Opinion
No. 150570/16.
03-15-2017
Joseph A. IOMMARINI and Gina Marie Iommarini, Plaintiffs, v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., as Nominee for Greenpoint Mortgage Funding, Inc., U.S. Bank National Association as Trustee under Pooling and Servicing Agreement dated as of December 1, 2004 Master Asset Backed Securities Trust 2004–WMC3 Mortgage Pass–Through Certificates Series 2004–WMC3, Bank of America, a/k/a Bank of America, National Association, Wells Fargo Bank a/k/a Wells Fargo Bank, National Association, Successor by Merger to Wells Fargo Home Mortgage, Inc., a/k/a Wells Fargo Home Mortgage, Inc., New Century Mortgage Corporation, U.S. Bank Association as Trustee for CSFB ABS Trust Series 2003–HE 2, Home Eq Services Barclays Capital Real Estate, Inc., Defendant.
The following papers numbered 1 to 3 were fully submitted on the 5th day of January, 2017:
| Papers/ | Numbered |
|---|---|
| Defendant Bank of America N.A.'s Notice of Motion to Dismiss Complaint Pursuant to CPLR 3211 (Affirmation and Memorandum of Law in Support) (Dated: September 15, 2016) | 1 |
| Plaintiffs' Affirmation and Affidavits in Opposition (Dated: October 27, 28, 2016) | 2 |
| Defendant's Reply Memorandum of Law in Further Support of Motion (Dated: November 14, 2016) | 3 |
Upon the foregoing papers, the motion of defendant Bank of America, N.A. a/k/a Bank of America, National Association (hereinafter, the "Bank") for an order dismissing the complaint as against it pursuant to CPLR 3211(a)(5), (7) is denied, without prejudice to renewal when discovery is complete.
Motion Seq. No. 002 was decided at oral argument and an Order was directed to be settled.
Plaintiffs (father and daughter) have instituted this action to, inter alia, quiet title and direct the Richmond County Clerk to discharge several mortgages (see para 1 of August 19, 2016 Amended Complaint; Bank's Exhibit D) encumbering their real property, which is located at 65 Erika Loop, Staten Island, New York. In support, plaintiffs maintain that they have either repaid the mortgages of record or, in the case of the defendant Bank, that the loans were fraudulently made. Thus, plaintiffs allege, in substance, that: (1) on June 13, 2007 they executed a bond and mortgage encumbering the subject premises in order to secure a line of credit from defendant Bank in the sum of $320,000.00; (2) less than two months later, i.e., on September 7, 2007, they entered into a mortgage modification and consolidation agreement with defendant Bank that added $80,000.00 to the line of credit, thereby encumbering plaintiffs' premises to the extent of $400,000.00 (see Bank's Exhibits A and B); (3) the mortgages in question represented twice the value of plaintiffs' property; (4) the Bank knowingly placed plaintiffs in this untenable position by granting them a further line of credit; (5) in so doing, the Bank acted in bad faith and with unclean hands; (6) there has been "no acknowledgment of any indebtedness ... [by Bank for] over six years"; (7) "the statute of limitations for the commencement of an action to foreclose [a] mortgage or to bring any action on the bond for principal or ... interest ... has not been tolled or abated"; and (8) as a result thereof, any such cause of action "has become outlawed [sic] and barred by the statute of limitations" (see Bank's Exhibit D). Accordingly, plaintiffs maintain that this encumbrance should be stricken, as well.
It is undisputed that plaintiffs took ownership of the premises in question as tenants in common on January 5, 2007, and that on May 13, 2009, one of the plaintiffs (Joseph) filed for bankruptcy. To the extent relevant, that proceeding resulted, in part, in a September 23, 2009, "So Ordered" Stipulation (see Bank's Exhibit C) a copy of which plaintiffs recorded with the Richmond County Clerk on April 7, 2015.
The Stipulation in question provides that Joseph Iommarini "believing that [the] Bank possessed a third mortgage in the sum of $400,000.00 upon his residence owned as a tenant in common with his daughter Gina Iommarini, located at 65 Erika Loop, Staten Island, New York ... commenced [an] adversary proceeding ... [against the Bank, which was resolved in a Stipulation] deeming that [1] the claim of the Bank is wholly unsecured, [2] the Bank's lien upon [Joseph's] interest in the property is void, [3] the Richmond County Clerk [can] remove the lien from the record, [4] the Bank acknowledges that the mortgage held by it is only against the interest of [Gina Iommarini] as [a] tenant in common, ... [5] the Bank does not hold any claim, secured or unsecured, against [Joseph's] interest ... [and 6] the Bank waives any and all claims whether secured or unsecured against [Joseph's] interest in the Property and consents to the disallowance of any such claim without further notice." (see Bank's Exhibit C).
In moving to dismiss plaintiffs' action to discharge its mortgage lien, defendant Bank asserts that plaintiffs' attempt to do so based on allegations of "bad faith" and "unclean hands" at the time of origination is barred by the six year statute of limitations for fraud (see CPLR 213[8] ; 3211[a][5] ). In addition, defendant Bank maintains that plaintiffs have failed to state a legally sufficient cause of action sounding in fraud, as their complaint lacks the specificity required by CPLR 3016(b).
In opposition, plaintiffs have offered multiple affidavits in which they aver, in pertinent part, that the fraud was only discovered within the last two years, during a title search conducted by their current attorney, and that defendant's attorney orchestrated the fraudulent loan for his own purposes .
The Court notes that the aforementioned attorney, Guy G. Giuliano, was subsequently disbarred as a result of his conviction, on December 20, 2012, of grand larceny in the first degree, a class B felony, in violation of Penal Law § 155.42 ; grand larceny in the second degree as a hate crime (two counts), a class B felony, in violation of Penal Law §§ 155.40 and 485.05 ; grand larceny in the second degree, a class C felony, in violation of Penal Law § 155.40 ; criminal possession of a forged instrument in the second degree (two counts), a class D felony, in violation of Penal Law § 170.25 ; offering a false instrument for filing in the first degree (10 counts), a class E felony, in violation of Penal Law § 175.35 ; falsifying business records in the first degree (11 counts), a class E felony, in violation of Penal Law § 175.10, and scheme to defraud in the first degree, a class E felony, in violation of Penal Law § 190.65 (see Matter of Giuliano, 117 AD3d 114 ).
"On a motion to dismiss the complaint pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the court must afford the pleading a liberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Breytman v. Olinville Realty, LLC, 54 AD3d 703, 703–704 ; see Leon v. Martinez, 84 N.Y.2d 83, 87–88 ). "Whether the complaint will later survive a motion for summary judgment, or whether the plaintiff will ultimately be able to prove its claims ... plays no part in the determination of a pre-discovery 3211[a][7] motion to dismiss" (Shaya B. Pac., LLC v. Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34, 38 ; see EBC I, Inc. v. Goldman Sachs & Co., 5 NY3d 11, 19 ). Here, affording the complaint a liberal construction, accepting the facts as alleged therein as true, and granting plaintiffs the benefit of every possible inference, it is the opinion of this Court that the complaint sufficiently states a cause of action to discharge defendant's lien for fraud at this pre-discovery stage of the proceedings (Shaya B. Pac., LLC v. Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, supra at 38). At present, although facts sufficient to justify opposition may exist, they currently reside almost exclusively within the knowledge of the officers or employees of defendant Bank (see CPLR 3211[d] ).
Turning to so much of defendant Bank's motion to dismiss as is based on CPLR 3211(a)(5), i.e., that the action is untimely, it is well established that the moving defendant bears the initial burden of establishing, prima facie, that the time within which to commence the action has expired. Only then does the burden shift to the plaintiff to raise a triable issue of fact as to whether the statute of limitations was, e.g., tolled or is otherwise inapplicable (see Rakusin v. Miano, 84 AD3d 1051, 1052 ; Texeria v. BAB Nuclear Radiology, P.C., 43 AD3d 403, 405 ).
The statute of limitations for an action based on fraud is set forth in CPLR 213(8). To the extent relevant, that statute provides that the time within which an action based on fraud must be commenced "shall be the greater of six years from the date the cause of action accrued or two years from the time the plaintiff or the person under whom the plaintiff claims discovered the fraud, or could with reasonable diligence have discovered it." In this case, while the defendant Bank has demonstrated its right to judgment as a matter of law by the production of documentary and other evidence that plaintiffs' time to commence this action expired six years from the date of accrual, it has proffered no evidence regarding the alternate computation of the time for commencement, i.e., two years from the date of discovery. Under these circumstances, the defendant Bank has failed to demonstrate as a matter of law that the action at bar was not commenced within the "greater" of the two time periods specified in the statute. On this issue, plaintiffs contend that the fraud was only discovered during a title search conducted fewer than two years prior to the commencement of this action. Assuming arguendo that the foregoing is true, a triable issue would exist as to whether that discovery could, with reasonable diligence, have been made earlier. As a result, the defendant Bank has failed to demonstrate prima facie that the action is time-barred.
Accordingly, it is
ORDERED, that the motion to dismiss the complaint of defendant Bank of America, N.A. a/k/a Bank of America National Association, is denied, without prejudice to renewal when discovery is complete.