DecidedonJune5,2008 SupremeCourt,KingsCounty WellsFargoBank,N.A.,ASTRUSTEEC/OLittonLoanServicing,LP,Plaintiff, against HillaryFarmer,Jr.,et.al.,Defendants. 27296/07 Appearances: Plaintiff: StevenJ.Baum,PC BuffaloNY Defendant: ArthurM.Schack,J. InmyFebruary4,2008decisionandorderintheinstantmatterIdeniedwithoutprejudicethe applicationofplaintiffWELLSFARGOBANK,N.A.

ANK,N.A.,ASTRUSTEE(WELLSFARGO)foranorderof referenceforthepremiseslocatedat363MadisonStreet,Brooklyn,NewYork(Block1820,Lot 76,CountyofKings),withleavetorenewuponprovidingtheCourtwith:acopyofavalid assignmentoftheinstantmortgageandnotetoplaintiffWELLSFARGOBANK,N.A.,ASTRUSTEE (WELLSFARGO);asatisfactoryexplanationtoquestionswithrespecttothetwoDecember8, 2004assignmentsoftheinstantmortgageandnotefromARGENTMORTGAGECOMPANY,LLC (ARGENT)toAMERIQUESTMORTGAGECOMPANY(AMERIQUEST),andthenfromAMERIQUEST toplaintiffWELLSFARGO;andsatisfactorilyansweringcertainquestionsregardingaMay5, 2005limitedpowerofattorneyfromWELLSFARGO,asTrustee,toLITTONLOANSERVICING,LP (LITTON),asServicer.[*2] Plaintiffhasreneweditsapplicationforanorderofreferenceforthesubjectpremises,butthe paperssubmittedfailtocurethedefectsenumeratedinmypriordecisionandorder.The purportedplaintiff,WELLSFARGO,doesnotowntheinstantmortgageloan.Therefore,the instantmatterisdismissedwithprejudice. Background DefendantHILLARYFARMERborrowed$460,000.00fromARGENTonDecember3,2004.The noteandmortgagewererecordedintheOfficeoftheCityRegister,NewYorkCityDepartment ofFinanceonDecember21,2004,atCityRegisterFileNumber(CRFN)2004000781656.Five dayssubsequent,onDecember8,2004,twoinvalidassignmentsoftheinstantmortgageand notetookplace,withARGENTassigningthenoteandmortgagetoAMERIQUEST,andthen AMERIQUESTassigningthenoteandmortgagetoplaintiffWELLSFARGO.Bothofthese

assignmentswerenotrecordedformorethanfourteenmonths,untilFebruary21,2006,when theywerebothrecordedatthatsametimeandsequentially,atCRFN2006000100653and CRFN2006000100654. WhilebothassignmentslisttheofficesofARGENTandAMERIQUESTatdifferentlocationsin Orange,California,bothassignmentswereexecutedby"JoseBurgosAgent,"beforethesame notarypublic,inWestchesterCounty,NewYork.Bothoftheseassignmentsfailedtohavea corporateresolutionorapowerofattorneyattached,whichauthorizedthe"Agent"toactfor hisprincipal.Thus,theseassignmentsareinvalidandplaintiffWELLSFARGOlacksstandingto bringtheinstantforeclosureaction. Iallowedplaintiffanopportunitytocuretheassignmentdefects,byexplaining:bywhat authoritydidMr.Burgosactas"Agent"forbothARGENTandAMERIQUEST;whyMr.Burgos actedonthesamedayastheassignorandtheassigneeoftwomortgagebehemoths;and,why corporationslocatedinOrange,Californiaexecutedassignmentsontheothersideofthe continent,inWestchesterCounty,NewYork? Then,assumingthatWELLSFARGOcouldexplainandcuretheassignmentdefects,WELLS FARGOhadtoprovideanswersaboutLITTON,itsallegedservicer.Theinstantapplicationforan orderofreferencecontainsan"affidavitofmeritandamountdue"byDebraLyman,Vice PresidentofLITTON,attorneyinfactforWELLSFARGO.TheLimitedPowerofAttorney,dated May5,2005,attachedtotheinstantapplicationforanorderofreference,statesthatWELLS FARGO:initscapacityastrusteeundercertainServicingAgreementsrelatingtoParkPlace SecuritiesInc.AssetBackedPassthroughCertificates,Series2005WLL1datedasofMarch1, 2005(the"Agreement")byandamongParkPlaceSecurities,Inc.as("Depositor")andLitton LoanServicingLPas("Servicer")andWellsFargoBank,N.A.asTrusteeherebyconstitutesand appoints:LITTONLOANSERVICINGLPitstrueandlawfulattorneyinfact...toexecuteand deliveronbehalfof[WELLSFARGO]anyandallofthefollowinginstruments[documentswith respecttoforeclosures]totheextentconsistentwiththetermsandconditionsofthe Agreement[sic]. SincetheCourtdoesnotknowforwhomWELLSFARGOistheTrustee,theCourthasnoway [*3]toknowiftheabovenamedMarch1,2005Agreementreferstotheinstantmortgage. Sincea"trustee"is"onewho,havinglegaltitletoproperty,holdsitintrustforthebenefitof anotherandowesafiduciarydutytothatbeneficiary"(Black'sLawDictionary1519[7thed 1999]),theCourtneedstoknowforwhomWELLSFARGOholdsthemortgageloanintrust. Further,todetermineifMs.Lymanhadtheauthoritytoexecuteheraffidavitonbehalfof plaintiffWELLSFARGO,theCourtrequiredaninspectionoftheMarch1,2005Servicing Agreement.(EMCMortg.Corp.vBatista,15Misc3d1143(A),[SupCt,KingsCounty2007]; DeutscheBankNat.TrustCo.vLewis,14Misc3d1201(A)[SupCt,SuffolkCounty2006]). Discussion InmypreviousdecisionandorderIdeterminedthatplaintiffWELLSFARGOlacked"standing"to bringtheinstantaction.TheCourtofAppeals(SaratogaCountyChamberofCommerce,Inc.v

Pataki,100NY2d,901,812[2003]),certdenied540US1017[2003])heldthat"[s]tandingto sueiscriticaltotheproperfunctioningofthejudicialsystem.Itisathresholdissue.Ifstanding isdenied,thepathwaytothecourthouseisblocked.Theplaintiffwhohasstanding,however, maycrossthethresholdandseekjudicialredress."InCarpervNussbaum,36AD3d176,181(2d Dept2006),theCourtheldthat"[s]tandingtosuerequiresaninterestintheclaimatissuein thelawsuitthatthelawwillrecognizeasasufficientpredicatefordeterminingtheissueatthe litigant'srequest."Ifaplaintifflacksstandingtosue,theplaintiffmaynotproceedintheaction. (StarkvGoldberg,297AD2d203[1dDept2002]). Intheinstantaction,thetwoDecember8,2004assignmentsARGENTtoAMERIQUESTand AMERIQUESTtoWELLSFARGOaredefective.ThisdeniesWELLSFARGO'sstandingtobring thisaction.Therecordedassignmentsarebothby"JoseBurgosAgent."An"agent"is"one whoisauthorizedtoactfororinplaceofanother;arepresentative"(Black'sLawDictionary64 [7thed1999]).TheassignmentslackanypowerofattorneygrantedbyeitherARGENTor AMERIQUESTtoJoseBurgostoactastheiragents.RealPropertyLaw(RPL)254(9)states: Powerofattorneytoassignee.Theword"assign"orotherwordsofassignment,when containedinanassignmentofamortgageandbondormortgageandnote,mustbeconstrued ashavingincludedintheirmeaningthattheassignordoestherebymake,constituteand appointtheassigneethetrueandlawfulattorney,irrevocable,oftheassignorinthenameof theassignor,orotherwise,butatthepropercostsandchargesoftheassignee,tohave,useand takealllawfulwaysandmeansfortherecoveryofthemoneyandinterestsecuredbythesaid mortgageandbondormortgageandnote,andincaseofpaymenttodischargethesameas fullyastheassignormightorcoulddoiftheassignmentwerenotmade.[Emphasisadded]"An attorneyinfactismerelyaspecialkindofagent."(EtterlevExcelsiorIns.Co.ofNewYork,74 AD2d436,441[2dDept1980]).Further,theagent,whohasafiduciaryrelationshipwiththe principal,"isapartywhoactsonbehalfoftheprincipalwiththelatter'sexpress,implied,or apparentauthority."(MaurillovParkSlopeUHaul,194AD2d142,146[2dDept1992]). Therefore,tohaveaproperassignmentofamortgagebyanauthorizedagent,apowerof attorneyisnecessarytodemonstratehowtheagentisvestedwithauthoritytoassignthe mortgage."Nospecialformorlanguageisnecessarytoeffectanassignmentaslongasthe [*4]languageshowstheintentionoftheownerofarighttotransferit[Emphasisadded]." (TawilvFinkelsteinBruckmanWohlMost&Rothman,223AD2d52,55[1dDept1996];see Suraleb,Inc.vInternationalTradeClub,Inc.,13AD3d 612<http://www.nycourts.gov/reporter/3dseries/2004/2004_09620.htm>[2dDept2004]). InanattempttoexplainwhyMr.Burgos,the"agent,"actedtwiceasanassignorandonceasan assignee,onDecember8,2004,plaintiff'scounselhasprovidedtheCourtwithanaffidavitof DianeE.Tiberend,datedMarch28,2008.Ms.Tiberend,asofthedateofheraffidavitis: GeneralCounsel,SeniorVicePresidentandSecretaryofACCCapitalHoldingsCorporation (ACH),theparentcompanyofARGENTandAMERIQUEST;AssistantSecretaryofAMERIQUEST fromSeptember21,1999;and,wasAssistantSecretaryofARGENTfromJuly2,2001until November1,2007,whenshebecametheSecretaryofARGENT.UnmentionedbyMs.Tiberend andplaintiff'scounselaretheAugust31,2007CITIGROUPpurchasesofARGENTand AMERIQUEST.Ms.Tiberendwearsanotherhat,thatofcorporatefunctionaryforCITIGROUP

subsidiaries. EricDashinhisSeptember1,2007NewYorkTimesarticle,"CitigroupBuysPartsofaTroubled MortgageLender,"wrote:Citigroup'sinvestmentbankingarmscoopeduptheassetsofthe troubledsubprimemortgagelenderACCCapitalHoldingsyesterday,thesamedaythatthe strugglingcompanyannouncedthatitwasclosing.CitigroupboughttheremnantsofACC's Argentwholesalemortgageoriginationdivisionaswellastheservicingrightstocollectonmore than$45billioninhomeloans.Termsofthedealwerenotdisclosed.ACCsaidthatitwas shuttingitsonlyotherholding,itsAmeriquestretailmortgageunit,whichoncebilleditselfas thesponsoroftheAmericandreambutwastarnishedbyscandal."ACCCapitalHoldingsis goingtomaintainoperationsasitpreparesfortheorderlywinddownofourretailmortgage business,whichisnolongeracceptingapplications,"thecompanysaid.ACCCapitalisthelatest ofatleast15subprimelenderstobeclosedasWallStreetstoppedpouringcapitalintothe industryafterrisinghomeownerdelinquenciesanddefaults.Theclosingistheendofalong challengedcompany,foundedbythebillionaireRolandE.Arnall,wholastyearwasnamed UnitedStatesambassadortotheNetherlands.[*5]"ThewholeAmeriquestandArgent businesseshavebeeninlimboforatleastayear,"saidGuyCecala,publisherofInside MortgageFinance."Theywereoneofthefirstsubprimelenderstoshowproblems:theyhad regulatoryconcerns,volumegoingdownandproblemswithloanquality." In2006,thecompanyagreedtopay$325milliontosettlefederalandstateregulators'claims ofdeceptivelendingpractices.Citigroupsaidyesterdaythatitwouldpickuptheremnantsof Argent,ACCCapital'swholesalemortgageoriginationbusiness,whosenationwidebroker networkwasonceunderfireforabusivepractices.Itsoperationshaveallbutshutdown. Citigroupexecutivessaidthattheyplannedtooverhaultheunit'smanagementteamand lendingpractices,changeitsnametoCitiResidentialLendingandbroadenitsproductlines. Theyplantorestartloanoriginationoperationsslowly. Inparagraph6ofheraffidavit,Ms.Tiberendreferstothe"dualassignmentprocess,"stating that"[t]osecurefundstolendacompletechainofassignmentshadtobeprovidedtothe relatedlender."Further,inparagraph6,shereferstounnamed"relatedwarehouselenders."A "warehouselender"providesalineofcredittoaloanoriginatortofundamortgageuntilitis soldintothesecondarymarket,directlyorthroughsecuritization.DefendantFARMERexecuted theinstantmortgagewithARGENTonDecember3,2004.Theassignmentstookplacefivedays lateronDecember8,2004.Thus,itappearsthatARGENTborrowedthefundsfroma "warehouselender(s)"tooriginatetheFARMERloan,anticipatingpayingtheloanbacktothe "warehouselender(s)"afterthemortgageloanwassecuritizedintoacollateralizeddebt obligation(CDO)withWELLSFARGOastheTrustee.However,theCourtstillcannotunderstand thenecessityforthe"dualassignmentprocess."Whycouldn'tanofficerofARGENThave assignedtheFARMERmortgagetoWELLSFARGO,asTrusteeforadesignatedbeneficiary,a namedCDO? Ms.Tiberendalsoclaims,in6ofheraffidavit,thatsinceARGENTandAMERIQUESTwere locatedinseparatelocationsandtoavoidthelossordestructionoforiginalloandocuments

whileintransit,"thedualassignmentprocess"wasconceivedandwhenapprovedbythe relatedwarehouselenderswasimplemented.Iwasinstrumentalinspearheadingthedual assignmentprocessinmypositionasSeniorCounselofACH."[*6]Sheclaims,in7,thatboth ARGENTandAMERIQUESTauthorizedbycorporateresolutionthesamepersonneltoexecute bothassignments."Thisinsuredthatthewarehouselenderreceivetheloandocumentsina timelyfashionandeliminatedtheriskposedbytransitoftheloandocumentstoalocation otherthanthewarehouselender'soffice."SheallegesthatMr.Burgosasanemployeeof ARGENTwasappointedasalimitedsigningofficerofbothARGENTandAMERIQUESTby corporateresolutions. However,shestates,in10:Adiligentsearchofcorporaterecordsforthespecificcorporate resolutionscannotcurrentlybefound.Inlieuthereof,andbasedonmyactualknowledgeand officer'spositionatbothargentandAmeriquestinDecember2004andcontinuouslysincethat dateIhaveattachedanOfficer'sCertificatememorializingMr.Burgos'appointmentonbehalf ofeachofthecompanies.(SeeExhibit6and7).[Emphasisadded] Exhibits6and7areherattemptatnuncprotunccorporateappointmentsofMr.Burgos,more thanthreeyearsafterhisexecutionoftheassignmentsas"Agent."TheseOfficer'sCertificates areunrecordedandlackmerit.ThisisnotacceptabletotheCourt.ItisclearthatMr.Burgosin actingas"Agent"neededauthorityforhisactions,eitherbycorporateresolutionorbypower ofattorney.SincenonewererecordedwiththeDecember8,2008assignments,theCourt's approvalofMs.Tiberend'sMarch28,2008appointmentsofMr.Burgoswouldbealegal miscarriage,despiteMs.Tiberend'sclaimthatthe"dualassignmentsystem"was"conceived andwhenapprovedbytherelatedwarehouselenderswasimplemented." Further,thesecondDecember8,2008assignment,fromAMERIQUESTto"WellsFargoBank, N.A.,asTrustee,"failstonameabeneficiaryfortheTrustee.Thefailuretonameabeneficiary fortheTrusteerenderstheassignmentwithoutmerit.Itisaxiomaticthat"[t]herearefour essentialelementsofatrust:(1)adesignatedbeneficiary;(2)adesignatedtrustee;(3)afundor otherpropertysufficientlydesignatedoridentifiedtoenabletitletheretotopasstothe trustee;and(4)actualdeliveryorlegalassignmentofthepropertytothetrustee,withthe intentionofpassinglegaltitletosuchpropertytothetrustee(BrownvSpohr,180NY201, 209)."(InreMannara,5Misc3d556,558[SurCt,NewYorkCounty2004]).(SeeInreMarcus Trusts,2AD3d640,641[2dDept2003];OrentreichvPrudentialIns.Co.ofAmerica,275AD2d 675[1dDept2000]). Plaintiff'scounselhasprovidedtheCourtwithanaffidavit,datedMarch28,2008,byKimM. Miller,"VicePresidentofBankruptcy,Litigation,DefaultDocumentsandForeclosuresofWELLS FARGOBANK,N.A."SheallegesthatWELLSFARGOisTrusteeforaCDO,"ParkPlaceSecurities Inc.AssetBackedPassThroughCertificates, Series2005WLL1,pursuanttoaPoolingandServicingAgreementbetweenParkPlace Securities,WellsFargo,N.A.andLittonLoanServicingLPasdatedMarch1,2005."Iconducted anincamerareviewoftheMarch1,2005PoolingandServicingAgreementand[*7]cannotfind

anyreferenceinittotheinstantFARMERmortgageloan. Therefore,sincetheAMERIQUESTtoWELLSFARGOassignmentissilentastoforwhomWELLS FARGOistheTrustee,plaintiffhasfailedtodemonstratehowtheMay5,2005limitedpowerof attorneyfromWELLSFARGOtoLITTONauthorizesan"affidavitofmeritandamountdue"by DebraLyman,VicePresidentofLITTON.Allofthedefendantsintheinstantactionhave defaulted.CPLR3215(f)requiresthatinanapplicationfordefaultjudgment,"theapplicant shallfileproofofserviceofthesummonsandthecomplaint,orasummonsandnoticeserved pursuanttosubdivision(b)ofrule305orsubdivision(a)ofrule316ofthischapter,andproofof thefactsconstitutingtheclaim,thedefaultandtheamountduebyaffidavitmadebythe party.[Emphasisadded]."Plaintiffshavefailedtosubmit"proofofthefacts"in"anaffidavit madebytheparty."The"affidavitoffacts"wassubmittedbyDebraLyman,VicePresidentof LITTON,theallegedservicingagentforWELLSFARGOanditsunknownbeneficiary.Asdiscussed above,theCourtcannotdetermineifMs.Lymanistheservicingagentforthisloan. BothDecember8,2004defectiveassignmentsARGENTtoAMERIQUESTandAMERIQUESTto WELLSFARGOarevoidedandcancelled.ARGENTistheowneroftheFARMERmortgageloan. Therefore,plaintiffWELLSFARGO'sapplicationforanorderofreferenceisdismissedwith prejudice.WELLSFARGOdoesnothavetitletotheinstantmortgageandlacksstandingto proceedintheinstantaction.TheAppellateDivision,SecondDepartment(KlugevFugazy,145 AD2d537,538[2dDept1988]),heldthata"foreclosureofamortgagemaynotbebroughtby onewhohasnotitletoitandabsenttransferofthedebt,theassignmentofthemortgageisa nullity."CitingKlugevFugazy,theCourt(KatzvEastVilleRealtyCo.,249AD2d243[1stDept 1998]),heldthat"[p]laintiff'sattempttoforecloseuponamortgageinwhichhehadnolegalor equitableinterestwaswithoutfoundationinlaworfact."TheCourt,inCampaignvBarba,23 AD3d327<http://www.nycourts.gov/reporter/3dseries/2005/2005_08266.htm>[2dDept 2005],heldthat"[t]oestablishaprimafaciecaseinanactiontoforecloseamortgage,the plaintiffmustestablishtheexistenceofthemortgageandthemortgagenote,ownershipofthe mortgage,andthedefendant'sdefaultinpayment[Emphasisadded]."(SeeHouseholdFinace RealtyCorp.ofNewYorkvWynn,19AD3d545[2dDept2005];SearsMortgageCorp.v Yahhobi,19AD3d402[2dDept2005];OcwenFederalBankFSBvMiller,18AD3d 527<http://www.nycourts.gov/reporter/3dseries/2005/2005_03829.htm>[2dDept2005];U.S. BankTrustNat.Ass'nvButti,16AD3d 408<http://www.nycourts.gov/reporter/3dseries/2005/2005_01707.htm>[2dDept2005];First UnionMortgageCorp.vFern,298AD2d490[2dDept2002];VillageBankvWildOaksHolding, Inc.,196AD2d812[2dDept1993]. Conclusion Accordingly,itisORDEREDthattherenewedapplicationofplaintiffWELLSFARGOBANK,N.A., ASTRUSTEE,foranorderofreferenceforthepremiseslocatedat363MadisonStreet, Brooklyn,NewYork(Block1820,Lot76,CountyofKings)isdeniedwithprejudice;anditis further ORDEREDthatthefollowingrealestatetransactionsfor363MadisonStreet,Brooklyn,New York(Block1820,Lot76,CountyofKings)arevoidedandcancelled:theAssignmentof

MortgagedatedDecember8,2004andrecordedonFebruary21,2006,atCityRegisterFile Number2006000100653;and,theAssignmentofMortgagedatedDecember8,2004and recordedonFebruary21,2006,atCityRegisterFileNumber2006000100654;anditisfurther ORDEREDthattheOfficeoftheCityRegisteroftheNewYorkCityDepartmentof[*8]Financeis directedtoamenditsrecordsinaccordancewiththisDecisionandOrder. ThisconstitutestheDecisionandOrderoftheCourt. HON.ARTHURM.SCHACK J.S.C.