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Wells Fargo Bank, N.A. v. Ullah

United States District Court, S.D. New York

June 15, 2015

WELLS FARGO BANK, N.A., not in its individual capacity but solely as trustee for RMAC REMIC Trust, Series 2009-9, Plaintiff,
FARRIN ULLAH a/k/a Farrin B. Ullah; ASSET ACCEPTANCE LLC; INTERNAL REVENUE SERVICE; BOARD OF MANAGERS OF THE COLUMBIA CONDIMINIUM; JOHN DOES #1-10, said names being fictitious and unknown to the plaintiff, the persons or parties unknown to the plaintiff, the persons or parties being the tenants, occupants, persons, corporations, if any, having or claiming an interest in or lien upon the premises described in the complaint, Defendants.


J. PAUL OETKEN, District Judge.

Wells Fargo Bank, N.A. ("Wells Fargo") brings this action as trustee for RMAC REMIC Trust, Series 2009-9 ("the Trust") seeking to foreclose on a mortgaged real property owned by Defendant Farrin Ullah.[1] On February 6, 2014, this Court dismissed the initial complaint for lack of standing. Wells Fargo subsequently filed an amended complaint. Ullah has moved to dismiss the amended complaint, and Wells Fargo has cross-moved for summary judgment of foreclosure. For the reasons that follow, the motion to dismiss is denied, and summary judgment of foreclosure is granted.

I. Background

On November 21, 2006, to finance the acquisition of a property located at 275 West 96th Street, Unit 25 E, New York, New York 10025 ("the Property"), Ullah executed and delivered to Castle Point Mortgage, Inc. ("Castle Point") a note in the principal amount of $880, 750, plus interest at the rate of 10.990% annually ("the Note"). (Am. Compl. Ex. A.) That same day, Ullah, acting as nominee for Castle Point, executed and delivered a mortgage ("the Mortgage") to Mortgage Electronic Registration Systems, Inc. ("MERS"), in the amount of $880, 750. (Am. Compl. Ex. B.) Ullah subsequently defaulted on the Note and Mortgage by failing to make monthly payments due thereunder for August 1, 2008, and for each subsequent month thereafter. ( See Dkt. No. 58 ("Pl. 56.1 Statement"), ¶ 18.)[2] Wells Fargo asserts-and Ullah disputes-that, through various assignments by various parties, it holds both the Note and Mortgage, and is therefore entitled to foreclose on the Property.

The amended complaint represents Wells Fargo's third attempt to foreclose on the Property. In its first attempt, it took over a state court case that ACT Properties, LLC ("ACT") had initiated against Ullah in 2009, in an attempt to foreclose on the same Property at issue here. In an August 2012 opinion, the state court held that ACT did not have standing to file the foreclosure action. The court reasoned that ACT's alleged predecessor in interest, MERS, never held the Note secured by Ullah's Mortgage, and therefore was incapable of assigning the Note- and with it, the right to foreclose-to ACT. ACT Props., Inc. v. Ullah, No. 115258/09 (N.Y. Sup.Ct., N.Y. Cnty. Aug. 16, 2012). The court relied on Bank of N.Y. v. Silverberg, 926 N.Y.S.2d 532 (A.D.2d Dep't 2011), which held that, as a nominee and mortgagee for the purposes of recording, MERS cannot "assign the right to foreclose upon a mortgage to a plaintiff in a foreclosure action absent a right to, or possession of, the actual underlying promissory note." Id. at 536.

In January 2013, Wells Fargo initiated this action, seeking foreclosure on the contested Property in federal court. (Dkt. No. 1.) This Court dismissed Wells Fargo's complaint for failure to allege standing. Wells Fargo Bank, N.A. v. Ullah, No. 13 Civ. 485 (JPO), 2014 WL 470883 (S.D.N.Y. Feb. 6, 2014). The Court held, first, that Wells Fargo was "precluded [by the state court decision] from asserting that MERS validly conveyed Ullah's note and mortgage to ACT" and, second, that "[t]his holding breaks the chain of valid conveyances from MERS to ACT to Wells Fargo." Id. at *5. Because "the complaint d[id] not allege any other means by which Wells Fargo came to hold the note and mortgage, " the Court dismissed the case. Id.

Wells Fargo moved for reconsideration of the Court's decision. (Dkt. No. 33.) It argued that it had alleged other means by which it came to hold the Note and Mortgage, namely that "the original Note... was endorsed in blank by Castle Point, " and that it "was physically transferred to [Wells Fargo] as evidenced by the Allonge to Note from ACT." (Dkt. No. 35 at 8.) The Court rejected this argument because it was based only on assertions in Wells Fargo's briefing papers. (Dkt. No. 36 at 5.) However, the Court granted Wells Fargo leave to amend the complaint, noting that the state court decision does not preclude Wells Fargo from arguing that it has standing, so long as Wells Fargo does so under "different circumstances" than those before the state court. ( Id. )

Wells Fargo filed an amended complaint on June 20, 2014. (Am. Compl.) The new complaint is almost identical to the last, except that it adds that ACT "physically transferred" the note to Wells Fargo. ( Id. ¶ 12.) Further, it states that Wells Fargo is "the holder of the Note, " that Wells Fargo "has held the subject Note... since prior to the commencement of this action, " and that Wells Fargo therefore "has standing to bring and maintain this action" and "is entitled to enforce payment of the Note... and the Mortgage securing the Note." ( Id. ¶¶ 14-15.)

On December 15, 2014, after several extensions of time to respond to the amended complaint, Ullah, through counsel, filed a motion to dismiss that complaint on various grounds, including that Wells Fargo lacks standing to sue. ( See Dkt. No. 45.) Ullah simultaneously filed an answer to the amended complaint. The answer includes three affirmative defenses that repeat the arguments made in Ullah's motion to dismiss, as well as a counterclaim. (Dkt. No. 48 ("Answer").) The counterclaim "demands that all interest be tolled on the present mortgage because no party has come forward with valid proof that they can and do possess the note." ( Id. ¶ 30.) Wells Fargo answered the counterclaim on January 7, 2015. (Dkt. No. 51.) On January 30, 2015, Wells Fargo opposed Ullah's motion to dismiss, and cross-moved for summary judgment. (Dkt. Nos. 52, 56.) Ullah, again through counsel, filed a reply brief in support of her motion to dismiss and in opposition to Wells Fargo's motion for summary judgment on February 28, 2015. (Dkt. No. 58.) Wells Fargo filed its reply on March 6, 2015. (Dkt. No. 59.)

On March 24, 2015, after the two motions had been fully briefed, Ullah filed a letter with the Court in which she demanded that her attorney be "removed." (Dkt. No. 60.) On April 20, Ullah filed an application requesting that the Court seek pro bono counsel to represent her. (Dkt. No. 63.) The Court held a hearing on April 23, at which Ullah initially appeared, but then left, stating that she was suffering from a medical condition.[3] During that hearing and in Ullah's presence, the Court denied Ullah's request that it seek pro bono counsel, and directed the Clerk of Court to amend the docket to reflect that Ullah is proceeding pro se. (Dkt. No. 68.) On April 28, the Court scheduled a telephonic conference for May 29. (Dkt. No. 69.) On May 27, the Court cancelled the telephone conference and scheduled an in-court hearing for June 9, 2015. (Dkt. No. 71.) On the morning of the June 9 hearing, new counsel for Ullah filed an appearance on the docket. (Dkt. No. 75.) The hearing proceeded that day, at which counsel for Wells Fargo and counsel for Ullah argued various issues related to the present motions.

II. Motion to Dismiss

Ullah moves to dismiss the amended complaint on three grounds: first, that Wells Fargo does not have standing to bring this action; second, that the initial complaint was not properly served; and, third, that she never received the 90-day foreclosure notice required under New York state law. ( See Dkt. No. 47 ("MTD").) Ullah raises these three arguments again in her answer, as affirmative defenses. (Answer ¶¶ 18-30.) Because the Court determines below that none of these arguments has merit, and that Wells Fargo is entitled to summary judgment, Ullah's motion to dismiss is denied.

III. Motion for Summary Judgment

A. Legal Standard

Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Rule 56). A fact is material if it "might affect the outcome of the suit under the governing law, " Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986), and a dispute is genuine if, considering the record as a whole, a rational jury could find in favor of the non-moving party, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

"It is the movant's burden to show that no genuine factual dispute exists." Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004). If the movant meets this initial burden of production, the non-moving party must then identify specific facts demonstrating a genuine issue for trial. Celotex Corp., 477 U.S. at 324. In determining whether there is a genuine dispute as to a material fact, the court views all evidence in the light most favorable to the nonmoving party and draws all reasonable inferences in that party's favor. See Okin v. Vill. of Cornwall-on-Hudson Police Dep't, 577 F.3d 415, 427 (2d Cir. 2009). The court's role is not to "weigh the evidence or resolve issues of fact." Lucente v. Int'l Bus. Mach. ...

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