Countrywide Home Funding Co. v Henry J.K.
Annotate this CaseDecided on June 28, 2007
Supreme Court, Nassau County
Countrywide Home Funding Co., Plaintiff,
against
Henry J.K.; Nancy L.K.; Sears Roebuck & Co.; Gimbel Brothers, Inc.; New York Telephone, Defendants.
008408/00
Ahern & Ahern, Esqs. attorneys for Plaintiff Countrywide
Thomas E. Brett, Esq. attorney for Guardian
Mental Hygiene Legal Service attorneys for Defendant Nancy L.K.
Joel K. Asarch, J.
The Defendant, NANCY L. K., by her Court-appointed Co-Guardian and son, has moved this Court for an order vacating and setting aside the within default judgment of foreclosure entered against NANCY L. K. and HENRY J. K. on May 22, 2001. The Plaintiff opposes the relief sought herein.
Despite the briefing schedule established by the Court, the Plaintiff untimely submitted opposition papers. However, the Court finds that considering such papers will not prejudice the Defendant and thus has accepted them, as well as the Reply Affirmation and Supplemental Reply Affirmation submitted by counsel for the Co-Guardian. CPLR 2214(c); see Dinnocenzo v. Jordache Enterprises, Inc., 213 AD2d 219, 624 NYS2d 6 (1st Dept. 1995). Secondly, the Co-Guardian has no standing to raise a defense on behalf of HENRY J. K., as his appointment and authority relates only to the Incapacitated Person. Finally, absent a showing of a meritorious defense or an objection by HENRY J. K. (which has not been presented herein), the alleged lack of notice will not be sufficient to set aside the default judgment as against him. See Crespo v. A.D.A. Management, 292 AD2d 739, 739 NYS2d 49 (1st Dept. 2002).
The papers indicate that a $39,000 mortgage was placed against a certain real property owned by NANCY L. K. and HENRY J. K. in New Hyde Park, New York on or about July 17, 1978. The Co-Guardian contends that his mother was hospitalized for mental illness shortly after the execution of the mortgage. According to the Co-Guardian, payments on the mortgage were made until about May, 1997 at which time the mortgagors apparently defaulted. A judgment for $95,252.90 now stands as against such borrowers. The Co-Guardian also advises that in 1997 and in 1999, the Village of New Hyde Park began to issue summonses against the [*2]subject real property, alleging dangerous conditions upon same.
On or about December 21, 2004, the Commissioner of the NASSAU COUNTY DEPARTMENT OF SOCIAL SERVICES commenced a proceeding pursuant to Article 81 of the Mental Hygiene Law to have a Guardian appointed for the personal needs and property management of NANCY L. K., an Alleged Incapacitated Person. Following several hearing dates, the Court found NANCY L. K. to be an Incapacitated Person and appointed Co-Guardians for her Personal Needs and Property Management by Order and Judgment dated December 1, 2005.
It is clear to the Court that the focus of this motion must be upon NANCY L. K. at the time the foreclosure action was instituted. According to the Affidavit of the process server attached to the moving papers, NANCY L. K. was served with the Summons and Complaint on June 20, 2000 "@ THE INTERSECTION OF 10TH STREET & FIRST AVENUE, NEW HYDE PARK, NY 11040" blocks away from her known residence and on the opposite side of a main thoroughfare. The Co-Guardian further alleges that NANCY L. K. was likely riding her bicycle at the time of service something she continued to do in 2006 during the pendency of the Article 81 proceeding. The Co-Guardian requests that a traverse hearing be held to determine the "circumstances of [the process server's] efforts over the 2-month period to serve Mrs. K." so as to shed further light on the outward indicia of her mental capacity during the relevant time period.
The Plaintiff by its counsel states that in 1999 and early 2000, the borrowers stopped making payments on the mortgage, and contends that "the movant admits that service upon her is correct but argues that she was not mentally capable of understanding it at the time." Counsel further argues that there is no caselaw to require a process server to make inquiry or " ... to determine the competency of the party being served in an action ...". While there exists no explicit duty for the process server to perform an in-depth assessment of the recipient of process, Courts have held that a process server must make inquiry and ascertain whether a person is authorized to accept service of process on behalf of a corporation, see Fashion Page Ltd. v. Zurich Ins. Co., 50 NY2d 265, 406 NE2d 747, 428 NY2d 890 (1980), or if the individual served had a relationship with and/or had accepted process for a defendant in the past, see Hailey v. Hyster Co., Inc., 190 AD2d 711, 593 NYS2d 117 (2nd Dept. 1993). The process server must determine whether the person receiving service is, in some instances, of suitable age and discretion, see CPLR 308(2), and whether such individual is serving in the military. See Military Law Section 300 et seq. Surely, the issue of a recipient's capacity is no less significant if there are manifestations which are readily discernable to even a lay observer in the course of their albeit brief interaction..
However, this Court need not consider in the case at bar the extent of the duty of the process server to make inquiry concerning the recipient's mental status. Clearly, such obligation ultimately falls upon the shoulders of the Plaintiff seeking relief from the Court as against such person.
"The court's duty to protect an incompetent litigant has long been recognized (citation omitted) and the duty is not limited to cases in which there has been judicial determination of lack of capacity." Matter of Feminella, 14 Misc 3d 476, 478, 824 NYS2d 705, 706-07 (Sup. Ct. Nassau Co. 2006). In the seminal case of Barone v. Cox, 51 AD2d 115, 379 NYS2d 881 (4th Dept. 1976), the Appellate Division made it clear that under Article 12 of the CPLR, "an action [*3]at law against a person incapable of protecting his interests or who apparently is so incapable and who has no committee or guardian, may not proceed without notice to the court of the circumstances and inquiry therein by the court." The Court then may appoint a Guardian ad Litem to receive service of the summons and complaint on behalf of such individual. Failure of the Plaintiff to bring the Defendant's possible mental incapacity to the Court's attention so that a determination may be made to appoint a Guardian ad Litem to protect their interests "will result in a default judgment that will be set aside, even after, for example, a foreclosure and subsequent sale to a third party (citation omitted)," Parras v. Ricciardi, 185 Misc 2d 209, 213, 710 NYS2d 792, 796 (N.Y.C. Civ. Ct. Kings Co. 2000). A default judgment entered against a party "incapable of protecting their interests is invalid and unenforceable unless a guardian ad litem is appointed for such person." Id. at 796.
Under the facts of this case as set forth in the various pleadings, the Court must focus on the circumstances existing at the action for foreclosure was commenced, and whether at such time NANCY L. K. " ... was known, or should have been known, to be an incompetent incapable of protecting [her] own interests." Citibank, N.A. v. Grant, 21 AD3d 924, 925, 801 NYS2d 59 (2nd Dept. 2005). Serving the Defendant some distance from her home is surely a factor which should elicit heightened scrutiny, as are the nature of the various violations placed on the real property prior to the commencement of the foreclosure action.
Public policy favors determinations on the merits. See Coven v. Trust Co. of New Jersey, 225 AD2d 576, 639 NYS2d 95 (2nd Dept. 1996). However, to prevail on a motion to vacate a default, the movant must demonstrate either a lack of personal jurisdiction or "excusable default". Moreover, CPLR 5015(a) requires the movant to show a reasonable excuse for the default and a potentially meritorious defense. Therefore, a hearing is necessary to determine if the Plaintiff knew or should have known about the alleged incapacity of the Defendant, NANCY L. K., at such time. The Plaintiff cannot simply rely on an Affidavit of Service from the process server if, on its face, there are indications of a possible need for the appointment of a Guardian ad Litem on her behalf. See Kleeman v. Rheingold, 81 NY2d 270, 614 NE2d 712, 598 NYS2d 149 (1993). The fact that no committee or guardian had been appointed at the time of the foreclosure action does not, in and of itself, absolve the Plaintiff from its obligation to notify the Court if there is a concern that a litigant is operating under a disability or suffers with certain functional limitations. When mental capacity of a litigant is at issue, the Court must ensure that the litigation will not "run roughshod over other people's rights." Parras v. Ricciardi, supra , at 798.
Accordingly, it is
ORDERED, that a hearing shall take place before the undersigned on July 23, 2007 at 9:30 a.m., or on a date mutually convenient to the parties not later than THIRTY (30) DAYS therefrom, at the Courthouse located at 100 Supreme Court Drive, Room 151 (first floor), Mineola, New York 11501, to determine if the Plaintiff knew or should have known that NANCY L. K. was incapacitated at the time the foreclosure action was commenced, and whether the Plaintiff should have requested that the Court make inquiry as to the propriety of the appointment of a Guardian ad Litem for NANCY L. K. in the said foreclosure action; and it is further
ORDERED, that the Plaintiff; its counsel; the Co-Guardian; counsel for the Co-Guardian; and MENTAL HYGIENE LEGAL SERVICE shall appear on the hearing date, and shall be [*4]prepared to proceed on such date; and it is further
ORDERED, that the application to vacate the default judgment of NANCY L. K. is held in abeyance pending such hearing; and it is further
ORDERED, that in all other respects, the motion is denied.
This constitutes the Decision and Order of the Court.
Dated:Mineola, New York
June 28, 2007
E N T E R :
_______________________________
Joel K. Asarch, J.S.C.
Copies mailed to:
Ahern & Ahern, Esqs.
Thomas E. Brett, Esq.
Mental Hygiene Legal Service
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