Opinion
INDEX NO.: 28849/2008
03-09-2017
WELLS FARGO BANK, N.A., D/B/A AMERICA'S SERVICING CO., Plaintiffs, v. ENDORA COFFEY, MITCHELL COFFEY, Defendants.
PLAINTIFFS' ATTORNEY: SHAPIRO, DICARO & BARAK, LLC 175 MILE CROSSING BLVD. ROCHESTER, NY 14624 DEFENDANT'S ATTORNEY: THE RANALLI LAW GROUP, PLLC 742 VETERANS MEMORIAL HWY. HAUPPAUGE, NY 11788
COPY
Short Form Order PRESENT: HON. HOWARD H. HECKMAN, JR., J.S.C. MOTION DATE: 08/17/2016
MOTION SEQ. NO.: 005 MD 006 MG PLAINTIFFS' ATTORNEY:
SHAPIRO, DICARO & BARAK, LLC
175 MILE CROSSING BLVD.
ROCHESTER, NY 14624 DEFENDANT'S ATTORNEY:
THE RANALLI LAW GROUP, PLLC
742 VETERANS MEMORIAL HWY.
HAUPPAUGE, NY 11788
Upon the following papers numbered 1 to 73 read on this motion: Notice of Motion/ Order to Show Cause and supporting papers 1-57 (#005); Notice of Cross Motion and supporting papers___ ; Answering Affidavits and supporting papers___ ; Replying Affidavits and supporting papers 58-73 (#006); Other___ ; (and after hearing counsel in support and opposed to the motion) it is,
ORDERED that this motion by defendant Mitchell Coffey brought on by Order to Show Cause (Molia, J.) dated August 3, 2016 seeking an order pursuant to CPLR 3211(a), 5015 & 6301, RPAPL 1303 & NY Banking Law 6-1: 1) vacating the Judgment of Foreclosure and Sale (Gazzillo, J.) dated July 6, 2015; 3) dismissing the complaint; 3) conducting a hearing to determine damages pursuant to Banking Law 6-1; and 4) enjoining the plaintiff from seeking to evict individual(s) occupying the mortgaged premises known as 802 Taylor Avenue, East Patchogue, New York including staying a judgment and warrant of eviction issued in a Landlord/Tenant proceeding in District Court under Index # LT-944-16/BR is denied; and it is further
ORDERED that any restraining order resulting from execution of this Order to Show Cause including stays related to of the judgment and warrant of eviction issued in the Landlord/Tenant proceeding under Index # LT-944-16/BR are hereby vacated; and it is further
ORDERED that the cross motion by plaintiff amending the Judgment of Foreclosure and Sale (Gazzillo, J.) dated July 6, 2015 nunc pro tunc discontinuing the action against defendant Endora Coffey and amending the caption to delete the deceased party defendant Endora Coffey is granted.
Plaintiff commenced this action to foreclose a mortgage dated February 14, 2006 in the original sum of $210,000.00 executed by defendants Mitchell Coffey and Endora Coffey in favor of BNC Mortgage, Inc.. On the same date the defendants executed a promissory note promising to re-pay the entire amount of the indebtedness to the mortgage lender. The defendants defaulted in making timely monthly mortgage payments beginning April 1, 2008 and thereafter defaulted in appearing in the action by failing to timely serve an answer. By Order (Gazzillo, J.) dated April 8, 2010 plaintiff's default judgment motion was granted and a referee was appointed to compute the sums due and owing to the plaintiff. By Order (Gazzillo, J.) dated September 5, 2014 the original Order of Reference was amended. A Judgment of Foreclosure and Sale (Gazzillo, J.) was granted on July 6, 2015. The foreclosure sale was conducted on January 26, 2016 and, as a result, title to the mortgaged premises was conveyed by referee's deed dated February 29, 2016 to U.S. Bank Trust, N.A., as Trustee for LSF9 Master Participation Trust, 13801 Wireless Way, Oklahoma City, OK 73134, U.S Bank Trust commenced a Landlord/Tenant holdover proceeding in District Court, Patchogue, New York in April, 2016. After a trial, a judgment and warrant of eviction was granted. Execution of the warrant of eviction has been stayed.
Defendant's motion seeks an order vacating the Judgment of Foreclosure and Sale, dismissing the complaint, canceling the referee's deed, enjoining further eviction proceedings pending in District Court and awarding damages to the defendant Mitchell Coffey based upon the mortgage lender's claimed violation of NY Banking Law 6-1. Defendant claims that service of the RPAPL 1303 notice by plaintiff's process server on August 6, 2008 did not comply with statutory requirements and therefore the complaint must be dismissed. Defendant claims that the RPAPL 1303 notice filed by the plaintiff "was in the form of a summons and complaint rather than in the form of the required notice" and that the required "heading contained in the filed notice was halfway down the page". Defendant submits certified copies of RPAPl 1303 notice filed with the County Clerk and those copies reflect that the caption of the action is set forth on the top half of the page with the notice itself beginning approximately halfway down the page. Defendant also claims that because defendant/mortgagor Endora Coffey died on March 24, 2010 the action was stayed and based upon the plaintiff's failure to substitute a personal representative for the decedent/defendant, all actions taken after her death were void. Defendant also claims that the home loan issued by the mortgage lender was a "high-cost" home loan in violation of NY Banking Law 6-1 It is defendant's contention that the documentary proof submitted proves the costs and fees associated with the loan exceed threshold limits and therefore the complaint must be dismissed pursuant to CPLR 3211(a)(1) & (7) and as a result the defendant who, does not contest his default in failing to make any mortgage payments for nearly nine years, is entitled to damages based upon the plaintiff's Banking Law violations.
In opposition, the plaintiff submits an attorney's affirmation and claims that no legal basis exists to justify granting the defendant's motion. Plaintiff contends that the defendant defaulted in appearing by failing to serve an answer to the complaint and has provided neither a reasonable excuse for his default, nor an arguably meritorious defense to the foreclosure action. Plaintiff claims that the affidavit of service executed by the process server provides sufficient proof that the mortgage lender has complied with CPLR 308 & RPAPL 1303 requirements, by serving the summons and complaint and the RPAPL 1303 notice on August 6, 2008, thereby obtaining jurisdiction over the defendant. Plaintiff maintains that absent any demonstration of a reasonable excuse for his failure to timely serve an answer and of a meritorious defense, no legal basis exists to vacate all prior proceedings particularly since by defaulting the defendant has waived the defenses he now attempts to assert. Plaintiff claims that the restraining order imposed as a result of defendant's motion must he vacated so that the warrant of eviction can he executed. Plaintiff also claims that the cross motion to discontinue this action against the decedent Endora Coffey, nunc pro tunc, and to amend the caption must be granted since she is not an indispensable party to this proceeding and since the plaintiff has renounced any intention to seek a deficiency judgment against her estate.
Ordinarily a defendant seeking to vacate a default in appearing in an action pursuant to CPLR 5015 must provide a reasonable excuse for the default and demonstrate a potentially meritorious defense (see Eugene DiLorenzo, Inc. v. A.C. Dutton Lbr., Co, 67 NY2d 138, 501 NYS2d 8 (1986); Deutsche Bunk National Trust Co. v. Gutierrez, 102 AD3d 825, 958 NYS2d 472 (2nd Dept., 2013)). Among the relevant factors to be considered are the extent of the delay, whether there has been prejudice to the opposing parly, whether there has been willfulness, the public policy in favor of resolving cases on the merits and whether an untimely answer sets forth an arguably meritorious defense to the complaint (Dinstber v. Allstate Insurance Company, 75 AD3d 957, 906 NYS2d 636 (3rd Dept., 2010); Montgomery v. Cranes, Inc., 50 AD3d 81, 855 NYS2d 681 (2nd Dept., 2008)). In this case, the defendant cites CPLR 5015(a) (2), (3) & (4) as grounds for relief claiming "newly discovered evidence" (CPLR 5015(a)(2)), "fraud misrepresentation, or other misconduct" committed by plaintiff (CPLR 5015 (a)(3)), and "lack of jurisdiction to render the judgment or order" (CPLR 5015 (a)(4)).
With respect to defendant's claim that plaintiff's failure to serve an RPAPL 1303 compliant notice which therefore requires that the complaint be dismissed, proper service of the notice on the borrowers is a condition precedent to the commencement of a foreclosure action and the plaintiff has the burden of establishing compliance with the condition (Aurora Loan Services, LLC v. Weisblum, 85 AD3d 95, 923 NYS2d 609 (2nd Dept., 2011); First National Bunk of Chicago v. Silver, 73 AD3d 162, 899 NYS2d 256 (2nd Dept., 2010)). However, while considered a condition precedent, a failure to comply with the notice provision is not considered a jurisdictional defect sufficient to provide independent grounds for vacating a default by a party who has otherwise defaulted in appearing in an action (Flagstar Bunk, FSB v. Jambelli, 140 AD3d 829, 32 NYS3d 625 (2nd Dept., 2016); U.S. Bank, N.A. v. Carey, 137 AD3d 894, 28 NYS3d 68 (2nd Dept., 2016); Pritchard v. Curtis, 101 AD3d 1502, 957 NYS2d 440 (3rd Dept., 2012)).
In this case, the defendant has defaulted at every level of prosecution and is now attempting to raise a series of defenses nearly nine years after the action was commenced and even alter his right to redeem the premises has expired. Defendant has failed to provide any reasonable excuse for his continuing default and cannot claim that plaintiff's alleged failure to comply with RPAPL 1303 service requirements establish a meritorious defense without submission of proof of a reasonable excuse for his default or some other Statutory grounds consistent with those set forth pursuant to CPLR 5015(a)(2),(3)&(4). There is no proof in this record to show that the plaintiff committed fraud or other misconduct, and nowhere does the plaintiff establish that newly discovered evidence exists sufficient to vacate his default, or to prove that the court's prior order and judgment were without a jurisdictional predicate. Absent such proof or any reasonable explanation for the defendant's default in serving an answer, no basis exists to vacate the judgment, cancel the referee's deed and dismiss the complaint.
With respect to the defendant's allegations related to his denial of service of the summons and complaint with the RPAPL 1303 notice, the record shows that the defendant defaulted in appearing in the action after being personally served with the pleadings on August 6, 2008. Although defendant's affidavit makes a conclusory statement that "I do not recall receiving such paperwork", there is no further elaboration of this denial providing any details concerning plaintiff's alleged failure to obtain jurisdiction over him. Plaintiffs submission of a copy of the affidavit of service provides sufficient prima facie proof of due and proper service of the summons and complaint and the RPAPL 1303 notice, and defendant's conclusory denial of service fails to rebut the presumption of valid service (see U.S. Bank, N.A. v. Peralta, 142 AD3d 988, 2016 NY Slip Op 05987 (2nd Dept., 2016); Wells Fargo Bank, N.A. v. Walter, 142 AD3d 992, 2016 NY Slip Op 05990 (2nd Dept., 2016)). Moreover, with respect to the defendant's claim that the plaintiff violated Banking Law 6-1, such a defense has clearly been waived as a result of the defendant's nearly eight year default in opposing this foreclosure action.
With respect to defendant's claim that the death of Endora Coffey during the pendency of these proceedings requires an order vacating the judgment, the law provides that as a general rule, if a cause of action survives the death of a party, the death divests the court of jurisdiction until a duly appointed personal representative is substituted for the decedent (CPLR 1015; Giroux v. Dunlop Tire Corp., 16 AD3d 1068, 791 NYS2d 769 (4th Dept., 2005); Gonzalez v. Ford Motor Co., 295 AD2d 474, 744 NYS2d 468 (2nd Dept., 2002); Matter of Einstoss, 26 NY2d 181, 309 NYS2d 184 (1970)). However, where a party's death does not affect the merits of a case, there is no need for strict adherence to the requirement that the proceedings be stayed pending substitution (Bova v. Vinciguerra, 139 AD2d 797, 526 NYS2d 671 (3rd Dept., 1988); Alaska Seaboard Partners Ltd Partnership v. Grant, 20 AD3d 436, 799 NYS2d 117 (2nd Dept., 2002)).
In this case, the foreclosed premises were owned by the Coffey defendants as tenants by the entirely. By operation of law, upon the demise of one tenant by the entirety, the surviving tenant became seized of the entire ownership interest in the property (see Paterno v. CYC, LLC, 46 AD3d 788, 850 NYS2d 131 (2nd Dept., 2007); Matter of Violi, 65 NY2d 392, 492 NYS2d 550 (1985); Squiciarino v. Squiciarino, 35 AD3d 844, 830 NYS2d 163 (2nd Dept., 2006)). The rule is that a mortgagor who has made an absolute conveyance of all her interest in mortgaged premises, including her equity of redemption, is not a necessary party to foreclosure, unless a deficiency judgment is sought (FNMA v. Connelly, 84 AD2d 805, 444 NYS2d 147 (2nd Dept., 1981); Heidegard v. Reis, 135 AD 414, 119 NYS 921 (1st Dept., 1909); Mutual Life Insurance Co., Inc. Of New York v. Ninety-Fifth Street & Lexington Avenue Corp., 60 NYS2d 450 ( NY Cty. Sup. Ct., 1946)). Since, upon her death, defendant Endora Coffey retained no ownership interest in the premises, and in view of the fact that the hank has made application to discontinue the action, nunc pro tunc, against the decedent and has elected to waive any right it may have had to seek a deficiency judgment against her, there is no reason to vacate the prior judgment or to dismiss the complaint, since the defendant's demise did not affect the merits of this proceeding in any form (see HSBC Bank USA v. Ungar Family Realty Corp., 111 AD3d 673, 974 NYS2d 583 (2nd Dept., 2013); DLJ Mortgage Capital, Inc. v. 44 Brushy Neck Ltd., 51 AD3d 857, 859 NYS2d 221 (2nd Dept., 2008); FNMA v. Connelly, supra; Paterno v. CYC, LLC, supra; Countrywide Home Loans v. Keys, 27 Ad3d 247, 811 NYS2d 362 (1st Dept., 2006); see also Residential Credit Solutions, Inc. v. Lalju et al., 39 Misc 3 rd 1218(A), 975 NYS2d 369 (Queens Cty. Sup. Ct., 2013)). Plaintiff's cross motion seeking to discontinue this action against the decedent, nunc pro tunc, and to amend the caption accordingly is therefore granted.
With respect to the defendant's application for injunctive relief to enjoin execution of the warrant Of eviction in the underlying Landlord/Tenant proceeding, the law is clear that to obtain a preliminary injunction, the moving party must establish by clear and convincing evidence: 1) a likelihood of success on the merits; 2) irreparable injury absent injunctive relief; and 3) that the equities balance in his favor (Nobu Next Door, LLC v. Fine Arts Housing, Inc., 4 NY3d 839, 800 NYS2d 48 (2005)); Zoller v. HSBC Mortgage Corp (USA), 135 AD3d 932, 24 NYS3d 168 (2nd Dept., 2016); Chase Home Finance, LLC v. Cartelli, 140 AD3d 911, 2016 NY Slip Op 04685 (2nd Dept., 2016)). There is clearly no reason to further delay the eviction of tenants remaining on the premises owned by U.S. Bank Trust as a result of the referee's conveyance to the successful bidder more than one year ago on February 29, 2016. The defendant has failed to make any showing of a likelihood of success on the merits or to prove that the balancing of the equities weigh in favor of a mortgagor who has not made a mortgage payment in nearly nine years. The stay imposed as a result of submission of this motion by the defendant is hereby vacated.
Finally, as to defendant's remaining arguments seeking equitable relief and concerning allegations of fraud and misconduct, none of defendant's claims provide legal or equitable grounds to vacate the prior proceedings and actions taken by the court during the pendency of these proceedings. Defendant's claims of fraud and/or misconduct mainly concern the plaintiff's alleged concealment of the death of defendant Endora Coffey. While the defendant clearly knew of his wife's death and never notified the court, even were the court to concede that the plaintiff concealed that fact, no prejudice resulted from the "deceit" since upon her death, the defendant/her husband became the sole title owner of the dwelling and was in fact the only indispensable party to this action. Plaintiff's claimed "fraud" could have had no effect on the outcome of this action and the mortgage lender gained no "reward" as a result. Moreover, in terms of equity, the record shows that the defendant has freely resided in the premises since April, 2008, and never sought to assert any of the defenses he now raises until eviction became imminent, whereupon this motion was submitted and as a result, he or the parties who presently reside in the premises have gained many more months of living in quarters without payment therefor (at least not made to the present owner of the premises). Based upon these circumstances the defendant's motion is denied in its entirety and the plaintiff's cross motion is granted. The stay imposed as a result of execution of the order to show cause is hereby vacated. Dated: March 9, 2017
/s/_________
J.S.C.