2011-ny-slip-op-32828-u-0Judge: Joan A. Madden

7/29/2019 2011-ny-slip-op-32828-u-0Judge: Joan A. Madden

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Bank of Am., N.A. v Seon Yeong Kang

2011 NY Slip Op 32828(U)

October 17, 2011

Supreme Court, New York County

Docket Number: 104587/10

Judge: Joan A. Madden

Republished from New York State Unified CourtSystem's E-Courts Service.

Search E-Courts (http://www.nycourts.gov/ecourts) forany additional information on this case.

This opinion is uncorrected and not selected for officialpublication.


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N 1012512011*

S U # f % E ~ f i & ~ & ~ A T E F NEW YORK - NEW YORK COUNTYIndex Number : 104587/%6*BANK OF AMERICAKANG,SEON YEONGSequence Number :002vs

AMEND

PARTLINDEX NO.MOTION D A T EMOTION SEQ. N O .M O T I O N C A L . NO .

The fo l low ing papers , numbered 1 t o w e r e read on th is m ot i on to / fo rPAPER5 N l l M B E R W

N o t i c e of M o t i o n / Order t o S h o w C a u se - Af f i dav i t s - Exhibi ts ...A n s w e r i n g A f f i d a v lt s - Exhibi tsRep l y i ng A f f i dav i t sCross -Mo t ion : 0 Yes 0 No

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F I L E DOCT 25 2011NEW YORKCOUNTY CLERK'S OFFICE

Dated : mJOAN A. MAD$$E%JNON-FINAL DISPOSIBO[Nr] REFERENCE

Check one: FINAL DISPOSITION FCheck i f appropr ia te : n DO NOT POST

f l SUBMIT ORDER/ JUDG. 0 SETTLE ORDER/ JUDG.

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SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NEWYORK: PART 11BANK OF AMERI CA, N. A. , as Succes sor byMer ger t o LASALLE BANK NA as Tr ust eef or WAMU MORTGAGE PASS- THROUGH

- X_____I_________________________

CERTI FI CATES SERI ES 2007- OA6 TRUST,Pl ai nt i f f ,- agai ns t -

SEON YEONG KANG, CI TY CONNECTI ONS REALTYI NC. , NEWYORK CI TY ENVI RONMENTALCONTROL BOARD, NEWYORK CI TY PARKI NGVI OLATI ONS BUREAU, NEWYORK CI TYTRANSI T ADJ UDI CATI ON BUREAU, NEWYORKSTATE DEPARTMENT OF TAXATI ON AND FI NANCE,WASHI NGTON MUTUAL BANK, FA and THEDOWNTOWN CLUB CONDOM NI UM BOARD,

I ndex No. : 104587/ 10

F I L E DNEWYORKCOUNTY CLERK'S OFFICE

Seon Yeong Kang, def endant pro se ( def endant) moves,pursuant t o CPLR 3025 and 3120, f or l eave t o f i l e an amendedanswer and count ercl ai mand a demand f or t he product i on ofdoc ument s .BACKQROUND

Thi s i s an act i on t o f or ecl ose on a mor t gage and not e.Accordi ng t o the compl ai nt , def endant f ai l ed to t ender paymentf or t he mont hl y mort gage i nst al l ment s t hat became due on Oct ober1, 2009 and cont i nuousl y t her eaf t er .

Def endant st at es t hat hi s mot i on f or l eave t o amend shoul dbe grant ed because he has come acrosIs new y di scoveredi nf or mat i on t hat pl ai nt i f f lacks standi ng t o mai nt ai n thi s

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act i on. Accordi ng to def endant , pl ai nt i f f 1ac. a standi ngbecause:t he t i me that t he f orecl osure act i on was commenced; and ( 2)r ecent f ederal cases have had si ml ar compl ai nt s di amssedbecause t he pl ai nt i f f s coul d not provi de ei t her t he or i gi nalmort gage and not e or an of f i ci al l y r ecor ded assi gnment of t hemor t gage and not e pr i or t o i nst i t ut i ng t he f orecl osure act i on.

( 1) i t was not t he or i gi nal mor t gage and not e holder at

The assi gnment of t he mort gage was execut ed between theor i gi nal mor t gagee and pl ai nt i f f on February 24, 2010. Mot i on,Ex. 3. Def endant assert s t hat t hi s assi gnment was r ecordedal most si x mont hs af t er t he i nstant f orecl osure proceedi ng wascommenced. The cour t not es that t he i nst ant act i on was commencedon Apr i l 8 , 2010. I n addi t i on, def endant cl ai ms that pl ai nt i f fengaged i n unconsci onabl e busi ness pract i ces i n vi ol at i on ofsecti on 349 of t he New York Busi ness Corporat i on Law.

I n def endant s proposed amended answer , he asserts sevenaf f i rmat i ve def enses: ( 1) f r aud; (2) pl ai nt i f f f ai l ed to compl yw t h t he pr ovi si ons of t he Trut h i n Lendi ng Act , 15 USC 5 1601 etseg. ( TI LA) ; ( 3) negl i gence on the par t of pl ai nt i f f ; (4) uncl eanhands; (5) f ai l ure to j o i n i ndi spensabl e par t i es; ( 6) l ack ofst andi ng; and ( 7 ) ent i r e cont rover sy doct r i ne. I n addi t i on,def endant assert s t hree count er cl ai ms, t he f i r st based on anal l eged vi ol at i on of Busi ness Corporat i on Law (BCL) 349, t hesecond based on an al l eged vi ol at i on of T I LA, and t he thi rd

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rei t erat i ng hi s ar gument regardi ng pl ai nt i f f ' s lack of st andi ng.I n def endant ' s i ni t i al answer , whi ch was ser ved and f i l ed

l at e w th l eave of t hi s cour t on consent , def endant asser t ed si xaf f i r mat i ve def enses, based on al l eged vi ol at i ons of New YorkBanki ng Law, and one count er cl ai m al so based on vi ol at i ons ofNew York Banki ng Law. The proposed amended answer no l ongeri ncl udes t hese or i gi nal def enses or count er cl ai m

I n opposi t i on t o t he i nstant mot i on, pl ai nt i f f contends t hatdef endant ' s mot i on shoul d be deni ed because t he proposed answeri s "gr ossl y i mpr oper , " poi nt i ng t o def endant ' s deni al that he i sa resi dent of New Yor k, but gi vi ng a New York r esi dence f or hi saddress i n t he same pl eadi ng. Speci f i cal l y, w t h r espect t o eachof t he proposed def enses, pl ai nt i f f ar gues: ( 1) t he al l egat i on off r aud i s not pled w t h any speci f i ci t y;doeB not af f ect t he enf or ceabi l i t y of the under l yi ng cont ract ;( 3 ) , ( 4) and ( 7 ) , the def enses consi st of one- l i ne concl usi ons ofl aw w t hout any speci f i c al l egat i ons; ( 5) t he l ack of st andi ngdef ense i s cont radi ct ed by def endant ' s own exhi bi t , si nce t he

( 2) a vi ol at i on of TI LA

assi gnment was executed approxi matel y si x weeks bef or e thepresent act i on was commenced, and t he f ac t that i t was notrecor ded unt i l af t er commencement of thi s sui t I s i r rel evant tot he val i di t y or enf or ceabi l i t y of the assi gnment ; and ( 6) al l ofthe f oregoi ng i ndi cat es that pl ai nt i f f does have standi ng tomai nt ai n thi s act i on.

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I n i t s opposi t i on to def endant ' s pr oposed count er cl ai ms,pl ai nt i f f asser t s that def endant f ai l ed to al l ege a publ i cconsumer- r el ated wr ong, whi ch i s a r equi red el ement f ormai nt ai ni ng a cause of act i on based on a vi ol at i on of BCL 5 349,t hat TI L A i s not appl i cabl e to pl ai nt i f f because i t di d notor i gi nate the mor t gage l oan, and t hat the l ack of st andi ngargument l acks mer i t f or t he reasons ar t i cul ated above.DI SCUSSI ON

CPLR 3025 ( b) pr ovi des t hat" [ a ] party may amend hi s pl eadi ng, ox: suppl ement i t byset t i ng f or t h addi t i onal or subsequent t ransact i ons oroccur r ences, at any t i me by l eave of court or byst i pul at i on of al l par t i es. Leave Ishall be f r eel y gi venupon such t erms as may be j ust i ncl udi ng t he grant i ng ofcost s and cont i nuances. "As stat ed i n Seidrnan v I ndustri al Rec yc l i ng Pr oper t i es , Inc.

( 83 AD3d 1040, 1040- 1041 [ 2d Dept 20111) :"Leave t o amend a pl eadi ng pur suant to CPLR 3025 ( b)ahoul d be f reel y grant ed unl ess t he proposed amendmenti s pal pabl y i nsuf f i ci ent or pat ent l y devoi d of mer i t ,or unl ess prej udi ce or sur pr i se to t he opposi ng par t yresul t s di r ectl y f romt he del ay i n seeki ng l eave t oamend. "Defendant ' s mot i on i s granted i n part and deni ed i n par t ,

and countercl ai ms assert ed i n t he proposed amended answer wi l l bedi scussed i n t he order presented i n t he proposed amendment and I naccordance w t h defendant ' s ar gument s.

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: FraudAs st at ed by t he cour t i n Fr i edman v Andewaon ( 23 AD3d 163,

166 [latept Z O O S l ) ,'A mere r eci t at i on of t he el ement s of f r audi s i nsuf f i ci ent to state a cause of act i on"( Nat i onal Union F i r e I ns. Co. of Pi t t s bur gh,Pa . v Chr i s t opher A s so c . , 257 AD2d 1, 9 [lmtDept 1 99 1) . Fur t her mor e, a pl ai nt i f f seeki ngt o r ecover f or f r aud and msrepresent at i oni s requi red t o s e t f or t h speci f i c anddet ai l ed f actual al l egat i ons that t hedef endant per sonal l y par t i ci pat ed i n, or hadknow edge of any al l eged f raud" ( Handel vBruder, 209 AD2d 2 8 2 , 282- 283 [ l a' Dept 19941 1 .CPLR 3016 ( b) r equi r es that t he compl ai nt , or answer, set

f or t h the msconduct compl ai ned of i n suf f i ci ent det ai l t ocl ear l y i nf ormeach person al l eged to have comm t t ed f r aud ofwhat t hei r r espect i ve r ol es were i n t he al l eged decept i on.

I n the i nst ant mat t er def endant ' s al l egat i ons of f r aud areconcl usor y and l ack suf f i ci ent par t i cul ar i t y t o sat i sf y t her equi rement s of CPLR 3016 ( b) Accordi ngl y, def endant ' ~af f i r mat i ve def ense of f r aud i s i nsuf f i ci ent on i t s f ace.

Thi s def ense pr of f ered by def endant asser t s that hi s monthl ymor t gage bi l l di f f er s f r omt he TI LA payment schedul e t hat he waspr ovi ded by pl ai nt i f f ' s predecessor - i n- i nt erest . Def endant al socl ai ms that t he l oan was an i nt ereat - onl y l oan, w t h anadj ust abl e payment schedul e.

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The purpose of TI LA i s t o ensure a mean, ngfu 1 scl osure Oft he cost of credi t , and as l ong as t here i s cl ear di scl osure oft he requi red i nf or mat i on, m nor vi ol at i ons whi ch do not cause anypotent i al or actual harm w l l not be f ound t o vi ol at e TI LA. J PMorgan Chase Bank v Tecl, 24 AD3d 1001 ( 3d Dept 2005). However ,TILA i s a r emedi al st at ut e whi ch shoul d be al l owed a broad andl i beral const r uct i on i n f avor of t he consumer . Communi t yNati onal Bank and Trust Company of New Yoxk v McClammy, 138 AD2d339 ( 2d Dept 1988) .

12 CFR 226. 18 set s f or t h t he i nf ormat i on t hat must beprovi ded by t he TI LA di scl osur es, whi ch i ncl udes, f or l oans suchas i nt er est - onl y mor t gage not es, a det ai l ed payment schedul e.

Al though i nar t i cul at el y st at ed, def endant asser t s adi screpancy between the amount s appear i ng i n t he TI LA paymentschedul e and hi s actual monthl y bi l l s.

I n opposi t i on t o t hi s def ense, pl ai nt i f f stat es t hat a cl ai munder TI LA can never const i t ut e a def ense t o a l ender ' s act i on ona debt , ci t i ng t o Household Consumer Discount Co. v Vespanzi ani(387 A2d 93 [ Pa Super 1978] ) , a 30- year - ol d Pennsyl vani a caset hat was subsequent l y reversed ( 490 Pa 209, 415 A2d 689 [ 19801) .However, curr ent New York l aw hol ds t hat such a def ense may bei nterposed, i nasmuch as "such damages [ caused by t hatdi scr epancy] mght of f set any damage award or def i ci ency j udgmentthat m ght be made i n f avor of t he pl ai nt i f f and agai nst

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[ def endant ] " Del t a Fundi ng Co r p . v Mur daugh, 6 AD3d 571, 571-5 7 2 ( 2d Dept 2004) .

At t hi s ear l y st age of t he proceedi ngs, t he cour t f i ndsthat, i n t he i nt erests of j ust i ce, t he proper exerci se of i t sdi scret i on i s t o gr ant def endant ' s mot i on f or leave t o f i l e anamended answer w t h r espect to t hi s def ense.Thi rd af gi r mat i ve def ense: N es i qence

Defendant ' a proposed def ense stat es:"The Pl ai nt i f f ' s cl ai m i s barred because any al l eged l osst o t he Pl ai nt i f f i s caused by i t s own negl i gence, or t henegl i gence of t hi r d par t i es over whi ch t he Def endanthas no cont rol . "Thi s i s a one- l i ne l egal concl usi on, cont ai ni ng no speci f i c

al l egat i ons, and i s, t her ef or e, i nadequat e als a matt er of l aw.Fur t her , no r eason has been prof f ered as t o why such a def ensecoul d not have been i ncl uded i n t he or i gi nal answer, whi ch thi scour t permt ted def endant t o f i l e l ate.2a f f i r m at i v ed ef e x l a eUncl ean han&

Si ml ar l y to defendant ' s proposed thi rd af f i rmat i ve def ense,thi s i s a one- l i ne st at ement , pri mar i l y l egal boi l erpl at e, w thno f actual al l egat i ons provi ded nor any reason gi ven as to whyt hi s boi l erpl at e coul d not have appeared i n t he or i gi nal answer .Hence, t he cour t decl i nes t o exerci se i t s di scret i on to permtdef endant , at t hi s st age, t o i nt erpose t h i s def ense.

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b f f i r m a t i v ei f t def ense: Fai l ure t0 19 n an i ndi apenaab e partvDef endant has f ai l ed t o al l ege who t hi s i ndi spensabl e par ty

mght be, and has of f ered no expl anat i on as t o why thi sboi l erpl at e sent ence coul d not have appeared i n hi s or i gi nalanswer . Theref ore, t he cour t decl i nes to exerci se i t s di scret i onto permt def endant t o asser t t hi s unsuppor t ed def ense at t hi sj unct ur e.Sixth. aff i rmat i ve de ense: Lack of s t aqdi nq

Thi s def ense l acks mer i t , because pl ai nt i f f has made out apr i ma facie show ng of havi ng standi ng t o pur sue t hi s act i on.

St andi ng r ewi r es an i nqui ry i nt o whet her a l i t i ganthas an i nt erest . . . i n t he l awsui t t hat t he l aww i l l recogni ze as a suf f i ci ent predi cat e f or det ermni ngt he i ssue at t he l i t i gant s r equeat . Wher e, as her e, t hei ssue of st andi ng i s rai sed by a def endant , a pl ai nt i f fmust prove i t s at andi ng i n order to be ent i t l ed t o r el i ef .I n a mor t gage f orecl osure act i on, a pl ai nt i f f has st andi ngwhere i t i s bot h t he hol der or assi gnee of t he subj ectmor t gage and t he hol der or assi gnee of t he under l yi ngnot e at t he t i me t he act i on i s commenced.As a general matt er, once a promssory not e i s t enderedt o and accept ed by an assi gnee, t he mor t gage passesi nci dent t o t he not e [ i nt ernal ci t at i ons om t t ed] . Bank of New York v Si l verberg, - D3d , 2011 NY Sl i p op05002 *3- 4 ( 2d Dept 2011) .

Where t he pl ai nt i f f i s t he assi gnee of t he mort gage and t heunderl yi ng note at t he t i me t he f orecl osure act i on was commenced,t he pl ai nt i f f has at andi ng t o mai nt ai n t he act i on [ i nt ernalquot at i on marks and ci t at i on omt t ed] I Wel l s Fargo Bank, N . A . vMar chi one, 69 AD3d 204, 207 ( 2d Dept 2009) .

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I n t he case at bar , def endant hi msel f has provi ded a copy ofthe assi gnment t o pl ai nt i f f of t he not e and mort gage, whi chpredat es t he f i l i ng of t he i nstant act i on by several weeka.Hence, pl ai nt i f f has st andi ng to mai nt ai n the present l awsui t .

Def endant ' s argument r est s on the assumpt i on t hat , i n orderto mai nt ai n a f or ecl osur e act i on, a pl ai nt i f f need record thenote and mor t gage, or r ecord the assi gnment of t he note andmor t gage, pr i or to commenci ng sui t . A s suppor t f or t hi sproposi t i on, def endant ci t es t o I n r e F or ec l os ur e Cases (2007 USDi st LEXI S 84011 [ND Ohi o 2007]), whi ch def endant msr eads asestabl i shi ng a f i l i ng r equi r ement as a predi cat e to i nst i tut i ng af orecl osure act i on. I n t hat f ederal case, t hat pl ai nt i f f , theal l eged assi gnee of t he or i gi nal not e and mor t gage hol der , wasonly abl e t o produce t he or i gi nal note, but not the assi gnment .The court ' s r ef er ence t o f i l i ng was i n the cont ext of evi dent i aryproof of t he assi gnment .at bar, where the copy of t he assi gnment has been produced by

Thi s i s di st i ngui shabl e f r o m the case

def endant hi msel f .Moreover , def endant appear s t o conf use recordi ng the note

and mort gage w t h t he not e and mort gage' s val i di ty andenf or ceabi l i t y. I n t hi s, def endant i s m sgui ded.

"The pl ai n purpose of t he recordi ng st at ut e i s to gi venot i ce t o subsequent pur chaser s and mort gagees.t he Real Proper t y Law shoul d be const rued i n f ur t herance of such

Sect i on 317 of

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l egi sl at i ve i nt ent . Security Discount Associates, I nc. v LynmarHomes Corp., 13 AD2d 3 8 9 , 394 ( 2d Dept 1961) . Recor di ng i s onl yevi dence of t he passi ng of t i t l e, not the passi ng of t i t l ei t sel f , whi ch must pr edat e t he recordi ng, and onl y serves asconst r uct i ve not i ce to f ut ure purchasers of anot her s i nterest i nt he pr oper t y. Bank of New York v Resles, 78 AD3d 469 (18tDept2010) .

Fur t hermore, whereas f ederal cases, such as t hose rel i edupon by def endant , may be per suasi ve, t hey are nei t hercont rol l i ng nor bi ndi ng on a stat e cour t .

Based on t he f oregoi ng, i t i s concl uded t hat pl ai nt i f f hasstandi ng t o mai nt ai n thi s act i on, and thi s af f i rmat i ve def ense ofdef endant s i s deemed t o be w thout mer i t .Seven h af f i rmat i ve d e n e: Ent i re cont mver av doct xi ne

The ent i re cont roversy doct r i ne i s a l egal concept under NewJ ersey l aw, and i s i nappl i cabl e to the i nstant act i on concerni ngf or ecl osure of a mor t gage on proper ty l ocat ed i n the state of NewYor k. See Seung- Mi n Oh v Gelco Corp., 257 AD2d 385 (latept1999) ; Tme r a v Folger, 198 AD2d 34 (latept 1993) .Fi r s t C ount er c l a; Vi ol at i on of BCL 349

The t hr eshol d under sect i on 349 requi res al l egat i ons thatthe def endant s pr act i ces have a broad i mpact on consumersat l ar ge. [ Cl l ear l y not cogni zabl e under t he st at ut e arel ar ge, pr i vat e, si ngl e- shot cont ractual t ransact i ons.Sect i on 349 was i nt ended [ a s ] a consumer pr otect i onst at ut e, so [ pl r i vate t ransact i ona w thout ram f i cat i onsf or t he publ i c at l arge are not the proper subj ect of

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[ such] a cl ai m [ i nt ernal quot at i on marks and ci t at i onsomt t ed] I ,Gr een Harbour Homeomers' As s oc i at i on, I nc . v G. H. Devel opmentand Cons t r uc t i on, Inc. , 307 AD2d 465, 468- 469 (3d Dept 2003) .

I n t he i nstant act i on, def endant has f ai l ed to al l ege 'aunique set of ci r cumst ances whose r emedy i s not al r eady avai l abl et o t he At t orney- General [ i nt ernal quot at i on marks and ci t at i onomt t ed] I' Thomps on v Par kchest er Apar t ment s Co. , 271 AD2d 311,311 (latept 2000) . Because def endant has onl y al l egedi ndi vi dual i nj ury, based on t he par t i cul ar ci r cumst ances of hi aown t r amact i on, a cause of act i on premsed on General BusheasLaw 5 349 cannot be mai ntai ned.

T I I g4 a b a a e dm D es on a vi ol at i on ofI n hi s proposed amended answer , defendant statel s t hat , at

t he t i me of t he l oan, pl ai nt i f f ' s pr edecessor - i n- i nt er estprovi ded hi m w t h t he TI LA st at ement w th t he payment schedul e.Def endant ' s count er cl ai mi s based on t he al l egat i on t hat hi smont hl y bi l l "does not f ol l ow t he payment schedul e provi de i n thef i nal Trut h i n Lendi ng St atement . "

As st ated above, a count er cl ai mbased on an al l egedvi ol at i on of TI LA may be asser t ed t o of f set any damages awar d ofdef i ci ency j udgment t o whi ch pl ai nt i f f may be ent i t l ed.Fundi ng Corp. v Mur daugh, 6 AD3d 571, supra; s ee also Publ i c LoanCompany v Hyde, 47 NY2d 182 ( 1979) . Ther ef or e, t he cour t f i nds

Del t a

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t hat t hi s count er cl ai mhas suf f i ci ent mer i t t o al l ow def endant t oamend hi s answer .Thi rd count er cl &n; Lack Q f st andi ng

Thi s count er cl ai m i s deemed t o be w t hout mer i t f or t hereasons enunci ated above w t h respect to t he si xth af f i rmat i vedefense .

Last l y, defendant ' s document demands are i nappropr i at el yi ncl uded i n t he i nst ant mot i on, and need not be addressed by t hecour t at t hi s t i me.CONCLUSI ON

Based on t he f or egoi ng, i t i s herebyORDERED t hat def endant ' s mot i on f or l eave t o f i l e and serve

an amended answer i s gr ant ed, i n par t , as f ol l ows: l eave i sgrant ed t o amend the answer t o i ncl ude the second af f i rmat i vedef ense and t he second count er cl ai m and t o th i s extent t heamended answer i n the form annexed t o the movi ng papers shal l bedeemed served and f i l ed upon servi ce of a copy of t h i s or der w thnot i ce of ent r y; and i t i s f ur t her

ORDERED t hat l eave to amend the answer i s deni ed w t hrespect t o t he f i r st , t hi r d, f our t h, f i f t h, si xt h and seventhaf f i rmat i ve def enses and t he f i r st and t hi rd count er cl ai ms; andi t i s f ur t her

ORDERED t hat defendant shal l serve and f i l e an amendedanswer i n compl i ance w i t h t he f or egoi ng; and i t i s f ur t her

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ORDERED t ha t t he par t i es ar e directed t o appear f or apr el i m nar y c onf er enc e i n Par t 11, Room 315, 60 Cent r e St r ee t , onNovember 17, 2011, at 9 : 3 0 a. m

/?/ 2011ATED: October

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ENTER :

M . S . C .HON. JOAN A. MADDENJ.S.C.

F I L E DNEWYORKCOUNTY CLERKS OFFICE

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2011-ny-slip-op-32828-u-0Judge: Joan A. Madden