03 14 11 sharif appellants brief
TRANSCRIPT
Nassau County Clerk’s Index № 14370/2008 TO BE ARGUED BY:
Steven Alexander Biolsi
TIME REQUESTED: 15 Minutes
SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE DIVISION: SECOND JUDICIAL DEPARTMENT
U.S. Bank, National Association, successor-in-interest to
Wachovia Bank, N.A. as indentured Trustee of MLMI
2005-A9,
PLAINTIFF-RESPONDENT,
APPELLATE DIVISION DOCKET №
2010-09895
AGAINST
Mohamed Y. Sharif,
DEFENDANT-APPELLANT,
AND
Nazimah Sharif, Mortgage Electronic Registration
Systems, Inc. as Nominee for Quicken Loans, Inc.,” John
Doe #1” through “Joe Doe #10,” the last ten names being
fictitious and unknown to the Plaintiff, the person or
parties intended being the person or parties, if any, having
or claiming an interest in or lien upon the mortgage
premises described in the complaint,
DEFENDANTS.
APPELLANT’S BRIEF
For
Defendant-Appellant Mohamed Y. Sharif
Shapiro, DiCaro, & Barak, LLP
ATTORNEYS FOR PLAINTIFF-RESPONDENT
250 Mile Crossing Boulevard, Suite One
Rochester, NY 14624
(585) 247-9000
Steven Alexander Biolsi
ATTORNEY FOR DEFENDANT-APPELLANT
7101 Austin Street, Suite 201B
Forest Hills, New York, 11375
(718) 263-2624
Defendant-Appellant Mohamed Y. Sharif, by his attorney, Steven A. Biolsi, pursuant to
Section 5531 of the Civil Practice Law and Rules, states as follows:
1. The index number of this case in the Court below was 14370/2008.
2. The full names of the original parties are as stated in the caption. There has
been no change in the names of the parties.
3. This action was commenced in the Supreme Court, Nassau County.
4. This action was commenced with the purchase of an index number and the filing
of a Summons, Complaint and Notice of Pendency on or about February 4, 2008.
Defendant-Appellant, with Defendant Nazimah Sharif, interposed a Verified
SUPREME COURT OF THE STATE OF NEW YORK APPELLATE DIVISION: SECOND DEPARTMENT ---------------------------------------------------------------------X U.S. Bank, National Association, successor-in-interest to Wachovia Bank, N.A. as indentured Trustee of MLMI 2005-A9,
Plaintiff-Respondent,
Docket № 2010-09895
- - against - - STATEMENT
PURSUANT TO CPLR § 5531
Mohamed Y. Sharif, Defendant-Appellant, Nazimah Sharif, Mortgage Electronic Registration Systems, Inc. as Nominee for Quicken Loans, Inc.,” John Doe #1” through “Joe Doe #10,” the last ten names being fictitious and unknown to the Plaintiff, the person or parties intended being the person or parties, if any, having or claiming an interest in or lien upon the mortgage premises described in the complaint, Defendants.
Nassau County
Supreme Court Index № 14370/08
---------------------------------------------------------------------X
Answer on or about August 25, 2008. No other defendant answered the
Complaint. There was no reply to the answer.
5. This is an action sounding in a foreclosure of a residential mortgage.
6. This appeal is from an order of the Supreme Court, Nassau County (Hon.
Thomas A. Adams, J.S.C.) dated August 17, 2010, entered in the office of the
Nassau County Clerk on August 20, 2010, and served by first class mail with
Notice of Entry on September 20, 2010, which denied Defendant/Appellant’s
motion to amend his answer and granted Plaintiff/Respondent’s motion for
summary judgment.
7. This appeal is being taken from an order to which there are no minutes. This
appeal is being perfected with the use of a fully reproduced record on appeal.
Dated: Queens, New York March 14, 2011 __________________________ Steven A Biolsi
i
T A B L E O F C O N T E N T S
Page
TABLE OF AUTHORITIES……………………………………………….. ii
PRELIMINARY STATEMENT…………….………………..………......... 1
STATEMENT OF QUESTIONS PRESENTED…………………………... 2
Question 1: Did the lower court err in denying Defendant-Appellants’
cross-motion, brought by order to show cause, seeking, inter alia, leave
to amend the answer?
Quest Question 2: Did the lower court err in granting Plaintiff-Respondent
motion seeking, inter alia, summary judgment and an order of
reference?
STATEMENT OF FACTS…….…………………………………….……... 3
ARGUMENT ………………………………………………………… 9
Point I - Defendant-Appellant Is Entitled To Amend His Answer
Pursuant To CPLR 3025(b), When He Learned That the Plaintiff
Was Neither The Servicer of the Note Nor The Actual Lender. 9
Point II - Mr. Sharif’s Proposed Amended Answer, With The Affirmative
Defense That The Note Was Never Assigned or Delivered To US
Bank, Is Indisputably Dispositive In Mr. Sharif’s Favor 16
Point III - The Action, Including the US Bank’s Motion For Summary
Judgment, Should Have Been Stayed Until Mr. Sharif Interposed
His Amended Answer. 22
Point IV - US Bank’s Motion for Summary Judgment Should Have Been
Denied. 24
CONCLUSION……………………………………………………………. 27
PRINTING SPECIFICATIONS STATEMENT………………………. 29
ii
T A B L E O F A U T H O R I T I E S
CASES PAGE
Abrahamian v.Tak Chan 33, A.D.3d 947, 949, 824
N.Y.S.2d 117, 119 (2d Dep’t 2006) 11
Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 508 N.Y.S.2d
923, 501 N.E.2d 572 (1986) 24
Campaign v. Barba, 23 A.D.3d 327, 805 N.Y.S.2d 86 (2d
Dep’t 2005) 16
Caprer v. Nussbaum, 36 A.D.3d 176, 825 N.Y.S.2d
55 (2d Dep’t 2006) 19, 21, 26
Century-Fox Film Corp., 3 N.Y.2d 395, 165
N.Y.S.2d 498, 144 N.E.2d 387 (1957). 25
Clarkin v. Staten Island University Hosp, 242,
A.D.2d 552, 662 N.Y.S.2d 91 (2d Dep’t
1997)
9, 11, 15
Dinizio and Cook, Inc. v. Duck Creek Marina at Three
Mile Harbor, Ltd., 32 A.D.3d 989, 990, 821
N.Y.S.2d 649, 650 (2d Dep’t 2006)
10, 11, 15
Dittmar Explosives v. A.E. Ottaviano, Inc., 20 N.Y.2d
498, 501, 285 N.Y.S.2d 55, 231 N.E.2d 756 (1967) 9, 11, 15
Dorival v. DePass, 74 A.D.3d 729, 901 N.Y.S.2d 528 (2d
Dep’t 2010). 25
Edenwald Contracting Co., Inc. v. City of New York, 60
N.Y.2d 957, 459 N.E.2d 164 (1983) 11, 15
First Trust Nat Ass’n v. Meisels, 234 A.D.2d 414, 651
N.Y.S.2d 121 (2d Dep’t 1996) 17
Flyer v. Sullivan, 284 A.D.697, 134 N.Y.S.2d 521 (1st
Dep’t 1954) 20, 21
Fryer v. Rockefeller, 18 Sickles 268, 63 N.Y.268 (1875). 21, 26
GE Capital Mortg. Services, Inc. v. Powell, 18 Misc.3d
228, 845 N.Y.S.2d 722 (N.Y. Sup, Kings Co. 2007) 19, 21, 26
iii
Gelbard v. Bodary, 270 A.D.2d 866, 706 N.Y.S.2d 801
(4th
Dep’t 2000) 13, 14
Hirschfeld v. Hogan, 60 A.D.3d 728, 874 N.Y.S.2d 585
(2d Dep’t 2009) 18
HSBC Bank USA V. Miller, 26 Misc.3d 407, 889
N.Y.S.2d 430, 2009 N.Y. Slip Op. 29444 (N.Y.
Sup. Ct. Sullivan Cty 2009)
17, 20
Kulge v. Fugazy, 145 A.D.2d 537, 536 N.Y.S.2d 92 (2d
Dep’t 1998); 17, 21, 26
Lucido v. Macnuso, 49 A.D.3d 220, 222, 851 N.Y.S.2d
238, 239 (2d Dep’t 2008) 10, 11, 15
Merritt v. Batholick, 9 Tiffany 44, 36 N.Y.44 (1867) 17, 21, 26
Nassi v. Joseph DiLemme Const. Corp., 250 A.D.2d 658,
659, 672 N.Y.S.2d 431, 432 (2d Dep’t 1998); 9, 15
Pick v. McCombs, 57 A.D.2d 1078, 395 N.Y.S.2d 819
(4th Dep’t 1977) 13, 15
Saratoga County Chamber of Commerce, Inc. v. Pataki,
100 N.Y.2d 801, 766 N.Y.S.2d 654, 798 N.E.2d
1047 (2003) cert. denied 540 U.S. 1017, 124 S.Ct.
570, 157 L.Ed.2d 430 (2003).
19
Sillman v. Twentieth Century-Fox Film Corp., 3 N.Y.2d
395, 165 N.Y.S.2d 498, 144 N.E.2d 387 (1957) 24
Slutsky v. Blooming Grove Inn, Inc., 147 A.D.2d 208,
212, 542 N.Y.S.2d 721, 723 (2d Dep’t 1989). 18, 21, 26
Stein v. Garfield Regency Condominium, 65 A.D.3d
1126, 886 N.Y.S.2d 54 (2d Dep’t 2009) 11, 15
Taylor v. Village of Ilion, 231 A.D. 923, 648 N.Y.S.2d
362 (4th
Dep’t 1996) 13
Village of Pomona v. Town of Ramapo, 41 A.D.3d 837,
838 N.Y.S.2d 653 (2d Dep’t 2007) 18
Wells Fargo Bank Minnesota, Nat. Ass’n v. Mastropaolo,
42 A.D.3d 239, 242, 837 N.Y.S.2d 247, 249 (2d
Dep’t 2007)
18
Winegard v. New York University Medical Center, 64
N.Y.2d 851, 476 N.E.2d 642, 487 N.Y.S.2d 316 24
iv
(1985)
Zinker v. Makler, 298 A.D.2d 516, 748 N.Y.S.2d 780 (2d
Dep’t 2002) 25, 26
Zuckerman v. City of New York, 49 N.Y.2d 557, 427
N.Y.S.2d 595, 404 N.E.2d 718 (1980) 24
STATUTES PAGE
CPLR §101 16
CPLR 2201 22
CPLR 3025(b) 9, 10, 15
CPLR 3211 18, 26
CPLR 3212(b) 24, 25, 26
UCC 3-104 18, 26
UCC 3-202(2) 18, 26
1
P R E L I M I N A R Y S T A T E M E N T
In this residential foreclosure action, Defendant-Appellant
Mohamed Y. Sharif, appeals, as of right, pursuant to CPLR §
5701(a)(1), from an order of the Supreme Court, Nassau County,
signed by the Honorable Thomas A. Adams on August 17, 2010
which denied Mr. Sharif‟s request seeking, inter alia, leave to amend
his answer immediately upon the discovery that Plaintiff-Respondent
did not own the underlying note contrary to Plaintiff-Respondent‟s
misstated allegations in its Verified Complaint.
Rather than grant Defendant-Appellant‟s motion, brought by
Order To Show Cause, Justice Adams improperly granted Plaintiff-
Respondent‟s motion seeking summary judgment and an order of
reference.
As more fully developed herein, leave to amend an answer is
freely given and, accordingly, Defendant-Appellant‟s motion should
have been granted by the lower court. Plaintiff-Respondent‟s motion
should have been denied.
2
S T A T E M E N T O F Q U E S T I O N S P R E S E N T E D
Question 1: Did the lower court err in denying Defendant-Appellants‟ cross-
motion, brought by order to show cause, seeking, inter alia, leave
to amend the answer?
The motion court, improperly relying upon case law from the
Fourth Judicial Department, incorrectly held that “Defendant has
failed to establish a reasonable excuse for his delay in seeking an
amendment of his answer to include such defense…”
Accordingly, this question should be answered in the affirmative.
Question 2: Did the lower court err in granting Plaintiff-Respondent motion
seeking, inter alia, summary judgment and an order of reference?
The motion court incorrectly held that “Plaintiff established a
prima facie right to summary judgment. Defendant has failed to
establish or raise an issue of fact to a defense to the action.”
Accordingly, this question should be answered in the affirmative.
3
S T A T E M E N T O F F A C T S
On or about October 19, 1999, Defendant-Appellant Mohamed
Sharif, with his wife, Defendant Nazimah Sharif, purchased the real
property located at and commonly known as 94 Babylon Turnpike,
Merrick, New York, situated within the County of Nassau, State of
New York (“Subject Property”) (R-217-218). In 2005, Mr. Sharif “re-
financed” his property and borrowed Three Hundred Forty Nine
Thousand Eight Hundred ($349,800) Dollars from Quicken Loans,
Inc. as evidence by an Adjustable Rate Note (“Note”) (R-219-222).
To secure repayment pursuant to the terms of the Note, Mr. Sharif
gave a mortgage, as recorded with the Clerk‟s Office of Nassau
County (R-223-244).
In September, 2007, Mr. Sharif, suffered from an illness
temporarily rendering him unable to work in his profession as a taxi
driver. Resultantly, he was unable to earn enough money to send a
timely payment to his mortgagee (or its servicer) (R-138, and 141)
4
In November, 2007, after Mr. Sharif‟s attempted to cure his
arrears, Merrill Lynch returned Mr. Sharif‟s mortgage payment and
requested that Mr. Sharif tender payment of $7,446.35 (R-132).
In December, 2007, Mr. Sharif tendered such payment (R-134).
Mr. Sharif also delivered correspondence explaining his financial
circumstances (R-141).
In January, 2008, Merrill Lynch rejected and returned Mr.
Sharif‟s payment of $7,515.75 (covering October, November, and
December arrears) (R-134).
Plaintiff-Respondent alleges that, soon thereafter, the mortgage
(not the Note) was assigned, properly or otherwise, to “US Bank,
National Association as trustee for MLMI 2005-A9” and then to “US
Bank, National Association successor-in-interest to Wachovia Bank,
N.A. as Indenture Trusee of MLMI 2005-A9” (R-245-248).
On August 4, 2008, Plaintiff-Respondent U.S. Bank, National
Association, successor-in-interest to Wachovia Bank, N.A. as
indentured Trustee of MLMI 2005-A9 (“US Bank”) commenced the
underlying foreclosure action by filing a Summons, Complaint, and
5
Notice of Pendency(R-73-92). The Complaint was verified and
certified by US Bank‟s attorney, Frank M. Cassara of Shapiro &
DiCaro, LLP (R-86).1
On August 25, 2008, Mr. Sharif answered the complaint
denying the allegations against him or, alternatively, denying having
knowledge or information to form a belief as to the truth of the
allegations against him (R-99-104).
Without hesitation, Mr. Sharif continued his efforts to cure his
default directly with the company that was demanding payment, PHH
Mortgage (R-168, 323 ¶ 12).2
In November 12, 2008, while Mr. Sharif attempted to resolve
the alleged problems, US Bank, in bad-faith, filed a motion seeking
1 Such verification, sworn to before a notary public, included that the “grounds of
my belief as to all matters in the complaint not stated to be upon my knowledge
are based upon the book and records of the Plaintiff.” (R-86) Furthermore, Mr.
Cassara certified, pursuant 22 NYCRR § 130-1.1, that “after an inquiry
reasonable under the circumstances, that the presentation of the Summons and
Complaint in this action, or the contentions therein, are not frivolous…” (R-87). 2 At no time did Mr. Sharif ever communicate with anyone from US Bank nor
was he ever told that he owed money to US Bank(R-167-168).
6
summary judgment initially returnable on December 19, 2008 (R-16
& 17, 323 ¶ 12).3
Several months later, on April 14, 2009, PHH Mortgage
acknowledged receipt of Mr. Sharif‟s papers requesting a
modification of the loan terms (R-143).4
To Mr. Sharif‟s surprise, on January 25, 2010, PHH Mortgage
delivered correspondence to Mr. Sharif unequivocally identifying
itself as the “Lender,” not US Bank, as it agreed to modify Mr.
Sharif‟s Loan (R-175, 176, 180, 184).
Because of the patently obvious fact that US Bank is not the
“Lender” despite the its attorney‟s sworn statements to the contrary,
Mr. Sharif, through his counsel immediately prepared an Order To
Show Cause seeking an order staying the action, granting leave to
serve and to file an amended answer, and dismissing the action. After
3 This motion was adjourned, on consent, many times and was not fully submitted
until July 22, 2010, resulting in the August 17, 2010 Order being appealed from
(R-9-10 & R-323 ¶12). 4 Contemporaneous with the underlying litigation, Mr Sharif was working with an
independent “mortgage specialist” directly with the Lender, PHH Mortgage; not
with US Bank (R-167-168).
7
providing the requisite “202.7 notice,” it snowed; courts were closed
(R-157).
After providing a new “202.7 notice,” Mr. Sharif submitted the
Order To Show Cause for signature (R-151-306). The application,
initially returnable March 3, 2010 was adjourned to July 22, 2010.
US Bank filed its opposition papers (R-307-320).
Mr. Sharif timely filed his Affirmation In Reply to Plaintiff‟s
Opposition on July 20, 2010 (R-321-325).
For reasons known, when rendering its decision and order, the
Court did not consider Mr. Sharif‟s Reply papers (Cf R-321 with R-
9).
As argued below, the entire record is void of any document
identifying Plaintiff-Respondent as the Lender. The entire record is
barren of any sworn statement that US Bank took delivery of the
underlying note or that it has actually has the note in its possession
(See, Record On Appeal, generally).
8
The Record On Appeal, substantively developed after issue was
joined, establishes that someone other than US Bank is the Lender.
(Id.)
Because of the foregoing, Mr. Sharif‟s request to stay the action
and to serve and file an amended answer should have been granted. In
the same vein, US Bank‟s motion for summary judgment, based upon
its own misstatements, should have been denied.
9
A R G U M E N T
P O I N T I
DEFENDANT-APPELLANT IS ENTITLED TO AMEND HIS
ANSWER PURSUANT TO CPLR 3025(B), WHEN HE LEARNED
THAT THE PLAINTIFF WAS NEITHER THE SERVICER OF THE
NOTE NOR THE ACTUAL LENDER.
Rule 3025(b) of the Civil Practice Law and Rules (“CPLR”),
provides that “[a] party may amend his pleading, or supplement it by
setting forth additional or subsequent transactions or occurrences, at
any time by leave of court or by stipulation of all parties. Leave shall
be freely given ….”
“It is well settled that a motion to amend a pleading should be
freely given absent a showing of prejudice or surprise to the opposing
party.” Nassi v. Joseph DiLemme Const. Corp., 250 A.D.2d 658, 659,
672 N.Y.S.2d 431, 432 (2d Dep‟t 1998); See also, Clarkin v. Staten
Island University Hosp, 242, A.D.2d 552, 662 N.Y.S.2d 91 (2d Dep‟t
1997). Furthermore, absent prejudice, “an amendment may be
allowed „during or even after trial‟ (Dittmar Explosives v. A.E.
Ottaviano, Inc., 20 N.Y.2d 498, 501, 285 N.Y.S.2d 55, 231 N.E.2d
10
756 [1967]‟…” Dinizio and Cook, Inc. v. Duck Creek Marina at
Three Mile Harbor, Ltd., 32 A.D.3d 989, 990, 821 N.Y.S.2d 649, 650
(2d Dep‟t 2006).
An application for leave to amend a pleading pursuant to
CPLR 3025(b) is governed by a substantially more
permissive standard [than what existed 50 years ago]. In
the absence of prejudice or surprise resulting directly
from the delay in seeking leave, such applications are to
be freely granted unless the proposed amendment is
palpably insufficient or patently devoid of merit. Lucido
v. Macnuso, 49 A.D.3d 220, 222, 851 N.Y.S.2d 238,
239 (2d Dep‟t 2008).
Cases in involving CPLR 3025(b) that place a burden on
the pleader to establish the merit of the proposed
amendment erroneously state the applicable standard and
are no longer to be followed. No evidentiary showing of
11
merit is required under CPLR 3025(b) Id. at 229, 851
N.Y.S.2d at 245.
“Mere lateness is not a barrier to the amendment. It must be
coupled with significant prejudice to the other side…” Abrahamian
v.Tak Chan 33, A.D.3d 947, 949, 824 N.Y.S.2d 117, 119 (2d Dep‟t
2006) citing to Edenwald Contracting Co., Inc. v. City of New York,
60 N.Y.2d 957, 459 N.E.2d 164 (1983).
Simply put: without significant prejudice or surprise to the opposing
party stemming for the time between the first pleading and the motion
seeking leave to amend that pleading, such leave must be granted.
CPLR 3025(b); Edenwald; Dittmar; Stein v. Garfield Regency
Condominium, 65 A.D.3d 1126, 886 N.Y.S.2d 54 (2d Dep‟t 2009);
Lucido; Abrahamian; Dinizio; Nassi; Clarkin.
In this case, Mr. Sharif‟s proposed amending answer includes
the proposed Affirmative Defense that that Mr. Sharif does not owe
anything to the US Bank because US Bank never took physical
delivery or assignment of the underlying note purportedly giving rise
to this foreclosure action, and, therefore, US Bank lacks standing (R-
12
283-288). US Bank does not have the Note. Throughout the record,
US Bank, through its attorneys and agents, never admit that they
actually hold the note or that they took physical delivery of it. (See,
Record on Appeal, generally). US Bank argues that it has
assignments of a mortgage from Mortgage Electronic Registrations
Systems, Inc. (R-309). The copy of the Note provided by US Bank,
want of any endorsement or allonge, only proves the Mr. Sharif owes
money to someone other than US Bank (R-34-37).
In the lower court, US Bank argued that it would be prejudiced
if Mr. Sharif‟s motion is granted because Mr. Sharif waited to seek
leave to amend his answer until after settlement talks failed (R-307-
308). US Bank is wrong: settlement talks did not fail. It was the fruit
of the settlement talks that proved US Bank was not the “Lender.” (R-
173-200). PHH Mortgage (not US Bank) agreed to modify the loan;
settlement talks were successful. US Bank‟s name appears nowhere
in PHH Mortgage‟s Loan Modification Package (Id.). The time
between Mr. Sharif‟s initial answer to US Bank‟s complaint and his
discovery that US Bank‟s complaint contained misstatements of
13
materials facts is attributable to the apparent fact that US Bank was
not involved in any portion of PHH Mortgage and Mr. Sharif‟s
settlement negotiations (Id.).
As part of US Bank‟s opposition to Mr. Sharif‟s motion brought
by Order To Show Cause, US Bank misguidedly relied upon three
non-controlling Fourth Judicial Department cases dealing with Statute
of Limitations; none of which are applicable to this case.5 First, in
Taylor v. Village of Ilion, the Defendant sought leave to serve a
second amended answer, asserting the Statute of Limitations Defense.
That is not the case at bar. Second, in Pick v. McCombs, the Court
held that the Plaintiffs should not be permitted to amend their reply
long after Plaintiffs certified their readiness for trial and “on the day
of trial to assert the defense of Statute of Limitations to defendants
counterclaims,” Pick, 57 A.D.2d at 1078, 395 N.Y.S.2d at 820. That
is not the case at bar.
5 Taylor v. Village of Ilion, 231 A.D. 923, 648 N.Y.S.2d 362 (4
th Dep‟t 1996);
Pick v. McCombs, 57 A.D.2d 1078, 395 N.Y.S.2d 819 (4th Dep‟t 1977); Gelbard
v. Bodary, 270 A.D.2d 866, 706 N.Y.S.2d 801 (4th
Dep‟t 2000).
14
Third, Gelbard v. Bodary, appears to be a defamation action
wherein the Plaintiff attempted to interpose a third amended
Complaint; but, it appears that the amended allegations were time
barred. Again, the issue of State of Limitations does not apply to the
case at bar.
In this case, US Bank would not have suffered any prejudice in
the event Mr. Sharif was granted leave to amend his answer because,
at the time the Order To Show Cause was filed, the parties were still
in settlement negotiations (R-158, 168, 307). No note of issue was
filed, no discovery occurred, no party certified that the action was
ready for trial.
US Bank cannot be surprised that Mr. Sharif desires to prove
that US Bank‟s complaint is unsupported by the record.
If US Bank truly holds and owns the Note upon which they
sought to foreclose, then they will not be prejudiced if Mr. Sharif‟s
answer is amended and interposed as proposed (R-300-305).
Conversely, if US Bank does not own the Note and it was never
assigned to it, Mr. Sharif will suffer irreparable prejudice and harm.
15
He will likely be evicted from his home. US Bank‟s action, if
successful, will be miscarriage of justice and a failure to protect
homeowners from abusive and unscrupulous banks and investors.
Finally, and most surprisingly, in reaching his decision and
order, Honorable Thomas A. Adams was similarly misguided by Pick,
a Fourth Department case not controlling in this Department and not
similar to the case at bar (R-10).
Because of the foregoing, Mr. Sharif‟s request seeking leave to
amend his answer should have been granted. Justice Adam‟s Short
Form Order should be reversed. CPLR 3025(b); Edenwald; Dittmar;
Stein; Lucido; Abrahamian; Dinizio; Nassi; Clarkin.
16
P O I N T I I
MR. SHARIF’S PROPOSED AMENDED ANSWER, WITH THE
AFFIRMATIVE DEFENSE THAT THE NOTE WAS NEVER
ASSIGNED OR DELIVERED TO US BANK, IS INDISPUTABLY
DISPOSITIVE IN MR. SHARIF’S FAVOR.
Civil Practice Law and Rules (“CPLR”) “shall govern the
procedure in civil judicial proceedings in all courts of the state and
before all judges, except where the procedure is regulated by
inconsistent statute.” 6 The CPLR dictates the proper and legal
procedure to commence an action and to bring a motion before the
Court and provides relief available to the successful party.
“To establish a prima facie case in an action to foreclose a
mortgage, the plaintiff must establish the existence of the mortgage,
mortgage note, ownership of the mortgage, and the defendant‟s
default in payment.” Campaign v. Barba, 23 A.D.3d 327, 805
N.Y.S.2d 86 (2d Dep‟t 2005). Furthermore, for almost 150 years, the
rule has been that the assignment of a mortgage without assignment of
6 CPLR § 101.
17
the debt is a nullity and no interest is assigned by it. Merritt v.
Batholick, 9 Tiffany 44, 36 N.Y.44 (1867). Without an assignment
of a note, a cause of action for foreclosure must fail. HSBC Bank
USA V. Miller, 26 Misc.3d 407, 889 N.Y.S.2d 430, 2009 N.Y. Slip
Op. 29444 (N.Y. Sup. Ct. Sullivan Cty 2009) citing to Merritt and
Kulge v. Fugazy, 145 A.D.2d 537, 536 N.Y.S.2d 92 (2d Dep‟t 1998);
c.f. First Trust Nat Ass‟n v. Meisels, 234 A.D.2d 414, 651 N.Y.S.2d
121 (2d Dep‟t 1996).
In HSBC Bank v. Miller, for example, Plaintiff, as a purported
mortgagee, attempted to foreclose on a mortgage after an alleged
default in payments on a note, but Plaintiff failed to produce a note or
its assignment to the Plaintiff. The Court pointed out that Plaintiff‟s
argument that the note is assigned in the same instrument containing
the assignment of the related mortgage is unsupported in law and is
wrong. On reargument, even the Plaintiff abandoned its futile
argument. HSBC Bank.
The law is perfectly clear:
18
A note secured by a mortgage is a negotiable instrument
(see, UCC 3-104) which requires an indorsement on the
instrument itself „or on a paper so firmly affixed thereto
as to become a part thereof” (UCC3-202[2] in order to
effectuate a valid „assignment‟ of the entire instrument.”
Slutsky v. Blooming Grove Inn, Inc., 147 A.D.2d 208, 212, 542
N.Y.S.2d 721, 723 (2d Dep‟t 1989).
Courts appear divided as to whether the lack of standing warrants
a dismissal pursuant to CPLR 3211(a) subdivision 3 or 7;
nevertheless, the dismissal is warranted if in fact, the Plaintiff lacks
standing. “Standing and capacity to sue are related, but
distinguishable, legal concepts.” Wells Fargo Bank Minnesota, Nat.
Ass‟n v. Mastropaolo, 42 A.D.3d 239, 242, 837 N.Y.S.2d 247, 249
(2d Dep‟t 2007). Although these concepts may be distinguishable, the
Appellate Division has dismissed actions pursuant to CPLR 3211(a)
subdivision 3 because of a lack of standing. See, e.g. Hirschfeld v.
Hogan, 60 A.D.3d 728, 874 N.Y.S.2d 585 (2d Dep‟t 2009); Village of
Pomona v. Town of Ramapo, 41 A.D.3d 837, 838 N.Y.S.2d 653 (2d
Dep‟t 2007).
19
Standing to sue requires the litigant to possess an interest in the
claim at issue in the lawsuit that the law will recognize as sufficient
predicate for determining the issue at the litigant‟s request.” Caprer v.
Nussbaum, 36 A.D.3d 176, 825 N.Y.S.2d 55 (2d Dep‟t 2006). To
have standing in an action, the Plaintiff must have an interest in the
claim giving rise to the action, for example, ownership of a note. GE
Capital Mortg. Services, Inc. v. Powell, 18 Misc.3d 228, 845
N.Y.S.2d 722 (N.Y. Sup, Kings Co. 2007) relying, in part, upon
Saratoga County Chamber of Commerce, Inc. v. Pataki, 100 N.Y.2d
801, 766 N.Y.S.2d 654, 798 N.E.2d 1047 (2003) cert. denied 540 U.S.
1017, 124 S.Ct. 570, 157 L.Ed.2d 430 (2003). (In this Kings County
Supreme Court case, Justice Arthur M. Schack found that Plaintiff GE
Capital Mortg. Services, Inc. lacked standing and dismissed the
foreclosure action because, among other things, the Plaintiff did not
own the mortgage and note secured by the mortgage at the time of the
action).
20
In the instant action, upon examination of the allegations
contained the Complaint, it appears that that the complaint is void of
any alleged delivery of the Note to US Bank (R-76-87). US Bank‟s
references to assignments of mortgages are of no moment (R-26, 62,
640. See, e.g. HSBC Bank.
In the motion court, in grave desperation to validate the missing
assignment of the Note, US Bank argued an alternative theory: “a
bond and mortgage may be transferred by delivery without a written
instrument or assignment.” Citing to Flyer v. Sullivan, 284 A.D.697,
134 N.Y.S.2d 521 (1st Dep‟t 1954) (R-312). Again, US Bank is
misguided by case law. The First Department actually wrote, in
Flyer, that “[t]he assignment by a mortgagee of the mortgage lien in
the land, without an assignment of the debt, is considered in law as a
nullity.” Id. at 698, 134 N.Y.S.2d at 523. Flyer supports Mr. Sharif‟s
position.
Notwithstanding the lack of supporting case law, US Bank only
proffers this alternative theory. US Bank never stated where and
21
when such unwritten delivery of the Note occurred, if ever (See, e.g.,
R-307-320).
Without an assignment or physical delivery of the note, US
Bank is without standing to sue Mr. Sharif.US Bank‟s foreclosure
action fails. Merritt; Slutsky; Kulge; Flyer.
For reasons unknown, Justice Adams speculatively decided that
US Bank “could” have taken delivery of the Note “by means other
than written negotiation” (R-10).7 While this may be lawfully correct,
it is merely speculative and unsupported by the Record.
US Bank is not entitled to a foreclosure of the mortgage in this
action. Merritt, Slutsky, Kulge. US Bank‟s cause of action fails as a
matter of law. Merritt, Slutsky, Kulge, Caprer, GE Capital Mortgage.
Because of the foregoing, had Justice Adams granted Mr. Sharif
leave to amend his answer, the Court should have also dismissed the
action in its entirety. Mr. Sharif‟s motion should have been granted.
7 Citing to Fryer v. Rockefeller, 18 Sickles 268, 63 N.Y.268 (1875).
22
Accordingly, it is respectfully submitted that Justice Adams‟
Short Form Order should be reversed.
P O I N T I I I
THE ACTION , INCLUDING THE US BANK’S MOTION FOR
SUMMARY JUDGMENT , SHOULD HAVE BEEN STAYED UNTIL
MR. SHARIF INTERPOSED HIS AMENDED ANSWER .
CPLR § 2201 provides that “except where otherwise
prescribed by law, the court in which an action is pending may grant a
stay of proceedings in a proper case, upon such terms as may be just.”
Upon review of the papers submitted in Mr. Sharif‟s Order To Show
Cause, it becomes evident that that the newly discovered information
that PHH Mortgage is the Lender rather than US Bank, Mr. Sharif‟s
new defense, as pleaded in the proposed amended answer, must be
interposed before a motion for summary judgment can be entertained
(R-300-305). And, until such time, the action should have been
stayed pursuant to CPLR § 2201.
Because of the foregoing, Justice Adams should have granted
Mr. Sharif‟s motion, brought by Order To Show Cause, seeking, inter
23
alia, to stay this action so that he can serve and file his proposed
amended answer.
Justice Adams did not address this portion of Mr. Sharif‟s
motion brought by Order To Show Cause.
Accordingly, it is respectfully submitted that Justice Adams‟
Short Form Order should be reversed.
24
P O I N T I V
US BANK’S MOTION FOR SUMMARY JUDGMENT SHOULD
HAVE BEEN DENIED .
Civil Practice Law and Rules (CPLR) Rules 3212(b) provides:
A motion for summary judgment shall be supported by
affidavit, by a copy of the pleadings and by other
available proof, such as depositions and written
admissions. The affidavit shall be by a person having
knowledge of the facts; it shall recite all the material
facts; and it shall show that there is no defense to the
cause of action or that the cause of action or defense has
no merit. The motion shall be granted if, upon all the
papers and proof submitted, the cause of action or
defense shall be established sufficiently to warrant the
court as a matter of law in directing judgment in favor of
any party.
In their application of CPLR 3212(b), the Court of
Appeals continually rules:
The proponent of a summary judgment motion must
make a prima facie showing of entitlement to judgment
as a matter of law, tendering sufficient evidence in
admissible form to demonstrate the absence of any
material issues of fact.8
8 Alvarez v. Prospect Hosp., 69 N.Y.2d 320, 508 N.Y.S.2d 923, 501 N.E.2d 572,
(1986) citing to Winegard v. New York Univ Med Ctr., 64 N.Y.2d 851, 487
N.Y.S.2d 316, 476 N.E.2d 642 (1985); Zuckerman v. City of New York, 49
N.Y.2d 557, 427 N.Y.S.2d 595, 404 N.E.2d 718 (1980); Sillman v. Twentieth
25
Pursuant to CPLR 3212(b), US Bank‟s motion seeking
summary judgment necessarily requires US Bank to submits all
pleadings. To this end, summary judgment cannot be decided in favor
of US Bank unless US Bank provides a copy of Mr. Sharif‟s amended
answer.
As argued above, Mr. Sharif‟s proposed amended answer
raises, at a minimum, triable issues of fact that would satisfy a burden
that may shift to him if the Court believed that US Bank established
its prima facie entitlement to summary judgment, thereby defeating
US Bank‟s motion. Dorival v. DePass, 74 A.D.3d 729, 901 N.Y.S.2d
528 (2d Dep‟t 2010).
However, upon its search of the Record on Appeal, this Court
can grant summary judgment in Mr. Sharif‟s favor after it searches the
record before it. Zinker v. Makler, 298 A.D.2d 516, 748 N.Y.S.2d
780 (2d Dep‟t 2002).
Century-Fox Film Corp., 3 N.Y.2d 395, 165 N.Y.S.2d 498, 144 N.E.2d 387
(1957).
26
As more fully developed above, the requisite material fact
necessarily needed in a foreclosure action is not disputed: US Bank
never took delivery of and does not hold the Note, or a proper
assignment thereof (See, Record On Appeal, generally).
Because of the foregoing, upon the search of the record, US
Bank‟s action against Mr. Sharif should be dismissed. UCC 3-104;
UCC 3-202(2); CPLR 3211; CPLR 3212; Merritt, Fryer, Slutsky,
Kulge, Caprer, GE Capital Mortgage; Zinker.
Mr. Sharif‟s motion, brought by Order To Show Cause, seeking,
inter alia, to amend his answer and, then, to dismiss the action should
have been granted. US Bank‟s motion seeking summary judgment
should have been denied.
Accordingly, it is respectfully submitted that Justice Adams‟
Short Form Order should be reversed.
27
C O N C L U S I O N
There is no evidence in this action that supports US Bank‟s
Complaint, verified and certified by an attorney. Immediately upon
the discovery that US Bank, by its attorneys, advanced factual and
material misstatements, Mr. Sharif moved to amend his answer, to
stay the action pending the interposition of this answer, and, then, to
dismiss the action based upon all of the documents presented by US
Bank showing that US Bank has no right to advance its claim in the
first place.
Accordingly, Defendant-Appellant Sharif respectfully requests
that this Court reverse Justice Adams decision and Short Form Order
denying Defendant-Respondent‟s application seeking a stay of this
action, leave to interpose his answer, a dismissal of this action and
Defendant-Appellant also respectfully requests that this Court reverse
Justice Adam‟s decision and Short Form Order granting Plaintiff-
Respondent US Bank‟s application seeking summary judgment.
28
Dated: Queens, New York March 19, 2011
Respectfully submitted,
By:
Steven Alexander Biolsi Attorney for Defendant-Appellant 7101 Austin Street, Suite 201B Forest Hills, NY 11375 Telephone: (718) 263-2624
29
CERTIFICATION OF COMPLIANCE WITH
PRINTING SPECIFICATIONS PURSUANT TO §670.10.3(f)
I, the undersigned, certify pursuant to 22 NYCRR § 670.10.3(f) that
the foregoing brief was prepared on a computer using Microsoft Word
2007 software.
Type: Proportionally spaced; Typeface: Times New Roman; Point size: 14 – text 12 – footnotes; Line Spacing: Double; Word Count: The total number of words in this brief, inclusive
of point headings, footnotes and this Statement, and exclusive of
pages containing the table of contents, table of authorities, Statement
pursuant to CPLR § 5531, proof of service, is 4,029.
Dated: Queens, New York March 19, 2011
____________________________
Steven Alexander Biolsi