US BANK NATIONAL ASSOCIATION FOR DEUTSCHE BANK ALT SECURITIES MORTGAGE LOAN TRUST SERIES 2007 v. MCGOWN

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Supreme Court, Kings County, New York.

US BANK NATIONAL ASSOCIATION, As Trustee FOR DEUTSCHE BANK, ALT–A SECURITIES MORTGAGE LOAN TRUST SERIES 2007–2, Plaintiff, v. James MCGOWN, A.M., Glen K. Williams, Manufacturers and Traders Trust Company, New York City Environmental Control Board, New York City Transit Adjudication Bureau, People of the State of New York, The Park Avenue Bank, “Jane Doe”, “Jane Doe”, Alison Hartford, Ashlynn Manning, Earl Dennis, Eileen Ryan, Emily Boubilar, Esmahan Succar, Katie key, Michael Perez, Robin Henerson, Sumarty Schiffer, Defendants.

4079/08

Decided: June 29, 2018

Upon the foregoing papers, defendant A.M., by her mother, natural guardian and court appointed legal guardian, Amy Hicks (Hicks), moves, by order to show cause, for an order: (1) vacating a default judgment against defendant, A.M., an infant under the age of 14 years; (2) vacating the new or second order of reference as to A.M.; (3) dismissing the instant action, with prejudice, as against A.M., pursuant to CPLR 3211 (a) (5) due to her infancy and for failure to serve her in accordance with CPLR 309 (a); and (4) granting A.M. an award of attorneys' fees for this motion.

Plaintiff, US Bank National Association, As Trustee for Deutsche Bank, Alt–A Securities Mortgage Loan Trust Series 2007–2 (US Bank), by cross motion, seeks an order: (1) pursuant to Debtor and Creditor Law § 278 (1) [a] and [b] to set aside the conveyance made between defendant James McGown (McGown) and A.M. and amending the caption of the action to remove A.M. as a defendant; or, alternatively, (2) substituting Hicks, as mother, natural guardian and court appointed legal guardian for A.M., nunc pro tunc, pursuant to CPLR 1021, 1201 and 2001; or (3) amending the caption of the action to remove A.M. as a defendant and add Hicks, as mother, natural guardian and court appointed legal guardian for A.M., as defendant in place of “Jane Doe,” nunc pro tunc, pursuant to CPLR 1024. Each party has opposed the other's motion, and for the reasons set forth below, the motion and cross motion are decided as follows.

Background Facts and Procedural History

(1)

McGown, as both borrower and mortgagor, executed a promissory note and first positioned mortgage, on March 15, 2007, for $816,000, naming Mortgageit, Inc., as lender, and Mortgage Electronic Registration Systems, Inc (MERS), as mortgagee, respectively. The mortgage covers the premises known and located at 156 South 4th Street, Brooklyn, New York (Block 2444, Lot 20).1 This mortgage was duly recorded in the Offices of the New York City Registrar on April 4, 2007 under City Register File Number (CRFN) 2007000173288. At the time this note and mortgage were executed, there was a prior existing mortgage on the property held by defendant Manufacturers and Traders Trust Company (M & T), as mortgagee, in the original amount of $250,000, which was subordinated to the MERS mortgage, by agreement dated February 20, 2007, and also duly recorded in the Offices of the New York City Register, on April 4, 2007, under City Register File Number (CRFN) 2007000173289. According to the complaint, McGown defaulted under the Mortgageit note and MERS mortgage by failing to pay the monthly payment for principal, interest and escrow due October 1, 2007.

On December 21, 2007, McGown, with an address of 122 Wyckoff Street, Brooklyn, New York, transferred the property by deed, to A.M., with a residence address of the subject property, for “$10 and other good and valuable consideration.” This deed was duly recorded in the Offices of the New York City Registrar on December 31, 2007 under City Register File Number (CRFN) 2007000633397, and did not identify the relationship,2 if any, between the grantor and grantee, nor did it identify the grantee as a minor, or that the transfer was being made pursuant to the Uniform Transfers to Minors Act (UMTA) (see EPTL § 7–6.1, et. seq.) with a designated custodian (see EPTL § 7–6.9 [5] ).

On January 17, 2008, MERS, as nominee for Mortgageit, assigned both the note and mortgage to US Bank, by assignment, duly recorded in the Offices of the New York City Register on February 6, 2008 under City Register File Number (CRFN) 2008000051772. The same day the assignment was recorded, US Bank commenced the instant foreclosure action against James McGown and A.M. by filing a summons and complaint with the Kings County Clerk's Offices, based upon the October 1, 2007 default. According to the affidavits of service on file with the court, both McGown and A.M. were served by Hector Flores, a licensed process server, February 22, 2008 at 109 Reade Street, Apt. A, New York, NY 10013.3 Both McGown and A.M. were served pursuant to CPLR 308 (2) by substituted service upon an “Angeles R.—Housekeeper”, who refused to give her surname, but did sign for the papers, as a person of suitable age and discretion. Copies were also mailed within five days of this service.

(2)

Neither McGown nor A.M. served and filed an answer to the complaint. Instead, the matter was referred for CPLR 3408 settlement conferencing. However, it could not be settled, and the parties thereafter engaged in contentious motion practice. Indeed, when US Bank moved for a second order of reference, A.M., by her then attorney, Maryann Sasaki, Esq, of Balsamo & Rosenblatt, PC, cross-moved seeking dismissal of this action, pursuant to CPLR 3215 (c). Particularly, Ms. Sasaki, as part of paragraph 5 of her affirmation in support, claimed that “A.M. specifically reserves the right to challenge service if this action survives the instant motion to dismiss.” The motion, however, was granted, and the cross motion denied, by an amended decision and order of this court dated May 25, 2016 (Sweeney, J.), and the instant order to show cause was brought seven months later revealing for the first time that A.M. was a minor.4

Discussion

(1)

A.M., by her mother, natural guardian and court appointed legal guardian, Hicks, seeks an order vacating the default judgment and order of reference against A.M., an infant under the age of 14 years, dismissal of the instant action, with prejudice, as against A.M., pursuant to CPLR 3211 (a) (5) due to her infancy and for failure to serve her in accordance with CPLR 309 (a), and granting A.M. an award of attorneys' fees for this motion. In support of her motion, Hicks annexes a redacted copy of A.M.'s birth certificate as well as acknowledgment letters from the Surrogate's Court, Kings County, appointing her guardian of the property of A.M. Further, both Hicks and the new counsel for A.M. separately aver that A.M. can only be sued through Hicks, as guardian, and that at the time of service it was “no secret” that A.M. was an infant since both McGown and A.M. were sued by the board of some unidentified building, and A.M. was named as an infant therein. Unfortunately, a copy of the summons in that mysterious action was not annexed to the moving papers. Finally, each also claims that the order of reference is a nullity since no valid, unexpired lis pendens is on file in the Kings County Clerk's Offices.

(2)

While Hicks has not specifically cited nor moved pursuant to CPLR 5015 (a) (4), it is relevant for discussion purposes. “When a defendant seeking to vacate a default judgment raises a jurisdictional objection pursuant to CPLR 5015 (a) (4), the court is required to resolve the jurisdictional question before determining whether it is appropriate to grant a discretionary vacatur of the default under CPLR 5015 (a) (1)” (Roberts v. Anka, 45 A.D.3d 752, 753, 846 N.Y.S.2d 280 [2d 2007] lv dismissed, sub nom In re Guc u, 10 N.Y.3d 789, 857 N.Y.S.2d 23, 886 N.E.2d 785 [2008], lv dismissed, sub nom Roberts v. Anka, 10 N.Y.3d 851, 859 N.Y.S.2d 613, 889 N.E.2d 492 [2008] ). “Under CPLR 5015 (a) (4), a default must be vacated once a movant demonstrates lack of personal jurisdiction ․ A party who moves to vacate a judgment entered on default is relieved of any obligation to demonstrate a reasonable excuse for the default and a potentially meritorious defense when lack of personal jurisdiction is asserted as the ground for vacatur” (Toyota Motor Credit Corp. v. Lam, 93 A.D.3d 713, 713, 939 N.Y.S.2d 869 [2d 2012] [internal citations omitted] ). As such, any discussion of the alleged meritorious defense of fraud or misrepresentation (and excusable default), pursuant to CPLR 5015 (a) (3), is premature at this time.

(3)

The relevant part of CPLR 309 (a) states that “[p]ersonal service upon an infant shall be made by personally serving the summons within the state upon a parent or any guardian or any person having legal custody or, if the infant is married, upon an adult spouse with whom the infant resides, or, if none are within the state, upon any other person with whom he resides, or by whom he is employed.” This section does not dictate the manner or method of service (see e.g., CPLR 308), but upon whom service shall be made.

Even though the case law on CPLR 309 is sparse, it appears that this section infers or presumes that a plaintiff knows of the minor's status in order to serve the proper party and be in compliance with this statute. In other words, a party seeking to serve a minor must have either actual or constructive notice that the party to be served is, in fact, a minor (see e.g, Higgins v. Blauvelt, 49 Misc. 2d 327, 267 N.Y.S.2d 461 [Sup. Ct., N.Y. County 1966]—infant defendant sued as a result of an automobile accident where his age would have been revealed in the police accident report). Indeed, without such information, it would be impossible for a plaintiff, such as US Bank, to comply with this statute. In that respect, CPLR 309 implicitly requires a plaintiff be aware of a defendant's status as a minor prior to service.

While Hicks correctly claims that the burden to obtain that information is on US Bank, the burden, however and in the first instance, was on McGown to provide such actual or constructive notice. Specifically, when McGown transferred the property to A.M., he was required to identify her on the deed as a minor in accordance with the Uniform Transfers to Minors Act,5 and by failing to do so, he secreted her minor status from US Bank. Indeed, if the deed had designated A.M. a minor in accordance with the UTMA, a foreclosure title search would have likely revealed her status much in the same way as a police accident report would in a tort action. Failure to obtain such a foreclosure search, with said deed existing, would have potentially doomed US Bank pursuant to CPLR 309 (a).

Further, Hicks' bare assertion of only becoming aware of this action in 2016 is belied by the fact that service was made at her residence address listed on A.M.'s birth certificate and does not even warrant a traverse hearing to resolve (see, Grinshpun v. Borokhovich, 100 A.D.3d 551, 954 N.Y.S.2d 520 [1st Dept. 2012] ). Indeed, and in actuality, it can even be said that the statute has been complied with as “a parent” [McGown or Hicks] was served on behalf of A.M., at her residence address, pursuant to both CPLR 308 (2) and 309 (a) (see Vincent C. Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C309:1 [“CPLR 309(a) refers to ‘personal service’ on the adult or adult-plus-infant, which means that any of the methods specified in CPLR 308 may be employed with respect to each person being served”] ). Indeed, and in these particular circumstances where only one service was required due to the minor's age (cf., Wells Fargo Bank, NA v. Riley, 23 Misc 3d 1107[A], 2009 N.Y. Slip Op. 50616[U], 2009 WL 962145 [Sup. Ct., Westchester County 2009] ) where service upon a 15–year–old defendant minor was held inadequate since the parent, also a party, was not served twice”), it seems appropriate to deem the affidavit of service amended, nunc pro tunc, to reflect compliance with CPLR 309 (a).

(4)

Hicks claims, through her attorney, that since Steven Baum's offices commenced this action, it must be fraudulent. Further, that the assignment of the subject mortgage to US Bank is fraudulent as it was executed by a known “robo-signer,” and that the order of reference issued is a nullity as there was no valid lis pendens on the property at the time.

Even if the court assumes these statements as true, Hicks has failed to offer any justifiable excuse for her failure to appear. Further, a review of the Kings County Clerk's records indicates that successive lis pendens, in accordance with CPLR 6516 (a), have been filed for the duration of this action.

Therefore, Hicks' motion seeking to vacate the order of reference, dismissal of the action based upon failure to serve the minor defendant, and an award of attorneys' fees is denied in its entirety.

(5)

US Bank seeks, by cross motion, pursuant to Debtor and Creditor Law § 278 (1) [a] and [b] to set aside the conveyance made between McGown and A.M. and amending the caption of the action to remove A.M. as a defendant. This application must be denied as it cannot be accomplished by motion. Debtor and Creditor Law § 278 (1) [a] and [b] requires commencement of an action or special proceeding (see Stott v. Kevin, 15 A.D.2d 827, 225 N.Y.S.2d 273 [2d Dept. 1962]; see also, Goldstein v. Wagner, 228 A.D. 847, 240 N.Y.S. 636 [2d Dept. 1930] ), and US Bank has neither commenced such a special proceeding nor moved to amend the complaint in this action to add a cause of action under that section.

(6)

Next, US Bank seeks, in the alternative, an order substituting Hicks, as mother, natural guardian and court appointed legal guardian for A.M., nunc pro tunc, pursuant to CPLR 1021, 1201 and 2001 or amending the caption of the action to remove A.M. as a defendant and add Hicks, as mother, natural guardian and court appointed legal guardian for A.M., as defendant in place of “Jane Doe,” nunc pro tunc, pursuant to CPLR 1024. Considering that since A.M.'s birth, Hicks has been 1) her mother and natural guardian, and as of 2015, her court appointed guardian, 2) this action requires such a guardian for A.M. pursuant to CPLR 1201, and 3) the affidavit of service has been amended nunc pro tunc, to reflect service upon a parent, that part of US Bank's motion seeking to amend the caption, also nunc pro tunc, is granted. Accordingly, it is

ORDERED that the motion of A.M. by Amy Hicks, by order to show cause, for an order: (1) vacating a default judgment against defendant, A.M., an infant under the age of 14 years; (2) vacating the new or second order of reference as to A.M.; (3) dismissing the instant action, with prejudice, as against A.M., pursuant to CPLR 3211 (a) (5) due to her infancy and for failure to serve her in accordance with CPLR 309 (a); and (4) granting A.M. an award of attorneys' fees for this motion, is denied in its entirety; and it is further

ORDERED that the part of the cross motion of US Bank seeking an order pursuant to Debtor and Creditor Law § 278 (1) [a] and [b] to set aside the conveyance made between defendant James McGown and A.M. and amending the caption of the action to remove A.M. as a defendant, is denied; and it is further

ORDERED that the part of the cross motion of US Bank seeking an order substituting Amy Hicks, as mother, natural guardian and court appointed legal guardian for A.M., nunc pro tunc, pursuant to CPLR 1021, 1201 and 2001 or amending the caption of the action to remove A.M. as a defendant and add Amy Hicks, as mother, natural guardian and court appointed legal guardian for A.M., as defendant in place of “Jane Doe,” nunc pro tunc, pursuant to CPLR 1024, is granted to the extent that Amy Carole Hicks is hereby substituted, nunc pro tunc, as guardian for A.M., pursuant to CPLR 1021, 1201 and 2001, and otherwise denied, and the caption amended to read as follows:

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF KINGS

X

Us Bank National Association, As Trustee

for Deutsche Bank, Alt–A Securities

Mortgage Loan Trust Series 2007–2

Plaintiff,

against –Index No. 4079/08

James McGown, Amy Carole Hicks, as mother,

natural guardian and court appointed guardian for

A.M., an infant under the age of 14 years,

Glen K. Williams, Manufacturers and Traders Trust

Company, New York City Environmental Control

Board, New York City Transit Adjudication

Bureau, People of the State of New York,

The Park Avenue Bank, “Jane Doe”, “Jane Doe”,

Alison Hartford, Ashlynn Manning, Earl

Dennis, Eileen Ryan, Emily Boubilar,

Esmahan Succar, Katie key, Michael Perez,

Robin Henerson, Sumarty Schiffer,

Defendants.

X

This constitutes the decision and order of the court.

FOOTNOTES

1.   The summons and complaint incorrectly identifies the block as 2440.

2.   It appears from the motion papers that James McGown is the natural father of A.M., who was born a few months prior to the transfer and is now approximately 10 or 11 years of age.

3.   This address is the same address listed for Amy Hicks on A.M.'s birth certificate, a copy of which is annexed as Exhibit B to the Hicks Order to Show Cause.

4.   Indeed, it was also disclosed for the first time that Amy Hicks was appointed “sole guardian” of the property of A.M. sometime in 2015.

5.   Alternatively, McGown could have complied with his obligations under the mortgage's due on sale clause (see the mortgage annexed to US Bank's cross motion as exhibit A, ¶ 18, p 12) and sought US Bank's prior written permission before transferring the property to A.M.

Mark I. Partnow, J.