Hudson City Sav. Bank v Gattegno

[*1] Hudson City Sav. Bank v Gattegno 2018 NY Slip Op 51185(U) Decided on July 31, 2018 Supreme Court, Suffolk County Quinlan, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 July 31, 2018
Supreme Court, Suffolk County

Hudson City Savings Bank, Plaintiff,

against

Liza Feldman Gattegno A/K/A Liza Feldman A/K/A Liza J. Gattegno A/K/A Liza Gattegno; Mortgage Electronic Registration Systems, Inc. as Nominee for Citibank, N.A.; National City Bank; Valley National Bank; "John Doe # 1-5" and "Jane Doe# 1-5", said names being fictitious, it being intent of Plaintiff to designate any and all occupants, tenants, persons or corporations, if any having or claiming an interest in or lien upon the premises being foreclosed herein, Defendant(s).



601051-2016



FEIN, SUCH & CRANE, LLP

Attorneys for Plaintiff

1400 Old Country Road, Ste. C103

Westbury, NY 11590

TARBET & LESTER, PLLC

Attorney for Defendant Gattegno

132 North Main Street

East Hampton, NY 11937
Robert F. Quinlan, J.

Upon the following papers read on this motion for an order granting summary judgment pursuant to CPLR 3212, setting the default of the non-answering defendants, an order of reference pursuant to RPAPL § 1321 and amending the caption; Notice of Motion and supporting papers NYSCEF Docs # 26-34; Affirmation in Opposition and supporting papers NYSCEF Docs # 35-38; Affirmation in Reply and supporting papers NYSCEF Docs #39-44, it is,

ORDERED that this motion by plaintiff Hudson City Savings Bank for an order striking the answer of defendant Liza Feldman Gattegno, awarding it summary judgment, appointing a [*2]referee to compute, granting default judgment against the non-appearing and non-answering defendants, and amending the caption, is granted as set forth below; and it is further

ORDERED that plaintiff's application to amend the caption of the complaint to substitute "John Doe (Refused Name)" and Oscar Rivera for "John Doe # 1 & 2" and to remove from the caption "John Doe # 3-5" and "Jane Doe # 1-5"is granted; and the caption shall now appear as follows:

X

HUDSON CITY SAVINGS BANK,

Plaintiff,

against -

LIZA FELDMAN GATTEGNO A/K/A LIZA FELDMAN A/K/A LIZA J. GATTEGNO A/K/A LIZA GATTEGNO; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. AS NOMINEE FOR CITIBANK, N.A.; NATIONAL CITY BANK; VALLEY NATIONAL BANK; "JOHN DOE (NAME REFUSED)" and OSCAR RIVERA,

Defendant(s).

X

; and it is further

ORDERED that plaintiff is to serve a copy of this order upon the calendar clerk of this part within thirty (30) days of this order, and all further proceedings are to be under the amended caption; and it is further

ORDERED that the default of the non-appearing and non-answering defendants are fixed and set; and it is further

ORDERED that plaintiff's application to appoint a referee pursuant to RPAPL§ 1321 is granted, as modified by the court and is signed contemporaneously with this order; 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 [*3]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, December 5, 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; and it is further

ORDERED that the action is scheduled for a settlement conference on Wednesday, September 12, 2018 at 9:30 AM in Part 27, at which the parties are to have representative present with authority to discuss potential settlement options for this action.

This is an action to foreclose a mortgage on residential real property known as 52 Winding Way, East Hampton, Suffolk County, New York ("the property"). On May 14, 2004 defendant Liza Feldman Gattegno ("defendant") executed a mortgage on the property to Mortgage Electronic Registration Systems, Inc. ("MERS") acting as nominee for Lehman Brothers Bank, FSB ("Lehman"), for the sole purpose of recording the mortgage to secure a note in the amount of $431,600.00 given that same day to Lehman. This mortgage was filed with the Suffolk County Clerk ("Clerk") on June 21, 2004. Subsequently, on June 1, 2007 MERS, acting as nominee for Lehman, assigned the mortgage to Citimortgage, Inc. ("Citi"), which assignment was filed with the Clerk on August 7, 2007. On May 17, 2007 defendant signed a note in the amount of $339,612.68 to Citi and gave a mortgage on the property that date to secure that note, which mortgage was field with the Clerk on June 21, 2007. Also on May 17, 2007, defendant executed a Consolidation, Extension and Modification Agreement ("CEMA") with Citi creating [*4]a single lien in the amount of $750,000.00, and executed a Consolidated Mortgage on the property to Citi to secure the CEMA. Both the CEMA and Consolidated Mortgage were filed with the Clerk on August 7, 2007. On July 7, 2015, Citi, through assignment of the Consolidated Mortgage and CEMA assigned both that mortgage and the note to plaintiff Hudson City Savings Bank ("plaintiff") which assignment was filed with the Clerk on September 12, 2015.

Defendant allegedly defaulted in the payment due April 1, 2011 and has remained in default. Plaintiff commenced this action by filing a summons, complaint and notice of pendency with the Clerk on January 25, 2016. Defendant filed an answer which raised only three affirmative defenses: first, a claim plaintiff lacked standing to bring the action; second, that plaintiff's claim should be denied because of "unclean hands of the Plaintiff and/ or its predecessors," and third, that defendant should be entitled to legal fees pursuant to RPL § 282. No other affirmative defenses were plead, and no counterclaims were raised.

The courts' computer records show that a conference was held in the court's dedicated Foreclosure Settlement Conference Part on June 10, 2016, at which time the court attorney referee released the action to an IAS part. Those same records indicate that the action was marked "not eligible," "not primary res." Compliance with CPLR 3408 has been established.

Plaintiff filed this motion, seeking summary judgment dismissing defendants affirmative defenses and striking her answer, setting the default of the non-answering defendants, amending the caption to substitute "John Doe (Name Refused)" and Oscar Rivera for the "John Doe" and "Jane Doe" defendants and appointing a referee to compute pursuant to RPAPL § 1321. In her opposition defendants only argues that plaintiff's submissions failed to meet the basic prima facie case for summary judgment, that plaintiff had not established its standing, and that defendant was deprived of her statutory right to a settlement conference pursuant to CPLR 3408.

The action and motion was originally assigned to the Honorable Joseph A. Santorellli of this court, but was reassigned to this foreclosure part by AO# 08-18, signed by DAJ C. Randall Hinrichs on February 1, 2018. By order dated March 7, 2018 the court set the case for oral argument on March 12, 2018, but on March 8, 2018 defendant's counsel asked to adjourn the argument as defendant was in California and would not be due back until the last week of April, 2018. By order dated March 8, 2018, the court removed the motion from its oral argument calendar, to provide a written decision instead.

UNSUPPORTED AFFIRMATIVE DEFENSES DISMISSED

As defendant has not supported the claims in her second and third affirmative defenses, those affirmative defenses are dismissed as abandoned, for the failure to raise and support pleaded affirmative defenses in opposition to a motion for summary judgment renders them abandoned and subject to dismissal (see Kuehne & Nagel Inc. v Baiden, 36 NY2d 539 [1975]; Kronick v L. P. Therault Co., Inc., 70 AD3d 648 [2d Dept 2010]; New York Commercial Bank v. J. Realty F. Rockaway, Ltd., 108 AD3d 756 [2d Dept 2013]; Starkman v. City of Long Beach, 106 AD3d 1076 [2d Dept 2013]; Katz v Miller, 120 AD3d 768 [2d Dept 2014]).

SUMMARY JUDGMENT

Entitlement to summary judgment in favor of a foreclosing plaintiff is established, prima facie, by plaintiff's production of the mortgage, the unpaid note, and evidence of default in payment (see Wells Fargo Bank, N.A. v. DeSouza, 126 AD3d 965 [2d Dept 2015]; Wells Fargo Bank, NA v Morgan, 139 AD3d 1046 [2d Dept 2016]). If established by proof submitted in [*5]evidentiary form, plaintiff has demonstrated its entitlement to summary judgment (CPLR 3212; RPAPL § 1321; see Federal Home Loan Mtge. Corp. v Karastathis, 237 AD2d 558 [2d Dept 1997]). The burden then shifts to a defendant to demonstrate the existence of a triable issue of fact as to a bona fide defense (see Capstone Bus. Credit, LLC v Imperia Family Realty, LLC, 70 AD3d 882 [2d Dept 2010]; Citibank, NA v Van Brunt Properties, LCC, 95 AD3d 1158 [2d Dept 2012]). Such defendant must then produce evidentiary proof in admissible form sufficient to demonstrate the existence of a triable issue of fact (see Washington Mut. Bank v Valencia, 92 AD3d 774 [2d Dept 2012]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 [1985]). An answer and affirmative defenses alone are insufficient to defeat plaintiff's motion (see Flagstar Bank v Bellafiore, 94 AD3d 1044 [2d Dept 2012]). In deciding the motion the court is to determine whether there are bonafide issues of fact and not to delve into or resolve issues of credibility (see Vega v Restani Corp., 18 NY3d 499 [2012]).

Where plaintiff's standing has been placed in issue by defendant's answer, plaintiff also must establish its standing as part of its prima facie showing (see Aurora Loan Servs., LLC v. Taylor, 25 NY3d 355 [2015]; Loancare v. Firshing, 130 AD3d 787 [2d Dept 2015]; HSBC Bank USA, N.A. v. Baptiste, 128 AD3d 77 [2d Dept 2015]; US Bank,, NA v Richard, 151 AD3d 1001 [2d Dept 2017]; Citimortgage v Rockefeller, 155 AD3d 998 [2d 2017]; US Bank, N. A. v Cohen, 156 AD3d 844 [2d Dept 2017]; HSBC Bank, U.S.A. v Oscar, 161 AD3d 1055 [2d Dept 2018]; JPMorgan Chase Bank, N.A. v Atedgi, 162 AD3d 756 [2d Dept 2018]; Nationstar Mtge., LLC v Laporte, 162 AD3d 784 [2d Dept 2018]).

Plaintiff establishes its standing by demonstrating that, when the action was commenced, it was either the holder or assignee of the underlying note (see Aurora Loan Servs., LLC v Taylor, supra; Wells Fargo Bank, NA v Rooney, 132 AD3d 980 [2d Dept 2015]).

A written assignment or physical delivery prior to the commencement of the action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident thereto (see U.S. Bank, NA v Collymore, 68 AD3d 752 [2d Dept 2009]; Bank of NY Mellon v Gales, 116 AD3d 723 [2d Dept 2014]; Bank of New York Mellon v Lopes, 158 AD3d 662 [2d Dept 2018]).

PLAINTIFF ESTABLISHES STANDING

Plaintiff has standing if it establishes that it was the holder of the note at the time the action was commenced (see Emigrant Bank v Larizza, 129 AD3d 904 [2d Dept 2015]; M & T Bank v Cliffside Prop. Mgt., LLC, 137 AD3d 876 [2d Dept 2016]). Here defendant attacks plaintiff's standing, correctly arguing that the assignment of the mortgage by MERS to Citi, on behalf of Lehman may assign the mortgage, but is ineffective to assign the note (see Bank of New York v Silverberg, 86 AD3d 274 [2d Dept 2011]; see also, Mortgage Elec. Registration Sys., Inc. v Coakley, 41 AD3d 674 [2d Dept 2007]; (Aurora Loan Servs., LLC v Baritz, 144 AD3d 618 [2d Dept 2016]). If this was the only basis for plaintiff's standing to bring the action, then defendant would be correct in her argument that standing has not been established. But, defendant overlooks other indicia of plaintiff's standing.

First, plaintiff attached to the complaint a copy of the original note defendant gave to Lehman, which bears an undated indorsement in blank from a representative of Lehman, which has been held sufficient to establish plaintiff's standing as to the original note and mortgage (see Nationstar Mortg., LLC v Catizone, 127 AD3d 1151 [2d Dept 2015]; Nationstar Mortg., LLC v [*6]Weisblum, 143 AD3d 866 [2d Dept 2016]; Wells Fargo Bank, N.A. v Osias, 156 AD3d 952 [2d Dept 2017]; Bank of America, NA v Wheatley, 158 AD3d 736 [2d Dept 2018]; HSBC Bank, USA v Oscar, 161 AD3d 1055 [2d Dept 2018]; Deutsche Bank Natl. Trust Co. v Homar, _AD3d_, 2018 NY Slip Op 05017 [2d Dept 2018]).

Second, having established the assignment of the Lehman note and mortgage underlying the CEMA and Consolidated Mortgage to Citi, plaintiff provides a copy of the assignment of them to it by Citi, filed with the Clerk and part of the record. This assignment assigns not just the mortgage, but also the note. An assignment of the mortgage which includes language also assigning the note is sufficient to establish standing of the assignee, here plaintiff (see Emigrant Bank v Larizza, 129 AD3d 904 [2d Dept 2015]; U. S. Bank N.A. v Akande, 136 AD3d 887 [2d Dept 2016]; Wells Fargo Bank. N. A. v Archibald, 150 AD3d 937 [2d Dept 2017]).

Third, plaintiff provides an affidavit of an employee of Citi, who establishes his ability to testify as to Citi's business records pursuant to CPLR 4518 (a). He testifies, and provides other evidence from Citi business records, that show that Citi has been in possession of the note on behalf of plaintiff as a servicer since July 13, 2007. Although the defendant did not raise the evidentiary objection that on the original submissions in support of plaintiff's motion, plaintiff did not provide proof of its authority to act as servicer, plaintiff saw fit to submit a copy of a power of attorney to act as plaintiff's servicer in reply. Although it could be said that such a submission may not be proper in reply (see Duran v Milord, 126 AD3d 932 [2d Dept 2015]; Bank of America, N.A. v Moody, 147 AD3d 712 [2d Dept 2017]), it has also been held that where defendant argued in opposition that plaintiff had failed to establish timely possession of the note, further submissions in reply clarifying plaintiff's initial submissions as to its possession of the note was proper (see Citibank, N.A. v Corrado, 162 AD3d 994 [2d Dept 2018]). In any event, such submission although helpful, was not necessary as defendant failed to raise that issue.

As plaintiff has establish its standing, defendant's first affirmative defense is dismissed.

RETURN TO FORECLOSURE SETTLEMENT CONFERENCE PART DENIED

Defendant's claim that she was not given a settlement conference pursuant to CPLR 3408 is without merit. Defendant was provided with such a conference before a court attorney referee in the Foreclosure Settlement Conference Part. That referee determined at the conference that based upon the evidence and arguments before the referee defendant was not eligible for such a conference as the property was not her primary residence. Defendant neither moved prior to plaintiff's motion, nor cross-moved, to return the case to the foreclosure settlement part. Instead, defendant raises it as a basis to deny plaintiff's motion for summary judgment. Her affidavit makes assertions that the property is her primary residence, alleging that such documents as her driver's license, her car registration and her income tax returns list the property as her residence, but copies of those documents are not attached. Defendant has not established by evidentiary proof in admissible form that plaintiff did not negotiate in good faith requiring the case be returned for further conference in the Foreclosure Settlement Conference Part (see Flagstar Bank, FSB v Titus, 120 AD3d 469 [2d Dept 2014]; Aurora Loan Svcs v Chirinkin, 135 AD3d 670 [2d Dept 2016]; Bank of NY Trust Co, NA v Chiejina, 142 AD3d 579 [2d Dept 2016]). In order to preserve the integrity of the Foreclosure Settlement Conference Part, this court must credit the determinations made by those referees unless provided proof otherwise. Defendant has not established that she presented anything more or less convincing to the court attorney referee than [*7]the unsupported claims she made to this court in her affidavit. A review of plaintiff's submissions on the motion show that defendant had provided plaintiff, and its predecessors in interest, with an address for her in New York City, that plaintiff's affidavit in support of the motion dated November 23, 2016 was notarized in Los Angeles, California, and the basis of her counsel's March 8, 2018 request to adjourn the oral argument of March 12, 2018 was that defendant was in California and would not be back until the end of April, 2018.

Defendant is free to confer with plaintiff in an attempt to reach a settlement, or make any applications for loan modifications or other means of settlement at any time, up to and including the issuance of a judgment of foreclosure and sale; but in the hope that defendant truly desires to settle this action, and not merely delay it, the court will schedule a settlement conference in this part on September 12, 2018 at 9:30 AM. Plaintiff is otherwise directed to proceed pursuant to the terms of this order, including the timely filing of a judgment of foreclosure and sale.

SUMMARY JUDGMENT GRANTED

Plaintiff's submissions have established the note and mortgage, the CEMA and Consolidated Mortgage and plaintiff's default in payment as indicated above. Therefore plaintiff has established it's entitlement to summary judgment in this foreclosure action. Whether Citi was servicer for plaintiff, or the holder of the note at the time, the representative of Citi's affidavit provides his ability to testify as to Citi's business records pursuant to CPLR 4518 (a), showing defendant's default in payment as of the payment due April 1, 2011. Defendant's opposition has failed to raise a triable issue of fact as to a valid defense. The court notes that defendant has been represented by counsel, who filed an answer raising only the affirmative defenses noted above. In opposition to plaintiff's motion defendant and her counsel only raised those issues already discussed. Although there were other issues apparent to the court that could have been either raised in opposition, or raised as affirmative defenses by cross-motion to amend defendant's answer, defendant did not do so. Failing to do so, defendant has waived those issues (see Bank of America, N.A. v Cudjoe, 157 AD3d 653 [2d Dept 2018]; Pennymac Corp. v DiPrima, 54 Misc 3d 990 [Sup. Ct., Suffolk County 2016]). The court will not sua sponte raise apparently available defenses and arguments waived by defendant who is represented by counsel.

Plaintiff's motion is granted, as indicated above, and the proposed order submitted with this motion, as modified by the court, is signed contemporaneously herewith.

This constitutes the Order and decision of the Court.

Dated: July 31, 2018

Hon. Robert F. Quinlan, J.S.C.