Opinion
Index No. 710141/2021 Motion Seq. No. 7 Motion Cal. No. 15
06-06-2023
HSBC BANK USA, NA AS TRUSTEE FOR NOMURA ASSET ACCEPTANCE CORPORATION MORTGAGE PASS THROUGH CERTIFICATION SERIES, 2006-API, Plaintiff, v. YOSI SHEM-TOV, CHECK, CASHED, ETC., LLC, MORTGAGE REGISTRATION SYSTEMS, INC. AS NOMINEE FOR FAIRMONT FUNDING, LTD., NEW YORK CITY DEPARTMENT OF FINANCE, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, PEOPLE OF THE STATE OF NEW YORK, GULAN DARVISTT, Defendants.
Unpublished Opinion
Motion Date: 12.21.2022
MOJGAN C. LANCMAN JUDGE
The order to show cause, affirmation in support and exhibits that were filed in paper form were read on the motion of the plaintiff, HSBC Bank USA, NA as Trustee for Nomura Asset Acceptance Corporation Mortgage Pass Through Certification Series, 2006-APl(the "Plaintiff"), to, in effect, lift the stay of this action. The e-filed papers designated by NYSCEF Doc. Nos. 6-17 and 21-38 were read on the cross-motion filed by the defendant Yosi Shem-Tov (the "Defendant") to dismiss this cause and in opposition to the Plaintiff s motion. On June 6, 2023, a virtual motion conference was held. Upon the foregoing papers and the motion conference, the motion and cross-motion are determined as follows:
The Plaintiff commenced this cause on October 29, 2007 seeking to foreclose a mortgage encumbering the real property located 13782 70th Avenue, Flushing, New York 11367 (the "Property"). A judgment of foreclosure and sale was filed on November 20,2018. Presently before the Court are two motions. The Plaintiff, in effect, seeks to lift the stay of this action. The Defendant cross-moves to dismiss this cause on the basis of the Plaintiff s lack of standing and lack of personal jurisdiction. For the following reasons, the Plaintiffs motion is granted and the Defendant's motion is denied.
I. Background and Procedural History
In October 2007, the Plaintiff commenced this cause due to the Defendant's default in payment of the monthly installment required on July 1, 2007 under the note and mortgage.
The Defendant was served pursuant to CPLR § 308 [2] on November 28, 2007. Thereafter, on November 29, 2007, the process server mailed a copy of the pleadings to the Defendant.
The Defendant is in default, having failed to answer. The Plaintiff s application for an Order of Reference was granted on January 21, 2009. The Defendant subsequently Filed for Chapter 11 Bankruptcy. The bankruptcy case was dismissed on July 8, 2010.
A settlement conference was held on March 28, 2012. The Defendant's brother, Orin Shem-Tov appeared; however, the Defendant did not. The Defendant's brother indicated that the Property is a rental property and is not owner occupied.
In January 2014, the Plaintiff Filed an application seeking an Order to vacate the previously granted Order of Reference and for a new Order of Reference. After the motion was adjourned twice at the Defendant's request, the Defendant made a cross-motion on March 28, 2014 seeking to vacate his default and for permission to serve a late answer.
By Memorandum Filed on January 23, 2015, the Honorable Valerie Brathwaite Nelson granted the Plaintiffs motion and denied the Defendant's cross-motion. Among other things, Justice Brathwaite Nelson concluded that the Defendant failed to establish a reasonable excuse for his default in answering the complaint.
Following unsuccessful settlement negotiations between the parties, the Defendant Filed a Chapter 13 Bankruptcy case on March 30, 2017, which was subsequently dismissed on June 28, 2017.
On November 2, 2018, a judgment of foreclosure and sale was Filed and recorded. The Defendant's prior counsel Filed a notice of appeal relative thereto on March 7, 2019.
On May 8, 2019, the Honorable Cheree Buggs signed an order to show cause Filed by the Defendant to stay the foreclosure auction of the Property pending the determination of his appeal. The order to show cause stayed the foreclosure sale pending the hearing of the motion. Thus, foreclosure sale scheduled for May 10, 2019 was cancelled. The motion was subsequently granted by Order dated August 5, 2019 to the extent that this cause was stayed pending the determination of the appeal.
The Defendant submitted a request on September 6, 2019 to the Appellate Division for an enlargement of time to perfect the appeal. The application was granted to the extent of extending this deadline to October 7, 2019.
The Defendant Filed a second request on October 7, 2019 to the Appellate Division for an enlargement of time to perfect his appeal. The application was granted to the extent of extending this deadline to November 6, 2019.
Despite two enlargements of time, the Defendant failed to perfect the appeal. Consequently, the appeal, assigned docket number 2019-03477, was automatically dismissed.
On January 21, 2020, the Plaintiff presented an Order to Show Cause seeking to, in effect, vacate the stay because the appeal had been dismissed. Justice Buggs signed same on January 23, 2020. In response, on June 16, 2021, the Defendant filed the present cross-motion. Following the reassignment of this cause to the undersigned, multiple settlement conferences were held, which proved unsuccessful. The motions shall thus now be decided.
II. Discussion
A. The Plaintiffs Motion
The Plaintiff moves, in effect, to lift the stay imposed by the Order dated August 5, 2019 and to proceed with the foreclosure auction of the Property. In relevant part, the subject Order states: "ORDERED, that this matter is stayed pending determination of the matter on appeal [the Defendant's appeal from the judgment of foreclosure and sale]."
The Defendant's appeal from the judgment of foreclosure and sale was dismissed because it was not perfected (see NYSCEF Doc. No. 19). Therefore, the stay must be lifted and the Plaintiff may proceed with the foreclosure sale (see HSBC Bank USA, National Association v Sage, 196 A.D.3d 1016 [3d Dept 2021]; HSBC Bank USA NA. v Pacyna, 112 A.D.3d 1246, 1247-1248 [3d Dept 2013]; Citicorp Mtge. v Rodelli, 249 A.D.2d 736, 738 [3d Dept 1998]).
The Defendant's opposition is baseless. Here, he argues, among other things, that the August 5, 2019 Order "is still fully enforceable" and that "[i]t is well established that the failure to perfect an appeal is not a determination of the underlying order appealed from." It is difficult to fathom how these arguments could be made in good faith, much less at all. The dismissal of an appeal for lack of prosecution "... constitutes an adjudication on the merits with respect to all issues which could have been reviewed on that appeal" (Spiritis v Village of Hempstead Community Dev. Agency, 63 A.D.3d 907, 908 [2d Dept 2009]; see Bray v Cox, 38 N.Y.2d 350 [1976]; Directional Lending, LLC v Guerrera, 147 A.D.3d 909 [2d Dept 2017]; Green Tree Credit, LLC v Jelks, 120 A.D.3d 1300 [2d Dept 2014]; Matter of Curtis &Assoc., P.C. v Callaghan, 119 A.D.3d 783 [2d Dept 2014]). Although it is true that the Appellate Division, as an exception to said general rule, has the discretion to consider an issue on a subsequent appeal that was raised or could have been raised in an earlier appeal which was dismissed for lack of prosecution (see Bray v Cox, 38 N.Y.2d 350), there is no pending subsequent appeal before it. The Defendant's remaining opposition arguments are without merit.
The Plaintiffs motion is therefore granted; the stay of this cause imposed by the Order dated August 5, 2019 is vacated and lifted; and the Plaintiff may proceed with the foreclosure sale of the Property.
B. The Defendant's Cross-Motion
The Defendant cross-moves to dismiss this cause on various grounds that are considered and ruled upon below.
First, the Defendant argues that despite his default in answering the complaint, he is entitled to assert a defense of lack of standing and to have this cause dismissed on that ground. As explained below, the Defendant is wrong because the loan at issue is not a "home loan."
RPAPL § 1302-a provides as follows:
Notwithstanding the provisions of subdivision (e) of rule thirty-two hundred eleven of the civil practice law and rules, any objection or defense based on the plaintiffs lack of standing in a foreclosure proceeding related to a home loan, as defined in paragraph (a) of subdivision six of section thirteen hundred four of this article, shall not be waived if a defendant fails to raise the objection or defense in a responsive pleading or pre-answer motion to dismiss. A defendant may not raise an objection or defense of lack of standing following a foreclosure sale, however, unless the judgment of foreclosure and sale was issued upon defendant's default [emphasis added].
In relevant part to the consideration of this motion, RPAPL § 1304 6. [a] [1 ] [iii] states:
"Home loan" means a loan, including an open-end credit plan, in which:
(iii) The loan is secured by a mortgage or deed of trust on real estate improved by a one to four family dwelling, or a condominium unit, in either case, used or occupied, or intended to be used or occupied wholly or partly, as the home or residence of one or more persons and which is or will be occupied by the borrower as the borrower's principal dwelling; and ...
The Property is not a "home loan" because it is not the Defendant's principal dwelling for a number of different reasons.
First, the Defendant admits in his affidavit in support of his motion and in opposition to the Plaintiffs motion that he did not reside at the Property but rather at "19353 McLaughlin Avenue, Hollis, New York 11423." His affidavit continues: "[a]s clearly identified in my mortgage documents, I lived there [19353 McLaughlin Avenue, Hollis, New York 11423] since taking the mortgage ... Again, according to the mortgage agreement, my address is 19353 McLaughlin Avenue, Hollis, New York 11423],.. I have not changed my residency address."
Second, the "1-4 Family Rider" to the mortgage deletes the occupancy-by borrower requirement contained in mortgage agreement (see Wall St. Mtge. Bankers, Ltd. v Berquin, 213 A.D.3d 972 [2d Dept 2023]; MLB Sub I, LLC v Mathew, 202 A.D.3d 1078 [2d Dept 2022]; HSBC Bank USA, N.A. v Ozcan, 154 A.D.3d 822 [2d Dept 2017]).
In sum, the Defendant waived the lack of standing defense because of his default in answering the complaint (see Nationstar Mortgage, LLC v Gayle, 191 A.D.3d 1003 [2d Dept 2021]; US Bank N.A. v Nelson, 169 A.D.3d 110 [2d Dept 2019]). "The [D]efendant's contention that, under RPAPL § 1302-a, he did not waive a defense based on lack of standing ... is without merit, as RPAPL § 1302-a applies only to a "home loan" within the meaning of RPAPL § 1304 (RPAPL § 1302-a). The record reflects that the subject loan does not qualify as a "home loan" within the meaning of the statute" (Nationstar Mortgage, LLC v Gayle, 191 A.D.3d 1003, 1006).
The Defendant also seeks to dismiss this cause on the ground of lack of personal jurisdiction. Here, the Defendant contends that he was never properly served because he did not reside at 8686 Midland Parkway, Jamaica, New York 11432, which is where a process server delivered the summons and complaint to one Carla. This argument must be rejected under the law of the case doctrine. "The doctrine of the law of the case is a rule of practice, an articulation of sound policy that, when an issue is once judicially determined, that should be the end of the matter as far as Judges and courts of co-ordinate jurisdiction are concerned" (Martin v City of Cohoes, 37 N.Y.2d 162 [1975] [internal quotation marks omitted]). It "... is a rule of practice that applies to legal determinations that were necessarily resolved on the merits in the prior decision, and to the same questions presented in the same case" (Wieder v Home Depot U.S.A., Inc., 208 A.D.3d 535, 538 [2d Dept 2022]) [citation omitted]). Here, Justice Brathwaite Nelson, within the context of a prior cross-motion filed by the Defendant for, inter alia, leave to serve a late answer, held in a Memorandum dated January 14, 2015 that he was properly served:
... the Court finds that defendant has not proffered a reasonable excuse for the failure to serve a timely answer. His assertion that he was not properly served with the summons and complaint pursuant to CPLR 308 fails to overcome the presumption created by the affidavit of plaintiffs process server, which constitutes prima facie evidence of proper service of the summons, complaint and RPAPL §1303 notice, as it is not supported by a sworn denial containing facts sufficient on its face to overcome the presumption of valid service [citations omitted].
The determination contained in the subject Memorandum and the Order thereon filed on June 17, 2016 that the Defendant was properly served precludes consideration of his present lack of personal jurisdiction argument. The application to dismiss based on lack of personal jurisdiction is thus denied (see Martin v City of Cohoes, 37 N.Y.2d 162; Wieder v Home Depot U.S.A., Inc., 208 A.D.3d 535).
The Defendant also seeks leave to serve a late answer. This application is denied for various reasons. First, the law of the case doctrine precludes this Court's consideration of this issue. Here, Justice Braithwaite Nelson denied the Defendant's application for leave to file a late answer through her Memorandum dated January 15, 2015 and the Order filed upon same on June 17, 2016 (see Martin v City of Cohoes, 37 N.Y.2d 162; Wieder v Home Depot U.S.A., Inc., 208 A.D.3d 535). Second, and in any event, there is no factual or legal basis to grant the present application. In seeking to compel the Plaintiff to accept his late answer, the Defendant is required to demonstrate a reasonable excuse and a potentially meritorious defense (see Goldstein v Ilaz, 296 A.D.3d 976 [2d Dept 2022]; Belches v City of New York, 191 A.D.3d 754 [2d Dept 2021]). "The determination of what constitutes a reasonable excuse lies within the sound discretion of the Supreme Court" (Citimortgage, Inc. v Kowalski, 130 A.D.3d 558, 558 [2d Dept 2015] [citation omitted]). The excuse proffered by the Defendant, that he was not properly served, was previously rejected by Justice Braithwaite Nelson.
Lastly, despite not seeking tolling of interest in the notice of cross-motion, the Defendant's affidavit makes such a request, without providing factual and legal grounds for same. The legal principles with respect to this issue were recently set forth as follows in Deutsche Bank Trust Company Americas v Gonzales, 215 A.D.3d 636, 639 [2d Dept 2023]):
A foreclosure action is equitable in nature and triggers the equitable powers of the court. Once equity is invoked, the court's power is as broad as equity and justice require. In an action of an equitable nature, the recovery of interest is within the court's discretion. The exercise of that discretion will be governed by the particular facts in each case, including any wrongful conduct by either party. Here, the defendant failed to show that the plaintiff engaged in any wrongdoing, or that any delay occasioned by the plaintiff was so egregious as to warrant the tolling of the accrual of interest [internal quotation marks and citations omitted].
Here, the Defendant fails to identify any wrongdoing committed by the Plaintiff or an egregious delay in prosecuting this cause. Moreover, the record shows that there are delays attributable to the Defendant, including two bankruptcy filings. Furthermore, the Plaintiff obtained a stay of all proceedings for the purpose of a taking an appeal, but the appeal was dismissed, after the Defendant was granted two extensions of time, because he chose not perfect same. The Court also notes that the foreclosure sale scheduled for May 10,2019 was cancelled upon the Defendant's application for a stay so that he could pursue an appeal, which he ultimately abandoned and was dismissed.
III. Conclusion
For the reasons stated above, it is hereby:
ORDERED, that the Plaintiffs motion is granted; and it is further, ORDERED, that all stays in this cause are vacated and lifted; and is further, ORDERED, that this cause is restored to active status and that the Clerk of the Court shall mark his or her records accordingly; and it is further, ORDERED, that the Plaintiff is granted leave to proceed with the foreclosure sale of the Property; and it is further, ORDERED, that the Defendant's cross-motion is denied; and it is further, ORDERED, that the Plaintiff shall serve a copy of this Order upon the defendants and the Referee by July 31, 2023.
This constitutes the Decision and Order of the Court.