CHASE HOME FINANCE LLC v. 1900 III LLC (2021)

MEMORANDUM AND ORDER

Appeal from an order of the Supreme Court (Ellis, J.), entered September 9, 2019 in Essex County, which, among other things, granted defendant Alex Shoumatoff's motion to dismiss the complaint against him for failure to prosecute.

In 2007, plaintiff commenced this mortgage foreclosure action against defendant Alex Shoumatoff (hereinafter defendant) after he allegedly failed to make payments due under a note.  Following joinder of issue, defendant served a 90–day demand in 2017, upon plaintiff's counsel, among others, demanding that plaintiff resume prosecution of the action and serve and file the note of issue within 90 days of receipt of the demand.  The note of issue was not filed and, in May 2019, defendant moved for, among other things, dismissal of the complaint under CPLR 3216.  Meanwhile, the note and mortgage were assigned to U.S. Bank Trust National Association, as Trustee for 1900 Capital Trust III (hereinafter U.S. Bank).  Plaintiff opposed defendant's motion and cross-moved for, among other things, an extension of time to file the note of issue.  Supreme Court granted defendant's motion, to the extent that defendant sought dismissal under CPLR 3216, and denied, as moot, the other requested relief.  The court also denied plaintiff's cross motion.  This appeal ensued.¹

U.S. Bank contends that Supreme Court erred in granting that part of defendant's motion seeking dismissal because there was insufficient proof regarding the service of the 90–day demand.  We disagree.  A 90–day demand must be served “by registered or certified mail” (CPLR 3216[b][3]).  The record contains an affidavit of service from the individual who served the 90–day demand.  The individual averred therein that he served the 90–day demand “by [f]irst [c]lass [m]ail and by [c]ertified [m]ail, [r]eturn [r]eceipt [r]equested.”  Contrary to U.S. Bank's assertion, any failure by defendant to submit tracking numbers or certified mailing receipts was not fatal under the circumstances of this case in proving how the 90–day demand was served.  Given that defendant submitted proof from an individual with personal knowledge regarding the service of the 90–day demand, defendant established that the 90–day demand was served in accordance with the requirements of CPLR 3216 (see Die Matic Prods., Inc. v. Flair Intl. Corp., 23 A.D.3d 513, 514, 806 N.Y.S.2d 631 [2005]).

Because there was no compliance with the 90–day demand, the party seeking to avoid dismissal had to demonstrate a “justifiable excuse for the delay and a good and meritorious cause of action” (Di Simone v. Good Samaritan Hosp., 100 N.Y.2d 632, 633, 768 N.Y.S.2d 735, 800 N.E.2d 1102 [2003] [internal quotation marks and citation omitted];  see Agnellino v. Town of Tioga, 18 A.D.3d 1007, 1007, 794 N.Y.S.2d 511 [2005]).  The opposition to defendant's motion advanced only a conclusory and unsubstantiated claim of law office failure by plaintiff's prior counsel as the justifiable excuse.  Although the failure to detail and substantiate a claim of law office failure would justify dismissal of the complaint (see HSBC Bank USA, N.A. v. Izzo, 177 A.D.3d 648, 649, 109 N.Y.S.3d 886 [2019], lv denied 35 N.Y.3d 906, 2020 WL 3096779 [2020];  Fenner v. County of Nassau, 80 A.D.3d 555, 556, 914 N.Y.S.2d 653 [2011];  Melius v. Pletman, 202 A.D.2d 880, 882, 609 N.Y.S.2d 450 [1994], lv dismissed and denied 84 N.Y.2d 903, 621 N.Y.S.2d 506, 645 N.E.2d 1205 [1994]), even when presented with an unjustifiable excuse, a court still retains some residual discretion to refuse dismissal of a complaint as a penalty under CPLR 3216 (see Baczkowski v. Collins Constr. Co., 89 N.Y.2d 499, 504, 655 N.Y.S.2d 848, 678 N.E.2d 460 [1997]).

In our view, the record demonstrates that a meritorious cause of action exists and that defendant has suffered minimal prejudice.  Additionally, plaintiff previously moved for summary judgment, thereby evincing a lack of intent to abandon the action.  This motion was not decided on the merits but was deemed a nullity by Supreme Court based upon issues concerning who was counsel of record for plaintiff.  Indeed, prior to the motion being deemed a nullity, it was originally assigned to a different justice, then removed from the calendar, subsequently reassigned and remained dormant for a significant period before being eventually restored to the calendar.  In other words, some of the delay in this case was not attributable to plaintiff.  Taking into account that CPLR 3216 is “extremely forgiving of litigation delay” (Baczkowski v. Collins Constr. Co., 89 N.Y.2d at 503, 655 N.Y.S.2d 848, 678 N.E.2d 460), as well as the public policy of resolving disputes on the merits (see Baptist Health Nursing & Rehabilitation Ctr., Inc. v. Baxter, 140 A.D.3d 1386, 1388, 33 N.Y.S.3d 567 [2016]), defendant's motion, under the particular circumstances of this case, should have been denied to the extent that it sought dismissal of the complaint, and plaintiff's cross motion should have been granted to the extent that it sought an extension of time to file the note of issue (see King v. Jordan, 243 A.D.2d 951, 953, 664 N.Y.S.2d 633 [1997];  compare Olejak v. Town of Schodack, 295 A.D.2d 679, 680, 742 N.Y.S.2d 924 [2002]).

Finally, defendant, in his motion, and plaintiff, in its cross motion, sought other relief that Supreme Court found to be moot based on its determination.  In view of our determination herein and because the parties did not brief those issues that the court deemed to be moot, the matter must be remitted for a determination on those issues.

ORDERED that the order is reversed, on the law, with costs, and matter remitted to the Supreme Court for further proceedings not inconsistent with this Court's decision.

FOOTNOTES

1.   U.S. Bank, as plaintiff's assignee, may prosecute this appeal (see CPLR 1018).

Aarons, J.

Garry, P.J., Lynch, Pritzker and Reynolds Fitzgerald, JJ., concur.