[App Div 2d Dept]

Appeal from judgment brings up…

Wells Fargo Bank, N.A. v Davis, 2020 NY Slip Op 02053 [2d Dept. 2020]

Although no appeal lies from a judgment entered upon the default of an appealing party (see CPLR 5511; Development Strategies Co., LLC, Profit Sharing Plan v Astoria Equities, Inc., 71 AD3d 628; Murphy v Shaw, 34 AD3d 657, 658), an appeal from such a judgment brings up for review those matters which were the subject of contest before the Supreme Court (see Geffner v Mercy Med. Center, 167 AD3d 571, 572; Bottini v Bottini, 164 AD3d 556, 558; Sarlo-Pinzur v Pinzur, 59 AD3d 607, 607-608; see also James v Powell, 19 NY2d 249, 256 n 3). The only issue the defendant raises on this appeal is whether the plaintiff established its standing to maintain the action. This issue was litigated at the inquest and was determined by the Supreme Court at the inquest. Thus, the issue of the plaintiff’s standing is properly before us.

CPLR 3203(a) Priority

Kunin v Guttman, 2020 NY Slip Op 02044 [2d Dept. 2020]

The defendant demonstrated her prima facie entitlement to judgment as a matter of law. “CPLR 5203(a) gives priority to a judgment creditor over subsequent transferees with regard to the debtor’s real property in a county where the judgment was docketed with the clerk of that county” (Matter of Smith v Ralph Dinapoli Landscaping, Inc., 111 AD3d 841, 841-842 [internal quotation marks omitted]; see CPLR 5203[a]; Matter of Accounts Retrievable Sys., LLC v Conway, 83 AD3d 1052, 1053). Pursuant to CPLR 5018(c), a judgment is docketed when the clerk makes an entry “under the surname of the judgment debtor, . . . consist[ing] of . . . the name and last known address of [the] judgment debtor” (CPLR 5018[c][1][i]; see Matter of Smith v Ralph Dinapoli Landscaping, Inc., 111 AD3d at 842; Matter of Accounts Retrievable Sys., LLC v Conway, 83 AD3d at 1053). ” Once docketed, a judgment becomes a lien on the real property of the debtor in that county'” (Matter of Smith v Ralph Dinapoli Landscaping, Inc., 111 AD3d at 842, quoting Matter of Accounts Retrievable Sys., LLC v Conway, 83 AD3d at 1053).

Here, the defendant demonstrated, prima facie, that the judgment was not docketed under the correct surnames of the title owners of the subject property—Alex Robinovich and George Guttmann—and that, therefore, no valid lien against the subject property was created (see CPLR 5018[c][1]; Matter of Smith v Ralph Dinapoli Landscaping, Inc., 111 AD3d at 842; We Buy Now, LLC v Cadlerock Joint Venture, LP, 46 AD3d 549, 550). Moreover, the defendant demonstrated, prima facie, that her purchase of the subject property was supported by fair consideration and made in good faith (see Phillips v Isaiah Owens Funeral Serv., Inc., 69 AD3d 822, 822-823). In opposition to the defendant’s prima facie showing, the plaintiff failed to raise a triable issue of fact.

Referee failed to notice or to hold a hearing on the issues

Bank of N.Y. Mellon v Viola, 2020 NY Slip Op 01895[2d Dept. 2020]

It is undisputed that the referee failed to provide notice to the defendant pursuant to CPLR 4313, or to hold a hearing on the issues addressed in the referee’s report. However, as long as a defendant is not prejudiced by the inability to submit evidence directly to the referee, a referee’s failure to notify a defendant and hold a hearing is not, by itself, a basis to reverse a judgment of foreclosure and sale and remit the matter for a hearing and a new determination of amounts owed (see Excel Capital Group Corp. v 225 Ross St. Realty, Inc., 165 AD3d 1233, 1236; Deutsche Bank Natl. Trust Co. v Zlotoff, 77 AD3d 702). Where, as here, a defendant had an opportunity to raise questions and submit evidence directly to the Supreme Court, which evidence could be considered by the court in determining whether to confirm the referee’s report, the defendant is not prejudiced by any error in failing to hold a hearing (see Excel Capital Group Corp. v 225 Ross St. Realty, Inc., 165 AD3d at 1236; Deutsche Bank Natl. Trust Co. v Zlotoff, 77 AD3d at 702). Therefore, the defendant failed to establish that the court erred in confirming the referee’s report and awarding the plaintiff a judgment of foreclosure and sale on the ground that the referee failed to provide notice of a hearing or hold a hearing.

Preliminary injunction should not grant ultimate relief requested

Berman v TRG Waterfront Lender, LLC, 2020 NY Slip Op 01902 [2d Dept. 2020]

“[A]bsent extraordinary circumstances, a preliminary injunction will not issue where to do so would grant the movant the ultimate relief to which he or she would be entitled in a final judgment” (SHS Baisley, LLC v Res Land, Inc., 18 AD3d 727, 728; accord Zoller v HSBC Mtge. Corp [USA], 135 AD3d 932, 933; see Board of Mgrs. of Wharfside Condominium v Nehrich, 73 AD3d 822, 824). Here, as TRG and Hansen contend, the Supreme Court should not have, in effect, granted the ultimate relief requested in Berman’s complaint, which was the return of the down payment. In ordering Hansen to return the down payment to Berman, the court, in effect, treated Berman’s motion as one for summary judgment (see CPLR 3212; St. Paul Fire & Mar. Ins. Co. v York Claims Serv., 308 AD2d 347, 349), which was improper, as issue had not been joined (see CPLR 3212[a]; City of Rochester v Chairella, 65 NY2d 92, 101; St. Paul Fire & Mar. Ins. Co. v York Claims Serv., 308 AD2d at 349).

Moreover, Berman failed to demonstrate his entitlement to temporary injunctive relief pursuant to CPLR 6301, as he failed to establish any of the three required elements for such relief: (1) likelihood of ultimate success on the merits, (2) irreparable injury absent granting of a preliminary injunction, (3) and a balancing of equities in his favor (see Keller v Kay, 170 AD3d 978, 981; Carroll v Dicker, 162 AD3d 741, 742; St. Paul Fire & Mar. Ins. Co. v York Claims Serv., 308 AD2d at 348).

Restored to the pre note of issue discovery stage

Ryskin v Corniel, 2020 NY Slip Op 01658 [2d Dept. 2020]

The Supreme Court should have denied, as unnecessary, that branch of the plaintiff’s motion which was to restore the action to the active calendar (see Leach v North Shore Univ. Hosp. at Forest Hills, 13 AD3d 415, 416; Neidereger v Hidden Park Apts., 306 AD2d 392). Since the note of issue the plaintiff filed in January 2014 was vacated, thereafter, the action was restored to the pre-note of issue discovery stage (see Leach v North Shore Univ. Hosp. at Forest Hills, 13 AD3d at 416). Because no note of issue had been filed, the action was not on the trial calendar. Therefore, the court’s action of marking the action “disposed” as of April 15, 2014, after the plaintiff failed to file and serve a note of issue by the court-ordered deadline, did not dismiss the action (see Arroyo v Board of Educ. of City of N.Y., 110 AD3d 17, 21). For the same reason, contrary to the defendant’s contention, CPLR 3404 was inapplicable (see Bar-El v Key Food Stores Co., Inc., 11 AD3d 420, 421). As “this action was never properly dismissed, there was no need for a motion to restore” (Arroyo v Board of Educ. of City of N.Y., 110 AD3d at 21).

The Supreme Court improvidently exercised its discretion in denying that branch of the plaintiff’s motion which was to extend his time to file a note of issue. CPLR 2004 allows a court to “extend the time fixed by any statute, rule or order for doing any act, upon such terms as may be just and upon good cause shown.” Here, the plaintiff established good cause for his delay in completing discovery and filing a note of issue based on law office failure, among other things (see CPLR 2004; see generally Tewari v Tsoutsouras, 75 NY2d 1, 12-13; Oliver v Town of Hempstead, 68 AD3d 1079; Storchevoy v Blinderman, 303 AD2d 672). Accordingly, we grant that branch of the plaintiff’s motion, and the plaintiff’s time to complete outstanding discovery and file a note of issue is extended until 30 days after service upon him of a copy of this decision and order.

We disagree with the Supreme Court’s determination to grant the defendant’s cross motion to strike the plaintiff’s amended bill of particulars. The stipulation dated November 11, 2014, provided, inter alia, that discovery was complete except for the plaintiff’s deposition and medical examination and that the plaintiff would file the note of issue by January 23, 2015. However, although the plaintiff failed to file the note of issue by this date, the defendant subsequently participated in the deposition and medical examination of the plaintiff. While we do not condone the parties’ entry into a stipulation regarding the scheduling of discovery and filing deadlines without court approval, in view of the fact that the parties proceeded with discovery beyond the agreed deadline, the court should have denied the defendant’s cross motion to strike the plaintiff’s amended bill of particulars.

5015(a)(1)(2)(3)

M&T Bank v Crespo, 2020 NY Slip Op 01608 [2d Dept. 2020]

“CPLR 5015(a) authorizes a court to relieve a party from an order or judgment, on motion, based on the existence of specified grounds[, including]: . . . newly discovered evidence (see CPLR 5015[a][2]); [and] fraud, misrepresentation, or other misconduct of an adverse party (see CPLR 5015[a][3])” (Bank of N.Y. Mellon Trust Co., N.A. v Thonfeld, 172 AD3d 665, 666). “A party seeking to vacate a judgment pursuant to CPLR 5015(a)(2) must establish, inter alia, that the newly discovered evidence probably would have produced a different result” (OneWest Bank, FSB v Galloway, 148 AD3d 818, 819; see Wall St. Mtge. Bankers, Ltd. v Rodgers, 148 AD3d 1088, 1089; Meltzer v Meltzer, 140 AD3d 716, 717).

Here, we agree with the Supreme Court’s determination granting the plaintiff’s motion for a judgment of foreclosure and sale and denying the defendant’s cross motion. The defendant failed to demonstrate that the newly discovered evidence probably would have produced a different result (see Wall St. Mtge. Bankers, Ltd. v Rodgers, 148 AD3d at 1089; OneWest Bank, FSB v Galloway, 148 AD3d at 819; Meltzer v Meltzer, 140 AD3d at 717). Further, the defendant failed to establish that the plaintiff engaged in any fraud, misrepresentation, or other misconduct warranting vacatur of the judgment pursuant to CPLR 5015(a)(3) (see Deutsche Bank Natl. Trust Co. v Conway, 169 AD3d 641, 642; Kondaur Capital Corp. v Stewart, 166 AD3d 748, 750; Bank of N.Y. Mellon Trust Co., N.A. v Sukhu, 163 AD3d 748, 751).

Maruf v E.B. Mgt. Props., LLC, 2020 NY Slip Op 01610 [2d Dept. 2020]

A party seeking to vacate an order entered upon his or her default in opposing a motion must demonstrate both a reasonable excuse for the default and a potentially meritorious [*2]opposition to the motion (see CPLR 5015[a][1]; Seaman v New York Univ., 175 AD3d 1578, 1579). Law office failure may qualify as a reasonable excuse for a party’s default if the claim of such failure is supported by a credible explanation of the default (see Singh v Sukhu, ___ AD3d ___, 2020 NY Slip Op 01105 [2d Dept 2020]). Nevertheless, ” [w]hile CPLR 2005 allows courts to excuse a default due to law office failure, it was not the Legislature’s intent to routinely excuse such defaults, and mere neglect will not be accepted as a reasonable excuse'” (Ortega v Bisogno & Meyerson, 38 AD3d 510, 511, quoting Incorporated Vil. of Hempstead v Jablonsky, 283 AD2d 553, 553-554; see Bank of N.Y. Mellon Trust Co., N.A. v Talukder, 176 AD3d 772, 774; Seaman v New York Univ., 175 AD3d at 1579).

Here, the plaintiff’s counsel asserted that they failed to oppose the defendant’s motion because they had the action marked in their calendaring system as “stayed.” However, the plaintiff’s counsel made no effort to explain if or why the action remained marked as stayed after having entered into the January 10, 2017, stipulation lifting the stay on motion practice. Further, the plaintiff’s counsel appeared on the return date of the motion to strike the complaint, despite allegedly believing that motion practice was stayed, and the matter was adjourned so as to allow the plaintiff additional time to oppose the motion. Notwithstanding the adjournment, the plaintiff failed to file opposition papers. The plaintiff also did not offer any excuse for the nine-month delay in moving to vacate the default (see Nanas v Govas, 176 AD3d 956, 957). Under these circumstances, the plaintiff failed to offer a reasonable excuse for his default.

In any event, the plaintiff failed to demonstrate a potentially meritorious defense to the motion to strike the complaint. Before a court invokes the drastic remedy of striking a pleading, there must be a clear showing that the failure to comply with discovery was willful and contumacious (see Harris v City of New York, 117 AD3d 790; Almonte v Pichardo, 105 AD3d 687, 688). Willful and contumacious conduct may be inferred from a party’s repeated failure to comply with discovery, coupled with inadequate explanations for those failures, or a failure to comply with discovery over an extended period of time (see Teitelbaum v Maimonides Med. Ctr., 144 AD3d 1013; Orgel v Stewart Tit. Ins. Co., 91 AD3d 922, 923). Here, on his motion to vacate, the plaintiff did not provide an explanation for his failure to comply with discovery over the course of one year, despite four stipulations requiring the disclosure (see Orgel v Stewart Tit. Ins. Co., 91 AD3d at 924).

CPLR 503 and 510 [Venue]

Drayer-Arnow v Ambrosio & Co., Inc., 2020 NY Slip Op 01601 [2d Dept. 2020]

CPLR 503 provides, in pertinent part, that “[e]xcept where otherwise prescribed by law, the place of trial shall be in the county in which one of the parties resided when it was commenced” (CPLR 503[a]). The sole residence of a domestic corporation for venue purposes is the county designated in its certificate of incorporation, despite its maintenance of an office or facility in another county (see CPLR 503[c]; O.K. v Y.M. & Y.W.H.A. of Williamsburg, Inc., 175 AD3d 540; Kidd v 22-11 Realty, LLC, 142 AD3d 488, 489; Matoszko v Kielmanowicz, 136 AD3d 762, 763).

“To effect a change of venue pursuant to CPLR 510(1), a defendant must show that the plaintiff’s choice of venue is improper and that its choice of venue is proper” (Gonzalez v Sun Moon Enters. Corp., 53 AD3d 526, 526; see Kidd v 22-11 Realty, LLC, 142 AD3d at 489). To succeed on their motions here, the moving defendants were obligated to demonstrate that, on the date that this action was commenced, none of the parties resided in Queens County (see Pomaquiza v 145 WS Owner, LLC, 172 AD3d 1119, 1120; Campbell v Western Beef, 123 AD3d 966, 967; Ramos v Cooper Tire & Rubber Co., 62 AD3d 773). Only if the moving defendants made such a showing was the plaintiff required to establish, in opposition, that the venue she selected was proper (see Deas v Ahmed, 120 AD3d 750, 751; Chehab v Roitman, 120 AD3d 736, 737).

Here, the moving defendants failed to submit the certificate of incorporation of Inshallah. In support of its motion, Northridge admitted that the address of Inshallah’s principal office listed on the website of the New York State Department of State, Division of Corporations, was located in Queens County, which only confirmed that the plaintiff’s choice of venue was proper. Although Inshallah’s chief executive officer claimed that Inshallah’s principal office was in Suffolk County and that it no longer maintained its principal office in Queens County, the moving defendants failed to establish that Inshallah’s certificate of incorporation had been amended to designate a county other than Queens (see Kidd v 22-11 Realty, LLC, 142 AD3d at 489; Matoszko v Kielmanowicz, 136 AD3d at 763; Hamilton v Corona Ready Mix, Inc., 21 AD3d 448, 449). The plaintiff’s submission, in opposition, of a certified copy of Inshallah’s certificate of incorporation, which demonstrated that Inshallah’s principal office was located in Queens County, conclusively established that her choice of venue was proper. Accordingly, those branches of their motions which were pursuant to CPLR 510(1) and 511(a) to change the venue of the action from Queens County to Suffolk County should have been denied (see O.K. v Y.M. & Y.W.H.A. of Williamsburg, Inc., 175 AD3d 540; Kidd v 22-11 Realty, LLC, 142 AD3d at 489; Ramos v Cooper Tire & Rubber Co., 62 AD3d at 773).

Disqual

Carroll-Mikhail v Teutonico, 2020 NY Slip Op 01596 [2d Dept. 2020]

In this action, inter alia, to recover damages for personal injuries allegedly sustained in an automobile accident, the plaintiffs appeal from an order which, in effect, granted the defendants’ motion to disqualify the law firm of Jonathan D’Agostino & Associates, P.C. (hereinafter the D’Agostino Firm) from representing the plaintiffs in this action. The D’Agostino Firm previously represented one of the defendants in this action, as a plaintiff in an unrelated personal injury action involving a different automobile accident which occurred approximately eight years prior to the accident at issue herein, and which was long resolved. Under the circumstances, disqualification of the D’Agostino Firm from representing the plaintiffs in this action was improvident, and therefore, we reverse the order and deny the defendants’ motion.

A party’s entitlement to be represented in ongoing litigation by counsel of his or her own choosing is a valued right which should not be abridged absent a clear showing by the party seeking disqualification that it is warranted (see Gulino v Gulino, 35 AD3d 812). Here, it is undisputed that the matter in which the D’Agostino Firm formerly represented one of the defendants in this action is unrelated to the present litigation. Moreover, the defendants failed to show that there was a reasonable probability that the D’Agostino Firm obtained confidential information in the course of the prior representation, which could be relevant to the present litigation (see Jamaica Pub. Serv. Co. v AIU Ins. Co., 92 NY2d 631, 638; Greene v Greene, 47 NY2d 447, 453). As such, the defendants failed to satisfy their burden of establishing that disqualification was warranted (see Aryeh v Aryeh, 14 AD3d 634).

5015 and mere neglect

Campbell v TPK Heating, Ltd., 2020 NY Slip Op 01595 [2d Dept. 2020]

“The court has discretion to accept law office failure as a reasonable excuse (see CPLR 2005) where the claim is supported by a detailed and credible explanation of the default” (Option One Mtge. Corp. v Rose, 164 AD3d at 1252; see Seaman v New York Univ., 175 AD3d 1578; Soto v Chelsea W26, LLC, 166 AD3d 1048, 1049). “However, mere neglect is not a reasonable excuse” (Seaman v New York Univ., 175 AD3d at 1579). Where a claim of law office failure is conclusory and unsubstantiated or lacking in credibility, it should be rejected (see Kondrotas-Williams v Westbridge Enters., Inc., 170 AD3d 983, 985; Lefcort v Samowitz, 165 AD3d 772, 773).

Here, the plaintiff’s unsubstantiated allegation of law office failure was insufficient to demonstrate a reasonable excuse for its default in appearing at the calendar call on March 6, 2017 (see Option One Mtge. Corp. v Rose, 164 AD3d at 1252). Moreover, the plaintiff proffers no excuse for his more than one-year delay in moving to vacate the order directing dismissal of the action and in taking any steps to ascertain the status of the case (see Diamond Truck Leasing Corp. v Cross Country Ins. Brokerage, Inc., 62 AD3d 745; Edwards v Feliz, 28 AD3d 512, 513).

3216, Administrative Dismissals, and Law of the Case

Deutsche Bank Natl. Trust Co. v Gambino, 2020 NY Slip Op 01476 [2d Dept 2020]

In an order dated May 3, 2012, the Bank was directed to move for an order of reference on or before May 31, 2012, “or the matter will be dismissed for plaintiff’s failure to prosecute.” The Bank took no further action, and the 2009 action was “administratively dismissed” in July 2012.

In 2015, the Bank, denominated as “Deutsche Bank National Trust Company, as Trustee for Morgan Stanley ABS Capital I Inc. Trust 2004-NC4, Mortgage Pass-Through Certificates, Series 2004-NC4,” commenced a new action against, among others, Gambino, to foreclose the same mortgage (hereinafter the 2015 foreclosure action). In the complaint, the Bank recited that it intended to have the 2009 action discontinued. Gambino moved, inter alia, to dismiss the complaint in the 2015 foreclosure action insofar as asserted against her as time-barred, contending that more than six years had elapsed since the acceleration of the debt in the 2009 action, and that the 2009 action had been “administratively dismissed” in 2012. In an order dated March 17, 2016, the Supreme Court denied the motion on the ground that the 2009 action had never been properly dismissed because a 90-day demand was never served upon the Bank pursuant to CPLR 3216. Gambino appealed from the order dated March 17, 2016.

On Gambino’s prior appeal, this Court determined that the Supreme Court erred in denying Gambino’s motion on a ground that the parties had not litigated, namely that the 2009 action had never been properly dismissed. This Court reversed the Supreme Court’s denial of Gambino’s motion to dismiss the complaint in the 2015 foreclosure action insofar as asserted against her, determining that it was time-barred (see Deutsche Bank Natl. Trust Co. v Gambino, 153 AD3d 1232 [hereinafter Gambino I]).

In December 2016, while the prior appeal was pending before this Court, the Bank moved, inter alia, to restore the 2009 action to the active calendar. In relevant part, the Bank argued that the Supreme Court was without authority to dismiss this action due to its failure to comply with CPLR 3216(b). Gambino opposed the motion, contending, among other things, that the time to seek restoration had expired, and she cross-moved to dismiss the complaint insofar as asserted against her. In an order dated April 14, 2017, the Supreme Court, inter alia, denied that branch of the Bank’s motion which was to restore the 2009 action to the active calendar and granted Gambino’s cross motion to dismiss the complaint insofar as asserted against her. The Bank appeals.

Contrary to Gambino’s contention, this Court’s determination in Gambino I did not constitute the law of the case with regard to the propriety of the dismissal of the 2009 action. The doctrine of the law of the case “applies only to legal determinations that were necessarily resolved on the merits in [a] prior decision, and to the same questions presented in the same case” (Mosby v Parilla, 140 AD3d 1129, 1130-1131 [internal quotation marks omitted]; see Ramanathan v Aharon, 109 AD3d 529, 530). In Gambino I, this Court concluded only that the 2015 foreclosure action was time-barred. As this Court expressly stated, in Gambino I, the plaintiff did not dispute the propriety of the dismissal of the 2009 action and, therefore, any issue as to whether the 2009 action had been properly dismissed was not before this Court (see Deutsche Bank Natl. Trust Co. v Gambino, 153 AD3d at 1234).

Nor is the Bank precluded by the concept of judicial estoppel from disputing the administrative dismissal of the 2009 action. While, in an effort to successfully prosecute the 2015 foreclosure action, the Bank represented that it would seek to discontinue the 2009 action, it is not judicially estopped from changing its position. ” [A] party who assumes a certain position in a prior legal proceeding and secures a favorable judgment therein is precluded from assuming a contrary position in another action simply because his or her interests have changed'” (Barker v Amorini, 121 AD3d 823, 824, quoting GECMC 2007-C1 Burnett St., LLC v Hoti Enters., L.P., 115 AD3d 642, 643). The Bank did not obtain a favorable judgment in the 2015 foreclosure action.

The Supreme Court should have granted that branch of the Bank’s motion which was to restore the 2009 action to the active calendar. The 2009 action was never formally dismissed, as the marking-off procedures of CPLR 3404 do not apply to pre-note of issue actions such as this one (see WM Specialty Mortg., LLC v Palazzollo, 145 AD3d 714, 715; JPMorgan Chase Bank, N.A. v Mehrnia, 143 AD3d 946, 947). Since the 2009 action could not properly be marked off pursuant to CPLR 3404, the Bank was not required to move to restore within any specified time frame and was not obligated to demonstrate a reasonable excuse and a potentially meritorious claim (see Bank of N.Y. v Arden, 140 AD3d 1099, 1100; Yunga v Yonkers Contr. Co., Inc., 134 AD3d 1031, 1033; Rakha v Pinnacle Bus Servs., 98 AD3d 657, 657-658). Further, there was neither a 90-day notice pursuant to CPLR 3216 (see Onewest Bank, FSB v Kaur, 172 AD3d 1392, 1393; Campbell v New York City Tr. Auth., 109 AD3d 455, 455), nor an order dismissing the complaint pursuant to 22 NYCRR 202.27 (see Wells Fargo Bank, N.A. v Drago, 170 AD3d 1083, 1084; JPMorgan Chase Bank, N.A. v Mehrnia, 143 AD3d at 947). Finally, Gambino does not contend that the 2009 action was dismissed pursuant to CPLR 3215(c).