1S REO Opportunity 1, LLC v. 223 Howard LLC

Summary

The United States District Court for the Eastern District of New York considers Plaintiff’s motion for summary judgment in a commercial mortgage foreclosure action. The court concludes that Plaintiff established the existence and ownership of the mortgage and note and Defendant’s default, and that Defendant failed to raise a genuine dispute of material fact through its affirmative defenses. The motion for summary judgment is granted in part and denied in part, although the provided excerpt does not include the complete disposition.

Holdings

1. A mortgagee establishes prima facie entitlement to summary judgment in a New York foreclosure action by producing the mortgage and note, proving ownership of the mortgage, and establishing the mortgagor's default. Plaintiff satisfied each element through the mortgage, note and allonge, assignment, and account and demand records.
2. Defendant's unclean-hands, bad-faith, unfair-lending, estoppel, duress, and related defenses failed because Defendant offered only a disputed and uncorroborated affidavit, failed to establish the alleged oral agreement, and could not overcome the mortgage's written tax-payment and no-oral-modification provisions.
3. The alleged creditors and competing interests did not require joinder under Rule 19 or RPAPL § 1311 because Defendant failed to provide evidence establishing qualifying liens or interests subordinate to Plaintiff's recorded mortgage.
4. The motion to strike Defendant's answer and affirmative defenses was denied as moot because the court granted summary judgment on the foreclosure claim and found that the defenses did not defeat Plaintiff's prima facie case.

Questions Presented

1. Whether Plaintiff established its prima facie entitlement to summary judgment in a New York mortgage-foreclosure action by proving the existence of the mortgage and note, ownership of the mortgage, and Defendant's payment default.
2. Whether Defendant's affirmative defenses based on waiver, unclean hands, bad faith, unfair lending practices, alleged oral modification or estoppel, and third-party interests created genuine disputes of material fact.
3. Whether alleged creditors or other claimed interests required joinder under Federal Rule of Civil Procedure 19 and New York Real Property Actions and Proceedings Law § 1311.
4. Whether Plaintiff's motion to strike Defendant's answer and affirmative defenses should be granted.

Disposition

other