U.S. Bank Trust, N.A. v Padilla

[*1] U.S. Bank Trust, N.A. v Padilla 2021 NY Slip Op 50372(U) Decided on April 21, 2021 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 April 21, 2021
Supreme Court, Suffolk County

U.S. Bank Trust, N.A., as Trustee for LSF10 Master Participation Trust, Plaintiff,

against

Ascencion Padilla, a/k/a ASCENSION PADILLA, et al., Defendants.



600172/18



STERN & EISENBERG, ESQS.

Attys. For Plaintiff

485B Rte. 1 So. - Ste. 330

Iselin, NJ08830

FRANK SCHELLACE, ESQ. Referee

350 POST AVE., SUITE 204

Westbury, NY 11590
Thomas F. Whelan, J.

Upon review of the court's computerized records, the order dated February 11, 2019 appointing Referee Frank Schellace, the Judgment of Foreclosure and Sale dated August 14, 2019, the foreclosure sale held on November 18, 2019 and the Terms of Sale, the stipulation dated March 4, 2021 between plaintiff's counsel and the referee, copies of e-mails and correspondence, Fiduciary Rules, Part 36, Fiduciary Order form No. 875, and this Court's Order of March 11, 2021, it is

ORDEREDthat upon the failure of the Referee, Frank Schellace, Esq., to file an affirmation of services pursuant to the direction of the Court, in its short form order of March 11, 2021, the [*2]Court will not award any additional fees above that previously ordered by the Court in prior orders of reference and the Judgment; and it is further

ORDERED that if an additional fee of $2,500.00 has been paid to the Referee, it shall be immediately refunded to plaintiff's counsel; and it is further

ORDEREDthat this matter is immediately forwarded to the Managing Inspector General for Fiduciary Matters, Elizabeth Candreva, Esq., for further review and with the recommendation that the listed Referee, Frank Schellace, Esq., be removed from the Fiduciary List and not be permitted to accept fiduciary appointments of any kind; and it is further

ORDERED that the Fiduciary Unit of Suffolk County is directed to conduct a search of outstanding appointments wherein Referee Frank Schellace, Esq., is still an active fiduciary under previous Orders of this Court, so that same may be replaced.

A foreclosure sale was conducted by the appointed Referee Frank Schellace, Esq., on November 18, 2019. However, the Referee refused to sign the Referee's Deed of Sale and accompanying documentation, so by Order dated December 10, 2020, the referee was directed to complete and execute all post-sale documents including the Referee's Deed, Referee's Report of Sale, and required tax forms, and return the documents to plaintiff's counsel no later than December 18, 2020. Plaintiff's counsel thereafter advised this court that the Referee failed to abide by that Order and that no documents were ever forthcoming from the referee.

Thereafter, this Court, by Order dated February 17, 2021, directed the Referee to appear and show cause, on March 15, 2021, in person, in Part 33, why he should not be held in contempt of court by reason of his failure to abide by the December 10, 2021 order.

Prior to the hearing date, the parties, separately, entered into a Stipulation, dated March 4, 2021, wherein the parties agreed that the completed documentation and the Referee's Deed would finally be provided to the plaintiff, but upon the condition that the referee be paid an additional fee of $2,500.00. By Order dated March 11, 2021, this Court directed that, pursuant to Fiduciary Rules, Part 36, this Court will not award the appointed referee any additional fees until the referee submitted an affirmation of services, which was to be filed with the Court prior to April 19, 2021. The Referee contacted the Court by fax, on March 23, 2021, stating:

"With respect to your Order dated March 11, 2021, please be advised that I will not be submitting an Affirmation of Services for additional fees as that issue was resolved in the March 4, stipulation. Let this communication serve as formal notice that I am still interested in receiving Part 36 assignments from your Honor. Respectfully submitted,"

This Court, through it's then secretary, advised the referee by telephone communication on [*3]April 1, 2021, that he had to submit an affirmation of services and additionally advise counsel for the plaintiff of same. No such affirmation was e-filed or submitted to the Court.

By his actions, the referee has deprived this Court of one of its critical functions, that is, the oversight of Fiduciary Appointments. The Court notes that the only Fiduciary Form filed by the Referee, on March 18, 2021, the "Foreclosure Action Surplus Monies Form," only claims the payment of $500.00. Yet, this Court authorized the payment of $350.00 with the Order of Reference, dated February 11, 2019 and an additional fee of $500.00 with the Judgment dated August 14, 2019. The stipulation filed on March 4, 2021 authorizes an additional payment of $2,500.00.

It has often been said that an appointed referee acts as the arm of the Court, but such an appointment does not permit one to act as the brain of the Court. Here, it took more than a year for the Court to be informed of the refusal of a Referee to complete the necessary paperwork, and apparently, only upon the payment of a large, unregulated fee.

Today, at 3:08 pm, the Court received a belated fax from the referee, stating "I will not be seeking any additional fees at this point in time in this matter." Such fails to account for all the sums already received. In light of all of the above, the Court will file this Order with the Inspector General for Fiduciary Matters.

DATED: April 21, 2021

THOMAS F. WHELAN, J.S.C.