Opinion
07-07-2017
ONE WESTBANK, FSB, Plaintiff, v. George A. RODRIGUEZ, Joyce D. Spann–Smoot, Mortgage Electronic Registration Systems Inc., as Nominee for AmNet Mortgage in Lieu of True Corporate Name American Mortgage Network Inc. and John Doe No. 1 through John Doe # 10, the last ten 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 Complaint, Defendants.
Ras Boriskin, LLC by Austin T. Shufelt, Esq., for Plaintiff. D'Angelica & Bilski by Christopher P. Bilski, Esq., for Defendants.
Ras Boriskin, LLC by Austin T. Shufelt, Esq., for Plaintiff.
D'Angelica & Bilski by Christopher P. Bilski, Esq., for Defendants.
LIZBETH GONZÁLEZ, J.
By letter dated 9/29/10, defendant George Rodriguez was notified that his mortgage loan for the subject premises known as 2735 Hering Place in Bronx County was in serious default; a total amount of $22,065.22 was due for outstanding monthly payments, late charges and fees. On 6/21/11, plaintiff commenced a foreclosure action under Index No. 380677/2011. Plaintiff filed an RJI to discontinue that action on 7/18/12.
The underlying foreclosure action was commenced on 12/3/12 under Index No. 35153/2012e. The basis for the discontinuance and the delay in filing the second action are unexplained.
Plaintiff filed an RJI on 6/14/13 requesting a residential foreclosure settlement conference. At the settlement conference subsequently held on 12/11/13, defendants Rodriguez and Joyce D. Spann–Moot were denied a modification. By Order dated 12/11/13, the Hon. Robert E Torres dismissed their appeal, directed plaintiff to proceed with the foreclosure and issued a 45–day stay. On 12/21/15, plaintiff moved for an order granting summary judgment, striking the answer, awarding a default judgment and appointing a Referee.
By Decision dated 5/24/16, this court denied summary judgment on the ground that plaintiff's proffered indorsement was placed not on the note itself but rather on a separate piece of paper, thus creating a triable issue as to who held the note at the time that the action was commenced. The court additionally held that by waiting more than three years to file an RJI after the defendants' alleged default, plaintiff violated the "good faith" requirements of CPLR § 3408. After careful consideration, the court referred the parties to the Foreclosure Settlement Part for a review of the accrued interest and penalties and for possible settlement.
In lieu of appearing in the Foreclosure Settlement Part, plaintiff moves to reargue its earlier application for summary judgment. Defendants Rodriguez and Joyce D. Spann–Moot oppose the motion on several grounds.
TIMELINESS
A motion to reargue must be made within 30 days after service of a copy of the order determining the prior motion and written notice of its entry ( CPLR 2221[d][3] ). On 6/2/16, defendants e-filed a copy of the 5/24/16 Order with Notice of Entry. Plaintiff e-filed a motion for reargument on 7/5/16. Defendants contend that plaintiff's summary judgment is untimely because its 30–day period for argument expired on 7/2/16. Plaintiff contends that the 30–day period was extended pursuant to General Construction Law § 20–a because 7/2/16 was a Saturday, and the following Monday was July 4th, a holiday.
General Construction Law § 20–a(1) provides that when any period of time falls on a Saturday, Sunday or public holiday, such act may be done on the next succeeding business day. Defendants argue that no such extension is available since Uniform Rule 202.5(d)(3)(i) provides that electronically filed documents may be transmitted at any time of night or day to the NYCEF site. No citation is proffered to buttress their argument. The court accordingly declines to adopt defendants' narrow construct. Plaintiff's motion to reargue is deemed timely filed.
INDORSEMENT
Plaintiff's motion to reargue this court's 5/24/16 Decision is granted to the following extent. This court in its prior decision determined that plaintiff lacked standing to sue to the extent that the indorsement appeared on a separate piece of paper and not on the note itself (see U.S. Bank, N.A. v. Faruque, 120 A.D.3d 575, 991 N.Y.S.2d 630 [2d Dept.2014] ; U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 890 N.Y.S.2d 578 [2d Dept.2009] ; see also MLCFC 2007–9 Mixed Astoria, LLC v. 36–02 35th Avenue Development, LLC, 116 A.D.3d 745, 983 N.Y.S.2d 604 [2d Dept.2015] ). In a supporting affirmation, plaintiff's counsel establishes that the mirror image of the original stamped indorsement bled through and appears in reverse on the note's signature page. Counsel superimposes side-by-side images on his affirmation to establish that the indorsement provided to the court was the reverse side of the signature page, not a separate, unadorned paper. Defendants offer no rebuttal and the court accordingly determines that plaintiff has standing to sue.
CPLR 3408In any residential foreclosure action involving a home loan, a mandatory settlement conference must be held pursuant to CPLR 3408. Both the plaintiff and the defendant are required to negotiate in good faith ( CPLR 3408[2][f] ). By itself, a party's failure to make or accept an offer is insufficient to establish a failure to negotiate in good faith ( CPLR 3408 [2 ][f][3] ). Unreasonable delays or the prosecution of foreclosure proceedings while loss mitigation applications are pending, however, may be considered as proof of noncompliance (ibid. ).
Defendants were notified of their failure to meet their mortgage obligations in 2010 and were sued in 2011. That foreclosure action was discontinued by plaintiffs in July 2012 for unknown reasons; several months later, a new foreclosure action was commenced in December 2012. Plaintiff filed an RJI in June requesting the mandatory settlement conference. When it was subsequently held in December 2013, defendants were deemed ineligible by plaintiff for a loan modification because their accumulated arrears—including untolled interest, late charges and fees—were too high.
Plaintiff bank seeks "full payment" of defendants' debt. Plaintiff fails to explain its discontinuance of its original foreclosure action or its commencement of a second action. Plaintiff declines to follow this court's directive that the borrowers' accrued interest and penalties be reviewed in the Foreclosure Settlement Part for possible settlement. Under these circumstances, it would be "unconscionable to hold defendants responsible for plaintiff's lengthy delay in obtaining the judgment of foreclosure and sale" ( Yagamo Acquisitions v. Baco Dev. 102 St., 278 A.D.2d 134, 718 N.Y.S.2d 325 [1st Dept.2000] ).
Unexcused delay in prosecuting a foreclosure action can result in the disallowance of interest ( Danielowich v. PBL Development, 292 A.D.2d 414, 739 N.Y.S.2d 408 [2d Dept.2002]. CPLR 5001[a] provides that in an action of an equitable nature, "interest and the rate and date from which it shall be computed" is within the court's discretion. Like the court in Citimortgage, Inc. v. Gueye, 52 Misc.3d 1203(A), 2016 WL 3450850 (Sup.Ct.N.Y. County 2016), this court finds that the plaintiff acted in bad faith contrary to the strictures of CPLR 3408 and issues the following directives:
1. Plaintiff commenced the first foreclosure action on 6/21/11 then discontinued
the action on 7/18/12 without explanation. Plaintiff commenced a second action on 12/3/12. Plaintiff shall not recover interest from 7/18/12 to 12/3/12.
2. By Order dated 12/11/13, plaintiff was directed by Justice Torres to proceed with the foreclosure action after plaintiff denied defendants' request for a modification. Plaintiff moved for summary judgment on 12/21/15; its two-year delay is unexplained. Plaintiff shall not recover for accrued interest from 12/11/13 through 12/21/15, minus the 45–day stay.
3. Plaintiff shall not recover interest from the date of this court's 5/24/16 Order to date.
4. Plaintiff shall not recover late charges from 6/21/11 to date.
5. The parties are directed to appear in the Foreclosure Settlement Part to finalize the calculation of interest and for possible settlement.
This is the Decision and Order of the Court. A copy of the Order with Notice of Entry shall be served within 30 days.