Mortgage Foreclosure-Related Handdowns - January 20, 2022 Edition

Second Department

BAC Home Loan Servicing, L.P. v. Howell, 2022 NY Slip Op 00299 (January 19, 2022)

The Second Department affirmed an order denying a defendant trustee’s motion to restore a previously withdrawn pre-answer motion to dismiss and to either deem her answer timely served or grant leave to file a late answer. The pre-answer motion had been made by the borrower individually and not her trustee. The court also found that the defendant trustee failed to demonstrate an excuse for her six-year default in answering the complaint.

Deutsche Bank Natl. Trust Co. v. Allenstein, 2022 NY Slip Op 00300 (January 19, 2022)

The court reversed two orders of the motion court and denied the plaintiff’s motion for an order of reference and default judgment, and granted the non-party appellant’s motion to intervene, holding that “A timely motion for leave to intervene should be granted when the intervenor has a real and substantial interest in the outcome of the proceedings.” The court also found that no relief was available to plaintiff pursuant to CPLR 3215 because “plaintiff's excuses for failing to timely move for leave to enter a default judgment and for an order of reference were insufficient since the events in question occurred after the one-year time period had already expired.”

Note: the motion to intervene was made in response to the plaintiff's motion, among other things, for leave to enter a default judgment and for an order of reference, which was made approximately 6½ years subsequent to the default of the defendants

Ditech Fin., LLC v. Howell, 2022 NY Slip Op 00301 (January 19, 2022)

The Second Department affirmed a decision denying a defendant trustee’s motion to renew her opposition to the plaintiff’s motion for an order of reference and also denying the defendant trustee’s cross-motion to dismiss the complaint. The court found that the motion court exercised discretion when it denied the motion to review, as the defendant’s argument with respect to lack of standing would not have changed the outcome of the predecessor plaintiff’s prior motion, as the defendant was in default, and RPAPL 1302-a, which allows standing to be raised at any time, does not apply to a defendant in default.

Financial Freedom Acquisition, LLC v. Braunsberg, 2022 NY Slip Op 00302 (January 19, 2022)

The Second Department dismissed an appeal of an order denying reargument and further affirmed an order denying the defendants’ motion to stay the proceedings because no affidavit of the defendant was submitted. Additionally, the court affirmed an order enjoining the defendants from filing any motion or application for relief of any kind, on notice or ex parte, without first obtaining an order from the court expressly permitting such filing and for costs against defendants’ counsel in the amount of $10,692. Finally, the court affirmed an order granting a judgment of foreclosure and sale on the basis that the referee’s findings were supported by the record.

HSBC Bank USA, N.A. v. Walker, 2022 NY Slip Op 00304 (January 19, 2022)

The Second Department affirmed an order denying the defendant’s motion pursuant to CPLR 5015(a)(2), (3), and (4) to vacate a judgment of foreclosure and sale. The court found that the affidavit of the process server constituted prima facie evidence of proper service and that the defendant failed to submit sufficient evidence to rebut the process server’s affidavit. With respect to newly-discovered evidence, the court found that the “movant must establish, among other things, that the evidence could not have been discovered earlier through the exercise of due diligence” and that a bankruptcy petition filed in 2008 by the plaintiff’s predecessor in interest and a settlement agreement dated 2011 were not facts that could not have been discovered earlier. Additionally, because the defendant failed to present a reasonable excuse for default, it was unnecessary to consider whether he had a meritorious defense.

SC Bromley 1, LLC v. Sherman, 2022 NY Slip Op 00326 (January 19, 2022)

The Second Department affirmed an order granting the plaintiff’s motion for summary judgment and denying the defendant’s cross-motion for summary judgment of dismissal pursuant to CPLR 3215. “While the action was a legal nullity insofar as asserted against the deceased mortgagor, because she died intestate, title to the real property automatically vested in her distributees, and the action, which does not seek a deficiency judgment against them, was therefore properly commenced directly against the distributees.”

U.S. Bank N.A. v. Sokolof, 2022 NY Slip Op 00330 (January 19, 2022)

The Second Defendant reversed an order denying a pro se defendant’s motion, made on the return date of a motion for summary judgment and an order of reference, for an extension of time to obtain counsel. The court found that it has “the discretion to grant an extension of time to file opposition papers ‘upon such terms as may be just and upon good cause shown, whether the application for extension is made before or after the expiration of the time fixed.’” The factors to be considered are the length of the delay, the reason or excuse for the delay, and any prejudice to the party opposing the motion.

U.S. Bank Trust, N.A. v. Johnson, 2022 NY Slip Op 00331 (January 19, 2022)

The Second Department reversed an order denying the defendants’ motion to vacate a judgment of foreclosure and sale pursuant to CPLR 5015(a)(4) on the basis that the plaintiff had failed to properly notice the motion. “The failure to give a party proper notice of a motion deprives the court of jurisdiction to entertain the motion and renders the resulting order void.” The Second Department declined to reverse the portion of the order for sanctions and an award for attorney’s fees because the record did not show that the plaintiff engaged in frivolous conduct (22 NYCRR § 130-1.1).