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Zink v. First Niagara Bank, N.A.

United States District Court, W.D. New York

May 9, 2014

JEFFREY ZINK, on behalf of himself and all others similarly situated, Plaintiffs,
v.
FIRST NIAGARA BANK, N.A., Defendant

Decided Date: January 27, 2014

Page 364

For Jeffrey Zink, Plaintiff: D. Gregory Blankinship, Jeremiah Frei-Pearson, Todd S. Garber, LEAD ATTORNEYS, Shin Young Hahn, Meiselman Packman Nealon Scialabba & Baker P.C., White Plains, NY.

For First Niagara Bank N.A., Defendant: Jeffrey Thomas Fiut, LEAD ATTORNEY, Hodgson Russ LLP, Buffalo, NY; Cynthia Giganti Ludwig, Jodyann Galvin, PRO HAC VICE, Hodgson Russ, LLP, Buffalo, NY.

OPINION

Page 365

ORDER

HONORABLE RICHARD J. ARCARA, UNITED STATES DISTRICT JUDGE.

This case was referred to Magistrate Jeremiah J. McCarthy for pretrial proceedings pursuant to 28 U.S.C. § 636(b)(1). On January 27, 2014, Magistrate Judge McCarthy filed an Amended Report and Recommendation (Dkt. No. 51) recommending that defendant First Niagara Bank, N.A.'s, motion to dismiss (Dkt. No. 37) plaintiff Jeffrey Zink's Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(6) be denied. Defendant First Niagara filed objections to the Amended Report and Recommendation primarily on the ground that federal law preempts plaintiff Zink's state law civil penalty claim for late presentment of a satisfaction of mortgage. (Dkt. No. 52).

The Court carefully reviewed the Amended Report and Recommendation, the pleadings submitted by the parties, and, after oral argument April 11, 2014, it is hereby

ORDERED, upon de novo review of defendant First Niagara's objections pursuant to 28 U.S.C. § 636(b)(1) to the Amended Report and Recommendation, and for all the reasons stated in the Amended Report and Recommendation, defendant's motion to dismiss (Dkt. No. 37) is denied.

The case is recommitted to Magistrate Judge McCarthy pursuant to the terms of the Court's prior referral order for further proceedings.

IT IS SO ORDERED.

OPINION

JEREMIAH J. MCCARTHY, United States Magistrate Judge.

AMENDED REPORT AND RECOMMENDATION

Defendant First Niagara Bank, N.A. (" First Niagara" ) has moved to dismiss

Page 366

plaintiff's Amended Complaint pursuant to Fed.R.Civ.P. (" Rule" ) 12(b)(6) [37].[1] That motion, being dispositive, has been referred to me by Hon. Richard J. Arcara for a Report and Recommendation [38]. Oral argument was held on January 13, 2014 [46], after which the parties made supplemental submissions [48, 49]. For the following reasons, I recommend that the motion be denied.

BACKGROUND

Plaintiff Jeffrey Zink seeks to maintain a class action to recover penalties from First Niagara, pursuant to New York's Real Property Law (" RPL" ) § 275(1) and Real Property Actions and Proceedings Law (" RPAPL" ) § 1921(1), for its allegedly " systematic failure to timely present to the county clerks of New York State proof that mortgages have been satisfied" . Amended Complaint [21], ¶ 1.

Both statutes contain the following provision: " Failure by a mortgagee to present a certificate of discharge for recording shall result in the mortgagee being liable to the mortgagor in the amount of five hundred dollars if he or she fails to present such certificate within thirty days [after payment] . . . in the amount of one thousand dollars if he or she fails to present a certificate of discharge for recording within sixty days and . . . in the amount of one thousand five hundred dollars if he or she fails to present a certificate of discharge for recording within ninety days."

Zink alleges that he obtained a mortgage for property in the Town of Cortlandt from HSBC Mortgage Corporation (USA) which was subsequently assigned to First Niagara (Amended Complaint [21], ¶ 12), and that First Niagara " failed to present a certificate or [ sic ] discharge for recording within ninety days of the date upon which the full amount of principle [ sic ] and interest was paid on the mortgage, as evidenced by the fact that the Satisfaction of Mortgage was not recorded for more than one-hundred and thirty-five (135) days after the discharge date" (id., ¶ ¶ 25, 32). He further alleges that " based on a review of county records, First Niagara appears to have failed to timely file mortgage satisfactions in thousands, if not tens of thousands, of instances" (id., ¶ 19).

In moving to dismiss, First Niagara argues that Zink's statutory claims are preempted by the National Banking Act (" NBA" ), 12 U.S.C. § 1, et seq., and a regulation promulgated thereunder by the Office of the Controller of the Currency (" OCC" ), 12 C.F.R. § 34.4(a)(10) (First Niagara's Memorandum of Law [37-1], Point I); that Zink lacks standing to pursue his claims because his satisfaction of mortgage has already been recorded (id., Point II); and finally, that Zink fails to properly allege that First Niagara violated RPL § 275 or RPAPL § 1921 (id., Point III).

ANALYSIS

A. Does Diversity Jurisdiction ...


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