The Bank of New York v. Varona

Full title: THE BANK OF NEW YORK, AS TRUSTEE, FOR THE BENEFIT OF CWABS, INC.…

Court: Supreme Court of the State of New York, Suffolk County

Date published: Mar 27, 2009

2009 N.Y. Slip Op. 30984 (N.Y. Sup. Ct. 2009)

Opinion

08-18453.

March 27, 2009.

ESCHEN, FRENKEL, WEISMAN GORDON, LLP, Attorneys for Plaintiff, Bay Shore, New York.

DONALD R. BLYDENBURGH, Judge.

Upon the following papers numbered 1 to 10 read on this application to amend and for an order of reference; Application and supporting papers1-9; Answering Affidavits and supporting papers no opposition; Replying Affidavits and supporting papers______; Other 10 memorandum of law; it is,

ORDERED that this ex-parte application by plaintiff for an order of reference and for an order amending the caption in this foreclosure action is considered under 2008 NY Laws, Chapter 472, enacted August 5, 2008, and is hereby denied, without prejudice, with leave for renewal upon proper papers; and it is further

ORDERED that any renewed application by plaintiff shall be accompanied by copies of all the supporting proof submitted on the instant application.

This is an action to foreclose a mortgage on premises known as 2 Evergreen Avenue, Brentwood, New York 11717, with tax map description 0500/117.00/03.00/ 001.000 ("premises"). The action was commenced on May 15, 2008, with the filing of a summons and complaint with RPAPL § 1303 notice in the Suffolk County Clerk's Office. A Notice of Pendency was also filed on May 15, 2008. The summons and complaint were served on all defendants within thirty days of the filing of the notice of pendency ( see CPLR 6512 and 6514[a]).

Defendant Jose A. Varona ("borrower") executed and delivered a note dated January 28, 2005, for a loan from Countrywide Home Loans, Inc. ("lender") in the sum of $212,000.00, at a yearly interest rate of 6.375% with monthly payments of principal and interest in the amount of $ 1,322.60. The note was secured by a mortgage on the premises signed by defendant Jose A. Varona before a notary public on January 28, 2005 ("mortgage"). The mortgage indicated that Mortgage Electronic Registration Systems, Inc. ("MERS") was acting solely as a nominee of the lender and its successors and assigns, and that for purposes of recording the mortgage, MERS was the mortgagee of record. The mortgage was recorded in the Suffolk County Clerk's Office on March 10, 2005, in Liber 20997, at page 339. The defendant Jose A. Varona subsequently executed a second note and mortgage in the amount of $125,914.50 dated November 21, 2006, and the mortgage was recorded in the Suffolk County Clerk's Office in on January 11, 2007, in Liber 21449, page 988. Both notes and mortgages were consolidated pursuant to the terms of a Consolidation, Extension and Modification agreement dated November 21, 2006, which was recorded in the Suffolk County Clerk's Office on March 13, 2007, in Book 21494, page 369, creating a single lien in the amount of $334,000.00. Thereafter, the consolidated note and mortgage were assigned to plaintiff The Bank of New York, as Trustee, for the benefit of CWABS, Inc., Asset-Backed Certificates, Series 2006 ("The Bank of New York"), by written assignment dated May 12, 2008 from MERS¹, and the assignment was recorded in the Suffolk County Clerk's Office on May 30, 2008, in Liber 21713, page 912. Plaintiff is the holder of the assignment to date. Defendant Jose A. Varona defaulted on the loan payment due on December 1, 2007, and the grace period under the note of 15 days thereafter ("default date") and each successive due date. Upon the failure of defendant Jose A. Varona to cure the default, under the terms and conditions of the loan, it was accelerated.

1 The MERS mortgage document was executed by borrower and discloses the security interest of MERS in certain rights of the lender, as the lender's agent, "including, but not limited to, the right to foreclose and sell the property" ( see paragraph A of page 2 of the mortgage document; see also In the Matter of MERSCORP, Inc. v Romaine , 8 NY3d 90, 828 NYS2d 266 [2006]). In the instant matter, MERS used its ostensible authority to assign the consolidated note and mortgage to The Bank of New York by assignment dated May 12, 2008.

Plaintiff now seeks an order appointing a referee to determine the amount due and to ascertain whether the subject premises can be sold in parcels; amending the caption of the action to delete the fictitious names "John Doe #1" through "John Doe #2" and substituting the names of "Josefina Varona" and "Dalida Peralta" in their stead, as defendants; and amending the caption of the action to discontinue against and delete the fictitious names "John Doe #3" through "John Doe #10" as party defendants. Plaintiff also seeks a default judgment against all non-answering defendants.

The court must deny plaintiff's application for an order of reference, as the result of the following deficiencies contained herein:

1. The submitted motion papers establish that this foreclosure action was commenced after August

1, 2007 but prior to September 1, 2008. Under the mandates imposed upon the Court by 2008 NY Laws, Ch. 472, Section 3-a, a plaintiff must provide proof identifying the type of loan being secured by the mortgage. Here, plaintiff has not submitted proof in evidentiary form as to whether the subject loan being foreclosed upon is a "subprime home loan" ( see RPAPL § 1304[c]) or a "high-cost home loan" ( see Banking Law § 6-l), or a "non-traditional home loan" ( see RPAPL § 1304[e]). Where the loan meets the statutory definition of any of these type of loans, plaintiff must submit evidentiary proof, including an affidavit from someone with personal knowledge, of defendant's residence address and contact information, sufficient for the Court to properly notify the defendant mortgagor that he or she may request a settlement conference if a resident of the premises in foreclosure ( see CPLR 3408). If the loan meets the statutory definition of a "high-cost home loan," the complaint must include an affirmative allegation of plaintiffs compliance with all of the provisions of Banking Law §§ 595-a and 6-l (see RPAPL § 1302).

2. Plaintiff has not submitted the required proof that a "Help for Homeowners in Foreclosure" notice which was served upon the mortgagor met all of the notice requirements of RPAPL § 1303. Given the explicit statutory requirements of RPAPL § 1303(2), plaintiff must submit proper evidentiary proof to establish full compliance with the substantive and procedural requirements of this statute ( see Countrywide Home Loans, Inc. v Taylor , 17 Misc3d 595, 843 NYS2d 495 [Sup Ct, Suffolk County 2007]). Upon renewal, plaintiff must submit an attorney's affirmation with specifics showing the notice was served and it complied with the form, type, size, type face, paper color and content requirements of RPAPL § 1303. Proof of service should indicate the notice was printed on colored paper other than the color of the summons and complaint, not just that it was printed on colored paper ( see Countrywide Home Loans, Inc. v Taylor supra).

3. Plaintiff has not submitted valid proof in evidentiary form regarding the facts constituting the claim and amounts due ( see Wolf v Citibank , 34 AD3d 574, 824 NYS2d 176 [2^nd Dept 2006]; Beaton v Transit Facility Corp. , 14 AD3d 637, 789 NYS2d 314 [2^nd Dept 2005]; Countrywide Home Loans v Taylor supra). Here, plaintiff has submitted a complaint not supported by an affidavit of verification which conforms with CPLR 3021. Therefore, the Court must consider the complaint to be unverified ( see CPLR 3022). Though a verification is not required ( see Logue v Young , 94 AD2d 827, 463 NYS2d 120 [3d Dept 1983]), it generally is the practice to do so ( see Blam v Netcher , 17 AD3d 495, 793 NYS2d 464 [2^nd Dept 2005]). Where a verified complaint has been served "it may be used as the affidavit of the facts constituting the claim and the amount due . . ." ( see Cplr 3215 [f]; also NYCTL 2005-A TRUST v Davis , 2009 NY Slip Op 29022, 870 NYS2d 905 [Sup Ct, Kings Cty 2009]).

Neither has plaintiff provided proof of an affidavit of merit in admissible form. Plaintiff submits the affidavit of Keri Selman, assistant vice president of plaintiff The Bank of New York, which was signed and notarized on May 13, 2008, in the State of Texas. An out-of-state affidavit must comply with CPLR 2309 [c], which requires an out-of-state affidavit to be accompanied by a certificate of conformity ( see Real Property Law § 299-a; see also PRA lll, LLC v Gonzalez , 54 AD3d 917, 864 NYS2d 140 [2^nd Dept 2008]; Ford Motor Credit C., v Prestige Gown Cleaning Serv. , 193 Misc2d 262, 748 NYS2d 235 [Civ Ct, Queens Cty 2002]). In the absence of a certificate of conformity, the affidavit is, in effect, unsworn ( see Worldwide Asset Purchasing, LLC v Simpson , 17 Misc3d 1128 [A], 851 NYS2d 75 [Auburn City Ct 2007]).

In the absence of either a complaint verified by a party with personal knowledge of the facts, or proper affidavit of merits by plaintiff, the plaintiff has failed to meet the burden of proof required by CPLR 3215 [f] to obtain an order of default ( see Blam v Netcher supra; Peniston v Epstein , 10 AD3d 450, 780 NYS2d 916 [2^nd Dept 2004]; Goodman v New York City Health Hospitals Corp. , 2AD3d 581, 768 NYS2d 365 [2^nd Dept 2003]; DeVivo v Sparag , 287 AD2d 535, 731 NYS2d 501 [2^nd Dept 2001]; Finnegan v Sheahan , 269 AD2d 491, 703 NYS2d734 [2^nd Dept 2000]; NYCTL 2005-A TRUST v Davis supra).

Similarly, the submitted assignment document from MERS to plaintiff The Bank of New York dated May 12, 2008, was signed before a notary public in the State of Texas and is also deficient, as it lacks a necessary certificate of conformity. Its submission is not valid proof in evidentiary form of its contents ( see PRA lll, LLC v Gonzalez supra; Worldwide Asset Purchasing, LLC v Simpson supra; Daimlerchrysler Services North America LLC v Tammaro , 14 Misc3d 128 (A), 836 NYS2d 484 [App Term 2^nd 11^th Jud Dists 2006]).

4. Plaintiff has not submitted a copy of the second note and mortgage in the amount of $125,914.50 dated November 21, 2006, which mortgage was alleged to have been recorded in the Suffolk County Clerk's Office in on January 11, 2007, in Liber 21449, page 988. Both notes and mortgages were alleged to have been consolidated pursuant to the terms of a Consolidation, Extension and Modification agreement dated November 21, 2006, which was alleged to have been recorded in the Suffolk County Clerk's Office on March 13, 2007, in Book 21494, page 369, creating a single lien in the amount of $334,000.00. Again, plaintiff has not attached a copy in admissible form, of this underlying document to the assignment dated May 12, 2008, for the Court to review. It is well settled that "[In] an action to foreclose a mortgage, a plaintiff establishes its case as a matter of law through the production of the mortgage, the unpaid note, and evidence of default" ( see Aames Funding Corp. v Houston , 44 AD3d 692, 843 NYS2d 660 [2^nd Dept 2007]; also Daniel Perla Assoc., LP v Kent Assoc., Inc. , 40 AD3d 677, 836 NYS2d 630 [2^nd Dept 2007]; Campaign v Barba , 23 AD3d 327, 805 NYS2d 86 [2^nd Dept 2005]). Therefore, plaintiff has again failed to meet the burden of proof required by CPLR 3215 [f] to obtain an order of default ( see Household Finance Realty Corp of NY v Winn , 19 AD3d 545, 796 NYS2d 533 [2^nd Dept 2005]; U.S. Bank Trust Nat Assoc. Trustee v Butti , 16 AD3d 408, 792 NYS2d 505 [2^nd Dept 2005]).

5. Plaintiff has not submitted proof in admissible form of compliance with the notice requirements contained in Paragraphs 15 and 22[b] of the mortgage. Here, the affidavit submitted by Keri Selman, assistant vice president of The Bank of New York, does not state the date the demand letter was sent to the borrower, nor the contents of the demand letter showing it conformed to the specific requirements of the mortgage, the necessity of which is a contractual condition-precedent to the exercising of plaintiff's rights upon default ( see GE Capital Mtg. Services Inc., v Mittelman , 238 AD2d 471, 656 NYS2d 645 [2^nd Dept 1997]; Moet ll Inc., v McCarthy , 229 AD2d 876, 646 NYS2d 64 [3^rd Dept 1996]; Manufacturers Trades Trust Co. v Korngold , 162 Misc2d 669, 618 NYS2d 744 [Sup Ct, Rockland County 1994]; CPLR 3215 [f]; 14A Carmody-Wait 2d §§ 92:35, 92:48 and 92:51).

Moreover, the default letter submitted to the Court as an exhibit is not in the English language. It appears to be in the Spanish language. A review of the note and mortgage does not reveal the requirement of a default letter to be in Spanish. Indeed, the note and mortgage signed by the borrower, are in the English language. "Where an affidavit or exhibit annexed to a paper served or filed is in a foreign language, it shall be accompanied by an English translation and an affidavit by the translator stating his qualifications and that the translation is accurate" ( see CPLR 2101[b]).

Upon renewal, plaintiff must attach a translated copy in English of the default letter with the required translator's affidavit (CPLR 2101 [b]). In addition, plaintiff must attach proof of mailing from someone with personal knowledge of the mailing or service of the notice of default upon the defendant Jose A. Varona pursuant to sections 15 and 22(b) of the mortgage agreement ( see Norwest Bank Minnesota, N.A. v Sabloff , 297 AD2d 722, 747 NYS2d 559 [2nd Dept 2002]). Further, plaintiff must attach an affirmation or affidavit of explanation to clarify the circumstances which show plaintiff's entitlement to its default relief based upon paragraphs 15 and 22[b] of the mortgage.

5. Plaintiff must submit proof in admissible form providing a factual basis for the substitution of "Josefina Varona" and "Dalida Peralta" as party defendants, and their respective relevancy to this foreclosure action.

Also, plaintiff is reminded that proper proof of compliance with CPLR 3215 [g][3], concerning the mailing of additional notice, is required upon application for a judgment of foreclosure against any defaulting mortgagor. An order of reference is simply a preliminary step towards obtaining a judgment of foreclosure ( see Home Sav. of Am., F.A. v Gkanios , 230 AD2d 770, 646 NYS2d 530 [2^nd Dept 1996]). The affidavit must state that "additional notice has been given by or on behalf of the plaintiff at least twenty days before the entry of the judgment" (CPLR 3215 [g][3][i]).

Accordingly, the plaintiff's application for an order of reference is denied, without prejudice to renewal upon proper papers, including but not limited to a copy of all the papers submitted with this application, a copy of this order, and the evidentiary proof specified above.