Opinion
Index No.: 2019-2008
04-13-2020
KEVIN CLANCY, WAYNE CARIGAN, and ROBERT GARRASSI, Plaintiffs, v. BANK OF NEW YORK MELLON F/K/A BANK OF NEW YORK, as Indenture Trustee for CWEQ REVOLVING HOME EQUITY TRUST Series 2007-A, BANK OF AMERICA, N.A., COUNTRYWIDE BANK N.A. COUNTRYWIDE HOME LOANS, INC., MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC. ("MERS").
APPEARANCES: Kevin Clancy, Wayne Carigan, and Robert Garrassi, pro se Richard N. Franco, Esq. of Davidson Fink, LLP for Defendants Mortgage Electronic Registration Systems, Inc. ("MERS"), Bank of America, N.A., and Bank of New York Mellon
PRESENT:
DECISION AND ORDER
RJI No.: 46-1-2019-1115 NOTICE: PURSUANT TO ARTICLE 55 OF THE CIVIL PRACTICE LAW AND RULES, AN APPEAL FROM THIS JUDGMENT MUST BE TAKEN WITHIN 30 DAYS AFTER SERVICE BY A PARTY UPON THE APPELLANT OF A COPY OF THE JUDGMENT WITH PROOF OF ENTRY EXCEPT THAT WHERE SERVICE OF THE JUDGMENT IS BY MAIL PURSUANT TO RULE 2103 (B)(2) OR 2103 (B)(6), THE ADDITIONAL DAYS PROVIDED SHALL APPLY, REGARDLESS OF WHICH PARTY SERVES THE JUDGMENT WITH NOTICE OF ENTRY. APPEARANCES: Kevin Clancy, Wayne Carigan, and Robert Garrassi, pro se Richard N. Franco, Esq. of Davidson Fink, LLP for Defendants Mortgage Electronic Registration Systems, Inc. ("MERS"), Bank of America, N.A., and Bank of New York Mellon MICHAEL R. CUEVAS , J.S.C.
INTRODUCTION
Kevin Clancy, Wayne Carignan,and Robert Garrassi ("Plaintiffs") commenced this action by a Summons dated September 16, 2019 and a Complaint dated September 13, 2019, both the Summons and Complaint identify the action as an "Action to Quiet Title". The Complaint asserts two causes of action: one, pursuant to Article 15 of the Real Property Actions and Proceedings Law and the second, pursuant to Real Property Law § 329. In their prayer for relief, Plaintiffs, in sum and substance, seek to establish their record to title to certain real property ("the premises"), and quiet title, removing any clouds against their title, such that their ownership is free of adverse claims from Bank of New York Mellon f/k/a Bank of New York, as indenture Trustee for CWEQ Revolving Home Equity Trust Services 2007-A, Bank of America, N.A., Countrywide Bank N.A. and, Countrywide Home Loans, Inc., and Mortgage Electronic Registration Systems Inc. ("MERS"). Specifically, Plaintiffs seek a judgment directing that a certain assignment of mortgage from Countrywide Home Loans, Inc. to Bank of America, N.A. and a certain assignment of mortgage from Bank of America, N.A. to Bank of New York Mellon f/k/a Bank of New York, as Indenture Trustee for CWHEQ Revolving Home Equity Trust Series 2007-A be expunged and cancelled of record.
By Notice of Motion dated October 18, 2019, and supported by an affirmation of Richard N. Franco, Esq. of Davidson Fink, LLP, Mortgage Electronic Registration Systems, Inc. ("MERS"), Bank of America, N.A., and Bank of New York Mellon ("Defendants") bring this instant pre-answer Motion to Dismiss the Complaint. In their Notice of Motion, Defendants request dismissal of the Complaint pursuant to CPLR 3211 (a)(1) (dismissal based on documentary evidence), CPLR 3211 (a)(5) (dismissal due to existing arbitration and award, collateral estoppel, discharge in bankruptcy, infancy or disability, payment, release, res judicata, statute of limitations, or statute of frauds), and/or CPLR 3211 (a)(7). However, their prayer for relief only requests dismissal based upon CPLR 3211 (a)(5), and/or CPLR 3211 (a)(7) (failure to state a cause of action). Significantly, Defendants only offer argument related to their request under CPLR 3211 (a)(7). This Court will briefly address all three grounds identified in the Notice of Motion.
This Motion was not brought on behalf of Defendants Countrywide Bank N.A., or Countrywide Home Loans, Inc.
FACTUAL BACKGROUND
The premises is located at 130 Polsin Drive, within the Town of Rotterdam, County of Schenectady and State of New York. Plaintiffs obtained their interest to the premises, via a Quitclaim Deed executed by Suzanne Hallinan and Patrick Hallinan on August8, 2019. This Deed was recorded in the Schenectady County Clerk's office on August23, 2019, in Book 2018 at Page 352, Document No. 2019-3514. This deed is attached to the deed as Schedule Exhibit A, and describes the premises, as follows
ALL THAT CERTAIN LOT, PIECE OR PARCEL OF LAND SITUATE IN THE TOWN OF ROTTERDAM, COUNTY OF SCHENECTADY AND STATE OF NEW YORK, DESIGNED AS LOT NO. 15 ON A MAP ENTITLED "MAP #2 OF HIGHBIRDGE MANOR, TOWN OF ROTTERDAM, SCH'DY CO., N.Y.", MADE BY WALTER E. MAXWELL, LICENSED SURVEYOR, DATED FEBRUARY 25, 1949, AND FILED IN THE SCHENECTADY COUNTY CLERK'S OFFICE APRIL 28, 1949, AND BOUNDED AND DESCRIBED, WITH REFERENCE TO SAID MAP, AS FOLLOWS:
BEGINNING AT A POINT ON THE EASTERLY SIDE OF POLSIN DRIVE WHERE IT IS INTERSECTED BY THE DIVISILINE BETWEEN LOTS NOS. 14 AND 15, AND RUNS THENCE NORTH 4 DEGREES 7 MINUTES WEST ALONG THE EASTERLY SIDE OF POLSIN DRIVE 65 FEET; THENCE NORTH 85 DEGREES 53 MINUTES EAST 150 FEET; THENCE SOUTH 4 DEGREES 7 MINUTES EAST, 65 FEET; THENCE SOUTH 85 DEGREES 53 MINUTES WEST, 150 FEET TO THE POINT OF BEGINNING.
Plaintiffs' Complaint seeks to compel the determination of claims to real property pursuant to Article 15 of the Real Property Actions and Proceedings Law (RPAPL), and pursuant to New York Real Property Law ("RPL") §329 to cancel certain mortgage assignments of record. Plaintiffs allege that the Defendants' underlying mortgage lien assignments, filed before their deed was recorded, are invalid.
Plaintiffs, as the fee simple owner of the premises, have standing to challenge the validity of Defendant's mortgage note and mortgage interest under RPAPL Article 15 and RPL 329. See, Silverberg v. Bank of New York Mellon, 165 A.D.3d 1193 (2d Dept. 2018); Wellington v. First Financial Freedom, 132 A.D. 3d 506 (1st Dept. 2015), Adam Plotch LLC v. World Savings Bank, FSB (E.D.N.Y. 2018).
Real Property Law §329 provides as follows: Actions to have certain instruments canceled of record. An owner of real property or of any undivided part thereof or interest therein of an owner of rent to accrue from a tenancy or subtenancy thereof, may maintain an action to have any recorded instalment in writing relating to such real property or interest therein, other than those required by law to be recorded, or any recorded assignment of rent to accrue from a tenancy or subtenancy of such property or interest therein declared void or invalid, or to have the same cancelled of record as to said real property, or his undivided part thereof or interest therein, or as to the rent to accrue therefrom belonging to him.
Plaintiffs allege that Defendants' lien or encumbrance interest was obtained via a purported "Credit Line" Mortgage recorded in the office of the Schenectady County Clerk's office on January 22, 2007, in Book of Mortgages 3771, at Page 526. See, Complaint¶8. Plaintiffs further allege that the "consolidated mortgage" allegedly refers to an earlier Consolidation, Extension, and Modification Loan agreement and a Consolidated Credit Line Mortgage Note, dated May 19, 2005, and recorded in the Schenectady County Clerk's office on June27, 2005, in Book of Mortgages 3514, Page 86. See, Complaint¶9. Plaintiffs then argue because it is alleged to be a Credit Line Mortgage and Note, the note does not appear to be a negotiable instrument pursuant to NYUCC Article 3. Plaintiffs additionally argue that based upon the documents annexed to the Complaint or referenced therein that the note and mortgage were never validly transferred, sold, delivered, negotiated, or assigned to any of the Defendants, their predecessors, or successors.
Plaintiffs' prayer for relief requests that Defendants' mortgage assignment recorded in the office of the Schenectady County Clerk on May 24, 2019, in Mortgage Book 4913, at page 309, Document No. 2019-724 (Mortgage Assignment:MERS to Bank of America, Exhibit B to the Complaint) and a mortgage assignment recorded on Septembers, 2019 in Mortgage Book 4936 at Page 58 (Mortgage Assignment: Bank of America to Bank of New York Mellon F/K/A Bank of New York, as Indenture Trustee for CWHEQ Revolving Home Equity Trust Series 2007-A, Exhibit C to the Complaint) ("2019 Assignments") be declared void and canceled and removed from the County's record. RPL §329, Silverberg v. Bank of New York Mellon, 165 A.D. 3d 1193 (2d Dept. 2018).
Defendants' argue that Plaintiffs received their interest in the premises several years after the original mortgages were validly recorded. RPL §291. Defendants further argue that since these underlying mortgages are valid, Plaintiffs have no basis to cancel the assignments of those mortgages.
PROCEDURAL SUMMARY
The Summons and Complaint for an action to quiet title was served on CT Corporation System, New York, NY by regular mail on September 19, 2019 (postmarked on September 15, 2019). Defendants filed their Motion to Dismiss on October 25, 2019, in lieu of filing an Answer. The Motion to Dismiss did not adduce a copy of the Summons and Complaint. Plaintiffs' reply Affidavit (signed by all three plaintiffs) was filed on or about November 13, 2019. Thereafter, the Court made requests for a complete copy of the Summons and Complaint and received a copy of the Complaint on January 1, 2020 via email.
A Motion to Dismiss may be denied when a moving party fails to include a copy of the Complaint with their motion as the pleadings are deemed necessary to the consideration of the questions involved on a CPLR 3211 motion. CPLR 2214 (c). However, the Assigned Judge opted to request copies of the pleading.
Notably, on December 12, 2019, Plaintiff Robert Garrasi sent an unsworn email statement in the nature of further opposition to the Motion to Dismiss. Counsel for Defendants, Richard N. Franco responded, also on December 12, 2019 objecting to the consideration of this email as violative of proper motion practice under the CPLR. See, CPLR 2214. The Court agrees with Defendants' objection and will not consider the information contained within the email which includes facts, not properly presented according to the rules of procedure or evidence because they are not presented within an affidavit under penalty of perjury with a showing of personal knowledge. See, Select Portfolio Servicing, Inc. v. Krupin, 2009 N.Y. Misc. LEXIS 6553 (Sup. Ct. NY Cty. 2009), Commissioner of Transp. v. Sunny Lbr. Supply NY, Inc., 40 Misc. 3d 590 (Civ. Ct. City N.Y. Kings Cty. 2013), CPLR 3212 (b). Moreover, the additional facts and arguments were submitted without a request for leave to submit a sur-opposition. See, Stang, LLC v. Hudson Sq. Hotel, LLC, 158 A.D. 3d 446, 447 (1st Dept. 2018).
THE LAW AND DISCUSSION
A. STANDARD OF LAW
In a pre-answer motion to dismiss under CPLR 3211, the allegations in the complaint must be accepted as true. 533 Park Ave Realty, LLC. v. Park Ave. Bldg. & Roof, 68 N.Y.S. 3d 110 (2d Dept. 2017). Whether the plaintiff can actually establish the claim asserted is not a part of the analysis. EBC I, Inc. v. Goldman Sachs & Co., 5 N.Y.3d 11 (2005). Rather, the inquiry is whether the facts alleged fit within a cognizable legal theory Brooks v. Key Trust Co., Natl. Assn., 26 A.D.3d 628 (3d Dept. 2006). The defendants burden is a heavy one "unless it has been shown that a material fact as claimed by the pleader to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it ... dismissal should not eventuate." Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275 (1977).
A defense based upon documentary evidence will properly support a dismissal motion only when the documentary evidence "utterly refutes plaintiff's allegations, conclusively establishing a defense as a matter of law." Crepin v. Fogarty, 59 A.D.3d 837, 838 (3d Dept. 2009). Plaintiffs' first cause of action challenges Defendants' mortgage pursuant to RPAPL Article 15, and second cause of action challenges Defendants' mortgage pursuant to RPL §329. In Mawere v. Landau, the court held that a motion pursuant to CPLR 3211 (a)(1) to dismiss the Complaint on the ground that the "action is barred by documentary evidence may be granted only where the documentary evidence utterly refutes the plaintiff's factual allegations, thereby conclusively establishing a defense as a matter of law." Mawere v. Landau, 130 A.D. 3d 986 (2d Dept. 2015). The Mawere defendants submitted no documentary evidence of a valid mortgage assignment conclusively establishing a defense as a matter of law. Id. The defendants also offered no documentary evidence that the mortgage note was ever lawfully transferred to the Bank of America, N.A. or any of it's predecessors in interest. Id. The Second Department found that defendants had the burden to show a lawful transfer or assignment under CPLR 3211 (a)(1). Id.
Here, Defendants offer no documentary evidence beyond that submitted by Plaintiffs and argue that Plaintiffs' admissions support dismissal under CPLR 3211(a)(1). Defendants argue that Plaintiffs admit that they took their interest in the property subject to the validly recorded mortgage liens held by Defendants, which were "recorded more than a decade prior to the alleged deed to Plaintiffs." Affirmation of Richard N. Franco, ¶8. The only documentary evidence submitted to date in this action are the exhibits to the Complaint. This includes: Plaintiffs' Deed recorded August 23, 2019 (Exhibit A), Mortgage Assignment: MERS to Bank of America, recorded May 24, 2019 (Exhibit B), Mortgage Assignment: Bank of America to Bank of New York Mellon [truncated], recorded September 5, 2019 (Exhibit C). Exhibit B, the MERS assignment, recites that it assigns: (1) a Mortgage made by Suzanne M. Hallinan to MERS, as Nominee for Countrywide Home Loans, Inc., dated October 24, 2003 in the original amount of $73,840.00 which was recorded on December 22, 2003 in the Schenectady County Clerk's Office at Book of Mortgages 3259 at Page 383; (2) a Mortgage made by Suzanne M. Hallinan to MERS, as Nominee for Countrywide Home Loans, Inc. dated May 19, 2005 in the original amount of $35,389.41 which was recorded on June 27, 2005 in the Schenectady County Clerk's Office at Book of Mortgages 3514 at Page 71; and a Consolidation, Extension and Modification Agreement made by Suzanne M. Hallinan to MERS, as Nominee for Countrywide Home Loans, Inc. dated May 19, 2005 to form a single lien of $108,000.00 which was recorded on June 27, 2005 in the Schenectady County Clerk's Office at Book of Mortgages 3514 at Page 86.
While the Court does not have before it actual copies of the above-mentioned recorded mortgages, the fact of their existence and that they were recorded more than a decade prior to 2019 is established by Exhibit B which was attached to and made a part of the Complaint, and which we must assume to be true. In addition, Plaintiffs' Complaint appears to admit the existence or legality of the 2003 and 2005 mortgages (Complaint¶ ¶8, 9), and to only then reach a legal conclusion that they were "never validly transferred, sold, delivered, negotiated, or assigned to any of the Defendants, their predecessors or successors herein." Complaint, ¶12. In any event, Plaintiffs took title by Quit Claim Deed.
Where a conveyance of land is made by a quitclaim deed which does not refer to the encumbrance of a mortgage on the property in anyway, the grantee takes title subject to that mortgage. Universal Trust Co. v. Boehanski, 75 Misc. 317 (Sch'dy Cty Ct. 1912), see also, 10 Warrens Weed New York Real Property §111.05. The grantor cannot convey, and the grantee could not acquire any greater estate than the former had at the time of the transfer. Id. The grantee acquired nothing more than a mere equity of redemption. Id. The conveyance did not in any way alter or vary the terms and conditions of the bond and gage and did not change the contractual relationship which existed between the mortgagee and the grantor. Universal, supra, 75 Misc., at 317. Since the mortgagee was not a party to the quitclaim deed, he could not be affected by it. Id. The mortgagee, moreover, was not bound to take Notice of the transfer of title, but had the right to rely upon the security, and to require the performance of the agreements in the bond and mortgage, and, upon default enforce the lien, irrespective of any subsequent act on the part of the grantor-mortgagor. Id.
Exhibits B and C to Plaintiffs' Complaint are challenged, Plaintiffs never explain the factual basis for their legal conclusion that the assignments of mortgage were not validly transferred, sold, delivered, or assigned. The documents on their face appear in proper form and legally sufficient. As each of the assignments are duly acknowledged and filed in the County Clerk's office, they enjoy a presumption of validity; a presumption that has not been refuted by clear and convincing evidence. See, Lum v Antonelli, 102 AD2d 258, 260-261, (2d Dep't 1984), aff'd 64 NY2d 1158 (1985), (In an action to cancel a deed under RPAPL Art 15, the certificate of acknowledgment "raises a presumption of due execution which. . . can be rebutted" only by clear and convincing evidence).
The Plaintiffs' allegations regarding the underlying Note (See, Complaint¶10) are also unexplained and a mere unsubstantiated allegation, not a fact that needs be presumed true.) A complaint may properly be dismissed where it is replete with legal conclusions and devoid of any factual allegations. See, Kamhi v. Tay, 244 A.D.2d 266, (1st Dep't 1997).
A CPLR 3211 (a)(5) dismissal arises where there is an affirmative defense due to due to an already existing arbitration and award, collateral estoppel, discharge in bankruptcy, infancy or disability, payment, release, res judicata, statute of limitations, or statute of frauds. Defendants do not make any actual arguments for dismissal under this subdivision. As these are affirmative defenses, Defendants had the burden to establish entitlement to them as a matter of law, and because they failed to produce any evidence or argument, their request for dismissal based on CPLR 3211 (a)(5) grounds fails. See, CPLR 3018, Peguero v. Gol Realty Corp., 58 A.D. 3d 556 (1st Dept. 2009), Baptiste v. Harding-Marin, 88 A.D. 3d 752 (2d Dept. 2011).
Defendants' move to dismiss under CPLR 3211 (a)(7) on the grounds that any alleged problems in the assignment chain can not provide a basis for the Court to hold Defendants' mortgage interests "invalid or inoperative," as required to state a claim to quiet title. Acocella v. Bank of N.Y. Mellon, 127 A.D. 3d 891 (2d Dept. 2015). Acocella illustrates that to maintain an equitable title claim, a plaintiff must allege "actual or constructive possession of the property and the existence of a removable cloud on the property, which is an apparent title, such as in a deed or other instrument that is actually invalid or inoperative." Id. Defendants argue that because the original liens were validly recorded, and because standing to enforce a later assigned note and mortgage can be made by physical delivery of the note at anytime prior to a foreclosure action, Plaintiffs do not (and cannot) state a cause of action. U.S. Bank Natl. Assn. v. Hunte, 2019 N.Y. App. Div. LEXIS 7328 (2d Dept. 2019). Plaintiffs essentially argue that if a later assignment of a "validly recorded note and mortgage" is invalid, then it renders the original note and mortgage invalid and this is the proper basis of a quiet title action.
The critical holding of Acocella, is, "where there is no bona fide justiciable controversy as to whether title to the property was wrongfully encumbered" a quiet title action is not proper. (Emphasis added.). The facts in Acocella are similar to those here. Frank Acocella excuted a note to borrow money from First Magnus Financial Corporation, which was secured with a mortgage against his home. Acocella, supra, 127 A.D. 3d, at 891. The mortgage and note were recorded. Id. Several years later, Mortgage Electronic Registration Systems, Inc. (MERS) as nominee to First Magnus, assigned the mortgage to defendant Bank of New York Mellon. Id. The note was later endorsed by First Magnus to Countrywide Document Custody Services and then was endorsed by Countrywide Document to Countrywide Home Loans, Inc. Id. Countrywide Home then endorsed the note without recourse in blank. Acocella, supra, 127 A.D. 3d, at 891. The Acocella complaint asserted that the mortgage loan was current and there was no pending foreclosure action. Id. Plaintiffs argued that the mortgage had been assigned directly from First Magnus to BNYM skipping over Countrywide Home. Id. Plaintiffs argued that the transfer of the mortgage without the note made the mortgage a nullity, and discharge of the mortgage was required. Id. The Second Department determined that because plaintiffs were not in default, and there was no pending foreclosure action in existence or being threatened, then there was no justiciable controversy warranting a quiet title action. Acocella, supra, 127 A.D. 3d, at 891. The Acocella court noted that plaintiffs also failed to show an additional ground en titling them to relief, such as, full payment and satisfaction of the mortgage. Id.
Silverberg V. Bank of N.Y. Mellon, 165 A.D. 3d 1193 (2d Dept. 2018) is distinguishable because a foreclosure action had been commenced in that matter.
In this matter, Plaintiffs have not alleged they are in default or that there is any pending foreclosure action in existence or being threatened. Plaintiffs also do not allege any additional ground entitling them to relief, including full payment and satisfaction of the mortgage or that Defendants' mortgage is barred by the statute of limitations under RPAPL Section 1501 (4). Plaintiffs' allegations that the 2019 mortgage assignments are invalid, thereby providing them a basis for a quiet title action cannot sustain a motion to dismiss for these reasons and also because the mortgage holder has the ability to establish that it has physical possession of the note at any time prior to the commencement of a foreclosure action. Aurora Loan Servs., LLC v. Taylor, 25 N.Y. 3d 355 (2015).
THE COURT'S RULING
Based upon the foregoing, it is hereby
ORDERED, that the motion by Defendants Mortgage Electronic Registration Systems, Inc. ("MERS"), Bank of America, N.A., and Bank of New York Mellon under CPLR 3211 (a)(7) is GRANTED as to Plaintiffs' Complaint and each of its causes of action to Quiet Title and to cancel any outstanding mortgages pursuant to RPAPL Article 15, and RPL §329, which claims are hereby DISMISSED;
ORDERED, that Defendants Mortgage Electronic Registration Systems, Inc. ("MERS"), Bank of America, N.A., and Bank of New York Mellon motions for dismissal under CPLR 3211 (a)(1) and CPLR 3211 (a)(5) are otherwise rendered moot. Dated: April 13, 2020
at Schenectady, New York
/s/_________
HON. MICHAEL R. CUEVAS
Supreme Court Justice Papers Considered: Summons Action to Quiet Title
Exhibit A: Plaintiffs Deed, Recorded August 23, 2019 Exhibit B: Mortgage Assignment: MERS to Bank of America, Recorded May 24, 2019 Exhibit C: Mortgage Assignment: Bank of America to Bank of New York Mellon F/K/A Bank of New York, as Indenture Trustee for CWHEQ Revolving Home Equity Trust Series 2007-A, Recorded September 5, 2019 Complaint Action to Quiet Title Notice of Motion to Dismiss Affirmation in Support of Pre-Answer Motion to Dismiss from Richard N. Franco, Esq. Affidavit of Mailing Dated October 21, 2019. Plaintiffs' Reply Affidavit in Opposition to Defendants' Pre-Answer CPLR 3211 Motion to Dismiss the Complaint Affidavit of Service of Plaintiffs' Affidavit in Opposition to Defendants' Pre-Answer Motion to Dismiss the Complaint, dated November 13, 2019 Affirmation in Further Support of Plaintiff's [sic] Pre-Answer Motion to Dismiss Affidavit of Service of Affirmation in Further Support of Plaintiff's [sic] Pre-Answer Motion to Dismiss, dated November 20, 2019 Email dated December 12, 2019, from Plaintiff Robert Garrasi Email dated December 12, 2019, from Richard N. Franco responded.