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ONLY THE HUSBAND TOOK OUT A MORTGAGE AND DEFENDANTS DENIED THE ALLEGATION IN THE COMPLAINT THAT THE WIFE’S INTEREST WAS SUBJECT TO AN EQUITABLE MORTGAGE; THEREFORE THE BANK’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED; THE COURT NOTED THAT “NEITHER ADMITTED NOR DENIED” IN AN ANSWER TO A COMPLAINT IS DEEMED AN ADMISSION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank did not demonstrate its foreclosure action could affect the wife’s (Gloria’s) interest in the property based on the husband’s (David’s) mortgage. It was not necessary for defendants to claim that Gloria’s interest was not subject to an equitable mortgage as an affirmative defense. [Although not related to the equitable mortgage issue, the Second Department noted that “Neither Admitted nor Denied” in an answer to an allegation in a complaint should be deemed to admit the allegation (see CPLR 3018[a] …)]:

… [W]e disagree with the plaintiff’s contention that the defendants, by not pleading it as an affirmative defense, waived their defense to the cause of action relating to the alleged equitable mortgage on Gloria Saff’s interest in the subject property. “CPLR 3018, which governs responsive pleadings, draws a distinction between denials and affirmative defenses” … . “Denials generally relate to allegations setting forth the essential elements that must be proved in order to sustain the particular cause of action” and “[t]hus a mere denial of one or more elements of the cause of action will suffice to place them in issue” … . A defendant, however, must plead, as an affirmative defense, “all matters which, if not pleaded, would be likely to take the adverse party by surprise or would raise issues of fact not appearing on the face of a prior pleading” … . Here, the defendants, in their answer, denied the allegations in the complaint relating to the existence of an equitable mortgage on Gloria Saff’s interest in the subject property. As the denials of an equitable mortgage were in response to allegations in the complaint, they would not take the plaintiff by surprise. * * *

Where spouses own property as tenants by the entirety, a conveyance by one spouse, to which the other has not consented, cannot bind the entire fee … . The mortgage executed by David Saff did not encumber Gloria Saff’s interest in the subject property, and the plaintiff failed to submit evidence demonstrating that it held an equitable mortgage on Gloria Saff’s interest in the subject property. Thus, the Supreme Court should have denied those branches of the plaintiff’s motion which were for summary judgment on the causes of action to foreclose the mortgage and for a judgment declaring that the plaintiff has an equitable mortgage against the interest of Gloria Saff in the subject property. U.S. Bank N.A. v Saff, 2021 NY Slip Op 00590, Second Dept 2-3-21

 

RATHER THAN DISMISSING THE COMPLAINT, SUPREME COURT SHOULD HAVE ORDERED THE NECESSARY PARTIES SUMMONED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the motion to dismiss should not have been granted on the ground plaintiffs failed to join necessary parties. The court should have ordered the parties summoned:

Necessary parties are those “who ought to be parties if complete relief is to be accorded between the persons who are parties to the action or who might be inequitably affected by a judgment in the action” (CPLR 1001[a] …). Here, the Supreme Court correctly determined that the Limited Partnership and the third limited partner, Ai Ying Zheng, are necessary parties to this action … . …

… [A]s the Limited Partnership and Ai Ying Zheng are subject to the jurisdiction of the Supreme Court, the court should have “order[ed][them] summoned,” rather than granting the motion to dismiss the complaint for failure to join necessary parties (CPLR 1001[b]…). Ji Juan Lin v Bo Jin Zhu, 2021 NY Slip Op 00550, Second Dept 2-3-21

 

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A PLENARY ACTION WAS REQUIRED TO SET ASIDE THE STIPULATION OF SETTLEMENT WHICH WAS INCORPORATED BUT NOT MERGED INTO THE JUDGMENT OF DIVORCE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined Supreme Court did not have the authority to declare certain portions of the stipulation of settlement invalid. A plenary action was necessary:

… [A] plenary action was required to seek to set aside the stipulation of settlement, which was incorporated but not merged into the judgment of divorce … . There are exceptions to this general rule, such as where reformation of a separation agreement is sought to conform the agreement with the intent of the parties … , or where the matrimonial action is still pending and was not terminated with entry of a judgment … , or in certain circumstances where enforcement of child support is sought … . None of these exceptions are applicable here.

In view of the foregoing, those branches of the plaintiff’s cross motion which were to vacate the provisions of the stipulation of settlement concerning equitable distribution and maintenance should have been denied. Jagassar v Deonarine, 2021 NY Slip Op 00549, Second Dept 2-3-21

 

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BEFORE PETITIONER INMATE’S ARTICLE 78 PETITION WAS CONSIDERED RESPONDENT VOLUNTARILY REVERSED THE GUILTY FINDINGS ON THE PRISON DISCIPLINARY VIOLATIONS; PETITIONER WAS NOT ENTITLED TO ATTORNEY’S FEES PURSUANT TO THE EQUAL ACCESS TO JUSTICE ACT UNDER THE “CATALYST THEORY” (THIRD DEPT).

The Third Department determined petitioner inmate was not entitled to attorney’s fees as a prevailing party pursuant to the Equal Access to Justice Act [EAJA] (CPLR Article 86). Petitioner contested guilty findings on several prison disciplinary violations and brought an Article 78 proceeding. Before the Article 78 petition was considered the respondent reversed the disposition and expunged it from petitioner’s prison record. Petitioner then sought attorney’s fees as the prevailing party:

Petitioner contends that he is entitled to counsel fees because he prevailed in the litigation under the “catalyst theory.” [The catalyst theory posits that a petitioner is a prevailing party if the desired result is achieved because the proceeding brought about the voluntary change in the respondent’s conduct … .] * * *

Although this Court has not decided whether it will adopt the catalyst theory in EAJA cases, when this Court has been asked to adopt the catalyst theory in other counsel fee award cases, it has declined to do so as the “United States Supreme Court has clearly held that a voluntary resolution of a matter lacks the necessary judicial imprimatur to warrant an award of [counsel] fees” … . … [T]he Court of Appeals specifically agreed … . The same reasoning applies here. The change in the legal relationship was accomplished prior to answering the petition, was based on the voluntary actions of the Department of Corrections and Community Supervision, and was “not enforced by a consent decree or judgment of Supreme Court” … . Matter of Clarke v Annucci, 2021 NY Slip Op 00473, Third Dept 1-28-21

 

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DEFENDANT ATTORNEY’S AFFIDAVIT IN SUPPORT OF ADMITTING LAW-FIRM BUSINESS RECORDS DID NOT INDICATE THE AFFIANT WAS FAMILIAR WITH THE RECORD KEEPING PRACTICES AND PROCEDURES OF THE LAW FIRM; THEREFORE THE COURT SHOULD NOT HAVE CONSIDERED THE RECORDS IN THE SUMMARY JUDGMENT PROCEEDINGS (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendants failed to lay a proper foundation for the admissibility of business records (the Matter Ledger Card) which purported to describe the legal work done by defendants for plaintiff:

We agree with the plaintiff that the court should not have considered these documents because the defendants failed to submit them in admissible form … .

The defendants failed to lay a proper foundation for the admissibility of the Matter Ledger Card pursuant to CPLR 4518. “A proper foundation for the admission of a business record must be provided by someone with personal knowledge of the maker’s business practices and procedures” … . [Defendant’s] affidavit failed to set forth that he “was personally familiar with [the law firm’s] record keeping practices and procedures” and, as a result, failed to lay a proper foundation for the admission of the Matter Ledger Card concerning the plaintiff’s payment history … . Anghel v Ruskin Moscou Faltischek, P.C., 2021 NY Slip Op 00403, Second Dept 1-27-21

 

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ALTHOUGH DEFENDANTS MISSED THE DEADLINE AND THEREBY WAIVED THE RIGHT TO MEDICAL EXAMINATIONS OF PLAINTIFF, THE MOTION TO STRIKE THE NOTE OF ISSUE AND COMPEL AN EXAM SHOUD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the defendants’ motion to strike the note of issue and certificate of readiness and compel a medical examination of plaintiff should have been granted. Although the defendants missed the agreed deadline for the exam, they had an adequate excuse and there was no prejudice:

Although a defendant waives the right to medical examinations of the plaintiff by failing to conduct them within the time period set forth in compliance conference orders … , “under certain circumstances and absent a showing of prejudice to the opposing party, the court may exercise its discretion to relieve a party of a waiver of the right to conduct a physical examination” … . Here, a scheduled medical examination of the plaintiff failed to happen due to a clerical error by the vendor that scheduled the examination. Consequently, the defendants did not have the opportunity to conduct an independent medical examination of the plaintiff. Further, no prejudice was shown by the plaintiff. Andujar v Boyle, 2021 NY Slip Op 00400, Second Dept 1-27-21

 

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DEFENDANTS DID NOT SEEK LEAVE OF COURT TO FILE A LATE MOTION FOR SUMMARY JUDGMENT AND OFFERED AN EXPLANATION FOR THE FIRST TIME IN REPLY PAPERS; THE EXPLANATION SHOULD NOT HAVE BEEN CONSIDERED AND THE MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s late motion for summary judgment should not have been granted. Defendants did not seek permission to make the late motion and only offered an explanation for the delay in reply papers, which should not have been considered:

Pursuant to CPLR 3212(a), unless the trial court directs otherwise, a motion for summary judgment “shall be made no later than one hundred twenty days after the filing of the note of issue, except with leave of court on good cause shown” … . Here, the defendants moved for summary judgment dismissing the complaint more than 120 days after the filing of the note of issue without seeking leave of court or offering an explanation showing good cause for their delay. As a result, the Supreme Court improvidently exercised its discretion in considering the defendants’ good cause argument, presented for the first time in reply papers, and in granting their motion … . Rivera v Zouzias, 2021 NY Slip Op 00443, Second Dept 1-27-21

 

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CPLR 205 (A), WHICH ALLOWS AN ACTION TO BE REFILED WITHIN SIX MONTHS OF DISMISSAL, DOES NOT APPLY TO MOTIONS; THE DEFENDANTS WERE AGGRIEVED BY AN ORDER WHICH STAYED THE PROCEEDINGS FOR FURTHER SUBMISSIONS AND THEREFORE COULD APPEAL THE ORDER (THIRD DEPT).

The Third Department, reversing Supreme Court, over a dissent, determined CPLR 205 (a), which allows an action to be refiled within six months of dismissal under certain conditions, does not apply to motions. Here the plaintiff sought to bring a second motion for a deficiency judgment pursuant to Real Property Actions and Proceedings Law (RPAPL) 1371 after the first was deemed untimely because it was not served within the 90-day time-frame. The dissenter argued the defendants were not aggrieved by the lower court’s order which stayed the proceedings for further submissions and therefore could not appeal:

As an initial matter, plaintiff contends that, because Supreme Court did not ultimately rule on the relief sought — namely a deficiency judgment — and instead issued a stay to allow further submissions from the parties, defendants are not aggrieved by the ruling and the appeal should be dismissed. … We disagree. A party is aggrieved when the court denies the relief it requested or grants relief, in whole or in part, against a party who had opposed the relief … . Here, defendants opposed plaintiff’s second motion for a deficiency judgment as untimely. Had Supreme Court agreed, the case would have been dismissed outright, and defendants would have been relieved of any deficiency judgment. Instead, they continue to be involved in litigation and remain exposed to the potential of said judgment and the financial consequences attendant thereto. Defendants are therefore clearly aggrieved by the finding of timeliness by Supreme Court. * * *

… [P]laintiff urges this Court to find the second motion timely by applying CPLR 205 (a), allowing it to file the second motion six months after the denial of the first motion. … Here, the statute provides that “[i]f an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff . . . may commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months after the termination provided that the new action would have been timely commenced at the time of commencement of the prior action” … . An action is defined as “a civil or criminal judicial proceeding” … . CPLR 105 defines an action to include a special proceeding, whereas a motion is defined as “an application for an order” (CPLR 2211). RPAPL 1371 (2) and (3) expressly direct that a motion for a deficiency judgment be made. Motions are not subject to the tolling provision of CPLR 205 (a). Had the Legislature intended to include motions in CPLR 205 (a), it could have done so and its failure to do so, is presumed to be intentional … . Trustco Bank v The Preserve Dev. Group Co., LLC, 2021 NY Slip Op 00350, Third Dept 1-21-21

 

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FAMILY COURT SHOULD NOT HAVE REFUSED JURISDICTION OVER THIS CUSTODY AND NEGLECT PROCEEDING STEMMING FROM AN INCIDENT DURING A BRIEF VISIT TO TENNESSEE (THIRD DEPT). ​

The Third Department, reversing Family Court and ordering new proceedings in front of a different judge, in a full-fledged opinion by Justice Clark, determined Family Court completely mishandled this custody matter which involved neglect proceedings in Tennessee stemming from an incident during the family’s brief visit there. Family Court had refused to exercise jurisdiction over the matter on inconvenient-forum grounds. On appeal, all parties agreed Family Court had committed reversible errors:

… [T]here was no dispute that the children and their respective parents/custodian had lived in New York for at least six consecutive months prior to the April 2019 commencement of the neglect proceeding in Tennessee, thereby making New York the children’s home state … . Thus, pursuant to the UCCJEA, Family Court had jurisdiction over the neglect proceeding commenced in Tennessee … . * * *

The record irrefutably reflects that the children came into emergency care in Tennessee during a brief visit to the state and that, prior to entering care, they had not resided in Tennessee. The children’s respective parents/legal custodian reside in New York, as does a half sibling of one of the children. Roughly 850 miles separate the Tennessee court and Chemung County, and the parties have limited financial means to travel to Tennessee to participate in court proceedings or to visit with the children. Additionally, with the exception of DSS, which did not provide an appropriate basis in law for its objection, all parties and the Tennessee court agreed that Family Court should exercise jurisdiction over the dispositional phase of the neglect proceeding. Significantly, evidence regarding the children’s best interests and the feasibility of reunifying them with their respective parents and/or petitioner is in New York, including proof relating to any remedial and rehabilitative services offered to and engaged in by the mother and Jamie A. Any testimony required from witnesses located in Tennessee can be taken by phone. Matter of Diana XX v Nicole YY, 2021 NY Slip Op 00352, Third Dept 1-21-21

 

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THE REFEREE’S REPORT IN THIS FORECLOSURE ACTION WAS BASED UPON BUSINESS RECORDS WHICH WERE NOT PRODUCED AND SHOULD NOT HAVE BEEN CONFIRMED; ALTHOUGH DEFENDANTS DEFAULTED, THE REFEREE’S REPORT FUNCTIONS AS AN INQUEST ON DAMAGES WHICH THE DEFENDANTS CAN CONTEST (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the referee’s report in this foreclosure action should not have been confirmed because it was based upon business records that were not produced. The court noted that the fact that defendants had defaulted did not preclude them from contesting the amount owed:

… [T]he referee’s report should not have been confirmed because it was based upon unproduced business records … . The fact that the defendants defaulted in appearing did not mean that they were precluded from contesting the amount owed … . The referee’s report served the function of an inquest on damages, which must be based upon admissible evidence … . Wilmington Sav. Fund Socy., FSB v Moriarty-Gentile, 2021 NY Slip Op 00328, Second Dept 1-20-21

 

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