SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
Bank of America, N.A., Successor by Merger to BAC Home
Loans Servicing, LP f/k/a Countrywide Home Loans Servicing,
LP,
Index No.: 6109/2010
MEMORANDUM OF LAW
Plaintiff,
-againstMitch N. Paulsen, Mortgage Electronic Registration Systems,
Inc., as Nominee for Somerset Investors Corp., John Rivas, Scott
Klein, Mary Klein, Jerry Klein, and “JOHN DOE #1” through
“JOHN DOE #10,” the last ten names being fictitious and
unknown to the plaintiff, the person or parties, if any, having or
claiming an interest in or lien upon the mortgaged premises
described in the Complaint,
Defendants.
MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFF’S SECOND SUCCESSIVE
MOTION FOR SUMMARY JUDGMENT
MITCH N. PAULSEN
Defendant, Pro Se
91 Stone Street
Elmont, New York 11003
Tel: (516) 424-5528
Em: Mitch.Paulsen@mpo.cc
DATED: MAY , 2015
1
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES………………………………………………………………………4
PRELIMINARY STATEMENT…………………………………………………………………..8
STATEMENT OF FACTS….……………………….…………………………………………….8
I. THE PARTIES...……………………..................................................................................8
II. THE SUBJECT LOAN TRANSACTION & UNDERLYING INSTRUMENTS…………9
III. THE RELEVANT PROCEDURAL HISTORY OF THE INSTANT ACTION...……….11
LEGAL STANDARD……………………………………………………………………………14
I. SUMMARY JUDGMENT STANDARD………………………………………………..14
ARGUMENT……………..……………………………………………………………………...14
I. BANA’S INSTANT MOTION REPRESENTS NOTHING MORE THAN AN
IMPERMISSIVE SUCCESSIVE ATTEMPT BY PLAINTIFF FOR SUMMARY
JUDGMENT WHICH, AS A MATTER OF LAW, MUST BE DENIED………………14
II. PLAINTIFF FAILED TO STRICTLY COMPLY WITH RPAPL § 1304……………….18
III. QUESTIONS OF FACT REGARDING PLAINTIFF’S ALLEGED STANDING TO
FORECLOSE PRECLUDE BANA FROM SUMMARY JUDGMENT………………...22
A. BANA Was Neither the Original Lender Nor Payee Under the Subject Note……25
B. BANA Was Admittedly Not the “Owner” of the Subject Note as of the
Commencement Date of the Action………………………………………………25
C. BANA Is Not and Was Not the Assignee of the Subject Note ………….……….25
D. BANA Is Not and Was Not the “Holder” of the Subject Note as of the
Commencement Date of the Action……...……………………………………….26
E. Fannie Mae Is and Was the “Owner” and “Holder” of the Subject Note as of
the Commencement Date of the Action…………………………………………..27
F. BANA Did Not Physically Possess the Subject Note as of the Commencement
Date of the Action………………………………………………………………...29
2
G. Questions of Fact Exist Regarding the Unindorsed Subject Note………………...30
H. The Wojciechowski Affidavit is Vague, Conclusory, and the “Facts” Alleged
Therein Are Contradicted by the Evidentiary Record………………………..…...32
CONCLUSION…………………..................................................................................................34
3
TABLE OF AUTHORITIES
RULES
22 NYCRR § 202.12 ................................................................................................13
22 NYCRR § 202.12-a (b) (2) .......................................................................... 20, 21
22 NYCRR § 202.19 (b) ..........................................................................................13
CPLR 3015 (a) .........................................................................................................19
CPLR 3018 (b) .........................................................................................................19
CPLR 3025 (b) .........................................................................................................25
CPLR 3211 (a) (5)....................................................................................................19
CPLR 3212 (a) .........................................................................................................14
CPLR 3212 (b) .................................................................................................. 14, 23
CPLR 3212 (f) ..........................................................................................................14
CPLR 3214 (a) .........................................................................................................16
CPLR 3408 (d) .................................................................................................. 20, 21
CPLR 4511 (d) .........................................................................................................10
STATUTES
CPLR § 2001 ............................................................................................................21
RPAPL § 1302 (1) (a) ..............................................................................................24
RPAPL § 1303 .........................................................................................................19
RPAPL § 1304 ................................................................................ 18, 19, 20, 21, 22
RPAPL § 1304 (1)............................................................................................. 18, 24
RPAPL § 1304 (2)....................................................................................... 18, 20, 21
RPAPL § 1304 (5)....................................................................................................18
RPAPL § 1304 (5) (a) ..............................................................................................18
UCC § 1-201 (14) ....................................................................................................24
UCC § 1-201 (20) ....................................................................................... 24, 26, 27
UCC § 3-110 (1) ............................................................................................... 25, 27
UCC § 3-201 ............................................................................................................27
UCC § 3-202 (1) ............................................................................................... 24, 27
UCC § 3-202 (2) ............................................................................................... 27, 32
UCC § 3-204 (1) ............................................................................................... 24, 26
UCC § 3-204 (2) ............................................................................................... 24, 26
4
NEW YORK COURT OF APPEALS CASES
Alvarez v Prospect Hosp., 68 NY2d 320 [1986] .....................................................14
Chemical Bank of Rochester v Haskell, 51 NY2d 85 [1980] ..................... 24, 26, 27
Hoberg v Sofranscy, 248 NY 141 [1928] ................................................................30
Spielman v Mfrs. Hanover Trust Co., 60 NY2d 221 [1983] ...................................24
Sundail Const. Co. v Liberty Bank of Buffalo, 277 NY 137 [1938] ........................30
Vega v Restani Constr. Corp., 18 NY3d 499 [2012] ...............................................14
NEW YORK APPELLATE COURT CASES
Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95 [2d Dept 2011]19, 20, 21, 22,
34
Bank of Am., N.A. v Paulsen, 125 AD3d 909 [2d Dept 2015]........ 12, 23, 26, 30, 33
Bank of N.Y. Mellon v Gales, 116 AD3d 723 [2d Dept 2014] ................................34
Bank of N.Y. v Silverberg, 86 AD3d 274 [2d Dept 2011] .......................................29
Brandes Meat Corp. v Cromer, 146 AD2d 666 [2d Dept 1989] .............................10
Campaign v Barba, 23 AD3d 327 [2d Dept 2005] ........................................... 24, 28
Capuano v Platzner Int'l Group, Ltd., 5 AD3d 620 [2d Dept 2004] .......................15
Chong Min Mun v Soung Eun Hong, 109 AD3d 732 [1st Dept 2013] ....................17
Citibank, N.A. v Herman, 125 AD3d 587 [2d Dept 2015] ......................... 23, 24, 25
CitiMortgage v Stosel, 89 AD3d 887 [2d Dept 2011] .............................................23
citing Lexow & Jenkins v Hertz Commercial Leasing Corp., 122 AD2d 25 [2d Dept
1986] .....................................................................................................................29
Deutsche Bank Nat'l Trust Co. v Barnett, 88 AD3d 636 [2d Dept 2011] ........ 31, 34
Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680 [2d Dept 2012] ...............31
Deutsche Bank Natl. Trust Co. v Spanos, 102 AD3d 909 [2d Dept 2013] .............20
Emigrant Sav. Bank-Brooklyn/Queens v Doliscar, 124 AD3d 831 [2d Dept 2015]
..............................................................................................................................31
Farm Family Cas. Ins. Co. v Brady Farms, Inc., 87 AD3d 1324 [4th Dept 2011] .17
First Natl. Bank of Chicago v Silver, 73 AD3d 162 [2d Dept 2010] ......................19
Fleming & Assoc., CPA, PC v Murray & Josephson, CPAs, LLC,___AD3d___, 2015
NY Slip Op 02899 [1st Dept 2015] .......................................................................17
Floyd v NY State Thruway Auth., 125 AD3d 1456 [4th Dept 2015] .......................16
Franzese v Fid. N.Y. FSB, 214 AD2d 646 [2d Dept 1995] .....................................24
Giardina v Lippes, 77 AD3d 1290 [4th Dept 2010], lv denied 16 NY3d 702 [2011]
....................................................................................................................... 16, 18
5
Homecomings Fin. v Guldi, 108 AD3d 506 [2d Dept 2013] ............................ 23, 34
HSBC Bank USA v Hernandez, 92 AD3d 843 [2d Dept 2012] ...............................26
Hudson City Sav. Bank v DePasquale, 113 AD3d 595 [2d Dept 2014]..................22
Jones v 636 Holding Corp., 73 AD3d 409 [1st Dept 2010] ....................................17
Krupp v. Aetna Life & Cas. Co., 103 AD2d 252 [2d Dept 1984] ...........................33
Midfirst Bank v Agho, 121 AD3d 343 [2d Dept 2014] ............................................25
MLCFC 2007-9 ACR Master SPE, LLC v Camp Waubeeka, LLC, 123 AD3d 1269
[3d Dept 2014] ......................................................................................................17
Mtge. Elec. Registration Sys., Inc. v Coakley, 41 AD3d 674 [2d Dept 2007].........24
Newburgh Winnelson Co. v Baisch Mech., Inc., 30 AD3d 495 [2d Dept 2006] .....17
Pritchard v Curtis, 101 AD3d 1502 [3d Dept 2012] ...............................................19
Rupert v Gates & Adams, P.C., 83 AD3d 1393 [4th Dept 2011] ............................18
Sepulveda v Cammeby’s Mgt. Co., LLC, 119 AD3d 927 [2d Dept 2014]...............14
Slutsky v Blooming Grove Inn, Inc., 147 AD2d 208 [2d Dept 1989] ............... 24, 31
Sutter v Wakefern Food Corp., 69 AD3d 844 [2d Dept 2010] ................................15
TD Bank, N.A v Leroy, 121 AD3d 1256 [3d Dept 2014].........................................21
U.S. Bank, N.A. v Collymore, 68 AD3d 752 [2d Dept 2009] ..................................32
US Bank N.A. v Weinman, 123 AD3d 1108 [2d Dept 2014] ............................ 23, 34
US Bank Nat'l Ass'n v Madero, 125 AD3d 757 [2d Dept 2015] .............................23
US Bank Natl. Assn. v Faruque, 120 AD3d 575 [2d Dept 2014] ............................34
US Bank, Natl. Assn. v Sharif, 89 AD3d 723 [2d Dept 2011] .................................23
Vinar v Litman, 110 AD3d 867 [2d Dept 2013] ............................................... 15, 17
Wells Fargo Bank, NA v Burke, 125 AD3d 765 [2d Dept 2015] ............... 23, 31, 33
Wells Fargo Bank, NA v Ostiguy,___AD3d___, 2015 NY Slip Op 03015 [3d Dept
2015] .....................................................................................................................33
Yakima Tingling v C.I.N.H.R., Inc., 120 AD3d 570 [2d Dept 2014]................ 15, 17
NEW YORK TRIAL COURT CASES
Chase Home Fin. LLC v Silver, 47 Misc 3d 1203[A], 2015 NY Slip Op 50424[U]
[Sup Ct, Kings County 2015] ...............................................................................22
Citimortgage, Inc. v. Pembelton, 39 Misc 3d 454 [Sup Ct, Suffolk County 2013] 19
JP Morgan Chase Bank, Nat. Ass'n v Butler, 40 Misc 3d 1205[A], 2013 NY Slip Op
51050[U] [Sup Ct, Kings County 2013] ..............................................................28
PHH Mtge. Corp. v Koch, 46 Misc 3d 1206[A], 2015 NY Slip Op 50007[U] [Sup
Ct, Kings County 2015] ........................................................................................22
6
RBS Citizens, N.A. v Fruda, 2014 NY Misc LEXIS 5868, 2014 WL 7720120, Index
No.: 57269 [Sup Ct, Warren County, May 13, 2014] ..........................................29
Wells Fargo Bank, N.A. v Edeman, 2014 NY Slip Op 32013[U] [Sup Ct, Suffolk
County 2014] ........................................................................................................29
Wells Fargo Bank, N.A. v Pasciuta, 2014 NY Slip Op 32113[U] [Sup Ct, Suffolk
County 2014] ........................................................................................................19
Wells Fargo Bank, N.A. v Weekes, 46 Misc 3d 1205[A], 2014 NY Slip Op 51895[U]
[Sup Ct, Kings County 2014] ...............................................................................29
OTHER AUTHORITIES
L 2008, ch 472, § 2 ..................................................................................................18
L 2009, ch 507, § 1-a ...............................................................................................18
7
PRELIMINARY STATEMENT
Defendant, MITCH N. PAULSEN, submits this memorandum of law in opposition to the
second successive summary judgment motion (mot. seq. 006) impermissively made in the instant
by plaintiff, Bank of America, N.A., Successor by Merger to BAC Home Loans Servicing, LP
f/k/a Countrywide Home Loans Servicing, LP. As explained and thoroughly demonstrated
hereinafter, Plaintiff is not entitled to its requested relief and its motion must therefore be denied
in its entirety.
Referenced, submitted herewith, and cited to herein the instant Memorandum of Law
(“Def.’s Mem.”) is the Affidavit of Mitch N. Paulsen, dated May
, 2015, with Exhibits “1”
through “5,” inclusive (“Paulsen Opp. Aff.”). As a courtesy to the Court, since the parties’
submissions are quite voluminous; the within citations include parallel and pinpoint citations to
the evidentiary record, which is comprised of and has been labeled with bates numbers “0001”
through “0310.”
STATEMENT OF FACTS
I.
THE PARTIES.
MITCH N. PAULSEN (“Mr. Paulsen” or “Defendant”) is the individual defendant named
in the caption of this matter who has owned and occupied, as his primary residence, the single
family residential home located at 91 Stone Street, Elmont, New York 11003 (the “subject
Property”), for the entirety of the time herein discussed and relevant. (Paulsen Opp. Aff. ¶ 5).
Bank of America, N.A., Successor by Merger to BAC Home Loans Servicing, LP f/k/a
Countrywide Home Loans Servicing, LP (“BANA” or “Plaintiff”) is the plaintiff named in the
caption of this foreclosure matter. (Paulsen Opp. Aff. ¶ 20, Ex. 1 at Bates No. 0110).
8
II.
THE SUBJECT LOAN TRANSACTION & UNDERLYING INSTRUMENTS.
In order to meet certain financial obligations in connection with the subject Property, in
early-2004, Mr. Paulsen entered into a mortgage loan transaction (the subject “Loan Transaction”)
with lender, Countrywide Home Loans, Inc., a New York corporation (“CHL”), and
mortgagee/nominee, Mortgage Electronic Registration Systems, Inc., a Delaware corporation
(“MERS”). (See, Paulsen Opp. Aff. ¶ 6, Ex. 1 at Bates No.’s 0017, 0021). With respect to the
subject Loan Transaction, on May 13, 2004, Mr. Paulsen executed one (1), and only one (1)
promissory note, payable to CHL, in the amount of Two Hundred Forty-Four Thousand
($244,000.00) Dollars (the “subject Note”). (Id. at ¶ 7, Ex. 1 at Bates No.’s 0004, 0016-0019;
Lambert 2nd MSJ Aff. ¶ 3, Ex. A).
As security for the subject Note, on May 13, 2004, Mr. Paulsen granted a mortgage to
MERS, as nominee for CHL (the “subject Mortgage”). (Id. at ¶ 8, Ex. 1 at Bates No.’s 0004, 00200037; Lambert 2nd MSJ Aff. ¶ 4, Ex. B). Pursuant to section “(C)” of the subject Mortgage, “FOR
PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF
RECORD.” (Id. at ¶ 9, Ex. 1 at Bates No. 0021). Furthermore, pages two (2) through three (3) of
the subject Mortgage provide, in relevant part, that:
I mortgage, grant and convey the Property to MERS (solely as nominee for Lender
and Lender’s successors in interest) and its successors in interest subject to the
terms of this Security Instrument. . . . I give MERS (solely as nominee for Lender
and Lender’s successors in interest) rights in the Property described in (A) through
(G) below: . . . .
(Id. at ¶ 10, Ex. 1 at Bates No.’s 0022-0023). Thus, it is an indisputable fact that not anywhere
located therein the subject Mortgage does it state that MERS was given any rights, title, or interest
in the subject Note. (Id. at ¶ 11).
9
Public records1 demonstrate that immediately thereafter the May 13, 2004 closing of the
subject Loan Transaction; CHL sold, assigned, transferred, and/or otherwise negotiated the subject
Note directly to the Federal National Mortgage Association (hereinafter referred to as “FNMA”).
(Paulsen Opp. Aff. ¶ 12, Ex. 2). Subsequently, via an Assignment of Mortgage instrument
executed on March 25, 2010; MERS claimed to have assigned ONLY the subject Mortgage alone,
not the subject Note, directly to BANA. (Id. at ¶ 13, Ex. 1 at Bates No.’s 0070-0071; Woj. 2nd MSJ
Aff. Ex. 1). Pursuant to public records as well as the evidentiary record, the subject Mortgage and
subject Note have not been further sold, assigned, and/or otherwise negotiated. (Id. at ¶ 14).
Therefore, as of the commencement date of the instant action (i.e., March 29, 2010),
FNMA was and still is the owner of the subject Note and BANA, itself, readily admits this fact.
(Id. at ¶ 15, Ex. 4 at Bates No.’s 0268-0269; Riselvato 1st MSJ Aff. ¶ 36 [“Due to inadvertent error,
the Complaint asserts that plaintiff is the ‘owner and holder’ of the note being foreclosed . . . .
[T]his note is owned by Fannie Mae . . . .”]).
Furthermore, pursuant to FNMA’s business records, as such are made publicly available
by FNMA via its website www.allregs.com; FNMA, as “Note Holder,” did not, itself, hold
physical custody of the subject Note. (Id. at ¶ 16, Ex. 3 at Bates No.’s 0225-0232, 0253-0255).
Instead, as of May 11, 2009, FNMA appointed Bank of New York Trust Company, N.A., f/k/a
The Bank of New York Mellon Trust Company, N.A. (collectively referred to hereinafter as
“BONY”) as its “designated document custodian” or its “DDC.” (Id. at ¶ 17, Ex. 3 at Bates No.’s
0225-0232).
With respect to the public records annexed thereto Mr. Paulsen’s affidavit as Exhibits “2” and
“3,” as well as those annexed hereto as Exhibits “1” and “2”; it is beyond well settled that the New
York State Supreme Courts are empowered to take “judicial notice” of public records as admissible
evidence (see CPLR 4511 [d]; Brandes Meat Corp. v Cromer, 146 AD2d 666, 667 [2d Dept 1989]).
1
10
Aside from BONY, FNMA has also approved several dozen other entities to act as
document custodians (see Paulsen Opp. Aff. ¶ 18, Ex. 3 at Bates No.’s 0243-0252); however, it is
an indisputable fact that neither BANA, nor any of its predecessors, has/have ever been an
approved document custodian for FNMA (see id.).
Thus, as a matter of fact, BANA, itself, could not have had physical possession of the
subject Note as of the commencement date of the instant action. (Id. at ¶ 19).
III.
THE RELEVANT PROCEDURAL HISTORY OF THE INSTANT ACTION.
BANA commenced the herein discussed residential foreclosure action by filing a Notice
of Pendency, Summons, and Complaint (collectively referred to hereinafter as the “subject
Complaint”) with the Office of the Nassau County Clerk on March 29, 2010. (Paulsen Opp. Aff.
¶ 20, Ex. 1 at Bates No.’s 0105-0119; Lambert 2nd MSJ Aff. Ex. G).
In the very first paragraph of the subject Complaint, Plaintiff falsely alleges to own and
hold the subject note. Compare Id. at Ex. 1 at Bates No. 0110; Pl.’s Compl. ¶ 1 (“Plaintiff . . . [is]
the owner and holder of the [subject] note and mortgage being foreclosed.”); and Id. at Ex. 2
(Documentary evidence that FNMA is and always has been the owner of the subject Note); with
Id. at Ex. 4 at Bates No.’s 0268-0269; Riselvato 1st MSJ Aff. ¶ 36 (“Due to inadvertent error, the
Complaint asserts that plaintiff is the ‘owner and holder’ of the note being foreclosed . . . . [T]his
note is owned by Fannie Mae . . . .”).
In response to the subject Complaint, on April 19, 2010, issue was joined via service of
Mr. Paulsen’s Verified-Answer with Affirmative Defenses (the “Answer”) upon BANA’s counsel.
(Id. at ¶ 22, Ex. 1 at Bates No.’s 0132-0141; Lambert 2nd MSJ Aff. Ex. I). Subsequently, on or
around August 21, 2012, BANA filed a motion for summary judgment, order of reference, as well
as other miscellaneous relief (“Pl’s 1st MSJ”). (Id. at ¶ 23, Ex. 4). On December 24, 2012,
11
Honorable Thomas A. Adams issued an Order granting BANA’s first motion for summary
judgment and subsequently granted BANA a Judgment of Foreclosure and sale. (Paulsen Opp.
Aff. ¶ 24, Ex. 1 at Bates No.’s 0008, 0158-0161; Lambert 2nd MSJ Aff. ¶ 23, Exs. M-N).
However, by Decision & Order dated February 25, 20152; the Appellate Division, Second
Department “ORDERED that the judgment of foreclosure and sale is reversed, on the law, those
branches of the plaintiff’s motion which were for summary judgment on the complaint, to strike
the appellant’s answer, and for an order of reference are denied, and the order entered April 11,
2013, is modified accordingly. . . ” (Id. at ¶ 25, Ex. 1 at Bates No.’s 0163-0165; Lambert 2nd MSJ
Aff. Ex. O).
In reversing the orders of the supreme court, the Appellate Division, Second Department
found, inter alia, that:
a. Defendant’s Answer sufficiently raised the issue of standing;
b. BANA’s submissions failed to establish its physical possession of the subject Note as
of the commencement date of this action;
c. the assignment of mortgaged only assigned the subject Mortgage to BANA and not the
subject Note;
d. issues of fact exist regarding BANA’s alleged standing; and
e. those issues of fact regarding BANA’s alleged standing precluded BANA from the
award of summary judgment.
(Id. at ¶ 26, Ex. 1 at Bates No.’s 0164-0165; Lambert 2nd MSJ Aff. Ex. O).
2
Published in the New York Official Reports as Bank of Am., N.A. v Paulsen, 125 AD3d 909 [2d
Dept 2015].
12
More importantly, it should be noted that not anywhere in the Appellate Division, Second
Department’s Decision and Order was BANA given leave to reargue or renew its now denied first
motion for summary judgment (see id.).
Thus, in light of the fact that the Appellate Division, Second Department already decided
that issues of fact exist in this matter pertaining to BANA’s standing, those of which preclude
BANA from summary judgment; Mr. Paulsen has contemporaneously herewith filed and served
notice for a Preliminary Conference, pursuant to 22 NYCRR § 202.12 and 22 NYCRR § 202.19
(b), so that a discovery schedule can be outlined for the parties to prepare for trial. (Paulsen Opp.
Aff. ¶¶ 27-28).
Moreover, while both parties have exchanged preliminary requests for disclosure and
discovery of materials concerning BANA’s alleged standing; BANA failed to obtain, submit,
object to, and/or in any way respond to the various discovery demands. (Id. at ¶ 29, Ex. 5).
Notably, not one single new fact, which was not already available to BANA at the time it submitted
its first motion for summary judgment, has been discovered by and/or through BANA’s recent
discovery demands. (Id. at ¶ 30, Ex. 5).
However, notwithstanding the fact that BANA was never granted leave to file successive
motions for summary judgment, nor has BANA discovered any “new” evidence which was not
already accessible to it when it filed its first summary judgment motion; BANA has nonetheless
impermissively filed its herein opposed second successive motion for summary judgment. (Id. at
¶ 31).
Thus, pursuant to the foregoing and as explained below, as a matter of both fact and law,
BANA is not entitled to an award of summary judgment and its motion must therefore be denied
in its entirety.
13
LEGAL STANDARD
I.
SUMMARY JUDGMENT STANDARD.
Pursuant to the CPLR, “any party may move for summary judgment in an action, after
issue has been joined . . . .” (CPLR 3212 [a]), and the motion “shall be granted if, upon all the
papers and proof submitted, the cause of action or defense shall be established sufficiently to
warrant the court as a matter of law in directing judgment in favor of any party.” (CPLR 3212 [b]).
Furthermore, it is now well settled that:
Summary judgment is a drastic remedy, to be granted only where the moving
party has “tender[ed] sufficient evidence to demonstrate the absence of any material
issues of fact” . . . and then only if, upon the moving party’s meeting of this burden,
the non-moving party fails “to establish the existence of material issues of fact
which require a trial of the action.” The moving party’s “[f]ailure to make [a] prima
facie showing [of entitlement to summary judgment] requires a denial of the
motion, regardless of the sufficiency of the opposing papers.”
Vega v Restani Constr. Corp., 18 NY3d 499, 503 [2012]; quoting Alvarez v Prospect Hosp., 68
NY2d 320, 324 [1986] (citations omitted) (bold emphasis added). Furthermore, “CPLR 3212 (f)
permits a court to deny a motion for summary judgment where it appears that the facts essential to
oppose the motion exist but cannot then be stated. . . . This is especially so when the opposing
party has not had a reasonable opportunity for disclosure prior to the making of the motion.”
Sepulveda v Cammeby’s Mgt. Co., LLC, 119 AD3d 927, 927 [2d Dept 2014] (citations omitted).
ARGUMENT
I.
BANA’S INSTANT MOTION REPRESENTS NOTHING MORE THAN AN
IMPERMISSIVE SUCCESSIVE ATTEMPT BY PLAINTIFF FOR SUMMARY
JUDGMENT WHICH, AS A MATTER OF LAW, MUST BE DENIED.
Under New York common law, it is now well settled that “successive motions for summary
judgment should not be entertained, absent a showing of newly discovered evidence. . . .” Yakima
14
Tingling v C.I.N.H.R., Inc., 120 AD3d 570, 570 [2d Dept 2014]. On this point, the Appellate
Division, Second Department has established that:
[E]vidence is not ‘newly discovered’ simply because it was not submitted on the
previous motion. Rather, the evidence that was not submitted in support of the
previous summary judgment motion must be used to establish facts that were not
available to the party at the time it made its initial motion for summary judgment
and which could not have been established through alternative evidentiary means.
Vinar v Litman, 110 AD3d 867, 868-869 [2d Dept 2013]; citing Sutter v Wakefern Food Corp., 69
AD3d 844, 845 [2d Dept 2010]. As such, “successive motions for summary judgment should not
be made based upon facts or arguments which could have been submitted on the original motion
for summary judgment.” Capuano v Platzner Int'l Group, Ltd., 5 AD3d 620, 621 [2d Dept 2004].
Here, it is an indisputable fact that BANA’s herein opposed second motion for summary
judgment is completely devoid of any “newly discovered” information or facts which were not
already known and which were not already available to BANA when it submitted its first motion
for summary judgment.
Simply put, with respect to BANA’s alleged standing, if it really had physical possession
of the subject Note on commencement date of this action (i.e., March 29, 2010), which Mr. Paulsen
vehemently disagrees; then BANA’s physical possession cannot be considered “new evidence,”
as BANA would have presumably known this information since March 29, 2010 (i.e., significantly
before making its first motion for summary judgment).
BANA’s moving papers clearly demonstrate Plaintiff’s knowledge of New York’s rule
against successive motions for summary judgment (see Paulsen Opp. Aff. Ex. 1 at Bates No. 0013;
Lambert 2nd MSJ Aff. at ¶¶ 43-44). However, BANA attempts to circumvent this rule by
disingenuously asserting that “discovery was conducted” (id.), whereas in reality:
a) BANA has never responded nor objected to any of Mr. Paulsen’s disclosure demands
concerning BANA’s standing (see Paulsen Opp. Aff. ¶ 29, Ex. 5);
15
b) BANA’s discovery demands, served only a few weeks ago, are demonstrably a sham, as
BANA’s filing of the instant second motion for summary judgment automatically stayed
all disclosure (see CPLR 3214 [a]); and
c) BANA has unequivocally not obtained “newly discovered” facts or information from Mr.
Paulsen which was not already known or available to BANA when it filed its first summary
judgment motion.
More importantly, it is further indisputable that not once, throughout the entirety of
BANA’s instant second motion for summary judgment, does BANA assert or evince the basis of
its second summary judgment motion being made upon “newly discovered evidence” which was
not previously available to BANA at the time it filed its first summary judgment motion (see
Lambert 2nd MSJ Aff. at ¶¶ 1-44, Exs. A-R; Woj. 2nd MSJ Aff. ¶¶ 1-12, Exs. 1-4).
Instead, BANA believes that it can circumvent New York’s rule against successive
motions for summary judgment by simply asserting that “further discovery has been conducted”
(Paulsen Opp. Aff. Ex. 1 at Bates No. 0013; Lambert 2nd MSJ Aff. at ¶ 43). However, BANA’s
attempt, as well as its cited authorities, are unavailing and without merit (see id.; Lambert 2nd MSJ
Aff. at ¶ 43). Specifically, while the Appellate Division, Fourth Department case cited by BANA
tersely mentions that “we are not precluded from addressing defendant’s present [successive
summary judgment] motion, particularly in view of the fact that it was made after further discovery
(Floyd v NY State Thruway Auth., 125 AD3d 1456, 1457 [4th Dept 2015]); the Floyd Court ended
the foregoing quoted sentence by citing Giardina v Lippes, 77 AD3d 1290, 1292 [4th Dept 2010],
lv denied 16 NY3d 702 [2011], which opined, in relevant part, that “successive summary judgment
motions generally are disfavored absent newly discovered evidence or other sufficient cause . . .
.” Also, the Appellate Division, Fourth Department’s position on successive motions for summary
judgment is only persuasive and not binding on this Court, since the Appellate Division, Second
16
Department has already established the binding rule on successive motions for summary judgment
(see e.g., Vinar, 110 AD3d at 867-869).
Ironically, the other two appellate authorities cited by BANA actually contradict BANA’s
argument (see Chong Min Mun v Soung Eun Hong, 109 AD3d 732 [1st Dept 2013], Newburgh
Winnelson Co. v Baisch Mech., Inc., 30 AD3d 495 [2d Dept 2006]), as both of those cases only
allowed successive motions for summary judgment because “new evidence” not previously
available to the movants were the bases of the second motions.
Therefore, as a matter of law, BANA’s instant motion for summary judgment must be
denied in its entirety, as the filing of such was not based upon “newly discovered” facts or
information which were not already available to BANA at the time it filed its first summary
judgment motion—clearly in violation of all four appellate divisions’ proscription against
successive motions for summary judgment. See, Fleming & Assoc., CPA, PC v Murray &
Josephson, CPAs, LLC,___AD3d___, 2015 NY Slip Op 02899 [1st Dept 2015] (“As we have held,
‘Successive motions for summary judgment should not be entertained without a showing of newly
discovered evidence or other sufficient justification’ (Jones v 636 Holding Corp., 73 AD3d 409,
409, 899 N.Y.S.2d 605 [1st Dept 2010].”).; Yakima Tingling v C.I.N.H.R., Inc., 120 AD3d 570,
570 [2d Dept 2014] (“[S]uccessive motions for summary judgment should not be entertained,
absent a showing of newly discovered evidence. . . .”); MLCFC 2007-9 ACR Master SPE, LLC v
Camp Waubeeka, LLC, 123 AD3d 1269, 1271 [3d Dept 2014] (“[I]f the facts or arguments now
advanced could have been submitted in support of the original motion for summary judgment, the
successive motion should not be permitted.”); Farm Family Cas. Ins. Co. v Brady Farms, Inc., 87
AD3d 1324, 1326 [4th Dept 2011] (“Although it is well settled that ‘successive motions for
summary judgment are generally disfavored’ (Rupert v Gates & Adams, P.C., 83 AD3d 1393,
17
1395, 919 NYS2d 706 [2011]), such motions for summary judgment are permitted where there is
‘newly discovered evidence or other sufficient cause’ (Giardina v Lippes, 77 AD3d 1290, 1291,
909 NYS2d 602 [2010], lv denied 16 NY3d 702, 942 NE2d 320, 917 NYS2d 109 [2011]”).
II.
PLAINTIFF FAILED TO STRICTLY COMPLY WITH RPAPL § 1304.
Commonly referred to as the mandatory “90-day notices” conditions precedent, New York
law requires that “at least ninety days before a lender, an assignee or a mortgage loan servicer
commences legal action against the borrower, including mortgage foreclosure, such lender,
assignee or mortgage loan servicer shall give notice to the borrower . . .” (RPAPL § 1304 [1]), and
that such “notice shall be sent by such lender, assignee or mortgage loan servicer to the borrower,
by registered or certified mail and also by first-class mail to the last known address of the borrower
. . . .” RPAPL § 1304 (2).
When initially enacted, RPAPL § 1304 only applied to “high-cost,” “subprime,” and “nontraditional” home loans, as such were defined by RPAPL § 1304 (5). (L 2008, ch 472, § 2). In
2009, the Legislature amended RPAPL § 1304, effective January 14, 2010 (L 2009, ch 507, § 1a), to apply to any “home loan,” as defined by RPAPL § 1304 (5) (a). Here, since the instant action
was commenced on March 29, 2010, and in light of the fact that Mr. Paulsen asserted BANA’s
non-compliance with RPAPL § 1304 as an affirmative defense in his Answer (see Paulsen Opp.
Aff. Ex. 1 at Bates No. 0136; Ans. ¶ 10); the 90-day notice requirements set forth in the statute are
applicable herein.
To the extent that any argument is made that Mr. Paulsen did not properly raise and/or
sufficiently plead the affirmative defense of BANA’s lack of compliance with RPAPL § 1304,
such an argument would fail as a matter of law, as it has been established that a plaintiff’s failure
to strictly comply with and satisfy the RPAPL pre-foreclosure notice requirements is a non-
18
waivable defense. Citimortgage, Inc. v. Pembelton, 39 Misc 3d 454, 461-462 [Sup Ct, Suffolk
County 2013]. Analyzing the three leading appellate division opinions regarding foreclosure
related statutory mandates (i.e., First Natl. Bank of Chicago v Silver, 73 AD3d 162 [2d Dept 2010],
Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95 [2d Dept 2011], and Pritchard v Curtis, 101
AD3d 1502 [3d Dept 2012]), the Pembelton Court harmonized the Silver, Weisblum, and Pritchard
holdings with the application of the CPLR as follows:
[u]nquestionably, appellate case authorities have recently determined that service
of the statutory notices required by RPAPL 1303 and 1304 is a condition
precedent to a mortgage foreclosure action (see Aurora Loan Servs., LLC v
Weisblum, 85 AD3d 95, 102-108 [2d Dept 2011]; First Natl. Bank of Chicago v
Silver, 73 AD3d 162, 165-169 [2d Dept 2010]). It has further been established
that, unlike the affirmative defenses contemplated by CPLR 3015 (a), 3018 (b)
and 3211 (a) (5), which are waived if not timely raised, the failure to comply with
these statutory conditions precedent may be raised at any time during the action
(id. at 163). . . . In Pritchard, the Third Department acknowledged the Second
Department’s holdings in Weisblum and Silver that satisfaction with the notice
requirements imposed by RPAPL §1303 and § 1304 were conditions precedent
to the action and that the failure to comply with either could be raised at any time.
Pembelton, 39 Misc 3d at 461-462 (underscore emphasis added); see also Wells Fargo Bank, N.A.
v Pasciuta, 2014 NY Slip Op 32113[U], *6 [Sup Ct, Suffolk County 2014] (“Here, [although] any
standing defense was waived by [defendant’s] failure to assert it in a timely [answer or] pre-answer
motion. . . . [defendant’s] RPAPL § 1304 notice defense has not been waived and may thus be
asserted both in opposition to the plaintiff’s motion-in-chief. . . .”).
Indeed, the Second Department has made it unequivocally clear that when it comes to the
pre-foreclosure notice provisions set forth under RPAPL § 1304, the statute does not require a
foreclosing plaintiff’s partial compliance or sufficient compliance; but rather strict compliance.
Weisblum, 85 AD3d at 103 (“[P]roper service of the RPAPL 1304 notice containing the statutorilymandated content is a condition precedent to the commencement of the foreclosure action. The
plaintiff’s failure to show strict compliance requires dismissal.”) (emphasis added).
19
Thus, since a “plaintiff’s failure to show strict compliance [with RPAPL § 1304] requires
dismissal” (Weisblum at 103), the Second Department has further instructed the lower courts that
it is the plaintiff’s burden to prove, and not the defendant’s to disprove, satisfaction and strict
compliance with the statute. Deutsche Bank Natl. Trust Co. v Spanos, 102 AD3d 909, 911 [2d
Dept 2013]; quoting Weisblum at 106 (“‘[P]roper service of RPAPL 1304 notice on the borrower
or borrowers is a condition precedent to the commencement of a foreclosure action, and the
plaintiff has the burden of establishing satisfaction of this condition’.”) (internal citations omitted).
Here, the 90-day notices submitted by BANA (see Paulsen Opp. Aff. Ex. 1 at Bates No.’s
0084-90; Woj. 2nd MSJ Aff. Ex. 3), actually serve as direct and irrefutable evidence that BANA
failed to strictly comply with mandates set forth thereunder RPAPL § 1304 (2). Specifically, at
first glance, the 90-day notices proffered by BANA seemingly evince its compliance with RPAPL
§ 1304 (2)—i.e., by providing a list of “at least five housing counseling agencies as designated by
the division of housing and community renewal” (hereinafter referred to as “DHCR” designated
agencies) (see Paulsen Opp. Aff. Ex. 1 at Bates No’s. 0086, 0090-90). However, upon closer
inspection of agencies allegedly provided by BANA; it is an indisputable fact that BANA
actually only provided four (4), and not the statutorily mandated five (5) DHCR designated
agencies serving Nassau County (10th Judicial District)—i.e., the applicable subject region!3
Although the word “region” is not defined therein RPAPL § 1304, the DHCR provides it
designated agencies delineated by county (“region” meaning “county” of subject property),
whereas here, “Nassau County” would define the region.
3
Contrarily, pursuant CPLR 3408 (d) and 22 NYCRR § 202.12-a (b) (2), both of which also discuss
the applicable counseling list and regions under RPAPL § 1304; the word “region,” as it pertains
to the mandatory housing counseling agencies designated by the DHCR, is referred to as the
“judicial district” (“region” meaning “judicial district” of the foreclosure action), whereas here,
the “10th Judicial District” would define the region—i.e., “Nassau & Suffolk County,” combined.
20
To assist the Court, attached hereto as Exhibit “1” is a screen shot taken from the DHCR
website4 which provides a link to the complete list of DHCR designated and RPAPL § 1304 (2)
approved agencies in New York. Upon following the foregoing link, the full list of each and every
DHCR designated housing agency serving every county/region/judicial district in the State of New
York appears5. Attached hereto as Exhibit “2” is a true and complete copy of that full list of every
DHCR designated housing agency serving every county/region/judicial district of New York.
Thus, even with the most generous definition of “region” (i.e., including both, Nassau and
Suffolk County DHCR designated agencies), BANA’s RPAPL § 1304 notices only provide four
(4), and not the statutorily mandated five (5) DHCR designated agencies approved for Mr.
Paulsen’s region (see RPAPL § 1304 [2]; CPLR 3408 [d]; 22 NYCRR § 202.12-a [b] [2]).
What makes BANA’s failure to strictly comply with RPAPL § 1304 especially egregious
is that it although it could have provided Mr. Paulsen with any five (5) of the TWENTY-ONE
(21) DIFFERENT AGENCIES LISTED AND AVAILABLE—BANA NONETHELESS
ELECTED TO ONLY PROVIDE FOUR (4), IN DIRECT VIOLATION OF RPAPL § 1304
(2) (see infra Ex. 2 [i.e., 21 numbered different DHCR agencies serving Nassau & Suffolk
County]).
BANA’s failure to strictly comply with RPAPL § 1304 (2)—i.e., its failure to provide “at
least five housing counseling agencies as designated by the DHCR” for the Nassau & Suffolk
County/10th Judicial District region, constitutes a fatal defect, one which CANNOT be ignored
pursuant to CPLR § 2001. See, TD Bank, N.A v Leroy, 121 AD3d 1256, 1260 [3d Dept 2014];
quoting Weisblum, 85 AD3d at 108 (“Based on the legislative intent, plaintiff’s . . . fail[ure] to
4
http://www.nyshcr.org/Topics/Home/Owners/ForeclosurePrevention/InformationForLenders.htm
5
http://www.dfs.ny.gov/consumer/mortg_nys_np_counseling_agencies.htm
21
comply with the [RPAPL] mandatory condition precedent — ‘cannot be deemed a minor
irregularity which can be overlooked’.”); accord PHH Mtge. Corp. v Koch, 46 Misc 3d 1206[A],
2015 NY Slip Op 50007[U], *4 [Sup Ct, Kings County 2015] (Finding plaintiff’s failure to evince
that it provided the borrower with a list of at least five housing counseling agencies designated by
DHCR as proof of non-compliance with RPAPL 1304); Chase Home Fin. LLC v Silver, 47 Misc
3d 1203[A], 2015 NY Slip Op 50424[U], *5 [Sup Ct, Kings County 2015] (same).
Consequently, pursuant to the fact that BANA’s very own submissions prove that it has
failed to satisfy and strictly comply with the statutorily imposed mandatory pre-foreclosure notice
conditions precedent set forth under RPAPL § 1304; as a matter of law, this Court must deny
BANA’s instant motion for summary judgment and should dismiss BANA’s foreclosure action in
its entirety. See, Hudson City Sav. Bank v DePasquale, 113 AD3d 595, 596 [2d Dept 2014]; citing
Weisblum, 85 AD3d at 105-106 (“Contrary to the plaintiff’s contentions, it failed to tender
sufficient evidence demonstrating . . . its strict compliance with RPAPL 1304. . . . [T]he
Supreme Court properly denied the plaintiff's motion for summary judgment and granted
[defendants] summary judgment dismissing the complaint . . . .”) (bold emphases &
underscores added).
III.
QUESTIONS OF FACT REGARDING PLAINTIFF’S ALLEGED STANDING TO
FORECLOSE PRECLUDE BANA FROM SUMMARY JUDGMENT.
Aside from all of the foregoing reasons why BANA is not entitled to having its second
successive motion for summary judgment granted, it is also true that now, more than ever before,
a slew of genuine and material issues of fact exist pertaining to BANA’s alleged standing. So, in
addition to the foregoing, pursuant to the reasons set forth below, this Court should deny BANA’s
instant and impermissive second motion for summary judgment in its entirety.
22
Firstly, as solidified by the recent wave of reversals ordered by the Appellate Division,
Second Department; “[i]n a mortgage foreclosure action, a plaintiff has standing when 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.” Citibank, N.A. v Herman, 125 AD3d 587, 588 [2d Dept 2015];
US Bank N.A. v Weinman, 123 AD3d 1108, 1109 [2d Dept 2014] (same) (both reversing the trial
court). Where, as here, “standing is put into issue by the defendant, a plaintiff must prove its
standing if it is to be entitled to relief.” Bank of Am., N.A. v Paulsen, 125 AD3d 909, 910 [2d Dept
2015] (reversing this trial court) (bold emphasis added); see also US Bank Nat'l Ass'n v Madero,
125 AD3d 757, 757-758 [2d Dept 2015]; Wells Fargo Bank, NA v Burke, 125 AD3d 765, 766 [2d
Dept 2015] (same) (both reversing the trial court).
Furthermore, a defendant can be awarded summary judgment on the issue of standing and
“[t]he prima facie showing which a defendant must make on a motion for summary judgment is
governed by the allegations made by the plaintiff in the pleadings.” Herman, 125 AD3d 588589 (bold emphasis added). Thus, as a matter of law, a defendant in a foreclosure action is entitled
to summary judgment and the dismissal of the underlying complaint upon tendering evidentiary
proof, in admissible form (see CPLR 3212 [b]), demonstrating that the plaintiff lacked the required
standing to commence the action (see Herman at 588-589; Homecomings Fin. v Guldi, 108 AD3d
506, 509 [2d Dept 2013]; CitiMortgage v Stosel, 89 AD3d 887, 888 [2d Dept 2011]; US Bank,
Natl. Assn. v Sharif, 89 AD3d 723, 725 [2d Dept 2011]).
With respect to the issue of standing, “[a]s a general matter, once a promissory note is
tendered to and accepted by an assignee, the mortgage passes as an incident to the note.” Herman
at 588 (citations omitted). “However, the transfer of the mortgage without the debt is a nullity,
23
and no interest is acquired by it because a mortgage is merely security for a debt or other obligation
and cannot exist independently of the debt or obligation.” Id. (citations omitted).
Thus, it is now well settled that the standing of a foreclosing plaintiff, appearing personally
or by its servicer (see RPAPL § 1304 [1]), is measured at the time of the commencement of the
action, by either: (1) its “ownership” of the underlying promissory note (see RPAPL § 1302 [1]
[a]; Campaign v Barba, 23 AD3d 327, 327 [2d Dept 2005]); (2) it being the “holder” of the
underlying promissory note (see UCC § 1-201 [20]), via special indorsement (see UCC § 3-204
[1]), coupled with receipt of delivery6—i.e., “physical possession” (see UCC § 3-202 [1]);
Spielman v Mfrs. Hanover Trust Co., 60 NY2d 221, 226 [1983]; Chemical Bank of Rochester v
Haskell, 51 NY2d 85, 90 [1980]; Mtge. Elec. Registration Sys., Inc. v Coakley, 41 AD3d 674, 674
[2d Dept 2007]); or (3) it being the “holder” of the underlying promissory note (see UCC § 1-201
[20]), via indorsement in blank (see UCC § 3-204 [2]), coupled with delivery—i.e., “physical
possession” of said note (see UCC § 3-202 [1]; Franzese v Fid. N.Y. FSB, 214 AD2d 646, 646 [2d
Dept 1995]; Slutsky v Blooming Grove Inn, Inc., 147 AD2d 208, 212 [2d Dept 1989]).
Stated more simply, pursuant to the foregoing, BANA had the standing to commence this
specific action if, as of March 29, 2010 (i.e., the commencement date of the action), BANA was
either: (1) the original lender and the specifically named “payee” under the subject Note (i.e.,
subject Note originally made payable to the direct “order” of BANA); (2) the owner of the subject
Note; or (3) the “holder” of the subject Note, as such is defined by the UCC.
Yet, as explained below, BANA demonstrably was neither the original payee, owner, nor
holder of the subject Note as of the commencement this action, or, at the very least; serious
questions of fact exist pertaining to BANA’s alleged standing as of the commencement date.
6
UCC § 1-201 (14) defines “Delivery” as a “voluntary transfer of possession” (act of volition).
24
A.
BANA Was Neither the Original Lender Nor Payee Under the Subject Note.
Here, the admitted evidentiary record undisputedly proves that CHL, not BANA, was the
original lender and payee named of the subject Note (see Paulsen Opp. Aff. ¶ 7, Ex. 1 at Bates
No.’s 0004, 0016-0019; Lambert 2nd MSJ Aff. ¶ 3, Ex. A).
Thus, since the subject Note was originally made payable to the order of CHL—i.e., not
BANA (see id.); BANA did not have the standing to sue as the original lender or payee pursuant
to UCC § 3-110 (1) (see Midfirst Bank v Agho, 121 AD3d 343, 347-348 [2d Dept 2014]).
B.
BANA Was Admittedly Not the “Owner” of the Subject Note as of the
Commencement Date of the Action.
Apparently not familiar with the old proverb “lead with your best foot forward”; BANA
commenced this action by falsely asserting in the very first paragraph of its subject Complaint that
it was the “owner” of the subject Note. Compare Paulsen Opp. Aff. Ex. 1 at Bates No. 0110; Pl.’s
Compl. ¶ 1 (“Plaintiff . . . [is] the owner and holder of the [subject] note and mortgage being
foreclosed.”); and Id. at Ex. 2 (Documentary evidence that FNMA is and always has been the
owner of the subject Note); with Id. at Ex. 4 at Bates No.’s 0268-0269; Riselvato 1st MSJ Aff. ¶
36 (“Due to inadvertent error, the Complaint asserts that plaintiff is the ‘owner and holder’ of the
note being foreclosed . . . . [T]his note is owned by Fannie Mae . . . .”).
Thus, with respect to the fact that BANA is bound by its standing allegations set forth in
its subject Complaint (see Herman, 125 AD3d 588-589), which to-date, BANA has never sought
leave to amend (see CPLR 3025 [b]); the evidentiary record here clearly proves that BANA is not,
was not, and never has been the “owner” of the subject Note.
C.
BANA Is Not and Was Not the Assignee of the Subject Note.
As a matter of both fact and law, the Appellate Division, Second Department has already
determined that here, “although the assignment of mortgage was dated March 25, 2010, prior to
25
the date this action was commenced, that assignment transferred the mortgage only. Consequently,
the assignment did not show that the note was also assigned at that time.” Paulsen, 125 AD3d at
911.
Thus, BANA is not and was not the lawful assignee of the subject Note as of the
commencement date of the instant action. Compare Paulson Opp. Aff. ¶¶ 7-11; Ex. 1 at Bates
No.’s 0016-0019, 0020-0037 (MERS only granted rights and title to the subject Mortgage, not the
subject Note); and id. at ¶ 13, Ex. 1 at Bates No.’s 0070-0071 (Assignment of Mortgage claimed
that MERS assigned the subject Mortgage alone, without the subject Note, to Plaintiff); with HSBC
Bank USA v Hernandez, 92 AD3d 843, 843 [2d Dept 2012] (“An assignment of a mortgage without
assignment of the underlying note or bond is a nullity, and no interest is acquired by it.”).
D.
BANA Is Not and Was Not the “Holder” of the Subject Note as of the
Commencement Date of the Action.
New York’s Uniform Commercial Code defines “holder” as “a person who is in possession
of a document of title or an instrument or an investment certificated security drawn, issued or
indorsed to him or to his order or to bearer or in blank.” UCC § 1-201 (20) (bold, italicized,
and underscore emphasis added). Where, like here, the plaintiff was not the originator or original
payee under the Note, the Court of Appeals has established that “[i]n order for [plaintiff] to recover
it first had to establish its status as a holder of the notes. This it did by production of the
notes in its possession, which had been transferred to [plaintiff] by another holder with all
necessary indorsements.” Haskell, 51 NY2d at 90 (bold emphases & underscores added).
Here, since the subject Note was not originally made payable to the “order” of BANA, but
was instead originally payable to the “order” of CHL (supra Def.’s Mem. at *23), and in light of
the fact that the subject Note does not bear any indorsements—i.e., special or in blank (see UCC
§ 3-204 [1]; § 3-204 [2]), from the undisputed owner of the subject Note (i.e., Fannie Mae); it is a
26
legal impossibility for BANA to be considered the “holder” of the subject Note. See, UCC § 1201 (20); § 3-110 (1); § 3-201; § 3-202 (1), § 3-202 (2); Haskell at 90.
Furthermore, the evidentiary record herein proves and BANA concedes that CHL sold,
assigned, “transferred” (see UCC § 3-201), and/or otherwise “negotiated” (see UCC § 3-202 [1]),
the subject Note directly to Fannie Mae, prior to the commencement date of this action (supra
Def.’s Mem. at *8). Therefore, since CHL “transferred” and “negotiated” the subject Note to
Fannie Mae prior to the commencement of the action; pursuant to UCC § 1-201 (20) and § 3-110
(1), BANA, as a matter of both fact and law, was not the “holder” of the subject Note as of as of
the March 29, 2010 commencement date of this action.
E.
Fannie Mae Is and Was the “Owner” and “Holder” of the Subject Note as of
the Commencement Date of the Action.
Aside from being the undisputed “owner” of the subject Note, pursuant to its guidelines;
Fannie Mae, and not BANA, is and was also the “holder” of the subject Note as of the
commencement date of this action (see Paulsen Opp. Aff. Ex. 3 at Bates No.’s 0253-0255).
Specifically, pursuant to Fannie Mae’s guidelines:
Fannie Mae is at all times the owner of the mortgage note, whether the note is in
Fannie Mae’s portfolio or whether owned as trustee, for example, as trustee for an
MBS trust. In addition, Fannie Mae at all times has possession of and is the holder
of the mortgage note, except in the limited circumstances expressly described
below.
(Id. at Ex. 3 at Bates No. 0253) (bold & italicized emphasis added). As the above referenced text
is consistent with the evidentiary record—Fannie Mae, not BANA, is and was the “holder” of the
subject Note as of the commencement date of this action. As for the “limited circumstances”
mentioned above, Fannie Mae’s guidelines state:
When Fannie Mae transfers possession, the servicer becomes the holder of the note
as follows:
27
• If a note is held at Fannie Mae’s document delivery facility, Fannie Mae has
possession of the note on behalf of the servicer so that the servicer has constructive
possession of the note and the servicer shall be the holder of the note . . . .
• If the note is held by a document custodian on Fannie Mae’s behalf, the custodian
also has possession of the note on behalf of the servicer so that the servicer has
constructive possession of the note and the servicer shall be the holder of the note .
...
This Guide provision may be relied upon by a Court to establish that the servicer
conducting the foreclosure, bankruptcy, probate, or other legal proceeding in its
name has possession, and is the holder, of the note during the foreclosure . . . .
(Paulsen Opp. Aff. at Ex. 3 at Bates No.’s 0253-0255). Unfortunately for Fannie Mae, while it
would probably love for New York Courts and New York’s UCC to adopt the above referenced
definition and interpretation of “holder”; New York law has quite a differing interpretation of such.
In fact, after reading the exact same Fannie Mae guidelines as referenced above, a Kings
County Supreme Court was prompted to opine that “[a] reading of this FANNIE MAE regulation
demonstrates the lengths to which FANNIE MAE evaded its responsibility to be the real plaintiff
in interest . . . [i]t demonstrates the ‘unclean hands’ of FANNIE MAE and its servicer . . . [i]t is
FANNIE MAE’S roadmap of how to inveigle and deceive a court.” JP Morgan Chase Bank, Nat.
Ass'n v Butler, 40 Misc 3d 1205[A], 2013 NY Slip Op 51050[U], *6 [Sup Ct, Kings County 2013].
Additionally, with respect to Fannie Mae’s above referenced guidelines, which directs courts to
adopt Fannie Mae’s interpretation of physical possession and constructive possession of a
promissory note, the Butler Court went on to further opine that “FANNIE MAE’s Servicing Guide,
with its deceptive practices to fool courts, does not supercede [sic] New York law,” (id. at *7) and
“FANNIE MAE must be unaware that in New York ‘[t]o establish a prima facie case in an action
to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and mortgage
note, ownership of the mortgage, and the defendant’s default in payment [emphasis added].’
(Campaign v Barba, 23 AD3d 327 [2d Dept 2005]).” (Id. at *5); accord RBS Citizens, N.A. v
28
Fruda, 2014 NY Misc LEXIS 5868, *7-13, 2014 WL 7720120,* 4-7, Index No.: 57269 [Sup Ct,
Warren County, May 13, 2014].
Furthermore, under New York law, with respect to any responsive claims BANA may
assert regarding any agency relationship with Fannie Mae; it is well settled that “[a] party who
claims to be the agent of another bears the burden of proving the agency relationship by a
preponderance of the evidence, and the declarations of an alleged agent may not be shown for the
purpose of proving the fact of agency.” Wells Fargo Bank, N.A. v Edeman, 2014 NY Slip Op
32013[U], *3 [Sup Ct, Suffolk County 2014]; citing Bank of N.Y. v Silverberg, 86 AD3d 274, 281
[2d Dept 2011]. “Furthermore, the acts of a person assuming to be the representative of another
are not competent to prove the agency without evidence tending to show the principal’s knowledge
of or assent to such acts.” Edeman at *3; citing Lexow & Jenkins v Hertz Commercial Leasing
Corp., 122 AD2d 25, 26 [2d Dept 1986]; accord Wells Fargo Bank, N.A. v Weekes, 46 Misc 3d
1205[A], 2014 NY Slip Op 51895[U], *3 [Sup Ct, Kings County 2014].
Thus, under New York law, Fannie Mae is and was the owner and holder of the subject
Note as of the commencement date of this action, and BANA has woefully failed to demonstrate
any, let alone a sufficient agency relationship with Fannie Mae to confer standing.
F.
BANA Did Not Physically Possess the Subject Note as of the Commencement
Date of the Action.
As a matter of fact, since it has been established that Fannie Mae is and was the owner of
subject Note as of the commencement date of the instant action; then the subject Note would have
been physically possessed by one of the several dozen document custodians approved to hold
custody of Notes owned by Fannie Mae (see Paulsen Opp. Aff. at Ex. 3 at Bates No.’s 0225-0252).
Accordingly, since BANA is not one of Fannie Mae’s approved document custodians, BANA
would not have had physical possession of the subject Note (see id.).
29
Furthermore, by failing to produce the fully executed “2009 Form” (see Paulsen Opp. Aff.
at Ex. 3 at Bates No.’s 0234-0235), nor delivery records of the subject Note; BANA has also failed
to establish that the subject Note was delivered to it, prior to the commencement of the action, as
Fannie Mae’s servicer (see Paulsen, 125 AD3d at 911).
As a final note, even if BANA had/has physical possession of the subject Note, which has
indisputably NOT been indorsed by the current owner and holder of such (i.e., Fannie Mae); it is
beyond well settled that physical delivery and/or possession of a negotiable instrument (i.e., a
mortgage note) without being the “holder” of that note as defined by the UCC, gives a party no
right to enforce—i.e., no standing to foreclose. See, Sundail Const. Co. v Liberty Bank of Buffalo,
277 NY 137, 140 [1938] (“The corporation, as a mere holder of the misappropriated [negotiable
instrument] unindorsed, had no claim it could enforce.”); see also Hoberg v Sofranscy, 248 NY
141, 144 [1928] (“[A]n unindorsed note payable to its order would vest a purchaser with no better
title than that of a thief.”).
G.
Questions of Fact Exist Regarding the Unindorsed Subject Note.
It is a fact that BANA’s moving papers, themselves, create a question of fact regarding the
subject Note. Compare Paulsen Opp. Aff. Ex. 1 at Bates No.’s 0004, 0016-0019; Lambert 2nd MSJ
Aff. ¶ 3, Ex. A (subject Note, marked “ORIGINAL,” consisting of only two [2] pages, both bearing
two [2] hole punches at the top of the pages, and devoid of any indorsements and/or allonges);
with id. at Ex. 1 at Bates No.’s 0043, 0048-0051; Woj. 2nd MSJ Aff. ¶ 4, Ex. 1 (a second version
of the subject Note, also marked “ORIGINAL,” apparently now consisting of three [3] pages, with
only the first two [2] pages bearing two [2] hole punches at the top of the pages, and the third [3]
page being a blank sheet of white paper with no hole punches whatsoever, bearing an undated
indorsement stamp in blank).
30
Thus, since there are two (2) different versions of the subject Note (i.e., one with and one
without a third page indorsed in blank), and because page three (3) of the second version of the
subject Note does not evince hole punches on the page; there is a genuine question of fact as to
whether the indorsement and/or allonge was so “firmly affixed thereto as to become a part thereof.”
Slutsky, 147 AD2d at 212; accord Burke, 125 AD3d at 767 (“While the copy of the note submitted
by the plaintiff in support of its motion includes an indorsement to the plaintiff by the original
lender and a second indorsement to the plaintiff, both indorsements are undated and, thus, it is not
clear whether the indorsements were effectuated prior to the commencement of this action.”);
Emigrant Sav. Bank-Brooklyn/Queens v Doliscar, 124 AD3d 831, 833 [2d Dept 2015] (“An
allonge to the note that is included in the record was not only undated, but was both endorsed by
EMC to the plaintiff and then endorsed in blank by the plaintiff, raising triable issues of fact as to
whether the note was actually assigned to the plaintiff and, if so, whether the plaintiff had already
reassigned the note to yet another party. Thus, the allonge presented a triable issue of fact as to
whether the plaintiff was the holder or assignee of both the note and mortgage prior to its
commencement of this action.”); Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680, 682 [2d
Dept 2012] (“[C]ontrary to the plaintiff's contention, it failed to demonstrate that it was the holder
of the note and mortgage by virtue of the endorsement of the note or a written assignment. While
the copy of the note submitted by the plaintiff in support of its motion included an endorsement to
the plaintiff, the endorsement is undated, and it was not included in the copy of the note which was
annexed to the plaintiff's complaint.”); Deutsche Bank Nat'l Trust Co. v Barnett, 88 AD3d 636,
637-638 [2d Dept 2011] (“[T]he documentation submitted failed to establish that, prior to
commencement of the action, the plaintiff was the holder or assignee of both the note and
mortgage. The plaintiff submitted copies of two different versions of an undated allonge which
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was purportedly affixed to the original note pursuant to UCC 3-202 (2). Moreover, these allonges
purporting to endorse the note from First Franklin, A Division of National City Bank of Indiana
(hereinafter Franklin of Indiana) to the plaintiff conflict with the copy of the note submitted, which
contains undated endorsements from Franklin of Indiana to First Franklin Financial Corporation
(hereinafter Franklin Financial), then from Franklin Financial in blank.”) (citation omitted); U.S.
Bank, N.A. v Collymore, 68 AD3d 752, 754 [2d Dept 2009] (“[T]he vice-president's affidavit
contained an undated indorsement in blank by the original lender. Furthermore, the Bank's reply
submissions included a different version of the note and an affidavit from a director of the
Residential Funding Corporation which contradicted the affidavit of the Bank's vice president in
tracing the history of transfers of the mortgage and note to the Bank. In view of the Bank's
incomplete and conflicting evidentiary submissions, an issue of fact remains as to whether it had
standing to commence this action.”).
H.
The Wojciechowski Affidavit is Vague, Conclusory, and the “Facts” Alleged
Therein are Contradicted by the Evidentiary Record.
Pertaining to Plaintiff’s alleged standing, BANA’s instant moving papers include an
affidavit from BANA’s assistant vice president, wherein the affiant ambiguously asserts that
“BANA, directly or through an agent, has [present tense] possession of the promissory note”
(Paulsen Opp. Aff. Ex. 1 at Bates No. 0043; Woj. 2nd MSJ Aff. ¶ 4). BANA’s affiant further
asserts, albeit vaguely that “BANA received the original note for the Subject Loan on or about . .
. .” (Id. at Ex. 1 at Bates No. 0043; Woj. 2nd MSJ Aff. ¶ 6). Lastly, and without any specific details
whatsoever; BANA’s affiant asserts that the Note was shipped to BANA’s counsel, yet this detail
has never even been alleged, let alone confirmed by BANA’s counsel (see id. at Ex. 1 at Bates No.
0043; Woj. 2nd MSJ Aff. ¶ 8).
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Unfortunately for BANA, the very exact same language used by BANA’s affiant regarding
Plaintiff’s alleged standing—i.e., “BANA, directly or through an agent . . .” and “BANA received
the original note . . . on or around . . .,” in and of itself has recently been determined as raising
sufficient enough issue of fact to preclude a foreclosing plaintiff from summary judgment. Wells
Fargo Bank, NA v Ostiguy,___AD3d___, 2015 NY Slip Op 03015, *2 [3d Dept 2015]; citing
Paulsen, 125 AD3d at 911 (“[I]n her affidavit, she states that ‘[plaintiff], directly or through an
agent, has possession of the Promissory Note and Mortgage.’ Herman's varying, and potentially
inconsistent, statements do not definitively establish that plaintiff maintained physical possession
of the note at the relevant time, and her affidavit fails to disclose who plaintiff's purported ‘agent’
could be or establish that any such agency relationship does, in fact, exist. Because the issue of
standing cannot be resolved as a matter of law on this record, summary judgment was not
warranted in favor of either party.”) (citation omitted).
Furthermore, BANA’s impermissive second request for summary judgment is also
properly denied since the affidavit provided in support is clearly contradicted by the evidentiary
record. See generally, Krupp v. Aetna Life & Cas. Co., 103 AD2d 252, 262 [2d Dept 1984] (holding
that “the court may not ordinarily weigh the credibility of the affiants unless untruths are clearly
apparent”). Here, the evidentiary record pertaining to Fannie Mae’s ownership and physical
possession of the subject Note (see Paulsen Opp. Aff. at Ex. 3 at Bates No.’s 0225-0252), coupled
with BANA’s counsel’s silence as to its alleged physical possession of the subject Note,
collectively establishes the falsity of the averments that BANA had physical possession of the
subject Note at any time.
Thus, the affidavit is wholly insufficient to confer BANA’s standing. See, Ostiguy at *2;
citing Paulsen at 911; accord Burke at 766 (“The affidavits of the plaintiff's Vice President of
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Loan Documentation did not give any factual details of a physical delivery and, thus, failed to
establish that the plaintiff had physical possession of the note at the time the action was
commenced.”); Weinman at 1109 (same); US Bank Natl. Assn. v Faruque, 120 AD3d 575, 577 [2d
Dept 2014] (same); Bank of N.Y. Mellon v Gales, 116 AD3d 723, 724-725 [2d Dept 2014] (same);
Guldi, 108 AD3d at 508-509 (same); Barnett, 88 AD3d at 638 (same); Weisblum, 85 AD3d at 109
(same).
CONCLUSION
For all the foregoing reasons, MITCH N. PAULSEN, contends that he has sufficiently
established all those reasons why this Court should DENY THE ENTIRETY of Plaintiff’s herein
discussed and opposed impermissive second motion for summary judgment.
Dated: Elmont, New York
May , 2015
_________________________
MITCH N. PAULSEN
Defendant, Pro Se
91 Stone Street
Elmont, New York 11003
Tel: (516) 424-5528
Em: Mitch.Paulsen@mpo.cc
34
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
Bank of America, N.A., Successor by Merger to BAC Home
Loans Servicing, LP f/k/a Countrywide Home Loans Servicing,
LP,
Index No.: 6109/2010
MEMORANDUM OF LAW
Plaintiff,
-againstMitch N. Paulsen, Mortgage Electronic Registration Systems,
Inc., as Nominee for Somerset Investors Corp., John Rivas, Scott
Klein, Mary Klein, Jerry Klein, and “JOHN DOE #1” through
“JOHN DOE #10,” the last ten names being fictitious and
unknown to the plaintiff, the person or parties, if any, having or
claiming an interest in or lien upon the mortgaged premises
described in the Complaint,
Defendants.
MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFF’S SECOND SUCCESSIVE
MOTION FOR SUMMARY JUDGMENT
MITCH N. PAULSEN
Defendant, Pro Se
91 Stone Street
Elmont, New York 11003
(516) 424-5528
Mitch.paulsen@mpo.cc (email)
35