Onewest Bank N.A. v. Min et al

Filing 132

MEMORANDUM OPINION AND ORDER re: 115 FIRST MOTION for Summary Judgment filed by CIT Bank, N.A. For the foregoing reasons, Plaintiff's motion for summary judgment is granted to the extent that it seeks a determination that Plaintiff is entitl ed to foreclose on Min's interest in the Property. It is denied without prejudice, pending the resolution of the remaining default judgment motion practice, to the extent it seeks a computation of damages and entry of a judgment of foreclosure a nd sale. Plaintiff's motion for default judgment is denied without prejudice to renewal in compliance with the Court's separate order to be entered contemporaneously with this Memorandum Opinion and Order. The Clerk of Court is requested to update the docket to reflect that this case is not stayed in its entirety. Only certain requirements related to final pre-trial conference preparation have been stayed. (See Docket Entry No. 125.) Docket Entry No. 115 is resolved. SO ORDERED. (Signed by Judge Laura Taylor Swain on 5/08/2019) (ama) Modified on 5/8/2019 (ama).

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------x
CIT BANK, N.A.,
Plaintiffs,
-v-

No. 14 CV 6793-LTS-OTW

JI YOUN MIN, YOOMI MIN, SUNG JIN
MIN, WASHINGTON MUTUAL BANK,
F.A., THE BOARD OF MANAGERS OF
THE 200 CHAMBERS STREET
CONDOMINIUM, NEW YORK CITY
ENVIRONMENTAL CONTROL BOARD,
NEW YORK CITY TRANSIT
ADJUDICATION BUREAU, QUEENS
LUMBER CO., INC., and NEW YORK CITY
PARKING VIOLATIONS BUREAU,
Defendants.
-------------------------------------------------------x
MEMORANDUM OPINION AND ORDER
Plaintiff CIT Bank, N.A. (“CIT” or “Plaintiff”), formerly known as OneWest
Bank, N.A., moves for summary judgment against Ji Youn Min (“Min”), and for a default
judgment against Yoomi Min, Sung Jin Min, Queens Lumber Co., Inc., Washington Mutual
Bank, F.A., the Board of Managers of the 200 Chambers Street Condominium (the “Board of
Managers”), the New York City Environmental Control Board, the New York City Transit
Adjudication Bureau, and the New York City Parking Violations Bureau (collectively, the
“Defaulting Defendants” and, cumulatively with Min, “Defendants”). Plaintiff seeks a judgment
of foreclosure and sale of the property located at 200 Chambers Street, Unit 3-M, New York,
New York (the “Property”) pursuant to Article 13 of the New York Real Property Actions and
Proceedings Law (“NY RPAPL”). Min challenges Plaintiff’s standing to bring suit, arguing that

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Plaintiff has not demonstrated that it held the mortgage note, either through written assignment
or by taking physical delivery, prior to filing its complaint, and contends that Plaintiff did not
provide the requisite notice prior to commencing the foreclosure proceeding.
The Court has jurisdiction of the action pursuant to 28 U.S.C. section 1332.
The Court has reviewed the submissions of the parties carefully, and for the
following reasons, grants in part Plaintiff’s motion for summary judgment against Min. The
Court denies without prejudice Plaintiff’s motion for default judgment as against the Defaulting
Defendants.
BACKGROUND1
On March 9, 2007, Min executed and delivered to Just Mortgage, Inc. (“JMI”),
and its successors and assigns a promissory note (the “Note”) evidencing a loan made to Min in
the principal amount of $560,000 plus interest. (Def. 56.1 St. ¶ 11.) On the same day, Min
executed and delivered a mortgage against the Property (the “Mortgage”) to JMI’s nominee,
Mortgage Electronic Registration Systems, Inc. (“MERS”), to secure payment as set forth in the
Note. (Id.) The Note was then indorsed by JMI to IndyMac Bank (“IndyMac”) by an allonge
attached to the Note. (Id. ¶ 12.) On August 7, 2007, the Mortgage was recorded in the Office of
the City Register of the City of New York as CRFN 200700406683. (Mortgage, Docket Entry
No. 118-1.) The Mortgage contains a provision entitling the lender to costs and attorneys’ fees
incurred following a successful foreclosure. (Mortgage ¶ 22.) The Mortgage also contains a

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The facts recited herein are undisputed unless otherwise indicated. Facts recited
as undisputed are identified as such in the parties’ statements pursuant to
S.D.N.Y. Local Civil Rule 56.1 or drawn from evidence as to which there is no nonconclusory contrary factual proffer. Citations to the parties’ respective Local
Civil Rule 56.1 Statements (“Def. 56.1 St.” or “Pl. 56.1 St.”) incorporate by reference the
parties’ citations to underlying evidentiary submissions.

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covenant permitting the lender to recover, with interest, costs incurred to remedy, inter alia, any
breach of the borrower’s obligations under the Mortgage. (Mortgage ¶ 9.)
On July 11, 2008, the Office of Thrift Supervision closed IndyMac and appointed
the Federal Deposit Insurance Corporation (“FDIC”) as IndyMac’s receiver. (Def. 56.1 St. ¶ 14.)
IndyMac’s assets were then transferred to IndyMac Federal Bank, FSB (“IndyMac Federal”).
(Id.) The FDIC was then appointed conservator and, later, receiver of IndyMac Federal. (Id.)
On October 1, 2008, Min, then and still residing at 1600 Broadway, Apt. 8C, New
York, New York, defaulted on her obligations to remit payment under the Note and Mortgage.
(Id. ¶¶ 18-19.) Min thereafter failed to make any of her required monthly payments. (Id. ¶¶ 18,
22.)
On March 18, 2009, Plaintiff, then known as OneWest Bank, FSB (“OneWest”),
and IndyMac Federal executed a Master Purchase Agreement by which OneWest acquired
substantially all of IndyMac Federal’s assets. (Donivan Hodge Aff., Docket Entry No. 118, ¶
10.) Pursuant to this transaction, Plaintiff and IndyMac Federal entered into a Loan Sale
Agreement on March 19, 2009, under which Plaintiff acquired certain mortgage loans then held
by IndyMac Federal. (Id. ¶¶ 11-12.) Attachment A to the Loan Sale Agreement listed the
particular loans to be transferred, including the instant loan in favor of Min. (Hodge Aff. ¶ 12;
Loan Sale Agreement, Docket Entry No. 118-4; Attachment A, Docket Entry No. 124-1.)
Although Attachment A is not attached to the Loan Sale Agreement filed in support of this
motion on ECF (Docket Entry No. 118-4), a partially redacted version was provided to the Court
with the courtesy copy of the Loan Sale Agreement (Hodge Aff., Ex. D) and was publicly filed
as an exhibit to Plaintiff’s reply brief along with an affidavit from Plaintiff’s attorney stating that

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Attachment A was served on Min on March 27, 2017, in response to Min’s first set of document
requests (Docket Entry No. 124-1).
The Note includes two allonges with undated indorsements. (Note, Docket Entry
No. 118-13, Bates Nos. CIT0010-CIT0011.) The first allonge (“First Allonge”) is indorsed by
the FDIC, as receiver to IndyMac Federal, to OneWest without recourse. (Id. at Bates No.
CIT0010.) The First Allonge was signed by Sandra Schneider, Plaintiff’s Vice President, as
Attorney-in-Fact for the FDIC, pursuant to a limited power of attorney. (Id.; see Limited Power
of Attorney, Docket Entry No. 118-6.) The second allonge (the “Second Allonge”) was indorsed
in blank by Schneider as Vice President of Plaintiff. (Note, Bates No. CIT0011.) Although the
original Note has not been provided to the Court, Donivan Hodge, Plaintiff’s Assistant Secretary,
states in his sworn affidavit that the allonges were “affixed” to the Note. (Hodge Aff. ¶ 14.)
Hodge states that the information set forth in his affidavit was gleaned from a
review of Plaintiff’s business records and his personal knowledge of the “operation of and the
circumstances surrounding the preparation, maintenance, distribution, and retrieval of records in
[Plaintiff’s] record keeping systems.” (Hodge Aff. ¶ 3.) He further states that Plaintiff’s
business practice is to create such records in the ordinary course of business soon after the
information contained in the records becomes known by Plaintiff’s employees, and that records
created by prior owners or servicers of a loan are incorporated into Plaintiff’s record-keeping
system. (Id.)
In his affidavit, Hodge states that Plaintiff “obtained possession of the Note,”
including the aforementioned allonges, “prior to August 22, 2014,” the day the Complaint was
filed. (Hodge. Aff. ¶¶ 25-26; Compl. Docket Entry No. 1.)

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Hodge affirms, based on his familiarity with Plaintiff’s “practice for printing and
mailing notices” and a review of Plaintiff’s records, that Plaintiff sent four 90-day notices of
default, as required by NY RPAPL section 1304, dated April 16, 2014, to Min at both the
Property and her 1600 Broadway, New York, New York address, by both certified and first-class
mail. (Hodge Aff. ¶¶ 19-22.) Hodge explains that Plaintiff’s practice is to prepare and mail 90day notices to defaulting borrowers and, within two days, place a copy of each notice in the file
for the corresponding loan. (Id. ¶ 21.) Hodge avers, based on his review of the records, that the
aforementioned process was followed here. (Id.)
Plaintiff proffers copies of these notices, which include mailing labels containing
bar-coded tracking numbers that correspond to the tracking numbers on a PS Form 3877 stamped
by the United States Postal Service and a TrackRight transaction report, which lists each notice
as having been mailed on either April 17 or 18, 2014. (Docket Entry Nos. 118-8, 118-9, 11810.) Min states that she does not possess any of the 90-day notices and does not recall ever
having received one. (Min Cert., Docket Entry No. 74, ¶ 2.)
Following the 2014 purchase of its parent company by CIT Group Inc., OneWest
was renamed CIT Bank, N.A. (Def. 56.1 St. ¶ 16.)
DISCUSSION
Motion for Summary Judgment
The pending motion is brought pursuant to Rule 56(a) of the Federal Rules of
Civil Procedure. Under Rule 56(a), summary judgment is appropriate when 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.” The moving party bears the burden of demonstrating the absence of a material
issue of fact, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986), and the court

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must be able to find that, “after drawing all reasonable inferences in favor of a non-movant, no
reasonable trier of fact could find in favor of that party.” Marvel Entm’t, Inc. v. Kellytoy (USA),
Inc., 769 F. Supp. 2d 520, 523 (S.D.N.Y. 2011) (quoting Heublein v. United States, 996 F. 2d
1455, 1461 (2d Cir. 1993)) (internal quotation marks omitted). A fact is considered material “if
it might affect the outcome of the suit under the governing law,” and an issue of fact is “genuine”
where “the evidence is such that a reasonable jury could return a verdict for the nonmoving
party.” Holtz v. Rockefeller & Co. Inc., 258 F.3d 62, 69 (2d Cir. 2001) (internal quotation marks
and citations omitted). “[M]ere conclusory allegations or denials . . . cannot by themselves
create a genuine issue of material fact where none would otherwise exist.” Hicks v. Baines, 593
F.3d 159, 166 (2d Cir. 2010) (quoting Fletcher v. Atex, Inc., 68 F.3d 1451, 1456 (2d Cir. 1995)).
“To establish a prima facie case of foreclosure in New York, a plaintiff must
show (1) a mortgage; (2) an unpaid note; and (3) proof of default.” 1077 Madison St. LLC v.
Smith, 670 Fed. App’x 745, 746 (2d Cir. 2018). The requirement that a plaintiff hold the note
prior to the commencement of a foreclosure action constitutes an element of standing and, when
a question is raised, must be proven by the plaintiff. Aurora Loan Servs. LLC v. Taylor, 25
N.Y.3d 355, 361 (2015); see also GRP Loan, LLC v. Taylor, 945 N.Y.S.2d 336, 338 (App. Div.
2012) (“Where the issue of standing is raised by a defendant, a plaintiff must prove its standing
in order to be entitled to relief.”). If a promissory note is “tendered to and accepted by an
assignee, the mortgage passes as an incident to the note,” but a transfer of the mortgage without
the note is a “nullity” because a mortgage is “merely security for a debt . . . and cannot exist
independently.” Bank of New York v. Silverberg, 926 N.Y.S.2d 532, 537 (App. Div. 2011)
(internal quotation marks and citations omitted). Therefore, establishing that the mortgage was
assigned to a plaintiff is not sufficient to support an inference that the plaintiff also held the

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underlying note. See Aurora Loan Servs., 25 N.Y.3d at 361 (explaining that the dispositive
document to confer standing is the note, not the mortgage); see also Wells Fargo Bank, NA v.
Burke, 5 N.Y.S.3d 107, 109 (App. Div. 2015) (finding that the timing of an assignment of a
mortgage was irrelevant to the determination of when a corresponding note was assigned.).
Transfer of a note may be effectuated by “[e]ither a written assignment . . . or the
physical delivery of the note.” U.S. Bank, N.A. v. Collymore, 890 N.Y.S.2d 578, 580 (App. Div.
2009). Physical delivery is “established where the plaintiff possesses a note that, on its face or
by allonge, contains an indorsment in blank or bears a special indorsment payable to the order of
the plaintiff.” Eastern Sav. Bank, FSB v. Thompson, 631 Fed. App’x 13, 15 (2d Cir. 2015)
(quoting Wells Fargo Bank, NA v. Ostiguy, 8 N.Y.S.3d 669, 671 (App. Div. 2015)) (internal
quotation marks omitted). Such an allonge must be “so firmly affixed to the note as to become a
part thereof.” HSBC Bank USA, N.A. v. Thomas, 999 N.Y.S.2d 671, 674 (N.Y. Sup. Ct. 2014)
(citing UCC § 3-202(2)).
The Second Circuit has found that the written assignment of a note requires no
special form and that the particular form of Loan Sale Agreement which was used to transfer
substantially all of IndyMac Federal’s assets to Plaintiff was sufficient to convey standing to
foreclose. OneWest Bank, N.A. v. Melina, 827 F.3d 214, 223 (2d Cir. 2016). Here, the Loan
Sale Agreement was executed prior to the commencement of this action.
Min challenges the validity of the sale, which gave rise to the transfer of the Note
by allonge, arguing that Plaintiff provided no evidence that her loan was included in the Loan
Sale Agreement because Attachment A, which lists the individual loans being transferred, was
not produced, and because Plaintiff may not have complied with the terms of the Loan Sale
Agreement. Because Attachment A, although difficult to read, clearly refers to the Property’s

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address, was provided to the Court in hard copy with Plaintiff’s moving papers, and was publicly
filed on ECF with Plaintiff’s reply, Min’s argument is without merit. See Onewest Bank, N.A. v.
Perez, No. 14 CV 3465 (ADS) (SIL), 2015 WL 12659924, at *9 (E.D.N.Y. July 18, 2015)
(finding that Attachment A of the same Loan Sale Agreement included the subject property
based on the partial information legible in the document and the sworn affidavit of Plaintiff’s
officer). Furthermore, Hodge’s sworn statement also indicates that Min’s loan was transferred
pursuant to the Loan Sale Agreement. See id.; (Hodge Aff. ¶ 12).
Min’s assertion that the conveyance of the Note is invalid because Plaintiff failed
to comply with certain terms of the Loan Sale Agreement is ineffective to undermine Plaintiff’s
standing to foreclose because Min was neither a party to that agreement nor an intended
beneficiary of it. See Perez, 2015 WL 12659924 at *7, 9 (citing Rajamin v. Deutsche Bank Nat.
Trust Co., 757 F.3d 79, 81 (2d Cir. 2014)) (finding that the defendants could not assert
noncompliance with the Loan Sale Agreement to challenge Plaintiff’s standing to foreclose).
Accordingly, Plaintiff has standing to bring this foreclosure action and, based on
her concession, Min defaulted on the loan. The Court thus finds that Plaintiff has established its
prima facie case. The Court now turns to Min’s defense that Plaintiff failed to provide the 90day notice required by NY RPAPL section 1304 (“Section 1304”).
Section 1304(1) prescribes the contents of the notice that a mortgagee or loan
servicer must send to a borrower defaulting on a home loan at least 90 days prior to commencing
legal action. Such notice must be sent to both the property encumbered by the mortgage and any
other address of record. NY RPAPL § 1304(1).

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In New York, the mailing of a 90-day notice is presumed if the mortgagee or loan
servicer provides a sworn statement that the notice was “mailed by a particular person, or that a
particular process, which resulted in mailing, was uniformly and diligently followed.” Wells
Fargo Bank, N.A. v. Ullah, No. 13 CV 485 (JPO), 2015 WL 3735230, at *9 (S.D.N.Y. June 15,
2015) (citation and quotation marks omitted). Such a sworn statement may be coupled with
supporting documentary evidence to trigger the presumption. Here, Hodge’s affidavit explains
that Plaintiff’s practice is to generate and mail the required notices and then file them within
short order, and that, according to his review of Plaintiff’s files, that practice was adhered to
here. This assertion is buttressed by ample supporting evidence. Plaintiff proffers copies of the
notices containing mailing labels addressed both to the Property and to Min’s residence
reflecting tracking numbers that correspond to entries on the Postal Service form and a
transaction report2 indicating that each notice was sent on April 17 or 18, 2014. See OneWest
Bank, N.A. v. Guerrero, No. 14 CV 3754 (NSR), 2018 WL 2727891, at *8 (S.D.N.Y. June 6,
2018) (finding a presumption of mailing based on a similar review of business records,
familiarity with a similar corporate mailing practice, and a similar transaction report). Min’s

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Min argues that Hodge failed to adequately explain who prepared the transaction report
and how and when it was created. The transaction report is properly admitted as a
business record, as Hodge’s affidavit makes clear that the records he relied upon were
“kept in the course of regularly conducted business activity and also that it was the
regular practice of that business activity to make the record.” U.S. v. Komasa, 767 F.3d
151, 156 (2d Cir. (2014) (internal quotation marks, citations, and alterations omitted).
Specifically, Hodge has stated that he has acquired knowledge of Plaintiff’s records
preparation and management practices through his current job at CIT and that all records
relied on in drafting his affidavit were regularly kept in the course of Plaintiff’s business
and were regularly updated by staff when or shortly after staff acquired the knowledge of
the information to be memorialized in such records.

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self-serving denial of receipt is, alone, insufficient to create a genuine issue of material fact.3 Id.
at *8. Plaintiff is therefore entitled as a matter of law to foreclose on the Property.
Plaintiff also requests attorneys’ fees, interest, and costs consistent with the terms
of the Mortgage. Under New York law, courts will enforce mortgage provisions, like those of
any other contract, that clearly entitle a prevailing party to reasonable attorneys’ fees. See Wells
Fargo Bank, N.A. v. 390 Park Ave. Assocs., LLC, No. 16 CV 9112 (LGS), 2018 WL 4373996,
at *8 (S.D.N.Y. Sept. 12, 2018) (citing NetJets Aviation, Inc. v. LHC Commc’ns, LLC, 537 F.3d
168, 175 (2d Cir. 2008)). Here, paragraph 22 of the Mortgage clearly provides for the award of
attorneys’ fees and costs to the mortgagee upon a successful foreclosure action. Likewise,
paragraph 9 permits the lender to recover costs, including interest, to enforce the covenants set
forth in the mortgage. Accordingly, Plaintiff is entitled to attorneys’ fees, interest, and costs, and
Plaintiff may make a motion in accordance with Federal Rule of Civil Procedure 54(d),
supported by sufficient evidence, for the award of such fees.
Default Judgment
Plaintiff also moves for default judgment against the Defaulting Defendants. The
Clerk of Court issued Certificates of Default against all Defendants except the Board of
Managers. (Docket Entry Nos. 33, 34, 36, 37, 38, 39, 42, and 43.) Plaintiff produced affidavits
of service for its first motion for default judgment (Docket Entry Nos. 57 and 62). That motion
was resolved by vacatur of Min’s default and the denial of default judgments against the
remaining Defaulting Defendants without prejudice as premature. CIT Bank, N.A. v. Ji Youn

3

Based on the Court’s finding that the 90-day notices were timely mailed, the Court
declines to address Plaintiff’s argument that such notices were not required because the
Property was not Min’s residence at any relevant time.

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Min, 14 CV 6793 (LTS), 2016 U.S. Dist. LEXIS 102694 (S.D.N.Y. Aug. 3, 2016). Plaintiff has
not, however, provided proof that it served its current motion for summary judgment and
renewed motion for default judgment on the Defaulting Defendants.4 Plaintiff’s motion for
default judgment is therefore denied without prejudice to renewal. The Court will enter a
separate order directing Plaintiff to renew its motion for default judgment in compliance with,
inter alia, the aforementioned service requirements.
CONCLUSION
For the foregoing reasons, Plaintiff’s motion for summary judgment is granted to
the extent that it seeks a determination that Plaintiff is entitled to foreclose on Min’s interest in
the Property. It is denied without prejudice, pending the resolution of the remaining default
judgment motion practice, to the extent it seeks a computation of damages and entry of a
judgment of foreclosure and sale. Plaintiff’s motion for default judgment is denied without
prejudice to renewal in compliance with the Court’s separate order to be entered
contemporaneously with this Memorandum Opinion and Order.

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The defendant Board of Managers filed a notice of appearance on October 8, 2014,
waiving service of papers other than notice of foreclosure judgment and sale, and
reserving its lien rights. (Docket Entry No. 19.) It has not answered or otherwise
responded to the Complaint.

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The Clerk of Court is requested to update the docket to reflect that this case is not
stayed in its entirety. Only certain requirements related to final pre-trial conference preparation
have been stayed. (See Docket Entry No. 125.)
Docket Entry No. 115 is resolved.
SO ORDERED.
Dated: New York, New York
May 8, 2019
/s/ Laura Taylor Swain
LAURA TAYLOR SWAIN
United States District Judge

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