The following e-filed documents, listed by NYSCEF document number (Motion 001) 7, 8, 9, 10, 11, 12, 13, 14, 15 were read on this motion for DISMISSAL.

The following e-filed documents, listed by NYSCEF document number (Motion 002) 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51 were read on this motion for DISMISSAL.

In motion sequence 001, defendants, Bank of America, N.A., and Mortgage Electronic Registration Systems, Inc. (MERS), move to dismiss the complaint of plaintiffs, Richard Jarrett [*2]and Tenants for 193 Edgecombe Avenue, under CPLR 3211 (a) (1) and (a) (7). In motion sequence 002, defendants, Wilmington Trust, National Association, as Successor Trustee to Citibank, N.A. as Trustee of Structured Asset Mortgage Investments II Inc., Bear Stearns Alt-A Trust II, Mortgage Pass-through Certificates Series 2007-1, and Specialized Loan Servicing, LLC, move to dismiss plaintiffs' complaint under CPLR 3211 (a) (1), (a) (3), (a) (5), (a) (7), and (a) (8), and seek sanctions under 22 NYCRR 130-1.1.

Motion sequence 001 is granted as unopposed. Motion sequence 002 is granted in part and denied in part.

Jarrett owned real property at 193 Edgecombe Avenue in Manhattan. In 2007,^[FN1] he executed a first mortgage to secure payment of a $900,000 promissory note in favor of Countrywide Home Loans, Inc.^[FN2] This mortgage was recorded on August 7, 2007. In 2011, the mortgage was assigned by MERS, as nominee for Countrywide, to Citibank. On July 11, 2014, the mortgage was assigned by Citibank to Wilmington Trust, as successor to Citibank, by a second assignment of mortgage.

After Jarrett defaulted on his repayment obligation in 2011, Citibank brought a foreclosure action in Supreme Court, New York County.^[FN3] (See NYSCEF No. 9 [foreclosure action summons and complaint].) Jarrett appeared in the foreclosure action through counsel. Citibank obtained summary judgment on May 12, 2015. (See NYSCEF No. 12 at 2 [Shlomo S. Hagler, J.].) Citibank then moved for a judgment of foreclosure and sale. In 2018, the court (Judith N. McMahon, J.) denied Jarrett's motion to dismiss and granted Citibank's motion for judgment of foreclosure and sale. (Id.) Jarrett then moved to reargue, but withdrew the motion on February 19, 2019. A notice of sale was filed on November 13, 2019, and the property was sold at auction on December 11, 2019.

On January 27, 2022, Jarrett (individually and on behalf of the alleged tenants) filed a motion in the original foreclosure action to set aside the sale of the property. Supreme Court (Francis A. Kahn, III, J.) denied the motion on March 18, 2022. (NYSCEF No. 12 at 2.) Jarrett then moved to reargue the court's March 2022 order denying his motion to set aside the sale. The court (Kahn, J.) denied that motion on September 16, 2022. (NYSCEF No. 18 at ¶ 11.)

On August 29, 2022, plaintiffs brought this action, asserting six claims. The first three [*3]causes of action seek cancellation of the deed and the first and second assignments of mortgage under Real Property Law (RPL) § 329. The fourth cause of action alleges slander of title. The fifth cause of action alleges civil fraud and forgery in execution of the assignments. The sixth cause of action alleges violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USC § 1961 et seq.).

On motion sequence 001, Bank of America and MERS move to dismiss plaintiffs' claims against them. The motion is granted. On motion sequence 002, Wilmington Trust and Specialized Loan Servicing move to dismiss plaintiffs' claims against them and for sanctions. The motion to dismiss is granted; the request for sanctions is denied.

Bank of America and MERS move to dismiss the claims against them under CPLR 3211 (a) (5), arguing that those claims are barred by claim and issue preclusion, are partially time-barred, and fail in any event to state a cause of action. The motion is granted as unopposed.

Wilmington Trust and Specialized Loan Servicing move to dismiss plaintiffs' complaint (1) under CPLR 3211 (a) (5), as barred by issue preclusion and the statute of limitations; (2) under CPLR 3211 (a) (3) and (a) (7), for lack of standing and failure to state a cause of action; and (3) under CPLR 3211 (a) (1), based on a defense founded on documentary evidence.^[FN4] The Wilmington Trust and Specialized Loan Servicing defendants also move for sanctions under 22 NYCRR 130-1.1.

a. Issue preclusion

Issue preclusion applies when "(1) the issues in both proceedings are identical, (2) the issue in the prior proceeding was actually litigated and decided, (3) there was a full and fair opportunity to litigate in the prior proceeding, and (4) the issue previously litigated was necessary to support a valid and final judgment on the merits." (Conason v Megan Holding, LLC, 25 NY3d 1, 17 [2015].)

Defendants argue that plaintiffs' complaint is no more than an attempt "to relitigate the issue of standing that has already been decided years ago in the foreclosure action." (NYSCEF No. 17 at ¶ 21.) Plaintiffs respond that "it is undisputed that the issues of the legal entitlement, and ownership were not fully addressed." (NYSCEF No. 41 at ¶ 43.) Jarrett asserts that his former attorney raised these issues in the 2011 foreclosure action on a cross-motion, but that after the attorney passed away, plaintiff's new attorney "removed the cross-motion, and thus the arguments were waived on default." (Id.) Plaintiff claims that his attorney's waiver shows "that [plaintiffs] did not have a full and fair opportunity" to litigate. (Id. at ¶ 45.) But by attesting to his attorneys' decisions to raise and then waive these issues, plaintiff proves the opposite—that he did have a full and fair opportunity to litigate the issues. Issue preclusion therefore bars [*4]Jarrett's claims in this action.

The tenants on the other hand, were not parties to the prior action. Their claims here are therefore not precluded. Defendants argue that tenants were not named in that action because "pursuant to prior owner Richard Jarrett . . . , there [were] none." (NYSCEF No. 50 at ¶ 24.) But regardless why defendants did not name tenants, that tenants did not have an opportunity to litigate these issues in the prior action means that issue preclusion does not bar tenants' claims.

b. Statutes of limitations

Defendants contend that plaintiffs' first, second, fourth, fifth, and sixth causes of action are barred by the statutes of limitations. (NYSCEF No. 17 at ¶¶ 27-34.) This court agrees.

Defendants claim that the first, second, and fifth causes of action are time-barred under the six-year statute of limitations applicable to RPL § 329 and civil fraud and forgery claims, because the second assignment of mortgage was recorded on September 3, 2014—more than six years before plaintiffs brought this action in 2022. Plaintiffs argue in response that the statute of limitations was tolled based on the continuing-wrong doctrine. Plaintiffs claim that each time defendants retained new attorneys those "attorneys reviewed, believed and filed documents based on the fraud," and thus "each time was a new occurrence and tolled the statute of limitations." (NYSCEF No. 41 at ¶ 54.) But the continuing-wrong doctrine "may only be predicated on continuing unlawful acts," i.e., on a "series of independent, distinct wrongs," rather than on "the continuing effects of earlier unlawful conduct." (Henry v Bank of Am., 147 AD3d 599, 601 [1st Dept 2017].) There is no merit to plaintiffs' contention that defendants' retention of new counsel would constitute an "independent, distinct wrong."

Defendants assert that plaintiffs' fourth cause of action is time-barred by the one-year statute of limitations applicable to slander of title, based on the date the second assignment was recorded (September 3, 2014) and the date the Office of the City Register recorded the referee's deed (June 1, 2021).^[FN5] Plaintiffs do not oppose defendants' claim that the applicable statute of limitations bars plaintiffs' slander-of-title cause of action.

Defendants assert that plaintiffs' sixth cause of action is time-barred by the four-year statute of limitations applicable to RICO claims. Defendants contend that plaintiffs knew or should have known of their injury either when the foreclosure action commenced (November 17, 2011), or, at the latest, when plaintiffs received defendants' notice of motion to amend the caption to substitute Wilmington Trust into the foreclosure action (June 4, 2018). Plaintiffs, however, argue that "the time for the statute of limitations has tolled"—without further explanation—and that "[t]he fraud and misrepresentations were quite complex, and therefore it was only recently that the Plaintiffs had knowledge of the fraud." (NYSCEF No. 41 at ¶¶ 60, 65.) But for RICO purposes, the statute of limitation's accrual date is not based on when a plaintiff "discovered the underlying fraud," but only when the plaintiff "knew or should have [*5]known" of the fraud. (Izmirligil v Steven J. Baum, P.C., 180 AD3d 767, 771 [2d Dept 2020].) This court therefore agrees with defendants that the date of accrual was the day on which the foreclosure action commenced. And plaintiffs' conclusory assertion that the statute of limitations was tolled is insufficient to rebut defendants' claims.

The court thus grants defendants' motion to dismiss plaintiffs' first, second, fourth, fifth, and sixth causes of action based on the applicable statutes of limitations.

c. Standing

Defendants argue that plaintiffs' third cause of action must be dismissed under CPLR 3211 (a) (3), which authorizes dismissal when "the party asserting the cause of action has not legal capacity to sue." Plaintiffs' third cause of action is premised on RPL § 329. That provision allows "[a]n owner of real property" to maintain an action to declare as void any recorded instrument in writing concerning real property.

On a motion to dismiss, "the facts pleaded in the complaint must be taken as true and are accorded every favorable inference." (Maas v Cornell Univ., 94 NY2d 87, 91 [1999].) A court, however, need not consider "allegations consisting of bare legal conclusions as well as factual claims flatly contradicted by documentary evidence." (Id. [internal quotation marks omitted].) Here, defendants have submitted documentary evidence establishing that the court-appointed referee assigned a deed to the premises to Wilmington Trust on March 29, 2021. (NYSCEF No. 25 [recorded deed].) And plaintiffs have not submitted admissible evidence refuting Wilmington Trusts' ownership of the premises pursuant to the deed. Nor are plaintiffs parties to the assignment or the deed.

Plaintiffs' sole argument with respect to Jarrett is instead that he "is the true owner of the property," because "untruthful and fraudulent security instruments" are the only factors "hampering his entitlement." (NYSCEF No. 41 at ¶ 12.) The court is unpersuaded. Jarrett is seeking to declare void various property-related instruments and thereby vindicate his assertion of ownership of the property. But he must already be the owner, legally speaking, to have standing to seek those declarations in the first place. Jarrett is not now the owner of the property. He lacks standing under RPL § 329.

With respect to the tenants, plaintiffs claim that because the foreclosure action did not sever their tenancy, tenants "fall within the scope of what the legislature was intending for RPL § 329." (NYSCEF No. 41 at ¶ 13.) But only "[a]n owner of real property . . . or an owner of rent to accrue from a tenancy or subtenancy" may maintain an action under RPL § 329. Plaintiffs do not cite case law, or any other authority, for their assertion that tenants may maintain an action under that section; and this court's research has uncovered none. And the court declines to read § 329 as providing tenants this right of action.^[FN6]

Defendants' motion to dismiss this cause of action for lack of standing is granted.

d. Failure to state a claim

Defendants also argue that plaintiffs' first, second, and third causes of action must be dismissed because "Specialized Loan Servicing LLC is not a party to any such transaction, and Wilmington as a trustee entity is not a party to an assignment in its own right and is not properly named in an action [under] Real Property Law § 329." (NYSCEF No. 17 at ¶ 10, citing Izmirligil v Steven J. Baum, P.C., 180 AD3d 767, 770 [2d Dept 2020] [holding that a trustee entity is not a party to an assignment].) Plaintiffs' arguments in opposition amount to no more than conclusory allegations that Specialized Loan Servicing "was the party[ ] who signed and executed the assignment" and that, because "the loan could not have been in the trust," Wilmington Trust was the party to the assignment.^[FN7] (NYSCEF No. 41 at ¶¶ 17, 20.) The court agrees with defendants. Plaintiffs' complaint alleges that Specialized Loan Servicing acted not as a party to one or both assignments, but rather as "the ones[] who executed the second assignment." (NYSCEF No. 19 at ¶ 9.) And as to Wilmington Trust, plaintiffs' argument does not contest that Wilmington Trust is acting as a trustee entity and is therefore not a party to the assignment.

In terms of plaintiffs' fourth cause of action, a slander-of-title claim requires that plaintiffs prove "(1) a communication falsely casting doubt on the validity of complainant's title, (2) reasonably calculated to cause harm, and (3) resulting in special damages." (Fink v Shawangunk Conservancy, Inc., 15 AD3d 754, 756 [3d Dept 2005].) As proof of their claim, plaintiffs assert that defendants "have submitted documents to the County Clerk of New York, and courts, and ACRIS, including the invalid Assignments and the invalid and misleading lis pendens, and made allegations that are misleading and doubtful." (NYSCEF No. 19 at ¶ 87.) Defendants argue that this claim should be dismissed because plaintiffs "allege no communication with any other party, no communication calculated to cause harm, and state no special damage as a result." (NYSCEF No. 17 at ¶ 13.) Further, as defendants note, plaintiffs are not owners of the premises. (NYSCEF No. 50 at ¶ 14.)

The court agrees with defendants. There is no "evidence of the malicious intent necessary to support a cause of action for slander of title," nor is there any proof that the assignments were false. (See Fink, 15 AD3d at 756 [denying the slander-of-title claim where malicious intent was not proven and where "defendant had probable cause to claim title to the disputed property"].) Further, plaintiffs have not satisfactorily pleaded special damages. Specifically, plaintiffs request $250,000 for defendants' actions, which "caused the Plaintiffs to sustain significant damage to their credit and financial[ ] and emotional harm," and also "hampered[ ] and significantly damaged marketability of the title." (NYSCEF No. 19 at ¶¶ 90-91 [plaintiffs' complaint].) New York courts require that special damages be pleaded with "sufficient particularity." (Drug Research Corp. v Curtis Publ. Co., 7 NY2d 435, 440-441 [1960] [holding that special damages [*6]must be "fully and accurately stated" and where the damage claimed is $5,000,000, "[s]uch round figures, with no attempt at itemization, must be deemed to be a representation of general damages"].) And as the Court of Appeals has noted, "[t]he most usual manner in which a third person's reliance upon disparaging matter causes pecuniary loss is by preventing a sale to a particular purchaser." (Rosenbaum v City of New York, 8 NY3d 1, 12 [2006] [internal quotation marks omitted].) Here, plaintiffs do not allege any such occurrence.

Plaintiffs' sixth cause of action alleges civil racketeering under RICO. To state a claim under RICO, "a plaintiff must allege that a defendant, employed by or associated with an enterprise affecting interstate or foreign commerce, conducted or participated in the conduct of this enterprise's affairs through a pattern of racketeering activity." (Greenberg v Blake, 2010 WL 2400064, *4 [ED NY 2010].) Defendants argue that their interactions "were ordinary business relationships" that did not constitute an "enterprise" under RICO. (NYSCEF No. 17 at ¶ 19.) Plaintiffs respond that "courts have broadly interpreted the term 'enterprise'" and that they "have found a mortgage pool or trust can be considered an enterprise." (NYSCEF No. 41 at ¶¶ 32, 35, citing Heller v First Town Mortg. Corp., 1998 WL 614197, *7 [SD NY 1998] [concluding that "a mortgage pool is an enterprise because it comprises numerous investors who have combined for a common purpose: to have their mortgages jointly managed"].) But even if a mortgage pool may constitute a RICO enterprise, plaintiffs have not pleaded a viable RICO claim.

An enterprise under RICO is "a group of persons associated together for a common purpose of engaging in a course of conduct, which is proved by evidence of ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit." (Greenberg, 2010 WL2400064, *4 [internal quotation marks omitted].) To plead the existence of an enterprise properly, plaintiff "must provide solid information regarding the hierarchy, organization, and activities of the alleged enterprise, from which [the court] could fairly conclude that its members functioned as a unit." (Id. [internal quotation marks omitted].) Plaintiffs have failed to do so here. Other than their conclusory assertions that defendants' actions were sufficiently unified to represent an enterprise, plaintiffs do not present specific factual or evidentiary claims concerning the organization of defendants' enterprise. Plaintiffs assert in their opposition papers that defendants had "a common and shared purpose" and that they "each have their own other businesses that are different from their scheme." (NYSCEF No. 41 at ¶¶ 34, 36.) But, again, these conclusory claims—without any factual support—fail to establish the existence of an enterprise and that the enterprise was "distinct from the individuals comprising it." (Greenberg, 2010 WL2400064, *4 [noting that an enterprise cannot be "simply the same 'person' referred to by a different name"].)

Plaintiffs' complaint against these defendants fails to state a cause of action.

e. Dismissal based on documentary evidence

Defendants claim that this action should be dismissed under CPLR 3211 (a) (1) because "both assignments and deed are validly recorded, and the Order entering Judgment of Foreclosure and Sale, the Order Denying the motion to set aside the sale and Order denying the Motion to deed upon which it paid the purchase price of $1,512,000.00 clearly show the Defendant held a valid interest upon which it foreclosed and obtained a valid referee." (NYSCEF No. 17 at ¶ 40.) Plaintiffs argue that defendants' reliance on the recorded assignments is "conclusory and inadequate" because under RPL § 321 (2) (b) "the county clerk was required to file and record the certificate at issue, and assume it was properly acknowledged." (NYSCEF No. 41 at ¶ 71.) Plaintiffs further assert that the judgments are not unambiguous because "the [*7]issues surrounding this matter were never addressed." (Id. at ¶ 73.) But because this court has determined that the assignments and deed are, in fact, valid based on the decisions in the 2011 foreclosure action, it concludes that these documents are unambiguous. Further, the court is unpersuaded by plaintiffs' argument that because the county clerk was obligated to record the assignments defendants' claims are conclusory.

Thus, the count grants defendants' motion to dismiss under CPLR 3211 (a) (1).

f. Sanctions under 22 NYCRR 130-1.1

Finally, defendants assert that sanctions are warranted because "[t]his entire, time barred meritless cause of action against a litany [of] parties was clearly meant as a dilatory action to delay the ongoing eviction proceeding and harass the Defendants." (NYSCEF No. 17 at ¶ 50.) Plaintiffs argue that because "the Complaint had merit, . . . sanctions are improper." (NYSCEF No. 41 at ¶ 85.)

Plaintiffs' claims, although meritless, do not rise to the level of being sanctionably frivolous. And defendants provide no factual support for their assertion that plaintiffs' intent in bringing these claims was merely improper delay.

Accordingly, it is

ORDERED that the motion to dismiss of defendants Bank of America and MERS (mot seq 001) is granted, and the complaint is dismissed as against these defendants, with costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further

ORDERED that the branch of the motion brought by defendants Wilmington Trust and Specialized Loan Servicing that seeks dismissal of plaintiffs' claims against them (mot seq 002) is granted, and the complaint is dismissed as against these defendants, with costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further

ORDERED that the branch of the motion brought by defendants Wilmington Trust and Specialized Loan Servicing that seeks sanctions against plaintiffs (mot seq 002) is denied; and it is further

ORDERED that the action is severed and continued against the remaining defendants First Equities, Inc., Susan Barrie, Esq., New York City Department of Finance, ABC Corporation, John Doe, and Jane Doe; and it is further

ORDERED that the caption be amended to reflect these dismissals and that all future papers filed with the court bear the amended caption; and it is further

ORDERED that plaintiffs serve a copy of this order with notice of its entry on all parties; on the office of the County Clerk, which shall grant judgment accordingly; and on the office of the General Clerk, which shall amend the caption and update its records accordingly.