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THE LATE SUMMARY JUDGMENT MOTION AND THE EXCUSE OFFERED IN REPLY PAPERS SHOULD NOT HAVE BEEN CONSIDERED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the late summary judgment motion and an excuse offered in reply papers should not have been considered:

Pursuant to CPLR 3212, courts have “considerable discretion to fix a deadline for filing summary judgment motions,” so long as the deadline is not “earlier than 30 days after filing the note of issue or (unless set by the court) later than 120 days after the filing of the note of issue, except with leave of court on good cause shown” … . As a general matter, a court should not consider a good cause argument proffered by a movant if it is presented for the first time in reply papers … . Here, it is undisputed that the defendant moved for summary judgment approximately 30 days after the date set by the Supreme Court without seeking leave of the court or offering an explanation showing good cause for the delay in their moving papers. As a result, the court improvidently exercised its discretion in considering that branch of the defendant’s motion which was for summary judgment dismissing the complaint insofar as asserted against it and in considering the good cause arguments raised for the first time in the defendant’s reply papers … . O’Neil v Environmental Prods. Corp., 2020 NY Slip Op 05516, Second Dept 10-7-20

 

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THE MERE PRESENCE OF A REINSTATEMENT CLAUSE IN THE MORTGAGE, WHICH ESSENTIALLY ALLOWS A BORROWER IN DEFAULT TO PAY THE ARREARS AND STOP THE ACCELERATION OF THE DEBT, DOES NOT AFFECT OR IMPEDE THE ACCELERATION OF THE DEBT WHEN A FORECLOSURE ACTION IS STARTED; THE DEBT HERE WAS ACCELERATED WHEN THE FIRST FORECLOSURE ACTION WAS COMMENCED IN 2009 RENDERING THE INSTANT FORECLOSURE ACTION TIME-BARRED (FOURTH DEPT).

The Fourth Department, in a full-fledged opinion by Justice Curran, agreeing with the Second Department, determined the mere presence of reinstatement clause in a mortgage, which allows a borrower who has missed payments to pay the amount of the missed payments and resume monthly payments, does not affect or impede the acceleration of the debt when a foreclosure action is brought. Therefore the foreclosure action at issue was time-barred:

The mortgage is a uniform instrument issued by Fannie Mae, among others, for use in New York State and contains several provisions that are relevant on appeal. Section 22 (acceleration provision) permits the lender to require immediate payment of the loan in full upon the borrower’s default, provided certain conditions are met. Section 19 (reinstatement provision) grants a borrower in default the right to effectively de-accelerate the maturity of the mortgage debt by paying in full the past due amount, thereby returning the loan to its pre-default status. * * *

… [W]e conclude that the mortgage’s reinstatement provision does not in any way affect or impede acceleration of the full mortgage debt. The reinstatement provision is not mentioned anywhere in the text of the mortgage’s acceleration provision, which governs when Fannie Mae could exercise its option to accelerate the full debt … . Further, the language of the reinstatement provision “indicates that [Fannie Mae’s] right to accelerate the entire debt may be exercised before the [borrower’s] rights under the reinstatement provision . . . are exercised or extinguished” … . Thus, in effect, the reinstatement provision merely “gives the borrower the contractual option to de-accelerate the mortgage when certain conditions are met” … —which presupposes that an acceleration has already occurred. Federal Natl. Mtge. Assn. v Tortora, 2020 NY Slip Op 05410, Fourth Dept 10-2-20

 

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ALTHOUGH THE DISMISSAL OF THE COMPLAINT IN THIS TRAFFIC ACCIDENT CASE INVOLVING A LIMOUSINE BUS WAS REVERSED ON APPEAL, PLAINTIFFS DID NOT ADDRESS ON APPEAL THE ASPECT OF THE DECISION WHICH DISMISSED THE FAILURE-TO-PROVIDE-SEATBELTS CAUSE OF ACTION; THEREFORE ANY CHALLENGE TO THAT ASPECT OF THE DISMISSAL WAS ABANDONED BY PLAINTIFFS (FOURTH DEPT).

The Fourth Department, reversing Supreme Court’s dismissal of the complaint in this traffic accident case, noted that the plaintiffs’ failure to address an aspect of the decision granting defendants’ motion for summary judgment constituted an abandonment of any challenge to that portion of the decision. The motion court had dismissed the complaint in its entirety including plaintiffs’ cause of action alleging defendants were negligent in not providing seatbelts for the limousine in which plaintiff was a passenger. However the seatbelt ruling was not challenged by the plaintiffs on appeal. Therefore Supreme Court’s dismissal of the seatbelt cause of action remained in effect:

Supreme Court erred in granting that part of defendants’ motion seeking summary judgment dismissing the complaint based on application of the emergency doctrine. ” ‘The existence of an emergency and the reasonableness of a driver’s response thereto generally constitute issues of fact’ ” … . Upon our review of the record, we conclude that “whether the emergency doctrine precludes liability presents a question of fact and, therefore, summary judgment for defendants . . . was inappropriate” … .

We note, however, that the court also granted that part of defendants’ motion seeking to dismiss plaintiffs’ claim that defendants were negligent in failing to provide seatbelts on the ground that defendants were under no duty to do so. Plaintiffs failed to brief any argument with respect to the dismissal of that claim, thereby abandoning any challenge to that part of the order … . We therefore modify the order by denying the motion in part and reinstating the complaint except insofar as the complaint, as amplified by the bill of particulars, alleges that defendants were negligent in failing to provide seatbelts. VanEpps v Mancuso, 2020 NY Slip Op 05359, Fourth Dept 10-2-20

 

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GENERAL OBLIGATIONS LAW 17-105, NOT 17-101, APPLIES TO THE REVIVAL OF AN EXPIRED STATUTE OF LIMITATIONS FOR A MORTGAGE FORECLOSURE; THE RELEVANT DOCUMENTS HERE DID NOT MEET THE CRITERIA OF SECTION 17-105; FORECLOSURE WAS THEREFORE TIME-BARRED (FOURTH DEPT).

The Fourth Department, in a full-fledged opinion by Justice Peradotto, determined that General Obligations Law 17-105, not 17-101, applied to the revival of an expired statute of limitations for foreclosure of a mortgage and the documents in this case did not meet the criteria of section 17-105. Therefore the foreclosure action was time-barred. The court noted that Supreme Court should have issued a judgment declaring the rights of the parties pursuant to Real Property Actions and Proceedings Law 1501 and 1521:

General Obligations Law § 17-105 (1) provides, in relevant part:

“A waiver of the expiration of the time limited for commencement of an action to foreclose a mortgage of real property or a mortgage of a lease of real property, or a waiver of the time that has expired, or a promise not to plead the expiration of the time limited, or not to plead the time that has expired, or a promise to pay the mortgage debt, if made after the accrual of a right of action to foreclose the mortgage and made, either with or without consideration, by the express terms of a writing signed by the party to be charged is effective, subject to any conditions expressed in the writing, to make the time limited for commencement of the action run from the date of the waiver or promise.”

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… [T]the financial statements submitted by defendant do not meet the requirements of subdivision (1) of section 17-105 because those documents merely list the mortgage as a liability and do not constitute an express promise to pay the mortgage debt … . Batavia Townhouses, Ltd. v Council of Churches Hous. Dev. Fund Co., Inc., 2020 NY Slip Op 05331, Fourth Dept 10-2-20

 

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WHEN THE MERITS OF A MOTION TO REARGUE ARE ADDRESSED THE DENIAL IS APPEALABLE; THE PERSONAL SERVICE REQUIREMENTS FOR THE NOTICE OF SALE PURSUANT TO THE LIEN LAW WERE NOT MET, THEREFORE THE 10-DAY PERIOD FOR BRINGING A SPECIAL PROCEEDING TO CONTEST THE VALIDITY OF THE LIEN DID NOT START TO RUN (THIRD DEPT).

The Third Department noted that where the court addresses the merits of a motion to reargue it will be deemed to have granted the motion to reargue for purposes of appeal. Therefore, although the denial of a motion to reargue is not appealable, the denial after addressing the merits is appealable. In that case the motion is treated as if the motion to reargue were granted and then the original decision was adhered to. The court also noted that the requirements for the personal service of a notice of sale were not met in this case. Therefore the 10-day period for bringing a special proceeding to determined the validity of the lien did not start to run:

“Although, generally, no appeal lies from an order denying a motion to reargue, where the court actually addresses the merits of the moving party’s motion, we will deem the court to have granted reargument and adhered to its prior decision — notwithstanding language in the order indicating that reargument was denied” … . * * *

Under Lien Law §201-a, petitioner’s 10-day time period to “commence a special proceeding to determine the validity of the lien” does not begin to run until service upon it of the “notice of sale” by respondent, the lienor. Service of such notice of sale by the lienor must be effectuated by personal service “within the county where [the] lien arose,” unless the person to be served “cannot with due diligence be found within such county” (Lien Law § 201). … As Supreme Court correctly found, and as the record reflects, respondent failed to submit any proof that it exercised due diligence in seeking to effect personal service upon petitioner of the notice of lien and sale before improperly resorting to the statutory alternative of certified mail service. As a result, the 10-day time limitation for petitioner to challenge the lien under Lien Law § 201-a did not begin to run … . Matter of Manufacturers & Traders Trust Co. v J.D. Mar. Serv., 2020 NY Slip Op 05260, Third Dept 10-1-20

 

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AN UNPAID PENALTY ASSESSED FOR DEFENDANT’S FAILURE TO MAINTAIN WORKERS’ COMPENSATION COVERAGE WAS ENTERED AS A SUPREME COURT JUDGMENT BY THE COUNTY CLERK IN ACCORDANCE WITH THE WORKERS’ COMPENSATION LAW; BY THE TERMS OF THE STATUTE, SUPREME COURT DID NOT HAVE SUBJECT MATTER JURISDICTION AND DEFENDANT COULD NOT MOVE TO VACATE THE DEFAULT JUDGMENT (THIRD DEPT).

The Third Department determined a judgment entered in Supreme Court by the county clerk pursuant to the Workers’ Compensation Law 26  is not reviewable by Supreme Court. The Workers’ Compensation Board assessed a penalty against defendant for failure to maintain workers’ compensation coverage. When the penalty was not paid the judgment was entered by the county clerk as a ministerial act which cannot be addressed by a motion in Supreme Court to vacate a default judgment:

Defendants … ignore the peculiar statutory scheme by which only this Court may review a final determination by plaintiff with respect to, among other things, assessments ordered pursuant to Workers’ Compensation Law § 52 (5) up until the time that a judgment against an employer is entered. At that point, no appeal is permitted … .

Workers’ Compensation Law § 26 provides that where an employer fails to pay an assessment imposed pursuant to Workers’ Compensation Law § 52 (5) within 20 days after it is due, plaintiff’s chair may file a certified copy of the order imposing such assessment with the county clerk where the employer’s principal place of business is maintained. “[T]hereupon[,] judgment must be entered in the [S]upreme [C]ourt, by the clerk of such county in conformity therewith immediately upon such filing. . . . Such judgment shall be entered in the same manner, have the same effect and be subject to the same proceedings as though rendered in a suit duly heard and determined by the [S]upreme [C]ourt, except that no appeal may be taken therefrom” (Workers’ Compensation Law § 26 …). The entry of such judgment is “merely a ministerial act” made pursuant to Workers’ Compensation Law § 26 … . Indeed, the statute provides that the court shall “vacate or modify” the judgment only “to conform to any later award or decision of [plaintiff]” and “[t]he award may be so compromised [only] by [plaintiff and] in the discretion of [plaintiff]” (Workers’ Compensation Law § 26). Inasmuch as the entry of plaintiff’s order here by the County Clerk was “merely a ministerial act” … , Supreme Court lacked the authority to vacate the judgment because the underlying order was not issued by the court … . …

To allow defendants to petition a different court to vacate its default after judgment has been entered would undermine this statutory scheme by allowing a court other than this one to, in effect, review a final decision of plaintiff. Workers’ Compensation Bd. of the State of N.Y. v Williams Auto Parts Inc., 2020 NY Slip Op 05261, Third Dept 10-1-20

 

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CANCELLATION AND DISCHARGE OF A MORTGAGE PURSUANT TO RPAPL 1501 (4) MUST BE SOUGHT BY AN ACTION OR COUNTERCLAIM, NOT BY A MOTION (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the motion to cancel and discharge the mortgage pursuant to RPAPL 1501 (4) should not have been granted. That relief must be sought by an action or counterclaim:

Supreme Court should not have granted that branch of the motion which was to cancel and discharge the mortgage pursuant to RPAPL 1501(4), since that relief must be sought in an action or counterclaim and not by motion … . Bank of N.Y. Mellon v 11 Bayberry St., LLC, 2020 NY Slip Op 05175,  Second Dept 9-30-20

A MOTION TO DISMISS AN ACTION FOR A DECLARATORY JUDGMENT FOR FAILURE TO STATE A CAUSE OF ACTION, WHERE THERE ARE NO QUESTIONS OF FACT, SHOULD BE TREATED AS A MOTION FOR A DECLARATION IN DEFENDANT’S FAVOR (SECOND DEPT).

The Second Department noted that where a motion to dismiss an action for declaratory judgment is made, the motion should be deemed a request for a declaration in defendant’s favor:

The courts may consider “the merits of a properly pleaded cause of action for a declaratory judgment upon a motion to dismiss for failure to state a cause of action where ‘no questions of fact are presented [by the controversy]'”  … . “Under such circumstances, the motion to dismiss the cause of action for failure to state a cause of action should be taken as a motion for a declaration in the defendant’s favor and treated accordingly” … . Astoria Landing, Inc. v New York City Council, 2020 NY Slip Op 05174, Second Dept 9-30-20

 

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THE REFEREE’S REPORT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN CONFIRMED; THE REFEREE RELIED ON HEARSAY AND FAILED TO CONDUCT A HEARING ON NOTICE AS REQUIRED BY THE CPLR (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the referee’s report should not have been confirmed.  The evidence of default presented to the referee was hearsay and the referee did not hold a hearing on notice as required by CPLR 4320:

… [W]ith respect to the amount due to the plaintiff, the referee based his findings on the affidavit of Nicholas J. Raab, an employee of Specialized Loan Servicing, LLC, the plaintiff’s loan servicing agent for the subject loan. While Raab provided a proper foundation for the admission of business records made by a prior servicer … , he failed to attach the business records themselves to his affidavit. Accordingly, Raab’s assertions regarding the date of the defendant’s default in making her mortgage payments, the total sum due to the plaintiff, which included the amount of accrued interest calculated from the date of default, and amounts purportedly paid in an escrow advance and for property preservation, without the business records themselves, constituted inadmissible hearsay … .

… [T]he referee should not have computed the amount due to the plaintiff without holding a hearing on notice to the defendant (see CPLR 4313 …). “While [the] Supreme Court has the authority to engage a Referee to compute and report the amount due under a mortgage (see, RPAPL 1321[1]), and can, in its order of reference, define the scope of the reference and delineate the Referee’s powers and duties thereunder (CPLR 4311), absent any specified restrictions the Referee has those powers and duties delineated in CPLR article 43 and also must comply with the procedures specified therein … . One of the specified procedures is the conducting of a hearing (CPLR 4320[a]), upon notice (CPLR 4313)” … . Wells Fargo Bank, N.A. v Yesmin, 2020 NY Slip Op 05257, Second Dept 9-30-20

 

NASSAU COUNTY SUPREME COURT CANNOT VACATE A DEFAULT ORDER ISSUED BY NEW YORK COUNTY SUPREME COURT, DESPITE THE CHANGE OF VENUE FROM NEW YORK COUNTY TO NASSAU COUNTY (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the Nassau County Supreme Court could not vacate the default order issued by New York County Supreme Court, even though New York County Supreme Court had granted a change of venue to Nassau County:

The Supreme Court, Nassau County, had no authority to vacate the order of the Supreme Court, New York County … . A motion to vacate an order must be addressed to the court that made the order (see CPLR 5015[a]), and no court other than the one that rendered the order may entertain a motion to vacate it … . In any event, contrary to the defendants’ contention, the Supreme Court, New York County, did not lack subject matter jurisdiction to issue the New York County default order one day after its order granting a change of venue to Nassau County, since the “Supreme Court is a court possessing State-wide jurisdiction and is competent to entertain a motion no matter where the underlying action is pending” … . London v 107 (160) Realty, LLC, 2020 NY Slip Op 05195, Second Dept 9-30-20

 

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