Opinion
7226/09.
Decided March 8, 2010.
The plaintiff Bayview Loan Servicing, LLC is represented by Fein, Such, Kahn Shepard, P.C. by Samit G. Patel, Esq., of counsel, the defendants Avery Enterprises, Inc. and Stanley Henry are represented by Emanuel Towns, Esq.
In this action to foreclosure a mortgage on a commercial property, plaintiff Bayview Loan Servicing, LLC, (Bayview) moves for summary judgment against defendants Avery Enterprises, Inc., (Avery), the mortgager and Stanley Henry (Henry), the guarantor. Bayview also moves to strike defendants' answer and affirmative defenses. Defendants cross move for leave to serve an amended answer and for discovery.
On May 14, 2007, Avery executed a note and mortgage covering property located at 1672, 1674 and 1684 Broadway, Brooklyn, NY to Interbay Funding, LLC (Interbay) which was duly recorded on June 8, 2007. Henry executed a guarantee on May 14, 2007 of the note and mortgage.
The mortgage was thereafter assigned by Interbay to Bayview on July 12, 2007 which assignment was recorded on August 1, 2007 in the Kings County Clerks Office. The Summons and Verified Complaint was filed on March 29, 2009 and service was thereafter effected. On or about May 8, 2009, defendants moved to dismiss for lack of personal jurisdiction. The motion was marked off the calendar on May 20, 2009 for movant's failure to appear. On August 5, 2009, this Court granted defendants Avery and Henry's application for leave to serve an answer and the answer was deemed served on July 2, 2009, nun pro tunc.
The defendants Avery and Henry along with other parties commenced an action in the U.S. District Court Eastern District of New York against Bayview as well as the United States of America (the Federal Action) and other parties seeking, inter alia, as described by District Court Judge Vitaliano "wide-ranging injunctive and declaratory relief" as well as a finding that the Emergency Stabilization Act of 2008 and specifically the Troubled Assets Relief Program (TARP) violates the Fifth and Fourteenth Amendment. The Federal Action was dismissed on January 26, 2009. ( Henry Builders, Inc.v US, 2009 WL185419 [E.D.NY]).
The plaintiff has made a prima facie showing of its entitlement to summary judgment in this foreclosure action by submitting the mortgage, the unpaid note, the assignment along with evidence of non-payment. ( Capstone Business Credit, LLC v Imperia Family Realty, ___ NY2d ___, 2010 WL 552922 [NYAD 2d Dept]). The burden than shifts to the defendants to demonstrate "the existence of a triable issue of fact as to a bona fide defense to the action, such as waiver, estoppel, bad faith, fraud or oppressive or unconscionable conduct on the part of the plaintiff" ( Mahopac Natl. Bank v Baisley, 244 AD2d 466,467 [2d Dept 1997]).
Defendants have opposed the motion for summary judgment by cross moving for discovery and for leave to serve an amended answer. Defendants submit an attorney's affirmation, and a four page affidavit of Henry, an officer of Avery and the guarantor.
Significantly, defendants do not deny the execution of the mortgage and note, do not dispute the amount due or deny that they are in default. Instead, they assert a series of affirmative defenses that are grounded more in public policy arguments than in law.
A review of the affirmative defenses contained in the proposed amended answer (which the Court will deem served non pro tunc) includes the following:
a) The first affirmative defense asks the Court to "take judicial notice of the fact that the people of the State of New York, are faced and subjected to an international economic catastrophe that is not of our making", that "financial entities that hold and/or have ownership interests" in the note and mortgage have benefitted from "federal capital infusions" (presumably the TARP program) and that the failure to provide similar financial relief to defendants constitutes discrimination and is violative of the New York State Constitution;
b) The second affirmative defense alleges that the defendants "have been left to hold the ashes left from this international economic tragedy" that the plaintiff is the "beneficiary of an unconstitutional Act of Congress" (i.e. TARP) and that the defendants Avery and Henry are being discriminated against;
c) The third affirmative defense is lack of standing.
Defendants Henry and Avery offer no statutory or case law support for the first and second affirmative defenses. Restated, defendants appear to argue that plaintiff (assuming it was the beneficiary of TARP funds) is estopped from maintaining this action because of their receipt of federal funding and that since defendants have not received federal TARP funds they have been subjected to unlawful discrimination.
If this Court were to accept this defense, it would call into question the entire federal structure put in place by the Congress to respond to what defendants have described as the "international economic catastrophe". This Court declines to do so. Without commenting on the wisdom of the TARP program, Congress in response to the economic crisis had broad powers to fashion a legislative solution without including the defendants in the TARP program.
In support of the third affirmative defense, defendants submit an undated and unsigned one page default letter from Bayview to Avery in which Bayview describes itself "as servicer for Wachovia Bank NA" and argues that this letter raises issues as to the standing of Bayview to bring this action. The Court finds that in light of the affidavit of Karen Griffith Assistant Vice President of Bayview, attesting to the fact that Bayview is the current holder of the note and mortgage and attesting to the default, that defendants have failed to raise triable issues of fact as to the standing of Bayview to bring this action.
Accordingly, plaintiff's motion for summary judgment and the appointment of a receiver is granted. Defendants' cross-motion for discovery is denied and as previously noted, the cross-motion to amend the answer is granted, however the affirmative defenses and counter claims asserted are dismissed.
Settle Order on Notice.
The foregoing constitutes the decision and Order of the Court.