Deutsche Bank Natl. Trust Co. v Lanzilotta
Annotate this CaseDecided on July 6, 2018
Supreme Court, Suffolk County
Deutsche Bank National Trust Company AS TRUSTEE UNDER THE POOLING AND SERVICING AGREEMENT DATED AS OF JANUARY 1, 2007, GSAMP TRUST 2007-FMI, , Plaintiff,
against
Melissa Lanzilotta, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR FREMONT INVEST AND LOAN, and "JOHN DOE" and "JANE DOE", the last two names being fictitious, said parties intended being tenants or occupants, if any, having or claiming an interest in or lien upon the premises described in the complaint, Defendant(s).
35654-2009
Houser & Allison, APC
Attorneys for Plaintiff
60 East 42nd Street, Suite 1148
New York, NY 10165
Victor Campos, P.C.
Attorney for Defendant-Lanzilotta
94 West Main Street, Suite 202
Bay Shore, NY 11706
Robert F. Quinlan, J.
Upon the following papers numbered 1- 79 read on this motion for an order setting the default of the non-answering defendants and an order of reference, and cross-motion to dismiss or alternatively for an order extending defendant's time to file an answer; Notice of Motion and supporting papers 1-36 ; Cross-motion, opposition and supporting papers 37-56; Replying Affirmation, opposition and supporting papers 57-70; and Replying Affirmation and affidavit, as well as further support for cross-motion 71-79, it is,
ORDERED that defendant Melissa Lanzilotta's cross motion seeking dismissal of the complaint based upon plaintiff's alleged lack of standing to prosecute the action, and alternatively for an extension [*2]of time to file a late answer pursuant to CPLR § 2004 is denied; and it is further
ORDERED that plaintiff Deutsche Bank National Trust Company as Trustee under the Pooling and Servicing Agreement dated as of January 1, 2007, GSAMP Trust 2007-FMI's motion to fix and determine the defaults of the non-answering defendants, for appointment of a referee pursuant to RPAPL§1321 and to amend the caption is granted; and it is further
ORDERED that plaintiff's proposed order submitted with this motion, as modified by the court is signed contemporaneously herewith; and it is further
ORDERED that the caption in this action shall now appear as indicated in plaintiff's proposed order and all further proceedings shall be under that caption; and it is further
ORDERED that plaintiff is directed to serve an executed copy of the order of reference amending the caption of this action upon the Calendar Clerk of this Court within 30 days of the date of this order and all further proceedings are to proceed under that caption; and it is further;
ORDERED that plaintiff is to include in any proposed order of judgment of foreclosure and sale language complying with the Suffolk County Local Rule for filing of the Suffolk County Foreclosure Surplus Monies form contained in Suffolk County Administrative Order # 41-13; and it is further
ORDERED, that, if a prior notice of pendency is outdated, plaintiff is directed to file a successive notice of pendency at least twenty (20) days prior to the submission of any proposed judgment of foreclosure and sale, submitting a copy thereof with proof of filing with any proposed judgment of foreclosure and sale; and it is further.
ORDERED that within 30 days of the date of this order, plaintiff is to serve a copy of the order of reference upon all parties who have appeared in this action, as well as upon the referee and thereafter file the affidavits of service with the Clerk of the Court; and it is further
ORDERED that within 60 days of the date of this order, plaintiff is to provide the referee, and defendants who have appeared, all papers and documents necessary for the referee to perform the determinations required by this order, "plaintiff's submissions"; defendant(s) may submit written objections and proof in support thereof, "defendant's objections," to the referee within 14 days of the mailing of plaintiff's submissions; and it is further
ORDERED that the referee's report is to be prepared and submitted to plaintiff within 30 days of receipt of plaintiff's submissions, and the referee's report is to be submitted by plaintiff with its application for a judgement of foreclosure and sale; and it is further
ORDERED that the referee's duties are defined by this order of reference (CPLR 4311, RPAPL § 1321), and the referee has no power beyond that which is limited by this order of reference to the ministerial functions of computing amounts due and owing to plaintiff and determining whether the premises can be sold in parcels; the referee shall hold no hearing, take no testimony or evidence other than by written submission, and make no ruling on admissibility of evidence; the referee's report is merely advisory and the court is the ultimate arbiter of the issues, if defendant's objections raise issues as to the proof of amounts due and owing the referee is to provide advisory findings within his/her report; and it is further
ORDERED that if defendant's objections have been submitted to the referee, defendant(s) shall also submit them to the court if opposing plaintiff's application for a judgment of foreclosure and sale; failure to submit defendant's objections to the referee will be deemed a waiver of objections before the court on an application for a judgment of foreclosure and sale; failure to raise and submit defendant's objections made before the referee in opposition to plaintiff's application for a judgment of foreclosure and sale shall constitute a waiver of those objections on the motion; and it is further
ORDERED that plaintiff is to file an application for a judgment of foreclosure and sale within 120 days of the date of this order; and it is further
ORDERED that this action shall be calendared for a status conference on Wednesday, November [*3]14, 2018 at 9:30 AM in Part 27 for the court to monitor the progress of this action. If a judgment of foreclosure and sale is filed with the court before that date, no appearance will be necessary; and it is further
ORDERED that failure to comply with any term of this order will not form the basis for a motion to dismiss the action, but will be the subject of the status conference at which future compliance will be determined.
This is an action to foreclose a mortgage on residential real property ("the property") located at 1031 Broadway Street, Islip, Suffolk County, New York owned by defendant Melissa Lanzilotta ("defendant") alleging that on October 2, 2006 defendant executed a mortgage on the property to Mortgage Electronic Registrations Systems, Inc. ("MERS") acting solely as nominee of the lender, Fremont Investment & Loan ("Fremont"), for the purpose of recording the mortgage, to secure a note given the same day by defendant to Fremont. The mortgage was recorded with the Suffolk County Clerk ("Clerk") on November 27, 2006. Plaintiff Deutsche Bank National Trust Company as Trustee under the Pooling and Servicing Agreement dated as of January 1, 2007, GSAMP Trust 2007-FMI ("plaintiff"), a successor in interest to Fremont, commenced this lawsuit by filing a summons, complaint and notice of pendency with the Clerk on September 11, 2009, alleging defendant had defaulted in her payment required by the note and mortgage with the payment due on August 1, 2008.
Defendant never answered the complaint, although a notice of appearance on her behalf was filed with the Clerk by the law firm of Citak & Citak, dated April 5, 2010. The court's computer records show that six conferences, commencing on April 8, 2010 and concluding on November 23, 2010, were held in the court's dedicated Foreclosure Settlement Conference Part ("FSCP"), but no resolution was reached. An additional settlement conference was held on July 24, 2013 before the Hon. Peter H. Mayer of this court, who was assigned the case after it was transferred from the FSCP. Therefore, if applicable, compliance with CPLR 3408 has been established.
On June 11, 2015, defendant's new counsel, The Young Law Group, PLLC, filed a motion on behalf of defendant seeking to have the action dismissed pursuant to CPLR § 3215 (c) which motion was denied by Justice Mayer's order of September 11, 2015 (Mot. Seq. # 001).
As defendant never moved to vacate her default in answering, or sought an extension to file a late answer, plaintiff filed this motion on September 30, 2016 (Mot. Seq. #002). Defendant, now represented by a third law firm, Victor Campos, P.C., filed a motion to dismiss claiming plaintiff lacked standing, or in the alternative, for an extension of time to file a late answer (Mot. Seq. #003). Subsequent to the filing of both motions, on March 27, 2017 (AO #36-2017) District Administrative Judge C. Randall Hinrichs, transferred the case to Acting Supreme Court Justice James Hudson; and then on June 12, 2017 (AO # 76-17) Judge Hinrichs transferred the case to this dedicated foreclosure part. On March 15, 2017 defendant's counsel filed a bankruptcy proceeding in the U.S. Bankruptcy Court, Eastern District of New York, and a decision on the motions was stayed thereby, until at a conference on October 25, 2017 when the court was notified of the discharge of the bankruptcy action. At that time both motions were marked submitted on the court's October 26, 2017 motion calendar.
Defendant's cross-motion is addressed first, and is denied in all regards.
NO BASIS TO EXTEND TIME TO ANSWER
A party may not move for affirmative relief of a non-jurisdictional nature, such as dismissal of a complaint, without first moving to vacate his/ her default (see Nationstar Mtg., LLC v Kamil, 155 AD3d 968 [2d Dept 2017]; Chase Home Finance, LLC v Garcia, 140 AD3d 820 [2d Dept 2016]; Nationstar Mortgage, LLC v Avella, 142 AD3d 594 [2d Dept 2016]; Southstar III, LLC v Ettienne, 120 AD3d 1332 [2d Dept 2014];U.S. Bank Natl. Assn. v Gonzalez, 99 AD3d 694 [2d Dept 2012]; Deutsche Bank Trust Co., Am. v. Stathaklis, 90 AD3d 694 [2d Dept 2011]; Holubar v. Holubar, 89 AD3d 802 [2d Dept 2011]).
Whether asking for an extension to file a late answer pursuant to CPLR § 2004, to compel acceptance of a late answer under CPLR§3012(d ) or to vacate a default in answering under CPLR 5015(a)(1), a moving defendant is faced with the same initial hurdle, she must provide a reasonable excuse and proof of a meritorious defense (see Maspeth Fed. Sav. & Loan Assn. v McGown, 77 AD3d 890 [2d Dept 2010]; Karalis v New Dimensions HR, Inc., 105 AD3d 707 [2d Dept 2013]; Midfirst Bank v Al—Rahman, 81 AD3d 797 [2d Dept 2011]; TCIF REO GCM, LLC v Walker, 139 AD3d 7945 [2d Dept 2016]; U.S. Bank, N.A. v Grubb, _AD3d_, 2018 NY Slip Op 04373 [2d Dept 2018]). This standard governs applications made both prior and subsequent to a formal fixing of a default on the part of defendant by the court (see Bank of New York v Espejo, 92 AD3d 707 [2d Dept 2012]; Integon Natl. Ins. Co. v Norterile, 88 AD3d 654 [2d Dept 2011]). Where there is failure to provide a reasonable excuse, the court need not consider claims of meritorious defenses (see One W. Bank FSB v Valdez, 128 AD3d 655 [2d Dept, 2015]); HSBC Bank USA v Miller, 121 AD3d 1044 [2d Dept 2014]; Deutsche Bank National Trust Co v Kuldip, 136 AD3d 969 [2d Dept 2016]; Bank of NY Mellon v Colucci, 138 AD3d 1047 [2d Dept 2016]; US Bank Natl Assn v Barr, 139 AD3d 937 [2d Dept 2016]; Bank of NY v Krausz, 144 AD3d 718 [2d Dept 2016]; Wells Fargo Bank v Pelosi; 159 AD3d 852 [2d Dept 2018]; US Bank, N.A. v Dedomenico, _AD3d_, 2018 NY Slip Op 04594 [2d Dept 2018]).
Here, in support of defendant's motion, her counsel submits no affidavit from defendant to establish a reasonable excuse. Instead, on the initial submission, he attempts to "bootstrap" a claimed meritorious defense of plaintiff's lack of standing to bring the action into a "reasonable excuse" for defendant's failure to earlier move to vacate her default in answering or for an extension to file the proposed late answer. A claimed meritorious defense is not a substitute for an affidavit from defendant setting forth her reasonable excuse. Although it may be possible to argue that as counsel submitted a copy of the proposed answer verified by defendant, there is an "affidavit," such an argument would be to no avail, as there is nothing in the verified complaint that provides a "reasonable excuse" for defendant's failure to file an answer or to make an earlier motion. Having failed to establish a reasonable excuse, defendant's motion must be denied.
COURT WILL NOT EXERCISE INHERENT DISCRETIONARY POWER
The court has inherent discretionary power to relieve a party from a judgment or order for sufficient reason and in the interest of justice, but the power is not plenary. It should be used only to relieve a party from judgments had through fraud, mistake, inadvertence, surprise or excusable neglect. A party seeking to have the court exercise this inherent power must provide proof of one of these reasons, otherwise the court cannot vacate the judgment or order (see Wells Fargo Bank, NA v Choo, 159 AD3d 938 [2d Dept 2018]). As defendant has failed to argue the applicability of any of the preceding reasons for the court to exercise it's inherent discretionary power to grant her relief, the court cannot do so, nor would it do so under these fact in any event.
AFFIDAVIT OF DEFENDANT IMPROPERLY SUBMITTED IN REPLY
Defendant's reply to plaintiff's opposition to the cross-motion is an inappropriate vehicle for defendant to first submit her affidavit in an attempt to provide a reasonable excuse for her delay. A court should disregard information submitted in a movant's affidavit in reply which should have been submitted along with the original submission (see Duran v Milord, 126 AD3d 932 [2d Dept 2015]; Bank of America, N.A. v Moody, 147 AD3d 712 [2d Dept 2017]; Wells Fargo Bank, N.A. v Osias, 156 AD3d 942 [2d Dept 2017]). The function of a reply affidavit is to address arguments made in opposition to the position of movant, not to permit movant to introduce new arguments or evidence in support of its motion (see Ritt v. Lenox Hill Hospital, 182 AD2d 560 [2d Dept 1992]; Matter of Allstate Insurance v Dawkins, 52 AD3d 826 [2d Dept 2008]).
EVEN IF AFFIDAVIT CONSIDERED, NO REASONABLE EXCUSE
Even if the court were to consider defendant's affidavit, she still failed to establish a reasonable [*4]excuse for her default in answering, or provide a reasonable explanation for her failure to move earlier to extend her time to answer or vacate her default in answering. In essence, her affidavit puts forward arguments concerning her unfortunate personal circumstances, and what at best can be said to be "law office failure." Such claims have been held not to provide a reasonable excuse.
A parties unfortunate financial problems are not a reasonable excuse for failing to file an answer, nor are any claims of unfamiliarity with the legal system (see Stevens v Charles, 102 AD3d 763 [2d Dept 2013]; U. S. National Bank v Slavinski, 78 AD3d 1167 [2d Dept, 2010]). Neither is a claim that defendant did not know she had to serve an answer, where, as here, she raises no claim of failure of service, as such a claim is insufficient in the face of the clear warning provided in the summons (see Chase Home Fin., LLC v Minott, 115 AD3d 634 [2d Dept 2014]; US Bank Natl. Assn. v Ahmed, 137 AD3d 1106 [2d Dept 2016]). Nor is the fact that the parties were engaged in the court's settlement conference part a reasonable excuse for delay in answering (see HSBC Bank USA, N.A. v Lafazan, 115 AD3d 647 [2d Dept 2014]; US Bank Natl. Assn. v Ahmed, supra).
Clearly, failed strategies, poor advice or law office failure should not be excused and accepted as a reasonable excuse for delay where there has been long periods of inaction, a failed strategy, or no credible explanation why there was no prior attempts to vacate a default in answering (see Star Industries, Inc. v. Innovative Beverage, Inc., 55 AD3d 903 [2d Dept 2008]; Wells Fargo Bank, N.A. v. Cervini, 84 AD3d 789 [2d Dept 2011]; Cantor v. Flores, 94 AD3d 936 [2d Dept 2012]; Chase Home Finance, LLC v Minott, supra ; Bank of NY Mellon v Colucci, supra; US Bank Natl Assn v Barr, supra; LaSalle Bank, NA v LoRusso, 155 AD3d 706 [2d Dept 2017]; Deutsche Bank Natl. Trust v Saketos, 158 AD3d 610 [2d Dept 2018]). Here defendant was represented by counsel who filed a notice of appearance in 2010, she subsequently retained a second law firm in 2015 which moved to dismiss pursuant to CPLR § 3215 (c), but did not alternatively move to file a late answer or vacate her default. She now is represented by her third counsel on these motions. If the reason for her delay is because of conduct of prior counsel, that issue is more properly between her and her prior counsel, not plaintiff or the court.
EVEN IF LATE ANSWER ALLOWED, DISMISSAL NOT WARRANTED
As cited above, even if the court considered the late affidavit submitted with her reply, defendant has failed to provide a reasonable excuse for her failure to timely answer the complaint, therefore the court need not consider the merit of her claimed defense. The court hastens to point out that even if it had allowed defendant's late answer raising a claim of plaintiff's lack of standing, her cross-motion to dismiss would have necessarily been denied. The gravamen of her argument on the motion rests upon the claim that the affidavit submitted by plaintiff's servicer's employee was ineffective to establish plaintiff' possession of the note before the action was commenced, and that there was an "allonge" to the note executed by Fremont that was both in blank and undated. Defendant's counsel incorrectly argues that a note indorsed by the original lender that is both undated and in blank is insufficient to transfer possession of the note (UCC 3-204 [2]; see Aurora Loan Services, LLC v Taylor, 25 NY2d 355, 362 [2015]; JPMorgan Chase Bank, NA v Weinberger, 142 AD3d 643 [2d Dept 2016];Penny Mac Corp. v Chavez, 144 AD3d 1006 [2d Dept 2016]; Deutsche Bank Natl. Trust Co. v Logan, 146 AD3d 861 [2d Dept 2017]; Wells Fargo Bank, NA v Thomas,150 AD3d 1312 [2d Dept 2017]; Deutsche Bank National Trust Co. v Carlin, 152 AD3d 491 [2d Dept 2017]; US Bank N.A. v Coppola, 156 AD3d 934 [2d Dept 2017]). The court observes that the indorsement appears to be on the back of the note and was "xeroxed" so that it appears as a separate page in the present submission, therefore it is likely not an allonge as argued by defendant's counsel. Such an "error," as well as other claims of insufficiency of the servicer's affidavit, could be easily corrected by a better affidavit, if the court had granted defendant's motion to file a late answer and considered her cross-motion to dismiss. The cross-motion to dismiss at best would have resulted in a denial of both motions, as defendant did not meet her burden of proof for summary judgment dismissing the action.
If considered, defendant's motion could have been said to have raised a triable issue of fact as to plaintiff's standing, but she would not have submitted proof warranting dismissal of the action pursuant to CPLR 3211(a). A party seeking summary judgment may not merely point to gaps in an opponent's proof to obtain relief, she must adduce affirmative evidence of entitlement to that relief (see Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]; Gilbert Frank Corp. v. Federal Insurance, 70 NY2d 966 [1988]; Torres v. Industrial Container, 305 AD2d 136 [1st Dept 2003]). The proponent of summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, providing sufficient evidence to establish the absence of any material issues of fact, failure to do so requires the motion to be denied regardless of the sufficiency of the opposition (see William J. Jenack Estate Appraiser and Auctioneers v Rabizadeh, 22 NY3d 470 [2013]; Jacobsen v New York City Health & Hospitals Corp., 22 NY3d 824 [2014]). At best, defendant's submission would have raised the issue that standing could not have been determined upon the submissions (see Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680 [2d Dept 2011], US Bank National Association v Faruque, 120 AD3D 575 [2d Dept 2014]). Having failed to establish her burden of prima facie proof of plaintiff's lack of standing as a matter of law, defendant's motion would have been denied (see Deutche Bank Trust Co. Ams. v Vitallas, 131 AD3d 52 [2d Dept 2015]; Aurora Loan Servs., LLC v Mercius, 138 AD3d 650 [2d Dept 2016]; Wells Fargo Bank, NA v Talley, 153 AD3d 583 [2d Dept 2017]).
PLAINTIFF'S SUBMISSION SUFFICIENT TO GRANT IT'S MOTION
Here, as defendant's motion could not be considered as she failed to establish her right to cure her default in answering and file a late answer raising the affirmative defense of plaintiff's lack of standing, she has waived that affirmative defense (see Chase Home Fin., LLC v Garcia, 140 AD3d 820 [2d Dept 2016]; Emigrant Bank v. Marando, 143 AD3d 856 [2d Dept 2016]; Castle Peak 2012-1 Loan Trust v Sottile, 147 AD3d 720 [2d Dept 2017]; Citigroup v Kopelowitz, 147 AD3d 1014 [2d Dept 2017]; HSBC Bank, USA, NA v Roldan, 155 AD3d 942 [2d Dept 2017]; Citibank, NA v Gentile, 156 AD3d 859 [2d Dept 2017]; Bank of America, NA v Cudjoe, 157 AD3d 653 [2d Dept 2018]).
On a motion for leave to enter a default judgment, plaintiff is required to submit proof of service of the summons and complaint, proof of the facts constituting the claim, and proof of the defaulting party's failure to answer or appear (CPLR 3215[f]; see Dupps v Betancourt, 99 AD3d 855 [2d Dept 2012]; Green Tree Serv., LLC v Cary, 106 AD3d 691[2d Dept 2013]; JPMorgan Chase Bank, N.A. v Boampong, 145 AD3d 981 [2d Dept 2016]; US Bank, N.A. v Singer, 145 AD3d 1057 [2d Dept 2016]; Bank of Am., NA v Agarwal, 150 AD3d 651[2d Dept 2017]; US Bank, N.A. v Dedomenico, supra). Proof required on default under CPLR 3215 (f) is merely proof of facts constituting the claim. To demonstrate the facts constituting the claim, movant must only submit sufficient proof to enable the court to determine if the claim is viable (see Woodson v. Mendon Leasing Corp., 100 NY2d 62 [2003]; Global Insurance Company v. Gorum, 143 AD3d 768 [2d Dept 2016]; Manhattan Telecommunications Corp. v. H & A Locksmith, Inc., 21 NY3d 200 [2013]; Araujo v. Aviles, 33 AD3d 830 [2d Dept 2006]; U.S. Bank, N.A. v. Tate, 102 AD3d 859 [2d Dept 2013]). Plaintiff's submissions have met its proof of a prima facie case through the production of the original mortgage, the unpaid note, and evidence of defendants default in payment (see Deutsche Bank Natl. Trust Co. v Abdan, 131AD3d 1001 [2d Dept 2015]; U. S. Bank N. A. v Akande, 136 AD3d 887 [2d Dept 2016]).
Plaintiff's request for an order fixing the defaults of the non-answering, non-appearing defendants and an order of reference appointing a referee to compute the amount due plaintiff under the note and mortgage pursuant to RPAPL § 1321 is granted (see Green Tree Serv. v Cary, supra; Vermont Fed. Bank v Chase, 226 AD2d 1034 [3d Dept 1996]; Bank of East Asia, Ltd. v Smith, 201 AD2d 522 [2d Dept 1994]; U. S. Bank v Wohlerman 135 AD3d 850 [2d Dept 2016]). Plaintiff's application to amend the caption to remove the "John Doe" and "Jane Doe"defendants is granted.
This is the order and decision of the court and plaintiff's proposed order, as modified by [*5]the court is signed contemporaneously herewith.
Dated: July 6, 2018
_______________________________________
HON. ROBERT F. QUINLAN, J.S.C.
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