Opinion
Index No. 26736/2019E
06-23-2022
NYCTL 1998-2 Trust AND THE BANK OF NEW YORK MELLON, AS COLLATERAL AGENT AND CUSTODIAN, Plaintiff, v. College Equity Fund Inc., et al., Defendants.
Unpublished Opinion
Adrian Armstrong, J.
The following papers numbered - to - were read on these motions (Seq. No. 2) noticed on - and duly submitted as No.__ on the Motion Calendar of Sequence No. 2 Doc. Nos.
Notice of Motion - Exhibits and Affidavits Annexed As indicated in NYSCEF
Cross Motion - Exhibits and Affidavits Annexed As indicated in NYSCEF
Others As indicated in NYSCEF
Upon the foregoing papers, the motion and cross-motion listed above are decided in accordance with the annexed decision and order.
Upon the foregoing papers, the motion of the plaintiff for the appointment of a referee and for related relief, and the cross-motion by the defendant College Equity Fund Inc. ("College Equity") for an order vacating its default in answering the complaint with leave to serve an amended answer and for dismissal of the plaintiff's complaint pursuant to CPLR 3215 (c) is decided as follows:
This tax lien foreclosure action seeking to foreclose a lien on property located at 1023 College Avenue in Bronx County (Block 2437, Lot 37) (the "Tax Parcel") was commenced by filing the summons and complaint in the Bronx County Clerk's office on June 10, 2019. The property is owned in part by certain individuals who are deceased, and in part by defendant College Equity. Pursuant to an Order of Publication and Appointment of Guardian ad Litem (Barbato, J., March 5, 2020), defendants Lloyd Davis, Elizabeth Davis, Carolyn Boone, and unknown heirs were served by publication.
Pursuant to the terms of the Publication Order, the first publication was to have occurred by April 4, 2020. Due to Executive Order 202.8 dated March 20, 2020, the first publication on defendants Davis and Boone was not completed prior to April 4, 2020. Plaintiff seeks to extend the thirty day time frame for the first publication date as set forth in the Publication Order nunc pro tunc to October 2, 2020. Plaintiff also moves to extend the time period for filing proof of service on defendants Davis and Boone set forth in CPLR Section 306-b nunc pro tunc until March 23, 2021. That part of the motion is unopposed.
Defendants College Equity and Samuel Walker filed an answer dated December 14, 2020. Plaintiff rejected that answer as untimely and returned the answer by letter dated December 16, 2020.
Plaintiff now moves for the appointment of a referee. Defendant College Equity opposes the motion, and cross-moves to dismiss the action pursuant to CPLR 3215 (c), or in the alternative, to vacate the defendant's default in answering with leave to file an amended answer.
Defendant calculates that over two years expired since its default. CPLR 3215 provides that "[i]f 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... unless sufficient cause is shown why the complaint should not be dismissed" (CPLR 3215[c]). As more than one year has passed since the default, even taking into account the foreclosure moratorium and other Covid-19 stays and regulations, plaintiff is required to establish "sufficient cause" why the complaint should not be dismissed, which requires a showing that it had a reasonable excuse for the delay in taking proceedings for the entry of a default judgment, and that it has a potentially meritorious cause of action. (Wells Fargo Bank, N.A. v. Bonanno, 146 A.D.3d 844, 45 N.Y.S.3d 173 [2d Dept. 2017]). Plaintiff has established good cause in that, albeit it could have pursued a default against College Equity, no judgment of foreclosure or reference could be obtained before service was made on the heirs of the deceased co-owners. In view of the regular and continuing manner in which the plaintiff pursued publication, good cause exists for the failure to seek judgment as to College Equity. Moreover, the plaintiff establishes an entitlement to judgment herein.
Defendant argues that plaintiff failed to serve a "hardship notice" in compliance with the Covid 19 Emergency Foreclosure and Eviction Prevention Act of 2020 before bringing the present motion. Defendant argues that although a "hardship notice" was purportedly served, plaintiff's affidavit of service does not provide the disclosure required under the statute, i.e., that the declaration could be accessed on the Department of Taxation website, or that the disclosure was mailed or served upon the defendant at either the property address or its agent for service. These arguments, however, are now academic in that the foreclosure crisis is ended and all statutory stays and moratoria have been abrogated.
Lastly, defendant argues that it should be given leave to vacate its default in answering and be permitted to serve an amended answer as it has a reasonable excuse for default and a meritorious defense. Defendant argues that service was effectuated by serving defendant's registered agent for process (Legal Services LLC) in Delaware. Defendant argues that it is an unauthorized foreign corporation as defined by Corporation Law 102(a)(7), and thus the provisions of Business Corporation Law 307 would apply to service on the defendant. The plaintiff did not comply with BCL 307 (a) as to service, defendant argues, and thus service was ineffective.
CPLR 311 (a) (1) provides in relevant part that personal service on a corporation shall be made by delivering the summons "to an officer, director,... or... any other agent authorized by appointment or by law to receive service. A business corporation may also be served pursuant to [Business Corporation Law §§ 306 or 307]." Thus, plaintiff could have acquired personal jurisdiction over defendant by serving it pursuant to either CPLR 311 (a) (1) or Business Corporation Law § 307 (see Halas v Dick's Sporting Goods, 105 A.D.3d 1411, 1413-1414, 964 N.Y.S.2d 808 [4th Dept. 2013]; Van Wert v Black & Decker, 246 A.D.2d 773, 774, 667 N.Y.S.2d 770 [3d Dept. 1998]). As the First Department has unambiguously held:
"The motion to dismiss as against GSI on jurisdictional grounds was also properly denied insofar as it was premised on the claim of improper service. Although GSI is an unauthorized foreign corporation, plaintiff was not required to serve it in the manner set forth in Business Corporation Law § 307 (Business Corporation Law § 307 [e]; Van Wert v Black & Decker, supra). It also had the option of serving GSI through an agent authorized by appointment to receive service (CPLR 311). Plaintiff served a legal assistant at Goldman, who allegedly stated that she was authorized to accept service for GSI and endorsed the summons acknowledging her acceptance of process for GSI. Although she later submitted an affidavit stating that she was not in fact authorized to accept process for GSI, the motion court properly concluded that the service should be upheld since the process server "acted reasonably and with due diligence under the circumstances" and since "the manner of service, objectively viewed, was calculated to give and did give the corporate defendant fair notice of the commencement of this action" (Belluardo v Nationwide Ins. Co., 231 A.D.2d 661, 661-662; see also, Fashion Page v Zurich Ins. Co. 50 N.Y.2d 265, 272)."(Hessel v. Goldman, Sachs & Co., 281 A.D.2d 247, 247-248, 722 N.Y.S.2d 21, 23 [1st Dept. 2001] [emphasis added].)
Here, service was properly effectuated by service on College Equity's agent under CPLR 311. Moreover, the defendant failed to establish any excuse for its untimely answer, nor has any meritorious defense been established.
The court has considered the additional contentions of the parties not specifically addressed herein. To the extent that any relief requested by either party was not addressed by the court, it is hereby denied.
Accordingly, it is hereby, ORDERED that the motion is granted, and the cross-motion is denied; and it is further, ORDERED that defendants Ronnette Walker; Pamela Gray; Bronx Supreme Court; Credit Acceptance Corporation; HSBC Finance Corporation, successor in interest to HSBC Bank Nevada, National Association; Criminal Court of the City of New York (Bronx); New York State Department of Taxation and Finance; New York City Transit Authority Transit Adjudication Bureau; and New York City Parking Violations Bureau are determined to be in default; and it is further
ORDERED, that the Plaintiffs have complied with the requirements of the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 or the COVID-19 Emergency Protect Our Small Businesses Act of 2021, as applicable; and it is further
ORDERED that the Referee make his/her report and computation with all deliberate speed; and it is further
ORDERED that, if necessary, the Referee may take testimony pursuant to RPAPL § 1321; and it is further
ORDERED that by accepting this appointment the Referee certifies that he/she is in compliance with Part 36 of the Rules of the Chief Judge (22 NYCRR Part 36), including, but not limited to §36.2 (c) ("Disqualifications from appointment"), and §36.2 (d) ("Limitations on appointments based upon compensation"), and, if the Referee is disqualified from receiving an appointment pursuant to the provisions of that Rule, the Referee shall immediately notify the Appointing Judge; and it is further
ORDERED that, pursuant to CPLR 8003(a), the statutory fee of $350.00, shall be paid to the Referee for the computation of the amount due and upon the filing of his/her report and the Referee shall not request or accept additional compensation for the computation unless it has been fixed by the court in accordance with CPLR 8003(a); and it is further
ORDERED that the Referee is prohibited from accepting or retaining any funds for him/herself or paying funds to him/herself without compliance with Part 36 of the Rules of the Chief Administrative Judge; and it is further
ORDERED, that "John Doe" be removed as a party defendant in this action and the caption of this action be amended to reflect the removal of "John Doe" as a party defendant; and it is further
ORDERED that _______with an address of_____, is hereby appointed Referee, in accordance with RPAPL § 1321, to compute the amount due to Plaintiffs and to examine whether the Tax Parcel may be sold in parcels; and it is further
ORDERED that the thirty day time frame for the first publication date as set forth in the Publication Order for Service by Publication is extended nunc pro tunc through October 2, 2020; and it is further
ORDERED, that the time period for completion service as set forth in CPLR 306-b with regard to the Defendants Davis and Boone is hereby extended nunc pro tunc until March 23, 2021; and it is further
ORDERED that the caption shall read as follows:
Supreme Court of the State of New York
County of the Bronx
NYCTL 1998-2 TRUST AND THE BANK OF NEW YORK TAXPARCEL: MELLON, AS COLLATERAL AGENT AND CUSTODIAN, 1023 College Avenue Bronx, New York Plaintiff, INDEX NO.: 26736/2019E
v.
COLLEGE EQUITY FUND INC.; The heirs-at-law, next of kin, distributees, executors, administrators, assignees, lienors, creditors, successors-in-interest and generally all persons having or claiming under, by or through LLOYD DAVIS, DECEASED, by purchase, inheritance, lien or otherwise of any right, title or interest in and to the premises described in the complaint herein,and all creditors thereof, and the respective wives, or widows of his, if any, all of whose names and addresses are unknown to plaintiffs; the heirs-at-law, next of kin, distributees, executors, administrators, assignees, lienors, creditors, successors-in-interest and generally all persons having or claiming under, by or through ELIZABETH DAVIS, DECEASED, by purchase, inheritance, lien or otherwise of any right, title or interest in and to the premises described in the complaint herein, and all creditors thereof, and the respective husbands, or widowers of hers, if any, all of whose names and addresses are unknown to plaintiffs; The heirs-at-law, next of kin, distributees, executors, administrators, assignees, lienors, creditors, successors-in-interest and generally all persons having or claiming under, by or through CAROLYN BOONE, DECEASED, by purchase, inheritance, lien or otherwise of any right, tide or interest in and to the premises described in the complaint herein, and all creditors thereof, and the respective husbands, or widowers of hers, if any, all of whose names and addresses are unknown to plaintiffs;
SAMUEL WALKER; RONNETTE WALKER; PAMELA GRAY; BRONX SUPREME COURT; CREDIT ACCEPTANCE CORPORATION; HSBC FINANCE CORPORATION, SUCCESSOR IN INTEREST TO HSBC BANK NEVADA, NATIONAL ASSOCIATION; CRIMINAL COURT OF THE CITY OF NEW YORK (BRONX); NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; UNITED STATES OF AMERICA; NEW YORK CITY DEPARTMENT OF FINANCE; NEW YORK CITY TRANSIT AUTHORITY TRANSIT ADJUDICATION BUREAU; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, and NEW YORK CITY PARKING VIOLATIONS BUREAU, Defendants, And it is further, ORDERED that Plaintiffs shall serve a copy of this Order with notice of entry on all parties and persons entitled to notice, including the Referee appointed herein.
This constitutes the decision and order of the court.