What is going on in NY? We have children getting their braids cut off on the way to school
http://query.nytimes.com/mem/archive-free/pdf?res=F10610FC345F10738DDDAE0A94D9405B8185F0D3
We have children getting their braids cut off in Kindergarten by classmates
http://www.essence.com/2010/02/24/bullies-cut-5-year-old-girls-hair/
They're young, but shouldn't they know better? If not addressed, the psychological effects of long-term bullying are bad enough without tacking on that now this five-year-old girl has to walk around with a patch of hair missing from the back of her head.
Schools and Judges taking no action
http://www.cltmag.com/us-judge-finds-no-constitutional-damages-claim-in-bullying-case.html
Teacher chops off child's braid
http://www.essence.com/2009/12/15/crazytown-usa-braids-not-safe-in-milwauk/
People need to teach their children to keep their hands off of other people PERIOD.
When my son was in Pre-school- a religous one mind you, another child cut my son't face- he was 3 and 1/2 at the time. The school did nothing about it. My son still has a scar to this day although a faint one. I really wish I would have sued the school and the parents of the little psychopath !! The school system needs to protect these kids system needs to protect these kids. It's just hair it will grow back is not acceptable.
Showing posts with label NY. Show all posts
Showing posts with label NY. Show all posts
Friday, August 12, 2011
Thursday, July 28, 2011
Judge SCHACK - NY
HSBC Bank USA, N.A. v Taher
2011 NY Slip Op 51208(U)
Decided on July 1, 2011
Supreme Court, Kings County
Schack, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.
Decided on July 1, 2011
Supreme Court, Kings County
HSBC Bank USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, Plaintiff, Index No. 9320/09
against
Ellen N. Taher, et. al., Defendants.
9320/09
Appearances:
Plaintiff
Shapiro, Dicaro & Barak, LLC
Rochester NY
Defendant
No Appearance
Arthur M. Schack, J.
The following papers numbered 1 – 2 read on this motion:Papers Numbered:
Proposed Order of Reference with Affidavits/Exhibits1
Affirmation pursuant to Administrative Order 548/10______2
________________________________________________________________________ [*2]
In this foreclosure action, plaintiff HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2 (HSBC), moved, upon the default of all defendants, for an order of reference and related relief for the premises located at 931 Gates Avenue, Brooklyn, New York (Block 1632, Lot 57, County of Kings). Before considering plaintiff HSBC’s instant motion, I issued a decision and order, dated November 8, 2010, instructing plaintiff’s counsel, to comply with the requirements of Chief Administrative Judge Ann T. Pfau, in her Administrative Order 548/10 of October 20, 2010, that an affirmation be submitted “within sixty (60) days of this decision and order, or the instant foreclosure action will be dismissed with prejudice.” My decision and order mandated:
plaintiff’s counsel to state that he communicated on a specific date
with a named representative of plaintiff HSBC who informed counsel
that he or she:
(a) has personally reviewed plaintiff’s documents and records
relating to this case; (b) has reviewed the Summons and
Complaint, and all other papers filed in this matter in support
of foreclosure; and, (c) has confirmed both the factual accuracy
of these court filings and the accuracy of the notarizations
contained therein.
Further, plaintiff’s counsel, based upon his or her communication
with plaintiff’s representative named above must upon his or her
“inspection of the papers filed with the Court and other diligent
inquiry, . . . certify that, to the best of [his or her] knowledge, information
and belief, the Summons and Complaint filed in support of this action
for foreclosure are complete and accurate in all relevant respect.”
Counsel is reminded that the new standard Court affirmation form
states in a note at the top of the first page:
During and after August 2010, numerous and widespread
insufficiencies in foreclosure filings in various courts around the
nation were reported by major mortgage lenders and other authorities.
These insufficiencies include: failure of plaintiffs and their counsel
to review documents and files to establish standing and other
foreclosure requisites; filing of notarized affidavits which falsely
attest to such review and to other critical facts in the foreclosure
process; and “robosigning” of documents by parties and counsel.
The wrongful filing and prosecution of foreclosure proceedings
which are discovered to suffer from these defects may be cause
for disciplinary and other sanctions upon participating counsel. [Emphasis added]
According to the October 20, 2010 Office of Court Administration
press release about the new filing requirement:
The New York State court system has instituted a new filing
requirement in residential foreclosure cases to protect the integrity
of the foreclosure process and prevent wrongful foreclosures.
Chief Judge Jonathan Lippman today announced that plaintiff’s [*3]
counsel in foreclosure actions will be required to file an
affirmation certifying that counsel has taken reasonable steps -
including inquiry to banks and lenders and careful review of the
papers filed in the case – to verify the accuracy of documents
filed in support of residential foreclosures. The new filing
requirement was introduced by the Chief Judge in response to
recent disclosures by major mortgage lenders of significant
insufficiencies – including widespread deficiencies in notarization
and “robosigning” of supporting documents – in residential
foreclosure filings in courts nationwide. The new requirement
is effective immediately and was created with the approval of the
Presiding Justices of all four Judicial Departments.
Chief Judge Lippman said, “We cannot allow the courts
in New York State to stand by idly and be party to what we now
know is a deeply flawed process, especially when that process
involves basic human needs – such as a family home – during
this period of economic crisis. This new filing requirement will
play a vital role in ensuring that the documents judges rely on will
be thoroughly examined, accurate, and error-free before any judge
is asked to take the drastic step of foreclosure.” [Emphasis added]
(See Gretchen Morgenson and Andrew Martin, Big Legal Clash on
Foreclosure is Taking Shape, New York Times, Oct. 21, 2010; Andrew
Keshner, New Court Rules Says Attorneys Must Verify Foreclosure Papers,
NYLJ, Oct. 21, 2010).
On plaintiff HSBC’s deadline day, January 7, 2011, the 60th day after issuing my November 8, 2010 decision and order, plaintiff’s counsel, Frank M. Cassara, Esq., of Shapiro, DiCaro & Barak, LLC, submitted to my chambers the required affirmation, pursuant to Chief Administrative Judge Pfau’s Administrative Order 548/10. Mr. Cassara, affirmed “under the penalties of perjury”:
2. On January 4, 2011 and January 5, 2011, I communicated with
the following representative or representatives of Plaintiff, who informed
me that he/she/they (a) personally reviewed plaintiff’s documents and
records relating to this case for factual accuracy; and (b) confirmed
the factual accuracy and allegations set forth in the Complaint and
any supporting affirmations filed with the Court, as well as the accuracy
of the notarizations contained in the supporting documents filed therewith.
NameTitle
Christina CarterManager of Account Management
3. Based upon my communication with Christina Carter, as well
as upon my inspection and reasonable inquiry under the circumstances,
I affirm that, to the best of my knowledge, information, and belief, the
Summons and Complaint, and other papers filed or submitted to the
Court in this matter contain no false statements of fact or law . . .
4. I am aware of my obligations under New York Rules of
Professional Conduct (22 NYCRR Part 1200) and 22 NYCRR Part 130.
[Emphasis added]
The assignment of the subject mortgage and note to HSBC, by MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS), in the instant foreclosure action is without legal authority. MERS never possessed the TAHER note it allegedly assigned to plaintiff HSBC. Thus, plaintiff HSBC lacked standing to commence the instant foreclosure action. Therefore, the assignment is defective and the instant action is dismissed with prejudice.
Mr. Cassara’s affirmation, affirmed “under the penalties of perjury,” that to the best of Mr. Cassara’s “knowledge, information, and belief, the Summons and Complaint, and other papers filed or submitted to the [*4]Court in this matter contain no false statements of fact or law,” is patently false. Moreover, the Court is troubled that: the alleged representative of plaintiff HSBC, Christina Carter, who according to Mr. Cassara, “confirmed the factual accuracy and allegations set forth in the Complaint and any supporting affirmations filed with the Court, as well as the accuracy of the notarizations contained in the supporting documents filed therewith,” is not an employee of HSBC, but a robosigner employed by OCWEN LOAN SERVICING, LLC [OCWEN], whose signature on legal documents has at least three variations; the MERS to plaintiff HSBC assignment of the subject mortgage and note was executed by Scott W. Anderson, a known robosigner and OCWEN employee, whose signature is reported to have appeared in at least four different variations on mortgage assignments; and, the instant affidavit of merit was executed by Margery Rotundo, another robosigner, OCWEN employee and self-alleged employee of various other banking entities.
Last month, on May 19, 2011, in a case involving a defective MERS to HSBC assignment by a robosigner, Maine’s highest court, the Supreme Judicial Court, found that HSBC’s affidavits and the assignment of the note and mortgage by MERS to HSBC contained serious defects. The Maine Court held “that the affidavits submitted by HSBC contain serious irregularities that make them inherently untrustworthy.” (HSBC Mortg. Services, Inc. v Murphy, 19 A3d 815, 2011 ME 59, * 3). HSBC has a history of foreclosure actions before me with affidavits of merit executed by Margery Rotundo and MERS to HSBC assignments executed by Scott Anderson that “contain serious irregularities that make them inherently untrustworthy.” Moreover, Mr. Cassara was put on notice, in my November 8, 2010 decision and order, that “[t]he wrongful filing and prosecution of foreclosure proceedings which are discovered to suffer from these defects may be cause for disciplinary and other sanctions upon participating counsel.”
Chief Judge Jonathan Lippman, in the Office of Court Administration’s October 20, 2010 press release about the issuance of Administrative Order 548/10 and the need for plaintiff’s counsel in foreclosure actions to verify the accuracy of supporting documents, stated that “[w]e cannot allow the courts in New York State to stand by idly and be party to what we now know is a deeply flawed process, especially when that process involves basic human needs – such as a family home – during this period of economic crisis.” Frivolous conduct, as defined by 22 NYCRR § 130.1.1 (c), includes conduct that “is completely without merit in law” and “asserts material factual statements that are false.”
Further, the Part 130 rules are intended to stop the waste of judicial resources, which appears to have occurred in the TAHER foreclosure action. In the instant action: the assignment of the subject mortgage and note by MERS to HSBC is without legal authority; HSBC’s continued use of robo-signers “is completely without merit in law”; plaintiff HSBC “asserts material factual statements that are false”; and, the continuation of this case with all its defects is a waste of judicial resources. Therefore, plaintiff HSBC’s President and Chief Executive Officer, Irene M. Dorner, its counsel, Frank M. Cassara, Esq., and his firm, Shapiro, DiCaro & Barak, LLC, will be given an opportunity to be heard why this Court should not sanction them for making a “frivolous motion,” pursuant to 22 NYCRR §130-1.1.
Background
Defendant EILEEN N. TAHER (TAHER) borrowed $363,750.00 from DELTA
FUNDING CORPORATION (DELTA) on January 13, 2006. The note and mortgage were recorded in the Office of the City Register, New York City Department of Finance on February 3, 2006, at City Register File Number (CRFN) 2006000067459, by MERS, “acting solely as a nominee for Lender [DELTA]” and “FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD [capitalized and boldfaced in the mortgage].” Subsequently, on February 28, 2007, defendant TAHER borrowed another $125,472.07 from DELTA, with this mortgage and note recorded in the Office of the City Register, New York City Department of Finance on March 14, 2007, at CRFN 2007000136036, by MERS, “acting solely as a nominee for Lender [DELTA]” and “[f]or purpose of Recording this mortgage, MERS is the Mortgagee of Record [not capitalized or boldfaced, and the word "purpose" not "purposes" used].” Also, on February 28, 2007, defendant TAHER executed a consolidation, extension and modification agreement with DELTA, consolidating the two mortgages and notes into one mortgage and note for $487,500.00 [the unpaid balance of the first mortgage was $362,297.93], with this recorded in the Office of the City Register, New York City Department of Finance on March 14, 2007, at CRFN 2007000136037, by MERS, “acting solely as nominee for Lender [DELTA]” and “MERS is the Mortgagee of this Security Instrument.” Further, the “Note Holder” is the “Lender or anyone who succeeds to Lender’s rights under [*5]this Agreement and who is entitled to receive the payments [by TAHER].” Therefore, pursuant to the terms of the TAHER consolidation, extension and modification agreement, DELTA, not MERS, is the “Note Holder.”
According to plaintiff’s papers, defendant TAHER defaulted in her loan payments with the installment payment due on September 1, 2008. Subsequently, 169 days later, MERS assigned the subject DELTA nonperforming $487,500.00 consolidation, extension and modification agreement mortgage and note to HSBC, in an assignment dated February 16, 2009 and recorded in the Office of the City Register, New York City Department of Finance on August 6, 2009, at CRFN 2009000245093. The assignment was executed by Scott W. Anderson, who claimed to be “Senior Vice President of Residential Loan Servicing” for “MORTGAGE ELECTRONIC REGISTRATIONS SYSTEMS, INC., as nominee for DELTA FUNDING CORPORATION by its attorney-in-fact OCWEN LOAN SERVING, LLC.” Both assignor MERS and assignee HSBC have the same address, 1661 Worthington Road, Suite 100, West Palm Beach, FL 33409. This is actually OCWEN’s address. Further, Mr. Anderson’s assignment states that the power of attorney from DELTA to OCWEN was recorded at CRFN Number 2005000560341.
The Court checked the Automated City Register Information System (ACRIS) and discovered that this document is a limited power of attorney from DELTA to OCWEN for the premises located at 14 Harden Street, Brooklyn, New York (Block 7821, Lot 49, County of Kings), not the subject premises in the instant action. Further, MERS is not mentioned in or involved with the limited power of attorney for the 14 Harden Street premises. Also, in the 14 Harden Street matter, both assignor DELTA and assignee OCWEN have the same address, 1661 Worthington Road, Suite 100, West Palm Beach, FL 33409.
Robosigner Scott W. Anderson
While I have never personally met Mr. Anderson, his signatures have appeared in many foreclosure documents in this Court. His claims of wearing different corporate hats and the variations in the scrawls of initials used for his signature on mortgage documents has earned Mr. Anderson notoriety as a robosigner. Kimberly Miller, in her January 5, 2011-Palm Beach Post article, “State details foreclosure crisis,” wrote:
Sweeping evidence of the case the state attorney general’s office
has built in its pursuit of foreclosure justice for Florida homeowners is
outlined in a 98-page presentation complete with copies of allegedly
forged signatures, false notarizations, bogus witnesses and improper
mortgage assignments.
The presentation, titled “Unfair, Deceptive and Unconscionable
Acts in Foreclosure Cases,” was given during an early December
conference of the Florida Association of Court Clerks and Comptrollers
by the attorney general’s economic crimes division.
It is one of the first examples of what the state has compiled in
its exploration of foreclosure malpractice, condemning banks, mortgage
servicers and law firms for contributing to the crisis by cutting corners . . .
In page after page of copied records, the presentation meticulously
documents cases of questionable signatures, notarizations that could not
have occurred when they are said to have because of when the notary
stamp expires, and foreclosures filed by entities that might not have
had legal ability to foreclose.
It also focuses largely on assignments of mortgage [sic],
documents that transfer ownership of mortgages from one bank to
another. Mortgage assignments became an issue after the real estate
boom, when mortgages were sold and resold, packaged into securities
trusts and otherwise transferred in a labyrinthine fashion that made
tracking difficult.
As foreclosures mounted, the banks appointed people to create
assignments, “thousands and thousands and thousands” of which were signed weekly by people who may not [*6]have known what they were signing . . .
In another example, the signature of Scott Anderson, an employee
of West Palm Beach-based Ocwen Financial Corp., appears in four
styles on mortgage assignments . . .
Paul Koches, executive vice president of Ocwen, acknowledged
Tuesday that the signatures were not all Anderson’s, but that doesn’t mean
they were forged, he said. Certain employees were given authorization
to sign for Anderson on mortgage assignments, which Koches noted
do not need to be notarized.
Still, Ocwen has since stopped allowing other people to sign for
Anderson, Koches said.
Last September, the Ohio Court of Appeals, Second District, Montgomery County
(2010 WL 3451130, 2010-Ohio-4158, lv denied 17 Ohio St.3d 1532 [2011]), affirmed the denial of a foreclosure, sought by plaintiff HSBC, because of numerous irregularities. The Ohio Court, in citing four decisions by this Court [three of the four involved Scott Anderson as assignor] summarized some of this Court’s prior concerns with HSBC and Mr. Anderson, in observing, at * 11:
recent decisions in the State of New York have noted numerous
irregularities in HSBC’s mortgage documentation and corporate
relationships with Ocwen, MERS, and Delta. See, e.g., HSBC Bank
USA, N.A. v Cherry (2007), 18 Misc 3d 1102 (A) [Scott Anderson
assignor] and HSBC Bank USA, N.A. v Yeasmin (2010), 27 Misc 3d
1227 (A) (dismissing HSBC’s requests for orders of reference in
mortgage foreclosure actions, due to HSBC’s failure to provide proper
affidavits). See, also, e.g., HSBC Bank USA, N.A. v Charlevagne (2008),
20 Misc 3d 1128 (A) [Scott Anderson assignor] and HSBC Bank USA,
N.A. v Antrobus (2008), 20 Misc 3d 1127 (A) [Scott Anderson assignor]
(describing “possible incestuous relationship” between HSBC Bank,
Ocwen Loan Servicing, Delta Funding Corporation, and Mortgage
Electronic Registration Systems, Inc., due to the fact that the entities
all share the same office space at 1661 Worthington Road, Suite 100,
West Palm Beach, Florida. HSBC also supplied affidavits in support
of foreclosure from individuals who claimed simultaneously to be
officers of more than one of these corporations.).This Court reviewed Scott Anderson’s signature on the instant MERS to HSBC assignment of the TAHER mortgage and note and using ACRIS compared his signature with that used in assignments in the five prior Scott Anderson assignment foreclosure cases decided by this Court. Similar to the Florida Attorney General’s Economic Crimes Division findings, as reported above in the Kimberly Miller Palm Beach Post article, I also found four variations of Mr. Anderson’s signature in these six assignments. Each signature is actually a variation of Mr. Anderson’s initials, “SA.” The Court concludes that it must be a herculean task for Mr. Anderson to sign “Scott Anderson” or “Scott W. Anderson” in full.
Mr. Anderson’s first signature variation is found in: the January 19, 2007 assignment of the 48 Van Siclen Avenue (Block 3932, Lot 45, County of Kings) mortgage and note from DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE TO MTGLQ INVESTORS LP, by Scott W. Anderson as Senor Vice President of OCWEN, attorney-in-fact for DEUTSCHE BANK (Deutsche Bank Nat Trust Co. v Castellanos, 18 Misc 3d 1115 [A] [Sup Ct, Kings County 2007]), recorded on February 7, 2007 at CRFN 2007000073000; and, the June 13, 2007 assignment of the 3570 Canal Avenue (Block 6978, Lot 20, County of Kings) mortgage and note from MERS to HSBC, by Scott Anderson as Vice President of MERS, acting as nominee for DELTA (HSBC Bank USA, N.A. v Cherry, 18 Misc 3d 1102 (A) [Sup Ct, Kings County 2007]), recorded on August 13, 2007 at CRFN 2007000416732. In this signature variation the letter “S” is a cursive bell-shaped curve overlapping with the cursive letter “A.”
The second signature variation used for Mr. Anderson is in the May 1, 2007 assignment of the 572 Riverdale Avenue (Block 3838, Lot 39, County of Kings) mortgage and note from MERS to HSBC, by Scott Anderson as Vice President of MERS, acting as nominee for DELTA (HSBC Bank USA, N.A. v Valentin, 18 Misc 3d 1123 [A] [Sup [*7]Ct, Kings County 2008]) and HSBC Bank USA, N.A. v Valentin, 21 Misc 3d 1124 [A] [Sup Ct, Kings County 2008], affd as modified 72 AD3d 1027 [2010]), recorded on June 13, 2007 at CRFN 2007000306260. These decisions will be referred to as Valentin I and Valentin II. In this signature variation the letter “S” is a cursive circle around a cursive letter “A” with various loops.
The third signature variation used for Mr. Anderson is in the November 30, 2007 assignment of the 680 Decauter Street (Block 1506, Lot 2, County of Kings) mortgage and note from MERS to HSBC, by Scott Anderson as Vice President of MERS, acting as nominee for DELTA (HSBC Bank USA, N.A. v Antrobus, 20 Misc 3d 1127 [A] [Sup Ct, Kings County [2008]), recorded on January 16, 2008 at CRFN 2008000021186. In this signature variation, the initials are illegible. One cursive letter looks almost like the letter “O.” It is a circle sitting in a valley created by something that looks like the cursive letter “M.”
In the fourth signature variation, used for Mr. Anderson in the February 16, 2009 assignment in the instant case, the cursive letter “S,” which is circular with a loop on the lower left side abuts the cursive letter “A” to its right.
Moreover, in HSBC Bank USA, N.A. v Cherry, Mr. Anderson acted both as assignor of the mortgage and note to HSBC and then as servicing agent for assignee HSBC by executing the “affidavit of merit”for a default judgment. Because of this, in Valentin I, I required him to provide me with an affidavit about his employment history. In Valentin II the Court was provided with an affidavit by Mr. Anderson, sworn on March 14, 2008. Mr. Anderson, in his affidavit, admitted he was conflicted. I noted, at * 2, in Valentin II that:
The Court is troubled that Mr. Anderson acted as both assignor
of the instant mortgage loan, and then as the Vice President of Ocwen,
assignee HSBC’s servicing agent. He admits to this conflict, in ¶ 13,
stating that “[w]hen the loan went into default and then foreclosure in
2007, Ocwen, in it capacity as servicer, elected to remove the loan
from the MERS system and transfer title to HSBC.”
The stockholders of HSBC and the noteholders of the Trust [the
owner of the mortgage] probably are not aware that Mr. Anderson,
on behalf of the servicer, Ocwen, claims to have the right to assign
“toxic” nonperforming mortgage loans to them. It could well be that
Ocwen’s transfer of the instant nonperforming loan, as well as others, is
part of what former Federal Reserve Board Chairman Alan Greenspan
referred to in his October 23, 2008 testimony, before the House
Oversight Committee, as “a once in a century credit tsunami.”
Interestingly, the purported signature of Mr. Anderson in the March 14, 2008-Valentin II affidavit is a fifth signature variation. The Court is perplexed that in response to my order for Mr. Anderson to submit an affidavit with respect to his employment, Mr. Anderson was unable to sign either “Scott Anderson” or “Scott W. Anderson.” Instead, there is a fifth variation of scrawled initials. There is a big loop for the cursive letter “S,” which contains within it something that looks like the cursive letter “M” going into lines that look like the cursive letter “V,” with a wiggly line going to the right of the page.
Robosigner Margery Rotundo
In the instant action, Margery Rotundo executed the April 27, 2009 affidavit of merit and amount due. Ms. Rotundo has, in prior foreclosure cases before me, a history of alleging to be the Senior Vice President of various entities, including plaintiff HSBC, Nomura Credit & Capital, Inc. and an unnamed servicing agent for HSBC. In the instant action she claims to be the Senior Vice President of Residential Loss Mitigation of OCWEN, HSBC’s servicing agent.
In HSBC Bank USA, N.A. v Charlevagne (20 Misc 3d 1128 (A) [Sup Ct, Kings County 2008]), one of the cases in which Scott Anderson as Vice President of MERS assigned the mortgage and note to HSBC, I commented about Ms. Rotundo’s self-allegations of multiple employers, at * 1:
The renewed application of plaintiff, HSBC . . . for an order of
reference and related relief in this foreclosure action, in which all
defendants defaulted, for the premises located at 455 Crescent Street,
Brooklyn, New York (Block 4216, Lot 20, County of Kings) is again [*8]
denied without prejudice, with leave to renew upon providing the
Court with a satisfactory explanation to four concerns.
First, the original application for an order of reference and
related relief was denied with leave to renew, in my unpublished
decision and order of November 15, 2007, because the “affidavit of
merit” was not made by a party but by Margery Rotundo, who swore
that [she] was “Senior Vice President Residential Loss Mitigation of
OCWEN LOAN SERVICING, LLC [OCWEN], Attorney in Fact for
HSBC,”and the “Limited Power of Attorney” from HSBC to OCWEN
was defective. In the renewed application, Ms. Rotundo claims in her
January 9, 2008-”affidavit of merit and amount due,” that she “is the
Senior Vice President of Residential Loss Mitigation of HSBC BANK
USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN
TRUST 2005-3, RENAISSANCE HOME EQUITY LOAN ASSET-
BACKED NOTES, SERIES 2005-3.” In prior decisions, I found that
Ms. Rotundo swore: on October 5, 2007 to be Senior Vice President
of Loss Mitigation for Nomura Credit & Capital, Inc. (Nomura Credit
& Capital, Inc., 19 Misc 3d 1126 (A) [April 30, 2008]); and, on
December 12, 2007 to be Senior Vice President of an unnamed
servicing agent for HSBC (HSBC Bank USA, NA v Antrobus, 20
Misc 3d 1127 (A) [July 31, 2008]).
The late gossip columnist Hedda Hopper and the late United
States Representative Bella Abzug were famous for wearing many
colorful hats. With all the corporate hats Ms. Rotundo has recently
worn, she might become the contemporary millinery rival to both
Ms. Hopper and Ms. Abzug. The Court needs to know the employment
history of the peripatetic Ms. Rotundo. Did she truly switch employers
or did plaintiff have her sign the “affidavit of merit and amount due”
as its Senior Vice President solely to satisfy the Court?
In my Charlevagne decision and order I denied an order of reference without prejudice and granted leave to plaintiff HSBC to renew its application for an order of reference for the premises by providing the Court with several documents, including, at * 4, “an affidavit from Margery Rotundo describing her employment history for the past three years.” Subsequently, plaintiff HSBC’s counsel in Charlevagne, Steven J. Baum, P.C., never provided me with an affidavit from Margery Rotundo, but filed with the Kings County Clerk, on October 27, 2008, a stipulation of discontinuance and cancellation of the notice of pendency.
Robosigner Christina Carter
Mr. Cassara, plaintiff’s counsel affirmed that “On January 4, 2011 and January 5, 2011, I communicated with the following representative . . . of Plaintiff . . . Christina Carter . . . Manager of Account Management.” This is disingenuous. Ms. Carter is not employed by plaintiff, but by OCWEN. She executed documents as an officer of MERS and as an employee of OCWEN. Ms. Carter’s signature on documents is suspect because of the variations of her signature used.
This Court examined eight recent documents that exhibit three different variations of Christina Carter’s signature. The first signature variation is on her May 24, 2010 application with the Florida Department of State for a notary public commission. In this application she lists as her business address that of OCWEN, “1661 Worthington Road, West Palm Beach, FL 33409.” In her full signature the capital letters “C” in her first and last names are signed differently than in other recent documents reviewed by this Court.
In five other documents reviewed by the Court, Ms. Carter signs her initials with the second letter “C” looking like a cursive letter “L,” with a circular loop on the second letter “C.” Three of these documents are deeds of release to acknowledge mortgage satisfactions, filed with the Clerk of Court for Middlesex County, South District, State of Massachusetts. In the first document, signed on July 2, 2010, Ms. Carter signed as “Account Management, Manager” for OCWEN, for the premises at 158 Algonquin Trail, Ashland, Massachusetts, with the deed of release [*9]recorded on September 9, 2010, at document number 2010 00156681. In the second document, signed on July 7, 2010, Ms. Carter signed as “Account Management, Manager” for US BANK NATIONAL ASSOCIATION, AS TRUSTEE BY ITS ATTORNEY-IN-FACT OCWEN LOAN SERVICING, LLC, for the premises at 30 Kenilworth Street, Malden, Massachusetts, with the deed of release recorded on September 3, 2010, at document number 2010 01542078. In the third Middlesex County, Massachusetts document, signed on July 19, 2010, she signed as “Account Management, Manager” for OCWEN, for the premises at 10 Johnson Farm Road, Lexington, Massachusetts, with the deed of release recorded on September 9, 2010, at document number 2010 00156684. In the fourth document, signed on July 12, 2010, for the assignment of a mortgage for 1201 Pine Sage Circle, West Palm Beach, Florida, Ms. Carter signed as “Account Management, Manager” for NEW CENTURY MORTGAGE CORPORATION BY ITS ATTORNEY-IN-FACT OCWEN LOAN SERVICING, LLC (NEW CENTURY). This mortgage was assigned to DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR IXIS REAL ESTATE CAPITAL TRUST 2005-HE3 MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2005-HE3 (DEUTSCHE BANK) and recorded on August 23, 2010 with the Palm Beach County Clerk at CFN 20100314054. Interestingly, both assignor NEW CENTURY and assignee DEUTSCHE BANK have the same address, c/o OCWEN, “1661 Worthington Road, Suite 100, West Palm Beach, FL 33409.” In the fifth document, Ms. Carter changes corporate hats. She signed, on September 8, 2010, an Oregon assignment of a mortgage deed of trust, for 20673 Honeysuckle Lane, Bend Oregon, as Vice President of MERS “ACTING SOLELY AS NOMINEE FOR CHAPEL MORTGAGE CORPORATION.” The assignment is to DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR IXIS REAL ESTATE CAPITAL TRUST 2006-HE2 MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2006-HE2, whose address is c/o OCWEN, “1661 Worthington Road, Suite 100, West Palm Beach, FL 33409.” This was recorded on September 20, 2010 with the Clerk of Deschutes County, Oregon.
Ms. Carter, in the third variation of her signature, again only uses her initials, but the second letter “C” looks like the cursive letter “C,” not the cursive letter “L” with a circular loop. The Court examined two of these documents. The first document is a mortgage satisfaction, signed on June 15, 2010, and filed with the Clerk of Court for Middlesex County, South District, State of Massachusetts. Ms. Carter signed as “Account Management, Manager” for OCWEN, for the premises at 4 Mellon Road, Billerica, Massachusetts. The deed of release was recorded on July 19, 2010, at document number 2010 00031211. In the second document, a mortgage satisfaction for the premises at 13352 Bedford Meadows Court, Wellington, Florida, Ms. Carter signed on July 22, 2010, as “Account Management, Manager” for “HSBC BANK USA, NATIONAL ASSOCIATION AS TRUSTEE BY ITS ATTORNEY-IN FACT OCWEN LOAN SERVICING, LLC.” The document never states for whom HSBC is the Trustee.
This was recorded on September 10, 2010 with the Palm Beach County Clerk at CFN 20100339935.
Plaintiff’s lack of Standing
Real Property Actions and Proceedings Law (RPAPL) § 1321 allows the Court in a foreclosure action, upon the default of defendant or defendant’s admission of mortgage payment arrears, to appoint a referee “to compute the amount due to the plaintiff.” Plaintiff HSBC’s application for an order of reference is a preliminary step to obtaining a default judgment of foreclosure and sale. (Home Sav. Of Am., F.A. v Gkanios, 230 AD2d 770 [2d Dept 1996]).
However, the instant action must be dismissed because plaintiff HSBC lacks standing to bring this action. MERS lacked the authority to assign the subject TAHER mortgage to HSBC and there is no evidence that MERS physically possessed the TAHER notes. Under the terms of the TAHER consolidation, extension and modification agreement, DELTA, not MERS, is the “Note Holder.” As described above, the consolidation, extension and modification agreement defines the “Note Holder” as the “Lender or anyone who succeeds to Lender’s rights under this Agreement and who is entitled to receive the payments.”
“Standing to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801 812 [2003], cert denied 540 US 1017 [2003]). Professor David Siegel (NY Prac, § 136, at 232 [4d ed]), instructs that:
[i]t is the law’s policy to allow only an aggrieved person to bring a
lawsuit . . . A want of “standing to sue,” in other words, is just another
way of saying that this particular plaintiff is not involved in a genuine
controversy, and a simple syllogism takes us from there to a “jurisdictional” [*10]
dismissal: (1) the courts have jurisdiction only over controversies; (2) a
plaintiff found to lack “standing”is not involved in a controversy; and
(3) the courts therefore have no jurisdiction of the case when such a
plaintiff purports to bring it.
“Standing to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” (Caprer v Nussbaum (36 AD3d 176, 181 [2d Dept 2006]). If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]).
The Appellate Division, Second Department recently instructed, with respect to standing in a foreclosure action, in Aurora Loan Services, LLC v Weisblum (___ AD3d ___, 2011 NY Slip Op 04184 [May 17, 2011]), at * 6-7, that:
In order to commence a foreclosure action, the plaintiff must
have a legal or equitable interest in the mortgage ( see Wells Fargo
Bank, N.A. v Marchione, 69 AD3d, 204, 207 [2d Dept 2009]). A
plaintiff has standing where it is both (1) the holder or assignee of
the subject mortgage and (2) the holder or assignee of the underlying
note, either by physical delivery or execution of a written assignment
prior to the commencement of the action with the filing of the complaint
(see Wells Fargo Bank, N.A. v Marchione, 69 AD3d at 207-209; U.S.
Bank v Collymore, 68 AD3d 752, 754 [2d Dept 2009].)
Assignments of mortgages and notes are made by either written instrument or the
assignor physically delivering the mortgage and note to the assignee. “Our courts have repeatedly held that a bond and mortgage may be transferred by delivery without a written instrument of assignment.” (Flyer v Sullivan, 284 AD 697, 699 [1d Dept 1954]).
In the instant action, even if MERS had authority to transfer the mortgage to HSBC, DELTA, not MERS, is the note holder. Therefore, MERS cannot transfer something it never proved it possessed. A “foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity [Emphasis added].” (Kluge v Fugazy (145 AD2d 537, 538 [2d Dept 1988]). Moreover, “a mortgage is but an incident to the debt which it is intended to secure . . . the logical conclusion is that a transfer of the mortgage without the debt is a nullity, and no interest is assigned by it. The security cannot be separated from the debt, and exist independently of it. This is the necessary legal conclusion.” (Merritt v Bartholick, 36 NY 44, 45 [1867]. The Appellate Division, First Department, citing Kluge v Fugazy in Katz v East-Ville Realty Co. ( 249 AD2d 243 [1d Dept 1998]), instructed that “[p]laintiff’s attempt to foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law or fact.” (See U.S. Bank, N.A. v Collymore, 68 AD3d at 754).
MERS had no authority to assign the subject mortgage and note
Scott Anderson for MERS as assignor, did not have specific authority to sign the TAHER mortgage. Under the terms of the consolidation, extension and modification agreement, MERS is “acting solely as nominee for Lender [DELTA].” The alleged power of attorney cited in the Scott Anderson MERS to HSBC assignment, as described [*11]above, is a limited power of attorney from DELTA to OCWEN for the premises located at 14 Harden Street, Brooklyn, New York, not the subject premises. MERS is not mentioned or involved with this limited power of attorney. In both underlying TAHER mortgages MERS was “acting solely as a nominee for Lender,” which is DELTA. The term “nominee” is defined as “[a] person designated to act in place of another, usu. in a very limited way” or “[a] party who holds bare legal title for the benefit of others.” (Black’s Law Dictionary 1076 [8th ed 2004]). “This definition suggests that a nominee possesses few or no legally enforceable rights beyond those of a principal whom the nominee serves.” (Landmark National Bank v Kesler, 289 Kan 528, 538 [2009]). The Supreme Court of Kansas, in Landmark National Bank, 289 Kan at 539, observed that:
The legal status of a nominee, then, depends on the context of
the relationship of the nominee to its principal. Various courts have
interpreted the relationship of MERS and the lender as an agency
relationship. See In re Sheridan, 2009 WL631355, at *4 (Bankr. D.
Idaho, March 12, 2009) (MERS “acts not on its own account. Its
capacity is representative.”); Mortgage Elec. Registrations Systems,
Inc. v Southwest, 2009 Ark. 152 ___, ___SW3d___, 2009 WL 723182
(March 19, 2009) (“MERS, by the terms of the deed of trust, and its
own stated purposes, was the lender’s agent”); La Salle Nat. Bank v
Lamy, 12 Misc 3d 1191 [A], at *2 [Sup Ct, Suffolk County 2006]) . . .
(“A nominee of the owner of a note and mortgage may not effectively
assign the note and mortgage to another for want of an ownership
interest in said note and mortgage by the nominee.”)
The New York Court of Appeals in MERSCORP, Inc. v Romaine (8 NY3d 90 [2006]), explained how MERS acts as the agent of mortgagees, holding at 96:
In 1993, the MERS system was created by several large
participants in the real estate mortgage industry to track ownership
interests in residential mortgages. Mortgage lenders and other entities,
known as MERS members, subscribe to the MERS system and pay
annual fees for the electronic processing and tracking of ownership
and transfers of mortgages. Members contractually agree to appoint
MERS to act as their common agent on all mortgages they register
in the MERS system. [Emphasis added]
Thus, it is clear that MERS’s relationship with its member lenders is that of agent with the lender-principal. This is a fiduciary relationship, resulting from the manifestation of consent by one person to another, allowing the other to act on his behalf, subject to his control and consent. The principal is the one for whom action is to be taken, and the agent is the one who acts.It has been held that the agent, who has a fiduciary relationship with the principal, “is a party who acts on behalf of the principal with the latter’s express, implied, or apparent authority.” (Maurillo v Park Slope U-Haul, 194 AD2d 142, 146 [2d [*12]Dept 1992]). “Agents are bound at all times to exercise the utmost good faith toward their principals. They must act in accordance with the highest and truest principles of morality.” (Elco Shoe Mfrs. v Sisk, 260 NY 100, 103 [1932]). (See Sokoloff v Harriman Estates Development Corp., 96 NY 409 [2001]); Wechsler v Bowman, 285 NY 284 [1941]; Lamdin v Broadway Surface Advertising Corp., 272 NY 133 [1936]). An agent “is prohibited from acting in any manner inconsistent with his agency or trust and is at all times bound to exercise the utmost good faith and loyalty in the performance of his duties.” (Lamdin, at 136).
Thus, in the instant action, MERS, as nominee for DELTA, is DELTA’s agent for limited purposes. It only has those powers given to it and authorized by DELTA, its principal. Plaintiff HSBC failed to submit documents authorizing MERS, as nominee for DELTA, to assign the subject consolidation extension and modification mortgage to plaintiff HSBC. Therefore, MERS lacked authority to assign the TAHER mortgage, making the assignment defective. In Bank of New York v Alderazi (28 Misc 3d 376, 379-380 [Sup Ct, Kings County 2010]), Justice Wayne Saitta instructed that:
A party who claims to be the agent of another bears the burden
of proving the agency relationship by a preponderance of the evidence
(Lippincott v East River Mill & Lumber Co., 79 Misc 559 [1913])
and “[t]he declarations of an alleged agent may not be shown for
the purpose of proving the fact of agency.” (Lexow & Jenkins, P.C. v
Hertz Commercial Leasing Corp., 122 AD2d 25 [2d Dept 1986]; see
also Siegel v Kentucky Fried Chicken of Long Is. 108 AD2d 218 [2d
Dept 1985]; Moore v Leaseway Transp/ Corp., 65 AD2d 697 [1st Dept
1978].) “[T]he acts of a person assuming to be the representative of
another are not competent to prove the agency in the absence of evidence
tending to show the principal’s knowledge of such acts or assent to them.”
(Lexow & Jenkins, P.C. v Hertz Commercial Leasing Corp., 122 AD2d
at 26, quoting 2 NY Jur 2d, Agency and Independent Contractors § 26).
Further, several weeks ago, the Appellate Division, Second Department in Bank
of New York v Silverberg, (___ AD3d ___, 2011 NY Slip Op 05002 [June 7, 2011]), confronted the issue of “whether a party has standing to commence a foreclosure action when that party’s assignor—in this case, Mortgage Electronic Registration Systems, Inc. (hereinafter MERS)—was listed in the underlying mortgage instruments as a nominee and mortgagee for the purpose of recording, but was never the actual holder or assignee of the underlying notes.” The Court held, “[w]e answer this question in the negative.” Silverberg, similar to the instant TAHER matter, deals with the foreclosure of a mortgage with a consolidation, modification and extension agreement. MERS, in the Silverberg case and the instant TAHER action, never had title or possession of the Note and the definition of “Note Holder” is substantially the same in both consolidation, extension and [*13]modification agreements. The Silverberg Court instructed, at * 4-5:
the assignment of the notes was thus beyond MERS’s authority as
nominee or agent of the lender (see Aurora Loan Servs., LLC v
Weisblum, AD3d, 2011 NY Slip Op 04184, *6-7 [2d Dept 2011];
HSBC Bank USA v Squitteri, 29 Misc 3d 1225 [A] [Sup Ct, Kings
County, F. Rivera, J.]; ; LNV Corp. v Madison Real Estate, LLC,
2010 NY Slip Op 33376 [U] [Sup Ct, New York County 2010,
York, J.]; LPP Mtge. Ltd. v Sabine Props., LLC, 2010 NY Slip Op
32367 [U] [Sup Ct, New York County 2010, Madden, J.]; Bank of
NY v Mulligan, 28 Misc 3d 1226 [A] [Sup Ct, Kings County 2010,
Schack, J.]; One West Bank, F.S.B., v Drayton, 29 Misc 3d 1021
[Sup Ct, Kings County 2010, Schack, J.]; Bank of NY v Alderazi,
28 Misc 3d 376, 379-380 [Sup Ct, Kings County 2010, Saitta, J.]
[the "party who claims to be the agent of another bears the burden
of proving the agency relationship by a preponderance of the evidence"];
HSBC Bank USA v Yeasmin, 24 Misc 3d 1239 [A] [Sup Ct, Kings
County 2010, Schack, J.]; HSBC Bank USA, N.A. v Vasquez, 24
Misc 3d 1239 [A], [Sup Ct, Kings County 2009, Schack, J.]; Bank of
NY v Trezza, 14 Misc 3d 1201 [A] [Sup Ct, Suffolk County 2006,
Mayer, J.]; La Salle Bank Natl. Assn. v Lamy, 12 Misc 3d 1191 [A]
[Sup Ct, Suffolk County, 2006, Burke, J.]; Matter of Agard, 444 BR
231 [Bankruptcy Court, ED NY 2011, Grossman, J.]; but see U.S.
Bank N.A. v Flynn, 27 Misc 3d 802 [Sup Ct, Suffolk County 2011,
Whelan, J.]).
Moreover, the Silverberg Court concluded, at * 5, that “because MERS was never the lawful holder or assignee of the notes described and identified in the consolidation agreement, the . . . assignment of mortgage is a nullity, and MERS was without authority to assign the power to foreclose to the plaintiff. Consequently, the plaintiff failed to show that it had standing to foreclose.” Further, Silverberg the Court observed, at * 6, “the law must not yield to expediency and the convenience of lending institutions. Proper procedures must be followed to ensure the reliability of the chain of ownership, to secure the dependable transfer of property, and to assure the enforcement of the rules that govern real property.” [Emphasis added]
Therefore, the instant action is dismissed with prejudice.
Cancellation of subject notice of pendency
The dismissal with prejudice of the instant foreclosure action requires the
cancellation of the notice of pendency. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding [*14]brought to recover the possession of real property.” The Court of Appeals, in 5308 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 319 [1984]), commented that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.”
CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:
The Court, upon motion of any person aggrieved and upon such
notice as it may require, shall direct any county clerk to cancel
a notice of pendency, if service of a summons has not been completed
within the time limited by section 6512; or if the action has been
settled, discontinued or abated; or if the time to appeal from a final
judgment against the plaintiff has expired; or if enforcement of a
final judgment against the plaintiff has not been stayed pursuant
to section 551. [emphasis added]
The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. “Abatement” is defined as “the act of eliminating or nullifying.” (Black’s Law Dictionary 3 [7th ed 1999]). “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains (2A Carmody-Wait 2d § 11.1).” (Nastasi v Natassi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that the “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR § 6501 (see 5303 Realty Corp. v O & Y Equity Corp., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the dismissal of the instant complaint must result in the mandatory cancellation of plaintiff HSBC’s notice of pendency against the property “in the exercise of the inherent power of the court.”
Possible frivolous conduct by HSBC and its counsel
In this Court’s November 8, 2010 decision and order, Mr. Cassara and his firm, as counsel for plaintiff HSBC, were put on notice about the new affirmation required to be submitted by plaintiff’s counsel in foreclosure actions, pursuant to Administrative Order 548/10. In foreclosure cases pending on October 20, 2010, such as the TAHER case, the affirmation is required to be filed with the Court when moving for either an order of reference or a judgment of foreclosure and sale or five business days before a scheduled auction. Chief Judge Lippman, according to the Office of Court Administrations’s October 20, 2010 press release, stated that, “[t]his new filing requirement will play a vital role in ensuring that the documents judges rely on will be thoroughly examined, accurate, and error-free before any judge is asked to take the drastic step of foreclosure.”
Plaintiff’s counsel was warned that defects in foreclosure filings “include failure of plaintiffs and their counsel to review documents and files to establish standing and other [*15]foreclosure requisites; filing of notarized affidavits which falsely attest to such review and to other critical facts in the foreclosure process; and robosigning’ of documents by parties and counsel.” Mr. Cassara affirmed “under the penalties of perjury,” on January 6, 2011, to the factual accuracy of the complaint, the supporting documents and notarizations contained therein and that the complaint and papers filed with the Court in the TAHER matter “contain no false statements of fact or law.” Further, plaintiff’s counsel was informed that “[t]he wrongful filing and prosecution of foreclosure proceedings which are discovered to suffer from these defects may be cause
for disciplinary and other sanctions upon participating counsel [Emphasis added].”
However, plaintiff HSBC did not have standing to bring the instant action and its
complaint is replete with false statements. For example, ¶ 1 alleges that HSBC has an office at “1661 Worthington Road, Suite 100, P.O. Box 24737, West Palm Beach, FL 33415.” This is actually OCWEN’s office. OCWEN’s zip code is 33409, not 33415. Also, how big is P.O. Box 24737? Is it big enough to contain an HSBC office? Further, ¶ 6 alleges that HSBC is the owner of the note, which it is not. MERS had no authority to assign the note owned by DELTA to HSBC. MERS was DELTA’s nominee for recording the TAHER-consolidated mortgage but it never possessed the underlying note. (See Bank of New York v Silverberg at * 4-5).
Three robosigners – Scott Anderson, Margery Rotundo and Christina Carter – are involved in this matter. Scott Anderson, who wears many corporate hats and has at least five variations of his initials scrawled on documents filed in this Court, is the alleged assignor of the subject mortgage and note to HSBC, despite lacking authority from DELTA. Both alleged assignor MERS and alleged assignee HSBC have the same address – 1661 Worthington Road, Suite 100, West Palm Beach, Florida 33409. The milliner’s delight Margery Rotundo executed the affidavit of merit for OCWEN. Then, Mr. Cassara relied upon Christina Carter as the representative of HSBC to confirm the accuracy of HSBC’s documents and their notarizations. However, she is not employed by HSBC. Is Mr. Cassara aware of the robosigning history of Mr. Anderson, Ms. Rotundo and Ms. Carter?
Putting aside HSBC’s lack of standing, MERS allegedly assigned the TAHER- consolidated mortgage and note to HSBC 169 days after defendant TAHER allegedly defaulted in her payments. If HSBC has a duty to make money for its stockholders, why is it purchasing nonperforming loans, and then wasting the Court’s time with defective paperwork and the use of robosigners? The Courts have limited resources, even more so in light of the recent cuts in the budget for fiscal year 2012 and the layoff of several hundred court employees by the Office of Court Administration. The Courts cannot allow itself, as Chief Judge Lippman said in OCA’s October 20, 2010 press release, “to stand by idly and be party to what we know is a deeply flawed process, especially when that process involves basic human needs – such as a family home – during this period of economic crisis.” [*16]
Last year, in HSBC Bank USA v Yeasmin, 24 Misc 3d 1239 [A], for a variety of reasons, I denied plaintiff’s renewed motion for an order of reference and dismissed the foreclosure action with prejudice. Plaintiff’s counsel in Yeasmin submitted an affidavit by Thomas Westmoreland, Vice President of Loan Documentation for HSBC, in which he admitted to a lack of due diligence by HSBC. I observed in Yeasmin, at * 8, that Mr. Westmoreland stated:
in his affidavit, in ¶’s 4 – 7 and part of ¶ 10:
4. The secondary mortgage market is, essentially, the buying and
selling of “pools” of mortgages.
5. A mortgage pools is the packaging of numerous mortgage
loans together so that an investor may purchase a significant
number of loans in one transaction.
6. An investigation of each and every loan included in a particular
mortgage pool, however, is not conducted, nor is it feasible.
7. Rather, the fact that a particular mortgage pool may
include loans that are already in default is an ordinary risk
of participating in the secondary market . . .
10. . . . Indeed, the performance of the mortgage pool is the
measure of success, not any one individual loan contained
therein. [Emphasis added]
The Court can only wonder if . . . the dissemination of this
decision will result in Mr. Westmoreland’s affidavit used as evidence
in future stockholder derivative actions against plaintiff HSBC. It can’t
be comforting to investors to know that an officer of a financial
behemoth such as plaintiff HSBC admits that “[a]n investigation of
each and every loan included in a particular mortgage pool, however,
is not conducted, nor is it feasible” and that “the fact that a particular
mortgage pool may include loans that are already in default is an
ordinary risk of participating in the secondary market.”
Therefore, the continuation of this action by plaintiff HSBC, with its false
statements of facts, the use of robosigners, and the disingenuous affirmation of Mr. Cassara, appears to be frivolous. 22 NYCRR § 130-1.1 (a) states that “the Court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, which shall be payable as provided in section 130-1.3 of this Subpart.” Further, it states in 22 NYCRR § 130-1.1 (b), that “sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated.”
22 NYCRR § 130-1.1(c) states that:
For purposes of this part, conduct is frivolous if: [*17]
(1) it is completely without merit in law and cannot be supported
by a reasonable argument for an extension, modification or
reversal of existing law;
(2) it is undertaken primarily to delay or prolong the resolution of
the litigation, or to harass or maliciously injure another; or
(3) it asserts material factual statements that are false.
It is clear that the instant motion for an order of reference “is completely without merit in law” and “asserts material factual statements that are false.” Further, Mr. Cassara’s January 6, 2011 affirmation, with its false and defective statements may be a cause for sanctions.
Several years before the drafting and implementation of the Part 130 Rules for
costs and sanctions, the Court of Appeals (A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 6 [1986]) observed that “frivolous litigation is so serious a problem affecting the
proper administration of justice, the courts may proscribe such conduct and impose sanctions in this exercise of their rule-making powers, in the absence of legislation to the contrary (see NY Const, art VI, § 30, Judiciary Law § 211 [1] [b] ).”
Part 130 Rules were subsequently created, effective January 1, 1989, to give the
courts an additional remedy to deal with frivolous conduct. These stand beside Appellate Division disciplinary case law against attorneys for abuse of process or malicious prosecution. The Court, in Gordon v Marrone (202 AD2d 104, 110 [2d Dept 1994], lv denied 84 NY2d 813 [1995]), instructed that:
Conduct is frivolous and can be sanctioned under the court rule if
“it is completely without merit . . . and cannot be supported by a
reasonable argument for an extension, modification or reversal of
existing law; or . . . it is undertaken primarily to delay or prolong
the resolution of the litigation, or to harass or maliciously injure
another” (22 NYCRR 130-1.1[c] [1], [2] . . . ).
In Levy v Carol Management Corporation (260 AD2d 27, 33 [1st Dept 1999]) the Court stated that in determining if sanctions are appropriate the Court must look at the broad pattern of conduct by the offending attorneys or parties. Further, “22 NYCRR
130-1.1 allows us to exercise our discretion to impose costs and sanctions on an errant party . . .” Levy at 34, held that “[s]anctions are retributive, in that they punish past conduct. They also are goal oriented, in that they are useful in deterring future frivolous conduct not only by the particular parties, but also by the Bar at large.”
The Court, in Kernisan, M.D. v Taylor (171 AD2d 869 [2d Dept 1991]), noted that the intent of the Part 130 Rules “is to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics (cf. Minister, Elders & Deacons of Refm. Prot. Church of City of New York v 198 Broadway, 76 NY2d 411; see Steiner v Bonhamer, 146 Misc 2d 10) [Emphasis added].” The instant action, with HSBC lacking standing and using robosigners, is “a waste of judicial resources.” This [*18]conduct, as noted in Levy, must be deterred. In Weinstock v Weinstock (253 AD2d 873 [2d Dept 1998]) the Court ordered the maximum sanction of $10,000.00 for an attorney who pursued an appeal “completely without merit,” and holding, at 874, that “[w]e therefore award the maximum authorized amount as a sanction for this conduct (see, 22 NYCRR 130-1.1) calling to mind that frivolous litigation causes a substantial waste of judicial resources to the detriment of those litigants who come to the Court with real grievances [Emphasis added].” Citing Weinstock, the Appellate Division, Second Department, in Bernadette Panzella, P.C. v De Santis (36 AD3d 734 [2d Dept 2007]) affirmed a Supreme Court, Richmond County $2,500.00 sanction, at 736, as “appropriate in view of the plaintiff’s waste of judicial resources [Emphasis added].”
In Navin v Mosquera (30 AD3d 883 [3d Dept 2006]) the Court instructed that when considering if specific conduct is sanctionable as frivolous, “courts are required to
examine whether or not the conduct was continued when its lack of legal or factual basis was apparent [or] should have been apparent’ (22 NYCRR 130-1.1 [c]).” The Court, in Sakow ex rel. Columbia Bagel, Inc. v Columbia Bagel, Inc. (6 Misc 3d 939, 943 [Sup Ct,
New York County 2004]), held that “[i]n assessing whether to award sanctions, the Court must consider whether the attorney adhered to the standards of a reasonable attorney (Principe v Assay Partners, 154 Misc 2d 702 [Sup Ct, NY County 1992]).”
In the instant action, plaintiff HSBC’s President and Chief Executive Officer (CEO) bears a measure of responsibility for plaintiff’s actions, as well as plaintiff’s counsel. In Sakow at 943, the Court observed that “[a]n attorney cannot safely delegate all duties to others.” Irene M. Dorner, President and CEO of HSBC, is HSBC’s “captain of the ship.” She should not only take credit for the fruits of HSBC’s victories but must bear some responsibility for its defeats and mistakes. According to HSBC’s 2010 Form 10-K, dated December 31, 2010, and filed with the U.S. Securities and Exchange Commission on February 28, 2011, at p. 255, “Ms. Dorner’s insight and particular knowledge of HSBC USA’s operations are critical to an effective Board of Directors” and Ms. Dorner “has many years of experience in leadership positions with HSBC and extensive global experience with HSBC, which is highly relevant as we seek to operate our core businesses in support of HSBC’s global strategy.” HSBC needs to have a “global strategy” of filing truthful documents and not wasting the very limited resources of the Courts. For her responsibility she earns a handsome compensation package. According to the 2010 Form 10-k, at pp. 276-277, she earned in 2010 total compensation of $2,306,723. This included, among other things: a base salary of $566,346; a discretionary bonus of $760,417; and, other compensation such as $560 for financial planning and executive tax services; $40,637 for executive travel allowance, $24,195 for housing and furniture allowance, $39,399 for relocation expenses and $3,754 for executive physical and medical expenses.
Therefore, the Court will examine the conduct of plaintiff HSBC and plaintiff’s counsel, in a hearing, pursuant to 22 NYCRR § 130-1.1, to determine if plaintiff HSBC, [*19]by its President and CEO, Irene M. Dorner, and plaintiff’s counsel Frank M. Cassara, Esq. and his firm Shapiro, DiCaro & Barak, LLC, engaged in frivolous conduct, and to allow plaintiff HSBC, by its President and CEO, Irene M. Dorner, and plaintiff’s counsel Frank M. Cassara, Esq. and his firm Shapiro, DiCaro & Barak, LLC a reasonable opportunity to be heard.
Conclusion
Accordingly, it is
ORDERED, that the motion of plaintiff, HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, for an order of reference for the premises located at 931 Gates Avenue, Brooklyn, New York (Block 1632, Lot 57, County of Kings), is denied with prejudice; and it is further
ORDERED, that because plaintiff, HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, lacks standing in this foreclosure action, the instant complaint, Index No. 9320/09 is dismissed with prejudice; and it is further
ORDERED, that the Notice of Pendency filed with the Kings County Clerk on April 16, 2009 by plaintiff, HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, in an action to foreclose a mortgagefor real property located at 931 Gates Avenue, Brooklyn, New York (Block 1632, Lot 57, County of Kings), is cancelled and discharged; and it is further
ORDERED, that it appearing that plaintiff HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, plaintiff’s counsel Frank M. Cassara, Esq. and his firm Shapiro, DiCaro & Barak, LLC engaged in “frivolous conduct,” as defined in the Rules of the Chief Administrator, 22 NYCRR § 130-1 (c), and that pursuant to the Rules of the Chief Administrator, 22 NYCRR § 130.1.1 (d), “[a]n award of costs or the imposition of sanctions may be made . . . upon the court’s own initiative, after a reasonable opportunity to be heard,” this Court will conduct a hearing affording: plaintiff HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, by its President and Chief Executive Officer, Irene M. Dorner; plaintiff’s counsel Frank M. Cassara, Esq.; and, his firm Shapiro, DiCaro & Barak, LLC; “a reasonable opportunity to be heard” before me in Part 27, on Friday, July 15, 2011, at 2:30 P.M., in Room 479, 360 Adams Street, Brooklyn, NY 11201; and it is further
ORDERED, that Ronald David Bratt, Esq., my Principal Law Clerk, is directed to serve this order by first-class mail, upon: Irene M. Dorner, President and Chief Executive Officer of plaintiff, HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST [*20]2007-2, 452 Fifth Avenue, New York, New York 10018; Frank M. Cassara, Esq., Shapiro DiCaro & Barak, LLC, 250 Mile Crossing Boulevard, Suite One, Rochester, New York 14624; and, Shapiro DiCaro & Barak, LLC, 250 Mile Crossing Boulevard, Suite One, Rochester, New York 14624.
This constitutes the Decision and Order of the Court.
ENTER
___________________________
HON. ARTHUR M. SCHACK J. S. C.
2011 NY Slip Op 51208(U)
Decided on July 1, 2011
Supreme Court, Kings County
Schack, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.
Decided on July 1, 2011
Supreme Court, Kings County
HSBC Bank USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, Plaintiff, Index No. 9320/09
against
Ellen N. Taher, et. al., Defendants.
9320/09
Appearances:
Plaintiff
Shapiro, Dicaro & Barak, LLC
Rochester NY
Defendant
No Appearance
Arthur M. Schack, J.
The following papers numbered 1 – 2 read on this motion:Papers Numbered:
Proposed Order of Reference with Affidavits/Exhibits1
Affirmation pursuant to Administrative Order 548/10______2
________________________________________________________________________ [*2]
In this foreclosure action, plaintiff HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2 (HSBC), moved, upon the default of all defendants, for an order of reference and related relief for the premises located at 931 Gates Avenue, Brooklyn, New York (Block 1632, Lot 57, County of Kings). Before considering plaintiff HSBC’s instant motion, I issued a decision and order, dated November 8, 2010, instructing plaintiff’s counsel, to comply with the requirements of Chief Administrative Judge Ann T. Pfau, in her Administrative Order 548/10 of October 20, 2010, that an affirmation be submitted “within sixty (60) days of this decision and order, or the instant foreclosure action will be dismissed with prejudice.” My decision and order mandated:
plaintiff’s counsel to state that he communicated on a specific date
with a named representative of plaintiff HSBC who informed counsel
that he or she:
(a) has personally reviewed plaintiff’s documents and records
relating to this case; (b) has reviewed the Summons and
Complaint, and all other papers filed in this matter in support
of foreclosure; and, (c) has confirmed both the factual accuracy
of these court filings and the accuracy of the notarizations
contained therein.
Further, plaintiff’s counsel, based upon his or her communication
with plaintiff’s representative named above must upon his or her
“inspection of the papers filed with the Court and other diligent
inquiry, . . . certify that, to the best of [his or her] knowledge, information
and belief, the Summons and Complaint filed in support of this action
for foreclosure are complete and accurate in all relevant respect.”
Counsel is reminded that the new standard Court affirmation form
states in a note at the top of the first page:
During and after August 2010, numerous and widespread
insufficiencies in foreclosure filings in various courts around the
nation were reported by major mortgage lenders and other authorities.
These insufficiencies include: failure of plaintiffs and their counsel
to review documents and files to establish standing and other
foreclosure requisites; filing of notarized affidavits which falsely
attest to such review and to other critical facts in the foreclosure
process; and “robosigning” of documents by parties and counsel.
The wrongful filing and prosecution of foreclosure proceedings
which are discovered to suffer from these defects may be cause
for disciplinary and other sanctions upon participating counsel. [Emphasis added]
According to the October 20, 2010 Office of Court Administration
press release about the new filing requirement:
The New York State court system has instituted a new filing
requirement in residential foreclosure cases to protect the integrity
of the foreclosure process and prevent wrongful foreclosures.
Chief Judge Jonathan Lippman today announced that plaintiff’s [*3]
counsel in foreclosure actions will be required to file an
affirmation certifying that counsel has taken reasonable steps -
including inquiry to banks and lenders and careful review of the
papers filed in the case – to verify the accuracy of documents
filed in support of residential foreclosures. The new filing
requirement was introduced by the Chief Judge in response to
recent disclosures by major mortgage lenders of significant
insufficiencies – including widespread deficiencies in notarization
and “robosigning” of supporting documents – in residential
foreclosure filings in courts nationwide. The new requirement
is effective immediately and was created with the approval of the
Presiding Justices of all four Judicial Departments.
Chief Judge Lippman said, “We cannot allow the courts
in New York State to stand by idly and be party to what we now
know is a deeply flawed process, especially when that process
involves basic human needs – such as a family home – during
this period of economic crisis. This new filing requirement will
play a vital role in ensuring that the documents judges rely on will
be thoroughly examined, accurate, and error-free before any judge
is asked to take the drastic step of foreclosure.” [Emphasis added]
(See Gretchen Morgenson and Andrew Martin, Big Legal Clash on
Foreclosure is Taking Shape, New York Times, Oct. 21, 2010; Andrew
Keshner, New Court Rules Says Attorneys Must Verify Foreclosure Papers,
NYLJ, Oct. 21, 2010).
On plaintiff HSBC’s deadline day, January 7, 2011, the 60th day after issuing my November 8, 2010 decision and order, plaintiff’s counsel, Frank M. Cassara, Esq., of Shapiro, DiCaro & Barak, LLC, submitted to my chambers the required affirmation, pursuant to Chief Administrative Judge Pfau’s Administrative Order 548/10. Mr. Cassara, affirmed “under the penalties of perjury”:
2. On January 4, 2011 and January 5, 2011, I communicated with
the following representative or representatives of Plaintiff, who informed
me that he/she/they (a) personally reviewed plaintiff’s documents and
records relating to this case for factual accuracy; and (b) confirmed
the factual accuracy and allegations set forth in the Complaint and
any supporting affirmations filed with the Court, as well as the accuracy
of the notarizations contained in the supporting documents filed therewith.
NameTitle
Christina CarterManager of Account Management
3. Based upon my communication with Christina Carter, as well
as upon my inspection and reasonable inquiry under the circumstances,
I affirm that, to the best of my knowledge, information, and belief, the
Summons and Complaint, and other papers filed or submitted to the
Court in this matter contain no false statements of fact or law . . .
4. I am aware of my obligations under New York Rules of
Professional Conduct (22 NYCRR Part 1200) and 22 NYCRR Part 130.
[Emphasis added]
The assignment of the subject mortgage and note to HSBC, by MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS), in the instant foreclosure action is without legal authority. MERS never possessed the TAHER note it allegedly assigned to plaintiff HSBC. Thus, plaintiff HSBC lacked standing to commence the instant foreclosure action. Therefore, the assignment is defective and the instant action is dismissed with prejudice.
Mr. Cassara’s affirmation, affirmed “under the penalties of perjury,” that to the best of Mr. Cassara’s “knowledge, information, and belief, the Summons and Complaint, and other papers filed or submitted to the [*4]Court in this matter contain no false statements of fact or law,” is patently false. Moreover, the Court is troubled that: the alleged representative of plaintiff HSBC, Christina Carter, who according to Mr. Cassara, “confirmed the factual accuracy and allegations set forth in the Complaint and any supporting affirmations filed with the Court, as well as the accuracy of the notarizations contained in the supporting documents filed therewith,” is not an employee of HSBC, but a robosigner employed by OCWEN LOAN SERVICING, LLC [OCWEN], whose signature on legal documents has at least three variations; the MERS to plaintiff HSBC assignment of the subject mortgage and note was executed by Scott W. Anderson, a known robosigner and OCWEN employee, whose signature is reported to have appeared in at least four different variations on mortgage assignments; and, the instant affidavit of merit was executed by Margery Rotundo, another robosigner, OCWEN employee and self-alleged employee of various other banking entities.
Last month, on May 19, 2011, in a case involving a defective MERS to HSBC assignment by a robosigner, Maine’s highest court, the Supreme Judicial Court, found that HSBC’s affidavits and the assignment of the note and mortgage by MERS to HSBC contained serious defects. The Maine Court held “that the affidavits submitted by HSBC contain serious irregularities that make them inherently untrustworthy.” (HSBC Mortg. Services, Inc. v Murphy, 19 A3d 815, 2011 ME 59, * 3). HSBC has a history of foreclosure actions before me with affidavits of merit executed by Margery Rotundo and MERS to HSBC assignments executed by Scott Anderson that “contain serious irregularities that make them inherently untrustworthy.” Moreover, Mr. Cassara was put on notice, in my November 8, 2010 decision and order, that “[t]he wrongful filing and prosecution of foreclosure proceedings which are discovered to suffer from these defects may be cause for disciplinary and other sanctions upon participating counsel.”
Chief Judge Jonathan Lippman, in the Office of Court Administration’s October 20, 2010 press release about the issuance of Administrative Order 548/10 and the need for plaintiff’s counsel in foreclosure actions to verify the accuracy of supporting documents, stated that “[w]e cannot allow the courts in New York State to stand by idly and be party to what we now know is a deeply flawed process, especially when that process involves basic human needs – such as a family home – during this period of economic crisis.” Frivolous conduct, as defined by 22 NYCRR § 130.1.1 (c), includes conduct that “is completely without merit in law” and “asserts material factual statements that are false.”
Further, the Part 130 rules are intended to stop the waste of judicial resources, which appears to have occurred in the TAHER foreclosure action. In the instant action: the assignment of the subject mortgage and note by MERS to HSBC is without legal authority; HSBC’s continued use of robo-signers “is completely without merit in law”; plaintiff HSBC “asserts material factual statements that are false”; and, the continuation of this case with all its defects is a waste of judicial resources. Therefore, plaintiff HSBC’s President and Chief Executive Officer, Irene M. Dorner, its counsel, Frank M. Cassara, Esq., and his firm, Shapiro, DiCaro & Barak, LLC, will be given an opportunity to be heard why this Court should not sanction them for making a “frivolous motion,” pursuant to 22 NYCRR §130-1.1.
Background
Defendant EILEEN N. TAHER (TAHER) borrowed $363,750.00 from DELTA
FUNDING CORPORATION (DELTA) on January 13, 2006. The note and mortgage were recorded in the Office of the City Register, New York City Department of Finance on February 3, 2006, at City Register File Number (CRFN) 2006000067459, by MERS, “acting solely as a nominee for Lender [DELTA]” and “FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD [capitalized and boldfaced in the mortgage].” Subsequently, on February 28, 2007, defendant TAHER borrowed another $125,472.07 from DELTA, with this mortgage and note recorded in the Office of the City Register, New York City Department of Finance on March 14, 2007, at CRFN 2007000136036, by MERS, “acting solely as a nominee for Lender [DELTA]” and “[f]or purpose of Recording this mortgage, MERS is the Mortgagee of Record [not capitalized or boldfaced, and the word "purpose" not "purposes" used].” Also, on February 28, 2007, defendant TAHER executed a consolidation, extension and modification agreement with DELTA, consolidating the two mortgages and notes into one mortgage and note for $487,500.00 [the unpaid balance of the first mortgage was $362,297.93], with this recorded in the Office of the City Register, New York City Department of Finance on March 14, 2007, at CRFN 2007000136037, by MERS, “acting solely as nominee for Lender [DELTA]” and “MERS is the Mortgagee of this Security Instrument.” Further, the “Note Holder” is the “Lender or anyone who succeeds to Lender’s rights under [*5]this Agreement and who is entitled to receive the payments [by TAHER].” Therefore, pursuant to the terms of the TAHER consolidation, extension and modification agreement, DELTA, not MERS, is the “Note Holder.”
According to plaintiff’s papers, defendant TAHER defaulted in her loan payments with the installment payment due on September 1, 2008. Subsequently, 169 days later, MERS assigned the subject DELTA nonperforming $487,500.00 consolidation, extension and modification agreement mortgage and note to HSBC, in an assignment dated February 16, 2009 and recorded in the Office of the City Register, New York City Department of Finance on August 6, 2009, at CRFN 2009000245093. The assignment was executed by Scott W. Anderson, who claimed to be “Senior Vice President of Residential Loan Servicing” for “MORTGAGE ELECTRONIC REGISTRATIONS SYSTEMS, INC., as nominee for DELTA FUNDING CORPORATION by its attorney-in-fact OCWEN LOAN SERVING, LLC.” Both assignor MERS and assignee HSBC have the same address, 1661 Worthington Road, Suite 100, West Palm Beach, FL 33409. This is actually OCWEN’s address. Further, Mr. Anderson’s assignment states that the power of attorney from DELTA to OCWEN was recorded at CRFN Number 2005000560341.
The Court checked the Automated City Register Information System (ACRIS) and discovered that this document is a limited power of attorney from DELTA to OCWEN for the premises located at 14 Harden Street, Brooklyn, New York (Block 7821, Lot 49, County of Kings), not the subject premises in the instant action. Further, MERS is not mentioned in or involved with the limited power of attorney for the 14 Harden Street premises. Also, in the 14 Harden Street matter, both assignor DELTA and assignee OCWEN have the same address, 1661 Worthington Road, Suite 100, West Palm Beach, FL 33409.
Robosigner Scott W. Anderson
While I have never personally met Mr. Anderson, his signatures have appeared in many foreclosure documents in this Court. His claims of wearing different corporate hats and the variations in the scrawls of initials used for his signature on mortgage documents has earned Mr. Anderson notoriety as a robosigner. Kimberly Miller, in her January 5, 2011-Palm Beach Post article, “State details foreclosure crisis,” wrote:
Sweeping evidence of the case the state attorney general’s office
has built in its pursuit of foreclosure justice for Florida homeowners is
outlined in a 98-page presentation complete with copies of allegedly
forged signatures, false notarizations, bogus witnesses and improper
mortgage assignments.
The presentation, titled “Unfair, Deceptive and Unconscionable
Acts in Foreclosure Cases,” was given during an early December
conference of the Florida Association of Court Clerks and Comptrollers
by the attorney general’s economic crimes division.
It is one of the first examples of what the state has compiled in
its exploration of foreclosure malpractice, condemning banks, mortgage
servicers and law firms for contributing to the crisis by cutting corners . . .
In page after page of copied records, the presentation meticulously
documents cases of questionable signatures, notarizations that could not
have occurred when they are said to have because of when the notary
stamp expires, and foreclosures filed by entities that might not have
had legal ability to foreclose.
It also focuses largely on assignments of mortgage [sic],
documents that transfer ownership of mortgages from one bank to
another. Mortgage assignments became an issue after the real estate
boom, when mortgages were sold and resold, packaged into securities
trusts and otherwise transferred in a labyrinthine fashion that made
tracking difficult.
As foreclosures mounted, the banks appointed people to create
assignments, “thousands and thousands and thousands” of which were signed weekly by people who may not [*6]have known what they were signing . . .
In another example, the signature of Scott Anderson, an employee
of West Palm Beach-based Ocwen Financial Corp., appears in four
styles on mortgage assignments . . .
Paul Koches, executive vice president of Ocwen, acknowledged
Tuesday that the signatures were not all Anderson’s, but that doesn’t mean
they were forged, he said. Certain employees were given authorization
to sign for Anderson on mortgage assignments, which Koches noted
do not need to be notarized.
Still, Ocwen has since stopped allowing other people to sign for
Anderson, Koches said.
Last September, the Ohio Court of Appeals, Second District, Montgomery County
(2010 WL 3451130, 2010-Ohio-4158, lv denied 17 Ohio St.3d 1532 [2011]), affirmed the denial of a foreclosure, sought by plaintiff HSBC, because of numerous irregularities. The Ohio Court, in citing four decisions by this Court [three of the four involved Scott Anderson as assignor] summarized some of this Court’s prior concerns with HSBC and Mr. Anderson, in observing, at * 11:
recent decisions in the State of New York have noted numerous
irregularities in HSBC’s mortgage documentation and corporate
relationships with Ocwen, MERS, and Delta. See, e.g., HSBC Bank
USA, N.A. v Cherry (2007), 18 Misc 3d 1102 (A) [Scott Anderson
assignor] and HSBC Bank USA, N.A. v Yeasmin (2010), 27 Misc 3d
1227 (A) (dismissing HSBC’s requests for orders of reference in
mortgage foreclosure actions, due to HSBC’s failure to provide proper
affidavits). See, also, e.g., HSBC Bank USA, N.A. v Charlevagne (2008),
20 Misc 3d 1128 (A) [Scott Anderson assignor] and HSBC Bank USA,
N.A. v Antrobus (2008), 20 Misc 3d 1127 (A) [Scott Anderson assignor]
(describing “possible incestuous relationship” between HSBC Bank,
Ocwen Loan Servicing, Delta Funding Corporation, and Mortgage
Electronic Registration Systems, Inc., due to the fact that the entities
all share the same office space at 1661 Worthington Road, Suite 100,
West Palm Beach, Florida. HSBC also supplied affidavits in support
of foreclosure from individuals who claimed simultaneously to be
officers of more than one of these corporations.).This Court reviewed Scott Anderson’s signature on the instant MERS to HSBC assignment of the TAHER mortgage and note and using ACRIS compared his signature with that used in assignments in the five prior Scott Anderson assignment foreclosure cases decided by this Court. Similar to the Florida Attorney General’s Economic Crimes Division findings, as reported above in the Kimberly Miller Palm Beach Post article, I also found four variations of Mr. Anderson’s signature in these six assignments. Each signature is actually a variation of Mr. Anderson’s initials, “SA.” The Court concludes that it must be a herculean task for Mr. Anderson to sign “Scott Anderson” or “Scott W. Anderson” in full.
Mr. Anderson’s first signature variation is found in: the January 19, 2007 assignment of the 48 Van Siclen Avenue (Block 3932, Lot 45, County of Kings) mortgage and note from DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE TO MTGLQ INVESTORS LP, by Scott W. Anderson as Senor Vice President of OCWEN, attorney-in-fact for DEUTSCHE BANK (Deutsche Bank Nat Trust Co. v Castellanos, 18 Misc 3d 1115 [A] [Sup Ct, Kings County 2007]), recorded on February 7, 2007 at CRFN 2007000073000; and, the June 13, 2007 assignment of the 3570 Canal Avenue (Block 6978, Lot 20, County of Kings) mortgage and note from MERS to HSBC, by Scott Anderson as Vice President of MERS, acting as nominee for DELTA (HSBC Bank USA, N.A. v Cherry, 18 Misc 3d 1102 (A) [Sup Ct, Kings County 2007]), recorded on August 13, 2007 at CRFN 2007000416732. In this signature variation the letter “S” is a cursive bell-shaped curve overlapping with the cursive letter “A.”
The second signature variation used for Mr. Anderson is in the May 1, 2007 assignment of the 572 Riverdale Avenue (Block 3838, Lot 39, County of Kings) mortgage and note from MERS to HSBC, by Scott Anderson as Vice President of MERS, acting as nominee for DELTA (HSBC Bank USA, N.A. v Valentin, 18 Misc 3d 1123 [A] [Sup [*7]Ct, Kings County 2008]) and HSBC Bank USA, N.A. v Valentin, 21 Misc 3d 1124 [A] [Sup Ct, Kings County 2008], affd as modified 72 AD3d 1027 [2010]), recorded on June 13, 2007 at CRFN 2007000306260. These decisions will be referred to as Valentin I and Valentin II. In this signature variation the letter “S” is a cursive circle around a cursive letter “A” with various loops.
The third signature variation used for Mr. Anderson is in the November 30, 2007 assignment of the 680 Decauter Street (Block 1506, Lot 2, County of Kings) mortgage and note from MERS to HSBC, by Scott Anderson as Vice President of MERS, acting as nominee for DELTA (HSBC Bank USA, N.A. v Antrobus, 20 Misc 3d 1127 [A] [Sup Ct, Kings County [2008]), recorded on January 16, 2008 at CRFN 2008000021186. In this signature variation, the initials are illegible. One cursive letter looks almost like the letter “O.” It is a circle sitting in a valley created by something that looks like the cursive letter “M.”
In the fourth signature variation, used for Mr. Anderson in the February 16, 2009 assignment in the instant case, the cursive letter “S,” which is circular with a loop on the lower left side abuts the cursive letter “A” to its right.
Moreover, in HSBC Bank USA, N.A. v Cherry, Mr. Anderson acted both as assignor of the mortgage and note to HSBC and then as servicing agent for assignee HSBC by executing the “affidavit of merit”for a default judgment. Because of this, in Valentin I, I required him to provide me with an affidavit about his employment history. In Valentin II the Court was provided with an affidavit by Mr. Anderson, sworn on March 14, 2008. Mr. Anderson, in his affidavit, admitted he was conflicted. I noted, at * 2, in Valentin II that:
The Court is troubled that Mr. Anderson acted as both assignor
of the instant mortgage loan, and then as the Vice President of Ocwen,
assignee HSBC’s servicing agent. He admits to this conflict, in ¶ 13,
stating that “[w]hen the loan went into default and then foreclosure in
2007, Ocwen, in it capacity as servicer, elected to remove the loan
from the MERS system and transfer title to HSBC.”
The stockholders of HSBC and the noteholders of the Trust [the
owner of the mortgage] probably are not aware that Mr. Anderson,
on behalf of the servicer, Ocwen, claims to have the right to assign
“toxic” nonperforming mortgage loans to them. It could well be that
Ocwen’s transfer of the instant nonperforming loan, as well as others, is
part of what former Federal Reserve Board Chairman Alan Greenspan
referred to in his October 23, 2008 testimony, before the House
Oversight Committee, as “a once in a century credit tsunami.”
Interestingly, the purported signature of Mr. Anderson in the March 14, 2008-Valentin II affidavit is a fifth signature variation. The Court is perplexed that in response to my order for Mr. Anderson to submit an affidavit with respect to his employment, Mr. Anderson was unable to sign either “Scott Anderson” or “Scott W. Anderson.” Instead, there is a fifth variation of scrawled initials. There is a big loop for the cursive letter “S,” which contains within it something that looks like the cursive letter “M” going into lines that look like the cursive letter “V,” with a wiggly line going to the right of the page.
Robosigner Margery Rotundo
In the instant action, Margery Rotundo executed the April 27, 2009 affidavit of merit and amount due. Ms. Rotundo has, in prior foreclosure cases before me, a history of alleging to be the Senior Vice President of various entities, including plaintiff HSBC, Nomura Credit & Capital, Inc. and an unnamed servicing agent for HSBC. In the instant action she claims to be the Senior Vice President of Residential Loss Mitigation of OCWEN, HSBC’s servicing agent.
In HSBC Bank USA, N.A. v Charlevagne (20 Misc 3d 1128 (A) [Sup Ct, Kings County 2008]), one of the cases in which Scott Anderson as Vice President of MERS assigned the mortgage and note to HSBC, I commented about Ms. Rotundo’s self-allegations of multiple employers, at * 1:
The renewed application of plaintiff, HSBC . . . for an order of
reference and related relief in this foreclosure action, in which all
defendants defaulted, for the premises located at 455 Crescent Street,
Brooklyn, New York (Block 4216, Lot 20, County of Kings) is again [*8]
denied without prejudice, with leave to renew upon providing the
Court with a satisfactory explanation to four concerns.
First, the original application for an order of reference and
related relief was denied with leave to renew, in my unpublished
decision and order of November 15, 2007, because the “affidavit of
merit” was not made by a party but by Margery Rotundo, who swore
that [she] was “Senior Vice President Residential Loss Mitigation of
OCWEN LOAN SERVICING, LLC [OCWEN], Attorney in Fact for
HSBC,”and the “Limited Power of Attorney” from HSBC to OCWEN
was defective. In the renewed application, Ms. Rotundo claims in her
January 9, 2008-”affidavit of merit and amount due,” that she “is the
Senior Vice President of Residential Loss Mitigation of HSBC BANK
USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN
TRUST 2005-3, RENAISSANCE HOME EQUITY LOAN ASSET-
BACKED NOTES, SERIES 2005-3.” In prior decisions, I found that
Ms. Rotundo swore: on October 5, 2007 to be Senior Vice President
of Loss Mitigation for Nomura Credit & Capital, Inc. (Nomura Credit
& Capital, Inc., 19 Misc 3d 1126 (A) [April 30, 2008]); and, on
December 12, 2007 to be Senior Vice President of an unnamed
servicing agent for HSBC (HSBC Bank USA, NA v Antrobus, 20
Misc 3d 1127 (A) [July 31, 2008]).
The late gossip columnist Hedda Hopper and the late United
States Representative Bella Abzug were famous for wearing many
colorful hats. With all the corporate hats Ms. Rotundo has recently
worn, she might become the contemporary millinery rival to both
Ms. Hopper and Ms. Abzug. The Court needs to know the employment
history of the peripatetic Ms. Rotundo. Did she truly switch employers
or did plaintiff have her sign the “affidavit of merit and amount due”
as its Senior Vice President solely to satisfy the Court?
In my Charlevagne decision and order I denied an order of reference without prejudice and granted leave to plaintiff HSBC to renew its application for an order of reference for the premises by providing the Court with several documents, including, at * 4, “an affidavit from Margery Rotundo describing her employment history for the past three years.” Subsequently, plaintiff HSBC’s counsel in Charlevagne, Steven J. Baum, P.C., never provided me with an affidavit from Margery Rotundo, but filed with the Kings County Clerk, on October 27, 2008, a stipulation of discontinuance and cancellation of the notice of pendency.
Robosigner Christina Carter
Mr. Cassara, plaintiff’s counsel affirmed that “On January 4, 2011 and January 5, 2011, I communicated with the following representative . . . of Plaintiff . . . Christina Carter . . . Manager of Account Management.” This is disingenuous. Ms. Carter is not employed by plaintiff, but by OCWEN. She executed documents as an officer of MERS and as an employee of OCWEN. Ms. Carter’s signature on documents is suspect because of the variations of her signature used.
This Court examined eight recent documents that exhibit three different variations of Christina Carter’s signature. The first signature variation is on her May 24, 2010 application with the Florida Department of State for a notary public commission. In this application she lists as her business address that of OCWEN, “1661 Worthington Road, West Palm Beach, FL 33409.” In her full signature the capital letters “C” in her first and last names are signed differently than in other recent documents reviewed by this Court.
In five other documents reviewed by the Court, Ms. Carter signs her initials with the second letter “C” looking like a cursive letter “L,” with a circular loop on the second letter “C.” Three of these documents are deeds of release to acknowledge mortgage satisfactions, filed with the Clerk of Court for Middlesex County, South District, State of Massachusetts. In the first document, signed on July 2, 2010, Ms. Carter signed as “Account Management, Manager” for OCWEN, for the premises at 158 Algonquin Trail, Ashland, Massachusetts, with the deed of release [*9]recorded on September 9, 2010, at document number 2010 00156681. In the second document, signed on July 7, 2010, Ms. Carter signed as “Account Management, Manager” for US BANK NATIONAL ASSOCIATION, AS TRUSTEE BY ITS ATTORNEY-IN-FACT OCWEN LOAN SERVICING, LLC, for the premises at 30 Kenilworth Street, Malden, Massachusetts, with the deed of release recorded on September 3, 2010, at document number 2010 01542078. In the third Middlesex County, Massachusetts document, signed on July 19, 2010, she signed as “Account Management, Manager” for OCWEN, for the premises at 10 Johnson Farm Road, Lexington, Massachusetts, with the deed of release recorded on September 9, 2010, at document number 2010 00156684. In the fourth document, signed on July 12, 2010, for the assignment of a mortgage for 1201 Pine Sage Circle, West Palm Beach, Florida, Ms. Carter signed as “Account Management, Manager” for NEW CENTURY MORTGAGE CORPORATION BY ITS ATTORNEY-IN-FACT OCWEN LOAN SERVICING, LLC (NEW CENTURY). This mortgage was assigned to DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR IXIS REAL ESTATE CAPITAL TRUST 2005-HE3 MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2005-HE3 (DEUTSCHE BANK) and recorded on August 23, 2010 with the Palm Beach County Clerk at CFN 20100314054. Interestingly, both assignor NEW CENTURY and assignee DEUTSCHE BANK have the same address, c/o OCWEN, “1661 Worthington Road, Suite 100, West Palm Beach, FL 33409.” In the fifth document, Ms. Carter changes corporate hats. She signed, on September 8, 2010, an Oregon assignment of a mortgage deed of trust, for 20673 Honeysuckle Lane, Bend Oregon, as Vice President of MERS “ACTING SOLELY AS NOMINEE FOR CHAPEL MORTGAGE CORPORATION.” The assignment is to DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR IXIS REAL ESTATE CAPITAL TRUST 2006-HE2 MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2006-HE2, whose address is c/o OCWEN, “1661 Worthington Road, Suite 100, West Palm Beach, FL 33409.” This was recorded on September 20, 2010 with the Clerk of Deschutes County, Oregon.
Ms. Carter, in the third variation of her signature, again only uses her initials, but the second letter “C” looks like the cursive letter “C,” not the cursive letter “L” with a circular loop. The Court examined two of these documents. The first document is a mortgage satisfaction, signed on June 15, 2010, and filed with the Clerk of Court for Middlesex County, South District, State of Massachusetts. Ms. Carter signed as “Account Management, Manager” for OCWEN, for the premises at 4 Mellon Road, Billerica, Massachusetts. The deed of release was recorded on July 19, 2010, at document number 2010 00031211. In the second document, a mortgage satisfaction for the premises at 13352 Bedford Meadows Court, Wellington, Florida, Ms. Carter signed on July 22, 2010, as “Account Management, Manager” for “HSBC BANK USA, NATIONAL ASSOCIATION AS TRUSTEE BY ITS ATTORNEY-IN FACT OCWEN LOAN SERVICING, LLC.” The document never states for whom HSBC is the Trustee.
This was recorded on September 10, 2010 with the Palm Beach County Clerk at CFN 20100339935.
Plaintiff’s lack of Standing
Real Property Actions and Proceedings Law (RPAPL) § 1321 allows the Court in a foreclosure action, upon the default of defendant or defendant’s admission of mortgage payment arrears, to appoint a referee “to compute the amount due to the plaintiff.” Plaintiff HSBC’s application for an order of reference is a preliminary step to obtaining a default judgment of foreclosure and sale. (Home Sav. Of Am., F.A. v Gkanios, 230 AD2d 770 [2d Dept 1996]).
However, the instant action must be dismissed because plaintiff HSBC lacks standing to bring this action. MERS lacked the authority to assign the subject TAHER mortgage to HSBC and there is no evidence that MERS physically possessed the TAHER notes. Under the terms of the TAHER consolidation, extension and modification agreement, DELTA, not MERS, is the “Note Holder.” As described above, the consolidation, extension and modification agreement defines the “Note Holder” as the “Lender or anyone who succeeds to Lender’s rights under this Agreement and who is entitled to receive the payments.”
“Standing to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801 812 [2003], cert denied 540 US 1017 [2003]). Professor David Siegel (NY Prac, § 136, at 232 [4d ed]), instructs that:
[i]t is the law’s policy to allow only an aggrieved person to bring a
lawsuit . . . A want of “standing to sue,” in other words, is just another
way of saying that this particular plaintiff is not involved in a genuine
controversy, and a simple syllogism takes us from there to a “jurisdictional” [*10]
dismissal: (1) the courts have jurisdiction only over controversies; (2) a
plaintiff found to lack “standing”is not involved in a controversy; and
(3) the courts therefore have no jurisdiction of the case when such a
plaintiff purports to bring it.
“Standing to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” (Caprer v Nussbaum (36 AD3d 176, 181 [2d Dept 2006]). If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]).
The Appellate Division, Second Department recently instructed, with respect to standing in a foreclosure action, in Aurora Loan Services, LLC v Weisblum (___ AD3d ___, 2011 NY Slip Op 04184 [May 17, 2011]), at * 6-7, that:
In order to commence a foreclosure action, the plaintiff must
have a legal or equitable interest in the mortgage ( see Wells Fargo
Bank, N.A. v Marchione, 69 AD3d, 204, 207 [2d Dept 2009]). A
plaintiff has standing where it is both (1) the holder or assignee of
the subject mortgage and (2) the holder or assignee of the underlying
note, either by physical delivery or execution of a written assignment
prior to the commencement of the action with the filing of the complaint
(see Wells Fargo Bank, N.A. v Marchione, 69 AD3d at 207-209; U.S.
Bank v Collymore, 68 AD3d 752, 754 [2d Dept 2009].)
Assignments of mortgages and notes are made by either written instrument or the
assignor physically delivering the mortgage and note to the assignee. “Our courts have repeatedly held that a bond and mortgage may be transferred by delivery without a written instrument of assignment.” (Flyer v Sullivan, 284 AD 697, 699 [1d Dept 1954]).
In the instant action, even if MERS had authority to transfer the mortgage to HSBC, DELTA, not MERS, is the note holder. Therefore, MERS cannot transfer something it never proved it possessed. A “foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity [Emphasis added].” (Kluge v Fugazy (145 AD2d 537, 538 [2d Dept 1988]). Moreover, “a mortgage is but an incident to the debt which it is intended to secure . . . the logical conclusion is that a transfer of the mortgage without the debt is a nullity, and no interest is assigned by it. The security cannot be separated from the debt, and exist independently of it. This is the necessary legal conclusion.” (Merritt v Bartholick, 36 NY 44, 45 [1867]. The Appellate Division, First Department, citing Kluge v Fugazy in Katz v East-Ville Realty Co. ( 249 AD2d 243 [1d Dept 1998]), instructed that “[p]laintiff’s attempt to foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law or fact.” (See U.S. Bank, N.A. v Collymore, 68 AD3d at 754).
MERS had no authority to assign the subject mortgage and note
Scott Anderson for MERS as assignor, did not have specific authority to sign the TAHER mortgage. Under the terms of the consolidation, extension and modification agreement, MERS is “acting solely as nominee for Lender [DELTA].” The alleged power of attorney cited in the Scott Anderson MERS to HSBC assignment, as described [*11]above, is a limited power of attorney from DELTA to OCWEN for the premises located at 14 Harden Street, Brooklyn, New York, not the subject premises. MERS is not mentioned or involved with this limited power of attorney. In both underlying TAHER mortgages MERS was “acting solely as a nominee for Lender,” which is DELTA. The term “nominee” is defined as “[a] person designated to act in place of another, usu. in a very limited way” or “[a] party who holds bare legal title for the benefit of others.” (Black’s Law Dictionary 1076 [8th ed 2004]). “This definition suggests that a nominee possesses few or no legally enforceable rights beyond those of a principal whom the nominee serves.” (Landmark National Bank v Kesler, 289 Kan 528, 538 [2009]). The Supreme Court of Kansas, in Landmark National Bank, 289 Kan at 539, observed that:
The legal status of a nominee, then, depends on the context of
the relationship of the nominee to its principal. Various courts have
interpreted the relationship of MERS and the lender as an agency
relationship. See In re Sheridan, 2009 WL631355, at *4 (Bankr. D.
Idaho, March 12, 2009) (MERS “acts not on its own account. Its
capacity is representative.”); Mortgage Elec. Registrations Systems,
Inc. v Southwest, 2009 Ark. 152 ___, ___SW3d___, 2009 WL 723182
(March 19, 2009) (“MERS, by the terms of the deed of trust, and its
own stated purposes, was the lender’s agent”); La Salle Nat. Bank v
Lamy, 12 Misc 3d 1191 [A], at *2 [Sup Ct, Suffolk County 2006]) . . .
(“A nominee of the owner of a note and mortgage may not effectively
assign the note and mortgage to another for want of an ownership
interest in said note and mortgage by the nominee.”)
The New York Court of Appeals in MERSCORP, Inc. v Romaine (8 NY3d 90 [2006]), explained how MERS acts as the agent of mortgagees, holding at 96:
In 1993, the MERS system was created by several large
participants in the real estate mortgage industry to track ownership
interests in residential mortgages. Mortgage lenders and other entities,
known as MERS members, subscribe to the MERS system and pay
annual fees for the electronic processing and tracking of ownership
and transfers of mortgages. Members contractually agree to appoint
MERS to act as their common agent on all mortgages they register
in the MERS system. [Emphasis added]
Thus, it is clear that MERS’s relationship with its member lenders is that of agent with the lender-principal. This is a fiduciary relationship, resulting from the manifestation of consent by one person to another, allowing the other to act on his behalf, subject to his control and consent. The principal is the one for whom action is to be taken, and the agent is the one who acts.It has been held that the agent, who has a fiduciary relationship with the principal, “is a party who acts on behalf of the principal with the latter’s express, implied, or apparent authority.” (Maurillo v Park Slope U-Haul, 194 AD2d 142, 146 [2d [*12]Dept 1992]). “Agents are bound at all times to exercise the utmost good faith toward their principals. They must act in accordance with the highest and truest principles of morality.” (Elco Shoe Mfrs. v Sisk, 260 NY 100, 103 [1932]). (See Sokoloff v Harriman Estates Development Corp., 96 NY 409 [2001]); Wechsler v Bowman, 285 NY 284 [1941]; Lamdin v Broadway Surface Advertising Corp., 272 NY 133 [1936]). An agent “is prohibited from acting in any manner inconsistent with his agency or trust and is at all times bound to exercise the utmost good faith and loyalty in the performance of his duties.” (Lamdin, at 136).
Thus, in the instant action, MERS, as nominee for DELTA, is DELTA’s agent for limited purposes. It only has those powers given to it and authorized by DELTA, its principal. Plaintiff HSBC failed to submit documents authorizing MERS, as nominee for DELTA, to assign the subject consolidation extension and modification mortgage to plaintiff HSBC. Therefore, MERS lacked authority to assign the TAHER mortgage, making the assignment defective. In Bank of New York v Alderazi (28 Misc 3d 376, 379-380 [Sup Ct, Kings County 2010]), Justice Wayne Saitta instructed that:
A party who claims to be the agent of another bears the burden
of proving the agency relationship by a preponderance of the evidence
(Lippincott v East River Mill & Lumber Co., 79 Misc 559 [1913])
and “[t]he declarations of an alleged agent may not be shown for
the purpose of proving the fact of agency.” (Lexow & Jenkins, P.C. v
Hertz Commercial Leasing Corp., 122 AD2d 25 [2d Dept 1986]; see
also Siegel v Kentucky Fried Chicken of Long Is. 108 AD2d 218 [2d
Dept 1985]; Moore v Leaseway Transp/ Corp., 65 AD2d 697 [1st Dept
1978].) “[T]he acts of a person assuming to be the representative of
another are not competent to prove the agency in the absence of evidence
tending to show the principal’s knowledge of such acts or assent to them.”
(Lexow & Jenkins, P.C. v Hertz Commercial Leasing Corp., 122 AD2d
at 26, quoting 2 NY Jur 2d, Agency and Independent Contractors § 26).
Further, several weeks ago, the Appellate Division, Second Department in Bank
of New York v Silverberg, (___ AD3d ___, 2011 NY Slip Op 05002 [June 7, 2011]), confronted the issue of “whether a party has standing to commence a foreclosure action when that party’s assignor—in this case, Mortgage Electronic Registration Systems, Inc. (hereinafter MERS)—was listed in the underlying mortgage instruments as a nominee and mortgagee for the purpose of recording, but was never the actual holder or assignee of the underlying notes.” The Court held, “[w]e answer this question in the negative.” Silverberg, similar to the instant TAHER matter, deals with the foreclosure of a mortgage with a consolidation, modification and extension agreement. MERS, in the Silverberg case and the instant TAHER action, never had title or possession of the Note and the definition of “Note Holder” is substantially the same in both consolidation, extension and [*13]modification agreements. The Silverberg Court instructed, at * 4-5:
the assignment of the notes was thus beyond MERS’s authority as
nominee or agent of the lender (see Aurora Loan Servs., LLC v
Weisblum, AD3d, 2011 NY Slip Op 04184, *6-7 [2d Dept 2011];
HSBC Bank USA v Squitteri, 29 Misc 3d 1225 [A] [Sup Ct, Kings
County, F. Rivera, J.]; ; LNV Corp. v Madison Real Estate, LLC,
2010 NY Slip Op 33376 [U] [Sup Ct, New York County 2010,
York, J.]; LPP Mtge. Ltd. v Sabine Props., LLC, 2010 NY Slip Op
32367 [U] [Sup Ct, New York County 2010, Madden, J.]; Bank of
NY v Mulligan, 28 Misc 3d 1226 [A] [Sup Ct, Kings County 2010,
Schack, J.]; One West Bank, F.S.B., v Drayton, 29 Misc 3d 1021
[Sup Ct, Kings County 2010, Schack, J.]; Bank of NY v Alderazi,
28 Misc 3d 376, 379-380 [Sup Ct, Kings County 2010, Saitta, J.]
[the "party who claims to be the agent of another bears the burden
of proving the agency relationship by a preponderance of the evidence"];
HSBC Bank USA v Yeasmin, 24 Misc 3d 1239 [A] [Sup Ct, Kings
County 2010, Schack, J.]; HSBC Bank USA, N.A. v Vasquez, 24
Misc 3d 1239 [A], [Sup Ct, Kings County 2009, Schack, J.]; Bank of
NY v Trezza, 14 Misc 3d 1201 [A] [Sup Ct, Suffolk County 2006,
Mayer, J.]; La Salle Bank Natl. Assn. v Lamy, 12 Misc 3d 1191 [A]
[Sup Ct, Suffolk County, 2006, Burke, J.]; Matter of Agard, 444 BR
231 [Bankruptcy Court, ED NY 2011, Grossman, J.]; but see U.S.
Bank N.A. v Flynn, 27 Misc 3d 802 [Sup Ct, Suffolk County 2011,
Whelan, J.]).
Moreover, the Silverberg Court concluded, at * 5, that “because MERS was never the lawful holder or assignee of the notes described and identified in the consolidation agreement, the . . . assignment of mortgage is a nullity, and MERS was without authority to assign the power to foreclose to the plaintiff. Consequently, the plaintiff failed to show that it had standing to foreclose.” Further, Silverberg the Court observed, at * 6, “the law must not yield to expediency and the convenience of lending institutions. Proper procedures must be followed to ensure the reliability of the chain of ownership, to secure the dependable transfer of property, and to assure the enforcement of the rules that govern real property.” [Emphasis added]
Therefore, the instant action is dismissed with prejudice.
Cancellation of subject notice of pendency
The dismissal with prejudice of the instant foreclosure action requires the
cancellation of the notice of pendency. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding [*14]brought to recover the possession of real property.” The Court of Appeals, in 5308 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 319 [1984]), commented that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.”
CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:
The Court, upon motion of any person aggrieved and upon such
notice as it may require, shall direct any county clerk to cancel
a notice of pendency, if service of a summons has not been completed
within the time limited by section 6512; or if the action has been
settled, discontinued or abated; or if the time to appeal from a final
judgment against the plaintiff has expired; or if enforcement of a
final judgment against the plaintiff has not been stayed pursuant
to section 551. [emphasis added]
The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. “Abatement” is defined as “the act of eliminating or nullifying.” (Black’s Law Dictionary 3 [7th ed 1999]). “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains (2A Carmody-Wait 2d § 11.1).” (Nastasi v Natassi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that the “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR § 6501 (see 5303 Realty Corp. v O & Y Equity Corp., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the dismissal of the instant complaint must result in the mandatory cancellation of plaintiff HSBC’s notice of pendency against the property “in the exercise of the inherent power of the court.”
Possible frivolous conduct by HSBC and its counsel
In this Court’s November 8, 2010 decision and order, Mr. Cassara and his firm, as counsel for plaintiff HSBC, were put on notice about the new affirmation required to be submitted by plaintiff’s counsel in foreclosure actions, pursuant to Administrative Order 548/10. In foreclosure cases pending on October 20, 2010, such as the TAHER case, the affirmation is required to be filed with the Court when moving for either an order of reference or a judgment of foreclosure and sale or five business days before a scheduled auction. Chief Judge Lippman, according to the Office of Court Administrations’s October 20, 2010 press release, stated that, “[t]his new filing requirement will play a vital role in ensuring that the documents judges rely on will be thoroughly examined, accurate, and error-free before any judge is asked to take the drastic step of foreclosure.”
Plaintiff’s counsel was warned that defects in foreclosure filings “include failure of plaintiffs and their counsel to review documents and files to establish standing and other [*15]foreclosure requisites; filing of notarized affidavits which falsely attest to such review and to other critical facts in the foreclosure process; and robosigning’ of documents by parties and counsel.” Mr. Cassara affirmed “under the penalties of perjury,” on January 6, 2011, to the factual accuracy of the complaint, the supporting documents and notarizations contained therein and that the complaint and papers filed with the Court in the TAHER matter “contain no false statements of fact or law.” Further, plaintiff’s counsel was informed that “[t]he wrongful filing and prosecution of foreclosure proceedings which are discovered to suffer from these defects may be cause
for disciplinary and other sanctions upon participating counsel [Emphasis added].”
However, plaintiff HSBC did not have standing to bring the instant action and its
complaint is replete with false statements. For example, ¶ 1 alleges that HSBC has an office at “1661 Worthington Road, Suite 100, P.O. Box 24737, West Palm Beach, FL 33415.” This is actually OCWEN’s office. OCWEN’s zip code is 33409, not 33415. Also, how big is P.O. Box 24737? Is it big enough to contain an HSBC office? Further, ¶ 6 alleges that HSBC is the owner of the note, which it is not. MERS had no authority to assign the note owned by DELTA to HSBC. MERS was DELTA’s nominee for recording the TAHER-consolidated mortgage but it never possessed the underlying note. (See Bank of New York v Silverberg at * 4-5).
Three robosigners – Scott Anderson, Margery Rotundo and Christina Carter – are involved in this matter. Scott Anderson, who wears many corporate hats and has at least five variations of his initials scrawled on documents filed in this Court, is the alleged assignor of the subject mortgage and note to HSBC, despite lacking authority from DELTA. Both alleged assignor MERS and alleged assignee HSBC have the same address – 1661 Worthington Road, Suite 100, West Palm Beach, Florida 33409. The milliner’s delight Margery Rotundo executed the affidavit of merit for OCWEN. Then, Mr. Cassara relied upon Christina Carter as the representative of HSBC to confirm the accuracy of HSBC’s documents and their notarizations. However, she is not employed by HSBC. Is Mr. Cassara aware of the robosigning history of Mr. Anderson, Ms. Rotundo and Ms. Carter?
Putting aside HSBC’s lack of standing, MERS allegedly assigned the TAHER- consolidated mortgage and note to HSBC 169 days after defendant TAHER allegedly defaulted in her payments. If HSBC has a duty to make money for its stockholders, why is it purchasing nonperforming loans, and then wasting the Court’s time with defective paperwork and the use of robosigners? The Courts have limited resources, even more so in light of the recent cuts in the budget for fiscal year 2012 and the layoff of several hundred court employees by the Office of Court Administration. The Courts cannot allow itself, as Chief Judge Lippman said in OCA’s October 20, 2010 press release, “to stand by idly and be party to what we know is a deeply flawed process, especially when that process involves basic human needs – such as a family home – during this period of economic crisis.” [*16]
Last year, in HSBC Bank USA v Yeasmin, 24 Misc 3d 1239 [A], for a variety of reasons, I denied plaintiff’s renewed motion for an order of reference and dismissed the foreclosure action with prejudice. Plaintiff’s counsel in Yeasmin submitted an affidavit by Thomas Westmoreland, Vice President of Loan Documentation for HSBC, in which he admitted to a lack of due diligence by HSBC. I observed in Yeasmin, at * 8, that Mr. Westmoreland stated:
in his affidavit, in ¶’s 4 – 7 and part of ¶ 10:
4. The secondary mortgage market is, essentially, the buying and
selling of “pools” of mortgages.
5. A mortgage pools is the packaging of numerous mortgage
loans together so that an investor may purchase a significant
number of loans in one transaction.
6. An investigation of each and every loan included in a particular
mortgage pool, however, is not conducted, nor is it feasible.
7. Rather, the fact that a particular mortgage pool may
include loans that are already in default is an ordinary risk
of participating in the secondary market . . .
10. . . . Indeed, the performance of the mortgage pool is the
measure of success, not any one individual loan contained
therein. [Emphasis added]
The Court can only wonder if . . . the dissemination of this
decision will result in Mr. Westmoreland’s affidavit used as evidence
in future stockholder derivative actions against plaintiff HSBC. It can’t
be comforting to investors to know that an officer of a financial
behemoth such as plaintiff HSBC admits that “[a]n investigation of
each and every loan included in a particular mortgage pool, however,
is not conducted, nor is it feasible” and that “the fact that a particular
mortgage pool may include loans that are already in default is an
ordinary risk of participating in the secondary market.”
Therefore, the continuation of this action by plaintiff HSBC, with its false
statements of facts, the use of robosigners, and the disingenuous affirmation of Mr. Cassara, appears to be frivolous. 22 NYCRR § 130-1.1 (a) states that “the Court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, which shall be payable as provided in section 130-1.3 of this Subpart.” Further, it states in 22 NYCRR § 130-1.1 (b), that “sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated.”
22 NYCRR § 130-1.1(c) states that:
For purposes of this part, conduct is frivolous if: [*17]
(1) it is completely without merit in law and cannot be supported
by a reasonable argument for an extension, modification or
reversal of existing law;
(2) it is undertaken primarily to delay or prolong the resolution of
the litigation, or to harass or maliciously injure another; or
(3) it asserts material factual statements that are false.
It is clear that the instant motion for an order of reference “is completely without merit in law” and “asserts material factual statements that are false.” Further, Mr. Cassara’s January 6, 2011 affirmation, with its false and defective statements may be a cause for sanctions.
Several years before the drafting and implementation of the Part 130 Rules for
costs and sanctions, the Court of Appeals (A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 6 [1986]) observed that “frivolous litigation is so serious a problem affecting the
proper administration of justice, the courts may proscribe such conduct and impose sanctions in this exercise of their rule-making powers, in the absence of legislation to the contrary (see NY Const, art VI, § 30, Judiciary Law § 211 [1] [b] ).”
Part 130 Rules were subsequently created, effective January 1, 1989, to give the
courts an additional remedy to deal with frivolous conduct. These stand beside Appellate Division disciplinary case law against attorneys for abuse of process or malicious prosecution. The Court, in Gordon v Marrone (202 AD2d 104, 110 [2d Dept 1994], lv denied 84 NY2d 813 [1995]), instructed that:
Conduct is frivolous and can be sanctioned under the court rule if
“it is completely without merit . . . and cannot be supported by a
reasonable argument for an extension, modification or reversal of
existing law; or . . . it is undertaken primarily to delay or prolong
the resolution of the litigation, or to harass or maliciously injure
another” (22 NYCRR 130-1.1[c] [1], [2] . . . ).
In Levy v Carol Management Corporation (260 AD2d 27, 33 [1st Dept 1999]) the Court stated that in determining if sanctions are appropriate the Court must look at the broad pattern of conduct by the offending attorneys or parties. Further, “22 NYCRR
130-1.1 allows us to exercise our discretion to impose costs and sanctions on an errant party . . .” Levy at 34, held that “[s]anctions are retributive, in that they punish past conduct. They also are goal oriented, in that they are useful in deterring future frivolous conduct not only by the particular parties, but also by the Bar at large.”
The Court, in Kernisan, M.D. v Taylor (171 AD2d 869 [2d Dept 1991]), noted that the intent of the Part 130 Rules “is to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics (cf. Minister, Elders & Deacons of Refm. Prot. Church of City of New York v 198 Broadway, 76 NY2d 411; see Steiner v Bonhamer, 146 Misc 2d 10) [Emphasis added].” The instant action, with HSBC lacking standing and using robosigners, is “a waste of judicial resources.” This [*18]conduct, as noted in Levy, must be deterred. In Weinstock v Weinstock (253 AD2d 873 [2d Dept 1998]) the Court ordered the maximum sanction of $10,000.00 for an attorney who pursued an appeal “completely without merit,” and holding, at 874, that “[w]e therefore award the maximum authorized amount as a sanction for this conduct (see, 22 NYCRR 130-1.1) calling to mind that frivolous litigation causes a substantial waste of judicial resources to the detriment of those litigants who come to the Court with real grievances [Emphasis added].” Citing Weinstock, the Appellate Division, Second Department, in Bernadette Panzella, P.C. v De Santis (36 AD3d 734 [2d Dept 2007]) affirmed a Supreme Court, Richmond County $2,500.00 sanction, at 736, as “appropriate in view of the plaintiff’s waste of judicial resources [Emphasis added].”
In Navin v Mosquera (30 AD3d 883 [3d Dept 2006]) the Court instructed that when considering if specific conduct is sanctionable as frivolous, “courts are required to
examine whether or not the conduct was continued when its lack of legal or factual basis was apparent [or] should have been apparent’ (22 NYCRR 130-1.1 [c]).” The Court, in Sakow ex rel. Columbia Bagel, Inc. v Columbia Bagel, Inc. (6 Misc 3d 939, 943 [Sup Ct,
New York County 2004]), held that “[i]n assessing whether to award sanctions, the Court must consider whether the attorney adhered to the standards of a reasonable attorney (Principe v Assay Partners, 154 Misc 2d 702 [Sup Ct, NY County 1992]).”
In the instant action, plaintiff HSBC’s President and Chief Executive Officer (CEO) bears a measure of responsibility for plaintiff’s actions, as well as plaintiff’s counsel. In Sakow at 943, the Court observed that “[a]n attorney cannot safely delegate all duties to others.” Irene M. Dorner, President and CEO of HSBC, is HSBC’s “captain of the ship.” She should not only take credit for the fruits of HSBC’s victories but must bear some responsibility for its defeats and mistakes. According to HSBC’s 2010 Form 10-K, dated December 31, 2010, and filed with the U.S. Securities and Exchange Commission on February 28, 2011, at p. 255, “Ms. Dorner’s insight and particular knowledge of HSBC USA’s operations are critical to an effective Board of Directors” and Ms. Dorner “has many years of experience in leadership positions with HSBC and extensive global experience with HSBC, which is highly relevant as we seek to operate our core businesses in support of HSBC’s global strategy.” HSBC needs to have a “global strategy” of filing truthful documents and not wasting the very limited resources of the Courts. For her responsibility she earns a handsome compensation package. According to the 2010 Form 10-k, at pp. 276-277, she earned in 2010 total compensation of $2,306,723. This included, among other things: a base salary of $566,346; a discretionary bonus of $760,417; and, other compensation such as $560 for financial planning and executive tax services; $40,637 for executive travel allowance, $24,195 for housing and furniture allowance, $39,399 for relocation expenses and $3,754 for executive physical and medical expenses.
Therefore, the Court will examine the conduct of plaintiff HSBC and plaintiff’s counsel, in a hearing, pursuant to 22 NYCRR § 130-1.1, to determine if plaintiff HSBC, [*19]by its President and CEO, Irene M. Dorner, and plaintiff’s counsel Frank M. Cassara, Esq. and his firm Shapiro, DiCaro & Barak, LLC, engaged in frivolous conduct, and to allow plaintiff HSBC, by its President and CEO, Irene M. Dorner, and plaintiff’s counsel Frank M. Cassara, Esq. and his firm Shapiro, DiCaro & Barak, LLC a reasonable opportunity to be heard.
Conclusion
Accordingly, it is
ORDERED, that the motion of plaintiff, HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, for an order of reference for the premises located at 931 Gates Avenue, Brooklyn, New York (Block 1632, Lot 57, County of Kings), is denied with prejudice; and it is further
ORDERED, that because plaintiff, HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, lacks standing in this foreclosure action, the instant complaint, Index No. 9320/09 is dismissed with prejudice; and it is further
ORDERED, that the Notice of Pendency filed with the Kings County Clerk on April 16, 2009 by plaintiff, HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, in an action to foreclose a mortgagefor real property located at 931 Gates Avenue, Brooklyn, New York (Block 1632, Lot 57, County of Kings), is cancelled and discharged; and it is further
ORDERED, that it appearing that plaintiff HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, plaintiff’s counsel Frank M. Cassara, Esq. and his firm Shapiro, DiCaro & Barak, LLC engaged in “frivolous conduct,” as defined in the Rules of the Chief Administrator, 22 NYCRR § 130-1 (c), and that pursuant to the Rules of the Chief Administrator, 22 NYCRR § 130.1.1 (d), “[a]n award of costs or the imposition of sanctions may be made . . . upon the court’s own initiative, after a reasonable opportunity to be heard,” this Court will conduct a hearing affording: plaintiff HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, by its President and Chief Executive Officer, Irene M. Dorner; plaintiff’s counsel Frank M. Cassara, Esq.; and, his firm Shapiro, DiCaro & Barak, LLC; “a reasonable opportunity to be heard” before me in Part 27, on Friday, July 15, 2011, at 2:30 P.M., in Room 479, 360 Adams Street, Brooklyn, NY 11201; and it is further
ORDERED, that Ronald David Bratt, Esq., my Principal Law Clerk, is directed to serve this order by first-class mail, upon: Irene M. Dorner, President and Chief Executive Officer of plaintiff, HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST [*20]2007-2, 452 Fifth Avenue, New York, New York 10018; Frank M. Cassara, Esq., Shapiro DiCaro & Barak, LLC, 250 Mile Crossing Boulevard, Suite One, Rochester, New York 14624; and, Shapiro DiCaro & Barak, LLC, 250 Mile Crossing Boulevard, Suite One, Rochester, New York 14624.
This constitutes the Decision and Order of the Court.
ENTER
___________________________
HON. ARTHUR M. SCHACK J. S. C.
Monday, April 25, 2011
Retiring Bankruptcy Judge John Ninfo Still Plans to Educate Youth on Financial Dangers
s he approaches retirement from the U.S. Bankruptcy Court for the Western District of New York, where he has presided over thousands of cases of financial disarray, Bankruptcy Judge John Ninfo II is going to continue to preach his finely honed lessons on financial literacy, the Rochester (N.Y.) Democrat and Chronicle reported yesterday. However, with the recent recession still looming large, Judge Ninfo is adjusting his message: He now says we probably should live below our means, much as many of our parents and grandparents did in the 1950s and 1960s. Judge Ninfo will retire from the bankruptcy court at the end of the year, capping his time on the bench at an even two decades. He will continue on with one of his passions by continuing to volunteer with Credit Abuse Reduction Education (CARE), the national financial literacy program that he started in 2002.
http://www.democratandchronicle.com/article/20110424/BUSINESS/104240344/1001/BUSINESS
http://www.democratandchronicle.com/article/20110424/BUSINESS/104240344/1001/BUSINESS
Friday, February 18, 2011
New York Foreclosure Legal Assistance
Mortgages (BNA 02/16/2011)
New York to Provide Legal Assistance In Foreclosure Cases, Chief Judge Says
ALBANY, N.Y.-New York state will create a program this year to ensure that homeowners who cannot afford a lawyer are provided with free legal assistance at their foreclosure settlement conferences, Judge Jonathan Lippman, the state's chief judge, announced Feb. 15 in his annual State of the Judiciary address.
Lippman said the program would begin in Queens, N.Y., in conjunction with the Legal Aid Society of Queens, and in Orange County, N.Y., with Hudson Valley Legal Services. The program will expand statewide by the end of the year, he said.
"A truly glaring problem ... is that the foreclosure process presents a need for legal counsel at precisely the moment when a lawyer is least affordable,'' Lippman said in his prepared State of the Judiciary report.
"Far too many homeowners enter our courts without legal help and with little understanding of the legal process. Many are so intimidated by the process and its consequences that they don't show up at all.''
The program is the second effort by Lippman and the state court system to address problems associated with foreclosures. In October, the New York State Unified Court System promulgated a rule requiring that attorneys for plaintiffs in residential foreclosure proceedings file an affirmation certifying that they have taken reasonable steps to verify the accuracy of documents related to the case.
The legal assistance program was applauded by the New York State Bar Association. "We are pleased with the chief judge's pilot program and his plans to later expand this innovative program statewide,'' Stephen P. Younger, president of the association, said in a statement.
"Nearly two-thirds of homeowners facing foreclosure are not represented by attorneys at their settlement conferences,'' Younger said.
Under a 2008 state law, courts must schedule a mandatory settlement conference with the parties in foreclosure proceedings involving certain subprime loans.
Lippman to Assign Attorneys
Lippman said, under the new program, he would assign legal services attorneys with foreclosure expertise to courts in the counties involved in the program. "After a screening process designed to make sure that the foreclosure settlement conferences are as meaningful as possible, these legal services attorneys will provide legal assistance or representation to unrepresented homeowners at the initial conference in as many cases as possible,'' he said.
"Thereafter, the attorney will either keep the case and continue with representation or refer the homeowner to a network of legal services, pro bono or law school clinic counsel who will be standing by to provide additional legal assistance in support of this project.''
By Gerald B. Silverman
http://www.nytimes.com/2011/02/16/business/16housing.html?_r=2
New York to Provide Legal Assistance In Foreclosure Cases, Chief Judge Says
ALBANY, N.Y.-New York state will create a program this year to ensure that homeowners who cannot afford a lawyer are provided with free legal assistance at their foreclosure settlement conferences, Judge Jonathan Lippman, the state's chief judge, announced Feb. 15 in his annual State of the Judiciary address.
Lippman said the program would begin in Queens, N.Y., in conjunction with the Legal Aid Society of Queens, and in Orange County, N.Y., with Hudson Valley Legal Services. The program will expand statewide by the end of the year, he said.
"A truly glaring problem ... is that the foreclosure process presents a need for legal counsel at precisely the moment when a lawyer is least affordable,'' Lippman said in his prepared State of the Judiciary report.
"Far too many homeowners enter our courts without legal help and with little understanding of the legal process. Many are so intimidated by the process and its consequences that they don't show up at all.''
The program is the second effort by Lippman and the state court system to address problems associated with foreclosures. In October, the New York State Unified Court System promulgated a rule requiring that attorneys for plaintiffs in residential foreclosure proceedings file an affirmation certifying that they have taken reasonable steps to verify the accuracy of documents related to the case.
The legal assistance program was applauded by the New York State Bar Association. "We are pleased with the chief judge's pilot program and his plans to later expand this innovative program statewide,'' Stephen P. Younger, president of the association, said in a statement.
"Nearly two-thirds of homeowners facing foreclosure are not represented by attorneys at their settlement conferences,'' Younger said.
Under a 2008 state law, courts must schedule a mandatory settlement conference with the parties in foreclosure proceedings involving certain subprime loans.
Lippman to Assign Attorneys
Lippman said, under the new program, he would assign legal services attorneys with foreclosure expertise to courts in the counties involved in the program. "After a screening process designed to make sure that the foreclosure settlement conferences are as meaningful as possible, these legal services attorneys will provide legal assistance or representation to unrepresented homeowners at the initial conference in as many cases as possible,'' he said.
"Thereafter, the attorney will either keep the case and continue with representation or refer the homeowner to a network of legal services, pro bono or law school clinic counsel who will be standing by to provide additional legal assistance in support of this project.''
By Gerald B. Silverman
http://www.nytimes.com/2011/02/16/business/16housing.html?_r=2
Tuesday, January 25, 2011
Judge Moonlighting
http://alm-editorial-us.msgfocus.com/c/1fuqoB0xSUPuT1AQHyv
In New York, a state judge can race motorcycles, coach basketball and captain a sightseeing boat without creating a conflict with his primary judicial role or compromising its dignity. Those are a few of the determinations made since prohibitions against judicial moonlighting were relaxed.
In New York, a state judge can race motorcycles, coach basketball and captain a sightseeing boat without creating a conflict with his primary judicial role or compromising its dignity. Those are a few of the determinations made since prohibitions against judicial moonlighting were relaxed.
New York - new bankruptcy exemptions
New York just increased homestead exemption to $150,000 for an individual and $300,000 for a couple from $50,000 which was raised in 2005 from $10,000.
Cash exemption was doubled to $5,000; auto exemption went from $2,400 to $4,000; tools of trade was quintupled to $3,000; aggregate personal property exemption was doubled to $10,000.
You can read about the new, New York exemptions here:
New York Bankruptcy Exemptions Suddenly Increased – This Is the Biggest Bankruptcy News in Years!
http://longislandbankruptcyblog.com/york-bankruptcy-exemptions-suddenly-increased-biggest-bankruptcy-news-years/
and here
The New, New York Bankruptcy Exemption Statutes for 2011
http://longislandbankruptcyblog.com/new-york-bankruptcy-exemption-statutes-for-2011/
Cash exemption was doubled to $5,000; auto exemption went from $2,400 to $4,000; tools of trade was quintupled to $3,000; aggregate personal property exemption was doubled to $10,000.
You can read about the new, New York exemptions here:
New York Bankruptcy Exemptions Suddenly Increased – This Is the Biggest Bankruptcy News in Years!
http://longislandbankruptcyblog.com/york-bankruptcy-exemptions-suddenly-increased-biggest-bankruptcy-news-years/
and here
The New, New York Bankruptcy Exemption Statutes for 2011
http://longislandbankruptcyblog.com/new-york-bankruptcy-exemption-statutes-for-2011/
Monday, January 17, 2011
Banks Don't Follow Rules = Throw Out The Case
That seems like a very simple formula. Many judges are following this formula. It just seems so clear, so black and white to me….. This is Fair
http://www.dailyfinance.com/story/credit/new-york-judge-starts-throwing-out-foreclosure-cases/19797842/?icid=sphere_copyright
http://www.dailyfinance.com/story/credit/new-york-judge-starts-throwing-out-foreclosure-cases/19797842/?icid=sphere_copyright
Monday, December 27, 2010
New York Bill to Shield More Debtors in Bankruptcy Is Signed by Paterson
New York debtors in bankruptcy and other court cases will be able to shield more assets from lenders under a law signed by Governor David Paterson, Bloomberg News reported on Thursday. The law increases the dollar value of some exemptions for the first time since the 19th century, and raises others to levels that would help debtors live without government assistance, said Charles Juntikka, a New York City lawyer who represents debtors. Under the new law, debtors can retain vehicles valued as much as $4,000 above an associated loan, up from $2,400. They also may keep a home with equity of $75,000 to $150,000, depending on location, up from $50,000. Home equity is the value of a home, less mortgages. The measure may make it harder for New York City to enforce parking rules and collect unpaid tickets, according to a July letter from Mayor Michael Bloomberg. The city will seek to amend it to solve that problem, said a spokesman for the mayor.
http://www.bloomberg.com/news/print/2010-12-23/new-york-bill-to-shield-more-debtors-in-bankruptcy-is-favored-by-paterson.html
http://www.bloomberg.com/news/print/2010-12-23/new-york-bill-to-shield-more-debtors-in-bankruptcy-is-favored-by-paterson.html
Monday, November 29, 2010
NY Fed Ct Dismisses RESPA Challenge to Division of Title Insurance Premiums b/t Title Insurer and Title Agent
The United States District Court for the Eastern District of New York recently dismissed putative class claims asserting violations of the federal Real Estate Settlement Procedures Act ("RESPA") relating to allegations of prohibited kickbacks to and illegal fee splitting by title insurers with title agents, as barred under RESPA and under the "filed-rate doctrine."
This case began as a putative class action with Gerry Galiano as the named plaintiff, which in turn emerged out of another class action that named many of the same defendants. The plaintiff alleged that various title insurance defendants, including the Title Insurance Rate Service Association, Inc. ("TIRSA"), injured the plaintiff by setting title insurance rates that included both agency commissions -- which the plaintiff characterized as "prohibited fees, kickbacks or other things of value" -- as well as insurance risk costs, or that the division of the title insurance fee into agency commission and risk premium was a prohibited "fee splitting 'other than for services actually performed.'"
The court noted that RESPA was enacted to safeguard home buyers from abusive practices resulting in in "unnecessarily high settlement charges." However, the court also noted that Congress did not intend to empower the federal courts to serve as "roving equity tribunals" governing real estate closings.
As you may recall, Sections 8(a) and 8(b) of RESPA prohibit the giving or receiving of referral fees, kickbacks, or any other "thing of value" in exchange for the referral of real estate settlement service business involving a federally regulated mortgage loan. However, Section 8(c) of RESPA includes a "safe-harbor" provision allowing "bona fide" fees for services actually rendered.
The Court held that the plaintiff conceded the defendants performed actual services, and this admission is "fatal" to his RESPA claim. Because the services at issue, such as performing title searches and examinations, are "essential" services when insuring title, they are "bona fide" as required under RESPA. The Court noted that, given this fact, the plaintiff was in essence contesting the amounts paid for title insurance services, and that RESPA is not intended to be a "price-control statute." The Court further held that the defendants only shared fees with third parties when those parties performed essential services, and this does not constitute an improper "split charge for which no service was performed."
In addition, the District Court held that the "filed-rate doctrine" would also bar the plaintiff's RESPA claim. This doctrine states that "rates filed with a regulatory agency, such as the title-insurance rates at issue are "per se reasonable and unassailable in judicial proceedings." These rates were filed by the title insurance defendants with the New York Insurance Department. As you may recall, the filed-rate doctrine prevents courts from substituting their judgment for that of a regulatory agency applying expertise to the area in question. The doctrine also prevents price discrimination among consumers, as non-suing consumers would be at a disadvantage to those who were awarded lower rates via a lawsuit.
Finally, the Court observed that there is no fraud exception to the filed-rate doctrine, as such an exception would simply be involving the courts in deciding what constitutes a "reasonable rate." The Court also noted that the Second Circuit has "not yet spoken" on the applicability of the filed-rate doctrine to RESPA "kickback claims," and the lower court was thus not bound by a "specific line of reasoning." The District Court held that because the kickback allegations had been rejected, as actual services were performed, the payments in question could not be "illegal kickbacks" that would preclude application of the filed-rate doctrine.
This case began as a putative class action with Gerry Galiano as the named plaintiff, which in turn emerged out of another class action that named many of the same defendants. The plaintiff alleged that various title insurance defendants, including the Title Insurance Rate Service Association, Inc. ("TIRSA"), injured the plaintiff by setting title insurance rates that included both agency commissions -- which the plaintiff characterized as "prohibited fees, kickbacks or other things of value" -- as well as insurance risk costs, or that the division of the title insurance fee into agency commission and risk premium was a prohibited "fee splitting 'other than for services actually performed.'"
The court noted that RESPA was enacted to safeguard home buyers from abusive practices resulting in in "unnecessarily high settlement charges." However, the court also noted that Congress did not intend to empower the federal courts to serve as "roving equity tribunals" governing real estate closings.
As you may recall, Sections 8(a) and 8(b) of RESPA prohibit the giving or receiving of referral fees, kickbacks, or any other "thing of value" in exchange for the referral of real estate settlement service business involving a federally regulated mortgage loan. However, Section 8(c) of RESPA includes a "safe-harbor" provision allowing "bona fide" fees for services actually rendered.
The Court held that the plaintiff conceded the defendants performed actual services, and this admission is "fatal" to his RESPA claim. Because the services at issue, such as performing title searches and examinations, are "essential" services when insuring title, they are "bona fide" as required under RESPA. The Court noted that, given this fact, the plaintiff was in essence contesting the amounts paid for title insurance services, and that RESPA is not intended to be a "price-control statute." The Court further held that the defendants only shared fees with third parties when those parties performed essential services, and this does not constitute an improper "split charge for which no service was performed."
In addition, the District Court held that the "filed-rate doctrine" would also bar the plaintiff's RESPA claim. This doctrine states that "rates filed with a regulatory agency, such as the title-insurance rates at issue are "per se reasonable and unassailable in judicial proceedings." These rates were filed by the title insurance defendants with the New York Insurance Department. As you may recall, the filed-rate doctrine prevents courts from substituting their judgment for that of a regulatory agency applying expertise to the area in question. The doctrine also prevents price discrimination among consumers, as non-suing consumers would be at a disadvantage to those who were awarded lower rates via a lawsuit.
Finally, the Court observed that there is no fraud exception to the filed-rate doctrine, as such an exception would simply be involving the courts in deciding what constitutes a "reasonable rate." The Court also noted that the Second Circuit has "not yet spoken" on the applicability of the filed-rate doctrine to RESPA "kickback claims," and the lower court was thus not bound by a "specific line of reasoning." The District Court held that because the kickback allegations had been rejected, as actual services were performed, the payments in question could not be "illegal kickbacks" that would preclude application of the filed-rate doctrine.
Tuesday, November 16, 2010
NY- Judge Schack names Robo- Signers in Cases
ROSA C. LARA
WM SPECIALTY MORTGAGE LLC, v. GRANT
TAMARA PRICE
DEUTSCHE BANK NATIONA L TRUST COMPANY, v. EZAGUI
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. CLOUDEN
CHRISTOPHER M. ZEIS
PROPERTY ASSET MANAGEMENT, INC., v. THEODORE
JOHN SHELLEY
U.S. BANK NATIONAL ASSOCIATION, v. LOUIS
ELY HARLESS
BANK OF NEW YORK v. MULLIGAN
DEUTSCHE BANK NATIONAL TRUST, v. AUGUSTE
JEFF RIVAS
DEUTSCHE BANK NATIONAL TRUST COMPANY v. CASTELLANOS
NICOLE GAZZO ESQ., Attorney of STEVEN J. BAUM PC/ CATHY MENCHISE
HSBC BANK USA, N.A., v. YEASMIN
CATHY MENCHISE
U.S. BANK NATIONAL ASSOCIATION, v. MAYNARD
BRYAN KUSICH
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. HENRY
WELLS FARGO BANK, N.A., v. GUY
U.S. BANK, NATIONAL ASSOCIATION, v. VIDEJUS
MARGERY ROTUNDO / SCOTT ANDERSON
HSBC BANK USA, N.A.,v. CHARLEVAGNE
NOMURA CREDIT & CAPITAL,, INC.,v. WASHINGTON
SCOTT ANDERSON / JESSICA DYBAS
HSBC BANK USA, N.A., v. BETTS
SCOTT ANDERSON
HSBC BANK USA, NATIONAL ASSOCIATION,, v. ANTROBUS
ALBERT FIORELLO
NYCTL 1998-1 TRUST AND THE BANK OF NEW, v. CRUZ
VICTOR F. PARISI
HSBC BANK USA, NATIONAL ASSOCIATION, v. PERBOO
LEO S. ORTEGA, Jr.
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. GRANT
KERI SELMAN
BANK OF NEW YORK v. OROSCO
JOE LANNING
U.S. BANK NATIONAL ASSOCIATION, v. GRANT
CHINA BROWN
GE CAPITAL MORTGAGE SERVICES, INC., v. POWELL
ERICA JOHNSON SECK
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. MARAJ
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. HARRIS
ONEWEST BANK v. DRAYTON
http://stopforeclosurefraud.com/2010/11/16/mind-blowing-judge-schack-names-robo-signers-in-many-foreclosure-cases-greatest-hits/
WM SPECIALTY MORTGAGE LLC, v. GRANT
TAMARA PRICE
DEUTSCHE BANK NATIONA L TRUST COMPANY, v. EZAGUI
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. CLOUDEN
CHRISTOPHER M. ZEIS
PROPERTY ASSET MANAGEMENT, INC., v. THEODORE
JOHN SHELLEY
U.S. BANK NATIONAL ASSOCIATION, v. LOUIS
ELY HARLESS
BANK OF NEW YORK v. MULLIGAN
DEUTSCHE BANK NATIONAL TRUST, v. AUGUSTE
JEFF RIVAS
DEUTSCHE BANK NATIONAL TRUST COMPANY v. CASTELLANOS
NICOLE GAZZO ESQ., Attorney of STEVEN J. BAUM PC/ CATHY MENCHISE
HSBC BANK USA, N.A., v. YEASMIN
CATHY MENCHISE
U.S. BANK NATIONAL ASSOCIATION, v. MAYNARD
BRYAN KUSICH
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. HENRY
WELLS FARGO BANK, N.A., v. GUY
U.S. BANK, NATIONAL ASSOCIATION, v. VIDEJUS
MARGERY ROTUNDO / SCOTT ANDERSON
HSBC BANK USA, N.A.,v. CHARLEVAGNE
NOMURA CREDIT & CAPITAL,, INC.,v. WASHINGTON
SCOTT ANDERSON / JESSICA DYBAS
HSBC BANK USA, N.A., v. BETTS
SCOTT ANDERSON
HSBC BANK USA, NATIONAL ASSOCIATION,, v. ANTROBUS
ALBERT FIORELLO
NYCTL 1998-1 TRUST AND THE BANK OF NEW, v. CRUZ
VICTOR F. PARISI
HSBC BANK USA, NATIONAL ASSOCIATION, v. PERBOO
LEO S. ORTEGA, Jr.
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. GRANT
KERI SELMAN
BANK OF NEW YORK v. OROSCO
JOE LANNING
U.S. BANK NATIONAL ASSOCIATION, v. GRANT
CHINA BROWN
GE CAPITAL MORTGAGE SERVICES, INC., v. POWELL
ERICA JOHNSON SECK
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. MARAJ
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. HARRIS
ONEWEST BANK v. DRAYTON
http://stopforeclosurefraud.com/2010/11/16/mind-blowing-judge-schack-names-robo-signers-in-many-foreclosure-cases-greatest-hits/
Tuesday, November 9, 2010
N.Y. Foreclosure Case Alarms Nation's Biggest Lenders
A year ago, Long Island Judge Jeffrey Spinner concluded that a mortgage company's paperwork in a foreclosure case was so flawed and its behavior in negotiations with the borrower so "repugnant" that he erased the family's $292,500 debt and gave the house back for free, the Washington Post reported today. The judgment in favor of the homeowner, Diane Yano-Horoski, which is being appealed, has alarmed the nation's biggest lenders, who say that it could establish a dramatic new legal precedent and roil the nation's foreclosure system. Judge Spinner and some of colleagues in the New York City area estimate they are dismissing 20 to 50 percent of foreclosure cases on the basis of sloppy or fraudulent paperwork filed by lenders.
http://www.washingtonpost.com/wp-dyn/content/article/2010/11/08/AR2010110806583.html
http://www.washingtonpost.com/wp-dyn/content/article/2010/11/08/AR2010110806583.html
Thursday, August 26, 2010
Schack Attack!!!
2010 NY Slip Op 51482(U)
ARGENT MORTGAGE COMPANY, LLC, Plaintiff,
v.
DAPHINE MAITLAND, ET. AL., Defendants.
41383/07.
Supreme Court, Kings County.
Decided August 19, 2010.
Melissa A Sposato, Esq., Law Offices of Jordan Katz, PC, Melville NY, Plaintiff.
No Appearances, Defendant.
ARTHUR M. SCHACK, J.
In this mortgage foreclosure action, plaintiff’s motion for an order of reference for the premises located at 732 Hendrix Street, Brooklyn, New York (Block 4305, Lot 22, County of Kings) is denied with prejudice. The complaint is dismissed. The notice of pendency filed against the above-named real property is cancelled. Plaintiff’s successor in interest, AMERICAN HOME MORTGAGE SERVICING, INC. (AHMSI), lacks standing to continue this action because the instant mortgage was satisfied on April 26, 2010. Plaintiff’s counsel never notified the Court that the mortgage had been satisfied and failed to discontinue the instant action with prejudice. I discovered that the mortgage had been satisfied by personally searching the Automated City Register Information System (ACRIS) website of the Office of the City Register, New York City Department of Finance. AHMSI’s President and Chief Executive Officer or its Executive Vice President, Chief Legal Officer and Secretary Jordan D. Dorchuck, Esq., its counsel, Melissa A. Sposato, Esq. and her firm, Jordan S. Katz, P.C., will be given an opportunity to be heard as to why this Court should not sanction them for making a “frivolous motion,” pursuant to 22 NYCRR §130-1.1.
http://stopforeclosurefraud.com/2010/08/25/foreclosure-fraud-personally-caught-by-judge-schack-dismissed-with-prejudice/
http://foreclosureblues.wordpress.com/2010/08/25/new-york-foreclosure-canceled-for-fraud-and-dismissed-with-prejudice-by-judge-schack/
2010 NY Slip Op 51482(U)
ARGENT MORTGAGE COMPANY, LLC, Plaintiff,
v.
DAPHINE MAITLAND, ET. AL., Defendants.
41383/07.
Supreme Court, Kings County.
Decided August 19, 2010.
Melissa A Sposato, Esq., Law Offices of Jordan Katz, PC, Melville NY, Plaintiff.
No Appearances, Defendant.
ARTHUR M. SCHACK, J.
In this mortgage foreclosure action, plaintiff's motion for an order of reference for the premises located at 732 Hendrix Street, Brooklyn, New York (Block 4305, Lot 22, County of Kings) is denied with prejudice. The complaint is dismissed. The notice of pendency filed against the above-named real property is cancelled. Plaintiff's successor in interest, AMERICAN HOME MORTGAGE SERVICING, INC. (AHMSI), lacks standing to continue this action because the instant mortgage was satisfied on April 26, 2010. Plaintiff's counsel never notified the Court that the mortgage had been satisfied and failed to discontinue the instant action with prejudice. I discovered that the mortgage had been satisfied by personally searching the Automated City Register Information System (ACRIS) website of the Office of the City Register, New York City Department of Finance. AHMSI's President and Chief Executive Officer David M. Friedman or its Executive Vice President, Chief Legal Officer and Secretary Jordan D. Dorchuck, Esq., its counsel, Melissa A. Sposato, Esq. and her firm, Jordan S. Katz, P.C., will be given an opportunity to be heard as to why this Court should not sanction them for making a "frivolous motion," pursuant to 22 NYCRR §130-1.1.
Background
Defendant DAPHINE MAITLAND (MAITLAND) borrowed $392,000.00 from original plaintiff ARGENT MORTGAGE COMPANY, LLC (ARGENT), on August 4, 2006. The loan was secured by a mortgage, recorded by ARGENT, at the Office of the City Register of the City of New York, New York City Department of Finance, on August 23, 2006, at City Register File Number (CRFN) XXXXXXXXXX. Defendant MAITLAND allegedly defaulted in her mortgage loan payments with her June 1, 2007 payment. ARGENT commenced the instant action with the filing of the summons, complaint and notice of pendency with the Kings County Clerk on November 8, 2007. Plaintiff's counsel, on April 14, 2009, filed the instant motion for an order of reference with the Court'sForeclosure Department. After reviewing the papers, the Foreclosure Department forwarded the instant motion to me on August 16, 2010.
On August 16, 2010, I searched ACRIS and discovered that AHMSI, the successor in interest to plaintiff ARGENT, executed a satisfaction of the instant mortgage almost four months ago, on April 26, 2010. The satisfaction was executed in Idaho Falls, Idaho, by Krystal Hall, Vice President of "AMERICAN HOME MORTGAGE SERVICING, INC., AS SUCCESSOR TO CITI RESIDENTIAL LENDING, INC. AS SUCCESSOR TO ARGENT MORTGAGE COMPANY, LLC," and the satisfaction was recorded at the Office of the City Register of the City of New York, on May 10, 2010, at CRFN XXXXXXXXXXXXX.
Successor plaintiff AHMSI is one of several companies controlled by billionaire investor Wilbur L. Ross, Jr. through his firm, W. L. Ross & Company. Louise Story, in her April 4, 2008 New York Times article, "Investors Stalk the Wounded of Wall Street," described Mr. Ross as "a dean of vulture investing." She wrote:
Almost two centuries ago, as Napoleon marched on Waterloo, a scion of the Rothschilds is said to have declared: The time to buy is when blood is running in the streets.
Now as red ink runs on Wall Street, the figurative heirs of the Rothschilds — bankers, traders, hedge fund gurus and takeover artists — are plotting to profit from today's financial upheaval. These market opportunists — vulture investors in the Wall Street term — have begun to swoop. They are buying up mortgages of hard-pressed homeowners, the bank loans of cash-short businesses, and companies that seem to be hurtling to bankruptcy. And they are trying to buy them all on the cheap. . . .
"The only time you really know you've reached the bottom is when you're back on the other side and things are going back up," said Wilbur L. Ross, Jr., a dean of vulture investors, who made a fortune buying steel companies when no one else seemed to want them.
Such caution aside, his firm, W. L. Ross & Company, recently spent $2.6 billion for two mortgage servicers [AHMSI and Option One] and a bond insurance company. He said he planned to buy more as hedge funds and other investor sell at bargain prices.
Moreover, ACRIS revealed that defendant MAITLAND sold the premises to 732 HENDRIX STREET, LLC for $155,000.00, with the deed executed on April 5, 2010 and recorded on April 14, 2010, at the Office of the City Register of the City of New York, at CRFN XXXXXXXXXXXXX.
Plaintiff's counsel never had the courtesy or professionalism to notify the Court that the instant mortgage was satisfied and file a motion to discontinue the instant action. The Court is gravely concerned that it: expended scarce resources on an action that should have been discontinued; and, would have signed an order that could have possibly damaged the credit rating of defendant MAITLAND and put an unfair cloud on the title to the subject premises now owned by 732 HENDRIX STREET, LLC, causing both defendant MAITLAND and 732 HENDRIX STREET, LLC much time and effort to correct an error caused by the failure of successor plaintiff AHMSI and plaintiff's counsel to exercise due diligence. If successor plaintiff AHMSI is a responsible lender, not a vulture investor looking to profit "when blood is running in the streets," it should have notified the Court that the subject mortgage had been satisfied.
Discussion
It is clear that successor plaintiff AHMSI lacked standing to proceed in the instant action since some time prior to April 26, 2010, when the satisfaction for defendant MAITLAND's mortgage was executed. The exact date is probably April 5, 2010, when defendant MAITLAND likely paid off the subject mortgage loan as part of her closing with 732 HENDRIX STREET, LLC, for the sale of the subject mortgaged premises. "To establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant's default in payment." (Campaign v Barba (23 AD3d 327 [2d Dept. 2005]). The instant mortgage was satisfied months before the instant motion for an order of reference was forwarded to me by the Foreclosure Department. The satisfaction, dated April 26, 2010, states that "AMERICAN HOME MORTGAGE INC. AS SUCCESSOR TO CITI RESIDENTIAL LENDING, INC. AS SUCCESSOR TO ARGENT MORTGAGE COMPANY, LLC . . . does hereby certify that a certain indenture of mortgage . . . to secure payment of the principal sum of $392,000.00, and interest, and duly recorded . . . document no. 2006000477619 on the 23rd day of August 2006, is PAID, and does hereby consent that the same be discharged of record." (See Household Finance Realty Corp. of New York v Wynn, 19 AD3d 545 [2d Dept. 2005]; Sears Mortgage Corp. v Yahhobi, 19 AD3d 402 [2d Dept. 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept. 2005]; U.S. Bank Trust Nat. Ass'n Trustee v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks, Holding, Inc., 196 AD2d 812 [2d Dept 1993]).
The Court of Appeals (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801, 812 [2003], cert denied 540 US 1017 [2003]) declared that "[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress."
In Caprer v Nussbaum (36 AD3d 176, 181 [2d Dept 2006]) the Court held that "[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant's request." If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]).
Since AHMSI executed the satisfaction for the instant mortgage, the Court must not only deny the instant motion, but also dismiss the complaint and cancel the notice of pendency filed by ARGENT with the Kings County Clerk on November 8, 2007. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that "would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property." Professor David Siegel, in NY Prac, § 334, at 535 [4th ed] observes about a notice of pendency that:
The plaintiff files it with the county clerk of the real property county, putting the world on notice of the plaintiff's potential rights in the action and thereby warning all comers that if they then buy the property or lend on the strength of it or otherwise rely on the defendant's right, they do so subject to whatever the action may establish as the plaintiff's right.
The Court of Appeals, in 5303 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 315 [1984]), commented that "[a] notice of pendency, commonly known as a lis pendens,' can be a potent shield to litigants claiming an interest in real property." The Court, at 318-320, outlined the history of the doctrine of lis pendens back to 17th century England. It was formally recognized in New York courts in 1815 and first codified in the Code of Procedure [Field Code] enacted in 1848. At 319, the Court stated that "[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit," and, at 320, "the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review."
In Israelson v Bradley (308 NY 511, 516 [1955]) the Court observed that with a notice of pendency a plaintiff who has an interest in real property has received from the State:
an extraordinary privilege which . . . upon the mere filing of the notice of a pendency of action, a summons and a complaint and strict compliance with the requirements of section 120 [of the Civil Practice Act; now codified in CPLR § § 6501, 6511 and 6512] is required. Proper administration of the law by the courts requires promptness on the part of a litigant so favored and that he accept the shield which has been given him upon the terms imposed and that he not be permitted to so use the privilege granted that itbecomes a sword usable against the owner or possessor of realty. If the terms imposed are not met, the privilege is at an end. [Emphasis added]
Article 65 of the CPLR outlines notice of pendency procedures. The Court, in Da Silva v Musso (76 NY2d 436, 442 [1990]), held that "the specific statutorily prescribed mechanisms for implementing this provisional remedy . . . were designed with a view toward balancing the interests of the claimant in the preservation of the status quo against the equally legitimate interests of the property owner in the marketability of his title." The Court of Appeals, quoted Professor Siegel, in holding that "[t]he ability to file a notice of pendency is a privilege that can be lost if abused' (Siegel, New York Practice § 336, at 512)." (In Re Sakow, 97 NY2d 436, 441 [2002]).
The instant case, with successor plaintiff AHMSI lacking standing to bring this action and the complaint dismissed, meets the criteria for losing "a privilege that can be lost if abused." CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:
[t]he court, upon motion of any person aggrieved and upon such notice as it may require, shall direct any county clerk to cancel a notice of pendency, if service of a summons has not been completed within the time limited by section 6512; or if the action has been settled, discontinued or abated; or if the time to appeal from a final judgment against the plaintiff has expired; or if enforcement of a final judgment against the plaintiff has not been stayed pursuant to section 5519. [Emphasis added]
The plain meaning of the word "abated," as used in CPLR § 6514 (a) is the ending of an action. Abatement is defined (Black's Law Dictionary 3 [7th ed 1999]) as "the act of eliminating or nullifying." "An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains' (2A Carmody-Wait 2d § 11.1)." (Nastasi v Nastasi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that "[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR 6501 (see 5303 Realty Corp. v O & Y Equity Corp. at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1st Dept 1998]; Siegel, NY Prac § 336 [4th ed])." AHMSI, as successor plaintiff, lacks standing to sue. Therefore, dismissal of the instant complaint must result in mandatory cancellation of the November 8, 2007 notice of pendency against the property "in the exercise of the inherent power of the Court."
The failure of successor plaintiff AHMSI, by its President David M. Friedman or its Executive Vice President, Chief Legal Officer and Secretary Jordan D. Dorchuck, Esq., and its counsel, Melissa A. Sposato, Esq. and her firm, Jordan S. Katz, P.C., to discontinue the instant action since the April 2010 payoff of the MAITLAND mortgage appears to be "frivolous." 22 NYCRR § 130-1.1 (a) states that "the Court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, which shall be payable as provided in section 130-1.3 of this Subpart." Further, it states in 22 NYCRR § 130-1.1 (b), that "sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated."
22 NYCRR § 130-1.1 (c) states that:
For purposes of this part, conduct is frivolous if:
(1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law;
(2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or
(3) it asserts material factual statements that are false.
It is clear that since at least April 26, 2010 the instant motion for aan order of reference "is completely without merit in law" and "asserts material factual statements that are false."
Several years before the drafting and implementation of the Part 130 Rules for costs and sanctions, the Court of Appeals (A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 6 [1986]) observed that "frivolous litigation is so serious a problem affecting the proper administration of justice, the courts may proscribe such conduct and impose sanctions in this exercise of their rule-making powers, in the absence of legislation to the contrary (see NY Const, art VI, § 30, Judiciary Law § 211 [1] [b] )."
Part 130 Rules were subsequently created, effective January 1, 1989, to give the courts an additional remedy to deal with frivolous conduct. These stand beside Appellate Division disciplinary case law against attorneys for abuse of process or malicious prosecution. The Court, in Gordon v Marrone (202 AD2d 104, 110 [2d Dept 1994], lv denied 84 NY2d 813 [1995]), instructed that:
Conduct is frivolous and can be sanctioned under the court rule if "it is completely without merit . . . and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; or . . . it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another" (22 NYCRR 130-1.1[c] [1], [2] . . . ).
In Levy v Carol Management Corporation (260 AD2d 27, 33 [1st Dept 1999]) the Court stated that in determining if sanctions are appropriate the Court must look at the broad pattern of conduct by the offending attorneys or parties. Further, "22 NYCRR 130-1.1 allows us to exercise our discretion to impose costs and sanctions on an errant party . . ." Levy at 34, held that "[s]anctions are retributive, in that they punish past conduct. They also are goal oriented, in that they are useful in deterring future frivolous conduct not only by the particular parties, but also by the Bar at large."
The Court, in Kernisan, M.D. v Taylor (171 AD2d 869 [2d Dept 1991]), noted that the intent of the Part 130 Rules "is to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics (cf. Minister, Elders & Deacons of Refm. Prot. Church of City of New York v 198 Broadway, 76 NY2d 411; see Steiner v Bonhamer, 146 Misc 2d 10) [Emphasis added]." Since at least April 26, 2010, and probably since April 5, 2010, the instant action is "a waste of judicial resources." This conduct, as noted in Levy, must be deterred. In Weinstock v Weinstock (253 AD2d 873 [2d Dept 1998]) the Court ordered the maximum sanction of $10,000.00 for an attorney who pursued an appeal "completely without merit," and holding, at 874, that "[w]e therefore award the maximum authorized amount as a sanction for this conduct (see, 22 NYCRR 130-1.1) calling to mind that frivolous litigation causes a substantial waste of judicial resources to the detriment of those litigants who come to the Court with real grievances [Emphasis added]." Citing Weinstock, the Appellate Division, Second Department, in Bernadette Panzella, P.C. v De Santis (36 AD3d 734 [2d Dept 2007]) affirmed a Supreme Court, Richmond County $2,500.00 sanction, at 736, as "appropriate in view of the plaintiff's waste of judicial resources [Emphasis added]."
In Navin v Mosquera (30 AD3d 883 [3d Dept 2006]) the Court instructed that when considering if specific conduct is sanctionable as frivolous, "courts are required to examine whether or not the conduct was continued when its lack of legal or factual basis was apparent [or] should have been apparent' (22 NYCRR 130-1.1 [c])." The Court, in Sakow ex rel. Columbia Bagel, Inc. v Columbia Bagel, Inc. (6 Misc 3d 939, 943 [Sup Ct,
New York County 2004]), held that "[i]n assessing whether to award sanctions, the Court must consider whether the attorney adhered to the standards of a reasonable attorney (Principe v Assay Partners, 154 Misc 2d 702 [Sup Ct, NY County 1992])." In the instant action, plaintiff's Chief Legal Officer or its outside counsel is responsible for keeping track of whether the mortgage was satisfied. In Sakow at 943, the Court observed that "[a]n attorney cannot safely delegate all duties to others."
This Court will examine the conduct of successor plaintiff AHMSI and plaintiff's counsel, in a hearing, pursuant to 22 NYCRR § 130-1.1, to determine if plaintiff AHMSI, by its President, David M. Friedman, or its Executive Vice President, Chief Legal Officer and Secretary, Jordan D. Dorchuck, Esq., and plaintiff's counsel Melissa A. Sposato, Esq. and her firm Jordan S. Katz, P.C. engaged in frivolous conduct, and to allow successor plaintiff AHMSI, by its President David M. Friedman or Executive Vice President, Chief Legal Officer and Secretary Jordan D. Dorchuck, Esq., and plaintiff's counsel Melissa A. Sposato, Esq. and her firm Jordan S. Katz, P.C. a reasonable opportunity to be heard. The Court is aware that AHMSI's Chief Legal Officer, Mr. Dorchuck, is a member of the New York State Bar. (See Mascia v Maresco, 39 AD3d 504 [2d Dept 2007]; Yan v Klein, 35 AD3d 729 [2d Dept 2006]; Greene v Doral Conference Center Associates, 18 AD3d 429 [2d Dept 2005]; Kucker v Kaminsky & Rich, 7 AD3d 39 [2d Dept 2004]).
Conclusion
Accordingly, it is
ORDERED, that the motion of successor plaintiff, AMERICAN HOME MORTGAGE SERVICING, INC., for an order of reference for the premises located at 732 Hendrix Street, Brooklyn, New York (Block 4305, Lot 22, County of Kings), is denied with prejudice; and it is further
ORDERED, that because successor plaintiff, AMERICAN HOME MORTGAGE SERVICING, INC., lacks standing and no longer is the mortgagee in this foreclosure action, the instant complaint, Index No. 41383/07 is dismissed with prejudice; and it is further
ORDERED, that the Notice of Pendency filed with the Kings County Clerk on November 8, 2007, by original plaintiff, ARGENT MORTGAGE COMPANY, LLC, in an action to foreclose a mortgage for real property located at 732 Hendrix Street, Brooklyn, New York (Block 4305, Lot 22, County of Kings), is cancelled; and it is further
ORDERED, that it appearing that successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., Melissa A. Sposato, Esq. and Jordan S. Katz, P.C. engaged in "frivolous conduct," as defined in the Rules of the Chief Administrator, 22 NYCRR § 130-1 (c), and that pursuant to the Rules of the Chief Administrator, 22 NYCRR § 130.1.1 (d), "[a]n award of costs or the imposition of sanctions may be made. . . upon the court's own initiative, after a reasonable opportunity to be heard," this Court will conduct a hearing affording: successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., by its President David M. Friedman or Executive Vice President, Chief Legal Officer and Secretary, Jordan D. Dorchuck, Esq.; Melissa A. Sposato, Esq.; and, Jordan S. Katz, P.C.; "a reasonable opportunity to be heard" before me in Part 27, on Monday, September 13, 2010, at 2:30 P.M., in Room 479, 360 Adams Street, Brooklyn, NY 11201; and it is further
ORDERED, that because the headquarters of successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC. is in Irving, Texas, Mr. Friedman or Mr. Dorchuck may appear either in person or by telephone; and it is further
ORDERED, that Ronald David Bratt, Esq., my Principal Law Clerk, is directed to serve this order by first-class mail, upon: David M. Friedman, President of successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., 4600 Regent Boulevard, Suite 200, Irving, Texas 75063; Jordan D. Dorchuck, Esq., Executive Vice President, Chief Legal Officer and Secretary of successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., 4600 Regent Boulevard, Suite 200, Irving, Texas 75063; Melissa A. Sposato, Esq., Law Offices of Jordan S. Katz, P.C., 395 North Service Road, Suite 401, Melville, New York XXXXX-XXXX; and Jordan S. Katz, P.C., 395 North Service Road, Suite 401, Melville, New York XXXXX-XXXX.
This constitutes the Decision and Order of the Court.
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