United States District Court, E.D. New York
MEMORANDUM & ORDER
NICHOLAS G. GARAUFIS, United States District Judge.
Avail Holding, LLC brings this residential mortgage
foreclosure action against Defendant Frances Ramos
("Ramos" or "Defendant"), seeking to
foreclose on a mortgage held by Ramos encumbering the
property located at 101-22 132nd Street, South Richmond Hill,
New York 11419 (the "Subject Property"). (See
Compl. (Dkt. 1).) The Complaint also names the following
additional defendants, alleging that they "have or may
claim to have some interest in" the Subject Property:
Commissioner of Social Services of the City of New York
Social Services District; Credit Acceptance Corporation; New
York City Environmental Control Board; New York City Transit
Adjudication Bureau; and John Doe "1" through
"12." (Id., ¶¶ 2-9.)
the court is Ramos's Motion to Dismiss the Complaint on
abstention grounds pursuant to Federal Rule of Civil
Procedure 12(b) (the "Motion"). (See Not.
of Mot. to Dismiss (Dkt. 18).) For the following reasons,
Defendant's Motion is DENIED.
The Instant Action
where otherwise indicated, the following facts are drawn from
the Complaint and are presumed to be true for the purpose of
this Memorandum and Order. Ramos resides in and owns the
Subject Property. (Compl. ¶ 3; Aff. of Frances Ramos in
Support of Mot. to Dismiss ("Ramos Aff.") (Dkt.
18-2) ¶ 2.) On June 15, 2007, Ramos executed a
promissory note (the "Note") to First Franklin
Financial Corp. ("First Franklin"), whereby First
Franklin loaned her $392, 800. (Compl. ¶ 12.) The Note
was secured by a mortgage (the "Mortgage") on the
Subject Property, which Ramos executed, acknowledged, and
delivered to Mortgage Electronic Registration Systems, Inc.,
as nominee for First Franklin. (Id. ¶ 13.) The
Note and Mortgage were reassigned several times before being
assigned to Plaintiff on November 6, 2015. (Id.
¶ 19.) Beginning in August 2010, Ramos stopped making
the required monthly payments and thereby defaulted on the
Mortgage. (Id. ¶ 21.) Default continues to date
and, as of the filing of the Complaint, Ramos owes
approximately $548, 653.76. (Id. ¶¶ 22,
December 11, 2015, Plaintiff commenced this foreclosure
action pursuant to New York Real Property Actions and
Proceedings Law ("RPAPL") §§ 1301 et
seq. (Id. ¶ 1.) According to Ramos, this
is the third foreclosure action that Plaintiff and its
predecessors-in-interest have commenced against her, with the
first two actions being dismissed "because the plaintiff
in each failed to comply with New York foreclosure law's
predicate notice requirements." (Ramos Aff. ¶ 7.)
has moved to dismiss the Complaint pursuant to Rule 12(b) of
the Federal Rules of Civil Procedure and the abstention
doctrine. (Not. of Mot. to Dismiss at 2.) She argues
that the court should abstain from adjudicating this action
"in order to effectuate New York's comprehensive
regulatory scheme and consumer protections governing
residential foreclosure actions, which address a foreclosure
crisis of compelling interest to the State of New York."
(See Def.'s Mem. of Law in Supp. of Mot. to
Dismiss ("Def.'s Br.") (Dkt. 18-3) at 1.)
Plaintiff opposes Defendant's Motion, arguing that the
abstention doctrine is inapplicable to this case because (i)
"New York state laws governing prosecution of a
residential foreclosure action are clear, unambiguous and not
subject to any significant differing interpretations of local
policy"; and (ii) there is no administrative agency
charged with adjudicating foreclosures in New York.
(See Pl.'s Mem. of Law in Opp'n to Mot. to
Dismiss ("Pl.'s Opp'n") (Dkt. 18-7) at
New York State's Residential Mortgage Foreclosure
response to the mortgage foreclosure crisis, New York enacted
the Foreclosure Prevention and Responsible Lending Act
("FPRLA"), which provides a series of legal
protections and foreclosure prevention opportunities to
homeowners at risk of losing their homes. See 2008 N.Y. Sess.
Law Ch. 472 (S. 8143-A). (See also Def.'s Br. at
6.) Pursuant to protections enacted by the FPRLA, for
example, a lender, an assignee or a mortgage loan servicers
is required to send borrowers a notice of default at least 90
days before commencing a legal action against the borrower
(see N.Y. Real Prop. Acts. § 1304) and must
file certain information about the loan and the borrower with
New York's Superintendent of Financial Services before
initiating the lawsuit (see id. § 1306). In
addition, in any foreclosure action involving an
owner-occupied home, the parties must participate in a
mandatory court-supervised settlement conference.
(See N.Y.C.P.L.R. 3408.) At the settlement
conference, parties are required to "negotiate in good
faith to reach a mutually agreeable resolution, including but
not limited to a loan modification, short sale, deed in lieu
of foreclosure, or any other loss mitigation, if
possible." (Id.) The Uniform Rules for New
York State Trial Courts provide that motions are "held
in abeyance" while these settlement conferences are
held. (See N.Y.Comp. Codes R. & Regs. tit. 22,
Queens County, New York, where the property at issue in this
foreclosure matter is located, the New York Supreme Court
created a specialized Residential Foreclosure Part to conduct
the mandatory settlement conferences pursuant to Rule 3408 of
the New York Civil Practice Law and Rules ("CPLR
3408"). (See Decl. of Christopher Newton (Newton
Decl.) (Dkt. 18-1) ¶ 14.) The Residential Foreclosure
Part is staffed by a judge and court referees who serve as
mediators in the settlement conferences. (See also
Id. ¶ 16.)
does not dispute that the court has diversity jurisdiction to
adjudicate this action. Instead, Ramos argues that the court
should decline to exercise its jurisdiction and should
dismiss the case pursuant to the abstention doctrine.
(See Def.'s Br. at 4-5.) "As a general
rule, federal courts are under a virtually unflagging
obligation to exercise the jurisdiction given them."
Cannady v. Valentin, 768 F.2d 501, 503 (2d Cir.
1985) (per curiam) (internal citations omitted). Under the
abstention doctrine, however, a district court may decline to
exercise or postpone the exercise of its jurisdiction in
certain "exceptional circumstances." Colo.
River Water Conservation Dist. v. Akin, 424 U.S. 800,
813 (1976) (citation omitted).
Abdication of the obligation to decide cases can be justified
under [abstention] doctrine only in the exceptional
circumstances where the order to the parties to repair to the
state court would clearly serve an important countervailing
interest. It was never a doctrine of equity that a federal
court should exercise its judicial discretion to dismiss a
suit merely because a State court could entertain it.
Id. at 813-14 (citations and quotation marks
omitted); see also Quackenbush v. Allstate Ins. Co.,
517 U.S. 706, 716 (1996); Ctv. of Allegheny v. Frank
Mashuda Co.. 360 U.S. 185, 189 (1959). "Because
abstention is the exception, not the rule, a party seeking
abstention carries a heavy burden" State Farm Mut.
Auto. Ins. Co. v. Mallela. 175 F.Supp.2d 401, 410
(E.D.N.Y. 2001) (internal quotation marks and citation
omitted); see Arkwright-Boston Mfrs. Mut. Ins. Co. v.
City of N.Y.. 762 F.2d 205, 210 (2d Cir. 1985) (holding
that party opposing the exercise of federal jurisdiction has
the "burden of persuasion").
argues that the instant action should be dismissed under the
abstention principles outlined in Louisiana Power &
Light Co. v. City of Thibodaux, 360 U.S. 25 (1959), and
Burford v. Sun Oil Co., 319 U.S. 315(1943). For the
following reasons, the court finds that neither doctrine