Wheeler v HSBC Bank USA, N.A.Annotate this Case
Decided on January 20, 2012
Supreme Court, Kings County
Tomeka Wheeler, Plaintiff,
HSBC Bank USA, National Association, as TRUSTEE FOR HOME EQUITY LOAN TRUST SERIES ACE 2006-HE1, et al., Defendant.
Attorney for Plaintiff:
Henry W. Davoli, Jr.
342 North Long Beach Road
Rockville Center, NY 11570
Attorney for Defendant:
Donald G. Davis
Fidelity National Title Group, Inc.
350 Fifth Avenue, Suite 3000
New York, NY 10118
Carolyn E. Demarest, J.
Defendant moves pursuant to 22 NYCRR §202.21(e) to vacate the Note of Issue and Certificate of Readiness and strike the case from the trial calendar and to dismiss the complaint, pursuant to CPLR § 3216(e), for failure to prosecute this action and, pursuant to CPLR §3126(3), as a sanction for the willful default of court-ordered discovery and false representations in the Certificate of Readiness.
In a related foreclosure action also before this court, HSBC v Jones, Index No. 26000/06 ("HSBC Action"), HSBC sought to foreclose on the subject property 433 Bainbridge Street, Brooklyn, New York ("Property"). On October 10, 2007, plaintiff Tomeka Wheeler ("Wheeler"), who is not a party to the HSBC Action, commenced the present action seeking to restore title to the Property in her name.[FN1] On December 4, 2007, [*2]this court signed a judgment of foreclosure and sale in the HSBC Action. In February of 2008, HSBC and Wheeler entered into a stipulation that HSBC would not proceed with the foreclosure sale in theHSBC Action pending the determination or other disposition of the present matter.
On January 28, 2008, HSBC served a notice in the instant action to take the deposition of Wheeler and notice for discovery and inspection that included a number of specific documents relating to plaintiff's claims.[FN2] On March 26, 2010, HSBC served the first set of interrogatories upon Wheeler. On April 21, 2010, this court entered a preliminary conference order directing responses to discovery and inspection demands and answers to interrogatories on or before June 21, 2010 and the deposition of both parties on June 30, 2010.
At a compliance conference on July 21, 2010, a per diem attorney appeared for the plaintiff that was not the attorney of record and the matter was adjourned for a week. On July 21, 2010, HSBC received responses to the first request for the production of documents, but as of that date, had still not received interrogatory responses from Wheeler. On July 22, 2010, HSBC sent plaintiff's counsel, Henry W. Davoli, Jr. ("Davoli"), a letter indicating that the July 21, 2010 response by plaintiff was inadequate as the documents were "not organized in any manner whatsoever", the plaintiff failed to identify which documents were responsive to each specific demand, the response did not include many of the documents requested or an explanation as to why they were not included, and no response to the first set of interrogatories was provided.
Plaintiff provided responses to interrogatories dated July 27, 2010, at the July 28, 2010 conference before this court. However, the interrogatories were only signed by Wheeler's attorney and they were unverified. Further, some of the interrogatories were not answered. At the July 28, 2010 conference, and in subsequent correspondence on September 24, 2010, HSBC indicated that plaintiff's prior responses were inadequate. On September 27, 2010, HSBC sent plaintiff a specific itemized list of six sets of documents that plaintiff did not include in the document production and twelve insufficient interrogatory responses. On September 29, 2010, the eve of a scheduled compliance conference, plaintiff's counsel sent HSBC a letter, not verified by his client, essentially denying the existence of any other documents, declining to respond further to the interrogatory demands, and noting that "a deposition would appear to be the place where you can obtain the details which you are perhaps seeking."
Plaintiff's counsel, again, sent a per diem attorney that was not handling the discovery in this action to a compliance conference on September 30, 2010. At that conference, this [*3]court entered a short form order directing plaintiff "to serve supplemental responses to defendant's interrogatories and responses to defendant's document demands, as requested in letter dated September 27, 2010, within 30 days." Plaintiff did not provide any supplemental response to HSBC in compliance with that order.
According to HSBC's attorney, plaintiff's counsel did not take any further actions to prosecute this matter after the order was issued on September 30, 2010. On July 14, 2011, HSBC served plaintiff's counsel with a letter, pursuant to CPLR § 3216, demanding that plaintiff resume prosecution of the action and to serve and file a Note of Issue within 90 days after receipt of the letter. HSBC indicated that the failure to resume prosecution of the action and file a Note of Issue would serve as the basis of a motion to dismiss for failure to prosecute. On September 9, 2011, Davoli filed a Note of Issue with the Kings County Clerk [FN3] in which he indicated that "[d]iscovery proceedings now know [sic] to be necessary completed", "there are no outstanding requests for discovery", "[t]here has been compliance with any order issued pursuant to the Precalendar Rules (22 NYCRR 202.12)", and "[t]he case is ready for trial." Divoli also attached an "affirmation of compliance" to the Note of Issue stating, "[a]ll directives of the Preliminary Conference Order of Carolyn E. Demarest dated April 23, 2010 have been complied with", "[d]epositions of all parties have been conducted", and "[a]ll relevant witness information and party statements have been exchanged."
HSBC moves to vacate the Note of Issue and Certificate of Readiness and strike the case from the trial calendar and to dismiss the complaint, pursuant to CPLR § 3216(e), for failure to prosecute this action and, pursuant to CPLR § 3126(3), as a sanction for the willful default in court-ordered discovery and false representations in the Certificate of Readiness that disclosure was complete and the case is ready for trial.
In opposition to the instant motion, plaintiff contests that its correspondence prior to this court's order of September 30, 2010 was sufficient for the purposes of discovery and the plaintiff is ready to appear for a deposition. Plaintiff does not object to the striking of the Note of Issue and setting a further compliance conference. The sole affidavits submitted in support of the opposition papers are copies of an August 6, 2007 affidavit by Wheeler [FN4], [*4]written in support of the rejected Order to Show Cause in the HSBC Action, and a May 23, 2007 affidavit by Quintin Jones ("Jones"), the defendant in the HSBC Action.[FN5] It is not clear whether these affidavits were provided to the defendant prior to filing the opposition of this motion. The only other documents provided by plaintiff in opposition to the motion, other than correspondence between the attorneys, were documents previously provided to defendant that are publicly available on the New York City Department of Finance Automated City Registration Information System ("ACRIS"), including the mortgages, notes, deeds, powers of attorney, and assignments associated with the transfers of the Property. Notably absent from the opposition were supplemental responses to defendant's interrogatories and responses to defendant's document demands as directed by this court on September 30, 2010. Plaintiff has not contested that numerous aspects of the Note of Issue, sworn to by Davoli, were untrue, including counsel's purported compliance with the preliminary conference order, the completion of the depositions of parties, and that all relevant witness information and party statements have been exchanged. Davoli claims that his "office was forced to filed the Note of Issue" upon receiving the 90-day notice from HSBC.
"The drastic remedy of dismissing a complaint based on the plaintiffs' failure to comply with court-ordered disclosure should be granted only where there is a clear showing that the plaintiffs' conduct was willful and contumacious" (Kim v Goldmine Realty, Inc., 73 AD3d 709 [2d Dept 2010]). In this action, despite a preliminary conference order, several compliance conferences, and numerous demands from HSBC for documents regarding plaintiff's claims and answers to interrogatories, plaintiff has only responded with disorganized documents that are publicly available and an inadequate response to interrogatories that was not verified by the plaintiff as required by CPLR § 3133(b). Plaintiff also disregarded this court's written order of September 30, 2010 that specifically directed plaintiff to submit supplemental responses to defendant's interrogatories and document demands. Further, the certificate of readiness accompanying the Note of Issue falsely attested to the completion of discovery when, in fact, no depositions had taken place, plaintiff had not complied with court orders, and numerous items of discovery remained outstanding. [*5]As these incorrect assertions were material facts, the filing of the Note of Issue was a nullity and must be vacated (see Garofalo v Mercy Hosp., 271 AD2d 642 [2d Dept 2000]; Blackwell v Long Island College Hosp., 303 AD2d 615, 616 [2d Dept 2003]; 22 NYCRR §202.21(e)).It is clear that the Note of Issue was knowingly and wrongfully submitted as a tactical matter to stave off dismissal of this action. "The plaintiff['s] willful and contumacious conduct can be inferred from [the] knowing and wrongful submission of a false certificate of readiness and [the] repeated failure to comply with court-ordered disclosure (Kim, 73 AD3d at 710; see Yona v Beth Isr. Med. Ctr., 285 AD2d 460, 461 [2d Dept 2001]).
Further, plaintiff failed to argue that even in the event that this court were to vacate the Note of Issue, there was a justifiable excuse for the delay (see Garofalo., 271 AD2d at 642-643; Blackwell, 303 AD2d at 616; Zelik v Policy Signing & Accounting Centre, 258 AD2d 580, 581 [2d Dept 1999]). This case was commenced on the eve of the Property being sold pursuant to a judgment of foreclosure and sale in the HSBC Action and has been pending for over four years. Davoli's argument that his office was "forced" to file the Note of Issue is unavailing as he could have moved to vacate the notice, moved to extend the 90-day period, completed discovery, or showed a reasonable excuse for the delay. Plaintiff could and should have sought intervention in the HSBC foreclosure action in order to protect her claimed right to title to the property. However, Davoli did none of these. Plaintiff has done virtually no discovery in four years and repeatedly disobeyed court orders.
Accordingly, this action should be dismissed with prejudice pursuant to CPLR § 3126(3) for plaintiff's failure to comply with court orders and CPLR § 3216(e) for plaintiff's failure to prosecute the action (see Kim, 73 AD3d at 710; Yona, 285 AD2d at 461; Blackwell, 303 AD2d at 616). However, due to the serious allegations of a fraud perpetrated against the plaintiff regarding the ownership of her home, and the ramifications of such a dismissal, the plaintiff is directed to serve supplemental responses to defendant's interrogatories and responses to defendant's document demands, as requested in plaintiff's letter dated September 27, 2010, within 30 days of the service of this order. All responses must be verified by Tomeka Wheeler. Upon service of complete responses to interrogatories and document demands, plaintiff is to be deposed on or before April 6, 2012.
The Note of issue is extended to May 2, 2012 and no further extensions will be granted. The matter is adjourned to May 9, 2012 for a compliance conference at 2:30 P.M.. At that compliance conference, the action will be dismissed if plaintiff has not complied with this order and the Note of Issue has not been filed. Should the plaintiff file another frivolous Note of Issue, or take other frivolous actions that further delay the prosecution of this action, a hearing will be scheduled to determine the monetary sanctions against plaintiff's counsel, pursuant to § 130-1.1 of the Rules of the Chief Administrator, for his frivolous conduct throughout this litigation.
CONCLUSIONAccordingly, the motion to strike the Note of Issue and Certificate of Readiness, pursuant to CPLR §§ 3126(3) and 3216(e) is granted. The plaintiff is directed to serve [*6]supplemental responses to defendant's interrogatories and responses to defendant's document demands, as requested in plaintiff's letter dated September 27, 2010, within 30 days of service of this order upon counsel. All responses must be verified by Tomeka Wheeler. Upon service of complete responses to interrogatories and document demands, plaintiff is to be deposed on or before April 6, 2012.
The Note of issue is extended to May 2, 2012 and a compliance conference is scheduled for May 9, 2012 at 2:30 P.M.. Upon plaintiff's failure to comply with this order, this action will be dismissed with prejudice.
The foregoing constitutes the decision and order of the court.
E N T E R :
Footnote 1: It is noted that Wheeler attempted to bring an Order to Show Cause for a temporary restraining order in the HSBC Action on October 9, 2007. However, as Wheeler did not properly make an application to intervene as a party, the Order to Show Cause was rejected by this court.
Footnote 2: In the complaint, Wheeler brought causes of action for a claim of the Property pursuant to Article 15 of the Real Property Actions and Proceedings Law, a claim for adverse possession of the Property, and a civil RICO claim pursuant to 18 USC 1961.
Footnote 3: It is unclear how Davoli was permitted to file the Note of Issue with the county clerk on September 9, 2011 as the Note of Issue deadline of October 15, 2010, as ordered in the preliminary conference order, had passed almost eleven months earlier and the Note of Issue date does not appear to have been extended by the court.
Footnote 4: In the affidavit, Wheeler alleges that she owned the Property and sought to refinance it in 2001 in order to pay her bills while her social security disability was pending due to purported medical problems and a loss of "most of her sight." The affidavit claims that in the process of refinancing the Property, a number of individuals, working in conjunction with one another, defrauded Wheeler, Wheeler lost the title to the Property, and she never intended to transfer title.
Footnote 5: In the affidavit, Jones alleges that he was essentially a straw purchaser for another individual, Denise Smith, who ultimately defrauded him. Jones claims he became the unwilling owner of the Property, he "was not experienced in real estate", and he purported to "transfer the property back to [Wheeler] with the understanding that she will take over whatever rights [he] may have in the property." However, the court takes judicial notice that no deed transferring the property back to Wheeler appears to have ever been filed with the New York City Department of Finance. Further, since the inception of this case, a deed filed with the New York City Department of Finance appears to have created a second chain of title raising further issues of whether Jones ever maintained an interest in the Property.