Opinion
27271/2013
09-24-2019
U.S. BANK NATIONAL ASSOCIATION, as Trustee Successor in Interest to Bank of America, National Association as Trustee Successor by Merger to Lasalle National Bank, NA, as Trustee for Wamu Mortgage Pass-Through Certificates Series 2006-AR11 Trust, Plaintiff, v. Helene WINSTON, as Executrix of the Estate of Marshall Winston a/k/a Marshall L. Winston; Helene Winston; National City Bank; State of New York; Mitchell Winston and Edna Winston, Defendants.
ECKERT SEAMANS CHERIN & MELLOTT, LLC, Attorneys for Plaintiff, 10 Bank Street, Suite 700, White Plains, NY 10606 GRAUSSO & FOY. ESQ., Attorneys for Defendants Helene Winston as Executrix and Individually, 8 West Main Street, Suite 5, Patchogue, NY 11772
ECKERT SEAMANS CHERIN & MELLOTT, LLC, Attorneys for Plaintiff, 10 Bank Street, Suite 700, White Plains, NY 10606
GRAUSSO & FOY. ESQ., Attorneys for Defendants Helene Winston as Executrix and Individually, 8 West Main Street, Suite 5, Patchogue, NY 11772
Robert F. Quinlan, J.
Upon the following papers numbered 1 to 78 read on this motion by plaintiff to amend its complaint, to strike its request for a deficiency judgment, to discontinue the action against decedent's estate, to vacate the note of issue, upon vacatur to grant leave to renew its' prior motion for summary judgment, upon renewal to grant summary judgment, grant default judgment against the non-answering defendants and the appointment of a referee pursuant to RPAPL § 1321 ; plaintiff's notice of motion, supporting papers and memorandum of law: 1-33 ; defendants' affirmation in opposition and supporting papers: 34-68 ; and plaintiff's memorandum of law in reply: 69-78 ; it is
ORDERED that portion of plaintiff U.S. Bank, National Association, as Trustee, Successor In Interest to Bank of America, National Association, as Trustee, successor by merger to LaSalle National Bank, NA, as Trustee for WAMU Mortgage Pass-Through Certificates Series 2006-AR11 Trust's motion seeking to amend its complaint to strike therefrom any claim for a deficiency judgment is granted; and it is further
ORDERED that portion of plaintiff U.S. Bank, National Association, as Trustee, Successor In Interest to Bank of America, National Association, as Trustee, successor by merger to LaSalle National Bank, NA, as Trustee for WAMU Mortgage Pass-Through Certificates Series 2006-AR11 Trust's motion pursuant to CPLR 3217 (b) to voluntarily discontinue any claim therein against Helen Winston as Executrix of the Estate of Marshall Winston is granted upon the condition that such claim is to be discontinued with prejudice; and it is further
ORDERED that those portions of plaintiff U.S. Bank, National Association, as Trustee, Successor In Interest to Bank of America, National Association, as Trustee, successor by merger to LaSalle National Bank, NA, as Trustee for WAMU Mortgage Pass-Through Certificates Series 2006-AR11 Trust's motion seeking to vacate the note of issue, to renew its' motion for summary judgment and to set the default of the non-appearing, non-answering defendants are denied as moot; and it is further
ORDERED that plaintiff U.S. Bank, National Association, as Trustee, Successor In Interest to Bank of America, National Association, as Trustee, successor by merger to LaSalle National Bank, NA, as Trustee for WAMU Mortgage Pass-Through Certificates Series 2006-AR11 Trust is granted judgment dismissing the answer of the remaining defendant Helene Winston, in accordance with the court's decision placed on the record after oral argument on April 11, 2019, and memorialized by the written order of the court of the same date, (Mot. Seqs #005 and #006) and that portion of plaintiff's motion seeking the appointment of a referee to compute pursuant to RPAPL § 1321is granted; and it is further
ORDERED that plaintiff's counsel is directed to submit a proposed order of reference within forty-five (45) days of the date of this order; and it is further
ORDERED that this action shall be calendared for a status conference on Monday, February 24, 2020 at 9:30 AM in Part 27 for the court to monitor the progress of this action. If a judgment of foreclosure and sale is filed with the court before that date, no appearance will be necessary.
This is an action to foreclose a mortgage on residential real property located at 709 Montauk Highway, Amagansett, Suffolk County, New York ("the property") on June 30, 2006 given by decedent Marshall Winston ("decedent") to Washington Mutual Bank, FA ("WAMU"), a predecessor in interest to plaintiff U.S. Bank, National Association, as Trustee, Successor In Interest to Bank of America, National Association, as Trustee, Successor By Merger to LaSalle National Bank, NA, as Trustee for WAMU Mortgage Pass-Through Certificates Series 2006-AR11 Trust ("plaintiff'), to secure a note given to WAMU by decedent of the same date. Although married to defendant Helene Winston, title to the property was only in decedent's name. Decedent defaulted on payments due pursuant to the terms of the mortgage and note, and prior to commencement of the action he passed away. Decedent's will was admitted to probate in the Surrogate Court, Westchester County and defendant Helene Winston was appointed Executrix of his estate. Plaintiff commenced this action by filing of the summons, complaint and notice of pendency with the Suffolk County Clerk on October 9, 2013.
The prior history of this action is more completely set forth in the court's decisions placed on the record after oral arguments on June 30, 2016 (Mot. Seqs. #002 and #003) and April 11, 2019 (Mot. Seqs. #005 and #006), which oral decisions were memorialized by written orders of the same dates, and only issues relevant to the present motion will be further set forth in this decision.
As a result of defendant Helen Winston as Executrix's ("the Estate") cross-motion and opposition (Mot. Seq. #002) to plaintiff's original motion for summary judgment (Mot. #001), plaintiff withdrew that motion and instead moved to amend its complaint to include defendant Helene Winston not only in her representative capacity, but also individually (Mot. Seq. #003). The reason for this appears to have been because the submissions by the Estate sought dismissal of the action on the basis that plaintiff had not named a necessary party, defendant Helene Winston in her individual capacity ("defendant"). In his affirmation counsel then representing the Estate argued that defendant must be named individually as she was the specific devisee of the property, submitting a copy of decedent's will which established that fact. Counsel went on to argue that title in property to a specific devisee passes immediately upon a decedent's death, without need for action by a representative of the Estate, citing case law in support of that argument (see Mot. Seq. #002, defense counsel's affirmation, paragraphs 8 through 13). As stated above, the court held oral argument on Mot. Seq #002 and #003 on June 30, 2016, and in its decision placed on the record defendant's motion to dismiss was denied and plaintiff's motion to amend to include defendant individually was granted. The court also set a discovery schedule, set a date for a certification conference and authorized further summary judgment motions after the completion of discovery and the filing of a note of issue.
After the filing of the note of issue, plaintiff and defendant both filed summary judgment motions (Mot. Seqs. #004 and #005). In its decision after oral argument on April 11, 2019 the court denied defendants' cross-motion and granted plaintiff partial summary judgment dismissing the four defenses raised in the unified answer filed by the Estate and defendant ("defendants") to the amended complaint, their counterclaims, and 21 of their 22 affirmative defenses, setting the remaining 22nd affirmative defense, which raised the claim that plaintiff had not complied with the notice of default required by the mortgage, for a limited issue trial pursuant to CPLR 3212 (g) and § 2218, denying the application to dismiss defendants' answer and to appoint a referee to compute pursuant to RPAPL § 1321. The court also granted plaintiff's application to amend the caption to substitute Mitchell Winston and Edna Winston for the "John Doe" defendants and fixed and set the default of the non-appearing, non-answering defendants, including them.
Additionally, plaintiff's application to file a subsequent motion for summary judgment on the lone issue set for the limited issue trial was denied, but based upon the oral argument and submissions, the court granted the plaintiff the opportunity to move within sixty (60) days to vacate the note of issue and/or withdraw its claim against the Estate. The limited issue trial was scheduled for July 29, 2019, but adjourned as plaintiff filed this motion (Mot. Seq. #006), in compliance with the court's authorization.
Plaintiff now moves seeking the relief indicated above, and defendants file opposition, not filing a cross-motion for summary judgment, or to renew or reargue their prior motion, although defendants' counsel makes references to the fact that the complaint should be dismissed, arguing for the first time that plaintiff's proof in Motion Seq. #004 did not met the prima facie burden in a foreclosure action of establishing proof of decedent's default in payment. The court addresses this issue first, but also notes that pursuant to the order dated August 9, 2019, the court held a conference with both parties on the motion. After that conference plaintiff's counsel submitted a letter to the court, copied to defendants' counsel, making further legal arguments in support of its position and citing case law not previously cited in support of plaintiff's position. The court has not considered that submission in reaching its decision, treating it as a sur-reply.
DEFENDANTS ARGUMENTS FOR DISMISSAL IMPROPER AND WAIVED
At the outset the court notes any request by defendants in their opposition seeking dismissal of the action is procedurally improper as it is not accompanied by a notice of cross motion ( CPLR 2215 ). In the absence of a notice of cross motion, defendants are not entitled to obtain any affirmative relief (see , Lee v. Colley Group McMontebello, LLC , 90 AD3d 1000 [2d Dept 2011] ; DeLorenzo v. Gabbino Pizza Corp. , 83 AD3d 992 [2d Dept 2011] ). The passing reference by defendants' present counsel in the preamble to his affirmation stating that "Upon renewal" the court should grant defendants summary judgment is procedurally insufficient and improper to constitute a motion to renew.
Additionally, the arguments of the defendants made for the first time in opposition to plaintiff's present motion, that the affidavit of plaintiff's representative which established decedent's default in payment in Mot. Seq. # 004 was insufficient hearsay is barred by the doctrine of the "law of the case," were waived and without merit.
The decision of April 11, 2019 found that plaintiff had established the basic elements of a prima facie case for foreclosure: proof of the note, mortgage and decedent's default in payment (see Federal Home Loan Mtge. Corp. v. Karastathis , 237 AD2d 558 [2d Dept 1997] ; Wells Fargo Bank, N.A. v. DeSouza , 126 AD3d 965 [2d Dept 2015] ; Wells Fargo Bank, NA v. Morgan , 139 AD3d 1046 [2d Dept 2016] ). The court notes that neither in the Estate's cross-motion and opposition in Mot. Seq. #002, nor in defendants' cross-motion and opposition in Motion Seq. #005, did defendants raise any claim that decedent was not in default in payment, or that plaintiff had not established proof of decedent's default in payment, nor did they object to the affidavit submitted by plaintiff to establish that default as inadmissible hearsay.
Now, citing a portion of the decision in Bank of New York Mellon v. Gordon, 171 AD3d 197 (2d Dept 2019), defendants argue that the proof submitted by plaintiff in Mot. Seq. #004 to establish decedent's default in payment was inadmissable hearsay because the documents upon which plaintiff's affiant reached that conclusion were not attached to the affidavit. Such an argument is without merit under the facts of this action, even if it had been raised in a proper cross-motion to renew or reargue. Defendants attention is drawn to further language in Bank of New York Mellon v. Gordon , supra at 202:
However, as a general matter, a court should not examine the admissibility of evidence submitted in support of a motion for summary judgment unless the nonmoving party has specifically raised that issue in its opposition to the motion (see Rosenblatt v. St. George Health & Racquetball Assoc. , 119 AD3d at 55, 948 N.Y.S.2d 401), .... "Indeed in civil cases, ‘inadmissible hearsay admitted without objection may be considered and given such probative value as, under the circumstances, it may possess’ " (Rosenblatt v. St. George Health & Racquetball Assoc. , 119 AD3d at 54-55, 948 N.Y.S.2d 401, quoting Jerome Prince, Richardson on Evidence § 8-108 [Farrell 11th ed 2008]; see Matter of Findlay, 253 NY 1, 11, 170 N.E. 471 ; Ford v. Snook , 205 App. Div 194, 198, 199 N.Y.S. 630 aff'd 240 NY 624, 148 N.E.732).
Having failed to raise an objection to the insufficiency of plaintiff's proof of decedent's default in payment based upon hearsay, such objection, as pointed out in Bank of New York Mellon v. Gordon , supra , was waived by defendants and the court found that upon the evidence presented plaintiff had established decedent's default in payment, which along with proof of the note and mortgage establishes plaintiff's basic proof required to foreclose.
Further, the doctrine of the "law of the case" precludes consideration of issues previously waived by defendants embodied in a prior decision of the court and resolved therein (see Martin v. City of Cohes, 37 NY2d 162. 165 [1975]; Madison Acquisition Group, LLC v. 7614 Fourth Real Estate Development, LLC, 134 AD3d 683 [2nd Dept., 2015] ; Certain Underwriters at Lloyd's of London v. North Shore Signature Homes, Inc. , 125 AD3d 799 [2nd Dept., 2015] ; Ahrorgulova v. Mann , 144 AD3d 953 [2d Dept 2016] ; Strujan v Glencord Bldg. Corp. , 137 AD3d 1252 [2d Dept 2016] ; Aurora Loan Servs., LLC v. Dorfman, 170 AD3d 786 [2d Dept 2019] ).
Having failed to either seek leave to re-argue or renew the prior order or to appeal it, no legal basis exists to re-consider that prior determination of the court and defendants' new found claim has been waived.
DISCONTINUANCE AGAINST ESTATE GRANTED
As a plaintiff cannot ordinarily be compelled to litigate, its motion for a voluntary discontinuance should be granted absent special circumstances such as prejudice to the other parties (see Great W. Bank v. Terio , 200 AD2d 608 [2d Dept 1994] ; Citibank v. Nagrotsky , 239 AD2d 456 [2d Dept 1197] ; Wells Fargo Bank, N.A. v. Fisch, 103 AD3d 622 [2d Dept 2013] ; Hurell-Harung v. State , 112 AD3d 1213 [3rd Dept 2013] ; Federal Natl. Mtg. Assoc. v. Biggs , 172 AD3d 1322 [2d Dept 2019] ). The determination of a motion for leave to voluntarily discontinue an action pursuant to CPLR 3217 (b) rests with the sound discretion of the court (see Wells Fargo Bank v. Chaplin , 107 AD3d 881 [2d Dept 2013] ; Emigrant Mortg. Co. v. Carrera, 126 AD3d 853 [2d Dept 2015] ; Kondaur Capital Corp. v. Reilly , 162 AD3d 998 [2d Dept 2018] ).
Here plaintiff seeks an order pursuant to CPLR 3217 (b) granting its application to discontinue the action against the Estate, and in doing so it disavows any claim for a deficiency judgment against the Estate. If its application is granted, plaintiff would not be able to seek a deficiency judgment against defendant or the defaulting defendants, as they were not signatories to the note and therefore not liable under its terms (see PHH Mtge. Corp. v. Davis , 111 AD3d 1110 [2d Dept 2013] ).
Defendants claim two grounds that require denial of plaintiff's application; the first is that the Estate is a necessary party to the action and the second is that defendant would be prejudiced as plaintiff must establish the mailing of the notice of default to decedent required by the mortgage, as raised in the 22nd affirmative defense, the sole issue to be determined at the limited issue trial set by the order of April 11, 2019. Both arguments are without merit.
ESTATE NOT A NECESSARY PARTY
Defendants' argument that the Estate is a necessary party is based upon a claim that title to the property rests in the Estate, and without the Estate plaintiff cannot foreclose. This argument not only flies in the face of the law, but also contradicts defendant's prior sworn statements wherein she attests to being the record owner of the property and the prior arguments and admissions of defendants' counsels that defendant is record owner of the property.
In opposition to plaintiff's original motion for summary judgement (Mot. Seq.#001) and in support of the Estate's cross-motion (Mot. Seq. #002), the Estate's then counsel argued that defendant was a necessary party as she was the specific devisee of the property as set forth in decedent's will, that title to the property passed to her upon decedent's death, citing case law to that effect, and provided a copy of that will as an exhibit to the Estate's submission (see paragraphs 8 through 13 of counsel's affirmation).
In opposition to Mot. Seq. #004, and in support of defendants' cross-motion (Mot. Seq. #005) defendants' new counsel also admitted that defendant was the record owner of the property (see defendants' memorandum of law, page iv, first paragraph) and also submitted defendant's affidavit, acting in her capacity as Executrix, in which she acknowledged that she was the owner of record of the property individually as a result of the decedent's will (see paragraph 3 of her affidavit).
Despite these averments, admissions, prior arguments of counsel and the submission of decedent's will by both parties (filed with the Surrogate Court of Westchester County on February 18, 2011 and upon which letters testamentary were issued to defendant on March 1, 2011), defendants' present counsel now argues that there is no deed of record transferring the title of the property to defendant, and therefore the Estate must be a necessary party even if plaintiff waives its claim for a potential deficiency judgment. This argument has no support in fact or law. In support of his theory, counsel attached as an exhibit to his affirmation a copy of a title report prepared in 2016 addressed to defendants' prior counsel, apparently for a potential "short sale" to a named corporate entity, in which a reference is made to the owner of the property being the "Winston Family." Present counsel can provide no personal knowledge as to the title report, the unidentified title "reporter" provides no affidavit, nor is that person's opinion as to when and to whom title passes under the law of any import.
Title to real property under the will of a decedent, as first argued by defendants, vests in the beneficiary at the moment of the testator's death, and unless otherwise provided in the will, an executrix takes no title to the property of the estate, since title vests in the devisee subject to the necessities of the estate (see Waxson Realty Corp. v. Rothschild , 255 NY 332 [1931] ; In re Seviroli , 31 AD3d 452 [2d Dept 2006] ). As both parties have produced copies of decedent's will, there is no question that title vested in defendant individually upon decedent's passing. There is no proof of any provision "otherwise" in the will, nor of any necessity of the estate that would preclude vesting of title. Defendants' first counsel cited case law establishing the need to make defendant a party individually in Mot. Seq. #002 as owner of record and defendant's own affidavit acknowledges that title was vested in her as "record owner." Defendants' present counsel also admitted that fact. The claim now raised in contradiction to defendants' prior positions that title remains in the Estate, and therefore it is a necessary party that cannot be removed from the case by plaintiff's voluntary discontinuance, is clearly without merit.
DEFENDANT ESTABLISHES NO REAL PREJUDICE FROM A DISCONTINUANCE
Defendant's argument that a voluntary discontinuance of the claim against the Estate would prejudice her based upon her present counsel's attempt to withdraw the prior admissions and acknowledgments that she is record owner is equally without merit. The basis for this argument is the Estate's 22nd affirmative defense that raises a claim that plaintiff's failed to prove the mailing to decedent of a notice of his default in payment pursuant to the terms of the mortgage. This is a contractual condition precedent that is personal to the decedent and the Estate. Although raised as an affirmative defense in the unified answer filed by defendants, the claim is only applicable to the Estate as representative of decedent, and not another party. A defense available to a mortgagor that arises from a statute or condition of the mortgage are personal to the mortgagor, and not available to a co-defendant, even one who takes title from the mortgagor (see Citimortgage, Inc. v. Etienne , 172 AD3d 808 [2d Dept 2019] ; Ashkenazy Acquisition Corp. v. Rela Realty Corp. , 296 AD2d 332 [2d Dept 2002] ; Greene v. Rachlin , 154 AD3d 814 [2d Dept 2017] ). Therefore, as such defense was never available to defendant individually, she will not be prejudiced by its unavailability upon the granting of the discontinuance of the claim against the Estate.
The facts of this case differ from those in the case cited by defendants in support of their argument that the court should not exercise its discretion and grant the discontinuance because defendant is prejudiced, GMAC Mortgage, LLC v. Bisceglie , 109 AD3d 874 (2d Dept 2013). In that case plaintiff sought to vacate the order of summary judgment it had obtained and discontinue the action dishonestly claiming the reason for this was there was an issue with the default notification. When defendant-mortgagor opposed the application claiming personal knowledge that the discontinuance was actually sought because of an investigation into "robo-signing" of the documents submitted by plaintiff to wrongfully obtain summary judgment, plaintiff failed to contest that claim. Observing plaintiff's failure to deny the contentions of defendant-mortgagor, the trial court denied discontinuance. The Appellate Division, Second Department, affirmed the trial court's exercise of its discretion based upon plaintiff's failure to refute the claims of "robo-signing," indicating that such conduct was to avoid the adverse results of the "robo-signed" documents falsely submitted to obtain summary judgment and that defendant had been prejudiced to the extent of her expenses in defending the invalid action. Similar results were reached in Maranelli v. Wimmer , 139 AD3d 914 (2d Dept 2016), Blauvelt Mini -Mall, Inc. v. Town of Orangetown , 158 AD3d 678 (2d Dept 2018) and Yonkers Firefighters v. City of Yonkers , 165 AD3d 816 (2d Dept 2018) where the courts found improper or illegitimate reasons for a plaintiff's attempt to obtain a voluntary discontinuance which prejudiced the sole defendant in each case.
No such claims are raised here, at best defendants could claim that plaintiff may not be able to sustain its proof to establish compliance with the mailing of a notice of default to decedent, affecting only the claim against the Estate. But as indicated above, as record owner who took title subject to the mortgage, defendant cannot claim this contractual condition precedent which is personal to the decedent and the Estate. It is not a defense for defendant, nor is it a systemic fraud or improper conduct being perpetrated upon the court and a single defendant to obtain an unfair advantage. Unlike those cases cited in the proceeding paragraph, plaintiff here only seeks a voluntary discontinuance against one answering defendant, the Estate, and can maintain a cause of action against defendant as the record owner, foreclosing the mortgage which is in default by waiving the claim for a deficiency judgment which would only be available against the Estate. Once a mortgagor has transferred title to a non-mortgagor, even by a transfer set in place through a will by operation of law upon his death, the mortgagor, or his estate representative, is no longer a necessary party to the foreclosure, absent a claim for a deficiency judgment (see Federal National Mtge. Assoc. v. Connelly , 84 AD2d 805 [2d Dept 1981] ; DLJ Mtge. Capital, Inc. v. 44 Brushy Neck, Ltd. , 51 AD3d 857 [2d Dept 2008] ).
Whether plaintiff's decision to seek discontinuance is brought about because it feels that it cannot establish the contractual condition precedent against the Estate, because it decided to forgo the time and expense that such proof would require, including a trial, because it determined that to proceed further in this manner merely to obtain a deficiency judgment that it could not expect to collect from the Estate was not cost effective when it could foreclose the mortgage and obtain reasonable relief, or for some other business reason, it does not appear to this court to be the illegitimate or improper consequences facing the courts in the previously cited cases. In all of those cases, plaintiffs acted by subterfuge in an attempt to unfairly gain an advantage against the sole available defendant and caused those defendants prejudice at least in the costs of defending the actions. In none of those cases, if a discretionary voluntary discontinuance had been granted pursuant to CPLR 3217 (b), could a valid cause of action continue against a valid defendant as here. Here, defendant has not suffered the prejudice of having to expend money on defending the discontinued claim, as the expenses of defense were there no matter the capacity she was defending under.
CPLR 3217 (b) allows the court the discretion to grant a voluntary discontinuance upon what it finds to be proper terms and conditions. The court finds that the under the circumstances of this case, it is appropriate to grant plaintiff's request for a voluntary discontinuance pursuant to CPLR 3217 (b) against the Estate as it disavows all claims to a deficiency judgment pursuant to RPAPL § 1371, upon the condition that such discontinuance is with prejudice as to the Estate.
Upon the granting of the discontinuance, plaintiff's complaint is appropriately amended to remove any claim for a deficiency judgment against the remaining defendants.
JUDGMENT GRANTED FOR PLAINTIFF
As the action is discontinued against the Estate, there is no need for the limited issue trial set by the decision and order of April 11, 2019. That trial was to determine whether defendant's 22nd affirmative defense raising the claim that plaintiff failed to comply with the contractual condition precedent in the mortgage of a notice of default should be dismissed. As explained above, that defense was personal to the decedent as mortgagor, and passed to his Estate. As the claim against the Estate has been extinguished, so has the need to determine the issues involving this affirmative defense. As the decision on April 11, 2019 resolved all other issues raised in opposition to plaintiff's motion for summary judgment in plaintiff's favor, and had already fixed and set the default of all non-answering, non-appearing defendants, the court now grants judgment to plaintiff, dismissing and striking defendant's answer and grants plaintiff's application for the appointment of a referee to compute pursuant to RPAPL § 1321.
Accordingly, that portion of plaintiff's present motion seeking to vacate the note of issue, to renew its motion for summary judgment and to set the default of the non-appearing, non-answering defendants are denied as moot.
Plaintiff is to submit an order of reference pursuant to RPAPL § 1321 in conformity with the terms of this decision within forty-five (45) days of the date of this order.
A compliance conference is scheduled for February 24, 2019 at 9:30 AM to monitor the progress of this action. If a judgment of foreclosure and sale is filed with the court before that date, no appearance will be necessary.
This constitutes the decision and judgment of the court.