SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
---------------------------------------------------------------
x
A YANA RUSH, GUL MAGSOOD, ANGEL
OSMANZAI, RAHIM MAQSOOD, MOHAMMED
SHUKRAN, RITA IDAVOY, REBECCA VERNA,
BRIAN VERNA, ARIEL CROSS-EDWARDS
Plaintiffs,
Index No. 3605/2011
-againstAssigned to Justice
Steven M. Jaeger
SAVE MY HOME CORP., SAVE MY HOME
NOW, INC., SAVE MY HOME TODAY INC.,
SAVE MY HOME U.S.A., INC., BENJAMIN
ABRAHAM, AMIT SINGH, DANIELLE DOE,
HUMA HALIMI (aJkJa HELEN HALIMI), NAVIN
MENON (aJkJa NA VIN MENIN, aJkJa NOVIN
MENON), CHRIS MARINO, THE SELIG LAW
GROUP, P.C., EXPRESS MODIFICATIONS INC.,
DAVID GOTTERUP, EXPRESS HOME
SOLUTIONS, INC. (aJkJa EXPRESS HOME 411,
aJkJa EXPRESS DEBT SOLUTIONS), KENNETH
SAROSI, BRIAN MANGAN, MICHAEL
ANDERSON, SANDRA GONZALEZ, DELSY
VALASQUEZ, TANNIA GRIGO, MILADYS
DOE, RICHARD MASINI, EDWIN GARCIA,
EMPIRE HOME SAVER INCORPORATED (aJkJa
EMPIRE HOME SAVINGS)
AFFIRMATION IN
SUPPORT OF JUDGMENT
Defendants.
---------------------------------------------------------------
x
STATE OF NEW YORK
)
: ss
COUNTY OF NEW YORK )
JOSEPH GALLAGHER, an attorney duly admitted to practice law before
the Courts of the State of New York, being duly sworn, deposes and says:
1.
I am an attorney admitted to practice in the State of New York and am one
of the counsel for Plaintiffs in the above-captioned action. As such, I am fully familiar
with the facts and circumstances as set forth herein.
2.
I respectfully submit this affirmation in support of Plaintiffs' request to
modify and amend the Judgment entered at the inquest held by this Court on September
14,2011.
3.
By an Order dated July 20,2011 and modified on August 22,2011, the
Hon. Steven Jaeger granted default judgment in favor of Plaintiffs and set this matter
down for an inquest.
4.
The inquest was referred to this Court and held on the morning of
September 14, 2011. A copy of the transcript of the inquest is attached hereto as Exhibit
A. At the inquest, counsel for Plaintiffs presented evidence of damages to the Court, and
outlined orally the Court's authority to order compensatory, exemplary, and punitive
damages, if warranted, at an inquest. Plaintiffs' compensatory damages include all fees
paid to the Defaulting Defendants and, where appropriate, any incidental damages
suffered as a result of the actions of the Defaulting Defendants, including late payment
fees and penalties imposed by Plaintiffs' lenders or servicers. Counsel for Plaintiffs
requested that the Court award treble their compensatory damages to those Plaintiffs that
brought claims under N.Y. Real Property Law § 265-b ("Section 265-b"), treble their
compensatory damages up to $10,000 to those Plaintiffs that brought claims under N.Y.
General Business Law § 350 ("Section 350"), and, in the case of two plaintiffs, quadruple
damages for their claim under N.Y. Banking Law § 590 ("Section 590").
2
5.
This Court awarded "damages according to the request of the plaintiffs'
attorney, including punitive damages because of [the Defendants'] flagrant disregard for
the law." Exh. A, at 10.
6.
While preparing the judgment, counsel for Plaintiffs recognized that the
punitive damages awarded by the Court to that point would not be enforceable against all
of the Defaulting Defendants, notwithstanding the Court's finding that they flagrantly
disregarded the law.
7.
Given that the deterrent effect of punitive damages would be compromised
if Plaintiffs were unable to enforce them against each of the Defaulting Defendants,
including the principals, managers, owners, and operators of the for-profit mortgage
modification scam companies at the heart of this case, Plaintiffs respectfully request that
the Court modify and amend its damage award so that an appropriate level of damages
are awarded against all Defaulting Defendants.
8.
Specifically, as to their fraud claims, which are against all Defendants and
which permit punitive damages, Plaintiffs request that the Court award each Plaintiff
punitive damages that are treble their compensatory damages against all of the Defaulting
Defendants. A chart summarizing the damage award for each Plaintiff under this
approach is attached hereto as Exhibit B.
9.
Awarding punitive damages for fraud-based claims that are treble
compensatory damages is consistent with the approach of the New York State Legislature,
which authorized such awards under Section 265-b and Section 590 to combat consumer
fraud in the mortgage industry.
3
10.
In the case of Plaintiffs Brian and Rebecca Vema, who were awarded
quadruple damages against some of the Defaulting Defendants under Section 590,
Plaintiffs ask that the Court not modify or amend its quadruple damages award under
Section 590, and that, at the same time, the Court modify and amend the judgment to
award them treble damages for their fraud-based claims against all of the Defaulting
Defendants.
DATED:
September 26, 2011
New York, NY
4
A
Inquest Transcript 9/22/2011 9:49:00 PM
COUNTY OF NASSAU: TRIAL TERM PART 37
-----------------------------------------------X
AYANA RUSH, GUL MAGSOOD, ANGEL OSMANZAI,
RAHIM MAGSOOD, MOHAMMED SHUKRAN, RITA IDA VOY,
REBECCA VERNA, BRIAN VERNA, ARIEL CROSS-EDWARDS,
INDEX NO.
3605/2011
Plaintiffs,
- againstSAVE MY HOME CORP., SAVE MY HOME NOW, INC.,
SAVE MY HOME TODAY, INC., SAVE MY HOME, USA,
INC., BENJAMIN ABRAHAM, AMIT SINGH, DANIELLE
DOE, HUMA HALIMI (a/kla Helen Halimi), NAVIN
MENON (a/kla Novin Menon), CHRIS MARINO, THE
SELIG LAW GROUP, PC, EXPRESS MODIFICATIONS
INC., (a/kla/ Express Home 411 a/kla Express
Debt Solutions), KENNETH SAROSI, BRIAN MANGAN,
MICHAEL ANDERSON, SANDRA GONZALEZ, DELSY
VALASQUEZ, TANNIA GRIGO, MILADYS DOE, RICHARD
MASINI, EDWIN GARCIA, EMPIRE HOME SAVER, INC.
(a/kla Empire Home Savings),
Defendants.
-----------------------------------------------X
Mineola, New York
September 14, 2011
BE FOR E:
HON. JOHN M. GALASSO,
Supreme Court Justice
A P PEA RAN C E S:
DAVIS, POLK & WARDWELL, LLP
Attorneys for Plaintiffs
450 Lexington Avenue
New York, New York 10017
BY: JOSEPH T GALLAGHER, ESQ.
SAGAR K. RAVI, ESQ.
ANDREW J. BRUCK, ESQ.
98636/869 -- Osmanzai v. Save My Home
Unsigned
Page -
Inquest Transcript 9/22/2011 9:49:00 PM
(Plaintiff's exhibits 1 through 7 were marked in
2
Evidence.)
3
(Court's exhibit I was marked.)
4
COURT CLERK: For an inquest is Ayana Rush, et
5
al against Save My Home Corporation, et al under index
6
number 3605 of 2011. Appearances for the record, please.
7
MR. GALLAGHER: Joseph Gallagher, Davis, Polk
8
and Wardwell, 450 Lexington Avenue, New York, New York
9
10017 for plaintiffs.
10
11
MR. RAVI: Sagar K. Ravi also of Davis, Polk and
Wardwell.
12
MR. BRUCK: Andrew Bruck, Davis Polk.
13
THE COURT: This is the nature of an inquest.
14
15
Any witnesses or evidence at this time?
MR. GALLAGHER: Your Honor, we won't be
16
producing witnesses today, but under Uniform Trial Rule
17
202.46 we are proceeding on affidavits. We have already
18
premarked a number of exhibits with the court reporter and
19
we can show them to your Honor as we proceed through the
20
inquest.
21
THE COURT: All right. Begin.
22
MR. GALLAGHER: As your Honor has noted we are
23
here on an inquest for Rush v. Save My Home. As your Honor
24
is also aware this is not the only loan scam prevention
25
case that we have been filing. This happens to be the
98636/869 -- Osmanzai v. Save My Home
Unsigned
Page 2
Inquest Transcript 9/22/2011 9:49:00 PM
first one that we filed back in March of this year. It was
2
heard in front of Justice Steven Jaeger. When the
3
defendants who are separate from the defendants that you
4
may know from the Home Safe America case declined to appear
5
on July 20, 2011, Justice Jaeger entered an order granting
6
default judgment against those defendants who have failed
7
to appear. As part of that order, rather on our motion for
8
that order we had submitted a number of affidavits
9
outlining by each plaintiff why they were entitled to
10
damages, the damages they were entitled to and supporting
11
documents outlining why they were entitled to those
12
damages. If we want to go through the individual exhibits
13
14
THE COURT: All right.
15
MR. GALLAGHER: The first one is just the
16
complaint. We wanted to give the court just adequate
17
notice of all of the issues on this case and all
18
allegations that were deemed to be true during the default
19
that is exhibit 1. If your Honor would like --
20
THE COURT: They were all marked already, right?
21
MR. GALLAGHER: Yes. Exhibit 2 is Justice
22
Jaeger's July 20, 2011 order actually granting the default
23
judgment. That is here.
24
Exhibit 3 is Justice Jaeger's order modifying
25
the terms of the default judgment severing the one
98636/869 -- Osmanzai v. Save My Home
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Page 3
Inquest Transcript 9/22/2011 9:49:00 PM
defendant who did appear from the case and actually setting
2
3
the date of the inquest for today's date.
Exhibit four is a compendium of all of the
4
plaintiffs' affidavits submitted in this case. As I said
5
before these outline the specific facts as to each
6
defendant, the amount of fees that were paid by each
7
defendant and evidence supporting the payment of those fees
8
and evidence explaining why each plaintiff is entitled not
9
just to compensatory damages but to the exemplary damages
10
that the statutes entitle them to.
11
Exhibits five and six are things I would like to
12
particularly draw the court's attention to. They are
13
affidavits that were submitted in what you might know as
14
the third loan scam prevention case that we had filed.
15
This is Quaria Osmanzai v. Save My Home. It is index
16
number 9471-11. This case goes against many of the same
17
defendants including the same corporate defendants as the
18
Rush case that we are here on inquest right now. This is
19
just more evidence that the scam perpetrated by these
20
defendants goes far beyond the nine plaintiffs in Rush and
21
extends to these plaintiffs and to other victims statewide
22
within the greater New York area. This is just further
23
evidence if the court will consider it as to why a
24
deterrent in the form of exemplary damages is so crucially
25
called for in this case.
98636/869 -- Osmanzai v. Save My Home
Unsigned
Page 4
Inquest Transcript 9/22/2011 9:49:00 PM
Just to sort of close it out exhibit number
2
seven is a order granted by Justice Adams in the Osmanzai
3
case granting plaintiffs' application for preliminary
4
injunction and an order of attachment. That is the
5
evidence that we have put out right now.
6
To summarize all of the claims that we have in
7
this case just in terms of the damage awards that we are
8
looking for, we have prepared a chart that unfortunately we
9
noticed a little while ago had a couple of inaccuracies in
10
it. What we are hoping to do later on is right after we
11
get back to our office from the hearing will fax to
12
chambers a corrected version of that that has the exact
13
numbers that your Honor can read in a very summary format.
14
To go on to the specific claims that we are
15
asking for, we will proceed first to talk about why this
16
court should grant exemplary damages and not just the
17
compensatory damages of the fees that were paid to these
18
loan modification scammers.
19
Now, there is good case law in both the second
20
and fourth departments. In the second department there is
21
a case from 2000 called Kessler versus Atlantic Avenue CVS
22
in which the court there noted that exemplary damages and
23
punitive damages in particular are properly determined at
24
an inquest. In that case the court said that only
25
liability allegations are deemed admitted on a motion for
98636/869 -- Osmanzai v. Save My Home
Unsigned
Page 5
Inquest Transcript 9/22/2011 9:49:00 PM
default judgment but any damage allegations including for
2
punatives must be determined at an inquest. The fourth
3
department case from that year Johnson v. McFadden Ford is
4
even more relevant and closer on point. There the fourth
5
department affirmed an inquest finding of actual damages,
6
of treble damages and of attorney's fees, so it is entirely
7
proper for this court to consider this type of exemplary
8
damage in line with the statutory grant of authority to
9
grant and to impose these damages for their deterrent
10
effect on the loan scammers that are operating in the
11
greater New York area. To go through each plaintiff
12
individually, we can go through each of their names and see
13
what damages they are entitled to.
14
The first plaintiff we can name is Ayana Rush
15
and she's the main plaintiff in this case. She had paid
16
the Save My Home defendants a total fee of a thousand
17
dollars. That was the fee that was charged for her loan
18
modification that never happened. The defendants never did
19
any work really on the loan modification and she was never
20
refunded the money as she was promised. Now under Section
21
265(b) of the Real Property Law such actions taken when
22
defendants take up-front fees in these cases, treble
23
damages can be awarded and it's incredibly important in
24
these cases that exemplary damages such as these treble
25
damages are awarded. The entire reason the statutes were
98636/869 -- Osmanzai v. Save My Home
Unsigned
Page 6
Inquest Transcript 9/22/2011 9:49:00 PM
passed by the New York State legislature was to deter these
2
loan scammers. If they realize that they only need to pay
3
a small portion of the fee that they collected to ten or,so
4
plaintiffs, including the nine that we have here, whenever
5
they can get in front of a court and still keep the fees
6
for the perhaps thousands of other plaintiffs they have
7
scammed, there is no reason not to scam.
8
Moreover and more importantly, this doesn't just
9
deter the individual defendants in this case, it will also
10
deter the other loan scammers operating in the greater New
11
York area, a few of which I know your Honor is intimately
12
familiar with operating under the name Home Safe America.
13
By allowing these exemplary damages to proceed and awarding
14
these exemplary damages this court can send the message
15
that New York is not going to tolerate those loan scammers
16
victimizing low and middle income homeowners.
17
But to bring it back directly to the case of Ms.
18
Rush, she paid a thousand dollars in fees. Under Section
19
265(b) or any of the other statutes, including General
20
Business Law Section 349 and 350 she is entitled to a
21
trebling of her damages to at least $3,000.
22
The second plaintiff that we can deal with is
23
Mr. Gul Magsood. Now he paid the Save My Home defendants a
24
total of $3,718. Now he is entitled to treble damages on
25
this case of $11,292.30. Again for one for the deterrent
98636/869 -- Osmanzai v. Save My Home
Unsigned
Page 7
Inquest Transcript 9/22/2011 9:49:00 PM
effect and two in recognition of the -- in recognition of
2
the heinous actions taken by defendants in victimizing
3
these homeowners and doing it time and time again, not just
4
for these defendants but for all of the other defendants in
5
the other case and all the other victims yet to come to
6
light.
7
The next group of plaintiffs are Angel Osmanzai
8
and Rahim Magsood who are a married couple that retained
9
the services of the Save My Home defendant, which later
10
became Express Home Solutions under David Gotterup,
11
G-O-T-T-E-R-U-P. Now as a couple they paid 51 hundred
12
dollars and they are entitled to a trebling of that with
13
one limitation. They do not have a claim under Section
14
265(b) of the Real Property Law, however, they do have a
15
claim under Section 350 of the General Business Law which
16
does permit a version of trebling damages. In effect
17
Section 350 allows a trebling up to $10,000.
18
Now, the trebling, if you just did the straight
19
multiplication their damage award would go over $10,000,
20
but under Section 350 they are entitled to an award of
21
$10,000.
22
The next plaintiff is Mr. Mohammed Shukran, he
23
paid $3,000 to the Save My Home and Express Home Entities.
24
He is entitled to a trebling of those damages to at least
25
$9,000, and if the court accounts for the extra fees that
98636/869 -- Osmanzai v. Save My Home
Unsigned
Page 8
Inquest Transcript 9/22/2011 9:49:00 PM
he had to pay on his mortgage just late fees, servicer fees
2
and the like, all of which are outlined in his affidavit,
3
he is entitled to an award of $9,250.38.
4
The next plaintiff is Ms. Rita Ida Voy. She
5
paid $3,500 to the Express Home Entity, David Gotterup and
6
Sarosi Company. She's entitled to a trebling of those
7
damages, again once you include the late payment fees and
8
other ancillary expenses that she incurred, of $12,200.79.
9
The next pair of plaintiffs are Brian and
10
Rebecca Verna, a married couple that jointly paid the
11
Express Home Entity $2,750 in up-front fees that were
12
illegally collected. Again, all of these up-front fees
13
were illegal under Section 265(b) of the Real Property Law.
14
Now, they do not have again a Section 265(b) claim, but
15
they can have a multiple of their claim under Section 590
16
of the Banking Law. Again, we are not going to press the
17
quadrupling of the fees, but they are entitled to such an
18
award because Section 590 disallows people advising others
19
on the terms of their mortgage or acting as a mortgage
20
broker without a license.
21
Now, Mr. Gotterup, everyone who worked in the
22
Express Home Entity was proceeding without a license here,
23
so they are entitled to the quadrupling of damages under
24
Section 590 which would grant them an award of $11,000.
25
The final plaintiff that we are dealing with
98636/869 -- Osmanzai v. Save My Home
Unsigned
Page 9
Inquest Transcript 9/22/2011 9:49:00 PM
here is Ms. Ariel Cross-Edwards. She paid fees of $2,000
2
to the Express Home Entity. Again, a trebling of those
3
fees would justify an award of $6,000.
4
That is essentially --
5
THE COURT: You are seeking judgment in
6
accordance with the requests you just stated for the
7
record?
8
MR. GALLAGHER: Yes, we are. Just to clarify
9
one point about Section 590 I may have misspoken. It is
10
not per se a licensing requirement, it is a registration
11
requirement, they must register with the New York State
12
Banking System.
13
THE COURT: I am granting damages according to
14
the request of the plaintiffs' attorney, including punitive
15
damages because of their flagrant disregard for the law.
16
Submit your judgment.
17
MR. GALLAGHER: Thank you very much.
18
THE COURT: Thank you.
19
CERTIFICATION
20
21
I, JANINE KREBS, CSR, Official Court Reporter,
22
do hereby certify that the above is a true and accurate
23
transcript of the proceedings.
24
25
JANINE KREBS, CSR
98636/869 -- Osmanzai v. Save My Home
Unsigned
Page 10
B
APPENDIXB:
PLAINTIFFS' DAMAGE AWARDS AGAINST THE DEFAULTING DEFENDANTS
Plaintiff;
\
,,'i;,'·.,. ·,. rCaJlse;of~ction. <,d "\l, \<}L.;.... iii :f;i<.,;~(,'
.;
, .,.
,:Ilafuag¢.Award /.;;t~ :'. ,~Wf,·,X~tt;J[
AyanaRush
Compensatory 1
Total Damage Award - TreblingL
$1,000.00
$3,000.00
Gul Magsood
Compensatory
Total Damage Award - Trebling
$3,764.10
$11,292.30
Angel Osmanzai and
Rahim Maqsood
Compensatory
Total Damage Award - Trebling
$5,100.00
$15,300.00
Mohammed Shukran
Compensatory
Total Damage Award- Trebling
$3,083.46
$9,250.38
a
lCompensatory damages include all fees paid to the Defaulting Defendants and, where appropriate, any incidental damages suffered as a result of the
actions of the Defaulting Defendants, including late payment fees and penalties imposed by Plaintiffs' lenders or servicers.
2 Total damages are calculated by reference to several statutory causes of action that permit exemplary damages, as well as fraud-based claims that
permit punitive damages as a matter of law. The Plaintiffs' statutory causes of action may be based on: (i) N.Y. Real Prop. Law § 265-b(4)(b), which provides
that homeowners may recover actual and consequential damages from distressed property consultants that violate § 265-b; damages may be trebled if the
distressed property consultant acted intentionally or recklessly; (ii) N.Y. Gen. Bus. Law § 350-e, which provides that plaintiffs may recover the greater of actual
damages or $500 from defendants who violate §§ 350, 350-a; if the court finds that such violations were willful or knowing, it may treble actual damages up to a
total of $ 10,000; and (iii) N.Y. Banking Law § 598, which provides that non-exempt, unlicensed or unregistered persons or entities that violate N.Y. Banking
Law § 590 shall be liable to any person or entity affected for a sum of money not less than the amount of money paid, nor more than four times such sum. The
fraud claims include common law fraud, fraudulent inducement, fraudulent concealment, civil conspiracy to commit fraud, and aiding and abetting fraud.
Rita Idavoy
Compensatory
Total Damage Award - Trebling
$4,066.93
$12,200.79
Rebecca and Brian
Vema
Compensatory
Total Damage Award- Trebling
$2,750.00
$8,250.00
Total Damage Award - Section 5903
$11,000.00
Compensatory
Total Damage Award - Trebling
$2,000.00
$6,000.00
Ariel Cross-Edwards
3 Plaintiffs Rebecca and Brian Vema were awarded quadruple damages under Section 590 totaling $11,000 against Defaulting Defendants Express
Home Solutions, Inc. (aJk/a Express Home 411, aJk/a Express Debt Solutions), Navin Menon (aJk/a Navin Menin, a/k/a Novin Menon), and Miladys Doe (who
counsel for Plaintiffs have learned is Miladys Bohorquez). While treble damages totaling $8,250.00 may be enforced against all of the Defaulting Defendants,
the additional $2,750.00 in damages under Section 590 may only be enforced against those particular Defaulting Defendants.
2
SUPREME COURt OF THE STATE OF NEW YORK
COUNTY OF NASSAU
"
Index No. 3605/2011
Date Purchased 03/09111
A YANA RUSH, GUL MAGSOOD, ANGEL
OSMANZAI, RAHIM MAQSOOD,
MQHAMMEDSHUKRAN, RITA IDAVOY,
REBECCA VERNA, BRIAN VERNA, ARIEL
CROSS-EDWARDS
Plaintiffs,
- against..;
SAVE.MY HOME CORP., SAVE MY HOME
NOW, INC., SAVE MY HOME TODAY INC.,
SAVEMYHOME U,S.A., ING., BENJAMIN
ABRAHAM, AMIT SINGH, DANIELLE DOE,
HtJMAHALIMI (aIkIaHELEN HALIMI), NAVIN
MENON (alk/a NAVIN NffiNIN, aIkIa NOVIN
MENON), CHRISMARlNQ,THE SELIG LAW
GROUP, P.(;.,EXPRESS r-.10DIFICATIONS
INC., DAYIDGOTTERUP,EXPRESS HOME
SOLUTIONS, INC. (a/k/a EXPRESS HOME 411,
aIkIa EXPRESS DEBt SOLUTIONS), KENNETH
SAROSI, BRIAN MANGAN, MICHAEL
ANDERSON, SANDRA GONZALEZ, DELSY
VALASQUEZ, TANNIA GRIGO, MILADYS
DOE,RICHARDMASINI, EDWIN GARCIA,
ROBERT WEINREB, EMPIRE HOME SAVER
INCORPORATED (aIkIaEMPIREHOME
SAVINGS)
Defendants.
AFFIRMATION OF JOSEPH GALLAGHER
LAWYERS' COMMITTEE
FOR CIVIL RIGHTS UNDER LAW
1401··New York Avenue, N~W., Suite 400
Washington,D,C.20005
450 Lexington Avenue
New York, New York 10017
(202)662-8600
(212) 450-4000
DAV IIS>PO .... K •. &<WA.RDWEL LL.L.p
Attorneys for. Plaintifft