Nationstar Mtge., LLC v Restifo

Supreme Court, Schenectady County

Decided on May 27, 2026

Index No. 2019-1892

Thomas D. Buchanan, J.

Plaintiff has moved for several forms of relief, including summary judgment pursuant to CPLR 3212 in favor of Plaintiff and against defendants Restifo and Cramer ("Defendants"), dismissal pursuant to CPLR 3211(b) of the defenses and counterclaims asserted in the Answer served by Defendants, and default judgment pursuant to CPLR 3215 against all non-appearing defendants. This is an action to foreclose a mortgage on real property. Plaintiff has submitted an affidavit from its counsel and an affidavit from its Executive Vice President outlining the factual basis for Plaintiff's claim. The NYSCEF file for this action contains copies of the pleadings and exhibits, Notice of Pendency and affidavits of service.

Summary Judgment. The standard for deciding a summary judgment motion is well established. The proponent of the motion bears the initial burden of making a prima facie showing of its entitlement to judgement as a matter of law by submitting sufficient evidence to show that no material issues of fact exist. This initial burden must be carried irrespective of the sufficiency of papers submitted in opposition (See, Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851 [1985]). If the initial showing is made, then the burden of proof shifts to responding party to produce evidence sufficient to establish the existence of material fact issues requiring trial (Alvarez v. Prospect Hosp., 68 NY2d 320 [1986]). Both the movant and the respondent must submit evidence in admissible form (Zuckerman v. City of New York, 49 NY2d 557 [1980]). The facts must be construed in a light most favorable to the non-moving party (See, e.g., Hanna v. St. Lawrence County, 34 AD3d 1146 [3rd Dept 2006]).

In a mortgage foreclosure case, the plaintiff moving for summary judgment must produce the mortgage and unpaid note, together with evidence of the mortgagor's default, in order to make a prima facie showing of entitlement to judgment as a matter of law (see e.g. Marshall v. Alaliewie, 304 AD2d 1032 [3d Dept 2003]; Great Western Bank v. Terio, 200 AD2d 607 [2d Dept 1994]). Here, Plaintiff submits the Affirmation of Kathy Winchester with annexed exhibits including the note, mortgage and payment history. Ms. Winchester makes two statements as to [*2]Defendants' default. Chronologically, she first asserts that in September of 2017 the loan was current but became delinquent "after that point" and, while payments were made that "advanced the due date," the delinquency was never cured. Second, Ms. Winchester states that as of the date this action was commenced, the loan was due for the March 1, 2019, payment and all subsequent payments. The notice of default letter and the RPAPL §1304 90-day letter annexed to the Winchester Affirmation are both dated May 6, 2019, and indicate that the subject loan was past due for all payments after February of 2019.

The payment history annexed to the Winchester Affirmation does not include any transactions in 2017. In 2018, the payment history appears to show gaps in monthly payments, but it also has several entries for "forbearance suspense" and "forbearance adjustment," terms that are not explained in the Winchester Affirmation. In apparent contradiction of the description given by Ms. Winchester, the payment history shows payments made in January, February, March, April, and May of 2019. Given these inconsistencies in the evidence submitted, Plaintiff does not carry its initial summary judgment burden of proof.

Dismissal. Technically, a motion to dismiss a defense is brought under CPLR 3211(b), while a motion to dismiss a counterclaim should be brought under CPLR 3211(a) (see John R. Higgitt, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3211:34). However, Plaintiff's motion to dismiss Defendants' counterclaims basically asserts failure to state a claim (CPLR 3211 [a][7]), for which the standard to be applied by the Court is very similar to that applied to a motion under CPLR 3211(b), pursuant to which a party may move to dismiss one or more defenses on the grounds that a defense is not stated or has no merit. A court addressing a §3211(b) motion must construe the Answer liberally and afford the defendant the benefit of every reasonable inference, just as must be done under §3211(a)(7) (compare Leon v. Martinez, 84 NY2d 83, 88 [1994] with Bank of New York v. Penalver, 125 AD3d 796 [2d Dept 2015]). Under §3211(a)(7), a court must determine only whether the allegations fit within a cognizable legal theory (Leon, 84 NY2d at 87-88), while under §3211(b), any doubt as to the availability of the defense should be resolved in favor of the defendant (Brodeur v. Hayes, 305 AD2d 754 [3d Dept 2003]). In the interest of judicial economy, the Court will treat Plaintiff's motion as having been brought under both paragraphs of §3211.

Defendants assert one affirmative defense and three counterclaims. Defendants' "First Affirmative Defense and Counterclaim" alleges negligence by Plaintiff in the conduct of its business. The second counterclaim alleges gross negligence. Plaintiff argues that the relationship between Plaintiff and defendants is contractual and cannot give rise to a claim of negligence. True, in order to pursue a negligence claim arising from a contractual relationship, a plaintiff must show a legal duty independent from those imposed by the contract (North Shore Bottling Co. v. C. Schmidt & Sons, 22 NY2d 171 [1968]). Such an independent duty can arise from the relationship between the contracting parties (Sommer v. Federal Signal Corp., 79 NY2d 540 [1992]). The relationship between a borrower and a mortgage loan servicer, however, is not one that gives rise to a duty independent of the contract (see e.g. Pirrelli v. OCWEN Loan Servicing, LLC, 129 AD3d 689 [3d Dept 2015]). Defendants' first counterclaim sounding in negligence therefore lacks the element of duty and cannot stand.

The second counterclaim, which seeks punitive damages for gross negligence, requires Plaintiffs to allege that (1) the defendant's conduct is actionable as an independent tort, (2) the tortious conduct is of an egregious nature and involves high moral culpability, (3) the egregious conduct is directed toward Plaintiffs, and (5) it is part of a pattern directed at the public generally [*3](Hobish v. AXA Equitable Life Ins. Co., 43 NY3d 442 [2025]). With no independent duty, there can be no independent tort, and the second counterclaim fails as well.

At the same time, however, evidence of bad faith, fraud or oppressive conduct can operate to relieve a mortgagor's default (Consolidated Mortgage, LLC v. Westport Golf Investors, LLC, 141 AD3d 923 [3d Dept 2016]). Defendants' allegations as to Plaintiff's conduct surrounding the initiation of this foreclosure action are sufficient to articulate that affirmative defense. While the First Affirmative Defense and Counterclaim fails as a counterclaim, it survives as an affirmative defense.

Defendants' third counterclaim alleges deceptive business practices in violation of General Business Law §349. A plaintiff bringing a §349 claim must plead and prove (1) the challenged act or practice was consumer oriented, (2) it was misleading in a material way, and (3) the plaintiff suffered injury as the result of the deceptive act (Gregg v. SN Servicing Corp., 2025 WL 2922391, 2025 NY Slip. Op 05672 [2d Dept 2025]). Plaintiff argues that its actions in connection with the mortgage transaction were not consumer-oriented conduct, being undertaken only in relation to its private contract with Defendants.

The allegations in the third counterclaim assert that Plaintiff has employed objectionable business practices against Defendants "and others." In their responding papers on this motion, Defendants point to actions taken against Plaintiff by federal and state agencies, as well private individuals via class action, for policies and actions that Defendants allege are similar to Plaintiff's behavior toward them. While the allegations in the third counterclaim are rather brief, they do fit withing a cognizable legal theory; namely, §349. It must be noted, however, that the damages available to Defendants are limited by the statute. Even if Defendants are ultimately awarded treble damages under §349(h), those damages will be limited to a maximum of $1,000.00 (Hobish, 43 NY3d at 457- 58), and in the discretion of the Court, reasonable attorney's fees.

Plaintiff's submissions are also sufficient to show that the remaining defendants, although served with process, are in default in pleading or appearing.

Therefore, in consideration of the foregoing, it is hereby

ORDERED, that Plaintiff's motion for summary judgment is denied; and it is further

ORDERED, that Plaintiff's motion to dismiss Defendants' affirmative defenses and counterclaims is granted in part and Defendants' first and second counterclaims are hereby dismissed; and it is further

ORDERED, that Plaintiff's motion to dismiss is otherwise denied, so that Defendants' first affirmative defense and third counterclaim remain viable; and it is further

ORDERED, that Plaintiff's motion for default judgment against defendant Pioneer Savings Bank is granted and the default is fixed and determined pursuant to CPLR §3215.

Dated: May 27, 2026

ENTER.

Thomas D. Buchanan

Supreme Court Justice

Papers Considered:

Notice of Motion; Affirmation of Kathy Winchester, with annexed exhibits; Affirmation of Regularity of Douglas C. Weinert, Esq. with Exhibits A through P; Memorandum of Law; [*4]Affirmation of Wayne A. Cramer, with annexed exhibits; Attorney Affidavit of David H. Pentkowski, Esq., with annexed exhibits.