HSBC Bank v Cadore

[*1] HSBC Bank v Cadore 2009 NY Slip Op 51785(U) [24 Misc 3d 1238(A)] Decided on August 17, 2009 Supreme Court, Kings County Lewis, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on August 17, 2009
Supreme Court, Kings County

HSBC Bank, as Trustee for Ace Securities Corp., Home Equity Loan Trust, Series 2006-OP1 Asset Backed Through Certificates, Plaintiff,

against

Veronica Cadore, et al., Defendant.



34487/07



Plaintiff Attorney: Helmut Borchert, Esq.

Borchert, Genovesi, Laspina

Defendant Attorney Joseph McCray, Pro se

Yvonne Lewis, J.

Pro se defendant Joseph McCray moves by order to show cause for an order, pursuant to CPLR §3212 (e), granting him partial summary judgment voiding and setting aside two allegedly fraudulent deeds and a subsequent mortgage in this foreclosure action. Plaintiff HSBC Bank USA (HSBC), as trustee for Ace Securities Corp., Home Equity Loan Trust, Series 2006-OP1 Asset Backed Through Certificates, cross-moves for an order, (1) pursuant to CPLR §3211, dismissing Mr. McCray's counterclaim as barred by res judicata and collateral estoppel and/or dismissing the counterclaim as untimely pursuant to CPLR §320 or, in the alternative, (2) pursuant to 22 NYCRR §202.21, vacating the note of issue and granting plaintiff leave to serve a late reply to Mr. McCray's counterclaim challenging the ownership of the subject premises.

BACKGROUND FACTS AND PROCEDURAL HISTORY

The premises located at 119 MacDonough Street in Brooklyn, New York (the subject premises) is a four-unit apartment building allegedly owned by Veronica Cadore and/or Michelle Cadore and in which Joseph McCray, Colette Pirkle and John Pirkle (the Tenant Defendants) were tenants. The building is the subject of a foreclosure action brought by HSBC, a foreign state banking corporation which holds a lien against the property secured by a mortgage which was recorded March 30, 2006.

The City of New York (NYC) acquired the subject premises on April 18, 1979 by deed recorded the same day. The NYC Department of Housing Preservation and Development (the HPD) sold and conveyed the subject premises to Veronica Cadore by deed recorded on April 13, 2000, although the Tenant Defendants were living in the building at the time and had bid on the property. In 2001, the Tenant Defendants sued the HPD and Veronica Cadore seeking to void the conveyance on the ground that the HPD failed to consider their bid and improperly sold the building to Veronica Cadore (the HPD action). The Hon. Muriel S. Hubsher dismissed the Article 78 part of that action as against the HPD for untimeliness (see McCray v New York City [*2]Dept. of Hous. Preserv. & Dev., Sup Ct, Kings County, May 17, 2002, Hubsher, J., index No. 28238/01). She also dismissed, without prejudice, the claim against Veronica Cadore for allegedly breaching a deed provision which required her to offer the Tenant Defendants a two-year lease, explaining that the Tenant Defendants had not shown why the dispute could not be resolved in Civil Court, the preferred forum for landlord-tenant disputes (see id.). The Tenant Defendants have not appealed the order declining to award Mr. McCray legal title to the subject premises in the HPD Action.

Colette and John Pirkle, Tenant Defendants, subsequently purported to convey whatever interests they had in the subject premises, if any, to Mr. Joseph McCray by deed recorded July 10, 2003. Veronica Cadore also purported to convey her interest in the subject premises, if any, to Michelle Cadore by deed recorded on January 13, 2006 by Equity Settlement Service, Inc. (Equity). On that date Equity also recorded a mortgage which listed Michelle as borrower and Option One Mortgage Corp. (Option One Mortgage) as lender.

HSBC initially sought to foreclose on the mortgage by filing an action, bearing index number 28853/07, when Veronica and Michelle Cadore defaulted by failing to pay the principal and interest owed. The Tenant Defendants were also named as defendants possessing a possible interest in the subject premises, given their involvement in the HPD Action. When Mr. McCray refused HSBC's request to discontinue the action due to a defect in the complaint, HSBC commenced the instant action on September 12, 2007. Mr. McCray filed a Note of Issue in the instant action on November 10, 2008.

THE PARTIES' CONTENTIONS

HSBC seeks to dismiss Joseph McCray's counterclaim pursuant to CPLR §3211 (a) (1) (5) and (a) (1) (6) as barred by the doctrines of res judicata and collateral estoppel. It additionally argues that the counterclaim should be dismissed as untimely and improper under CPLR §320. In the alternative, plaintiff contends that the note of issue should be vacated, discovery should be opened, and it should be granted leave to serve a late reply to the counterclaim, given that its current law firm was recently retained as counsel. Plaintiff maintains that its counsel's predecessor had failed to zealously prosecute the case by erroneously relying on prior orders, ongoing settlement negotiations with the borrower, and confusing legislative changes regarding foreclosure to bar defendant's claims.

In seeking partial summary judgment on his counterclaim, Mr. McCray argues that he is, as a matter of law, the title owner of the subject premises and that he acquired title to the subject premises by adverse possession. He alleges that the Tenant Defendants, including himself, had occupied the building without paying rent openly, hostilely, and notoriously for over ten years and further avers that he had made necessary improvements to the property. Plaintiff maintains that he had not executed any bond or note, nor agreed to any mortgages against the property. He adds that Veronica and Michelle do not have, nor ever had, any legal interest in the subject premises.

In opposition to plaintiff's cross motion, Mr. McCray argues his counterclaim is not barred by res judicata or collateral estoppel because the HPD Action in Kings Supreme Civil Court was heard and adjudicated by a Criminal Court Judge and was therefore void. He further maintains that there was no valid final judgment that could bar his counterclaim because no notice of entry was [*3]ever served or filed in the HPD Action. Mr. McCray also requests the imposition of sanctions against plaintiff for frivolous and vexatious litigation.

DISCUSSION

A litigant's choice to proceed pro se has no effect on his burden to present legally competent evidence (see Duffen v State of New York, 245 AD2d 653, 653-654 [1997]). Although courts may afford pro se litigants some latitude, a pro se litigant has no greater rights than any other litigant and will be held to the same standards of proof as those who are represented by counsel (see Banushi v Lambrakos, 305 AD2d 524, 524 [2003]; Roundtree v Singh, 143 AD2d 995, 996 [1988]; Callender v Titus, 4 Misc 3d 126[A], *1 [2004]). Furthermore, a pro se litigant must still adhere to court-imposed and statutory regulations and deadlines (see e.g. Greenfield v Gluck, 2003 NY Slip Op 50729[U] [2003] [self-represented litigant's alleged ignorance of time limit for filing summary judgment motion did not excuse his noncompliance]).

The court first turns to plaintiff's cross motion to dismiss as a threshold matter. HSBC advocates dismissal of Joseph McCray's counterclaim for a judgment nullifying and vacating the deed recorded on April 9, 2000 by Veronica Cadore and setting aside the deed and mortgage recorded on January 13, 2006.

Timeliness

Plaintiff appears to challenge the timeliness of Joseph McCray's counterclaim by arguing that the pleading in which it was raised, the answer, was not served within twenty days after service of the complaint, as required under CPLR §3012 (a) (see also CPLR §302 [a]). However, the statutory section of the CPLR pertaining to counterclaims is CPLR 3019, entitled "Counterclaims and cross-claims." Although the statute is silent as to the time restrictions under which counterclaims must be served, a counterclaim is generally deemed interposed as of the time the summons is filed (see CPLR §203 [d]; Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR §3019:8; see also Long Is. Tinsmith Supply Corp. v Westbury Hebrew Congregation, 2009 NY Slip Op 50606[U], *5 [2009]; Proskauer Rose Goetz & Mendelsohn v Munao, 270 AD2d 150 [2000]).

Here, HSBC served the summons and complaint on Mr. McCray on September 17, 2007. Although Mr. McCray did not serve his answer and interpose the counterclaim therein until October 23, 2008, the counterclaim is timely. The court therefore declines to dismiss Mr. McCray's counterclaim based on untimeliness grounds.

Collateral Estoppel and Res Judicata

The doctrine of collateral estoppel bars "a party from re-litigating in a subsequent action or proceeding on an issue which was clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same" (Chiara v Town of New Castle, 61 AD3d 915 [2009], quoting Ryan v New York Tel. Co., 62 NY2d 494, 500 [1984]). Under New York law, courts require proof of two elements to invoke collateral estoppel: 1) an identity of issues which were necessarily decided in the prior action that are decisive in the present action, and 2) a full and fair opportunity by the party against whom collateral estoppel is being invoked to have contested the issue previously decided and now claimed to be controlling (see Comprehensive Med. Care of NY, P.C. v Hausknecht, 55 AD3d 777, 778 [2008], citing Buechel v Bain, 97 NY2d 295, 303-304 [2001]; Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 349 [1999]; D'Arata v. New York Cent. Mut. Fire Ins. Co., 76 [*4]NY2d 659, 664 [1990]). Collateral estoppel will operate to bar only issues that were actually litigated or necessarily decided in the prior proceeding (see McGee v J. Dunn Constr. Corp., 54 AD3d 1009, 1009-1010 [2008]; Chisholm-Ryder Co. v Sommer & Sommer, 78 AD2d 143, 144 [1980]). The party against whom preclusion is sought bears the burden of demonstrating the absence of a full and fair opportunity to contest the prior determination (City of New York v College Point Sports Assn., Inc., 61 AD3d 33, 42 [2009]; Buechel, 97 NY2d at 304). Although, collateral estoppel is a flexible doctrine that should not be applied rigidly or mechanically, courts will also weigh policy considerations such as fairness to the parties, conservation of the court and litigants' resources, and societal interest in consistent and accurate results (see Russo v Irwin, 49 AD3d 1039, 1041 [2008]).

Here, HSBC avers that the issue of legal title over the subject premises has already been adjudicated in the HPD Action, thus barring the success of Mr. McCray's counterclaim in this action. In the HPD Action, the court granted the HPD's motion to dismiss on the basis of untimeliness and determined legal title of the subject premises in favor of Veronica Cadore and against the Tenant Defendants, including Joseph McCray. That judgment in Supreme Court, Kings County, involved the same dispute by the same parties over legal title to the same real property as in the instant action. As a party to the HPD Action, Mr. McCray previously had a full and fair opportunity to litigate the issue of ownership of the subject premises, but failed to commence the action within the Statute of Limitations therein. Raising the same issue as a counterclaim in this action does not entitle him to a second bite of the apple. Thus, Mr. McCray has not met his burden of showing the absence of a full and fair opportunity to litigate the issue in this action.

Principles of res judicata also bar the instant counterclaim. Under New York's transactional approach to res judicata, "once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred even if based upon different theories or if seeking a different remedy" (see QFI, Inc. v Shirley, 60 AD3d 656, 657 [2009], quoting O'Brien v City of Syracuse, 54 NY2d 353, 357 [1981]). A valid final judgment thus bars future actions between the same parties on the same cause of action (see Fogel v Oelmann, 7 AD3d 485, 486 [2004]; Field Home-Holy Comforter v DeBuono, 238 AD2d 589, 590 [1997]).

Moreover, res judicata applies not only to the parties of record in the prior action, or administrative proceeding, but also to those in privity with them (see Matter of State of New York v Seaport Manor A.C.F., 19 AD3d 609, 610 [2009]; see also Watts v Swiss Bank Corp., 27 NY2d 270 [1970]). To establish privity, "the connection between the parties must be such that the interests of the nonparty can be said to have been represented in the prior proceeding" (Green v Santa Fe Indus., 70 NY2d 244, 253 [1987]).

The HPD Action was litigated to a final conclusion, as it was decided on untimeliness grounds, which "is at least sufficiently close to the merits for claim preclusion purposes to bar a second action" (see Matter of Palm Mgt. Corp. v Goldstein, 29 AD3d 801, 804 [2006], quoting Smith v Russell Sage Coll., 54 NY2d 185, 194 [1981]). Furthermore, although HSBC was not a party to the HPD Action, it is clearly in privity with Veronica Cadore as it is the assignee of the mortgage issued to her by Option One Mortgage (see McDonald v Lengel, 2 AD3d 1182, 1183 [2003]; Seaport Manor, 19 AD3d at 610). Mr. McCray is thus barred under res judicata as well [*5]from relitigating his counterclaim regarding legal title to the subject premises.

Although Mr. McCray argues that the judgment in the HPD Action was not entered, the Kings Supreme Court County Clerk's records reflect that the Hon. Justice Hubsher's decision and order was filed on June 6, 2002. Such order is not void and may have preclusive effect on subsequent actions.

Also contrary to Mr. McCray's assertions, a civil judgment is not void merely because it is heard by a Criminal Court Judge (see People v Fevziekinici, 191 Misc 2d 510, 516 [2002] ["The fact that for administrative purposes parts in this court are sometimes designated as criminal or civil does not alter the jurisdiction of a Justice of the Supreme Court to hear both civil and criminal matters."]; see also People v Schoenwandt, 12 Misc 3d 105, 106 [2006] [criminal trial heard in courtroom of a Criminal Court Judge who had been appointed an Acting Supreme Court Justice but still retained status as a criminal court judge with jurisdiction over criminal matters]; People v Zimmer, 166 Misc 2d 256, 258-259 [1995]). Indeed, many Justices in Supreme Court, Kings County, preside over both civil and criminal Supreme Court matters (Fevziekinici, 191 Misc 2d at 516). Supreme Court Justices are vested with inherent plenary power to fashion any remedy necessary for the proper administration of justice (see People ex rel Doe v Beaudoin, 102 AD2d 359, 363 [1984]; see also McKinney's Const. Art. 6 § 7). Mr. McCray's contention that a Supreme Court Justice who usually deals with criminal matters may not adjudicate a civil action is without merit (see Carnese v Wiegert, 273 AD 554, 556 [2000] [where a divorce judgment was signed by a Family Court Judge as an acting Supreme Court Justice, respondent offered no factual or legal basis showing that Family Court lacked jurisdiction]).

Joseph McCray's Motion for Partial Summary Judgment

The Court's determination in plaintiff's favor on the cross motion to dismiss is dispositive with respect to Mr. McCray's motion seeking partial summary judgment on the counterclaim. Mr. McCray's arguments regarding the merits of the counterclaim are therefore rendered moot and the court need not address them.

Mr. McCray also appears to move for the imposition of sanctions against plaintiff in his opposition papers to plaintiff's cross motion. However, he fails to show that plaintiff's allegedly false statements rise to the level of frivolousness required for sanctions (see 22 NYCRR §130-1.1 [c]; Drummond v Drummond, 305 AD2d 450, 451-52 [2003], lv denied 1 NY3d 504 [2003]). Furthermore, Joseph McCray did not move for sanctions on notice (see 22 NYCRR §130-1.1 [d]; see also Frohman v Frohman, 203 AD2d 420, 421 [1994]; Mazo v NYRAC, Inc., 191 AD2d 617, 618 [1993]). The court must therefore, also deny Joseph McCray's request for sanctions.

The court has considered McCray's remaining arguments and finds that they are not dispositive on the motion. The motion for partial summary judgment must be denied in its entirety.

This constitutes the decision and order, of this court.

ENTER,

Yvonne Lewis, JSC