Opinion
Index No. 850255/2018 Motion Seq. No. 002
09-19-2024
MATRIX FINANCIAL SERVICES CORPORATION, Plaintiff, v. CHANG TAE SEO, NEW YORK CITY DEPARTMENT OF FINANCE PARKING VIOLATIONS BUREAU, THE BOARD OF MANAGERS OF THE 120 RIVERSIDE BOULEVARD AT TRUMP PLACE CONDOMINIUM, JOHN DOE Defendant.
Unpublished Opinion
PRESENT: HON. FRANCIS A. KAHN, III JUSTICE
DECISION + ORDER ON MOTION
FRANCIS A. KAHN III JUDGE
The following e-filed documents, listed by NYSCEF document number (Motion 002) 53, 54, 55, 56. 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80 were read on this motion to/for JUDGMENT-SUMMARY.
Upon the foregoing documents, the motion is determined as follows:
This is an action to foreclose on a mortgage encumbering residential real property located at 120 Riverside Boulevard, Apt 10C, New York, New York, given by Defendant Chang Tae Seo ("SEO") to non-party Mortgage Electronic Registration Systems, as nominee for non-party Flagstar Bank, FSB. The mortgage secures an indebtedness in the original principal amount of $625,500.00 and is evidenced by a note. Both loan documents are dated October 13, 2016. Plaintiff commenced this action wherein it is alleged that on or about December 1, 2017, Defendant Seo defaulted in repayment under the loan. Defendant Seo answered and pled thirty-three affirmative defenses including lack of standing, failure to comply with RPAPL §§1303, 1304 and 1306, failure to serve a contractual pre-foreclosure notice, as well as a counterclaim. By order of this Court dated May 20, 2020, Plaintiff s motion for summary judgment was denied on the basis that prima facie evidentiary proof of the note, mortgage and Seo's default was not established. Now, Plaintiff again moves for summary judgment against Defendant Seo, a default judgment against the non-appearing parties, for an order of reference and to amend the caption. Defendant Seo opposes the motion.
In moving for summary judgment, Plaintiff was required to establish prima facie entitlement to judgment as a matter of law though proof of the mortgage, the note, and evidence of Defendants' default under the loan documents (see U.S. Bank, N.A. v James, 180 A.D.3d 594 [1st Dept 2020]; Bank of NY v Knowles, 151 A.D.3d 596 [1st Dept 2017]; Fortress Credit Corp, v Hudson Yards, LLC, 78 A.D.3d 577 [1st Dept 2010]). Also, based on the affirmative defenses pled. Plaintiff was required to demonstrate, prima facie, its standing (see eg Wells Fargo Bank, N.A. v Tricario, 180 A.D.3d 848 [2nd Dept 2020]), its strict compliance with RPAPL §§1303, 1304 and 1306 (see U.S. Bank, NA v Nathan, 173 A.D.3d 1112 [2d Dept 2019]; HSBC Bank USA, N.A. v Bermudez, 175 A.D.3d 667, 669 [2d Dept 2019]) as well as its substantial compliance with the requisites under paragraph 22 of the mortgage (see eg Wells Fargo Bank, N.A. v McKenzie, 186 A.D.3d 1582, 1584 [2d Dept 2020]).
Proof supporting a prima facie case on a motion for summary judgment must be in admissible form (see CPLR §3212[b]; Tri-State Loan Acquisitions III, LLC v Litkowski, 172 A.D.3d 780 [1st Dept 2019]). A plaintiff may rely on evidence from persons with personal knowledge of the facts, documents in admissible form and/or persons with knowledge derived from produced admissible records (see eg U.S. Bank N.A. v Moulton, 179 A.D.3d 734, 738 [2d Dept 2020]). No particular set of business records must be proffered, as long as the admissibility requirements of CPLR 4518[a] are fulfilled and the records evince the facts for which they are relied upon (see eg Citigroup v Kopelowitz, 147 A.D.3d 1014, 1015 [2d Dept 2017]).
Plaintiffs motion was supported with an affirmation from Efren Sanchez ("Sanchez"), a Vice President of RoundPoint Mortgage Servicing LLC., formally known as RoundPoint Mortgage Servicing Corporation ("RoundPoint"), servicer and attorney-in-fact for Plaintiff. Sanchez avers that his submission was based upon a review of RoundPoint's records and knowledge of its record keeping practices. Sanchez's affidavit laid a proper foundation for the admission of RoundPoint's records into evidence under CPLR §4518 by sufficiently showing that the records RoundPoint relied upon "reflect[ed] a routine, regularly conducted business activity, and that it be needed and relied on in the performance of functions of the business", "that the record [was] made pursuant to established procedures for the routine, habitual, systematic making of such a record" and "that the record [was] made at or about the time of the event being recorded" (Bank of N.Y.Mellon v Gordon, 171 A.D.3d 197, 204 [2d Dept 2019]; see also Bank of Am v Brannon, 156 A.D.3d 1 [1st Dept 2017]). The records of other entities were also admissible since Sanchez established that those records were received from the makers and incorporated into the records RoundPoint kept and that it routinely relied upon such documents in its business (see eg U.S. Bank N.A. v Kropp-Somoza, 191 A.D.3d 918 [2d Dept 2021]). Further, annexed to the affirmation were the records referenced by Sanchez (cf. Deutsche Bank Natl. Trust Co. v Kirschenbaum, 187 A.D.3d 569 [1st Dept 2020]). RoundPoint's authority to act on Plaintiffs behalf was established with submission of a limited power of attorney, dated October 17, 2022 (see U.S. Bank N.A. v Tesoriero, 204 A.D.3d 1066 [2d Dept 2022]; Deutsche Bank Natl. Trust Co. v Silverman, 178 A.D.3d 898 [2d Dept 2019]; US Bank N.A. v Louis, 148 A.D.3d 758 [2d Dept 2017]).
Sanchez's review of the attached records demonstrated the material facts underlying the claim for foreclosure, to wit the mortgage, note, and evidence of mortgagor's default in repayment under the note (see eg ING Real Estate Fin. (USA) LLC v Park Ave. Hotel Acquisition, LLC, 89 A.D.3d 506 [1stDept 2011]; see also Bank of NY v Knowles, supra; Fortress Credit Corp. v Hudson Yards, LLC, supra).
As to standing in a foreclosure action, it is established in one of three ways: [1] direct privity between mortgagor and mortgagee, [2] physical possession of the note prior to commencement of the action that contains an indorsement in blank or bears a special indorsement payable to the order of the plaintiff either on its face or by allonge, and [3] assignment of the note to Plaintiff prior to commencement of the action (see eg Wells Fargo Bank, N.A. v Tricario, 180 A.D.3d 848 [2d Dept 2020]; Wells Fargo Bank, NA v Ostiguy, 127 A.D.3d 1375 [3d Dept 2015]). "The attachment of a properly endorsed note to the complaint may be sufficient to establish, prima facie, that the plaintiff is the holder of the note at the time of commencement" (Deutsche Bank Natl. Trust Co. v Webster, 142 A.D.3d 636, 638 [2d Dept 2016]; cf. JPMorgan Chase Bank, N.A. v Grennan, supra). In this case, Plaintiff annexed a copy of the note to the complaint endorsed in blank by the original lender, Flagstar, on its face. This is sufficient to demonstrate that Plaintiff was the holder of the note when the action was commenced (see Ocwen Loan Servicing LLC v Siame, 185 A.D.3d 408 [1st Dept 2020]; Bank of NY v Knowles, supra at 597).
Proof of compliance with RPAPL §1304 requires Plaintiff to proffer "sufficient evidence demonstrating the absence of material issues as to its strict compliance with RPAPL 1304" (Aurora Loan Servs., LLC v Weisblum, 85 A.D.3d 95, 106 [2d Dept 2011]). "'[P]roof of the requisite mailing . . . can be established with proof of the actual mailings, such as affidavits of mailing or domestic return receipts with attendant signatures, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure'" (Deutsche Bank Natl. Trust Co. v Dennis, 181 A.D.3d at 866, quoting Citibank, N.A. v Conti-Scheurer, 172 A.D.3d 17, 21 [2d Dept 2019). In other words, an affidavit from the person who performed the actual mailing is not necessary (see Bossuk v Steinberg, 58 N.Y.2d 916, 919 [1983]) and proof from a person with "personal knowledge of the practices utilized by the [sender] at the time of the alleged mailing" is sufficient (Preferred Mut. Ins. Co. v Donnelly, 22 N.Y.3d 1169, 1170 [2014).
To demonstrate standard mailing procedure, the Court of Appeals has "has long recognized a party can establish that a notice or other document was sent through evidence of actual mailing or-as relevant here-by proof of a sender's routine business practice with respect to the creation, addressing, and mailing of documents of that nature" (Cit Bank N.A. v Schiffman, 36 N.Y.3d 550, 556 [2d Dept 2020][internal citations omitted]). A satisfactory office practice giving rise to the presumption "must be geared so as to ensure the likelihood that [the] notice ... is always properly addressed and mailed" (Nassau Ins. Co. v Murray, 46 N.Y.2d 828, 830 [1978]) and can be demonstrated via an affiant who explains "among other things, how the notices and envelopes were generated, posted and sealed, as well as how the mail was transmitted to the postal service" (Cit Bank N.A. v Schiffman, supra). Fulfillment of this requirement can raise a presumption that the required notice was sent and received by the projected addressee (Cit Bank N.A. v Schiffman, supra).
In support of the motion, the mailing of the statutory and contractual notices was attested to and described in an affidavit from Victoria Wollf ("Wollf”), an Assistant Secretary of Dovenmuehle Mortgage Inc., ("Dovenmuehle"), Plaintiffs prior servicer. Wollf attested to personal knowledge of the mailing practices and procedures of Dovenmuehle and described its process of mailing of the default notices in this case in adequate detail (see United States Bank Trust, N.A. v Mehl, 195 A.D.3d 1054 [2d Dept 2021]; Citimortgage, Inc. v Ustick, 188 A.D.3d 793, 794 [2d Dept 2020]). Compliance with RPAPL §1306 was shown by submitting a copy of a proof of filing statement from the New York State Department of Financial Services (see United States Bank Trust. N.A. v Mehl, supra at 1056) and RPAPL §1303 via the affidavit of Plaintiff s process server (see HSBC Bank USA, N.A. v Ozcan, 154 A.D.3d 822 [2d Dept 2017]).
In opposition, to the extent Defendant argues that the within motion is an inappropriate successive motion for summary judgment, that claim is unavailing. Multiple disputed issues are not presented here as Defendants only contest the issue of standing in opposition to the motion (cf. Wells Fargo Bank v Gittens, 217 A.D.3d 901, 903 [2d Dept 2023]). On the contrary, entertaining a second summary judgment motion furthers the ends of justice by allowing the Court to eliminate the need for a trial on issues that Defendants have not contested, to wit the existence of the note, mortgage or the default thereunder (see MTGLQ Invs. LP v Collado, 183 A.D.3d 414 [1st Dept 2020]; Bank of Am NA v Brannon, 156 A.D.3d, 1,6 [1st Dept 2017][Uncontradicted facts on a motion for summary judgment are "deemed to be admitted"]). The argument that Plaintiff failed to demonstrate all the elements of a cause of action for foreclosure is without merit. The affidavit and proffered business documents were all in admissible form. Likewise, the claim that the affiants lacked the requisite knowledge to support their information therein is unavailing.
As to the branch of Plaintiff s motion to dismiss all Defendants' affirmative defenses, CPLR §3211 [b] provides that "[a] party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit". For example, affirmative defenses that are without factual foundation, conclusory or duplicative cannot stand (see Countrywide Home Loans Servicing, L.P. v Vorobyov, 188 A.D.3d 803, 805 [2d Dept 2020]; Emigrant Bank v Myers, 147 A.D.3d 1027, 1028 [2d Dept 2017]). When evaluating such a motion, a "defendant is entitled to the benefit of every reasonable intendment of its pleading, which is to be liberally construed. If there is any doubt as to the availability of a defense, it should not be dismissed" (Federici v Metropolis Night Club, Inc., 48 A.D.3d 741, 743 [2d Dept 2008]).
All the affirmative defenses and the counterclaim are entirely conclusory and unsupported by any facts in the answer or by the papers submitted in opposition. As such, these affirmative defenses and the counterclaim are nothing more than an unsubstantiated legal conclusion which are insufficiently pled as a matter of law (see Board of Mgrs. of Ruppert Yorkville Towers Condominium v Hayden, 169 A.D.3d 569 [1st Dept 2019]; see also Bosco Credit V Trust Series 2012-1 v. Johnson, 177 A.D.3d 561 [1stDept 2020]; 170 W. Vil. Assoc, v G & E Realty, Inc., 56 A.D.3d 372 [1st Dept 2008]; see also Becher v Feller, 64 A.D.3d 672 [2d Dept 2009]; Cohen Fashion Opt., Inc. v V & M Opt., Inc., 51 A.D.3d 619 [2d Dept 2008]). Further, to the extent that no specific legal argument was proffered in support of a particular affirmative defense, such defenses were abandoned (see U.S. Bank N.A. v Gonzalez, 172 A.D.3d 1273, 1275 [2d Dept 2019]; Flagstar Bank v Bellafiore, 94 A.D.3d 1044 [2d Dept 2012]; Wells Fargo Bank Minnesota, N.A v Perez, 41 A.D.3d 590 [2d Dept 2007]).
The branch of Plaintiff s motion for a default judgment against the non-appearing parties is granted (see CPLR §3215; SRMOF II 2012-1 Trust v Tella, 139 A.D.3d 599, 600 [1st Dept 2016]).
The branch of Plaintiff s motion to amend the caption is granted (see generally CPLR §3025; JP Morgan Chase Bank, N.A. v Laszio, 169 A.D.3d 885, 887 [2d Dept 2019]).
Accordingly, it is
ORDERED that Plaintiffs motion for summary judgment against the appearing parties and for a default judgment against the non-appearing parties is granted; and it is further
ORDERED that the affirmative defenses and the counterclaim pled by all the appearing Defendants are dismissed; and it is further
ORDERED that Clark Whitsett, Esq. 66-05 Woodhaven Blvd., Rego Park, New York 11374 - 718-850-0003 is hereby appointed Referee in accordance with RPAPL § 1321 to compute the amount due to Plaintiff and to examine whether the property identified in the notice of pendency can be sold in parcels; and it is further
ORDERED that in the discretion of the Referee, a hearing may be held, and testimony taken; and it is further
ORDERED that by accepting this appointment the Referee certifies that he is in compliance with Part 36 of the Rules of the Chief Judge (22 NYCRR Part 36), including, but not limited to §36.2 (c) ("Disqualifications from appointment"), and §36.2 (d) ("Limitations on appointments based upon compensation"), and, if the Referee is disqualified from receiving an appointment pursuant to the provisions of that Rule, the Referee shall immediately notify the Appointing Judge; and it is further
ORDERED that, pursuant to CPLR 8003(a), and in the discretion of the court, a fee of $350 shall be paid to the Referee for the computation of the amount due and upon the filing of his report and the Referee shall not request or accept additional compensation for the computation unless it has been fixed by the court in accordance with CPLR 8003(b); and it is further
ORDERED that the Referee is prohibited from accepting or retaining any funds for himself or paying funds to himself without compliance with Part 36 of the Rules of the Chief Administrative Judge; and it is further
ORDERED that if the Referee holds a hearing, the Referee may seek additional compensation at the Referee's usual and customary hourly rate; and it is further
ORDERED that Plaintiff shall forward all necessary documents to the Referee and to Defendants who have appeared in this case within 30 days of the date of this order and shall promptly respond to every inquiry made by the referee (promptly means within two business days); and it is further
ORDERED that if Defendant(s) have objections, they must submit them to the referee within 14 days of the mailing of plaintiffs submissions; and include these objections to the Court if opposing the motion for a judgment of foreclosure and sale; and it is further
ORDERED that failure to submit objections to the referee may be deemed a waiver of objections before the Court on an application for a judgment of foreclosure and sale; and it is further
ORDERED, that the caption of this action be striking the "John Doe" and "Jane Doe" Defendants; and it is further
ORDERED the caption is amended as follows:
and it is further,
ORDERED that Plaintiff must bring a motion for a judgment of foreclosure and sale within 45 days of receipt of the referee's report; and it is further
ORDERED that if Plaintiff fails to meet these deadlines, then the Court may sua sponte vacate this order and direct Plaintiff to move again for an order of reference and the Court may sua sponte toll interest depending on whether the delays are due to Plaintiff s failure to move this litigation forward; and it further
ORDERED that counsel for Plaintiff shall serve a copy of this order with notice of entry upon the County Clerk (60 Centre Street, Room 141B) and the General Clerk's Office (60 Centre Street, Room 119), who are directed to mark the court's records to reflect the parties being removed pursuant hereto; and it is further
ORDERED that such service upon the County Clerk and the Clerk of the General Clerk's Office shall be made in accordance with the procedures set forth in the Protocol on Courthouse and County Clerk Procedures for Electronically Filed Cases (accessible at the "E-Filing" page on the court's website at the address (www.nycourts.gov/supctmanh)]; and it is further
ORDERED that Plaintiff shall serve a copy of this Order with notice of entry on all parties and persons entitled to notice, including the Referee appointed herein.
All parties are to appear for a virtual conference via Microsoft Teams on January 22, 2025, at 10:00 a.m. If a motion for judgment of foreclosure and sale has been filed Plaintiff may contact the Part Clerk (SFC-Part32-Clerk@nycourts.gov) in writing to request that the conference be cancelled. If a motion has not been made, then a conference is required to explore the reasons for the delay.