Onewest Bank, N.A. v. Rosado et al
Filing
89
OPINION AND ORDER re: 68 MOTION for Summary Judgment . filed by CIT Bank, N.A.. For the foregoing reasons, Plaintiff's motion for summary judgment is GRANTED. Plaintiff is directed to submit a proposed judgment no later than June 21, 2016. The Clerk of Court is respectfully directed to close the motion at Docket No. 68. (As further set forth in this Order.) (Signed by Judge Lorna G. Schofield on 6/7/2016) (kgo)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
:
ONEWEST BANK, N.A.,
:
Plaintiff,
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-against:
:
OMAR ROSADO, et al.,
Defendants. :
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USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #:
DATE FILED: 06/07/2016
14 Civ. 9917 (LGS)
OPINION AND ORDER
LORNA G. SCHOFIELD, District Judge:
This action arises from a default on a mortgage loan made to Defendants Omar Rosado
and Cecilia Fernandez by Plaintiff CIT Bank, N.A., formerly known as OneWest Bank N.A.
Plaintiff moves for summary judgment pursuant to Federal Rule of Civil Procedure 56. Because
this action presents no triable issue of fact, Plaintiff’s motion is granted.
BACKGROUND
All facts below are taken from Plaintiff’s statement of material facts, Defendants’ counterstatement of material facts and the parties’ submissions on the motion.
Plaintiff CIT Bank, N.A. was a federal savings bank known as OneWest Bank, FSB. On
February 28, 2014, it changed its charter to become a national banking association and changed
its name to OneWest Bank, N.A. Effective August 3, 2015, OneWest Bank N.A. changed its
name to CIT Bank, N.A. Plaintiff’s principal place of business is in Pasadena, California.
Defendants Omar Rosado and Cecilia Fernandez are individuals residing in Bronx
County, New York, and are co-owners of a mortgaged property located at 1274 Mayflower
Avenue, Bronx, New York. On February 28, 2007 Defendants obtained a mortgage loan on this
property from IndyMac Bank, F.S.B., in the original principal amount of $585,120.00,
memorialized in a note executed by both Defendants. In October 2008, Plaintiff offered and
Defendants accepted a modification of the mortgage loan. The modification was memorialized in
an agreement dated October 28, 2008, capitalizing the arrears to that time, lowering the interest
rate and establishing a new principal balance of $631,237.14.
On July 11, 2008, the Office of Thrift Supervision (“OTS”) closed IndyMac and
appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver for IndyMac. OTS
created a new entity, IndyMac Federal Bank, FSB, into which IndyMac’s assets were transferred,
and appointed FDIC as conservator for IndyMac Federal. On March 19, 2009, OTS appointed
FDIC as receiver for IndyMac Federal. FDIC has served as receiver for IndyMac and as
conservator or receiver for IndyMac Federal continuously from the dates of its appointment to the
present.
On March 19, 2009, CIT Bank -- at that time operating as OneWest Bank, FSB -- became
the owner and servicer of Defendants’ mortgage loan when it acquired substantially all assets and
mortgage servicing rights of IndyMac Federal from FDIC. An allonge1 annexed to the note
memorializing the mortgage loan specifically indorses the note to OneWest Bank, FSB. Plaintiff
had physical possession of the original indorsed note until May 30, 2014.
On May 30, 2014, Plaintiff shipped the collateral file related to the mortgage loan to its
foreclosure counsel, which had physical possession of the note on December 16, 2014, when this
action was commenced. Plaintiff’s foreclosure counsel returned the note and mortgage to
Plaintiff on September 23, 2015. Plaintiff continues to be the owner and holder of the note
currently.
Defendants defaulted on the mortgage loan, note and modification agreement by failing to
make timely payment due September 1, 2009, and all payments due thereafter. Plaintiff states
An allonge is a paper attached to a negotiable instrument to provide space for additional
endorsements.
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that on July 11, 2014, it mailed 90-day notices, as described in New York Real Property Law §
1304 to both Defendants by certified and first class mail; and that on July 14, 2014, it mailed
notices of default to both Defendants by certified and first class mail. Plaintiff made both
mailings through Plaintiff’s servicing division, IndyMac Mortgage Services. On July 11, 2014,
the 90-day notices were filed with the New York State Department of Financial Services.
As evidence of the mailings, Plaintiff provides copies of the Notice of Default, dated July
10, 2014. The first page of each notice appears to be a mailing label and bears a printed U.S.
Postal Service tracking number and bar code to reflect the mailing along with the comment where
a postage stamp ordinarily would be located “PRESORT First-Class Mail U.S. Postage and Fees
Paid WSO.” Plaintiff also provides copies of the 90-Day Notices with a similar mailing label
bearing a USPS bar code and tracking number. Plaintiff also submits a business record that
reflects these mailings, including the tracking number, the addressee, the subject address, the
mailing date, the status and the amount of postage. In their response to Plaintiff’s 56.1 Statement,
Defendants do not dispute the mailing of the 90-day notice, but as to the Notices of Default deny
that they were mailed “insofar as Plainitff’s evidence fails to establish mailing of the Notice of
Default.”
Defendants failed to cure their default on the mortgage loan, and Plaintiff exercised its
right to accelerate the mortgage. When this action was commenced on December 16, 2014, an
unpaid principal balance of $624,527.17, plus interests and fees, remained due and owing to
Plaintiff on the mortgage loan, for a total amount sought by Plaintiff of $856,294.59. To date, the
mortgage loan remains in default.
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STANDARD
Summary judgment is appropriate where the record before the Court establishes 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). A genuine dispute as to a material fact exists “if the evidence is
such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). The Court must construe the evidence in the light most
favorable to the nonmoving party and must draw all reasonable inferences in favor of the
nonmoving party. See id. at 255.
When the movant has properly supported its motion with evidentiary materials, the
opposing party must establish a genuine issue of fact by “citing to particular parts of materials in
the record.” Fed. R. Civ. P. 56(c)(1); see also Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009).
“[A] party may not rely on mere speculation or conjecture as to the true nature of the facts to
overcome a motion for summary judgment.” Hicks v. Baines, 593 F.3d 159, 166 (2d Cir.2010)
(internal quotation marks and citation omitted). “Only disputes over facts that might affect the
outcome of the suit under the governing law” will preclude a grant of summary judgment.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
DISCUSSION
I.
Plaintiff Has Made a Prima Facie Showing of Entitlement to Judgment of
Foreclosure
Under New York law, a plaintiff demonstrates prima facie entitlement to judgment as a
matter of law in a foreclosure action “by submitting the mortgage, the unpaid note, and evidence
of the defendant’s default.” Wells Fargo Bank, N.A. v. Morgan, --- N.Y.S. 3d ----, 2016 WL
2993966, at *2 (2d Dep’t May 25, 2016); see Eastern Savings Bank v. Robinson, No. 13 Civ.
7308, 2016 WL 482024, at *3 (E.D.N.Y. Feb. 4, 2016) (“In a New York mortgage foreclosure
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action, a plaintiff makes a prima facie case -- with summary judgment appropriate if nothing else
is shown -- where the foreclosing party produces documentary evidence establishing the three
elements of a foreclosure claim: (1) a mortgage, (2) a note, and (3) proof of default on the note by
the mortgagor.”). In connection with this motion, Plaintiff has provided all three of these -- the
mortgage, the note and proof of default in the form of a sworn statement by a CIT representative
that Defendants failed to make timely payment due September 1, 2009 and thereafter, copies of
notices of default sent to Defendants, and 90-day notices, dated July 10, 2014, as described in
New York Real Estate Law, sent to Defendants and filed with the New York State Department of
Financial Services.
Defendants do not dispute the existence of the mortgage loan or the note as described by
Plaintiff, nor do they dispute their default and an unpaid principal balance of $624,527.17, plus
interest and fees.
II.
Plaintiff’s Notice Complied with the Requirements of the Mortgage
Once a plaintiff has made a prima facie showing of entitlement to a judgment of
foreclosure, the defendant must raise a triable issue of fact to meet its burden and withstand the
motion for summary judgment. Fleet Nat. Bank v. Olasov, 793 N.Y.S.2d 52, 52 (2d Dep’t 2005);
see Eastern Savings Bank v. Aufiero, No. 14 Civ. 256, 2016 WL 1056998, at *5 (E.D.N.Y. Mar.
14, 2016) (“The burden then shifts to the defendant to demonstrate that there is a triable issue of
fact with respect to the merits of any defenses or counterclaims.”). Under New York law, failure
to comply with a condition precedent enumerated in a mortgage agreement is an affirmative
defense to a mortgage foreclosure action. Wells Fargo Bank, N.A. v. Eisler, 118 A.D.3d 982, 982,
988 N.Y.S.2d 682 (2d Dep’t 2014).
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Defendants argue that Plaintiff failed to provide Defendants with a notice of default as
required by the mortgage in two respects that Plaintiff asserts create triable issues of fact: first,
that the notice of default provided by Plaintiff does not comport with the terms of the mortgage;
and second, that Plaintiff does not provide sufficient evidence that the notice of default was
mailed. Because neither of these contentions gives rise to an issue of fact, Plaintiff’s motion for
summary judgment is granted.
A.
The Notice of Default Complied with the Terms of the Mortgage
The notices of default originated by Plaintiff adequately conform to the provisions of the
mortgage. Substantial compliance is sufficient under New York law. See Indymac Bank, FSB v.
Kamen, 890 N.Y.S.2d 649, 649 (2d Dep’t 2009) ("[T]he notice of default . . . substantially
complied with the terms of the mortgage.").
Paragraph 22 of the mortgage provides the conditions under which the lender may
accelerate the mortgage and initiate foreclosure proceedings. Paragraph 22(b) requires a notice of
default, and Paragraph 22(b)(6) requires that any such notice state that the borrower has "the right
in any lawsuit for Foreclosure and Sale to argue that I did keep my promises and agreements
under the Note and under this Security Instrument, and to present any other defenses that I may
have." In this case, the notices of default state that a borrower "may have the right to bring a
court action to assert the non-existence of a default or any other defense [a borrower] may have to
acceleration and foreclosure."
Defendants contend that this language could mislead the average homeowner into
believing that he or she must assert his or her claims or defenses in a separate lawsuit, rather than
in an ongoing foreclosure action. Defendants argue that, because the notices of default do not
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replicate identically the language in Paragraph 22(b)(6), they are necessarily insufficient and
preclude entry of summary judgment in favor of Plaintiff. Defendants’ argument is unfounded.
New York law requires that notices of default "adequately conform[] to the provisions of
the mortgage which govern[] such notice." First Trust Nat’l Ass’n v. Meisels, 651 N.Y.S.2d 121,
121 (2d Dep’t 1996); see Kamen, 890 N.Y.S.2d at 649. Defendants misstate what is required of a
notice of mortgage: a verbatim transcription of the terms of the mortgage is not required. This
very argument was considered and rejected in OneWest Bank, N.A. v. Rubio, No. 14 Civ. 3800,
2015 WL 5037111 (S.D.N.Y. Aug. 26, 2015). However, Rubio -- considering the same language
at issue here -- found that the language in the mortgage did not adequately conform to the
mortgage. tThe court nevertheless concluded that because defendants did not contend they
actually were prejudiced by the noncompliant notice, strict enforcement of the mortgage’s
provision for the contents of notice of default was not necessary. Id. at *4. So too in the present
case, the notices of default received by Defendants did not conform to the prescribed language.
However, Defendants do not allege any prejudice resulting from the deviation, and specifically do
not argue that they lacked actual notice of their default and their ability to assert claims or
defenses. "[W]here the adversary party does not claim the absence of actual notice or prejudice
by the deviation," as here, "strict compliance with contractual notice provisions need not be
enforced." Baygold Assocs., Inc. v. Congregation Yetev Lev of Monsey, Inc., 916 N.Y.S.2d 639,
640 (2d Dep’t 2011). Defendants have failed to raise a triable issue of fact that would defeat
summary judgment regarding the language of the notice of default.
B.
Plaintiff Has Provided Sufficient Evidence of Mailing that a Reasonable Jury
Would Conclude the Notice Was Mailed
Similarly, Defendants have not created an issue of fact as to whether the Notices of
Default were mailed to them. Plaintiff has provided the notices, bearing postal service tracking
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numbers and bar codes, and their own business record that reflects the mailings. Defendants do
not contend that they did not receive the notices of default. Defendants do not even contend that
the notices of default were not mailed. Defendants have not cited anything in the record to
suggest that the notices were not mailed. Defendants simply contend that Plaintiff has not
provided evidence sufficient to establish that the notices were mailed. This is not sufficient to put
the matter at issue for purposes of summary judgment. See Fed. R. Civ. P. 56(c)(1); Wright, 554
F.3d at 266 (“When a motion for summary judgment is properly supported by documents or other
evidentiary materials, the party opposing summary judgment may not merely rest on the
allegations or denials of his pleading; rather his response, by affidavits or otherwise as provided
in the Rule, must set forth specific facts demonstrating that there is a genuine issue for trial.”
(internal quotation marks and citation omitted)). Because there are no disputed issues of material
fact, summary judgment is granted.
III.
Defendants Abandon All Issues Except Their Adequate Notice Issue
Plaintiff seeks summary judgment on its claims and all of Defendants’ affirmative
defenses and counterclaims. Plaintiff addressed each of these fifteen affirmative defenses and
counterclaims in its brief in support of its motion for summary judgment. In failing to respond on
any of these issues, except the sufficiency of the notice of default and the sufficiency of the
evidence that the notice of default was mailed, Defendants have abandoned those unaddressed
claims. See Jackson v. Fed. Exp., 766 F.3d 189, 198 (2d Cir. 2014) (“[I]n 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.”).
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CONCLUSION
For the foregoing reasons, Plaintiff’s motion for summary judgment is GRANTED.
Plaintiff is directed to submit a proposed judgment no later than June 21, 2016. The Clerk of
Court is respectfully directed to close the motion at Docket No. 68.
SO ORDERED.
Dated: June 7, 2016
New York, New York
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