First Union Natl. Bank v Estate of Bailey
Annotate this CaseDecided on May 26, 2005
Supreme Court, Kings County
FIRST UNION NATIONAL BANK, Plaintiff,
against
Estate of Robert L. Bailey, deceased, his Unknown Heirs, devisees and distributees, and the spouses, heirs, devisees and distributees or successors in interest of such heirs, devisees or distributees, if any, Robert Schneider, Esq., as Temporary Administrator for the Estate of Robert L. Bailey, CITY OF NEW YORK BY PARKING VIOLATIONS BUREAU, CITY OF NEW YORK BY ENVIRONMENTAL CONTROL BOARD, PEOPLE OF THE STATE OF NEW YORK BY STATE TAX COMMISSION, PEOPLE OF THE STATE OF NEW YORK BY STATE TAX COMMISSION CHILD SUPPORT, Defendants.
25547/01
This was an ex parte application. Plaintiff was represented by Gullace & Weld, LLP, 500 First Federal Plaza, Rochester, New York 14614.
Herbert Kramer, J.
What are the obligations of a guardian ad litem and temporary administrator in the context of a foreclosure proceeding?
This Court has been asked to sign a judgment of foreclosure and sale in this unopposed proceeding where both a guardian ad litem and a temporary administrator have been assigned. In On its own motion, this Court has scrutinized the proceedings had herein and found service was [*2]not properly effected in this case for reasons set forth below. Ordinarily, this fatal defect in the proceedings should have been brought to this Court's attention through motions made by both the guardian ad litem and the temporary administrator. However, these motions were never made and this court on its own motion must rectify this situation. This lack of diligence on the part of the court appointed officers in this matter prompts this decision.
A guardian ad litem and a military attorney is appointed on behalf of any defendant who may be an absentee, an infant, an incompetent or who may be an unknown successor in interest to a deceased defendant or a defendant who may be in military service in order to protect and defend the interests of said defendants in the action. As to defendants in the military service of the United States of America, a guardian ad litem is appointed for the purpose of representing them and protecting their interests.
When it becomes apparent that there are potential defendants, who are incompetents, infants or missing heirs, who will be affected by the judgment, it is the obligation of the plaintiff in the first instance to ascertain the whereabouts of these defendants and only upon a showing of due diligence will an order of publication issue. CPLR §315. In the event that their whereabouts cannot be ascertained, or they are located and are not legally competent to protect their own interests in the suit, it is incumbent upon the plaintiff to seek the appointment of a guardian and/or temporary administrator to ensure their interests are protected. Oneida Nat. Bank & Trust Co.v. Unczur, 37 AD2d 480 (4th Dept. 1971).
This Court holds that a guardian ad litem and/or temporary administrator for the estate play an essential role in the protection of defendants who are otherwise unable to protect and defend themselves and this role entails the faithful performance of a series of obligations. First, the guardian and/or administrator must obtain the entire file from the plaintiff and become thoroughly familiar with it They must review the efforts made by the plaintiff to locate the missing defendants and determine if they are sufficient. If they find that an order of publication has issued without a showing of due diligence, they must make a motion to vacate that order and dismiss the proceeding for lack of jurisdiction. Even if they believe the efforts met a certain threshold level, they are obligated to undertake a search for the heirs on their own, particularly where, as here, the file indicates that such heirs may well exist. They are further obligated to raise any and every other defense, other than jurisdictional defenses, that may be available to the defendant including but not limited to those defenses available under th Home Owner's Equity Protection Act (HOEPA); the Truth in Lending Act (TILA); Real Estate Settlement Procedures Act(RESPA); New York Deceptive Practices Act and Banking Law §6-l dealing with high cost loans.
It is only through the diligent efforts of these appointees that the proceeding becomes an adversarial one with the interests of each side being appropriately represented. Thus in one case it was through the diligent efforts of the guardian ad litem that was appointed in a surplus money proceeding that it was discerned that the owner of the equity of redemption was in a mental hospital. The guardian ad litem reported on his incompetency, located a daughter in Boston and another relative in New York and ultimately successful moved for an order disaffirming the referee's report and appointing a committee for the incompetent defendant. Roslyn Sav Bank v. Jones, 69 Misc 2d 733(NY Co. Ct. 1972). See also Parras v. Ricciardi, 185 Misc 2d 209(NY City Civ. Court, 2000)(where landlord sought to evict mentally incompetent tenant then residing [*3]in a nursing home, court order could have "allowed the guardian ad litem to enter the apartment to look for information about the tenant's relatives, a Will, assets, etc. Possibly the proceeding could then be settled . . . [and even if not] . . . . a judgment obtained by the landlord after the guardian was appointed would be a valid judgment . . . "). Indeed, the faithful performance of these obligations is particularly crucial where, as here, real property whose value far exceeds the amount of indebtedness is about to be sacrificed to satisfy same. See e.g. Oneida Nat. Bank & Trust Co.v. Unczur, supra, 37 AD2d 480.
Unfortunately, in this case, these obligations were honored more in the breach than in the application. Here, as in Oneida, supra, the amount due and owing on a mortgage which was based upon a retail installment obligation was only a fraction of the potential value of the property being foreclosed. An order of publication issued pursuant to CPLR 314 et seq. on the bare bones affirmation of plaintiff's counsel supported by an unsworn letter from a title company claiming that there is no record of any estate proceedings and the affidavit of a process server who visited the mortgaged premises and spoke to a neighbor who stated that the aforementioned property has been unoccupied for the last several months.
With the publication of the requisite boilerplate notice, plaintiff's efforts to locate any persons with a legal interest in this property were exhausted. Although there were seemingly no defects in the publication, this Court finds that the efforts expended in attempting to locate and serve the defendants prior to publication do not constitute the due diligence necessary to support an order of publication. The order of publication is hereby vacated. Compare McFarland v. McFarland, 7 Misc 3d 1003(A)(NY Sup. 2005)(efforts of plaintiff's process server to locate an infant in foreclosure proceeding which included interviews with neighbors, inquiries of the US Postal Service, Board of Elections, Surrogate's Court, telephone directories and the New York Department of Motor Vehicles held to satisfy standard of reasonable due diligence).
A temporary administrator to represent the estate of Robert L. Bailey was appointed and a guardian ad litem to represent the interests of unknown heirs, devisees and devotees and their spouses.
The guardian ad litem did no more than submit an affidavit consenting to act as guardian ad litem and then waived "Notice of Application for Order of Reference and Referee's Report of Computation, Notice of Referee's Computation and Application for Judgment of Foreclosure and Sale in the above captioned action." The guardian ad litem put in an answer, saying inter alia that he is a "stranger to all and singular the matters and things alleged in said complaint; that he claims such interest in the premises in said complaint mentioned as he is entitled to and does submit his rights and interests in the matters in question to the protection of this Court." The temporary administrator similarly submitted a qualifying affidavit and an answer that "submits said defendant's rights and interests in the matter in question to the protection of this Court." Their final reports recited in boilerplate conclusory fashion that which was required to cut off the interests of the defendants and permit the judgment to be signed.
These efforts fall far short of the obligation to protect and defend the interests of the defendants to this action, particularly, where as here, the prerequisite of due diligence for the issuance of an order of publication was not met. Indeed, failure of due diligence is a jurisdictional defect. Caban v. Caban, 116 AD2d 783( 3d Dept., 1986)
Accordingly, this Court finds that no jurisdiction over the defendant heirs, devisees and [*4]distributees of Robert L. Bailey, deceased, was obtained by Select Portfolio Servicing Inc., the current owner and holder of the mortgage being foreclosed by virtue of an assignment from the plaintiff, who as the result of a merger become known as Wachovia Bank, and the plaintiff's causes of action are dismissed.
Plaintiff's ability to collect on its debt is not thereby foreclosed as plaintiff can commence a proceeding for the appointment of an administrator in Surrogate's Court pursuant to SCPA §1001 et seq.
This matter is dismissed.
This constitutes the decision and order of the Court.
J.S.C.
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