Suffolk Fed. Credit Union v Schultes-Smith

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Suffolk Fed. Credit Union v Schultes-Smith 2017 NY Slip Op 31081(U) April 26, 2017 Supreme Court, Suffolk County Docket Number: 12109/2013 Judge: Howard H. Heckman 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] '\hon Form Order SUPREME COURT - STATE OF NEW YORK IAS PART 18 - SUFFOLK COUNTY PRESENT: HON. HOWARD H. HECKMAN, JR., J.S.C. INDEXNO.: 12109/2013 MOTION DATE: 0110612017 MOTION SEQ. NO.: 003 MD ----------------------------------------------------------------)( SUFFOLK FEDERAL CREDIT UNION, Plaintiffs, -againstCYNTHIA J. SCHULTES-SMITH, CHRISTOPHER E. SMITH, SR., PLAINTIFFS' ATTORNEY: CAMP ASANO LAW FIRM 2000 DEER PARK A VENUE DEER PARK, NY 11 729 DEFENDANT'S ATTORNEY: GENEVIEVE LANE LOPRESTI, ESQ. 3958 MERRICK ROAD Defendants. SEAFORD, NY 11783 ----------------------------------------------------------------X Upon the following papers numbered I to 40 read on Lhis motion : Notice of Motion/ Order to Show Cause and supporting papers-1.:.!L: Notice of Cross Motion and supporting papers_ : Answering Affidavits and supporting papers 16-36 ; Replying Affidavits and supporting papers 37-38 : Other Sure-rcrly 35-40 : (and after h1.:aring counsel in support and opposed to the motion) it is. ORDERED that this motion by defendant Cynthia J. Schultes-Smith brought on by Order to Show Cause (Baisley, J.) dated December 21 , 2016 seeking an order pursuant to CPLR 2004, 2005, 3012, 321 L 3408, 5015 & 6301: 1) setting aside the sale of the foreclosed premises; 2) vacating the Judgment of Foreclosure and Sale (Budd, J.) dated December 18, 2015 and the Order (Budd, J.) dated October 16, 2014 granting a default judgment in favor of the plaintiff; 3) dismissing the complaint for failure to obtai n personal jurisdiction over the defendant; 4) granting leave for .defondant to serve and file a late answer; 5) remanding the action to the foreclosure settlement part; 6) compelling the mortgage lender to offer a loan modification 7) sanctionjng the plaintiff including awarding reasonable attorneys fees, costs and disbursements and scheduling a bad faith hearing; 8) voiding the referee· s deed transferring title to the plaintiff; 9) reinstating the mortgage and staying acceleration of the amounts due under the mortgage; I 0) compelling the plaintiff to sell the premises to the defendant: 11) enjoining eviction proceedings and permitting the defendant and her animals to continue to reside at the mortgaged premises without further interference; and 12) substituting inconung counsel Genevieve Lane-Lopresti as defondant' s attorney in place and stead of frank Blangiardo, Esquire is denied.: and it is further ORDERED that the stay imposed as a result of the Court ' s (Baisley, J.) execution of the Dcct:mber 21. 2016 Order w Show Cause is hereby vacated. Plaintiff commenced this action to foreclose a mortgage in the original sum of $248,000.00 executed by defendants Cynthia J. Schultes-Smith and Christopher E. Smith Sr. in favor of Suffolk Federal Credit Union. On the same date both defendants executed a promissory note promising to re- [* 2] pu) the entin: amount orthi.: imkhtedncss to the mortgage lender. The dcli.:ndants defaulted in making timely monthly mortgage payments beginning Octohcr I. 2012 and lhcreal1er defaulted in <.1ppcaring. in the action hy failing to timely serve an answer. By Order (Budd. J.) dated October 16. 201-l plain ti tr s unopposed default judgment motion \\US g.rnnted und a referee was appointed to compute the sums <luc and O\\·ing lO the plaintiff. A Judgmenl of Foreclosure ant.I Sak (Budd . .I.) \\US granh.:d on Dcc1:mbcr 18. 20 IS . The Ji.m:dosure sale \\US hcltl on September 13. 2016 and titk to 1he pn:mises wa-; conveyed to the <..;uffolk Federal Credit l Inion hy the rclerec on the same date. /\ kn <lay notice to quit \\as personally sen·e<l on the deli.:ndant on Decc.:mb1:r I 0. 2016. De!Cndant subm ittcd this mnti<ll1 seeking injunctive and plenary relil'l. on fkccmhl·1· 21. 2016. The motion has been adjourned on rnnsent the parties until April 25. 2017 and the defendant continues to reside in the prcmises. or lkl(·nda11t·s motion st.:eks an order setting aside the sale o!" the premises: vacnting the prior order granting a dcfoult judgment and the judgment or rorcdosure and sale: dismissing pla intiffs cornplaini or, in the.: alternative granting leave lo serve a late unswcr and to remand the action to the foreclosure settlement conference part: imposing sanctions based upon the plaintilrs claimed bad faith: ant.I granting various forms or injunctive and equitable relief including voiding the referee's dec<l, enjoining eviction proceedings, reinstating the mortgage, compelling the lender to issue a loan nH><..lilication. compdling the Credit Union lo sell the pn:miscs to the defendant and scheduling a hat! faith hearing based upon the plaintiffs unreasonable rcrusal to deal fairly with the borrower. Dclen<lanl submits two affidavits and two affirmations of counsel and claims that she has a reasonable excuse for her failure to serve an answer based upon the fact that she was never personally served with the summons and complaint. Defendant also claims that she has u meritorious defense to plainti IT s action since the mortgage documents arc ..contradictory" and were nc..:ver rul ly explained to her. Defendant states that the aflidavit or service of the summons and complaint is '·putently false .. since: I) she retains a specific. independent recollection or the date service was claimed to have been made upon her personally approximately 3 and Yz years ago and recalls that she was ri<ling her tractor taking care of the fields for her horses until 9:00 p.m on that day accompanied by a friend who was assisting her.; 2) the area where she lived 'Nas ··dense.. ··gated .. and ina1.:c1.:ssiblc to tht.: process server: and 3) the description provided by the process server was inaccurate as she <lid not have brown and grey hair, wus not 58 years or age. W<lS 20 pounds lighter than (kscribcd. and lll'Vcr spo ke with the process server about her mil itary service. Defendant claims lllllllCl"OllS Other anidavits of SC..:rVi<..:t.: ol· documents including motion papt.:rs. the judgment of foreclosure nnd suk. and the I 0 <lay notice to quit submitted by tht.: mortgage lender art.: ll1lsc since she was 11ev1.:r served with these records and <locume11ts. Defendant asserts that she is entitkd to equitable relit.:f~md sct.:ks to pay a .. fair share ror what is mine.. and c:laims that she is being "ripped off". Defendant also daims that the hank onicial anti the court atlnrney/n:!Crce <li<l not treat her foirlv durin!.! settlement <liscussions claiming that the court atlornev cranlt.:d her onlv one settlement . .... ..... .. """"" . con lcrem;c des pi le hcµg.in!! for one simple adjournment. Defendant states that ho th the rekree and her thl'n alhlrne) ref"usl.'d to affi.ml her an opportunity to compkt~ the process of Iii ling out forms for a loan modification. \\ ith C\Htnscl yelling at her to: ..sd l e\ erything and drin· around in a lillk car..:·. Defendant sel.'ks annther opportunity to pay the mortgage as she claims she "always (has) a~ evidenced hy my payment histor) ··. In opposition. the plaintiff submits an attorney"s anirmatio11 and claims that no legal basis c:-; is ts to ..iusti I\· '"' . uranti Ill.!. the dcle11dant · s mot ion. Plaintiff contends that the defendant default1:J in ... appearing by fo iling. to serve an answer to the complaint and has provided nt.:ither a reasonable -2- [* 3] cxcu~e for her tk:foult. nor an arguably m<.:ritorious defense to the foreclosure action. Plaintiff daims that th~' alfo.lavit or service cxcc.:uted hy the process server provides su nicient proof that the mortgage lcmk:r has obtained jurisdiction owr the ddl:ndunt and contends that absent the submission or any crc<libk: proof to deny such scr\'iLe the defendant" s motion must he denied. Plaintiff also claims that counsd for the credit uni(111 has acted in good faith during the two settlement confcn.:nccs ennduL·tcd in court and that no basis ex ists to grant injun<.:tivc relief or to vac.:att: any or the prior orders and judgments grnntcd hy the court h:1 upnn the defendant''> dcfoull. -;ed Initial!,·. it ..:hould l~e m'tcd that court record-> indicate that the dc!Cndnnt cnntinu1.·-; t<1 n:prcsenl herscl r as a pro sc litigant. It remains counsel's duty to file a notice or appearance with the Clerk orthe Court to reflect incoming counsel's representation of the defondant in this action. J\ dcll:n<lalll seeking to va~ale a default in <lppcaring in an action pursuant to CPLR 50 I 5 must provide a n.:asonablc excuse for the default and demonstrate a potentially meritorious clefonse (see 1~·11gene Diloren:::o. Inc. r . ;J.C. Dutton Lhr., Co. 67 NY2d 138, 501 NYS2d 8 (1986): /)e11tsche Bonk /'v'atimwl Trust Co. 1·. Gutierre:::. I 02 J\D3d 825. 958 YS2d 472 (2"J Dept.. 20 I 3)). I lowcwr absent proper service or the summons and complnint a default judgmenl is a nullity since a court lacks in pcrsonam jurisdiction over the dcfondant (CPLR 50 I 5(u) l'rude11ce , .. Wrig/11. 94 AD3d I 071. 9-D NYS2<l 185 (2"'1 Dept., 2012): r~·migront !vfortgaKe ( '0111pw1y. Inc. , .. Weslerl'efl. 105 /\ l)Jd 8%. 964 YS2d 543 (2 11J Dept.. 2013 ): Deutsche /Jank Nutio11al Trust Co. 1·. Pestano. 71 AD3d I 07-J. 899 NYS2d 269 (2"J Dept.. 20 I 0)). Ordinarily a process server's afJidavit or service constitutes prima focic evidence of proper service (U.S. Bonk. N.,.f. "· Ta11her. J 40 /\D3d 1154. 36 NYS3d 144 (2"J Dept.. 2016): FV-1. Inc. 1·. Reicl. 138 AD3d 922. 3 I NYS3d 119 {211J Dept.. 20 I 6 ): Wachovia Bank. NA. 1·. Greenherg. I :rn t\D3d 984. 31 . YS3d 110 (2"J Dept.. '20 I 6): .\11:.RS 1·. J.osco. 125 /\D3d 733. 5 NYSJd l 12 (2 11' 1 Dept.. 2015): NJ'CT/, ,.. 'faq/i.1ti11os. 101/\D3<l1092. 956 NYS2d 571 (2"'1 Dept..2012)). J\ dckndunt may rebut the process server's anidavit by submitting an arfidavit containing specific and detailed contradictions or the claims in the process server's affidavit. hut hare. conclusory and unsubstantiated denials of service arc insunicicnt to rebut the presumption of proper service (U.S. /Junk 1·. !'era/ta. 142 J\D3d 988, J7 l'\YS3d 308 (2 11' 1 Dept.. 2016): Washi11gfo11 /1111t1wl Bank 1·. //11ggins, 140 /\IBd 858. 35 NYS3d 127 (2'"1 Dept..2016): Wells Fargo /Jankv. Christie. 83 t\D3d 824. 921 NYS2d 127 (2".i Dc.:pt.. 20 l I): U..',:. /Jank. N.A. 1·. 'l"ate. I 02 ;\D3d 859. 958 NYS2<l 722 (1'" 1 Dept.. 2013 ): /3e11e.ficia/ //o111emrners Serr. Corp. ,.. ( iim11/1. 60 J\ DJ<l 984. 87 5 N YS2d 815 (2"'1 Dept.. 2009)). /\ ddi.:ndant's sworn anid<1"il denying scn·icc, together with claims of significant d isc.:rcp;111cics bet ween the appearance and the Jcscri pt ion of the person sc.:rved by tile process SCl"\"Cr will necessitate a hearing (see :\lachol'<!C 1·. ,\.l'Ohmlu. 120 J\D3u 772. 992 NYS2d 279 (2"'1 Dept.. 20 I J ): /:"111igm111 ,\/ortgug' Sen-ices 1·. fl'<'sfc•1Telt ..rnprn.: Wc:lls Fargo 8w1k. .V..·I. 1·. Final foucli /nterion . I./.(·. 112 /\I )Jd 813. 977 IYS2d 351 (2"'1 Dept.. 20 I J )). I l<l\\.e\Tr. claimeJ discrepancies "hich arc unsubstantiated and ora minor. slight or inconsequential nature arc insunic.:ient tn \\arrant a hearing on the issue or service (/fll~i ·i\/uc FC'dernl /Junk. I S B 1·. I ~1·1111111. 74 /\D3d 751. 90 I NYS2d S..t5 (211d Dept.. 20 I 0): /kl/('.fidal l/omc011·11,,,. Se1TiC<.' Corp. \' (iirn11/1. \"/ljJW. )). I he rccord shll\\·s that the 1 ~mces:; :•.:rn:r s.:n·ed thl' <lek:ndant C)nthia .!. Sc!1t1ltcs·S.nith b:. perso1wl deliver> pursuant lo CJ>l ,R 308( I) at the mortgaged pn.:mises on May 22. 20 I> at 7:-t:! p.m. The dL·scriplion of thl' person served was n \Vhi te female \\'ilh brown/grey hair. approximatcl> 58-(12 \'1.·~1rs . oLt!.!c who \\tlS between 5 fo~H J inches and 5 fool 7 inches and \\Ci!.!hc<l between 130 and 1-Hl - ~ ., - . )- [* 4] pounds. Defendant subm ts an affidavit claiming: 1) that she \ms never pl.!rsonal ly servc<l with the summons and complaint: 2) that she \\«ls riding her tractor on that date until 9:00 p.m. and \\'as thl.!refore not able to rl.!ceive papers: 3) that the area where she was allegedly served was gated and inuccessiblc: and 4) that the desniption of her appearance was inaccurate since she did not have hrO\'vll and gn.:y hair. \\US not 58 years of age. never spoke to anyone about military service and her weight was .. totally off as it wus in excess of 20 pounds··. 1 Based upon tile C\ icktH.:e submilled. the artidavil of the process server provided prima focic evickncc tir pn'pt.:r :-ervii.:t· or the q1mnwn~ and cnmp!aint tn c~tablish j mi-;diction nver her pursu;11ll to C PLR :108( I ). II "as thus incumbent upon the defendant to rebut the prima focic sl1ln":ing by submission or Spl.!Ci lie and substuntiated claims regarding lack or sen ice. Dclendam · s aflidavit wholly fails to rebut the presumption of due service upon her. Defendant ·s claimed discrepancies or her appearance with res1x:ct to her age. weight and color or her hair arc either minor (age) or arc not substantiated by any relevant. admissible proor other than her own sci f serving estimates of her appearance at the time. Then; is no objective evidence submitted in the form or either conJirming documentary proof in the form or a driver's license or contemporaneous photo idcnti fication. or un arfidavit oLm independent obscr\'er who would support the de fondant's sci I' description ol' her own appearance. Moreover. ddendanf s affidavit states that on the evening of the alleged service. she had a friend assisting her while she worked. yet there is no affidavit from this individual lo support the assertions made by Schultes-Smith denying serv ice. I laving subm itted unsubstantiated and conclusory denials or service and receipt of papers, the de!endant's application to dismiss the complaint for failure to obtain personal jurisdiction over her is denied (Wells Fargo Hank. NA. v. 'fricuri<.:o. 139 J\D3d 722. 3'.2 NYKS3d 213 (2 11d Dept.. 2016); IndyMac''· lfy11wn. 74 AD3d 751. 901 NYS2d 545 (2'"1 Dept.. 20 I 0): U.S. Bank. NA. 1·. Pera/tu. supra.: Wells Fargo Bank. NA. 1·. W(l/ter, 142 J\D3d 992. 37 NYS3d 446 ('.~"d Dept.. 2016)). With respect to the defond< ml·s application seeking kavc to serve a late answer. the law requires proof lo establish a reasonable excuse for the delendant ·s failure to time!) serve an answer and a showinl.!. of an arl.!,uahlv meritorious defense (Deutsche /Jank Natimwl 7i-ust ( 'o. ''· (/lffierre:. supra. : /)e111.,:·he /Jonk-Nati<~11al Ji-usf Co. 1·. /\or/is. 138 AD3d 915. 30 NYS3d 228 (2'"1 Dept.. 2016); li. .)'. /Jank 1-. Cher11hi11. 141 J\03d 514. 36 NYS3d 154 (2"'1 Dept.. 20 16)). Defendant has wholly foikJ to submit any reasonable explanation for her prolonged dcli.tull in timely serving un answer am.I to provide an arguably meritorious dcfonsc lo plaintirr s forcclosurl.! action. Dc!i.:ndunt's only dcknsc arc her claims that the mortgage documents me ..contrndictory.. and that the knder had a duty to expla in the obligations she incurred as a result or signi ng the note and mortgage. either assertion prn\·idcs the necessary showing of a meritorious defense. With respect to the defendant's upplicalion seek ing injuncti ve rdicL the hm is clear that in llnkr to obtain a preliminary inj unction the moving part~' must establish hy dear und convi ncing i: vidc111.:c: I) ;J likelihood or success on the ml!rits: 2) irrl'parablc injury absent a preliminary inj um:tio11: and 3) that the equit ies bu!ancl.! in ht.:r !:1vor (( '/J(fse !Jome Fi11t111n'. I.I.< '" ( 'urtelli. 140 · /\D.id 911. 32 N YSJd 515 (2"J Dept.. '.:!01 6): Nohu Next /)oor. LU' 1 Fine . Iris //o11si11g. /11c.. -l ·. NY3d ~D(J. 800 NYS2d -l8 (2005): /.oiler 1 I /S!J( ' .\/ortgoge Corv. l Vi J\1>3d <n2. 2-l NYSJd l Mi -. (2"'1 lkpl.. 201 (l): ,\/.//. ,\l,:ndt·lht111111 Or1/101ic <~ /'ro.,1/ie1h· SnTin·.\. 111< 1· ll'rnh'I'. 12(, /\l)~d S5°. 5 NYSJd 5 I 7 <2"'1lkpt.. 20 I 5)). The dt.:cision to grnnt or deny injuncliH.: rdicf liL·s in the sound disnction or the trial court (see .\fuller o(:lm1<111idu Reu!zr Corp. . I'. rmrn of ( ~\'\"{('/" 8<~1 '. 126 /\ l)Jd 894. J NYS3d (d2 (2"J Dept.. 2015)). On thl! basis of this record dcrcndant's request for injuncti\e -4- [* 5] r.:licr must he tknicd. The ddi.!nJunl has failed to make any dear showing or a likelihood of succL::->s on the merits or lo prove that the balancing ol'thc equities weigh in her favor gi,en the fact that mortgage payments han~ not been made since Octobt:r I. 2012. Finally. with respect to the cJcl\.:ndant' s claims or bad faith and her contention that she is cntitkd to equitabk rclieC the law is ckar that whik a court retains inherent equitabk power lo ensure that fr)rcclo..;11rc is not made an .. instrument of injustice·· {S<'C'. llkaifi 1· ( 'e/e\·tiol ( 'J111rch o( Chris/ Cafrw:·· /'urish. 2-+ /\D~d -+76. -+77. 808 YS2c.J ~30 ('.211,j Dept.. 2005) quoting Ciuardiw1 I 0<t11 ( ·,, 1· F(lr~1 '. -n _ 'Y2d '\ 15. 520, 41 C) 1YS2d 56 (I <>92)). in this in'>tance there has hccn no cn.:d ihit: evidrnce or inj usticc suhmi 1ted by the dl!fcndant warranting this c.:olu1 · s further inwrvcntion. /\ foreclosing party has no obi igation to modify the terms of a Imm freely entered into by a borrower and thl! failure to offer a loan modification docs not provide any defense to a mor1gagor \\·ho has defaulted in mnk.ing. payment::; under the terms of the original agreement (see ( 'itihunk. N.A. 1'. l'w1 Brunt l'roperties, U.( ·. 95 /\D3d 1158. 945 NYS2d 330 (2 11J Dept.. 20 12)). This record reveals that the dcrcndant has defoultt;cl in making payments for the past 54 months and there is no crcdibl<.: proor submitted to support defcnc.Janrs assertions that the credit union h<l!i acted in bad faith or in excess of its jurisdiction. Defendant's claim of unfair treatment by the court attorney/referee is itself incredible and the balam:c or her contentions do not provide believable factual grounds sunicicnt to grant inj unc.:tivc relief or to vacate any of the prior orders or judgment entered in this foreclosure action. Based upon these circumstances no legal grounds ex ist to further delay the defendant's eviction from the premises. Accordingly. the defendant's motion is denied in its entirety and the stay imposed as a result of the execution of the order to show cause is hereby vacated. Dated: April 26. :w 17 J.S.C. -5 -

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