U.S. Bank N.A. v Charles
Annotate this CaseDecided on January 19, 2018
Supreme Court, Suffolk County
U.S. Bank National Association, as Successor Trustee of Bank of America, National Association, (Successor or by Merger to LaSalle Bank National Association) as Trustee for Morgan Stanley Mortgage Loan Trust 2006-7, Plaintiff,
against
Yolita J. Charles, JPMorgan Chase Bank, N.A., Mortgage Electronic Registration Systems, Inc., John Doe (being fictitious, the names unknown to Plaintiff intended to be tenants, occupants, persons or corporations having or claiming an interest in or lien upon the property described in the complaint or their heirs at law, distributees, executors, administrators, trustees, guardians, assignees, creditors or successors.), Defendant(s).
31219-2010
GROSS, POLOWY & ORLANS, ESQ.
Attorneys for Plaintiff
1775 Wehrles Drive, Suite 100
Williamsville, NY 14221
WILLIAM M. GEARTY, ESQ.
Attorneys for Defendant Yolita J. Charles
168 Smithtown Blvd.
Nesconset, NY 11767
Peter J. Kelly, J.
Upon the following papers numbered 1 to 29 read on this application for an order vacating plaintiff's default in filing the note of issue and granting an extension to file the note of issue; Notice of Motion/Order to Show Cause and supporting papers 1-17; Notice of Cross Motion and supporting papers___________; Answering Affidavits and supporting papers 18-25 ; Replying Affidavits and supporting papers 26-29 ; and upon the following papers numbered 1 to 46 read on this application for an order dismissing the action; Notice of Motion/Order to Show Cause and supporting papers 1-17; Notice of Cross Motion and supporting papers___________; Answering Affidavits and supporting papers 18-46 ; Replying Affidavits and supporting papers; Other ; it is,
ORDERED that motion by plaintiff U.S. Bank National Association, as Successor Trustee of Bank of America, National Association, (Successor or by Merger to LaSalle Bank National Association) as Trustee for Morgan Stanley Mortgage Loan Trust 2006-7 (#002) and the motion by defendant Yolita J. Charles (#003) are consolidated for purposes of this determination; and it is further
ORDERED that the motion of defendant Yolita J. Charles to dismiss the action pursuant to CPLR 3216 is denied: and it is further
ORDERED that the motion by plaintiff U.S. Bank National Association, as Successor Trustee of Bank of America, National Association, (Successor or by Merger to LaSalle Bank National Association) as Trustee for Morgan Stanley Mortgage Loan Trust 2006-7 to vacate plaintiff's default in filing the note of issue and extend time to file the note of issue is granted; and it is further
ORDERED that plaintiff is directed to file a Note of Issue within 14 days of the date of this order; and it is further
ORDERED that a pre-trial conference is scheduled for Tuesday February 28, 2018 at 9:30AM.
This is an action to foreclose a mortgage on premises known as 78 Cordello Avenue, Central Islip, Suffolk County, New York ("the property"). Plaintiff U.S. Bank National Association, as Successor Trustee of Bank of America, National Association, (Successor or by Merger to LaSalle Bank National Association) as Trustee for Morgan Stanley Mortgage Loan Trust 2006-7 ("plaintiff") commenced this action by filing a summons, complaint and notice of pendency with the Suffolk County Clerk on August 20, 2010. Defendant Yolita J. Charles appeared by service and filing of an answer dated September 13, 2010.
Plaintiff moved for summary judgment dismissing defendant's answer, appointment of a referee pursuant to RPAPL § 1321, fixing the default of the non-appearing, non-answering defendants and amending the caption (Mot. seq. #001). After oral argument on May 2, 2016, the court issued a decision on the record granting plaintiff partial summary judgment. The further history of this case and the basis for the court's decision are contained in that decision. In granting partial summary judgment, the court fixed and set the default of the non-answering, non-appearing defendants, amended the caption and dismissed defendant's first, third and fifth affirmative defenses, but as there were questions of fact as to plaintiff's proof of its standing to bring the action (defendant's second affirmative defenses) and of compliance with the conditions precedent of mailing the notices required by RPAPL § 1304 and of the default notice pursuant to the mortgage (defendant's fourth affirmative defense) those affirmative defenses could not be [*2]dismissed. As questions of fact remained as to those issues, the court set the action for a limited issue trial pursuant to CPLR § 2218 and issued a written discovery and scheduling order which authorized discovery limited to those issues.
That order also set the matter down for a certification conference on August 31, 2016 at which time the court would direct the filing of the note of issue and set a tentative trial date. According to court records counsel for both parties appeared on August 31, 2016, defendant's counsel advised he had served discovery demands on May 31, 2016 and to date had not received a response from plaintiff. The undersigned gave plaintiff sixty days to comply or the court would entertain a motion by defendant. Counsel also informed the court that the parties were engaged in the loan modification process. The conference was adjourned to November 9, 2016.
On November 9, 2016 counsel appeared and executed a Compliance Conference Order certifying discovery was complete and the matter ready for trial. The order directed plaintiff file a note of issue on or before December 9, 2016 and scheduled a pre-trial conference for January 18, 2017. At the pre-trial conference the court was informed that plaintiff did not file the note of issue. The undersigned directed counsel to make the appropriate motion(s).
Plaintiff now moves to vacate its default in filing the note of issue and for an extension of time to file same and defendant moves to dismiss the action pursuant to CPLR 3216. Although defendant's motion to dismiss was filed subsequent to plaintiff's motion it will be addressed first.
CPLR 3216 REQUIREMENTS NOT MET
Defendant moves pursuant to CPLR 3216 to dismiss the action for want of prosecution. Defendant argues that plaintiff failed to comply with the court's directives set forth in its decision on the record after oral argument on May 2, 2016, then failed to timely file the note of issue in accordance with the November 9, 2016 compliance conference order, and the action should be dismissed. Plaintiff opposes the motion arguing defendant is not entitled to dismissal and any delay in the proceedings was due to loss mitigation efforts initiated by defendant.
The November 9, 2016 compliance conference order reads in pertinent part: "ORDERED that the plaintiff shall file a note of issue, together with a copy of this order, on or before December 9, 2016. Failure to file the note of issue in accordance with this order may result in the imposition of sanctions attendant with defaults, including dismissal pursuant to CPLR 3216 if applicable; ..."
A court may not dismiss an action based on neglect to prosecute unless the statutory conditions in CPLR 3216 are met (see Banik v Evy Realty, LLC, 84 AD3d 994 [2d Dept 2011]; US Bank, National Association v Mizrahi, 2017 NY Slip Op 08548, __ AD3d __ [2d Dept 2017]). Satisfaction of the preconditions set forth in CPLR 3216 is mandatory before an action may be dismissed (see Rhodehouse v CVS Pharmacy, Inc., 151 AD3d 771 [2d Dept 2017]). Here neither the May 2, 2016 decision after oral argument, or the compliance conference order, constitute a valid 90-day demand pursuant to CPLR 3216.
The November 9, 2016 compliance conference order did not constitute a valid 90-day demand pursuant to CPLR 3216 because it merely advised plaintiff that it "may result in ... dismissal pursuant to CPLR 3216 if applicable" (emphasis supplied). Since there was no warning that failure to file the note of issue by December 9, 2016 would serve as a basis for a motion to dismiss the action it was not an order constituting notice under CPLR 3216 (see Altmara, Inc. v Panoramic Ace Properties, Inc., 151 AD3d 922 [2d Dept 2017]; Neary v Tower Ins., 94 AD3d [*3]723 [2d Dept 2012]; Banik v Evy Realty, LLC, supra). Additionally, where, the compliance conference order directs filing of a note of issue less than the statutory 90 days, it is not a valid 90-day notice under CPLR 3216 (see Kapnisakis v Woo, 114 AD3d 729 [2d Dept 2014]; Gladman v Messuri, 71 AD3d 827 [2d Dept 2010]).
Likewise, there was no warning in the May 2, 2016 order constituting notice under CPLR 3216 nor was that the intent of the court in issuing that order. Defendant's argument that plaintiff's purported failure to comply with the terms of the May 2, 2016 order warrants dismissal of the action pursuant to CPLR 3216 is without merit. Defendant's allegation that plaintiff delayed in obtaining the transcript is contradicted by the facts. A review of the transcript shows plaintiff complied with the court's directive and timely obtained the transcript within a week of the oral argument, thus there was no "abandonment" of the decision. Furthermore, and contrary to defendant's contention, there was no directive that plaintiff provide the transcript to defendant. Each party is responsible for obtaining its own transcript from the reporter at its own expense, unless the parties agree otherwise. Finally any alleged issue regarding the amended caption or the discovery schedule were matters to be taken up with the court, not a basis for dismissal of the action.
Accordingly defendant's motion is denied.
GOOD CAUSE TO EXTEND TIME TO FILE NOTE OF ISSUE
Next the court turns to plaintiff's motion pursuant to CPLR 2004 for an order vacating plaintiff's default in filing a note of issue and granting an extension to file a note of issue. In support of its motion plaintiff submits the affirmation of counsel and numerous exhibits including the pleadings, a transcript of the May 2, 2016 oral argument and correspondence between plaintiff's servicer and defendant regarding ongoing loss mitigation efforts. In sum, counsel argues that during the relevant time period from August 19, 2016 through January 20, 2017 counsel was directed by plaintiff to place the foreclosure proceedings on hold due to active loss mitigation review, initiated by defendant and in compliance with federal regulations and guidelines, which is why a note of issue was not filed as directed in the compliance conference order. Defendant opposes the motion arguing plaintiff's explanation for the delay is insufficient. Plaintiff submits a reply affirmation.
The court may extend the time fixed by any statute, rule or order for doing any act, upon such terms as may be just and upon good cause shown (CPLR 2004). In addition to the statutory authority, a court has authority under the common law, in its discretion, to grant relief from a judgment or order in the interest of justice, taking into account the equities of the case and the grounds for the requested relief (see Mochkin v Mochkin, 120 AD3d 776 [2d Dept 2014]; Hodge v Development at Helderberg Meadows, LLC, 114 AD3d 1122 [2014]). In exercising its discretion the court may consider the length of delay, the reason for the delay and prejudice to the defendant (see Tewari v Tsoutsouras, 75 NY2d 1 [1989]).
With respect to the present motion the court is only concerned with the time frame between the May 2, 2016 oral argument and the January 18, 2017 conference. By its submissions plaintiff set out in detail the mitigating circumstances brought upon by defendant's filing of loss mitigation applications. According to plaintiff's counsel the file was placed on loss mitigation hold from August 19, 2016 to November 4, 2016. During that time , pursuant to federal regulations and guidelines, they ceased activity on the file except for limited actions that would [*4]not result in the issuance of a judgment of foreclosure and sale. Counsel appeared at the August 31, 2016 conference, the hold was lifted November 4, 2016, counsel appeared at the certification conference on November 9, 2016 and the action was certified for trial. Then, little more than a week later, the action was again placed loss mitigation hold from November 17, 2016 until January 20, 2017, as a result of actions initiated by defendant.
Each of these holds which plaintiff refers to is the result of a purposeful act of defendant in exploring loss mitigation efforts in an attempt to avoid foreclosure, which is the right of every defendant to pursue. This court is well aware of the CFPB rules and the prohibition against dual tracking (12 CFR §1024.41) that apply to servicers, and in certain other circumstances the court might find a loss mitigation hold would not preclude the court from determining a dispositive motion already filed or directing some other act by plaintiff. However, in the present case plaintiff set forth mitigating circumstances brought upon by defendant's filing of loss mitigation applications and established good cause for vacating their default and granting an extension for filing a note of issue. Contrary to defendant's argument an affidavit of merit is not an absolute requirement except after a default in pleading (see Tewari v Tsoutsouras, supra), and in this circumstance, the merit of plaintiff's case is apparent.
Accordingly plaintiff's motion is granted. Plaintiff is directed to file a note of issue within 14 days of the date of this order.
A pre-trial conference is scheduled for Tuesday February 28, 2018 at 9:30AM.
This constitutes the order and decision of the Court.
DATED: January 19, 2018
HON. ROBERT F. QUINLAN, JSC
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