OneWest Bank N.A. v. Conroy et al
Filing
155
MEMORANDUM AND OPINION. For the reasons set forth herein, the Court grants plaintiff's motion for summary judgment and denies defendant's motion for summary judgment. Ordered by Judge Joseph F. Bianco on 10/5/2018. (Karamigios, Anna)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 14-CV-5862 (JFB) (AKT)
_____________________
CIT BANK, N.A.,
Plaintiff,
VERSUS
TARA CONROY A/K/A TARA DONOVAN, ET AL.,
Defendants.
___________________
MEMORANDUM AND ORDER
October 5, 2018
___________________
JOSEPH F. BIANCO, District Judge:
evidence demonstrates that CIT Bank is
entitled to summary judgment. Accordingly,
Donovan’s motion for summary judgment is
denied and CIT Bank’s cross-motion for
summary judgment is granted.
Plaintiff CIT Bank, N.A. (“plaintiff” or
“CIT Bank”) brings this action against James
Donovan (“defendant” or “Donovan”) and
Tara Conroy (also known as Tara Donovan)
to foreclose on a mortgage encumbering real
property (“the Subject Property”) pursuant to
New York’s Real Property Actions and
Proceedings Law (“RPAPL”) Section 1301,
et seq. Presently before the Court are
Donovan’s motion for summary judgment
and CIT Bank’s cross-motion for summary
judgment. For the reasons set forth below,
the Court concludes that the uncontroverted
The Court assumes familiarity with the
facts and procedural history of this case, and
summarizes only the facts and history
pertinent to the pending motions. The Court
takes the following facts from the parties’
Rule 56.1 Statements, affidavits and
exhibits. 1 Unless otherwise noted, where a
Because both parties moved for summary judgment,
multiple Local Rule 56.1 statements were submitted.
Defendant Donovan’s statement in support of his
motion will be cited as “Def.’s 56.1”; plaintiff’s
statement in opposition to defendant’s motion will be
cited as “Pl.’s Opp. 56.1”; plaintiff’s statement in
support of its motion will be cited as “Pl.’s 56.1”; and
defendant’s statement in opposition to plaintiff’s
motion will be cited as “Def.’s Opp. 56.1.” The Court
notes that defendant filed two Rule 56.1 statements in
1
A. Facts
I. BACKGROUND
Rule 56.1 statement is cited, that fact is
undisputed or the opposing party has not
pointed to any contradictory evidence in the
record.
Loan is signed.” (Donovan Decl. Ex. C
¶ 3(e)). Second, on or about June 1, 2008,
IndyMac and defendants executed a
Modification Agreement entitled “Roll-toPerm,” which changed the interest rate and
monthly payment on the Note. (Marks Aff.
Ex. C.)
1. Note and Mortgage
As noted, plaintiff brings this action
against defendants, under RPAPL § 1301 et
seq. to foreclose on the Subject Property and
to declare the balance of the principle due and
immediately payable under the terms of a
Note and Mortgage (collectively, the “Loan”)
executed on April 25, 2007. (Pl.’s 56.1 ¶ 4.)
The Note was executed by defendants in
favor of non-party IndyMac Bank, FSB
(“IndyMac”) in the principal sum of
$600,000, secured by a lien on the Subject
Property. (Pl.’s 56.1 ¶¶ 4-5; see also Marks
Aff. Ex. A.) The Note and Mortgage both
state that the failure to make each monthly
payment in full on the due date will constitute
a default. (Marks Aff. Ex. A ¶ 7(B), Ex. B
¶ 11.) According to the terms of the
Mortgage, the mortgagee may send a notice
of default to the mortgagors, notifying them
that the overdue amount must be paid by a
certain date. (Marks Aff. Ex. B ¶ 22.) If the
mortgagors fail to pay by that date, Paragraph
22 of the Mortgage allows the mortgagee to
require immediate payment in full of the
remaining unpaid amount. (Id.)
In July 2008, IndyMac was closed by the
Office of Thrift Supervision. (Marks Aff.
¶ 7.)
The Federal Deposit Insurance
Corporation (“FDIC”) was appointed as
Receiver, and IndyMac’s assets were
transferred to IndyMac Federal Bank
(“IndyMac Federal”). (Id.) On March 19,
2009, OneWest Bank N.A. (“OneWest”)
acquired “substantially all” of the assets of
IndyMac Federal pursuant to a Master
Purchase Agreement and a Loan Sale
Agreement (“LSA”). (Marks Aff. ¶¶ 8-9.)
CIT Bank, which was formerly called
OneWest, 2 attests that the Loan is one of the
assets it acquired from IndyMac Federal, as
reflected in a Loan Schedule attached to the
LSA. (Marks Aff. Ex. D.) Though difficult
to read, the Loan Schedule lists the address of
the Subject Property, as well as certain other
identifying features of the Loan. (Id.) On
July 18, 2010, OneWest recorded a copy of
the assignment of the Mortgage from
IndyMac Federal to OneWest in the Suffolk
County Clerk’s Records Office with an
effective date of March 19, 2009. (See ECF
No. 3-1.)
The Loan was subject to two
modifications.
First, a Modification
Agreement, executed on October 28, 2007,
extended the construction period by sixty
days, added a prepayment penalty, and
released the interest rate lock commitment,
requiring that it float “until the Permanent
When plaintiff filed the complaint in this
action, it also filed a Certificate of Merit
attaching the Note indorsed by IndyMac in
blank and two allonges to the Note. (Id.) As
opposition to plaintiff’s motion for summary
judgment: one is dated February 4, 2017 (ECF No.
135-35), and the other is dated February 15, 2017
(ECF No. 136-3). The Rule 56.1 statements are
slightly different. Therefore, for purposes of the
instant motion, the Court will cite to the February 15,
2017 version, but has considered both statements filed
by defendant.
2
In 2014, plaintiff changed its name from OneWest
Bank, FSB to OneWest Bank N.A. and then changed
its name again to CIT Bank, N.A. (Marks Aff. ¶ 10.)
There is no dispute that OneWest and CIT Bank are
the same entity.
2
attached to the Marks Affidavit copies of the
default notices and the transaction report
confirming the date the notices were sent to
defendants. (See Marks Aff. Exs. F, G.) In
accordance with RPAPL § 1304, on June 11,
2014, plaintiff mailed ninety-day preforeclosure notices to each defendant by
certified and regular mail. (Marks Aff. Ex.
H; Pl’s 56.1 ¶ 16.) Plaintiff attached a
transaction report to the Marks Affidavit
confirming that the ninety-day notices were
sent to defendants. (Marks Aff. Ex. G,
Transaction Report.) Plaintiff avers that
$592,405.03 remains due on the Loan. (Pl’s
56.1 ¶ 17; Marks Aff. ¶¶ 12, 16.)
to the allonges attached to the Note, each is
titled “ALLONGE TO NOTE” and states the
following: “For purposes of further
endorsement of the following described
Note, the allonge is affixed and becomes a
permanent part of said Note.” (Marks Aff.
Ex. A at 10-11.) The allonges differ in that
one contains a specific indorsement making
the Note payable to “ONEWEST BANK,
FSB, WITHOUT RECOURSE” and is
signed by Sandra Schneider as “Attorney-InFact” on behalf of the “FEDERAL DEPOSIT
INSURANCE CORPORATION as Receiver
for IndyMac Federal Bank, FSB, successor to
IndyMac Bank, F.S.B.” (id. at 10), while the
other allonge is indorsed in blank, and is
signed by Sandra Schneider in her capacity as
“Vice President of OneWest Bank, FSB.”
(Id. at 11.) Both allonges are undated. (See
id. at 10-11.)
Defendant contends that he made the
February 1, 2009 payment, but that plaintiff
misapplied that payment. (Def.’s Opp. 56.1
¶ 14.) He also claims, without offering any
evidence, that “the Loan was paid through
March 1, 2016.” (Def.’s Mem. at 20.)
Defendant does not dispute that he received
the ninety-day notice, but instead argues that
the notice failed to comply with the
requirements of RPAPL § 1304 because the
Notice provided February 1, 2009 as the date
of defendants’ initial default on the loan.
(Def’s Opp. 56.1 ¶¶ 15-16.) He further
claims that he only received the Notice by
certified mail. (Id.)
In an affirmation signed and dated
January 30, 2017, CIT Bank’s foreclosure
counsel affirmed that he received the Note
and indorsements-in-blank from CIT Bank
on May 30, 2014 (Jacobson Aff. ¶¶ 3-4, ECF
No. 135-14) and, thus, that CIT Bank
possessed the Note when this action was filed
on October 7, 2014.
2. The Default
Plaintiff alleges that defendants breached
the Loan by failing to make the monthly
payment due on February 1, 2009, and all
subsequent monthly payments due thereafter.
(Marks Aff. ¶ 12.) On May 9, 2009, IndyMac
sent a letter to defendants by certified mail
informing them that they were in default and
that a payment of $17,054.89 was due on or
before June 9, 2009, to cure the default.
(Donovan Decl. Ex. E.)
Following
defendants’ continued default of the loan, on
June 11, 2014, pursuant to paragraph 22 of
the Mortgage, plaintiff mailed notices of
default to James Donovan and Tara Conroy
individually, by certified and regular mail.
(Marks Aff. ¶ 13; Pl’s 56.1 ¶ 15.) Plaintiff
B. Procedural History
On August 9, 2009, plaintiff, then known
as OneWest, commenced a state court action
in New York Supreme Court, Suffolk County
(“the State Action”), attempting to foreclose
on the Subject Property.
Plaintiff
immediately moved for summary judgment.
By Order dated December 15, 2010, the state
court denied OneWest’s motion, finding that
there was no admissible proof that OneWest
was the successor in interest to IndyMac
Federal with respect to defendants’ Loan and
thus had no standing to commence the
lawsuit. Following defendants’ subsequent
motion to dismiss plaintiff’s claim, the state
3
court converted the motion to one for
summary judgment and, on August 12, 2013,
granted summary judgment to defendants.
The court found that plaintiff had failed to
submit sufficient evidence to establish
standing as of the date the State Action was
filed.
Order’s conclusion that plaintiff’s claims
were barred by the doctrine of collateral
estoppel. (ECF No. 150.) By Memorandum
and Order dated July 20, 2018, this Court
granted
plaintiff’s
motion
for
reconsideration, and on reconsideration,
denied defendants’ motions for summary
judgment on the basis of collateral estoppel.
(ECF No. 154.) 4 The Court did not reach the
merits of the parties’ remaining arguments.
(See id.)
On October 7, 2014, plaintiff initiated the
instant action, amending its complaint on
September 23, 2016.
(ECF No. 97.)
Following discovery, defendants moved for
summary judgment. (ECF Nos. 135-11,
136.) Defendant Conroy’s motion was
limited to the argument that plaintiff was
precluded from bringing this action under the
doctrines of res judicata and collateral
estoppel. Defendant Donovan also asserted
those arguments, but also raised others,
including an attack on the sufficiency of the
assignment and indorsement of the Note,
failure to give proper notice pursuant to
RPAPL § 1304, lack of subject matter
jurisdiction under the Rooker Feldman
doctrine, and judicial estoppel. Plaintiff
crossed-moved for summary judgment on its
foreclosure claim and on defendants’
counterclaims. (ECF No. 135-31.)
II. STANDARD OF REVIEW
Under Federal Rule of Civil Procedure
56(a), a court may grant a motion for
summary judgment only if “the movant
shows that there is no genuine dispute as to
any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P.
56(a); Gonzalez v. City of Schenectady, 728
F.3d 149, 154 (2d Cir. 2013). The moving
party bears the burden of showing that he or
she is entitled to summary judgment.
Huminski v. Corsones, 396 F.3d 53, 69 (2d
Cir. 2005). “A party asserting that a fact
cannot be or is genuinely disputed must
support the assertion by: (A) citing to
particular parts of materials in the record,
including
depositions,
documents,
electronically stored information, affidavits
or declarations, stipulations (including those
made for purposes of the motion only),
admissions, interrogatory answers, or other
materials; or (B) showing that the materials
cited do not establish the absence or presence
of a genuine dispute, or that an adverse party
cannot produce admissible evidence to
support the fact.” Fed. R. Civ. P. 56(c)(1).
The court “is not to weigh the evidence but is
instead required to view the evidence in the
By Memorandum and Order dated May 3,
2017, the Honorable Leonard D. Wexler
granted defendants’ motions for summary
judgment based solely on collateral
estoppel, 3 denied plaintiff’s motion for
summary judgment on its affirmative claims,
but granted plaintiff’s motion for summary
judgment on defendants’ counterclaims, and
dismissed the complaint. (ECF No. 148.)
On May 17, 2017, plaintiff filed a motion
for reconsideration of the May 3, 2017
In light of its previous state foreclosure action against
defendants, the Court found that the plaintiff was
estopped from asserting that it had standing to
foreclose, and therefore declined to consider the merits
of plaintiff’s foreclosure claim against defendants.
(Id. at 5.)
Because defendant Tara Conroy’s motion for
summary judgment asserted only that plaintiff’s
foreclosure claim was barred by collateral estoppel,
the Court denied that motion in its entirety on
reconsideration.
3
4
4
Where, as here, the parties have filed
cross-motions for summary judgment, “the
court must consider each motion
independently of the other and when
evaluating each, the court must consider the
facts in the light most favorable to the
nonmoving party.” Chartis Seguros Mexico,
S.A. de C.V. v. HLI Rail & Rigging, LLC, 3 F.
Supp. 3d 171, 179 (S.D.N.Y. 2014); see also
Heublein, Inc. v. United States, 996 F.2d
1455, 1461 (2d Cir. 1993) (“[T]he court must
evaluate each party’s motion on its own
merits, taking care in each instance to draw
all reasonable inferences against the party
whose motion is under consideration.” (citing
Schwabenbauer v. Bd. of Educ. of Olean, 667
F.2d 305 (2d Cir. 1981))).
light most favorable to the party opposing
summary judgment, to draw all reasonable
inferences in favor of that party, and to
eschew credibility assessments.” Amnesty
Am. v. Town of West Hartford, 361 F.3d 113,
122 (2d Cir. 2004) (quoting Weyant v. Okst,
101 F.3d 845, 854 (2d Cir. 1996)); see
Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986) (summary judgment is
unwarranted if “the evidence is such that a
reasonable jury could return a verdict for the
nonmoving party”).
Once the moving party has met its
burden, the opposing party “must do more
than simply show that there is some
metaphysical doubt as to the material
facts . . . . [T]he non-moving party must
come forward with specific facts showing
that there is a genuine issue for trial.”
Caldarola v. Calabrese, 298 F.3d 156, 160
(2d Cir. 2002) (quoting Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 586-87 (1986)). As the Supreme Court
stated in Anderson, “[i]f the evidence is
merely colorable, or is not significantly
probative, summary judgment may be
granted.” 477 U.S. at 249-50 (citations
omitted). Indeed, “the mere existence of
some alleged factual dispute between the
parties will not defeat an otherwise properly
supported motion for summary judgment.”
Id. at 247-48. The non-moving party may not
rest upon conclusory allegations or denials
but must set forth “concrete particulars”
showing that a trial is needed. R.G. Grp., Inc.
v. Horn & Hardart Co., 751 F.2d 69, 77 (2d
Cir. 1984) (quoting SEC v. Research
Automation Corp., 585 F.2d 31, 33 (2d Cir.
1978)). Thus, it is insufficient for a party
opposing summary judgment “merely to
assert a conclusion without supplying
supporting arguments or facts.” BellSouth
Telecomms., Inc. v. W.R. Grace & Co., 77
F.3d 603, 615 (2d Cir. 1996).
III. DISCUSSION
A. Mortgage Foreclosure
Under New York law, a mortgage is
“merely security for a debt or other
obligation.” United States v. Freidus, 769 F.
Supp. 1266, 1276 (S.D.N.Y. 1991) (quoting
77 N.Y. Jur. 2d, Mortgages § 2); accord
Rivera v. Blum, 420 N.Y.S.2d 304, 308 (Sup.
Ct. 1978) (“A mortgage is a security for a
debt representing a lien on the mortgaged
premises.”). The “mortgagor is bound by the
terms of his contract as made” and, in the
event of a default, cannot be relieved from the
default unless “waive[d] by the mortgagee,”
or where there is “estoppel, or bad faith,
fraud, oppressive or unconscionable
conduct” on the part of the mortgagee.
Freidus, 769 F. Supp. at 1276 (quoting
Nassau Tr. Co. v. Montrose Concrete Prods.
Corp., 56 N.Y.2d 175, 183 (1982))
(collecting cases).
To establish a prima facie case in a
foreclosure action, New York courts require
that the plaintiff demonstrate “the existence
of the mortgage and mortgage note,
ownership of the mortgage, and the
defendant’s default in payment.” Campaign
5
v. Barba, 805 N.Y.S.2d 86, 86 (2d Dep’t
2005); see also Freidus, 769 F. Supp. at 1277
(stating that in foreclosure actions, “the
essential requirements of the plaintiff’s case
are proof of the existence of an obligation
secured by a mortgage, and a default on that
obligation”). Once the plaintiff establishes a
prima facie case, it has a presumptive right to
foreclose. See Fleet Nat’l Bank v. Olasov,
793 N.Y.S.2d 52, 52 (2d Dep’t 2005)
(collecting cases).
default in the form of unrebutted affidavit
testimony and copies of the notice of default
and pre-foreclosure notice sent to defendants.
Defendant raises a number of defenses to
foreclosure, contending that he is entitled to
judgment as a matter of law. Specifically,
defendant contends that plaintiff lacks
standing to foreclose on the mortgage. He
further claims that judicial estoppel bars
plaintiff’s claim and that this Court lacks
subject matter jurisdiction pursuant to the
Rooker Feldman doctrine. 5 However, as
discussed below, the Court finds that
defendant fails to raise any triable issue of
fact, and concludes that, having established
its standing to foreclose on defendants’
mortgage and the requisite elements of
foreclosure based on uncontroverted
evidence, plaintiff is entitled to judgment as
a matter of law.
The burden then shifts to the defendant to
raise a triable issue of fact, including with
respect to any alleged defenses or
counterclaims. Id. at 52-53; see also U.S.
Bank Tr. Nat’l Ass’n Tr. v. Butti, 792
N.Y.S.2d 505, 506 (2d Dep’t 2005)
(affirming summary judgment where
“plaintiff produced the note and mortgage
executed by the appellant, as well as evidence
of nonpayment,” and “[a]ccordingly, it was
incumbent upon the appellant to produce
evidentiary proof in admissible form
sufficient to require a trial of his defenses,”
but “appellant failed to do so”); Republic
Nat’l Bank of N.Y. v. O’Kane, 764 N.Y.S.2d
635, 635 (2d Dep’t 2003) (same).
1. Standing
First, defendant challenges plaintiff’s
standing to bring this foreclosure action by
claiming that the assignment of the Note to
plaintiff was invalid and/or that plaintiff
otherwise does not have proper possession of
the Note. (See Def.’s Mem. at 15-18.)
“Where standing is raised as a defense by the
defendant, the plaintiff is required to prove its
standing before it may be determined
whether the plaintiff is entitled to relief.”
1077 Madison St., LLC v. Smith, 670 F.
App’x 745, 746 (2d Cir. 2016) (quoting U.S.
Bank, N.A. v. Sharif, 933 N.Y.S.2d 293, 295
(2d Dep’t 2011)). In this regard, “[u]nder
New York law, ‘[a] plaintiff establishes its
As discussed more fully below, plaintiff
has established the required elements of
foreclosure.
Specifically, plaintiff has
produced the Note and Mortgage as
attachments to its complaint and again as
exhibits in support of its motion for summary
judgment.
Additionally, plaintiff has
produced the LSA demonstrating the
assignment of the Loan to OneWest. Further,
plaintiff has provided proof of defendants’
The Court notes that defendant appears to have
abandoned the defenses of judicial estoppel and the
Rooker-Feldman doctrine in his opposition to
plaintiff’s cross-motion for summary judgment.
However, in light of defendant’s pro se status, the
Court address them here. See Jackson v. Fed. Exp.,
766 F.3d 189, 197-98 (2d Cir. 2014) (“Where a partial
response to a motion is made—i.e., referencing some
claims or defenses but not others—a distinction
between pro se and counseled responses is
appropriate. In the case of a pro se, the district court
should examine every claim or defense with a view to
determining whether summary judgment is legally and
factually appropriate. In contrast, in the case of a
counseled party, a court may, when appropriate, infer
from a party’s partial opposition that relevant claims
or defenses that are not defended have been
abandoned.”)
5
6
standing in a mortgage foreclosure action by
demonstrating that, when the action was
commenced, it was either the holder or
assignee of the underlying note.’” OneWest
Bank, N.A. v. Melina, 827 F.3d 214, 222 (2d
Cir. 2016) (quoting Wells Fargo Bank, N.A.
v. Rooney, 19 N.Y.S.3d 543, 544 (2d Dep’t
2015)). “Either a written assignment of the
underlying note or the physical delivery of
the note prior to the commencement of the
foreclosure action is sufficient to transfer the
obligation, and the mortgage passes with the
debt as an inseparable incident.”
Id.
(citations omitted).
indorsement in blank—at the time it initiated
the instant foreclosure proceeding. (Marks
Aff. Ex. A.)
Andrew L. Jacobson,
foreclosure counsel to CIT Bank, affirmed
that his law firm received the original Note,
with allonges, on or about, May 30, 2014,
and, thus, that CIT Bank possessed the Note
when this action was filed on October 7,
2014, and retained possession through the
date of his affirmation, January 30, 2017.
(Jacobson Affirm. ¶¶ 1, 3-4.) Additionally,
the Assistant Vice President of CIT Bank
stated in her affidavit that, on May 29, 2014,
the collateral file, including the original
indorsed Note, was sent to CIT Bank’s
attorneys. (Marks Aff. ¶ 11.) The Marks
Affidavit and Jacobson Affirmation provide
sufficient evidence of physical possession to
prove plaintiff’s standing to foreclose on the
mortgage associated with the Note. 6 See
Melina, 817 F.3d at 223 (citing Wells Fargo
Bank, N.A. v. Charlaff, 24 N.Y.S.3d 317, 319
(2d Dep’t 2015)); Rooney, 19 N.Y.S.3d at
544-45; HSBC Bank USA, N.A. v. Spitzer, 18
N.Y.S.3d 67, 68 (2d Dep’t 2015); Deutsche
Bank Nat’l Tr. Co. v. Abdan, 16 N.Y.S.3d
459, 459 (2d Dep’t 2015). As a matter of law,
the Mortgage was also transferred to CIT
Bank at the time the Note was transferred.
See Mortg. Elec. Registration Sys., Inc. v.
Coakley, 838 N.Y.S.2d 622, 623 (2d Dep’t
2007) (finding that the mortgage “passed as
an incident to the promissory note”).
“Holder status is established where the
plaintiff possesses a note that, on its face or
by allonge, contains an indorsement in blank
or bears a special indorsement payable to the
order of the plaintiff.” E. Sav. Bank, FSB v.
Thompson, 631 F. App’x 13, 15 (2d Cir.
2015) (quoting Wells Fargo Bank, N.A. v.
Ostiguy, 8 N.Y.S.3d 669, 671 (3d Dep’t
2015)). “New York courts have repeatedly
held that proof of physical possession—such
as the affidavits of OneWest’s corporate
representative and counsel in this case—is
sufficient on its own to prove a plaintiff’s
standing to foreclose on the mortgage
associated with the note.” Melina, 827 F.3d
at 223 (“OneWest thus had no obligation to
provide details pertaining to the transfer or
delivery of [the defendant’s] [n]ote in order
to prove its standing to foreclose on the
associated mortgage.”).
Defendant’s claim that the Note was
fraudulently indorsed is not supported by any
evidence in the record. (Def.’s Mem. at 1618.) Specifically, defendant argues that,
during discovery, plaintiff submitted two
Here, plaintiff is the holder of the Note.
Plaintiff has demonstrated that it received the
Note by physical delivery and that it
possessed the Note—which contains an
Defendant’s argument that the Marks Affidavit is not
based upon personal knowledge fails to create an issue
of fact. (Def.’s Opp. Mem. at 12-13.) Marks attests
that she has “acquired personal knowledge of the
matters stated herein by personally examining the[]
business records.” (Marks Aff. ¶ 3.) Marks further
attests that, “[i]n connection with making this
affidavit, I have personally examined these business
records as they relate to the loan at issue in this action,
including the exhibits herein.” (Supp. Marks Aff. ¶ 2.)
These statements are sufficient. See OneWest Bank,
N.A. v. Rubio, No. 14-CV-3800, 2015 WL 5037111, at
*2 (S.D.N.Y. Aug. 26, 2015) (finding similar affidavit
admissible to establish prima facie entitlement to
summary judgment in foreclosure action in favor of
plaintiff).
6
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different versions of the Note: one which
contains a “stamp indorsement” by Vartan
Derbedrossian as Vice President of IndyMac,
who plaintiff alleges was not authorized to
indorse Notes on behalf of IndyMac, and one
stamped “Certified True Copy” that does not
contain an indorsement by Derbedrossian.
(Id.; Def.’s Opp. 56.1 ¶ 5.) Defendant
contends that the indorsed Note was not
submitted by plaintiff at the time it
commenced the 2009 State Action. (Def.’s
Mem. at 17.) He argues that the indorsed
Note first appeared in the State Action on or
about March 13, 2013, attached as an exhibit
to plaintiff’s opposition to the summary
judgment motion before the state court. (Id.)
Thus, defendant claims that the indorsed
version of the Note is fraudulent as
Derbedrossian was no longer employed by
IndyMac after February 2009. (Id. at 18.)
instrument that has been endorsed in blank
must establish how it came into possession of
the instrument in order to be able to enforce
it.”
JPMorgan Chase Bank, N.A. v
Weinberger, 37 N.Y.S.3d 286, 289 (2d Dep’t
2016). Further, “it is unnecessary to give
factual details of the delivery in order to
establish that possession was obtained prior
to a particular date.” Id. (citing Aurora Loan
Servs., LLC v Taylor, 25 N.Y.3d 355, 362
(2015)).” 7
Plaintiff also established its standing on
independent grounds as the assignee of the
Note. “In New York, standing to foreclose
may be established by ‘a written assignment
of the underlying note.’” Melina, 827 F.3d at
223 (quoting OneWest, F.S.B. v. Goddard, 17
N.Y.S.3d 142, 143 (2d Dep’t 2015)). “No
special form or language is necessary to
effect an assignment as long as the language
shows the intention of the owner of a right to
transfer it.” Id. (quoting Suraleb, Inc. v. Int’l
Trade Club, Inc., 788 N.Y.S.2d 403, 404 (2d
Dep’t 2004)). Plaintiff asserts that the
Mortgage and Note were assigned to it by the
execution of the LSA dated March 19, 2009,
between OneWest and the FDIC as Receiver
for IndyMac Federal, pursuant to which CIT
Bank acquired certain loans from IndyMac,
including the at-issue Loan. (See Marks Aff.
Ex. D.) The LSA provides that FDIC, as
receiver and conservator for IndyMac
Federal, would “sell[], transfer[], convey[],
assign[] and deliver[]” to OneWest, and
OneWest would “purchase[], accept[] and
assume[] from [FDIC] . . . all of [FDIC’s]
rights, title and interests in, to and under”
certain defined assets. (Marks Aff. Ex. D
The record simply does not support this
assertion. First, any variations of the Note are
immaterial because the uncontroverted
record establishes plaintiff’s ownership of the
Note, indorsed in blank, and the concomitant
right to foreclose the mortgage at the time it
filed this action. Furthermore, the Note is
undated and plaintiff has not claimed that the
Note was indorsed after February 2009.
(Marks Aff. Ex. A; Pl.’s Reply Mem. at 8.)
Moreover, according to Derbedrossian’s
Response to Defendant’s First Request for
Admissions, he kept his “signing authority
when the FDIC was appointed conservator of
[IndyMac Bank].” (See Donovan Decl. Ex.
R.) Contrary to defendant’s contentions,
“[t]here is simply no requirement that an
entity in possession of a negotiable
Defendant’s argument that Sandra Schneider was not
authorized to execute allonges on behalf of the FDIC
and that the allonge to the Note is insufficient because
it was paperclipped to the Note fail to create an issue
of fact precluding summary judgment. (See Def.’s
Opp. 56.1 ¶ 6; Def.’s Mem. at 18-19.) Although it is
true that New York U.C.C. § 3-302(2) requires that
“[a]n indorsement must be written . . . on the
instrument or on a paper so firmly affixed thereto as to
become a part thereof,” here, the Note itself contains
an indorsement in blank.
(Marks Aff. ¶ 5.)
Additionally, as discussed infra, the assignment of the
Note to plaintiff in and of itself is sufficient to establish
plaintiff’s ownership of defendants’ Loan. See
Melina, 827 F.3d at 223.
7
8
§ 2.01(a)). Such assets include “all of the
[FDIC’s] rights, title and interest in, to and
under the Loans (including all Notes, the
other Loan Documents and Related
Agreements) identified on the Loan Schedule
attached hereto as Attachment A.” (Id. at §
2.01(a)(i)). The attached Loan Schedule
includes defendants’ Mortgage Loan. (See
Marks Aff. Ex. D.) Significantly, as the
Second Circuit recently noted in Melina, in
reference to the same LSA agreement at issue
here, “[t]he LSA thus assigned to [Plaintiff]
all of the rights that FDIC previously had to
[the defendant’s] loan as the conservator and
receiver of IndyMac Federal—and this
assignment sufficed to give [the plaintiff]
standing to foreclose.” 827 F.3d at 223.
Thus, the LSA is sufficient under New York
law to assign the Note to OneWest. See
Melina v. OneWest Bank, N.A., No. 14 CV
5290, 2015 WL 5098635, at *4 (E.D.N.Y.
Aug. 31, 2015) (citing Rajamin v. Deutsche
Bank Nat’l Tr. Co., 757 F.3d 79, 91-92 (2d
Cir. 2014), aff’d 827 F.3d 214 (2d Cir. 2016);
CIT Bank N.A. v. Elliot, 15-CV-4395, 2018
WL 1701947, at *8-9 (E.D.N.Y. Mar. 31,
2018); OneWest Bank, N.A. v. Perez, 14- CV3465, 2015 WL 12659924, at * 7-8 (July 18,
2015). Again, the Mortgage followed the
Note by operation of law. See Mortg. Elec.
Registration Sys., Inc., 838 N.Y.S.2d at 623. 8
Therefore, plaintiff has established its
standing as both the holder and the assignee
of the Note, and thus the Mortgage, prior to
the commencement of this action.
¶¶ 6-7.) However, nothing in the record
supports defendant’s contention. In fact,
defendant continued to make monthly
payments on the Loan for ten months after
plaintiff’s alleged failure to convert the Loan.
(See Def.’s Opp. 56.1 ¶ 14; Marks Aff. Ex. E,
Loan History.)
Furthermore, defendant
ignores the June 1, 2008 Modification
Agreement, which superseded any earlier
agreements between the parties. (Marks Aff.
Ex. C.) That agreement contained the terms
of the defendants’ permanent loan and states
on the first page: “THIS AGREEMENT
MODIFIES THE NOTE TO CHANGE THE
INTEREST RATE AND MONTHLY
PAYMENT, PROVIDES FOR A CHANGE
IN THE INTIAL FIXED INTEREST RATE
TO AN ADJUSTABLE INTEREST RATE
AND LIMITS THE AMOUNT THE
ADJUSTABLE INTEREST RATE CAN
CHANGE AT ANY ONE TIME AND THE
MAXIMUM RATE.” (Id.) Any contrary
contentions made by defendant are not
supported by the record. See E. Sav. Bank
FSB v. Rabito, No. 11-cv-2501, 2012 WL
3544755, at *4-5 (E.D.N.Y. Aug. 16, 2012)
(finding that defendant failed to raise any
legal defense to plaintiff’s proof of default
where he denied the default in his answer and
opposition to a motion for summary
judgment, but provided no further evidence
in support).
Defendant further contends that plaintiff’s
ninety-day foreclosure notice failed to satisfy
the requirements of RPAPL § 1304. That
section provides, in relevant part, that “at
least ninety days before a lender, an assignee,
or a mortgage loan servicer commences legal
action against the borrower, . . . including
mortgage foreclosure, [that entity] shall give
notice to the borrower in at least fourteenpoint type” of the debt owed and amounts due
2. Default and Notice Requirements
Defendant
disputes
his
default,
contending that the Loan was rescinded when
IndyMac failed to convert the Loan from the
construction phase to the permanent phase on
March 16, 2008, pursuant to the terms of the
2007 modified agreement. (Def’s Rule 56.1
The recorded assignment of the Mortgage to plaintiff
on July 19, 2010, is further evidence of plaintiff’s
standing. (See Certificate of Merit, Ex. A.)
8
9
Loan History.) 9 Furthermore, as set forth in
the Marks Affidavit, “on June 11, 2014, as
part of [p]laintiff’s regular mailing practices,
[p]laintiff mailed 90-day notices that were
compliant with RPAPL 1304 in font size and
content to each [d]efendant by both certified
and regular mail.” (Marks Supp. Aff. ¶ 3; see
also Marks Aff. Ex. H.) Moreover, defendant
does not deny receiving the notice in the mail
and CIT Bank submitted documentary
evidence in the form of United States Postal
Service records establishing that the notices
were mailed to the Subject Property on June
11, 2014. (See Def.’s Opp. 56.1 ¶ 16; Marks
Aff. Ex. G.) Therefore, as the uncontroverted
evidence shows, the notice requirements of
RPAPL § 1304 were satisfied.
to cure the default. Id. § 1304(1). It further
provides that such notice must be given in a
specific form:
Such notice shall be sent . . . by
registered or certified mail and also
by first-class mail to the last known
address of the borrower, and to the
residence that is the subject of the
mortgage. . . . Notice is considered
given as of the date it is mailed.
Id. § 1304(2). “[P]roper service of RPAPL
[§] 1304 notice on the borrower or borrowers
is a condition precedent to the
commencement of a foreclosure action.”
Wells Fargo Bank, N.A. v. Ullah, No. 13-CV485 (JPO), 2015 WL 3735230, *8 (S.D.N.Y.
June 15, 2015) (quoting Aurora Loan Servs.,
LLC v. Weisblum, 923 N.Y.S.2d 609, 615 (2d
Dep’t 2011)). Plaintiff has the burden of
establishing that it satisfied this condition.
Id.
Thus, having established its standing to
sue and the existence of a debt and a
mortgage securing the debt, plaintiff has also
provided proof of defendants’ default in the
form of unrebutted affidavit testimony and
copies of the notice of default and preforeclosure notice sent to defendants. See
OneWest Bank, N.A. v. Rosado, No. 14 Civ.
9917, 2016 WL 3198305, at *2 (S.D.N.Y.
June 7, 2016) (finding similar proof
sufficient); Melina, 2015 WL 5098635, at *13 (same).
Accordingly, plaintiff has
established its prima facie case for
foreclosure.
Although defendant generally denies that
he defaulted on the Loan, he argues that, if a
default did occur, the earliest date on which
plaintiff could have declared a default was
April 1, 2009. (Def.’s Opp. 56.1 ¶¶ 14, 15,
19; Def.’s Mem. at 20.) Thus, defendant
alleges that because plaintiff’s ninety-day
notice stated that the default occurred on
February 1, 2009, the notice contains a
factual inaccuracy and fails to meet the
requirements of RPAPL § 1304. (Def.’s
Mem. at 20.) Furthermore, defendant alleges
that he only received the ninety-day notice by
certified mail. (Def.’s Opp. 56.1 ¶ 16.)
B. Alleged Defenses
1. Judicial Estoppel
Defendant raises the affirmative defense
that plaintiff’s action is barred by the doctrine
of judicial estoppel. (Def.’s Mem. at 14-15.)
Defendant appears to base this contention on
the fact that plaintiff has foreclosed on other
homes “as successor in interest to IndyMac.”
(Id. at 14.) Defendant’s argument has no
Such
conclusory
allegations
are
insufficient to create an issue of fact. As
demonstrated by the loan history attached to
the Marks Affidavit, plaintiff defaulted on the
payment due February 1, 2009, and all
payments thereafter. (See Marks Aff. Ex. E,
Defendant relies on the incomplete history of loan
payments that he attached to his declaration. (See
Donovan Decl. Ex. S.) However, that document
provides the loan payments made by defendants
through only January 2009. (Id.)
9
10
(alterations in original) (quoting Exxon, 544
U.S. at 283). Four requirements must be
satisfied for Rooker-Feldman to apply:
“(1) the federal-court plaintiff lost in state
court; (2) the plaintiff ‘complain[s] of
injuries caused by a state court judgment’;
(3) the plaintiff ‘invite[s] . . . review and
rejection of that judgment’; and (4) the state
judgment was ‘rendered before the district
court proceedings commenced.’”
Id.
(alterations in original) (quoting Hoblock v.
Albany Cty. Bd. of Elecs., 422 F.3d 77, 85 (2d
Cir. 2005)). However, a plaintiff’s injuries
are not “caused by a state court judgment”
when the state court “simply ratified,
acquiesced in, or left unpunished” the actions
of a third party. Hoblock, 422 F.3d at 88.
Additionally, “a party is not complaining of
an injury ‘caused by’ a state-court judgment
when the exact injury of which the party
complains in federal court existed prior in
time to the state-court proceedings, and so
could not have been ‘caused by’ those
proceedings.” McKithen v. Brown, 481 F.3d
89, 98 (2d Cir. 2007).
merit and thus fails to raise a material issue
of fact.
Judicial estoppel prevents a party from
asserting a factual position in one legal
proceeding that is contrary to a position that
it successfully advanced in another
proceeding. See Mitchell v. Washingtonville
Cent. Sch. Dist., 190 F.3d 1, 6 (2d Cir. 1999).
Thus, “[a] party invoking judicial estoppel
must show that (1) the party against whom
the estoppel is asserted took an inconsistent
position in a prior proceeding and (2) that
position was adopted by the first tribunal in
some manner, such as by rendering a
favorable judgment.” Id. (citation omitted).
Here, plaintiff has not taken a position
inconsistent with its position in any prior
action.
In fact, plaintiff’s basis for
foreclosure in the instant action is based on
the same LPA at issue in other successful
foreclosure actions filed by plaintiff. See
OneWest Bank, N.A. v. Melina, 827 F.3d 214,
222 (2d Cir. 2016); CIT Bank N.A. v. Elliot,
15-CV-4395, 2018 WL 1701947, at *8-9
(E.D.N.Y. Mar. 31, 2018); OneWest Bank,
N.A. v. Rubio, No. 14-CV-3800, 2015 WL
5037111 (S.D.N.Y. Aug. 26, 2015).
Therefore, defendant’s judicial estoppel
defense fails as a matter of law.
Here, plaintiff does not complain of
injuries caused by a state court judgement;
rather, plaintiff’s foreclosure claim is based
on defendants’ default on their loan payment,
events that occurred prior to the state court
action.
Therefore, the Rooker-Feldman
doctrine does not bar plaintiff’s claim.
2. The Rooker-Feldman Doctrine
In his final defense, defendant asserts that
the instant action is barred by the RookerFeldman doctrine. “Under the Rooker–
Feldman doctrine, federal district courts lack
jurisdiction over cases that essentially
amount to appeals of state court judgments.”
Vossbrinck v. Accredited Home Lenders,
Inc., 773 F.3d 426, 426 (2d Cir. 2014) (citing
Exxon Mobil Corp. v. Saudi Basic Indus.
Corp., 544 U.S. 280, 283-84 (2005)). “The
doctrine is rooted in the principle that
‘appellate jurisdiction to reverse or modify a
state-court
judgment
is
lodged . . .
exclusively in [the Supreme] Court.’” Id.
***
In sum, the Court finds that each of
defendant’s challenges is without merit and is
insufficient to create a triable issue of fact
sufficient to defeat summary judgment. The
uncontroverted evidence establishes that
defendants’ Mortgage was validly assigned
by IndyMac to plaintiff prior to the
commencement of this foreclosure action.
Additionally, the Marks Affidavit states
unequivocally that based on her inspection of
the relevant business records maintained by
11
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