FILED: WESTCHESTER COUNTY CLERK 03/22/2016 07:11 PM INDEX NO. 52297/2016 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/22/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF WESTCHESTER - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Index No. 52297/2016 WELLS FARGO BANK, N.A., - against- Plaintiff, ANSWER WITH AFFIRMATIVE DEFENSES AND COUNTERCLAIMS KERI A. DEFILIPPI; KRIS A. DEFILIPPI; "JOHN DOES" and "JANE DOES", said names being fictitious, parties intended being possible tenants or occupants of premises, and corporations, other entities or persons who claim, or may claim, a lien against the premises, Property: 1344 Bolton Road Pelham, NY 10803-3602 Defendants. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The Defendants, Kris A. Defilippi and Keri A. Defilippi (hereinafter the Defendants ), by their attorney, Carl E. Person, in Answer to the Plaintiff s complaint (the Complaint ) respectfully allege as follows: 1. DENY having knowledge or information sufficient to form a belief as to the truth or falsity of each of the allegations set forth in 1 of the Complaint. 2. DENY having knowledge or information sufficient to form a belief as to the truth or falsity of each of the allegations set forth in 2 of the Complaint; except ADMIT that they are residents of the State of New York. 3. DENY the allegations set forth in 3 of the Complaint; except ADMIT that they signed a note involving the subject property, which note Plaintiff has no standing to enforce. 1 of 26
4. DENY the allegations set forth in 4 of the Complaint; except ADMIT that they signed a mortgage involving the subject property, which mortgage the Plaintiff has no standing to enforce. 5. DENY the allegations set forth in 5, including sub sections (a), (b), (c) and (d) of the Complaint; except ADMIT that they signed a mortgage involving the subject property, which mortgage Plaintiff has no standing to enforce. 6. DENY having knowledge or information sufficient to form a belief as to the truth or falsity of each of the allegations set forth in 6 of the Complaint. 7. DENY the allegations set forth in 7 of the Complaint; Plaintiff has no standing to bring and maintain this lawsuit. 8. DENY the allegations set forth in 8 of the Complaint; Plaintiff has no standing to bring and maintain this lawsuit. 9. DENY the allegations set forth in 9 of the Complaint; Plaintiff has no standing to bring and maintain this lawsuit. 10. DENY the allegations set forth in 10 of the Complaint; Plaintiff has no standing to bring and maintain this lawsuit. 11. DENY the allegations set forth in 11 of the Complaint; Plaintiff has no standing to bring and maintain this lawsuit. 12. DENY the allegations set forth in 12 of the Complaint; Plaintiff has no standing to bring and maintain this lawsuit. 13. DENY the allegations set forth in 13 of the Complaint; Plaintiff has no standing to bring and maintain this lawsuit. 2 of 26
14. DENY the allegations set forth in 14 of the Complaint. Plaintiff has no standing to bring and maintain this lawsuit. 15. DENY having knowledge or information sufficient to form a belief as to the truth or falsity of each of the allegations set forth in 15 of the Complaint. 16. DENY having knowledge or information sufficient to form a belief as to the truth or falsity of each of the allegations set forth in 16 of the Complaint. 17. DENY having knowledge or information sufficient to form a belief as to the truth or falsity of each of the allegations set forth in 17 of the Complaint. WHEREFORE, Defendants pray that judgment be entered dismissing Plaintiff s Complaint, together with costs, attorneys fees and any other and further relief deemed just and equitable by this Court. AFFIRMATIVE DEFENSES Note: Some of the Affirmative Defenses below are pleaded in the alternative, by assuming, arguendo, that Plaintiff is entitled to enforce the note, mortgage and related loan documents. AS AND FOR A FIRST AFFIRMATIVE DEFENSE (Failure to State a Claim Upon Which Relief May be Granted) 1. Plaintiff, in its Complaint, has failed to state a claim, or allege any facts, upon which any relief may be granted. 3 of 26
AS AND FOR A SECOND AFFIRMATIVE DEFENSE (Lack of Standing) 2. At the time it commenced this action, Plaintiff: (i) was not the holder or owner in possession of the original note, mortgage and related loan documents it seeks to enforce; and (ii) was not (and is still not) authorized to enforce the original note, mortgage and related loan documents by their lawful owner and holder. AS AND FOR A THIRD AFFIRMATIVE DEFENSE (Plaintiff is Not a Real Party in Interest) 3. Plaintiff is not a real party in interest, is unauthorized to bring and maintain suit on behalf of the owner in possession of the original note, mortgage and related loan documents, and is unauthorized to act on behalf of the actual holder and lawful owner of the original note, mortgage and related loan documents, with the result that Plaintiff lacks an interest in the alleged causes of action, and lacks authority to bring, maintain or settle this action. AS AND FOR A FOURTH AFFIRMATIVE DEFENSE (Failure to Include an Essential Party) 4. Plaintiff lacks standing in this action, is not authorized to bring and maintain suit on behalf of the lawful owner and holder in possession of the original note, mortgage and related loan documents, and has failed to include the lawful owner and holder in possession of the original note, mortgage and related loan documents as a party to this lawsuit. 4 of 26
AS AND FOR A FIFTH AFFIRMATIVE DEFENSE (Unclean Hands) 5. Plaintiff filed this action seeking the equitable relief of foreclosure despite having acted (and despite its predecessors in interest having acted) with unclean hands with respect to business dealings involving Defendants, the Property, the note, mortgage and related loan documents. Upon information and belief, Plaintiff, and its predecessors in interest, each acted with unclean hands by and through their demand for, and collection of payments, from Defendants despite lacking standing to enforce the note, mortgage and related loan documents. AS AND FOR A SIXTH AFFIRMATIVE DEFENSE (Breach of the Implied Covenant of Good Faith and Fair Dealing) 6. Plaintiff has filed this action seeking an equitable foreclosure despite having acted unfairly and without good faith with respect to its business dealings involving Defendants, the Property, the note, mortgage and related loan documents. AS AND FOR A SEVENTH AFFIRMATIVE DEFENSE (Predatory Lending Practices) 7. Plaintiff s (including its predecessors ) practice of making loans to homeowners and thereafter pursuing the equitable remedy of foreclosure without affording Defendants (and other similarly situated Defendants who own property) the good faith opportunity to enter into a fair, reasonable and affordable loan modification is, upon information and belief, a predatory lending practice undertaken by the Plaintiff (and its predecessors) with unclean hands, in bad faith, and in breach of the covenant of good faith and fair dealing inherent in every contract. 5 of 26
AS AND FOR AN EIGHTH AFFIRMATIVE DEFENSE (No Proximate Cause for Damages Alleged) 8. The damages alleged by Plaintiff did not proximately result from any act or omission of Defendants, and as a result, Plaintiff is not entitled to any of the remedies it seeks as against Defendants. AS AND FOR A NINTH AFFIRMATIVE DEFENSE (Write- Off) 9. Upon information and belief, Plaintiff, or Plaintiff s predecessor(s) in interest, has written off the alleged debt for tax purposes, and has derived a financial advantage from the write- off, with the result that Plaintiff is now precluded from attempting to enforce the alleged debt. AS AND FOR A TENTH AFFIRMATIVE DEFENSE [New York State Mortgage Foreclosure Law/Chapter 507 of the Laws of 2009 (RPAPL 1303)] 10. Failure to strictly comply with the mandatory written notice requirements of New York State Mortgage Foreclosure Law/Chapter 507 of the Laws of 2009 (amending RPAPL 1303) that are a condition precedent to maintaining this foreclosure action. AS AND FOR AN ELEVENTH AFFIRMATIVE DEFENSE [New York State Mortgage Foreclosure Law/Chapter 507 of the Laws of 2009 (RPAPL 1304)] 11. Failure to strictly comply with the mandatory written notice requirements of New York State Mortgage Foreclosure Law/Chapter 507 of the 6 of 26
Laws of 2009, Section 1 (amending RPAPL 1304) that are a condition precedent to maintaining this foreclosure action. AS AND FOR A TWELFTH AFFIRMATIVE DEFENSE (RPAPL 1306) 12. Failure to strictly comply with the mandatory written notice requirements of RPAPL 1306 that are a condition precedent to maintaining this foreclosure action. AS AND FOR A THIRTEENTH AFFIRMATIVE DEFENSE (New York State Mortgage Foreclosure Law/Chapter 507 of the Laws of 2009, Section 5) 13. Failure to strictly comply with the mandatory requirements of Banking Law Sections 595- a and 6-1 or 6- m, as well as any rules and regulations promulgated under New York State Mortgage Foreclosure Law/Chapter 507 of the Laws of 2009, Section 5. AS AND FOR A FOURTEENTH AFFIRMATIVE DEFENSE (Violation of Federal and NY Antitrust Laws - Short Sale Restriction) 14. Violation of 340 of the New York General Business Law (the Donnelly Antitrust Act) and 1-2 of the Sherman Antitrust Act (15 U.S.C.A. 1-2), as a combination, agreement and/or conspiracy and boycott and group boycott in unreasonable restraint of trade, for not offering Defendants the opportunity to purchase the mortgaged property through a "short sale" while Plaintiff is willing to approve a short sale to anyone not related or affiliated with Defendants, and 7 of 26
requiring for any short sale that Defendants lose ownership and occupancy of the mortgaged property. AS AND FOR A FIFTEENTH AFFIRMATIVE DEFENSE (Violation of Federal and NY Antitrust Laws - Bad- Faith Conferencing) 15. Unclean hands of Plaintiff, by having unlawful practices (antitrust violations) that unlawfully preclude use of the conferencing part and good- faith negotiating requirements (pursuant to CPLR 3408) by excluding short sales and sale of the original note, mortgage and related documents to Defendants, because both of such transactions, if permitted by Plaintiff, would enable Defendants to retain ownership and occupancy of the mortgaged property, which Defendants want to do. AS AND FOR A SIXTEENTH AFFIRMATIVE DEFENSE (Failure to Offer Purchase Opportunity at Net Present Value) 16. Failure by Plaintiff to offer Defendants the opportunity to purchase the original note, mortgage and related loan documents, as an alternative to foreclosure and sale, at the "net present value" as defined by federal agency rules and regulations or at the current market value for such note, mortgage and related loan documents. AS AND FOR A SEVENTEENTH AFFIRMATIVE DEFENSE (Plaintiff is Not a Holder in Due Course) 17. Plaintiff is not a holder in due course of the original note, mortgage, and related loan documents referenced in the Complaint (collectively the Loan Documents ), with the result that it lacks standing to enforce all Loan Documents. 8 of 26
AS AND FOR AN EIGHTEENTH AFFIRMATIVE DEFENSE (Bifurcation of the Note and Mortgage) 18. Ownership of the original note has been separated from ownership of the original mortgage as a byproduct of various purported transfers and assignments of the original note, mortgage and related loan documents by Plaintiff, its predecessors in interest, and its agents, with the result that both the original note and original mortgage have been rendered unenforceable. AS AND FOR A NINETEENTH AFFIRMATIVE DEFENSE (RPAPL 1302) 19. Plaintiff failed to comply with the pleading requirements set forth in RPAPL 1302. AS AND FOR A TWENTIETH AFFIRMATIVE DEFENSE (Defective Assignment of the Original Note, Mortgage and Related Loan Documents) 20. Upon information and belief, one or more attempted transfers of the original note, mortgage and related loan documents took place prior to the filing of this lawsuit, and that/those attempted transfer(s), which purported to assign the original note and/or mortgage with related loan documents, is/are defective because: (i) the note and mortgage were purportedly assigned by a party that had neither a real interest in, nor possession of, the documents sought to be assigned; and/or (ii) the assignments were executed by an individual lacking the authority to make the purported transfers of interest; and/or (iii) there was a failure of consideration in connection with the purported transfer(s); and/or (iv) there was a failure to abide by applicable law and/or contractual requirements relating to the 9 of 26
purported transfers of the original note and mortgage through the purported assignments. AS AND FOR A TWENTY- FIRST AFFIRMATIVE DEFENSE (Failure to Offset and Workout a Reasonable Modification) 21. Plaintiff, in contrast with current industry practices, pursued the equitable remedy of foreclosure without first offering Defendants a good faith opportunity to enter into a permanent loan modification that: (i) is reasonable and affordable in the required monthly payment amount; and (ii) in compliance with applicable loss mitigation rules and regulations. AS AND FOR A TWENTY- SECOND AFFIRMATIVE DEFENSE (Violation of Federal and NY Antitrust Laws Mortgage Insurance Requirement) 22. Violation of 340 of the New York General Business Law (the Donnelly Antitrust Act) and 1-2 of the Sherman Antitrust Act (15 U.S.C.A. 1-2), as a combination, agreement and/or conspiracy and boycott and group boycott in unreasonable restraint of trade, for requiring or buying mortgage insurance requiring, as a condition to payment on an allegedly defaulted note and mortgage, that the homeowner- Defendants lose both title and occupancy to the mortgaged premises, through short sale, deed in lieu of foreclosure, abandonment or foreclosure sale with such consequence. 10 of 26
Defendants reserve the right to add other affirmative defenses, offsets and to add additional counterclaims as discovery discloses the full extend of the activities of Plaintiff. WHEREFORE, Defendants pray that judgment be entered dismissing Plaintiff s Complaint, together with costs, attorney s fees and any other and further relief deemed just and equitable by this Court. COUNTERCLAIMS AS AND FOR A FIRST COUNTERCLAIM (Declaratory Judgment against Counterclaim Defendant) 23. Counterclaim Plaintiffs, Kris A. Defilippi and Keri A. Defilippi (the Counterclaim Plaintiffs ) repeat each and every allegation contained in all of the preceding paragraphs as if fully stated herein. 24. Upon information and belief, Counterclaim Defendant, Wells Fargo Bank, N.A., is not a real party in interest and is neither the owner/holder of, nor a party entitled to enforce, the original note, mortgage and related loan documents at issue (annexed to Plaintiff s complaint). 25. The allegations in the preceding 23-24 are in actual and real controversy, so that a declaratory judgment would serve to adjudicate the rights of the respective parties before a wrong actually occurs in the hope that later litigation will be unnecessary. 11 of 26
WHEREFORE, Counterclaim Plaintiffs respectfully demand a declaratory judgment stating that Counterclaim Defendant: (i) is not a real party in interest and is not the owner and holder of the original note, mortgage and related loan documents at issue in this lawsuit; and (ii) is not entitled to enforce the original note, mortgage and related loan documents at issue in this lawsuit. The following counterclaims are pleaded in the alternative to the claims and allegations included in the preceding paragraphs of this Answer. AS AND FOR A SECOND COUNTERCLAIM (Breach of the Implied Covenant of Good Faith and Fair Dealing) 26. Counterclaim Plaintiffs repeat each and every allegation made in the preceding paragraphs as if fully stated herein. 27. Every contract, including the one at issue, contains an implied covenant of good faith and fair dealing. 28. This implied covenant is breached when one party acts in a way that deprives the other party of his right to receive benefits under the contract, even if such an act is not expressly forbidden by the agreement. 29. Counterclaim Defendant (including its predecessor(s) in interest) acted unfairly and with unclean hands by failing to negotiate in good faith for a fair, reasonable and affordable loan modification that would enable Counterclaim Plaintiffs to make payments on the loan to the real party in interest entitled to receive those payments. 12 of 26
30. Counterclaim Defendant acted with unclean hands by filing a foreclosure action seeking equitable remedies after acting unfairly by and through its unwillingness to negotiate in good faith for an enforceable and affordable loan modification that would enable Counterclaim Plaintiffs to make payments on the loan to the real party in interest entitled to receive them. 31. Counterclaim Plaintiffs have been damaged and deprived of their right to receive benefits under the contract as a proximate result of Counterclaim Defendant s activities as described in this Answer with Counterclaims. WHEREFORE, Counterclaim Plaintiffs respectfully demands judgment: (i) (ii) Declaring that Counterclaim Defendant breached the implied covenant of good faith and fair dealing with Counterclaim Plaintiffs; and Ordering Counterclaim Defendant s Complaint to be dismissed without prejudice to give the parties an opportunity to negotiate a fair and reasonable settlement. Thereafter, if Counterclaim Defendant fails to negotiate a fair and reasonable loss mitigation alternative, such failure shall be a defense to any foreclosure action brought by Counterclaim Defendant; and (iii) Awarding costs and attorneys fees to Counterclaim Plaintiffs; and (iv) Ordering any and all other further relief deemed appropriate by this Court. 13 of 26
AS AND FOR A THIRD COUNTERCLAIM (Violation of 340 of the New York General Business Law The Donnelly Act - Industry- Wide Agreement Not to Approve a Short Sale to the Defaulted Homeowner- Mortgagor) 32. Counterclaim Plaintiffs repeat and reallege each and every allegation set forth above as if more fully set forth herein. 33. CPLR 3408 requires that Counterclaim Defendant request the court to assign this lawsuit to the residential mortgage foreclosure conferencing part, to see if the parties are able to resolve or settle the foreclosure action through a loan modification, short sale, refinancing or other means to enable Counterclaim Plaintiffs to keep the Property. CPLR 3408 provides in part: (a)... for the purpose of holding settlement discussions pertaining to the relative rights and obligations of the parties under the mortgage loan documents, including, but not limited to determining whether the parties can reach a mutually agreeable resolution to help the defendant avoid losing his or her home, and evaluating the potential for a resolution in which payment schedules or amounts may be modified or other workout options may be agreed to, and for whatever other purposes the court deems appropriate. 34. During the conferencing period, the parties are required by CPLR 3408 to act in good faith. CPLR 3408 provides: (f) Both the plaintiff and defendant shall negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible. 35. Whether a loan modification is required to be offered during conferencing may be determined by the "net present value" ("NPV") test, which the 14 of 26
mediator or referee has a right to require the parties to perform during mediation. See bottom of page 1 of "Understanding Net Present Value - A presentation created in April 2013 by Ariel Speser and Brian Haaland", available at http://www.commerce.wa.gov/documents/understanding%20npv%20fin AL%20SCRIPT%20%205%202%2013.pdf 36. If the NPV test is positive, Counterclaim Defendant is required to offer an appropriate loan modification agreement or, upon information and belief, the opportunity for Counterclaim Plaintiffs to purchase the note and mortgage for its NPV or present market value note and mortgage. 37. If the NPV test is positive, Counterclaim Plaintiffs have a right to refinance the loan (provided Counterclaim Defendant receives 100% of the NPV) to enable Counterclaim Plaintiffs to obtain a better rate and/or lower monthly payment, if possible, otherwise there would be a violation of the Sherman Antitrust Act (15 U.S.C.A. 1-2) and 340 of the New York General Business Law (the Donnelly Antitrust Act), as a boycott and conspiracy or agreement in unreasonable restraint of trade and monopolizing the market through a combination of banks and servicers acting in concert through Mortgage Electronic Registration Systems, Inc. or "MERS" and through buying and selling notes and mortgages among themselves through Pooling and Servicing Agreements and Trust Indenture agreements having substantially similar provisions. 15 of 26
38. The relevant market for these alleged restraints are 1-4 family residential securitized mortgages in default or alleged default, and the relevant sub- markets are: 1. Short sales of the mortgaged property; 2. Sales of the defaulted note and mortgage as indirect way of purchasing the mortgaged property; 3. Loan modification agreements; and institutions. 4. Refinancing of the mortgaged property with other financial 39. As background, millions of securitized 1-4 family residential mortgages are being or have been foreclosed and the mortgaged property sold for their present (often substantially reduced) value or less, with the homeowner being forced to lose his/her home because of industry- wide (non- governmental) restrictions on homeowners preventing them from participating in sales of their property, note and mortgage. 40. Also, the notes and mortgages are being sold to hedge funds, vulture funds and investors for commencement of foreclosure proceedings, followed by sale of the mortgaged property and eviction of the former homeowner from the premises, such as the Plaintiff is attempting to do in this action. 16 of 26
41. The antitrust problem is that by private agreement among lender, servicer and trustee (the "Industry Agreement"), created at the beginning of securitization of notes and mortgages by the nation's major banks, the homeowner- mortgagor is never permitted to buy the note and mortgage when they are being offered for sale and sold (i.e., assigned) and then re- assigned, even during conferencing under CPLR 3408, at which time there is a statutory duty to negotiate in good faith to try to enable the homeowner to keep his property. Such negotiations should include a look at the possibility of selling the note and mortgage to the homeowner- defendant for the net present value ("NPV") of the note and mortgage (i.e., the amount which Counterclaim Defendant would realize upon the sale it is seeking the court to approve), but this did not and does not occur. 42. As a result of the Industry Agreement, the homeowner is stuck with the bank's refusal during conferencing to grant a loan modification and cannot get another bank or person to lend against the mortgaged property (at its present reduced value) to enable the homeowner to refinance the mortgage (with an affordable monthly payment at the present, lower rate of interest) and remain as owner and occupant of the home. 43. This is a serious antitrust law violation, involving an unlawful combination of banks setting up the Industry Agreement among the financial institutions making about two- thirds of the nation's residential mortgage loans, including (upon information and belief) the instant mortgage, in unreasonable 17 of 26
restraint of trade in violation of 1 of the Sherman Antitrust Act, 15 U.S.C.A. 1 and 340 of the New York General Business Law (the Donnelly Antitrust Act). 44. The securitization process has resulted in this Industry Agreement in unreasonable restraint of trade. It is also a boycott and group boycott because the banks, servicers and REMIC trustees do not allow any sale of the note and mortgage to the homeowner. Also, it is a conspiracy in unreasonable restraint of trade. 45. Furthermore, the banks are monopolizing the foreclosure sales market for 1-4 family residential homes by not permitting sale of the note and mortgage to the homeowner for its current value (thus preventing any refinancing with another bank based on present value and present interest rate), which is also monopolizing the submarket of refinancing of residential home mortgages in foreclosure. 46. Also, Counterclaim Plaintiffs have a right to purchase the note and mortgage for the Net Present Value, which is the full amount that Counterclaim Defendant would receive if it obtained an order from this Court permitting it to foreclose upon and sell the mortgaged property. This right is attributable to the Sherman Antitrust Act and the New York Donnelly Antitrust Act, because not allowing Counterclaim Plaintiffs to either do a short sale (or purchase the note and mortgage when Counterclaim Defendant, upon information and belief, is willing to sell the note and mortgage to various vulture funds or other type of hedge fund or investor under these circumstances) is an unlawful group boycott and unreasonable restraint in trade and monopolizing created by conspiracy, combination and 18 of 26
agreement involving the Industry Agreement and (upon information and belief) the Pooling and Servicing Agreement and the Trust Indenture agreement relating to the instant note and mortgage, with their mortgage insurance requirements. 47. A copy of this pleading is being served upon the New York State Attorney General in accordance with the requirements of Section 340, New York General Business Law. 48. Counterclaim Plaintiffs seek disclosure of the Net Present Value and the data which is used by Counterclaim Defendant to calculate the Net Present Value or NPV, including the date(s) for which the data is applicable, and any offers of the note and mortgage that Counterclaim Defendant has made from the date of alleged default to the present. 49. Counterclaim Plaintiffs seek time during conferencing to either purchase the note and mortgage outright for an amount equal to the NPV or to arrange for a financial institution to provide refinancing of the mortgage and to pay the real party in interest the full amount of the NPV. 50. Any provisions in the Pooling and Servicing Agreement and/or Trust Indenture agreement which prohibit a sale of the note and mortgage to Counterclaim Plaintiffs, or for refinancing, are illegal, null and void under 1-2 of the Sherman Antitrust Act and under 340 of the New York General Business Law. 19 of 26
Damages 51. Counterclaim Plaintiffs have been damaged by the activities of Counterclaim Defendant, and any predecessors, servicers, and successor(s), by agreeing to a set of rules set forth in the Industry Agreement and the uniform terms of the Pooling and Servicing Agreements and Trust Indenture agreements that permit short- sale of the home or sale of a defaulted note and mortgage to anyone but the homeowner- mortgagor (or relatives or business associates), which if enforced would result in damages and the unnecessary loss of Counterclaim Plaintiffs mortgaged property. 52. Counterclaim Plaintiffs are entitled to treble damages plus attorneys fees under the New York Donnelly Act. 53. Counterclaim Plaintiffs are being threatened with irreparable injury through this threatened loss of the mortgaged property by not permitting them to retain the Property through short sale or purchase of the note and mortgage, thereby resulting in loss of the mortgaged property through foreclosure and sale. Counterclaim Plaintiffs seek and are entitled to a preliminary and permanent injunction to stop any sale of the note and mortgage, or of the mortgaged property, until this action is resolved. Relief 54. Counterclaim Plaintiffs are entitled to a preliminary and permanent injunction prohibiting Counterclaim Defendant or any successors or servicers or agents to sell the note and mortgage without giving Counterclaim Plaintiffs a first 20 of 26
option to purchase the note and mortgage on the same terms and conditions, and from selling the mortgaged property through foreclosure and sale without first offering the note and mortgage to Counterclaim Plaintiffs for the NPV, the present value of the note and mortgage, or the price at which they are being offered to a third person. 55. Counterclaim Plaintiffs are entitled to damages, including consequential damages such as caused by a reduced credit rating, higher interest rates, costs of seeking alternatives, higher prices because of lower borrowing opportunities. 56. Counterclaim Plaintiffs are entitled to an order giving them an option to purchase the note and mortgage or to refinancing the existing mortgage based on the NPV for a 90- day period, subject to extension if within the 90 days Counterclaim Plaintiffs have a bona fide commitment for purchase or refinancing of the mortgage. 57. Counterclaim Plaintiffs are entitled to recovery of pecuniary damages in an amount to be proven at trial, plus treble damages under the Donnelly Act, together with attorney's fees, and such other and further relief deemed appropriate by this court. AS AND FOR A FOURTH COUNTERCLAIM (Violation of 340 of the New York General Business Law The Donnelly Act - Industry- Wide Agreement Not to Offer or Sell the Note and Mortgage to the Homeowner- Mortgagor) 58. Counterclaim Plaintiffs repeat each and every allegation made in the preceding paragraphs as if fully stated herein. 21 of 26
59. The Industry Agreement and the industry- wide agreement, practice and custom denying a homeowner in litigation the opportunity to buy the note and mortgage when they are being offered to hedge funds and others is a violation of 340 of the New York General Business Law (the Donnelly Act). 60. Damages and requests for relief are set forth at 51-57 above. AS AND FOR A FIFTH COUNTERCLAIM (Violation of 340 of the New York General Business Law - The Donnelly Act - Industry- Wide Agreement Requiring Mortgage Insurance Denying Payment when Mortgagor Does Not Lose His/Her Ownership and Occupancy) 61. Counterclaim Plaintiffs repeat each and every allegation made in the preceding paragraphs as if fully stated herein. 62. The Industry Agreement and the industry- wide agreement, practice and custom and usage (in the securitization of 1-4 family residential mortgages) requiring mortgage insurance denying payment when the defaulted mortgagor does not lose his/her ownership and occupancy is a violation of 340 of the New York General Business Law (the Donnelly Act). 63. Damages and requests for relief are set forth at 51-57 above. 22 of 26
AS AND FOR A SIXTH COUNTERCLAIM (Violation of CPLR 3408 - Violations of The Donnelly Act Unlawfully Deprived Counterclaim Plaintiffs of the Benefits of CPLR 3408, including an Offer to Remain as Owner of the Mortgaged Property through Short Sale or Purchase of the Note and Mortgage) 64. Counterclaim Plaintiffs repeat each and every allegation made in the preceding paragraphs as if fully stated herein. 65. CPLR 3408 does not help Counterclaim Plaintiffs if Counterclaim Defendant is barred by the Industry Agreement and/or the industry- wide agreement, practices, and custom and usage, from permitting a short sale to Counterclaim Plaintiffs or a sale of the note and mortgage to Counterclaim Plaintiffs. 66. This practice, however, is illegal, as a violation of New York's antitrust statute, 340 of the New York General Business Law, otherwise known as the Donnelly Act. 67. Accordingly, by reason of the unlawful practices of Counterclaim Defendant, through anticipatory breach and industry agreement, Counterclaim Plaintiffs have not been given the opportunity to determine, during conferencing, all of the possible loss mitigation transactions available to Counterclaim Plaintiffs, which results in bad- faith by Counterclaim Defendant, from the outset of the litigation. Counterclaim Defendant has failed to either offer a short sale for Counterclaim Plaintiffs to accept directly (at the price available to third persons or at the NPV) and/or to offer to sell the note and mortgage to Counterclaim Plaintiffs directly (at the price available to third persons or at the NPV). 23 of 26
68. Counterclaim Plaintiffs are entitled to have this action put into conferencing to see whether Counterclaim Defendant should be required to let Counterclaim Plaintiffs resolve this action by enabling them to keep ownership and occupancy of the mortgaged property rather than to have the property sold at auction, with resulting loss of ownership and occupancy. 69. Damages and requests for relief are set forth at 51-57 above, except that Counterclaim Plaintiffs do not seek treble damages for violation of CPLR 3408. PRAYER WHEREFORE, the Defendant/Counterclaim Plaintiffs pray the Court for the following relief against the Plaintiff/Counterclaim Defendant, all of which (for purposes of brevity and accuracy) is incorporated by reference: 1. Dismissal of the complaint with prejudice and with costs. 2. As to the First Counterclaim the relief described at 25 above; 3. As to the Second Counterclaim the relief described at 31 above; above; 4. As to the Third Counterclaim the relief described in 51-57 above; 5. As to the Fourth Counterclaim the relief described in 51-57 24 of 26
6. As to the Fifth Counterclaim the relief described in 51-57 above; above; and 7. As to the Sixth Counterclaim the relief described in 51-57 8. As to all Six Counterclaims Such other and further relief which this Court deems just and proper. Dated: New York, New York March 22, 2016 Carl E. Person Attorney for Defendants/ Counterclaim Plaintiffs Kris A. Defilippi & Keri A. Defilippi 225 E. 36th Street - Suite 3A New York NY 10016 (212) 307-4444 25 of 26
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF WESTCHESTER - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Index No. 52297/2016 WELLS FARGO BANK, N.A., Plaintiff, - against- KERI A. DEFILIPPI; KRIS A. DEFILIPPI; "JOHN DOES" and "JANE DOES", said names being fictitious, parties intended being possible tenants or occupants of premises, and corporations, other entities or persons who claim, or may claim, a lien against the premises, Property: 1344 Bolton Road Pelham, NY 10803-3602 Defendants. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ANSWER WITH AFFIRMATIVE DEFENSES AND COUNTERCLAIMS Pursuant to 22 NYCRR 130-1.1, I, the undersigned, an attorney admitted to practice in the courts of New York State, certifies that upon information and belief and reasonable inquiry, the contentions contained in this answer are not frivolous. Dated: March 22, 2016 Carl E. Person Attorney for Defendants/ Counterclaim Plaintiffs Kris A. Defilippi & Keri A. Defilippi 225 E. 36th Street - Suite 3A New York NY 10016 (212) 307-4444 26 of 26