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WHITE OAK COMMERCIAL FINANCE, LLC, Plaintiff, v. Atul GOYAL, Anuja Goyal, Bhupendra Yaduvanshi, Deutsche Bank Trust Company Americas, as Trustee for the Residential Accredit Loans, Inc. Mortgage Asset-Backed Pass Through Certificates, Series 2006-QS6, & Ocwen Loan Servicing, LLC, Defendants.
Plaintiff White Oak Commercial Finance, LLC holds a mortgage on property owned by defendants Atul and Anuja Goyal. Defendant Deutsche Bank Trust Company Americas holds a purported senior note and mortgage on the property (serviced by defendant Ocwen Loan Servicing, LLC). Defendant Bhupendra Yaduvanshi holds a third, junior mortgage on the property.
Plaintiff brought a quiet-title action against all defendants under RPAPL Article 15 seeking to extinguish the senior note and mortgage. Plaintiff now moves for a default judgment against the Goyals and Yaduvanshi. The Goyals cross-move to dismiss plaintiff's complaint as against them.
Plaintiff served the Goyals with a summons and verified complaint in the action on August 4, 2016. They neither answered nor moved to dismiss. Plaintiff served Yaduvanshi on August 6, 2016. Plaintiff later stipulated to extend Yaduvanshi's time to answer until September 30, 2016. He filed an answer on that date. Plaintiff also stipulated to extend Deutsche Bank and Ocwen's time to answer or otherwise respond to the complaint until August 31, 2017. On August 30, 2017, Deutsche Bank and Ocwen moved to dismiss the complaint under CPLR 3211 (a) (1), (3) and (7).
Plaintiff amended its complaint on October 24, 2017, while that motion to dismiss remained pending. The amended complaint did not change the claims against the Goyals or Yaduvanshi. Plaintiff served the amended complaint on Yaduvanshi on October 25, 2017, and served the amended complaint on the Goyals on October 26. Neither Yaduvanshi nor the Goyals responded to the amended complaint.1
On October 10, 2018, plaintiff moved for a default judgment under CPLR 3215 against the Goyals and Yaduvanshi. Plaintiff also requested severance of its claims against Deutsche Bank and Ocwen under CPLR 3215 (a) and CPLR 603. The Goyals cross-moved to dismiss plaintiff's claims against them as untimely under CLPR 3215 (c).
A. The Goyal's CPLR 3215 (c) Cross-Motion to Dismiss
Under CPLR 3215 (a), a plaintiff may ask the court to enter judgment upon the default of a defendant. If, however, the plaintiff fails to seek a default judgment within one year of the default, “the court shall not enter judgment” but shall instead “dismiss the complaint as abandoned,” unless the plaintiff shows “sufficient cause ․ why the complaint should not be dimissed.” (CPLR 3215 (c).)
The Goyals cross-move under CPLR 3215 (c) to dismiss plaintiff's claims against them for failure to seek a default judgment within one year of the Goyals' default. This court concludes that plaintiff's request for judgment was untimely, but that plaintiff has shown sufficient cause why the complaint should not be dismissed. The Goyals' cross-motion is denied.
Plaintiff failed to amend its complaint until more than thirteen months had elapsed from the Goyals' default on the original complaint. As a result, under the clear, mandatory language of CPLR 3215 (c), plaintiff's claims against the Goyals were subject to dismissal before it served or filed the amended complaint. (See Aurora Loan Servs., LLC v. Hiyo, 130 AD3d 763, 754 [2d Dept 2015].)
For these purposes it is immaterial that plaintiff's amended complaint was timely under CPLR 3025 (a). Nothing in CPLR 3025 purports to affect the distinct timeliness requirements of CPLR 3215 (c). To the contrary, CPLR 3025 (a) addresses scenarios in which a defendant has not defaulted—that section permits amendment of a pleading as of right within twenty days of service of a responsive pleading, or “at any time before the period for responding to it expires.” The time limit for a plaintiff to seek judgment where a defendant has defaulted is instead set only by CPLR 3215 (c). (Cf. Gerschel v. Christensen, 128 AD3d 455, 457 [1st Dept 2015] [holding a default judgment motion timely where plaintiff had amended its complaint within one year of service of the original complaint].)
This court concludes, however, that plaintiff has nonetheless shown sufficient cause why the action should not be dismissed.
Plaintiff clearly has not abandoned the action. (See Laourdakis v. Torres, 98 AD3d 892, 892 [1st Dept 2012]; Byk-Chemie GmbH v. Efka Chemicals, B.V., 161 AD2d 196, 197 [1st Dept 1990].) Plaintiff served an amended complaint on all defendants (including the Goyals) shortly after receiving Deutsche Bank and Ocwen's motion to dismiss the original complaint. Plaintiff then successfully opposed Deutsche Bank and Ocwen's motion to dismiss the amended complaint; and plaintiff has now also obtained summary judgment against Deutsche Bank and Ocwen.
Similarly, plaintiff's successful prosecution of the action against Deutsche Bank and Ocwen shows that its attack on the senior note and mortgage has merit. And that attack underlies plaintiff's quiet-title claims against the Goyals, as well. Plaintiff has thus established that those claims are meritorious. (See Keen v. Keen, 140 AD2d 311, 312 [2d Dept 1988].)
Additionally, the Goyals have not established prejudice from plaintiff's delay in moving for default judgment. (Hinds v. 2461 Realty Corp., 169 AD2d 629, 632 [1st Dept 1991].) The record reflects that plaintiff's claims lie principally against Deutsche Bank and Ocwen (as holder and servicer of the senior mortgage at issue), and that plaintiff named the Goyals (owners of the mortgaged property) as defendants chiefly so that all potentially interested parties would be bound by the resolution of plaintiff's quiet title action. Moreover, the need to ensure that the quiet-title judgment obtained by plaintiff against Deutsche Bank and Ocwen binds the other parties with an interest in the property further counsels against dismissal of plaintiff's claims against the Goyals.
The Goyals' cross-motion to dismiss plaintiff's complaint as against them is denied.
B. Plaintiff's CPLR 3215 Motion For Default Judgment against The Goyals and Yaduvanshi
CPLR 3215 (a) provides that a plaintiff may seek entry of default judgment against a defendant who has failed to file a responsive pleading. (Thattil v. Mondesir, 253 AD2d 809, 810 [2d Dept 1998].) To obtain judgment, plaintiff must provide proof of various material facts regarding its prosecution of the action and defendants' default. (CPLR 3215 (f).)
Plaintiff must submit proof of service of its summons and complaint. Plaintiff's affidavits of service fully establish that plaintiff properly served the summons, complaint, and amended complaint. The Goyals and Yaduvanshi do not dispute service
Plaintiff must also submit proof of default. Here plaintiffs established that the Goyals defaulted by failing to respond either to the original complaint or the amended complaint. Yaduvanshi answered the original complaint. But the plaintiffs have shown that Yaduvanshi defaulted by failing also to answer the amended complaint, as required under CPLR 3025 (d). (See Aeromar C. Por A. v. Port Auth. of NY & NJ, 145 AD2d 584, 586 [2d Dept 1988].) Yaduvanshi requests more time to answer the amended complaint, arguing that he failed to respond due to his limited role in this litigation (obtaining an accounting of his own mortgage on the Goyals' property). That does not, however, excuse his failure to answer the amended complaint altogether.
Finally, plaintiff has established proof of the facts constituting its claims against the Goyals by submitting its complaint in the action, which was verified by plaintiff's principal.
Plaintiff's motion for default judgment as against the Goyals and against Yaduvanshi is granted.
C. Plaintiff's CPLR 603 Request to Sever Its Claims Against Ocwen & Deutsche Bank
Plaintiff has also requested severance of its claims against Deutsche Bank and Ocwen under CPLR 603. In light of this court's grant of summary judgment to plaintiff on those claims (see NYSCEF No. 182), this request is denied as moot.
Accordingly, it is hereby
ORDERED that Defendant's cross-motion for dismissal is DENIED; and it is further
ORDERED that Plaintiff's motion for default judgment against the Goyals and Yaduvanshi is GRANTED; and it is further
ORDERED that Plaintiff's motion for severance against Ocwen and Deutsche Bank is DENIED AS MOOT.
1. Plaintiffs later successfully opposed Deutsche Bank and Ocwen's motion to dismiss the amended complaint (See NYSCEF No. 87.) And plaintiffs then obtained summary judgment against those defendants. (See NYSCEF No. 182.)
Gerald Lebovits, J.
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Docket No: 156453/2016
Decided: March 20, 2019
Court: Supreme Court, New York County, New York.
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