Opinion
13552-2010
08-12-2019
JP MORGAN CHASE BANK, NATIONAL ASSOCIATION, as Purchaser of the Loans and Other Assets of Washington Mutual Bank, Formerly known as Washington Mutual Bank, FA (the "Savings Bank") From the Federal Deposit Insurance Corporation, Acting as Receiver for the Savings Bank and Pursuant to Its Authority Under the Federal Deposit Insurance Act, Plaintiff, v. Marilyn CASTRO, Deepgreen Bank, Washington Mutual Bank, FA, Will Castro and Jane Doe No.1, Defendants.
ADAM LEITMAN BAILEY, P.C., Attorneys for Plaintiff, One Battery Park Plaza, Eighteenth floor, New York, NY 10004, MACCO & STERN LLP Attorneys for Defendant Marilyn Castro, 2950 Express Drive South, Suite 109, Islandia, NY 11749
ADAM LEITMAN BAILEY, P.C., Attorneys for Plaintiff, One Battery Park Plaza, Eighteenth floor, New York, NY 10004, MACCO & STERN LLP
Attorneys for Defendant Marilyn Castro, 2950 Express Drive South, Suite 109, Islandia, NY 11749
Robert F. Quinlan, J.
Upon the following papers read on defendant Marilyn Castro's application for an order granting defendant leave to file a late answer, renewing opposition to plaintiff's motion for order of reference, and to dismiss the action ; Notice of Motion dated May 12, 2017 and supporting papers; Affirmation in Opposition and supporting papers dated July 13, 2017; and upon the following papers read on plaintiff's application for an order granting judgment of foreclosure and sale ; Notice of Motion dated July 5, 2017 and supporting papers; Affidavit in Opposition sworn to July 18, 2017 and supporting papers; Reply Affirmation in support of plaintiff's motion dated July 26, 2017 and supporting papers; it is,
ORDERED that defendant Marilyn Castro's application for an order granting her leave to file a late answer, renewing her opposition to plaintiff's motion for order of reference, and to dismiss the action (Seq. #002) and plaintiff's application for an order granting judgment of foreclosure and sale (Seq. #003) are consolidated for purposes of this determination; and it is further
ORDERED that the application by defendant Marilyn Castro for an order her leave to file a late answer, renewing her opposition to plaintiff's motion for order of reference, and to dismiss the action for failure to establish standing and failure to comply with RPAPL § 1304 is denied; and it is further
ORDERED that plaintiff's application for an order confirming the report of the referee and for judgment of foreclosure and sale is granted; and it is further
ORDERED that plaintiff's proposed order of judgment of foreclosure and sale, as modified by the court, is signed contemporaneously herewith.
This is an action to foreclose a mortgage on a residential property known as 5 Norris Lane, East Setauket, Suffolk County, New York ("the property"). Plaintiff commenced this action by filing the summons and complaint on April 9, 2010. Service of the summons and complaint on defendant Marilyn Castro ("defendant") was completed on May 6, 2010. Defendant did not file an answer but appeared in the Foreclosure Settlement Conference Part by counsel Brett Margolin ("Margolin") on July 14, 2010. The court's records show that the July 14, 2010 conference was adjourned to September 8, 2010 at which time defendant appeared pro se. A third conference was held on November 17, 2010 and at the fourth and final conference on January 11, 2011 defendant defaulted in appearing and the action was referred to an IAS part. Then, nearly four years after she was served with the summons and complaint, defendant appeared in this action by counsel Michael E. Walter's ("Walter") filing of a Notice of Appearance dated February 11, 2014.
Plaintiff filed its motion for summary judgment and order of reference (Seq. #001) which was originally returnable September 9, 2015. Walter submitted an affirmation in opposition dated August 12, 2015 arguing only that plaintiff lacked standing and not addressing defendant's default in answering or seeking permission to file a late answer. With the motion pending Walter served notice on plaintiff that defendant had filed a Chapter 7 proceeding on December 1, 2015 and plaintiff served and filed a Suggestion of Bankruptcy with the court dated December 2, 2015. On April 8, 2016 the automatic stay was vacated by the bankruptcy court and on April 29, 2016 plaintiff filed a Notice of Bankruptcy Court Order Granting Relief from Automatic Stay. With the stay lifted this action and the pending motion were transferred to the general inventory of this part pursuant to Administrative Order #58-16 dated October 12, 2016 and the motion was scheduled for oral argument on February 23, 2017.
At oral argument on February 23, 2017, defendant's present counsel, Macco & Stern, LLP, appeared and provided a consent to change attorney dated February 21, 2017 in this action for Walter. As additional submissions by defendant showed that present counsel had substituted for Walter in the bankruptcy proceeding on August 20, 2016, they were of necessity familiar with this action. After oral argument the court placed its decision on the record granting plaintiff's motion and signed the proposed order, as modified by the court (Seq. #001). Defendant now moves for an order granting leave for her to file a late answer pursuant to CPLR 3012(d), renewing her opposition to plaintiff's motion based upon her default in answering (Seq. #001), and dismissing the complaint (Seq. #002). Plaintiff opposes defendant's motion and also moves for on order granting judgment of foreclosure and sale (Seq. #003).
A defendant seeking to vacate her default in answering, extending her time to answer the complaint and to compel the plaintiff to accept an untimely answer must provide a reasonable excuse for the delay and demonstrate a potentially meritorious defense to the action (see Maspeth Fed. Sav. & Loan Assn. v. McGown, 77 AD3d 890 [2d Dept 2010] ; Karalis v. New Dimensions HR, Inc. , 105 AD3d 707 [2d Dept 2013] ; TCIF REO GCM, LLC v. Walker , 139 AD3d 7945 [2d Dept 2016]; U.S. Bank, N.A. v. Grubb , 162 AD3d 823 [2d Dept 2018] ). This standard governs applications made both prior and subsequent to a formal fixing of a default on the part of defendant by the court (see Integon Natl. Ins. Co. v. Norterile, 88 AD3d 654 [2d Dept 2011] ; Bank of New York v. Espejo, 92 AD3d 707 [2d Dept 2012] ).
The determination as to what constitutes a reasonable excuse lies within the sound discretion of the trial court (see Matter of Gambardella v. Ortov Light. , 278 AD2d 494 [2d Dept 2000] ; Segovia v. Delcon Constr. Corp. , 43 AD3d 1143 [2d Dept 2007] ; U.S. Bank, N.A. v. Grubb , 162 AD3d 823 [2d Dept 2018] ). Yet there are claims of excuse which have been found by appellate courts not to be reasonable, among them are reliance upon poor advice or strategy (see Chase Home Finance, LLC v. Minott 115 AD3d 634 [2d Dept 2014] ; Bank of NY Mellon v. Colucci , 138 AD3d 1047 [2d Dept 2016] ); law office failure where there has been a long period of inaction, a failed strategy, and no detailed or credible explanation for the failure has been offered (see Star Industries, Inc. v. Innovative Beverage, Inc. , 55 AD3d 903 [2d Dept 2008] ; Wells Fargo Bank, N.A. v. Cervini, 84 AD3d 789 [2d Dept 2011] ; US Bank Natl Assn v. Barr , 139 AD3d 937 [2d Dept 2016] ; LaSalle Bank, NA v. LoRusso , 155 AD3d 706 [2d Dept 2017] ; Deutsche Bank Natl. Trust v. Saketos , 158 AD3d 610 [2d Dept 2018] ; Bank of New York Mellon v. Rucci , 168 AD3d 799 [2d Dept 2019] ; Nationstar Mtg. LLC v. Ramnarine , 172 AD3d 866 [2d Dept 2019] ); and being engaged in the court's settlement conference part (see HSBC Bank USA, N.A. v. Lafazan, 115 AD3d 647 [2d Dept 2014] ; JPMorgan Chase Bank, N.A. v. Boampong , 145 AD3d 981 [2d Dept 2016] ; US Bank N.A. v. Louis , 148 AD3d 758 [2d Dept 2017] ; Bank of America, N.A. v. Viener , 172 AD3d 795 [2d Dept 2019] ). Where there is failure to provide a reasonable excuse, the court need not consider claims of meritorious defenses (see One W. Bank FSB v. Valdez ,); Bank of NY Mellon v. Colucci , 138 AD3d 1047 [2d Dept 2016] ; Wells Fargo Bank v. Pelosi ; 159 AD3d 852 [2d Dept 2018] ; US Bank, N.A. v. Dedomenico , 162 AD3d 962 [2d Dept 2018] ).
In her affidavit defendant admits that she immediately retained Margolin to defend the foreclosure action and submits a document dated May 21, 2010 authorizing Chase Home Finance LLC to speak and correspond with Margolin. She further states between June 2010 and January 2011 Margolin appeared at various settlement conferences in this action, although, unbeknownst to her, not filing an answer on her behalf. She goes on to state that in or about September 2011 Margolin resigned from the Bar for disciplinary reasons, and submits a copy of the September 11, 2011 order of the Appellate Division, Second Department, attesting to that fact. Yet, she states that it was not until February 2014 that she retained Walter to represent her in this action, and that based upon Margolin's "misreprentations," Walter assumed Margolin had interposed a timely an answer. The court notes there is no affirmation from Walter to that effect or to explain his actions, and that his opposition to plaintiff's motion (Seq. #001) only raised a claim of plaintiff's lack of standing, not referring to any answer he or she "assumed" had been filed.
As supported by the court's citations above, a claim, whether it be of failed strategy, bad advice or "law office failure" under the circumstances of this case, involving years of delay where a defendant acknowledges being represented by two previous attorneys, is not a reasonable excuse for defendant's failure to answer and for waiting so long to file an application to serve a late answer. There is no detailed or credible explanation offered through affidavit or affirmation explaining the attorneys' failure to file an answer, or why the second attorney did not ascertain whether an answer had been filed upon being engaged in 2014 or address that issue. Defendant's conclusory and unsubstantiated claims of law office failure based upon her assumptions do not constitute a reasonable excuse for her default, nor does her reliance upon being engaged in settlement conferences (whether true or not) provide such an excuse. As indicated, a court has the discretion to accept law office failure as a reasonable excuse if it is supported by a detailed and credible explanation, although mere neglect by prior counsel, as well as defendant, is not a reasonable excuse (see Capital One, N. A. v. Amid , ––– AD3d ––––, 2019 NY Slip Op 05381 [2d Dept 2019] ).
As the court concludes that defendant does not have a reasonable excuse for defaulting in the action, it is unnecessary to address whether she has a meritorious defense (see One W. Bank FSB v. Valdez , 128 AD3d 655 [2d Dept, 2015] ; Deutsche Bank National Trust Co v. Kuldip , 136 AD3d 969 [2d Dept 2016] ; HSBC Bank USA, Nat. Ass'n v. Smart , 155 AD3d 843 [2d Dept 2017] ; Wells Fargo Bank v. Pelosi ; 159 AD3d 852 [2d Dept 2018] ; HSBC Bank USA, National Association v. Daniels , 163 AD3d 639 [2d Dept 2018] ), even if that defense is a claim that plaintiff failed to comply with the notice requirements of RPAPL 1304 (see HSBC Bank, N.A. v. Clayton , 146 AD3d 942 [2d Dept 2017] ; Bank of Am., N.A. v. Agarwal , 150 AD3d 651 [2d Dept 2017] ).
The court has considered defendant's remaining contentions and finds them to be without merit. Defendant's application is denied (Seq. #002).
Accordingly, plaintiff's submissions having provided the necessary basis to warrant a judgment of foreclosure and sale, that application is granted (Seq. #003) and plaintiff's proposed order, as modified by the court, is signed contemporaneously herewith.
This constitutes the Order and decision of the Court.