Opinion
703762/2015
04-05-2017
U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR RASC-2005KS5, Plaintiff, v. RICKY WONGSONADI, USA REALTY & MANAGEMENT GROUP, INC., MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR FREMONT INVESTMENT & LOAN, "JOHN DOE No.1" to "JOHN DOE #10," the last 10 names being fictitious and unknown to plaintiff, the persons or parties intended being the persons or parties, if any, having or claiming an interest in or lien upon the mortgaged premises described in the verified complaint, Defendants. RICKY WONGSONADI, Third-Party Plaintiff, v. ANSAR MUSSALEEN and USA REALTY & MANAGEMENT GROUP INC., Third-Party Defendants.
The following electronically filed documents read on this motion by plaintiff for an Order pursuant to CPLR 3212 granting plaintiff summary judgment, striking defendants Ricky Wongsonadi and USA Realty & Management Group, Inc.'s answers, amending the caption, appointing a referee, and awarding plaintiff costs of this motion; on this cross-motion by defendant/third-party plaintiff RICKY WONGSONADI (Wongsonadi) for an Order pursuant to CPLR 3211(5) dismissing the action on the grounds that it is barred by the statute of limitations; and on this cross-motion by defendant/third-party defendant USA REALTY & MANAGEMENT GROUP, INC. (USA Realty) for an Order dismissing the complaint as plaintiff is barred by the statute of limitations, lacks standing to bring this action, and failed to comply with a condition precedent: Papers/Numbered Notice of Motion-Affirmation-Exhibits-Memo. of Law EF 37 - 55 Wongsonadi's Notice of Cross-Motion EF 57 - 62 USA Realty's Notice of Cross-Motion EF 79 - 86 Plaintiff's Reply & Opposition to Cross-Motion EF 87 Wongsonadi's Reply EF 88 - 89
This foreclosure action pertains to property located at 111-15A f/k/a 111-17 157th Street, Jamaica, New York 11433.
Based on the record before the Court, on February 7, 2005, Wongsonadi obtained a loan from Fremont Investment & Loan in the principal amount of $262,880, secured by a mortgage on the subject premises. Plaintiff asserts that it is the holder of the note and mortgage, and Wongsonadi defaulted pursuant to the terms of the note and mortgage by failing to make the monthly mortgage payments beginning on February 1, 2009 and continuing thereafter.
Based on the default, plaintiff commenced a prior foreclosure action by filing a summons and complaint and notice of pendency on August 10, 2009. The action was voluntarily discontinued and the lis pendens was cancelled on March 8, 2011.
Plaintiff then commenced this foreclosure action by filing a summons and complaint and notice of pendency on April 17, 2015. Defendant USA Realty joined issue by filing an answer with counterclaims on May 28, 2015. Defendant Wongsonadi joined issue by filing an answer with counterclaims on June 29, 2015. All other defendants are in default. This matter was released from the residential foreclosure settlement conference part on October 28, 2015 as Wongsonadi did not reside at the subject property. Wongsonadi then commenced a third-party action against Ansar Mussaleen and USA Realty on March 4, 2016.
Plaintiff now moves for an Order of Reference. Defendants Wongsonadi and USA Realty each oppose the motion and cross-move to dismiss the action on the grounds that the statute of limitations has run. The cross-motions to dismiss the action will be addressed herein first.
On a motion pursuant to CPLR 3211(a)(5)to dismiss a complaint as barred by the applicable statute of limitations, the moving defendant must establish, prima facie, that the time in which to commence the action has expired (Kitty Jie Yuan v 2368 W. 12th St., LLC, 119 AD3d 674 [2d Dept. 2014]). Once a mortgage debt is accelerated, the borrower's right and obligation to make monthly installments ceases, all sums become immediately due and payable, and the six-year statute of limitations begins to run on the entire mortgage debt (see CPLR 213[4]; EMC Mtge. Corp. v Patella, 279 AD2d 604 [2d Dept. 2001]; Federal Natl. Mtge. Assn. v Mebane, 208 AD2d 892 [2d Dept. 1994]). A lender may revoke its election to accelerate the mortgage through an affirmative act of revocation occurring during the six-year statute of limitations (see EMC Mtge. Corp. v Patella, 279 AD2d 604 [2d Dept. 2001]).
Here, the debt was accelerated upon commencement of the first action on August 10, 2009. Defendants contend, therefore, that the statute of limitations expired on or about August 10, 2015, and the voluntary discontinuance was not an affirmative act by the lender to revoke its election to accelerate (see Federal Natl. Mtge. Assn. v Mebane, 208 AD2d 892 [2d Dept. 1994]). Thus, defendants assert that this action is time-barred. Plaintiff contends that this action is timely because the voluntary discontinuance of the prior action acted as a deceleration of the debt.
Although a court dismissal of a prior action for failure to prosecute, failure to appear at a conference or lack of personal jurisdiction or the acceptance of additional payments after acceleration do not constitute an act of revocation, (see e.g. Clayton Natl., Inc. v Guldi, 307 AD2d 982 [2d Dept. 2003]; Federal Nat. Mortg. Ass'n v Mebane, 208 AD2d 892 [2d Dept. 1994]), here plaintiff voluntarily discontinued the prior action before the six year statute of limitations expired. "When an action is discontinued, it is as if had never been; everything done in the action is annulled and all prior orders in the case are nullified" (Newman v Newaman, 245 AD2d 353, 354 [2d Dept. 1997]). Thus, the election to accelerate contained in the complaint was nullified when plaintiff voluntarily discontinued the prior action. Accordingly, this Court finds that discontinuing the prior foreclosure action was an affirmative act of revocation (see U.S. Bank Nat. Ass'n v Deochand, 2017 NY Slip Op 30472[U][Sup. Ct., Queens Cnty. 2017]; Assyag v Wells Fargo Bank, N.A., 2016 WL 6138269 [Sup. Ct., Queens Cnty. 2016]; 4 Cosgrove 950 Corp. v Deutsche Bank Nat. Trust Co., 2016 WL 2839341 [Sup. Ct., New York Cnty. 2016]). Thus, the statute of limitations has not run, and plaintiff's action is timely.
Turning to plaintiff's motion for summary judgment, it is well settled that a plaintiff in a mortgage foreclosure action establishes a prima facie case of entitlement to summary judgment through submission of proof of the existence of the underlying note, mortgage, and default in payment after due demand (see American Airlines Federal Credit Union v Mohamed, 117 AD3d [2d Dept. 2014]; TD Bank, N.A. v 126 Spruce Street, LLC, 117 AD3d 716 [2d Dept. 2014]; Citibank, N.A. v Van Brunt Properties, LLC, 95 AD3d [2d Dept. 2012]). Upon such a showing, the burden shifts to the defendant to produce evidence in admissible form sufficient to raise a material issue of fact requiring a trial.
In support of the motion, plaintiff submits the affidavit of Sony Prudent, a Senior Loan Analyst for Ocwen Loan Servicing, LLC (Ocwen), the loan servicer for plaintiff. Sony Prudent states that based upon a personal review of Ocwen's business records, which include the records from plaintiff and plaintiff's prior loan servicer GMAC Mortgage, LLC, the note and mortgage were assigned to plaintiff by physical transfer to plaintiff on May 1, 2005. Since that time, plaintiff has been in possession of both the original note and mortgage. Sony Prudent affirms that defendant is in default under the terms and conditions of the note and mortgage because the February 1, 2009 payment and subsequent payments were not made. Sony Prudent further affirms that a default notice was sent to Wongsonadi on April 15, 2015. Additionally, 90 day pre-foreclosure notices were sent by first-class mail and certified mail to defendant on September 29, 2014.
Based upon plaintiff's submission of the note, mortgage, and Sony Prudent's affidavit evidencing defendant Wongsonadi's failure to make the contractually required loan payments, plaintiff has established its prima facie case of entitlement to summary judgment.
In opposition, defendant USA Realty contends that summary judgment is not warranted as plaintiff lacks standing and failed to comply with a condition precedent. USA Realty also contends that Sony Prudent's is inadmissible and insufficient to establish plaintiff's prima facie case.
Sony Prudent properly laid the foundation for the affidavit to qualify the records relied upon as business records. "[A] witness who is familiar with the practices of a company that produced the records at issue, and who generally relies upon such records, may have the requisite knowledge to meet the CPLR requirements for the admission of a business record, provided that the witness can also attest that (1) the record was made in the regular course of business; (2) it was the regular course of business to make such record; and (3) the record was made contemporaneously with the relevant event, thereby assuring its reliability" (People v Brown, 13 NY3d 332, 341 [2009]). The factual allegations set forth in Sony Prudent's affidavit, including a personal review of the records, sufficiently established the admissibility of her statements under the business records exception to the hearsay rule (see Deutsche Bank Natl. Trust Co. v Monica, 131 AD3d 737 [3d Dept. 2015]; Portfolio Recovery Assoc., LLC v Lall, 127 AD3d 576 [1st Dept. 2015]; Merrill Lynch Bus. Fin. Servs. Inc. v Trataros Constr., Inc., 30 AD3d 336 [1st Dept. 2006]).
Sony Prudent affirms that plaintiff had physical possession of the subject note prior to and at the time of commencement. A plaintiff has standing where it is both the holder or assignee of the subject mortgage and the underlying note at the time the action is commenced (see Aurora Loan Services, LLC v. Taylor, 114 AD3d 627 [2d Dept. 2014]; Deutsche Bank Natl. Trust Co. v Whalen, 107 AD3d 931 [2d Dept. 2013]; Bank of NY v Silverberg, 86 AD3d 274 [2d Dept. 2011]). "A plaintiff may demonstrate that it is the holder or assignee of the underlying note 'by showing either a written assignment of the underlying note or the physical delivery of the note'" (Aurora Loan Servs., LLC v Mercius, 138 AD3d 650, 651 [2d Dept. 2016] quoting U.S. Bank N.A. v Guy, 125 AD3d 846 [2d Dept. 2015]). Although USA Realty contends that Sony Prudent's affidavit is insufficient in that it does not provide any factual details concerning the physical delivery of the note to plaintiff, there is no requirement that plaintiff establish how it came into possession of the endorsed in blank note to be able to enforce it (see PennyMac Corp. v Chavez, 144 AD3d 1006 [2d Dept. 2016]; JPMorgan Chase Bank, N.A. v Weinberger, 143 AD3d [2d Dept. 2016]). Moreover, as plaintiff has demonstrated its standing by demonstrating that it was the holder of, and in possession of, the note at the time this action was commenced, any challenge to the assignments is insufficient to demonstrate that plaintiff lacks standing. USA Realty also argues that plaintiff failed to satisfy a condition precedent by failing to provide a default notice as required by the terms of the subject mortgage. As defendant Wongsonadi has not denied receipt of the notice, USA Realty's argument is mere speculation and insufficient to defeat a motion for summary judgment. In any event, Sony Prudent affirms that a notice of default was sent to Wongsonadi on April 15, 2009. Sony Prudent's affidavit is sufficient to demonstrate compliance with the terms of the note and mortgage (see Indymac Bank, F.S.B. v Kamen, 68 AD3d 931 [2d Dept. 2009]).
Lastly, defendant Wongsonadi argues that the motion for summary judgment is premature as discovery is pending in the third-party action. Specifically, Wongsonadi contends that if the foreclosure action proceeds, it would prejudice his rights with respect to his suit to have the subject property transferred back to him.
Wongsonadi does not contest the existence of the note, mortgage, and default thereunder. Rather, he contends that this motion for summary judgment is premature, however, Wongsonadi fails to offer any evidentiary basis to suggest that discovery may lead to relevant evidence. The mere hope and speculation that evidence sufficient to defeat the motion might be uncovered during discovery is an insufficient basis upon which to deny the motion (see CPLR 3212[f]; Medina v Rodriguez, 92 AD3d 850 [2d Dept. 2012]; Hanover Ins. Co. v Prakin,81 AD3d 778 [2d Dept. 2011]; Essex Ins. Co. v Michael Cunningham Carpentry, 74 AD3d 733 [2d Dept. 2010]; Peerless Ins. Co. v Micro Fibertek, Inc., 67 AD3d 978 [2d Dept. 2009]; Gross v Marc, 2 AD3d 681 [2d Dept. 2003]). Additionally, any dispute as to the amount owed by Wongsonadi to plaintiff may be resolved after a referee is appointed and the existence of such a dispute does not preclude the issuance of summary judgment (see Crest/Good Mfg. Co., Inc. v Baumann, 160 AD2d 831 [2d Dept. 1990]).
The remainder of defendants' opposition is insufficient to raise a question of fact. As defendants have failed to raise a material issue of fact in opposition, plaintiff is entitled to the relief sought (see Baron Assoc., LLC v Garcia Group Enters., Inc., 96 AD3d 793 [2d Dept. 2012]; Wells Fargo Bank Minn., Natl. Assn. v Perez, 41 AD3d 590 [2d Dept. 2007], lv dismissed 10 NY3d 791 [2008]).
Accordingly, for the reasons stated above, plaintiff's motion for summary judgment is granted. Plaintiff's branches of its application for a default judgment against the remaining defaulting defendants and for the appointment of a referee to compute the amounts due under the subject mortgage are also granted. The submissions further reflect that plaintiff is entitled to amend the caption.
Defendant RICKY WONGSONADI's cross-motion and defendant USA REALTY & MANAGEMENT GROUP, INC.'s cross-motion are both denied.
Settle Order. Dated: April 5, 2017 Long Island City, NY ROBERT J. MCDONALD J.S.C.