[*1]
| Deutsche Bank Trust Co. Ams. v Vitellas |
| 2013 NY Slip Op 50698(U) [39 Misc 3d 1222(A)] |
| Decided on May 2, 2013 |
| Supreme Court, Queens County |
| Siegal, 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| This opinion is uncorrected and will not be
published in the printed Official Reports. |
Supreme Court, Queens County
Deutsche Bank
Trust Company Americas, as Trustee for Rali 2002QS6, Plaintiff,
against
Stefanos Vitellas; Douglas Manor Association, Inc., Fleet
National Bank; JPMorgan Chase Bank; New York City Environmental Control Board;
New York City Parking Violations Bureau, New York City Transit Adjudication Bureau,
New York State Department of Taxation and Finance; Maria Vitellas; Winthrop
University Hospital, "John Does" and "Jane Does" (Said name being fictitious, it being
the intended of Plaintiff to designate any and all occupants of the premises being
foreclosed herein, and any parties, corporations or entities, if any, having or claiming an
interest or lien upon the mortgaged premises.), Defendants.
|
14695/12
Bernice Daun Siegal, J.
The following papers numbered 1 to 12 read on this motion for an order
to grant reargument and renewal of defendants Stefanos Vitellas and Maria Vitellas'
motion to dismiss and Plaintiff's cross-motion to amend the complaint pursuant to CPLR
2221, and upon reargument and renewal, denying defendants Stefanos Vitellas and Maria
Vitellas' motion to dismiss in its entirety and granting Plaintiff's cross-motion to amend
the complaint in its entirety.
PAPERS
NUMBERED
Notice of Motion - Affidavits-Exhibits..................................1 - 4
Affirmation in Opposition......................................................5 - 9
Reply affirmation...................................................................10 - 12
[*2]
Upon the foregoing papers, it is hereby ordered
that the motion is resolved as follows:
Plaintiff Deutsche Bank Trust Company ("Deutsche Bank") moves to reargue and
renew pursuant to CPLR. §2221.
Facts
Defendant
Stefanos Vitellas ("Vitellas") executed a promissory note to Lyons Mortgage Services for
$560,000 on April 1, 2002, which was concurrently assigned to the Mortgage Electronic
Registration Systems, Inc. ("MERS") as nominee. The note was secured in the mortgage
in the name of Vitellas on real property located at 28-02 Marinette St., Douglaston, New
York.
Vitellas filed a Chapter 7 bankruptcy petition on or about May 1, 2004.
Vitellas defaulted on the mortgage on March 1, 2010 and the subject mortgage was
subsequently assigned to Deutsche Bank on February 8, 2011.
Deutsche Bank, which contends that it is the holder of the subject note and
mortgage, commenced this action on July 16, 2012 to foreclose on Vitella's premises. On
October 24, 2012, Vitellas moved to dismiss the Deutsche Bank's complaint for lack of
standing, pursuant to CPLR 3211(a)(3). This court, on January 11, 2013, granted the
defendant's motion and denied plaintiff's cross-motion as moot. This court noted that "in
the absence of any evidence to demonstrate the existence of a written note or physical
delivery of the note Vitellas' motion for lack of standing is granted."
The court grants the motion to re-argue, and upon reargument denies
Defendant's motion to dismiss and grants Plaintiff's cross motion to amend the complaint,
as more fully set forth below.
Discussion
Motion to Reargue
If a defendant raises
the defense of standing in a mortgage foreclosure action, the burden is on the plaintiff to
establish standing. (US. Bank v. Sharif, 89 A.D3d 723 [2nd Dept. 2011].) A
plaintiff has standing in a mortgage foreclosure action where it is both (1) the holder or
assignee of the subject mortgage and (2) the holder or assignee of the underlying note.
(Aurora Loan Services, LLC v.
Weisblum, 85 AD3d 95, 108 [2nd Dept. 2011]; Wells Fargo Bank v.
Marchione, 69 AD3d 204, 208 [2nd Dept. 2009.) "Either a written assignment
of the underlying note or the physical delivery of the note prior to the commencement of
the foreclosure action is sufficient to transfer the obligation, and the mortgage passes
with the debt as an inseparable incident." (Bank of New York v. Silverberg, 86
AD3d 274, 281 [2nd Dept. 2011]; Aurora Loan Services, 85 AD3d 95, 108.)
For the court to grant a motion for leave to reargue, the motion "shall be
based upon a matter of fact or law allegedly overlooked or misapprehended by the court
in determining the prior motion." CPLR 2221(d)(2). However, it will not "include any
matter of fact not offered on the prior motion." Id.
Deutsche Bank argues that this court "misapprehended the relevant facts
and principles of laws" in dismissing its standing claim by considering only its failure to
submit evidence of a written assignment of a note, while ignoring the previously
submitted evidence of a physical [*3]delivery of the note.
Deutsche Bank had submitted an Affidavit in Possession from Jane M. Sperbeck, an
authorized officer by GMAC Mortgages, attesting to the delivery. In the Affidavit,
Sperbeck stated that "upon a review of the records, I have determined that on March 25,
2004, a note dated April 1, 2002 for the amount of $560,000 and executed by Stefanos
Vitellas as maker to Lyons Mortgaging Services, Inc., a lender was therefore delivered to
the Plaintiff." In opposition, Vitellas asserts that the Sperbeck affidavit "is entitled to no
weight" because it is "conclusory" and "provides no detail of the records reviewed."
Upon reargument this court concludes that in the underlying motion,
Deutsche Bank met its burden of establishing standing for the purposes of overcoming
plaintiff's motion to dismiss. On a motion to dismiss, the pleading must be afforded a
liberal construction. (Leon v. Martinez, 84 NY2d 83, 87-88 [1994].) The court
should "accept the facts as alleged in the complaint as true, accord plaintiffs the benefit
of every possible favorable inference, and determine only whether the facts as alleged fit
within any cognizable legal theory." (Id.; Ginsburg Development Companies,
LLC v. Carbone, 85 AD3d 1110, 1111 [2nd Dept. 2011].) The Sperbeck affidavit
stated that the delivery of the note occurred on March 25, 2004. Vitellas neither denies
that the Sperbeck Affidavit was annexed with plaintiff's opposition nor denies that the
delivery was made prior to the commencement of this foreclosure action, on July 16,
2012, as required to deny standing.
Thus, Deutsche Bank has provided sufficient evidence for the court to grant
its motion to reargue, [FN1] and , upon reargument, the court finds
that Deutsche Bank has provided sufficient evidence for the court to deny Vitellas's
motion to dismiss for lack of standing.
In opposition, Vitellas contends that Deutsche Bank cannot foreclose on a
note that was previously discharged in Bankruptcy as there is no valid In Personam
Liability. Vitellas filed a Chapter 7 bankruptcy petition on May 1, 2004 and identified the
subject note in Schedule D. Specifically, the petition identified Home Comings Financial
("Home Comings"), the servicer of the Lyons loan. Home Comings was served with the
petition and notice of Chapter 7 however, neither Home Comings nor Lyons appeared in
the bankruptcy action. Vitellas contends that the note was legally extinguished as a
consequence of the Chpater 7 bankruptcy.
However, "a bankruptcy discharge extinguishes only one mode of enforcing
a claim-namely, an action against the debtor in personam-while leaving intact
another-namely, an action against the debtor in rem." (Johnson v. Home State
Bank, 501 U.S. 78 [1991]; see also In re Marcakis, 254 B.R. 77
[Bkrtcy.E.D.NY,2000].) Therefore, the Chapter 7 discharge extinguished the personal
obligation under the promissory note, however, the Chapter 7 discharge did not eliminate
the bank's security interest against the property.
Cross-Motion to Amend the
Complaint
The court now must address plaintiff's original
cross-motion to amend the complaint. Leave to amend a pleading should be freely
granted where the proposed amendment is not palpably insufficient or patently devoid of
merit and will not prejudice or surprise the opposing party. (See CPLR §3025(b);
Bloom v. Lugli, 102 AD3d
715 [2nd Dept January 16, 2013]; Greco v. Christoffersen, 70 AD3d 769 [2nd Dept 2010].)
The "Wherefore Clause" of the complaint [*4]states, in
part, "that the defendants STEFANOS VITELLAS be adjudged to pay any deficiency
which may remain..." However, plaintiff states that if Vitellas has obtained a valid
discharge under Chapter 7 of the Bankruptcy Code, plaintiff would not seek a deficiency
judgment against him. In reply, the defendant did not oppose plaintiff's cross-motion to
file and serve an Amended Complaint. Accordingly, plaintiff's original cross-motion for
leave to file and serve amend the complaint in the form annexed to the "Notice of
Cross-Motion to Amend the Complaint" is granted. (See CPLR § 3025(b).)Conclusion
For the reasons set forth above,
plaintiff's motion for reargument is granted and upon reargument defendant's motion to
dismiss for lack of standing is denied and plaintiff's cross-motion amend the complaint is
granted.
Dated: May 2 , 2013___________________________
Bernice D. Siegal, J. S. C.
Footnotes
Footnote 1:In light of this
determination, it is unnecessary to make a ruling on Deutsche Bank's motion for renewal.