Citimortgage Inc v Volkommer

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Citimortgage Inc v Volkommer 2016 NY Slip Op 32568(U) December 19, 2016 Supreme Court, Suffolk County Docket Number: 063096/2014 Judge: Thomas F. Whelan Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] COPY MEMO DECISION & ORl)ER INDEX No. 063096/2014 SUPREME COURT- STATE Of NEW YORK I.AS. PART 33 - SUFFOLK COUNTY PRESENT: Hon. THOMAS F. WHELAN Justice of the S':1preme Court . ----~---------------------------------------------------------)( CITIMORTGAGE INC, Plaintiff, MOTION DATE: 10113116 SUBMIT DATE: 11/25/16 Mot. Seq. 002 - MG Mot. Seq. 003 - MD CDISP: YES ROSICKI, ROSICK.1 & ROSICKI Atty. for Plaintiff 2 Summit Court, Suite 30 l Fishkill, NY 12524 -againstCANDYCE M. VOLKOMMER, a/k/a CANDYCE VOLKOMMER, and PATRICK J. PATRICKJ. VOLKOMMER, YOUNG LAW GROUP, PLLC Atty. for Defendant P. Volkommer 80 Orville Drive, Suite 100 Bohemia, New York 11716 Defendants. ---------------------------------------------------------------)( Upon the following papers numbered l to _8_ read on this motion by the plaintiff to confirm report and for judgment and separate motion bv defendant P. Volkommer to vacate default and other relief ; Notice of Motion/Order to Show Cause and supporting papers I - 3 ; Separate Order to Show Cause and supporting papers by defendant P. Volkommer 4-5 ; Opposing papers 6-7 ; Reply papers 8 ; Other ; (Md afie1 heating eot1Mel in stipport and opposed to the motion) it is, ORDERED that this motion by the plaintiff (#002) for ru:i order substituting a subsequent transferee as plaintiff, and an order confirming the report of the referee appointed in a prior order of reference entered upon the defaults of all defendants in answering the complaint and for the issuance of a judgment of foreclosure and sale is considered under RP APL Article 13 and is granted; and it is further ORDERED that those portions of the separate motion (#003) by defendant, Patrick J. Volkommer, for an order vacating the May 19, 2015 order of reference on default pursuant to CPLR 5015(3) are considered thereunder and denied; and it is further [* 2] Citimortgagc, lnc. v Volkommer Index No. 063096/2014 Page 2 ORDERED that those portions of the defendant's separate motion (ff.003) for an order vacating the May 19, 2015 order of reference and the moving defendant's underlying default in answering pursuant to CPLR 5015(a)( I), 2004, 2005, with leave to appear herein by answer pursuant to CPLR 3012(d) are considered thereunder and are denied; and it is further ORDERED that the remaining portions of the defendant's motion (#003) wherein he seeks an order imposing sanctions against the plaintiffand/or its counsel due to their purported engagement in frivolous conduct arc considered under 22 NYCRR Part 1301-1 and denied. The plaintiff commenced this action on April 25, 2014 to foreclose the lien of a $359,650.00 mortgage given by the Volkommer defendants to ABN AMRO Mortgage, Group. Inc. on August29. 2005. to secure a mortgage note likewise given on that day by the Volkommer defendants. According to the complaint filed herein, the loan went into default on August L 2009 and remains without cure. The plaintiff further slates in the complaint filed herein that a prior foreclosure action was filed with the clerk on September I 0, 2012 under Index Number 12-27859, and that ''the plaintiff will unde11ake to discontinue said action". Said action was brought against the Volkommer defendants. Mortgage Electronic Registration Systems, lnc., as nominee for RBS Citizens, N.A., and unlmown defendants John Doe and Jane Doe. Only defendant, Patrick J. Volk.ommer, appeared in that action by an answer prepared by his cunent counsel. The record reflects that prior to the interposition of any motions in that action, defense counsel consented to the plaintiffs discontinuance of 2012 action by defense counsel's execution of a stipulation on April 21, 2014, providing for such discontinuance and the cancellation of the notice of pendency. Nevertheless, the plaintiff counsel ' s did not execute that stipulation w1til September 12, 2016, after which, said stipulation and the other papers necessary to secure the discontinuance of the prior action was filed with the Clerk. Following service or the summons and complaint in this action on April 30, 2014, the plaintiff served the Volkommer defondants with a Request for Judicial Intervention by mail on May 15, 20 14. which was electronically filed on June 26, 2014 and processed by court personnel on October 28, 2014. Thereafter, the court scheduled a CPLR 3408 settlement conference in the specialized mortgage foreclosure conference part of this cow1 for December 9, 2014, at which, neither of the Volkommer defendants appeared. By notice of motion returnable Mayl4, 2015. duly served upon the Volkommer defendants, the plaintiff sought the deletion of the Lmknown defendants and an order of reference on default. That motion (#00 l ), which was not opposed by the Volkommcr derendants, was granted by order dated May 19, 2015. The plaintiff served its current motion (#002) for the issuance of a judgment of foreclosure and the other incidental relief upon the Volkommer defendants on August 30, 2016. Six days prior to the noticed return date of said motion on October 13, 2016. defendant, Patrick J. Volkommer. interposed his separate motion (#003) by order to show cause to vacate the prior order of reference, his default in answering with leave to serve an answer and the imposition of sanctions against the [* 3] Citimortgage. Jnc. v Volkommer Index No. 063096/2014 Page 3 plaintiff and/or his counsel. Both the plaintiffs motion (#002), and the separate motion by defendant Volkommcr (11003). were adjourned to November 25, 2016 and marked submitted on that date. Those portions of the defendant's motion wherein he seeks to vacate the order of reference issued herein on May 19, 2015 pursuant to CPLR 5015(a)(3) are denied. The claim to this relief is predicated upon purported acts of fraud allegedly engaged in by plaintiffs counsel in the preparation and filing or the Request for Judicial Interventio n f'·RJr'] in this action. Therein, the plaintiff's counsel failed to identity the prior 2012 foreclosure action as a "related action" in the box provided therefor on the RJI form generated by the Office of Court Administration and filed herein. According to defense counsel, absent this allegedly perj urious and fa lse attestati on, '·this case would have been transferred to the Honorable John J. Leo, J.S.C. , and the undersigned (defense counsel I would have received proper and lawful notice of the 20 14 action. which was commenced in d irect violation of RPAPL 1301" (see page 5, if 22, of the affirmation of Ivan Young, Esq., submitted in support of the defendant's motion l#003J; and at page 8, ~ 32, wherei n it is alleged that "!AS would have transferred this matter to Judge Leo (i.e. the judge presiding over the active, open and pending 2012 ac:t ion'·) and this 2014 Action would have been dismissed for being brought forth in direct violation of RP APL 1301 (3)" [citations omitted]). The plaintiff and its counsel are thus charged with failing to give proper notice of this action to the defendant's counsel and with "being able to induce this court into granting a default judgment and order of reference on May 19, 2015" (id., at page 6, iJ23). However, the court finds that these contentions lack merit due to their speculative nature as they arc premised upon pure surmise and conjecture as to what would have happened if the 2012 action had been identified as related to this one in the Request for Judicial Intervention served and filed herein. In addition, relief pursuant to CPLR 50 l 5(a)(3) is ava ilable upon a showing ofcither intrinsic or extrinsic fraud. Claims of intrinsic fraud are based upon assertions that the plaintifPs pleaded factual allegalions are fa lse due to perjured testimony or upon the use of false and/or fraudulent documents in support of its claims fo r relief (see Deutsche Bank Natl. Trust Co. v Karlis. 138 AD3d 915, 30NYS3d 228 (2d Dept2016J: U.S. Bank, N.A. vPeters, 127 A03 d 742, 9 NYS3d 58 f2d Dept 20151; New Century Mtge. Corp. v Corriette. 117 AD3d 1011 , 986 NYS2d 56012d Dept 20141; Bank of New York v S tradford, 55 AD3d 765. 869 NYS2d 554 l2d Dept 2008); Morel v Clacherly, 186 AD2d 638. 589 NYS2d 778 [2d Dept 1992 J). To be entitled to a vacatur of an order or judgment upon such grounds, the defendant must establish both a reasonable excuse for the default and a potentially meritorious defense to the action (see Deutsche Bank Natl. Trust Co. v Karlis. 138 AD3d 915, supra: U.S. Bank, N.A. v Peters. 127 AD3d 742. supra; Wells Fargo Bank, N.A. v Bra1111, I 23 A03d 698. 998 NYS2d 420 12d Dept 20141: New Century Mtge. Corp. v Corrie/le, 117 AD3d 1011. supra: Bank of New York v Lagakos, 27 AD3d 678, 810 NYS2d 923 [2d Dept 2006]: Fiscllmau v Gilmore. 246 A03d 508, 666 NYS2d 942 l2d Dept 1998]; Morel v Clacherty, 186 AD2d 638. supra). I Jere, neither the factual allegations in the plaintiffs complaint nor any of the papers submitted in support of the plaintiffs prior motion (#00 I) for an order of reference have been shown [* 4] Cilim01tgage, [nc. v Volkommer Index No. 063096/2014 Page 4 to contain false or pe1j urious statements. To the extent that the failure to identity the 2012 action as one related to this one in the RJI filed herein may be considered as constituting a material omission of fact on the part of plaintiff' s counsel, there is no causal connection between such omission and the procurement ofthe order of reference nor any reliance upon said omission by the defendant (see Nerey v Greenport Mtge. Funding, ]11c., _ AD3d _ , 40 NYS3d 510 [2d Dept 20161; ''To estahlish.fi·aud. a plaint(ff'11111st prove a misrepresentation or a material omission <~ffact which was false and known to befahe by the defendant, made for the pwpose <?f'inducing the other party to rely upon it.just{fiable reliance. and infwy" [citations omitted]). In any event, and as more fully set forth below, no reasonable excuse for the moving defendant's default in answering is discernable from his moving papers. In contrast to intrinsic fraud, extrinsic fraud is one practiced in obtaining a judgment that is based opon wrongful acts of trickery or deceit which alleged ly ]nduced the moving defendant into defaulting or otherwise wrongfully deterred him or her from litigating the plaintiff's claims (see CPLR 5015laJl3 j ; see EMC Mtge. Corp. v Toussaint, 136 AD 3d 861, 25 NYS3d 312 [2d Dept 20l6J; U.S. Bank, N.A. v Peters, 127 AD3d 742, supra; B"nk of New York v Lagakos, 27 AD3d 678, 810 NYS2d 923 [2d Dept 2006]; Shaw v Shaw, 97 AD2d 403 , 403, 467 NYS2d 23 l 12d Dept 19831). To succeed on such a claim, the defendant must demonstrate that he or she "was led to believe that he or she need not defend the suit" (see Shaw v Shaw, 97 AD2d 403, supra). As in the case of intrinsic fraud, reliance is a necessary element of a claim of extrinsic fraud. In the reply papers submitted by the defendant, his counsel clearly characterizes the 5015(a)(3) as a claim for one sounding in "extrinsic fraud" due to the plaintiff's failure to list the 2012 action as a related action on the RJI filed herein. However, defense counsel's assertion that had there been no such failure, he "would have received proper and lawful notice of the 2014 action. which was commenced in direct violation of RPJ\.PL 1301'' (see page 5, ii 22, of the supporting aflirmation of defense counsel), is belied by ceratin factual averments put before this court in other paragraphs of defense counsel ' s supporting affirmation. In paragraph 11 of defense counsel's supporting affo-mation, it is alleged that on May 2, 2014, the defendant contacted his counsel and advised him about the plaintiff's service of the summons and complaint in this action, which service was effected by in hand delivery to the defendant on April 30, 2016 (see page 3 of defense counsel's supporting affirmation at ii 11). Thereafter on May 29, 2014. the defendant contacted his counsel a second time and advised that he bad received the RJI served by plaintiffs counsel by mail on May 15, 2014, a copy of which, the defendant faxed to his counsel (see id; at ~ 12 and Exhibit 9 attached thereto). In response to both inquiries, defense counsel advised the defendant to "disregard" the papers served in this action as ·'they were probably sent in error. being that the 2012 action was in the process of being voluntarily cancelled by Plaintiff and Rosicki"' (id. at ii~ 11: 12). Apparent from these factual avennents is that the defendant faxed a copy of the RJI to his counsel within nine days of the expiration of the time within which the defendant was required to answer the previously served summons and complaint. While the RJI failed to list the 2012 action [* 5] Citimo1tgage, Inc. v Volkommer Index No. 063096/2014 Page 5 as related to this one, the plaintiffs service thereof upon the defendant did not cause him to default in answering nor did it constitute a lack of any proper notice of the commencement of this action to his counsel. Rather, such default was caused by defense counsel's erroneous presumption that there was no need to respond to the summons and complaint served on April 30, 2014, by in hand delivery to the defendant, nor to service by mail of the RJl because "they were probably served in error''. There is thus nothing in the record that suggests that the defendant was in anyway induced or "led to bcl icve" by the plaintiff or its counsel that said defendant need not appear in the action and defond against the plaintiff's claims by virtue of the service and filing of the RJI that failed to list the prior action as one related to this action. The defendant's reliance upon the Appellate Division decision in Bank ofNew York Me/1011 v Marolda (139 AD3d 774. 33 NYS3d 280 !2d Dept 20161) is misplaced. Many of the material facts found therein, including complete identity of the summonses and complaints served in the two pending actions and index numbers, the plaintifrs grant of an extension of time to answer in the first commenced action and its faiJure to give notice of motion practice in the second action, differ materially from facts existent in this action. Contrary to the contentions of defense counsel, the complaint served in this action is not identical to the one served in the 2012 action except for the index number, as there arc fewer dcfondants named in the caption an<l this complaint contains allegations regarding the existence of the prior commenced action and that it was in the process of being discontinued (cf, page 5, 18 of defense counsel's supporting affirmation). ln addition, the RJ I faxed by the defendant to his counsel contained the caption of this action which differed from the caption of the prior action. Moreover, the plaintiff served all of its moving papers upon the defendant, including those put before the court on the plaintiffs first motion (#00 I) for the order of reference that was granted on May 19, 2015. Accordingly, the court finds the defendant's claim of extrinsic fraud to be without merit. Those portions of the defendant's motion (#003) wherein he seeks a vacatur of the order of reference pursuant to CPLR 50 l 5(a)(3) arc thus denied. Also denied are those portions of the defendant's motion (1/003) wherein he seeks an order va<.:ating the May 19, 2015 order of reference and the moving defendant's underlying default in answering pursuant to CPLR 50 15(a)(J), 2004, 2005 for leave to appear herein by answer pursuant to C PLR 3012( d). To be entitled to this relief: it was incumbent upon the defendant to demonstrate ··excusable default grounds" which require a showing of a reasonable excuse for the default and a demonstration of a potentially meritorious defense (see Mellon v /zmirligil, 88 AD3d 930, 931 NYS2d 667 r2d Dept 2011 J, quoting. Wells Fargo Bank, N.A. v Cervini, 84 AD3d 789, 921 NYS2d 643 [2d Dept 201 1l: HSBC Bank USA, Natl. Ass'11 v Rotimi. 121 AD3d 855, 995 NYS3d 81 f2d Dept 20141: Mannino Dev., Inc. v Linares, 117 AD3d 995. 986 NYS2d 578 !2d Dept 20141: Diederich v Wetzel, I 12 A 03d 883, 979 NYS2d 605 [2d Dept 2013): Community Preserv. Corp. v Bridgewater Co11domi11i11ms, LLC. 89 AD3d 784, 785, 932 NYS2d 378 [2d Dept 201 l]). The material facts of the asserted meritorious defense must be advanced in an atlidavit of the defendant or a proposed verified answer attached to the moving papers (see Gershman v A hmad. 131 AD3d [* 6] Citimortgage, Inc. v Volkommer Index No. 063096/ 2014 Page 6 1104, 16 NYS3d 836 f2d Dept 2015]: Karalis v New Dimensions HR, Inc., I 05 AD3d 707, 962 Y S2d 647 r2d Dept 2013 j). I Icrc, the de fondant, solely through his counsel, advances Jaw office failure as the reasonable excuse for the default in answering the complaint. This failure is premised upon defense counsel's claim that he twice advised the defendant in May of 2014 to disregard the papers served upon him in this action "as they were probably sent in error, being that the 2012 action was in the process of being voluntarily cancelled by Plaintiff and Rosicki". However, this erroneous advice, coupled with the defendant's decision to follow it, " 'constituted a misguided strategy', not law office failure'· (Bank of New York Mellon v Co/luci, 138 AD3d 104 7, 30 NYS3d 667 [2d Dept 20161. quoting OCE Busi11ess Sys., btc. v J.J. Sopher & Co., Inc., 186 AD2d 464, 589 NYS2d 774 !2d Dept 1992J; see Wltite v Daimler Chrysler Corp., 44 AD3d 651, 843 NYS2d 168 [2d Dept 2007]; see also Emigrant Ba1tk v Wiseman, 127 AD3d 1013, 6 NYS3d 670 [2d Dept 2015]; HSBC Bank USA, N.A. v Rotimi, 121 AD3d 855, 856, 995 NYS2d 81 [2d Dept 2015]). Even if it were otherwise, the defendant failed to demonstrate possession of a meritorious defense to the plaintiff's claim for foreclosure and sale. The only defense asserted in the defendant's moving papers and the proposed answer attached thereto is that this second foreclosure action must be dismissed because it was commenced before the prior 2012 foreclosure action was formally discontinued in violation of the provisions of RPAPL § 1301. The court, however, rejects thjs defense. RP APL 1301 (3) provides that"[ w ]hi le ran] action is pending or after final judgment for the plaintiff therein, no other action shall be commenced or maintained to recover any part of the mortgage debt, without leave of the court in which the former action was brought" (Hometown Bank of Hudson Val. v Belar<li11elli, 127 AD3d 700, 701, 7 NYS3d 289 [2d Dept 2015J). Conversely, ·'where a ·foreclosure action is no longer pending and did not result in a judgment in the plaintiffs favor, the plaintiff is not precluded from commencing a separate action' without leave of the court (TD Bank, N.A. v 250 Jackson A ve., LLC, 137 AD3d 1006~ 27 NYS3d 619 [2d Dept 290161 quoting Hometo wn Bank of Hudson Val. v Belardinelli, 127 AD3d 700, 70 I, supra, quof;ng McSorley v Spear. 13 AD3d 495, 496, 789 NYS2d 52 f2d Dept 2004)). Although the plaintiff in this action secured defense counsel's stipulated consent to discontinue the plai ntiff's 2012 action prior to commencing this second foreclosure action and before any judgment was entered therein, there was a technical violation ofRP/\PL 1301(3) due to the p laintiffs failw-c to sign and file the papers necessary for the formal discontinuance of said prior action prior to the commencement or this action. Nevertheless, a technical violation of RP APL § 130 I, which is strictly construed as it is in derogation of common law rights, does not necessarily warrant a dismissal of the second action (see VNB New York Corp. v Paskesz, 131 AD3d 1235, 18 NYS3d 68 l2d Dept 2015)). Where a defendant seeking dismissal of the second action. in which no judgment was entered, is not in the position of having to defend the first action because the plaintiff was in the process of discontinuing [* 7] Citimortgage, Inc. v Volkommer Index No. 063096/2014 Page 7 said action, the violation of RPAPL § 1301 may be disregarded a<; a mere irregularity provided it does not prejudice a substantial right of any party (see Wells Fargo Ba11k, N.A. v Irizarri. 142 AD3d 6 10, 36 NYS3d 689 f2d Dept 20 16J: cf. A urora Loan Serv., LLC v Reid, 132 J\D3d 788, 17 NYS3d 894 [2d Dept 2015] ). Under the circumstances of this case, the court fin ds that the technical violation of RP APL § 130 I (3) is a mere ilTcgularity not causing substantial prejudice to the rights of any party. The 2012 action was essentially dormant following the defendant's appearance therein by answer. Although discovery notices were attached to such answer and disputes with respect thereto aired in correspondence between counsel, no motions were made by any party prior o r subsequent to the plaintiff s presentation of the discontinuation stipulation that was executed by defense counsel on April 21. 2014. The court thus finds that the defendant failed to demonstrate a potentially meritorious defense to the plaintiffs claim for foreclosure and sale pursuant to RP APL § 130 I. Those portions of the defendant's motion wherein he seeks a vacatur of the May 19, 2015 order or reference issued herein by this court and a vacatur of his underlying default in answering the complaint pursuant to CPLR 5015(a)(l), 2004, 2005 fo r leave to appear herein by the answer attached to his moving papers pursuant to CPLR 3012(d) arc thus denied. J\lso denied arc the remaining portions of the defendant's motion (#003) wherein he seeks an order imposing sanctions against the plaintiff and/or its counsel due to their purported engagement in frivolous conduct. The moving papers fai led to demonstrate that any conduct complained of herein by the defendant through his counsel constitutes frivolous conduct as that term is defined in 22 NYC RR I 30-1 (c). Left for consideration is the plaintifrs motion (#002) for confirmation of the report of the referee to compute and issuance of a judgment of foreclosure di recting a sale of the mortgaged premises and the other re lief demanded in its moving papers. The moving papers sufficiently demonstrated the plaintiffs entitlement to such relief (see Cafaro v Tineo. 135 AD3d 887, 22 NYS3d 909 l2d Dept 2016l ;HSBC Bank USA, Natl. Assoc. vSimmons, 125 J\DJd 930. 5 NYS3d 175 [2d Dept 2015]). The opposing papers foiled to demonstrate any grounds for a denial or the plaintiffs motion. The proposed j udgmcnt attached to the moving papers, as modified by the court to reflect the issuance and terms of this order. has been marked signed. Dated : '. ""(!/ \, Qtb "",) 1/ ' 7

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