Opinion
No. 1427–11.
2013-01-2
US BANK, NA, Plaintiff, v. Bernardita A. REED a/k/a Bernardita Reed, et al., Defendants.
Fein, Such & Crane, LLP, Chestnut Ridge, NY, for Plaintiff. Fred M. Schwartz, Esq. Smithtown, NY, for Defendant, Reed.
Fein, Such & Crane, LLP, Chestnut Ridge, NY, for Plaintiff. Fred M. Schwartz, Esq. Smithtown, NY, for Defendant, Reed.
THOMAS F. WHELAN, J.
ORDERED that this motion (# 001) by the plaintiff for an order discontinuing this mortgage foreclosure action without prejudice and to cancel the notice of pendency filed herein is considered under CPLR 3217 and is granted; and it is further
ORDERED that the cross motion (# 002) by defendant, Bernardita A. Reed a/k/a Bernardita Reed, for dismissal with prejudice and an award of attorneys fees, costs and/or sanctions is denied.
On May 5, 2005, defendant Reed obtained a mortgage loan in the amount of $328,000.00 in connection with her purchase of residential real property located in Sound Beach, New York. As security for the loan, which was represented by a note, the plaintiff executed a mortgage in favor of the lender that secured the principal amount of the loan. The record reflects that the plaintiff acquired ownership of the note and mortgage by a November 24, 2010 written assignment of the mortgage and the debt secured thereby by a nominee of the original lender.
The plaintiff commenced this foreclosure action in January of 2011, some eleven months after defendant Reed's default in payment. Issue was joined by service of an answer by defendant Reed dated February 11, 2011. Defendant Reed's answer contains fifteen (15) affirmative defenses and one counterclaim in which she demands an award of counsel fees, costs an disbursement due to the plaintiff's engagement in purported unconscionable acts including its failure to reinstate the mortgage and its demands for recovery of alleged excessive and unreasonable fees and expenses.
By notice of motion returnable November 29, 2011,
the plaintiff interposed this motion (# 001) for an order cancelling the notice of pendency and discontinuing this action without prejudice. Defendant Reed opposes the motion by the interposition of a cross-motion (002) wherein she seeks the following relief: 1) a denial of the plaintiff's motion, with prejudice; 2) that dismissal be conditioned upon the payment of counsel fees and costs in favor of the defendant; 3) that sanctions be imposed upon the plaintiff; 4) that the plaintiff's action be dismissed predicated upon the plaintiff's lack of standing; 5) that interest be tolled from the date of the alleged default; and 6) that counsel fees and costs be awarded to the defendant. For the reasons stated below, the plaintiff's motion-in-chief (# 001) is granted while the defendant's cross motion (# 002) is denied.
The delay in the submission of these applications is attributable to the parties' engagement in the settlement conference procedures that were conducted in the specialized mortgage foreclosure conference part over the past ten months. Since no settlement was reached, the action was remanded to this IAS part for adjudication of the parties' claims in their ordinary course, including determination of the instant applications following their restoration to the motion calendar of the court on December 21, 2012.
First considered are those portions of the cross motion (# 002) of the defendant wherein she seeks affirmative relief of the type contemplated by CPLR 3211(a)(3), namely dismissal of the plaintiff's complaint due to its purported lack of standing to prosecute its claims for foreclosure and sale ( see Wells Fargo Bank Minn., N.A. v. Mastropaolo, 42 AD3d 239, 244, 837 N.Y.S.2d 247 [2d Dept 2007] ). Unfortunately, these demands for relief are not timely interposed since they were made in this post-answer motion rather than in a pre-answer motion to dismiss ( seeCPLR 3211(a); Nowacki v. Becker, 71 AD3d 1496;897 N.Y.S.2d 560 [2d Dept 2010]; Bennett v. Hucke, 64 AD3d 529, 881 N.Y.S.2d 335 [2d Dept 2009]; Bowes v. Healy, 40 AD3d 566, 833 N.Y.S.2d 400 [2d Dept 2007] ). While the standing defense was preserved in the answer served by defendant Reed, adjudication of such defense must be made at trial or its procedural equivalent, namely, a motion for summary judgment ( see Nowacki v. Becker, 71 AD3d 1496,supra; Diaz v. DiGiulio, 29 AD3d at 623, 816 N.Y.S.2d 125 [2d Dept 2006] ).
In any event, this application lacks merit since it is unsupported by any proof that the plaintiff lacks standing. The unsubstantiated claims of defense counsel as to the purported lack of standing on the part of the plaintiff are insufficient to overcome the prima facie showing of standing that was made by the plaintiff's production of a written assignment of the mortgage debt as evidenced by the note and the mortgage in favor of the plaintiff that was executed by a nominee and disclosed agent of the original lender well before the commencement of this action ( see Chase Home Finance, LLC v. Miciotta, 101 AD3d1307, 2012 WL 6199623 [3d Dept 2012]; CitiMortgage, Inc. v. Rosenthal, 88 AD3d 759, 931 N.Y.S.2d 638 [2d Dept 2011]; US Bank Nat. Ass'n v. Cange, 96 AD3d 825, 947 N.Y.S.2d 522 [2d Dept 2012]; U.S. Bank, N.A. v. Collymore, 68 AD3d 752, 754 890 N.Y.S.2d 578 [2d Dept 2009]; Deutsche Bank Nat. Trust Co. v. Pietranico, 33 Misc.3d 528, 928 N.Y.S.2d 818 [Sup.Ct. Suffolk Cty.2011]; US Bank v. Flynn, 27 Misc.3d 802, 897 N.Y.S.2d 855 [Sup.Ct. Suffolk Cty.2010] ).
The remaining portions of the defendant's cross motion are equally lacking in merit. Therein, defendant Reed demands awards of attorneys fees, costs and sanctions and a tolling of interest from the date of her alleged default in payment. To the extent that these demands may fairly be read as resting upon claims that the plaintiff engaged in bad faith, frivolous, or other wrongful conduct by reason of its prosecuting of this action without the requisite “standing” to do so, such demands are denied.
The absence of standing on the part of the plaintiff is not an actionable wrong, as it does not constitute bad faith, frivolous, unconscionable, fraudulent or oppressive conduct ( see Deutsche Bank Nat. Trust Co. v. Hunter, 100 AD3d 810, 954 N.Y.S.2d 181 [2d Dept 2012] ). Rather, a lack of standing on the part of a plaintiff is merely an affirmative defense which must be timely raised by a defendant possessed of such defense or it is waived ( see Wells Fargo Bank Minn., N.A. v. Mastropaolo, 42 AD3d 239,supra; Bank of New York v. Alderazi, 99 AD3d 837, 951 N.Y.S.2d 900 [2d Dept 2012]; JPMorgan Chase Bank, N.A. v. Bauer, 92 AD3d 641, 938 N.Y.S.2d 190 [2d Dept 2012]; Citibank, N.A. v. Swiatkowski, 98 AD3d 555, 949 N.Y.S.2d 635 [2d Dept 2012]; CitiMortgage, Inc. v. Rosenthal, 88 AD3d 759,supra ). Like a plaintiff whose claim is time barred under a statute of limitations or is precluded by a statute of frauds, a plaintiff without standing may prevail in the prosecution of its claim, since such defense, like all other non-jurisdictional affirmative defenses, are waived if not raised by an adverse party ( see Orix Financial Services, Inc. v. Haynes, 56 AD3d 377, 867 N.Y.S.2d 332 [1st Dept 2008]; Wells Fargo Bank Minn., N.A. v. Mastropaolo, 42 AD3d 239,supra; Roland v. Benson, 30 AD3d 398, 816 N.Y.S.2d 190 [2d Dept 2006] ). As the Appellate Division observed in Roland v. Benson, 30 AD3d 398,supra, “[h]ere the defendants, in the answer, admitted the existence of an agreement and did not specifically plead the statute of frauds as an affirmative defense as required by CPLR 3018(b). The failure to do so constituted a waiver of the defense and effectively precluded the Supreme Court from considering the issue on the merits ( see Blechner v. Pecoraro, 164 A.D.2d 878, 879–880, 559 N.Y.S.2d 553 [2d Dept 1990] )”. Defendant Reed's demands for the imposition of sanctions or the recovery of costs and/or attorneys fees due to the plaintiff's purported lack of standing are thus denied.
Nor is there any merit to the defendant's claim for a judicial imposition of a toll on interest from the date of her default in payment. No basis in either law or fact has been advanced for the issuance of an order preventing the plaintiff from enforcing the terms of its mortgage, including its contractual right to collect interest, fees and penalties by reason of the defendant's default ( see Citibank, N.A. v. Van Brunt Properties, LLC, 95 AD3d 1158, 945 N.Y.S.2d 330 [2d Dept 2012]; Emigrant Mortg. Co., Inc. v. Fisher, 90 AD3d 823, 935 N.Y.S.2d 313 [2d Dept 2011]; Indymac Bank, F.S.B. v. Yano–Horoski, 78 AD3d 895, 896, 912 N.Y.S.2d 239 [2d Dept 2010] ).
Also denied are the remaining portions of defendant Reed's cross motion wherein she seeks counsel fees and costs due to the plaintiff's purported engagement in frivolous conduct by reason of its alleged delay in the prosecution of its claim and its purported failure to comply with administrative rules applicable to this action ( see defense counsel's supplemental affirmation dated December 1, 2011). This court flatly rejects the notion that a claimant may be sanctioned or otherwise adjudged liable for engaging in frivolous, unconscionable, malicious or oppressive conduct under rules governing frivolous or vexatious litigation by virtue of such claimant's mere commencement of a civil action to enforce contractual rights and remedies long recognized as enforceable under the laws of this state. As this court recently stated, “secure property rights are an important pillar in the foundation of a free society. The founding fathers took seriously their business of preserving liberty through the protection of property rights. They viewed such rights as undeniable rights of human beings critical to the maintenance of life, liberty and the pursuit of happiness and they recognized that property rights defined must be enforced if they are to be effective. As we are a nation of laws, not of men or women, the courts should ensure that property rights are well defined and well enforced. If so, the promise of free and ready transfers of real property or any interest therein will continue to be realized by the citizenry of this state” ( Carver Federal Saving Bank v. Redeemed Christian Church, 35 Misc.3d 1228(A), 2012 WL 1877316 [Sup.Ct. Suffolk Cty.2012] ).
The fact that a claimant may not prevail in the prosecution of a civil claim due to some procedural irregularity, such as a lack of standing or to the absence of merit in the claim, itself, does not transform the claimant into a tortfeasor or other wrongdoer nor does it give rise to liability for litigation costs ( see Engel v. CBS, Inc., 93 N.Y.2d 195, 204–206, 689 N.Y.S.2d 411 [1999];Muro–Light v.. Farley, 95 AD3d 846, 944 N.Y.S.2d 571 [2d Dept 2012]; [“ The institution of a civil action by summons and complaint will not give rise to a claim to recover damages for abuse of process, as doing so is not legally considered the type of process capable of being abused ”]; Hornstein v. Wolf, 109 A.D.2d 129, 491 N.Y.S.2d 183, [2d Dept 1985]; [“ The mere bringing of a civil suit, even if groundless and ill motivated, does not result in special damage or injury sufficient to sustain an action for malicious prosecution ”] ). Were it otherwise, a colossal chill upon the bringing of causes to the court for adjudication would no doubt arise and effect a significant impairment of the vital and separate role played by the judiciary as the third, co-equal branch of the government of this state.
For these reasons and those outlined above, the court concludes that there is no basis for the suspension of accrued interest under the loan documents, an award of counsel fees or costs or the imposition of monetary sanctions against the plaintiff or its counsel pursuant to 22 NYCRR Part 130–1 or otherwise. The defendant's cross motion (# 002) is thus denied in its entirety.
The plaintiff's motion (# 001) for an order discontinuing this action is granted to the extent that the claims asserted herein by the plaintiff are hereby discontinued, without prejudice. The voluntary discontinuance of a claim by the party asserting the claim is governed by CPLR 3217. An order is required here, as issue has been joined and counsel for the answering defendant has refused to sign a stipulation of discontinuance ( seeCPLR 3217(b)).
“In the absence of special circumstances, such as prejudice to a substantial right of the defendant, or other improper consequences, a motion for a voluntary discontinuance should be granted' “ (Blackwell v. Mikevin Management III, LLC, 88 AD3d 836, 931 N.Y.S.2d 116 [2d Dept 2011]quoting Expedite Video Conferencing Servs., Inc. v. Botello, 67 AD3d 961, 961, 890 N.Y.S.2d 82 [2d Dept 2009] ). Answering defendant Reed failed to demonstrate that one or more of the above listed circumstances exist and warrant a denial of the plaintiff's motion. The fact that the plaintiff may recommence the action does not constitute prejudice to any substantial right of defendant Reed. The court thus grants the plaintiff's motion for an order discontinuing, without prejudice, the claims advanced by it in its amended complaint. The counterclaim of defendant Reed is severed and continued herein, notwithstanding the absence of any request for such relief, since the discontinuance of such counterclaim does not appear to be within the purview of the provisions of CPLR 3217.
Proposed order of discontinuance and cancellation of notice pendency signed, as modified by the court.