Opinion
17024/07
09-21-2011
LaSalle Bank N.A., AS TRUSTEE FOR MORGAN STANLEY LOAN TRUST 2006-1AR, Plaintiff, v. James Munoz; JOSE MUNOZ, COASTAL ONE BANK; CRIMINAL COURT OF THE CITY OF NEW YORK; CSGA, LLC; HOME EQ SERVICING; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. AS NOMINEE FOR ALLIANCE MORTGAGE BANKING CORP; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; NEW YORK CITY PARKING VIOLATIONS BUREAU; NEW YORK CITY TRANSIT ADJUDICATION BUREAU; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; JULIO CORDERO; MARIA CORDERO, Defendants.
, J.
Plaintiff commenced this action seeking foreclosure of a mortgage given by defendants Jose Munoz and James Munoz in favor of Alliance Mortgage Banking Corp. (Alliance) with respect to the real property known as 150-12 126th Street, South Ozone Park, New York to secure repayment of a promissory note made by defendant James Munoz, evidencing a loan in the principal sum of $472,000.00, plus interest. The mortgage lists Mortgage Electronic Registration Systems, Inc. (MERS), as the nominee of Alliance and its successors and assigns. In its complaint, plaintiff alleged, among other things, that it was the holder of the mortgage, defendant James Munoz defaulted under the terms of the mortgage and note by failing to pay the monthly mortgage installment payment due on March 1, 2007, and it elected to accelerate the entire mortgage debt. Plaintiff named MERS as a defendant herein. Defendants Munoz, appearing pro se, served a joint answer admitting execution and delivery of the mortgage by them, and the note by defendant James Munoz, and that plaintiff was the holder of the mortgage. They asserted in their answer that "I don't have nothing to do [illegible] this [illegible]. It is diferent [sic] persond [sic] and diferents [sic] address [sic]." Defendants Munoz, however, did not appear in opposition to plaintiff's motion for, among other things, summary judgment against them, and the motion was granted by order dated October 12, 2007. Plaintiff thereafter moved for leave to enter a judgment of foreclosure and sale, which was granted without opposition. The foreclosure sale was held on December 4, 2009, at which plaintiff was the successful bidder.
Defendant Jose Munoz, now appearing by counsel, moves to set aside the foreclosure sale, vacate the judgment of foreclosure and sale pursuant to CPLR 5015(a)(3) and (4), and dismiss the complaint with prejudice. He claims the court lacked subject matter jurisdiction to entertain the action and render the judgment, because plaintiff lacked standing to bring this action. Defendant Jose Munoz also claims that plaintiff procured the judgment by fraud, misrepresentation, and misconduct, and the foreclosure sale was the result of fraud, collusion and misconduct. According to defendant Jose Munoz, plaintiff intentionally misrepresented its interest in the mortgage to the court, by claiming it was the assignee of the mortgage at the time of the commencement of the action. Defendant Jose Munoz asserts that plaintiff, in support of its motion for summary judgment, presented to the court an invalid assignment dated August 2, 2007 executed by Darleen Karaszewski, Esq., on behalf of MERS "by Corporate Resolution dated 7/19/07." He contends that Ms. Karaszewski, Esq. lacked requisite authority to act on behalf of MERS. He also contends that because Ms. Karaszewski is an associate in the law firm of Steven J. Baum, P.C., which is representing plaintiff herein, her execution of the assignment as an agent of defendant MERS, subsequent to the commencement of this action, raises ethical concerns. Defendant Jose Munoz further contends plaintiff engaged in "robosigning," i.e. the fraudulent practice wherein an affiant signs, in a short time frame, numerous affidavits and legal documents asserting the bank's right to foreclose, despite having no personal knowledge of the facts contained in them (see generally Ohio v GMAC Mtge., LLC, 760 F Supp2d 741, 743 [ND Ohio, 2011]).
Defendant James Munoz obtained counsel and separately moved by order to show cause dated July 9, 2010, to, among other things, vacate the judgment of foreclosure and sale obtained against him. That motion was denied by order of this court dated December 3, 2010.
Defendant Jose Munoz alternatively argues that even if Ms. Karaszewski had requisite authority, and no ethical problem exists, the subject mortgage was not assigned to plaintiff until August 2, 2007, approximately one month after the commencement of this action on July 9, 2007. Defendant Jose Munoz asserts that to the extent the August 2, 2007 assignment recited it was effective retroactive to June 9, 2007, such retroactive assignment did not confer standing on plaintiff in this action (see Countrywide Home Loans, Inc. v Gress, 68 AD3d 709 [2009]). Defendant Jose Munoz also asserts that he was never notified of the purported "transfer" of the mortgage.
To the extent defendant Jose Munoz contends the court lacks subject matter jurisdiction and therefore the judgment should be vacated pursuant to CPLR 5015(a)(4) and the complaint dismissed pursuant to CPLR 3211(a)(2),
"[t]he Supreme Court is a court of general jurisdiction, and it is competent to entertain all causes of action unless its jurisdiction has been specifically proscribed' (Thrasher v United States Liab. Ins. Co., [19 NY2d 159,] 166 [1967]). The Supreme Court indisputably has the power to entertain mortgage foreclosure actions ... (see Security Pac. Natl. Bank v Evans, [31 AD3d 278,] 280)" (Wells Fargo Bank Minnesota, Nat. Assn. v Mastropaolo, 42 AD3d 239, 244 [2007]).
Plaintiff's alleged lack of standing at the time this action was commenced, is not tantamount to a lack of subject matter jurisdiction (see id.; U.S. Bank v Emmanuel, 83 AD3d 1047 [2011]). Defendant Jose Munoz did not raise the standing issue in his answer (or in a pre-answer motion to dismiss the complaint), and thus, he waived any defense based on a lack of standing, pursuant to CPLR 3211 (e) (see id.). In addition, he did not appear in opposition to plaintiff's motion for summary judgment and consequently, did not raise a triable issue of fact in response to plaintiff's prima facie showing of entitlement to judgment as a matter of law (see id.).
To the extent defendant Jose Munoz contends he was never properly served with process, and therefore, the judgment should be vacated pursuant to CPLR 5015(a)(4) and the complaint dismissed pursuant to CPLR 3211(a)(8), his contention is waived by his service of an answer in which he failed to challenge personal jurisdiction (see Federal Home Loan Mtge. Corp. v Torres, 238 AD2d 306 [1997).
With respect to that branch of the motion by defendant Jose Munoz pursuant to CPLR 5015(a)(3), defendant Jose Munoz has failed to establish plaintiff procured the October 12, 2007 order, or resulting judgment, by fraud, misrepresentation, or other misconduct (see CPLR 5015[a][3]; Midfirst Bank v Al-Rahman, 81 AD3d 97 [2011]; Tribeca Lending Corp. v Crawford, 79 AD3d 1018, 1020 [2010]). He has not shown that the August 2, 2007 assignment agreement misrepresented Ms. Karaszewski's authority, any document previously submitted by plaintiff to the court was the result of "robosigning," or plaintiff engaged in any concealment of a material fact. To the extent defendant Jose Munoz asserts that Ms. Karaszewski engaged in dual representation when she executed the assignment on behalf of MERS, while a member of the law firm representing plaintiff, Michael Jablonski, Esq., a member of Steven Baum, P.C. affirms that the law firm does not represent defendant MERS in this action. Defendant Jose Munoz, furthermore, has failed to demonstrate Ms. Karaszewski breached any duty of undivided loyalty to plaintiff by executing the assignment on behalf of MERS after the commencement of this action.
In HSBC Bank USA, N.A. v Vasquez, (24 Misc 3d 1239[A] [2009]), a mortgage foreclosure action, the court denied a motion for summary judgment by the plaintiff, with leave to renew upon certain specified papers, including a copy of a "valid" assignment of the subject mortgage to the plaintiff. The court determined, among other things, that the assignment offered by the plaintiff in support of its motion, was invalid. The court noted it was executed by one "Darleen Karaszewski, Esq." on behalf of MERS, but that no corporate resolution or power of attorney had been recorded with the assignment. To the extent defendant Jose Munoz asserts plaintiff was not entitled to summary judgment because it, like the plaintiff in HSBC Bank USA, N.A. v Vasquez, failed to prove a corporate resolution or power of attorney had been recorded with the August 2, 2007 assignment, he has failed to move to vacate his default in appearing in opposition to the motion by plaintiff for summary judgment (see infra at 4).
To the degree defendant Jose Munoz asserts the assignment was improper, and he was not provided with notice of the assignment of the mortgage, he has failed to move to vacate his default in opposing plaintiff's motions for summary judgment and for a judgment of foreclosure and sale, pursuant to CPLR 5015(a)(1), and in any event, has not offered a reasonable excuse for his default in responding to them (see ADL Construction, LLC v Chandler, 78 AD3d 407 [2010]; St. Rose v McMorrow, 43 AD3d 1146 [2007]; see also Pape v Daino, 60 AD3d 654 [2008]).
Insofar as defendant Jose Munoz seeks to set aside the foreclosure sale, he has failed to prove fraud, collusion, mistake, or misconduct which casts suspicion on the fairness of the sale (see Maloney v Talbot, 55 AD3d 568 [2008]; Chase Manhattan Mtge. Corp. v Cobbs, 4 AD3d 383 [2004]; see also Guardian Loan Co. v Early, 47 NY2d 515 [1979]). He also has failed to show that he has any right enjoin delivery of the deed at this post-sale juncture.
The motion by defendant Jose Munoz is denied.
Dated: Long Island City, NY
September 21, 2011
HON. ROBERT J. McDONALD
J.S.C.