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HSBC BANK USA NATIONAL ASSOCIATION as Trustee FOR ACE SECURITIES CORP. HOME EQUITY LOAN TRUST SERIES 2007-HE4, Plaintiff, v. Leona REYNOLDS, Mortgage Electronic Registration Systems, Inc., MortgageIT, Inc., Teachers Federal Credit Union, Slomini's, Inc., s/h/a Slomins, Inc., HSBC Finance Corporation f/k/a HSBC Bank Nevada, NA, Town Supervisor, Town of Babylon, Capital One Bank (USA), NA, Clerk of the Suffolk Country Traffic and Parking Violations Agency, “John Doe #1” to “John Doe #12”, the last 12 names being fictitious and unknown to plaintiff, the person or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises described in the complaint, Defendants.
Upon the following papers numbered 1 to 10 read on this motion to appoint a referee among other things and cross motion to dismiss; Notice of Motion/Order to Show Cause and supporting papers 1 - 5; Notice of Cross Motion and supporting papers: 6-8; Opposing papers: 9-10; Reply papers; Other; and after hearing counsel in support of and in opposition to the motion on June 28, 2018 it is,
ORDERED that this motion (# 001) by the plaintiff for, among other things, a default judgment and the appointment of a referee to compute, is granted, in its entirety; and it is further
ORDERED that this cross motion (# 002) by the defendant, Leona Reynolds, to dismiss or seeking leave to serve a late answer is denied in its entirety; and it is further
ORDERED that the proposed Order submitted by plaintiff, as modified by the court, is signed simultaneously herewith; and it is further
ORDERED that plaintiff is directed to file a notice of entry within five days of receipt of this Order pursuant to 22 NYCRR § 202.5-b(h)(2).
The matter was reassigned to this Part pursuant to Administrative Order No. 32-18, dated April 19, 2018. Oral argument was held on June 28, 2018.
This is a foreclosure action on property located in West Babylon, New York. In essence, on November 10, 2006, defendant Leona Reynolds borrowed $360,000.00 from the plaintiff's predecessor-in-interest and executed a promissory note and mortgage. Upon default of that loan, defendant entered into a Loan Modification Agreement, with an effective date of September 1, 2008, which increased the principal balance due and owing to $382,547.71. Defendant immediately defaulted on this new loan by failing to make the October 1, 2008 monthly installment. The instant action was commenced by filing on May 15, 2015. Shortly thereafter, on May 12, 2015, defendant Leona Reynolds, was personally served with the complaint pursuant to CPLR 308(1). Ms. Reynolds did not interpose an answer or pre-answer motion within the time frame provided for in CPLR 320(a) and 3012(a).
The plaintiff filed its Request for Judicial Intervention on July 11, 2015. Thereafter, a conference was held pursuant to CPLR 3408 on November 20, 2015, at which time the matter was released from further conferences.
Plaintiff now moves (# 001) for a default judgment and an order of reference. Defendant has also moved by cross motion (# 002) for dismissal or, in the alternative, leave to file a late answer and permit discovery.
The Court will first consider the defendant's motion (# 002), as determination thereof may render determination of the plaintiff's motion, academic. The Court notes that the opposition and defendant's motion are based solely upon an attorney's affirmation. However, an affirmation from an attorney having no personal knowledge of the facts is without evidentiary value and, thus, is insufficient to raise a triable issue of fact (see Zuckerman v. City of New York, 49 NY2d 557, 427 NYS2d 595 ; Onewest Bank, FSB v. Michel, 143 AD3d 869, 39 NYS3d 485 [2d Dept 2016] ).
Notwithstanding the infirm pleading, the Court holds that the defendant's allegations regarding CPLR 3215(c) is without merit. CPLR 3215(c) provides that “[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned ․ unless sufficient cause is shown why the complaint should not be dismissed” (CPLR 3215[c]; HSBC Bank USA, N.A. v. Hasis, 154 AD3d 832, 833, 62 NYS3d 467 [2d Dept 2017], citing Wells Fargo Bank, NA v. Bonanno, 146 AD3d 844, 45 NYS3d 173 [2d Dept 2017] ). To avoid dismissal, the plaintiff need not actually obtain nor specifically seek the default judgment within one year (see HSBC Bank USA, NA v. Hasis, 154 AD3d at 833, supra; see also Wells Fargo Bank, N.A. v. Daskal, 142 AD3d 1071, 1072, 37 NYS3d 353 [2d Dept 2016] ). As long as “proceedings” are being taken that manifest “an intent not to abandon the case but to seek a judgment, the case should not be subject to dismissal” (Wells Fargo Bank, NA v. Daskal, 142 AD3d 1071, 1073, 37 NYS3d 353 [2d Dept 2016], citing Brown v. Rosedale Nurseries, 259 AD2d 256, 257, 686 NYS2d 22 [1st Dept 1999], US Bank NA v. Dorestant, 131 AD3d 467, 469, 15 NYS3d 142 [2d Dept 2015]; Wells Fargo Bank, N.A. v. Combs, 128 AD3d 813,813, 10 NYS3d 257 [2d Dept 2015]; Klein v. St. Cyprian Props., Inc., 100 AD3d 711, 712, 954 NYS2d 170 ; Pisciotta v. Lifestyle Designs, Inc., 62 AD3d 850, 852, 879 NYS2d 179 [2d Dept 2009]; Icon Equip. Distribs. v. Gordon Envtl. & Mech. Corp., 272 AD2d 579, 579 709 NYS2d 426 [2d Dept 2000] ).
Prior to the economic crisis of 2008 and the legislative response thereto, the Second Department took a less constrictive position in determining such motions. In fact, in Myers v. Slutsky, 139 AD2d 709, 527 NYS2d 464 (2d Dept 1988), the Court held:
While it is true that the section contains the word “shall”, it should be noted that the use of the word “shall” is not a final and conclusive test of the intent of the Legislature. The fact that a statute is framed in mandatory words such as “shall” or “must” is of slight, if any, importance on the question (McKinney's Cons Laws of NY, Book 1, Statutes § 177, at 344).
In fact, even in a case were the excuse offered was rejected, the court, in DiMartino v. New York State Dept. of Taxation and Finance, 150 AD2d 633, 541 NYS2d 844 (2d Dept 1989), would not dismiss the action and held:
While we agree that the plaintiff's excuse for the delay is not persuasive, the drastic remedy of dismissal of the complaint is inappropriate under the circumstances presented here (citation omitted).
Numerous cases often rejected such applications (see Iorizzo v. Mattikow, 25 AD3d 762, 807 NYS2d 663 [2d Dept 2006] [nine year delay]; Countrywide Home Loans, Inc. v. Brown, 19 AD3d 638, 797 NYS2d 295 [2d Dept 2005]; State Farm Mut. Auto. Ins. Co. v. Rodriguez, 12 AD3d 662, 784 NYS2d 875 [2d Dept 2004]; North Fork Bank v. Cantico Intl., Ltd., 284 AD2d 442, 726 NYS2d 570 [2d Dept 2001]; Grajales v. Freihofer Baking Co., 283 AD2d 608, 725 NYS2d 553 [2d Dept 2001]; Icon Equip. Dist. Inc. v. Gordon Envtl. & Mech. Corp., 272 AD2d 579, 709 NYS2d 426 [2d Dept 2000]; Magliore v. Barber, 283 AD2d 614, 725 NYS2d 870 [2d Dept 2001]; Grenport Bank v. Ginyard, 253 AD2d 451, 675 NYS2d 314 [2d Dept 1998]; First Nationwide Bank v. Pretel, 240 AD2d 629, 659 NYS2d 291 [2d Dept 1997]; Needleman v. Burger King, Inc., 237 AD2d 339, 655 NYS2d 68 [2d Dept 1997]; Umlic-One, Inc. v. Cahill Trust, 236 AD2d 390, 654 NYS2d 574 [2d Dept 1997]; Flora Co. v. Ingilis, 233 AD2d 418, 650 NYS2d 24 [2d Dept 1996] [delay was de minimis]; Bank of New York v. Gray, 228 AD2d 399, 643 NYS2d 422 [2d Dept 1996]; Goldberg v. Progressive Credit Union, 213 AD2d 595, 624 NYS2d 927 [2d Dept 1995] [default motion made “shortly after the required time limitation of CPLR 3215(c)”]; Ingenito v. Grumman Corp., 192 AD2d 509, 596 NYS2d 83 [2d Dept 1993] ).
In this case, the plaintiff moved for an order of reference by mailing same to the office of defendant's counsel on January 27, 2017, a mere two months after the one year statutory time frame, upon release from the foreclosure settlement part. At the oral argument, held on June 28, 2018, plaintiff's counsel offered the cause for the delay as the difficulty in obtaining the Affidavit of Indebtedness from the servicer. The Court notes that the affidavit was procured within one year after the default. Additionally, a review of the records before the Court demonstrates that the plaintiff's current servicer paid property taxes of $32,217.82 from 2013 through 2016, within one year after the default and property insurance of $5,366.46 from 2015 to 2016, within one year after the default. This is aside from the $61,769.67 expended by the prior servicer toward the escrow balance. The records submitted also demonstrate constant, monthly property inspection fees, with regard to the property, during the year after the default.
At the oral argument, defendant's counsel stated that he never filed a notice of appearance, and yet, the motion papers were mailed to and accepted by him (see CPLR 320[a]; 2103[b] ). It is clear that a notice of appearance would waive the right to seek dismissal (see US Bank Natl. Assn. v. Gustavia Home, LLC, 156 AD3d 843, 67 NYS3d 242 [2d Dept 2017]; Bank of America, N.A. v. Rice, 155 AD3d 593, 63 NYS3d 486 [2d Dept 2017]; Household Fin. Realty Corp. v. Adeosun-Ayegbusi, 156 AD3d 870, 65 NYS3d 761 [2d Dept 2017] ).
The determination of whether there is a reasonable excuse is a matter left to the sound discretion of the Supreme Court (see Bank of New York Mellon v. Adago, 155 AD3d 594, 63 NYS3d 495 [2d Dept 2017]; Wells Fargo Bank, N.A. v. Kahana, 153 AD3d 1300, 59 NYS3d 705 [2d Dept 2017]; Park Lane N. Owners, Inc. v. Gengo, 151 AD3d 874, 58 NYS3d 81 [2d Dept 2017] ).
Here, as set forth above, it is apparent that “proceedings” were being taken which manifested the required “intent not to abandon the case” (see Wells Fargo Bank, NA v. Daskal, 142 AD3d at 1073, supra ). Moreover, there is a lack of prejudice to defendant caused by the plaintiff's short delay (see LNV Corp. v. Forbes, 122 AD3d 805, 996 NYS2d 696 [2d Dept 2014] ).
Under the circumstances of this case, the Court exercises its discretion in finding that the plaintiff proffered a reasonable excuse for the de minimus delay of just two months (see Bank of New York Mellon v. Adago, 155 AD3d 594, supra, [two month delay]; HSBC Bank USA, N.A. v. Hasis, 154 AD3d 832, supra [“a substantial delay”]; JPMorgan Chase Bank, Natl. Assn. v. Kaushal, 156 AD3d 772, 65 NYS3d 734 [2d Dept 2017] [delay in court-ordered submission]; Wells Fargo Bank, N.A. v. Kahana, 153 AD3d 1300, supra [six year delay]; Bank of New York Mellon v. Izmirligil, 144 AD3d 1067, 44 NYS3d 44 [2d Dept 2016]; Golden Eagle Capital Corp. v. Paramount Mgt. Corp., 143 AD3d 670, 38 NYS3d 438 [2d Dept 2016]; Maspeth Fed. Sav. and Loan Assn. v. Brooklyn Heritage, LLC, 138 AD3d 793, 28 NYS3d 325 [2d Dept 2016]; BAC Home Loans Serv., LP v. Reardon, 132 AD3d 790, 18 NYS3d 664 [2d Dept 2015]; Citimortgage, Inc. v. Kowalski, 130 AD3d 558, 13 NYS3d 468 [2d Dept 2015] ).
No extraordinary circumstances exist to warrant dismissal (see Onewest Bank, FSB v. Michel, 143 AD3d 869, supra ).1
The Court turns then to defendant's application pursuant to CPLR 3012(d). A defendant seeking to vacate a default in answering a complaint and to compel the plaintiff to accept an untimely answer as timely must show both a reasonable excuse for the default and the existence of a potentially meritorious defense (see CPLR 2004, 3012[d]; HSBC Bank USA, Natl. Assn. v. Rotimi, 121 AD3d 855, 855, 995 NYS2d 81 [2d Dept 2014] citing Chase Home Fin., LLC v. Minott, 115 AD3d 634, 981 NYS2d 757 [2d Dept 2014]; Community Preserv. Corp. v. Bridgewater Condominiums, LLC, 89 AD3d 784, 932 NYS2d 378 [2d Dept 2011]; Taddeo—Amendola v. 970 Assets, LLC, 72 AD3d 677, 897 NYS2d 642 [2d Dept 2010] ).
Here, the Court notes that the defendant was served personally on May 12, 2015 and failed to answer or offer an affidavit proffering any excuse for her failure to respond to the complaint. That is despite the numerous warnings set forth on the RPAPL § 1304 notices, the summons (RPAPL § 1320) and the RPAPL § 1303 notice. Inasmuch as the defendant failed to advance a reasonable excuse in support of her application to vacate her default in answering and for leave to extend her time to answer under CPLR 2004 and 3012(d), the application must be denied (see Bank of New York Mellon v. Adago, 155 AD3d 594, supra; Citimortgage, Inc. v. Kowalski, 130 AD3d 558, supra).
It is, therefore, unnecessary to address whether defendant has demonstrated a potentially meritorious defense (see BAC Home Loans Serv., LP v. Readon, 132 AD3d 790, 18 NYS3d 664 [2d Dept 2015]; Citimortgage, Inc. v. Kowalski, 130 AD3d 558, 13 NYS3d 468 [2d Dept 2015]; Emigrant Bank v. Wiseman, 127 AD3d 1013, 6 NYS3d 670 [2d Dept 2015] ). Further, the Court notes with regards to the defendant's opposition that, absent a valid jurisdictional or abandonment defense, a party in default may not appear in the action and contest the plaintiff's right to relief unless the defaulter can establish grounds for the vacatur of his or her default (see Schwartz v. Reisman, 112 AD3d 909, 976 NYS2d 883 [2d Dept 2013]; U.S. Bank N.A. v. Gonzalez, 99 AD3d 694, 694—695, 952 NYS2d 59 [2d Dept 2012]; McGee v. Dunn, 75 AD3d 624, 625, 906 NYS2d 74 [2d Dept 2010] ). In this case, because the defendant defaulted in answering and her application to vacate such default has been denied, any allegations in opposition to plaintiff's motion are stricken.
The Court now turns to the plaintiff's motion for an order appointing a referee to compute, granting it default judgments as against all non-appearing defendants, and to amend the caption, and finds that the plaintiff has sufficiently demonstrated its entitlement to the appointment of a referee and for a default judgment as requested on this motion (see CPLR 3212, 3215, 1003 and RPAPL § 1321; Wells Fargo Bank, N.A. v. Ali, 122 AD3d 726, 995 NYS2d 735 [2d Dept 2014]; Central Mtge. Co. v. McClelland, 119 AD3d 885, 991 NYS2d NYS2d 87 [2d Dept 2014]; Peak Fin. Partners, Inc. v. Brook, 119 AD3d 916, 987 NYS2d 916 [2d Dept 2014]; Plaza Equities, LLC v. Lamberti, 118 AD3d 688, 986 NYS2d 843 [2d Dept 2014]; Flagstar Bank v. Bellafiore, 94 AD3d 1044, 943 NYS2d 551 [2d Dept 2012] ).
In light of the above, the plaintiff's motion (# 001) is granted in its entirety, and defendant's cross motion (# 002) is denied. The Court simultaneously signs the proposed Order submitted by plaintiff, as modified.
1. In any event, the plaintiff would be able to recommence the action pursuant to CPLR 205(a) (see Wells Fargo Bank, N.A. v. Eitani, 148 AD3d 193, 47 NYS3d 80 [2d Dept 2017] ).
Thomas F. Whelan, J.
Response sent, thank you
Docket No: 604662/15 E
Decided: July 10, 2018
Court: Supreme Court, Suffolk County, New York.
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