Opinion
Index No. 204804/2022
08-05-2024
Lakeview Loan Servicing, LLC, Plaintiff, v. Salvatore Iannuzzi, et al., Defendant(s).
McCalla Raymer Leibert Pierce, LLC, New York, New York, for plaintiff.
McCalla Raymer Leibert Pierce, LLC, New York, New York, for plaintiff.
ALETHA V. FIELDS, J.
Upon efiled documents 34-50 and any efiled documents cited herein or therein, considered on plaintiff's motion (sequence 1) that seeks leave to enter a default for judgment, it is hereby
ORDERED that plaintiff's motion for leave to enter a default judgment be, and hereby is, DENIED conditionally; and it is further
ORDERED that on its own initiative, this Court hereby DISMISSES conditionally the complaint as to all non-appearing defendants, as defined herein; and it is further
ORDERED that either by motion made by order to show cause filed on or before September 5, 2024, plaintiff be, and hereby is, authorized to attempt to make a showing that the dismissal remedy of CPLR 3215 (c) should not be imposed; and it is further
ORDERED that in the absence of strict compliance with the immediately preceding decretal paragraph, the complaint be dismissed as to all non-appearing defendant and the motion be deemed unconditionally granted effective on September 6, 2024.
In this mortgage foreclosure action, plaintiff served all the defendants including some John Doe defendants. No defendant responded in any way to the summons and complaint (see generally, 21st Mtge. Corp. v Raghu, 197 A.D.3d 1212 [2d Dept 2021]).
Plaintiff's motion papers admit that the action was released from the CPLR 3408 process on May 9, 2023. Plaintiff filed this motion on May 15, 2024 (Notice of Motion [Dkt. 34]; Guide to NY Evid rule 2.01, Judicial Notice [permitting judicial notice without request and of facts in internal court records]; see also, Matter of Bosse v Simpson, 173 A.D.3d 856 [2d Dept 2019]).
"If 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, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed" (CPLR 3215 [c]). However, the one-year period does not begin to run until after the 3408 process ends (Deutsche Bank Natl. Trust Co. v Lewin, 205 A.D.3d 677 [2d Dept 2022]). The court's duty to dismiss is non-discretionary (Deutsche Bank Natl. Trust Co. v Iovino, 171 A.D.3d 1011 [2d Dept 2019]).
Trial courts should dismiss sua sponte under CPLR 3215 (c) because "dates are often easily discernible in determining whether a plaintiff has taken proceedings within one year after a defendant's default" (Citibank, N.A. v Kerszko, 203 A.D.3d 42, 49-50 [2d Dept 2022]). The "easily discernible" dates are May 9, 2023 (release from CPLR 3408) and May 15, 2024 (motion date). Therefore, more than one year elapsed. On its own initiative, this Court conditionally dismisses the complaint.
CPLR 3215 (c) and the appellate interpretation of it puts a trial court in an unenviable position of acting "upon its own initiative" to dismiss an action. CPLR 3215 (c)'s unless clause restricts a court's "upon its own initiative" action only to the whether a plaintiff timely took proceedings for the entry of judgment, not to whether sufficient cause, as set forth in the unless clause, exists. CPLR 3215 (c) leaves at risk a plaintiff who disagrees with a court's "easily discernible" timeliness determination. Equally at risk is the plaintiff who, based on that disagreement, did not argue sufficient cause in the initial default judgment motion.
Telling those plaintiffs to rely on a motion for renewal based on facts not introduced on the original motion rings hollow because of the ease with which a court may discard such plaintiff's purported reasonable excuse for not raising the facts in the initial motion (CPLR 2221 [e] [2], [3]). A plaintiff arguing, "We did not think these facts necessary," can find itself with no reasonable excuse because a court may respond, "Plaintiff bore a burden to prove timeliness or should have seen the possibility of an 'on its own initiative' dismissal. Plaintiff has not proven a "reasonable justification for the failure to present such facts on the prior motion" (CPLR 2221 [e] [3]). As for sufficient cause, the same analysis applies; a plaintiff may hear, "Plaintiff should have anticipated the need to argue sufficient cause on the prior motion." Those plaintiffs that pursue an unsuccessful motion for leave to reargue have no right to direct appeal (Alvarez v Jawaid, 163 A.D.3d 746 [2d Dept 2018]).
Although the determination of the dates might be easily discernible, less obvious may be whether a defendant waived CPLR 3215 (c) by an informal appearance (e.g., Deutsche Bank Natl. Trust Co. v O'Connor, 223 A.D.3d 872 [2d Dept 2024]; Christiana Trust v Victor, 224 A.D.3d 869 [2d Dept 2024] [service of a late answer waives CPLR 3215 (c) rights]; HSBC Bank USA, N.A. v Ranasinghe, 199 A.D.3d 993 [2d Dept 2021] [moving for leave to serve a late answer without simultaneously or sooner moving for CPLR 3215 (c) relief waives CPLR 3215 (c) rights]; Onewest Bank, FSB v Bernstein, 196 A.D.3d 591 [2d Dept 2021] [stipulation to answer or make a preanswer motion to dismiss is an informal appearance that waives 3215 (c) rights]), or whether plaintiff did take proceedings toward judgment in time (e.g., Mtge. Electronic Registration Sys. Inc. v McVicar, 203 A.D.3d 915 [2d Dept 2022] [moving for an eventually vacated order of reference constitutes taking proceedings toward judgment]). Even in the easily discernible date calculation, questions may arise like whether the defendant appeared at the 3408 conference and was able to avail itself of the 30 day extension of the time to respond to the complaint (CPLR 3408 [m]). This Court has no record information on that point in this case. These more fact specific inquiries weigh in favor of conditional dismissals. Plaintiffs' right to be heard at a meaningful time is enhanced by a bright line rule of conditional dismissals.
A second reason to exercise discretion to make a CPLR 3215 (c) dismissal conditional is appellate guidance about timing. A plaintiff that raises a potential sufficient cause defense to a CPLR 3215 (c) motion has "anticipatorily argued" (Kerszko, 203 A.D.3d at 45 [2d Dept 2022]), a phrase suggesting that when moving for the default judgment, a plaintiff may, but is not required to, argue sufficient cause and, by extension, timeliness.
CPLR 3215 (c) dismissals "are specifically directed and permissible by the statute itself, though subject to a plaintiff showing sufficient cause as to why the complaint should not be dismissed" (Wells Fargo Bank, N.A. v Louis, ___A.D.3d ___, 213 N.Y.S.3d 86 [2d Dept] at n 1). Although Louis mainly addressed discretionary dismissals and although the Louis footnote distinguishes statutory dismissals like CPLR 3215 (c) dismissals from discretionary dismissals, Louis' "subject to" language parallels Kerszko 's "anticipatorily argues" language indicating but not necessarily establishing binding precedent that a response after a court acts on its own initiative to dismiss under CPLR 3215 (c) is permitted.
Worries that this Court gives too much weight to a footnote are easily answered (United States v Carolene Products Co., 304 U.S. 144 at n 4 [1938] [establishing that already existing in our jurisprudence is a "narrower scope for the presumption of constitutionality" unfavorably treating "discrete and insular minorities"]).
A third reason to dismiss conditionally on the Court's own initiative is that a moving plaintiff that suffered a 3215 (c) dismissal on the court's own initiative has no appeal as a matter of right from that defeat because the dismissal is not the result of a motion made on notice (Am. Home Mtge. Servicing, Inc. v Kaplan, 227 A.D.3d 647 [2d Dept 2024]; cf. Deutsche Bank Natl. Trust Co. v Khalil, 208 A.D.3d 555 [2d Dept 2022] [treating a notice of appeal from a sua sponte dismissal as a motion for leave to appeal]). In Kerszko despite discussion about the self-preservation of issues when a trial court acts sua sponte on a CPLR 3215 (c) motion, the Second Department treated the notice of appeal as a motion for leave to appeal because "a majority of the Justices on this panel have concluded that leave is required, we are constrained to grant leave to address the merits of the appeal" (Kerszko, 203 A.D.3d at 56). At least with the chance to respond to what a court sets forth as the basis for a CPLR 3215 (c) dismissal on the court's initiative, plaintiff has fuller access to justice and the ability to build a record closer to that which would exist if a defendant have affirmatively moved for CPLR 3215 (c) relief.
A fourth reason to dismiss conditionally is that this outcome does not violate the simple rule of law that "[d]ismissal is mandatory" (Aurora Loan Servs., LLC v Hiyo, 130 A.D.3d 763, 764 [2d Dept 2015]). The question is not dismissal, it is timing. Waiting to finalize a conditional dismissal that may have blindsided a plaintiff demonstrates prudence and serves the goals set forth in CPLR 104. CPLR 3215 (c) does not say that the Court when acting on its own must dismiss immediately. Appellate guidance set forth above suggests waiting, and in the guise of interpretation, this Court sees, post- Louis, good reason not to assume or graft onto CPLR 3215 (c) a "without notice" or "immediately" requirement, doing so would be to "legislate under the guise of interpretation" (People v Finnegan, 85 N.Y.2d 53, 58 [1995]).
Finally, a fifth reason to dismiss conditionally is that were this a motion brought by a defendant seeking dismissal under CPLR 3215 (c), the plaintiff would see the entire argument made in favor of dismissal. By allowing for the conditional dismissal, this Court puts plaintiff's facing a court's own initiative on equal footing with a plaintiff facing a defendant's motion. It would be indeed odd for a defendant who affirmatively moved for CPLR 3215 (c) relief to have to survive opposition to the known arguments of the defense application when a defendant who sat idle benefits in having a CPLR 3215 (c) dismissal occur without plaintiff having a chance to speak. The idle defendant may not deserve worse treatment than the active one, but surely the passive defendant does not deserve treatment that tops the litigating defendant.
From this review and "to secure the just, speedy[,] and inexpensive determination of every civil judicial proceeding" (CPLR 104) this Court determines, as a matter of discretion, that post- Louis, when a plaintiff does not argue any defenses to a CPLR 3215 (c) dismissal and the court acts on its own initiative, an aggrieved plaintiff should be afforded a short time to argue against the court's own initiative action, given that the legislature has, in effect, required the courts to act as an advocate.
Therefore, this Court conditionally dismisses the action as set forth in the decretal paragraphs of this order.