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DEFENDANTS’ DEFAULT IN MAKING MORTGAGE PAYMENTS WAS NOT SUPPORTED BY THE SUBMISSION OF THE RELEVANT BUSINESS RECORDS; THEREFORE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the proof of defendants’ default in mortgage payments was based upon business records which were not produced:

… [T]he plaintiff failed to establish, prima facie, the defendants’ default in payment by submitting the affidavit of Haley Pope, the Foreclosure Manager for its loan servicer. Pope did not specifically state that she had personal knowledge of the defendants’ default in payment. To the extent Pope relied on her review of business records, she did not identify which records she relied on to assert a default in payment, or attach any business records to her affidavit to substantiate the alleged default in payment. Thus, the plaintiff failed to meet its prima facie burden by relying on Pope’s conclusory assertion that the defendants defaulted in payment, which was not supported by a factual basis … . Wilmington Sav. Fund Socy., FSB v McLaughlin, 2021 NY Slip Op 04576, Second Dept 7-28-21

 

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ALTHOUGH DEFENDANT WAS IN DEFAULT IN THIS FORECLOSURE ACTION, SHE STILL CAN CONTEST THE AMOUNT OWED; THE REFEREE’S REPORT HERE WAS REJECTED BECAUSE IT WAS BASED IN PART ON UNPRODUCED BUSINESS RECORDS AND THE MATTER WAS REMITTED FOR RECALCULATION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the referee’s report in this foreclosure action should have been rejected because it was based in part on business records which were not produced. Although defendant was in default, she still could contest the amount owed:

The fact that the defendant defaulted in appearing did not mean that she was precluded from contesting the amount owed … . The Supreme Court should not have confirmed the referee’s report because the referee’s recommendation that the plaintiff be awarded tax and hazard insurance disbursements was premised upon unproduced business records … . Consequently, the referee’s findings with respect to the total amount due upon the mortgage were not substantially supported by the record … . Accordingly, we reject the referee’s report and remit the matter to the Supreme Court, Kings County, for a new report computing the amount due to the plaintiff, followed by further proceedings in accordance with CPLR 4403 and the entry of an appropriate amended judgment thereafter. Wells Fargo Bank, N.A. v Campbell, 2021 NY Slip Op 04574, Second Dept 7-28-21

 

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THE BUSINESS RECORDS REFERRED TO IN THE SUPPORTING AFFIDAVIT WERE NOT ATTACHED; THE BANK’S MOTION FOR A DEFAULT JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s motion for a default judgment in this foreclosure action should not have been granted. The business records referred in the affidavit of the banks servicing agent were not attached:

Where, as here, a foreclosure complaint is not verified, CPLR 3215(f) states, among other things, that upon any application for a judgment by default, proof of the facts constituting the claim, the default, and the amount due are to be set forth in an affidavit made by the party'” … . Here, in support of its motion, the plaintiff submitted an affidavit of merit executed by a “Document Execution Specialist” who was employed by the plaintiff’s servicing agent … . The affiant asserted that she had personal knowledge of the merits of the plaintiff’s cause of action based upon her review of various business records. However, as the defendants correctly contend, since the plaintiff failed to attach the business records upon which the affiant relied in her affidavit, her factual assertions based upon those records constituted inadmissible hearsay, and her affidavit was insufficient to demonstrate “proof of the facts constituting the claim” … . Deutsche Bank Natl. Trust Co. v Hossain, 2021 NY Slip Op 04480, Second Dept 7-21-21

 

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A STAY OF THE FORECLOSURE PROCEEDINGS WAS TRIGGERED BY THE SUSPENSION OF DEFENDANT’S ATTORNEY; BUT THE APPEARANCE OF NEW COUNSEL FOR THE DEFENDANT TO OPPOSE PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT WAIVED THE PROTECTION OF THE STAY (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Dillon,, determined the defendant in this foreclosure action waived any stay of proceedings under CPLR 321(c) triggered by her attorney’s suspension:

CPLR 321(c) … provides any adversary party with a mechanism for lifting a stay—by serving a notice upon the nonrepresented party to obtain a new attorney.  Thus there are … two ways in which a CPLR 321(c) stay may be lifted. One way is if the party that lost its counsel retains new counsel at its own initiative, or otherwise communicates an intention to proceed pro se … . The second way is by means of the above-described notice procedure … . …

… [T]he plaintiff moved … for summary judgment … and for an order of reference … at a time when no event allowing for the lifting of the CPLR 321(c) stay had yet occurred. No new attorney had yet appeared on behalf of the defendant, and there is no indication that the defendant had elected to proceed pro se … . Moreover, the plaintiff moved for summary judgment without having served a CPLR 321(c) notice demanding the appointment of new counsel and without abiding by the statutorily mandated 30-day waiting period that follows the notice.

Nevertheless, the defendant’s new counsel formally appeared in the action six days after the plaintiff’s summary judgment motion was filed, submitted papers in opposition to that motion, and cross-moved to dismiss the complaint insofar as asserted against the defendant, all within the original or adjusted briefing schedule. … The appearance and activities of the defendant’s new counsel operated, in effect, as a waiver of the protections otherwise afforded to the defendant by CPLR 321(c) … . Wells Fargo Bank, N.A. v Kurian, 2021 NY Slip Op 04509, Second Dept 7-31-21

 

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SUPREME COURT HAD THE AUTHORITY UNDER CPLR 3001 TO ISSUE A DECLARATORY JUDGMENT ON THE PROPER RATE FOR POST-JUDGMENT INTEREST; ANOTHER COURT’S PRIOR DISCUSSION OF THE PROPER INTEREST RATE WAS MERELY ADVISORY (I.E., NOT ON THE MERITS) AND THEREFORE WAS NOT SUBJECT TO THE DOCTRINES OF RES JUDICATA, COLLATERAL ESTOPPEL OR LAW OF THE CASE (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Dillon, over an extensive dissent, determined (1) Supreme Court had the power to issue a declaratory judgment in this hybrid proceeding seeking a declaratory judgment on the rate of post-judgment interest; and (2) Supreme Court correctly found that dicta in a prior ruling about the proper post-judgment interest rate (i.e., that the rate should be 9% per year under the CPLR, not 2% per month under the Insurance Law) was merely “advisory” and therefore was not controlling under the doctrines of collateral estoppel, res judicata, or law of the case. Supreme Court’s finding that the Insurance Law interest rate applied was affirmed. Using that rate the original 2001 judgment of $8,842.49 had apparently grown to $229,981.66 as of 2015:

CPLR 3001 uniquely vests the Supreme Court with authority to render declaratory judgments to the exclusion of other courts of the state. … [T]o the extent [respondent] wished to obtain a declaratory judgment governing the rate of interest on its judgment, … with appellate remedies correctly foreclosed, the Supreme Court was the only court where it could seek redress on that issue. * * *

… [T]he Appellate Term’s expression in its decision and order dated August 18, 2017, regarding the applicable rate of interest was not determined on the merits, but was instead merely advisory. * * *

… [Appellant] was unable to establish that there was a determination on the merits in any prior proceeding about the proper rate of interest applicable to the judgment, as to preclude the Supreme Court from considering the issue de novo … . Matter of B.Z. Chiropractic, P.C. v Allstate Ins. Co., 2021 NY Slip Op 04484, Second Dept 7-21-21

 

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MOTHER’S ATTORNEY SHOULD NOT HAVE BEEN ALLOWED TO WITHDRAW WITHOUT NOTICE TO MOTHER WHO DID NOT ATTEND THE TERMINATION-OF-PARENTAL-RIGHTS HEARING; THE DEFAULT ORDER TERMINATING MOTHER’S PARENTAL RIGHTS WAS THEREFORE IMPROPER AND APPEAL IS NOT PRECLUDED (FOURTH DEPT).

The Fourth Department, reversing Family Court, determined the default order terminating mother’s parental rights was improper because mother’s attorney was allowed to withdraw without notice to mother. Because the default order was improper, mother’s appeal is not precluded (default orders are not appealable):

In this proceeding pursuant to Social Services Law § 384-b,respondent mother contends that Family Court erred in allowing the mother’s attorney to withdraw as counsel and in proceeding with the hearing in the mother’s absence. We agree. ” ‘An attorney may withdraw as counsel of record only upon a showing of good and sufficient cause and upon reasonable notice to the client . . . [, and a] purported withdrawal without proof that reasonable notice was given is ineffective’ ” … . Because there is no indication in the record that the mother’s attorney informed her that he was seeking to withdraw as counsel, the court should not have relieved him as counsel … . Although, generally, no appeal lies from an order entered on default (see CPLR 5511 …), here, the absence of evidence that the mother was put on notice of her attorney’s motion to withdraw renders the finding of default improper, and thus the mother’s appeal is not precluded … . We therefore reverse the order and remit the matter to Family Court for the assignment of new counsel and a new hearing … . Matter of Calvin L.W. (Dominique H.), 2021 NY Slip Op 04470, Fourth Dept 7-15-21

 

THE REFUSAL OF DEFENDANT’S REQUEST TO POLL THE JURY REQUIRED A NEW TRIAL (FOURTH DEPT).

The Fourth Department, reversing the judgment, determined defendant’s request to poll the jury should not have been denied:

Plaintiff commenced this action seeking damages for, inter alia, assault and battery, and in his amended answer defendant asserted counterclaims for, inter alia, defamation. The matter proceeded to trial, and now plaintiff appeals and defendant cross-appeals from an order and judgment of Supreme Court that denied the parties’ respective motions to set aside portions of the jury verdict and, upon the jury verdict, awarded damages both to plaintiff and to defendant. We reverse.

We agree with defendant on his cross appeal that the court erred in denying his request to poll the jury. “A party has an absolute right to poll the jury, and a court’s denial of that right mandates reversal and a new trial” … . We therefore reverse the order and judgment and remit the matter to Supreme Court for a new trial … . Fitzgerald v Kula, 2021 NY Slip Op 04452, Fourth Dept 7-16-21

 

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DISCOVERY REQUESTS AIMED AT AN ISSUE WHICH WAS ADMITTED BY DEFENDANTS SHOULD NOT HAVE BEEN GRANTED; BECAUSE THE ALTERNATIVE ARGUMENT FOR THE DISCOVERY REQUESTS WAS NOT SUPPORTED BY A MEMO IN THE RECORD DEMONSTRATING THE ISSUE WAS PRESERVED, THE ARGUMENT WAS REJECTED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined defendants’ discovery requests in this traffic accident case should not have been granted. The requests for defendants’ cell phone records and receipts for food and beverages on the day of the accident were aimed at demonstrating the identity of the driver of defendants’ vehicle. But the identity of the driver had been admitted by the defendants. Plaintiff’s alternative argument was rejected because there was no memorandum of law in the record to demonstrate the issue had been raised below:

Given the prior admission establishing that [defendant] Vladyslav was the operator of the pickup truck, plaintiff “failed to meet the threshold for disclosure by showing that [his] request for [defendants’] cell phone [records and records for food and beverage purchases] was reasonably calculated to yield information material and necessary to [his action]” … . …

Plaintiff … contends, as an alternative ground for affirmance, that there is a different reason supporting disclosure that was not included in his discovery requests or motion papers in the record on appeal, i.e., the requested records are potentially relevant to identifying witnesses who could testify about Vladyslav’s physical condition on the night of the accident and to determining whether Vladyslav was intoxicated or impaired. On the record before us, which does not include any memoranda of law despite our repeated and longstanding advisements that such memoranda may properly be included in the record on appeal for the limited purpose of determining preservation … , we conclude that plaintiff’s contention is not properly before us inasmuch as it is raised for the first time on appeal … . Brennan v Demydyuk, 2021 NY Slip Op 04425, Fourth Dept 7-16-21

 

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THE JUDGE SHOULD NOT HAVE DISMISSED DEFENDANTS’ AFFIRMATIVE DEFENSES BECAUSE PLAINTIFF DID NOT REQUEST THAT RELIEF (SECOND DEPT).

The Second Department noted that the judge should not have ordered relief not requested by the plaintiff:

… [T]he Supreme Court erred by, in effect, sua sponte, directing dismissal of all of [defendants’] affirmative defenses to the complaint … . The plaintiff did not move for summary judgment dismissing any of [defendant’s] affirmative defenses, and the court erred in awarding this unrequested relief … .  MacKay v Paliotta, 2021 NY Slip Op 04348, Second Dept 7-15-21

 

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ALTHOUGH DOMINICA, THE EXECUTRIX OF JOSEPHINE’S ESTATE, WAS NEVER SUBSTITUTED FOR JOSEPHINE AFTER JOSEPHINE’S DEATH, DOMINICA APPEARED AND ACTIVELY LITIGATED A MOTION TO VACATE; THE FAILURE TO EFFECT SUBSTITUTION IN THAT CIRCUMSTANCE IS A MERE IRREGULARITY; TWO-JUSTICE DISSENT (FOURTH DEPT).

The Fourth Department, over a two-justice dissent, determined the failure to substitute the executrix of Josephine’s estate, Dominica P., after Josephine’s death did not nullify the proceedings. Dominca P appeared and actively litigated a motion to vacate brought by Kathleen. In that circumstance the failure to effect substitution was deemed a mere irregularity:

Josephine died at some point before the entry of the order on appeal, and the executrix of her estate, Dominica P., was never formally substituted as the petitioner in this proceeding. There is no dispute, however, that Dominica was properly served with Kathleen’s motion to vacate, and Dominica never objected to adjudicating Kathleen’s motion in the absence of a formal substitution order. To the contrary, Dominica—acting in her capacity as the executrix of Josephine’s estate—appeared and successfully opposed Kathleen’s motion on the merits. Dominica likewise appeared in this Court to oppose Kathleen’s appeal. Because Dominica appeared and actively litigated Kathleen’s motion on the merits, it is well established that any “defect in failing to first effect substitution was a mere irregularity” … . Moreover, to formally correct this irregularity, we now modify the order by substituting Dominica as the petitioner in this proceeding … . Matter of Robinson v Kathleen B., 2021 NY Slip Op 04320, Fourth Dept 7-9-21

 

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