Velocity Investment, L.L.C., Plaintiff(s) v. Kern Hokai, Defendant(s) (2026)

ssociates, P.C.)

Appearing for Defendant

Kern Hokai, pro se

Upon the foregoing cited papers, the Decision/ Order on the Defendant's motion to dismiss and Plaintiff's cross-motion to dismiss the counterclaim, is as follows:

The motions were taken on submission on July 6, 2026.

FACTS OF THE CASE

Plaintiff commenced this consumer debt action by filing summons and complaint on November 19, 2025, alleging that defendant owe a balance of $22,905.91 (principal of $22,266.18 plus interest of $639.73) on a loan granted to defendant in 2019 by original lender LendingClub Bank, N.A. in the total amount of $35,000. Plaintiff further alleged that LendingClub Bank, N.A. assigned the loan on 03/09/21 to Lending Club Corp. Servicer for Loan Asset Holding II Trust 2020-1. Further, that plaintiff purchased the loan from Lending Club Corp. Servicer for Loan Asset Holding II Trust 2020-1 on 01/30/24.

Defendant filed his answer with a counterclaim alleging violation of the Fair Debt Collection Practices Act (FDCPA) on January 16, 2026. On the same day, defendant filed the within motion to dismiss the complaint. On February 3, 2026, plaintiff filed its opposition to the motion and a cross motion to strike the counterclaim. The motions were submitted on July 6, 2026.

Although defendant also alleged that there is a discrepancy in the amount alleged as owing in the complaint as owing and the amount shown on the Loan Summary that accompanied the complaint, however, the court has reviewed both documents and saw no such discrepancy. Both documents clearly state that the amount in owing is $22,905.91. No where in the Loan Summary document did it state this amount as $27,905.71, contrary to defendant's assertion.

DISCUSSION

a. Defendant's Motion to Dismiss

The crux of Defendant's motion to dismiss is that '[T]he complaint identifies "lendingClub Corp. Servicer" in the chain of title — a servicer is not an owner and has no authority to transfer ownership' to plaintiff. Defendant theorized that since plaintiff claims that it purchased the loan from a loan 'servicer', it lacked standing because servicing companies do not own the loans they service and consequently lack the ability to sell those loans to third parties. He further argued that even if the Trust were to assign or sell the loan to plaintiff, a valid "assignment document" or "bill of sale with proper signatures, closing date or account identification", should have been attached to the complaint.

Contrary to defendant's argument, plaintiff's complaint only needs to comply with CPLR 3016(j) in order to pass the pleading test. A complaint need not lay out every conceivable allegation that plaintiff intends to rely upon nor attach every and all evidence intended to be used to prove the claims. See Isaacs v Washougal Clothing Co., 233 A.D.568, 253 N.Y.S. 387 (4th Dept 1931) (holding that pleading is sufficient if facts necessary to make out cause of action can fairly be gathered from the complaint.). Consumer credit transaction complaints are guided by CPLR 3016(j).

The within complaint substantially complies with the pleading requirements as prescribed by CPLR 3016(j) in that it named the original creditor; provided the account's last four digits; provided date and amount of last payment on the account; gave the date on or about which the final statement of account was provided to the defendant; that this was a loan and not a revolving account; provided account balance printed on the most recent monthly statement recording a purchase transaction, last payment or balance transfer.

"On a defendant's motion to dismiss the complaint based upon the plaintiff's alleged lack of standing, the burden is on the moving defendant to establish, prima facie, the plaintiff's lack of standing as a matter of law" MLB Sub I, LLC v Bains, 148 AD3d 881 (2nd Dept. 2017) (quoting New York Community Bank v McClendon, 138 AD3d 805, 806 [2016]; Arch Bay Holdings, LLC-Series 2010B v Smith, 136 AD3d 719, 719 [2016]). "To defeat a defendant's motion, the plaintiff has no burden of establishing its standing as a matter of law; rather, the motion will be defeated if the plaintiff's submissions raise a question of fact as to its standing" Id. (quoting Deutsche Bank Trust Co. Ams. v Vitellas, 131 AD3d 52, 60 [2015]; citing New York Community Bank v McClendon, 138 AD3d at 806).

Indeed, defendant's challenge to plaintiff's standing rests heavily upon speculative belief that servicing companies cannot and do not own loans. That may well be the case, however, defendant produced no evidence to support this position. The allegation in the complaint that plaintiff purchased the loan from its previous owner in January of 2024, coupled with its substantial compliance with CPLR 3016(j) pleading requirements, meets the prima facie standing burden.

More importantly, defendant's motion was not accompanied by a formal 'notice of motion', in violation of CPLR 2214(a), which directs that "a notice of motion shall specify the time and place of the hearing on the motion, the supporting papers upon which the motion is based, the relief demanded and the grounds therefor." Since defendant's motion to dismiss was not made on notice, even though plaintiff responded to it by filing an opposition, this court declines to entertain it and as such it must be DENIED ¹ .

b. Plaintiff's Cross-Motion to Strike Counterclaim

Plaintiff cross motion suffers from the same infirmity that befell defendant's motion, in that it also lacks a 'notice of motion or cross-motion'. CPLR 2215 directs that any demand for cross-relief by the nonmoving party shall be made by notice of cross motion, which was not done here. This court is perplexed as to how both sides committed the exact same error in moving for relief. The question that must be answered here is whether to entertain the cross-application without a formal notice of motion.

In the case of Fried v Jacob Holding, Inc, 110 AD.3d 56, 970 NYS.2d 260 (2nd Dept. 2013), the Second Department, after reviewing its prior conflicting decisions on the subject matter, decided that it is best to leave it to the discretion of the trial Judge whether or not to entertain requests for affirmative cross-relief without a formal notice of cross-motion, while pointing out that any order granting or denying such cross-relief would not be appealable as of right because a request for relief made in the absence of a notice of cross motion is not a "motion made upon notice" pursuant to CPLR 5701(a)(2)² .

Since the court rejected defendant's motion for failing to file a formal notice of motion, the same standard would be applied to plaintiff's cross-motion for also failing to file a formal notice of cross motion.

Accordingly, it is,

ORDERED that defendant's motion to dismiss is DENIED.

ORDERED, that plaintiff's cross-motion is also DENIED.

This constitutes the decision and Order of this court.

Date: _____________________________

Hon. Chidi A. Eze

Civil Court Judge (NYC)

FOOTNOTES

1.   Although in the case of Fried v Jacob Holding, Inc.,110 AD3d 56 (2nd Dept. 2013), the Second Department left it up to the trial judge to entertain or reject an application for relief without a formal notice of motion, however in this case, this court would reject defendant's motion for failing to comply with CPLR 2214(a).

2.   CPLR 5701(a)(2) directs that "An appeal may be taken to the appellate division as of right in an action, originating in the supreme court or a county court: from an order not specified in subdivision (b), where the motion it decided was made upon notice.

Chidi A. Eze, J.