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SUPREME COURT OF T E STATE OF NEW YORK
COUNTY OF KING
X
JP MORGAN CHASE BANK, NATIONAL ASSOCIATION INDEX NUMBER: 506027/14
SUCCESSOR IN INTEREST BY PURCHASE FROM THE
DEPOSIT INSURANCE CORPORATION AS RECEIVER OF Order to Show Cause
WASHINGTON MUTUAL BANK FKA WASHINGTON
FA.'
MUTUAL BANK, SUCCESSOR IN INTEREST TO NORTH
AMERICAN MORTGAGE COMPANY,
PLAINTIFF,
-Against-
PETER MCKENZIE; SHERREL FARNSWORTH A/K/A SHERREL
A.FARNSWORTH; JP; JP MORGAN CHASE BANK, N.A; RAB
PERFORMANCE RECOVERIES, LLC; AMERICAN EXPRESS;
FSB, CAPITAL ONE BANK; CITY OF NEW YORK TRANSIT
ADJUDICATION BUREAU; NEW YORK; NEW YORK CITY
ENVIRONMENTAL CONTROL BOARD; NEW YORK CITY
DEPARTMENT OF FINANCE - PARKING VIOLATIONS BUREAU
WILLIAM DOE; AND DANIELLE MOORE,
DEFENDANTS.
X
Upon the reading and filing of the annexed affidavit of Sherrel Farnsworth sworn to on June 5,
2018, the affirmation and the emergency affirmation of-hiin Spikes affirmed on June 8 2018,
the exhibits annexed hereto, and upon all the pleadings and proceedings heretofore had herein,
LET the Plaintiff or their attorneys and the Referee show cause before this Court, at an IAS Part
thereof, Room Ó , at the Courthouse located at 360 Adams Street, Brooklyn,
New York, on the day of , 2018, at 9:30 A.M. on that day, or as soon
thereafter as counsel may be heard, WHY an order should not be made and entered as follows:
a) Staying the Plaintiff and/or their agents, and the Referee,
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from seeking to enforce the terms of the order and judgment of foreclosure and sale by
selling and/or transferring titleto the property known as 240 Greene Avenue, Brooklyn New
York 11238
b) Vacating the default judgment and the judgment of foreclosure and sale entered on
default which judgment is dated 4/20/2018 and the Referee's Notice of Sale.
c) Granting such other and further relief as to this court may seem just and proper.
PENDING the hearing of this motion, itis
ORDERED, that the Plaintiff and the referee, their agents and assigns, are stayed
from sellingyg$br transferring title to the property known as 240 Greene Avenue, Brooklyn
N 112 8fnding the hearing of this Order to Show Cause, .
1ŠUFFICIENT REASON APPEARING THEREFORE, let of a
.. copy of this Order to Show Cause, and the papers upon which itis based, upon Fein Such and
Crane, Attorneys for Plaintiff and Joel Abramson, Esq. at his office, and Peter Mckenzie at
his address and on his David J. at-ltie-efiEes-addrese- and other
attorney Aroñstam, Esq any
parties who have appeared in this action on or before the day of
2018, be deemed good and sufficient service.
EN R,
JUSTI F THE SUPREME COURT
PETER P. S
ON.
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KING
X
JP MORGAN CHASE BANK, NATIONAL ASSOCIATION INDEX NUMBER: 506027/14
SUCCESSOR IN INTEREST BY PURCHASE FROM THE
DEPOSIT INSURANCE CORPORATION AS RECEIVER OF Order to Show Cause
WASHINGTON MUTUAL BANK FKA WASHINGTON
FA.'
MUTUAL BANK, SUCCESSOR IN INTEREST TO NORTH
AMERICAN MORTGAGE COMPANY,
PLAINTIFF,
-Against-
PETER MCKENZIE; SHERREL FARNSWORTH A/K/A SHERREL
A.FARNSWORTH; JP; JP MORGAN CHASE BANK, N.A; RAB
PERFORMANCE RECOVERIES, LLC; AMERICAN EXPRESS;
FSB, CAPITAL ONE BANK; CITY OF NEW YORK TRANSIT
ADJUDICATION BUREAU; NEW YORK; NEW YORK CITY
ENVIRONMENTAL CONTROL BOARD; NEW YORK CITY
DEPARTMENT OF FINANCE - PARKING VIOLATIONS BUREAU
WILLIAM DOE; AND DANIELLE MOORE,
DEFENDANTS.
X
Upon the reading and filing of the annexed affidavit of Sherrel Farnsworth sworn to on June 5,
2018, the affirmation and the emergency affirmation of Kevin Spikes affirmed on June 8 2018,
the exhibits annexed hereto, and upon all the pleadings and proceedings heretofore had herein,
LET the Plaintiff or their attorneys and the Referee show cause before this Court, at an IAS Part
thereof, Room , at the Courthouse located at 360 Adams Street, Brooklyn,
New York, on the day of , 2018, at 9:30 A.M. on that day, or as soon
thereafter as counsel may be heard, WHY an order should not be made and entered as follows:
a) Staying the Plaintiff and/or their agents, and the Referee,
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from seeking to enforce the terms of the order and judgment of foreclosure and sale by
selling and/or trañsferring titleto the property known as 240 Greene Avenue, Brooklyn New
York 11238
b) Vacating the default judgment and the judgment of foreclosure and sale entered on
default which judgment is dated 4/20/2018 and the Referee's Notice of Sale.
c) Granting such other and further relief as to this court may seem just and proper.
PENDING the hearing of this motion, itis
ORDERED, that the Plaintiff and the referee, their agents and assigns, are stayed
from selling and/or transferring title to the property known as 240 Greene Avenue, Brooklyn
New York 11238 pending the hearing of this Order to Show Cause,
SUFFICIENT REASON APPEARING THEREFORE, let personal service of a
copy of this Order to Show Cause, and the papers upon which itis based, upon Fein Such and
Crane, Attorneys for Plaintiff and Joel Abramson, Esq. at his office, and Peter Mckenzie at
his address and on his attorney David J. Aronstam, Esq at his office address and any other
parties who have appeared in this action on or before the day of
2018, be deemed good and sufficient service.
ENTER,
JUSTICE OF THE SUPREME COURT
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KING
X
JP MORGAN CHASE BANK, NATIONAL ASSOCIATION INDEX NUMBER:
SUCCESSOR IN INTEREST BY PURCHASE FROM THE AFFIRMATION
DEPOSIT INSURANCE CORPORATION AS RECEIVER OF OF COUNSEL
WASHINGTON MUTUAL BANK FKA WASHINGTON
FA.'
MUTUAL BANK, SUCCESSOR IN INTEREST TO NORTH
AMERICAN MORTGAGE COMPANY,
PLAINTIFF,
-Against-
PETER MCKENZIE; SHERREL FARNSWORTH A/K/A SHERREL
A.FARNSWORTH; JP; JP MORGAN CHASE BANK, N.A; RAB
PERFORMANCE RECOVERIES, LLC; AMERICAN EXPRESS;
FSB, CAPITAL ONE BANK; CITY OF NEW YORK TRANSIT
ADJUDICATION BUREAU; NEW YORK; NEW YORK CITY
ENVIRONMENTAL CONTROL BOARD; NEW YORK CITY
DEPARTMENT OF FINANCE - PARKING VIOLATIONS BUREAU
WILLIAM DOE AND DANIELLE MOORE,
DEFENDANTS.
X
Kevin H. Spikes, Esq., Partner to the Firm of Thomas & Spikes, Esqs. an attorney duly
admitted to practice law before the courts of the State of New York do hereby affirm the
following under penalties of perjury.
1. I submit this affirmation in support of the defendant Sherrel Farnsworth's Order to
Show Cause seeking to vacate the default judgment and judgment of foreclosure and sale the
court granted against her to the plaintiffs and staying the imminent auction of the property.
Defendant seeks the reliefs on grounds that sufficient reasons exist for the vacatur of the defaults
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in the interest of justice pursuant to the court's holding in Ladd v. Stevenson 112 N.Y 325 and or
pursuant to CPLR 5015 (3) for the plaintiff's procurêñient of a judgment through
misrepresentation of facts and or under CPLR 5015 a, given the existence of reasonable excuses
for the default judgment and the judgment of foreclosure and sale.
2. The defendant has received no notice of sale of the property but has heard from
investors that an auction is scheduled to sell the property on June 14, 2018. This case is an ECF
case and no notice of sale is posted on ECF. The property is in a prime location here in
Brooklyn and we are concerned that itmight be auctioned off without notice to defendant Sherrel
Farnsworth. The defendants also seek a consolidation of this foreclosure case and the ongoing
partition action for judicial economy and to facilitate a resolution of this case on the merit. See
the support A - judgment of foreclosure and Exhibit B- Default Judgment.
following Exhibits;
3 Ms. Farnsworth purchased the property which is being foreclosed upon in the year
2000. See Exhibit C- deed to the property. She invested a substandal amount of in
money
purchasing and renovating the property. Defendant Mckenzie was not part of the purchase of the
property or the first loan. He assisted her to refinance the loan in 2001. As a consideration, he
was given one percent of the property and the Ms. Farnsworth retained 99 percent of the
property.
4. Both defendants had their signatures on the note and the mortgage. Contractually, Ms.
Farnsworth had an interest in the note and the bank formatted the transaction accordingly.
They
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were aware that she will be paying for the mortgage starting from the time the loan documents
were executed and she made the mortgage payments. It was understood by both borrowers that
her signature on the note and mortgage as Mckenzie's attorney in fact and her signature on the
mortgage for herself will ensure that Ms. Farnsworth's interest in the note is preserved and
reflected. A copy of the note and mortgage, with the signatures are annexed as Exhibit D.
5. Although Peter and Sherrel had disagrccments over the value of Peter's one percent interest,
at this time Peter wants the bank to allow Sherrel to modify the loan. Sherrel found employment
soon after she lost her job in 2014. She has been working since then and can make the mortgage
payments. She has not been able to apply for modification because the bank has not given her a
chance to do so. They insist that her name is not on the note, estoppel disallows them from taking
this position.
6. A partition action commenced by Ms. Farnsworth in 2015 is at a trialstage. A prior Partition
action was commenced on the property by Mr. Mckenzie and that action was dismissed for non
appearance. Mr. Mckenzie filed to vacate the judgmeñt of dismissal three years after the
dismissal. For merit, he provided the court with handwritten statements and showed no receipts
for his damages and the court found that his three years delay in vacating the judgment was
unreasonable and that the fact he did not substantiate his damages with any kind of receipt
showed that his case had no merit. The court's decision denying the Order to Show Cause is
annexed as Exhibit E. Sherrel offered to pay Mr. Mckenzie 140,000 dollars for his one percent
interest in the property and he refused to take it.Sherrel has lived at the property for fifteen years
and wants to keep her house. Mr. Mckenzie wants the house sold.
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7. Plaintiff's default judgments and judgment of foreclosure and sale were granted on default
on grounds of defendant's failure to file opposition papers to the motions. The default judgment
is annexed as Exhibit A and the judgment of foreclosure and sale is annexed as Exhibit B. The
default was caused by an attorney with our firm who we assigned to handle the case. He left the
Firm without leaving us hand over notes. We found the file just recently in a closed filecabinet.
We were unaware that he did not know prepare and file the answer. Neither were we aware that
a default judgmeñt was entered against defendant Sherrel Farnsworth for defaulting.
8. We had no intentions of abandoning the case and appeared on several modification
conferences. And only became aware of the default judgment and the failure to filean answer
not long ago. By the time we noticed the default, defeñdaat McKenzie had already consented to a
judgmeñt of foreclosure and sale. The notice of entry of the judgment of foreclosure and sale was
15*
entered on the day of May 2018.
9. No modification package was submitted on behalf of defendant Sherrel on grounds thatthe
bank insisted that her name is not on the note and that she could not apply for a modification of
the loan.
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10. Law Office failure, of the sort relayed here constitutes an excusable default. Secondly,
Sherrel Famsworth has a meritorious defense as can be seen by her affidavit in support, this
affirmation and her annexed proposed answer to the complaint.
11. Stating briefly, she is a homeowner in a residential foreclosure proceeding and although her
name is not on the note, the bank has received mortgage payments from her from the day the
loan documents were executed. Additionally, the broker and bank staff on the loan offered to
structure the loan where her interest in the note will not be lost.Consequently, she was instructed
to sign as attorney in fact on both the note and the mortgage and to sign for herself on the
mortgage. Clearly, the bank is estopped from stating that she had no interest in the note.
12. A robo-signer executed the assigareeñts in this foreclosure case, hence this home owner
was a victim of the illegal lending and foreclosure initiation practices homeowners all over the
US faced. The government attempted to redress those wrongs and or mitigate the loss through
regulations and government programs. Ms. Farnsworth was deprived from benefitting from those
regulations and programs by the conducts of the bank and Mr. McKenzie. She has invested
substantially into the property and actually spent all her inheritance money from her father to
renovate the property. Additionally the current value of the house is 1. 5 million and the debt
owed is about $500,000. Her mortgage payments built up equity in the property.
13. New York State courts generally lean towards an approach which emphasizes
liberality
and extension of courtesies in the handling law office defaults. In a case with similar facts,New
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2nd
York Appellate Division Department opined that Supreme Court's rejection of attorney for
rejection"
the defendant's law office failure excuse was an "improvident where the Firm asserted
that a new associate they hired to serve discovery responses as mandated by a preliminary
conference order and to strike plaintiff's complaint pursuant to CPLR 3126 failed to do so. The
appeal court stated that the failure of the retained attorney was neither intentional nor a pattern of
willful conduct. Girondo v. Katzen 19 Ad 3d 644, 645 2005;
14. See also Hageman v. Home Depot USA Inc. 25 Ad 3d 760, 808 NYS 2d 763. "Although the
defendant's defaults were more than isolated incidents, it cannot be said based on the evidence
neglect."
presented that they constituted a pattern of willful
2nd
15. In Henry v. Kuveke 9 Ad 3d 476, 781 NYS 2d 114 New York Appellate Division
Department 2000. Two dates were given by the trialcourt, one was for submission of opposition
documcats and the other, a deadline to submit all motions. Counsel's mistake as to what date to
file opposition papers was a reasonable excuse opined Appellate Division Second Department
and reversed Supreme Court's no reasonable excuse ruling. The court reached their opinion in
consideration of "the strong policy in favor of resolving cases on the merit, the plaintiff's lack of
intent to abandon the action, the lack of prejudice to the respondents and the fact that the delay
willful."
was not
16. At bar, we assigned the case to an attorney to do the work. There was clearly no iñtêñtion to
abandon the case.
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17. Their will be no prejudice on the bank. Given the fact that they initiated the foreclosure case
and are sufficiently acquainted with the facts of the case to know that defendant Sherrel has
meritorious defenses to the lawsuit. They are also aware that default judgment from the seeming
failure to file an answer was going to amount to a windfall for them and not justice.
18. Asst!ming argueñdo without conceding that the defendant has no reasonable excuse for the
default, ifthe court so opines, vacatur of a default can be achieved absent a reasonable excuse for
a default where unique circumstances warranting a vacatur exists. The unique circumstance
though must constitute sufficient reasons for vacatur in the interest of justice pursuant to court
opinions in 1.add v. Stevenson 112 NY 325, Katz v. Marra 74 Ad 3d 888 2010 and Woodson v.
Mendon Leasing Corporation 100 NY 2d 62 2003. The rationale here stems from the fact that a
court has an inherent power, unlimited by statute to open up itsjtidgment for sufficient reasons,
in the interest ofjustice.
19. Unique circumstances waiiañtiñg vacatur was found and a default judgment was vacated
though no reasonable excuse was given for the default on grounds that the award was an unfair
windfall and movant was confused about the procee-jiñgs. See Alfred Wade v. Village of
Whitehall 46 Ad 3d 1302. Again, the plaintiff in R. L C Investors Inc . v. Pauline Zabski et.aj
answer"
109 AD 2d 1053, prematurely moved to hold the defendâñts in default for not "filing an
and a default judgment was entered them. A judgment of foreclosure and sale was thereafter
procured against them. The judgments were entered despite the fact that the time for them to file
an answer or appear in the case had not begun to run. Reversing the judgment, the appellate
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court opined that the fact that the defendants were not in default was sufficient reason, in the
interest of justice to vacate the defaults and set aside the foreclosure sale of the property.
20. Finding unique circumstances warranting vacation of the court order in Soggs v. Crocco 247
Ad 2d 887, 888 1988, appellate court second division reversed the Supreme Court's order for
specific performance without reaching to the provisions of CPLR 5015 codified list.The parties
in Soggs v. Crocco agreed that the Plaintiff would compensate defendant for her 46 percent
interest share at a price approved by the FCC. FCC failed to approve a price making it
impossible for the plaintiff to fulfillthe obligation. The defendant moved the court for specific
performañce and the court ordered for same. The appeal to vacate the order was granted on
grounds that the refusal of the FCC to fulfillthe role assigned to it caused an "insurmountable
omitted)."
bar to the specific performance of the agreement (citation They further stated that the
view"
order directing specific performance "decree[s] the impossible... in our and concluded that
the the unique circumstances of this case warrant vacatur of the order directing specific
performance.
21. The foundational case of Ladd v. Stevenson 112 NY 325 is another illustrative one. When
he was alive, Mr. Stevenson of Ladd v. Stevenson 112 NY 325 gave a couple Mr. and Mrs.
Goetlets a bond of indemnity and covenants in his deed to a property. Plaintiff, Ladd sued and
procured a judgment against the property and this posed a problem given the existence of the
rights to the indemnity bond and covenants inuring to the benefit of the Goetlets on the property.
Consequently, Mrs Stevenson the administratrix of her hmhand's estate and the Goetlets moved
in"
to vacate the judgment in the interest of justice for purposes of allowing them "come and
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defend the case. The trial court vacated the judgment to allow them in. At the time of this
appeal, the statute for vacatur (Code 742) the equivalent of the current CPLR 5015 did not list
that a judgment could be vacated on this ground. The appellate court however found sufficient
reason in the interest of justice to affirm the vacatur.
22. To vacate the judgments under CPLR 5015 A, defendant Sherrel Farnsworth also has to
demonstrate that she has a meritorious case. Regarding merit for purposes of vacatur under
CPLR 5015 (A), itis noteworthy that the bank erred in not allowing Ms. Farnsworth apply for a
modification of the loan given the fact that they accepted payments from her from the time she
bought the house. They knew she was going to be making the mortgage payments. They advised
the parties to deed one percent of the value of the property to Peter for consideration. They also
advised the parties to have Sherrel sign the note and the mortgage as attorney in fact for Peter
and to sign the mortgage. Cumulatively, these were acts that were undertaken to ensure that
Sherrel's interest in the note and mortgage was preserved.
23. The doctrine of estoppel is imposed by statute in the interest of fairness to foreclose the
enforcement of rights which would work fraud or injustice upon the person against whom
enforcement is sought and who, in justifiable reliance upon his adversary's words or conduct, has
sought"
been misled into acting upon the belief that such enforcement would not be Jean Maby
H. v Joseph H., 246 AD2d 282, 285; Matter of Boyles v Boyles 95 AD2d 95, 97. Nassau Trust
Co. v Montrose Concrete Prods. Corp., 56 NY2d 175, 184; see Matter of John Robert P. v Virp
C,23 AD3d 659, 661; Sherrel Farnsworth relied on the bank and made all the mortgage
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payments thereby building up equity in the property. It'sunjust for the bank to deny her assess to
modify the loan on assertions that she has no interest in the loan.
24. Additionally, Plaintiff, JP Morgan Chase bank, NA joined the bank, JP Morgan Chase Bank,
NA as a defendant and citing a clause in a purchase agreement with FDIC they contend that they
are not liable for transacti
Preview
FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM INDEX NO. 506027/2014 NYSCEF DOC. NO. 264 RECEIVED NYSCEF: 05/15/2020 EXHIBIT L FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM S ÓNDEX INDEX NO. NO 506027/2014 506027/2014 IF PG rh NYSCEF NYSC DOC. DOC. NO. NO. 264 163 E RECEIVED NYSCEF: /D2018 05/15/2020 0 SUPREME COURT OF T E STATE OF NEW YORK COUNTY OF KING X JP MORGAN CHASE BANK, NATIONAL ASSOCIATION INDEX NUMBER: 506027/14 SUCCESSOR IN INTEREST BY PURCHASE FROM THE DEPOSIT INSURANCE CORPORATION AS RECEIVER OF Order to Show Cause WASHINGTON MUTUAL BANK FKA WASHINGTON FA.' MUTUAL BANK, SUCCESSOR IN INTEREST TO NORTH AMERICAN MORTGAGE COMPANY, PLAINTIFF, -Against- PETER MCKENZIE; SHERREL FARNSWORTH A/K/A SHERREL A.FARNSWORTH; JP; JP MORGAN CHASE BANK, N.A; RAB PERFORMANCE RECOVERIES, LLC; AMERICAN EXPRESS; FSB, CAPITAL ONE BANK; CITY OF NEW YORK TRANSIT ADJUDICATION BUREAU; NEW YORK; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; NEW YORK CITY DEPARTMENT OF FINANCE - PARKING VIOLATIONS BUREAU WILLIAM DOE; AND DANIELLE MOORE, DEFENDANTS. X Upon the reading and filing of the annexed affidavit of Sherrel Farnsworth sworn to on June 5, 2018, the affirmation and the emergency affirmation of-hiin Spikes affirmed on June 8 2018, the exhibits annexed hereto, and upon all the pleadings and proceedings heretofore had herein, LET the Plaintiff or their attorneys and the Referee show cause before this Court, at an IAS Part thereof, Room Ó , at the Courthouse located at 360 Adams Street, Brooklyn, New York, on the day of , 2018, at 9:30 A.M. on that day, or as soon thereafter as counsel may be heard, WHY an order should not be made and entered as follows: a) Staying the Plaintiff and/or their agents, and the Referee, 1 of 2 FILED: KINGS COUNTYCOUNTY CLERK CLERK 05/15/2020 /12 2018 09:31 03 :4 0 AM - INDEX NO. INDEX NO. 506027/2014 506027/2014 FILED : KINGS 0 6 / PM| NYSCEF DOC. NYSCEF DOC. NO. NO. 163 264 RECEIVED NYSCEF: 06/12/2018 RECEIVED NYSCEF: 05/15/2020 from seeking to enforce the terms of the order and judgment of foreclosure and sale by selling and/or transferring titleto the property known as 240 Greene Avenue, Brooklyn New York 11238 b) Vacating the default judgment and the judgment of foreclosure and sale entered on default which judgment is dated 4/20/2018 and the Referee's Notice of Sale. c) Granting such other and further relief as to this court may seem just and proper. PENDING the hearing of this motion, itis ORDERED, that the Plaintiff and the referee, their agents and assigns, are stayed from sellingyg$br transferring title to the property known as 240 Greene Avenue, Brooklyn N 112 8fnding the hearing of this Order to Show Cause, . 1ŠUFFICIENT REASON APPEARING THEREFORE, let of a .. copy of this Order to Show Cause, and the papers upon which itis based, upon Fein Such and Crane, Attorneys for Plaintiff and Joel Abramson, Esq. at his office, and Peter Mckenzie at his address and on his David J. at-ltie-efiEes-addrese- and other attorney Aroñstam, Esq any parties who have appeared in this action on or before the day of 2018, be deemed good and sufficient service. EN R, JUSTI F THE SUPREME COURT PETER P. S ON. 2 of 2 FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM INDEX NO. 506027/2014 NYSCEF DOC. NO. 264 RECEIVED NYSCEF: 05/15/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KING X JP MORGAN CHASE BANK, NATIONAL ASSOCIATION INDEX NUMBER: 506027/14 SUCCESSOR IN INTEREST BY PURCHASE FROM THE DEPOSIT INSURANCE CORPORATION AS RECEIVER OF Order to Show Cause WASHINGTON MUTUAL BANK FKA WASHINGTON FA.' MUTUAL BANK, SUCCESSOR IN INTEREST TO NORTH AMERICAN MORTGAGE COMPANY, PLAINTIFF, -Against- PETER MCKENZIE; SHERREL FARNSWORTH A/K/A SHERREL A.FARNSWORTH; JP; JP MORGAN CHASE BANK, N.A; RAB PERFORMANCE RECOVERIES, LLC; AMERICAN EXPRESS; FSB, CAPITAL ONE BANK; CITY OF NEW YORK TRANSIT ADJUDICATION BUREAU; NEW YORK; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; NEW YORK CITY DEPARTMENT OF FINANCE - PARKING VIOLATIONS BUREAU WILLIAM DOE; AND DANIELLE MOORE, DEFENDANTS. X Upon the reading and filing of the annexed affidavit of Sherrel Farnsworth sworn to on June 5, 2018, the affirmation and the emergency affirmation of Kevin Spikes affirmed on June 8 2018, the exhibits annexed hereto, and upon all the pleadings and proceedings heretofore had herein, LET the Plaintiff or their attorneys and the Referee show cause before this Court, at an IAS Part thereof, Room , at the Courthouse located at 360 Adams Street, Brooklyn, New York, on the day of , 2018, at 9:30 A.M. on that day, or as soon thereafter as counsel may be heard, WHY an order should not be made and entered as follows: a) Staying the Plaintiff and/or their agents, and the Referee, FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM INDEX NO. 506027/2014 NYSCEF DOC. NO. 264 RECEIVED NYSCEF: 05/15/2020 from seeking to enforce the terms of the order and judgment of foreclosure and sale by selling and/or trañsferring titleto the property known as 240 Greene Avenue, Brooklyn New York 11238 b) Vacating the default judgment and the judgment of foreclosure and sale entered on default which judgment is dated 4/20/2018 and the Referee's Notice of Sale. c) Granting such other and further relief as to this court may seem just and proper. PENDING the hearing of this motion, itis ORDERED, that the Plaintiff and the referee, their agents and assigns, are stayed from selling and/or transferring title to the property known as 240 Greene Avenue, Brooklyn New York 11238 pending the hearing of this Order to Show Cause, SUFFICIENT REASON APPEARING THEREFORE, let personal service of a copy of this Order to Show Cause, and the papers upon which itis based, upon Fein Such and Crane, Attorneys for Plaintiff and Joel Abramson, Esq. at his office, and Peter Mckenzie at his address and on his attorney David J. Aronstam, Esq at his office address and any other parties who have appeared in this action on or before the day of 2018, be deemed good and sufficient service. ENTER, JUSTICE OF THE SUPREME COURT FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM INDEX NO. 506027/2014 NYSCEF DOC. NO. 264 RECEIVED INDEX NYSCEF: NO. 05/15/2020 506027/2014 FILED: KINGS COUNTY CLERK 0 6 /12 /2018 11: 19 AM| NYSCEF DOC. NO. 146 RECEIVED NYSCEF: 06/12/2018 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KING X JP MORGAN CHASE BANK, NATIONAL ASSOCIATION INDEX NUMBER: SUCCESSOR IN INTEREST BY PURCHASE FROM THE AFFIRMATION DEPOSIT INSURANCE CORPORATION AS RECEIVER OF OF COUNSEL WASHINGTON MUTUAL BANK FKA WASHINGTON FA.' MUTUAL BANK, SUCCESSOR IN INTEREST TO NORTH AMERICAN MORTGAGE COMPANY, PLAINTIFF, -Against- PETER MCKENZIE; SHERREL FARNSWORTH A/K/A SHERREL A.FARNSWORTH; JP; JP MORGAN CHASE BANK, N.A; RAB PERFORMANCE RECOVERIES, LLC; AMERICAN EXPRESS; FSB, CAPITAL ONE BANK; CITY OF NEW YORK TRANSIT ADJUDICATION BUREAU; NEW YORK; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; NEW YORK CITY DEPARTMENT OF FINANCE - PARKING VIOLATIONS BUREAU WILLIAM DOE AND DANIELLE MOORE, DEFENDANTS. X Kevin H. Spikes, Esq., Partner to the Firm of Thomas & Spikes, Esqs. an attorney duly admitted to practice law before the courts of the State of New York do hereby affirm the following under penalties of perjury. 1. I submit this affirmation in support of the defendant Sherrel Farnsworth's Order to Show Cause seeking to vacate the default judgment and judgment of foreclosure and sale the court granted against her to the plaintiffs and staying the imminent auction of the property. Defendant seeks the reliefs on grounds that sufficient reasons exist for the vacatur of the defaults 1 of 17 FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM INDEX NO. 506027/2014 NYSCEF DOC. NO. 264 RECEIVED INDEX NYSCEF: NO. 05/15/2020 FILED COUNTY CLERK /12 018 506027/2014 : KINGS 0 6 /2 11: 19 AM| NYSCEF DOC. NO. 146 RECEIVED NYSCEF: 06/12/2018 in the interest of justice pursuant to the court's holding in Ladd v. Stevenson 112 N.Y 325 and or pursuant to CPLR 5015 (3) for the plaintiff's procurêñient of a judgment through misrepresentation of facts and or under CPLR 5015 a, given the existence of reasonable excuses for the default judgment and the judgment of foreclosure and sale. 2. The defendant has received no notice of sale of the property but has heard from investors that an auction is scheduled to sell the property on June 14, 2018. This case is an ECF case and no notice of sale is posted on ECF. The property is in a prime location here in Brooklyn and we are concerned that itmight be auctioned off without notice to defendant Sherrel Farnsworth. The defendants also seek a consolidation of this foreclosure case and the ongoing partition action for judicial economy and to facilitate a resolution of this case on the merit. See the support A - judgment of foreclosure and Exhibit B- Default Judgment. following Exhibits; 3 Ms. Farnsworth purchased the property which is being foreclosed upon in the year 2000. See Exhibit C- deed to the property. She invested a substandal amount of in money purchasing and renovating the property. Defendant Mckenzie was not part of the purchase of the property or the first loan. He assisted her to refinance the loan in 2001. As a consideration, he was given one percent of the property and the Ms. Farnsworth retained 99 percent of the property. 4. Both defendants had their signatures on the note and the mortgage. Contractually, Ms. Farnsworth had an interest in the note and the bank formatted the transaction accordingly. They 2 of 17 FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM INDEX NO. 506027/2014 $ NYSCEF DOC. NO. 264 RECEIVED INDEX NYSCEF: NO. 05/15/2020 506027/2014 FILED: KINGS COUNTY CLERK 0 6 /12 /2018 11: 19 NYSCEF DOC. NO. 146 RECEIVED NYSCEF: 06/12/2018 were aware that she will be paying for the mortgage starting from the time the loan documents were executed and she made the mortgage payments. It was understood by both borrowers that her signature on the note and mortgage as Mckenzie's attorney in fact and her signature on the mortgage for herself will ensure that Ms. Farnsworth's interest in the note is preserved and reflected. A copy of the note and mortgage, with the signatures are annexed as Exhibit D. 5. Although Peter and Sherrel had disagrccments over the value of Peter's one percent interest, at this time Peter wants the bank to allow Sherrel to modify the loan. Sherrel found employment soon after she lost her job in 2014. She has been working since then and can make the mortgage payments. She has not been able to apply for modification because the bank has not given her a chance to do so. They insist that her name is not on the note, estoppel disallows them from taking this position. 6. A partition action commenced by Ms. Farnsworth in 2015 is at a trialstage. A prior Partition action was commenced on the property by Mr. Mckenzie and that action was dismissed for non appearance. Mr. Mckenzie filed to vacate the judgmeñt of dismissal three years after the dismissal. For merit, he provided the court with handwritten statements and showed no receipts for his damages and the court found that his three years delay in vacating the judgment was unreasonable and that the fact he did not substantiate his damages with any kind of receipt showed that his case had no merit. The court's decision denying the Order to Show Cause is annexed as Exhibit E. Sherrel offered to pay Mr. Mckenzie 140,000 dollars for his one percent interest in the property and he refused to take it.Sherrel has lived at the property for fifteen years and wants to keep her house. Mr. Mckenzie wants the house sold. 3 of 17 FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM INDEX NO. 506027/2014 NYSCEF DOC. NO. 264 RECEIVED INDEX NYSCEF: NO. 05/15/2020 506027/2014 [FILED: KINGS COUNTY CLERK 0 6 /12 /2018 11: 19 AM| NYSCEF DOC. NO. 146 RECEIVED NYSCEF: 06/12/2018 7. Plaintiff's default judgments and judgment of foreclosure and sale were granted on default on grounds of defendant's failure to file opposition papers to the motions. The default judgment is annexed as Exhibit A and the judgment of foreclosure and sale is annexed as Exhibit B. The default was caused by an attorney with our firm who we assigned to handle the case. He left the Firm without leaving us hand over notes. We found the file just recently in a closed filecabinet. We were unaware that he did not know prepare and file the answer. Neither were we aware that a default judgmeñt was entered against defendant Sherrel Farnsworth for defaulting. 8. We had no intentions of abandoning the case and appeared on several modification conferences. And only became aware of the default judgment and the failure to filean answer not long ago. By the time we noticed the default, defeñdaat McKenzie had already consented to a judgmeñt of foreclosure and sale. The notice of entry of the judgment of foreclosure and sale was 15* entered on the day of May 2018. 9. No modification package was submitted on behalf of defendant Sherrel on grounds thatthe bank insisted that her name is not on the note and that she could not apply for a modification of the loan. 4 of 17 FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM INDEX NO. 506027/2014 NYSCEF DOC. NO. 264 RECEIVED INDEX NYSCEF: NO. 05/15/2020 506027/2014 FILED : K INGS COUNTY CLERK 0 6 /12 /2 018 11: 19 AM| NYSCEF DOC. NO. 146 RECEIVED NYSCEF: 06/12/2018 10. Law Office failure, of the sort relayed here constitutes an excusable default. Secondly, Sherrel Famsworth has a meritorious defense as can be seen by her affidavit in support, this affirmation and her annexed proposed answer to the complaint. 11. Stating briefly, she is a homeowner in a residential foreclosure proceeding and although her name is not on the note, the bank has received mortgage payments from her from the day the loan documents were executed. Additionally, the broker and bank staff on the loan offered to structure the loan where her interest in the note will not be lost.Consequently, she was instructed to sign as attorney in fact on both the note and the mortgage and to sign for herself on the mortgage. Clearly, the bank is estopped from stating that she had no interest in the note. 12. A robo-signer executed the assigareeñts in this foreclosure case, hence this home owner was a victim of the illegal lending and foreclosure initiation practices homeowners all over the US faced. The government attempted to redress those wrongs and or mitigate the loss through regulations and government programs. Ms. Farnsworth was deprived from benefitting from those regulations and programs by the conducts of the bank and Mr. McKenzie. She has invested substantially into the property and actually spent all her inheritance money from her father to renovate the property. Additionally the current value of the house is 1. 5 million and the debt owed is about $500,000. Her mortgage payments built up equity in the property. 13. New York State courts generally lean towards an approach which emphasizes liberality and extension of courtesies in the handling law office defaults. In a case with similar facts,New 5 of 17 FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM INDEX NO. 506027/2014 NYSCEF DOC. NO. 264 RECEIVED INDEX NYSCEF: NO. 05/15/2020 506027/2014 (FILED : KINGS COUNTY CLERK 0 6 /12 /2 018 11: 19 AM) NYSCEF DOC. NO. 146 RECEIVED NYSCEF: 06/12/2018 2nd York Appellate Division Department opined that Supreme Court's rejection of attorney for rejection" the defendant's law office failure excuse was an "improvident where the Firm asserted that a new associate they hired to serve discovery responses as mandated by a preliminary conference order and to strike plaintiff's complaint pursuant to CPLR 3126 failed to do so. The appeal court stated that the failure of the retained attorney was neither intentional nor a pattern of willful conduct. Girondo v. Katzen 19 Ad 3d 644, 645 2005; 14. See also Hageman v. Home Depot USA Inc. 25 Ad 3d 760, 808 NYS 2d 763. "Although the defendant's defaults were more than isolated incidents, it cannot be said based on the evidence neglect." presented that they constituted a pattern of willful 2nd 15. In Henry v. Kuveke 9 Ad 3d 476, 781 NYS 2d 114 New York Appellate Division Department 2000. Two dates were given by the trialcourt, one was for submission of opposition documcats and the other, a deadline to submit all motions. Counsel's mistake as to what date to file opposition papers was a reasonable excuse opined Appellate Division Second Department and reversed Supreme Court's no reasonable excuse ruling. The court reached their opinion in consideration of "the strong policy in favor of resolving cases on the merit, the plaintiff's lack of intent to abandon the action, the lack of prejudice to the respondents and the fact that the delay willful." was not 16. At bar, we assigned the case to an attorney to do the work. There was clearly no iñtêñtion to abandon the case. 6 of 17 FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM INDEX NO. 506027/2014 W NYSCEF DOC. NO. 264 RECEIVED INDEX NYSCEF: NO. 05/15/2020 506027/2014 |FILED: KINGS COUNTY CLERK 0 6/12 /2018 11: 19 NYSCEF DOC. NO. 146 RECEIVED NYSCEF: 06/12/2018 17. Their will be no prejudice on the bank. Given the fact that they initiated the foreclosure case and are sufficiently acquainted with the facts of the case to know that defendant Sherrel has meritorious defenses to the lawsuit. They are also aware that default judgment from the seeming failure to file an answer was going to amount to a windfall for them and not justice. 18. Asst!ming argueñdo without conceding that the defendant has no reasonable excuse for the default, ifthe court so opines, vacatur of a default can be achieved absent a reasonable excuse for a default where unique circumstances warranting a vacatur exists. The unique circumstance though must constitute sufficient reasons for vacatur in the interest of justice pursuant to court opinions in 1.add v. Stevenson 112 NY 325, Katz v. Marra 74 Ad 3d 888 2010 and Woodson v. Mendon Leasing Corporation 100 NY 2d 62 2003. The rationale here stems from the fact that a court has an inherent power, unlimited by statute to open up itsjtidgment for sufficient reasons, in the interest ofjustice. 19. Unique circumstances waiiañtiñg vacatur was found and a default judgment was vacated though no reasonable excuse was given for the default on grounds that the award was an unfair windfall and movant was confused about the procee-jiñgs. See Alfred Wade v. Village of Whitehall 46 Ad 3d 1302. Again, the plaintiff in R. L C Investors Inc . v. Pauline Zabski et.aj answer" 109 AD 2d 1053, prematurely moved to hold the defendâñts in default for not "filing an and a default judgment was entered them. A judgment of foreclosure and sale was thereafter procured against them. The judgments were entered despite the fact that the time for them to file an answer or appear in the case had not begun to run. Reversing the judgment, the appellate 7 of 17 FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM INDEX NO. 506027/2014 NYSCEF DOC. NO. 264 RECEIVED INDEX NYSCEF: NO. 05/15/2020 506027/2014 FILED : KINGS COUNTY CLERK 0 6 /12 /2 018 11: 19 AM) NYSCEF DOC. NO. 146 RECEIVED NYSCEF: 06/12/2018 court opined that the fact that the defendants were not in default was sufficient reason, in the interest of justice to vacate the defaults and set aside the foreclosure sale of the property. 20. Finding unique circumstances warranting vacation of the court order in Soggs v. Crocco 247 Ad 2d 887, 888 1988, appellate court second division reversed the Supreme Court's order for specific performance without reaching to the provisions of CPLR 5015 codified list.The parties in Soggs v. Crocco agreed that the Plaintiff would compensate defendant for her 46 percent interest share at a price approved by the FCC. FCC failed to approve a price making it impossible for the plaintiff to fulfillthe obligation. The defendant moved the court for specific performañce and the court ordered for same. The appeal to vacate the order was granted on grounds that the refusal of the FCC to fulfillthe role assigned to it caused an "insurmountable omitted)." bar to the specific performance of the agreement (citation They further stated that the view" order directing specific performance "decree[s] the impossible... in our and concluded that the the unique circumstances of this case warrant vacatur of the order directing specific performance. 21. The foundational case of Ladd v. Stevenson 112 NY 325 is another illustrative one. When he was alive, Mr. Stevenson of Ladd v. Stevenson 112 NY 325 gave a couple Mr. and Mrs. Goetlets a bond of indemnity and covenants in his deed to a property. Plaintiff, Ladd sued and procured a judgment against the property and this posed a problem given the existence of the rights to the indemnity bond and covenants inuring to the benefit of the Goetlets on the property. Consequently, Mrs Stevenson the administratrix of her hmhand's estate and the Goetlets moved in" to vacate the judgment in the interest of justice for purposes of allowing them "come and 8 of 17 FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM INDEX NO. 506027/2014 NYSCEF DOC. NO. 264 RECEIVED INDEX NYSCEF: NO. 05/15/2020 506027/2014 (FILED : KINGS COUNTY CLERK 0 6 /12 /2018 11: 19 AM| NYSCEF DOC. NO. 146 RECEIVED NYSCEF: 06/12/2018 defend the case. The trial court vacated the judgment to allow them in. At the time of this appeal, the statute for vacatur (Code 742) the equivalent of the current CPLR 5015 did not list that a judgment could be vacated on this ground. The appellate court however found sufficient reason in the interest of justice to affirm the vacatur. 22. To vacate the judgments under CPLR 5015 A, defendant Sherrel Farnsworth also has to demonstrate that she has a meritorious case. Regarding merit for purposes of vacatur under CPLR 5015 (A), itis noteworthy that the bank erred in not allowing Ms. Farnsworth apply for a modification of the loan given the fact that they accepted payments from her from the time she bought the house. They knew she was going to be making the mortgage payments. They advised the parties to deed one percent of the value of the property to Peter for consideration. They also advised the parties to have Sherrel sign the note and the mortgage as attorney in fact for Peter and to sign the mortgage. Cumulatively, these were acts that were undertaken to ensure that Sherrel's interest in the note and mortgage was preserved. 23. The doctrine of estoppel is imposed by statute in the interest of fairness to foreclose the enforcement of rights which would work fraud or injustice upon the person against whom enforcement is sought and who, in justifiable reliance upon his adversary's words or conduct, has sought" been misled into acting upon the belief that such enforcement would not be Jean Maby H. v Joseph H., 246 AD2d 282, 285; Matter of Boyles v Boyles 95 AD2d 95, 97. Nassau Trust Co. v Montrose Concrete Prods. Corp., 56 NY2d 175, 184; see Matter of John Robert P. v Virp C,23 AD3d 659, 661; Sherrel Farnsworth relied on the bank and made all the mortgage 9 of 17 FILED: KINGS COUNTY CLERK 05/15/2020 09:31 AM INDEX NO. 506027/2014 NYSCEF DOC. NO. 264 RECEIVED INDEX NYSCEF: NO. 05/15/2020 506027/2014 (FILED : K INGS COUNTY CLERK 0 6 /12 / 2 018 11: 19 Aj NYSCEF DOC. NO. 146 RECEIVED NYSCEF: 06/12/2018 payments thereby building up equity in the property. It'sunjust for the bank to deny her assess to modify the loan on assertions that she has no interest in the loan. 24. Additionally, Plaintiff, JP Morgan Chase bank, NA joined the bank, JP Morgan Chase Bank, NA as a defendant and citing a clause in a purchase agreement with FDIC they contend that they are not liable for transacti