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THE BANK FAILED TO DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION WITH ADMISSIBLE EVIDENCE; THE BANK’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank did not demonstrate standing to bring the foreclosure action. The bank’s motion for summary judgment should not have been granted:

The plaintiff failed to present admissible evidence establishing that the plaintiff or its counsel was in possession of the note at the time of commencement of the action. In support of its motion, the plaintiff submitted the affidavit of Howard R. Handville, a senior loan analyst at Ocwen Financial Corporation whose indirect subsidiary is Ocwen Loan Servicing, LLC (hereinafter Ocwen), the plaintiff’s loan servicer. Handville attested that he reviewed the servicing records maintained by Ocwen in its ordinary course of business, that prior servicers’ records were integrated into Ocwen’s records and relied upon by Ocwen and that “[b]ased on [his] review of the Servicing Records, the original Note and Mortgage for the Loan were physically delivered to Plaintiff’s custodian on April 25, 2007, prior to the commencement of this foreclosure action.” Handville further averred that “[s]ince that date, the original Note and Mortgage have remained in the physical possession of Plaintiff or its counsel.” Even if Handville’s affidavit was sufficient to lay a proper foundation for the admission of the “Servicing Records,” the affidavit was insufficient to establish standing because the records themselves were not submitted by the plaintiff. “‘[I]t is the business record itself, not the foundational affidavit, that serves as proof of the matter asserted’ … , and ‘a witness’s description of a document not admitted into evidence is hearsay’ … . Deutsche Bank Natl. Trust Co. v Schmelzinger, 2020 NY Slip Op 07543, Second Dept 12-16-20

 

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PLAINTIFF WAS INJURED WHEN A WHEEL ON THE CONTAINER HE WAS PUSHING GOT STUCK IN A GAP IN THE FLOOR AFTER THE PLYWOOD COVERING THE GAP BROKE; PLAINTIFF’S MOTION TO AMEND THE COMPLAINT TO ADD THE RELEVANT INDUSTRIAL CODE PROVISION SHOULD HAVE BEEN GRANTED; THE LABOR LAW 241(6), LABOR LAW 200 AND NEGLIGENCE CAUSES OF ACTION SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff’s Labor Law 241(6), Labor Law 200 and Negligence causes of action should not have been dismissed. Plaintiff was pushing a container of cinderblocks when plywood covering a gap in the floor broke and a wheel got stuck, causing plaintiff to be propelled head over heels and land on his back. The Second Department further held plaintiff should have been allowed to amend the complaint by adding the relevant Industrial Code provision, despite the 3 1/2 delay in bringing the motion to amend. Defendant was not prejudiced by the amendment:

As Industrial Code (12 NYCRR) § 23-1.7(e)(1) is applicable to these facts and defendant failed to show that it would be prejudiced by an amendment of the bill of particulars to assert a violation of this provision as a predicate to the Labor Law § 241(6) claim, plaintiff’s motion to amend should be granted (see CPLR 3025[b] …). In view of the absence of prejudice to defendant, plaintiff was not required to explain his 3½-year delay in bringing this motion … . …

… [A]n inadequately protected gap in the floor of a passageway at a construction site that causes a container, dumpster, or the like to become stuck or otherwise lose its balance and trip, slip, or fall violates Industrial Code (12 NYCRR) § 23-1.7(e)(1) and can serve as a predicate for a Labor Law § 241(6) claim. …

Defendant failed to establish prima facie that it neither created nor had notice of the dangerous condition of the hallway floor … . Trinidad v Turner Constr. Co., 2020 NY Slip Op 07519, First Dept 12-15-20

 

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THE QUI TAM COMPLAINT ALLEGING INSURERS FAILED TO ACCURATELY REPORT UNCLAIMED LIFE INSURANCE PROCEEDS, TO WHICH THE STATE IS ENTITLED, IN VIOLATION OF THE NEW YORK FALSE CLAIMS ACT SHOULD NOT HAVE BEEN DISMISSED AND THE MOTION TO AMEND THE COMPLAINT TO SPECIFY THE FRAUD ALLEGATIONS SHOULD HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff in this qui tam action should have been allowed to amend the complaint to specify the allegations of fraud against the defendant insurance companies. Unclaimed life insurance proceeds are supposed to escheat to the state. The lawsuit alleged the insurance companies had submitted false statements to the state to conceal the existence of life insurance proceeds to which the state is entitled, a violation of the New York False Claims Act (NYFCA). The First Department, in allowing the complaint to be amended to specify the fraud allegations, held that the 10-year statute of limitations applied to the filing of the alleged false reports:

… [P]laintiff adequately alleged that defendants knowingly filed false reports with the State which failed to identify escheatable life insurance proceeds. The complaint alleges that defendants’ recordkeeping was so haphazard — such as listing incorrect names, dates of birth, and Social Security numbers, or omitting one or more of those pieces of information altogether — that it amounted to reckless disregard for the truth or falsity of the reports that they submitted to the State (see State Finance Law § 188[3][a][iii]). In other circumstances, according to the complaint, defendants had actual knowledge that a policyholder was deceased, as evidenced by returned mail, customer call service logs, or demutualization payments separately escheated to the State, yet defendants nevertheless failed to disclose or escheat the deceased policyholder’s life insurance proceeds to the State (see State Finance Law § 188[3][a][i]). These allegations, if true, demonstrate that defendants “deliberately turn[ed] a blind eye to reporting errors and then attest[ed] that, to [their] knowledge, they d[id] not exist” … . Total Asset Recovery Servs. LLC v Metlife, Inc., 2020 NY Slip Op 07480, First Dept 12-10-20

 

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THE ESTATE WAS A NECESSARY PARTY IN THIS FORECLOSURE ACTION BECAUSE OF THE POTENTIAL FOR A DEFICIENCY JUDGMENT AGAINST THE DECEDENT; DEFENDANT’S CROSS MOTION FOR LEAVE TO SUBSTITUTE HERSELF AS ADMINISTRATOR OF THE ESTATE SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined decedent’s estate was a necessary party in this foreclosure action and defendant’s cross motion pursuant to CPLR 1015 for leave to substitute herself as administrator should have been granted:

In a mortgage foreclosure action, “[t]he rule is that a mortgagor who has made an absolute conveyance of all his [or her] interest in the mortgaged premises, including his equity of redemption, is not a necessary party to foreclosure, unless a deficiency judgment is sought” … . Here, the judgment of foreclosure and sale contains language providing for a potential deficiency judgment against the decedent if the sale of the property does not cover the amount due to the plaintiff. Consequently, the decedent’s estate was a necessary party to the action … . Specialized Loan Servicing, LLC v Kalinin, 2020 NY Slip Op 07417, Second Dept 12-9-20

 

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MOTHER HAD FLED TO ARGENTINA WITH THE CHILD WHILE CUSTODY PROCEEDINGS WERE PENDING; FAMILY COURT SHOULD NOT HAVE DENIED THE MATERNAL GRANDMOTHER’S PETITION SEEKING VISITATION ON THE GROUND SHE DID NOT HAVE STANDING; MATTER REMITTED FOR A BEST INTERESTS HEARING (SECOND DEPT). ​

The Second Department, reversing Family Court, determined the court erred in finding the maternal grandmother did not have standing to seek visitation and remitted the matter for a best interests hearing. Mother had fled to Argentina with the child when custody proceedings were pending:

“When a grandparent seeks visitation pursuant to Domestic Relations Law § 72(1), the court must make a two-part inquiry” … . The court must first determine if the grandparent has standing, based on death or equitable circumstances, and if it determines that the grandparent has established standing, it must then determine whether visitation is in the best interests of the child (see Domestic Relations Law § 72[1] …).

“Standing [based upon equitable circumstances] should be conferred by the court, in its discretion, only after it has examined all the relevant facts” … . “[A]n essential part of the inquiry is the nature and extent of the grandparent-grandchild relationship” … . “It is not sufficient that the grandparents allege love and affection for their grandchild” … . “They must establish a sufficient existing relationship with their grandchild, or in cases where that has been frustrated by the parents, a sufficient effort to establish one, so that the court perceives it as one deserving the court’s intervention” … .

Here, the Family Court’s determination that the grandmother lacked standing to seek visitation was not supported by a sound and substantial basis in the record … . The evidence demonstrated that the grandmother developed a relationship with the child early on in his life and thereafter made repeated efforts to continue that relationship … . Matter of Noguera v Busto, 2020 NY Slip Op 07385, Second Dept 12-9-20

 

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THE CRITERIA FOR THE HARSH REMEDY OF ATTACHMENT WERE NOT MET (SECOND DEPT).

The Second Department determined the criteria for an order of attachment were not met. The court noted that suspicion of an intent to defraud and the removal, assignment or disposition of property is not enough to warrant the harsh remedy of attachment:

CPLR 6212(a) provides that, on a motion for an order of attachment, “the plaintiff shall show, by affidavit and such other written evidence as may be submitted, that there is a cause of action, that it is probable that the plaintiff will succeed on the merits, that one or more grounds for attachment provided in section 6201 exist, and that the amount demanded from the defendant exceeds all counterclaims known to the plaintiff.” “Attachment is considered a harsh remedy and CPLR 6201 is strictly construed in favor of those against whom it may be employed” … .

The plaintiffs failed to make an adequate evidentiary showing that each of the defendants is a nondomiciliary residing without the state (see CPLR 6201[1]; see also General Construction Law § 35). Moreover, the plaintiffs’ contention that the defendants were attempting to defraud creditors or frustrate enforcement of a possible judgment against them (see CPLR 6201[3]) “was devoid of evidentiary support” … . “The fact that the affidavits in support of an attachment contain allegations raising a suspicion of an intent to defraud is not enough. It must appear that such fraudulent intent really existed in the defendant’s mind” … , and “the mere removal, assignment or other disposition of property is not grounds for attachment” … . 651 Bay St., LLC v Discenza, 2020 NY Slip Op 07331, Second Dept 12-9-20

 

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THE SECOND MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN DENIED; SUCCESSIVE SUMMARY JUDGMENT MOTIONS ARE GENERALLY PROHIBITED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the prohibition against successive summary judgment motions applied and the second motion should have been denied:

“Generally, successive motions for summary judgment should not be entertained, absent a showing of newly discovered evidence or other sufficient cause” … . “Evidence is not newly discovered simply because it was not submitted on the previous motion” … . “Rather, the evidence that was not submitted in support of the previous summary judgment motion must be used to establish facts that were not available to the party at the time it made its initial motion for summary judgment and which could not have been established through alternative evidentiary means” … . “Successive motions for summary judgment should not be made based upon facts or arguments which could have been submitted on the original motion for summary judgment” … . Wells Fargo Bank, NA v Carpenter, 2020 NY Slip Op 07426, Second Dept 12-9-20

 

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PLAINTIFF’S REQUEST FOR A 30-DAY ADJOURNMENT TO SEEK THE APPOINTMENT OF THE PUBLIC ADMINISTRATOR TO REPRESENT A DECEASED DEFENDANT SHOULD HAVE BEEN GRANTED; THE MOTION TO DISMISS THE COMPLAINT FOR FAILURE TO SUBSTITUTE A REPRESENTATIVE SHOULD HAVE BEEN DENIED (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff’s request for a 30-day adjournment to petition or move to have the public administrator appointed for a deceased defendant’s (Conrad’s) estate should have been granted. Supreme Court had granted the motion to dismiss the complaint for failure to substitute a representative of the deceased defendant pursuant to CPLR 1021:

A motion to substitute a party “may be made by the successors or representatives of a party or by any party” and is to be made within a reasonable time after the death of the party (CPLR 1021). “[I]f the event requiring substitution is the death of a party and timely substitution has not been made, the court, before proceeding further, shall, on such notice as it may in its discretion direct, order the persons interested in the decedent’s estate to show cause why the action or appeal should not be dismissed.” (id).

CPLR 1015(a) provides that “[i]f a party dies and the claim for or against him is not thereby extinguished the court shall order substitution of the proper parties.” … . Moreover, “[i]t is well settled that the death of a party divests the court of jurisdiction to render a judgment until a proper substitution has been made, so that any step taken without it may be deemed void, including an appellate decision” … . …

In light of the relatively short passage of time between Conrad’s death and the time defendants’ motion was made, the allegation in plaintiff’s complaint that the reverse mortgage upon which this case is premised was obtained fraudulently and is null and void, and the fact that the defendant banks had not even moved for substitution in the related foreclosure action, it was an abuse of discretion for the motion court not to allow plaintiff, at a minimum, the additional 30 days requested to seek to have the public administrator appointed so that the case could move forward and be decided on the merits. Dugger v Conrad, 2020 NY Slip Op 07313, First Dept 12-8-20

 

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PURPORTED MORTGAGE PAYMENTS MADE AFTER THE EXPIRATION OF THE STATUTE OF LIMITATIONS FOR A FORECLOSURE ACTION DID NOT REVIVE THE STATUTE OF LIMITATIONS FOR THE PURCHASERS OF THE ENCUMBERED PROPERTY OR THE BANK WHICH ISSUED A MORTGAGE SECURED BY THE ENCUMBERED PROPERTY (THIRD DEPT).

The Third Department, reversing Supreme Court, determined mortgage payments allegedly made after the expiration of the statute of limitations for a foreclosure action did not revive the statute of limitations as against defendants, who purchased the encumbered property, and defendant bank which issued a mortgage secured by the property:

… [T]he tolling or revival effect of partial payments differs as between the payor — the Gureckis — and subsequent purchasers — defendants (see General Obligations Law § 17-107 [2]). [A] qualifying partial payment that is made before the expiration of the statute of limitations will renew the statute of limitations against any subsequent purchaser (see General Obligations Law § 17-107 [2] [2d par] .. ). In contrast, a qualifying partial payment that is made after the expiration of the statute of limitations will only revive the statute of limitations as to a subsequent purchaser who did not give value or who had actual notice of the making of the payment … . Here, … at the time that [the payments] were made the statute of limitations had expired. Given that the record is clear that defendants are purchasers for value and plaintiff put forth no evidence that defendants had actual notice of the … payments, the payments did not have the effect of reviving the statute of limitations as to defendants (see General Obligations Law § 17-107 [2] …). Gurecki v Gurecki, 2020 NY Slip Op 07257, Third Dept 12-3-20

 

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THE RECEIPT OF THE LETTER BY CERTIFIED MAIL, NOT THE PRIOR RECEIPT OF AN EMAIL WITH THE LETTER ATTACHED, TRIGGERED THE FOUR-MONTH STATUTE OF LIMITATIONS FOR BRINGING AN ARTICLE 78 PROCEEDING; THE OMISSION OF THE REQUIREMENT THAT THE RESPONDENTS BE SERVED WITH THE ORDER TO SHOW CAUSE COULD BE REMEDIED BY AN EXTENSION OF THE TIME TO EFFECT SERVICE PURSUANT TO CPLR 306-B (THIRD DEPT).

The Third Department, reversing Supreme Court, determined the receipt of a letter by certified mail on January 22, not the receipt of the email with the letter attached on January 17, started the four-month statute of limitations for the Article 78 action. The letter was the final determination of the respondent Department of Health, denying petitioner’s application to open an assisted living facility.  In addition, the Third Department determined a mistake made in the order to show cause, which did not require service upon the respondents, could be remedied. Therefore petitioners should be granted an extension of time to serve respondents pursuant to CPLR 306-b:

There is no dispute that the January 17 letter constituted a final and binding determination. At issue is whether counsel’s receipt of the January 17 email or counsel’s receipt of the January 17 letter by certified mail on January 22, 2019 provided the notice necessary to trigger the running of the statute of limitations. …

We recognize that there is only one letter, the January 17 letter, a copy of which was attached to the January 17 email and the original was delivered by certified mail on January 22, 2019. That said, even though an email delivery could have sufficed, respondents opted to effect delivery of the January 17 letter through the more formal certified mailing process, by which actual delivery and receipt are confirmed with the recipient’s signature. Given that format, it was not necessarily unreasonable for petitioners to have assumed that receipt of the January 17 letter on January 22, 2017 triggered the limitations period or, at least, an ambiguity was created as to whether to measure the time period from that date. As such, we conclude that Supreme Court erred in granting respondents’ motion to dismiss the petition as untimely … . …

Petitioners submitted, and Supreme Court signed, a proposed order to show cause providing for service upon respondents by service on the Attorney General. Petitioners complied with the terms of that order, but such service was manifestly defective because petitioners were also statutorily required to effect service upon respondents (see CPLR 307, 7804 [c]). In their cross motion, petitioners promptly sought permission to correct this error, and it is evident that respondents were in no way prejudiced. Not to be overlooked is the looming expiration of the statute of limitations. Under such circumstances, rather than dismissing a proceeding, a court is authorized to extend the time for service “upon good cause shown or in the interest of justice” (CPLR 306-b …). Matter of Park Beach Assisted Living, LLC v Zucker, 2020 NY Slip Op 07264, Third Dept 12-3-20

 

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