Opinion
No. 6395/10.
2010-07-15
Kevin CALHOUN, Plaintiff, v. SAXON MORTGAGE SERVICES, INC., Deutsche Bank National Trust Corporation d/b/a Deutsche Bank Trust Company Americas and Deutsche Bank National Trust Company, individually and as trustee for Ixis Real Estate Capital Trust, Commonwealth Land Title Insurance Co., Jefferson Settlement Services Corp., IFS Properties, LLC,. Joseph Massaro, Matthew Mattera, Todd Yovino Christopher Coschignano, as referee, and Michelle Ramos, Defendant.
Farley & Kressler, P.C., Jericho, for Plaintiff. The Dorf Law Firm, LLP, by Jonathan B. Nelson, Esq., Mamaroneck, for Defendants IFS Properties, LLC.
Farley & Kressler, P.C., Jericho, for Plaintiff. The Dorf Law Firm, LLP, by Jonathan B. Nelson, Esq., Mamaroneck, for Defendants IFS Properties, LLC.
Stein, Wiener & Roth, LLP, Carle Place, for Co Counsel.
DANIEL R. PALMIERI, J.
That branch of the plaintiff's motion made pursuant to CPLR 6301 and CPLR 6312 for a preliminary injunction enjoining the defendants and their agents from taking any action which would interfere with or impair the plaintiff's possession to certain real property commonly known as 8 Raleigh Place, Roosevelt, New York, including commencement of eviction proceedings, is granted. The undertaking is fixed at $10,000, cash or bond. Cash may be held in escrow by plaintiff's attorney pending further order of this Court. Once received from plaintiff, counsel shall so notify this Court and defendants' counsel, in writing. A copy of the bond must be filed with the Court and a copy provided to the motion opponents' attorney. This undertaking, either cash or bond, must be given within 30 days of the date of this order, or the injunction shall be deemed dissolved without further order.
That branch of the motion made pursuant to CPLR 602 that is for consolidation of this action with another action, Deutsche Bank National Trust Company Americas Formerly Known As Banker's Trust Company, As Trustee And Custodian for MSIX 2006–1 By: Saxon Mortgage Services Inc., F/K/A Ameritech Mortgage Services, Inc., Its Attorney In Fact v. Michelle Ramos A/K/A Michele Ramos, et al., index no. 5731/08, is denied.
That branch of the motion made pursuant to CPLR 2001 and RPAPL 231 and RPAPL 1311 for vacatur of the Referee's Deed dated March 4, 2010 and the Judgment of Foreclosure and Sale dated September 4, 2008, index no. 5731/08 is denied.
The cross motion by defendants IFS Properties, LLC, Joseph Massaro, Matthew Mattera, and Todd Yovino (jointly, “IFS”) (seq. no. 002) made pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action against them is granted to the extent that the fifth (prima facie tort) and sixth (unjust enrichment) causes of action are dismissed, and is otherwise denied.
In this tangled double foreclosure matter, the plaintiff Kevin Calhoun seeks to defend his title against the claim of another purchaser of the same property in Roosevelt, New York. The history of this matter began well before the opponents on this motion and cross motion entered the scene, when one Michele Ramos gave two mortgages on February 28, 2006, one for $292,000 and another for $73,000.
The latter, smaller mortgage was identified as being junior to the former.
Copies of these two mortgages were annexed to plaintiff's reply papers, but are referred to here for the sake of the narrative.
According to the complaint in the current action (with annexed exhibits), adopted and referred to by Calhoun in his affidavit, he acquired his ownership interest in the house from defendant Deutsche Bank Trust Corporation, d/b/a Deutsche Bank National Trust Company Americas (“Deutsche Bank Americas”) and its bid assignee, defendant Deutsche Bank National Trust Company, as Trustee of Ixis Real Estate Capital Trust 2006–HE3 (“Deutsche Bank/Ixis”). The contract of sale, discussed below, refers to both these entities as sellers.
Deutsche Bank Americas had brought a foreclosure action against Michele Ramos, the prior owner, under index no. 2377/08. The notice of pendency in that action was filed on February 6, 2008.
According to the Referee's deed, the judgment in that case was entered on December 1, 2008.The Referee's deed was issued to Deutsch Bank/Ixis on June 30, 2009, upon the auction sale. Attached to the complaint as part of exhibit “4” is an endorsement cover sheet from the Nassau County Clerk's Office indicating that the deed was recorded on August 19, 2009.
This information was taken from an Affirmation of No Answer submitted by Deutsche Bank Americas's attorney. That Affirmation is found as an exhibit in plaintiff's reply papers, but as with the history of the mortgages it is noted here for purposes of the narrative.
Pursuant to the contract of sale with the plaintiff (signed by Deutsche Bank/Ixis's disclosed agent, defendant Saxon Mortgage Services, Inc.) dated October 28, 2009, Deutsch Bank/Ixis was to convey title in fee simple, which the contract defined at paragraph 10 as an interest free and clear “of all liens and encumbrances.” The closing of title occurred on November 6, 2009. The deed was recorded on December 15, 2009. It was a Bargain and Sale Deed with Covenants Against Grantor's Acts.
Plaintiff took possession, and alleges that he made $95,000 worth of improvements. He then began to market the property for re-sale. However, on January 20, 2010, plaintiff was contacted by one of the defendants here, Matthew Mattera, who informed him that he, Mattera ( i.e., IFS), had been the successful bidder at another foreclosure sale of the same property, conducted on January 19, 2010. That action, also brought against Michele Ramos, was under index no. 5731/08, and was based on a default under the other mortgage. A judgment of foreclosure and sale was granted on September 4, 2008,
and refers to a notice of pendency having been filed against the property on March 27, 2008—which was after the notice of pendency was filed in the action under 2377/08. Deutsche Bank Americas, plaintiff's seller here, was a defendant in that action, as Trustee and Custodian for MSIX 2006–1.
The case caption in that action refers to the bank as “Deutsch Bank Trust Company Americas” rather than “Deutsche Bank National Trust Company Americas”, but this difference in names is not raised by any party here.
As noted above, the auction sale occurred on January 19, 2010 and, IFS was the successful bidder. The Referee's deed was issued to it on March 4, 2010. The deed to IFS was recorded on March 5, 2010. As noted above Mattera was one of three owners of the successful bidder, defendant IFS Properties LLC, with defendants Joseph Massaro and Todd Yovino. IFS ultimately served plaintiff with a notice to quit, and this action ensued.
Among other things, plaintiff seeks an injunction enjoining the above-named individuals and IFS from interfering with plaintiff's ownership, use and enjoyment of the subject premises. By way of this present motion, the plaintiff seeks a preliminary injunction for this relief pending the conclusion of the litigation, in which he also has sued the title company that insured his title and Deutsch Bank Americas for breach of contract. He also seeks consolidation of this action with the foreclosure action under which IFS claims its title.
In a pre-answer cross motion to dismiss the complaint as to them, IFS and the individual defendants attack the complaint as failing to state a cause of action. In addition to the claim made for injunctive relief (first cause of action), the complaint alleges against IFS that plaintiff it is entitled to a declaration quieting title in its favor (second cause of action), and removing cloud on title (ninth cause of action). Plaintiff also seeks damages for prima facie tort (fifth cause of action) and unjust enrichment (sixth cause of action).
IFS contends in its memorandum of law that the filing of the notice of pendency in the action under index no. 5731/08, through which it acquired rights to the property, predates the acquisition of plaintiff's interest. IFS thus argues that plaintiff therefore took that interest subject to the results of that action, as if he were a party, and his interest thus was foreclosed upon the entry of judgment. CPLR 6501; see, e.g., Novastar Mortgage v. Mendoza, 26 AD3d 479 (2d Dept.2006); Green Point Sav. Bank v. St. Hilaire, 267 A.D.2d 203 (2d Dept.1999).
However, it appears from the record before the Court that IFS itself was on constructive notice of the foreclosure action under which plaintiff Calhoun later took title (2377/08) because, as noted above, the notice of pendency in that action was filed on February 6, 2008, and the notice of pendency in the action under which IFS took its title was filed on March 27, 2008. While it also appears that the mortgage foreclosed in the 2377/08 action was the smaller, junior mortgage (in that the judgment under 5731/08 was for $357,907 .09), the fact that this more senior mortgage might not have been extinguished by the judgment in 2377/08 does not eliminate the role of the notice of pendency. Thus, by the same authority advanced by IFS itself, its purchase occurred after the filing of the notice of pendency and it is thus “bound by all proceedings taken in the action after such filing to the same extent as if he or she were a party.” Novastar Mortgage v. Mendoza, 26 AD3d 479,supra. Those proceedings led to a recording of the auction buyer's deed on August 19, 2009, and plaintiff's deed from that auction buyer on December 15, 2009—both prior to the sale to IFS on January 19, 2010.
The Court also considers it worthy of note that there were two prior foreclosure actions here, under two other index numbers, which actions were discontinued without prejudice by the lender, acting though the same attorneys which represented them in the later actions, Fein, Such & Crane LLP. The orders of discontinuance went to two different judges, Hon. Joseph Spinola and Hon. Dana Winslow. Justice Winslow, obviously aware of the companion case and of the possibility of confusion, had directed in his order of discontinuance, dated December 21, 2007, as follows:
“Further, if this or these matters are recommenced they are related to the instant matter and the RJI shall so reveal, all papers shall be brought to the PC and a notation shall be made that this Court requests such new matter or matters.”
Unfortunately for the parties to this motion, this direction was ignored by the attorneys, who later filed RJIs in the two more recent foreclosure actions without notifying the Court and clerks of the related nature of the two actions. Copies of those RJIs have been provided by plaintiff, annexed to his reply papers. The two more recent foreclosure actions therefore took separate paths, leading to the dueling sales and the present law suit. The Court notes that neither the lenders nor their attorneys have responded in any way to this application.
Further, although Deutsche Bank Americas was serving as trustee/custodian for two different groups of mortgages in the two foreclosure actions (in action 5731/08 it was trustee/ custodian for MSIX 2006–1), both this bank and its agents/attorneys, the same counsel in both, apparently played a significant role in misleading the plaintiff and in causing the same house to be sold twice. As it is not necessary to the disposition of the present motion for an injunction, no findings are made here regarding the liability of the bank on the promise of no liens or encumbrances in the contract of sale, and the covenant in the deed given to plaintiff Calhoun, which was against grantor's acts. However, these are factors in determining where the balance of the equities lie.
In view of the foregoing, the Court concludes that the plaintiff has made out the essential showings necessary for the granting of a preliminary injunction: likelihood of success on the merits, irreparable harm absent the granting of the relief, and the equities balanced in his favor. See, e.g., Aetna Ins. Co. v. Capasso, 75 N.Y.2d 860, 862 (1990); W.T. Grant Co. v. Srogi, 52 N.Y.2d 496 (1981). As indicated above, the first-in-time status of the notice of pendency in action 2377/08 meets the first branch; irreparable harm absent the granting of the injunction is shown by plaintiff's eviction from the property after making the improvements, and being unable to sell the property to recover his investment; and while the equities at first blush appear equally balanced, in that both were mislead by third parties—the banks and the attorneys who failed to follow a judicial order that would have revealed the potential conflict prior to these sales—the greater involvement and effort of the plaintiff, as well as the contract and deed he received from the bank tip the scales in his favor. A preliminary injunction is therefore granted as sought in the plaintiff's order to show cause.
The undertaking is established as indicated above. CPLR 6312(b).
That branch of the motion that is for consolidation with the foreclosure action identified under index no. 5731/08 is denied. That action has been reduced to judgment and the sale conducted. No more proceedings are contemplated flowing from that case which involve the plaintiff here, other than the eviction proceedings, which has been enjoined by this present order. Proceedings in the present action provide the opportunity for all parties to address the issue of ownership of the subject property, and as the Court has jurisdiction over the persons of IFS and its members, and the plaintiff, their rights in that property may be fully adjudicated.
Further, neither of the present claimed owners were parties to the foreclosures, and as no party has raised any issue regarding the defaults under both mortgages and the resulting judgments, nothing is to be gained, and further confusion could result, should either foreclosure be reopened. The issue here is which asserted owner's interest should be recognized, not whether the mortgages should have been foreclosed. Had Justice Winslow's order been followed the present conundrum would likely not have resulted, as there would have been only one sale, but neither judgment would necessarily have been impaired. In short, the history of the foreclosure cases obviously are important to a determination of the present matter, but this does not require that the judgment in either foreclosure action be vacated and the cases reopened.
That branch of the motion that is for an immediate vacatur of the Referee's Deed dated March 4, 2010 and the Judgment of Foreclosure and Sale dated September 4, 2008, under index no. 5731/08 is denied. This relief, in effect, would be a grant of summary judgment in plaintiff's favor, without proper notice to all defendants, and is also premature with regard to the IFS defendants in that they have not yet answered. Although a preliminary injunction in this case is appropriate to preserve the status quo until this tangled tale can be finally decided, summary judgment is not. See, Alexandru v. Pappas, 68 AD3d 690 (2d Dept.2009); see also, Coolidge Equities, Ltd. v. Falls Court Props. Co., 45 AD3d 1289 (4th Dept.2007).
The cross motion to dismiss is granted to the extent that the claims sounding in prima facie tort and unjust enrichment are dismissed, and is otherwise denied. In evaluating a motion made pursuant to CPLR 3211(a)[7], the Court must look within the four corners of the complaint, and if any cause of action is discernable therefrom the motion should fail. See, e.g., Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275 (1977). In making this determination, the factual allegations asserted in the pleading are to be accepted as true, and the plaintiff is to be accorded the benefit of every favorable inference that may be drawn therefrom. Konidaris v. Aeneas Capital Mgt., LP, 8 AD3d 244 (2d Dept.2004); Leon v. Martinez, 84 N.Y.2d 83 (1994).
Applying these standards to the case at bar, the Court finds that all claims against the IFS defendants that seek or are directly connected to resolution of the plaintiff's claim to ownership of the subject premises (first, second and ninth) state causes of action under New York law. The moving defendants seek dismissal based upon the notice of pendency filed in the action identified as 5731/08, but in view of the history of that case and that of the other action under which the plaintiff took title, as set forth above, that alone is insufficient as a basis for dismissal.
However, claims under prima facie tort and unjust enrichment are not stated. To state a claim in prima facie tort, the plaintiff must allege the 1) intentional infliction of harm 2) which results in special damages 3) without any excuse or justification 4) by an act or series of acts that would otherwise be lawful. Freihofer v.. Hearst, 65 N.Y.2d 135, 142–143 (1985); Curiano v. Suozzi, 63 N.Y.2d 113, 117 (1984). A “disinterested malevolence” must be shown as the sole motivation behind the misconduct. R.I.Is. House, LLC v.. North Town Phase II, 51 AD3d 890 (2d Dept.2008). Here, the allegations made by plaintiff point to a motivation that was based not on a simple desire to harm but to validate the IFS defendants' interest in the subject property. That is fatal to a claim of prima facie tort.
Nor has the claim in unjust enrichment been sufficiently pled. “The theory of unjust enrichment lies as a quasi-contract claim” IDT v. Morgan Stanley Dean Witter & Co., 12 NY3d 132, 142 (2009), rearg. denied12 NY3d 889 (2009), quoting Goldman v. Metropolitan Life Ins. Co., 5 NY3d 561, 572 (2005). Unjust enrichment involves a claim by a party that it performed services on behalf of another at his or her behest, resulting in that party receiving an unjust benefit. See e.g. Fountoukis v. Geringer, 33 AD3d 756, 757 (2d Dept.2006); Clark v. Daby, 300 A.D.2d 732 (3d Dept.2002), lv denied100 N.Y.2d 503 (2003); Liberty Marble v. Elite Stone Setting, 248 A.D.2d 302, 304 (1st Dept.1998). “It is well settled that the essential inquiry in any action for unjust enrichment or restitution is whether it is against equity and good conscience to permit the defendant to retain what is sought to be recovered” Sperry v. Crompton Corp., 8 NY3d 204 (2007), quoting Paramount Film Distrib. v. State of New York, 30 N.Y.2d 415, 421 (1972), cert denied414 U.S. 829 (1973).
Here, the plaintiff does not allege that he and IFS had any contact until the double sale came to light. No benefit, monetary or otherwise, is alleged to have been conferred on IFS by the plaintiff, but rather that IFS itself paid for the same property that plaintiff did, and that (according to the plaintiff) his rights should be deemed superior. If IFS ultimately prevails, it will of necessity be based on the law of foreclosure and real property as it affects competing claims to such property. It will not mean that it has retained a benefit that in good conscience should belong to the plaintiff, because as noted IFS too paid for the property.
Accordingly, the cross motion is granted to the extent that the fifth and sixth causes of action are dismissed, and is otherwise denied. The moving defendants are reminded of their need to serve an answer in accord with the Civil Practice Law and Rules. See,CPLR 3211(f).
This shall constitute the Decision and Order of this Court.