CHASE HOME FINANCE LLC v. BERGER (2018)

In this mortgage foreclosure action, Plaintiff moves for an Order extending Plaintiff's time to serve Defendant, Abraham Berger (hereinafter “Defendant”) pursuant to CPLR § 306-b and for leave to serve Defendant by service upon his attorney pursuant to CPLR § 308(5). The Court has considered the following papers on the motion:

1. Notice of Motion, Attorney Affirmation and Exhibits A through I attached thereto, and Memorandum of Law;

2. Defendant's Memorandum;

3. Plaintiff's Memorandum of Law.

Factual Background:

The within action began as a “run-of-the-mill” mortgage foreclosure action commenced by Plaintiff in October 2009. Due to the procedural history of this case over the past nine years and for the sake of clarity, the Court must set forth a brief, yet detailed chronology that is relevant to the within motion.¹

To begin, on March 10, 2004, Defendant executed a note in favor of Flagstar Bank to borrow the sum of $300,000.² The Note was secured by a mortgage on the subject property with Mortgage Electronic Registration System (“MERS”) as nominee for Flagstar Bank. In March of 2008, Defendant allegedly defaulted on the mortgage. Plaintiff allegedly sent Defendant the required pre-foreclosure notices and on October 1, 2009, Plaintiff commenced the within action. See, Plaintiff's Exhibit A. Defendant defaulted in appearing.

Plaintiff thereafter moved for summary judgment and an order of reference, which the Court (Berliner, J.) granted on April 6, 2010. See, Plaintiff's Exhibit B. A Judgment of Foreclosure and Sale was signed by the Court (Berliner, J.) on August 25, 2010. See, Plaintiff's Exhibit C.

Plaintiff took no action for five years and then moved for an Order granting Plaintiff leave to substitute the Affidavit of Merit, affirm the Order of Reference and Judgment of Foreclosure and Sale and amend the caption. The Court (Alfieri, J.) granted Plaintiff's motion but stayed the action until Plaintiff filed a Notice of Issue. See, Plaintiff's Exhibit D. Plaintiff filed its Note of Issue on June 15, 2015.

Shortly thereafter, Defendant moved by way of Order to Show Cause for various relief, including vacature of the prior orders, dismissal of the complaint and the scheduling of a settlement conference.³ Defendant also sought a temporary restraining order staying a scheduled foreclosure sale. The Court (Garvey, J.) signed the Order to Show Cause on August 19, 2015 wherein the requested stay was granted pending a determination of the motion. See, Plaintiff's Exhibit E. Based on the arguments raised in Defendant's motion, Judge Garvey ordered that a Traverse hearing be held on August 31, 2015. Over the next two years, the Traverse hearing was adjourned on numerous occasions.⁴

Despite the fact that the Traverse hearing has yet to be conducted and a determination rendered, Plaintiff moved for an order extending its time to serve the Defendant and to permit service on the Defendant upon his attorney. In support of its motion, Plaintiff concedes that “[i]n preparation for the traverse hearing, it was determined for the first time that the affidavit of service contained an error.” See, Plaintiff's Attorney Affirmation at ¶ 11. The error, according to Plaintiff, was that the process server who signed the Affidavit of Service was not the process server who actually (as Plaintiff claims) served the Defendant. Because Plaintiff admits that the Affidavit of Service is false, Defendant argues that a Traverse hearing is no longer necessary and that the action must be dismissed. It is this motion that is the subject of the within Decision and Order.

Legal Discussion:

A motion for leave to extend time to serve a summons and complaint is governed by CPLR § 306-b. That statute provides, in relevant part, as follows:

Service of the summons and complaint ․ shall be made within one hundred twenty days after the commencement of the action or proceeding․ If service is not made upon a defendant within the time provided in this section, the court, upon motion, shall dismiss the action without prejudice as to that defendant, or upon good cause shown or in the interest of justice, extend the time for service.

CPLR § 306-b. The “good cause” standard requires a showing of reasonable diligence in attempting to effect service. See, Leader v. Maroney, 97 NY2d 95, 104 (2001). On the other hand, “[t]he interest of justice standard requires a careful judicial analysis of the factual setting of the case and a balancing of the competing interests presented by the parties.” Id. at 105. Thus, in determining whether to grant an extension of time to serve defendant under the “interest of justice” standard, the Court should consider all of the relevant factors including, but not limited to, “diligence, or lack thereof, ․ expiration of the Statute of Limitations, the meritorious nature of the cause of action, the length of delay in service, the promptness of a plaintiff's request for the extension of time, and prejudice to defendant.” Id. at 105-106. Whether to grant such a motion rests within the sound discretion of the court. See, Holbeck v. Sosa-Berrios, 161 AD3d 957, 958 (2d Dept. 2018).

Applied here, the Court finds that an extension of time to serve the summons and complaint is not warranted in the interests of justice under the circumstances of this case. First, the within action has been pending for almost nine years, five of which Plaintiff took no action after the Judgment of Foreclosure was granted and now more than four years since the Statute of Limitations expired. See, Colon v. Bailey, 26 AD3d 454, 456 (2d Dept. 2006)(Plaintiff's lack of diligence throughout the proceedings was but one factor the Court referenced as a basis to deny plaintiff's motion for an extension of time in the interests of justice). Second, Plaintiff already moved for and obtained an Order of Reference and Judgment of Foreclosure, based on an Affidavit of Merit that had to subsequently be substituted and based on an Affidavit of Service that Plaintiff concedes was incorrect. Moreover, on the date the Traverse hearing was actually scheduled to take place, the process server failed to appear. The Court further notes that Plaintiff is attempting to correct the deficiency in service by the filing of the within motion to avoid the necessity of proceeding with the Traverse hearing, a hearing that has been scheduled since 2015 and for which Plaintiff failed to produce its process server on the actual hearing date in September 2016. Plaintiff concedes that its service of the summons and complaint on Defendant was improper and is grasping at straws to correct its error. Under these circumstances, there can be no question that Defendant has been prejudiced. See, Wilkins v. Burgess, 25 AD3d 794, 795 (2d Dept. 2006).

Based on the foregoing, it is hereby

ORDERED that Plaintiff's motion for an extension of time to serve the summons and complaint is denied; and it is further

ORDERED that, in light of the Court's findings herein, Defendant's motion to vacate the Order of Reference dated April 6, 2010, and the Judgment of Foreclosure dated August 25, 2010 and subsequent order affirming the Judgment of Foreclosure dated February 20, 2015 is granted; and it is further

ORDERED that Defendant's motion to dismiss the complaint is granted without the necessity of conducting a Traverse hearing; and it is further

ORDERED that the Clerk of the County shall cancel and discharge of record a certain notice of pendency of action heretofore filed in the within action in the Office of the Clerk of said County of Rockland and recorded in a book kept for that purpose by the Clerk, and the Clerk shall enter on the margin of the record of the same a note of cancellation referring to this Order.

ORDERED that all other relief requested and not specifically addressed herein is denied.

The foregoing constitutes the Decision and Order of this Court.

FOOTNOTES

1.   In order to provide a complete chronology, the Court has reviewed the case file maintained by the Rockland County Clerk's office and has taken judicial notice of its contents. See, Khatibi v. Weill, 8 AD3d 485 (2d Dept. 2004).

2.   According to Plaintiff, the mortgage was assigned to Plaintiff by an Assignment of Mortgage dated December 18, 2008 although the Note was acquired by and in Plaintiff's possession as of October 5, 2004.

3.   In his Affidavit submitted to the Court in support of the Order to Show Cause, Defendant argued, inter alia, that the Court lacked in personum jurisdiction over him in that he was never personally served with the summons and complaint. See, Plaintiff's Exhibit E.

4.   However, on September 23, 2016, when all parties were present in court and prepared to conduct the hearing, the process server failed to appear.

Rolf M. Thorsen, J.