Deutsche Bank Natl. Trust Co. v Unknown Heirs to the Estate of Serge Souto

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Deutsche Bank Natl. Trust Co. v Unknown Heirs to the Estate of Serge Souto 2019 NY Slip Op 31340(U) April 29, 2019 Supreme Court, New York County Docket Number: 850071/2016 Judge: Arlene P. Bluth 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. [*FILED: 1] NEW YORK COUNTY CLERK 04/30/2019 11:03 AM NYSCEF DOC. NO. 196 INDEX NO. 850071/2016 RECEIVED NYSCEF: 04/30/2019 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: PART HON. ARLENE P. BLUTH IAS MOTION 32 Justice --------------------------------------------------------------------------------X INDEX NO. 850071/2016 . t DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR AMERICAN HOME MORTGAGE ASSETS TRUST 2007-1, MORTGAGE-BACKED PASS-THROUGH CERTIFICATES SERIES 2007-1, MOTION DATE MOTION SEQ. NO. - - -004 --- Plaintiff, -vUNKNOWN HEIRS TO THE ESTATE OF SERGE SOUTO A/KIA SERGE J. SOUTO, ROYAL BLUE REALTY HOLDINGS, INC.,JOHN SOUTO, AS VICE PRESIDENT OF ROYAL BLUE REALTY HOLDINGS, INC.,JOHN SOUTO, AS HEIR TO THE ESTATE OF SERGE SOUTO A/KIA SERGE J. SOUTO AND AS SOLE TRUSTEE OF THE SERGE SOUTO, IRREVOCABLE INTERVIVOS TRUST, THE BOARD OF MANAGERS OF 130 BARROW STREET CONDOMINIUM, NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, UNITED STATES OF AMERICA, KATZ EQUITIES, INC.,CORNICELLO TENDLER & BAUMEL-CORNICELLO, GILBERT DILUCIA, VICTORIA DILUCIA, PETER WEISS, SING YU INTERNATIONAL INC.,SY MARBLE & GRANITE IMPORTERS, THOMAS G. HASKINS, JORDAN BUTTROFF, LESLIE BUTTROFF, JOHN DOE DECISION AND ORDER Defendant. ---------------------------------------------------------------------------------X The following e-filed documents, listed by NYSCEF document number (Motion 004) 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170, 171, 183, 187 were read on this motion to/for DISMISSAL The motion to dismiss the amended complaint by defendant Royal Blue Realty Holdings, Inc. ("Royal Blue") is denied. Background This foreclosure action relates to a property located at 130 Barrow Street, Unit 166 in Manhattan. Plaintiff seeks to recover on the outstanding debt, which purportedly.amounts to $729,792.84 (the amount-secured by the premises). Royal Blue claims that plaintiffs amended complaint violates a previous Court order, plaintiffs RP APL 1304 notice was defective, Royal 'Blue never signed the Consolidation, Extension and/or Modiflcatio~ Agreement ("CEMA"), of 4 HEIRS TO ·rHEESTATE 850071/2016 DEUTSCHE BANK NATIONAL TRUST vs. 1 UNKNOWN ._._., .. __ ._._ nnA Page 1of4 [*FILED: 2] NEW YORK COUNTY CLERK 04/30/2019 11:03 AM NYSCEF DOC. NO. 196 INDEX NO. 850071/2016 RECEIVED NYSCEF: 04/30/2019 plaintiff lacks standing, plaintiffs claims are time-barred and plaintiffs amended complaint violates applicable statutes, including the Martin Act. As an initial matter, the Court observes that plaintiff previously moved to amend its complaint. In response to that motion, Royal Blue filed a cross-motion to dismiss in which it argued that plaintiffs claims were time-barred, plaintiff could not state a claim for unjust enrichment and plaintiffs claims violate the Martin Act. The judge assigned to the matter granted plaintiffs motion and denied Royal Blue's cross-motion (NSYCEF Doc. No. 118). Justice McMahon allowed plaintiff to "add 2 causes of action in the alternative for an equitable mortgage lien and unjust enrichment" (NSYCEF Doc. No. 118). The Court also denied the branch of plaintiffs motion to add new parties and denied Royal Blue's cross-motion to dismiss (id.). Therefore, the Court denies Royal Blue's motion to the extent it seeks to relitigate the arguments that were already rejected. This includes Royal Blue's claims about the Martin Act, whether the action is time-barred and Royal Blue's claim that plaintiff may not proceed on its unjust enrichment claim. Purported Violation of this Court's Decision The Court also denies Royal Blue's motion to the extent that it claims that plaintiff violated the Court's decision (see id.). Royal Blue takes issue with the fact that plaintiffs original complaint had two causes of action (foreclosure and reformation of mortgage) and the amended complaint now has five causes of action. But a closer look at the amended complaint reveals that the additional cause of action is a declaratory judgment claim based on the equitable mortgage lien (a cause of action the decision specifically allowed plaintiff to add). And these 850071/2016 DEUTSCHE BANK NATIONAL TRUST vs. UNKNOWN HEIRS TO THE ESTATE Motion No. 004 2 of 4 Page 2 of 4 [*FILED: 3] NEW YORK COUNTY CLERK 04/30/2019 11:03 AM NYSCEF DOC. NO. 196 INDEX NO. 850071/2016 RECEIVED NYSCEF: 04/30/2019 allegations were included in plaintiffs proposed amended complaint (see NYSCEF Doc. No. 49). There is no doubt that the previous decision, NYSCEF Doc. No. 118, was a bit contradictory. It allowed plaintiff to add two causes of action for equitable mortgage lien and for unjust enrichment, but plaintiffs proposed amended complaint contained two separate causes of action relating to its equitable mortgage lien claim. Despite this apparent confusion, this Court finds that there is no basis to find that plaintiff violated the Court's prior directives. It makes sense to allow plaintiff to keep a cause of action that is part of its equitable mortgage lien claim and one that was part of its proposed amended complaint attached to the prior motion. 1304 To the extent that Royal Blue claims that plaintiff violated RP APL 1304, that claim is denied. The notice required by RP APL 1304 is applicable only where the property is occupied by the borrower (RP APL 1304 [6][a][iii]). Here, Royal Blue is a corporate entity and, therefore, the notice was not required. The fact that plaintiff purportedly sent a 1304 notice anyway does not impose additional requirements. In any event, it is not clear at the motion to dismiss stage that a 1304 notice was required or that plaintiff failed to comply with this statute. CEMA Royal Blue's claim that it is not bound by the purported 2006 CEMA upon which plaintiff seeks to foreclose is denied. Plaintiff alleges in its amended complaint that Royal Blue is bound by the 2006 CEMA and, in opposition to Royal Blue's motion, attaches a copy of a CEMA signed by Royal Blue (see NYSCEF Doc. No. 155). That is enough at the motion to dismiss stage to deny this branch of Royal Blue's motion. 3 of 4 HEIRS TO THE ESTATE 850071/2016 DEUTSCHE BANK NATIONAL TRUST vs. UNKNOWN Page 3 of 4 [*FILED: 4] NEW YORK COUNTY CLERK 04/30/2019 11:03 AM NYSCEF DOC. NO. 196 INDEX NO. 850071/2016 RECEIVED NYSCEF: 04/30/2019 Standing Royal Blue contends that plaintiff lacks standing and points to issues with the chain of title for the note. Royal Blue contends that there were no assignments from American Home Mortgage Acceptance, Inc. or from American Home Mortgage. However, the affidavit of Shannon Childs (Senior Loan Analyst for plaintiff's servicer) establishes that plaintiff had possession of the note prior to the commencement of this action (NSYCEF Doc. No. 150, ifif 410). This affidavit is sufficient to defeat this branch of Royal Blue's motion at this stage of the litigation (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 366, 12 NYS3d 612 [2015]). Remaining Claims Royal Blue also moves to dismiss plaintiff's equitable mortgage lien claim on the ground that it is time-barred and to dismiss the unjust enrichment claim because it fails to state a cause of action. Both of these claims are denied because the Court already granted plaintiff leave to add these two causes of action under Motion Sequence 00 I, a motion that Royal Blue opposed. The Court has already ruled that adding these two causes of action was permissible; Royal Blue's remedy is to appeal or make a motion to reargue. It is not to make another motion to dismiss causes of action that the Court already allowed plaintiff to add. Accordingly, it is hereby ORDERED that the motion to dismiss by defendant Royal Blue Realty Holdings, Inc. is denied. Next Conference: July 11, 2019 at 10 a.m. DATE CHECK ONE: APPLICATION: CHECK IF APPROPRIATE: ARLEN ~ CASE DISPOSED GRANTED 0 NON-FINAL DENIED iM0NloARLENE P. BLUTH GRANTED IN PART , SETTLE ORDER SUBMIT ORDER INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT 4 of 4 850071/2016 DEUTSCHE BANK NATIONAL TRUST vs. UNKNOWN HEIRS TO THE ESTATE . D OTHER D REFERENCE Page 4 of 4

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