FILED: WESTCHESTER COUNTY CLERK 10/05/ :09 AM INDEX NO /2015 NYSCEF DOC. NO. 248 RECEIVED NYSCEF: 10/05/2017

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1 SUPREME COURT: STATE OF NEW YORK WESTCHESTER COUNTY: TRIAL READY PART X HSBC BANK USA NA AS TRUSTEE OF THE J.P. MORGAN MORTGAGE TRUST 2007-A2, -against- Plaintiff FRANCIS M. CAESAR and LISA N. CAESAR, et al., Index No Hon. Sam D. Walker J.S.C. Defendants X DEFENDANTS FRANCIS M. CAESAR & LISA N. CAESAR S POST-TRIAL MEMORANDUM OF LAW Francis M. Caesar, Esq. 19 Hayrake Lane Chappaqua, New York Defendant Pro Se and Attorney for Defendant Lisa Caesar 1 of 36

2 TABLE OF CONTENTS TABLE OF AUTHORITIES... ii I. PRELIMINARY STATEMENT... 1 A. INTRODUCTION B. PARTIES AND SHORT PROCEDURAL HISTORY C. OVERVIEW: THE TRAGEDY OF NOT COMMENCING AN ACTION D. DOCUMENTS REFERENCED HEREIN II. THE PLEADINGS III. THE EIGHT QUESTIONS OF LAW BEFORE THE COURT A. WHO COMMENCED THIS FORECLOSURE AND REFORMATION ACTION?... 9 B. IS THE ORDER OF SUBSTITUTION AN ORDER OF CORRECTION PER CPLR 2001?... 9 C. IS THE ORDER OF SUBSTITUTION AN ORDER OF AMENDMENT PER CPLR 3025(b)? D. IS AN ORDER OF SUBSTITUTION CAPABLE OF CHANGING THE IDENTITY OF A PARTY IN AN ACTION, NUNC PRO TUNC? E. IS A FORMAL JUDICIAL ADMISSION CONCLUSIVE OF THE ISSUE ADMITTED? F. ARE THE HSBC TRUSTEE S CLAIMS BEFORE THE COURT? G. ARE THE ORIGINAL PLAINTIFF AND THE SUBSTITUTE PLAINTIFF UNITED IN INTEREST? H. DOES THE RELATION BACK DOCTRINE APPLY TO THIS CASE? IV. NONCOMPLIANCE WITH RPAPL V. MR. CASPERITE FAILED TO PROVE EITHER THE US BANK TRUSTEE OR THE HSBC TRUSTEE HAD STANDING AT COMMENCEMENT A. NO PROOF THAT THE HSBC TRUSTEE HAD STANDING AT COMMENCEMENT B. MR. CASPERITE S TESTIMONY CAN ONLY PROVE THE HSBC TRUSTEE WAS THE HOLDER OF THE NOTE ON THE TRIAL DATE C. CONCESSION THAT THE US BANK TRUSTEE NEVER HAD STANDING VI. THE PLAINTIFF SIDE PUT FORWARD NO CASE FOR ENTITLEMENT TO REFORM THE MORTGAGE VII. DEFENDANTS ENTITLEMENT TO JUDGMENT AS A MATTER OF LAW A. DISMISSAL OF THE US BANK TRUSTEE S FORECLOSURE & REFORMATION ACTIONS FOR LACK OF STANDING, ABANDONMENT & NONCOMPLIANCE WITH RPAPL B. DISMISS THE HSBC TRUSTEE S ACTION AS A NULLITY C. DISMISS THE CAESAR DEFENDANTS COUNTERCLAIMS FOR NONJOINDER VIII. THE HSBC SURROGATES HAVE COMPLICATED THIS MATTER A. LAW OF THE CASE B. LACHES AND THE PREJUDICE OF CORRECTION C. THROUGH THE LENS OF EQUITY IX. CONCLUSION i 2 of 36

3 TABLE OF AUTHORITIES Cases ACA Fin. Guar. Corp. v. Goldman, Sachs & Co., 25 N.Y.3d 1043, 1044, 32 N.E.3d 921, 10 N.Y.S.3d 486 (2015) Anderson v. JD Posillico, Inc., 2015 N.Y. Slip Op (Sup. Ct. 2015) Arch Bay Holdings, LLC v. Albanese, 146 A.D.3d 849, 45 N.Y.S.3d 506 (2nd Dept. 2017)... 2, 6, 17, 24 Aurora Loan Servs., LLC v. Mercius, 138 A.D.3d 650, 652, 29 N.Y.S.3d 462 (2nd Dept. 2016) Bagnoli v. Albert, 263 A.D.2d 594, 596, 692 N.Y.S.2d 790 (App. Div. 1999) Bova v. Vinciguerra, 139 A.D.2d 797, 526 N.Y.S.2d 671 (2 nd Dept. 1988) Chamber of Commerce v. Pataki, 100 N.Y.2d 801, 816, 798 N.E.2d 1047, 766 N.Y.S.2d 654 (2003) Citibank, NA v. Cabrera, 130 A.D.3d 861, 14 N.Y.S.3d 420 (2nd Dept. 2015) Connell v. Hayden, 83 A.D.2d 30, 43, 443 N.Y.S.2d 383 (2nd Dept. 1981) Danann Realty Corp. v. Harris, 5 N.Y.2d 317, 322, 184 N.Y.S.2d 599, 157 N.E.2d 597 (1959) Desiderio v. Rubin, 234 A.D.2d 581, 583, 652 N.Y.S.2d 68 (2nd Dept. 1996) Deutsche Bank Nat l Trust Co. v. Royal Blue Realty Holdings, Inc., 2017 N.Y. Slip Op 1979 (App. Div. 2017)... 4 DiSilvio v. Romanelli, 2017 N.Y. Slip Op 4097 (2nd Dept. May 24, 2017)... 4, 7, 25 DLJ Mortgage Capital, Inc. v. Sosa, AD3d, 2017 N.Y. Slip Op 6158 (2 nd Dept. 2017) Eastern Sav. Bank, FSB v. Tromba, 2017 N.Y. Slip Op 1535 (2nd Dept. 2017) Fazio Masonry, Inc. v. Barry, Bette & Led Duke, Inc., 23 A.D.3d 748, 749, 803 N.Y.S.2d 729 (App. Div. 2005) FDIC v. Five Star Management, Inc., 258 AD 2d 15, 20 (1st Dept. 1999) Fleishman v. Eli Lilly & Co., 62 N.Y.2d 888, , 467 N.E.2d 517, 478 N.Y.S.2d 853 (1984) Fulgum v. Town of Cortlandt, 2 A.D.3d 775, 770 N.Y.S.2d 416 (2 nd Dept. 2003) ii 3 of 36

4 Goldenberg v. Westchester, 946 N.E.2d 717, 16 N.Y.3d 323, 921 N.Y.S.2d 619 (2011) Iorizzo v. Dyker Emergency Physicians, PC, 278 A.D.2d 280, 718 N.Y.S.2d 215 (2 nd Dept. 2000)... 7 JCD Farms, Inc. v. Juul-Nielsen, 300 A.D.2d 446, 751 N.Y.S.2d 421 (2 nd Dept. 2002) Katan Group, LLC v. CPC Resources, Inc., 127 A.D.3d 550, 551, 8 N.Y.S.3d 64 (App. Div. 2015) Key Intl Mfg v. Morse/Diesel, 142 A.D.2d 448, 536 N.Y.S.2d 792, 536 N.Y.S. 2 (2 nd Dept. 1988) Last v. Guardian Life Ins. Co. of America, 72 A.D.3d 1032, 898 N.Y.S.2d 879 (2nd Dept. 2010) Marcelle v. New York City Transit Authority, 289 A.D.2d 459, 735 N.Y.S.2d 580 (2nd Dept. 2001) Matter of C&M Plastics (Collins), 168 A.D.2d 160, 571 N.Y.S.2d 343 (App. Div. 1991)... 5, 12 MK West St. Co. v. Meridien Hotels, Inc., 184 A.D.2d 312, 584 N.Y.S.2d 310, 584 N.Y.S. (1 st Dept. 1992) National Financial Co. v. Uh, 279 A.D.2d 374, 720 N.Y.S.2d 17 (App. Div. 2001)... 5, 12 New Medico Associates, Inc. v. Empire Blue Cross and Blue Shield, 267 A.D.2d 757, 701 N.Y.S.2d 142 (App. Div. 1999) New York State Thruway Authority v. CBE Contracting Corp., 280 A.D.2d 390, 721 N.Y.S.2d 328 (1 st Dept. 2001) O Brien v. Contreras, 126 A.D.3d 958, 6 N.Y.S.3d 273 (2nd Dept. 2015)... passim Perez v. Paramount, 709 N.E.2d 83, 92 N.Y.2d 749, 686 N.Y.S.2d 342 (1999) Rahman v. Smith, 40 A.D.3d 613, 615, 835 N.Y.S.2d 404 (2nd Dept. 2007)... 13, 25 Reliance Ins. Co. v. Polyvision, 9 N.Y.3d 52, 876 N.E.2d 898, 845 N.Y.S.2d 212 (2007)... 6 Reynolds v. Blue Cross of Northeastern New York, Inc., 210 A.D.2d 619, 620 N.Y.S.2d 164 (App. Div. 1994) Sam & Mary Hous. Corp. v. Jo/Sal Mkt. Corp., 100 A.D.2d 901, 903, 474 N.Y.S.2d 786, 479 N.E.2d 821 (2 nd Dept. 1984), aff d 64 N.Y.2d 1107, 490 N.Y.S.2d 185 (1985)... 7 Scheff v. St. John s Episcopal Hosp., 115 A.D.2d 532, 534, 496 N.Y.S.2d 58 (2nd Dept. 1985)... 13, 14 iii 4 of 36

5 Spielman v. Manufacturers Hanover Trust Co., 60 NY2d 221, 227, 469 NYS2d 69 (1983) Strujan v. Glencord Bldg. Corp., 137 A.D.3d 1252, 1253, 29 N.Y.S.3d 398 (2nd Dept. 2016) Sutain, Ltd. v. Montgomery Ward, 22 A.D.2d 607, 257 N.Y.S.2d 724 (1st Dept. 1965) aff d 17 N.Y.2d 776, 270 N.Y.S.2d 626, 217 N.E.2d 674 (1966) Thurlow v. Dunwell, 100 A.D.2d 511, , 472 N.Y.S.2d 872 (2nd Dept. 1984) U.S. Bank Natl. Assn. v Cox, AD3d, 2017 NY Slip Op (2nd Dept. 2017) United Fairness, Inc. v. Town of Woodbury, 113 A.D.3d 754, 979 N.Y.S.2d 365 (2 nd Dept. 2014) US Bank National Association v. Akande, 136 A.D.3d 887, 26 N.Y.S.3d 164 (2nd Dept. 2016)... 2, 6, 24 US Bank National Association v. Madero, 125 A.D.3d 757, 758, 5 N.Y.S.3d 105 (2nd Dept. 2015) Ventures Trust 2013-IHR v. Tsimmer, 2017 N.Y. Slip Op (Sup. Ct. 2017) Wesco Ins. Co. v. Vinson, 137 A.D.3d 1114, 1115, 26 N.Y.S.3d 870 (2 nd Dept. 2016)... passim Zink v. McManus, 121 N.Y. 259 (N.Y. 1890) iv 5 of 36

6 Statutes CPLR CPLR CPLR , 8, 15, 30 CPLR , 9 CPLR , 9, 15 CPLR , 11, 12, 32 CPLR CPLR CPLR 2214(c)... 8 CPLR 3025(b)... 13, 14 CPLR 3025(c) CPLR , 8, 15, 30 CPLR 4518(a) CPLR 213(6) RPAPL passim RPAPL 1303(2) UCC 3-401(2) v 6 of 36

7 I. PRELIMINARY STATEMENT A. INTRODUCTION. This Post-Trial Memorandum of Law is filed on behalf of the mortgagordefendants in this action, Francis M. Caesar Esq. and Lisa N. Caesar (the Caesar Defendants ), pursuant to the instructions of the Hon. Sam D. Walker J.S.C. following the two-day bench trial in the above-captioned foreclosure action held on August 1-2, 2017 in the New York State Supreme Court, Westchester County. A copy of the certified Trial Transcript (Tr.) has been filed herewith and is incorporated herein by reference. The essence of this case is identified by this exchange at trial between Defendant Francis Caesar as a witness and Hon. Walker: MR. CAESAR: THE COURT: MR. CAESAR: THE COURT: So substitution is no different than when a plaintiff dies and a So the original action continues? Exactly. So he steps in and he continues to prosecute the dead person s claims. And that s what we have here. So that s your position, that substitution is a continuation of the original action. And if U.S. Bank, National lacks standing at [that] time, they still lack standing so HSBC cannot -- okay, I understand that. Tr. pp At trial, the substitute plaintiff in this foreclosure action did not even attempt to prove that the original plaintiff had standing when the original plaintiff commenced this action. Because the Caesar Defendants put standing into issue as an affirmative defense (Def. Ex. D and NYSCEF Doc. No. 91), without proof that the original plaintiff had standing, the case must be dismissed. (See US Bank National Association v. Akande, 136 A.D.3d 887, 26 N.Y.S.3d of 36

8 (2nd Dept. 2016) (After US Bank substituted into the foreclosure action for plaintiff PNB, to meet its prima facie burden of establishing its entitlement to judgment as a matter of law, U.S. Bank also had to establish PNB s standing to commence this foreclosure action. ); and see Arch Bay Holdings, LLC v. Albanese, 146 A.D.3d 849, 45 N.Y.S.3d 506 (2nd Dept. 2017) (where Arch Bay, as substitute plaintiff for Wachovia, failed to establish that Wachovia had standing as the holder or assignee of the note at the time it commenced the action. ). Dismissal of the original plaintiff s case is plainly warranted. Equally important however is the dismissal as a nullity of the unpleaded claims of the substitute plaintiff. (See e.g. Wesco Ins. Co. v. Vinson, 137 A.D.3d 1114, 26 N.Y.S.3d 870 (2 nd Dept. 2016).) B. PARTIES AND SHORT PROCEDURAL HISTORY. This action was commenced on March 17, 2011 by the US Bank National Association as Trustee of the JP Morgan Alternative Loan Trust 2007-A2 (the US Bank Trustee or the Original Plaintiff ). By an amended decision and order entered May 13, 2016 (Def. Ex. K; NYSCEF Doc. No. 77; herein the Order of Substitution ), the Court allowed the HSBC Bank USA NA as trustee of the JP Morgan Mortgage Trust 2007-A2 (the HSBC Trustee or the Substitute Plaintiff ) to substitute itself for the Original Plaintiff. Notably, the Substitute Plaintiff is neither a successor-in-interest of the Original Plaintiff nor an assignee of claims of the Original Plaintiff nor affiliated in any way with the JP Morgan Alternative Loan Trust 2007-A2. The main defendants in this action are the Caesar Defendants. The other defendants in this action are the United States of America on behalf of the Internal Revenue Service (the US Government ); Citibank, NA ( Defendant Citibank ); the New York State 2 8 of 36

9 Department of Labor ( NYSDOL ); the New York State Department of Taxation and Finance ( NYSDT&F ); and JOHN DOE #1 through JOHN DOE #10. Only the US Government made a timely appearance. The Caesar Defendants answer (Def. Ex. D) was deemed interposed, upon motion, by a decision and order entered December 11, 2013 (NYSCEF Doc. No. 16); all the other defendants defaulted in answering. Defendant Citibank filed a notice of appearance well after its default on June 28, Prior to the trial, the Caesar Defendants filed an application for an order to show cause and a motion for a directed verdict. Said application/motion is currently pending before the Court. (Motion Seq. 16 (NYSCEF Doc. Nos , ); and Motion Seq. 17 (NYSCEF Doc. Nos , ). The motion by the plaintiff side for sanctions and an injunction (Motion Seq. 18) has been withdrawn at trial. (Tr. p. 150) C. OVERVIEW: THE TRAGEDY OF NOT COMMENCING AN ACTION. and agents. This case is an example of a mortgagee being tragically disserved by its attorneys The HSBC Trustee is a mortgage noteholder that had a meritorious claim of foreclosure but completely failed to invoke the Court s jurisdiction on said claim. The HSBC Trustee neither commenced an action of foreclosure by filing a complaint (see CPLR 304) nor interposed a claim for foreclosure in this action (see e.g., CPLR 1014). This failure is a nonwaivable jurisdictional defect: Under CPLR 304(a), an action in Supreme Court is ordinarily commenced by filing a summons and complaint or summons with notice. The failure to file the initial papers necessary to commence an action constitutes a nonwaivable, jurisdictional defect, rendering the action a nullity. [Emphasis added.] 3 9 of 36

10 DiSilvio v. Romanelli, 2017 N.Y. Slip Op 4097 (2 nd Dept. 2017); see also Wesco Ins. Co. v. Vinson, 137 A.D.3d 1114; and see O Brien v. Contreras, 126 A.D.3d 958, 6 N.Y.S.3d 273 (2 nd Dept. 2015). Superficially, the caption of this action would belie the assertion that the HSBC Trustee has not commenced this action. But that is the irony in this tragedy. By a clear, unequivocal and overt notice of default and acceleration dated August 3, 2010 (NYSCEF Doc. No. 108), the Caesar Defendants mortgage debt was accelerated. The effective date of acceleration was September 2, (See Deutsche Bank Nat l Trust Co. v. Royal Blue Realty Holdings, Inc., 2017 N.Y. Slip Op 1979 (App. Div. 2017).) Thereafter, in March 2011 the agents and attorneys for the HSBC Trustee (collectively the HSBC Surrogates ) made the disastrous mistake of commencing this foreclosure action in the name of a wholly unrelated trust, the JP Morgan Alternative Loan Trust 2007-A2 (the US Bank Trust ) whose Trustee is the US Bank Trustee. (See e.g. Def. Ex. O.) For four and one-half years, the HSBC Surrogates vigorously prosecuted this case with the US Bank Trustee as the plaintiff and the purported party with standing. On the record, fallacious verified pleadings (NYSCEF Doc. No. 94 and Def. Ex. E) and fallacious affidavits (see e.g. Def. Ex. F) and affirmations were submitted to the Court to claim that the US Bank Trustee had all the rights to foreclose on the mortgage of the Caesar Defendants. Then, as early as September 2014, the HSBC Surrogates recognized that they had made that disastrous mistake: the US Bank Trustee had absolutely no interest in the Caesar Defendants note or mortgage, just as the Caesar Defendants had vigorously claimed in our answer in April (Def. Ex. D.) 4 10 of 36

11 This is the moment the disastrous mistake turned tragic: instead of moving to discontinue this action and then commencing a plenary action of foreclosure -- i.e., to invoke the Court s jurisdiction on the meritorious claim of the HSBC Trustee -- the HSBC Surrogates tried to salvage this case with a motion in December 2015 to either correct the pleadings or to substitute the HSBC Trustee for the US Bank Trustee. (Def. Ex. J and Def. Ex. A.) This effort to salvage the case was tragically unwise. Correction pursuant to CPLR 2001 could never be used by the HSBC Trustee to correct the complete failure to invoke the Court s jurisdiction. (See O Brien v. Contreras, 126 A.D.3d at ( appellate courts, guided by the legislative history, have made it clear that the complete failure to file the initial papers necessary to institute an action is not the type of error that falls within the court s discretion to correct under CPLR ).) Furthermore, substitution and caption amendment could never be used to nunc pro tunc transmogrify the identity of a plaintiff. (See National Financial Co. v. Uh, 279 A.D.2d 374, 720 N.Y.S.2d 17 (App. Div. 2001) ( the failure to name the real party in interest cannot be remedied by resort to the expedient of substitution. ).) In May 2016 by the Order of Substitution (Def. Ex. K), the Court would grant the HSBC Trustee the right to substitute itself for the US Bank Trustee; the Court amended the caption accordingly. Based on the failure to discontinue the action, it is apparent the HSBC Surrogates believed the case had been successfully salvaged to the benefit of the HSBC Trustee. But, substitution is not an available mechanism for replacing a party petitioner who had no right to sue with one who has such a right. Matter of C & M Plastics (Collins), 168 A.D.2d 160, 162, 571 N.Y.S.2d 343 (App. Div. 1991). Substitution did not change the pleadings. Substitution did not invoke the Court s jurisdiction on the meritorious but unpleaded claim of the HSBC Trustee of 36

12 The HSBC Trustee did not acquire its interest in the Note from the US Bank Trustee. Hence, the Order of Substitution only made the HSBC Trustee a representative substitute of the US Bank Trustee. (See CPLR 1021.) Now as a representative substitute, the HSBC Trustee had to prosecute the claims of the US Bank Trustee and defend the US Bank Trustee from the then extant counterclaims of the Caesar Defendants. (Def. Ex. D.) There is a jurisdictional and consequential difference between a successor substitute and a representative substitute. 1 But even if the HSBC Trustee were a successor substitute per CPLR which it is not -- the law is clear: when a defendant puts standing into issue, and a non-party has, post-commencement, substituted for the original plaintiff, said substitute plaintiff must prove the standing of the original plaintiff that commenced the action. (See US Bank National Association v. Akande, 136 A.D.3d 887; see also Arch Bay Holdings, LLC v. Albanese, 146 A.D.3d 849.) The US Bank Trustee commenced this action and never had standing. This was proved by the testimony at trial that the HSBC Trustee had possession of the Note at commencement of the action (Tr. p. 30) and by the affidavits from Jane Spare (Tr. p. 65; see also Def. Ex. A and Def. Ex. B.) Hence, the election of the HSBC Surrogates to move for substitution was just poor judgment. 1. By way of example, if this case were dismissed on a non-jurisdictional ground e.g., the failure to comply with RPAPL 1303 and if the HSBC Trustee were a successor substitute, it could use CPLR 205 to recommence an action without the worry of statute of limitations. However, as a representative substitute prosecuting the claims of the US Bank Trustee, CPLR 205 would be unavailable to the HSBC Trustee since it could only use CPLR 205 to recommence an action that prosecuted the meritless claims of the US Bank Trustee. (See Reliance Ins. Co. v. Polyvision, 9 N.Y.3d 52, 876 N.E.2d 898, 845 N.Y.S.2d 212 (2007).) 6 12 of 36

13 At trial, the HSBC Surrogates put forward evidence to prove the HSBC Trustee s claim. But this is not the HSBC Trustee s case; it is the US Bank Trustee s case. The HSBC Trustee s case, without pleadings duly filed per CPLR 304 or CPLR 1014, is not before the Court. (See DiSilvio v. Romanelli, 2017 N.Y. Slip Op 4097; see also Wesco Ins. Co. v. Vinson, 137 A.D.3d 1114; and see O Brien v. Contreras, 126 A.D.3d 958.) Hence, not only must the Court dismiss the US Bank Trustee s case for lack of standing, abandonment and failure to comply with RPAPL 1303, the Court must dismiss the HSBC Trustee s unpleaded case as a nullity. D. DOCUMENTS REFERENCED HEREIN. A certified copy of the Trial Transcript of the two day bench trial is included herewith and incorporated herein by reference. Also referenced and incorporated herein are the exhibits admitted at trial. In addition to the documents admitted at trial, and consistent with CPLR 2214(c), papers previously filed electronically with the Court in this action and related actions shall be referenced herein by the document number in the NYSCEF system. Said NYSCEF documents must be deemed admissible because they were filed without objection. Objections to evidence must be made when such evidence is proffered. Evidence submitted without objection is conclusively presumed to be unobjectionable. (See Iorizzo v. Dyker Emergency Physicians, PC, 278 A.D.2d 280, 718 N.Y.S.2d 215 (2 nd Dept. 2000). Furthermore, [i]n New York, courts may take judicial notice of a record in the same court of either the pending matter or of some other action. Sam & Mary Hous. Corp. v. Jo/Sal Mkt. Corp., 100 A.D.2d 901, 903, 474 N.Y.S.2d 786, 479 N.E.2d 821 (2 nd Dept. 1984), aff d 64 N.Y.2d 1107, 490 N.Y.S.2d 185 (1985) of 36

14 II. THE PLEADINGS. The pleadings of the Original Plaintiff are set forth in the verified summons and complaint filed at NYSCEF Doc. No. 94 as an exhibit to the plaintiff side s motion for summary judgment which motion was notably denied. The Caesar Defendants original answer with counterclaims (Def. Ex. D) was deemed interposed by a decision and order entered December 11, (NYSCEF Doc. No. 16.) The Original Plaintiff served an Amended Reply to respond to the counterclaims. (Def. Ex. E.) The Caesar Defendants filed an amended answer with counterclaims at NYSCEF Doc. No. 91. The plaintiff side protested said filing was late; nonetheless it filed a reply at NYSCEF Doc. No The HSBC Trustee has never filed or served any pleadings in this action proposed or otherwise setting forth its claims. It does not appear in this action as a successor substitute per CPLR 1018 but merely as a representative substitute. (See CPLR 1021). This distinction has jurisdictional implications and is critical to the Caesar Defendants defense. III. THE EIGHT QUESTIONS OF LAW BEFORE THE COURT. Because the Caesar Defendants duly interposed the affirmative defense of lack of standing, and because the agent of the actual holder and assignee of the Note made the formal judicial admission that the US Bank Trustee did not have any interest in the Note when this action was commenced, this case turns on eight questions of law: (A) WHO COMMENCED THIS ACTION? (B) IS THE ORDER OF SUBSTITUTION AN ORDER OF CORRECTION PER CPLR 2001? (C) IS THE ORDER OF SUBSTITUTION AN ORDER OF AMENDMENT PER CPLR 3025(b)? (D) CAN AN ORDER OF SUBSTITUTION CHANGE NUNC PRO TUNC THE IDENTITY OF A (E) (F) (G) (H) PARTY? IS A FORMAL JUDICIAL ADMISSION CONCLUSIVE OF THE ISSUE ADMITTED? ARE THE CLAIMS OF THE HSBC TRUSTEE BEFORE THIS COURT? ARE THE ORIGINAL PLAINTIFF AND THE SUBSTITUTE PLAINTIFF UNITED IN INTEREST? DOES THE RELATION BACK DOCTRINE APPLY TO THIS CASE? 8 14 of 36

15 A. WHO COMMENCED THIS FORECLOSURE AND REFORMATION ACTION? The Court s records are determinative of whom commenced this action. Court records, including the verified summons and complaint (NYSCEF Doc. No. 94) and the Request for Judicial Intervention (NYSCEF Doc. No. 2), show that the US Bank Trustee commenced this action explicitly on behalf of the JP Morgan Alternative Loan Trust 2007-A2 (the US Bank Trust). Responsive pleadings (Def. Ex. E), loan modification offers in the Foreclosure Settlement Conference Part (Def. Ex. C), and an affidavit from the servicer of the US Bank Trustee (Def. Ex. F) all demonstrate an active prosecution of the US Bank Trustee s case for at least four and one-half (4-1/2) years before abandonment of said case. The US Bank Trust is a valid and existing trust, separate and distinct from the trust underlying the HSBC Trustee i.e., the JP Morgan Mortgage Trust 2007-A2 (the HSBC MMT 2007-A2 Trust ). At trial, the Caesar Defendants proved this distinction with the admission of the assignment assumption and recognition agreement for the US Bank Trust (Def. Ex. O; also NYSCEF Doc. No. 25). This agreement is separate and distinct from the assignment assumption and recognition agreement for the HSBC MMT 2007-A2 Trust admitted by the plaintiff side at trial. (Pl. Ex. 5.) B. IS THE ORDER OF SUBSTITUTION AN ORDER OF CORRECTION PER CPLR 2001? The Order of Substitution (Def. Ex. K) is not an order that corrected the pleadings per CPLR It is plainly an order that allowed the HSBC Trustee to substitute itself for the US Bank Trustee. The decretal paragraph of the Order of Substitution reads entirely as follows: ORDERED the motion is granted, and the complaint is amended by substituting HSBC BANK USA, N.A., as Trustee of J.P. Morgan Mortgage Trust 2007-A2 (hereinafter HSBC Bank ), as plaintiff, and defendants may submit an amended answer on or before May 31, If 9 15 of 36

16 no amended answer is served then the present answer shall be considered the answer to the amended complaint. [Emphasis added.] First, this was not a sua sponte order; the nonparty HSBC Trustee specifically moved for substitution. (See e.g., Def. Ex. A, 5: ( I submit this affidavit in support of Plaintiff s [sic] Motion for Substitution ); see also Def. Ex. J, p. 7 of NYSCEF Doc. No. 9: ( For the foregoing reasons, [the HSBC Trustee], erroneously named in this action as [the US Bank Trustee], respectfully requests that its Motion to Substitute Plaintiff be granted, that it be substituted as the record plaintiff in this action, and that the caption be amended to reflect the substitution. [Emphasis added.]).) Secondly, there was no proof offered to support any contention that the HSBC Trustee was actually prosecuting its case under the guise of the US Bank Trustee. (See e.g., Colony Mtge Bankers v. Levell, 194 Misc. 2d 447, 448, 753 N.Y.S.2d 820 (Sup. Ct. 2003) ( This case was not commenced by Countrywide under a mistaken name. It was commenced by Colony which was under the impression that it was the mortgagee. Under these circumstances the court finds that the proposed amendment is beyond the authority to correct errors allowed by CPLR ) Third, as answered supra (III., A), this action was commenced by the US Bank Trustee. The attempt by the HSBC Trustee to use CPLR 2001 to fix the pleadings nunc pro tunc was fatal under applicable Court precedent. (See e.g., O Brien v. Contreras, 126 A.D.3d at ( appellate courts, guided by the legislative history, have made it clear that the complete failure to file the initial papers necessary to institute an action is not the type of error that falls within the court s discretion to correct under CPLR ).) Fourth, because the Caesar Defendants raised the affirmative defenses of lack of standing and capacity in our answer and asserted counterclaims specifically against the US Bank of 36

17 Trustee (Def. Ex. D), a nunc pro tunc correction would have been per se prejudicial: it would have undercut our affirmative defenses and our valid counterclaims. (Cf. Sutain, Ltd. v. Montgomery Ward, 22 A.D.2d 607, 257 N.Y.S.2d 724 (1st Dept. 1965) aff d 17 N.Y.2d 776, 270 N.Y.S.2d 626, 217 N.E.2d 674 (1966) ( the answer failed to raise an issue as to the plaintiff s status and capacity to sue. In fact, counsel for the defendant stated that he had no objection to the amendment. ).) Indeed, the Court in the Order of Substitution (Def. Ex. K) specifically noted that substitution (unlike correction) was not prejudicial to the Caesar Defendants. (See Def. Ex. K p. 2 ( Moreover, defendants have suffered no prejudice since the counterclaims and the affirmative defenses, including lack of standing, may be asserted against the substituted plaintiff, HSBC Bank. ).) This distinction between the prejudicial effects of substitution vs. correction was explained by the Caesar Defendants at Trial: THE COURT: MR. CAESAR: THE COURT: MR. CAESAR: Why didn t you appeal the Court s decision? Because I was told -- and I will explain to the Court -- there is an order and there is dicta. And I cannot appeal dicta. I cannot go to the Court of Appeals -- to the Appellate Division and say -- I know you cannot appeal dicta. So the question is, am I [an] aggrieved party? Am I aggrieved with respect to substitut[ion]? No. Am I aggrieved with correction? Yes. Why am I not aggrieved with substitution? It is precisely because of the last sentence that Honorable Lefkowitz put in here. [ ]The defendant[]s have suffered no prejudice since the counterclaims and the affirmative defenses, including lack of standing, may be asserted against the substituted plaintiff.[ ] (Tr. pp ) of 36

18 C. IS THE ORDER OF SUBSTITUTION AN ORDER OF AMENDMENT PER CPLR 3025(b)? The HSBC Surrogates have also propounded that the Order of Substitution (Def. Ex. K) is an order that amended the pleadings to make the HSBC Trustee the plaintiff herein nunc pro tunc. However, the amendment ordered by the Court was pursuant to CPLR 3025(c), not CPLR 3025(b). CPLR 3025(b) specifically provides in pertinent part that: A party may amend his or her pleading at any time by leave of court or by stipulation of all parties. Any motion to amend or supplement pleadings shall be accompanied by the proposed amended or supplemental pleading clearly showing the changes or additions to be made to the pleading. [Emphasis added.] Thus, relief under CPLR 3025(b) was not available to the HSBC Trustee. First, the HSBC Trustee was not a party to this action when it filed its motion in December 2015 (Def. Ex. J); thus the HSBC Trustee could not amend the US Bank Trustee s pleadings to make said pleadings those of the HSBC Trustee. Secondly, even if arguendo the HSBC Trustee were a party, its papers (Def. Ex. J) failed to comply with the express provisions of CPLR 3025(b) which requires the movant to not only submit the proposed pleading, but to highlight the differences between the original pleading and the proposed amended pleading. No proposed pleadings of the HSBC Trustee were attached (which consequentially failed to toll applicable statute of limitations.) D. IS AN ORDER OF SUBSTITUTION CAPABLE OF CHANGING THE IDENTITY OF A PARTY IN AN ACTION, NUNC PRO TUNC? No. [T]he failure to name the real party in interest cannot be remedied by resort to the expedient of substitution. National Financial Co. v. Uh, 279 A.D.2d 374, 720 N.Y.S.2d 17 (App. Div. 2001); see also Reynolds v. Blue Cross of Northeastern New York, Inc., of 36

19 A.D.2d 619, 620 N.Y.S.2d 164 (App. Div. 1994); and see Matter of C&M Plastics (Collins), 168 A.D.2d 160, 571 N.Y.S.2d 343 (App. Div. 1991). The substitute herein is a representative not a successor of the original plaintiff per CPLR As a representative, the Substitute Plaintiff can only prosecute the pleaded claims of the Original Plaintiff. E. IS A FORMAL JUDICIAL ADMISSION CONCLUSIVE OF THE ISSUE ADMITTED? Yes. Formal judicial admissions take the place of evidence and are concessions, for the purposes of the litigation, of the truth of a fact alleged by an adversary. Rahman v. Smith, 40 A.D.3d 613, 615, 835 N.Y.S.2d 404 (2nd Dept. 2007). F. ARE THE HSBC TRUSTEE S CLAIMS BEFORE THE COURT? No. The HSBC Trustee has never interposed its claims in this action; it is merely a substitute representative of the Original Plaintiff. (See Def. Ex. K; see also CPLR 1021) It has neither filed pleadings in this action (e.g., per CPLR 1013 and CPLR 1014) nor commenced its own action per CPLR 304. The failure to file the papers necessary to institute an action or a proceeding constitutes a nonwaivable, jurisdictional defect, rendering the action or proceeding a nullity. Wesco Ins. Co. v. Vinson, 137 A.D.3d 1114, G. ARE THE ORIGINAL PLAINTIFF AND THE SUBSTITUTE PLAINTIFF UNITED IN INTEREST? No. Unity of interest is a question of law and not of fact. Connell v. Hayden, 83 A.D.2d 30, 43, 443 N.Y.S.2d 383 (2nd Dept. 1981); see also Scheff v. St. John s Episcopal Hosp., 115 A.D.2d 532, 534, 496 N.Y.S.2d 58 (2nd Dept. 1985). Unity of interest in the analogous context of the adding a new defendant, has been defined as follows: Parties are united in interest only where the interest of the parties in the subject-matter is such that they stand or fall together and that judgment against one will similarly affect the other (Prudential Ins. Co. v Stone, 270 N.Y. 154, 159; see also, Mondello v New York Blood Ctr. Greater N. Y. Blood Program, supra, at 226; Brock v Bua, supra, at 68). If the of 36

20 relationship between the parties is such that one may have a defense not available to the other, they are not united in interest (see, Connell v Hayden, 83 AD2d 30, 41-43). In short, interests will be united, only where one is vicariously liable for the acts of the other (Connell v Hayden, supra, at 45). [Emphasis added.] Desiderio v. Rubin, 234 A.D.2d 581, 583, 652 N.Y.S.2d 68 (2nd Dept. 1996). Therefore, for the two trustees to be united in interest, the two trustees must be in the same jural relationship relative to the Caesar Defendants. As such, the defenses of the Caesar Defendants must be identical against the claims of each of the Original Plaintiff and the HSBC Trustee. In fact, the Caesar Defendants defenses to the claims of the US Bank Trustee are grounded in lack of standing and misrepresentation; our defenses to the (unpleaded) claims of the HSBC Trustee are grounded in lack of jurisdiction and statute of limitations. The difference in the defenses prove the Original Plaintiff and the HSBC Trustee are not united in interest. H. DOES THE RELATION BACK DOCTRINE APPLY TO THIS CASE? No. The HSBC Trustee is not a party to this action prosecuting its own claims; it is a substitute representative of the US Bank Trustee. The HSBC Trustee has neither intervened in nor been joined to this action; it has never filed or served its pleadings. Its problem is jurisdictional because it has never interposed its claims in this action and it is not entitled benefit from the informal notice policy relevant to the relation-back doctrine. (See e.g. Scheff v. St. John s Episcopal Hosp., 115 A.D.2d 532, 534.) Furthermore, statute of limitations affects the causes of action for reformation and foreclosure sub judice. Even had the HSBC Trustee duly interposed its claims at trial, the HSBC Trustee could not benefit from the relation back doctrine: where a new plaintiff is duly made a party to an action after expiration of applicable statute of limitations, it can have its identical of 36

21 claims relate back to the commencement of the action if and only if said new plaintiff is united in interest with the original plaintiff. (See Fazio Masonry, Inc. v. Barry, Bette & Led Duke, Inc., 23 A.D.3d 748, 749, 803 N.Y.S.2d 729 (App. Div. 2005); see also Key Intl Mfg v. Morse/Diesel, 142 A.D.2d 448, 536 N.Y.S.2d 792, 536 N.Y.S. 2 (2 nd Dept. 1988).) Without the Original Plaintiff and the Substitute Plaintiff being united in interest, the relation-back doctrine does not apply to this case. 2 IV. NONCOMPLIANCE WITH RPAPL Proper service of an RPAPL 1303 notice is a condition precedent to the commencement of a foreclosure action, and noncompliance mandates dismissal of the complaint... A defendant mortgagor can raise the mortgagee s failure to comply with the statute at any time. Eastern Sav. Bank, FSB v. Tromba, 2017 N.Y. Slip Op 1535 (2nd Dept. 2017). The Caesar Defendants raised the failure to comply with RPAPL 1303 as an affirmative defense in our Answer ( 17-18, Def. Ex. D) and Amended Answer ( 13-14, 2. The dicta of the Order of Substitution cites five cases that apply the relation back doctrine and by extension the informal notice policy relevant to unity of interest: New York State Thruway Authority v. CBE Contracting Corp., 280 A.D.2d 390, 721 N.Y.S.2d 328 (1 st Dept. 2001); MK West St. Co. v. Meridien Hotels, Inc., 184 A.D.2d 312, 584 N.Y.S.2d 310, 584 N.Y.S. (1 st Dept. 1992); United Fairness, Inc. v. Town of Woodbury, 113 A.D.3d 754, 979 N.Y.S.2d 365 (2 nd Dept. 2014); Fulgum v. Town of Cortlandt, 2 A.D.3d 775, 770 N.Y.S.2d 416 (2 nd Dept. 2003); JCD Farms, Inc. v. Juul- Nielsen, 300 A.D.2d 446, 751 N.Y.S.2d 421 (2 nd Dept. 2002). This dicta is inapposite. The HSBC Trustee has never interposed its claims in this action and was never a party to this action -- either by joinder, intervention or consolidation of a preexisting action (see e.g. Last v. Guardian Life Ins. Co. of America, 72 A.D.3d 1032, 898 N.Y.S.2d 879 (2nd Dept. 2010)). Furthermore, the Original Plaintiff and the Substitute Plaintiff are not united in interest. Nevertheless, said dicta is neither prejudicial to the Caesar Defendants nor a basis for an appeal. The Order of Substitution is an order of substitution it is neither an order of correction nor an order that invokes the relation back doctrine. Dicta is not the law of the case of 36

22 NYSCEF Doc. No. 91). Neither the Original Plaintiff nor the Substitute Plaintiff ever complied with RPAPL Proof of the Original Plaintiff s noncompliance is in the Court records of which the Court can take judicial notice. Hon. Adler found after the Traverse hearing in November 2014 that the Caesar Defendants had not been served with the verified summons and complaint. (NYSCEF Doc. No. 99; see also Def. Ex. I) The RPAPL 1303 notice must be served with the summons and complaint. (See RPAPL 1303(2)) If the Caesar Defendants were not served with the Original Plaintiff s summons and complaint -- the law of this case -- then logically the Caesar Defendants were not served with the RPAPL 1303 notice. 3 The Original Plaintiff s case must be dismissed. The HSBC Trustee never served a summons or complaint. In addition to this nonwaivable jurisdictional defect, the HSBC Trustee has failed to comply with RPAPL V. MR. CASPERITE FAILED TO PROVE EITHER THE US BANK TRUSTEE OR THE HSBC TRUSTEE HAD STANDING AT COMMENCEMENT. Mr. Ronald Casperite, Complex Liaison Manager of PHH Mortgage Corporation ( PHH ) and subordinate of Affiant Spare, was put on the witness stand with one task: to prove that the Original Plaintiff had standing on the date this action was commenced. At law he simply had to prove either (i) an assignment of the Note to the Original Plaintiff at or prior to commencement; or (ii) that the Original Plaintiff, or its agent, had, at commencement, possession of the Note endorsed in blank, endorsed to bearer or endorsed to the US Bank Trustee. He failed. 3. The Original Plaintiff s proffered proof of compliance with RPAPL 1303 was the affidavits of service of its process server, Mr. Robert Winckelmann. (NYSCEF Doc. Nos ) Said affidavits were deemed unreliable by Hon. Adler. (NYSCEF Doc. No. 99.) Indeed, in New York City, Mr. Winckelmann had lost his license to be a process server because of evidence of his sewer service. (See NYSCEF Doc. No. 116.) of 36

23 As set forth below: (i) he did not prove who had standing when the action was commenced; (ii) he totally abandoned the US Bank Trustee s case by acknowledging the Note was specially endorsed to the HSBC MMT 2007-A2 Trust; and (iii) he did not even prove when the Substitute Plaintiff came into possession of the specially endorsed Note. The crux of Mr. Casperite s failure is he offered no testimony that he was familiar with the record-keeping practices of either the HSBC Trustee or the HSBC Trustee s immediate and purported predecessor-in-interest, JP Morgan Acceptance Corp I. (See Arch Bay Holdings, LLC v. Albanese, 146 A.D.3d 849, 853.) Under the Assignment Assumption and Recognition Agreement ( Assign. Assump. Agreement ) that Mr. Casperite offered into evidence, JP Morgan Acceptance Corp. I is expressly identified as the transferee and Depositor of the Note. The transferee was not PHH. The Caesar Defendants duly interposed the affirmative defense of lack of standing. (Def. Ex. D and NYSCEF Doc. No. 91) It is axiomatic under New York law that a plaintiff in a foreclosure action has standing where it is either the holder or assignee of the underlying note at the time the action is commenced [emphasis added], U.S. Bank Natl. Assn. v Cox, AD3d, 2017 NY Slip Op 01909; see also DLJ Mortgage Capital, Inc. v. Sosa, AD3d, 2017 N.Y. Slip Op The plaintiff side has argued, unsuccessfully, that the Court, nunc pro tunc, changed the identity of the plaintiff in this action. This claim is patently and demonstrably false and unsubstantiated. But, notwithstanding this false and unsubstantiated claim, the plaintiff side has failed to prove either the Original Plaintiff or the Substitute Plaintiff had standing when this action was commenced of 36

24 A. NO PROOF THAT THE HSBC TRUSTEE HAD STANDING AT COMMENCEMENT Although at trial Mr. Casperite had possession of the original Note with an allonge bearing a special endorsement to the HSBC Trust, he failed to prove (i) how the HSBC Trustee came into possession of said Note or (ii) when the HSBC Trustee came into possession thereof. He therefore failed to prove that the HSBC Trustee had standing when the action was commenced. Mr. Casperite offered the Assign. Assump. Agreement (Tr. pp ; Pl. Ex. No. 5) as proof that PHH transferred its interest in the Note on March 1, 2007 to the substitute plaintiff in this action, the HSBC Trustee. His testimony and submission do not meet the threshold of proof required to support the plaintiff s prima facie case. The date Mr. Casperite alleged the Note was transferred from PHH is directly contrary to two affidavits submitted by Mr. Casperite s direct supervisor, Affiant Spare, Assistant Vice President of PHH. (Def. Ex A and Def. Ex. B.) Affiant Spare averred that PHH transferred the Note to the HSBC Trustee, and that the HSBC Trustee took possession of the Note, no later than February 7, ( 5 Def. Ex. B.) This contradiction of an essential fact is problematic to the plaintiff s case. To the extent Mr. Casperite s testimony directly contradicts the averments contained in the earlier affidavits of his direct supervisor, Affiant Spare, Mr. Casperite s testimony should be disregarded as an obvious attempt to feign a factual issue designed to avoid the consequences of Affiant Spare s earlier averments. (See e.g., Marcelle v. New York City Transit Authority, 289 A.D.2d 459, 735 N.Y.S.2d 580 (2nd Dept. 2001).) Equally problematic to the plaintiff side is the Assign. Assump. Agreement (Pl. Ex. No.5) does not memorialize a transfer of the Note from PHH to the HSBC Trust. PHH of 36

25 is not even identified as the HSBC Trustee s predecessor-in-interest in the Note -- the non-party JP Morgan Acceptance Corp I is so identified. In fact, the Assign. Assump. Agreement purports to memorialize two transactions (neither of which involved PHH): 1. a transfer of the Note and associated file from a non-party entity called JP Morgan Acquisition Corp. to an entity called JP Morgan Acceptance Corp. I (see 1(a), Pl. Ex. No.5): and 2. a transfer from the Depositor (i.e., the JP Morgan Acceptance Corp. I) to the HSBC MMT 2007-A2 Trust of certain mortgage loans identified on a schedule that is not attached (see 1(a), Pl. Ex. No.5). The Assign. Assump. Agreement is thus not competent to show when PHH relinquished possession of, or conveyed its interest in, the Note. In the first recital paragraph of the Assign. Assump. Agreement (Pl. Ex. No.5), there is a casual reference to JP Morgan Acquisition Corp. s acquiring certain Mortgage Loans. But said reference does not specify: what loans were acquired (no schedule was attached to the submitted document); whether the Caesar Defendants loan was among said loans; from whom said loans were acquired; the date the loans were acquired; or the consideration paid for the loans. In fact, nowhere in the Assign. Assump. Agreement is there a statement that the JP Morgan Acquisition Corp. acquired any loan from PHH. The Assign. Assump. Agreement is therefore not probative of whom had standing with respect to the Caesar s loan on the date this action was commenced. Mr. Casperite s testimony was nothing more than a recital of conclusory statements. Personal knowledge is not presumed from a mere positive averment of the facts (Bova v. Vinciguerra, 139 A.D.2d 797, 526 N.Y.S.2d 671 (2 nd Dept. 1988). A court should be of 36

26 shown how the deponent knew or could have known such facts. If there is no evidence from which the inference of personal knowledge can be drawn than it is presumed that such does not exist. (Id.) Succinctly, Mr. Casperite did not describe PHH s or its purported successors activities with sufficient particularity to warrant an inference of personal knowledge. His lack of probative personal knowledge was demonstrated by: (i) his contradiction of the prior averments by his direct supervisor at PHH, Affiant Spare; and (ii) his failure to recognize the lack of probative value of the Assign. Assump. Agreement. Thus, Mr. Casperite failed to demonstrate the admissibility of the records relied upon under the business records exception to the hearsay rule (see CPLR 4518(a)). A proper foundation for the admission of a business record must be provided by someone with personal knowledge of the maker s business practices and procedures. Aurora Loan Servs., LLC v. Mercius, 138 A.D.3d 650, 652, 29 N.Y.S.3d 462 (2nd Dept. 2016). Mr. Casperite, an employee of PHH, did not attest that he was personally familiar with the record keeping practices and procedures of: (i) (ii) (iii) the plaintiff, the US Bank Trustee; the substitute plaintiff, the HSBC Trustee; or JP Morgan Acceptance Corp I, the purported predecessor of the HSBC Trustee. (See e.g. Citibank, NA v. Cabrera, 130 A.D.3d 861, 14 N.Y.S.3d 420 (2nd Dept. 2015); and see US Bank National Association v. Madero, 125 A.D.3d 757, 758, 5 N.Y.S.3d 105 (2nd Dept. 2015).) Mr. Casperite s assertions based on the Assign. Assump. Agreement were thus inadmissible, and thus failed to establish plaintiff s prima facie entitlement to judgment as a matter of law. (See US Bank National Association v. Madero, 125 A.D.3d at 758.) of 36

27 B. MR. CASPERITE S TESTIMONY CAN ONLY PROVE THE HSBC TRUSTEE WAS THE HOLDER OF THE NOTE ON THE TRIAL DATE Mr. Casperite acknowledged that the reference to MMT 2007-A2 on the allonge to the Note was a reference to the HSBC MMT 2007-A2 Trust whose trustee is the HSBC Trustee (Tr ). The Court can conclude said reference is a special endorsement of the Note. (See UCC 3-401(2); and see Spielman v. Manufacturers Hanover Trust Co., 60 NY2d 221, 227, 469 NYS2d 69 (1983)) ( The code provides only that an indorsement must be written by or on behalf of the holder and on the instrument or allonge [A] person may use any name or mark as a means of identification... including any trade or assumed names upon an instrument or by a word or mark in lieu of written signatures. ) Thus, as an agent in possession at trial of the original Note specially endorsed to the HSBC Trustee, Mr. Casperite simply proved that the HSBC Trustee was the holder of the Note on the date of the trial. Mr. Casperite did not prove that the HSBC Trustee was the holder at any date prior thereto. C. CONCESSION THAT THE US BANK TRUSTEE NEVER HAD STANDING Mr. Casperite conceded in his testimony -- through formal judicial admissions -- that the US Bank Trustee never had possession of the Note (Tr. p. 71) and that PHH retained possession of the Note on behalf of the HSBC Trustee (Tr. pp ). His testimony on this issue was consistent with the formal judicial admissions made by his direct supervisor, Affiant Spare, the Assistant Vice President of PHH. Affiant Spare averred in two affidavits (Def. Ex. A and Def. Ex. B) that the US Bank Trustee was only identified in this action because of a mistake: in the affidavit she submitted in support of the motion for substitution (Def. Ex. A) and in the affidavit in support of the motion for summary judgment (Def. Ex. B). Mr. Casperite s testimony is further proof of the complete abandonment of the US Bank Trustee s case by PHH and the Substitute Plaintiff. In fact, upon being substituted into the of 36

28 action, the HSBC Trustee summarily abandoned the claims of the US Bank Trustee. For this reason alone, this case should have been discontinued years ago. VI. THE PLAINTIFF SIDE PUT FORWARD NO CASE FOR ENTITLEMENT TO REFORM THE MORTGAGE. Foreclosure of a mortgage without a proper description of the property appended thereto cannot be effected. (See Bagnoli v. Albert, 263 A.D.2d 594, 596, 692 N.Y.S.2d 790 (App. Div. 1999).) A metes and bounds description that does not describe a closed area is legally deficient. (See e.g. Thurlow v. Dunwell, 100 A.D.2d 511, , 472 N.Y.S.2d 872 (2nd Dept. 1984); see also Zink v. McManus, 121 N.Y. 259 (N.Y. 1890).) At trial the plaintiff side put on no case relating to its cause of action for reformation no description of the alleged defect, no testimony from a land surveyor, no title report in admissible form. The Caesar Defendants can only surmise the Original Plaintiff sought reformation because the following covenant appears in the Caesar Defendants deed (NYSCEF Doc. No. 104) and is not set forth in the legal description attached to the HSBC Trustee s mortgage (NYSCEF Doc. No. 105): BEING AND INTENDED to be the same premises as conveyed to the party of the first part by deed from John Mangialardi, Esq., Referee dated May 4, 2006 to and recorded on October 11, 2006 in the Westchester County Register s Office in Control No The Caesar Defendants know that the legal description appended to the deed and the mortgage fail to describe a closed area based on the affidavit of the professional land surveyor, Steven Willard (NYSCEF Doc. No. 122). Contrary to the claims at trial by Mr. Andrew Morganstern, Esq. of Rosicki Rosicki & Associates P.C. (Tr. pp ), Mr. Willard s affidavit made clear that the Caesar Defendants deed did not need to be reformed. (See e.g. NYSCEF Doc. No. 122, 17 and 18.) of 36

29 The remedy of reformation, however, is subject to the statute of limitations period of six (6) years. (See CPLR 213(6); and see FDIC v. Five Star Management, Inc., 258 AD 2d 15, 20 (1st Dept. 1999) ( The Statute of Limitations for a claim of reformation based upon mistake is six years, accruing on the date of the mistake [citations omitted]. That limitations period applies to scrivener s errors. ).) The US Bank Trustee has abandoned its reformation cause of action. The HSBC Trustee s potential reformation claim must be dismissed for the jurisdictional reason discussed above (lack of commencement) and because more than six years has elapsed since the errant legal description was attached to the mortgage. VII. DEFENDANTS ENTITLEMENT TO JUDGMENT AS A MATTER OF LAW. Based on the foregoing, the HSBC Surrogates should have discontinued this matter years ago. Nevertheless, this Court must now: (A) dismiss the US Bank Trustee s causes of action for lack of standing, abandonment and noncompliance with RPAPL 1303; (B) dismiss the unpleaded, unfiled and unserved claims of the HSBC Trustee as a nullity for complete failure to commence its action (lack of jurisdiction); and (C) dismiss without prejudice the Defendant Caesars counterclaims for failing to join the HSBC Trustee as a party to this action. A. DISMISSAL OF THE US BANK TRUSTEE S FORECLOSURE & REFORMATION ACTIONS FOR LACK OF STANDING, ABANDONMENT & NONCOMPLIANCE WITH RPAPL The US Bank Trustee, as the party that commenced this action, did not have standing at commencement. This has been confirmed by the formal judicial admissions of the US Bank Trustee s agent. The US Bank Trustee failed to comply with RPAPL The Caesar Defendants duly interposed the affirmative defenses of lack of standing in our answer (Def. Ex. D) and amended answer (NYSCEF Doc. No. 91). Under New York law, [a] plaintiff establishes its standing in a mortgage foreclosure action by of 36

30 demonstrating that, when the action was commenced, it was either the holder or assignee of the underlying note [emphasis added], DLJ Mortgage Capital, Inc. v. Sosa, AD3d, 2017 N.Y. Slip Op 6158 (2 nd Dept. 2017); see also U.S. Bank Natl. Assn. v Cox, AD3d, 2017 NY Slip Op (2nd Dept. 2017). Upon motion sub judice, the HSBC Trustee was granted the right to substitute itself for the US Bank Trustee by the Order of Substitution. (Def. Ex. K.) As a substitute plaintiff, the HSBC Trustee had to prove the original plaintiff had standing at the commencement of the action. (See US Bank National Association v. Akande, 136 A.D.3d 887; see also Arch Bay Holdings, LLC v. Albanese, 146 A.D.3d 849; and see Ventures Trust 2013-IHR v. Tsimmer, 2017 N.Y. Slip Op (Sup. Ct. 2017) ( To satisfy its prima facie burden of establishing its entitlement to a judgment of foreclosure, the third party must also establish that the party commencing the action had standing to do so at the time of the commencement. ).) Notably, at trial sub judice not one scintilla of evidence was put forward to prove that the US Bank Trustee -- the original plaintiff -- had standing. Indeed the evidence at trial proves the US Bank Trustee was an unintentional plaintiff and therefore never a party with an interest in the Note. Mr. Ronald Casperite, Complex Liaison Officer of PHH testified that PHH is the originator and servicer of the Note and that PHH transferred its interest in the Note to the HSBC Trustee in March (Tr. p 18) Mr. Casperite also testified that PHH remained servicer on the Note on behalf of the HSBC Trustee upon said transfer. (Tr. p. 33) At trial two affidavits of Ms. Jane Spare, Assistant Vice President of PHH, was entered in as exhibits. (Def. Ex. A and Def. Ex. B) (Mr. Casperite testified at trial that Ms. Spare was his immediate supervisor. (Tr. p. 59)) Ms. Spare averred that PHH is the loan of 36

31 servicer and attorney-in-fact for the HSBC Trustee and the US Bank Trustee. ( 1, Def. Ex. B) Ms. Spare further averred that the US Bank Trustee was named plaintiff in this action due to a mistake. ( 8, Def. Ex. A; and 8, Def. Ex. B) Furthermore Ms. Spare averred that [s]ince the HSBC Bank Trust held the Note since the commencement of the foreclosure action, it should be the named plaintiff in this foreclosure lawsuit. ( 10, Def. Ex. A) This testimony and these averments of PHH must constitute formal judicial admissions that the HSBC Trustee had standing and that the US Bank Trustee did not have standing. Theses admission were deliberate, clear and unequivocal, Rahman v. Smith, 40 A.D.3d 613, 615. As detailed supra (IV.), the US Bank Trustee never complied with RPAPL Thus, the Caesar Defendants are entitled to dismissal of the US Bank Trustee s case as a matter of law. B. DISMISS THE HSBC TRUSTEE S ACTION AS A NULLITY. Because the HSBC Trustee never duly interposed its claims per CPLR 304 (or even CPLR 1014), its case -- no matter how meritorious -- is not jurisdictionally before the Court. Its case must be therefore be dismissed as a nullity because said failure is a nonwaivable, jurisdictional defect. Wesco Ins. Co. v. Vinson, 137 A.D.3d 1114, 1115; and see O Brien v. Contreras, 126 A.D.3d 958, 6 N.Y.S.3d 273 (2nd Dept. 2015); see also DiSilvio v. Romanelli, 2017 N.Y. Slip Op 4097 (2nd Dept. May 24, 2017). There was a complete failure of the HSBC Trustee to commence its action by filing a summons or complaint. (See Goldenberg v. Westchester, 946 N.E.2d 717, 16 N.Y.3d 323, 921 N.Y.S.2d 619 (2011).) Such failure is not only a nonwaivable jurisdictional defect, the HSBC Trustee s appearance without filing its pleadings has failed to toll applicable statute of of 36

32 limitations. (See Perez v. Paramount, 709 N.E.2d 83, 92 N.Y.2d 749, 686 N.Y.S.2d 342 (1999) (Provides where motion papers include a copy of the proposed supplemental summons and amended complaint, a motion for leave to amend a complaint tolls the statute of limitations until the entry of the order deciding the motion.).) C. DISMISS THE CAESAR DEFENDANTS COUNTERCLAIMS FOR NONJOINDER. The Caesar Defendants filed the amended answer (NYSCEF Doc. No. 91) because the Caesar Defendants mistakenly believed the Court had, sua sponte, joined the HSBC Trustee as a plaintiff. (This was based on the reference in the dicta of the Order of Substitution to joinder cases that applied the relation-back doctrine. (See supra footnote 2.)) However, the Court has no authority to sua sponte join a plaintiff to an action. (See New Medico Associates, Inc. v. Empire Blue Cross and Blue Shield, 267 A.D.2d 757, 701 N.Y.S.2d 142 (App. Div. 1999).) Because the HSBC Trustee was never joined as a party to this action, the Caesar Defendants counterclaims against the HSBC Trustee must be dismissed without prejudice per CPLR 1003 for nonjoinder of a necessary party. VIII. THE HSBC SURROGATES HAVE COMPLICATED THIS MATTER. Based on the record of this case, the trial court can see there were no triable issues of fact. This case proceeded to trial because the HSBC Surrogates failed to discontinue it. After specifically moving for substitution (see e.g., Def. Ex. A and Def. Ex. J; NYSCEF Doc. Nos. 8-13) and actually being granted substitution (Def. Ex. K) the HSBC Surrogates want this Court to believe the Order of Substitution granted the HSBC Trustee the wholly prejudicial relief of correction per CPLR A plain reading of the Order of Substitution belies this conclusion. (Def. Ex. K) The plaintiff side is bound by the consequences of 36

33 of its litigation strategy. (See Katan Group, LLC v. CPC Resources, Inc., 127 A.D.3d 550, 551, 8 N.Y.S.3d 64 (App. Div. 2015).) A. LAW OF THE CASE The plaintiff side is restrained by the principle of law of the case from attempting to have the trial Court recast the Order of Substitution as an order of correction. (See Strujan v. Glencord Bldg. Corp., 137 A.D.3d 1252, 1253, 29 N.Y.S.3d 398 (2nd Dept. 2016).) Nevertheless, even if the trial Court re-evaluates the facts and law underlying the Order of Substitution (Def. Ex. K), the trial Court can see the relief of correction as properly denied. The December 2015 motion papers submitted on behalf of the HSBC Trustee (Def. Ex. J & Def. Ex. A; see complete motion papers at NYSCEF Doc. Nos 8-13) prove that the affidavit of fact submitted in support of said motion did not demonstrate that the HSBC Trustee used ordinary intelligence to uncover the mistake in the identity of the plaintiff in this action. (See e.g. Danann Realty Corp. v. Harris, 5 N.Y.2d 317, 322, 184 N.Y.S.2d 599, 157 N.E.2d 597 (1959).) Indeed, because the Caesar Defendants specifically noted in our answer (Def. Ex. D) that the trustee of the HSBC MMT 2007-A2 Trust was a necessary party to the action, PHH, as the common servicing agent of the HSBC Trustee and the Original Plaintiff, was put on inquiry notice as early as April 2013 when the Caesar Defendants first filed our answer - - to determine if a mistake in the identity of the plaintiff had been made. (See e.g., ACA Fin. Guar. Corp. v. Goldman, Sachs & Co., 25 N.Y.3d 1043, 1044, 32 N.E.3d 921, 10 N.Y.S.3d 486 (2015) (where a party alleging reliance on a misrepresentation has hints of its falsity, a heightened degree of diligence is required of it. It cannot reasonably rely on such representations without making additional inquiry to determine their accuracy. ).) of 36

34 B. LACHES AND THE PREJUDICE OF CORRECTION. Furthermore, the equitable principle of laches would bar any corrective relief for the HSBC Trustee because it did not make an appearance in this action until December 2015: more than four and one-half (4-1/2) years after the action was commenced and more than two and one-half (2-1/2) years after the Caesar Defendants filed our Answer. (See Chamber of Commerce v. Pataki, 100 N.Y.2d 801, 816, 798 N.E.2d 1047, 766 N.Y.S.2d 654 (2003).) Correction would have been per se prejudicial to the Caesar Defendants because it would have voided our affirmative defenses and voided our meritorious counterclaims for misrepresentation against the US Bank Trustee. Furthermore, it would have allowed the HSBC Trustee to avoid the consequence of statute of limitations with respect to its proposed reformation claims. (See generally CPLR 201.) C. THROUGH THE LENS OF EQUITY This Court in equity can see with clarity a lender with a substantial loan a principal balance of approximately $2.1M furiously trying to protect its interest after applicable statutes of limitations have expired. But the Court in equity can also see with clarity how the lender and its agents were derelict in protecting the lender s rights: upon the Caesar Defendants interposition of the affirmative defenses of lack of standing and lack of capacity, said lender and its agents were on actual and effective notice of the jurisdictional defect in the pleadings. The pretense of the US Bank Trustee as plaintiff was exposed; it was per se negligence and malpractice to continue this action with said pleadings. A motion for substitution and the resultant Order of Substitution did not provide the remedy the HSBC Trustee needed. Furthermore, the Court has no sympathy for a plaintiff that sleeps on its rights. As the Court of Appeals noted: of 36

35 A Statute of Limitations serves in part to prevent plaintiffs from sleeping on their rights or waiting to assert stale claims and to ensure that defendants will receive notice of claims as soon as practicable. Fleishman v. Eli Lilly & Co., 62 N.Y.2d 888, , 467 N.E.2d 517, 478 N.Y.S.2d 853 (1984). The Substitute Plaintiff has never filed or served pleadings to give the Caesar Defendants jurisdictionally effective notice of the HSBC Trustee s claims. As discussed supra, the HSBC Trustee is not united in interest with the US Bank Trustee and therefore cannot rely on the relation-back doctrine to have its unpleaded, unfiled and unserved claims relate back to the commencement of the action. The HSBC Trustee cannot commandeer a wrongfully commenced action to resolve its jurisdictional failure. As pointedly noted by the Court in another matter: An action arising out of the same incident previously and timely filed by a different plaintiff against the same defendants does not inure to a plaintiff who failed to file an action against those very same defendants. [Emphasis Added]. Anderson v. JD Posillico, Inc., 2015 N.Y. Slip Op (Sup. Ct. 2015). IX. CONCLUSION A case for foreclosure by the HSBC Trustee was presented at trial. But where are the HSBC Trustee s pleadings? Substitution and caption amendment is an expedient that does not resolve the nonwaivable jurisdictional defect of failing to file initiatory papers to commence a plenary action of foreclosure. The Court must deny the attempts of the HSBC Surrogates to salvage their tragic disservice to the HSBC Trustee. This action was indisputably commenced by the US Bank Trustee. The only pleadings filed are those of the US Bank Trustee. (NYSCEF Doc. No. 94.) No late testimony from an HSBC Surrogate can overcome the abundant proof that this case was prosecuted for four of 36

36 and one-half years with the belief on the plaintiff side that the US Bank Trustee had standing. The verified summons and complaint NYSCEF Doc. No. 94), the loan modification offers (Def. Ex. C), the amended reply (Def. Ex. E), and the affidavit of Michael Bitterman of PHH (Def. Ex. F) are all examples that the plaintiff side understood and believed the US Bank Trustee was the proper plaintiff to commence this action. (See e.g. Colony Mtge Bankers v. Levell, 194 Misc. 2d 447.) Whereas the caption amendment granted by the Order of Substitution (Def. Ex. K) superficially masks the identity of the true plaintiff in this action, this Court must avoid the guileful attempt of the HSBC Surrogates to foreclose on the Caesar Defendants' home. The Caesar Defendants duly raised the affirmative defense of lack of standing. (Def. Ex. D and NYSCEF Doc. No. 91.) The US Bank Trustee's case must be dismissed for lack of standing and abandonment and the HSBC Trustee's case must be dismissed as a nullity. Lastly, the Caesar Defendants' counterclaims against the HSBC Trustee must be dismissed without prejudice for the failure to join the HSBC Trustee as a party to this action. Dated: Chappaqua, New York October S, 2017 Sworn to before me this day of October, 2017 Fran s M Caesar, Esq. 19 Hayra e Lane Chappaqua, New York Phone: Defendant Pro Se and Attorney for Defendant Lisa N. Caesar "r ALLISON SWANKO Notary Public, State of New Yorfc No. 01SW49'19012 Qualified in Westchester County I Q r;,,,., i=xoires April 11, 20_tJ of 36