Opinion
12 CV 4746 (RJD) (RML)
11-20-2013
U.S. BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF WAMU COMMERCIAL MORTGAGE SECURITIES TRUST 2006-SL1, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-SL1, Plaintiff, v. RAWLE BOSTON, et al., Defendant.
MEMORANDUM & ORDER
DEARIE, District Judge.
This is a mortgage foreclosure action in which Plaintiff, U.S. Bank, National Association, as trustee for the registered holders of WaMu Commercial Mortgage Securities Trust 2006-SL1, Commercial Mortgage Pass-Through Certificates, Series 2006-SL1 ("U.S. Bank"), seeks to foreclose property owned by defendant, Rawle Boston ("Mr. Boston"). U.S. Bank moves for summary judgment and argues it can foreclose on Mr. Boston's property because 1) Mr. Boston entered into a loan agreement, which he secured with a Mortgage on his property; 2) U.S. Bank was assigned the Mortgage and underlying Note; and 3) Mr. Boston has defaulted on the loan.
To avoid summary judgment, Mr. Boston must tender evidence that would enable a rational juror to decide in his favor. Mr. Boston fails to do so. U.S. Bank has tendered copies of the Note, Mortgage, and the Assignment of those documents. Although Mr. Boston argues that there is a question of fact as to the Assignment's validity and authenticity, the evidence does not substantiate his allegations. Mr. Boston's additional defenses are also without merit. U.S. Bank's motion for summary judgment is granted accordingly.
I. BACKGROUND
On September 1, 2006, Mr. Boston entered into a consolidated loan agreement with Washington Mutual Bank ("WaMu") for $635,000.00. He signed and delivered an Amended and Restated Promissory Note and Prepayment Addendum Thereto ("Note"), in which he promised to re-pay WaMu in monthly payments beginning on November 1, 2006. Compl. Ex. A, § 3(a). That same day, Mr. Boston executed a Mortgage on his real property located at 1144 President Street, Brooklyn, NY 11225, as well as his personal property to secure the debt. Id. Ex. B. On September 14, 2006, the Mortgage was duly recorded. Id.
U.S. Bank alleges that on November 30, 2006, it was assigned the Note, Mortgage, and all other relevant documents ("Loan Documents") by a written agreement from WaMu. Id. ¶ 11. In support of this claim, U.S. Bank maintains that it has received the originals of these documents, id. ¶ 16, and it has tendered to the Court true and correct copies of the Note, Mortgage, and the Assignment, id. Exs. A-C. The Assignment was executed on November 30, 2006, notarized on January 26, 2007, and recorded on July 31, 2007. Id. Ex. C. The notarization includes a certificate of authentication detailing the Assignment's valid execution. Id. U.S. Bank asserts that Mr. Boston defaulted on the loan and that it wrote him two letters regarding the default—one informing him of the default and another notifying him that the debt had been accelerated. Id. Exs. F-G.
U.S. Bank now seeks to foreclose on Mr. Boston's property. Mr. Boston contests U.S. Bank's ability to take any action against him. In addition to other affirmative defenses, he asserts that U.S. Bank does not own the Loan Documents. In particular, he challenges the Assignment's authenticity due to the length of time between its execution and notarization. He also claims that U.S. Bank has not tendered the necessary documents to demonstrate the Assignment is valid.
On September 24, 2012, U.S. Bank commenced this action seeking to foreclose the Mortgage on Mr. Boston's property and be named as having the first and best lien on the property. See id. After a pre-motion conference on February 8, 2012, U.S. Bank filed a letter motion for summary judgment.
II. DISCUSSION
Summary judgment is appropriate if there is "no genuine issue of material fact and . . . the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c)(2). The moving party bears the burden of showing that there is no issue of material fact, and the Court must "view the evidence in the light most favorable to" the nonmoving party in determining whether the moving party has met this burden. NetJets Aviation, Inc. v. LHC Commc'ns, LLC, 537 F.3d 168, 178 (2d Cir. 2008) (internal citations omitted). However, the "nonmoving party must offer more than 'conclusory allegations and unsubstantiated speculation' to defeat summary judgment; the nonmoving party 'must offer some hard evidence showing that its version of the facts is not wholly fanciful.'" Shelton v. Trustees of Columbia Univ., 369 Fed. App'x 200, 201 (2d Cir. 2010) (quoting Jeffreys v. City of New York, 436 F.3d 549, 554 (2d Cir. 2005)).
A plaintiff establishes a prima facie right to foreclosure under New York Law by producing "the note and mortgage . . . along with undisputed evidence the mortgagor has failed to make payment due under the loan agreements." Kondaur Capital Corp. v. Cajuste, 849 F. Supp. 2d 363, 369 (E.D.N. Y. 2012) (Kuntz, J.). If a plaintiff establishes a prima facie right to foreclosure, a defendant can only avoid summary judgment by raising "a triable issue of fact as to a bona fide defense to the action." Id. (internal quotation omitted). Here, U.S. Bank has established a prima facie case for mortgage foreclosure by tendering copies of the Note, Mortgage, Assignment, and letters from U.S. Bank notifying Mr. Boston that he had defaulted on the loan and that his debt had been accelerated. However, Mr. Boston alleges there is a triable issue of fact as to whether the Assignment was valid.
Mr. Boston first argues that the Assignment is not authentic; however, the record shows otherwise. In particular, the Assignment is signed by a notary public and contains a certificate of acknowledgment, which "raises a presumption of due execution . . . ." Hammond v. Am. Bus. Mortg. Servs., Inc., No. 03 CV 5021, 2005 WL 1541043, at *1 (E.D.N.Y. 2005) (Block, J.) (quoting Wash. Mut. Home Loans, Inc. v. Rueda, 12 A.D. 3d 438, 438 (2d Dep't 2004)). Indeed, a certificate of acknowledgment cannot be discredited "upon evidence of a doubtful character, such as the unsupported testimony of interested witnesses, nor upon a bare preponderance of evidence, but only on proof so clear and convincing to amount to a moral certainty." Wash. Mut. Home Loans, Inc., 12 A.D. 3d at 438 (internal quotations omitted). The only reason Mr. Boston gives for discrediting the Assignment is that it was not notarized until approximately two months after being executed. However, unless a governing statute states otherwise, "[t]he time when an acknowledgment ceremony is performed generally is not material." 91 Am. Jur. 3d Proof of Facts 345 § 7 (2013). Because New York Law does require assignments to be acknowledged in a specific time frame, see N.Y. Real Prop. §§ 290(3), 298, this time gap is immaterial and Mr. Boston cannot overcome the presumption of due execution.
Mr. Boston next argues that U.S. Bank is not entitled to summary judgment because it did not tender an endorsed Note with the Assignment. This argument is also without merit. Mr. Boston is correct that without transferring the underlying notes, an assignment of a mortgage is invalid. See Citimortgage, Inc. v. Stosel, 89 A.D. 3d 887, 888 (2d Dep't 2011). However, "[a]n assignment of the note and mortgage can be effectuated by a written instrument." In re Indicula, 484 B.R. 284, 288 (Bankr. S.D.N.Y.) (Glenn, Bankr. J.). Although an entity must own the mortgage and note to legally transfer them, here WaMu was the named lender on the Note and Mortgage, so it could assign these documents to U.S. Bank. Cf. id. U.S. Bank has put forth sufficient evidence to demonstrate that WaMu did just that. U.S. Bank has tendered copies of the Note, Mortgage, and Assignment to the Court; and the Assignment clearly transfers to U.S. Bank "all promissory notes and other documents" underlying the loan. Compl. Ex. C (emphasis added); cf. In re Mims, 438 B.R. 52, 56-57 (Bankr. S.D.N.Y. 2010) (Glenn, Bankr. J).
Mr. Boston asserts without elaboration a number of additional boilerplate affirmative defenses to U.S. Bank's complaint. However, he has not advanced any evidence in support of these defenses, nor does he address them in his opposition letter.
U.S. Bank named Springleaf Home Equity, New York City Parking Violations Bureau, and New York City Environmental Control Board as defendants to the action because these entities have, or claim to have, some interest in or lien on Mr. Boston's property that is subject to the Mortgage. Compl. ¶¶ 3-5, 28. U.S. Bank served these defendants on September 26, 2012, and their answers were due on October 17, 2012. ECF Nos. 4-6. These defendants have failed to file an answer or otherwise defend the action to date.
III. CONCLUSION
For all of the foregoing reasons, the Court grants U.S Bank's motion for summary judgment and further holds that U.S. Bank has the first and best lien on Mr. Boston's property. The Court refers the case to Magistrate Judge Levy to compute the amount of the foreclosure judgment. SO ORDERED. Dated: Brooklyn, New York
November 20, 2013
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RAYMOND J. DEARIE
United Sates District Judge