This is an action brought by plaintiff, U.S. Bank National Association, seeking a Judgment of Foreclosure and Sale to foreclose the mortgage encumbering the property owned by the Boodram defendants located at 95-23 111th Street, Jamaica, New York. The property is a single family home which also has an apartment leased to a tenant.

This action was commenced by the Druckman Law Group on behalf of the plaintiff by the filing of a summons and complaint and lis pendens on September 23, 2011. According to the complaint, on April 21, 2004, defendant Debbie N. Boodram in order to refinance a prior mortgage obtained a Note and mortgage from America's Wholesale Lender in the principal amount of $309,000.00. As security for the payment of the note, Steve Boodram and Debbie Boodram executed a mortgage that was recorded on July 3, 2004. The parties then entered into a new mortgage and note in the principal amount of $43,553.68 dated August 19, 2005 and a Consolidation, Extension, and Modification Agreement dated August 19, 2005 to form a single lien in the amount of $348,000.00. The mortgage was assigned to the plaintiff by assignment of mortgage dated July 22, 2011. The complaint asserts that the mortgagors failed to pay the monthly installment on April 1, 2010 as well as the monthly installments which became due each month thereafter. The plaintiff accelerated the mortgage and elected to have the entire principal sum and all amounts still owing under the note be due and payable in full immediately.

The defendants were served with copies of the summons and complaint on October 4, 2011. Defendants, pro se served a verified answer with affirmative defenses on October 14, 2011. The plaintiff served a RJI one year later on November 27, 2012. On June 24, 2013, Elizabeth Lynch, Esq. of MFY Legal Services appeared for the defendants solely for the purpose of settlement conference negotiations occurring in the Residential Foreclosure Conference Part.

Defendants now move for an order directing the plaintiff to waive all interest and fees charged on the subject mortgage starting from September 23, 2011. Defendant asserts that the plaintiff has not negotiated in good faith as required by CPLR [*2]3408 and also waited an inordinately long time to file an RJI that triggers the court-supervised settlement conference. It is also asserted that even after the RJI was filed, plaintiff was dilatory in meeting court deadlines to make a determination on the Boodram's requests for loan modifications. Defendants assert that during the delays, interest and fees continued to accrue to plaintiff's benefit and as the mortgage loan arrears continue to rise the possibility of a modification becomes less affordable. Therefore, the defendants seek a tolling of interest and fees.

In support of the motion the defendants submit affidavits from Steve Boodram and Elizabeth M. Lynch. In his affidavit, Steve Boodram states that he is employed as a pastor of a local church which he owns and his wife is employed as a teacher at a local school. He states that when he began to fall behind in his mortgage payments in 2010 he applied to Bank of America for a mortgage modification. He continued with the modification process without an answer until he received a letter for a foreclosure conference on March 18, 2013. In May 2013, he retained MFY to represent him in the Foreclosure Settlement Part. In July 2013 he learned that Nationstar was now the servicer of his loan. He stated that he submitted numerous applications to Nationstar for a loan modification. In July 2014 he received a letter from Gross Polowy, plaintiffs new counsel, asking him to submit a new modification application. He states that he has submitted all of the documents requested but he has not as yet received an response to his application.

Ms. Lynch also submits an affirmation in support of the motion. She states that the defendants are entitled a tolling of the loan interest on the ground that they have failed to negotiate in good faith as required by CPLR 3408. She states that on June 24, 2013 she first emailed the Boodrams modification application to the Druckman Law Group, the law firm that commenced the instant action.

Counsel states the defendants appeared at a settlement conference on July 1, 2013. However, the case was adjourned to August 21, 2013 for plaintiff to review the modification application.

On August 21 2013, the Druckman firm informed the referee that Nationstar was now the defendants' servicer and Nationstar needed additional documents. The Referee directed the plaintiff to render a decision by October 16, 2013 and adjourned the matter to November 18, 2013 for conference.

On November 18, 2013 plaintiff's counsel stated it had [*3]transmitted the Boodrams' September 10, 2013 documents to Nationstar. However, the Referee directed the Boodrams to submit a new application by December 13, 2013 and ordered the plaintiff to render a decision by January 14, 2014. The matter was adjourned to March 14 2014 and the court directed a representative of the plaintiff to appear on the next conference date.

Ms. Lynch states that she sent a new modification application to the Druckman Firm on December 12, 2013. On March 6, 2014 she received a email from Druckman stating that the Boodrams' modification application had gone stale and a new modification application needed to be submitted.

At the conference on March 14, 2014, Druckman informed the Referee that the Boodrams' February 20, 2014 document submission was submitted too late and a new application was required. The Referee directed the Boodrams to submit another entirely new application by April 16, 2014 and adjourned the case to April 22, 2014 so the Druckman Firm could acknowledge receipt of the documents. Further the plaintiff's representative who appeared at the March 14, 2014 conference, Karen Monroy, lacked authority to settle the case ostensibly because the bank dd not have a full package to review.

On April 22, 2014, plaintiff's counsel advised that it received the Boodrams' April 16th application, forwarded it to Nationstar, and stated that no other documents were needed.

On May 8, 2014, Gross Polowy LLC was substituted as attorneys of record for the plaintiff in place of the Druckman Law Group PLLC.

On May 30, 2014, Druckman stated that Nationstar now needed proof of the Boodrams' extension to file 2013 taxes. On June 2, 2014, Boodrum brought the required documentation. The Referee then directed plaintiff to render a decision by July 8, 2014 and adjourned the conference to August 6, 2014 and ordered a bank representative to appear at the next conference.

On August 6, 2014, an attorney from Gross Plowy, Margaret Carruci, Esq., informed the court that a consent to change plaintiff's attorney had been filed changing plaintiff's counsel from Druckman to Gross Polowy. Gross Polowy provided defendants with a reinstatement letter showing that as of July 31, 2014, the amount to reinstate the mortgage was $119,568.66. In July 2013, [*4]one year prior the reinstatement amount was $96,451. Counsel contends that in the one year that the loan modification applications were pending the delinquent interest, fees and costs charged to the mortgage was $25,354.67. She states that over the past three years since the action was commenced approximately $75,000 has been added to the mortgage in interest and fees.

At the August 6, 2014 conference, a bank representative, Mr. Berninger, appeared and stated that Druckman never transmitted the Boodrams' 2013 proof of filing tax extension to Nationstar. On August 6, 2014 counsel transmitted the document to Mr. Berninger. At that time the counsel informed the Referee that defendants would move to toll the mortgage interest but that plaintiff should continue to review the Boodrams' modification application. The Referee directed the bank to make a determination by August 18, 2014. As of August 25 2o14, there was no decision on the Boodrams' modification application. Counsel has submitted several court decisions in which the courts have tolled the interest where it was demonstrated that the bank had not negotiated in good faith.

Counsel asserts that plaintiff breached its statutory duty to negotiate in good faith by violating court directives and engaging in dilatory tactics. Citing US Bank NA v Sarmiento, 121 AD3d 187 [2d Dept. 2014], counsel states that the Second Department has recently held that where the settlement conference process is unnecessarily delayed by the plaintiffs, the plaintiff has failed to act in good faith within the meaning of CPLR 3408(f). Counsel asserts that the plaintiff's dilatory tactics, misrepresentations, and disregard of Court directives delayed the settlement conference process. Further, counsel asserts that for almost three years the plaintiff required the Boodrams to submit three full applications for loan modifications and required them to continuously submit additional documents.

In addition, the defendants allege that the plaintiff failed to file an RJI for more than years keeping the case on the shadow docket. Defendants also state that the plaintiffs failed to review the Boodrams' June 24 2013 modification application, required a second application without reviewing the first application and then required a third application on March 6, 2014 stating the prior applications were stale. Counsel also asserts that the plaintiff's delayed the process by failing to make a decision on the applications by the dates directed by the Referee on five separate occasions including October 16, 2013, January 14, 2014, May 27, 2014, July 8, 2014, and August 18, 2014. In view of the plaintiff's delay Defendants request that the court waive all interest and fees charged to the mortgage [*5]from September 2011, the date the summons and complaint was filed.

Subsequent to the submission of the motion the defendant supplemented its motion on November 18, 2014 and February 2, 2015 by submitting additional cases to the court including the recent Second Department case of U.S. Bank N.A. v Smith, 123 AD3d 914 [2d Dept. 2014], decided in December 2014 in which the court held that pursuant to CPLR 3408, the parties at a mandatory foreclosure settlement conference are required to negotiate in good faith to reach a mutually agreeable resolution. The purpose of the good faith requirement is to ensure that both plaintiff and defendant are prepared to participate in a meaningful effort at the settlement conference to reach resolution (see US Bank N.A. v Sarmiento, 121 AD3d 187 [2d Dept. 2014]). "To conclude that a party failed to negotiate in good faith pursuant to CPLR 3408(f), a court must determine that "the totality of the circumstances demonstrates that the party's conduct did not constitute a meaningful effort at reaching a resolution" (US Bank N.A. v Sarmiento, supra).

In opposition, plaintiff's counsel, James J. Casser, Esq. disputes the factual allegations set forth by the defendants and claims that the delay was not only occassioned by the plaintiff but that the defendants also are to blame for the breakdown in communication. Counsel asserts that the bank attemprted to reach the defendants by phone on over 100 ocassions and also went to the premises and ran skip races to comunicate with the defendats so that deficiencies in the applications could be cured. Plaintiff asserts that the defendants failed to submit a completed application in time for Nationstar to render a decision. Counsel claims that although mistakes were made by plaintiff's prior counsel, the mistakes do not show a lack of good-faith negotiations. Counsel states that he failure to modify the mortgage resulted from mutual errors and the accrual of interest during the time of the residential foreclosure conferences is not completely plaintiff's fault.

Based upon the discrepencies in the factual allegations put forth by the parties, this court finds that there are questions of fact as to whether the plaintiff and defendants have exhibited good faith during negotiations in the foreclosure settlement part pursuant to CPLR 3408 and whether there was a a meaningful effort at reaching a decision. The Courts have held that he exercise of discretion with regard to the tolling of interest will be governed by the particular facts in each case, including any wrongful conduct by either party (see Danielowich v PBL Dev., 292 AD2d 414 [2d Dept. 2002]).

Accordingly, the parties and counsel are directed to appear for a hearing to be held in Room 304 of the Queens County Supreme Court, located at 25-10 Court Square, Long Island City, New York, 11101, at 10:00 a.m on June 8, 2015.

Notify counsel

Long Island City, NY

______________________________

ROBERT J. MCDONALD

J.S.C.