Green v. Kadilac Mortgage Bankers, Ltd.

936 F. Supp. 108, 1996 U.S. Dist. LEXIS 11045, 1996 WL 437432
CourtDistrict Court, S.D. New York
DecidedJuly 31, 1996
Docket95 Civ. 5212 (WCC)
StatusPublished
Cited by13 cases

This text of 936 F. Supp. 108 (Green v. Kadilac Mortgage Bankers, Ltd.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Green v. Kadilac Mortgage Bankers, Ltd., 936 F. Supp. 108, 1996 U.S. Dist. LEXIS 11045, 1996 WL 437432 (S.D.N.Y. 1996).

Opinion

OPINION AND ORDER

WILLIAM C. CONNER, Senior District Judge:

Plaintiffs Lawrence E. Green and Barbara L. Green, acting pro se, have alleged that defendants violated 42 U.S.C. § 1983 by conspiring to deprive them of their property without due process of law. Defendants Ka-dilac Mortgage Bankers, Ltd. frk/a/ Kadilac Funding, Ltd. (“Kadilac”), Mordechay Mov-tady and Jack Economou have moved, pursuant to Fed.R.Civ.P. 56(c), for summary judgment dismissing the complaint. Defendants Peggy Hatle, Philip Pagliaro, and Columbia Equities, Ltd. (“Columbia”) have made a motion to dismiss the complaint under Fed. R.Civ.P. 12(b)(6). Each of the defendants has requested sanctions against plaintiffs, and defendant Economou has applied for a permanent injunction barring plaintiffs from filing any further claims against him arising from the alleged events. Plaintiffs have moved for default judgment against Kadilac and Movtady and have made a motion under Fed.R.Civ.P. 15 for leave to file amended and supplemental pleadings asserting claims against additional defendants. Plaintiffs also seek sanctions against each of the defendants.

For the reasons set forth below, defendants’ motions under Rule 56(c) and Rule 12(b)(6) are granted, and plaintiffs’ motions are denied. The motions for sanctions filed by defendants Kadilac, Movtady, Hatle, Pag-liaro and Columbia are granted, while defen *111 dant Eeonomou’s request for sanctions and application for a permanent injunction are denied.

BACKGROUND

The following facts are drawn from the complaint in this case, affidavits submitted by several of the parties and the records of a number of prior lawsuits related to this action. The parties are essentially in agreement on the factual circumstances of this case, although they disagree sharply on the legal significance of those facts.

On June 27, 1985, the Greens purchased the premises at 18A Bundy Hill Road in Pawling, New York, for $60,000 and executed a purchase money mortgage for $48,000. Kadilac was the mortgagee. As a condition for entering into the mortgage agreement, Kadilac required the Greens to place $4,000 in escrow to ensure that the driveway, which encroached on the adjoining property, would be relocated. On that same day, Kadilac assigned the mortgage to the Federal Home Loan Mortgage Corporation (“FHLMC”) and became the servicing agent for the mortgage. The assignment was recorded on August 1, 1985.

From August 1985 to May 1987, the Greens made mortgage payments to Kadilac. The Greens assert that during this period, they tried unsuccessfully to get Kadilac to use the funds in escrow to correct the driveway encroachment. The Greens ceased to make payments to Kadilac as of June 1,1987, when they discovered that the FHLMC, rather than Kadilac, held their mortgage. They contend that in the absence of notice from the FHLMC of the assignment of the mortgage, they had no obligation to make payments.

On July 15, 1987, the Greens filed an action in this court (the “first federal action”) captioned Green v. Kessler, No. 87 Civ. 5024. The Greens alleged that the defendants, who included Kadilac and its president Movtady, had conspired to defraud the Greens by, inter alia, failing to correct the driveway encroachment. On February 23, 1989, that action was dismissed with prejudice for lack of subject matter jurisdiction. The Second Circuit affirmed on September 5, 1989, and denied rehearing on January 18,1990.

Meanwhile, on October 12, 1987, the FHLMC instituted foreclosure proceedings (the “foreclosure action”) in New York State Supreme Court, Dutchess County. A notice of pendency was filed on November 2, 1987. No further action was taken in that case for some time while the parties attempted to work out their differences. The notice of pendency apparently expired on November 2, 1990. 1 On or about March 22, 1991, the FHLMC filed a second foreclosure action in the same court. A notice of pendency was filed on April 2, 1991. On March 24, 1992, the court dismissed the second foreclosure action on the ground that an identical action was already pending. On June 10, 1992, Justice Hillery granted summary judgment in the foreclosure action in favor of the FHLMC. She subsequently granted reargument and on August 4, 1992, issued a .decision adhering to the original result. The Greens filed a notice of appeal from that decision.

Also on August 4, 1992, Justice Hillery entered an order appointing defendant Jack Eeonomou as referee for the purpose of determining the amount of money that the Greens owed to the FHLMC. Eeonomou completed his report on August 18,1992. On October 16, 1992, the Appellate Division denied the Greens’ application for a stay of the foreclosure proceedings pending appeal. On April 7, 1993, Justice Hillery approved Eeo-nomou’s report, entered a judgment of foreclosure and sale and appointed Eeonomou as referee to conduct the sale. The sale was scheduled for July 7,1993.

On June 16, 1993, the Greens filed' an action in this court (the “second federal action”) captioned Green v. Federal Home Loan Mortgage Corp., No. 93 Civ. 4113. In that case, the Greens alleged that they had never received notice of the assignment of their mortgage to the FHLMC, that the FHLMC had failed to obtain correction of the driveway encroachment or to return to *112 the Greens the funds held in escrow for that purpose, that the FHLMC had notice that the mortgage had been obtained by fraud but nevertheless failed to take any corrective action and that the FHLMC had improperly pursued foreclosure actions against the Greens. The Greens asserted that the FHLMC had violated their civil rights to the enjoyment of their property.

The Greens filed an application in the second federal action for a preliminary injunction to halt the foreclosure sale. Plaintiff argued that the judgment of foreclosure was invalid because: (1) the state court lacked jurisdiction over the foreclosure action brought by the FHLMC because such suits could only be brought in federal district court, (2) the FHLMC could not be represented by a private attorney in the foreclosure action and (3) the FHLMC did not have capacity to sue in New York state. On July 2, 1993, Judge Goettel denied the Greens’ application. He concluded that the Greens’ contentions that the state court lacked jurisdiction over the foreclosure action were mer-itless and that they were collaterally es-topped from relitigating issues that had been decided in the foreclosure action. He also stated that plaintiffs’ denial of due process claims were meritless because plaintiffs had been afforded ample process in the state court. Judge Goettel stayed proceedings in the second federal action pending the outcome of the Greens’ state court appeal.

On July 7, 1993, the property was sold to Kadilac for $90,000, leaving a deficiency of $14,778.15.

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936 F. Supp. 108, 1996 U.S. Dist. LEXIS 11045, 1996 WL 437432, Counsel Stack Legal Research, https://law.counselstack.com/opinion/green-v-kadilac-mortgage-bankers-ltd-nysd-1996.