Opinion
Index No. 151908/2019
03-27-2020
JACQUELINE RASMUSSEN Plaintiffs v. RRA CP OPPORTUNITY TRUST 1; Et. Al. Defendant.
NYSCEF DOC. NO. 48 Present:
DECISION AND ORDER
Motion Sequence Nos.: 001 Recitation as required by CPLR 2219(a) of the papers considered in the review of Motion Sequence Number 001
| Numbered | |
|---|---|
| Notice of Motion by Defendant RRA (001),[together with Memo of Law & Affidavits in Support] | 1 |
| Affirmation & Affidavit in Opposition by Plaintiff, | 2 |
| Affirmation in Reply by Defendant | 3 |
Plaintiffs' Motion
Defendant RRA CP Opportunity Trust ("RRA") moves by notice of motion (Seq. No. 001) for a pre-discovery order dismissing the above captioned case pursuant to CPLR §3211(a) (7) on the ground that the Plaintiff has failed to state a cause of action. In the alternative, Defendant argues that they have provided sufficient documentary evidence to warrant dismissal of the case pursuant to CPLR §3211(a)(1). Plaintiff Jacqueline Rasmussen opposes the application in its entirety. While various other entities have been sued by the Plaintiff, including ten "John Doe's," no other parties have appeared to date.
As delineated in her Verified Summons and Complaint, the present action is one to quiet title and to discharge a recorded mortgage encumbering a parcel of real property located at 10 Borman Avenue in Staten Island, New York. In sum and substance, Plaintiff argues that any foreclosure that could be commenced upon the mortgage would be time barred, and moreover, that the mortgage was satisfied by payment through a government funded program (the Second Lien Modification Program, or "2MP").
Relevant Facts
Both parties relevant to the present motion agree to many of the underlying facts. Plaintiff is the owner of a parcel of real property located at 10 Borman Avenue in Staten Island, New York. In or around March of 2006 Plaintiff and her Husband (now deceased) took out a $42,000 Home Equity Loan (HELOC) from a company known as Greenpoint Mortgage. Security for this loan, in the form of a mortgage, was recorded against the property by an agent of Greenpoint Mortgage known as Mortgage Electronic Registration Systems, Inc. ("MERS"). MERS recorded the mortgage in August of 2006. In July of 2008, the Plaintiff defaulted on her loan obligation by failing to make required payments. It is undisputed that Plaintiff has not made a single HELOC payment since July of 2008. Sometime in 2011, the HELOC was assigned to Bank of America ("BOA") for servicing. BOA subsequently recorded an assignment of mortgage on September 9, 2013. The HELOC was once again assigned to the current defendant RRA in December of 2017. RRA recorded an assignment of mortgage on January 29, 2018.
When the Plaintiff defaulted on her loan obligation in July of 2008 no immediate action was taken. However, on or about March 9, 2011 Bank of America, as loan servicer, served a "Notice of Intent to Accelerate" which indicated that the Plaintiff was in default and that if she did not cure the default by April 13, 2011 all mortgage payments "[would] be accelerated" and "foreclosure proceedings [would] be initiated" (See Pl. Ex. E.). When Plaintiff failed to cure on April 13, 2011 it is undisputed that Bank of America did not commence foreclosure proceedings, however, the parties vehemently disagree as to whether BOA accelerated the mortgage payments.
Plaintiff argues that in accordance with the March 9th Notice of Intent the mortgage payments were accelerated on April 13, 2011. Defendant, in opposition, argues that despite the wording of the notice of intent, the mortgage payments were never actually accelerated. Defendant claims that the failure to accelerate is evidenced by subsequent letters that were sent to the Plaintiff on 10/31/11, 12/19/11, 1/31/12, 2/17/12, 3/20/12, 4/19/12, 5/29/12, 6/26/12 and 7/19/12. Only one of these letters, from October of 2011, has been provided to the Court. The October letter states (in relevant part) that the Plaintiff's default "could result in acceleration of all sums due under the note." (See Pl. Ex. F).
A determination of whether or not the payments were actually accelerated is crucial to the determination of the Plaintiff's cause of action as the acceleration of mortgage payments starts the running of the six-year statute of limitations. See Onewest Bank FSB v . Psp-nc., LLC , 2020 NY Slip Op 01627 (2d Dept. 2020); see also, Bank of N.Y. Mellon v. Ahmed , 2020 NY Slip Op 01591 (2d Dept. 2020). However, if a mortgage is not accelerated then the statute runs anew upon the date of each unpaid installment. See U.S. Bank Trust , N.A. v. Clark , 178 A.D.3d 982 (2d Dept. 2019). Notably, even if accelerated, a bank may affirmatively revoke its election to accelerate. See Federal Natl. Mtge. Assn. v. Rosenberg , 2020 NY Slip Opo 00814 (2d Dept. 2020).
A second factual dispute relates to whether or not the loan at issue was previously satisfied by the Federal Government. Plaintiff claims that in May of 2006 she executed a "superior first-lien" consolidated mortgage with Greenpoint Mortgage in the amount of $340,000. Plaintiff further alleges that in 2014 this primary mortgage was modified under a governmental program known as the "Making Home Affordable Program" ("HAMP"). See 12 USCS §5219(a). Plaintiff claims that pursuant to the requirements of the HAMP program, and its inter-related "Second Lien Modification Program" ("2MP"), any secondary mortgage such as the HELOC at issue, either had to be similarly modified, or satisfied via a lump sum payment from the U.S. Treasury Department. Based upon this requirement, Plaintiff alleges that the HELOC was satisfied by the U.S. Treasury Department and cannot be enforced now. Plaintiff surmises that any inaccuracy in the Defendant's records regarding this payment would be due to the fact that the payment was made to RRA's predecessor-in-interest, Greenpoint Mortgage and that a satisfaction of mortgage was never properly filed with the County Clerk.
The HAMP program was intended to modify the payment terms of primary mortgages, and the 2MP program was intended to work in coordination with HAMP to lower payments on second mortgages. Both of these programs were enacted by Congress and signed into law as part of the Emergency Economic Stabilization Act of 2008. See 12 U.S.C.S. §5219a; see also Costa v. Deutsche Bank Nat'l Trust Co., 247 F. Supp. 3d 329 (S.D.N.Y. 2017).
In reply, Defendant argues that payment under the 2MP program was never received by RRA or indicated in the records of any of its predecessors-in-interest. Moreover, Defendant argues that the Plaintiff has failed to offer documentary evidence that she ever actually modified her $340,000 primary mortgage under the HAMP and 2MP programs. However, Plaintiff admits in her Affidavit that she cannot locate the original HAMP documentation, but is in the process of obtaining the same from that loan's current servicer, PHH Mortgage Corporation. Plaintiff further alleges that she has dutifully made every required payment under the modified $340,000 mortgage.
Applicable Law
When a motion is made pursuant to CPLR 3211(a)(7), to dismiss for a failure to state a cause of action, the court must accept the facts alleged in the compliant as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts alleged fit within any cognizable legal theory. See Doe v. Ascend Charter Schs., 2020 NY Slip Op 01600 (2d dept. 2020). The standard is not whether the complaint is sufficient to survive a motion for summary judgment, or if the plaintiff will ultimately be able to prove his or her claims at trial. See EBCI , Inc. v. Goldman Sachs & Co., 5 N.Y.3d 11 (2005). Since, unlike a motion for summary judgment, the burden never shifts to the non-moving party, a plaintiff has no obligation to provide evidence to support his or her allegations. See Sokol v. Leader , 74 A.D.3d 1180 (2d Dept. 2010); See also Kotowski v. Hadley , 38 A.D.3d 499 (2d Dept. 2007). Evidentiary material may be considered in relation to a 3211(a)(7) motion. If so considered, the criterion becomes whether the plaintiff "has" a cause of action not whether they have merely stated one. However, unless it can be conclusively shown that a material fact claimed by the plaintiff is not a fact at all, then dismissal should not eventuate. See Guggenheimer v. Ginzburg , 43 N.Y.2d 268 (1977); see also Patel v. Gardens at Forest Hills Owners Corp., 2020 NY Slip Op 01509 (2d Dept. 2020).
When a motion is made pursuant to CPLR §3211(a)(1), to dismiss upon documentary evidence, the documentary evidence offered must utterly refute the plaintiff's factual allegations, or conclusively establish a defense as a matter of law. See Leavitt Enter., Inc. v. Two Fulton Sq., LLC, 2020 NY Slip Op 01606 (2d Dept. 2020). Only documents that are essentially undeniable such as mortgages, deeds, contracts or similar papers may be considered on a 3211(a)(1) motion. Affidavits or deposition testimony are not considered documentary evidence within the intent of CPLR §3211(a)(1). See Minchala v. 829 Jefferson , LLC , 177 A.D.3d 866 (2d Dept. 2019).
Decision
The Plaintiff's cause of action is to quiet title and remove the HELOC mortgage as an encumbrance. The basis for the Plaintiff's cause of action is two-fold. First, she argues that any foreclosure upon the mortgage is time-barred by the statute of limitations because the letter dated March 9, 2011 served as notification that the HELOC payments were accelerated. In reply, Defendant correctly indicates that language similar to that used in the March 9th letter has been found to be insufficient to accelerate the full amount of a mortgage. See e.g. Milone v. US Bank N.A., 164 A.D.3d 145 (2d Dept. 2018); see also Bank of N.Y. Mellon v. Viola , 2020 NY Slip Op 01895 (2d Dept. 2020). However, based upon the limited motion record available, this Court is unable to determine if any of the other various communications sent to the Plaintiff throughout the year 2012 either ratified the terms of the March 9th letter, or contained a demand for the entire loan amount. This subsequent correspondence has not been provided to the Court. Without reviewing these documents, and giving the Plaintiff the benefit of every possible inference, it cannot be conclusively determined at this pre-discovery juncture that the Plaintiff does not have a possible statute of limitations defense.
The second prong of the Plaintiff's cause of action relies upon her allegation that the HELOC was paid off by the U.S. Treasury in May of 2014. Plaintiff alleges that when she was granted a HAMP modification of her primary mortgage, the program required that any secondary (2MP) mortgage had to be satisfied. Thus, giving the Plaintiff the benefit of every possible inference, and accepting the facts alleged in her complaint as true, Defendant failed in their burden of conclusively proving that the HELOC was not previously satisfied. Defendant's claim that the Plaintiff has not offered documentary evidence to support her HAMP claim is unpersuasive, as she is not required to provide evidentiary proof in response to a pre-discovery motion to dismiss. See Arts4All , Ltd. v. Hancock , 5 A.D.3d 106 (1st Dept. 2004); see also, TIAA Global Invs., LLC v. One Astoria Sq. LLC , 127 A.D.3d 75 (1st Dept. 2015). At all times it remained the Defendant's burden to establish that the facts alleged by the Plaintiff were undisputedly "not a fact at all." See S.P. v. Dongbu Ins. Co., 174 A.D.3d 911 (2d Dept. 2019).
For the reasons set forth above, Defendant's motion to dismiss the Plaintiff's cause of action to quiet title is hereby denied. However, nothing in this Decision precludes the Defendant from filing a motion for summary judgment after discovery is conducted on the issues of fact framed herein. This constitutes the Decision and Order of the Court on all issues raised in relation to motion sequence number 001.
Generally, as the preliminary conference in this matter has been stayed due to the pending motion to dismiss, this Court would schedule a P.C. appearance. However, due to the current health crisis all non-essential matters are to be conducted remotely. Accordingly, it is hereby ordered that the Plaintiff and Defendant are to confer remotely (through telephone or electronic means) to stipulate to a discovery schedule and e-file the same within the next 45 days. This stipulated discovery schedule will become the preliminary conference order. The order should include both document discovery and the scheduling of depositions. However, the order need not include a compliance conference date. An appearance date will be will be scheduled by Court Notice in the future.
Dated: March 27, 2020
/s/_________
Hon. Catherine M. DiDomenico
Acting Justice Supreme Court