Gustavia Home, LLC v. Hoyer et al

Filing 108

ORDER: For the reasons set forth in the attached Memorandum & Order, the 94 Motion to Set Aside Judgment is denied. Ordered by Judge Pamela K. Chen on 3/25/2021. (Nguyen, Andrew)

Case 1:16-cv-04015-PKC-VMS Document 108 Filed 03/25/21 Page 1 of 6 PageID #: 1976

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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GUSTAVIA HOME, LLC,
Plaintiff,
MEMORANDUM & ORDER
16-CV-4015 (PKC) (VMS)

- against YVETTE HOYER, SHAUNA M. PAUL,
UNITED STATES OF AMERICA/INTERNAL
REVENUE SERVICE, NEW YORK STATE
DEPARTMENT OF TAXATION AND
FINANCE, CITY OF NEW YORK
DEPARTMENT OF TRANSPORTATION
PARKING VIOLATIONS BUREAU, CITY
OF NEW YORK ENVIRONMENTAL
CONTROL BOARD, and JOHN DOE “1”
through “12,” said persons or parties having or
claimed to have a right, title or interest in the
mortgaged premises herein, their respective
names are presently unknown to Plaintiff,
Defendants.
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PAMELA K. CHEN, United States District Judge:

Plaintiff Gustavia Home, LLC commenced this diversity mortgage foreclosure action
under Article 13 of the New York Real Property Actions and Proceedings Law § 1301 et seq.,
seeking to foreclose on a mortgage encumbering the property located at 361 Vernon Avenue,
Brooklyn, New York 11206 (“the Property”). (Complaint, Dkt. 1, ¶ 1.) By Memorandum and
Order dated January 24, 2019, the Court granted Plaintiff’s motion for summary judgment and
denied a competing cross-motion for summary judgment brought by Defendants Yvette Hoyer and
Shauna M. Paul (collectively, “Defendants”). Gustavia Home, LLC v. Hoyer, 362 F. Supp. 3d 71,
77 (E.D.N.Y. 2019) (“January 24, 2019 Order”). That decision is currently on appeal before the
Second Circuit, under Case No. 19-471, pursuant to a Notice of Appeal that Defendants filed on
February 22, 2019. (Dkt. 75.) Presently before the Court is Defendant Paul’s motion under Federal
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Rule of Civil Procedure 60(b) (“Rule 60(b)”) to set aside the January 24, 2019 Order. (Dkt. 94.)
The motion, filed on September 30, 2019, was subsequently held in abeyance because Defendant
Hoyer filed for bankruptcy. (See Dkt. 95; 10/8/2019 Docket Order.) The bankruptcy proceedings
concluded on September 23, 2020, and the parties finished briefing the motion on November 23,
2020. (See Dkt. 100 at ECF 20–21; see also Dkts. 101, 102, 104). For the reasons set forth below,
the motion is denied.
JURISDICTION
Because the present Rule 60(b) motion to set aside the January 24, 2019 Order was filed
after Defendants filed a Notice of Appeal with respect to that Order, the Court must first determine
whether it has jurisdiction to consider the motion. “Normally, the docketing of a notice of appeal
will divest a district court of jurisdiction over the issues encompassed by the appeal.” McGee v.
State Farm Mut. Auto. Ins. Co., 684 F. Supp. 2d 258, 266 (E.D.N.Y. 2009) (citing Ryan v. U.S.
Lines Co., 303 F.2d 430, 434 (2d Cir. 1962)). This rule, however, is not without exception. Under
Rule 4 of the Federal Rules of Appellate Procedure, if a party files a notice of appeal after the
district court enters a judgment but before it disposes of a Rule 60 motion “filed no later than 28
days after the judgment is entered,” the notice of appeal does not become effective until the district
court has disposed of the Rule 60 motion. See Fed. R. App. P. 4(a)(4)(A)(vi), 4(a)(4)(B)(i). The
Rule 60(b) motion here, though, was filed more than 28 days after the filing of Defendants’ Notice
of Appeal, so Rule 4(a)(4)(B)(i) does not apply. (See Dkts. 75, 94.)
Nevertheless, in Ryan v. United States Lines Co., the Second Circuit established a
procedure whereby the district court may consider and deny a Rule 60(b) motion after an appeal is
taken, but may grant the motion “only if the moving party obtains permission from the circuit
court.” Toliver v. County of Sullivan, 957 F.2d 47, 49 (2d Cir. 1992) (per curiam) (citing Ryan,
303 F.2d at 434). “In other words, before the district court may grant a [R]ule 60(b) motion, [the
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Second Circuit] must first give its consent so it can remand the case, thereby returning jurisdiction
over the case to the district court.” Id. In practice, this means that “the district court ‘must first
determine whether or not it will grant the motion, and then, if it finds that it would, require the
moving party to obtain the necessary remand from the [Second Circuit].’” Martin v. Giordano,
No. 11-CV-4507 (ARR) (JO), 2016 WL 4411401, at *2 (E.D.N.Y. Aug. 18, 2016) (quoting Garcia
v. Myears, No. 13-CV-965, 2015 WL 1015425, at *2 (W.D.N.Y. Mar. 9, 2015)). But if the district
court “determines that it will not grant the motion for reconsideration, it has jurisdiction to resolve
the motion without resort to permission from the Second Circuit.” Id. Because the Court is
denying the present Rule 60(b) motion, the Court has jurisdiction to proceed.
LEGAL STANDARD
“Rule 60(b) permits the Court to relieve a party from an order in the event of mistake,
inadvertence, excusable neglect, newly discovered evidence, fraud, or for other reason that justifies
relief.” Lilakos v. New York City, No. 14-CV-5288 (PKC) (LB), 2016 WL 6768943, at *1
(E.D.N.Y. Nov. 15, 2016) (quoting Dziennik v. Sealift, Inc., No. 05-CV-4659 (DLI) (MDG), 2015
WL 1469323, at *2 (E.D.N.Y. Mar. 30, 2015)). “The decision whether to grant a party’s Rule
60(b) motion is committed to the ‘sound discretion’ of the district court,” Stevens v. Miller, 676
F.3d 62, 67 (2d Cir. 2012), and because Rule 60(b) is a means of “extraordinary judicial relief,” it
is properly invoked “only upon a showing of exceptional circumstances,” Nemaizer v. Baker, 793
F.2d 58, 61 (2d Cir. 1986) (collecting cases). A Rule 60(b) motion is not a substitute for an appeal
or a vehicle for relitigating an issue already decided. See Stevens, 676 F.3d at 67; United Airlines,
Inc. v. Brien, 588 F.3d 158, 176 (2d Cir. 2009); see also Shrader v. CSX Transp., Inc., 70 F.3d
255, 257 (2d Cir. 1995) (“[A] motion to reconsider should not be granted where the moving party
seeks solely to relitigate an issue already decided.”).

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DISCUSSION
Defendant Paul’s Rule 60(b) motion seeks relief from the January 24, 2019 Order on the
basis that “the Court mistakenly found [Plaintiff] to be the holder and assignee of the Note and
Mortgage.” (Defendant Paul’s Memorandum in Support of Rule 60(b) Motion (“Def.’s Mem.”),
Dkt. 94-1, at 1.) In essence, Defendant Paul argues that there is a broken chain of assignments
from First Franklin, A Division of National City Bank of Indiana (“First Franklin Bank”), the
original lender and originator of the Note and Mortgage, to Plaintiff, such that Plaintiff did not
validly hold the Note and Mortgage when it commenced this action. (See id. at 5–6.) As alleged
in the Complaint, the chain of assignments went as follows: First Franklin Bank assigned the
Mortgage and simultaneously endorsed the Note to First Franklin Financial Corporation (“First
Franklin Corporation”), which assigned the Mortgage and simultaneously endorsed the Note to
Dreambuilder Investments, LLC (“Dreambuilder”), which then assigned the Mortgage and Note
to Plaintiff. (See Complaint, Dkt. 1, ¶¶ 24–31.) But as the Complaint and its attached exhibits
appear to indicate, the assignment from First Franklin Bank to First Franklin Corporation
purportedly occurred on February 8, 2006, while the assignment from First Franklin Corporation
to Dreambuilder purportedly occurred on June 30, 2005. (See id. ¶¶ 28–29; see also Ex. D of
Complaint, Dkt. 1-4.) Because the latter assignment apparently predates the former, Defendant
Paul argues that First Franklin Corporation could not have been the holder and assignee of the
Mortgage and Note when it purported to assign them to Dreambuilder, and as such, the
assignments from First Franklin Corporation to Dreambuilder and, subsequently, from
Dreambuilder to Plaintiff were invalid. (See Def.’s Mem., Dkt. 94-1, at 5–6.) Defendant Paul
contends that Defendants and the Court “previously overlooked” this alleged broken chain of
assignments and that “the instant foreclosure action should have been dismissed for lack of
standing.” (Id. at 1, 6.) The Court disagrees.
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Aside from the fact that Defendant Paul’s motion is based entirely on information
contained in the Complaint filed at the beginning of this case—and thus the issue she raises in her
motion could and should have been raised before—the Court actually did not overlook the
chronological discrepancy that Defendant Paul currently points out. The January 24, 2019 Order
specifically notes:
The Court acknowledges a chronological discrepancy in the chain of assignments
of the note and mortgage on the Property. The original mortgagee who contracted
with Defendant Hoyer was First Franklin, A Division of National City Bank of
Indiana. Documents submitted by Plaintiff show that on June 30, 2005, First
Franklin Financial Corporation assigned the note and mortgage to Dreambuilder
Investments, LLC. But the evidence indicates that First Franklin Financial
Corporation was not assigned the mortgage from First Franklin, A Division of
National City Bank of Indiana, until February 8, 2006. Although one might argue
that this chain of events rendered First Franklin Financial Corporation’s assignment
to Dreambuilder Investments LLC ineffective—which would in turn render the
assignment to Plaintiff ineffective—evidence presented by Plaintiff (Note
Aff. ¶¶ 7–11) establishes that Plaintiff is nevertheless legally entitled to foreclose.
See E. Savings Bank, FSB v. Whyte, No. 13-CV-6111, 2016 WL 236221, at *3
(E.D.N.Y. Jan. 20, 2016) (noting that “[a]n affidavit attesting to physical possession
of the note prior to commencement of the [foreclosure] action is sufficient to
establish physical delivery” and “to transfer both the note and the attendant right to
foreclose,” thus rendering “any purported deficiencies in the chain of title”
irrelevant).
Gustavia Home, 362 F. Supp. 3d at 91 n.14 (internal record citations, except last one, omitted).
Defendant Paul provides nothing that calls into question the Court’s prior determination that,
notwithstanding the chronological discrepancy in the chain of assignments, “Plaintiff is
nevertheless legally entitled to foreclose.” Id. Defendant Paul identifies no new evidence or
controlling legal authority that was overlooked. (See generally Def.’s Mem., Dkt. 94-1; Defendant
Paul’s Reply (“Def.’s Reply”), Dkt. 104.)

Instead, she makes unfounded arguments that:

(1) “Plaintiff has not established that the note, attached to the Complaint in Exhibit B, is in fact the
‘original note’ by uncontroverted affidavit testimony;” and (2) “[n]owhere in the Complaint, or
any subsequently filed documents, is there an affidavit with evidence that [Plaintiff]’s custodian
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received the ‘original note’ [or] . . . that the original note was then safeguarded in a secure
location.” (Def.’s Reply, Dkt. 104, ¶¶ 6–7.) As the January 24, 2019 Order establishes, Plaintiff
did provide such affidavit testimony and evidence. See Gustavia Home, 362 F. Supp. 3d at 91
n.14; see also Affidavit of Note Possession by Jared Dotoli, Dkt. 60-5, ¶ 7 (“I have personally
reviewed the Records, the collateral file, with corresponding original documents with regards to
the Loan. I can attest that Plaintiff GUSTAVIA, came into possession of the original Note, with
allonge and endorsements, as affixed thereto, which was delivered from DREAMBUILDER
INVESTMENTS, LLC, on 12/30/15.”), ¶ 9 (“I have reviewed the original Note, with all
corresponding endorsements and Allonge as affixed to the Note, and I can attest that the copy
attached hereto is a true and accurate copy.”); ¶ 10 (“The Note was and is held in Plaintiff’s office
located at c/o Kenner Cummings, PLLC, 104 SE 8th Avenue, Fort Lauderdale, FL 33301, where
it remains today.”); ¶ 11 (“Thus, I am able to confirm that GUSTAVIA has possession of the
original Note, prior to commencement of this action.”).
Defendant Paul has not demonstrated any reason, much less exceptional circumstances,
that warrants relief under Rule 60(b).
CONCLUSION
The Rule 60(b) motion for relief from judgment is denied.
SO ORDERED.
/s/ Pamela K. Chen
Pamela K. Chen
United States District Judge
Dated: March 25, 2021
Brooklyn, New York

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