Opinion
01-21-2016
PEOPLE of the State of New York, Plaintiff, v. GREENTREE SERVICING LLC, Defendant.
Alex Smith, Esq., Assistant Corporation Counsel, City of Middletown, for the State. Kristin Mykulak, Esq., PIB Law, for Defendant.
Alex Smith, Esq., Assistant Corporation Counsel, City of Middletown, for the State.
Kristin Mykulak, Esq., PIB Law, for Defendant.
ROBERT F. MOSON, J. Defendant, by counsel, moves for an order, pursuant to CPLR § 3211(a)(8), dismissing the information charging the defendant with violating Middletown City Code § 475.10A. The People have opposed the motion.
This is a criminal action in which the defendant is charged with a violation of Section 475.10A of the Middletown City Code. The defendant herein is the assignee of a mortgage between the Bank of New York, and David B. York. The mortgage was executed between the Bank of New York and David York on or about March 17, 2006, by which the Bank of New York held the mortgage on a parcel of land located at 43–45 Washington St., Middletown, N.Y. 10940. Subsequently, David York defaulted on the loan agreement, and the Bank of New York initiated a foreclosure action on or about July 11, 2012. That foreclosure action is still pending in Orange County Supreme Court under Index No.: 2012–005692. On or about August 15, 2014 the mortgage was assigned from the Bank of New York to the defendant.
At some point, the mortgagor, David York, abandoned the property, and, as part of a separate action, the improvement on the parcel was demolished leaving the parcel clear. Recently the clear parcel of land has been utilized by persons unknown as a parking lot and resting place for untagged motor vehicles. It was as a result of the present condition of the parcel that the Code Inspector of the City of Middletown filed an information citing the defendant for a violation of Section 475.10A of the Middletown City Code. The whereabouts of the mortgagor, David York, is unknown.
The defendant has sought dismissal pursuant to CPLR § 3211(a)(8). As this is a criminal prosecution, the CPLR is not applicable. The court, under its discretionary authority and in the interest of justice, will deem the defendant's motion to be pursuant to CPL § 170.30(1)(f).
In the wake of the financial and housing foreclosure crises of the last decade, many municipalities have been plagued with an exponential increase in abandoned and derelict houses within their communities. The substantial number of foreclosures statewide has resulted in a backlog of cases pending in the courts. During the pendency of these foreclosure actions, many municipalities have had their power to enforce municipal codes limited by their inability to serve legal process on the titled owner who has abandoned the property. The New York State Legislature recognized this problem, and in 2009 enacted Section 1307 of the Real Property Actions and Proceedings Law.
RPAPL § 1307(1) provides a mechanism by which liability for the maintenance of a foreclosed and abandoned property may be imposed upon the mortgagee of the property. RPAPL § 1307(a) provides that after there has been a foreclosure sale of the abandoned property, that the mortgagee becomes liable for the maintenance of the property. It is the position of the defendant that under RPAPL § 1307(1) no liability may be imposed on the defendant herein, as there has yet to be a foreclosure sale.
The few cases that have examined RPAPL § 1307 have been limited to an examination of Section 1. Lezama v. Cedano 119 A.D.3d 479, 991 N.Y.S.2d 32, Appellate Division, First Department [2014] is a negligence action that arose out of the failure to maintain a property where a fatal fire occurred. Defendant Cedano had abandoned the property. The action also named the mortgagee, Bank of New York as a direct defendant. Bank of New York brought a motion, pursuant to CPLR § 3211(a)(1), which was predicated upon RPAPL § 1307(1), that no liability could be assigned to the Bank of New York. The Supreme Court granted the motion to dismiss. However, the Appellate Division reversed. It held that the Bank of New York had failed to present sufficient evidence that the property was abandoned, thus leaving the requirements of RPAPL § 1307(1) unsatisfied. The Lezama Court did not address the issue of whether or not a foreclosure sale had occurred, or if there was local law that addressed the issue.
Defendant cites Town of Huntington v. Lagone, 29 Misc.3d 779, 908 N.Y.S.2d 320, Suffolk County [2010], in which a civil action against the mortgagee for failure to maintain the mortgaged property was dismissed, as there had yet to be foreclosure sale in satisfaction of RPAPL § 1307(1). Again, there is no indication that there was a local law that imposed a duty to maintain the property upon a mortgagee, thus side stepping the issue of the applicability of RPAPL § 1307(8).
It would appear to be uncontested, in the instant action, that should the court rely solely on RPAPL § 1307(1) to determine the outcome, that the defendant, at this point in time, may not be held to have a duty to maintain the subject property as there has yet to be a foreclosure sale. However, the people rely upon RPAPL § 1307(8) which provides: "This section [ RPAPL § 1307 ] shall not preempt, reduce or limit any rights or obligations imposed by any local laws with respect to property maintenance and the locality's ability to enforce those laws." In the absence of a local law that imposes a duty to maintain property upon the mortgagee out of possession, the defendant's position would appear to be meritorious. The City of Middletown has such a local law: Middletown City Code § 296–3. The City of Middletown, as do all municipalities, has a compelling interest in seeing that the public is protected through enforcement of municipal building and maintenance codes, and has broad authority to enact legislation to that end (see, New York State Constitution, Article 9, § 2 ; Municipal Home Rule Law, § 10, sub. 1). To ensure that the city has authority to enforce its codes, it has enacted Middletown City Code § 296–3, which provides that "any person who violates or assists in the violation" of New York Uniform Fire Prevention and Building Codes will be guilty of an offense and be subject to fine, imprisonment or both. MCC § 296–3 enumerates a list of entities that it defines as a "person", and subject to prosecution for failure to comply with the city code. Included in this enumerated list of "person[s]" is a mortgagee. It is in reliance upon this section of the city code that the instant criminal proceeding against the defendant was brought.
It is the opinion of the court that RPAPL § 1307(8), and not RPAPL § 1307(1), is controlling in the instant case. The legislature, by including RPAPL § 1307(8), insured that local laws would not be hampered or restricted by the language of RPAPL § 1307. The purpose of enacting RPAPL § 1307 by the legislature was to give municipalities, on a statewide basis, the power to address foreclosed and abandoned properties, but it could not have been the intention of the legislature to restrict the power of those municipalities that had already taken their own steps to insure their authority and ability to enforce local building and maintenance codes.
Therefore, it is ORDERED, that the defendant's motion to dismiss is denied in its entirety, and it is further ORDERED, that the parties appear before the court on February 11, 2016 at 11:00 AM.