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You are here: Home1 / Civil Procedure2 / ONCE PLAINTIFF RELEASED THE MORTGAGE UPON PAYMENT OF LESS THAN THE VALUE...
Civil Procedure, Foreclosure

ONCE PLAINTIFF RELEASED THE MORTGAGE UPON PAYMENT OF LESS THAN THE VALUE OF THE NOTE, PLAINTIFF COULD PROCEED AGAINST THE NOTE AND GUARANTY BY AMENDING THE FORECLOSURE COMPLAINT.

The Second Department, reversing Supreme Court, determined, once plaintiff agreed to release a mortgage in return for sale proceeds which were less than the value of the note, plaintiff could then commence a proceeding on the note and the guaranty. The court further held that the action on the note and guaranty could be accomplished by amending the original foreclosure complaint:

“RPAPL 1301(3) . . . prohibits a party from commencing an action at law to recover any part of the mortgage debt while the foreclosure proceeding is pending or has not reached final judgment, without leave of the court in which the foreclosure action was brought'” … . Conversely, “where a foreclosure action is no longer pending and did not result in a judgment in the plaintiff's favor, the plaintiff is not precluded from commencing a separate action' without leave of the court” … .

Here, since, pursuant to the parties' stipulation, the plaintiff agreed to accept the net proceeds of the sale in exchange for releasing the property from the mortgage and there was no judgment in the plaintiff's favor, the plaintiff was not precluded from seeking to recover on the note and guaranty by RPAPL 1301(3), “a statute which must be strictly construed” … .

Furthermore, there is no reason the plaintiff could not seek such relief by seeking leave to amend its complaint, rather than by commencing a new action … . TD Bank, N.A. v 250 Jackson Ave., LLC, 2016 NY Slip Op 01828, 2nd Dept 3-16-16

FORECLOSURE (PLAINTIFF COULD PROCEED AGAINST NOTE AND GUARANTY AFTER RELEASING MORTGAGE)/NOTE (FORECLOSURE, PLAINTIFF COULD PROCEED AGAINST NOTE AND GUARANTY AFTER RELEASING MORTGAGE)/MORTGAGES (FORECLOSURE, PLAINTIFF COULD PROCEED AGAINST NOTE AND GUARANTY AFTER RELEASING MORTGAGE)/DEBTOR-CREDITOR  (FORECLOSURE, PLAINTIFF COULD PROCEED AGAINST NOTE AND GUARANTY AFTER RELEASING MORTGAGE)/CIVIL PROCEDURE (AMENDING COMPLAINT, AFTER RELEASING MORTGAGE, PLAINTIFF COULD PROCEED AGAINST THE NOTE AND GUARANTEE BY AMENDING THE ORIGINAL FORECLOSURE COMPLAINT)

March 16, 2016
Tags: Second Department
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https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png 0 0 CurlyHost https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png CurlyHost2016-03-16 12:35:352020-01-26 18:50:28ONCE PLAINTIFF RELEASED THE MORTGAGE UPON PAYMENT OF LESS THAN THE VALUE OF THE NOTE, PLAINTIFF COULD PROCEED AGAINST THE NOTE AND GUARANTY BY AMENDING THE FORECLOSURE COMPLAINT.
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THE DEFENDANT HOSPITAL DID NOT DEMONSTRATE THAT A DOCTOR ORDERED THE RESTRAINT OF PLAINTIFF’S DECEDENT AND THEREFORE DID NOT DEMONSTRATE THAT MEDICAL MALPRACTICE, AS OPPOSED TO NEGLIGENCE, WAS THE APPROPRIATE THEORY; THE ACTION SHOULD NOT HAVE BEEN DISMISSED BASED UPON THE EXPIRATION OF THE 2 1/2 YEAR STATUTE OF LIMITATIONS FOR MEDICAL MALPRACTICE (SECOND DEPT).
FAILURE TO WARN WAS NOT A SUBSTANTIAL CAUSE OF THE INJURIES AND DEATHS IN THIS PRODUCTS LIABILITY ACTION, DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN GRANTED (SECOND DEPT).
THE COMPLAINT ADEQUATELY ALLEGED FACTS SUPPORTING PIERCING THE CORPORATE VEIL; THE CAUSES OF ACTION FOR UNJUST ENRICHMENT AND BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT).
PLAINTIFF DID NOT HAVE STANDING TO CONTEST PROPERTY TRANSFER TO HER BROTHER BY HER MOTHER BASED UPON AN ALLEGATION MOTHER LACKED MENTAL CAPACITY AT THE TIME OF THE TRANSFER, PLAINTIFF HAD ONLY A POTENTIAL, SPECULATIVE INTEREST IN HER MOTHER’S PROPERTY.
THE CONTRACT PROPERLY ACCORDED THE ARBITRATOR THE AUTHORITY TO DETERMINE “GATEWAY” QUESTIONS OF ARBITRABILITY; NONSIGNATORIES ARE COMPELLED TO ARBITRATE (SECOND DEPT).
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