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October 20, 2020

First Dept: Actual Proof of Default Required in Order to Obtain Foreclosure Judgment

The First Department unanimously reversed and vacated a Judgment of Foreclosure and Sale because the lender's application was not supported by any actual evidence of the borrower's default and the amount due under the mortgage.  While the lender relied upon an affidavit from an "assistant vice president of plaintiff's loan servicer, who asserted that ... defendant had been in default since March 1, 2009, and owed plaintiff the amount stated[, ...] the affiant's assertions [were] inadmissible hearsay ... because the books and records themselves were not submitted to the court[.]"  Deutsche Bank Natl. Trust Co. v Kirschenbaum, 2020 NY Slip Op 05849 (1st Dept. Oct. 20, 2020). 

August 26, 2020

Second Department - Mere Attorney Neglect is an Insufficient Basis to Vacate an Eleven Day Default

The Second Department unanimously affirmed the Judgment of Foreclosure and Sale, finding that the borrowers' counsel's conclusory and unsubstantiated claims of law office failure constituted "mere neglect" and not a reasonable excuse for their 11 day delay in interposing an answer.  SRP 2015-1, LLC v. Thomas, 2020 NY Slip Op 04804 (2nd Dept. Aug. 26, 2020). 

March 10, 2020

First Dept: Loan Servicer's Affidavit Insufficient to Prove Standing

The First Department unanimously reversed and held that an affidavit from the loan servicer's employee, without production of the underlying records, was insufficient to prove physical delivery of the promissory note to the plaintiff prior to the commencement of the action.  Deutsche Bank Nat. Trust Co. v. Kirschembaum, 2020 NY Slip Op 01573 (1st Dept. Mar. 10, 2020). 

October 10, 2019

First Department - Discontinuing Prior Action, Without More, Did Not Revoke Acceleration

The First Department unanimously reversed and held that the mere discontinuance of a prior action, without more, was insufficient to constitute an affirmative act to revoke a lender's election to accelerate.  Accordingly, the trial court decision was reversed and the clerk was directed to enter judgment dismissing the underlying mortgage foreclosure action as time-barred.  Wells Fargo Bank, N.A. v. Liburd, 2019 NY Slip Op 07323 (1st Dept. Oct. 10, 2019). 

June 25, 2019

First Department - Bank Failed to Show Excuse for More than Three Year Delay in Prosecuting Foreclosure Action

The First Department unanimously reversed and directed the dismissal of a foreclosure action pursuant to CPLR 3215(c) as the Plaintiff failed to move for a default judgment within one year of default.  The Plaintiff failed to explain why it did not move for a default judgment for over three years and the First Department held that the "Plaintiff's assertion that it was in continued litigation regarding the prior mortgage ... is belied by documentary evidence ... [and thus] fails to constitute a reasonable excuse for delay."  Deutsche Bank Nat. Trust Co. v. Cruz, 2019 N.Y. App. LEXIS 5075, 2019 NY Slip Op 05097 (1st Dept. 2019). 

June 20, 2019

First Dept: Issue of Fact Regarding Whether or Not Prior Voluntarily Discontinuance Revoked Acceleration

The First Department unanimously affirmed the denial of the bank's summary judgment application finding that an issue of fact exists as to whether or not a  voluntary discontinuance of a prior foreclosure action constituted an affirmative act revoking acceleration. Initially, the trial court granted summary judgment to plaintiff-bank but then defendant successfully moved for renewal and reargument, which resulted in the instant appeal.  U.S. Bank N.A. v. Charles, 2019 NY Slip Op 04997 (1st Dept. 2019). 

May 01, 2019

Trial Court - Homeowners Do Not Have to Pay Twice for Their Home

In an action to strike certain mechanic's liens filed by subcontractors, the trial court granted summary judgment to the plaintiff-homeowners and held that the subcontractors could not recover from the homeowners.  The homeowners entered into a contractor with a developer who agreed to sell them vacant land and build a house on it.  Despite paying the developer/general contractor, the general contractor never paid the subcontractors who performed certain work.  Per N.Y. Lien Law 4, the trial court held that "the subcontractor's right to recover is derivative of the right of the general contractor to recover, and if the general contractor is not owed any amount under its contract with the owner at the time the subcontractor's notice of lien is filed, then the subcontractor may not recover."  Wicke-Coamey & Wicke-Coamey v. Dougherty Concrete, Inc. et al., Index No. EF000843-2018 (Sup. Ct. Orange Cty. May 1, 2019) (Onofry, J.). 

March 20, 2019

Second Dept to Trial Court: You Can't Sua Sponte Dismiss A Foreclosure Action

On March 20, 2019, the Second Department reversed an Order of the Hon. Jeffrey Arlen Spinner, Suffolk County Supreme Court, dated December 20, 2016, which denied the movant's motion to vacate a prior order which, sua sponte, directed dismissal of the foreclosure action.  On October 2, 2007, the plaintiff commenced the foreclosure action.  On October 14, 2008, the Court granted an Order of Reference in favor of the Plaintiff.  Thereafter, the action laid dormant for almost two years until Plaintiff filed its application for Judgment of Foreclosure and Sale, which was denied without prejudice on April 22, 2011.  Thereafter, on November 21, 2012, the court directed dismissal of the action, sua sponte, on the grounds that plaintiff "without good cause or explanation, failed and neglected to comply with the express directive of the [c]ourt and has failed to resume prosecution of this action."   The Second Department held that the dismissal under CPLR 3216, for failure to prosecute, was improper as issue was never joined  The Second Department further held that dismissal under CPLR 3215(c) was also improper as Plaintiff did take proceedings for entry of default judgment, back in 2008.  U.S. Bank N.A. v. Picone, 2019 N.Y. App. Div. LEXIS 2088 (2nd Dept. 2019). 

December 12, 2018

Second Department Affirms, Holding That the Legal Description of the Real Property Controls When There is a Discrepancy Between the Legal Address and the Legal Description of A Piece of Real Property

In a residential mortgage foreclosure action, on appeal the Second Department unanimously affirmed the Judgment of Foreclosure and Sale and held that the legal description of a piece of real property controls when there is a discrepancy between the legal address and the legal description of the premises.  Here, the mortgage instrument identified the encumbered real property as "LOT 5 OHLAND ROAD REAR" but also stated that the legal description was in "SCHEDULE 'A' ATTACHED HERETO AND MADE A PART HEREOF."  As the Schedule A legal description contained the metes and bounds description of the property which included lots 4, 5 and 6, the Second Department affirmed and held that the mortgage encumbered all three lots.  SRP 2012-5, LLC v. Corrao, 167 A.D.3d 798 (2nd Dept. 2018). 

November 02, 2018

Trial Court Discharges $71,631.56 Relocation Lien as HPD Improperly Filed It Against a Subsequent Owner

On November 2, 2018 the Hon. Kevin J. Kerrigan, Supreme Court, Queens County, invalidated and discharged a certain relocation lien, filed against real property in Queens County, holding that the relocation lien was invalid as it was filed after the premises had been conveyed to a new owner who took title without notice of the relocation lien.  On November 4, 2015, the City of New York Department of Buildings issued a vacate order against the premises upon a finding that the one-family home was converted into an illegal rooming house with six furnished rooms.  On April 1, 2016, Norma Smith Campbell conveyed the premises by deed to Adrian Group LLC, who in turn on  March 15, 2018 conveyed the premises to 32-41 100 Street LLC.  On June 19, 2018, HPD filed a notice of lien against the premises, pursuant to 26 NYCRR 305, stemming from the execution of the November 4, 2015 Vacate Order and the related expenses incurred for relocating four tenants.  

The Hon. Kevin J. Kerrigan held that only the negligent prior owner, Norma Smith Campbell, was responsible to repay the city for the expenses incurred with relocating her tenants and that since, at the time of filing of the section 26-305 relocation lien, she had no fee interest in the premises, the relocation lien was invalid as against the premises and the new owner.  

March 15, 2018

First Department Unanimously Affirms Dismissal of Foreclosure Action as Time-barred

The First Department unanimously affirmed the dismissal of a mortgage foreclosure action as time-barred holding that the RPAPL 1304 ninety (90) day notice does not toll the statute of limitations as the lender has complete control over when to serve the RPAPL 1304 notice.  Lender commenced its first foreclosure action on August 3, 2009 but waited until August 27, 2015 to commence its second foreclosure action, which was twenty-four days past the expiration of the statute of limitations. HSBC Bank USA v. Kirschenbaum, 159 A.D.3d 506 (1st Dept. 2018). 

December 22, 2017

​Fourth Dept. Reverses and Vacates Order Discharging Mortgage due to Borrower’s Failure to Obtain Personal Jurisdiction Over Lender. 

In this case, as outlined above, plaintiff failed to comply with step two of Limited Liability Company Law § 304. We reject plaintiff’s contention that nothing more was required of her after the registered mail was returned as undeliverable. Inasmuch as plaintiff failed to comply with step two, she necessarily also failed to comply with step three, which would show that a party complied with the service requirements of section 304. Initially, we note that plaintiff filed an affidavit of service showing personal service upon the Secretary of State and a notation that service was made upon defendant by registered mail, return receipt requested, but she did not file an affidavit of compliance (see Flannery v General Motors Corp., 86 NY2d 771, 773 [1995]; VanNorden v Mann Edge Tool Co., 77 AD3d 1157, 1159 [3d Dept 2010]; Smolen v Cosco, Inc., 207 AD2d 441, 441-442 [2d Dept 1994]).

December 08, 2017

Trial Court Denies Borrower's CPLR 3215(c) Motion, Finding that Borrower Waived Right to Seek Dismissal after Borrower Attempted to File Untimely Answer and his Counsel Filed an Unqualified Notice of Appearance.

Defendant's notice of cross motion (#002) is dedicated to a claim that the plaintiff is not entitled to a default judgment due to its abandonment of its claim for foreclosure and sale under CPLR 3215(c). This statutory provision requires the plaintiff to take proceedings for the entry of a judgment within one year after the default and if it does not, the complaint shall besubject to dismissal as abandoned by the court unless sufficient cause is shown why the complaint should not be so dismissed. Nevertheless, a defendant may waive the right to seek relief under CPLR 3215(c) by serving an answer or taking "any other steps which may be viewed as a formal or informal appearance."

July 11, 2017

1st Dept: Post-Foreclosure Owner's Possessory Rights are Superior to Those of a Court-Appointed Receiver

After the senior lienholder foreclosed and title was transferred from the borrower to a subsequent owner, a Court-appointed receiver, appointed in a junior lienholder's foreclosure action, interfered with the new owner's possessory rights by, inter alia, attempting to collect rent from the building's tenants.  Even though the receiver had not been discharged in the junior lienholder's action, the First Department unanimously reversed, held that the Receiver's rights were cut off once the Judgment of Foreclosure and Sale was entered in the senior lienholder's foreclosure action, and enjoined the receiver from interfering with the possessory rights of the fee owner.  

May 19, 2017

Foreclosure Auction Winner who Failed to Close was Entitled to Return of $80K Down-payment after Subsequent Auction Resulted in Increased Sales Price.

In this action to foreclose on a tax lien and the sell it encumbers, non-party Avant Garde Development ( Avant ) moves seeking an order pursuant to CPLR 2606 and 2607, directing the NYC Commissioner of Finance to disburse payment to Avant in the amount of $80.000.00. Avant avers that the sum sought represents its down-payment in an unsuccessful attempt to purchase a property at issue at a public auction. Avant contends that it is entitled to the foregoing sum because the property ultimately sold at a subsequent auction for a sum higher that Avant's bid. 

November 29, 2016

In this foreclosure proceeding, defendant Joshua Kirschenbaum ("Kirschenbaum") moves to dismiss the complaint pursuant to CPLR 3211(a)(5)on grounds that this action is barred by the statute of limitations. Plaintiff HSBC Bank USA, National Association as Trustee for

Deutsche Alt-A Securities, Inc. Mortgage Loan Trust Mortgage Pass-Through Certificates Series 2005-2 ("Plaintiff") Opposes the motion. 

October 27, 2016

Determination of respondent Environmental Control Board (ECB), dated March 27, 2014, which affirmed the finding of an ECB administrative law judge that petitioner had violated Administrative Code of City of NY § 28-118.3.2, and imposed a civil penalty of $1,200, unanimously annulled, without costs, and the petition brought pursuant to CPLR article 78 (transferred to this Court by order of Supreme Court, New York County [PaulWooten, J.], entered May 8, 2015), granted. ECB’s determination was not supported by substantial evidence, and was affected by an error of law (see generally 300 Gramatan Ave. Assoc. v State Div. of Human Rights, 45 NY2d 176, 181 [1978]). The record demonstrates that petitioner’s apartment building was constructed in 1905, prior to January 1, 1938, when certificates of occupancy began to be required.

January 07, 2016

First Department: Cause of Action for Aiding and Abetting Fraud Adequately Pled, Affirms Denial of Motion to Dismiss

In a unanimous decision, the First Department affirmed the denial of a motion to dismiss the plaintiffs' cause of action for aiding and abetting fraud, finding that the Plaintiffs sufficiently stated "substantial assistance" and sufficiently pleaded "actual knowledge" of the underlying fraud.  Chambers v. Weinstein, 135 A.D.3d 450 (1st Dept. 2016). 

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