Wells Fargo Bank, N.A. v D.A.T.A. Mgt. Group Inc.

[*1] Wells Fargo Bank, N.A. v D.A.T.A. Mgt. Group Inc. 2017 NY Slip Op 51615(U) Decided on November 27, 2017 Supreme Court, Suffolk County Quinlan, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 November 27, 2017
Supreme Court, Suffolk County

Wells Fargo Bank, N.A. SUCCESSOR BY MERGER TO WACHOVIA MORTGAGE, FSB, Plaintiff,

against

D.A.T.A. Management Group Inc., WILLIAM DEEGAN, BRIAN BRETAN, NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, PEOPLE OF THE STATE OF NEW YORK, "JOHN DOE 1 TO JOHN DOE 25", SAID NAMES BEING FICTITIOUS, THE PERSONS OR PARTIES INTENDED BEING THE PERSONS, PARTIES, CORPORATIONS OR ENTITIES, IF ANY, HAVING OR CLAIMING AN INTEREST IN OR LIEN UPON THE MORTGAGED PREMISES DESCRIBED IN THE COMPLAINT, Defendants.



020499-2011



Jonathan M. Vecchi, Esq.

DRUCKMAN LAW GROUP PLLC

Attorneys for Plaintff

242 Drexel Avenue Westbury, NY 11590

D.A.T.A. Management Group, Inc.

118 Columbia Street Huntington Station, NY 11746

Ira Lawrence Goldberg, Esq.

Attorney for Defendant

William Deegan

32 West Merrick Road

Freeport, NY 11520

Brian Bretan

Pro Se
Robert F. Quinlan, J.

Upon the following papers numbered 1 to 52read on this motion for judgment of foreclosure and sale: Notice of Motion/ Order to Show Cause and supporting papers1-28 ; Notice of Cross Motion and supporting papers 28-34 ; Affirmation in Opposition to Cross-Motion and supporting papers 35-52 ; it is,

ORDERED that this motion by plaintiff Wells Fargo Bank, N.A., successor by merger to Wachovia Mortgage, FSB for an order of reference appointing a referee to compute pursuant to RPAPL § 1321, fixing the defaults as against the non-appearing, non-answering defendants, for leave to amend the caption of this action to remove the "John Doe" defendants is granted; and it is further

ORDERED that plaintiff's application to amend the caption is granted and the caption shall now appear as follows:

X

WELLS FARGO BANK, N.A. SUCCESSOR BY

MERGER TO WACHOVIA MORTGAGE, FSB,

Plaintiff,

against -

D.A.T.A. MANAGEMENT GROUP INC.,

WILLIAM DEEGAN, BRIAN BRETAN, NEW

YORK STATE DEPARTMENT OF TAXATION

AND FINANCE, PEOPLE OF THE STATE OF

NEW YORK,

Defendant(s).

X;

and it is further

ORDERED that within 30 days of the date of this order, plaintiff is directed to serve a copy of this order amending the caption of this action upon the Calendar Clerk of this Court; and it is further;

ORDERED that plaintiff is to include in any proposed order of judgment of foreclosure and sale language complying with the Suffolk County Local Rule for filing of the Suffolk County Foreclosure Surplus Monies form contained in Suffolk County Administrative Order # 41-13; and it is further

ORDERED, that, if a prior notice of pendency is outdated, plaintiff is directed to file a successive notice of pendency at least twenty (20) days prior to the submission of any proposed judgment of foreclosure and sale, submitting a copy thereof with proof of filing with any proposed judgment of foreclosure and sale; and it is further.

ORDERED that within 30 days of the date of this order, plaintiff is to serve a copy of the order of reference upon all parties who have appeared in this action, as well as upon the referee and thereafter file the affidavits of service with the Clerk of the Court; and it is further

ORDERED that within 60 days of the date of this order, plaintiff is to provide the referee, and defendants who have appeared, all papers and documents necessary for the referee to perform the determinations required by this order, plaintiff's submissions; defendant(s) may submit written objections and proof in support thereof, defendant's objections, to the referee within 14 days of the mailing of plaintiff's submissions; and it is further

ORDERED that the referee's report is to be prepared and submitted to plaintiff within 30 days of receipt of plaintiff's submissions, and the referee's report is to be submitted by plaintiff with its application for a judgement of foreclosure and sale; and it is further

ORDERED that the referee's duties are defined by this order of reference (CPLR 4311, RPAPL § 1321), and the referee has no power beyond that which is limited by this order of reference to the ministerial functions of computing amounts due and owing to plaintiff and determining whether the premises can be sold in parcels; the referee shall hold no hearing, take no testimony or evidence other than by written submission, and make no ruling on admissibility of evidence; the referee's report is merely advisory and the court is the ultimate arbiter of the issues, if the objections by defendant(s) raise issues as to the proof of amounts due and owing the referee is to provide advisory findings within his/her report; and it is further

ORDERED that if defendant(s) has submitted objections and proof to the referee, defendant(s) shall also submit them to the court if opposing plaintiff's application for a judgment of foreclosure and sale; failure to submit objections to the referee will be deemed a waiver of objections before the court on an application for a judgment of foreclosure and sale; failure to raise and submit the objections made before the referee in opposition to plaintiff's application for a judgment of foreclosure and sale shall constitute a waiver of those objections on the motion; and it is further

ORDERED that plaintiff is to file an application for a judgment of foreclosure and sale within 120 days of the date of this order; and it is further

ORDERED that this action shall be calendared for a status conference on Tuesday, March 27, 2018 at 9:30 AM in Part 27 for the court to monitor the progress of this action. If a judgment of foreclosure and sale is filed with the court before that date, no appearance will be necessary; and it is further

ORDERED that failure to comply with any term of this order will not form the basis for a motion to dismiss the action, but will be the subject of the status conference at which future compliance will be determined; and it is further

ORDERED that defendant William Deegan's cross-motion to dismiss the action pursuant to dismissing the complaint pursuant to CPLR § 3215 (c) is denied.

This is an action to foreclose a mortgage on a premises known as 118 Columbia Street, Huntington Station, Suffolk County, New York ("the property") given by defendant-mortgagor D.A.T.A. Management Group Inc. ("DATA") on January 7, 2008 to Wachovia Mortgage, FSB ("Wachovia) to secure an adjustable rate note in the amount of $200,000.00 executed the same day to Wachovia by DATA and William Deegan ("Deegan"). Deegan signed the mortgage in his capacity as president of DATA, but signed the note both in his representative capacity as president of DATA, and also individually. The mortgage was filed with the Suffolk County Clerk on January 22, 2008.

Plaintiff Wells Fargo Bank, N.A., successor by merger with Wachovia Mortgage, FSB ("plaintiff") commenced this action by filing a summons, complaint and notice of pendency with the Suffolk County Clerk on June 28, 2011, alleging defendants DATA and Deegan were in default in payment under the terms of the note and mortgage as of the payments due July 15, 2010. Defendant DATA was served through service upon the Secretary of State on July 7, 2011 and defendant Deegan was served personally pursuant to CPLR 308 (2) at his residence, 21 Pioneer Boulevard, Huntington Station, Suffolk County, New York on July 5, 2011, with the required mailing made July 8, 2011.

Both defendants were served with copies of the summons, complaint, notice of pendency, as well as the notice required by RPAPL § 1303 in sufficient form. No defendant filed an answer.

The court's records indicate that on April 14, 2014 defendant Deegan's counsel filed a notice of appearance.

After commencing the action, it appears that plaintiff's first counsel, Steven J. Baum, P.C., took no further action on the case, neither filing an RJI to schedule a conference in the court's dedicated Foreclosure Settlement Conference Part ("FSCP"), as was required at that time, nor filing the affirmations/ affidavits required by the administrative orders of the Chief Administrative Judge in effect at the time (AO # 548/10 and AO # 431/11), nor moving upon defendant's default in answering. Plaintiff's present counsel filed an RJI, a conference was scheduled in the FSCP on March 31, 2014 at which no defendants appeared, after which the action was released to an IAS Part and plaintiff then filed this motion.

By notice of motion dated June 10, 2014, originally returnable on July 10, 2014, plaintiff's present counsel moved this court for the appointment of a referee to compute pursuant to RPAPL § 1321 and CPLR 4311 upon defendants' default in answering and to amend the caption (Mot. Seq. # 001). Defendant Deegan's counsel obtained a stipulation to adjourn the motion and filed his cross-motion to dismiss pursuant to CPLR § 3215 (c) returnable September [*2]2, 2014 (Mot. Seq. # 002). Both motions appear from the court's records to have been submitted to the now retired Justice William J. Kent of this court. The action was transferred to the inventory of Acting Supreme Court Justice Richard I. Horowitz, who conferenced the case in an attempt to reach a settlement on September 8, 2015 with no success. The motion was re-assigned to this dedicated foreclosure part and marked "submitted" on March 17, 2016.

DEFENDANT'S CROSS

MOTION DENIED

The court first addresses defendant's cross-motion. Defendant Deegan's counsel argues that because plaintiff waited almost three years from the date of default in answering to move upon that default, the court is bound by the "mandatory" language of CPLR § 3215 (c) to dismiss the case. Defendant Deegan fails to realize that by not immediately moving to dismiss in April of 2014, instead merely filing a notice of appearance and then moving in September 2014 to dismiss pursuant to CPLR § 3215 (c), he has waived that claim. Where defendant has filed a formal appearance (CPLR 320, §321[a]) or taken actions which amount to an informal appearance, defendant has waived the ability to move pursuant to CPLR § 3215 (c) (see De Lourdes Torres v Jones, 26 NY3d 742, 772 [2016]; HSBC Bank USA v Lugo, 127 AD3d 502 [1st Dept 2015]; HSBC Bank USA, N. A. v Grella, 145 AD3d 669 [2d Dept 2016]; Bank of America, NA v Rice, _AD3d_, 2017 NY Slip Op 07581 [2d Dept 2017]). Defendant Deegan's motion is dismissed.

The court recognizes that although defendant Deegan was president of defendant DATA, defendant Deegan's counsel formally appeared only on behalf of Deegan, nor did he argue to dismiss the action pursuant to CPLR § 3215 (c) on behalf of DATA. First, the court finds that as president of DATA and personal co-signatory of the note with DATA, the act of appearing on behalf of Deegan by defendant's counsel constituted an informal appearance on behalf of DATA, precluding the claim of applicability of the "mandatory dismissal" requirement as to DATA as indicated by the cases cited above.

Further, as to any argument that the action should be dismissed as to the non-moving defendant DATA, CPLR § 3215 (c) was enacted to dispose of abandoned cases and provides a saving provision to what is otherwise mandatory dismissal, allowing denial of such a motion by stating that the court "shall dismiss the complaint as abandoned, without costs, ... unless sufficient cause is shown why the complaint should not be dismissed." This saving provision has been found when the plaintiff's conduct has shown that there was no intent to abandon the complaint (see LNV Corp v Forbes, 122 AD3d 805 [2d Dept 2014]; US Bank National Assoc v Wolnerman, 135 AD3d 850 [2d Dept 2016]). Where the evidence shows merit to plaintiff's claim, lack of intent to abandon the claim and sufficient cause for any alleged delay, the court should not dismiss the action for failure to move for the default within a year (see Bank of New York v Gray, 228 AD2d 399 [2d Dept 1996]; Golden Eagle Capital Corp v Paramount Mtg Corp, 143 AD3d 438 [2d Dept 2016]). The determination as to what is a reasonable excuse is committed to the sound discretion of the motion court (see Maspeth Fed. Sav. & Loan Assn. v Brooklyn Heritage, LLC, 138 AD3d 793 [2d Dept 2016]; Golden Eagle Capital corp. v Paramount Mgt. Corp., supra; Bank of New York Mellon v Adago, _AD3d_ , 2017 NY Slip Op 07582 [2d Dept 2017]).

The court finds that under the circumstances of this case, the acts and arguments of plaintiff's counsel have established that there was no intent to abandon the claim and that a "mandatory dismissal," sua sponte, as to defendant DATA is not warranted. Here the court finds that the circumstances of this case as set forth by plaintiff establishes a reasonable excuse for the delay and the court exercises its discretion not to dismiss. Plaintiff's former counsel is now notorious for its negligent and questionable conduct. Upon substitution present counsel had to make sure that compliance was made with the applicable administrative orders in effect, that an RJI was properly filed so that compliance with CPLR 3408 conferencing would be made, and had to see that sufficient proof to establish plaintiff's entitlement to an order upon defendant's default and pursuant to RPAPL § 1321 was gathered. The court notes that plaintiff made its motion upon the defaults within three months of the release from the FSCP.

PLAINTIFF'S APPLICATION FOR AN ORDER OF REFERENCE IS GRANTED

Although plaintiff's application is addressed as one to merely appoint a referee to compute pursuant to RPAPL § 1321 (although mentioning the fixing of the defaults in the annexed proposed order), it is in reality a motion pursuant to CPLR § 3215 to set and fix the default in answering by defendants. In order to grant the application to appoint a referee pursuant to RPAPL § 1321, the order intrinsically has to fix and set defendants' default in answering (see Wells Fargo Bank, NA v Ambrosov, 120 AD3d 1225 [2d Dept 2014]; Bank of New York v Stein, 130 AD3d 552 [2d Dept 2015]; U.S. Bank NA v Nogriff, 131 AD3d 527 [2d Dept 2015]; Flagstar Bank v Jambelli, 140 AD3d 829 [2d Dept 2016]); Fed. Natl. Mtg. Assoc. v Zapata, 143 AD3d 857 [2d Dept 2016]).

On a motion for leave to enter a default, the movant is required to submit proof of service of the summons and complaint, proof of the facts constituting the claim, and proof of the defaulting party's failure to answer or appear (CPLR 3215[f]; see Dupps v Betancourt, 99 AD3d 855 [2d Dept 2012]; Green Tree Serv., LLC v Carey, 106 AD3d 691[2d Dept 2013]; JPMorgan Chase Bank, N.A. v Boampong, 145 AD3d 981 [2d Dept 2016]; US Bank, N.A. v Singer, 145 AD3d 1057 [2d Dept 2016]). Plaintiff has met its proof of a prima facie case through the production of the original mortgage, the unpaid note, and evidence of defendants default (see Deutsche Bank Natl. Trust Co. V Abdan, 131AD 3d 1001 [2d Dept 2015]; U.S. Bank N. A. v Akande, 136 AD3d 887 [2d Dept 2016]).

Proof required on default under CPLR 3215 (f) is merely proof of facts constituting the claim. To demonstrate the facts constituting the claim, movant must only submit sufficient proof to enable the court to determine if the claim is viable (see Woodson v. Mendon Leasing Corp., 100 NY2d 62[2003]; Global Insurance Company v. Gorum, 143 AD3d 768 [2d Dept 2016]; Manhattan Telecommunications Corp. v H & A Locksmith, Inc., 21 NY3d 200[2013]; Araujo v. Aviles, 33 AD3d 830 [2d Dept 2006]; U. S. Bank, N.A. v. Tate, 102 AD3d 859 [2d Dept 2013]). Plaintiff's submissions have met this burden.

Plaintiff's request for an order fixing the defaults of the non-answering, non-appearing defendants and an order of reference appointing a referee to compute the amount due plaintiff under the note and mortgage pursuant to RPAPL § 1321 is granted (see Green Tree Serv. v Cary, supra; Vermont Fed. Bank v Chase, 226 AD2d 1034 [3dDept 1996]; Bank of East Asia, Ltd. v [*3]Smith, 201 AD2d 522 [2d Dept 1994]; U. S. Bank v Wohlerman 135 AD3d 850 [2d Dept 2016]).

Plaintiff's application to amend the caption to remove the "John Doe" defendants is granted upon proof submitted.

This is the order and decision of the court and plaintiff's proposed order, as modified by the court is signed contemporaneously herewith.

Dated: November 27, 2017

_______________________________________

Hon. Robert F. Quinlan, J.S.C.