One West Bank, FSB v. Aikey et al
Filing
53
-CLERK TO FOLLOW UP- DECISION AND ORDER denying 29 Defendant's Motion to Dismiss; denying 39 Motion ; denying 46 Motion to Strike ; granting 23 Motion for Summary Judgment. (Clerk to follow up consistent with Decision and Order.) Signed by Hon. Michael A. Telesca on 3/31/15. (JMC)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
__________________________________________
ONEWEST BANK, N.A.,
Plaintiff,
13-CV-6453T
v.
RICHARD AIKEY JR., et al.,
DECISION
and ORDER
Defendants.
__________________________________________
INTRODUCTION
Plaintiff OneWest Bank, N.A., (“OneWest”) the holder of a
mortgage note issued to defendant Richard Aikey, Jr. (“Aikey”)
brings this diversity action to foreclose on the mortgage note
secured by property in Canandaigua, New York, claiming that Aikey
is in default on the mortgage note and that OneWest is entitled to
foreclosure on the property secured by the note. OneWest now moves
for summary judgment against the defendant claiming that there are
no material issues of fact in dispute and that it is entitled to
judgment in its favor as a matter of law.
Defendant Aikey, proceeding pro se, does not deny that he has
defaulted on the mortgage loan, but contends that the plaintiff
violated state and federal laws when it issued, serviced, and
attempted to foreclose on the loan, and that as a result of the
plaintiff’s
actions,
plaintiff’s
motion
should
be
denied.
Defendant further contends that plaintiff’s failure to comply with
relevant banking laws renders the mortgage he signed void, and he
seeks a declaration to that effect.
For the reasons set forth below, plaintiff’s motion for
summary judgment is granted, and defendant’s motions to dismiss and
for a declaration that the mortgage note he signed is void are
denied.
Plaintiff’s motion to strike defendant’s sur-reply is
denied.
BACKGROUND
In November, 2007, defendant Richard Aikey Jr., executed and
delivered a promissory note to IndyMac Bank, FSB, in the amount of
$148,800.00.
The note was secured by a mortgage on property
located at 2697 County Road 10 in Canandaigua, New York.
Under the
terms of the mortgage loan, which was a 30 year loan with a fixed
interest rate of 7.750% for the first five years, and then an
adjustable rate for the remaining 25 years, defendant was to pay
$533.31 per month for the first five years of the loan, and then a
greater amount beginning December 1, 2012.
According to the
plaintiff, once the higher payments became due in December, 2012,
the defendant stopped making any payments, and has not made any
payments in any amount since November, 2012.1
1
Though not a part of the record, the Court takes judicial notice that in
September, 2008, Aikey was convicted of unlawfully engaging in a course of sexual
conduct against a child in the second degree (in violation of New York State
Penal Law § 130.80[1][b]). See People v. Aikey, 94 A.D.3d 1485, 1485; 943
N.Y.S.2d 702, 703 (App. Div. 4th Dept.,2012)(affirming conviction). In October,
2008, Aikey, as a second-time sex offender, was sentenced by Ontario County Court
(New York) Judge Frederick Reed to a term of 15 years imprisonment.
He is
currently incarcerated at the Elmira State Correctional Facility in Elmira, New
York.
Page -2-
DISCUSSION
I.
Summary Judgment Standard
Rule 56(a) of the Federal Rules of Civil Procedure provides
that
summary
judgment
shall
be
granted
if
the
moving
party
demonstrates “that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law."
When considering a motion for summary judgment, all genuinely
disputed facts must be resolved in favor of the party against whom
summary judgment is sought. Tolan v. Cotton,
S. Ct. 1861, 1863 (2014) .
, U.S.,
134
If, after considering the evidence in
the light most favorable to the nonmoving party, the court finds
that no rational jury could find in favor of that party, a grant of
summary judgment is appropriate.
Scott v. Harris, 550 U.S. 372,
380 (2007)(citing Matsushita Elec. Industrial Co. v. Zenith Radio
Corp., 475 U.S. 574, 586-587 (1986)).
II.
Plaintiff has established that it is entitled to Summary
Judgment
“In a New York mortgage foreclosure 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.”
Eastern
Savings
Bank,
FSB
v.
Bright,
No. 11–cv–1721, 2012 WL 2674668, *3 (E.D.N.Y. July 5, 2012); One
W. Bank, FSB v. Davi, No. 1:13 CV 1055 FJS/RFT, 2014 WL 4897311, at
Page -3-
*2 (N.D.N.Y. Sept. 30, 2014).
In the instant case, plaintiff,
through admissible evidence, has demonstrated the existence of a
valid mortgage and note, and has established that the defendant has
defaulted on the note.
According to the plaintiff, defendant last
made a payment on the note in November, 2012.
Defendant does not deny that he has defaulted on the note, but
argues that the plaintiff’s attempt to foreclose on the note is
invalid because the plaintiff has not complied with relevant state
and federal banking laws applicable to his note and mortgage.
Specifically, Aikey alleges that because the plaintiff has failed
in its motion papers to identify the type of loan that was made to
the defendant, the plaintiff has failed to comply with New York
banking laws, and therefore is not entitled to judgment in this
foreclosure proceeding. Defendant further alleges that the loan he
received was a “high-cost home loan” that is subject to stringent
regulations, and that the plaintiff failed to comply with those
regulations in issuing, servicing, and foreclosing on the loan, and
as a result of plaintiff’s deficiencies, the note and mortgage
should be declared void.
See Defendant’s Memorandum of Law in
Opposition to Plaintiff’s Motion for Summary judgment (docket item.
no. 30) at p. 2, 3-4.
While the defendant is correct that certain “high-cost” home
loans are subject to more stringent regulations under Section 6-1
of the New York Banking Law, defendant has failed to establish that
the loan he took from the plaintiff was a “high-cost” home loan as
Page -4-
that term is defined under New York law.
Indeed, defendant makes
only conclusory allegations that his loan is a high-cost loan, and
provides no facts in support of his claim. Plaintiff, however, has
introduced evidence demonstrating the loan is not a high-cost home
loan under New York law.
Specifically, plaintiff has established
that the interest rate on the loan was below the threshold interest
rate for high-cost loans as set forth in Section 6-1(g) of the
New York Banking Law, and that the points and fees associated with
defendant’s loan did not exceed the threshold for such fees as set
forth in the law.
Because the plaintiff has established that the
defendant’s loan was not a high-cost home loan under New York law,
defendant’s arguments that the plaintiff failed to comply with
provisions relating to high-cost home loans are without merit.
Defendant further argues that the plaintiff’s motion should be
denied, and the complaint dismissed, because OneWest, in issuing,
servicing and attempting to foreclose on the defendant’s loan,
failed to
comply
with the
federal
Home Ownership
and
Equity
Protection Act (“HOEPA”), codified in relevant part at 15 U.S.C.
§ 1639.
received
Specifically, defendant alleges that because the loan he
included
a
provision
for
negative
amortization,
and
because the plaintiff failed to properly disclose this provision,
the loan violates HOEPA, and therefore the note and mortgage should
be declared void.
Again, the defendant has failed to establish that his loan was
a high-cost loan under federal law as that term was defined in
Page -5-
2007, at the time when the loan was issued.
To qualify as a high-
cost loan under federal law in 2007, the loan would have had to
have an interest rate at least ten percentage points above the
yield on
certain
treasury securities,
or would
have
to
have
included fees greater than eight percent of the total loan amount.
Plaintiff has established that neither of these conditions was met,
and as a result has established that the loan was not a high-cost
loan under federal law.
Because the loan was not a high-cost loan
under federal law, defendant’s claims that the plaintiff failed to
comply with provisions applicable to such loans is without merit.
Finally, I have considered defendant’s remaining objections,
including claims that default and foreclosure notices were sent to
his home address rather than his prison address.
These claims are
without merit as defendant failed to notify the plaintiff of his
change of
address,
and
plaintiff
ascertain defendant’s new address.
was under
no
obligation to
Defendant’s claims that he did
not receive certain disclosures in conjunction with the issuance of
the loan are conclusory, and plaintiff has presented evidence that
the disclosures were made in a timely manner.
CONCLUSION
For the reasons set forth above, I grant plaintiff’s motion
for summary judgment, and deny defendant’s motion to dismiss the
complaint.
Plaintiff’s motion to strike defendant’s sur-reply is
denied, and defendant’s motion seeking a declaration that the
mortgage issued by OneWest is void is denied.
Page -6-
Additionally, it is further:
ORDERED, that this action is hereby referred to Gerald Murphy
of the law firm Forsyth, Howe, O'Dwyer, Kalb & Murphy, P.C.,
One Chase Square, Suite 1900, Rochester, NY 14604, at telephone
number 585-324-0605, as Special Master to ascertain and compute the
amount due to Plaintiff herein pursuant to the note and mortgage,
including but not limited to, unpaid principal balance, interest,
accumulated late charges, and recoverable balance due and owing on
the note secured by the mortgage, and to examine and report whether
the premises should be sold in one parcel, and it is further
ORDERED, that the Special Master shall make his report to the
Court as soon as is practicable, and it is further
ORDERED, that upon submission of the Special Master's Report,
Plaintiff shall pay $250.00 to the Special Master as compensation
for
his
services,
which
sum
may
be
recouped
as
a
cost
of
litigation; and it is further
ORDERED, that the Special Master appointed herein is subject
to the requirements of Rule 53 of the Federal Rules of Civil
Procedure,
and,
if
the
Special
Master
is
disqualified
from
receiving an appointment pursuant to the provisions of that Rule,
the Special Master shall notify the Appointing Judge forthwith, and
it is further
ORDERED, that by accepting this appointment the Special Master
certifies that he is in compliance with Rule 53 of the Federal
Rules of Civil Procedure, including, but not limited to, Section
Page -7-
53(a)(2) (“Disqualification”), section 53(c) (“Master's Authority”)
and section 53(g) (“Compensation”), and it is further
ORDERED, that the caption herein be amended to reflect OneWest
Bank N.A.'s name change from OneWest Bank, FSB to OneWest Bank
N.A.; that "Keith Shaffer" be substituted in place and stead of
defendant “John Doe No. l”; and that the names of defendants "John
Doe No. 2" through "John Doe No. 10" be stricken and that the
action be discontinued as to them, all of the foregoing without
prejudice; and it is further
ORDERED that pursuant to FRCP Rule 55(b), default judgment
against defendants HSBC Bank Nevada, N.A. and Keith Shaffer (served
herein as "John Doe No. 1") for failing to appear and interpose any
answer or defense in this action is granted.
ALL OF THE ABOVE IS SO ORDERED.
S/ Michael A. Telesca
MICHAEL A. TELESCA
United States District Judge
Dated:
Rochester, New York
March 31, 2015
Page -8-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?