Opinion
No. 6355–09.
06-28-2010
WELLS FARGO BANK, N.A., 3476 Stateview Boulevard Ft. Mill, SC 29715, Plaintiff, v. Susan L. WINE, Cornwall Builders Corp., People of the State of New York, Wells Fargo Bank, N.A., John Doe (Said name being fictitious, it being the intention of Plaintiff to designate any and all occupants of premises being foreclosed herein, and any parties, corporations or entities, if any, having or claiming an interest or lien upon the mortgaged premises), Defendants Frank G. Reiss Appraisals, Inc., Commonwealth Land Title Insurance Company, Zale Stevens, Inc. John Does (Said names being fictitious, it being the intention of Defendant Wine to designate any and all parties, corporations, and entities, who acted as Investors in Certificates, Mortgage Aggregators, Investment Bankers, and others with like interest in the subject mortgage and note as further set forth hereinbelow), Third–Party Defendants.
Steven J. Baum, P.C., Buffalo, Attorneys for Plaintiff Wells Fargo Bank, N.A. L'Abbate, Balkan, Colavita & Contini, LLP, Scott E. Kossove, Esq., of Counsel, Garden City, Attorneys for Third–Party Defendant Frank G. Reiss Appraisals, Inc. Bartlett, Pontiff, Stewart & Rhodes, P.C., Karla Williams Buettner, Esq., of Counsel, Glens Falls, Attorneys for Third–Party Defendant Commonwealth Land Title Insurance Company. Susan L. Wine, New Paltz, Defendant/Third–Plaintiff Pro Se. Robert A. Ransom, New Paltz, Defendant, pro se.
Steven J. Baum, P.C., Buffalo, Attorneys for Plaintiff Wells Fargo Bank, N.A.
L'Abbate, Balkan, Colavita & Contini, LLP, Scott E. Kossove, Esq., of Counsel, Garden City, Attorneys for Third–Party Defendant Frank G. Reiss Appraisals, Inc.
Bartlett, Pontiff, Stewart & Rhodes, P.C., Karla Williams Buettner, Esq., of Counsel, Glens Falls, Attorneys for Third–Party Defendant Commonwealth Land Title Insurance Company.
Susan L. Wine, New Paltz, Defendant/Third–Plaintiff Pro Se.
Robert A. Ransom, New Paltz, Defendant, pro se.
Opinion
MICHAEL H. MELKONIAN, J.
Third–Party Defendants Commonwealth Land Title Insurance Company (hereinafter “Commonwealth”) and Frank G. Reiss Appraisals, Inc. (hereinafter “Reiss”) move for an order dismissing the complaint against them pursuant to CPLR § 3211(a)(7). Pro Se Defendant/Third–Party Plaintiff Susan L. Wine (hereinafter “Wine”) moves, inter alia, for an order dismissing plaintiff Wells Fargo Bank, N.A.'s (hereinafter “Wells Fargo”) complaint. Defendant Robert A. Ransom (hereinafter “Ransom”) moves for an order to compel Wells Fargo to accept his answer to the complaint.
This is an action for the foreclosure of a mortgage in which Wells Fargo, the lender, claims that Wine, the borrower, is in default as a result of her having failed to make the required payments. To the extent relevant, Wells Fargo's loan, in the amount of $636,000.00, is secured by a mortgage on Wine's property at 515 Albany Post Road, New Paltz, New York. The loan agreement was executed on or about January 11, 2007. The note was recorded on or about April 11, 2007. This foreclosure action was commenced by the filing and service of a summons and complaint on or about December 22, 2009.
On February 15, 2010, Wine served what she purports to be a motion to dismiss Wells Fargo's complaint. Wine also included an answer to the complaint. Wine's answer includes counterclaims and a purported third-party complaint against, inter alia, Reiss and Commonwealth. The third-party complaint alleges, inter alia, violations of the Civil Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USC § 1962 ), fraudulent misrepresentation and civil conspiracy.
As is relevant, Wine alleges that Commonwealth and Reiss collectively engaged in a conspiracy by, inter alia, providing a “bogus appraisal” of the property which is the subject of this action and a “bogus title insurance policy” on the property. It is further claimed that Wells Fargo, Commonwealth and Reiss collectively engaged in a “fraudulent scheme[s] for improper use of * * * Wine's identity, negligent and/or intentional misrepresentation of appraised fair market value upon which * * * Wine was contractually bound to reply and factually entitled to rely, fraud in the inducement, fraud in the execution, and breaches of contractual and fiduciary obligations * * * “.
On or about February 15, 2010, Ransom attempted to serve an answer to the complaint, but it was rejected by Wells Fargo as untimely.
The Court finds that it lacks jurisdiction over Commonwealth as a result of Wine's failure to properly serve Commonwealth. The Court therefore grants Commonwealth's motion to dismiss Wine's complaint against Commonwealth to the extent of holding that Wine is not entitled to obtain relief from or against Commonwealth.
Turning to Reiss' motion to dismiss, on a CPLR 3211 § (a)(7) motion to dismiss for failure to state a claim, the Court may not inquire into whether the moving party has defenses (Unadilla Silo Co., Inc. v. Ernst & Young, 234 A.D.2d 754 [3rd Dept.1996] ) or search the record to address the merits of the cause of action. The Court's inquiry on these motions is limited to deciding whether the facts as alleged in the complaint fit within a cognizable legal theory (Maas v. Cornell University, 94 N.Y.2d 87 [1999] ; Cron v. Hargro Fabrics, 91 N.Y.2d 362 [1998] ). When doing so, the Court must afford the complaint a liberal construction, accept as true the allegations contained therein, and accord the proponent of the cause of action the benefit of every favorable inference and cognizable legal theory (Skibinsky v. State Farm Fire & Cas. Co., 6 AD3d 975 [3rd Dept.2004] ; 1455 Washington Ave. Assoc. v. Rose & Kiernan, Inc., 260 A.D.2d 770 [3rd Dept.1999] ). Further, whatever can reasonably be implied from allegations in the pleadings and plaintiff's supporting affidavits must be deemed to be true (Cron v. Hargro Fabrics, 91 N.Y.2d 362 [1998] ; Korenman v. Zaydelman, 237 A.D.2d 711 [3rd Dept.1997] ).
Wine's fourth cause of action as against Commonwealth and Reiss rests on allegations of fraudulent misrepresentation (Swersky v. Dreyer and Traub, 219 A.D.2d 321 [1st Dept.1996] ). The elements of a cause of action for fraudulent misrepresentation are (1) a material false representation, (2) intent to deceive, (3) reasonable reliance on the misrepresentation, and (4) damage (Vermeer Owners, Inc. v. Guterman, 78 N.Y.2d 1114 [1991] ; Swersky v. Dreyer and Traub, 219 A.D.2d 321 [1st Dept.1996] ). In order to avoid dismissal under CPLR § 3211(a)(7), it is also required that each of these elements be supported by factual allegations sufficient to satisfy the “detail” requirement of CPLR § 3016(b) (Williams v. Upjohn Health Care Services, Inc., 119 A.D.2d 817 [2nd Dept.1986] ). CPLR § 3016(b) mandates that where a cause of action is based upon “misrepresentation, fraud * * * the circumstances constituting the wrong shall be stated in detail.”
In this case, the allegations of fraud in Wine's purported third-party complaint are deficient as against both Commonwealth and Reiss. This cause of action, even read in a light most favorable to Wine, fails to satisfy the specificity and particularity requirements of CPLR §§ 3013 and 3016(b). Notable in this regard is the absence of any specific allegation to support the claims, e.g., of misrepresentation or fraudulent conduct, as against these particular parties. The mere claim of a party's involvement in a purported fraudulent transaction cannot satisfy the pleading requirements of a cause of action for fraud (see, CPLR § 3016[b] ; Old Republic National Title Insurance Co. v. Cardinal Abstract Corp., 14 AD3d 678, 680 [2nd Dept.2005].
Under such circumstances, Wine has failed to state a cause of action against Reiss based upon fraud.
As for the allegations of Commonwealth and Reiss' involvement in a civil conspiracy to commit fraud (count seven of Wine's complaint), said cause of action must also be dismissed. While Wine alleges that Commonwealth and Reiss acted in concert with each other and with Wells Fargo to defraud her and uses the word “conspiracy,” this Court does not perceive said allegations as alleging a distinct cause of action for conspiracy, but rather only re-alleging Wine's cause of action sounding in fraud. Since the substantive claim of fraud has been found wanting, the cause of action predicated upon the same parties' alleged conspiracy to commit that fraud should also be dismissed (Linden v. Moskowitz, 294 A.D.2d 114 [1st Dept.2002], lv. denied, 99 N.Y.2d 505 [2003] ). In fact, New York refuses to recognize civil conspiracy to commit a tort as an independent cause of action (Salvatore v. Kumar, 45 AD3d 560 [2nd Dept.2007] ).
Wine's eighth cause of action also sounds in “fraud” but it states that it was brought for violations of the Civil RICO Act. Wine alleges, in a conclusory fashion, that Commonwealth and Reiss, along with Wells Fargo, committed “predetermined acts and conduct specifically designed to defraud [Wine],” that they participated in an “enterprise” to “perpetrate a fraud” upon her and that she sustained “damages” as a result of their RICO violations.
In order to sustain a civil RICO claim, a party is required to allege that the multiple predicates constitute a pattern of racketeering activity (HJ Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 250 [1989] ). Further, to allege a pattern of racketeering activity, a party “must show that the racketeering predicates are related, and that they amount to or pose a threat of continued criminal activity” (HJ Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 239 [1989] ). Although civil liability may be predicated upon a violation of the RICO statute (18 USC § 1964 [c] ), civil RICO claims are subject to heightened pleading requirements (Besicorp Ltd. v. Kahn, 290 A.D.2d 147, 151 [3rd Dept.2002], leave denied 98 N.Y.2d 601 [2002] ).
Here, Wine's pleading fails to satisfy those requirements. Without addressing every argument asserted by Reiss in support of its request for dismissal of this cause of action, the Court grants the motion to dismiss this claim. First, Wine's pleading lacks the required specificity in tying Commonwealth and Reiss to the alleged RICO violations and/or to any alleged pattern of “racketeering activity.” In fact, a review of the allegations in Wine's complaint pertaining to Commonwealth and Reiss confirms that the complaint fails to attribute specific misrepresentations or omissions to Commonwealth and Reiss in either the RICO or the fraud claims to support either of these causes of action. Nor does the complaint plead with sufficient particularity the alleged predicate acts giving rise to her RICO cause of action (Besicorp Ltd. v. Kahn, 290 A.D.2d 147, 151 [3rd Dept.2002], leave denied 98 N.Y.2d 601 [2002] ). The complaint contains, at most, rambling allegations suggesting that Commonwealth and Reiss falsified loan documents.
Moreover, Wine's allegation that Wells Fargo, Commonwealth and Reiss constituted an “enterprise,” “with the aim and objective * * * to perpetrate a fraud upon [her]” is merely conclusory and lacks any factual support relating to their organization, structure or whether they functioned as a unit (First Capital Asset Management, Inc. v. Satinwood, Inc., 385 F3d 159, 175 [2nd Cir.2004] ).
Because Wine's eighth cause of action contains insufficient factual allegations to show a pattern of racketeering activity, it fails to state a civil RICO cause of action (HJ Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229 [1989] ; Simpson Elec. Corp. v. Leucadia, Inc., 72 N.Y.2d 450 [1988] ; CFJ Assoc. of N.Y. v.. Hanson Indus., 274 A.D.2d 892, 896 [3rd Dept.2000] ; United Knitwear Co., Inc. v. North Sea Ins. Co., 203 A.D.2d 358 [2nd Dept.2004] ).
Accordingly, Reiss' motion to dismiss Wine's complaint is granted.
The Court turns next to Ransom's motion to compel Wells Fargo to accept his January 9, 2010 answer and his request for costs associated with his motion.
As stated before, on December 17, 2009, Wells Fargo commenced this action against the defendants in this mortgage foreclosure action. The summons and complaint was served upon defendants, by personal delivery, directly to Ransom on December 22, 2009. The time for Ransom to answer the complaint expired on January 11, 2010 (CPLR § 3012[a] ). There was no extension of time to answer requested by or granted to Ransom.
Pursuant to CPLR § 3012(d), the Court may extend the time to appear or plead, or compel the acceptance of a pleading untimely served, upon such terms as may be just and upon a showing of reasonable excuse for delay or default. To that end, “[w]hether there is a reasonable excuse for a default is a discretionary, sui generis determination to be made by the court based on all relevant factors, including the extent of the delay, whether there has been prejudice to the opposing party, whether there has been willfulness, and the strong public policy in favor of resolving cases on the merits” (Rickert v. Chestara, 56 AD3d 941 [3rd Dept., 2008], citing Harcztark v. Drive Variety, Inc., 21 AD3d 876, 876–877 [2nd Dept., 2005] ).
There is no proposed answer contained in the Ransom's moving papers.
Ransom concedes that there was a default in answering the summons and complaint. Ransom's explanation for his default as set forth in his affidavit consists of the following conclusory statements:
“5.On January 8, 2010, my wife, a pro se defendant, emailed the Plaintiff's attorney in an effort to ascertain the return date and possibly to get an extension. If such attorney's intention was to utilize January 11, 2010, as the return date for the unnamed and unserved John Doe Defendant who answered the door and accepted the summons intended for his wife, me, then he had the opportunity to make that clear in his return email to her. Instead he was as clear that the return date on the Complaint was February 7.
6.On January 29, 2010, an extension to February 12th was agreed to by the Plaintiff's attorney.
9.For all the chatter of the county, state and federal governments about helping homeowners stay in their homes, prior to receiving the summons on December 22, 2009, my wife spent 15 months trying to get someone related to the Plaintiff to negotiate with her concerning her mortgage, to no avail. That attitude is consistent with the behavior of the Plaintiff in the matter at hand, and this is a Plaintiff that received federal tax dollars to help it stay in business in early 2009.”
Vague, nonspecific and uncorroborated factual assertions, upon which a claim of a reasonable excuse for a default is predicated, are generally insufficient to satisfy the reasonable excuse requirements (Wells Fargo Bank v. Linzenberg, 50 AD3d 674 [2nd Dept.2008] ; Canty v. Gregory, 37 AD3d 508 [2nd Dept.2007] ; Aames Capital Corp. v. Davidsohn, 24 AD3d 474 [2nd Dept.2005] ). Here, Ransom offers nothing but unsubstantiated claims that he was granted an extension of time to answer. Moreover, such claim is belied by the record. Attached to Ransom's papers are documents indicating that only Wine was granted an extension. Since the facts underlying Ransom's claims of a reasonable excuse for his default (as bereft and unsubstantiated as they are) are flatly contradicted by the record, Ransom has no viable claim of a reasonable excuse for his failure to answer or otherwise appear in this action. Accordingly, in the Court's discretion, it denied Ransom's motion and denies that portion of his motion which is for the associated costs.
The Court next turns to Wine's motion to dismiss Wells Fargo's complaint for lack of standing. As stated before in its complaint, Wells Fargo alleges that on January 11, 2007, defendant Wine mortgaged her real property to Wells Fargo, in exchange for a loan in the amount of $636,000.00. It is further alleged that Wine's mortgage went into default in December 2008. Wine's defense of lack of standing appears to be predicated upon Wells Fargo's failure to attach the “subject mortgage and subject promissory note” as “exhibits” to the complaint as well as Wine's allegation that Wells Fargo is not “current owner of the subject mortgage and subject promissory note.”
It is axiomatic that a plaintiff has standing to bring a foreclosure action on a note and mortgage if at the time the action is commenced it is the owner thereof, either as the original mortgagee or as a bona fide assignee of such mortgagee's rights (National Mtge. Consultants v. Elizaitis, 23 AD3d 630 [2nd Dept.2005] ; Federal Nat. Mtge. Assn. v. Youkelsone, 303 A.D.2d 546 [2nd Dept.2003] ). The unavoidable corollary is that if it does not enjoy such status at the time the action is commenced, it lacks standing to do so, in that it has no legal or equitable interest in the property or the debt upon which to prosecute an action (Katz v. East–Ville Realty Co., 249 A.D.2d 243 [1st Dept.1998] ; Kluge v. Fugazy, 145 A.D.2d 537 [2nd Dept.1988] ).
Wine's asserted defenses, namely, that Wells Fargo lacks standing by reason of its non-ownership of the subject note and mortgage is refuted by the record. Here, Wells Fargo has clearly established ownership of the note and mortgage with a recording of the note on April 11, 2007, which pre-dated the commencement of this action. Wine's convoluted argument that Wells Fargo is not the current owner of the mortgage because the description of the property does not contain the correct tax map designation is lacking in merit. Here, the complaint contains the street address and a metes and bounds description of the property, together with the date and recording information of the mortgage. Even an erroneous description will not deprive a court of jurisdiction as long as the pleadings and other papers are sufficiently particular to give notice of the property that is being foreclosed (United Companies Lending Corp., v. Rogers, 45 AD3d 1419 [4th Dept.2007] ; American Mortgage Bank v. Matovitz, 208 A.D.2d 788 [2nd Dept.1994] ). In this case, the Court finds that the information contained in the complaint is sufficient to apprise Wine of the identity of the premises.
The remaining defenses asserted in the answer/motion to dismiss of Wine are similarly without merit. Wine's conclusory claims that the doctrine of unclean hands, that Wells Fargo's damages were caused by its own wrongful conduct and that documentary evidence bars Wells Fargo's claims for foreclosure are belied or unsupported by the record and are otherwise without basis in fact or law.
Accordingly, Wine's motion to dismiss the complaint is denied.
This constitutes the Decision and Order of the Court. This Decision and Order is returned to the attorneys for Wells Fargo. All other papers are delivered to the County Clerk. The signing of this Decision and Order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the applicable provisions of this rule with regard to filing, entry and Notice of Entry.
SO ORDERED.