Opinion
2016-0140
08-28-2019
U.S. BANK TRUST, N.A., AS TRUSTEE FOR LSF9 MASTER PARTICIPATION TRUST, Plaintiff, v. David CARPENTIER a/k/a David L. Carpentier; Beneficial Homeowner Service Corporation; Capital One Bank (USA), N.A., Defendants.
McCabe, Weisberg & Conway, P.C., New Rochelle (Scali Riggs and Franklin K. Chiu of counsel), for plaintiff. Legal Aid Society of Northeastern New York, Inc., Plattsburgh (Daniel Alley of counsel), for defendant David Carpentier a/k/a David L. Carpentier.
McCabe, Weisberg & Conway, P.C., New Rochelle (Scali Riggs and Franklin K. Chiu of counsel), for plaintiff.
The Court notes that Cohn & Roth, LLC was substituted as counsel for plaintiff subsequent to the filing of the motion under consideration herein.
Legal Aid Society of Northeastern New York, Inc., Plattsburgh (Daniel Alley of counsel), for defendant David Carpentier a/k/a David L. Carpentier.
Robert J. Muller, J.
The facts of this matter will not be repeated at length as the parties' familiarity with the pleadings and this Court's Decision and Order of May 1, 2018 is assumed. Briefly stated, defendant Beneficial Homeowner Service Corporation (hereinafter Beneficial) issued a loan to defendant David Carpentier a/k/a David L. Carpentier (hereinafter defendant) in the amount of $82,947.10, which loan was evidenced by a promissory note and secured by a mortgage on real property located at 8851 Route 9 in the Town of Chazy, Clinton County. Defendant then defaulted on his monthly payments in April 2015. By assignment dated January 12, 2016 and recorded on January 19, 2016, the mortgage was transferred to plaintiff by Caliber Home Loans, Inc. (hereinafter Caliber), as attorney in fact for Beneficial.
Plaintiff commenced this foreclosure action on February 5, 2016 and defendant then served an answer on March 16, 2016 asserting four affirmative defenses: (1) plaintiff lacks standing; (2) the complaint fails to state a cause of action; (3) plaintiff violated the Truth in Lending Act; and (4) plaintiff violated the notice requirements of RPAPL 1304. Defendant simultaneously served discovery demands. Plaintiff thereafter moved for summary judgment, which motion was denied based upon a finding that plaintiff "failed to demonstrate its standing" ( 59 Misc 3d 1219[A], 2018 NY Slip Op 50629[U], *2 [Sup Ct, Clinton County 2018]; see Wells Fargo Bank, N.A. v. Walker , 141 AD3d 986, 987 [2016] ; Deutsche Bank Natl. Trust Co. v. Monica , 131 AD3d 737, 738 [2015] ; Wells Fargo Bank, NA v. Ostiguy , 127 AD3d 1375, 1376 [2015] ). This Court further stated as follows:
"To the extent that plaintiff has failed to satisfy its initial burden of demonstrating its entitlement to summary judgment, there is no need to consider defendant's opposition papers. Suffice it to say, nevertheless, that were the papers to be considered defendant has succeeded in raising a triable issue of fact. Specifically, defendant contends that summary judgment must be denied because he served discovery demands on plaintiff[,] many of which sought information on the issue of standing[,] and plaintiff has yet to respond. Where, as here, it appears that additional discovery may yield material and relevant evidence, then summary judgment must be denied" ( 2018 NY Slip Op 50629[U], at *2 [citation omitted]; see Hobler v. Hussein , 111 AD3d 1006, 1009 [2013] ; Saratoga Assoc. Landscape Architects, Architects, Engrs. & Planners, P.C. v. Lauter Dev. Group , 77 AD3d 1219, 1222 [2010] ).).
Presently before the Court is plaintiff's second motion for summary judgment as against defendant. Plaintiff also seeks a default judgment as against Beneficial and defendant Capital One Bank (USA), N.A. (hereinafter Capital One) — both of which were named as necessary parties under RPAPL 1311 (3) — and the appointment of a referee, these latter requests for relief having also been denied by the Court in its earlier decision. Each aspect of the motion will be addressed ad seriatim .
Turning first to that aspect of the motion which seeks summary judgment, plaintiff has undisputedly produced evidence of the mortgage, the unpaid note and defendant's default (see Wells Fargo Bank, N.A. v. Walker , 141 AD3d at 987 ; Deutsche Bank Natl. Trust Co. v. Monica , 131 AD3d at 738 ; Wells Fargo Bank, NA v. Ostiguy , 127 AD3d at 1376 ). Further, defendant has not opposed summary judgment with respect to his second, third and fourth affirmative defenses and in fact agreed to withdraw these affirmative defenses during oral argument. To that end, plaintiff's entitlement to summary judgment once again hinges upon whether it has successfully established its standing (see Wells Fargo Bank, N.A. v. Walker , 141 AD3d at 987 ; Deutsche Bank Natl. Trust Co. v. Monica , 131 AD3d at 738 ; Wells Fargo Bank, NA v. Ostiguy , 127 AD3d at 1376 ).
"A plaintiff has standing in a mortgage foreclosure action ‘where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced’ " ( Chase Home Fin., LLC v. Miciotta , 101 AD3d 1307, 1307 [2012], quoting Bank of NY v. Silverberg , 86 AD3d 274, 279 [2011] ; accord Wells Fargo Bank, N.A. v. Wine , 90 AD3d 1216, 1217 [2011] ; CitiMortgage, Inc. v. Rosenthal , 88 AD3d 759, 761 [2011] ). "Where a mortgage is represented by a bond or other instrument, an assignment of the mortgage without assignment of the underlying note or bond is a nullity" ( U.S. Bank, N.A. v. Collymore , 68 AD3d 752, 754 [2009] ; see Merritt v. Bartholick , 36 NY 44, 45 [1867] ; Kluge v. Fugazy , 145 AD2d 537, 538 [1988] ). "Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident" ( U.S. Bank N.A. v. Carnivale , 138 AD3d 1220, 1221 [2016], quoting Onewest Bank, F.S.B. v. Mazzone , 130 AD3d 1399, 1400 [2015] ; accord Bank of NY Mellon v. Rutkowski , 148 AD3d 1341, 1341-1342 [2017] ; U.S. Bank, N.A. v. Collymore , 68 AD3d at 754 ).
In considering the issue of standing relative to plaintiff's first motion for summary judgment, the Court stated as follows:
"[P]laintiff has submitted the affidavit of David Nilsen to establish its standing. Nilsen does not list his job title but does state that, ‘[i]n the regular performance of [his] job functions, [he is] familiar with [the] business records maintained by Caliber ..., as attorney in fact and servicer for [plaintiff] for the purpose of servicing mortgage loans.’ According to Nilsen, ‘Wells Fargo Bank, N.A., the Custodian for [plaintiff,] received physical possession of the note on December 8, 2015, which is memorialized by the assignment of mortgage dated January 12, 2016 from Beneficial ... to [plaintiff].’ Plaintiff has also submitted a copy of the note — with an allonge endorsed to plaintiff from Caliber as attorney in fact for Beneficial and an allonge endorsed to blank from Caliber as attorney in fact for [plaintiff] — as well as copies of the mortgage and the assignment of mortgage.
"With that said, plaintiff has failed to submit the power of attorney and servicing agreement whereby it has authorized Caliber to act as its attorney in fact and servicer. It is therefore unclear what — if any — authority Nilsen had to execute an affidavit in support of the motion. Plaintiff has also failed to submit any documents whereby Wells Fargo Bank, N.A. ... is authorized to act as custodian for plaintiff. As a result, it is unclear whether plaintiff received physical possession of the note as Nilsen asserts. Indeed, while Nilsen indicates that transfer of the note was somehow memorialized by the assignment of mortgage, the assignment contains no reference whatsoever to the note. Rather, it transfers only the mortgage .... Finally, plaintiff has failed to establish that it remained in possession of the note at the time of commencement of the action — Nilsen makes no statement whatsoever in this regard" ( 2018 NY Slip Op 50629[U], at 2-3).
The Court further stated that, "[w]hile the copy of the note with allonge[ ] could perhaps establish that plaintiff is the holder of the note, the allonge[ was] executed by Caliber as attorney in fact for Beneficial and the record contains no power of attorney whereby Beneficial authorized Caliber to act as its attorney in fact."
Here, plaintiff has submitted the very same affidavit of David Nilsen, this time supplemented by the affidavit of Kolette Modlin, an "Authorized Officer [of] Caliber ..., Attorney-in-Fact for [plaintiff] for the loan at issue in this proceeding." Modlin states as follows:
"In the regular performance of my job functions, I have access to and am familiar with business records maintained by ... Caliber ... for the purpose of servicing mortgage loans. I have knowledge of the manner in which these business records are created. These records ... are (a) made at or near the time of the occurrence of the matters set forth by, or from information provided by, persons with knowledge of the activity and transactions reflected in such records; and (b) kept as a regular practice in the ordinary course of business conducted by ... Caliber .... It is the regular practice of ... Caliber ... to make such records. To the extent records related to the [l]oan come from another entity, ..., those records were received by ... Caliber in the ordinary course of its business, have been incorporated into and maintained as part of ... Caliber['s] business records, and have been relied on by ... Caliber ...."
Modlin further states that
"[a]fter [defendant] executed the [n]ote, the original ... was delivered to Wells Fargo Bank, N.A. as custodian.... Based upon a review of the books and records of Caliber ..., Wells Fargo Bank, N.A. received physical possession of the [n]ote on December 8, 2015, which was prior to commencement of the instant action .... Wells Fargo Bank, N.A. remained in possession of the [n]ote at [the] time of commencement."
Plaintiff has this time submitted a copy of an August 5, 2014 limited power of attorney whereby Caliber is authorized to act as its attorney in fact. Plaintiff has also submitted a copy of a "Securitization Servicing Agreement" (hereinafter Servicing Agreement) dated July 17, 2014, contending that such Servicing Agreement provides proof that Caliber is authorized to act as servicer for plaintiff. This Servicing Agreement lists Volt LVIII, LLC as "issuer," Wells Fargo as "paying agent," U.S. Bank National Association as "indenture trustee," LSF9 Master Participation Trust as "participation agent" and Caliber as "servicer," and pertains to both "the ‘Original Group 24 Mortgage Loans ’ " and " ‘Original Group 27 Mortgage Loans ’ " (emphasis in original). Significantly, plaintiff has submitted only the first six pages of the Servicing Agreement, together with the signature pages, leaving it unclear whether the loan at issue here is one of the original group 24 or 27 mortgage loans.
Insofar as Wells Fargo Bank, N.A. (hereinafter Wells Fargo) acting as custodian of the note is concerned, plaintiff submits a copy of Caliber's "Fiserv record confirming" that the note was delivered to Wells Fargo, which record is attached to Modlin's affidavit. Plaintiff provides no explanation as to what a Fiserv record is, but review of this record reveals that it is computer generated and identifies defendant in the field labeled "primary name," LSFS Master Participation Trust in the field labeled "Inv[estor] Name" and Wells Fargo in the field labeled "document custodian." There is no date as to when the document was delivered to Wells Fargo, nor is there anything to indicate that the document referenced in the record is a note.
Under the circumstances the Court finds that plaintiff has once again failed to establish its standing as a matter of law (see U.S. Bank Trust, N.A. v. Moomey-Stevens , 168 AD3d 1169, 1172-1173 [2019] ; Wells Fargo Bank, N.A. v. Walker , 141 AD3d at 987 ; Deutsche Bank Natl. Trust Co. v. Monica , 131 AD3d at 738 ; Wells Fargo Bank, NA v. Ostiguy , 127 AD3d at 1376 ). While plaintiff has now submitted a power of attorney whereby Caliber was authorized to act as attorney in fact for plaintiff, it still has not submitted a power of attorney whereby Caliber was authorized to act as attorney in fact for Beneficial. As such, the allonge to the note endorsed to plaintiff from Caliber as attorney in fact for Beneficial remains insufficient to establish standing. Further, insofar as the Servicing Agreement is incomplete and fails to identify the so-called original group 24 and 27 mortgage loans covered by the Agreement, it remains unclear whether Nilsen — and now Modlin — have authority to execute affidavits in support of the motion. Indeed, the limited power of attorney expressly states that the "documents described [therein] may only be executed and delivered by such [a]ttorneys-[i]n-[f]act if such documents are required or permitted under the terms of the related servicing agreements ...."
The limited power of attorney includes the execution of documents necessary to "foreclos[e] on propert[ies] under the Security Instruments by judicial or non-judicial foreclosure."
Moreover, even if Nilsen and Modlin are authorized to execute affidavits, their affidavits fail to clarify how Wells Fargo came to act as custodian of the note. Indeed, aside from the Servicing Agreement identifying Wells Fargo as payment agent — whatever that term might mean — there is nothing else in the record describing its relationship with either plaintiff or Caliber. Further — and as noted above — it is not even clear that the loan under consideration here is covered under the Servicing Agreement. Finally, Nilsen and Modlin's representations appear to contradict the complaint, which alleges that the "[n]ote was ... delivered to [p]laintiff prior to commencement of [the] action."
To the extent that plaintiff has again failed to satisfy its initial burden of demonstrating its entitlement to summary judgment, there is no need to consider defendant's opposition papers (see Vogler v. Perrault , 149 AD3d 1298, 1299 [2017] ). With that said, were the papers to be considered, defendant has succeeded in raising a triable issue of fact. Specifically, plaintiff still has not responded to defendant's discovery demands. While plaintiff contends that no response is necessary because defendant has failed to offer an "evidentiary basis ... to suggest that discovery may lead to relevant evidence," such contention is unavailing. Given plaintiff's inability to establish its standing not once — but now twice — there certainly appears to be an evidentiary basis to suggest that discovery may lead to relevant evidence on this particular issue.
Based upon the foregoing analysis the aspect of plaintiff's motion seeking summary judgment is denied (see Hobler v. Hussein , 111 AD3d 1006, 1009 [2013] ; Saratoga Assoc. Landscape Architects, Architects, Engrs. & Planners, P.C. v. Lauter Dev. Group , 77 AD3d 1219, 1222 [2010] ).
Turning now to that portion of the motion which seeks a default judgment as against Beneficial and Capital One, plaintiff has failed to submit an "affidavit made by the party," as required under CPLR 3215 (f). Indeed, without a complete copy of the Servicing Agreement whereby Caliber was authorized to act as servicer for plaintiff, both Nilsen and Modlin's affidavits are insufficient (see Lasalle Bank N.A. v. Smith , 26 Misc 3d 1239[A], 2010 NY Slip Op 50470[U], *2 [Sup Ct, Kings County 2010]; NYCTL 2004-A Trust v. Alessandro , 25 Misc 3d 1220[A], 2009 NY Slip Op 52204[U], *2 [Sup Ct, Kings County 2009]; NYCTL 2005-A Trust v. Davis , 23 Misc 3d 503, 506 [Sup Ct, Kings County 2009] ). That aspect of the motion seeking a default judgment is therefore denied.
Finally, because plaintiff has failed to demonstrate its entitlement to summary judgment and discovery remains outstanding, plaintiff is not entitled to the appointment of a referee at this time.
The parties are hereby directed to confer and complete a Preliminary Conference Stipulation and Order, which form is available online at http://www.nycourts.gov/courts/4jd/motion-terms-rules.shtml, and then submit the same to the Court within thirty (30) days of the date of this Decision and Order.
Therefore, having considered the "Attorney Affirmation Regarding CPLR Rule 3408 Settlement Conferences" of Scali Riggs, Esq., dated October 30, 2018, "Attorney Affirmation in Support" of Scali Riggs, Esq. with Exhibits "A" through "D" attached thereto, dated October 30, 2018, "Memorandum of Law in Support" of Scali Riggs, Esq., dated October 30, 2018, "Affidavit as to Military Service" of Kamiesha Fairclough with attachment thereto, sworn to November 1, 2018, "Affidavit of Possession" of Kolette Modlin with Exhibits "A" through "C" attached thereto, sworn to October 11, 2018, "Affidavit" of David Nilsen with Exhibits "A" through "K" attached thereto, sworn to May 18, 2017, all submitted in support of the motion; "Affirmation" of Daniel Alley, Esq. with Exhibits "A" through "C" attached thereto, dated January 7, 2019, submitted in opposition to the motion; and "Affirmation in Reply" of Franklin K. Chiu, Esq. with Exhibits "A" through "D" attached thereto, dated March 20, 2019, submitted in further support of the motion; and oral argument having been held on August 23, 2019 with Jacob Painter, Esq. appearing as local counsel on behalf of plaintiff and Daniel Alley, Esq. appearing on behalf of defendant, it is hereby
ORDERED that plaintiff's motion is granted to the extent that defendant's second, third and fourth affirmative defenses are dismissed, which affirmative defenses were withdrawn by counsel for defendant during oral argument in any event; and it is further
ORDERED that plaintiff's motion is otherwise denied; and it is further
ORDERED that the parties shall confer and complete a Preliminary Conference Stipulation and Order, which form is available online at http://www.nycourts.gov/courts/4jd/motion-terms-rules.shtml, and then submit the same to the Court within thirty (30) days of the date of this Decision and Order.
The above constitutes the Decision and Order of this Court.
The original of this Decision and Order has been filed by the Court together with the Notice of Motion dated October 30, 2018 and the submissions enumerated above. Counsel for defendant is hereby directed to obtain a filed copy of the Decision and Order for service with notice of entry in accordance with CPLR 5513.