| N.Y. Sup. Ct. | Nov 19, 2009
This is an action wherein the plaintiff claims foreclosure of a mortgage dated August 4, 2004 in the original principal amount of $292,500 recorded with the Clerk of Suffolk County, New York in Liber 20826 of Mortgages at page 285. The mortgage secures an adjustable rate note of the same amount with an initial interest rate of 10.375%. The mortgage encumbers real property commonly known as 8 Oakland Street, East Patchogue, Town of Brookhaven, New York and described as district 0200, section 979.50, block 05.00, lot 001.000 on the Tax Map of Suffolk County. Plaintiff commenced this action by filing a summons, verified complaint and notice of pendency on July 27, 2005. The notice of pendency was extended by order dated September 2, 2008 and a judgment of foreclosure and sale was granted on January 12, 2009.
Thereafter and in accordance with Laws of 2008, chapter 472, § 3-a, and in view of the fact that the loan at issue was deemed to be “subprime” or “high-cost” in nature, defendant seasonably requested that the court convene a settlement conference. That request was granted and a conference was commenced on February 24, 2009, which was continued five times in a series of unsuccessful attempts by the court to obtain meaningful cooperation from plaintiff. In view of plaintiffs intransigence in its continuing failure and refusal to cooperate, both with the court and with defendant’s multiple and reasonable requests, the court directed that plaintiff produce an officer of the bank at the adjourned conference scheduled for September 22, 2009.
At the conference held on September 22, 2009, Karen Dickinson, regional manager of loss mitigation for IndyMac Mortgage Services, a division of OneWest Bank F.S.B. (IndyMac) appeared on behalf of plaintiff. IndyMac purports to be the servicer of the loan for the benefit of Deutsche Bank which, it is claimed, is the owner and holder of the note and mortgage (though the record holder is IndyMac Bank F.S.B., an entity which no longer is in existence). At that conference, it was celeritously made clear to the court that plaintiff had no good faith intention whatsoever of resolving this matter in any manner other than a complete and forcible devolution of title from defendant. Although Indy-Mac had prepared a two-page document entitled “Mediation Yano-Horoski” which contained what purported to be a financial analysis, Ms. Dickinson’s affirmative statements made it abundantly clear that no form of mediation, resolution or settle
That having been said, the court is greatly disturbed by plaintiffs assertions of the amount claimed to be due from defendant. The referee’s report dated June 30, 2008, which has its genesis in a sworn affidavit by a representative of plaintiff (presumably one with knowledge of the account), reflects a total amount due and owing of $392,983.42. The principal balance is reported to be $290,687.85 with interest computed at the rates of 10.375% from November 1, 2005 through August 31, 2006 ($25,118.62), 12.50% from September 1, 2006 to February 28, 2007 ($18,018.66), 12.375% from March 1, 2007 to March 31, 2008 ($39,126.39) and 11.375% from April 1, 2008 to June 24, 2008 ($7,700.24) totalling $89,963.91. Plaintiff also claims $20 in nonsufficient funds charges, $295 in property inspection fees and $12,016.66 for tax and insurance advances. The judgment of foreclosure and sale dated January 12, 2009 was granted in the amount of $392,983.42 with interest at the contract rate from June 24, 2008 through January 12, 2009 and at the statutory rate thereafter plus attorney’s fees of $2,300 and a bill of costs in the amount of $1,705. Even computing the accrual of prejudgment interest of $18,299.18 (using plaintiffs per diem rate in the referee’s report) together with postjudgment interest
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 [2d Dept 2005]). In the matter before the court, the pendulum of credibility swings heavily in favor of defendant. 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 omnibus” (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, 503 [1878]). Regrettably, the court has been unable to find even so much as a scintilla of good faith on the part of plaintiff. Plaintiff comes before this court with unclean hands yet has the insufferable temerity to demand equitable relief against defendant.
The court, over the course of some six substantive appearances in seven months, has been afforded more than ample opportunity to assess the demeanor, credibility and general state of relevant affairs of defendant and plaintiff. Although not actually relevant to the disposition of this matter, the court is constrained to note that defendant is afflicted with multiple health problems which outwardly manifest in her experiencing great difficulty in ambulation, necessitating the use of mechanical supports. Moreover, defendant’s husband, Mr. Gregory Horoski, suffers from a myriad of serious medical conditions which greatly impede most aspects of his daily existence. Nonetheless, both of these persons, together with their adult daughter who resides with them and who is substantially and gainfully employed, receive income which they are more than willing to commit, in good faith, toward repayment of the debt to plaintiff and indeed, despite their physical challenges, they have appeared at each and every scheduled conference before this court. At each appearance, they have assiduously attempted to resolve this controversy in an amicable fashion, only to be cal
As a relevant aside, the scenario presented here raises the specter of a much greater social problem, that of housing those persons whose homes are foreclosed and who are thereafter dispossessed. It is certainly no secret that Suffolk County is in the yawning abyss of a deep mortgage and housing crisis with foreclosure filings at a record high rate and a corresponding paucity of emergency housing. While foreclosure and its attendant eviction are clearly the inevitable (and in some cases, proper) result in a number of these situations, the court is persuaded that this need not be the case here. In this matter, defendant is plainly willing to make arrangements for repayment and both her husband and daughter are likewise willing to allocate their respective incomes in order to reach the same end. Were plaintiff amenable, defendant would presumably continue to maintain the property’s physical plant, pay taxes thereon and the property would retain or perhaps increase its market value. Plaintiff would receive a regular income stream, albeit with a reduced rate of interest and without sustaining a loss of several hundred thousand dollars. In addition, no neighborhood blight would occur from the boarding of the property after foreclosure which would, in turn, avert problems of litter, dumping, vagrancy and vandalism as well as a corresponding decline in the property values in the immediate area. In short, a loan modification would result in a proverbial “win-win” for all parties involved. To do otherwise would result in virtually certain undomiciled status for two physically unhealthy persons and their daughter, leading to an additional level of problems, both for them and for society.
Since an action claiming foreclosure of a mortgage is one sounding in equity (Jamaica Sav. Bank v M. S. Inv. Co., 274 NY 215 [1937]), the very commencement of the action by plaintiff invokes the court’s equity jurisdiction. While it must be noted 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 nevertheless has equity jurisdiction and distinct rules'regarding equity are still extant (Carroll v Bullock, 207 NY 567 [1913]). Speaking generally and broadly, it is settled law that “[stability of contract obligations must not be undermined by judicial sympathy” (Graf v Hope Bldg. Corp., 254 NY 1, 4
In Eastman Kodak Co. v Schwartz (133 NYS2d 908 [Sup Ct, NY County 1954]), Special Term stated that “[t]he 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.” (Id. at 925, citing First Trust & Sav. Bank v Iowa-Wisconsin Bridge Co., 98 F2d 416 [8th Cir 1938], cert denied sub nom. Phoenix Fin. Corp. v Iowa-Wisconsin Bridge Co., 305 U.S. 650" court="SCOTUS" date_filed="1938-12-05" href="https://app.midpage.ai/document/stanton-v-commissioner-8154079?utm_source=webapp" opinion_id="8154079">305 US 650 [1938], reh denied 305 US 676 [1939]; General Excavator Co. v Keystone Driller Co., 64 F2d 39 [6th Cir 1933], cert granted 289 US 721 [1933], affd 290 U.S. 240" court="SCOTUS" date_filed="1933-12-04" href="https://app.midpage.ai/document/keystone-driller-co-v-general-excavator-co-102153?utm_source=webapp" opinion_id="102153">290 US 240 [1933].)
In attempting to arrive at a determination as to whether or not equity should properly intervene in this matter so as to permit foreclosure of the mortgage, the court is required to look at the situation in toto, giving due and careful consideration as to whether the remedy sought by plaintiff would be repugnant to the public interest when seen from the point of view of public morality (see for example 55 NY Jur 2d, Equity § 113; Molinas v Podoloff, 133 NYS2d 743 [Sup Ct, NY County 1954]). Equitable relief will not lie in favor of one who acts in a manner which is shocking to the conscience (Duggan v Platz, 238 App Div 197 [3d Dept 1933], mod on other grounds 263 NY 505 [1934]); neither will equity be available to one who acts in a manner that is oppressive or unjust or whose conduct is sufficiently egregious so as to prohibit the party from asserting its legal rights against a defaulting adversary (In re Foreclosure of Tax Liens, 117 NYS2d 725 [Sup Ct, Kings County 1952], affd on other grounds sub nom. City of New York v Stolpensky, 286 App Div 1027 [2d Dept 1955], mod on other grounds on rearg 1 AD2d 95 [2d Dept 1955], appeal granted 1 AD2d 784 [2d Dept 1956]). The compass by which the questioned conduct must be measured is a moral one and the acts complained of (those that are sufficient so as to prevent equity’s intervention) need not be criminal or actionable at law but must merely be willful and unconscionable
An objective and painstaking examination of the totality of the facts and circumstances herein leads this court to the inescapable conclusion that the affirmative conduct exhibited by plaintiff at least since February 24, 2009 (and perhaps earlier) has been and is inequitable, unconscionable, vexatious and opprobrious. The court is constrained, solely as a result of plaintiffs affirmative acts, to conclude that plaintiffs conduct is wholly unsupportable at law or in equity, greatly egregious and so completely devoid of good faith that equity cannot be permitted to intervene on its behalf. Indeed, plaintiffs actions toward defendant in this matter have been harsh, repugnant, shocking and repulsive to the extent that it must be appropriately sanctioned so as to deter it from imposing further mortifying abuse against defendant. The court cannot be assured that plaintiff will not repeat this course of conduct if this action is merely dismissed and hence, dismissal standing alone is not a reasonable option. Likewise, the imposition of monetary sanctions under 22 NYCRR 130-1.1 et seq. is not likely to have a salubrious or remedial effect on these proceedings and certainly would not inure to defendant’s benefit. This court is of the opinion that cancellation of the indebtedness and discharge of the mortgage, when taken together, constitute the appropriate equitable disposition under the unique facts and circumstances presented herein.
After careful consideration, it is the determination of this court that the indebtedness evidenced by the adjustable rate note dated August 4, 2004 in the original principal amount of $292,500 made by Diana J. Yano-Horoski in favor of IndyMac Bank F.S.B. should be cancelled, voided and set aside. In addition, the mortgage which secures the adjustable rate note, given to Mortgage Electronic Registration Systems Inc., as nominee for IndyMac Bank F.S.B., dated August 4, 2004 and recorded with the Clerk of Suffolk County on August 16, 2004 in Liber 20826 of Mortgages at page 285, as assigned by assignment re
Upon the court’s own motion, it is ordered that the adjustable rate note in the amount of $292,500 dated August 4, 2004 made by Diana J. Yano-Horoski in favor of IndyMac Bank F.S.B. shall be and the same is hereby cancelled, voided, avoided, nullified, set aside and is of no further force and effect; and it is further ordered that the mortgage in the amount of $292,500 which secures said adjustable rate note given by Diana J. Yano-Horoski to Mortgage Electronic Registration Systems Inc., as nominee for IndyMac Bank F.S.B., dated August 4, 2004 and recorded with the Clerk of Suffolk County on August 16, 2004 in Liber 20826 of Mortgages at page 285, as assigned to IndyMac Bank F.S.B. by assignment recorded with the Clerk of Suffolk County in Liber 21273 of Mortgages at page 808 shall be and the same is hereby vacated, cancelled, released and discharged of record; and it is further ordered that the plaintiff, its successors and assigns are hereby barred, prohibited and foreclosed from attempting, in any manner, directly or indirectly, to enforce any provision of the aforesaid adjustable rate note and mortgage or any portion thereof as against defendant, her heirs or successors; and it is further ordered that the judgment of foreclosure and sale granted under this index number on January 12, 2009 and entered in the Office of the Clerk of Suffolk County on January 23, 2009 shall be and the same is hereby vacated and set aside; and it is further ordered that the notice of pendency filed with the Clerk of Suffolk County on July 27, 2005 under sequence No. 172456, which was extended by order dated September 2, 2008 shall be and the same is hereby cancelled, vacated and set aside; and it is further ordered that the notice of pendency filed with the Clerk of Suffolk County on August 29, 2008 under sequence No. 199616, shall be and the same is hereby cancelled, vacated and set aside; and it is further ordered that the Clerk of Suffolk County shall cause a copy of this order and judgment to be filed in the land records so as to effectuate of record each