motion (#003) as indicated above, defendant's cross motion (#004) is denied and plaintiffs additional motion (#005) is granted. Counsel for the parties are directed to appear !o r a pre-trial conference on May 25, 2018 as noted above and the proposed order submitted by plaintiff has been marked ··not signed."'

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