Countrywide Home Loans, Inc. v Sanvitale2016 NY Slip Op 32549(U)

October 28, 2016Supreme Court, Suffolk County

Docket Number: 38113-08Judge: Thomas F. Whelan

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SHORT FORM ORDER

COPY INDEXNo. 38113-08

SUPREME COURT - STATE OF NEW YORK

l.A.S. PART 33 - SUFFOLK COUNTY

PRESENT: Hon. THOMAS F. WHELAN

Justice of the Supreme Court

----------------------------------------------;-----------------)( COUNTRYWIDE HOME LOANS, INC.,

Plaintiff,

-against-

DANIEL R. SANVIT ALE, DONNA M. SANVITALE, NEW YORK STATE DEPART­MENT OFT AXA TION AND FINANCE, "JOHN DOES" and " JANE DOES", said names being fictitious, parties intended being tenants or occupants of premises, and corporations, other entities or person who claim or may claim, a lien against the premises,

Defendants. : ---------------------------------------------------------------)(

MOTION DA TE: 09/30116 SUBMIT DATE: 09/30/16 Mot. Seq.# 003 - MOTD

CDlSP: No

KOZENY, McCUBBIN & KATZ Attys. For Plaintiff 40 Marcus Drive - Ste. 200 Melville, N Y 11747

Upon the following papers numbered I to _ 4 __ read on this motion by plaintiff for default judgments on its complaint and other relief , Notice of morion and supporting papers J...:..!_; Notice of Cross Motion & Supporting papers · Opposing papers; : Reply papers ; Other_; it is,

ORDERED that this motion by a purported assignee oftbe plaintiff for default judgments on the complaint filed and served in this action is considered under CPLR 3215, RP APL Article l 3 and RPL Article 3 and is denied; and it is further

ORDERED that those portions of this motion wherein the movant requests that the court compel the Suffolk County Clerk to record a copy of a lost mortgage assignment as though it was an original are denied.

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Country" ide I Iome I .oans. Inc v Sanvitalc Index 1o. 38 I I 112008 Page 2

In i' ktolx:r or2008, the plaintiff: as captioned above. con1mence<l this action to foreclose the lien or twc previously consolidated mortgage loans originated by Countrywide 1 lomc Loans. Inc .. in 2002 and :.003. Those two mortgage loans were thereafter consolidated with a m:w money mortgage given by t 1c Sanvitak <ld\.:n<lants on September 27, 2006 lo American I lomc Mortgage. The new monies lo:med, namely. $127.304.20. were the subject or mortgage executed by the Sanvitak defendant~ on that date which allegedly secured a note in said amount, no copy or which is attached to the moving papers. Also executed on that date was Consolidation. Extension and Modification Agreement [ CEMA I. by which, the two prior and consolidated mortgage liens were combined with the$ I 27J04.20 mortgage lien or September 27, 2006 to form a single lien in the total amount or $417,000.00. The Santivale defendants also executed a consolidated note and mortgage in favor or J\merica11 i iome Mortgage on S1.:ptcmbl.!r 27, 2006 i11 lhc amoum of $417,000.00 wltid1 1dh.:d1.:d ll1t: combined amount due under the three mortgage liens consolidated under the 2006 CEMA $4 17.000.00.

On November I. 2006. Countrywide I lomc Loans Inc., Ilk/a Countrywide Funding Corporation. issued a satisfoction of mortgage. discharging the 2002 and 2003 mortgages and such satisfactio 1 piece was recorded in the office of the Su !folk County Clerk on January 16. 2007. On January :D. 2007. the plaintiff, Counhywicle Ilome Loans Inc., by its nominee MERS, issued an assignmcntofthc 2002 and 2003 mortgages in favor of American llome Mortgage. which assignment was recorded in the ortice or the Suffolk County Clerk on March 30. 2007.

By assign men: dated February 27, 2014. American Home Mortgage. Corp .. purportedly assigned the 2002. 2003 and 2006 mortgages and the CEMAs to the plaintiff. but said assignment was not recorded due its purported loss. Then on March 11. 2014. the plaintiff assigned all of said mortgages and loan documents to Citimortgage, Inc. The recording of that assignment is not apparent from the moving papt.:rs.

By the instant motion, Citimortgage. Inc., by its loan servicer, Bank or America, N.A., moves (#003) for a default judgment on the complaint which contains two causes action. In the First. the plainti n: a<; captioned above. sought foreclosure of the I iens of the consolidated mortgages, deficiency j udgmcnts against the obi igor defendants and a pub I ic sale of the prern ises. In the Second cause of action, the plaint i IT sought the cancellation or record of the ovember I. 2006 mortgage salisfaction piece ostensibly issued by it which discharged the debts or the 2002 and 2003 mortgages upon allegations that the satisfaction piece was .. erroneously recorded .. in the orlice or the Suffolk County Clerk on January 16, 2007. The movant also seeks the deletion of the unknown defendants. the issuance or an order or rclcrence and a judicial mandate directing the , uffolk County Clerk tn rct:ord a copy or the lost, Fchruary 27. 2014 assignment. by which, American I lomc Mortgage. Corp., by its altorm:y-in-foct, purportedly assigned the 2002. 2003 and 2006 mortgages and th\.! CEMAs to the named plaintiff For the reasons stated. the motion is denied.

A party's right to recover upon a defendant's default in answering is governed by CPLR 3215. and. pursuant tht:rcto. th<: moving pany must submit proof of service of the summons and complaint, proor orthc fotts constituting the claim. and proof of the defaulting defendant's foilure to answer (.\·ee CPLR 12151 ll U.S. Bank Natl. Ass'u ,. A /ha, 130 Al)Jcl 715. I I YS:?.d 864 l2d Dept 2015 ]: llSRC

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Bank USA. N.A. ,, Ale.rn11der, 124 ADJd 838. 4 YS2d 47 j2d Dt:pl 20 I 51: Todd v Green. I 22 /\D3d 83 I. 997 \I YS2d 155 I 2d Dept 2014 J: Oak /lo/low N ursing Ctr. v Stumbo, 117 /\D3d 698. <>85

YS2d 2<>9 [ 2d Dept 2014]: U.S. Bauk, Natl. Ass '11 v Razon. I 15 !\()Jc! 739. 981 YS2d 571 ! 2d l}t;pt 20 J .. ·I: Dela Cruz 1• Keter Residence, LLC, 115 /\D3d 700. 981 N YS2d 607 12<l Dept. 2014 I: Kolo11kowskfr Dai(r Ne1vs, l.P .. 94 J\D3<l 704, 941 NYS2d 663 12d Dept. 2012]: Trit111gle Prop. #2, LLC, "N11ra11g 73 /\D3<l I 030. 903 NYS2d 424 l2<l Dcpl 20 I 01). To satisfy the .. facts constituting the claim .. clement of CPLR 3215(t). the plaintiff must advance, in an aflidavit or verified pleading, facts by a person with knowledge from which. the court may <lis<.:ern the plaintiff's possession or one or more viable cla ims l(>r rdieragainst the defaul ting defendant (see f)LJ Mtge. Capital, Jue. v United Ge11. Title /us. Co., 128 /\D3<l 760, 9 NYS3d 335 r2<l Dept 20 15 I: Williams v North Shore Lil lleull'1 S)·s .. I i9 AD3J 937, 989 NYS2<l 887 j2<l Dept 20 i 4 j~ CPS Group, inc. v Gt1!iiro Emer. Corp .. 54 t\ l)J<l 800, 863 NYS2d 76412<l Dept 2008 1 ~ Resnick v lebovit:, 28 /\D] d 533, 81 3 YS2<l 48012<l Dept 20061: Beato1111 Tramit Fae. Corp . . 14 J\D3d 637, 789 NYS2d 31412<l Dept 20051).

I lne, the moving papers foiled lo establish the movant's entitlement to a default judgment on the com pl 1int scrvc<l an<l filed herein. An award of a default judgment on the First cause of action. which soun<ls in foreclosure and sale of the thn.:c liens or the mortgages last consolidated in 2006. is dependent upon the es tab I ishment of a viable claim for the cancellation or record of the November I. 2006 morlga!!-e salisl:1ction piece which discharged. of record. the debts of the 2002 and 2003 mortgage~ upon its recording in the office of the Suffolk County Clerk on January 16. 2007. This result is mandated by l\\'O well established legal precepts: the first hcing, that where. as here. the balances or prior mortgage loans arc increa<;cd by new monies lent on a subsequent mortgage loan and a ( ' I ~MJ\ i:; executed to consolidate al I of the mortgages into si nglc liens. the prior notes and mortgages sti ll exist and rctc:iin an independent nature and thus may be assigned or otherwise lransforred to other parties (.\'Le Beclwrd v Monty's Bay Recreation, Ille., 129 /\D3d I l87, 11 NYS3d 695 13d Dept 20 151: Be11so1111 Deutsche Bank Natl. Trust, Inc., I 09 AD3d 495. 970 NYS2d 794 12d Dept 2013 ]: see also Aurora loan Servs., LLC v Weisblum, 85 /\03cl 95. 109. 923 NYS2d 60912d Dept 20 111). The second or suc.;h precepts is that. while a CEM/\ creates a single mortgage lien from two or morc loans or differing priorities ... laJ consolidation of outstanding loans is a device intended for the convenience of only the contracting parties" and thus ··cannot impair liens in favor of parties that arc not the contracting parties. which retain their independent fore<! and cffccC (Federal Deposit Ins. Corp. ,. flve Star Mgt .. 258 /\0 2d 15. 22, 692 NYS2d 69 11 st I kpt 1999 j).

I k re, the first mortgage loan transaction of September 27, 2006 was a new money loan by which the )anvitalc defendants accepted additional funds totaling $127.304.20 from American llome Mortgage. The Sanvitalc defendants executed a mortgage in that a1·10unt on that <late to secure a mortgage 10tc in the same amount. but no copy or said note is attached to the moving papers. The San vi tale de fondants also agreed. upon their execution of Consolidation. Extension and Modi Ii cation /\grccmcnl I C'EM/\ I or1hat date. to consolidate the lien of this new loan with the liens of the :2002 and 2003 mor1gages which \·vcrc previously consolidated under the 2003 CEMJ\ between the Smwitales and the plaintiff. !'he further executed a consoli<latcd note in the combined amount of all outstanding amounts due.: wH.J..:r all three of the consolidated loans in the amount of $4 I 7 .000.00 a mortgage..: in that amount as well.

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Countrywide I lomc l.onns. Inc. v Sanvitale Index No. 38 I 13/2008 Page 4

Nevertheless, it appears that a cancellation of the September 27. 2006 mortgage satisfaction piece. which di scharged the debts of both the 2002 and 2003 mortgage notes. is a condition precedent to foreclosure or the lien or the consolidated mortgage issued on Scptcmhcr 27, 2006 to secure the consoliuated note of that date which reflected the combined amount duc under each ol· three new money loans in the S4 I 7,000.00. because the mortgage notes representing those debts viz a viz third parties remain in force and effect and subsist independent of the terms o f the 2006 CEM/\. agreement bet ween the Sanvitalc defendants <md /\.merican l Jome Mortgage or its successors. Since one may noi foreclose 1he lien of a mortgage if the debt thereunder has been satisfied or otherwise discharged, Joreclosurl.! or the 2006 consolidated lien consisting of the combined balances due under each or the three note~; is precluded by the currently existing, public record o f the discharge of the 2002 and 2003 debts umicr the terms oi' the J ·ovembcr l, 2006 satisfaction piece that was recorded on January I b. 2007. The movanrs possession of a viable claim for cancellation of the mortgage satisfaction piece, is thus u condition precedent to succeeding on the First cause of action sounding in foreclosure of the consolidated lien ol'all three mortgages.

/\ review of the moving pnpers reveals that Citimortgagc. Inc., by its loan servicer. l3/\N/\ , failed to ckmonstrate possession ora viable claim for cancellation ofthe Septcm ber 27, 2006 rno11gage satisfaction issued by MERS. as nominee or the named plaintiff that was recorded on January 16. 2007. Via )Jc daims for a declaration as to the invalidity ora recorded sat isfaction piece together with judicial di rectives expunging or cancelling the purported discharge o r the debt contained therein pursuant tn RP APL J\rtidc 15 and/or RPL § 329 rest upon claims for reinstatement or a mortgage owne<l by the claimant that was erroneously or fraudulently disdiargcd of record without a concomitant satisfact ion or the debt of the mortgage lien (see Onewest Bank, FSB v Michel, _ /\.D3d_ 2016 WL 6089145 [2<.I Dept 20161: Mortgage Elec. Registration S)'s .. foe. 11Smitlt, 111 /\.D3d 804, 975 NYS2d 121 l2d Dept 20 I 31; Deutsche Bank Trust Co. , Americas v Stathakis, 90 AD3d 983 . 935 NYS2d 651 l2d Dept 20111; Citibank, N.A. v Kenney, 17 !\D3d 305, 308, 793 NYS2d 84 [2d Dept 2005): Regions Bank v Campbell, 291 J\D2d 437, 737 NYS2d 636 [2d Dept 2002]; Matter of Barclays Bank of New York , 96 /\.D2d 594, 464 1YS2d I 0 I 6 l2d Dept 1983 [). ·1·1ic remedy is derived from long standing equity principles which recognize that a lien affecting real property which is satisfied of record in an instrument issued by error, mistake or fraudulent acts. may be restored((' its original status and plausibility provided that no injury or prejudice is intlictcd upon anyone who innocently relicd upon the discharge and either ptll"chascd the property or made a loan thereon in ·cliancc upon th~ validity of said satisfaction (see Belflvay Capital, LLC 1• Sole ii. 104 /\.D3d 628. 961 NYS2d 225 12d Dept 2013]; DLJ Mtge. Capital, Jue. v Windsor. 78 /\.D3d 645. 647. 910 NYS2d 160 [2d Dept 20 10j; New York Com1111111ityBr111k 11 Vermo11ty. 68 AD3d 1074, 892 NYS2d 137 f2<l Dept 20091; Muttero/Ditta, 22 1NYS2d34 [Sup. Ct. Kings County 1961 j). Accordingly. the identi fication and joinder of all those huving interests in the rrcmiscs recorded subsequent to the recording 'Jf the sat isfaction piece that is the subject of the claim for cancellation is required (see RPJ\PL ~ 1515).

l Jpon 1he court·s review of the allegations set forth in the complaint and those advanced in the ulfo.lavit o r merit. which was executed by an employee of Bank of America, N. J\. [.BAN/\.[, the loan servicer ol Citimortgage, said allegations foil to establish the movant" s possession or a viabk claim

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Countrywide I lomc Loans. Inc. v Sanvitale Index No. 381 13/2008 Page 5

fort he cancellation or the November I, 1006 mortgage satisfaction that was recorded on January 16 2007. Facts con~tituting the elements or such a claim, including the nature and circumstances of the mistaken <Ln<l erroneous issuance of the subject satisfaction piece and the absence or any concomitant discharge or satisfaction or the debt purportedly released therein, arc not discernible from the complaint or the affidavit or merit attached to the moving papers. Nor arc there any allegations regarding the existence or non-existence of persons or entities who lent monies or otherwise relied upon the r~cor<lcd satisfaction piece. Al I such persons would be necessary party dcfondants, absent the effectiveness of a duly indexed notice of pcndcncy as to that claim which binds a ll such persons as if they were joined as party defendants, because the 2006 CEM/\ cannot effect the rights or other non-party lienholdcrs who may have relied upon the 2007 rernrded discharge ol'thc 2002 and 2003 1JJl11'lgag \; d1:bh.

J\ccor<lingly, those portions of this motiun (#003) by BJ\NA, as loan s~rvi(;l.!r ror Ci ti mortgage. Im.:., for <lc foult j u<lgments on the complaint filed and served herein, the appoint1ncnt or a referee to compute. together and the deletion or unknown defendants arc denied.

/\!so denied is the applit:ation for relief in the form orajudicial mandate directing the Suffolk County C'krk to record a copy of the February 27 , 1014, by \·Vhich American I Jome Mortgage. Corp .. by its attorney-in-fact purportedly assigned the 2002, 2003 and 2006 mortgages and the CEM/\s to the plainti f None or the procedural or substantive requirements imposed upon the granting or this relief huvc been addressed, let alone established by the movan1. While relief under common law principles may he ava ilable to the owner of a recordable instrument such as deed. mo11gagc or assignment or mortgage, whicl1 was not recorded <luc to its loss or destruction. the claim must rest upon allegations and evidence of the due execution of the lost instrument and of its contents viu a certified wpy or other clear and convincing prool"ofthe contents thereof (see Argent Mtge. Co., LLC v 35 Pla11Ji Rd. Realty Corp .. 13 l /\D3d 909, 15 NYS3d 473 f2d Dept 20151 ; O'Brien v Town of /lu11ti11gto11 , 66 /\DJd 160, 166, 884 NYS2d 446 [2d Dept 2009L La Capria v B01wzza, 153 J\D2d 551 , 552-553, 544 NYS2d 848 l2d Dept 1989]: Edwanf.5 v Noyes, 65 NY 125, 127 [ 1875]).

/\lternativcly, statutory claims in the nature or mandamus to compel may lie against a County Cl<.!rk in his or her capa<.:ity as registrar or conveyances where said Clerk is in breach or a ministerial duty to rc<.:ord an instrument entitled to recording pursuant in Real Properly Law §§ 290 [31. 291 or other provisions or the Recording /\ct. I lowcvcr. such claims must rest upon allegations that a copy or the lost deed, mortgage or other instrument at issue is valid on its face and recordable because it is duly ack1wwledgcd and was presented lo the Clerk with the proper Ice who refused to record it (see Real Property Law§ 2C)()j 3 J. § 2') 1; County Law§ 5251 I]: JP Mm·ga11 Clwse Bauk., N.A. 1• Mhmtefo. 123 /\D3d 669, 123 /\D3d 669 l2d Dept 20 l 4J; Matter of Mersc<>IJJ, Inc. v Romaine. 24 /\D3d 673, 674, 808 1'"YS2d 307. l!ffd. 8 NY3d 90. 828 NYS2d 266 12006 I).

I le'·c, there is no pleaded claim for the recording of the purportedly lost assignment. only counsel" s brier and casual request for such relief that is advanced in hi s supporting anirmation and it is without any mention of the clements necessary state a viable claim for this n.: licf. Nor has the County Clerk. in her capacity us the registrar of deeds and other conveyances, been joined as a party

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Countrywide I lomc Loans. Inc. v Saiwitalc

lnd<.:x N( . 38113/2008

Page (i

ddcndanl 10 any such daim. the true nafurc of whi<.:h. is not clear. The uppl ication is thus procedurally ddc<.:ti vc . md lacking. in .substantive merit and it is denied on those grounds.

In view of the fon.:goi ng. lhl.! instant motion (//003) for dduult judgmcnb on the complaint am.I the other 1dicf demanded in the moving papers is in all respects denied.

Dated: October ) C '.20 I<> .7\J'

I

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