Opinion
00-CV-0540E(Sr)
January 25, 2003
MEMORANDUM AND ORDER
This decision may be cited in whole or in any part.
This is an action by plaintiff to foreclose a mortgage on defendants' real property. On June 22, 2000 plaintiff filed a complaint against Lawrence and Denise Fugle (the "Fugles") seeking to foreclose on three real property mortgages used to secure Farm Service Agency ("FSA") loans that were in default by the Fugles. Plaintiff's complaint also named Reisdorf Bros., Inc. ("Reisdorf"), Gordon Heineman ("Heineman") and John Doe, Mary Roe and XYZ Corporation (collectively known as "Doe, Roe and XYZ") as defendants. Plaintiff alleges that Reisdorf has a junior interest in the Fugles' property because he had obtained a mortgage on such property subsequent to the three FSA mortgages. Heineman was named as a defendant because the Fugles have apparently leased a portion of their real property to him. Defendants Doe, Roe and XYZ were named as unknown "tenants, occupants or other persons, if any, having or claiming any estate or interest" in the Fugles' Property. See Compl. ¶ 22. The Fugles filed an Answer October 6, 2000 and admitted the existence of the three FSA loans and corresponding mortgages, but denied that they had ever defaulted on their obligations. See Answer ¶¶ 1-17. In addition, the Fugles asserted eleven affirmative defenses. On January 26, 2001 plaintiff appeared before this Court in response to an order to show cause why this action should not be dismissed as to defendants Reisdorf, Heineman, and Doe, Roe and XYZ for failure to prosecute. Six days later, the Clerk of this Court filed a February 1, 2001 Entry of Default against Reisdorf and Heineman for failing to appear or otherwise defend in this action. On February 2, 2001 the Court dismissed Doe, Roe and XYZ from this action; however Reisdorf and Heineman remain as defendants. On September 20, 2001 this Court again ordered plaintiff to appear and show cause as to why Reisdorf and Heineman should not be dismissed for its failure to prosecute. Plaintiff subsequently made such an appearance and, on October 15, 2000, this Court issued an Order and held that Reisdorf and Heineman should not be dismissed from this case because each held interests in the property at issue. Plaintiff filed this summary judgment motion May 8, 2002. Neither Reisdorf nor Heineman has ever filed an answer in this case and the Fugles have not filed any opposition to plaintiff's summary judgment motion.
In 1994, the agency formerly known as the Farmers Home Administration ("FHA") was combined with other Department of Agriculture agencies to form the FSA.
FHA made the following loans to the Fugles: (1) $180,000 on April 15, 1985, (2) $23,000 on April 3, 1986 and (3) $27,500 on May 20, 1987. See Compl., Exs. A-F.
According to a May 3, 1991 Mortgage Agreement, the Fugles mortgaged interests in their property to Reisdorf in exchange for a $38,187 loan. See Compl., Ex.G.
On May 10, 2002 a Notice had been sent to each party indicating that a hearing on plaintiff's summary judgment motion would be held before the Court on June 7, 2002. No defendant appeared on such date to defend against plaintiff's motion. The Court received two letters via facsimile from the Fugles' attorney, J. Anthony Jordan, Esq., on June 25, 2002 requesting that the Fugles be allowed time to file opposition to plaintiff's summary judgment motion. According to the letters, the Fugles had previously sought to obtain different counsel and Jordan was requesting an extension to allow the Fugles to do so in order to file opposition papers to the plaintiff's motion for summary judgment. However, Jordan had apparently been under the erroneous impression that this Court had already granted the summary judgment motion at the June 7, 2002 hearing. Accordingly, the undersigned sent a July 17, 2002 letter to Jordan explaining that plaintiff's motion had been submitted on June 7, 2002 but that the disposition of such was still awaiting attention. In any event, Jordan's request for an extension is not justifiable inasmuch as it was communicated to this Court eighteen days after the June 7, 2002 hearing and more than six weeks after the May 10, 2002 Notice that had been sent to all of the parties.
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment shall be entered where the movant demonstrates that there is "no genuine issue as to any material fact" and that "the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986). A genuine issue of fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In deciding whether summary judgment is appropriate this Court must draw all factual inferences in favor of the nonmoving party. Adickes v. S.H. Kress Co, 398 U.S. 144, 157 (1970).
Nevertheless, the non-moving party must rebut the motion for summary judgment with more than conclusory allegations and general denials. FRCvP 56(e); see also Kerzer v. Kingly Mfg., 156 F.3d 396, 400 (2d Cir. 1998) ("Conclusory allegations, conjecture and speculation * * * are insufficient to create a genuine issue of fact."). Furthermore, summary judgment is mandated "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, at 322.
Summary judgment is appropriate in foreclosure actions and plaintiff's motion may be granted if it can establish "proof of the existence of an obligation secured by a mortgage, and a default on that obligation." U.S. v. Freidus, 769 F. Supp. 1266, 1277 (S.D.N.Y. 1991). If those elements are established, the mortgagee has a "presumptive right to collect, which can only be overcome by an affirmative showing from the defendant." Ibid. In this case, plaintiff has conclusively established that it provided three separate loans to the Fugles and that each such loan was secured by a mortgage. It is undisputed that the Fugles executed and delivered to plaintiff three promissory notes and corresponding mortgages and agreed to pay principal and interest to plaintiff pursuant to the terms contained therein. See Answer ¶¶ 2-12. In addition, plaintiff has established that the Fugles defaulted on their loan obligations. Plaintiff submitted an affidavit of Nancy L. New, Program Division Director of the FSA, wherein she states that the Fugles have "defaulted in the payment of the various mortgage installments due to Plaintiff * * *." New Aff. ¶ 5. While the Fugles have submitted an answer denying such default, they have submitted no evidence in support of such denial or in opposition to New's affidavit. Plaintiff has therefore met its initial burden and is presumptively entitled to foreclosure unless the Fugles can demonstrate some other defense. See Resolution Trust Co. v. J.I. Sopher Co., Inc., 1995 WL 489697, at *2 (S.D.N.Y. 1995) (holding that defendant must demonstrate a "bona fide defense" in order to withstand plaintiff's motion for summary judgment of foreclosure). The Fugles have not demonstrated any valid defenses as each of the eleven affirmative defenses contained in their Answer is without merit.
Attached to New's affidavit is a "Computation Schedule" which itemizes the principal and interest that is due on the promissory notes and mortgages. According to New's calculations, the Fugles owe a total of $282,256.04 in principal and $156,731.09 in interest to plaintiff.
The Fugles have submitted no evidence to support their asserted defenses and they have submitted nothing in opposition to plaintiff's motion for summary judgment. Such absence of evidence fails to overcome plaintiff's presumptive right to foreclosure. See Resolution Trust Co., at *2 ("[T]o defend against a summary judgment motion in a foreclosure action it is incumbent upon the real property owner * * * to produce `evidentiary proof in admissible form * * * sufficient to require a trial (of that defense) * * * mere conclusions, expressions of hope, unsubstantiated allegations or assertions are insufficient.'") (quoting State Bank of Albany v. Fioravanti, 51 N.Y.2d 638, 647 (1980)). Moreover, despite the absence of evidentiary support, the Court has examined each of the Fugles' affirmative defenses and has determined that together they raise no triable issues of fact; summary judgment will therefore be granted to plaintiff. See e.g. Cadlerock Joint Venture v. Alvarez, 1999 WL 619588, at *5 (S.D.N.Y. 1999) (granting plaintiff's summary judgment motion in a foreclosure action because of the insufficiency of defendants' evidence with respect to their affirmative defense).
Moreover, the Fugles have violated Rules 56 and 7.1(e) of the Local Rules of Civil Procedure ("LRCvP") by failing to submit either an opposing statement of material facts or an answering memorandum of law and supporting affidavit. See LRCvP 7.1(e), 56. Accordingly, plaintiff's Statements of Material Facts are deemed admitted unless controverted by the record. See Brainard v. Freightliner Corp., 2002 WL 31207467, at *2 n. 7 (W.D.N.Y. 2002) (discussing LRCvP 7.1(e) and 56 and citing cases).
Accordingly it is ORDERED that plaintiff's motion for summary judgment is granted in its entirety, that judgment of foreclosure and sale is awarded to plaintiff and that the mortgaged premises described in the Complaint be sold in accordance with the following provisions:
That the mortgaged premises described in the Complaint, as hereinafter set forth, be sold in a single parcel subject to the rights, if any, of all oil and gas leases and easements or other restrictions of record, all prior encumbrances, liens and appropriations of record, and any utility easements of record;
That the mortgaged premises described in the Complaint, as hereinafter set forth, be sold subject to the following: any state of facts that an accurate survey may show; easements, covenants, restrictions, or reservations of record, if any; zoning restrictions and any amendments thereto according to law, and now in force; existing violations and orders of the appropriate departments of any city, town or village, if any; the physical condition of the premises at the time of closing; and without any apportionments or adjustments;
That the sale be conducted at a public auction at the Wyoming County Courthouse, Warsaw, New York, by and under the direction of Peter A. Lawrence, United States Marshal for the Western District of New York, who is hereby directed to make the sale of said premises;
That the aforesaid United States Marshal shall give public notice of the time and place of the sale as follows:
That he cause to be sent by mail a copy of the Notice of Sale by depositing the same in a prepaid wrapper addressed to
J. Anthony Jordan, Esq., Attorney for Defendants. Lawrence J. Fugle and Denise E. Fugle, 126 Main Street, Suite 2A, Greenwich, New York 12834.
Lawrence J. Fugle, 3979 East Main Street Road, Attica, New York 14011.
Denise E. Fugle, 3979 East Main Street Road, Attica, New York 14011.
Eric T. Dadd, Esq., Dadd and Nelson, Attorneys for Defendant, Reisdorf Bros., Inc., 11 Exchange Street, Attica, New York 14011.
Gordon Heineman, 3979 East Main Street Road, Attica, New York 14011;
That he post copies of the Notice of Sale in three conspicuous public places in Wyoming County, New York, where the premises are located;
That he cause the Notice to be published once weekly for four consecutive weeks in the Batavia Daily News (Wyoming County Edition), a newspaper of general circulation published in Wayne County, where the mortgaged premises are located. The Notice need not contain the full legal description of the property as set forth in Schedule A attached hereto, but may refer to the property as 3979 East Main Street Road, Attica, New York.
The plaintiff or any other party to this action may become a purchaser on such sale.
The United States Marshal shall execute to the purchaser on such sale a deed of the premises sold and upon receiving the proceeds of sale, forthwith pay the following items:
FIRST, his fees and commissions on said sale not exceeding, however, the sum of $100.00;
SECOND, advertising expenses as shown on bills to be specified in his Report of Sale;
THIRD, the sum of $40.00, hereby adjudged to constitute plaintiff's costs in this action, with interest thereon from the date hereof, together with filing fees of $150.00 and an additional allowance of $200.00, hereby awarded to the plaintiff in addition to costs, with interest thereon from the date hereof, and also the sum of $438,987.13, with interest thereon from April 15, 2002, the amount owing to the plaintiff and secured by the mortgages which are the subject of this action, or so much thereof as the purchase money of the mortgaged premises will pay of the same;
That, in case the plaintiff is the purchaser of the mortgaged premises at the sale, or in the event the rights of the purchaser at the sale and the terms of sale under this judgment shall be assigned to and acquired by the plaintiff and a valid assignment thereof filed with the United States Marshal, the United States Marshal shall not require the plaintiff to pay in cash the entire amount bid at said sale, but shall execute and deliver to plaintiff a deed of the premises sold upon payment to the United States Marshal of the amounts specified above in items marked "FIRST" and "SECOND"; that the balance of the amount bid, after deducting therefrom the amounts paid by the plaintiff, shall be allowed to the plaintiff as specified above in item marked "THIRD"; that if, after so applying the balance of the amount bid there shall be a surplus over and above the said amounts due plaintiff, the plaintiff shall pay to the United States Marshal, upon delivery to it of said United States Marshal's deed, the amount of such surplus; and that the United States Marshal then shall make the payments as herein directed;
That the United States Marshal take the receipt of the plaintiff or its attorney, for the amounts paid as hereinabove directed in item marked "THIRD", and file it with his Report of Sale;
That the surplus moneys, if any, be then deposited in the Registry of this Court, to be withdrawn only on the order of this Court;
That the United States Marshal make his report of such sale and file it with the Clerk of this Court with all convenient speed; that if the proceeds of the sale be insufficient to pay the amounts herein directed to be paid to plaintiff, with the expenses of sale, interest, costs and allowances as aforesaid, the United States Marshal specify the amount of such deficiency in his Report of Sale.
The purchaser on such sale shall be let into possession of the premises sold upon production of the United States Marshal's deed to such premises; and that it is further
ORDERED, ADJUDGED AND DECREED that each and every one of the defendants in this action, and all persons claiming under them or any or either of them after the filing of the Notice of Pendency of this action, be and they are forever barred and foreclosed of all right, title, interest, claim, lien and equity of redemption in and to the mortgaged premises and each and every part and parcel thereof;
That defendants Lawrence J. Fugle and Denise E. Fugle are directed to pay any deficiency which may remain, after applying all monies received from the sale of the mortgaged premises, of the indebtedness secured by the promissory notes and mortgages or to be paid by the plaintiff as costs or otherwise herein and plaintiff may have execution thereon.
The description of the said premises is attached hereto as Schedule A.