[*1]
States Resources Corp. v Whittingham
2011 NY Slip Op 51241(U) [32 Misc 3d 1210(A)]
Decided on June 30, 2011
Supreme Court, Kings County
Rivera, 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This opinion is uncorrected and will not be published in the printed Official Reports.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 June 30, 2011
Supreme Court, Kings County


States Resources Corp., Plaintiff,

against

Delores Whittingham, Defendant.




5731/10



Attorney for Plaintiff

Stephen M. Valente, Esq.

Reneau J. Longoria, Esq.

Doonan, Graves & Longoria, LLC

100 Cummings Center, Suite 225D

Beverly, MA 01915

(978) 921-2670

Attorney for Defendant

Alice A. Nicholson, Esq.

60 Irving Place

Brooklyn, NY 11238

(800) 323-3034

Francois A. Rivera, J.

The following papers numbered 1 to 4 read on this motion:

Papers Numbered

Notice of Motion/Order to Show Cause/

Petition/Cross Motion and

Affidavits (Affirmations) Annexed1-2

Opposing Affidavits (Affirmations)3

Reply Affidavits (Affirmations)4

Affidavit (Affirmation)

Other Papers [*2]

Upon the foregoing papers, defendant Delores Whittingham (Whittingham) moves, by Order to Show Cause,[FN1] for an order:

(1) pursuant to CPLR 5015 (a) (2) and (3), vacating the Final Summary Judgment (the foreign judgment)[FN2] of the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida (the Florida Court), which was filed in this court;

(2) staying plaintiff States Resources Corp. (SRC) and its agents from executing the foreign judgment, including taking any action to participate in or conduct any proceedings that could result in collection of the foreign judgment or any related deficiency foreign judgment after a foreclosure sale, including levying upon personal or real property located in New York, including real property located at 4807 Church Avenue in Brooklyn, New York (the Brooklyn property);

(3) pursuant to CPLR 5402 and Real Property Actions and Proceedings Law (RPAPL) §§ 1301 and 1371, enjoining plaintiff from execution of the foreign judgment or any related deficiency judgment on the grounds that plaintiff (a) is barred from suing in law and equity concurrently; (b) elected to obtain a foreclosure and sale judgment and conduct a public auction of the mortgaged premises in Florida, a foreign jurisdiction; and (c) forfeited the deficiency by failing to make a motion within 90 days after delivery of the referee's deed; and

(4) granting Whittingham other further relief, including costs, disbursements, and reasonable counsel fees, as the court deems just and proper.

BACKGROUND

According to the parties' papers, SRC, the judgment-creditor, seeks to enforce the foreign judgment rendered in an underlying action in the Florida Court based on the following factual allegations.

On or about January 21, 2004, Whittingham executed a promissory note (the Note) in favor of SRC's predecessor in interest, Ameribank, in the amount of $380,000. To secure payment of the loan obligation, Whittingham executed a mortgage (the Mortgage) in Ameribank's favor, also dated January 21, 2004, on the property located at 1426 Federal [*3]Highway in Lake Worth, Florida (the mortgaged property).[FN3] On or about February 2, 2009,[FN4] the Federal Deposit Insurance Corporation (FDIC) apparently sold the Note and Mortgage to SRC, and an Assignment of Mortgage from FDIC, as receiver for Ameribank, to SRC, dated March 13, 2009, was recorded on March 27, 2009 in Palm Beach County's public records.

Whittingham allegedly defaulted under the Note by failing to make the payments for December 2008 and thereafter. SRC then declared the full amount of $396,142.48, together with default rate interest, late charges, court costs, and attorney fees, due and owing. It commenced an action (the Florida Action) against Whittingham in the Circuit Court of the Fifteenth Judicial Circuit in Florida on both the cause of action based on the Note (Count I, in law) and the cause of action to foreclose on the property based on the Mortgage (Count II, in equity).

On January 29, 2010, the Fifteenth Circuit Court granted plaintiff summary judgment on the cause of action in law (Count I) in the amount of $414,939.62 (the Note Judgment or the foreign judgment), and expressly reserved jurisdiction over the matter for the purpose of rendering judgment on the remaining counts of the complaint in the Florida Action. Plaintiff filed the Note Judgment in the Kings County Clerk's Office under index number 5731/10 on March 8, 2010. On March 23, 2010, the Florida Court granted summary judgment on the cause of action based in equity (Count II), foreclosing the Mortgage (the Foreclosure Judgment). When defendant did not pay the Foreclosure Judgment, the Florida mortgaged property was sold for $120,100 at a public auction on June 14, 2010.[FN5]

In December 2010, plaintiff served on defendant an Execution with Notice to Garnishee, which referenced the Note Judgment in the amount of $414,939.62, and forwarded the same document to the Kings County Sheriff's Office for execution against the Brooklyn property). Subsequently, the sheriff of Kings County posted a notice of sale of the Brooklyn property in New York, scheduled for March 9, 2011. However, upon defendant's filing of the instant Order to Show Cause, the Kings County Sheriff's Office postponed the execution sale indefinitely.

MOTION PAPERS


Defendant's motion papers consist of the Order to Show Cause, an affirmation by defendant's counsel, Alice A. Nicholson (Nicholson), an emergency affirmation by [*4]Nicholson, and six annexed exhibits labeled 1 through 6. Exhibit 1 is the Florida Court's Note Judgment in the Florida Action, dated January 29, 2010. Exhibit 2 is the Florida Court's Mortgage Judgment in the Florida Action, dated March 23, 2010. Exhibit 3 is purportedly a copy of the Note executed by Whittingham in favor of Ameribank. Exhibit 4 is purportedly a copy of the Mortgage executed by Whittingham. Exhibit 5 is purportedly a copy of the Execution with Notice to Garnishee, as well as the Affidavit in Support of Foreign Judgment filed in the Kings County Clerk's Office on March 8, 2010. Finally, Exhibit 6 is the Lienors Notification and Notice of Sales from the Sheriff's Office which scheduled the sale of the Brooklyn property on March 9, 2011.

In opposition, plaintiff submits a memorandum of law and twelve annexed exhibits labeled A through L. Exhibit A is purportedly a copy of the Note executed by Whittingham in favor of Ameribank. Exhibit B is purportedly a copy of the Mortgage executed by Whittingham. Exhibit C is purportedly a copy of the Notice of Filing of Original Loan Documents, which plaintiff avers is evidence that the original Note and Mortgage were filed with the Clerk for the Florida Court. Exhibit D is purportedly a copy of the Assignment of Mortgage from FDIC as receiver for Ameribank to SRC. Exhibit E is the Lis Pendens, Summons, Complaint, and relevant exhibits filed in the underlying Florida Action. Exhibit F is Whittingham's Answer to the Complaint in the underlying Florida Action. Exhibit G is the Florida Court's Note Judgment in the Florida Action, dated January 29, 2010. Exhibit H is the Florida Court's Mortgage Judgment in the Florida Action, dated March 23, 2010. Exhibit I is purportedly a copy of the Execution with Notice to Garnishee. Exhibit J is the Lienors Notification and Notice of Sales from the Sheriff's Office which scheduled the sale of the Brooklyn property on March 9, 2011. Exhibit K is the affidavit of Cory Butler, a manager in the Special Assets Division of SRC who attested that the total amount in arrears due from Whittingham is $353,571.17. Exhibit L is purportedly a copy of the Limited Power of Attorney granting Doug Glenn, President of SRC, authority to execute, acknowledge, seal, and deliver all instruments of transfer and conveyance on behalf of FDIC as receiver for Ameribank.

Defendant's reply affirmation refers to three exhibits labeled 9 though 11, only two of which are annexed. Exhibit 9 is a copy of a case cited by plaintiff in its opposition papers, Morganstin v Fifth Third Bank, 36 So 3d 670 (2010), which plaintiff attempts to discredit. Exhibit 10 purports to be a print-out from FDIC's website indicating that SRC purchased sixty-one performing loans from FDIC as receiver for Ameribank (mistakenly annexed as Exhibit 11). It is unclear what Exhibit 11 is purported to be, given defendant's failure to annex it to her reply papers or to fully describe it in the affirmation.[FN6]

THE PARTIES' CONTENTIONSDefendant argues that the sale of the Brooklyn property is prohibited because (1) SRC is barred by the New York 90-day statute of limitations for moving for a deficiency judgment [*5]under RPAPL § 1371; (2) SRC cannot simultaneously collect in law and in equity with respect to a mortgage debt; and (3) the assignment of the Note appears fabricated and SRC may not be the legal owner of the Note and Mortgage. In addition to insisting that plaintiff exceeded the statute of limitations, Whittingham contends that plaintiff, having chosen to pursue a foreclosure judgment based in equity in Florida, cannot now also seek a money judgment based in law in New York. Finally, defendant maintains that Foreclosure Judgment in the Florida Action may have been obtained by fraudulent assignments or fabricated documents, given that the signature on the Note by Doug Glenn, an executive of SRC, does not constitute an endorsement by or on behalf of the FDIC as holder of the Note.[FN7]


Plaintiff first notes that defendant did not include a sworn affidavit in support of her motion. It then argues that defendant fails to meet her burden of demonstrating a likelihood of success on the merits and did not take any steps to resolve her alleged unsatisfied debt in the amount of $353,571.17, including outstanding principal and interest, late fees, taxes, insurance, and other costs. Plaintiff maintains that it is entitled to full faith and credit enforcement of the foreign judgment in New York, and that pursuant to CPLR 5401 and 5402, New York law allows the domestication of a foreign judgment and execution thereon if not satisfied. Moreover, according to plaintiff, New York RPAPL § 1371 is inapplicable because the debt at issue is not secured by a mortgage, as required in the statute, and should instead be treated as an unsatisfied judicially-decreed money judgment. Plaintiff also argues that Florida law, unlike New York law, does not require a mortgagee to elect the remedy sought against the mortgagor upon default of the loan obligation. Additionally, plaintiff asserts that the foreign judgment rendered by the Fifteenth Circuit should not be vacated because defendant presents no "new evidence" as grounds for vacatur and does not allege any lack of jurisdiction as a ground for the court to adjudicate the matter. Finally, plaintiff contends that defendant's allegations of fraud are explainable [FN8] and, moreover, are barred by principles of collateral estoppel and res judicata.

In reply, defendant maintains that, under Florida law, a mortgagee does not have an unequivocal right to a deficiency judgment over the mortgagor in the event that a mortgaged property does not sell for a sum sufficient to satisfy the outstanding debt, and further asserts that the court must undertake a two-part inquiry to determine the amount of deficiency due, [*6]including consideration of equitable factors that would warrant the reduction of the actual deficiency. She also emphasizes the 90-day statute of limitations for filing a motion for deficiency judgment and insists that assignment of the Note and Mortgage was improper.[FN9]

LAW AND APPLICATION


To prevail on an application for a preliminary injunction, the movant must demonstrate, by clear and convincing evidence: (1) a likelihood of success on the merits; (2) an immediate and irreparable injury without the preliminary injunction; and (3) a balance of equities in the movant's favor (see Ginsburg v Ock-A-Bock Community Assn., Inc., 34 AD3d 637, 637 [2006]; Merrill Lynch Realty Assoc. v Burr, 140 AD2d 589, 592 [1988]). A preliminary injunction may not be granted unless the party seeking it has stated a prima facie cause of action justifying a permanent injunction (see Graham v Wisenburn, 39 AD2d 334, 335 [1972]). To establish a likelihood of success on the merits, the movant must show its right to a preliminary injunction is plain on the facts of the case (see Merrill Lynch Realty Assoc., 140 AD2d at 592-593). Moreover, a preliminary injunction may be imposed only if the parties to be enjoined will not suffer great hardship as a result of its issuance (see Mr. Natural, Inc. v Unadulterated Food Prods., 152 AD2d 729, 730 [1989]). The grant of injunctive relief under CPLR 6301 lies solely within the discretion of the court (see Gerges v Koch, 62 NY2d 84 [1984], citing Kane v Walsh, 295 NY 198, 205 [1946]).

At the outset, the court notes that defendant fails to submit any affidavits in support of her application for a preliminary injunction CPLR 6312 (a) (see Park South Assoc. v Blackmer, 171 AD2d 468 [1991]). The only submission made in support of defendant's motion is Nicholson's affirmation, which is insufficient because facts set forth in an attorney's affirmation have no probative value absent the attorney's assertion of a basis for his or her personal knowledge of the underlying facts and transactions (Feratovic v Lun Wah, Inc., 284 AD2d 368 [2001]). Such basis for personal knowledge is not asserted here. Thus, given defendant's counsel's apparent lack of personal knowledge, the court finds that defendant failed to establish her entitlement to a preliminary injunction and the motion should be denied.

In any event, upon consideration of the affirmation of defendant's counsel, the court nevertheless would deny the requested relief. Whittingham has not attempted to make any showing or present any evidence with regard to the elements of irreparable harm and the balancing of equities. This omission alone constitutes a failure to satisfy the three requirements necessary to warrant a preliminary injunction (see e.g., Etzion v Etzion, 19 Misc [*7]3d 1102 [A] [2008]).

More importantly, the record reveals that plaintiff's Note judgment in the Florida Action, which was filed in the Kings County Clerk's Office on March 8, 2010, would ultimately be entitled to enforcement under principles of full faith and credit (see CPLR 5401 et seq.). New York courts are required to enforce judgments rendered in other states under Article IV of the United States Constitution. A plaintiff with a judgment from a sister state may have that judgment enforced in this state by converting it into a New York judgment (see Blackburn v Blackburn, 113 Misc 2d 619 [1982]). If the judgment was not obtained by default or confession of judgment (see CPLR 5401), it can be filed with a county clerk and then enforced as if it were a judgment of the Supreme Court of the State of New York (see CPLR 5402). The constitutional requirement of full faith and credit precludes any inquiry into the merits of the judgment, the logic or inconsistency of the decision underlying it or the validity of the legal principles on which it is based (see Cadle Co. v Tri-Angle Assoc., 18 AD3d 100 [2005]). While the merits of a judgment of a sister state may not be collaterally attacked, a judgment debtor may challenge the judgment on the basis of lack of personal jurisdiction (see JD Fin. Co. I v Patton, 284 AD2d 164, 166 [2001]). With regard to full faith and credit, a court's review of a foreign judgment is thus limited to whether the rendering court had jurisdiction (Mortgage Money Unlimited v Schaffer, 1 AD3d 773, 774 [2003]).

In the instant action, Whittingham seeks to challenge the merits of a sister state judgment by collaterally attacking it, which is impermissible (id.; Cadle Co., 18 AD3d at 103). If indeed defendant seeks to contest the judgment based on the merits of the underlying dispute, Florida is the appropriate venue for doing so. As the court's review is limited to an examination of jurisdiction, and no jurisdictional objections have been raised herein, no reason warrants staying or enjoining plaintiff from executing the foreign judgment in New York. In sum, as it is presumed valid, this New York court must give full faith and credit to the foreign judgment by Florida, a sister state (see Diners Club v Makovjy, 110 Misc 2d 870, 871 [1981]).

Regardless, as premised on the inconsistency between New York and Florida law, plaintiff's application would still fail because Florida law in fact allows a mortgagees to sue simultaneously in law on the promissory note and in equity on the mortgage (see e.g. Mellor v Goldberg, 658 So. 2d 1162 [1995] ["As a general rule, a holder of a promissory note secured by real property is permitted to pursue both an action on the note and an action to foreclose the mortgage. These remedies are not inconsistent and are each available to satisfy the underlying obligation."], citing Gottschamer v August, Thompson, Sherr, Clark & Shafer, P.C., 438 So 2d 408, 409 [1983]). The court additionally observes that defendant's concern regarding whether plaintiff met the 90-day statute of limitations set forth in RPAPL § 1371 is inapplicable, considering that plaintiff is not seeking a deficiency judgment for payment of a debt secured by a mortgage; rather, plaintiff herein seeks to enforce a judgment based on the Note.

Next, the court must also deny that branch of defendant's motion seeking to vacate the [*8]foreign judgment under CPLR 5015 (a) (2) and (3). This statute refers only to the vacatur of judgments and orders by the same court that rendered such judgments and orders, and is not applicable here, where the foreign judgment sought to be vacated was rendered by a sister state. Similarly, to the extent defendant relies on the broad, sweeping language of CPLR 5402 (b), which provides that the filed judgment is subject in New York to "the same procedures, defenses and proceedings for reopening, vacating or staying" as a supreme court judgment, such a literal interpretation would violate the full faith and credit requirement, which does not allow vacatur on a ground based on the merits (see Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C5402:2; see also Hospital Serv. Plan of N.J. (N.J. Blue Cross Plan) v Warehouse Prod. & Sales Empls. Union, 102 Misc 2d 872873 [1980]).

As a final matter, the court notes that plaintiff's papers in opposition to defendant's Order to Show Cause are defective in form, as an attorney affirmation or affidavit, not a memorandum of law, is the correct vehicle for submitting exhibits. Although a court may overlook technical defects and irregularities (CPLR 2001), here it is not necessary to consider plaintiff's opposition papers because Whittingham did not meet her prima facie burden in the first place (see Benitez v Mileski, 31 AD3d 473, 474 [2006]; Aronov v Leybovich, 3 AD3d 511, 512 [2004]).

Accordingly, it is

ORDERED that defendant's motion for an order granting a preliminary injunction and vacating the foreign judgment is denied.

The foregoing constitutes the decision, order, and judgment of the court.

E N T E R,

J. S. C.

Footnotes


Footnote 1: Upon considering an accompanying affirmation of emergency, the Honorable Bert A. Bunyan signed the instant Order to Show Cause on March 7, 2011 staying the execution of the foreign judgment of the Circuit Court of the Fifteenth Judicial Circuit and the seizure or sale, including the sheriff's sale scheduled for March 9, 2011, of personal or real property located at 4807 Church Avenue in Brooklyn, New York, pending hearing of this motion.

Footnote 2: As discussed further below, references to the foreign judgment relate specifically to the Note Judgment in the Florida Action which was filed in New York with the Kings County Clerk's Office.

Footnote 3: The Mortgage was recorded in the public records of Palm Beach County, Florida on January 22, 2004.

Footnote 4: Defendant avers in her moving papers that FDIC closed Ameribank and that the sale and transfer of the Note and Mortgage occurred on or about September 18, 2008

Footnote 5: Defendant, however, avers that plaintiff received approximately $129,000 as a result of the public auction of the mortgaged property.

Footnote 6: However, this omission is irrelevant, as discussed further below.

Footnote 7: Moreover, defendant notes, the assignment of the Mortgage to plaintiff was not filed in the County Clerk's office and defendant declines to address the propriety of the assignment of the Mortgage.

Footnote 8: Plaintiff indicates that the endorsement of Doug Glenn, President of SRC, on the Note was made pursuant to a Limited Power of Attorney, dated February 12, 2009 and recorded on February 27, 2009, as designated for the purpose of executing, acknowledging, sealing, and delivering all instruments of transfer and conveyance on behalf of FDIC as receiver for Ameribank, the original holder of the Note.

Footnote 9: Defendant refers to Exhibit 10 of her Reply, which is purportedly an FDIC website print-out of performing loans purchased by SRC from FDIC as receiver for Ameribank, to indicate that the instant loan was non-performing when SRC claims it purchased the loans from FDIC in February 2009 and was not part of this list. However, Exhibit 10 is missing and is not included among the attachments to defendant's Reply.