Stephens v. Bonaparte et al

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NEW YORK
-----------------------------------------------------------------X
In re:
Chapter 13
Evis Neverlane Stephens,
Case No.: 21-42857
Debtor.
-----------------------------------------------------------------X
Evis Neverlane Stephens,
Plaintiff,
v. 	Adv. Pro. No.: 22-01037
Maxine Bonaparte, Lezantonio Woodburn,
12706 Holdings Inc., Charles L Mester, Esq.,
Planet Management Group, LLC, Planet Home
Lending LLC dba Planet Home Servicing,
Wilmington Savings Fund Society, FSB (WSF),
Verus Securitization Trust 2020-NPL1,
Defendants.
---------------------------------------------------------------X
MEMORANDUM DECISION AND ORDER ON MOTIONS FOR SUMMARY
JUDGEMENT FILED BY (A) WILMINGTON SAVINGS FUND SOCIETY, FSB AND
VERUS SECURITIZATION TRUST 2020 NPL1, (B) PLANET MANAGEMENT
GROUP, LLC AND PLANET HOME LENDING, LLC d/b/a PLANET HOME
SERVICING; AND (C) EVIS NEVERLANE STEPHENS
Appearances:
Karamvir Dahiya, Esq.
Dahiya Law Office LLC
75 Maiden Lane, Suite 606
New York, NY 10038
Counsel for Plaintiff Evis
Neverlane Stephens
Jason D. St. John, Esq.
Chadwick Devlin, Esq.
Ashley M. Slater, Esq.
Akerman LLP
1251 Avenue of the Americas,
37th Floor
New York, NY 10020
Counsel for Defendants
Wilmington Savings Fund Society,
FSB and Verus Securitization
Trust 2020-NPL1
Ryan P. Mulvaney, Esq.
Stevens & Lee, P.C.
669 River Drive, Suite 201
Elmwood Park, NJ 07407
Counsel for Defendants Planet
Management Group, LLC and
Planet Home Lending, LLC
d/b/a Planet Home Servicing
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

2
INTRODUCTION
Evis Neverlane Stephens (“Plaintiff”) alleges she is the victim of a scheme that caused
her to transfer her home to Defendant 12076 Holdings Inc. (“Holdings”). Defendant Lezantonio
Woodburn (“Woodburn”) owns Holdings. Defendant Maxine Bonaparte (“Bonaparte”) was
Plaintiff’s real estate agent and introduced Plaintiff to Woodburn and Charles L. Mester, Esq.
(“Mester”). Mester is the attorney that represented Plaintiff in connection with the sale of
Plaintiff’s home to Holdings.
Plaintiff alleges that Bonaparte, Woodburn, and Mester told her they would help her save
her home from foreclosure. Plaintiff alleges they told her if she transferred her home to
Woodburn or Holdings, they would pay off her mortgage, she could continue to live in the home,
and, at some point, they would transfer the home back to her. However, Holdings did not
transfer the property back to Plaintiff and Plaintiff alleges that Woodburn and Bonaparte
harassed and intimidated Plaintiff and her family to get them to vacate the home.
Plaintiff alleges that Defendant Planet Management Group (“Planet Management”),
financed Holdings’ acquisition of the property, Planet Home Lending, LLC d/b/a Planet Home
Servicing (“Planet Servicing” and together with Planet Management, the “Planet Defendants”)
serviced Planet Management’s mortgage, and the Planet Defendants participated in the scheme
to trick Plaintiff into selling her home to Holdings. Planet Management assigned its mortgage on
the Plaintiff’s home to Defendant Wilmington Savings Fund Society, FSB (“Wilmington”).
Wilmington serves as the owner trustee of Defendant Verus Securitization Trust 2020-NPL1
(“Verus” and together with Wilmington, the “Wilmington Defendants”).
Plaintiff has moved for summary judgment to void the deed conveying her home to
Holdings on the grounds the deed was procured by fraud in factum. Alternatively, she seeks to
rescind the sale of her home and avoid the Wilmington Defendants’ mortgage pursuant to New
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

3
York’s Home Equity Theft Prevention Act. Lastly, Plaintiff seeks to avoid the transfer of her
home and avoid the Wilmington Defendants’ mortgage based on New York’s former Fraudulent
Conveyance Act.
The Planet Defendants and Wilmington Defendants have moved for summary judgment
to dismiss Plaintiff’s claims. Additionally, the Wilmington Defendants seek an equitable
mortgage on the Residence. For the reasons set forth below, Plaintiff’s motion for summary
judgement is denied and the Planet Defendants and the Wilmington Defendants’ motions for
summary judgment are granted.
JURISDICTION
This Court has jurisdiction over this adversary proceeding under 28 U.S.C. § 1334(b), 28
U.S.C. § 157(a), and the Standing Order of Reference entered by the United States District Court
for the Eastern District of New York dated August 28, 1986, as amended by the Order dated
December 5, 2012. The Plaintiff’s claims and the Wilmington Defendant’s counterclaim that are
the subject of this decision are core matters or related proceedings. Plaintiff, the Planet
Defendants, and the Wilmington Defendants have consented to this Court hearing and
determining all claims and counterclaims in this adversary proceeding. Pl.’s Statement Consent,
Adv. Pro. ECF No. 1801; Letter, Adv. Pro. ECF No. 183; Letter, Adv. Pro. ECF No. 184.
PROCEDURAL BACKGROUND
Plaintiff filed a petition for relief under chapter 13 of the Bankruptcy Code on November
15, 2021 (the “Petition Date”). Chapter 13 Voluntary Pet., ECF No.1.2
1 Citations to “Adv. Pro. ECF No.__” are references to documents filed on the docket of Stephens v. Bonaparte et
al., Adv. Pro. No. 22-01037.
2 Citations to “ECF No. __” are references to documents filed on the docket of In re Stephens, Case No. 21-42857
(the “Bankruptcy Case”).
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

4
Plaintiff commenced this adversary proceeding on May 9, 2022, against Bonaparte,
Mester, Woodburn, and Holdings. Compl., Adv. Pro. ECF No. 1. On December 28, 2022,
Plaintiff filed an amended complaint that added the Planet Defendants and the Wilmington
Defendants. Am. Compl., Adv. Pro. ECF No. 34.
The Wilmington Defendants, the Planet Defendants, and Mester each filed motions to
dismiss. Mot. Dismiss, Adv. Pro. ECF No. 48 (the “Wilmington MTD”); Mot. Dismiss, Adv.
Pro. ECF No. 51 (the “Planet MTD”); Mot. Dismiss, Adv. Pro. ECF No. 13 (the “Mester
MTD”).
On March 23, 2023, the Court issued a Memorandum Decision that granted the Mester
MTD in part. Mem. Decision, Adv. Pro. ECF No. 54.
On April 24, 2023, the Court entered an order directing all parties to mediation. Order,
Adv. Pro. ECF No. 65. On October 6, 2023, the mediators reported that the parties had reached
an impasse. Mediator’s Report, Adv. Pro. ECF No. 73.
On January 5, 2024, the Court granted in part the Planet MTD and the Wilmington MTD
but granted Plaintiff leave to amend the complaint to allege facts establishing Plaintiff’s standing
to bring causes of action to avoid and recover fraudulent conveyances. Mem. Decision Mot.
Dismiss, Adv. Pro. ECF No. 81. On February 22, 2024, Plaintiff filed a second amended
complaint (“Second Amended Complaint”). Am. Compl. Revised, Adv. Pro. ECF No. 93.
The following causes of action against the Planet Defendants and the Wilmington
Defendants survived the motions to dismiss:
 First Cause of Action – in which Plaintiff seeks a declaration that the deed
conveying Plaintiff’s property is void due to Forgery or Fraud in Factum
 Second Cause of Action – in which Plaintiff seeks rescission of the sale of her
home and avoidance of the mortgages on her home based on New York’s Home
Equity Theft Prevention Act
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

5
 Third Cause of Action – in which Plaintiff seeks to quiet title to her home based
on common law
 Tenth Cause of Action – in which Plaintiff seeks to quiet title to her home based
on New York Real Property Actions and Proceedings Law, Article 15
 Fifteenth Cause of Action–A, B, C, Sixteenth Cause of Action and Seventeenth
Cause of action – in which Plaintiff seeks to avoid and recover her home based on
New York’s former Fraudulent Conveyance Act and Bankruptcy Code sections
544 and 550, and to claim the home as exempt property
On March 6, 2024, the Wilmington Defendants answered and asserted a counterclaim
against the Plaintiff seeking equitable subrogation of their mortgage on the Plaintiff’s home and
a cross-claim against Planet Management for damages arising from the assignment of a mortgage
loan from Wilmington to Planet Management. Answer Am. Compl. with Cross-Cl. and
Countercl., Adv. Pro. ECF No. 97. Plaintiff answered the Counterclaim. Answer Countercl.,
Adv. Pro. ECF No. 100. Planet Management answered the Wilmington Defendants’ cross-claim.
Answer Cross-Cl., Adv. Pro. ECF No.101.
On June 10, 2024, the Planet Defendants answered the Second Amended Complaint,
counterclaimed against Plaintiff for an equitable lien, equitable subrogation of their mortgage,
and money damages for unjust enrichment. Answer Am. Compl. Countercl., Adv. Pro. ECF No.
102. The Planet Defendants asserted crossclaims against Holdings for indemnification, breach of
contract, and attorney’s fees, costs and expenses. Id. at ¶¶ 56-60;66-76. The Planet Defendants
also asserted crossclaims against Woodburn to recover on a guaranty and for attorney’s fees,
costs and expenses. Id. at ¶¶ 61-72.
On July 31, 2024, Plaintiff’s counsel informed the Court he had been suspended from
practice. Letter, Adv. Pro. ECF No.106. On November 5, 2024, Narissa Joseph appeared as
counsel for the Plaintiff. Notice of Appearance, Adv. Pro. ECF No. 111. On August 4, 2025,
after entry of an order lifting his suspension, Plaintiff’s original counsel appeared as counsel for
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

6
Plaintiff. Letter, Adv. Pro. ECF No. 133. On August 28, 2025, Plaintiff answered the Planet
Defendants’ counterclaim. Answer Countercl., Adv. Pro. ECF No. 146.
On October 17, 2025, the Wilmington Defendants moved for summary judgment seeking
dismissal of Plaintiff’s remaining causes of action and judgment in favor of the Wilmington
Defendants on its counterclaim for equitable subrogation of its mortgage on Plaintiff’s home.
Mot. Summ. J., Adv. Pro. ECF No. 150. Plaintiff filed her objection on December 19, 2025.
Mem. Law Opp’n, Adv. Pro. ECF No. 168. The Wilmington Defendants filed their reply on
January 9, 2026. Reply Mem. Law Further Supp., Adv. Pro. ECF No. 170.
On October 24, 2025, Plaintiff moved for summary judgment seeking judgment against
all defendants on all remaining causes of action and dismissing Wilmington’s counterclaim for
equitable subrogation. Pl.’s Mot. Summ. J., Adv. Pro. ECF Nos. 152, 154, 155. The
Wilmington Defendants objected to Plaintiff’s motion for summary judgment. Mem. Law
Opp’n, Adv. Pro. ECF Nos. 158, 159, 160. The Planet Defendants also objected to Plaintiff’s
motion for summary judgment. Mem. Law Opp’n, Adv. Pro. ECF No. 169. Plaintiff replied to
both Wilmington Defendants’ and Planet Defendants’ motions for summary judgment on
January 26, 2026. Reply, Adv. Pro. ECF Nos. 174, 175.
On December 10, 2025, the Planet Defendants moved for summary judgment. Mot.
Summ. J., Adv. Pro. ECF Nos. 163, 164. Plaintiff objected on January 24, 2026. Mem. Law
Opp’n, Adv. Pro. ECF No. 173. The Planet Defendants did not reply to Plaintiff’s opposition.
Woodburn, Bonaparte, and Holdings have not answered or otherwise responded to the
Plaintiff’s Second Amended Complaint or the cross-claims. To date, Plaintiff has not moved for
default judgment against Woodburn, Bonaparte, or Holdings. Mester filed opposition to
Plaintiff’s motion for summary judgment. Opp’n Mot. Summ. J., Adv. Pro. ECF No. 166.
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

7
Plaintiff replied to Mester’s opposition. Reply, Adv. Pro. ECF No. 176. Plaintiff’s claims
against Mester will be considered in a separate decision.
FACTS
Plaintiff purchased a house commonly known as 127-06 177th Street, Jamaica, New
York (the “Residence”) in 2006. Pl. Statement Undisputed Material Facts ¶ 3, Adv. Pro. ECF
No. 152-3 (“Pl. Facts”); Planet Defendants’ Statement of Undisputed Facts ¶ 1, Adv. Pro. ECF
No. 164-1 (“Planet Facts”); Wilmington Defendants’ Statement of Undisputed Facts ¶ 1, Adv.
Pro. ECF No.150-49 (“Wilmington Facts”).
Plaintiff financed the purchase of the Residence with a loan from Novastar Mortgage,
Inc., in the original principal amount of $630,000.00 (the “2006 Mortgage”). Pl. Facts ¶ 3;
Wilmington Facts ¶ 2; Planet Facts ¶ 2.
Ocwen Loan Servicing LLC (“Ocwen”) was the servicer for the 2006 Mortgage.
Wilmington Facts ¶ 4; Planet Facts ¶ 4. In 2010, Ocwen agreed to modify the 2006 Mortgage,
after Plaintiff fell behind on her mortgage payments. Wilmington Facts ¶¶ 3, 5, 15; Planet Facts
¶¶ 3, 5.
Plaintiff stopped making mortgage payments after receiving the modification. Stephen’s
Dep. Tr. 118:19-24 (“Stephen’s Dep. Tr.”), Mulvaney Dec., Ex. D, Adv. Pro. ECF No. 164-8.
Plaintiff stopped making payments based on her conversation with John Clark. Id. at 118:2-
120:25. Plaintiff said she met John Clark prior to 2006 when he helped her with real estate
matters unrelated to the Residence. Id. at 45:7-20. Plaintiff said that John Clark told her
something “about robo signing,” and based on John Clark’s advice, Plaintiff believed she could
keep the Residence without paying the 2006 mortgage. Id. at 120:19-25.
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

8
In 2015, Deutsche Bank National Trust Company as Trustee for Novastar Mortgage
Funding Trust, Series 2006-5 Novastar Home Equity Loan (“Deutsche Bank”) commenced an
action (the “2015 Foreclosure Action”) to foreclose the 2006 Mortgage. Pl. Facts ¶ 4 ;
Wilmington Facts ¶ 7; Planet Facts ¶ 7. John Clark introduced Plaintiff to Mr. Rouse, an
attorney who represented Plaintiff in the 2015 Foreclosure Action. Stephen’s Dep. Tr. 47:20-
48:6; 114:16-115:8. The New York state court granted Deutsche Bank’s motion for summary
judgment and entered an order of reference dated August 4, 2017. Wilmington Facts ¶ 8; Planet
Facts ¶ 8.
At some point, John Clark’s nephew, Otis, introduced Plaintiff to Bonaparte. Stephen’s
Dep. Tr. 129:16-25, 130:3-21. Bonaparte advised she could save the Residence from foreclosure
by putting the Residence in Woodburn’s name temporarily and then putting the Residence back
in Plaintiff’s name. Id. at 131:17-22. Bonaparte introduced Plaintiff to Mester, an attorney. Id.
at 133:8-25,134:1-3. Plaintiff met with Bonaparte, Otis, and Mester around September 21,
2018. Stephen’s Dep. Tr. at 135:15-23; Wilmington Facts ¶ 11; Planet Facts ¶ 11.
Plaintiff signed a contract, dated July 2018 (the “Sale Contract”), to sell the Residence to
Holdings. Stephen’s Dep. Tr. 188-190:2-20; Stephen’s Dep. Tr., Ex. J, Adv. Pro. ECF No. 150-
15. Plaintiff and Holdings closed the sale on March 27, 2019 (the “Transfer Date”). Pl. Facts ¶
26-28; Wilmington Facts ¶ 16; Planet Facts ¶ 16.
Plaintiff claims Woodburn, Holdings, and Bonaparte failed to reconvey the Residence
back to her. Am. Compl. Revised, ¶¶ 28, 33, 55, 56, Adv. Pro. ECF No. 93. Plaintiff also
alleges that Woodburn and Bonaparte harassed Plaintiff and her family to compel them to vacate
the Residence. Id. at ¶31-35. Further, Plaintiff alleges Woodburn and Bonaparte bullied
Plaintiff and her husband into signing an occupancy agreement that restricted Plaintiff to using
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

9
only a part of the Residence and imposed onerous terms. Am. Compl. Revised, ¶ 31-35, Adv.
Pro. ECF No. 93; Pl. Facts, ¶ 33-40. Moreover, Plaintiff alleges that Woodburn and Bonaparte
rented portions of the Residence to other people. Am. Compl. Revised, ¶34, Adv. Pro. ECF No.
93
Holdings financed its purchase of the Residence with a $535,000 loan from Planet
Management (the “2019 Loan”), secured by a mortgage on the Residence (the “2019
Mortgage”). Pl. Facts ¶ 29; Wilmington Facts ¶ 24; Planet Facts ¶ 25. Loan proceeds of
$337,500 were wired to Ocwen, and Ocwen accepted the $337,500 in full satisfaction of the 2006
Mortgage. Wilmington Facts ¶23-26; Planet Facts ¶ 23. Deutsche Bank then discontinued the
2015 Foreclosure Action and released the 2006 Mortgage on the Residence. Wilmington Facts ¶
27-29; Planet Facts ¶ 27-29.
IRP Fund II Trust 1A (“IRP”) purchased the 2019 Loan and the 2019 Mortgage from
Planet Management on April 30, 2019. Wilmington Facts ¶ 33; Planet Facts ¶ 30. Verus was
formed in 2020 to issue a securitization of non-performing mortgage assets. Dellovo Dec. ¶ 8,
Adv. Pro. ECF No. 150-36. IRP transferred the 2019 Loan to Verus. Id. Wilmington serves as
the owner trustee of the Verus trust. Id. at ¶ 9. On May 2, 2022, Planet Management assigned
the 2019 Mortgage to Wilmington, as owner trustee for Verus. Id. at ¶10.
DISCUSSION
I. 	Standards for Summary Judgment
Summary judgment is appropriate when “the pleadings, the discovery and disclosure
materials on file, and any affidavits show that there is no genuine issue as to any material fact
and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

10
“In ruling upon a summary judgment motion, the court's job is not to resolve disputed
issues of fact, but to determine whether a genuine issue of fact exists.” Bethpage Fed. Credit
Union v. Freidman (In re Kabbalah Taxi Inc.), No. 17-45743-cec, Adv. Pro. No. 18-1016-cec,
2018 WL 3569314, at *2 (Bankr. E.D.N.Y. July 20, 2018) (citing Celotex Corp. v. Catrett, 477
U.S. 317, 330 (1986)). “Only disputes over facts that might affect the outcome of the suit under
the governing law will properly preclude the entry of summary judgment. Factual disputes that
are irrelevant or unnecessary will not be counted.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986).
“When viewing the evidence, the court must ‘assess the record in the light most favorable
to the non-movant and . . . draw all reasonable inferences in [the non-movant's] favor.’”
Weinstock v. Columbia Univ., 224 F.3d 33, 41 (2d Cir. 2000) (quoting Delaware & Hudson Ry.
Co. v. Consol. Rail Corp., 902 F.2d 174, 177 (2d Cir. 1990)).
A movant has the initial burden of establishing the absence of any genuine issue of
material fact, which burden may be discharged by pointing out the absence of evidence
supporting the non-moving party’s case. Celotex, 477 U.S. at 323–25. Rule 56 “requires the
nonmoving party to go beyond the pleadings and by her own affidavits, or by the ‘depositions,
answers to interrogatories, and admissions on file,’ designate ‘specific facts showing that there is
a genuine issue for trial.’” Id. at 324. “The nonmoving party must show that there is more than
a metaphysical doubt regarding a material fact and may not rely solely on self-serving
conclusory statements.” Rosenman & Colin LLP v. Jarrell (In re Jarrell), 251 B.R. 448, 450–51
(Bankr. S.D.N.Y. 2000) (internal citations omitted).
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

11
First Cause of Action
Cancellation of Deed Based upon Forgery or Fraud in Factum
(Against All Defendants)
Plaintiff seeks summary judgment that her conveyance of the Residence to Holdings is
void because the deed was procured by fraud in factum. 3 Pl. Mem. of Law 48, Adv. Pro. ECF
No. 152-1 (“Pl. MOL”). Plaintiff claims she did not knowingly convey title and believed the
documents she signed at closing were for a loan modification. Id. Further, Plaintiff argues the
2019 Mortgage is void because the deed is void. Id. at 49. The Planet Defendants and the
Wilmington Defendants seek summary judgment dismissing Plaintiff’s First Cause of Action,
alleging that Plaintiff knew she was signing a deed that conveyed the Residence to Holdings.
Planet Defendants’ Mem. of Law 5-8, Adv. Pro. ECF No.163-3; Wilmington Defendants’ Mem.
of Law 3-5, Adv. Pro. ECF No. 150-49.
Fraud in the factum, also known as fraud in the execution, is a claim that a party was
induced to sign something entirely different than what the party thought they were signing.
Ackerman v. Ackerman, 120 A.D.3d 1279, 1280 (App. Div. 2d Dep’t 2014); Whitehead v. Town
House Equities, Ltd., 8 A.D.3d 367, 368 (App. Div. 2d Dep’t 2004). If the grantor is tricked into
signing a deed believing it to be some other instrument, the signature is a forgery, and the deed is
invalid “to the same extent that it would have been if the grantor's signature had been actually
forged by a third person.” Grimes v. Green Point Sav. Bank (In re Grimes), 147 B.R. 307, 313
(Bankr. E.D.N.Y. 1992); see also First Natl. Bank of Odessa v. Fazzari, 10 N.Y.2d 394, 397
(1961) (finding fraud in the factum where party signed promissory note believing it to be
statement of wages earned); JPMorgan Chase Bank, Nat’l Ass’n v. Kalpakis, 30 Misc.3d
3 Plaintiff alleged in the Second Amended Complaint that her signature was forged. Am. Compl. Revised ¶67, Adv.
Pro. ECF No. 93 (“Because of the forgery of plaintiff’s name to the grant deed or the fraud in the factum in
obtaining plaintiff’s signature, the subject grant deed is null and void ab initio”). Plaintiff does not allege forgery in
her motion for summary judgment.
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

12
1236(A) (Sup. Ct. Suffolk Cnty. 2011) (“[It is] well settled that deeds and encumbrances that are
forged or executed under false pretenses are the result of fraud in the factum (a/k/a fraud in the
execution) and are void ab initio.”), aff'd sub nom. JP Morgan Chase Bank, Nat’l Ass'n v.
Kalpakis, 91 A.D.3d 722 (App. Div. 2d Dep’t 2012).
To prevail on a claim for fraud in the factum, the claimant must prove “there [was] a
‘misrepresentation as to the character or essential terms of a proposed contract,’ and the party
signed without knowing or having a ‘reasonable opportunity to know of its character or essential
terms.’” Hetchkop v. Woodlawn at Grassmere, Inc., 116 F.3d 28, 31–32 (2d Cir. 1997) (quoting
Restatement (Second) of Contracts § 163 cmt. a (Am. L. Inst. 1981)).
Plaintiff failed to introduce evidence supporting her claim of fraud in the factum.
Plaintiff testified she understood that by signing the deed, she was transferring the Residence to
someone else. Stephen’s Dep. Tr. 132:17-133:7; 167:17-24; 333:13-15; 343:20-23. Plaintiff
also testified she agreed to pay Bonaparte $10,000 for transaction costs and to negotiate with
Ocwen for the Residence to be sold to Woodburn in a short sale. Id. at 300:6-7; 342:14-17.
Further, Plaintiff signed the Sale Contract, which is some evidence that Plaintiff knew she was
transferring the Residence. Moreover, Plaintiff testified she regretted not selling the Residence
to someone else for $10,000. Id. at 161:9-19.
Plaintiff testified she transferred the Residence to avoid foreclosure and to get the
Residence back one day. Id. at 132:7-9 (“[Bonaparte] told me, I know a friend. If I put the
property in their name, I will get back my house.”); Id. at 331:20-332:6 (Plaintiff testified the
Residence would be put into Woodburn’s name, she would get nothing but, after a while, she
would get the Residence back.). Plaintiff testified that she believed after the Residence was
transferred, Plaintiff could stay in the Residence for two years and pay $2,500 monthly (toward
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

13
the mortgage on the Residence), then Holdings would convey the Property back to Plaintiff;
provided Plaintiff continued to pay the 2019 Mortgage. Id. at 297:22-298:1; 298:11-14; 299:9-
15; 299:20-300:20; 300:8-17; 301:19-302:6. Plaintiff testified she made the $2,500 monthly
payments, until Bonaparte told her to stop. Id. at 329:18-25- 330:2-14. Plaintiff also testified
she could get the Residence back if she refinanced the 2019 Mortgage. Id. at 337:22-338:9.4
Although Plaintiff’s testimony that she transferred the Residence with the belief the
Residence would be conveyed back to her is not refuted, her testimony does not support a claim
of fraud in factum. To the contrary, her testimony evidences she knew she was conveying the
Residence to Holdings, but Holdings breached its agreement to convey the Residence back to
her.
Plaintiff points to deposition testimony that she claims evidences that she signed the
documents under duress believing the documents were to refinance the 2006 mortgage, not to
transfer title. Pl. Mem Opp’n Planet Def. Mot. Summ. J. 3, Adv. Pro. ECF No. 173. The
portions of the deposition cited by Plaintiff, however, relate to Plaintiff’s other real estate
transactions, not Plaintiff’s transfer of the Residence to Holdings. Stephen’s Dep. Tr. 50-60
(Plaintiff describing transfer of 1487 East 53rd Street to Mr. Clarke); Id. at 80-90 (Plaintiff
describing her purchase of Residence, not her sale of Residence to Holdings and documents
related to 1487 East 53rd Street.).5
4 Plaintiff did not produce documents memorializing an agreement for Holdings, Woodburn, or Bonaparte to convey
the Residence to Plaintiff.
5 Plaintiff’s brief cites “Dep. Tr., June 3, 2025, at 50-60, 80-90; July 30, 2025, at 20-30”. Plaintiff was deposed on
June 3, 2025 and July 30, 2025. Plaintiff’s citation to Dep. Tr. July 30, 2025, 20-30 is error. The July 30, 2025
deposition starts at page 268 since it is the continuation of Plaintiff’s June 3, 2025 deposition. Pages 20 to 30 of the
PDF version of the July 30, 2025 deposition transcript are page numbers 286-296. Plaintiff’s testimony concerns
verification of documents, documents Plaintiff reviewed to prepare for the deposition, Holdings’ attempts to collect
money from Plaintiff after the Transfer Date, and Plaintiff’s loan to purchase the Residence, Pages 20 to 30 of the
June 3, 2025, deposition concern Plaintiff’s income, employment, and decision to purchase the Residence, not the
Debtor’s transfer of the Residence to Holdings in 2019.
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

14
Therefore, Plaintiff has failed to prove that Holdings procured the deed to the Residence
through fraud in the factum, Plaintiff’s motion for summary judgment on the First Cause of
Action is denied, and the Planet Defendants’ and the Wilmington Defendants’ motions to dismiss
the First Cause of Action is granted.
Second Cause of Action6
Recission of Equity Purchase Contract and Grant Deed, Declaratory Relief and Damages
(Against all Defendants)
Plaintiff seeks summary judgment that she may rescind7 the deed transferring the
Residence to Holdings and avoid the 2019 Mortgage under New York’s Home Equity Theft
Prevention Act (“HETPA”). HETPA is:
intended to prevent abusive and fraudulent practices by purchasers of distressed
properties who falsely promise to “save” properties and to reconvey them to the
homeowners at a future date. The Act regulates certain sales of distressed
properties, and imposes stringent procedural and substantive requirements for
sales contracts (“covered contracts”) between homeowners (“equity sellers”) and
purchasers (“equity purchasers”). [HETPA] imposes potential civil and criminal
penalties for violations on both equity purchasers as well as lending institutions,
and creates a right of rescission extending for two years after a sale.
Damaris E. Torrent, Prac Commentaries, McKinney’s Cons Laws of NY, N.Y. Real Prop. Law §
265-a.
Homeowners seeking rescission under HETPA must show: (1) the seller is an equity
seller; (2) the purchaser is an equity purchaser; (3) the agreement between the equity seller and
the equity purchaser is a covered contract; (4) the covered contract does not comply with
6 Plaintiff’s Memoranda of Law erroneously refers to her claim under New York Real Property Law Section 265-
a(8) as the First Cause of Action. Pl. Mem. Law, Adv. Pro. ECF No. 152-2, 12-15. This cause of action is asserted
as the Second Cause of Action in the Second Amended Complaint. Am. Compl. Revised, Adv. Pro. ECF No. 93, at
¶¶ 70-84.
7 Plaintiff’s Memoranda of Law concludes by requesting an award of “actual and statutory damages, including
$25,000 per RPL § 265-a violation, lost equity, attorneys’ fees, and punitive damages as pled.” Pl. Mot. Summ. J
50, Adv. Pro. ECF No. 152-1. However, Plaintiff has not briefed the issue of damages or provided evidentiary
support for an award of damages as against the Wilmington Defendants or the Planet Defendants under HETPA or
otherwise.
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

15
HETPA; and (5) the equity seller complied with HETPA’s requirements for rescinding a covered
contract. Id. The burden of proof is on the equity seller to prove its claim by a preponderance of
the evidence.
Plaintiff is an Equity Seller
HETPA defines “equity seller” as “a natural person who is a property owner or
homeowner at the time of the equity sale.” N.Y. REAL PROP. Law § 265-a (2)(f) (McKinney
2026). Plaintiff is an equity seller because she is a natural person, and she owned the Residence
as of the Transfer Date. Pl. Facts ¶ 3; Planet Counterstatement of Undisputed Facts ¶ 3, Adv.
Pro. ECF No. 169-2.
Holdings and Planet are Equity Purchasers
HETPA defines “equity purchaser” as “any person who or entity which acquires title to
any residence in foreclosure . . . except a person who acquires such title as a bona fide purchaser
or encumbrancer for value. N.Y. REAL PROP. Law § 265-a (2) (McKinney 2026).
Holdings is an equity purchaser because it is an entity that acquired title to the Residence
while it was in foreclosure. Planet Management contends it is not an equity purchaser because it
is a good faith encumbrancer for value.
Respecting good faith purchasers or encumbrancers for value, HETPA provides:
The provision of [New York Real Property Law Section 265-a(8) which grants
equity sellers the right of rescission] shall not affect the interest of a bona fide
purchaser or encumbrancer for value if such purchase or encumbrance occurred
prior to the recording of the notice of rescission . . . . Knowledge that the
property was residential real property in foreclosure or, where applicable, default
shall not impair the status of such persons or entities as bona fide purchasers or
encumbrancers for value. This subdivision shall not be deemed to abrogate any
duty of inquiry which exists as to rights or interests of person in possession of the
residential real property in foreclosure, or where applicable, default.
N.Y. REAL PROP. Law § 265-a (8)(c) (McKinney 2026). Generally, a mortgagee is under a duty
of inquiry if it is “aware of facts that would lead a reasonable, prudent lender to make inquiries
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

16
of the circumstances of the transaction at issue.” N.Y. REAL PROP. Law § 266 (McKinney
2026); see also Miller-Francis v. Smith-Jackson, 113 A.D.3d 28, 34 (App. Div. 1st Dep’t 2013)
(“If a ‘reasonable inquiry’ would reveal some evidence of fraud, then failure to ‘make some
investigation’ will divest the mortgagee of bona fide encumbrancer status”); Lucia v. Goldman,
68 A.D.3d 1064, 1066 (App. Div. 2d Dep’t 2009) (finding an allegation that mortgagee’s agent
was present at closing where transaction details were discussed was sufficient to allege that
mortgagee was chargeable with notice of the alleged fraud and HETPA violations). Based on the
foregoing, a mortgagee should have a duty of inquiry under HETPA if the mortgagee is aware of
facts that would lead a reasonable, prudent lender to inquire whether the transaction complied
with HETPA. If a reasonable inquiry would reveal some evidence that the transaction violated
HETPA, the mortgagee would not be good faith encumbrancer.
In connection with the origination of, and due diligence related to, the 2019
Mortgage, Planet Management received, among other things:
the Title Report; the Title Policy; the Loan Agreement; the Commercial
Mortgage; the Note; the Guaranty; the appraisal of the Subject Property; the
Deed and Transfer Documents; . . . Declaration of Non-Owner Occupancy
executed by 12706 Holdings; . . . Certificate of Business Purpose of Loan signed
by 12706 Holdings . . . .
Dec. in Support of Mot. Summ. J. (“Woods Aff.”) ¶ 54, Adv. Pro. ECF No. 164-40.
The deed that Planet Management received indicated that Plaintiff resided at the
Residence. Woods Aff. Ex. M-13. From the Title Report, Planet Management knew the
Residence was in foreclosure and the foreclosure sale was scheduled to occur nine days
prior to the 2019 Mortgage Loan closing. Woods Aff. ¶ 41; Woods Aff. Ex. F, Part 1,
Ex. F, Part 2; Ex. G.
Schedule B to the Title Insurance Policy that Planet Management received prior to the
closing lists exceptions from title insurance coverage, and states in relevant part:
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

17
21. Please advise the [title insurance] Company prior to closing if any mortgage
on the property is in arrears two or more months, or if the mortgage pay off letter
discloses any late payment charges. In either situation, a copy of the contract of
sale must be delivered to the company prior to closing so that the company can
review the contract for compliance with the Home Equity Theft Prevention Act.
Failure to notify the Company of either of these facts and to deliver a copy of the
contract prior to closing will result in a delay in the closing while the Company
reviews the contract for compliance with the Home Equity Theft Prevention Act.
42. At closing, the seller(s) must provide an affidavit that they are vacating the
subject premises and the purchaser(s) must provide an affidavit that they are
planning to occupy the premises or, they are a relative of the seller, a referee for
the foreclosing lender or a not-for profit/public housing authority or, the sale is
authorized by state statute or pursuant to a court order. An affidavit stating that
the purchaser is a bona-fide purchaser for value is not sufficient. Otherwise an
exception must be taken in both the owner and loan policy to the effect that
“Policy will except and not cover any harm, loss or damage including but not
limited to legal fees and expenses and/or loss of title arising from any violation
of the Home Equity Theft Prevention Act.” The exception does not have to be
raised when the seller does not occupy the property as his/her/their principal
residence. If this is the case, please take an affidavit to that effect.
Woods Aff. Ex. F, Part 1, Schedule B ¶¶ 21, 42.
Planet Management admits it obtained a title report and title insurance policy “[a]s is
standard in the mortgage lending industry.” Woods Aff. ¶ 38. The title insurance policy, title
report, and deed put Planet on notice that: Plaintiff was an individual; she resided in the
Residence; and the 2006 Mortgage was in foreclosure. Those documents also put Planet
Management on notice that the Residence was “residential real property” as that term is used in
HETPA. Planet Management does not allege it received, prior to closing on the 2019 Mortgage,
a copy of the Sale Contract or Plaintiff’s affidavit that the Residence was not her principal
residence. 8 Further, Planet Management does not allege it received Holding’s affidavit that it
8 Plaintiff executed an “Affidavit of ‘Arm’s Length Transaction” representing that “[t]here are no agreements . . .
between the parties that the [Plaintiff] will remain in the [Residence] as a tenant or later obtain title or ownership of
the [Residence], except to the extent that the [Plaintiff] is permitted to remain as a tenant [in the Residence] for a
short terms, as is common and customary in the market, but no longer than ninety (90) days, in order to facilitate
relocation.” Stephens Dep. Tr., Ex. R annexed as Ex. E. to Mulvaney Dec., Adv. Pro. ECF 169-28. The affidavit is
on Ocwen Loan Servicing LLC letterhead, suggesting Plaintiff delivered the affidavit to Ocwen. The Planet
Defendants do not allege they received the Affidavit prior to closing.
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

18
was planning to occupy the Residence. To the contrary, Planet Management admits it received
Holding’s affidavit that it did not intend to occupy the Residence. Woods Aff. Ex. M-12.
Schedule B of Planet Management’s title insurance policy instructed Planet Management
to obtain the Sale Contract and affidavits from the Plaintiff and Holdings to enable the insurance
company to determine whether the transaction was HETPA compliant. Planet Management does
not contend it received those documents prior to closing the 2019 Mortgage. Had it obtained the
Sale Contract, it would have known that the Sale Contract did not comply with HETPA. See
infra at 19-21.
Under HETPA, Planet Management’s knowledge of the foreclosure sale would not
deprive Planet Management of its good faith encumbrancer status. N.Y. REAL PROP. Law §265-
a (8)(c) (McKinney 2026). However, once Planet Management had notice that: the Residence
was “residential real property,” Plaintiff may be an “equity seller,” Holdings may be an “equity
purchaser,” and its title insurer required additional documents to determine whether the sale
complied with HETPA, Planet Management had a duty of inquiry. If Planet management had
made a reasonable inquiry, it would have learned that the Plaintiff was an equity seller, Holdings
was an equity purchaser, the Residence was residential real property, and the Sale Contract did
not comply with HETPA. The Court finds Planet Management’s failure to make inquiry by
obtaining a copy of the Sale Contract, Plaintiff’s affidavit that she did not reside in the
Residence, or Holding’s affidavit concerning its intent to reside in the Residence prior to closing
the 2019 Mortgage, all as required by the title insurance policy, was not reasonable, especially
in light of Planet Management’s admission that obtaining title insurance was the industry
standard. Therefore, Planet Management is not a good faith encumbrancer and is an equity
purchaser under HETPA.
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

19
Wilmington admits that prior to acquiring the loan from Planet Management, Verus
received a title report, dated March 12, 2019, the Loan Policy of Title Insurance issued by WFG
National Title Insurance Company, Declaration of Non-Owner Occupancy executed by
Holdings, and the Certificate of Business Purpose of Loan signed by Holdings. Wilmington
Facts ¶¶ 35, 37; Dellavo Dec. ¶ 6, Adv. Pro. ECF No. 150-36. Therefore, like Planet
Management, Wilmington had notice that the Plaintiff was an equity seller, Holdings was an
equity purchaser, and the Sale Contract was potentially a covered contract under HETPA. Like
Planet Management, Wilmington does not allege it requested a copy of the Sale Contract or
performed other diligence to determine whether the sale violated HETPA. Therefore,
Wilmington is not a good faith encumbrancer and is an equity purchaser under HETPA.
The Sale Contract Qualifies as a Covered Contract
HETPA defines a covered contract as:
any contract, agreement, or arrangement, or any term thereof, between an
equity purchaser and equity seller which:
(i) is incident to the sale of a residence in foreclosure; or
(ii) is incident to the sale of a residence in foreclosure or default where
such contract, agreement or arrangement includes a reconveyance
arrangement; or
(iii) is incident to the sale of a residence that is the collateral for a
“distressed home loan” as defined in paragraph (d) of subdivision one of
section two hundred sixty-five-b of this article.
N.Y. REAL PROP. Law § 265-a (2)(c) (McKinney 2026).
HETPA defines “residence” as residential real property consisting of one to four-family
dwelling units, one of which the equity seller occupies or occupied at a time immediately prior to
the equity sale as his or her primary residence. N.Y. REAL PROP. Law § 265-a (2)(k) (McKinney
2026). HETPA defines “foreclosure” to include “an active notice of pendency filed in court . . .
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

20
or a foreclosure action . . . has been commenced against the subject property. . . .” N.Y. REAL
PROP. Law § 265-a (2)(g) (McKinney 2026). HETPA defines “distressed home loan” to include
a loan incurred by a homeowner primarily for personal, family or household purposes, secured
by a mortgage on residential real property. N.Y. REAL PROP. Law §§ 265-a (2)(c)(iii), 265-b
(1)(d) (McKinney 2026).
As set forth above, Plaintiff is an equity seller, and Holdings, Planet Management, and
Wilmington are equity purchasers. The Residence is a two-family house in which Plaintiff
resided immediately prior to Plaintiff’s sale of the Residence to Holdings. Pl. Facts ¶ 2; Resp.
and Counterstatement of Undisputed Facts (“Planet Response”) ¶ 2, Adv. Pro. ECF No. 169-1;
Stephen’s Dep. Tr. 216:18-25. Therefore, the Residence is a “residence” or “residential real
property” as defined by HETPA. Deutsche Bank commenced a foreclosure action and filed a
notice of pendency prior to the date of the Sale Contract. Pl. Facts ¶ 4; Planet Response, ¶ 4.
Plaintiff was in default under her mortgage prior to the date of the Sale Contract. Stephen’s Dep.
Tr. 234:25-236:7. Accordingly, the Sale Contract is a covered contract under HETPA section
265-a (2)(i). Under HETPA section 265-a (2) (iii), Plaintiff may rescind the conveyance of the
Residence and void the 2019 Mortgage, if the Sale Contract does not comply with HETPA, and
Plaintiff complies with HETPA’s requirements to effectuate rescission.
The Sale Contract Does Not Comply With HETPA
HETPA requires covered contracts to include a notice to the equity seller that the equity
seller may cancel the contract and to provide the date and time of the deadline for cancellation.
N.Y. REAL PROP. Law § 265-a (4)(i) (McKinney 2026). That notice must be in “immediate
proximity to the space reserved for the equity seller’s signature” and in “at least fourteen point
bold type.” Id. Additionally, the covered contract must be accompanied by a form providing
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

21
instructions for the cancellation of the covered contract. N.Y. REAL PROP. Law 265-a (4)(i), (6)
(McKinney 2026).
The Sale Contract does not comply with HETPA because the Sale Contract lacks
the cancellation notice. Sale Contract, Stephen’s Dep. Tr. Ex. J, Mulvaney Dec. Ex. D,
Adv. Pro. ECF No. 169-20. Further, there is no evidence that Plaintiff was provided with
the instructions to cancel the Sale Contract.
Plaintiff Failed to Comply with HETPA’s Requirements Regarding Rescission
A HETPA violation may entitle an equity seller to rescind a conveyance of real
property; provided the equity seller seeks rescission within “two years from the date of
the recording of the conveyance of the residential real property in foreclosure or, where
applicable, default.” N.Y. REAL PROP. Law § 265-a (8)(a) (McKinney 2026). To
exercise the right of rescission, the equity seller must:
(1) give written notice to the equity purchaser and his or her successor in interest, if the
successor is not a bona fide purchaser or encumbrancer. The notice of rescission
shall contain the name of the equity seller and the name of the equity purchaser in
addition to any successor in interest holding record title to the residential real
property and shall particularly describe such residential real property;
(2) record such notice with the county clerk of the county in which the property is
located, within two years of the date of the recording of the conveyance to the equity
purchaser; and
(3) return to the equity purchaser any consideration received from the equity purchaser as
part of the original transaction.
N.Y. REAL PROP. Law § 265-a (8)(b) (McKinney 2026). The equity purchaser and their
successors in interest (excluding bona fide purchasers or encumbrancers for value) have twenty
days after the delivery of the notice to reconvey title to the property free and clear of
encumbrances created subsequent to the rescinded transaction and which are due to the actions of
the equity purchaser. Id. Upon failure to reconvey title within such time, the equity seller may
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

22
bring an action to enforce the rescission and for cancellation of the covered contract and deed.
Id.
Plaintiff provided the Court with a document titled “Recission Notice Pursuant To
Real Property Law 265-a.” Recission Notice, Adv. Pro. ECF No. 154-21. The notice
states, among other things, that the equity purchaser is Holdings. The notice is signed by
Plaintiff’s counsel of record in this adversary proceeding and is dated November 18,
2021. Id. Plaintiff also provided an image of a document signed by Plaintiff’s counsel of
record in this adversary proceeding, dated November 18, 2021, that states:
TO THE CLERK OF THE COUNTY OF QUEENS, NEW YORK
You are hereby directed to Index the foregoing Rescission Notice pursuant to
Real Property Law §265-a98) [sic] to the names of each of the following
individuals’ entities and attorneys.
Id. The names on the list are: Holdings, Woodburn, and United American Title Agency,
LLC. Id. Plaintiff also includes images of three Certified Mail Receipts, dated
November 19, 2021, indicating mail was sent to Holdings, Woodburn, and United
American Title Agency, LLC. Id. Plaintiff did not provide the Court with the Recording
and Endorsement Cover Page for the deed conveying the Residence from Plaintiff to
Holdings or other evidence of the date on which that deed was recorded.
Neither Plaintiff’s conveyance of the Residence to Holdings nor Holding’s
conveyance of the 2019 Mortgage to Planet Management are subject to rescission
because Plaintiff has not satisfied her burden of proof that she complied with HETPA
section 265-a (8)(b). First, the notice of rescission is not authenticated. Notwithstanding
that the notice is signed by Plaintiff’s attorney and was filed on the Adversary Proceeding
docket by Plaintiff’s attorney, Plaintiff has not provided an affidavit, from someone with
firsthand knowledge that the notice is a true and correct copy of the notice purportedly
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

23
delivered to Holdings, Woodburn and the title company. Second, Plaintiff failed to
provide proof of service of the notice. The images of the certified mail receipts are
insufficient to prove service because there is no affidavit from someone with firsthand
knowledge that the notice was served on Holdings, Woodburn, and United American
Title Agency, LLC. Third, Plaintiff failed to provide proof that the notice was recorded,
or the notice was delivered to or received by the Queens County Clerk.
Importantly, the notice does not name Planet Management or Wilmington as
equity purchasers and does not allege service of the rescission notice on the Planet
Defendants or the Wilmington Defendants. Even if the notice of recission was timely
served and recorded, the notice would not affect a rescission of the 2019 Mortgage due to
Plaintiff’s failure to include Planet Management or Wilmington on the notice.
Finally, Plaintiff does not provide evidence that she intends to return to Planet
Management the consideration she received for the Residence, which is a condition to
rescission under HETPA. N.Y. REAL PROP. Law § 265-a (8)(b)(3) (McKinney 2026).
To the contrary, Plaintiff argues “[n]o tender is required given nominal consideration and
fraud. Pl. MOL 15-16. Plaintiff contends she received no consideration or only nominal
consideration for the residence. Id. at 2, 6, 12. However, the Residence’s sale price of
$337,000 was wired to Ocwen to satisfy Plaintiff’s obligations under the 2006 Mortgage.
Planet Facts ¶ 19; Wilmington Facts ¶ 26. After receipt, Deutsche Bank discontinued the
2015 Foreclosure Action. Planet Facts ¶¶ 30-32; Wilmington Facts ¶¶ 27-29.
Notwithstanding the proceeds for the Residence were not paid directly to Plaintiff,
Plaintiff received the benefit of $337,500 of the loan proceeds because the proceeds
satisfied Plaintiff’s debt to Deutsche Bank in full. See Thales Alenia Space France v.
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

24
Thermo Funding Co., LLC, No. 13-CV-712, 2014 WL 3887711, at *4 (S.D.N.Y. Aug. 7,
2014) (Under New York law, promisee may pay consideration to the promisor or some
other person); Cnty. Tr. Co. of New York v. Mara, 242 A.D. 206, 210-11 (App. Div. 1st
Dep’t 1934) (“To have an adequate consideration for a promise, the benefit need not
move to the promisor, and the discharge of one person from liability under a debt is a
sufficient consideration for the promise of another to pay”); Corning Federal Credit
Union v. Georgilis, 217 A.D.3d 828, 830 (App. Div. 2d Dep’t 2023) (mortgagee’s
payment of real property grantor’s creditors, including prior mortgagee, is consideration
for purposes of New York’s former Debtor and Creditor Law 273); see also 22 N.Y. Jur.
2d Contracts § 62 (“Consideration may be given to the promisor or to some other person
or by the promisee or by some other person. Thus, to constitute an adequate consideration
for a promise, the benefit need not move to the promisor as it may move to a third
person.”).
For the reasons set forth above, Plaintiff’s motion for summary judgment to
rescind the deed and avoid the 2019 Mortgage under HETPA is denied and the Planet
Defendants’ and the Wilmington Defendants’ motions to dismiss the Second Cause of
Action are granted.
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

25
Third Cause of Action
Quiet Title
(Against all Defendants and Does 1 through 200, inclusive)
Tenth Cause of Action
New York Real Property Actions and Proceedings Law, Article 159
In an action to quiet title, the plaintiff must prove actual or constructive possession of the
property and the existence of a removable cloud on the property, which can be a deed or other
instrument, that is invalid or inoperative. Nurse v. Rios, 160 A.D.3d 888, 888 (App. Div. 2d
Dep’t 2018) (collecting cases); see Acocella v. Wells Fargo Bank, NA, 139 A.D.3d 647, 649
(App. Div. 2d Dep’t 2016).
Under Article 15 of the New York Real Property Actions and Proceedings law, “a person
[that] claims an estate or interest in real property . . . may maintain an action against any other
person . . . to compel the determination of any claim adverse to that of the plaintiff which the
defendant makes.” N.Y. REAL PROP. Acts. Law § 1501 (McKinney 2023). Claims under Article
15 are similar but not identical to actions to quiet title. The difference is that in Article 15
proceedings, “the law permits the defendant, who has been brought in as a claimant, to set up its
own title and demand affirmative relief.” 17 Theodore Z. Wyman, J.D., Carmody-Wait § 101:4
(2d ed. 2023). “To obtain summary judgment in an action to quiet title pursuant to RPAPL
Article 15, the movant must establish, prima facie, that it holds title, or that the nonmovant's title
claim is without merit.” Corriette v. Mele, 244 A.D.3d 679, 682 (App. Div. 2d Dep’t 2025).
Plaintiff’s arguments are not clear, but it appears Plaintiff seeks summary judgment on
her Third and Tenth Causes of Action to restore her to title to the Residence, free of the 2019
Mortgage, because her transfer of the Residence to Holdings is subject to rescission under
9 The Amended Complaint does not identify the Defendants that are the subject of this cause of action.
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

26
HETPA or void due to fraud in the factum. Pl. MOL 31-32. The Wilmington Defendants seek
judgment dismissing Plaintiff’s Third and Tenth Causes of Action arguing that Plaintiff failed to
prove that Holdings acquired the deed to the Residence by fraud and Wilmington is a good faith
encumbrancer. Wilmington Mem. Law Supp. Mot. Summ. J., Adv. Pro. ECF 150-48. Although
Plaintiff moved for summary judgment on these claims, Plaintiff objected to Wilmington’s
request for summary judgement arguing there are material facts in dispute. Pl. Mem. Law Opp’n
12, Adv. Pro. ECF No. 168-2. In that regard, Plaintiff argues there is a dispute as to whether
Plaintiff occupies the Residence. Id. at 13. However, Wilmington does not contend that Plaintiff
lacks possession of the Residence. Wilmington Reply Mem. Law 8, Adv. Pro. ECF No. 170.
As set forth above, Plaintiff is not entitled to rescission under HETPA or to avoid the
transfer of the Residence to Holdings based on fraud in the factum. See supra at 14, 24. Also, as
discussed above, under New York Real Property Law section 266, the rights of a bona fide
encumbrancer for value will be protected, unless it appears that such purchaser or incumbrancer
had previous notice, whether actual or constructive, of the fraudulent intent of his immediate
grantor, or of the fraud rendering void the title of such grantor. See supra at 16; see In re
Doresca, No. 8-16-75006-LAS, Adv. Pro. No. 8-17-8213-LAS, 2023 WL 2639573, at *6
(Bankr. E.D.N.Y. Mar. 24, 2023). “A mortgagee will be charged with constructive notice if it is
aware of facts that would lead a reasonable, prudent lender to make inquiries of the
circumstances of the transaction at issue. . . . If a ‘reasonable inquiry’ would reveal some
evidence of fraud, then failure to ‘make some investigation’ will divest the mortgagee of bona
fide encumbrancer status.” Miller-Francis, 113 A.D.3d at 34 (citations omitted); see Lucia, 68
A.D.3d at 1066 (finding an allegation that mortgagee’s agent was present at closing where
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

27
transaction details were discussed was sufficient to allege that mortgagee was chargeable with
notice of the alleged fraud and HETPA violations).
To obtain the protections of a good faith encumbrancer for value, Wilmington would bear
the ultimate burden of proof to show that Planet Management, the assignor, had no knowledge of
the alleged fraud or of facts that would have led a reasonable mortgagee to make inquiry of the
possible fraud at the time the 2019 Mortgage was granted to Holdings, or, if Planet Management
was on notice, it conducted reasonable diligence. JP Morgan Bank v. Munoz, 85 A.D. 3d 1124,
1126 (App. Div. 2d Dep’t 2011); see Pennymac Corp. v. Dean-Phillips, 189 A.D.3d 1603, 1604
(App. Div. 2d Dep’t 2020) (Finding mortgagee was not bona fide encumbrancer for value based
on failure to make inquiry. Mortgagee’s assignee was not encumbrancer for value because “[a]n
assignee stands in the shoes of the assignor and takes the assignment subject to any preexisting
liabilities”); Rambaran, 97 A.D.3d at 804 (“[a]n assignee stands in the shoes of the assignor and
takes the assignment subject to any preexisting liabilities”).
Plaintiff argues she was defrauded in a foreclosure rescue scam as evidenced by the
occupancy agreement that Woodburn imposed on Plaintiff as a condition to remining in
possession of the Residence. Pl. Mem. Law Opp’n 12-13, Adv. Pro. ECF No. 168-2. However,
Plaintiff does not allege the Planet Defendants had notice or knowledge of the occupancy
agreement. In that regard, Plaintiff alleges she executed the occupancy agreement ten months
after Planet Management closed on the 2019 Mortgage and loan. Pl. Facts ¶ 34 (“On January 1,
2020, a "Contract - Use and Occupancy Agreement" was executed between [Holdings] (as
owner) and Calvin Stephens, [Plaintiff], John Doe(s), and Jane Doe(s) (as occupants) for the
[Residence]”). Further, Plaintiff has not provided evidence that the Wilmington Defendants had
notice of the occupancy agreement when the 2019 Mortgage was assigned from Planet
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

28
Management to Wilmington. See Wilmington Facts ¶¶ 35, 37; Dellavo Dec. ¶ 6, Adv. Pro. ECF
No. 150-36. Plaintiff has not come forward with any other evidence from which this Court can
conclude that the Planet Defendants had notice of the “rescue scam” prior to the Transaction
Date or that the Wilmington Defendants had notice of the alleged scam prior to acquiring the
2019 Loan or the 2019 Mortgage.
As set forth above, the Planet Defendants and the Wilmington Defendants had notice that
Plaintiff’s sale of the Residence violated HETPA, and for that reason, the Court determined that
the Planet Defendants and the Wilmington Defendants were not good faith encumbrancers under
HETPA. However, HETPA permits equity sellers to rescind sales even if there is no fraud.
Instead, rescission is permitted if the covered contract fails to include the HETPA disclosures. In
contrast, New York Real Property Law section 266 would permit a court to avoid a transfer only
if there is fraud. Although the title report, the title insurance policy, and Holdings affidavit put
the Planet Defendants and the Wilmington Defendants on notice of a HETPA violation, those
documents did not put the Planet Defendants or the Wilmington Defendants on notice of fraud.
As Plaintiff has failed to introduce evidence that the Planet Defendants or the
Wilmington Defendants had notice of any facts, whether actual or constructive, of Holdings’,
Woodburn’s, or Bonaparte’s alleged scheme to defraud Plaintiff, the Planet Defendants and the
Wilmington Defendants are good faith encumbrancers, as defined by New York Real Property
Law section 266, notwithstanding the Planet Defendants and Wilmington Defendants are not
good faith encumbrancers and are equity purchasers under HETPA.
Therefore, the Wilmington Defendants’ motion for summary judgement is granted and
Plaintiff’s Third and Tenth Causes of Action are dismissed solely to the extent those causes of
action seek to avoid the 2019 Mortgage.
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

29
Fifteenth Cause of Action A
(Fraudulent Conveyance, Section 273 of NY Debtor Creditor Law)
(Against All Defendants)
Fifteenth [sic] Cause of Action B
(Fraudulent Conveyance, Section 275 of NY Debtor Creditor Law)
(Against All Defendants)
Fifteenth [sic] Cause of Action C
(Fraudulent Conveyance, Section 273 and 275 of NYCD law, 11 U.S.C. §544)
(Against All Defendants)
Sixteenth Cause of Action
(Recovery of Fraudulent Transfer under 11 U.S.C. § 550)
(Against All Defendants)
Seventeenth Cause of Action
Avoidance of and Recovery of Fraudulent Transfers from Planet Enterprise
Plaintiff seeks judgment under Bankruptcy Code sections 522(g) and (h) and New York’s
Fraudulent Conveyance Act (“UFCA”)10 sections 273 and 275, avoiding the Plaintiff’s transfer of
the Residence to Holdings, avoiding Holding’s conveyance of the 2019 Mortgage to Planet
Management, recovering the 2019 Mortgage lien from Wilmington, and exempting the
Residence. Pl. Mot. Summ. J. 34-19, Adv. Pro. ECF No. 152-1.
Bankruptcy Code section 522(h) states:
(h) The debtor may avoid a transfer of property of the debtor or recover a setoff to
the extent that the debtor could have exempted such property under subsection
(g)(1) of this section if the trustee had avoided such transfer, if--
(1) such transfer is avoidable by the trustee under section 544, 545, 547, 548, 549,
or 724(a) of this title or recoverable by the trustee under section 553 of this title;
and
(2) the trustee does not attempt to avoid such transfer.
11 U.S.C. § 522(h). Bankruptcy Code section 522(g) states:
10 In December 2019, New York’s Fraudulent Conveyance Act (the “UFCA”) was repealed and replaced with the
Uniform Voidable Transactions Act (the “UVTA”). The UVTA became effective on April 4, 2020, but does not
apply to transfers occurring before the UVTA’s effective date. N.Y. Debt. & Cred. Law § Ch. 12, art. 10, Refs
Annos (McKinney 2020). Accordingly, the Court analyzes these causes of action under the UFCA.
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

30
(g) Notwithstanding sections 550 and 551 of this title, the debtor may exempt
under subsection (b) of this section property that the trustee recovers under section
510(c)(2), 542, 543, 550, 551, or 553 of this title, to the extent that the debtor
could have exempted such property under subsection (b) of this section if such
property had not been transferred, if--
(1)(A) such transfer was not a voluntary transfer of such property by the debtor;
and
(B) the debtor did not conceal such property; or
(2) the debtor could have avoided such transfer under subsection (f)(1)(B) of this
section.
11 U.S.C. § 522(g). Under Bankruptcy Code sections 522(g) and (h), “a debtor may avoid a
transfer if 1) it is avoidable by the trustee under sections 544 or 548; 2) the trustee does not
attempt to avoid the transfer; 3) the debtor could exempt the property if the trustee recovered it
under section 550; 4) the transfer was involuntary; and 5) the debtor did not conceal the
property.” Davis v. Suderov (In re Davis), 169 B.R. 285, 290 (E.D.N.Y. 1994).
There is no dispute: the Chapter 13 Trustee is not attempting to avoid the Plaintiff’s
transfer of the Residence or the 2019 Mortgage; Plaintiff could exempt the Residence if the
Chapter 13 Trustee had recovered it under Bankruptcy Code section 550; or that Plaintiff did not
attempt to conceal the Residence.
However, before considering whether Plaintiff’s transfer was involuntary and voidable as
a fraudulent conveyance, the Court must determine whether Plaintiff has standing to bring state
law fraudulent conveyance claims under Bankruptcy Code section 544. Densmore v. Litton
Loan Servicing, L.P. (In re Densmore), 445 B.R. 307, 312 (Bankr. D. Vt. 2011) (“The Court is
obligated to raise an issue implicating standing sua sponte, even if the parties fail to raise it,
because it implicates the Court's subject matter jurisdiction.”).
The Plaintiff would have standing to bring fraudulent conveyance claims under
Bankruptcy Code section 544 only if the trustee would have standing to bring such claims. 11
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

31
U.S.C. § 522(h)(1). A trustee has standing to avoid transfers under Bankruptcy Code section 544
if there exists an unsecured creditor, with an allowable claim against the bankruptcy estate, that
could avoid the transfer under applicable state law. Mendelsohn v. Kovalchuk (In re APCO
Merch. Servs., Inc.), 585 B.R. 306, 314 (Bankr. E.D.N.Y. 2018).
As stated by Judge Louis Scarcella in In re APCO Merch. Servs., Inc.:
The power given to a trustee under § 544(b) to avoid a transfer or obligation is
derivative, that is, there must be an actual existing creditor holding an allowable
unsecured claim who would have had that right outside of bankruptcy. “In order
for a trustee to maintain an action for avoidance of a fraudulent conveyance, the
trustee must show that at least one of the present unsecured creditors of the estate
holds an allowable claim, against whom the transfer or obligation was invalid
under applicable state or federal law.”
585 B.R. at 314 (quoting Young v. Paramount Commc'ns Inc. (In re Wingspread Corp.), 178
B.R. 938, 945 (Bankr. S.D.N.Y. 1995)). The burden of proof is on Plaintiff to prove she has
standing under 544(b) to bring the UFCA claims. Id.
Constructive fraudulent conveyances under former New York Debtor and Creditor Law
Sections 273 and 275 are avoidable only by existing creditors and not by future creditors. Shelly
v. Doe, 249 A.D.2d 756, 757-58 (App. Div. 3d Dep’t 1998). Therefore, Plaintiff must prove
there is a creditor that had an allowable claim as of the Petition Date that also had a claim as of
the Transfer Date. Silverman v. Sound Around, Inc. (In re Allou Distributors, Inc.), 392 B.R. 24,
31-32 (Bankr. E.D.N.Y. 2008). Although the creditor must be the same creditor on both the
Transfer Date and the Petition Date, the creditor need not hold the same claim on the Petition
Date as it did on the Transfer Date. In re Allou Distributors, Inc., 392 B.R. 24, 34 (Bankr.
E.D.N.Y. 2008). For example, a creditor whose claim is based on a revolving line of credit (e.g.,
credit card debt) that was owed a debt when a transfer was made where the account balance was
bought to zero after the transfer, may be a qualifying creditor if the debtor then incurred
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

32
additional charges and a balance was owed as of the petition date. In re Bushey, 210 B.R. 95,
101 (6th Cir. BAP 1997).
Plaintiff has not identified a qualifying creditor in her Motion for Summary Judgment.
At oral argument, Plaintiff requested the Court take judicial notice of the proofs of claim filed on
the claims register of this case. A bankruptcy judge may take judicial notice of a bankruptcy
court's records. See Fed. R. Evid. 201(c); Staten Island Savings Bank v. Scarpinito (In re
Scarpinito), 196 B.R. 257, 267 (Bankr. E.D.N.Y. 1996). Additionally, a properly executed and
filed proof of claim is prima facie evidence of the validity and amount of a claim. Fed. R.
Bankr. P. 3002(f). However, a court may not infer the truth of the facts contained in documents
of which it has taken judicial notice, unless the contents are otherwise admissible under the rules
of evidence. See Kramer v. Time Warner Inc., 937 F.2d 767, 774 (2d Cir. 1991) (courts may
take judicial notice of publicly filed documents but not for the truth of the matters asserted).
Accordingly, the Court may take judicial notice that creditors filed proofs of claim, the claims
are valid, and the creditors were owed the amounts set forth on the proofs of claim as of the
Petition Date. However, the proofs of claim are not prima facie evidence of, and the Court may
not take judicial notice that, the creditors that filed the claims were creditors as of the Transfer
Date. Rather, Plaintiff was required to introduce some evidence that one of Plaintiff’s creditors
was owed a debt as of the Transfer Date. Based on the foregoing, Plaintiff’s claims to avoid and
recover the Residence must be dismissed due to Plaintiff’s failure to prove standing. Ries v.
Wintz Props., Inc. (In re Wintz Cos.), 230 B.R. 848, 858 (B.A.P. 8th Cir. 1999).
As the Plaintiff has not established standing, the Court will not address the elements of
the Plaintiff’s causes of action, except to note that as set forth above, the record would support a
finding that the Plaintiff’s transfer of the Residence was voluntary because she knew she was
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

33
transferring ownership, even if she hoped Holdings would convey the Residence back to her.
The record also would support a finding that Plaintiff received consideration for the transfer
because Holdings caused Planet Management to transfer over $300,000 to Ocwen in full
satisfaction of the 2006 Mortgage loan.
Therefore, Plaintiff’s motion for summary judgment on her Fifteenth Cause of Action (A,
B, and C), Sixteenth Cause of Action, and Seventeenth Cause of Action is denied and those
causes of action are dismissed as against the Planet Defendants and the Wilmington Defendants.
Wilmington Defendants’ Counterclaim for Equitable Subrogation
Wilmington seeks equitable subrogation to the 2006 Mortgage if the Court avoids the
2019 Mortgage. Although the Court is dismissing Plaintiff’s claims to avoid the Mortgage, the
Court will address Wilmington’s counterclaim.
“Under the doctrine of equitable subrogation, where the ‘property of one person is used
in discharging an obligation owed by another or a lien upon the property of another, under such
circumstances that the other would be unjustly enriched by the retention of the benefit thus
conferred, the former is entitled to be subrogated to the position of the obligee or lien-holder.’”
Lucia v. Goldman, 145 A.D.3d 767, 769 (App. Div. 2d Dep’t 2016); see Wells Fargo Bank, N.A.
v. Dalfin, 169 A.D.3d 970, 972 (App. Div. 2d Dep’t 2019) (Mortgagee may be entitled to
equitable subrogation even if mortgagor’s signature was forged provided mortgagee had not
actively engaged in fraud and lacked actual notice of fraud or had unclean hands); Lombard v.
Yacoob, 168 A.D.3d 919 (App. Div. 2d Dep’t 2019) (mortgage assignee entitled to equitable lien
on real property for paying off mortgagor’s original mortgage, notwithstanding deed and original
mortgage had been avoided because deed had been procured through a home rescue scam).
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

34
In Lucia v. Goldman, the court granted a mortgagee an equitable subrogation lien,
notwithstanding the mortgagee’s lien was avoided under HETPA because the mortgagee was not
a good faith encumbrancer. 145 A.D.3d at 768. The trial court found that the mortgagee failed
to recognize certain warning signs at the closing, which would have led a reasonable, prudent
lender to make further inquiry before proceeding with the transaction. Id. However, the trial
court also found the mortgagee did nothing to actively facilitate the equity purchaser’s fraud and
the equity seller would receive a windfall if the mortgagee did not receive an equitable lien
because the mortgagee paid the equity seller’s existing mortgage and other amount on behalf of
the equity seller. Id. The equity seller appealed arguing the trial court erred in awarding the
mortgagee an equitable subrogation lien because the trial court already had determined the
mortgagee was not a good faith encumbrancer. Id. Therefore, the request for equitable
subrogation should have been denied under the doctrine of unclean hands. Id. at 769. The
Appellate Division, however, affirmed the trial court reasoning:
The doctrine of unclean hands applies when the offending party “is guilty of
immoral, unconscionable conduct” directly related to the subject matter in
litigation and which conduct injured the party seeking to invoke the doctrine.
Here, although Chase was charged with knowledge of information which would
have caused a prudent lender to inquire as to the circumstances of the transaction,
the Supreme Court did not find that it had actual notice of the fraud or that it did
anything to actively facilitate the fraud. There was no evidence that Chase “was a
willing participant in a mortgage [rescue] scheme”. Accordingly, the plaintiff
failed to show that Chase was guilty of immoral, unconscionable conduct, and the
court properly imposed equitable liens against the premises for the portion of the
Chase mortgage which was used to satisfy the plaintiff's prior mortgage and
amounts advanced by Chase for the payment of real estate taxes and insurance.
Lucia, 145 A.D.3d at 769 (internal citations omitted).
Here, Plaintiff has failed to introduce evidence that the Planet Defendants or the
Wilmington Defendants had actual notice of the alleged fraud or that they actively participated in
the fraud. Further, Planet Management funded a $337,500 payment to Ocwen that satisfied the
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38

35
2006 Mortgage in full, and Plaintiff would receive a windfall if the 2019 mortgage lien were to
be avoided and Wilmington did not receive an equitable subrogation lien. Therefore, if the Court
had avoided the 2019 Mortgage, Wilmington, as successor to Planet Management, would have
been entitled to an equitable subrogation lien on the Residence.
CONCLUSION
For the reasons set forth above, Plaintiff’s motion for summary judgment is denied to the
extent Plaintiff requested judgment against the Planet Defendants and the Wilmington
Defendants on Plaintiff’s First, Second, Third, Tenth, Fifteenth (A, B, and C), Sixteenth, and
Seventeenth Causes of action. The Planet Defendants’ and the Wilmington Defendants’ motions
for summary judgment are granted and those causes of action are dismissed as to the Planet
Defendants and the Wilmington Defendants.
SO ORDERED:
____________________________
Jil Mazer-Marino
Chief United States Bankruptcy Judge
Dated: July 1, 2026
Brooklyn, New York
Case 1-22-01037-jmm Doc 185 Filed 07/01/26 Entered 07/01/26 17:08:38