Opinion
3524/2009.
Decided May 18, 2011.
Seyfarth Shaw, LLP, by Jerry A. Montag, Donald R. Dunn, and Joshua A. Kurtz, Esqs., New York, NY, for the Plaintiff.
Michael D. Leopold, Esq., New York, NY, for the Defendant Tout-Puissant.
Stephen I. Feder, Esq., Forest Hills, NY, for the Proposed Intervenor.
The following papers numbered 1 to 15 read on this motion by defendant Jean P. Tout-Puissant a/k/a Jean Tout-Puissant s/h/a Jean P. Tout-Poissant a/k/a Jean Toutpuissant to vacate the judgment of foreclosure and sale and for leave to serve and file an answer; this cross motion by plaintiffs pursuant to 22 NYCRR 130-1.1(c) for an award of sanctions as against defendant Tout-Puissant and his counsel; and this motion by Ahmed Qasemi, the alleged successful bidder at the foreclosure sale, for leave to intervene and to cancel and nullify the foreclosure sale held on August 13, 2010, and to direct the Referee to return of the bid deposit to him. Papers Numbered
Order to Show Cause — Affidavits — Exhibits .............................1-5 Notice of Cross Motion — Affidavits — Exhibits ..........................6-18 Notice of Motion — Affidavits — Exhibits ................................9-12 Answering Affidavits — Exhibits .........................................13-15Plaintiffs commenced this action on February 13, 2009, to foreclose the tax lien encumbering the premises known as 111-32 Springfield Boulevard, Queens, New York, and obtained a judgment of foreclosure and sale dated April 13, 2010 against defendant Jean P. Tout-Puissant a/k/a Jean Tout-Puissant s/h/a Jean P. Tout-Poissant a/k/a Jean Toutpuissant ("Tout-Puissant") upon his default in appearing or answering the complaint.
A foreclosure sale was conducted pursuant to the judgment, at which time "Zak Realty Corp." was the successful bidder, having bid the amount of $175,000.00, and Ahmed S. Qasemi, as "agent" of Zak Realty Corp., allegedly tendered a bid deposit in the amount of $17,500.00 to the Referee who conducted the sale.
Defendant Tout-Puissant, upon the foregoing papers, moves to vacate the judgment obtained against him, alleging improper service of process, and for leave to serve and file an answer. He avers in his affidavit dated October 7, 2010, that he was not personally served with a copy of the summons and complaint, and never received copies of the summons and complaint. Defendant Tout-Puissant asserts that the affidavit of service dated March 3, 2009 of a licensed process server, indicates service of process by in-hand delivery to Tout-Puissant at 4 Troy Street, Elmont, New York, on February 26, 2009 at 8:10 P.M. He contends that such affidavit does not constitute proof of proper service upon him because he has not been "at" the Troy Street address in more than 6 years, and was "living" at 2308 Spruce Cabin Road, Cresco, Pennsylvania, on February 26, 2009, and "continue[s] to live at the Spruce Cabin Road address." Defendant Tout-Puissant also cites discrepancies between the physical description, included in the March 3, 2009 affidavit of service, of the person served and himself, as evidence that he was not served by in-hand delivery.
Plaintiffs oppose the motion by defendant Tout-Puissant, claiming that defendant Tout-Puissant was properly served with process, and cross-move for an award of sanctions against defendant Tout-Puissant and his counsel. Plaintiffs claim that Tout-Puissant included false allegations in his affidavit dated October 7, 2010, in support of the order to show cause.
Proposed intervenor Ahmed Qasemi ("Qasemi") separately moves for leave to intervene in the action and to set aside the sale and direct the Referee to return the deposit. Plaintiffs oppose that branch of the motion by proposed intervenor Qasemi in which he seeks to set aside the sale and direct the Referee to return the deposit. Plaintiffs contend that Qasemi has wrongfully refused to complete the purchase.
Plaintiffs filed the affidavit of service dated March 3, 2009, with the County Clerk, indicating service of process upon defendant Tout-Puissant. However, they also filed, on June 1, 2009, another affidavit of service of a licensed process server, with the County Clerk, indicating service of process upon defendant Tout-Puissant. Plaintiffs relied upon June 1, 2009 affidavit to demonstrate proper service of process upon defendant Tout-Puissant, in connection with their ex-parte application for an order of reference and judgment of foreclosure and sale. According to that affidavit of service, attempts at effecting personal delivery of a copy of the summons and complaint were made upon defendant Tout-Puissant at 111-32 Springfield Boulevard, Queens Village, New York, on May 29, 2009 at 1:00 P.M. and 7:30 P.M., and
May 30, 2009 at 12:00 P.M. The affidavit also indicates that on May 30, 2009, at 12:00 P.M., the process server affixed a copy of the summons and complaint to the door of the subject premises at 111-32 Springfield Boulevard, Queens Village, New York, Tout-Puissant's "last known address per the Attorney," and made a subsequent mailing of a copy of the summons and complaint to defendant Tout-Puissant at the same address. Such affidavit constitutes prima facie proof of proper service pursuant to CPLR 308(4) ( see, 425 East 26th Street Owners Corp. v Beaton , 50 AD3d 845 [2nd Dept. 2008]; Olesniewicz v Khan , 8 AD3d 354, 355 [2nd Dept. 2004]; Matrix Fin. Servs. Corp. v McKiernan, 295 AD2d 579 [2nd Dept. 2002], lv. to appeal dismissed, 99 NY2d 610).
Defendant Tout-Puissant's conclusory denial of service is insufficient to dispute the veracity or contents of the June 1, 2009 affidavit ( see, Manhattan Sav. Bank v Kohen, 231 AD2d 499 [2nd Dept. 1996], lv. to appeal denied, 91 NY2d 802; Sando Realty Corp. v Aris, 209 AD2d 682 [2nd Dept. 1994]; Genway Corp. v Elgut, 177 AD2d 467 [2nd Dept. 1991]). That branch of the motion by defendant Tout-Puissant to vacate the judgment of foreclosure and sale, pursuant to CPLR 5015(a)(4), is denied.
Likewise, to the extent defendant Tout-Puissant moves to vacate the judgment of foreclosure and sale pursuant to CPLR 317, he has failed to demonstrate that he did not receive notice of the summons and complaint in time to defend the action ( see, C H Import Export, Inc. v MNA Global, Inc. , 79 AD3d 784 [2nd Dept. 2010]; Irwin Mtge. Corp. v Devis , 72 AD3d 743 [2nd Dept. 2010]; Sturino v Nino Tripicchio Son Landscaping , 65 AD3d 1327 , lv. to appeal dismissed, 13 NY3d 935). That branch of the motion by defendant Tout-Puissant to vacate the judgment of foreclosure and sale pursuant to CPLR 317, and for leave to serve and file a late answer pursuant to CPLR 3012, is denied.
In addition, to the extent defendant Tout-Puissant objects to the service of process upon co-defendant Milton Brock, he lacks standing to raise a jurisdictional defense upon Brock's behalf ( see, Home Sav. of America, F.A. v Gkanios, 233 AD2d 422 [2nd Dept. 1996]).
Pursuant to 22 NYCRR 130-1.1, sanctions may be imposed against a party or the attorney for a party for frivolous conduct ( see, 22 NYCRR 130-1.1[b]). A party, or his or her counsel, commits frivolous conduct if, among other things, he or she asserts material factual statements that are false ( see, 22 NYCRR 130-1.1[c]; Joan 2000, Ltd. v Deco Const. Corp. , 66 AD3d 841 [2nd Dept. 2009]). Plaintiffs claim that defendant Tout-Puissant listed the Springfield Boulevard address on his petitions filed in bankruptcy court on February 5, 2009 and August 19, 2010, and therefore, has committed frivolous conduct herein by claiming his residence is in Pennsylvania. Defendant Tout-Puissant's listing of the Springfield Boulevard address on the bankruptcy petitions, however, does not conclusively indicate he claimed in the bankruptcy proceeding that the Springfield Boulevard address was his actual place of business, dwelling place, or usual place of abode on June 1, 2009 ( see, CPLR 308; see also, 28 USC § 1408). Under such circumstances, the cross motion by plaintiffs to impose sanctions upon defendant Tout-Puissant and his counsel is denied in an exercise of discretion.
It is unclear whether Qasemi has been assigned the successful bid made by Zak Realty Corp. in his individual capacity or whether he is appearing as a representative of that corporation. In any event, plaintiffs do not oppose his intervention, and, on that basis, the branch of the motion by Qasemi for leave to intervene in both capacities is granted.
With respect to that branch of the motion by Qasemi to set aside the sale and direct the return of the bid deposit, Qasemi asserts that, following the sale, he ordered a title search, which revealed exceptions to title based upon the existence of an open, privately-held mortgage and a notice of pendency filed against the property. He contends that no title company has been willing to omit these exceptions, and issue him title insurance, in the absence of a satisfaction of the mortgage and cancellation of the notice of pendency, and that, as a consequence, the Referee cannot provide him with marketable and insurable title. Qasemi also asserts that it is unlikely that the holders of the private mortgage will voluntarily sign a satisfaction of the mortgage and lift the notice of pendency. As a consequence, Qasemi contends the Referee will be unable to deliver insurable and marketable title to him.
The Appellate Division, Third Judicial Department, in Jorgensen v Endicott Trust Co. ( 100 AD2d 647, 648) stated: "As a general rule, a purchaser at a foreclosure sale is entitled to a good, marketable title ( Heller v Cohen, 154 NY 299, 306)." The Appellate Division, Second Judicial Department, in Argent Mortg. Co., LLC v Leveau ( 46 AD3d 727 , 728) elaborated:
"A marketable title is "a title free from reasonable doubt, but not from every doubt" '( Gateway Dev. Mfg. v Commercial Carriers, 296 AD2d 821, 824, quoting Regan v Lanze, 40 NY2d 475, 482; see Voorheesville Rod Gun Club v Tompkins Co., 82 NY2d 564, 571). Something more than a mere assertion of a right is essential to create an unmarketable or doubtful title' (Nasha Holding Corp. v Ridge Bldg. Corp., 221 App Div 238, 243; see Gateway Dev. Mfg. v Commercial Carriers, 296 AD2d at 824)"
Qasemi has failed to provide a copy of his title search in support of his motion, and he has made no showing that the privately-held mortgage is superior to the tax lien which was the subject of this foreclosure action. Rather, his counsel admits that "no one dispute[s] that the tax lien sale effectively extinguished the open mortgage," (except to the extent of the surplus). Qasemi also has made no showing that a necessary party was not named as a defendant in this action.
To the extent that any of the named defendants, in the future, may seek to vacate the judgment of foreclosure and sale, pursuant to CPLR 5015 and 317, such possible action does not render title to the subject premises presently unmarketable ( see, Argent Mortg. Co., LLC v Leveau , 46 AD3d 727 , supra). In any event, the bid was offered by Zac Realty Corp. with notice that the bidder agreed to take the premises subject to the "rights of any defendants, pursuant to [CPLR 317, 2003 and 5015]" ( see, Argent Mortg. Co., LLC v Leveau , 46 AD3d 727 , supra). Qasemi, therefore has failed to demonstrate he will be compelled to accept a defective title or doubtful title from the Referee. Qasemi has failed to demonstrate any other basis upon which to set aside the sale ( see generally, Alkaifi v Celestial Church of Christ Calvary Parish , 24 AD3d 476 [2nd Dept. 2005]).
That branch of the motion by Qasemi to set aside the foreclosure sale and to direct the Referee to return the bid deposit is denied.