Defendants. This is an action for foreclosure of a first lien mortgage encumbering the single

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Rosalind McDaniel
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1 SUPREME COURT: STATE OF NEW YORK TRIAL READY PART WESTCHESTER COUNTY PRESENT: HON. SAM D. WALKER, J.S.C X HSBC BANK USA N.A. AS TRUSTEE OF THE J.P. MORGAN MORTGAGE TRUST 2007-A2, -against- Plaintiff, Index No Francis M. Caesar; Lisa Caesar a/k/a Lisa N. Caesar; Citibank, N.A.; United States of America; New York State Department of Labor; New York State Department of Taxation and Finance; and John Doe#1 through John Doe#10, the last ten names being fictitious and unknown to the Plaintiff, the person or parties intended being the person or parties, if any, having or claiming an interest in or lien upon the mortgaged premises described in the complaint, ORDER AFTER TRIAL Defendants X This is an action for foreclosure of a first lien mortgage encumbering the single family residence commonly known as 19 HAYRAKE LANE, CHAPPAQUA, NY 10514, bearing tax map designation in the Town of New Castle, Westchester County: Section: 92.7 Block: 2 Lot: 10. This foreclosure action was commenced by the US Bank National Association as Trustee of the J.P. Morgan Alternative Loan Trust 2007-A2 (the Original Plaintiff ) against defendants Francis M. Caesar Esq. and Lisa N. Caesar (collectively the Caesar Defendants ), et al. The Original Plaintiff was substituted in this action by the HSBC Bank USA NA as Trustee of the J.P. Morgan Mortgage Trust 2007-A2 (the HSBC Trustee ) pursuant to an amended decision and order (Hon. Joan B. Lefkowitz J.S.C.) entered May 13, Specifically, upon motion by the HSBC Trustee to substitute itself herein for the Original Plaintiff, the Court granted said motion: 1

2 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 no amended answer is served then the present answer shall be considered the answer to the amended complaint. By an amended answer, the Caesar Defendants interposed, inter alia, the affirmative defense of lack of standing and noncompliance with RPAPL 1303 in addition to counterclaims against the HSBC Trustee separately, not in its capacity as substitute for the Original Plaintiff. In an affidavit dated September 27, 2016, submitted by the common servicing agent for the Original Servicer and the HSBC Trustee, the servicing agent conceded that the Original Plaintiff appeared in this action because of a mistake: I am a [sic] AVP at [PHH], loan servicer and attorney-in-fact for [the HSBC Trustee] and [the Original Plaintiff] After Borrowers defaulted under the Loan, this foreclosure action was erroneously filed in the name of [the Original Plaintiff] due to an assignment of mortgage that erroneously named [the Original Plaintiff] as the Assignee. This was a mistake, as the assignee should have been identified as the [HSBC Trustee], the entity which held the Note at that time (and still holds it). The common servicing agent therefore conceded the Original Plaintiff lacked standing to commence this foreclosure action. The trial was held before this Court on August 1-2, The HSBC Trustee was represented by Rosicki, Rosicki & Associates, P.C. Defendant Francis M. Caesar Esq. appeared pro se and as attorney of record for defendant Lisa N. Caesar. No other defendants in this action appeared at the trial. At trial, counsel for the HSBC Trustee withdrew the cross-motion of the HSBC Trustee for sanctions and an injunction against the Caesar Defendants. At the direction of this Court, counsel for the HSBC Trustee and the Caesar Defendants have submitted post-trial memoranda of law. 2

3 The Court has had a full opportunity to consider the evidence presented with respect to the issues in this action, including the testimony offered, the post-trial memoranda of law submitted and the following documents: Exhibits 1-12 entered by the HSBC Trustee at trial; Exhibits A-G, I-K and O entered by the Caesar Defendants at trial; The following e-filed documents referenced by the Caesar Defendants in the Caesar Defendants Post-Trial Memorandum of Law: e-filed document nos. 2, 8-13, 16, 25, 77, 91, 94, 99, 101, 104, 105, 108, , 122, , , , ; The following e-filed documents referenced by the HSBC Trustee in the HSBC Trustee s Post-Trial Memorandum of Law: e-filed document nos. ; The e-filed documents nos , , which were filed in connection with the e-filed motion no. 16; The e-filed document nos , which were filed in connection with the e-filed motion no. 17; The e-filed document nos , which were filed in connection with the e-filed motion no. 18; The notices of pendency e-filed at document nos. 216 and 246. The Court has further had an opportunity to observe the demeanor of the witnesses called to testify and has made determinations on issues of credibility with respect to these witnesses. The Court now makes the following findings of fact and conclusions of law. This action was commenced in March Only the defendant United States of America timely appeared; the Caesar Defendants by motion secured an order in December 2013 to compel acceptance of their late answer. Neither the Original Plaintiff nor the HSBC Trustee initiated any proceedings for the entry of a default judgment against the remaining defendants -- Citibank, N.A.; New York State Department of Labor; New York State Department of Taxation and Finance; and John Doe#1 through John Doe#10 -- within one year of their respective 3

4 defaults. The complaint is hereby deemed abandoned per CPLR 3215(c) with respect to said remaining defendants. The common mortgage servicing agent for the Original Plaintiff and the HSBC Trustee, through testimony and affidavits, conceded that the Original Plaintiff appeared in this action due to a mistake and conceded that the HSBC Trustee was the holder and assignee of the mortgage note underlying this action at the commencement hereof. Although the HSBC Trustee substituted for the Original Plaintiff herein after the commencement of the action, 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); see also, National Financial Co. v. Uh, 279 A.D.2d 374, 720 N.Y.S.2d 17 (App. Div. 2001; and see Reynolds v. Blue Cross of Northeastern New York, Inc., 210 A.D.2d 619, 620 N.Y.S.2d 164 (App. Div. 1994). As a substitute plaintiff where standing has been put into issue by the defendants, the HSBC Trustee had to prove that the Original Plaintiff had standing at the commencement of the action. (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. ); see also US Bank National Association v. Akande, 136 A.D.3d 887, 26 N.Y.S.3d 164 (2nd Dept. 2016); and see Arch Bay Holdings, LLC v. Albanese, 146 A.D.3d 849, 45 N.Y.S.3d 506 (2nd Dept. 2017). Upon concession that the Original Plaintiff lacked standing at the commencement hereof and due interposition of the affirmative defense of lack of standing, the Original Plaintiff s complaint must be dismissed. 4

5 Additionally, after a Traverse hearing held before Hon. Lester B. Adler, J.S.C. in November 2014, the Court determined the Caesars Defendants had not been served with process. The Caesar Defendants waived the affirmative defense of lack of personal jurisdiction by failing to move for dismissal within sixty (60) days of interposing said affirmative defense. However, the Original Plaintiff s process server averred in an affidavit of service that said process server delivered the RPAPL 1303 notice on the Caesar Defendants along with the summons and complaint. The Caesar Defendants raised the failure to comply with RPAPL 1303 in their amended answer as an affirmative defense. The HSBC Trustee failed to demonstrate that the Original Plaintiff had complied with RPAPL 1303 thus mandating dismissal of this action. See Eastern Sav. Bank, FSB v. Tromba, 2017 N.Y. Slip Op 1535 (2nd Dept. 2017). Lastly, to the extent the HSBC Trustee seeks to prosecute its claims against the Caesar Defendants, independent of the causes of action of the Original Plaintiff, the HSBC Trustee must commence an action pursuant to CPLR 304 or intervene in the action per CPLR 1013 to invoke the Court s jurisdiction. The HSBC Trustee did not intervene in this action and has failed to offer any proof that it commenced an action against the Caesar Defendants. Therefore, the HSBC Trustee s case must be dismissed as a nullity because said failure to intervene or commence an action is a nonwaivable, jurisdictional defect. See Wesco Ins. Co. v. Vinson, 137 A.D.3d 1114, 26 N.Y.S.3d 870 (2 nd Dept. 2016); see also O Brien v. Contreras, 126 A.D.3d 958, 6 N.Y.S.3d 273 (2nd Dept. 2015); and see DiSilvio v. Romanelli, 2017 N.Y. Slip Op 4097 (2 nd Dept. May 24, 2017). WHEREFORE, it is hereby ORDERED AND ADJUDGED, that the application of the Caesar Defendants to strike the Note of Issue is denied. ORDERED AND ADJUDGED, that the Caesar Defendants are granted judgment dismissing the foreclosure action commenced by the Original 5

6 Plaintiff (i.e., the US Bank National Association as Trustee of the J.P. Morgan Alternative Loan Trust 2007-A2) based on the Original Plaintiff s lack of standing, abandonment of claims and failure to comply with RPAPL ORDERED AND ADJUDGED, that the unpleaded and proposed action by the HSBC Trustee (i.e., the HSBC Bank USA NA as Trustee of the J.P. Morgan Mortgage Trust 2007-A2) against the Caesar Defendants is dismissed as a nullity for the failure of the HSBC Trustee to duly commence an action per CPLR 304 or intervene in this action per CPLR ORDERED AND ADJUDGED, that the Caesar Defendants counterclaims interposed against the HSBC Trustee are dismissed without prejudice for failure to join the HSBC Trustee as a necessary party. ORDERED AND ADJUDGED, that the defendant United States of America is granted judgment dismissing the foreclosure action commenced by the Original Plaintiff based on the Original Plaintiff s lack of standing and abandonment of claims. defendant Citibank, N.A. is deemed abandoned pursuant to CPLR 3215(c) for the failure of the Original Plaintiff or the HSBC Trustee (as substitute of the Original Plaintiff) to take proceedings for the entry of judgment within one year after the default of Citibank, N.A. defendant New York State Department of Labor is deemed abandoned pursuant to CPLR 3215(c) for the failure of the Original Plaintiff or the HSBC Trustee (as substitute of the Original Plaintiff) to take proceedings for the entry of judgment within one year after the default of New York State Department of Labor. defendant New York State Department of Taxation and Finance is deemed abandoned its pursuant to CPLR 3215(c) for the failure of the Original Plaintiff or the HSBC Trustee (as substitute of the Original Plaintiff) to take proceedings for the entry of judgment within one year after the default of New York State Department of Taxation and Finance. defendant John Doe#1 through John Doe#10 is deemed abandoned pursuant to CPLR 3215(c) for the failure of the Original Plaintiff or the HSBC Trustee (as substitute of the Original Plaintiff) to take proceedings for the entry of judgment within one year after the default of John Doe#1 through John Doe#10 ORDERED AND ADJUDGED, that the clerk of the County of Westchester is directed to cancel the notices of pendency of this action filed in the clerk s office on July 3, 2017 at NYSCEF Doc. No. 216 and on August 3, 2017 at 6

7 NYSCEF Doc. No. 246, and to make note to that effect on the margin of the record of the notices of pendency referring to this Order. This constitutes the order of the Court. Let Judgment enter accordingly. E N T E R, Dated: White Plains, New York, 2017 HON. SAM D. WALKER, J.S.C. SUPREME COURT JUSTICE 7

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

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