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FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiff, v. Michael CHIUSANO; Jose Alvarez; Saul Canales; Capital One Bank; Dr. Howard Leeman DDS, PC; Fidel Garcia; John Harrington; David Reyes; Edgar Reyes; Jose Reyes, Defendants.
ORDERED that this motion by plaintiff Federal National Mortgage Association for an order pursuant to RPAPL § 1351 granting a judgment of foreclosure, approving plaintiff's request for attorney's fees and associated relief is granted as set forth below; and it is further,
ORDERED that defendant Michael Chiusano's cross-motion to renew (CPLR 2221 [e] ) his prior cross-motion (Mot. Seq. # 002) made pursuant to CPLR § 3212 seeking summary judgment dismissing the action; and if dismissal was not granted, pursuant to CPLR §§ 317 and 5015 (a) seeking to vacate his default in answering or alternatively, pursuant to CPLR 3012 (d) to compel acceptance of his late answer is denied; and it is further
ORDERED that plaintiff Federal National Mortgage Association's proposed order of judgment of foreclosure and sale, as modified by the court, is signed contemporaneously with this order; and it is further
ORDERED that plaintiff shall serve the notice of the foreclosure sale and any adjournments upon the Supreme Court Calendar Clerk; and it is further
ORDERED that the referee complete and file the Suffolk County Foreclosure Action Surplus Monies form with the Supreme Court Calendar Clerk and the Suffolk County Clerk within thirty (30) days of the foreclosure sale; and it is further
ORDERED that the referee submit proof of deposit of any surplus monies with the County Comptroller with the Supreme Court Calendar Clerk and the Suffolk County Clerk within thirty (30) days of the closing of title; and it is further
ORDERED that the referee may make an application for additional fees, by letter to the court, as a result of any adjournments of the sale, providing proof of compliance with 22 NYCRR Part 36 including the filing of USC Forms 872 and 875; and it is further
ORDERED that pursuant to RPAPL § 1351(1) the mortgaged premises is to be sold under the direction of the referee within ninety (90) days of the date of this order.
This is an action to foreclose a mortgage on residential real property located at 73 West 22nd Street, Huntington Station, Suffolk County, New York (“the property”) given by defendant Michael Chiusano (“defendant”) to plaintiff Federal National Mortgage Association's (“plaintiff”) predecessor in interest on November 30, 2007 to secure a note given the same date by defendant to that predecessor in interest. Upon defendant's default in payment under the terms of the mortgage and note, another predecessor in interest to plaintiff, Citimortgage, Inc. (“Citimortgage”) commenced this action on September 10, 2013 by filing a summons, complaint and notice of pendency with the Suffolk County Clerk (“Clerk”). Affidavits of service upon all defendants were filed with the Clerk. No defendant timely appeared or filed an answer.
Upon the default in answering of defendants, plaintiff filed a motion for appointment of a referee pursuant to RPAPL§ 1321 returnable November 13, 2014 (Mot. Seq. # 001). Defendant cross-moved (Mot. Seq. # 002) pursuant to CPLR § 3212 seeking summary judgment dismissing the action, and if that was not granted for an order pursuant to CPLR §§ 317 and 5015 (a) vacating his default in answering; or alternatively, pursuant to CPLR 3012 (d) to compel acceptance of his late answer, as well as opposing plaintiff's motion. Both motions were marked submitted before the Hon. Thomas F. Whelan, Justice of this court on November 3, 2014. By AO # 19–16, dated April 12, 2016, District Administrative Judge C. Randall Hinrichs transferred the action and motions to this part, after which the motions were scheduled for oral argument on October 24, 2016 and adjourned to November 28, 2016. Oral argument of the motions was held on November 28, 2016, and in a decision on the record the court denied defendant's cross-motion and granted plaintiff's motion.
Subsequently, plaintiff filed a motion pursuant to RPAPL § 1351 seeking a judgment of foreclosure and sale (Mot. Seq. # 003) which was withdrawn by letter dated March 27, 2017. Plaintiff then filed this motion seeking a judgment of foreclosure and sale (Mot. # 004) and defendant filed his cross-motion seeking to renew his original cross-motion (Mot. Seq. # 005). Both motions were submitted on August 17, 2017.
CROSS MOTION TO RENEW DENIED
The court first addresses defendant's cross-motion, which is denied. In moving to renew pursuant to CPLR 2221 (e), defendant's counsel claims that there has been a change in the law since the court's decision of November 28, 2016 brought about by a decision of another justice of this court in JPMorgan Chase Bank v. Diaz, 56 Misc. 3d 1136, 57 N.Y.S.3d 358 (Sup. Ct., Suffolk Co., 2017). In addition to this argument, defendant's counsel also attempts to resurrect many of his arguments which this court's previous decision rejected, which could have been properly raised by a timely motion to reargue (CPLR 2221 [d]  ), but are not properly raised in renewal.
Simply put, defendant's counsel's argument for renewal is that the decision in JPMorgan Chase Bank v. Diaz, supra, has changed the law so that any defect in service of process cannot be disregarded by the court as a mere irregularity pursuant to CPLR § 2001, and that the holding in Midfirst Bank v. Agho, 121 A.D.3d 343, 991 N.Y.S.2d 623 (2d Dept. 2014) that an out of state notarization of an affidavit not in complete conformity with CPLR 2309 (a) and RPL § 299–a , yet which substantially conforms with the template set out as adequate in RPL § 309 b  , is inapplicable. This court declines to accept the rationale and holding of JPMorgan Chase Bank v. Diaz, supra, as it applies to the facts of this case, as it's broad statement that mistakes, omissions or defects related to personal jurisdiction cannot be disregarded by the court is contradicted by the decision of the Court of Appeals in Ruffin v. Lion Corp., 15 N.Y.3d 578, 915 N.Y.S.2d 204, 940 N.E.2d 909 , discussed below. JPMorgan Chase Bank v. Diaz, supra, has not changed the law on this issue.
The court in JPMorgan Chase Bank v. Diaz, supra, based the rationale for it's conclusion on the holding in Goldenberg v. Westchester County Health Care Corp., 16 N.Y.3d 323, 921 N.Y.S.2d 619, 946 N.E.2d 717 (2011), a case where the Court of Appeals was faced with a much different factual issue of “jurisdiction” than here, or which faced the court in JPMorgan Chase Bank v. Diaz, supra. Here, defendant's counsel's argument concerning “jurisdiction” centers on the failure of an out of state process server to be authorized to serve process under CPLR § 313 and Pennsylvania law, and the process server's failure to provide an affidavit of conformity (CPLR 2309 [a], RPL § 299–a  ), purportedly making service upon defendant improper and requiring dismissal based upon the reasoning of JPMorgan Chase Bank v. Diaz, supra.
The holding in Goldenberg v. Westchester County Health Care Corp., supra is inapplicable here, since the issue of “jurisdiction” there was not service, but the fact that plaintiff never filed a summons and complaint within the statute of limitations. The Court of Appeals, affirming both the trial court and the Second Department, held that the saving provisions of CPLR § 2001 were meant by the Legislature to apply to mistakes in what was filed as opposed to “excuse a complete failure to file within the statute of limitations” (Goldenberg v. Westchester County Health Care Corp., 16 N.Y.3d at 328, 921 N.Y.S.2d 619, 946 N.E.2d 717  ). Having never timely filed a summons and complaint, plaintiff in Goldenberg v. Westchester County Health Care Corp., supra, could not rely upon CPLR § 2001 to allow a trial court to disregard such a fundamental act. The Court of Appeals did not hold that mistakes, omissions or defects related to personal jurisdiction can never be disregarded by a trial court exercising it's discretion pursuant to CPLR § 2001. Such a broad proposition, proposed by the decision in JPMorgan Chase Bank v. Diaz, supra, is contradicted by the decision of the Court of Appeals in Ruffin v. Lion Corp., supra, a case where the facts are much more akin to those before this court.
In Ruffin v. Lion Corp., supra, plaintiff commenced a personal injury action, and like here, she had process served on a Pennsylvania entity in the Commonwealth of Pennsylvania, but failed to follow the requirements of CPLR § 313. Process was served by a resident of the Commonwealth who was neither an attorney, nor the sheriff of the county where service was made. Pennsylvania Rules of Civil Procedure No. 400 requires that service of process, with few exceptions not applicable in Ruffin v. Lion Corp., supra or this case, be made by the sheriff of the county where defendant resides. In neither Ruffin v. Lion Corp., supra, nor here, could a “competent adult” have served process pursuant to Pennsylvania Rules of Civil Procedure No. 400.1, as defendants in both cases were not served in Philadelphia County. Lion defaulted in appearing and plaintiff obtained a default judgment. Two years later Lion moved to dismiss the complaint pursuant to CPLR 3211 (a) (8) and/or to vacate its default pursuant to CPLR § 5015 (a) (4) claiming that there was no jurisdiction over it for failure of service based upon the status of the process server. The trial court denied that motion, holding that the violation of CPLR § 313 was a mere irregularity that could be disregarded pursuant to CPLR § 2001. The Second Department reversed, vacating the judgment and dismissing the complaint, holding that statutes defining service were jurisdictional (see Ruffin v. Lion Corp., 63 A.D.3d 814, 880 N.Y.S.2d 702 [2d Dept. 2009] ). However, in reversing that decision, the Court of Appeals noted that in determining whether a defect in service is merely technical constituting an irregularity that can be disregarded under CPLR § 2001, the court should be guided by the principle of notice to defendant, stating that simply because service is made by a process server who is unauthorized by his status does not affect the likelihood that the summons and complaint reached defendant and provided it notice of the lawsuit against it. As in this case, the process server in Ruffin v. Lion Corp., supra, filed an affidavit of service attesting to the fact that defendant was served.
This is substantially similar to the facts before this court on the issue of the process server's status raised by defendant's counsel. Here, the process server was a resident of the Commonwealth, not an attorney, and not the sheriff of the county where service was made. He provided an affidavit of service, which was filed with the Clerk. It appears to this court, that if the rationale of JPMorgan Chase Bank v. Diaz, supra, had been applied to facts in Ruffin v. Lion Corp., supra, the action against Lion would have been dismissed as “jurisdictionally defective,” resulting in the Court of Appeals affirming the Second Department, instead of reserving it, as was done. Applying the holding in Ruffin v. Lion Corp., supra, the improper status of the process server here is a mere irregularity that can be disregarded by the court, in it's discretion, pursuant to CPLR § 2001 and not a “jurisdictional defect” as argued by defendant's counsel. The holding in Ruffin v. Lion Corp., supra, establishes that mistakes, omissions or defects involving service and “jurisdiction” can be disregarded by a court pursuant to CPLR § 2001.
As the holding in Ruffin v. Lion Corp., supra, points out that there was no change of law as argued by defendant's counsel, defendant's motion to renew pursuant to CPLR 2221 (e) has no basis.
Here, aside from the affidavit of service of defendant, there is additional proof of the “likelihood that the summons and complaint will reach defendant and inform him that he is being sued.” (Ruffin v. Lion Corp., 15 N.Y.3d at 583, 915 N.Y.S.2d 204, 940 N.E.2d 909), the touchstone the Court of Appeals relied on in finding that the issue of the status of the process server had no effect on the likelihood of defendant's receipt of actual notice and could be disregarded pursuant to CPLR § 2001. To explain that, the court must delve into the “strange circumstances” of defendant's opposition.
Neither of defendant's cross-motions contain an affidavit from defendant claiming that he was not served. Instead in both his counsel submitted an affidavit from Vincent Marzullo (“Marzullo”) in support of “defendant's” claims (both affidavits are submitted as exhibits to Mot. Seq. # 005). Marzullo claims to be “attorney in fact for defendant” pursuant to a power of attorney executed on August 21, 2014. No power of attorney was submitted with Mot. Seq. # 002, and although the Marzullo affidavit submitted with Mot. Seq. # 005 refers to it as attached, no copy is attached. Defendant's counsel provided no authority that would allow “an attorney in fact” to substitute his for that of defendant. In fact most of Marzullo's “testimony” merely parrots arguments and submissions made by defendant's counsel. There is no claim in either Marzullo affidavit that defendant was not served with the summons and complaint, only conclusions that the service was improper. Yet Marzullo tacitly admits that defendant was served, as he stated in his affidavit submitted with Mot. Seq. # 001, and submitted again on this cross-motion, that “Michael Chiusano states that he was never asked by anyone if he was in military service.” The “anyone” Marzullo says defendant is referring to is the process server, who should have made such inquiry at the time of service. Although such a statement is hearsay, it is also an admission against defendant's interest in his claim for dismissal or to vacate his default pursuant to CPLR § 5015 (a) (1) & (4). This admission provides additional proof assuring the court of the likelihood of defendant's receipt of actual notice of the action, and that the issue of the status of the process server can be disregarded pursuant to CPLR § 2001 under the holding in Ruffin v. Lion Corp., supra. The affidavit of the process server cannot be disregarded under such circumstances merely because of his residence and status as non-attorney and non-sheriff which does not affect the likelihood that the summons and complaint reached the defendant and provided him notice of the lawsuit against him.
Additionally, the same principles apply with equal weight to the technical defect again claimed by defendant's counsel, that the out of state affidavit of service was not in conformity with CPLR 2309 (a) and RPL § 299–a . Further, if an affidavit of notarization, as here, substantially conforms with the template set out as adequate in RPL § 309 b  , no substantial right of defendant is prejudiced in disregarding it, it is therefore sufficient and a defect that the court can ignore pursuant to CPLR § 2001 (see Midfirst Bank v. Agho, 121 A.D.3d 343, 991 N.Y.S.2d 623 [2d Dept. 2014]; Todd v. Green, 122 A.D.3d 831, 997 N.Y.S.2d 155 [2d Dept. 2014]; Seiden v. Sonstein, 127 A.D.3d 1158, 7 N.Y.S.3d 565 [2d Dept. 2015]; Bank of New York Mellon v. Vytalingam, 144 A.D.3d 1070, 42 N.Y.S.3d 274 [2d Dept. 2016] ). Here, the affidavit and notarization substantially complies with the template, and the failure to be in full conformity with CPLR 2309 (a) and RPL § 299–a  may be disregarded by the court.
The other arguments raised by defendant's counsel in support of renewal essentially “rehash” the arguments previously made by defendant's counsel and Marzullo in support of Mot. Seq. # 002 and in opposition to Mot. Seq. # 001, and are inappropriate for renewal. Marzullo's and defendant's counsel's conclusions that a review of the submissions in Mot. Seq. # 001 failed to prove plaintiff's standing, failed to show compliance with the notice requirements of the mortgage and RPAPL § 1304 and their unsupported conclusion that defendant had a reasonable excuse for his default are repeated in Marzullo's affidavit in support of Mot. Seq. # 005 and defendant's counsels affirmation. Additional claims that reviews of the submissions on plaintiff's motion for a judgment of foreclosure are stale, unsupported or that the referee's report is somehow insufficient are irrelevant to the motion to renew.
At oral argument on November 28, 2016, the court queried defendant's counsel why in the two years between filing of the motions and oral argument an affidavit from defendant challenging service, supporting a claim of failure to receive notices, and providing a reasonable excuse for defendant's default in answering could not have been obtained to supplement the submissions. Now, defendant's counsel has had almost an additional eight months from that decision until this motion, and has still not provided an affidavit from defendant, or an explanation why one could not be obtained to support the use of Marzullo's affidavit.
Defendant's counsel's other various arguments concerning claimed deficiencies that precluded the court from issuing the order of November 28, 2016, his claimed meritorious defenses to the action and his perceived deficiencies in plaintiff's submissions for the judgment of foreclosure and sale have not been considered by the court as defendant has not successfully moved to vacate his default. To be granted affirmative relief of a non-jurisdictional nature a party must first successfully move to vacate his default (see Holubar v. Holubar, 89 A.D.3d 802, 934 N.Y.S.2d 710 [2d Dept. 2011]; Deutsche Bank Trust Co., Am. v. Stathaklis, 90 A.D.3d 694, 934 N.Y.S.2d 457 [2d Dept. 2011]; U.S. Bank Natl. Assn. v. Gonzalez, 99 A.D.3d 694, 952 N.Y.S.2d 59 [2d Dept. 2012]; Southstar III, LLC v. Enttienne, 120 A.D.3d 1332, 992 N.Y.S.2d 548 [2d Dept. 2014]; Chase Home Finance, LLC v. Garcia, 140 A.D.3d 820, 31 N.Y.S.3d 894 [2d Dept. 2016]; Nationstar Mortgage, LLC v. Avella, 142 A.D.3d 594, 36 N.Y.S.3d 679 [2d Dept. 2016]; Nationstar Mtg., LLC v. Kamil, 155 A.D.3d 968, 63 N.Y.S.3d 890 [2d Dept. 2017] ). This applies even if defendant bases his claim for dismissal on failure to comply with the provisions of RPAPL § 1304 (see HSBC Bank, N.A. v Clayton, 146 A.D.3d 942, 45 N.Y.S.3d 543 [2d Dept. 2017] ).
JUDGMENT OF FORECLOSURE AND SALE GRANTED
The court has reviewed plaintiff's application for a judgment of foreclosure and sale, setting the amounts due and owing plaintiff as determined by the referee, the referee's recommendation to sell the property in one parcel, and plaintiff's counsel's applications for attorney's fees. Plaintiff's submissions establish its entitlement to a judgment of foreclosure and sale, namely the referee's findings and report (see HSBC Bank USA, N.A. v. Simmons, 125 A.D.3d 930, 5 N.Y.S.3d 175 [2d Dept. 2015]; Mortgage Elec. Registration Sys., Inc. v. Holmes, 131 A.D.3d 680, 17 N.Y.S.3d 31 [2d Dept. 2015]; US Bank N.A. v. Saraceno, 147 A.D.3d 1005, 48 N.Y.S.3d 163 [2d Dept. 2017] ). Although the court is not bound by the referee's findings, the report of a referee should be confirmed whenever the findings are substantially supported by the record (see Hudson v. Smith, 127 A.D.3d 816, 4 N.Y.S.3d 894 [2d Dept. 2015]; Matter of Cincotta, 139 A.D.3d 1058, 32 N.Y.S.3d 610 [2d Dept. 2016]; Citimortgage, Inc. v. Kidd, 148 A.D.3d 767, 49 N.Y.S.3d 482 [2d Dept. 2017] ). Here, the referee submitted ample documentary evidence to support the amounts due and owing plaintiff, as the computation was premised upon business records produced by plaintiff in support of its initial motion for summary judgment (see Galasso, Langione & Botter, LLP v. Galasso, 89 A.D.3d 897, 933 N.Y.S.2d 73 [2d Dept. 2011]; Citimortgage, Inc. v. Kidd, supra. Defendant's counsel's claims that the amounts submitted by plaintiff were “stale” were without merit.
The assertion that the referee failed to hold a hearing is also without merit. Under the circumstances of this case, despite defendant's counsel's assertions, the referee was not required to hold a hearing before issuing his report (see Deutsche Bank National Trust Co. v. Jackson, 68 A.D.3d 805, 889 N.Y.S.2d 477 [2d Dept. 2009]; Deutsche Bank National Trust Co. v .Zlotoff, 77 A.D.3d 702, 908 N.Y.S.2d 612 [2d Dept. 2010]; Deutsche Bank National Trust Co. v .Williams, 134 A.D.3d 981, 20 N.Y.S.3d 907 [2d Dept. 2015]; Citimortgage, Inc. v. Kidd, supra; Bank of N.Y. Mellon v. Hoshmand, 158 A.D.3d 600, 71 N.Y.S.3d 527 [2d Dept. 2018] ). Further, plaintiff has provided proof that the Notice of Computation was sent to defendant's counsel who, on behalf of defendant, could have submitted objections to the proposed submissions before the referee, he did not (see Kihl v. Pfeffer, 94 N.Y.2d 118, 700 N.Y.S.2d 87, 722 N.E.2d 55 ; Engel v. Lichterman, 62 N.Y.2d 943, 479 N.Y.S.2d 188, 468 N.E.2d 26 ; Flushing Sav. Bank, FSB v. Colmar Realty, LLC, 121 A.D.3d 1040, 994 N.Y.S.2d 311 [2d Dept. 2014] ). Although given ample opportunity to raise any insufficiencies or errors in the submissions by plaintiff to the referee and the court, defendant's counsel has provided no substantive claim of error or insufficiency warranting denial of the application (see Deutsche Bank National Trust Co. v. Zlotoff, 77 A.D.3d 702, 908 N.Y.S.2d 612 [2d Dept. 2010] ).
In any event, the referee's report is only advisory, and is not binding upon the court, which remains the ultimate arbiter of the issue (see Citimortgage, Inc. v. Kidd, supra ). As pointed out in Wells Fargo v. Zelaya, 56 Misc. 3d 1219(A) (A), 2017 WL 3732345 (Sup. Ct., Suffolk Co., 2017), this has been a long standing principle (see Marshall v. Meech, 6 Sickels 140, 51 N.Y. 140, 143–4, ; In re Paul Jones & Co., 117 A.D.775, 102 N.Y.S. 983 [2d Dept. 1907] ).
Defendant's counsel also objects to the granting of the judgment of foreclosure and sale on the grounds that plaintiff has not provided proof of filing of a successive notice of pendency, as the original notice had expired. He points out that both the order placed on the record on November 28, 2016, as well as the order of reference signed that day by the court, required that upon filing a judgment of foreclosure and sale plaintiff submit proof of filing of a successive notice of pendency at least 20 days prior to the filing of the motion. Plaintiff has failed to provide such proof. In addition to this being ordered by the court, RPAPL § 1331 requires that a valid notice of pendency be filed at least twenty days before a final judgment directing a foreclosure sale is rendered, and it is a prerequisite for a valid judgment (see Slutsky v. Blooming Grove Inn, 147 A.D.2d 208, 542 N.Y.S.2d 721 [2d Dept. 1989]; Debcon Financial Services, Inc. v. 83–17 Broadway Corp., 61 A.D.3d 712, 878 N.Y.S.2d 75 [2d Dept. 2009] ). As plaintiff's notice of pendency had expired, in order to comply with the requirements of RPAPL § 1331, plaintiff would have had to availed itself of the saving exception for foreclosure actions provided by CPLR 6516 (a) and filed a successive notice of pendency, submitting proof of same.
Although plaintiff has failed to provide the proof of filing required by the court's order, the court has checked the on-line records the Clerk, which show that a successive notice of pendency was filed on December 14, 2016, shortly after the decision of November 28, 2016. The court having determined that plaintiff has complied with RPAPL § 1331, there is no impediment to the issuance of a judgment of foreclosure and sale. The court also notes that both its decision on the record and the written order of reference state that a failure to comply with these additional conditions placed on the proceedings by the court shall not form the basis for dismissal of the action.
The court will sign plaintiff's proposed order, with modifications. Among those modifications is awarding plaintiff counsel fees only in the amount that plaintiff's counsel says was agreed with plaintiff as a flat fee. As this was the agreement for legal services and fees between the parties, the court sees no basis to burden a defendant with additional legal fees which translate into a potential larger deficiency judgment against defendant. As the flat fee was agreed to between plaintiff and counsel, so it shall be enforced in this case by the court.
The proposed order submitted by plaintiff, as modified by the court, is signed contemporaneously with the signing of this order.
This constitutes the Order and decision of the Court.
Robert F. Quinlan, J.
Response sent, thank you
Docket No: 24443–2013
Decided: May 08, 2018
Court: Supreme Court, Suffolk County, New York.
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