Opinion
22316/10
07-29-2020
WELLS FARGO BANK, NA, Plaintiff, v. George VITTORIS, Mortgage Electronic Registration Systems, Inc., as Nominee for America's Wholesale Lender, New York City Environmental Control Board; New York City Parking Violations Bureau ; New York City Transit Adjudication Bureau, "Jane" Vittoris, Defendants.
The following papers numbered 1 to 7 read on this motion by defendant for an order (I) dismissing this action against defendant George E. Vittoris ("Defendant"), and vacating the June 12, 2015 Order of Reference ("OR") and the March 1, 2018 Judgment of Foreclosure and Sale ("JFS"), for plaintiff's failure to take steps towards entry of judgment within one year of Defendant's alleged default, as required by CPLR§ 3215(c) ; (ii) dismissing the action against Defendant, pursuant to CPLR § 3211(a)(8), and vacating the OR and the JFS pursuant to CPLR § 5015(a)(4), for the lack of personal jurisdiction over Defendant due to Plaintiff's failure to effect personal service of the summons and complaint on him; (iii) in the alternative to the relief specified in items (i) and (ii) above, vacating Defendant's alleged default, the OR and the JFS, canceling the scheduled sale of the subject premises and compelling plaintiff to accept defendant's answer which it had rejected for lateness pursuant to CPLR § 3012(d) and 5015(a)(1) ; (iv) vacating JFS, and canceling the scheduled sale of the subject premises for the additional reason that plaintiff's failed to serve the motions for the OR and the JFS, and the JFS, on defendant; (v) temporarily staying the foreclosure sale scheduled for January 17, 2020, and enjoining any actions by plaintiff, or by its agents and attorneys, to enforce the JFS, including any further efforts to sell the mortgaged premises, pending the hearing and determination of the instant Order to Show Cause; pursuant to CPLR 6301, et al.
PAPERS NUMBERED
Order to Show Cause and Affirmations and Affidavit in Support and Exhibits 1-4
Affirmation in Opposition and Exhibits 5-6
Reply Affirmation 7
Upon the foregoing papers, it is hereby ordered that the motion is resolved as follows:
In an action to foreclose a mortgage, Defendant brings the within motion to dismiss the action against Defendant, vacate the Order of Reference granted on June 12, 2015 and the Judgment of Foreclosure and Sale granted on March 1, 2018, for Plaintiff's failure to take steps toward entry of judgment within one year of Defendant's alleged default, as required by C.P.L.R. § 3215 (c).
As more fully set forth below, it is hereby ordered that the Order of Reference is vacated, the Judgment of Foreclosure and Sale is vacated, and the matter is dismissed.
BACKGROUND
The salient facts of this matter are as follows: Plaintiff, Wells Fargo Bank, N.A., (hereinafter "Wells Fargo") filed the summons and complaint in the within action on or about September 1, 2010. Plaintiff alleges substituted service on the Defendant on September 9, 2010. Plaintiff filed the affidavit of service with the Queens County Clerk on September 9, 2010. A Foreclosure Settlement Conference was held on March 22, 2011, at which time it was determined that no settlement could be reached and the matter was released from the Conference Part. George Vittoris' (herienafter "Vittoris") filed an Answer on December 30, 2011. Plaintiff rejected Defendant's answer on January 4, 2012, as untimely. Defendant served a Notice of Rejection on January 19, 2012. Plaintiff moved to hold Defendants in default and for an Order of Reference on October 12, 2012. On October 30, 2012, the area in which the subject property is located was declared a Federal Disaster Area and foreclosure activity was suspended. Plaintiff's motion for an Order of Reference was denied without prejudice on March 5, 2013, due to the relief of Defendant Vittoris' counsel. In the Order relieving counsel, the Court granted a sixty (60) day stay to allow Defendant Vittoris' to obtain new counsel. The stay was subsequently lifted by Order dated December 10, 2014. Plaintiff moved again for an Order of Reference by motion dated August 26, 2014, which was granted by this Court on June 12, 2015. The Judgment of Foreclosure and Sale was issued on March 1, 2018.
DISCUSSION
Defendant brings the within motion to dismiss the action against Defendant, to vacate the Order of Reference granted on June 12, 2015 and the Judgment of Foreclosure and Sale granted on March 1, 2018, because Plaintiff failed to move for the entry of judgment within one year of Defendant's alleged default, as required by C.P.L.R § 3215(c).
C.P.L.R § 3215(c) 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 ... upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed." "The language of CPLR 3215 (c) is not, in the first instance, discretionary, but mandatory, inasmuch as courts ‘shall’ dismiss claims ( CPLR 3215[c] ) for which default judgments are not sought within the requisite one year period, as those claims are then deemed abandoned." HSBC Bank USA, N.A. v. Grella , 145 AD3d 669, 671 (2d Dep't 2016), quoting Giglio v. NTIMP, Inc. , 86 AD3d 301, 307—08 (2d Dep't 2011). However, failure to take proceedings for entry of judgment within the one-year requisite period may be excused upon a showing of sufficient cause, which requires the plaintiff to "demonstrate that it had a reasonable excuse for the delay in taking proceedings for entry of a default judgment and that it has a potentially meritorious action." HSBC Bank USA, N.A. v. Jean , 165 AD3d 632, 634 (2d Dep't 2018) quoting Aurora Loan Serv., LLC v. Hiyo , 130 AD3d 763, 764 (2d Dep't 2015). The determination of whether an excuse is reasonable lies within the sound discretion of the Supreme Court. See Giglio , 86 AD3d at 308 ; McHenry v. San Miguel , 54 AD3d 912, 913 (2d Dep't 2008).
Here, it is undisputed that Plaintiff did not take proceedings for entry of judgment within the one-year requisite period after Defendant failed to appear or answer by October 20, 2010. Substituted service upon Defendant was complete on September 10, 2010, and Defendant defaulted by failing to serve an answer within thirty days pursuant to C.P.L.R. § 320 (a). Thereafter, Plaintiff took no steps to seek leave to enter a default judgment against Defendant until it moved for an order of reference on October 9, 2012, nearly two years after Defendant's default. As Plaintiff failed to take proceedings for the entry of judgment within one year after Defendant's default, to avoid dismissal of the complaint insofar as asserted against Defendant, Plaintiff was required to make a showing of sufficient cause, which required that it demonstrate that it had a reasonable excuse for its delay in taking proceedings for the entry of a judgment and that it had a potentially meritorious action. See NY C.P.L.R 3215 (c) (McKinney 2019); HSBC Bank v. Jean , 165 AD3d at 634, quoting Aurora Loan Serv. , 130 AD3d at 764. Under the circumstances presented, Plaintiff failed to demonstrate that it had a reasonable excuse for its delay in taking proceedings for the entry of a judgment against Defendant. Although Plaintiff was suspended from moving forward with foreclosure activities due to FEMA's declaration, that suspension did not constitute a reasonable excuse because it was issued on October 30, 2012, more than two years after Defendant defaulted. Moreover, the fact that Plaintiff's motion for an order of reference was denied due to Defendant's counsel filing an order to show cause to be relieved as counsel, also did not constitute a reasonable excuse for Plaintiff's delay since Defendant's counsel did not make such motion until December 14, 2012 — more than two years after Defendant defaulted. As Plaintiff failed to meet its burden to show sufficient cause why the action should not be dismissed insofar as asserted against Defendant, the Supreme Court should not have granted Plaintiff's order of reference.
Accordingly, denial of the motion and dismissal of the complaint as abandoned is mandated. ( CPLR 3215[c] ; see Van Hoesen v. Dolen , 94 AD3d 1264, 1267-1268 [2012] ; Giglio v. NTIMP, Inc. , 86 AD3d 301 [2011] ; Mejia-Ortiz v. Inoa , 71 AD3d 517 [2010] ; Shinn v. City of New York , 65 AD3d 621 [2009] ; DuBois v. Roslyn Natl. Mtge. Corp. , 52 AD3d 564 [2008].)
CONCLUSION
For the reasons set forth above, Defendant's motion pursuant to C.P.L.R. § 3215 (c) to dismiss the action against Defendant, to vacate the Order of Reference granted on June 12, 2015 and to vacate the Judgment of Foreclosure and Sale granted on March 1, 2018, is granted.
Submit order.