Deutsche Bank Natl. Trust Co. v Bolger
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Deutsche Bank Natl. Trust Co. v Bolger 2019 NY Slip Op 31663(U) June 10, 2019 Supreme Court, Suffolk County Docket Number: 29848/2007 Judge: Howard H. Heckman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [* 1] Shon Form Order SUPREME COURT - STATE F NEW YORK IAS PART 18 - SUFFOLK OUNTY PRESENT: HON. HOWARD H. HECKMAN, JR., J.S.C. ----------------------------------------------------------------)( DEUTSCHE BANK NATIONAL TRUST COMPANY, Plaintiff, INDEX NO.: 29848/2007 MOTION DATE: 5/21/2019 MOTION SEQ. NO.: #003 MG #004MD PLAINTIFF'S ATTORNEY: RAS BORISKJN, LLC 900 MERCHANTS CONCOURSE WESTBURY, NY 11590 -against- DEFENDANTS' ATTORNEY: CHRISTOPHER BOLGER, et al. , Defendants. MICHAEL G. MCAULIFFE, ESQ. 68 SOUTH SERVICE RD., STE. 100 MELVILLE, NY 11747 ----------------------------------------------------------------)( Upon the following papers numbered l to 30 read on this motio : Notice of Motion/ Order to Show Cause and supporting papers 1-11 (#003) ; Notice of Cross Motion and supporting p pers 12-18 (#004) : Answering Affidavits and ; Other_ : (and after hearing supporting papers 19-20. 2 1-22 ; Replying Affidavits and supporting pape s 23-27. 28-30 counsel in support and opposed to the motion) it is, ORDERED that this motion by plaintiff Deutsch Bank National Trust Company seeking an order pursuant to CPLR 222l(d) & 5015(a) vacating the s a sponte Order (Mayer, J.) dated April 17, 2013 dismissing plaintiff's complaint is granted; and it is her ORDERED that defendants' cross motion seekin an order denying plaintiffs motion or, in the alternative, granting defendants leave to serve a late a swer is denied; and it is further ORDERED that dispositive motions shall be se ed within ninety (90) days of the date of this order with notice of entry. Plaintiff's action seeks to foreclose a mortgage in he original sum of $437,400.00 executed by defendants Christopher Bolger and Tammy Bolger on ecember 13, 2006 in favor of First rtgagors executed a promissory note Lincoln Mortgage Corporation. On the same date both promising to repay the entire amount of the indebtedness o the mortgage lender. The mortgage and note were subsequently assigned to the plaintiff. Plaintif claims that both mortgagors defaulted in making timely monthly mortgage payments beginning M y 1, 2007 and the default has continued for the ensuing twelve ( 12) years. Plaintiff commenced this ction by filing a summons, complaint, and notice of pendency in the Suf(olk County Clerk's Office n September 19, 2007. Both mortgagors were served with the sununons and complaint on Septem er 20, 2007- defendant Tammy Bolger was personally served at the mortgaged premises pursuant to PLR 308(1) and defendant Christopher Bolger was served at the mortgaged premises pursuant to CPLR 308(2) by substituted service by personal delivery of the summons and complaint to co-de endant Tammy Bolger, defendant Christopher Bolger's wife. Both defendants defaulted in Court records indicate that plaintiff submitted a ti ely motion seeking an order granting a [* 2] default judgment on April 25, 2008 with an original retu date of September 12, 2008. That initial motion was later withdrawn and denied as moot by Order (Mayer, J.) dated January 7, 2009. Plaintiff served a second motion seeking an order of refer nee on April l 5, 2009 with an original return date of August 13, 2009. That motion was denied ithout prejudice by short form Order (Mayer, J.) dated February 18, 2011. The assigned court hereafter issued two sua sponte Orders dated March 1, 2013 and April 17, 2013. The second sua sponte Order (Mayer, J.) dismissed plaintiffs complaint on the basis of the mortgage lender' failure to submit "proofs" to demonstrate its standing and its jurisdiction in violation of the original March 1, 2013 sua sponte Order. There was no further activity until plaintiff served the pending underlying motion on December 12, 2018 made returnable on January 15, 2019 seeking to vacate the April 17, 2013 Order, restoring this action as an active foreclosure case, nd seeking leave to serve another default judgment motion. The defaulting mortgagors served a er ss motion in response on January 29, 2019 made returnable on February 5, 2019, seeking an order de ying plaintiffs motion or, in the alternative, granting leave for defendants to serve a late a swer. Both motions were submitted on this IAS Part 18's motion calendar on March 19, 2019. B short form Order dated April 23, 2019 this court converted plaintiffs motion as one seeking lea e to reargue Justice Mayer's April 17, 2013 Order on the basis that the time within which to serve a otion seeking leave to reargue had not expired since plaintiff was never served with a copy of th April 17, 2013 Order. The trial court issued an initial sua sponte Order ted March 1, 2013 which, in essence, required a bank attorney to appear in court for a "foreclos re status conference" within forty five (45) days and be armed with concrete, unassailable evidentia proof to make a prima facie showing of its entitlement to judgment. The sua sponte Order required ot only documentary proof in the form of the note and mortgage, but also included affidavits from i dividuals with "personal knowledge" sufficient: 1) to prove standing (including affidavits based u on "personal knowledge" verifying assignee' s note and mortgage possession and con rming the validity of an assignment); 2) to prove jurisdiction (including not only affida its of personal service but also submission of proof concerning "nail and mail" to demonstrat a "genuine inquiry" of the defaulting mortgagor' s whereabouts and proof of fil ing); 3) to prove compliance with mo11gage requireme ts related to service of notice of default (including an affidavit from an individual with "p rsonal knowledge" related to the notice content and timing of such service); 4) to prove compliance with service requirement ofRPAPL 1303 notices (including verification that the notice served complied with ' form, type size, type face, paper color and content requirements); 5) to prove compliance with service requirements ofRPAPL 1304 notices (including affidavits from individuals with personal knowle ge of proper service and verification of fom1 requirements related to "type-size and conte t requirements"; and 6) to prove compliance with RP APL 1306 filing r quirements (including an affidavit from a -2- [* 3] individual with "personal knowledge" confirming filing with the superintendent of banks). The sua sponte Order contained a "warning" that the fail e to "fully comply with the directives set forth in the Order, shall result in dismissal of plaintiffs c mplaint.. ... " On April 17, 2013 (forty-five days later) counsel r the plaintiff appeared for the conference and the sua sponte dismissal was issued on the same day ased upon counsel's failure to comply "with any of the directives" . Although the March 1, 2013 Order sets forth numerous directives, the April 17, 2013 Order recites two primary issues; 1) plaint ffs failure to establish "proper jurisdiction"; and 2) plaintiffs failure to have "proper sta ding" as the legal predicate leading to plaintiffs default. The Order recites as legal grounds for ismissal a violation of CPLR 3126 reciting plaintiffs "wilful failure to disclose information'ยท. Although this court directed the parties to further rief the legal issues based upon CPLR 2221 (d), upon further review that statute is inapplicable t the record in this case since plaintiff was never afforded an opportunity to "argue" the merits of the sua sponte dismissal. Put another way, this motion cannot be one to "reargue" where the plaintif was never permitted to "argue". Therefore, the appropriate statutory grounds applicable to seek such relief is for plaintiff to move to vacate the sua sponte order pursuant to CPLR 5015. CPLR 5015(a) (1) provides: R 5015. Relief from judgment or order. (a) On motion. The court which rendered ajud ent or order may relieve a party from it upon such terms as may be just, on motio of any interested person with such notice as the court may direct, upon the ground of l. excusable default, if such motion is ma e within one year after service of a copy of the judgment or order with writt n notice of its entry upon the moving party, or, if the moving party has ntered the judgment or order, within one year after such entry..... The first issue raised therefore on behalf of the pl in tiff is whether the mortgage lender had a reasonable excuse for failing to comply with the initial su sponte order within forty five (45) days and to appear in court with affidavits based upon "person 1 knowledge" for nearly every conceivable affirmative defense a defaulting mortgagor could possibl raise (assuming the defaulting borrowers had actually submitted an answer), together with copies o sufficient documentary proof relevant to this foreclosure action so as to be able to prove standing, ersonal jurisdiction, service of pre-action APL 1303 & 1304 notices, and statutorily mortgage required default notices, service of pre-action required filing of RP APL 1304 notices. In essence, the su sponte order required production by the plaintiff of all admissible, relevant evidence to make a pr a facie showing of its entitlement to judgment- which would ultimately be required to be sub itted in a summary judgment motion where the defaulting borrowers have raised each (or any) f the defenses set forth in their answer and in opposition to plaintiffs summary judgment motion. S rict compliance with the March 1, 2013 Order within a forty five day period was a near impossibi ity, particularly given the time period when it was issued when administrative orders (see A0/548/10 & A0/431/11) requiring attorney -3- [* 4] certifications was the source of continuing delays in pros cuti9n of foreclosure actions. Based upon this record plaintiff had a reasonable excuse for failing to omply with the March 1, 2013 Order and therefore, pursuant to CPLR 5015, plaintiff is entitled to lief in the form of an order vacating the April 17, 2013 Order which dismissed this action and res ring this action as an active case *1 * 1. Case law is legion that a court's power to dismiss a c mplaint, sua sponte, is to be used sparingly and only when extraordinary circumstances exi t to warrant dismissal (see US. Bank, NA . v. Emmanuel, 83 AD3d 1047, 921NyS2d320 (2"d Dept., 01 l); HSBC Bank USA, NA. v. Taher, 104 AD3d 815, 962 NYS2d 301 (2"d Dept., 2013); JPMo gan Chase Bank, NA. v. Laszlo, 169 AD3d 885, 94 NYS3d 343 (2"d Dept., 2019); LaSalle Ba , NA. v. Lopez, 168 AD3d 697, 91 NYS3d 259 (2"d Dept., 2019) HSBC Bank USA, NA. v. A geles, 143 AD3d 671, 38 NYS3d 589 (2"d Dept., 20 16)). While there is no explicit definition in th numerous appellate cases addressing this issue to describe what is exactly meant by "extraordinary circumstances" which would justify dismissal, the sua sponte Order granted in this case clear! did not warrant dismissal of plaintiff's complaint based upon the grounds set forth in the Order. or was there any justification for dismissal pursuant to CPLR 3126 based upon a "wilful fa lure to disclose" given this record of the underlying proceedings. Plaintiff was never afforded a re e nable opportunity to comply with the prior sua sponte order and therefore its default could not ave been wilful disobedience. Moreover, at the time this action was dismissed, both defendant/mo gagors were in default in serving an answer and therefore plaintiff had no obligation to provid proof of standing (see Wells Fargo Bank, NA. v. Emma, 161AD3d1131, 78 NYS3d 425 (2nd Dept, 20 18); Bank ofAmerica, NA. v. Cudjoe, 157 AD3d 653, 69 NYS3d 101 (2"d Dept., 20 18); Citiban NA. v. Gentile, 156 AD3d 859, 65 NYS3d 778 (2"d Dept., 2017); Bank ofAmerica, NA. v. owrie, 155 AD3d 995, 64 NYS3d 584 (2"d Dept., 2017); Nationstar Mortgage, LLC. v. Kami/, 155 D3d 968, 63 NYS3d 890 (2"d Dept., 2017); Bank of New York J\tfellon v. lzmirlgil, 144 AD3d 1067, 4 NYS3d 44 (2"d Dept., 20 17)) (or any of the other numerous directives in the March 1, 2013 sua s onte Order). With respect to the jurisdictional predicate used as a justification for dismiss I, the record shows that plaintiff had previously made a prima facie showing of jurisdiction by ubmitting affidavits of service in support of two prior motions seeking an order of reference, and oreover the jurisdictional predicate had been waived by both defendants based upon counsel havi g appeared in this action on their behalfwh ich defendant Bolger concedes in his affidavit (CPLR 20; see Bank ofAmerica, NA. v. Rice, 155 AD3d 593, 63 NYS3d 486 (2"d Dept., 2017)). Therefore o genuine issue of fact existed concerning personal jurisdiction. -4- [* 5] With respect to defendants' cross motion seeking eave to serve a late answer, the law requires a showing of a reasonable excuse for the default n answering and a demonstration of a potentially meritorious defense (see Eugene Dilorenzo, 1 c. v. A.C Dutton Lbr., Co., 67 NY2d 138, 501 NYS2d 8 (1986); Deutsche Bank National Trust Co any v. Gutierrez, 102 AD3d 825, 958 NYS2d 472 (2"d Dept., 2013)). While defendant Bolger akes reference to the fact that counsel failed to serve an answer on Bolger's behalf, there has be n no showing of a reasonable excuse or an arguably meritorious defense sufficient to justify granting defendants' leave to serve an answer at this stage of this action. Finally with respect to the issue of plaintiffs dela in prosecuting this action, while the question of "reasonable excuse" for default has been addr ssed as it relates to the merits of both parties' motions, the issue of unreasonable delay in seeki g the relief sought by plaintiff is of concern given the court's duty as a court of equity. Whil plaintiff correctly points out that the issue of abandonment and/or failure to timely seek judgment w thin one year of the mortgagors' original default (CPLR 3215(c)) is not part of this record, the mo gage lender/assignee has significantly delayed prosecution of this action. Equitable considerati ns must come into play so as to be fair to both parties. On one side of the argument is the defaultin mortgagor, who claims that he was deceived by the original lender, signed mortgage docume ts he and his wife never read, determined that he could not afford the payments in those documents, made desperate attempts to become "current" with the mortgage payments, and was stonewall d and given the "run around" by the lender's representatives. On behalf of the mortgage lende /assignee the theory is much simpler- the original lender loaned the defaulting borrowers more than $400,000.00 and hasn't received a payment in return in more than twelve (I 2) years. And u less Justice Mayer's Order was intended as a gift and/or the defaulting borrowers won the lottery on pril 17, 2013, there is no fairness in law or equity justifying dismissing plaintiff's action. While this court of equity has sympathy for the pli ht of the mortgagors, there is no relevant, admissible evidence submitted to deny the unalterable fac s that they signed a note and mortgage promising to repay the amount of monies borrowed from he lender and, in return, the lender loaned the mortgagors in excess of $400,000.00. Regardless of he fact that the mortgagors claim that they did not read what they signed, they remain legally respon ible for the promises made in the agreement they signed, including the promise they made t repay the monies that were loaned to them. It would therefore be wholly inequitable to, in effe t, gift more than $400.000.00 to the defendants However, clearly there has been a significant dela in the prosecution of this action and this court retains the right, upon submission of admissible and relevant evidence, to deny the mortgage lender future requests for relief including, but not limited o, the recovery of interest on the loan during the time period of delay, assuming the appropriate vidence is submitted to establish wrongful conduct on the part of the lender (see BAC Home Loans S rvicing, LP v. Jackson, 159 AD3d 861 , 74 NYS3d 59 (2 11d Dept., 2018); Greenport j\1ortgage Corp . . Lamberti, 155 AD3d 1004, 66 NYS3d 32 (2nd Dept., 2017); Citicorp Trust Bank v. Vidaurre, 155 A 3d 934, 65 NYS3d 237 (2nd Dept., 2017)) -5- [* 6] Accordingly, defendant's cross motion is denied a d plaintiff's motion is granted. The parties shall serve dispositive motions within ninety (90) ays of entry of this order. HON. HOWARD H. HECKMAN, JR. Dated: June 10, 2019 J.S.C. -6-
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