[*1] Bank of Am. N.A.

v Lucido 2012 NY Slip Op 50655(U) [35 Misc 3d 1211(A)] Decided on April 16, 2012 Supreme Court, Suffolk County Spinner, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on April 16, 2012 Supreme Court, Suffolk County

Bank of America N.A., Plaintiff against G. Lucido also known as GALINA LUCIDO, JOHN A. LUCIDO et. al., Defendants

2009-03769

Davidson Fink L.L.P. Attorneys for Plaintiff 28 East Main Street

Rochester, New York 14614 John Lucido Defendant Pro Se 46 Merrits Path Rocky Point, New York 11778 Jeffrey Arlen Spinner, J.

Plaintiff commenced this action claiming foreclosure of a mortgage by filing its Notice of Pendency and Summons and Complaint with the Clerk of Suffolk County. The mortgage at issue was given by Defendants to MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC. As Nominee For FIRST FRANKLIN FINANCIAL CORP. on March 23, 2007 in the original principal amount of $ 494,000.00 and was recorded with the Clerk of Suffolk County in Liber 21524 of Mortgages at Page 751. It was given as collateral security for a simultaneously executed Note in the same amount, the same constituting a first lien encumbering premises known as 46 Merrits Path, Rocky Point, New York. Sometime thereafter and through no fault of their own, Defendants defaulted upon their monthly installment payments due under the Note. It is undisputed that the principal balance owed to Plaintiff, as of the date of default, was and remains at $ 493,219.75. Following the [*2]commencement of this action, an initial settlement conference, as mandated by CPLR 3408 was convened on June 2, 2009. Thereafter, seventeen additional or adjourned settlement conferences were held, each one a component part of a continuing albeit fruitless effort to resolve this matter. It was only upon the express

directive of the Court that one of Plaintiff's representatives travelled from Fort Worth, Texas to appear with a view toward some amicable resolution of this action. However, in derogation of the mandatory provisions of CPLR 3408(c), no person ever appeared on Plaintiff's behalf who was vested with any authority to settle or otherwise compromise the matter. Further delays were occasioned by serious illness having afflicted both of the Defendants as well as the unfortunate passing of Mrs. Lucido (Mr. Lucido requested that the matter be temporarily removed from the conference calendar because he was unable to move forward while attending to the care of his wife). In addition, Plaintiff's former counsel, Steven J. Baum P.C., was discharged and the firm was thereafter disbanded. Defendant JOHN LUCIDO has, in the past, been employed as a commercial mortgage broker. Though he was not involved professionally in the procurement of the loan at issue herein, he apparently enjoys a considerable degree expertise in the area of mortgage financing, which knowledge has been displayed to this Court on multiple occasions. Throughout the settlement conference process, Defendants had, on not less than three occasions in the presence of the Court, submitted the rather voluminous financial documentation demanded by Plaintiff, to be used in considering the initial request for a customary modification. At one point in time, Defendants were offered a socalled "trial modification" with no terms disclosed other than a monthly payment amount to be remitted. However, that offer was never accepted by Defendants because of Plaintiff's steadfast and continued refusal to disclose any of its terms to them, including the interest rate as well as the manner in which their payments would be applied to the debt, a tactic that was strenuously defended by Plaintiff's successor counsel as "general industry practice."

At one of the early settlement conferences, Mr. Lucido informed the Court that the servicing of his loan had been transferred to one of Plaintiff's whollyowned subsidiaries and that they had embarked upon a print and internet advertising campaign wherein they were offering principal reductions in an apparent effort to help homeowners bring their delinquent loans current. They advertised basic requirements of a delinquency of over 60 days duration coupled with a principal balance in excess of 120% of the value of the property (as just one example of these blandishments by Plaintiff, see homeloanhelp.bankofamerica.com ). Based in large part upon this inducement, Mr. Lucido repeatedly raised the possibility of a principal reduction and when he was advised, in open court, that it would be "considered" by the bank, he obtained a third party evaluation of the Property, reflecting the fair market value to be $ 250,000.00. He thereupon prepared and submitted a written proposal requesting a principal reduction to $ 250,000.00, coupled with the immediate deposit with Plaintiff of $ 23,588.52, a sum equal to twelve months of principal, interest, taxes and insurance for it to hold in escrow to ensure his performance, a reduction in the interest rate to 4.50% (at that time, HAMP modifications were being offered with interest at 2%) and the immediate commencement of payments upon the new principal amount at the new interest rate. This written proposal was sent to Plaintiff prior to January 26, 2011 and by February 9, 2011 it had advised Defendant, by letter, that it had received his proposal and that the same was under consideration. [*3] The conference was adjourned several more times until June 9, 2011. At that conference, prior counsel advised Defendant and the Court that Plaintiff was "unwilling" to reduce the principal and actually misrepresented to the Court that there had been "...thirteen conferences and Defendant has never submitted financials." Prior counsel further misrepresented to the Court that

Plaintiff did not offer any loan modification programs that included a principal reduction as a component. At that juncture, the Court warned counsel that if there was found to be a lack of good faith in the settlement conference proceedings, the Court would consider the imposition of financial sanctions upon Plaintiff. The Court adjourned the conference to July 13, 2011 with the directive that a representative appear on Plaintiff's behalf to provide an explanation to the Court. On July 13, 2011, the matter again appeared for conference with prior counsel present. Plaintiff's representative informed the Court that the total debt owed by Defendants and secured by the Property (principal, interest, advances, etc.) now stood at $ 673,959.23 and further, affirmatively stated under oath that "This loan is part of a pooling of loans that entrust mortgagein fact, securities and their pooling and servicing agreement does not allow us to reduce the principal balance." When the Court called for production of the pooling and servicing agreement (the "PSA"), counsel stated that their office was just informed "today" of this claimed restriction and, in furtherance of Plaintiff's position, stated that "We can't consider a principal reduction. It's prohibited by the PSA." The bank representative did concede, however, that Defendants had been assiduously trying to work the matter out and that they had, in fact, been submitting financial documentation as requested by Plaintiff. The bank representative also asserted that she had an appraisal showing the property value to be $ 356,000.00 but when pressed for a copy, she stated that it was "tentative." No such appraisal was ever provided to the Court (indeed Plaintiff never produced any written indicia of the value of the Property), thusleaving the Court to accept the market value of $ 250,000.00 as advanced by Defendants.

The matter was again adjourned while the Court waited patiently for production of a copy of the PSA. Despite the Court's order, it was not produced on September 14, 2011 nor was it provided on October 19, 2011. However, upon some intense prodding by the Court, prior counsel generously offered to provide the Court only with what Plaintiff considered to be the "salient portions" of the PSA, despite the Court's clear and unambiguous order that the entire agreement be provided. Once again, the PSA was not provided for the December 7, 2011 conference, necessitating yet another adjournment, this time to December 21, 2011. A document purporting to be a complete copy of the PSA, consisting of 258 pages in PDF form, was finally e-mailed by prior counsel to the Court late in the day on December 15, 2011 (some 155 days after the Court ordered its production), forcing the Court to continue the matter yet again, from December 21, 2011 to January 4, 2012, and advising the parties that there would be a hearing on that date to consider the entire matter, including the possible imposition of sanctions for a lack of good faith. At the January 12, 2012 hearing, the office of Steven J. Baum P.C. (Plaintiff's counsel of record) failed to appear. Instead, a gentleman appeared, stating that he was per diem counsel to Pulvers Pulvers & Thompson who, in turn, was of counsel to Davidson Cook who were now attorneys for Plaintiff, though no substitution of attorney had been filed. Counsel indicated his [*4]readiness to proceed with the matter. The same bank representative who had appeared the prior year was present for the hearing as was Defendant Mr. Lucido. At the hearing, it was quickly established that the "complete" PSA as provided to the Court excluded the schedules to which it referred as an integral part, which included a description of the mortgage loans which were to be part of the pool. Although Plaintiff's representative claimed that she was in possession of the schedules, like the phantom appraisal, they were never

provided to the Court. During questioning by the Court, Plaintiff's representative conceded that Bank of America "...always had..." the PSA in their possession. This failure to disclose, coming upon the heels of Plaintiff's 155 day delay in providing the PSA coupled with what appears to be the intent, by Plaintiff and its prior counsel, to deceive this Court by deciding to only provide what it deemed to be the "salient" portions of the PSA, leads this Court toward the conclusion that Plaintiff was not acting in good faith throughout the pendency of this matter. Further examination of documents revealed that Plaintiff claimed standing by virtue of an Assignment from LaSalle Bank National Association acting as Trustee under the PSA that is at issue herein. That Assignment, clearly prepared by the law firm of Steven J. Baum P.C., was acknowledged on December 22, 2008 but expressly stated that it was "...effective as of March 30, 2007." The PSA deals with an entity denominated as "Merrill Lynch First Franklin Mortgage Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-3." Examination of the PSA reveals that it was consummated on May 1, 2007 (a fact that is reflected in the Assignment), which was the date on which it came into legal existence. The Assignment however expressly states that it became effective some 32 days prior to the existence of the PSA. Though questions were raised by the Court, this issue was not resolved, either by counsel or by Plaintiff. The hearing went forward with Plaintiff vigorously asserting that the PSA absolutely prohibited any reduction of the principal. Upon pointed inquiry by the Court, the following colloquy transpired:

THE COURT: Where is it in that agreement that it states that principal reductions are absolutely prohibited? BANK: Okay. I read through that here, and I don't know something stating completely prohibited. It doesn't come right out and say that portion. THE COURT: That's what was represented to the Court. Where does it say that? Give me a page. BANK: I highlighted it. BANK COUNSEL: I will read it for you. BANK: Page 86 is what I had highlighted, and then on Page 90. BANK COUNSEL: There are provisions in the PSA permitting THE COURT: You said Page 86? BANK COUNSEL: 86, it is section 301, servicer to service mortgage loans. The sentence starting with "notwithstanding" approximately fifteen lines down. THE COURT: All right. This refers to servicer not engaging in any conduct which would essentially cause the REMIC, the Real Estate Mortgage Investment Conduit, to fail to qualify as a REMIC or to result in the imposition of certain taxes under the Internal Revenue Code. BANK COUNSEL: Correct. THE COURT: Where does it say that a principal reduction is prohibited?

BANK COUNSEL: What this PSA document does state is that there are provisions that can [*5]prohibit the forgiveness of principal or the reduction of principal, but there are other provisions, specifically Page 90, that put it within the discretion of the servicer to recommend a principal reduction which must be signed off on by the investor. MR. LUCIDO: Where? BANK COUNSEL: It begins with "notwithstanding Clause 2 above, in the event that mortgage loan is in default." MR. LUCIDO: Where is this? Can you highlight that? Page 90? Okay, I see it. This actually allows for it. THE COURT: This seems to permit BANK COUNSEL: Correct, and that's what we are trying to tell the Court here. There are provisions that prohibit but there are provisions that do allow the servicer to recommend the reduction of principal. But it must be accepted by the investor. It must be in the best interest of the THE COURT: But that's not what has been represented to this Court by the bank and their prior counsel. In fact, prior counsel explicitly represented to this Court on more than one occasion that it is absolutely prohibited under these documents, under this PSA. That is what has been represented to this Court. BANK COUNSEL: We do submit that it might have been due to some of the provisions prohibiting principal reduction. They would have thought that those provisions may have been triggered. It might have been the opinion of the Court that they have not been.

THE COURT: Where are the express prohibitions, the ones that the bank relies on that they used here in telling this Court that they will not consider a principal reduction because it is absolutely prohibited under the terms of the PSA? BANK COUNSEL: Under the initial clause, which is 13 lines down from Section 3.01, servicer of service mortgage loan. THE COURT: Show me where else that it absolutely prohibits a principal reduction? Is there anywhere else in there that you can find? BANK COUNSEL: We have not found an absolute bar, a prohibition of forgiving or reducing. It is our position, and we submit to this Court, that there are circumstances that if occurring, which is also the signing off of the client, that a principal reduction could occur under certain circumstances. Subsequent to the foregoing colloquy and without any further concession to the Court's line of inquiry, counsel advised the Court that an offer was now being made to Defendant, stating that "We are going above and beyond what we are bending the rules of our underwriting. We are attempting to put together a product here that is not generally offered to the rest of the populace, the rest of the clientele, a 43.5 year product at 2% without the financials." When the Court inquired as to the reason for Plaintiff's abrupt about-face, counsel attempted to deflect attention from Plaintiff, instead intimating that the Court was, in effect, coercing a resolution by having "...held the bank's feet to the fire..." and further mis-stating the facts by incorrectly asserting that "...This Court was not willing to hear it after learning that there was not a principal reduction." It must be pointed out that in this matter as in all other foreclosure matters assigned to this Part, the Court has only attempted to fulfill its statutory

responsibilities and has not, in any manner forced, coerced nor compelled any particular resolution. It is also important to note here that counsel advised the Court that Plaintiff had a new BPO showing a value of $ 346,000.00 and although requested by the Court, this BPO, like the phantom appraisal referred to on July 13, 2011, was never produced. Based upon the foregoing factual scenario, the Court has serious and substantial questions as to whether or not Plaintiff and its prior counsel of record have acted in good faith in this [*6]matter. By reason of the lengthy delays herein, interest has been accumulating on the debt along with sums that may be due for advances for property taxes and insurance, to say nothing of Plaintiff's claimed counsel fees (which are, of course, subject to review by the Court). While it is important to note that the Court has grave reservations related to the actions in this matter of Steven J. Baum P.C., Plaintiff's former counsel of record, the Court hastens to add that it has absolutely no such issues with either Henry P. DiStefano Esq. or Alicia Menechino Esq. (in fact, the appearances covered by these two most excellent attorneys were the only ones upon which the Court was able to obtain a straight answer about anything on the Plaintiff's case herein). In 2008, New York's Assembly and Senate enacted Chapter 472 of the Laws of 2008 which constituted a sweeping reform of the laws governing subprime, high cost and non-traditional home loans. Included as part and parcel of that legislation was the newly enacted CPLR 3408 which required a mandatory settlement conference in an action to foreclose such a mortgage. Since that enactment, this Court, sitting first as Suffolk County's Residential Mortgage Foreclosure Conference Part and thereafter as an I.A.S. Part, has mandated that the parties to such an action act and negotiate in good faith.

Indeed, in December of 2009, both the Assembly and the Senate amended CPLR 3408 by way of Chapter 507 of the Laws of 2009, which, among other things, added a requirement that the parties act and negotiate in good faith (see CPLR 3408(f) which states that "Both the plaintiff and the defendant shall negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible."). This statutory scheme is further buttressed and implemented by the provisions of The Uniform Rules For The Trial Courts, 22 NYCRR 202.12-a. Indeed, that Rule vests the Court with broad powers to assist the parties in reaching a settlement of their differences, stating, in pertinent part, that "...The court may also use the conference for whatever other purposes the court deems appropriate," 22 NYCRR 202.12-a(c)(2). That Rule further imposes upon the Court the duty to be certain that all parties act in compliance therewith, stating that "...The court shall ensure that each party fulfills its obligation to negotiate in good faith..." 22 NYCRR 202.12-a(c)(4). For this Court to do anything less would be a serious derogation of its statutory responsibilities and would do a great dis-service to the public that it is obligated to serve.. Since an action to foreclose a mortgage is clearly a suit in equity, Jamaica Savings Bank v. M.S. Investing Co. 274 NY 215 (1937), all of the rules and tenets of equity are fully applicable to the proceeding, including the rules governing punitive or exemplary damages, I.H.P. Corp. v. 210 Central Park South Corp. 12 NY2d 329 (1963). In the timeless words of Judge Benjamin Cardozo "The whole body of principles, whether of law or of equity, bearing on the case, becomes the reservoir drawn upon by the court in enlightening its judgment" Susquehannah Steamship Co. Inc. v. A.O. Andersen & Co. Inc. 239 NY 289 at 294 (1925). In a suit in equity, the Court is vested with jurisdiction to do that which ought to be done. While the formal distinctions between an

action at law and a suit in equity have long since been abolished in New York (see CPLR 103, David Dudley Field Code of 1848 2, 3, 4, 69), the Supreme Court, as New York's trial court of general jurisdiction, is nevertheless vested with equity jurisdiction and the distinct rules governing the application of the principles of equity are still very much applicable, Carroll v. Bullock 207 NY 567 (1913). While the Court understands that the instruments upon which a mortgage foreclosure [*7]action is based are contractual in nature and, understanding that "[s]tability of contract obligations must not be undermined by judicial sympathy" Graf v. Hope Building Corp. 254 NY 1 at 4 (1930), it is equally true, as decreed in Noyes v. Anderson 124 NY 175 at 179 (1891) that "a party having a legal right shall not be permitted to avail himself of it for the purposes of injustice or oppression." Thus, equity will not intervene on behalf of one who acts in an unjust, unconscionable or egregious manner, York v. Searles 97 AD 331 (2nd Dept. 1904), aff'd 189 NY 573 (1907). This Court cannot, and will not, countenance a lack of good faith in the proceedings that are brought before it, especially where blatant and repeated misrepresentations of fact are advanced, neither will it permit equitable relief to lie in favor of one who so flagrantly demonstrates such obvious bad faith. In those very rare instances where the conduct of a party is unconscionable, shocking or egregious, a Court of equity is vested with the power to award exemplary damages. Exemplary damages may lie in a situation where it is necessary to both effectuate some punishment and to deter the offending party from engaging in such reprehensible conduct in the future. Such an award may also be made to address, as so clearly and succinctly enunciated by our Court of Appeals in Home Insurance Co. v. American Home

Products Corp. 75 NY2d 196, 550 NE 2d 930, 551 NYS 2d 481 (1989) "...gross misbehavior for the good of the public...on the ground of public policy". Indeed, exemplary damages are intended to have a deterrent effect upon conduct which is unconscionable, egregious, deliberate and inequitable, I.H.P. Corp. v. 210 Central Park South Corp. 12 NY2d 329, 189 NE 2d 812, 239 NYS 2d 547 (1963). In the matter that is sub judice, the record unequivocally demonstrates that Plaintiff, through its deliberate and contumacious conduct, has failed to act in good faith, although required by statute to do so. This Court is driven to the inescapable conclusion that Plaintiff has deliberately acted in bad faith over the preceding thirty four months. Through its repeated and persistent failure and refusal to comply with the lawful orders of the Court including those which directed production of documentation that was essential to address critical issues in the present matter, it has repeatedly caused to be put forth material mis-statements of fact which appear to have been calculated to deceive the Court and has delayed these proceedings without good cause, thereby needlessly increasing the amount owed upon the mortgage debt, to say nothing of the needless waste of the Court's time and resources, as well as those of Defendant. In short, the conduct of Plaintiff in this matter has been overreaching, willful and unconscionable, is wholly devoid of even so much as a scintilla of good faith and cannot be countenanced by this Court. Under the unique circumstances of this matter, the Court determines that it is fair and equitable that Plaintiff be forever barred, precluded, prohibited and foreclosed of and from collecting any of the claimed interest accrued on the loan between the date of default and the date of this Order; that Plaintiff be barred and prohibited from recovering any claimed legal fees and expenses;

and further, that the amount due Plaintiff under the Note and Mortgage herein be determined at this time to be no more than the principal balance of $ 493,219.75, exclusive of advances for property taxes and property insurance. The Court also determines that under the circumstances herein, the imposition of exemplary damages upon Plaintiff is equitable, necessary and appropriate, both in light of Plaintiff's shocking and deliberate bad faith conduct as well as to serve as an appropriate deterrent to any future outrageous, improper and wrongful conduct. The Court hereby fixes and determines [*8]the amount of exemplary damages in the sum of $ 200,000.00, recoverable by Defendants from Plaintiff in the nature of a principal reduction upon the mortgage sought to be foreclosed by Plaintiff. For all of the foregoing reasons, it is, therefore ORDERED , ADJUDGED and DECREED that Plaintiff, its successors, assigns and others are forever barred, foreclosed and prohibited from demanding, collecting or attempting to collect, directly or indirectly, any and all of the sums secured by the mortgage under foreclosure herein designated or denominated as interest, attorney's fees, legal fees, costs, disbursements or any sums other than the principal balance as well as advances for property taxes and property insurance if any, that may have accrued from the date of default up to the date of this Order; and it is further ORDERED, ADJUDGED and DECREED that the debt due Plaintiff under the Note and Mortgage under foreclosure in this action be fixed at $ 493,219.75, exclusive of any sums advanced for property taxes or property insurance; and it is further

ORDERED, ADJUDGED and DECREED that Defendant JOHN LUCIDO be and is hereby awarded exemplary damages as against Plaintiff in the amount of $ 200,000.00 to abide the event; and it is further ORDERED, ADJUDGED and DECREED that the foregoing award of $ 200,000.00 in exemplary damages shall be and is hereby applied as a credit against the principal balance of the mortgage under foreclosure herein, amending and reducing the same to $ 293,219.75. This shall constitute the Decision, Judgment and Order of the Court. Dated: April 16, 2012 Riverhead, New York E N T E R: ______________________________________ Jeffrey Arlen Spinner, J.S.C.

[*1]

Beneficial Homeowner Serv. Corp. v Steele 2011 NY Slip Op 50015(U) [30 Misc 3d 1208(A)] Decided on January 7, 2011 Supreme Court, Suffolk County Spinner, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 7, 2011 Supreme Court, Suffolk County

Beneficial Homeowner Service Corporation, Plaintiff against Stephen Steele, Susan Steele, Ocean Bank Fsb, "John Doe" and "Mary Roe" (said names being fictitious, it being the intention of Plaintiff to designate any and all occupants of the premises being foreclosed herein), Defendants

2010-01996

ATTORNEYS FOR PLAINTIFF Jonathan D. Pincus, Esq

95 Allens Creek Road Rochester, New York 14618 ATTORNEYS FOR DEFENDANTS STEELE Steven Tekulsky, Esq. 113 Cedar Street East Hampton, New York 11937 Jeffrey Arlen Spinner, J.

Plaintiff has commenced this action pursuant to Real Property Actions and Proceedings Law Article 13, claiming foreclosure of a mortgage which encumbers real property located at 634 Stephen Hands Path, East Hampton, Suffolk County, New York. In both its Verified Complaint both and the present motion papers, Plaintiff alleges that it is the owner and holder of a Loan Agreement executed by STEPHEN STEELE and SUSAN STEELE dated October 26, 2006 in the principal amount of $ 92,696.60 which is secured by a Mortgage of the same date and executed by both STEPHEN STEELE and SUSAN STEELE, recorded with the Suffolk County Clerk in Liber 21410 of Mortgages at Page 639. Plaintiff further alleges that Defendants [*2]STEELE are in default of their obligations under the Loan Agreement (though the nature and extent of the default is nowhere specified) and it is claimed that the principal sum of $ 91,614.34 is due and owing, together with interest at the rate of 5.250% per annum as computed from October 1, 2008. Defendants STEELE, through counsel, have timely appeared and have interposed an Answer consisting of general denials as to the allegations of the Plaintiff's

Complaint together with eight affirmative defenses. Plaintiff has moved for summary judgment in accordance with the provisions of CPLR 3212, having filed a Notice of Motion and supporting papers dated May 18, 2010 and containing a CPLR 2214(b) seven day notice as well as a request for appointment of a Referee pursuant to RPAPL 1921. Curiously and in direct derogation of the mandatory provisions of 22 NYCRR 202.7, Plaintiff has failed to specify or insert a return date for the application and has apparently served its papers with no return date. Not surprisingly, counsel for Defendants has neither answered nor responded thereto, presumably due to the lack of both a stated return date and appropriate notice. The Clerk of the Court apparently scheduled the motion for June 10, 2010, which was administratively adjourned by the Court to November 17, 2010. In the interim period, mandatory foreclosure settlement conferences in accordance with CPLR 3408 were convened on September 2, 2010 and November 9, 2010 respectively. Thereafter and on December 22, 2010, the Court received an Affidavit from Plaintiff's counsel which purports to comply with the provisions of Administrative Order no. AO548/10. It is settled law in New York that the initial burden is placed upon the proponent of an application for summary judgment as to making a prima facie case for entitlement to the relief sought, Norwest Bank Minnesota N.A. vs. Sabloff, 297 AD2d 722 (2nd Dept. 2002). Where Plaintiff comes forward with the mortgage at issue together with the underlying note or bond coupled with evidence of the alleged default, it establishes its prima facie right to judgment as a matter of law, Household Finance Realty Corporation of New York vs. Winn, 19 AD3d 544 (2nd Dept. 2005), Fleet National Bank vs. Olasov, 16 AD3d 374 (2nd Dept. 2005), leave to appeal dismissed 5 NY3d 849 (2005),

Gateway State Bank vs. Shangri-La Private Club For Women, 113 AD2d 791 (2nd Dept. 1985), aff'd 67 NY2d 627 (1986). Once such a prima facie showing has been made, the burden shifts to the party opposing the application to come forward with sufficient evidence to controvert the summary judgment motion by demonstrating the existence of a genuine triable issue of fact, Barcov Holding Corp. vs. Bexin Realty Corp., 16 AD3d 282 ( 1st Dept. 2005). For the reasons hereinafter set forth, the Court finds that Plaintiff has failed to satisfy its burden of setting forth a prima facie case for entitlement to the relief it seeks. The copy of the mortgage appended to Plaintiff's moving papers bears the signatures of both STEPHEN STEELE and SUSAN STEELE and contains an acknowledgment by a notary public. However, the copy of the Loan Agreement that is appended to Plaintiff's papers raises disturbing issues. That instrument bears the date of October 26, 2006 and recites a principal amount of $ 92,696.60. The Loan Agreement clearly reflects Defendant STEPHEN STEELE as the sole obligor thereunder but, most glaring of all, the Loan Agreement bears no signature whatsoever. General Obligations Law 5-701 requires promises such as those contained in the Loan Agreement to be both in writing and signed by the party to be charged [G.O.L. 5-701(a)(1)]. This Court must question how, under the circumstances presented here, Plaintiff can, with unbridled temerity, demand enforcement of the Loan Agreement against Defendant STEPHEN STEELE, who has not executed that instrument and against Defendant SUSAN STEELE, who is not even a party to that agreement. The most cursory reading of these instruments reveal the obvious facts as set forth above. This posture by Plainitff strains credulity and causes the Court to seriously question Plaintiff's good faith in commencing this action.

Distilled to its essence, a mortgage is a conveyance of an interest in land that is expressly intended to constitute security for some obligation, most commonly an indebtedness, Burnett v. Wright 135 NY 543, 32 NE 253 (1895). It follows logically then that in order for a mortgage to be valid and subsisting, there must [*3]be an underlying obligation that is to be secured by an interest in the real property, owed by the obligor to the obligee, which contains both the right of the obligee to foreclose and the right of the obligor to redeem, Baird v. Baird 145 NY 659, 40 NE 222 (1895), R.H. Macy & Co. v. Bates 280 AD 292, 114 NYS 2d 143 (3rd Dept. 1952). Absent these essential elements, a valid mortgage cannot exist because it is the underlying obligation which gives rise to the validity of the mortgage as a lien upon the real property. Here, the Loan Agreement that has been presented to the Court facially appears to run counter to New York's Statute of Frauds, G.O. L. 5-701. Since there has been presented to this Court no valid underlying obligation and no further explanation, the mortgage appears to fail as a matter of law. This situation is all the more disturbing when it is considered that the sworn statements contained in the both the Complaint and the Affidavit in Support Of the Motion for Summary Judgment expressly and falsely assert that Defendant SUSAN STEELE executed the Loan Agreement. This is compounded by the sworn statement of Shana Richmond, Plaintiff's foreclosure specialist, which is dated April 28, 2010 and which contains the same painfully obvious misstatements of fact. Going further, Plaintiff's counsel has submitted an Affirmation dated December 2, 2010 which purports to comply with Administrative Order no. AO548/10 in which he ratifies and confirms, in essence, the incorrect assertions in the Complaint and the Summary Judgment application. Aside from the papers themselves, it appears that counsel's affirmation runs afoul of the provisions of 22 NYCRR 130-1.1.

An action claiming foreclosure of a mortgage is a suit in equity, Jamaica Savings Bank v. M.S. Investment Co. 274 NY 215 (1937), and the very commencement of the proceeding invokes the equity jurisdiction of the Supreme Court. Thus, in order to obtain equitable relief, the applicant must come before the Court with clean hands, else such relief will be denied. Thus, where a party comes before the Court and is shown to have acted in a manner which is offensive to good conscience, fairness and justice, that party will be completely without recourse in a court of equity, no matter what his legal rights may be, York v. Searles 97 AD 331 92nd Dept. 1904), aff'd 189 NY 573 (1907). IStated a bit differently, in order to obtain equity, one must do equity. Here, it is irrefutable that Defendant SUSAN STEELE was not a party to the Loan Agreement and certainly did not execute the same. It is equally indubitable that Defendant STEPHEN STEELE did not execute the Loan Agreement that has been presented on this application. Nonetheless, Plaintiff has vigorously prosecuted this action, demanding foreclosure of the mortgage as well as money damages against both named Defendants. Under these circumstances, the Court is compelled to conduct a hearing to determine whether or not Plaintiff has proceeded in good faith and what sanction, if any should be imposed should the Court find a lack of good faith. It is, therefore, ORDERED that the Plaintiff's application for summary judgment and other relief is hereby denied; and it is further

ORDERED that a hearing shall be held in this matter, at which all counsel and parties shall appear, which shall not be adjourned except by the Court; and it is further ORDERED that said hearing shall be held on March 16, 2011 at 2:30 p.m. in Courtroom 229-A, Supreme Court, 1 Court Street, Riverhead, New York; and it is further ORDERED that Plaintiffs' counsel shall, within ten days after entry hereof, serve a copy of this Order with Notice of Entry upon all parties in this action as well as all counsel who have appeared in this action. [*4] Dated: January 7, 2011 Riverhead, New York E N T E R: ______________________________________ JEFFREY ARLEN SPINNER, J.S.CFINAL

Emigrant Mtge. Co. Inc. v Corcione 2010 NY Slip Op 20133 [28 Misc 3d 161] April 16, 2010 Spinner, J. Supreme Court, Suffolk County Published by New York State Law Reporting Bureau pursuant to Judiciary Law 431. As corrected through Wednesday, July 21, 2010

[*1] Emigrant Mortgage Co. Inc., Plaintiff, v Anthony J. Corcione et al., Defendants. Supreme Court, Suffolk County, April 16, 2010 APPEARANCES OF COUNSEL Deutsch & Schneider L.L.P., Glendale (Joshua Deutsch of counsel), for plaintiff. Serpe & Associates, P.C., New York City (Sean C. Serpe of counsel), for defendants. {**28 Misc 3d at 162} OPINION OF THE COURT Jeffrey Arlen Spinner, J. On July 23, 2009 plaintiff commenced this action claiming foreclosure of a mortgage by filing its notice of pendency and summons and complaint with the Clerk of Suffolk County. The mortgage at issue was given by defendants to plaintiff on July 5, 2007, in the principal amount of $302,500, and was

recorded with the Clerk of Suffolk County in Liber 21580 of Mortgages at page 379. Said mortgage was given as collateral security for a simultaneously executed adjustable rate note with interest at the initial rate of 11.625% and it constitutes a first lien upon premises known as 66 Circle Drive, East Northport, Town of Huntington, New York. On or about May 1, 2008, owing to a loss of employment, defendants defaulted upon their monthly installment payments due to plaintiff under the adjustable rate note. According to defendants, they had, from the very time of default, assiduously attempted to arrive at an amicable resolution but were met with multiple and varying impediments erected by plaintiff. They claim to have been ceaselessly trying since the default date, albeit without any success, to obtain a modification from plaintiff, having proceeded on their own, thence through a modification facilitator and finally through counsel. Plaintiff baldly asserts that defendants only sought to resolve this matter subsequent to the commencement of the foreclosure action,{**28 Misc 3d at 163} a position that is belied by the record. Though plaintiff advances no explanation whatsoever for the 14-month hiatus between default and suit, its actions, when considered in light of all of the circumstances herein, lead inexorably to the conclusion that this gap in time would indubitably increase the amount of interest plaintiff could exact from defendants, hardly a noble or good faith purpose. On or about August 3, 2009, initial process was served upon defendants and thereafter counsel appeared and interposed a verified answer on their behalf. By notice of motion dated October 14, 2009 (motion sequence No. 001) which was returnable October 28, 2009, plaintiff applied to this court for an order granting summary judgment pursuant to CPLR 3212 and for the appointment of a referee to compute in accordance with RPAPL 1321.

Thereafter, and on October 18, 2009, the first in what evolved into a series of foreclosure settlement conferences was convened. The same was adjourned on no less than five occasions and was ultimately referred to the undersigned by Court Attorney Referee Adrienne Williams, Esq., notwithstanding the vociferous and inexplicable objections of plaintiff's counsel. A conference was then held by the court on March 16, 2010 and the entire proceeding was thereafter adjourned for all purposes to April 27, 2010. A careful examination of all of the documentation submitted by plaintiff, both on its motion and at the conference, is, at the same time, both starkly revealing and greatly disturbing. While the adjustable rate note contains an initial interest rate of 11.625%, it is subject to change on August 1, 2012 and on the first day of each succeeding August thereafter, until its stated maturity date of August 1, 2037. The basis upon which the interest rate is computed is set forth at some length within paragraph four of the adjustable rate note. Briefly stated, it provides that the holder will determine the rate based upon the average weekly yield on securities issued by the United States Treasury as adjusted to a constant maturity of one year, to which it will then add 6.375% followed by a rounding of the same upward to the nearest one eighth of one percent. Appended thereto (and likewise annexed to the recorded mortgage) is a document entitled "Default Interest Rate Rider" which, by its express terms, modifies the adjustable rate note by [*2]providing for an upward increase in the rate of interest charged to 18% upon a default by the mortgagors. The default interest rate is triggered by any one of the events of default as they are defined in the adjustable rate note and mortgage.{**28 Misc 3d at 164} Though not expressly stated, this court, being fully aware of the customs and practices extant in the mortgage lending industry (including loan

origination, warehousing, brokerage, closing, settlement and transfer), must presume that the terms and conditions of the adjustable rate note, default interest rate rider and mortgage were the product of unequal bargaining power as between plaintiff and defendants. It is a virtual certainty that defendants were not afforded the opportunity to freely bargain and negotiate in reaching the operative terms that are now subject to this court's scrutiny. Since the instruments upon which plaintiff demands enforcement have obviously been promulgated by the lender to the borrowers and since the operative and binding terms thereof are clearly not negotiable by the borrower, such instruments must be considered to be in the nature of a contract of adhesion, which typically would be construed against the drafter thereof (Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377 [2003]). On March 16, 2010, in accordance with the provisions of CPLR 3408, a mandatory foreclosure settlement conference was convened before the court. Present at that conference were defendants, their counsel Sean C. Serpe, Esq., Millie Rivera, as a representative of plaintiff, and plaintiff's counsel Joshua Deutsch, Esq. One of the items produced at that conference was a document entitled "Loan Modification Agreement," which had been propounded by plaintiff's counsel on or about February 23, 2010 and which required an acceptance thereof not later than March 5, 2010 else the offer be revoked and the foreclosure action be continued. This agreement was intended to effectuate a cure of the arrears over time together with a myriad of other provisions. The amount or arrears to be cured was determined by plaintiff to total $119,330.89 with the sum of $84,606.45 to be recapitalized at the rate of 6%. Plaintiff proposed that if the agreement were fully consummated, after 12 months it would "forgive" default interest of approximately $30,000.

According to plaintiff, the principal balance owed stands at $301,721.58 and the interest accrued between May 1, 2008 and March 1, 2010 has reached the not insubstantial sum of $95,154.65 with a continuing per diem of $132.54 thereafter. According to both Ms. Rivera and attorney Deutsch, interest was computed at 16% per annum in accordance with the default interest rate rider described, supra (which, as previously noted, actually provides for default interest to be computed at the rate of 18%, an inconsistency that remains unexplained). In addition{**28 Misc 3d at 165} to interest, plaintiff also claimed the sum of $19,672.91 for "Other Charges" which plaintiff declined to explain to defendants or their counsel. Upon questioning by the court, it was revealed that these so-called "Other Charges" consisted of some $1,100 in preaction late charges, unsubstantiated tax and insurance advances of $10,000, check fees of $40, legal expenses of $3,380, unpaid legal expenses of $4,515 (total claimed legal expenses of $7,895), property inspection fees of $85, unpaid inspection fees of $40 and appraisal fees of $350. The court questions the entitlement of plaintiff to claim legal fees, costs and accrued [*3]interest (especially when computed at a confiscatory rate) inasmuch as not less than 14 months of accruals were due to plaintiff's delay in responding to defendants' entreaties toward resolution. Plaintiff's position appears to be facially unreasonable. Although not substantiated, plaintiff asserts that it has advanced the sum of $10,000 for taxes and insurance. According to the Tax Collector of the Town of Huntington, the annual tax upon the property at issue is $3,209.94, of which only the sum of $1,604.97 has been paid for the current levy. According to public records, the taxes for the prior year were $2,709.61. Even so, the affidavit of Joel Marcano, plaintiff's assistant treasurer, avers that as of

September 16, 2009, it had paid $6,662.51 for property taxes. These numbers simply do not add up and the amount demanded seems far too round. In addition, although reasonable legal fees are customarily allowed in a mortgage foreclosure action where provided for in the instruments of indebtedness, the same are subject to an award by the court and, above all, they must be reasonable and fairly related to the work performed. In this matter, the court is convinced that the fees demanded by plaintiff ($7,895) are both excessive and unreasonable, especially in light of the paucity of services that appear to have been performed. A cursory review of the agreement at the conference revealed some deplorable particulars. In the paragraph enumerated as 1.02, the language was set out in bold type and reads as follows: "Borrowers unconditionally, knowingly, voluntarily, intelligently, and after having obtained the advice of counsel or having been given ample opportunity to obtain the advi[ce] of counsel and declined to do so, waives any claim, counterclaim, right of recoupment, defenses, affirmative defenses or set-off of any kind or nature whatsoever with respect to the{**28 Misc 3d at 166} Existing Default, the Loan Documents, and/or the Indebtedness." Further along, in paragraph 2.01, the agreement further provides, in bold and underscored type, that "Borrowers submit to the jurisdiction of the Court and confirm that all contractual and statutory conditions precedent to such foreclosure proceedings have been satisfied . . . BORROWERS ACKNOWLEDGE THAT ALL PAYMENTS MADE UNDER THIS AGREEMENT ARE MADE WITHOUT PREJUDICE TO THE LOAN ACCELERATION OR THE PENDING FORECLOSURE PROCEEDINGS AND SHALL NOT CONSTITUTE A WAIVER OF ANY OF LENDER'S RIGHTS TO FORECLOSE."

Continuing on to paragraph 2.02 which prescribes that payments must be received by the first day of each month, without grace period, it states, in pertinent part, that "Emigrant shall, among other things, be immediately entitled, without any notice to the Borrowers, to exercise any and all remedies available to it and shall be entitled to collect all sums due under the Loan Documents as if this Agreement had not been made . . . the Borrowers shall have no right to cure said default, and Emigrant will be free to pursue all of its rights and remedies under the Loan Documents and this Agreement, at law and at equity." Moving along, paragraph 7.10 is intended to function as a general release given by "Borrowers, for themselves and their children, parents, relations" and running in favor of plaintiff "and any entities related to it and its past, present and future directors, officers (whether acting in such capacity or individually), shareholders, owners, partners, joint venturers, principals, trustees, creditors, attorneys, representatives, employees, managers." This clause, employing broad and sweeping language, releases and discharges the cited releasees from what seems to be every single possible potentiality, including: "(a) any and all claims for violation of the Truth In Lending Act ('TILA'), 15 U.S.C. 1601, et. seq., or its implementing regulations; (b) any and all claims for unfair and/or deceptive trade practices; (c) any and all claims for consumer fraud or for fraudulent and/or predatory lending practices; (d) any and all claims for attorney's fees and costs of any kind or nature, by statute or otherwise; (e) any and all{**28 Misc 3d at 167} claims that could have been asserted in any legal proceeding or action; and (f) any and all claims that are relating to, concerning, or underlying the Loan, and the brokering, closing, servicing or administration of the Loan." However, nowhere in the agreement is there a parallel release running from plaintiff to defendants. The obvious and facially clear intent of this clause is to circumvent each and every state and federal law in the State of New York intended to regulate the mortgage banking industry.

Perhaps the most distressing section of the agreement is paragraph 7.12, which reads verbatim as follows: "Borrowers hereby acknowledge, represent and warrant that if they cannot perform in accordance with the terms of this Agreement, they will never be able to perform in accordance with the Loan Documents, nor will they be able to reorganize under the provisions of the United States Bankruptcy Code or any similar law. Accordingly, in consideration of this Agreement and in recognition of Emigrant's willingness to enter into this Agreement, Borrowers hereby agree that if a petition in Bankruptcy is filed by or against them, as debtor and debtorin-possession (if applicable), Borrowers hereby consent to immediate and unconditional relief from the automatic stay of 11 U.S.C. 362 (the 'Stay') in favor of Emigrant, waives their right to oppose a motion for relief from the Stay, waives the benefits of the Stay, and hereby admits and agrees that grounds to vacate the Stay to permit Emigrant to enforce its rights and remedies under this Agreement, the Loan Documents and/or any other documents executed in connection therewith exist and shall continue to exist, which grounds include, without limitation, the fact that Emigrant's interests in the Property cannot be adequately protected." [*4]This clause, if given legal effect, effectively attempts to deprive defendants of any ability, now or at any future date, to act in a legitimate manner to save their home by invoking the protection of the United States Bankruptcy Code (11 USC 101 et seq.). The automatic stay is effective upon the filing of a petition in bankruptcy and is imposed pursuant to 11 USC 362. The automatic stay functions as perhaps the most important tool for the protection of the debtor, the creditors and preservation of the estate. It is abundantly clear that vacatur of the{**28 Misc 3d at 168} automatic stay is exclusively within the province of the Bankruptcy Court (United States ex rel. Fullington v Parkway Hosp., Inc., 351 BR 280 [ED NY 2006]) and that such a purported waiver of the automatic stay is legally inefficacious (M.E.S., Inc. v M.J. Favorito Elec., Inc., 2010 WL 959604, 2010 US Dist LEXIS 23809 [ED NY, Mar. 15, 2010]). By including this clause, it is clear that were it enforceable, plaintiff would be able to preempt the federal insolvency statutes.

This court has never been presented with such a waiver, especially when accompanied by absurd representations (drafted by the lender) that amount to what could best be described as an express warranty that defendants presently are and will forever be insolvent. It is axiomatic that a pre-bankruptcy waiver of such a valuable statutory right, even if freely bargained for (and in this court's opinion, this is certainly not the case), should not, under any circumstances, be enforced against consumer debtors such as defendants. In the view of this court, such a highly questionable waiver as this one is unconscionable, unreasonable, overreaching and is absolutely void as against public policy. This is even more glaringly true when the agreement is reviewed in toto and not piece by piece. This court is constrained to determine that the waiver, the release and indeed the agreement as a whole are unacceptable for all purposes. In 2008, New York's Assembly and Senate enacted chapter 472 of the Laws of 2008 which constituted a sweeping reform of the laws regarding subprime, high cost and nontraditional home loans. Part and parcel of that legislation included a newly enacted CPLR 3408 which required a mandatory settlement conference in an action to foreclose such a loan. Since its enactment, this court, sitting as the Residential Mortgage Foreclosure Conference Part, has mandated that the parties to such an action act and negotiate in good faith. Indeed, in December of 2009, both the Assembly and the Senate amended CPLR 3408 by, among other things, adding a requirement that the parties act in good faith. Indeed, my learned and distinguished colleague, Justice Timothy J. Walker, in Wells Fargo Bank, N.A. v Hughes (27 Misc 3d 628 [Sup Ct, Erie County 2010]), declined to approve a settlement proposal where the plaintiff failed to act in good faith as required by CPLR 3408. Regrettably, it is patently clear to this court that plaintiff has failed to act in good faith in this matter.

Upon reviewing the totality of the circumstances herein, this court is driven to the inescapable conclusion that plaintiff has,{**28 Misc 3d at 169} by way of calculation and premeditation (as evidenced by the terms of its carefully crafted agreement), created a scenario whereby it is a virtual certainty that defendants will ultimately be irreparably damaged and further, by way of the agreement, has gone to extraordinary lengths in an attempt to insulate itself from liability while [*5]at the same time ensuring that it will not sustain any pecuniary loss and that all costs will be borne by defendants. In short, the conduct of plaintiff in this matter has been overreaching, shocking, willful and unconscionable, is wholly devoid of even so much as a scintilla of good faith and cannot be countenanced by this court. Since an action to foreclose a mortgage is a suit in equity (Jamaica Sav. Bank v M. S. Inv. Co., 274 NY 215 [1937]), all of the tenets of equity are fully applicable to the proceeding, including the rules governing punitive or exemplary damages (I.H.P. Corp. v 210 Cent. Park S. Corp., 12 NY2d 329 [1963]). Indeed, this court is persuaded that Judge Benjamin Cardozo was most assuredly correct in stating that "[t]he whole body of principles, whether of law or of equity, bearing on the case, becomes the reservoir to be drawn upon by the court in enlightening its judgment" (Susquehanna S.S. Co. v Andersen & Co., 239 NY 285, 294 [1925]). In a suit in equity, the court is vested with jurisdiction to do that which ought to be done. While the court notes that the formal distinctions between an action at law and a suit in equity have long since been abolished in New York (see CPLR 103; Field Code of 1848 2, 3, 4, 69), the Supreme Court is nevertheless vested with equity jurisdiction and the distinct rules governing equity are still very much applicable (Carroll v Bullock, 207 NY 567 [1913]).

In those rare instances where the conduct of a party is unconscionable, shocking or egregious, a court of equity is vested with the power to award exemplary damages. Exemplary damages may lie in a situation where it is necessary to both effectuate punishment as well as to deter the offending party from engaging in such reprehensible conduct in the future. Such an award may also be made to address, as so ably enunciated by our Court of Appeals in Home Ins. Co. v American Home Prods. Corp. (75 NY2d 196, 203 [1990]), "gross misbehavior for the good of the public . . . on the ground of public policy." Indeed, exemplary damages are intended to have a deterrent effect upon conduct which is unconscionable, egregious, deliberate and inequitable (I.H.P. Corp. v 210 Cent. Park S. Corp., 12 NY2d 329 [1963]). Under the unique circumstances of this matter, the court determines that plaintiff be forever barred and prohibited from{**28 Misc 3d at 170} collecting any of the claimed interest accrued on the loan between the date of default and March 1, 2010, that plaintiff be barred and prohibited from recovering any claimed legal fees and expenses as well as any and all claimed advances to date and further that defendants' debt be determined at this time to be no more than the principal balance of $301,721.58. The court also determines that the imposition of exemplary damages upon plaintiff is equitable, necessary and appropriate, both in light of plaintiff's shockingly inequitable, bad faith conduct as well as to serve as an appropriate deterrent to any future outrageous, improper and wrongful activities. The court hereby fixes the amount of exemplary damages in the sum of $100,000, recoverable by defendants from plaintiff. For all of the foregoing reasons, it is, therefore ordered, adjudged and decreed that plaintiff's application for summary judgment and appointment of a

referee is denied; and it is further ordered, adjudged and decreed that plaintiff, its successors, assigns and others are forever barred, foreclosed and prohibited from demanding, collecting or attempting to collect, directly or indirectly, any and all of the sums in this proceeding delineated as interest, default interest, attorney's fees, legal fees, costs, disbursements, advances or any sums other than the principal balance, that may have accrued from May 1, 2008 up to the date of this order; and it is further ordered, adjudged and decreed that defendants Anthony J. Corcione and Jane Corcione residing at 66 Circle Drive, East Northport, New York 11731 recover judgment against plaintiff Emigrant Mortgage Co. Inc., with an office located at 5 East 42nd Street, New York, New York 10017, in the principal sum of $100,000 representing exemplary damages, and that defendants have execution therefor.

Emigrant Mtge. Co., Inc. v Fitzpatrick 2010 NY Slip Op 20317 [29 Misc 3d 746] August 11, 2010 Spinner, J. Supreme Court, Suffolk County Published by New York State Law Reporting Bureau pursuant to Judiciary Law 431. As corrected through Wednesday, December 8, 2010

[*1] Emigrant Mortgage Company, Inc., Plaintiff, v Linda Fitzpatrick, Also Known as Linda J. Fitzpatrick, et al., Defendants. Supreme Court, Suffolk County, August 11, 2010 APPEARANCES OF COUNSEL Deutsch & Schneider, LLP, Glendale, for plaintiff. Nassau/Suffolk Law Services, Islandia, for Linda Fitzpatrick, defendant. {**29 Misc 3d at 747} OPINION OF THE COURT Jeffrey Arlen Spinner, J. It is ordered that this motion by the plaintiff for an order pursuant to CPLR 3212 granting summary judgment in its favor and striking the answer of the defendant Linda Fitzpatrick, also known as Linda J. Fitzpatrick; appointing a referee to ascertain and compute the amount due; amending the caption of this action by substituting Haley Lanzafame for John Doe No. 1 and{**29 Misc 3d

at 748} striking out John Does Nos. [*2]2-10; and striking the notice for discovery and inspection of defendant Fitzpatrick pursuant to CPLR 3122 (b) is denied. This is an action to foreclose a mortgage on property known as 1 Forest Drive, East Northport, New York. Defendant Fitzpatrick obtained a loan in the amount of $210,000 at a yearly fixed rate of interest of 11.125% from the plaintiff and executed a note and said mortgage, both dated April 9, 2008, in favor of the plaintiff. The note indicated monthly mortgage payments to be $2,019.74. The defendant Fitzpatrick defaulted on the monthly loan payment due on September 1, 2008 and those due thereafter. Subsequently, the plaintiff declared the entire amount due. The plaintiff commenced the instant mortgage foreclosure action on March 25, 2009 alleging that upon information and belief the subject loan is a "subprime/high cost" loan and that the plaintiff is the holder and owner of the subject mortgage and note and has complied with Banking Law 595-a and 6-l or 6-m, if applicable, and RPAPL 1304. Defendant Fitzpatrick answered asserting a first affirmative defense that the loan was substantively unconscionable because the monthly mortgage payments of principal, interest and taxes of $2,753.88 were in excess of the defendant's fixed monthly income of $2,671; the plaintiff knew or should have known at the time that the loan agreement was made that the defendant Fitzpatrick's income was insufficient to cover the monthly payments due under the note; and the plaintiff failed to verify or to even inquire into defendant Fitzpatrick's income, which is fixed and easily verifiable, and disregarded income in determining the loan terms to extend to her. In addition, the first affirmative defense alleged that the loan was procedurally unconscionable due

to the unequal bargaining power and imbalance of the knowledge and understanding of the parties. As a second affirmative defense, defendant Fitzpatrick asserted that the plaintiff engaged in unfair and deceptive practices in the extension of said loan in violation of General Business Law 349. The second affirmative defense alleged in effect that the conduct of the plaintiff of extending the subject loan to defendant Fitzpatrick without determining her ability to repay when a reasonable person would expect such an established bank as the plaintiff to offer a loan that he or she could afford was materially misleading. In addition, the defense alleged that said conduct had the potential to affect similarly situated{**29 Misc 3d at 749} financially vulnerable consumers and alleged damage in the form of the loss of defendant Fitzpatrick's home of 22 years to foreclosure. Defendant Fitzpatrick pointed out in her answer that the mortgage payments she made for June, July and August 2008 prior to her default were paid out of the loan proceeds. The plaintiff now moves for summary judgment on the complaint on the grounds that defendant Fitzpatrick defaulted on her loan payments, the plaintiff served defendant Fitzpatrick with the required notices of default, and defendant Fitzpatrick failed to cure her default resulting in the acceleration of her loan. In support of the motion, the plaintiff submits a copy of the note and mortgage, the affidavit of facts of the plaintiff's assistant treasurer, the 90-day notice pursuant to [*3]RPAPL 1304 dated October 29, 2008 and addressed to defendant Fitzpatrick, the default notice pursuant to paragraph 22 of the mortgage, the "Help for Homeowners in Foreclosure" notice pursuant to RPAPL 1303, the Fair Debt Collection Practices Act notice, the summons with the "You Are In Danger of Losing Your Home" notice of RPAPL 1320, the

complaint, the answer of defendant Fitzpatrick, and the affidavits of service. The plaintiff also submits an affirmation regarding "sub-prime" status stating that upon information and belief this is an action to foreclose a residential mortgage loan which is a "subprime home loan" as defined in RPAPL 1304 or a "high-cost" home loan as defined in Banking Law 6-l (1) (d) (see CPLR 3408). In opposition to the motion, defendant Fitzpatrick contends that the plaintiff's act of extending said loan was unconscionable as evidenced by the parties' unequal appreciation of the undertaking and the clearly ascertainable inability of defendant Fitzpatrick to repay the loan according to its terms such that the plaintiff knew or should have known prior to closing that it would be impossible for defendant Fitzpatrick to make loan payments. Defendant Fitzpatrick's attorney states in her affirmation that upon information and belief, the subject loan is the first mortgage that defendant Fitzpatrick has ever had and that compared to the plaintiff, a large lending institution with extensive knowledge of loans, mortgages and extension of credit, defendant Fitzpatrick is a homeowner with very limited knowledge of loan terms and the lending process. Defendant Fitzpatrick's attorney contends in effect that a review of her client's easily verifiable income would have immediately alerted the plaintiff that defendant Fitzpatrick could not afford the loan that was extended to her. She further contends that the extension{**29 Misc 3d at 750} of the subject loan implies an intent by the plaintiff to seize defendant Fitzpatrick's home upon her almost inevitable default. It is well settled that the proponent of a summary judgment motion bears the initial burden of making a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient proof to demonstrate the absence of any

material issues of fact (Norwest Bank Minn. v Sabloff, 297 AD2d 722 [2d Dept 2002]). Failure to make such a prima facie showing requires a denial of the motion regardless of the sufficiency of the opposition papers (De Santis v Romeo, 177 AD2d 616 [2d Dept 1991]). In order to establish prima facie entitlement to summary judgment in a foreclosure action, a plaintiff must submit the mortgage and unpaid note, along with evidence of default (see Capstone Bus. Credit, LLC v Imperia Family Realty, LLC, 70 AD3d 882, 883 [2d Dept 2010]; U.S. Bank Natl. Assn. TR U/S 6/01/98 [Home Equity Loan Trust 1998-2] v Alvarez, 49 AD3d 711, 711 [2d Dept 2008]; Hoffman v Kraus, 260 AD2d 435, 436 [2d Dept 1999]). The plaintiff's motion for summary judgment should prove the allegations of the complaint (2-21 Bergman on New York Mortgage Foreclosures 21.05). Chapter 472 of the Laws of 2008 (known as the Subprime Residential Loan and Foreclosure Law) provides additional protections, including protections against predatory lending practices, to homeowners facing foreclosure whose home loans meet certain standards. The plaintiff seeking to foreclose a home loan that meets said standards must also submit evidence of compliance with the statutes pertaining to that specific type of home loan in order to demonstrate entitlement to summary [*4]judgment. If the loan is a high-cost home loan as defined in Banking Law 6-l or a subprime home loan as defined in Banking Law 6-m, the plaintiff seeking to meet its initial burden on a summary judgment motion must establish that it is the owner and holder of the subject mortgage and note or has been delegated the authority to commence a mortgage foreclosure action by the owner and holder and has complied with all of the provisions of Banking Law 595-a and any rules and regulations promulgated thereunder as well as Banking Law 6-l or 6-m and RPAPL 1304 (see RPAPL 1302).

The burden then shifts to the defendant to demonstrate "the existence of a triable issue of fact as to a bona fide defense to the action, such as waiver, estoppel, bad faith, fraud, or oppressive{**29 Misc 3d at 751} or unconscionable conduct on the part of the plaintiff" (Capstone Bus. Credit, LLC v Imperia Family Realty, LLC, 70 AD3d at 883, quoting Mahopac Natl. Bank v Baisley, 244 AD2d 466, 467 [2d Dept 1997]; see Nassau Trust Co. v Montrose Concrete Prods. Corp., 56 NY2d 175, 183 [1982]). If the loan is a high-cost home loan as defined in Banking Law 6-l or a subprime home loan as defined in Banking Law 6-m, it is a defense in a mortgage foreclosure action that the terms of the home loan or the actions of the lender violate any provision of Banking Law 6-l or 6-m or RPAPL 1304 (see RPAPL 1302). Here, the plaintiff has failed to demonstrate through the submission of proof from someone with personal knowledge that the subject loan is either a high-cost home loan as defined in Banking Law 6-l or a subprime home loan as defined in Banking Law 6-m and RPAPL 1304 (5) (c) and that the plaintiff has complied with all of the provisions of Banking Law 595-a, and any rules and regulations promulgated thereunder, as well as Banking Law 6-l or 6-m and RPAPL 1304, as alleged in the complaint. Nowhere in the attorney's affirmation of regularity or the affidavit of the plaintiff's assistant treasurer is there any mention or specification or explanation of the subject loan's exact loan type as either a high-cost home loan or a subprime home loan. The court notes that the plaintiff has submitted a 90-day default notice which is required for a high-cost home loan as defined in Banking Law 6-l or a subprime home loan as defined in Banking Law 6-m (see RPAPL 1304). If the subject loan is a high-cost home loan, then the plaintiff has failed to submit proof that it complied with Banking Law 6-l (2-a) (a) inasmuch as the subject mortgage lacks a legend on top in 12-point type stating that the mortgage is a high-cost

home loan subject to Banking Law 6-l. Therefore, the plaintiff's motion for summary judgment on the complaint is denied inasmuch as the plaintiff failed to meet its initial burden of establishing its prima facie entitlement to judgment as a matter of law (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Tyson v Tower Ins. Co. of N.Y., 68 AD3d 977 [2d Dept 2009]). In any event, when a plaintiff moves for summary judgment, it is proper for the court to look beyond the defendant's answer and deny summary judgment if facts are alleged in opposition to the motion which, if true, constitute a meritorious defense (see Nassau Trust Co. v Montrose Concrete Prods. Corp., 56 NY2d at{**29 Misc 3d at 752} 182). Here, defendant Fitzpatrick's opposition to the motion also raises allegations of a violation of Banking Law 6-l (2) (k) if the subject loan is actually a high-cost [*5]home loan in that it was made without "due regard to repayment ability . . . as verified by detailed documentation of all sources of income and corroborated by independent verification" and a violation of Banking Law 6-m (4) if the subject loan is actually a subprime home loan. Consistent with the rule referred to above, the court considers not only the defenses pleaded but also alleged violations of Banking Law 6-l (2) (k) and 6-m (4) (see 56 NY2d at 183). The plaintiff also moves for dismissal of the affirmative defenses of defendant Fitzpatrick on the grounds that the loan documents that were signed and presumably read and assented to by defendant Fitzpatrick fully disclosed the amount of monthly loan payments and income required to meet the obligations of the subject asset-based loan, that the plaintiff expressly relied on her sworn representations of her ability to repay the loan, and that there was no

predatory lending involved inasmuch as it was defendant Fitzpatrick who approached the plaintiff for a loan so as to avoid tax foreclosure. When moving to dismiss an affirmative defense, the plaintiff bears the burden of demonstrating that the affirmative defense is "without merit as a matter of law" (Vita v New York Waste Servs., LLC, 34 AD3d 559, 559 [2d Dept 2006]; see CPLR 3211 [b]). In reviewing a motion to dismiss an affirmative defense, this court must liberally construe the pleadings in favor of the party asserting the defense and give that party the benefit of every reasonable inference (see Fireman's Fund Ins. Co. v Farrell, 57 AD3d 721, 723 [2d Dept 2008]). Moreover, if there is any doubt as to the availability of a defense, it should not be dismissed (see id.). "[A] party is under an obligation to read a document before he or she signs it, and a party cannot generally avoid the effect of a [document] on the ground that he or she did not read it or know its contents" (Cash v Titan Fin. Servs., Inc., 58 AD3d 785, 788 [2d Dept 2009] [internal quotation marks and citations omitted]). "[T]here are situations where an instrument will be deemed void because the signer was unaware of the nature of the instrument he or she was signing, such as where the signer is illiterate, or blind, or ignorant of the alien language of the writing, and the contents{**29 Misc 3d at 753} thereof are misread or misrepresented to him by the other party, or even by a stranger" (id. [internal quotation marks and citations omitted]). Whether a contract or clause is unconscionable is to be decided by the court against the background of the contract's commercial setting, purpose and effect (see Wilson Trading Corp. v David Ferguson, Ltd., 23 NY2d 398, 403 [1968]). An unconscionable contract is "one which is so grossly unreasonable or unconscionable in the light of the mores and business practices of the time

and place as to be unenforceable according to its literal terms" (Gillman v Chase Manhattan Bank, 73 NY2d 1, 10 [1988] [internal quotation marks and citations omitted]). "A determination of unconscionability generally requires a showing that the contract was both procedurally and substantively unconscionable when made," for example, "some showing of an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party" (id. [internal quotation marks and citations omitted]). The [*6]procedural element of unconscionability requires an examination of the contract formation process and the alleged lack of meaningful choice with a focus on such matters as the size and commercial setting of the transaction, whether deceptive or high-pressure tactics were employed, the use of fine print in the contract, the experience and education of the party claiming unconscionability, and whether there was disparity in bargaining power (id. at 10-11). The substantive element of unconscionability entails an analysis of the substance of the bargain to determine whether the terms were unreasonably favorable to the party against whom unconscionability is urged (id.). With respect to the first affirmative defense that the loan was unconscionable, the plaintiff's attorney points out in his affirmation that defendant Fitzpatrick signed a "Resource Letter" on April 9, 2008, which is submitted with the motion papers, indicating that she understood and confirmed her ability to make the initial monthly mortgage payments of approximately $2,754 on a timely basis; that she had regular and dependable income from which to make her scheduled monthly payments; that under the standard loan program her annual regular and dependable income would need to be $100,163 and that if it was projected to be lower than said sum, she must have additional resources available to fund her monthly payments. In addition, the plaintiff's

attorney points out that defendant Fitzpatrick{**29 Misc 3d at 754} received a similar copy of this letter at the time that her loan was approved prior to closing and that she acknowledged that the loan was being made in reliance on said confirmation of her ability to repay. The plaintiff's attorney also indicates that since the loan was an asset-based loan, in which the plaintiff considered the value of the home, and not an income/net worth based loan, the plaintiff was not required to verify defendant Fitzpatrick's statements as to income. He further indicates that defendant Fitzpatrick was therefore required to sign a high-equity loan certificate, also submitted with the motion papers, acknowledging that the plaintiff may not have made any independent determination of her ability to repay the loan other than as represented by defendant Fitzpatrick in the loan application and that the plaintiff may be relying on her said representations. Here, the plaintiff has failed to demonstrate that the first affirmative defense lacks merit. The high-equity loan certificate explains that the subject loan is a high-equity plus loan which is a "no income-documentation mortgage loan" and the resource letter indicates that it is a loan program that does not enable the bank to independently verify the borrower's ability to make their scheduled loan payments to repay the loan. Said submissions raise an issue of fact as to whether the mere extension of an asset-based secured loan, a type of loan used almost exclusively in commercial business lending to provide working capital, to defendant Fitzpatrick as a residential home loan was grossly unreasonable or unconscionable (see e.g. Gartenberg v Wells Fargo Bus. Credit, 1985 WL 1217, 1985 US Dist LEXIS 20133 [SD NY 1985]; see also 211 NY Practice Guide: Business and Commercial 11.03). In addition, defendant Fitzpatrick's allegation that the loan agreement was unreasonably favorable to the plaintiff because the plaintiff knew or should have known that

she could not afford the terms of the agreement sufficiently states a claim for substantive unconscionability (see Williams v Aries Fin., LLC, 2009 WL 3851675, 2009 US Dist LEXIS 107812 [ED NY 2009]). Moreover, if the subject loan is actually a high-cost home loan, the plaintiff has clearly failed through its submissions to demonstrate compliance with Banking Law 6-l (2) (k), that the loan was made with "due regard to repayment ability, based upon consideration of the resident borrower or borrowers' [*7]current and expected income, current obligations, employment status, and other financial resources{**29 Misc 3d at 755} (other than the borrower's equity in the dwelling which secures repayment of the loan), as verified by detailed documentation of all sources of income and corroborated by independent verification." Likewise, if said loan is actually a subprime home loan, the plaintiff has failed to establish compliance with Banking Law 6-m (4). Therefore, the request for dismissal of the first affirmative defense is denied. Regarding the defense of unfair and deceptive practices in violation of General Business Law 349, the plaintiff asserts that the subject loan transaction did not involve any deceptive practice of fraudulent inducement inasmuch as defendant Fitzpatrick had significant tax arrears when she approached the plaintiff and sought a mortgage to prevent a tax foreclosure. The plaintiff points to the U.S. Department of Housing and Urban Development settlement statement in support of the assertion that defendant Fitzpatrick obtained in excess of $123,000 cash at the closing of which approximately $44,058.12 was used to pay the defendant's real estate tax arrears. An affirmative defense or a cause of action under General Business Law 349 (a) must allege that (1) the challenged conduct was consumer-oriented, (2)

the conduct or statement was materially misleading, and (3) damage (see Stutman v Chemical Bank, 95 NY2d 24, 29 [2000]; Lum v New Century Mtge. Corp., 19 AD3d 558, 559 [2d Dept 2005], lv denied 6 NY3d 706 [2006]). Here, the plaintiff has also failed to demonstrate that the second affirmative defense lacks merit. The plaintiff's proffered proof raises an issue of fact as to whether the act of offering an asset-based loan under the plaintiff's high-equity plus program to defendant Fitzpatrick and other homeowners in similarly financially vulnerable or desperate situations who approached the plaintiff for a loan was materially misleading in violation of General Business Law 349 (see generally Aurora Loan Servs., LLC v Thomas, 53 AD3d 561 [2d Dept 2008]; Popular Fin. Servs., LLC v Williams, 50 AD3d 660 [2d Dept 2008]). Therefore, the request for dismissal of the second affirmative defense is denied. The plaintiff's remaining requests for relief are denied.

[*1] HSBC Bank USA N.A. v Blum 2010 NY Slip Op 51207(U) [28 Misc 3d 1207(A)] Decided on June 10, 2010 Supreme Court, Suffolk County Spinner, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on June 10, 2010 Supreme Court, Suffolk County

HSBC Bank USA N.A., as Trustee etc., Plaintiff against Deborah A. Blum and Todd Blum, Defendants

2006-25122

Jonathan I. Ullmann Esq. Peter T. Roach & Associates P.C. Attorneys for Plaintiff 125 Michael Drive

Syosset NY 11791 Todd Blum Defendant Pro Se Jeffrey Arlen Spinner, J.

In this action, the Defendant TODD BLUM, acting pro se, sought and obtained an Order To Show Cause which was granted by this Court on April 7, 2010. The stated purpose of the Order To Show Cause was to enjoin certain ejectment proceedings. Plaintiff commenced this action claiming foreclosure of a first mortgage encumbering premises known as 101 Lincoln Road, Medford, Town of Brookhaven, New York resulting from a default occurring on or about April 1, 2006. A Judgment of Foreclosure & Sale was granted in this action, upon the default of the Defendants, on August 7, 2007 fixing the debt due Plaintiff at $ 320,160.61 exclusive of costs, attorney's fees, statutory interest and postjudgment advances. Following a series of four serial bankruptcy petitions (two separate Chapter 13 petitions filed by each Defendant) and an Order To Show Cause brought by Defendant DEBORAH A. BLUM, a public auction sale of the premises was conducted on December 2, 2009 by the Referee. The [*2]premises were struck down to Plaintiff who was the sole bidder and title to the premises devolved unto Plaintiff pursuant to a Referee's Deed In Foreclosure. At the time of sale, the debt due and owing to Plaintiff stood at $ 420,364.44. Defendants were then duly served with copies of the Referee's Deed and the requisite Notice To Quit Possession. By reason of their failure to

deliver up possession, Plaintiff applied to this Court for and obtained a Writ of Assistance, which was issued by this Court on February 23, 2010. In the present application, which is dated April 7, 2010, Defendant TODD BLUM requests an indeterminate stay of the ejectment proceedings, asserting verbatim that "I was in negotiation with bank rep. for "Cash for Keys" Tony Bykov manager for Ocwen and Edward Burke. I also am to sick to move in 72 hrs with my probifes and neropathy aiments [sic] I'm loosing my right foot!!" In response, Plaintiff has submitted voluminous opposing papers wherein counsel vigorously asserts that the application should be denied on a multitude of grounds. First, counsel avers that Defendant failed to serve the moving papers, having only delivered the bare Order. Second, counsel asserts that both Defendants have willfully and in bad faith delayed this foreclosure action on many occasions, both in this Court and the United States Bankruptcy Court, to the great detriment of Plaintiff. Third, counsel asserts that any relief sought by Defendants cannot lie inasmuch as any equity of redemption has been extinguished by virtue of the foreclosure sale and its attendant devolution of title. It has long been the law in New York that the consummation of a public auction of a property in foreclosure extinguishes all equity of redemption, Nutt v. Cuming 155 NY 309 [1898]. It follows, then, that there can be no redemption of property after such a foreclosure sale has been concluded, Deutsche Bank Co. Of Cal. v. DePalo 38 AD3d 490 [2nd Dept. 2007]. Since judicial sympathy is not a recognized defense to an action claiming foreclosure of a mortgage, Graf v. Hope Building Corporation 253 NY 1 [1930], the Court presumes that Defendant is appealing to the equity

jurisdiction of this Court. This would be appropriate since an action to foreclose a mortgage is a suit in equity, Jamaica Savings Bank v. M.S. Investing Co. 274 NY 215 [1937]. In a proceeding in equity, the Supreme Court is invested with the authority to do that which ought to be done, that which is fair under the circumstances of each case. The Court is constrained to note that Defendant does not raise any claim of a lack of service of the initial summons nor any mesne process and hence, the provisions of CPLR 317 and CPLR 5015 are inapplicable herein. Indeed, it is clear to this Court, especially after a painstaking examination of the history of proceedings under this index number (all of which have been before the undersigned Justice), that both Defendants were fully aware of the pendency of this action and that each of them affirmatively undertook acts that were calculated to delay, impede and impair Plaintiff in the exercise of its rights under the Note, Mortgage and Judgment of Foreclosure & Sale. In this endeavor, Defendants have been unfailingly successful. Indeed, the record is replete with ample proof that Defendants have lived in the home "rent free" so to speak, for a period in excess of four years and further, that Plaintiff has been forced to bear the expense of both casualty insurance to protect its interest in the premises as well as the [*3]property taxes levied thereon by the Town of Brookhaven. It follows, then, that Defendants have "unclean hands" and hence equity should not rightly intervene on their behalf, York v. Searles 97 AD 331 [2nd Dept. 1904], aff'd 189 NY 573 [1907]. Inasmuch as Defendant has advanced no legally or factually efficacious reason for any stay of proceedings, this application must be denied in its entirety.

It is therefore ORDERED that the application of the Defendant TODD BLUM shall be and the same is hereby denied in its entirety; and it is further ORDERED that the stay of proceedings heretofore ordered herein shall be and the same is hereby vacated, dissolved and set aside and is of no further force and effect; and it is further ORDERED that the Plaintiff is granted leave to continue prosecution of its ejectment proceeding herein. This constitutes the decision, judgment and order of the Court. Dated: June 10, 2010 Riverhead, New York _____________________________ Hon. Jeffrey Arlen Spinner J.S.C.

[*1] U.S. Bank Natl. Assn. v Mathon 2010 NY Slip Op 52082(U) [29 Misc 3d 1228(A)] Decided on December 1, 2010 Supreme Court, Suffolk County Spinner, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 1, 2010 Supreme Court, Suffolk County

U.S. Bank National Association, Plaintiff against Sheila Mathon, Hank Mathon, Mortgage Electronic Registration Systems Inc. as Nominee and Mortgagee of Record, WMC Mortgage Corp., the Law Offices of Joseph D'Elia, Key Bank of Long Island n/k/a Washington Mutual Bank, Commissioner of Taxation and Finance, United States of America-Internal Revenue Service and Shore Park Estates Homeowners Association Inc., Defendants

2007-30481

Adam M. Marshall Esq. Cullen & Dykman LLP Attorneys for Plaintiff 100 Quentin Roosevelt Boulevard Garden City, New York 11530 Rosicki, Rosicki & Associates P.C. Former Attorneys for Plaintiff 51 East Bethpage Road Plainview, New York 11803 Sheila Mathon Hank Mathon Defendants Pro Se 815 Anthony Drive Lindenhurst, New York 11757 Jeffrey Arlen Spinner, J. ORDER ON MOTION Mot. Seq. 004-MotD Original Return Date: September 15, 2010 Final Submit Date: November 17, 2010

Premises 815 Anthony Drive Lindenhurst, New York 11757 District0103 Section025.00 Block02.00 Lot049.008

This is an action wherein the Plaintiff claims foreclosure of a mortgage dated September 28, 2006 in the original principal amount of $486,400.00 recorded with the Clerk of Suffolk County, New York on October 16, 2006 in Liber 21401 of Mortgages at Page 349. The mortgage secures a note of the same amount and encumbers real property commonly known as 815 Anthony Drive, Lindenhurst, Town of Babylon, New York and described as District 0103 Section 025.00 Block 02.00 Lot 049.008 on the Tax Map of Suffolk County. Plaintiff commenced this action by filing a Summons, Verified Complaint and Notice of Pendency on September 26, 2007. Following the interposition of an Answer by Defendants then-counsel, summary judgment was granted by Order dated April 14, 2008 and a Referee was appointed to compute in accordance with RPAPL 1321. Thereafter, by Order dated January 30, 2009, a Substitute Referee was appointed. On July 12, 2010,

Plaintiff moved for a Judgment of Foreclosure & Sale and, following the interposition of opposition by Defendants together with the present Order To Show Cause, the application was voluntarily withdrawn. Defendants SHEILA MATHON and HANK MATHON ("The Mathons") have moved pro se, by Order To Show Cause dated August 12, 2010, for a stay of all proceedings under this index number. Their application recites a number of grounds for the relief demanded including the pendency of a lawsuit in the United States District Court for the Eastern District of New York brought by the Mathons as plaintiffs under docket no. 10-CV-3664, the failure of Plaintiff's counsel to serve notice of proceedings upon Defendants' counsel and finally, that Plaintiff's offer of a loan modification should have operated as a stay of this action. As to the claim involving the federal action, this cannot constitute a legally cognizant ground for relief in the instant matter. In order for such injunctive relief to lie, the competing actions must have full and complete identity of claims, parties and the relief demanded, Green Tree Fin. Servicing Corp. v. Lewis 280 AD2d 642, 720 NYS2d 843 [2nd Dept. 2001]. In the federal action, there is a lack of identity of the parties in that the Mathons have impleaded sixteen individuals and entities who are not parties to the instant action. Moreover, the federal action has been brought under the federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 USC 1961 et. seq. which is not a subject of the instant action. Since there exists such a dissimilarity of both parties and claims between the state and federal actions, this Court cannot grant injunctive relief under this theory. Turning next to the claim of a lack of notice to counsel, Plaintiff asserts that since the Mathons [*2]sought this relief by Order To Show Cause, it has

withdrawn its motion for judgment, thus rendering the application to be academic. Defendants claim that Plaintiff failed to serve their counsel Adam Gomerman Esq. with notice of their intent to seek judgment. They rely upon this Court's Order of April 14, 2008 which directs, in pertinent part, that "ORDERED that the answer interposed by defendants SHEILA MATHON and HANK MATHON is hereby stricken and deemed converted to an appearance and demand in foreclosure, requiring service of all future papers, including but not limited to Notice of Sale, Notice of Proceedings for Surplus Monies and Notice of Discontinuance of Action upon said defendants..." It is clear from the language thereof that service is to be made upon Defendants and not necessarily their attorney. Moreover, Defendants had discharged their counsel prior to the date of the application, thus rendering this claim to be academic. It must be stated here, however, that this Court takes a very dim view of the tactic of withdrawal of an application as a way in which to deprive an adverse litigant of his or her day in court. That being said, the Court finds that this claim for relief is devoid of legal and factual efficacy and likewise must be denied. The issue of the claim of the forbearance/modification agreement, however, is an entirely different situation, one that is considerably troubling to this Court. Defendants assert (and Plaintiff does not in any way controvert) that on April 17, 2009, without the benefit of counsel, they executed a three page document entitled "Home Affordable Modification Trial Period Plan" which was propounded to them by Plaintiff. Indeed, a copy of the same is appended as Exhibit C to the Affidavit of Thomas E. Reardon. According to Defendants (and again, not controverted by Plaintiff), they timely remitted to Plaintiff the three payments of $ 1,736.00 required thereunder and in compliance therewith, followed with nine more monthly payments in the same amount. According to Defendants (and once again, not controverted by Plaintiff), they continued to

send monthly payments of $ 1,736.00, doing so in compliance with a letter from Plaintiff's servicer Chase Home Finance LLC dated June 1, 2009 and appended to their Order To Show Cause. In relevant part, this letter states, in bold face type, as follows; "If you make all [3] trial period payments on time and comply with all applicable program guidelines, you will have qualified for a final modification. However, there may be a period of time between your last trial payment and your first modification payment as we finalize the documents and get them back from you. During that interval, you should make a continuation payment at the trial period amount, and an extra coupon has been provided for that purpose.That payment will be applied as a principal reduction payment on your loan after your final modification is effective." It is undisputed that Defendants sent thirteen payments to Chase Home Finance LLC totalling $ 22,568.00 in reliance upon both the aforementioned April 17, 2009 Trial Modification and the subsequent June 1, 2009 letter and further, that the same were accepted by Plaintiff, presumably under the terms and conditions dictated by Plaintiff. According to Defendants, they regularly inquired as to the status of the final modification and were variously informed that all documents had been received, the application was with underwriting and finally, underwriter had approved the final modification. Notwithstanding the continuing stream of payments from Defendants and the verbal representations made to them, Chase Home Finance LLC, by letter dated April 15, 2010 (two days shy of one year following execution of the Trial Modification) notified Defendants that a loan [*3]modification would not be offered to them due to their inability to meet the existing guidelines therefor. The reason stated for the denial was the inability to meet HAMP guidelines by modifying the payments to equal 31% of Defendants' gross monthly income. In opposition to the foregoing, the Affidavit of Thomas E. Reardon, Assistant Vice-President of Chase Home Finance LLC (Plaintiff's servicing agent), plainly acknowledges the foregoing assertions by Defendants but states, in Paragraph 7, that "...Due to a combination of factors, however, including missing documents, the submission of stale financial data and a significant influx of Trial Plan applications, the Mathons' Trial Plan was not reviewed by

the underwriting department until on or about April 2, 2010." The Affidavit does state that on June 30, 2010 the Mathons applied for a new modification but that they failed to supply all necessary documents for consideration. However, nowhere in Plaintiff's submissions to this Court is there any substantiation of this claim nor is the issue of Defendants' payments addressed. Too, there is no proof of any computation or other calculation explaining the basis for denial herein. In further opposition to Defendants' motion, Plaintiff has submitted the Affidavit of Adam M. Marshall Esq., an associate in the firm of Cullen & Dykman LLP. Mr. Marshall states under oath, in Paragraph 9 thereof, that "Since the Mathons moved by Order to Show Cause to stay the foreclosure on August 12, 2010, further efforts have been made to provide the Mathons with a loan modification based on verifiable income. On October 12, 2010, Plaintiff withdrew its Motion for Judgment of Foreclosure and Sale. In addition, a new application for a loan modification was forwarded to the Mathons. However, the Mathons have abjectly refused to complete the application or supply the financial documents requested therein." This Affidavit by counsel seems to be somewhat at odds with the averments of Mr. Reardon and is amply rebutted by Defendants' motion papers. Defendants have appended a plethora of documents dating from April 30, 2010 through July 28, 2010 evidencing their application for a new modification (which appears to be a HAMP modification identical to the one that Plaintiff had just rejected) as well as their cooperation with the demands of Plaintiff regarding the same. Even so, while Defendants were assiduously attempting to re-negotiate a modification, Plaintiff was instructing its counsel to continue prosecution of the foreclosure action. It is painfully obvious to this Court that Defendants relied upon representations made by

Plaintiff and acted affirmatively based upon those representations, all to their serious detriment. There has been no disclosure by Plaintiff to this Court as to whether or not this loan in foreclosure is deemed to be "sub-prime" or "high cost" in nature. Moreover, no mandatory settlement conference has been held in this matter though same is plainly required pursuant to CPLR 3408. Since an action claiming foreclosure of a mortgage is one sounding in equity, Jamaica Savings Bank v. M.S. Investing Co. 274 NY 215 (1937), the act by Plaintiff of commencing of this action inescapably invokes the Court's equity jurisdiction. While it is to be noted that the formal distinctions between an action at law and a suit in equity have been abolished in New York (see CPLR 103, Field Code Of 1848 2, 3, 4, 69), the Supreme Court nevertheless is fully vested with equity jurisdiction and the distinct rules governing equity are still extant, Carroll v. Bullock 207 NY 567, 101 NE 438 (1913). Speaking generally and broadly, it is the settled law of this jurisdiction that [*4]"Stability of contract obligations must not be undermined by judicial sympathy..." Graf v. Hope Building Corporation 254 NY 1 (1930). However, it is true with equal force and effect that equity must not and cannot slavishly and blindly follow the law, Hedges v. Dixon County 150 US 182, 192 (1893). Finally, as decreed by our Court of Appeals in the matter of Noyes v. Anderson 124 NY 175 (1890) "A party having a legal right shall not be permitted to avail himself of it for the purposes of injustice or oppression..." 124 NY at 179. In the matter of Eastman Kodak Co. v. Schwartz 133 NYS2d 908 (Sup. Ct., New York County, 1954), Special Term stated that "The maxim of "clean hands" fundamentally was conceived in equity jurisprudence to refuse to lend its aid in any manner to one seeking its active interposition who has been guilty

of unlawful, unconscionable or inequitable conduct in the matter with relation to which he seeks relief." 133 NYS2d at 925, citing First Trust & Savings Bank v. Iowa-Wisconsin Bridge Co. 98 F 2d 416 (8th Cir. 1938), cert. denied 305 US 650, 59 S. Ct. 243, 83 L. Ed. 240 (1938), reh. denied 305 US 676, 59 S Ct. 356 83 L. Ed. 437 (1939); General Excavator Co. v. Keystone Driller Co. 65 F 2d 39 (6th Cir. 1933), cert. granted 289 US 721, 53 S. Ct. 791, 77 L. Ed. 1472 (1933), aff'd 290 US 240, 54 S. Ct. 146, 78 L. Ed. 793 (1934). Here, the Court has serious and grave concerns regarding Plaintiff's conduct in this matter, which appears to be rife with bad faith. This can be amply seen by the acceptance of multiple payments following the three trial payments, the promise albeit unfulfilled of the permanent modification and the verbal assurances that the modification had been approved juxtaposed with the vague denial issued one year after the trial agreement, the spurious claims of non-cooperation by Defendants, the seeming offer of a "new" modification and the withdrawal of the motion for judgment in an apparent attempt to divest this Court of jurisdiction to deal with this Order To Show Cause. It is the province and indeed the obligation of the trial court to assess and to determine issues regarding credibility, Morgan v. McCaffrey 14 AD3d 670 (2nd Dept. 2005). In the matter before the Court, the pendulum of credibility seems to swing heavily in favor of Defendants. When the conduct of Plaintiff in this proceeding is viewed in its entirety, it compels the Court to invoke the ancient and venerable principle of "Falsus in uno, falsus in omni" (Latin; "false in one, false in all") upon Defendant which, after review, is wholly appropriate in the context presented, Deering v. Metcalf 74 NY 501 (1878). Regrettably, the Court has, thus far, been unable to find even a scintilla of good faith respecting

Plaintiff's conduct. Plaintiff comes before this Court with seemingly unclean hands demanding equitable relief against Defendants. After careful consideration, it is the determination of this Court that this matter be set down for a hearing to explore whether Plaintiff has acted in good faith, whether or not sanctions should be imposed upon Plaintiff or whether the Court should consider the invocation of other remedial measures. It is, therefore ORDERED that the application of Defendants SHEILA MATHON and HANK MATHON be and the same is hereby granted to the extent set forth herein; and it is further [*5] ORDERED that a hearing shall be convened in this matter, to be held on January 12, 2011 at 2:30 p.m., Courtroom 229A, Supreme Court, 1 Court Street, Riverhead, New York 11901; and it is further ORDERED that said hearing shall not be adjourned except upon order of the Court; and it is further ORDERED that any relief not expressly granted herein is hereby denied; and it is further ORDERED that within ten (10) days of the date of entry hereof, Plaintiff's counsel shall serve a copy of this Order upon the Calendar Clerk of the Supreme Court, upon Defendants and all parties entitled to notice. This shall constitute the Decision and Order of this Court. Dated: December 1, 2010

Riverhead, New York E N T E R: ______________________________________ JEFFREY ARLEN SPINNER, J.S.C.

Wells Fargo v Tyson 2010 NY Slip Op 20079 [27 Misc 3d 684] March 5, 2010 Spinner, J. Supreme Court, Suffolk County Published by New York State Law Reporting Bureau pursuant to Judiciary Law 431. As corrected through Wednesday, June 2, 2010

[*1] Wells Fargo, Plaintiff, v Steven E. Tyson et al., Defendants. Supreme Court, Suffolk County, March 5, 2010 APPEARANCES OF COUNSEL Steven E. Tyson, defendant pro se. Fein Such & Crane L.L.P., Chestnut Ridge (Richard Femano of counsel), for plaintiff. {**27 Misc 3d at 685} OPINION OF THE COURT Jeffrey Arlen Spinner, J. On September 7, 2007 plaintiff commenced this action claiming foreclosure of a mortgage by filing its notice of pendency and summons and complaint with the Clerk of Suffolk County. The mortgage at issue was originally given in favor of New Century Mortgage Corporation, plaintiff's assignor. Said mortgage was given to secure a note and constitutes a first lien

upon premises known as 3 Danville Court, Greenlawn, Town of Huntington, New York. On November 30, 2007, plaintiff filed an application with this court seeking the appointment of a referee pursuant to RPAPL 1321 but withdrew that application on December 5, 2007. Subsequently, and on September 18, 2009, plaintiff filed a second application for the same relief which was granted by order of this court dated November 4, 2009. On January 14, 2010, upon the written request of defendant Steven Tyson, this court convened a conference in order to address certain serious issues which had arisen with respect to the property under foreclosure. Defendant took the time to appear in person while plaintiff dispatched a per diem attorney who had absolutely no knowledge of the matter inasmuch as she was not regular counsel, was not provided with any information and hence no meaningful progress could occur. The court was thereupon compelled to continue the conference to February 24, 2010, at which time the defendant again appeared in person, on this occasion, with counsel of record for the plaintiff, appearing as instructed by the court. The issue that brings these parties before the court at this time concerns the entry, without permission, into defendant's dwelling house, by agents dispatched expressly for that purpose by plaintiff. Plaintiff vociferously [*2]asserts that it has the absolute and unfettered right, under the express terms of the mortgage, to enter the premises at any time, for purposes of inspection and protection of its security interest and that it is free to do so without having to obtain defendant's consent for the same. Defendant counters that plaintiff has wrongfully and without justification entered the dwelling on at least two separate occasions, causing damage to the premises and resulting in the loss of various items of personalty.

The following facts are not in dispute. Defendant and his wife are the owners, in fee simple absolute, of the premises known as 3 Danville Court, Greenlawn, New York, which are subject to a first lien in favor of plaintiff. Plaintiff has commenced an action{**27 Misc 3d at 686} to foreclose that lien, but there has been no devolution of title. Defendant's personal financial situation is such that he can no longer maintain the high cost of utility service, resulting in the voluntary discontinuance of same. Defendant has previously winterized the plumbing and heating systems in the dwelling, has secured the building, maintains the exterior of the premises and retains virtually all of his personalty in the home including furniture, clothing and foodstuffs. Defendant has, previous to any entry on the premises herein, notified plaintiff of the discontinuance of utility service and the winterization and securing of the dwelling. Defendant, although he is now residing elsewhere, has not abandoned the property, has not evinced any intent to abandon it and he visits the premises at least once weekly and sometimes with greater frequency. In addition, defendant has arranged with a neighbor to keep a watchful eye on the property in his absence. It is also undisputed that without any notice to defendant, on or about November 13, 2009, plaintiff dispatched an agent to the premises who thereupon changed the locks, thus barring defendant from access to his property. When defendant contacted plaintiff relative to his wrongful ouster from the dwelling and demanded access, plaintiff's representative denied any knowledge of the entry and directed him to contact Fein Such & Crane L.L.P., their counsel of record. Upon contacting them, defendant was advised by someone named Matt that the entry into the home was standard procedure but a new key to the premises would be provided to him by plaintiff, and defendant expressly directed that they remain away from the property. In spite of

defendant's requests plaintiff caused the property to be entered yet again in late December or early January, at which time defendant, having been telephoned by his neighbor, actually confronted these persons and urged them to immediately leave the premises. Defendant was able to discover that these persons obtained access by use of a key identical to the one that was previously provided by plaintiff to defendant. Defendant then secured the premises only to return later that day to find his garage open and the loss of various items of personal property, including an eight kilowatt portable generator, a 14-foot aluminum sectional extension ladder, an aluminum stepladder, a convertible hand truck, an AquaBot pool cleaning device and other items, valued, according to documentation supplied by defendant, at $4,892. Defendant thereafter contacted the Suffolk County Police Department and made a full report, which was docketed under central complaint No. 10-85647.{**27 Misc 3d at 687} It is at this point that the accounts begin to diverge. Defendant offered sworn testimony as follows: he arrived at the premises on November 17, 2009 to discover that he had been "locked out," so to speak; upon communicating with plaintiff, he was redirected to their attorney who informed him that the property was "inspected and secured" due to its abandoned state; they dispatched a new key to him whereupon he discovered that his door lock cylinders had been drilled out; defendant advised plaintiff that he was in possession of the premises, that he had not abandoned the dwelling, that it was replete with his furniture and personal effects and he further instructed them to remain away from the property and to refrain from any entry into the dwelling; according to defendant, plaintiff's representative apologized and stated that they would not enter the premises.

On February 24, 2010, plaintiff produced a witness, one John Denza, who testified under oath, as follows: at the express direction of plaintiff, his company (a private property inspection and preservation firm) caused the mortgaged premises to be inspected on November 3, 2009, allegedly found the front door to be wide open and the premises completely unsecured and so notified plaintiff; plaintiff faxed his company a work order on November 6, 2009 directing that the locks be changed and the dwelling be secured and winterized and further, that on November 13, 2009 his company caused the locks to be changed; he flatly denied that the locks had been drilled or otherwise forcibly removed, instead asserting that the front door to the premises was ajar and the existing lock cylinders were simply unscrewed and set aside. It was only after a rather probing examination by the court that Mr. Denza conceded that he had no actual knowledge as to the matters about which he testified since he never visited the premises, relying instead upon another individual to whom he had delegated all responsibility. Placing things into simpler terms, the totality of his testimony consisted of nothing more than selfserving statements constituting [*3]inadmissible hearsay not subject to any exception (Latimer v Burrows, 163 NY 7 [1900]; People v Huertas, 75 NY2d 487 [1990]). No testimony or evidence from a party with actual knowledge was proffered by plaintiff. The law is clear that it is both the province and the obligation of the trial court to assess and determine all matters of credibility (Matter of Liccione v John H., 65 NY2d 826 [1985]; Morgan v McCaffrey, 14 AD3d 670 [2d Dept 2005]). It is for the{**27 Misc 3d at 688} trial court to apply and resolve issues of witness credibility. Here, plaintiff has produced a witness who has absolutely no firsthand knowledge of the controversy, hence his testimony is devoid of all probative value and cannot be the subject of any serious

consideration. On the other hand, upon assessment of defendant's demeanor and comportment, the court is convinced that he is telling the truth and he is worthy of belief. At the February 24, 2010 conference, plaintiff's counsel doggedly insisted that plaintiff was wholly justified in taking the actions complained of by defendant (entry upon the property), asserting that it had done so in accordance with the rights conferred upon it under the terms of the mortgage and therefore plaintiff bore no liability whatsoever to defendant. At no time was there any denial that plaintiff had caused defendant's property to be entered on more than one occasion, counsel simply asserting that plaintiff had the right to enter into and protect the property as it saw fit. Though not specifically enumerated by counsel, the court presumes that plaintiff derives its claimed rights from paragraph 7 (b) of the mortgage herein, which states, in pertinent part, that "[l]ender, and others authorized by Lender may enter on and inspect the Property. They will do so in a reasonable manner and at reasonable times. If it has a reasonable purpose, Lender may inspect the inside of the home or other improvements on the Property. Before or at the time an inspection is made, Lender will give me notice stating a reasonable purpose for such interior inspection." Though this contractual provision clearly requires some kind of notice to defendant, there is no indication that any notice at all was provided to defendant. Indeed, plaintiff does not even advance any claim that it has complied with this section but instead baldly asserts, through counsel and not through any person with actual knowledge, that it has what appears to be an unfettered right to enter the premises at any time.

Presumably, counsel for plaintiff further relies upon the express provisions of paragraph 9 of the mortgage which states, in pertinent part, that "[i]f . . . I have abandoned the Property, then Lender may do and pay for whatever is reasonable and appropriate to protect Lender's interest in the Property . . . Lender's actions may include but are{**27 Misc 3d at 689} not limited to: (a) protecting and/or assessing the value of the Property; (b) securing and/or repairing the Property; . . . Lender can also enter the Property to make repairs, change locks . . . and take any other action to secure the Property." This section presupposes that defendant has abandoned the property. It logically follows then that abandonment would be a strict prerequisite to plaintiff's right of entry upon and within the premises. Here, defendant's testimony plainly reveals that he has not abandoned the property in any manner whatsoever and therefore the required condition precedent to plaintiff's entry does not exist. A fair reading of the contractual provisions set forth supra makes it abundantly clear that any and all actions taken by plaintiff must be reasonable and, where entry to do improvements on the property is contemplated, then the same must be accomplished only upon notice to the other party. It is apparent that plaintiff has breached its own contract by its failure to give notice and, further, that its actions are not reasonable under the circumstances presented. This is especially true herein since the condition precedent to plaintiff's right of entry has not occurred. Since the mortgage at issue is an instrument promulgated by the lender to the borrower and since the operative and binding terms thereof are not negotiable by the borrower, such an instrument is considered to be a contract of adhesion which is typically construed against the drafter thereof (Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377 [2003]). Under the circumstances

presented to this court, it is appropriate and fair that the terms of the instrument be construed in favor of defendant. In the matter before the court, it is apparent that plaintiff has perpetrated a trespass against the real property of defendant, which is actionable and subjects plaintiff to liability for damages. Distilled to its very essence, trespass is characterized by one's intentional entry, with neither permission nor legal justification, upon the real property of another (Woodhull v Town of Riverhead, 46 AD3d 802 [2d Dept 2007]). The injury arising [*4]therefrom afflicts the owner's right of exclusive possession of the property (Steinfeld v Morris, 258 App Div 228 [1st Dept 1939]; Kaplan v Incorporated Vil. of Lynbrook, 12 AD3d 410 [2d Dept 2004]). The elements of a claim for trespass are intent coupled with the entry upon the land that is in the possession of another. In order for trespass to lie, general intent is{**27 Misc 3d at 690} legally insufficient. Instead, there must be a specific intent, either to enter the land or to engage in some act whereby it is substantially certain that such entry onto the land will result therefrom (Phillips v Sun Oil Co., 307 NY 328 [1954]). The intent need not be illegal or unlawful (MacDonald v Parama, Inc., 15 AD2d 797 [2d Dept 1962]), but even one who enters the land upon the erroneous belief that he has the right to enter thereon will be held liable in trespass (Burger v Singh, 28 AD3d 695 [2d Dept 2006]). Trespass will lie against a party if entry upon the land was perpetrated by a third party, such as an independent contractor or other party, at the direction of the party to be charged (Gracey v Van Camp, 299 AD2d 837 [4th Dept 2002]). It follows then, both logically and legally, that the injured party must have been in possession, whether actual or constructive, at the time that the alleged wrongful entry occurred (Cirillo v Wyker, 51 AD2d 758 [2d Dept 1976]). In the matter that is presently sub judice, it is clear that a trespass has occurred on at least two

separate occasions. It is apparent to the court that this trespass was perpetrated against the property of defendant and was done at the special instance and request and upon the affirmative directive of plaintiff. Since the court finds that liability for trespass lies against plaintiff and in favor of defendant, the court must now move forward to consider and to determine the damages, if any, that should properly be awarded to defendant. Actual damages may be recovered against the trespasser-tortfeasor though they are not a mandatory component of the claim (Amodeo v Town of Marlborough, 307 AD2d 507 [3d Dept 2003]). The rule applicable herein is that where the invasion is de minimis or the actual amount of damages is not capable of calculation nor is it readily quantifiable, then an award of nominal damages will be appropriate under the circumstances (Town of Guilderland v Swanson, 29 AD2d 717 [3d Dept 1968], affd 24 NY2d 872 [1969]). Indeed, the damages that are recoverable by the injured party include those resulting from each and every consequence of the trespass, inclusive of both damage to property and injury to the person but only to the extent that such damages arose as a direct result of the wrongful intrusion by the trespasser-tortfeasor (Vandenburgh v Truax, 4 Denio 464 [Sup Ct Judicature 1847]). Damages for injury to real property are typically calculated and awarded as the lesser amount of the decline in fair market value versus the cost of restoring the property to its state before{**27 Misc 3d at 691} the trespass, in other words, the injured party is entitled to recover the amount by which the property has been devalued (Hartshorn v Chaddock, 135 NY 116 [1892]; Slavin v State of New York, 152 NY 45 [1897]). In this matter, there is no evidence that the value of the property has been diminished or otherwise adversely affected by the trespass, hence this method of calculation of damages is inapplicable.

In instances where the conduct complained of is willful, wanton or egregious, the court is vested with the power to award exemplary damages. Exemplary damages may lie in a situation where it is necessary not only to effectuate punishment but also to deter the offending party from engaging in such conduct in the future. Such an award may also be made to address, as enunciated by the Court of Appeals in Home Ins. Co. v American Home Prods. Corp. (75 NY2d 196 [1990]), "gross misbehavior for the good of the public . . . on the ground of public policy." Indeed, exemplary damages are intended to have a deterrent effect upon conduct which is unconscionable, egregious, deliberate and inequitable (I.H.P. Corp. v 210 Cent. Park S. Corp., 12 NY2d 329 [1963]). Since an action to foreclose a mortgage is a suit in equity (Jamaica Sav. Bank v M. S. Inv. Co., 274 NY 215 [1937]), all of the rules of equity are fully applicable to the proceeding, including those regarding punitive or exemplary damages (I.H.P. Corp. v 210 Cent. Park S. Corp., supra). Indeed this court is persuaded that Judge Benjamin Cardozo was most assuredly correct in stating that "[t]he whole body of principles, whether of law or of equity, bearing on the case, becomes the reservoir to be drawn upon by the court in enlightening its judgment" (Susquehannah S.S. Co. v Andersen & Co., 239 NY 285, 294 [1925]). In a suit in equity, the court is empowered with jurisdiction to do that which ought to be done. While the court notes that the formal distinctions between an action at law and a suit in equity have long since been abolished in New York (see CPLR 103; David Dudley Field Code of 1848 2, 3, 4, 69), the Supreme Court is nevertheless vested with equity jurisdiction and [*5]the distinct rules governing equity are still very much applicable (Carroll v Bullock, 207 NY 567 [1913]). Therefore, in a matter where the conduct of the

party to be charged is either willful, wanton or reckless, the court may invoke the principles of equity so as to make an award of exemplary damages. Here, the court is constrained to find that the conduct of plaintiff in this matter was both willful and wanton, as evidenced{**27 Misc 3d at 692} by not one but two unauthorized entries into defendant's dwelling, occurring in complete derogation of defendant's right of possession. This conduct becomes even more glaring when consideration is given to the fact that defendant affirmatively notified plaintiff that he had secured the property and that it was not abandoned and still contained his personal property. Even so, plaintiff maintains that it has entered the property under a color of right, which turns out to be illusory under the circumstances. In spite of these declarations, plaintiff willfully took it upon itself to enter the property on more than one occasion, doing so unreasonably and without notice, in direct contravention of the terms of its mortgage promulgated to defendant by its assignor. This is even more distressing when it is considered that plaintiff breaches its obligations to defendant under the mortgage, running roughshod over defendant's rights with a specious claim that it is acting to protect its rights and the property. In short, the conduct of plaintiff was nothing short of oppressive and would best be described as heavy-handed and egregious, to say the very least. Certainly, the trespass was willful and calculated and was not accidental in any way and the court finds that plaintiff did not act in good faith. Under these circumstances, an award of both actual and exemplary damages is necessary and appropriate in order to properly compensate defendant for the losses he has sustained by way of plaintiff's shockingly wrongful conduct as well as to serve as an appropriate deterrent to any future outrageous, improper and unlawful deeds.

The court finds the appropriate measure of damages for the trespass to defendant's possessory interest in the property to be in the amount of $200. The court further finds that defendant is entitled to recover $4,892 representing the value of the personalty lost as a direct result of plaintiff's actions in trespass. Finally, the court finds that defendant is entitled to recover exemplary damages from plaintiff in the amount of $150,000. For all of the foregoing reasons, it is, therefore ordered, adjudged and decreed that the defendant Steven E. Tyson, residing at 3 Danville Court, Greenlawn, New York 11740, recover judgment against the plaintiff Wells Fargo Bank N.A., with an office located at 3476 Stateview Boulevard, Fort Mill, South Carolina 29715, the sum of $200 for damages resulting from trespass, together with the sum of $4,892 for actual loss,{**27 Misc 3d at 693} together with the sum of $150,000 for exemplary damages, for a total recovery of $155,092 and that the defendant have execution therefor.