Deutsche Bank Natl. Trust Co. v Pascarella

[*1] Deutsche Bank Natl. Trust Co. v Pascarella 2013 NY Slip Op 50777(U) Decided on May 13, 2013 Supreme Court, Suffolk County Whelan, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 May 13, 2013
Supreme Court, Suffolk County

Deutsche Bank National Trust Co., Plaintiff,

against

Anthony Pascarella, THOMAS PASCARELLA, ET ALS, Defendants.



40756-09



ROSICKI, ROSICKI & ASSOC., PC

Attys. For Plaintiff

51 E. Bethpage Rd.

Plainview, NY 11803

SIMON, MEYORWITZ, et. al.,

Attys for Def. Thomas Pascarella

470 Park Ave. South

New York, NY 10016

Thomas F. Whelan, J.

Upon the following papers numbered 1 to8read on this motion by defendant Thomas Pascarella for an order directing the discontinuation of this foreclosure action, the cancellation of the notice of pendency and an [*2]order cancelling and vacating and the mortgage as void; Notice of Motion/Order to Show Cause and supporting papers 1 - 4; Notice of Cross Motion and supporting papers; Answering papers5-6; Reply papers7-8; Other; (and after hearing counsel in support of and in opposition to the motion) it is,

ORDERED that the moving defendant's request to be heard at oral argument on this motion is considered under 22 NYCRR 202.8 and is denied; and it is further

ORDERED that this motion (#002) by defendant, Thomas Pascarella, for an order directing the discontinuance of this action and an order directing the Clerk to vacate, cancel, nullify and/or mark void the mortgage that is the subject of this action and to further cancel the notice of pendency filed by the plaintiff upon commencement of this foreclosure action is considered under CPLR 3217, 6514 and is denied.

In October of 2009, the plaintiff commenced this action to foreclose a mortgage given by the Pascarella defendants to secure a mortgage note executed by defendant Anthony Pascarella in the amount of $191,250.00. Issue was joined in or about November of 2009 by the service of an answer by the obligor defendant, Anthony Pascarella. Moving defendant, Thomas Pascarella, appeared by herein counsel as evidenced by the November 12, 2009 filing of counsel's notice of appearance. The action was initialized by the filing of a Request for Judicial Intervention in April of 2010 upon the filing of the last of the plaintiff's affidavits of service. On May 6, 2010, a settlement conference was scheduled by and held in the specialized mortgage foreclosure part of this court, at which, neither of the Pascarella defendants appeared. The action was then assigned to this court. In October of 2010, the plaintiff moved for an order of reference which application was denied by the court in an order dated November 22, 2010 due to its withdrawal.

Answers served by the Pascarella defendants, if any, were withdrawn by them pursuant to the terms of a stipulation dated June 9, 2010 that was executed by the separate attorneys representing the Pascarella defendants and by the attorney for the plaintiff. Therein, the Pascarella defendants waived all defenses and claims by way of set-off or otherwise and the plaintiff waived its right to pursue a deficiency judgment against either of the Pascarella defendants. The parties stipulated that the balance of the principal then due totaled some $191,217.39 and that the plaintiff had the right to seek a judgment foreclosing the plaintiff's lien in such amount and to awards of counsel fees and such other costs and advances to which the plaintiff was entitled under the Real Property Actions and Proceedings Law. The parties further agreed that because the principal amount due was admitted, no reference for purposes of computation would be necessary unless the court directed otherwise, in which event, the defendants expressly consented to entry of an order appointing such referee. The defendants waived notice of all proceedings except notice of sale or discontinuance and notice to obtain surplus monies. The plaintiff agreed to diligently pursue the action and the sale of the premises as well as to maintain the mortgaged premises pending such sale.

Defendant Thomas Pascarella, represented by newly retained counsel, now moves for an order directing the discontinuance of this action, with prejudice. He further moves for an order directing the Clerk to cancel, nullify and/or mark void the mortgage that is the subject of this action [*3]and to further cancel the notice of pendency filed by the plaintiff upon commencement of this foreclosure action. The motion is singularly predicated upon claims that the plaintiff's failure to diligently prosecute this action as agreed to under the terms of the June 9, 2010 stipulation has prejudiced the moving defendant's rights and interests in the premises and has damaged his credit rating. The plaintiff opposes the motion upon the grounds that the same lacks a legal basis. It further alleges that the delay in prosecuting the action is not the result of its abandonment of its claims. Instead, the delay is attributable to the imposition of rules promulgated by court administrators subsequent to the commencement of this action which have unduly increased the burdens applicable to plaintiffs seeking the remedy of foreclosure and sale. For the reasons stated below, the motion is denied.

The discontinuance of an action is governed by Rule 3217 of the Civil Practice Laws and Rules. It is apparent even upon a most cursory reading thereof that the discontinuance of a claim may only be had at the behest of party asserting such claim. Here, the plaintiff opposes rather than supports the discontinuance proposed by defendant Pascarella on this motion. The court thus finds that the remedy of discontinuance is not available to the moving defendant. Those portions of this motion wherein the moving defendant seeks "an order that this court discontinue this action with prejudice" are thus denied.

To the extent that the moving defendant's request for a discontinuance may be viewed as one for dismissal of the complaint pursuant to CPLR 3215(c), it is denied. CPLR 3215(c) requires that a plaintiff commence proceedings for the entry of a default judgment within one year after the default or demonstrate sufficient cause why the complaint should not be dismissed. Where, as here, the plaintiff has made an application to the court for the entry of a default judgment within one year of the defendant's default, even if unsuccessful, the court may not later dismiss the complaint as abandoned pursuant to CPLR 3215(c) (see Jones v Fuentes, 103 AD3d 853, 962 NYS2d 263 [2d Dept 2013]; Home Sav. of America, F.A. v Gkanios, 230 AD2d 770, 646 NYS2d 530 [2d Dept 1996]; see also Norwest Bank Minnesota, N.A. v Sabloff, 297 AD2d 722, 747 NYS2d 559 [2d Dept 2002).

In any event, CPLR 3215(c) provides claimants with an exception to the otherwise mandatory nature of that provision, namely, that any failure to move withing one year of the default may be excused if sufficient cause is shown why the complaint should not be dismissed (see CPLR 3215[c]; Giglio v NTIMP, Inc., 86 AD3d 301, 926 NYS2d 546 [2d Dept 2011]). Good cause has been held to have been demonstrated where, as here, a delay in prosecuting the action is caused by the plaintiff's inability to comply with the onerous Administrative Orders numbered 548—10 and 431-11 promulgated, sua sponte, by court administrators rather than the legislature (see BAC Home Loans Serv., LP v Maurer, 36 Misc 3d 1210(A), 957 NYS2d 263, 263 [Sup. Ct. Suffolk County, 2012]), especially since such orders remain of questionable validity (see Countrywide Home Loans, Inc. v Taylor, ___ AD3d ___, 961 NYS2d 909 [Sup. Ct. Suffolk County, 2013]; Wells Fargo Bank, NA v Concepcion, 2013 WL 657889, *3, 38 Misc 3d 1225(A) [Sup. Ct. Suffolk County, 2013]; US Bank, NA v Castillo, 2013 WL 781904, *2, 38 Misc 3d 1228(A) [Sup. Ct. Suffolk County, 2013]; LaSalle Bank, NA v Pace, 31 Misc 3d 627, 919 NYS2d 794 [Sup. Ct. Suffolk County, 2011]; aff'd. [*4]100 AD3d 970, 955 NYS2d 161 [2d Dept. 2012]).

The moving defendant next demands an order directing the Clerk to vacate, cancel, nullify and/or mark as void the mortgage that is the subject of this action. According to the moving defendant, such relief is available to him because the plaintiff has not pursued the action or the sale as agreed to under the terms of the June 9, 2010 stipulation, all of which, has allegedly caused harm and/or injury to the moving defendant's credit rating and to his interests in the premises. The court, however, rejects these claims as wholly lacking in merit.

It is well settled law that stipulations of settlement are contracts and, as such, are governed by general contract principles for their interpretation and effect (see Moshe v Town of Ramapo, 54 AD3d 1030, 864 NYS2d 569 [2d Dept 2008]; American Bridge Co. v Acceptance Ins. Co., 51 AD3d 607, 609, 858 NYS2d 261 [2d Dept 2008]). It is equally well settled that when parties set down their agreement in a clear and complete document, their writing should be enforced according to its terms (see WWW Assoc., Inc. v Giacontieri, 77 NY2d 157, 565 NYS2d 440 [1990]). A court may not, in the guise of interpreting a contract, add or excise terms or distort the meaning of those used to make a new contract for the parties (see Teichman v Community Hosp. of W. Suffolk, 87 NY2d 514, 520, 640 NYS2d 472, 474 [1996]). Instead ," [t]he court's role is limited to interpretation and enforcement of the terms agreed to by the parties, and the court may not rewrite the contract or impose additional terms which the parties failed to insert' (Wells Fargo Bank, NA v Meyers, ___ AD3d__ 2013 WL 1811781 [2d Dept 2013], quoting Maser Consulting, P.A. v Viola Park Realty, LLC, 91 AD3d 836, 837, 936 NYS2d 693 [2d Dept 2012], quoting 131 Heartland Blvd. Corp. v C.J. Jon Corp., 82 AD3d 1188, 1189, 921 NYS2d 94 [2d Dept 2011]). It is only in those rare and "limited instances where some absurdity has been identified or the contract would otherwise be unenforceable either in whole or in part may the court interpret a document to carry out the intention of the parties "by transposing, rejecting, or supplying words to make the meaning of the contract more clear" (Matter of Wallace Partners, 86 NY2d 543, at 547—548, 634 NYS2d 669 [1995]).

Under the terms of the June 9, 2010 stipulation at issue here, the plaintiff agreed to "diligently pursue the action and the sale of the mortgaged premises". The stipulation did not define the term "diligently"nor did it include any time of the essence terms under which the plaintiff was obligated to perform. The moving defendant nonetheless claims that the plaintiff's failure to pursue this foreclosure action and to proceed with the sale of the premises as purportedly promised under the terms of the June 9, 2010 stipulation warrants an invocation of the court's equitable powers so as to cancel the mortgage that is the subject of this action. The court, however, disagrees.

Remedies for violations, if any, of the June 9, 2010 stipulation are seemingly available to the moving defendant under well established principles of contract law. Such contractual remedies include the assertion of claims for damages by reason of the plaintiff's purported breach of the stipulation and/or claims for specific performance. While the availability of such remedies may be complicated by the failure of the parties to define the term diligently or to otherwise provide a time for performance these remedies are not conclusively precluded (see Matter of Wallace Partners, [*5]86 NY2d at 547—548, supra). Morever, a claim for reformation may lie to correct mistakes and supply omissions in the terms of a contract such as the June 9, 2010 stipulation (see 1414 APF, LLC v Deer Stags, Inc., 39 AD3d 329, 834 NYS2d 133 [1st Dept 2007]; see also Curtis v Albee, 5 Bedell 360, 60 NE 660 [1901]).

Notably, the moving defendant does not seek any of the above described contractual remedies which may be available to him by reason of his counsel's participation as a signatory to the June 9, 2010 stipulation. Instead, he asks this court to direct the County Clerk to cancel, nullify and/or mark void the mortgage that is the subject of this action based upon his perception that the plaintiff breached the stipulation by failing to diligently purse this foreclosure action and the sale of the mortgaged premises. Implicated here are claims that a breach on the part of the plaintiff of one or more of its obligations under the terms of the June 9, 2010 stipulation relieves the moving defendant of his obligations under the terms of the mortgage and operates to prevent the plaintiff from enforcing the contractual rights remedies willing conferred upon it under the terms of mortgage and other loan documents. These claims are, however, unavailing.

As a general rule, contracts remain separate unless their history and subject matter show them to be unified (see County of Suffolk v Long Is. Power Auth., 100 AD3d 944, 954 NYS2d 619 [2d Dept 2012]). Separate written agreements not referring to one another that involve different subject matter and/or differing parties will not be regarded as interdependent or combined to form a unitary whole so as to be read and interpreted as forming one and the same transaction (see Applehead Pictures LLC v Perelman, 80 AD3d 181, 913 NYS2d 165 [1st Dept 2010]). Only contemporaneous instruments between the same parties relating to the same subject matter are entitled to be read together and interpreted as forming part of one and the same transaction (see 131 Heartland Blvd. Corp. v C.J. Jon Corp., 82 AD3d 1188, supra; Davimos v Halle, 60 AD3d 576, 877 NYS2d 20 [1st Dept 2009]).

It is clear upon a reading of the June 9, 2010 stipulation and the 2006 mortgage that they are not interdependent, unified, transactional contracts that are entitled to be read together as to all matters of construction and intent such that a material breach of the stipulation on the part of the plaintiff would relieve the defendants of their obligations under the mortgage (see County of Suffolk v Long Is. Power Auth., 100 AD3d 944, supra; Schonfeld v Thompson, 243 AD2d 343, 663 NYS2d 166 [1st Dept 1997]; cf., 131 Heartland Blvd. Corp. v C.J. Jon Corp., 82 AD3d 1188, supra). The judicial cancellation of the mortgage due to some breach, material or otherwise, by the plaintiff of an obligation under the terms of the separate and independent stipulation is thus not a remedy available to the plaintiff.

The court is mindful that there may be some instances in which a court may rightfully refuse to enforce a contract and in those instances a resort to equity to accomplish that result may be proper. For example, courts have long recognized that illegality or mistake, fraud, duress, unconscionability or overreaching, at the time of the making of the contract, may warrant a court's refusal to enforce it (see Hallock v State of New York, 64 NY2d 224, 485 NYS2d 510 [1984]). The cancellation of mortgage is, however, beyond the equitable powers of the court in the absence of an acceptable basis for preventing the plaintiff from enforcing the terms of its mortgage and/or relieving the mortgagor [*6]of his or her contractual obligations to the plaintiff for (see Citibank, N.A. v. Van Brunt Prop., LLC, 95 AD3d 1158, 945 NYS2d 330 [2d Dept 2012]; Indymac Bank, F.S.B. v Yano-Horoski, 78 AD3d 895, 912 NYS2d 239 [2d Dept 2010]).

While the remedy of foreclosure is equitable in nature and may be denied in cases of estoppel, bad faith, fraud or oppressive or unconscionable conduct (see Nassau Trust Co. v Montrose Concrete Prods. Corp., 56 NY2d 175, 183, 451 NYS2d 663, 667 [1982]; Ferlazzo v Riley, 278 NY 289, 16 NE2d 286 [1938]), a foreclosure action is in the nature of a proceeding in rem to appropriate the land and, as such, is unlike most other equity actions which operate in personam (see Jo Ann Homes v Dworetz, 25 NY2d 112, 302 NYS2d 799 [1969]). This distinction is not without a difference as it compels a vastly more limited application of equitable principles to foreclosure actions than to other actions equitable in nature. A court's resort to equity to deny the remedy of foreclosure is thus limited to cases wherein there is clear and convincing evidence of fraud, exploitive overreaching or unconscionable conduct on the part of the obligee to exploit an inadvertent, inconsequential, technical, non-prejudicial default by the mortgagor (see Cohn v Middle Rd. Riverhead Dev. Corp., 162 AD2d 578, 556 NYS2d 764 [2d Dept 1990]; Key Intern. Mfg. Inc. v Stillman, 103 AD2d 475, 480 NYS2d 528 [2d Dept 1984], mod. on other grounds 66 NY2d 924, 498 NYS2d 795 [1985]; Karas v Wasserman, 91 AD2d 812, 458 NYS2d 280 [3d Dept 1982]; see also Federal Home Loan Mtge. Corp. v Bronx New Dawn, 1995 WL 412399, [SDNY 1995]; cf., Graf v Hope Bldg. Corp., 254 NY 1, 171 NE 884 [1930]).

Here, the moving defendant has demonstrated neither a factual nor legal basis on which this court might invoke its equity powers so as to deny the plaintiff the contractual rights and remedies the defendants willingly conferred upon it under the terms of the mortgage and other loan documents. Any resort to equity under the circumstances of this case would violate the clear proscription against the undermining of the stability of contracts (see Wells Fargo v Meyer, ___ AD3d ____, supra; Emigrant Mtge. Co., Inc. v Fisher, 90 AD3d 823, 935 NYS2d 313 [2d Dept 2011]).

The moving defendant's demands for a cancellation of the notice of pendency are rejected as unmeritorious. The cancellation of such a notice is governed by CPLR 6514 which provides statutory grounds for such relief. None of the grounds set forth in the statute were advanced here and the record is devoid of due proof of the existence of facts that would establish the moving defendant's entitlement to an order cancelling the notice of pendency filed in connection with this action pursuant to CPLR 6514 or otherwise. Those portions of this motion wherein cancellation of the notice of pendency is demanded are thus denied.

In view of the foregoing, this motion (#002) by defendant Thomas Pascarella for the relief outlined above is, in all respects, denied. [*7]

DATED: ____________________________________________________

Thomas F. Whelan, J.S.C.