Opinion
INDEX No. 602067/2018 MOTION SEQ. Nos. 006 MG 008 MD
09-13-2024
WILMINGTON TRUST, NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY IN ITS CAPACITY AS TRUSTEE OF MFRA TRUST 2014-2, Plaintiff; v. THE PUBLIC ADMINISTRATOR OF SUFFOLK COUNTY ON BEHALF OF THE ESTATE OF JOAN JACKSON, DECEASED; UNKNOWN HEIRS OF THE ESTATE OF JOAN JACKSON, DECEASED: UNITED STATES O/B/O INTERNAL REVENUE SERVICE; NEW YORK STATE DEPARTMENT OF TAXATION &FINANCE; STEPHEN HENRY, if living, and if dead the respective heirs at law, next of kin, distributees, executors, administrators, trustees, devisees, legatees, assignees, lienors, creditors, and successors in interest and generally all persons having or claiming under, by or through said defendant who may be deceased. by purchase, inheritance, lien or otherwise, any right, title and interest, in and to the real property described in the complaint; ANDREW HENRY; PJ HENRY a/k/a PAUL MICHAEL HENRY; LESLIE MEJA; BLANCA CATILLO; EDER ARREOLA; ENRIQUE SANCHEZ, Defendants.
PLAINTIFF'S ATTORNEY: Friedman Vartolo, LLP DEFENDANT'S ATTORNEY: Christopher Thompson, Esq.
Unpublished Opinion
MOTION DATE: 5/15/2024
PLAINTIFF'S ATTORNEY: Friedman Vartolo, LLP
DEFENDANT'S ATTORNEY: Christopher Thompson, Esq.
PRESENT: HON. C. STEPHEN HACKELING, J.S.C.
C. Stephen Hackeling, Judge
Upon the reading and filing of the following papers in this matter: (1) Notice of Motion by plaintiff Wilmington Trust for a Judgment of Foreclosure and Sale [NYSCEF Doc. Nos. 218-232] and defendant Paul Michael Henry ("Defendant") having interposed opposition dated June 26, 2023 [NYSCEF Doc. Nos. 235-236] and moved pursuant to CPLR § 2221(e)(2) to renew his prior motion sequence no. 004 via motion sequence no. 008, seeking to dismiss the abovecaptioned action premised upon a change in the law [NYSCEF Doc. Nos. 245-246] and upon plaintiffs opposition thereto [NYSCEF Doc. Nos. 247-248] and defendant Henry's Reply thereto [NYSCEF Doc. No. 249], it is
ORDERED that plaintiffs motion (sequence no. 006) seeking a Judgment of Foreclosure and Sale is granted and a judgment of foreclosure and sale will be entered simultaneously herewith; and it is further
ORDERED that defendant's motion (sequence no. 008) to reargue his previously filed motion (sequence no. 004) on the ground that this action is barred by the statute of limitations is denied.
Factual Background
On January 31,2018, Wilmington Trust, National Association, Not in its Individual Capacity, But Solely in its Capacity as Trustee of MFRA Trust 2014-2 commenced this residential foreclosure action against The Estate of Joan Jackson, deceased; United States o/b/o Internal Revenue Service; New York State Department of Taxation and Finance; "John Doe" and "Jane Doe." On September 20, 2018, an order was entered (J. Kevins, J.S.C.)[NYSCEF Doc. No. 27] granting plaintiff (i) leave to file a supplemental summons and complaint, (ii) leave to serve by publication to acquire jurisdiction over the unknown heirs; (iii) amending the caption to remove The Estate of Joan Jackson inasmuch as she died intestate and plaintiff waived its right to a deficiency permitting the action to proceed against decedent's heirs; and (iv) appoint a Guardian ad Litem on behalf of any defendant)s) who may be a minor.
Thereafter, a second publication order was entered (J. Gajdos, Jr.. J.S.C.)[NYSCEF Doc. No. 60] on January 22, 2019 authorizing plaintiff to serve a second supplemental summons upon Stephen Henry and deliver to James E. Mcelhone, Esq. who was designated to appear as Guardian ad Litem on behalf of any individuals discovered to have an interest in the property who may be absentees, infants or incompetents or unknown successors in interest of defendant.
By notice of motion dated April 2, 2019 [NYSCEF Doc. No. 84], plaintiff moved for an order of reference, appointment of referee, and default judgment. Two days later, Paul Henry, by counsel, moved for an order (i)vacating the order appointing a Guardian ad Litem as none of the heirs are minors; (ii) granting him leave to intervene; and (iii) dismissing the action as time barred. Plaintiff withdrew its motion for default by letter dated May 29, 2019 [NYSCEF Doc. No. 112]. On June 6, 2019, plaintiff moved to consolidate this case with a related case bearing index number 031094/2009.
A related residential foreclosure action, assigned index number 031094/2009, was commenced by Penny Mac Loan Services, LLC v. Joan Jackson, John Doe and Jane Doe. Both the 2009 Action and this action seek to foreclose a mortgage on the property located at 24 Longview Road, Wading River, New York 11792.
This Court by decision and order dated February 25, 2022 (J. Rouse, A.J.S.C.) consolidated the 2009 case with this action. Judge Rouse also entered an Order on March 15, 2022 granting defendant's motion to intervene and denying his motion to dismiss this case as time-barred. [NYSCEF Doc. No. 146], Thereafter, defendant, by counsel, filed an answer with counterclaims [NYSCEF Doc. No. 147] which was "rejected" by plaintiffs counsel on April 5, 2022. [NYSCEF Doc. No. 153]. On April 12, 2022, defendant filed an appeal of this Court's March 15, 2022 order. [NYSCEF Doc. No. 156], Thereafter, plaintiff moved by notice of motion dated June 7, 2022 for an order of reference and defendant filed opposition thereto claiming, among other things that, he was not in default, plaintiffs affidavit was inadmissible hearsay, plaintiff lacks standing to foreclose and plaintiffs action is barred by the statute of limitations. By order dated October 3, 2022 (J. Rouse. A.J.S.C.), this Court overruled defendant's opposition and deemed all defendants, including Paul Henry, in default. [NYSCEF Doc. No. 203]. Defendant filed a notice of appeal on November 9, 2022 which was thereafter withdrawn and said default order is, presently the law of the case, and is now a final order.
The referee appointed herein filed his report and defendant timely interposed objections to the report. Shortly thereafter, plaintiff moved for judgment of foreclosure and sale (sequence no. 006). Defendant moved by order to show cause (sequence no. 007) under CPLR 2221(e)(2) which was later withdrawn on November 27, 2023. Four months later, defendant moved by notice of motion dated March 28, 2024 (sequence no. 008) for an Order pursuant to CPLR 2221(e)(2) granting leave to renew plaintiff s motion seeking consolidation of this action with the action under index number 31094/2009; and upon such renewal, vacating the order consolidating the two actions, and, in accordance with recently enacted legislation under the Foreclosure Abuse Prevention Act as well as the Appellate Division, Second Department's decision in HSBC Bank USA, N.A. v Francis (214 A.D.3d 58 [2d Dept 2023]), dismissing this action as time-barred.
Plaintiff properly filed a notice of constitutional challenge [NYSCEF Doc. No. 248].
Plaintiffs Motion for Judgment of Foreclosure and Sale (sequence no, 006)
Plaintiff moves for Judgment of Foreclosure and Sale (the "Motion")(seq. no. 006) and Paul Henry ("Defendant"), by his counsel, opposes plaintiff s motion and makes three arguments against awarding judgment herein. While defendant has been determined to be in default (See Doc. No. 203), his opposition does not seek affirmative relief - rather he objects to the referee's calculations.
Paul Henry's motion to intervene in this consolidated action was granted by this Court in its order dated February 25, 2022 (See Doc. Nos. 146 and 148).
Defendant first argues that "plaintiff relies [on] an affidavit that fails to substantiate its claim as to the amount allegedly due and owing." Specifically, defendant complains that plaintiffs servicer, Fay Servicing, "does not identify the prior servicer and does not authenticate any records of the prior servicer." This is not the case. The Affidavit of Merit and Amounts Due attached to the Motion (Doc. No. 226 at ¶2) states Fay's business records include:
"documentation obtained and maintained by Fay on behalf of the Plaintiff, from prior servicers or note holders relating to the loan hereinafter described. To the extent that the business records were created by prior holders and/or servicers of the subject loan, those records have been integrated into Fay's business records and are kept and relied upon as a routine and regular business practice and in the ordinary course of business conducted by Fay on behalf of the Plaintiff."
In a similar regard, defendant's attorney avers that plaintiff s representative's affidavit fails to provide a historical account of the Index to calculate the variable rate. Contrary to defendant s contention, the affiant laid a proper foundation for the admission of the business records on which she relied. See Deutsche Bank. National Trust Company v. Szabo, 2023 WL 4095837 (2d Dept. 2023). Plaintiffs representative's affidavit, at Exhibit D (Doc. No. 217) at page 18, attached a copy of plaintiffs business records illustrating the 12 separate rate changes from July 1, 2007 through February 20, 2023. This rate change chart provides the date the interest rate changed and the corresponding interest rate enabling the referee - and others - to properly calculate the amount of interest owed to plaintiff pursuant to the underlying note. "The referee s report should be confirmed whenever the findings are substantially supported by the record, and the referee has clearly defined the issues and resolved matters of credibility." U.S. Bank National Association v. 292 DeKalb Associates, LLC, 2023 WL 3986415 (2d Dept. 2023). No hearing is needed, as suggested by defendant, to calculate the interest due in this case.
Defendant next argues that "[p]laintiff fails to demonstrate its standing, insofar as the note contains a separate page along [sic] and plaintiff s affidavit fails to include a single business record demonstrating plaintiffs acquisition of the note prior to commencement." This argument fails for several reasons.
First, "[t]he original note is not required at a computational hearing where the court had previously decided the issue of standing in the prior order granting the plaintiff s motion, inter alia, for summary judgment on the complaint insofar as asserted against the defendant." HSBC Bank USA, N.A. v. Blair-Walker, 202 A.D.3d 1065, 163 N.Y.S.3d 582 (2d Dept. 2022).
Second, plaintiff established its prima facie burden of proof regarding standing when it attached to the complaint the note with properly endorsed allonges. U.S. Bank, Nat'l Ass n v. Zientek, 192 A.D.3d 1189 (2d Dept. 2021). It is well settled that plaintiff is not required to submit evidence demonstrating how or when it obtained physical possession of the note.
Third, defendant filed opposition papers to plaintiffs motion for an order of reference (See NYSCEF Doc. Nos. 196-197) challenging, among other things, plaintiffs standing. Plaintiffs motion for an order of reference was granted and as such, law of the case doctrine forecloses defendant's ability to re-argue standing. Luna Light, Inc. v. Just Indus., Inc., 137 A.D.3d 1228 (2d Dept. 2016). Moreover, defendant properly preserved his right to challenge this Court's order regarding standing, and other arguments, by filing an Appeal of the order of reference (See NYSCEF Doc. No. 207). It is for the Second Department to judge Judge Rouse's order; it is not for this Court to sit as the appellate court to judges of co-ordinate jurisdiction. See Flatbush Tow, LLC v. Morales, 190 A.D.3d 826, 140 N.Y.S.3d 556 (2d Dept. 2021)("The doctrine of the 'law of the case' is a rule of practice, an articulation of sound policy that, when an issue is once judicially determined, that should be the end of the matter as far as Judges and courts of co-ordinate jurisdiction are concerned.")
Defendant's argument that plaintiff failed to establish defendant's default must also fail in light of this Court's prior order granting a default judgment and appointing a referee. (See NYSCEF Doc. 203).
Defendant's third argument is that plaintiffs motion for judgment of foreclosure and sale should be denied because "[p]laintiff is seeking attorney fees for work not yet incurred." The Court concurs with defendant and the judgment of foreclosure and sale will reflect that the attorney fees awarded will be reduced by $375.00 representing 1.5 hours that were requested for post-judgment attorney fees.
After the parties fully briefed the issues presented by plaintiffs motion for an order confirming the referee's report and for Judgment of Foreclosure and Sale, the parties entered into a stipulation agreeing to adjourn the motion to give defendant an opportunity to serve [his] "opposition" before June 26, 2023 and Plaintiff to serve its "opposition" before July 10, 2023.
Even though defendant's opposition was filed late, the Court reviewed his "opposition" styled as a "Supplemental Memorandum of Law" [NYSCEF Doc. No. 239] however defendant's supplement made new arguments as to why judgment should not be granted, including, for the first time, affirmative relief requesting that the court "vacate its prior orders" and dismiss the case as time-barred based upon FAPA. Defendant's new arguments lack merit. As set forth above, statute of limitations was already raised and decided by this court (Doc. No. 203) and therefore it is barred by the law of the case doctrine. Flathush Tow, LLC v. Morales, 190 A.D.3d at 826. Moreover, as set forth below, defendant is in default and is barred from seeking non-jurisdicational affirmative relief.
The Foreclosure Abuse Prevention Act of 2022 amended six laws, i.e. CPLR §§ 203, 205, 213, 3217. RPAPL § 1301 and Gen. Oblig. Law § 17-105.
Notwithstanding this Court's prior final orders, defendant argues that those final orders should be vacated years later because of FAPA. All of defendant's arguments relying on FAPA are of no moment because FAPA does not vitiate prior court orders.
Defendant correctly points out the legislative intent underpinning FAPA's enactment; it is explicitly set forth in the Senate Memorandum in Support. The Legislature's passionate expression of what it perceives as an ongoing problem with abuses of the judicial foreclosure process, prior erroneous judicial interpretations, and the manipulation of the statute of limitations clearly expresses a legitimate legislative purpose in correcting the problem. But there is no suggestion - and such a position cannot be justified - to upset well-settled New York jurisprudence by applying FAPA to vitiate prior final orders entered in this case. To permit such an interpretation of FAPA's "retroactive effect" would constitute a constitutional violation of the Separation of Powers doctrine defining the distinctively different roles envisioned for the Judiciary and Legislature under both the United States and New York State Constitutions. This Court recently held FAPA's retroactivity clause violates the New York and United States Constitutions in any proceeding, like here, involving relitigation of a final order. Wilmington Trust, N.A., Not in its Individual Capacity hut Solely as Trustee for MFRA Trust 2014-2 v. Edward Gawlowski, et al., 2023 NY Slip Op 23305. All authorities and precedents cited in that decision are incorporated herein by reference in support of this holding.
Based upon the foregoing, plaintiff's motion (sequence no. 006) for an order confirming referee's report and Judgment of Foreclosure and Sale is granted and a judgment of foreclosure and sale will be entered simultaneously herewith.
Defendant's Motion to Renew (sequence no. 008)
After filing his Supplemental Memorandum of Law to plaintiffs motion for judgment of foreclosure and sale, defendant moved by notice of motion dated March 28, 2024 (sequence no. 008) for an order under CPLR 2221(e)(2) granting defendant leave to renew plaintiff s motion seeking consolidation of this action with the action under index number 031094/2009 and upon such renewal vacating the order consolidating the two actions; and in accordance with FAPA, dismissing this action as time-barred. [NYSCEF Doc. No. 245].
Even if defendant has standing to seek affirmative relief while in default, which he lacks, his request for relief does not accomplish his goal. If this Court vacated the consolidation order and dismissed this action as untimely, the 2009 action would still be viable - therefore his request for relief in motion sequence no. 008 makes little sense.
A motion for leave to renew pursuant to CPLR 2221(e)(2) based upon a change in the law that would change the prior determination must be made, absent circumstances set forth in CPLR 5015, before the time to appeal the final judgment has expired. Washington Mui. Bank, FA v. Itzkowitz, 47 A.D.3d 923 (2d Dept. 2008) citing Eagle Ins. Co. v. Persaud, 1 A.D.3d 356, 357, 766 N.Y.S.2d 571, quoting CPLR 2221 [e][2]; While defendant timely filed his motion, he fails to allege any of the circumstances set forth in CPLR 5015; he has been determined in default by this Court's October 3, 2022 order.
"A defendant in default is not entitled to affirmative relief of a non-jurisdictional nature absent vacatur of his or her default" Wells Fargo Bank v. Malik, 203 A.D.3d 1110 (2d Dept. 2022) citing Bank of N. E Mellon v. Lawson, 176 A.D.3d 1155, 1157, 111 N.Y.S.3d 337 [alterations and internal quotation marks omitted]). Here, defendant does not dispute that he is in default, and has not offered any excuse for that default. Since, the relief he seeks is not jurisdictional in nature, defendant is neither entitled to vacatur of the consolidation order nor dismissal of this case.
It is defendant's contention that the Appellate Division's decision in HSBC Bank, USA, N.A. v Francis, 214 A.D.3d 58 (3rd Dept. 2023), hereinafter the "Francis '' decision, and the enactment of the Foreclosure Abuse Protection Act of 2022 (hereinafter "FAPA") authorizes renewal and reconsideration of his prior application seeking dismissal of the Plaintiff s foreclosure complaint. The Francis decision established that in order to consolidate two pending actions, both actions must be New York CPLR § 213(4) Statute of Limitations viable. FAPA amended § 1301 of the New York RPAPL to add a new Section (3), which provides:
"While the action is pending or after final judgment for the plaintiff therein, no other action shall be commenced or maintained to recover any part of the mortgage debt, including an action to foreclose the mortgage, without leave of the court in which the
former action was brought. The procurement of such leave shall be a condition precedent to the commencement of such other action and the failure to procure such leave shall be a defense to such other action. For purposes of this subdivision, in the event such other action is commenced without leave of the court, the former action shall be deemed discontinued upon the commencement of the other action..."
In the instant case, the Supreme Court entered an order dated February 25. 2022 which consolidated a 2009 foreclosure action which was Statute of Limitations viable with a 2018 action which was not Statute of Limitations viable under FAPA. As a result of said consolidation, the Court (Rouse, J., AJSC) on March 11, 2022 denied defendant's motion to dismiss as not being time barred, but did allow defendant to intervene in the consolidated action. Thereafter, the Court entered a contested Order declaring defendant in default on October 3, 2022. Notice of Entry was given for said default order on October 19, 2022. Defendant filed a Notice of Appeal on November 9, 2022. which was thereafter withdrawn and said default order is, presently the law of the case, and is now a "'final order".
Defendant has no standing to assert any rights under the Francis decision or FAPA, as he has been judicially declared in default. See, Federal National Mortgage Association v Chiusano, 60 Mise.3d 326 (Sup. Ct. Suf. Co. 2018), citing to Nationstar Mortgage, LLC v Avella, 142 A.D.3d 594 (2nd Dept. 2016); Southstar III, LLC v Enttienne, 120 A.D.3d 1332 (2nd Dept. 2014). At best, a defaulting defendant can only seek relief in the nature of an application to vacate his default, pursuant to CPLR § 5015.
Accordingly, motion sequence no. 008 is denied.