| Deutsche Bank Natl. Trust Co. v Ford |
| 2020 NY Slip Op 02962 [183 AD3d 1168] |
| May 21, 2020 |
| Appellate Division, Third Department |
[*1]
| Deutsche Bank National Trust Company, as Trustee,Respondent, v William F. Ford et al., Appellants. |
Smith Hoke, PLLC, Latham (Meredith A. Moriarty of counsel), for appellants.
Parker Ibrahim & Berg LLP, New York City (Mitchell S. Kurtz of counsel), forrespondent.
Devine, J. Appeal from a judgment of the Supreme Court (Buchanan, J.), enteredJanuary 31, 2019 in Schenectady County, which, among other things, granted plaintiff'smotion for a judgment of foreclosure and sale.
Plaintiff commenced this mortgage foreclosure action in October 2007 and serveddefendants, who did not appear within the time allowed. Plaintiff successfully moved foran order granting a default judgment and appointing a referee to compute, then obtaineda judgment of foreclosure and sale, in 2008. Upon plaintiff's motion, the order and thejudgment were vacated in 2013. Plaintiff obtained a second order of reference in 2015that was later vacated upon consent.
In 2016, plaintiff again moved for an order of reference upon defendants' default.Defendants opposed the motion, arguing that the action should be dismissed asabandoned pursuant to CPLR 3215 (c) or, in the alternative, that the order of referenceshould be accompanied by a directive for a settlement conference. Supreme Court (ReillyJr., J.) appointed a referee but stayed the appointment until a scheduled conferenceoccurred. Plaintiff subsequently moved for a judgment of foreclosure and sale.Defendants opposed that motion and, in 2018, cross-moved for relief that includeddismissal of the complaint. Supreme Court (Buchanan, J.) granted plaintiff's motion anddenied defendants' cross motion in an order, then executed a judgment of foreclosure andsale. Defendants appeal.[FN1]
We affirm. Defendants defaulted in this action and, contrary to their contention,plaintiff manifested an intent to pursue it and "initiated proceedings for entry of thedefault judgment within one year of [that] default" by obtaining an order of reference anda judgment of foreclosure and sale, albeit later vacated, in 2008 (CitiMortgage, Inc. v Lottridge,143 AD3d 1093, 1094 [2016]; see CPLR 3215 [c]; HSBC Bank USA, N.A. vAlexander, 124 AD3d 838, 839 [2015]). Plaintiff thereafter continued to pursuethe matter, but defendants made no effort to vacate the 2016 order of reference orotherwise reopen their default. Although defendants belatedly suggested that there maybe grounds for vacatur under CPLR 5015 after plaintiff pointed out, in response to their2018 cross motion, that they were in default, an argument raised for the first time in replypapers is not properly before us (see Oglesby v Barragan, 135 AD3d 1215, 1216 [2016]; 10 Cardinal Lane, LLC v N.K.T.Land Acquisitions, Inc., 117 AD3d 1133, 1136 n 2 [2014]).[FN2] Accordingly, havingfailed "to move under CPLR 5015 (a) for vacatur of [their] default in the action or tovacate the [2016] order of reference" founded upon that default (Bank of N.Y. Mellon Trust Co.,N.A. v Balash, 156 AD3d 1203, 1204 [2017]; compare U.S. Bank N.A. vGilchrist, 172 AD3d 1425, 1428 [2019]), defendants "are deemed to haveadmitted all factual allegations contained in the complaint and all reasonable inferencesthat flow from them" (Woodson v Mendon Leasing Corp., 100 NY2d 62, 71[2003]; see McClelland v Climax Hosiery Mills, 252 NY 347, 351 [1930]).Defendants' attacks upon the merits of the facially viable claims in the complaint aretherefore barred, as are their attempts to raise various nonjurisdictional defenses to theissuance of the appealed-from judgment (see US Bank N.A. v Oliver, 180 AD3d 843, 844[2020]; U.S. Bank N.A. v Gilchrist, 172 AD3d at 1428; Bank of N.Y. MellonTrust Co., N.A. v Balash, 156 AD3d at 1204; Nationstar Mtge., LLC v Kamil, 155 AD3d 968, 968-969[2017]; PHH Mtge. Corp. vCelestin, 130 AD3d 703, 704 [2015]).
Finally, inasmuch as the standing of plaintiff to bring suit "is an issue separate fromthe subject matter of the action . . . , and does not affect the court's power toentertain the case before it" (Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d239, 243 [2007]; see HSBCBank USA, N.A. v Ashley, 104 AD3d 975, 976 [2013], lv dismissed 21NY3d 956 [2013]), it is one of the defenses precluded by defendants' continuing default(see Bank of N.Y. Mellon Trust Co., N.A. v Balash, 156 AD3d at 1204;Nationstar Mtge., LLC v Kamil, 155 AD3d at 968-969). It is accordinglyunnecessary to consider the separate question of whether RPAPL 1302-a—whichexempts defendants in certain foreclosure actions from the general rule that theaffirmative defense of standing is waived if not raised in an answer or timely pre-answermotion to dismiss (see CPLR 3211 [e])—applies to this and otherforeclosure actions commenced prior to the statute's enactment.
Mulvey, Aarons and Colangelo, JJ., concur.
Lynch, J.P. (dissenting). I respectfully dissent. The record shows that plaintiffobtained an order of reference in March 2008 and a judgment of foreclosure and sale inJune 2008 from Supreme Court (Reilly Jr., J.). In May 2013, however, plaintiff moved tovacate both the order and judgment because plaintiff could not "ensure that the submitteddocuments in support of the foreclosure" comply with Administrative Order of the ChiefAdministrative Judge of the Courts AO/548/10 issued by the Chief AdministrativeJudge.[FN*]Notably, the application was supported by a May 2013 affirmation of plaintiff's counsel,Stephen Valente (hereinafter the 2013 affirmation). In a previously filed affirmation inDecember 2012 (hereinafter the 2012 affirmation), Valente affirmed compliance withAdministrative Order AO/548/10 based on the affidavit of Robert Krenitsky, an officerof plaintiff's servicing agent. In the 2013 affirmation, Valente changed the course andrepresented that he was "unable to verily affirm that the documents previously submittedto the [c]ourt on behalf of . . . [p]laintiff by prior servicer to the loan arewholly true and accurate." Based on the 2013 affirmation, Supreme Court (Reilly Jr., J.)granted plaintiff's motion to vacate both the order and judgment in 2013.
In March 2015, plaintiff moved for a second order of reference, which was grantedin April 2015, but vacated on consent in October 2015. In April 2016, plaintiff movedfor a third order of reference, which Supreme Court granted in June 2016. Thereafter, bymotion returnable on December 15, 2017, plaintiff moved for a judgment of foreclosureand sale. The record shows that, on each of these last three applications, plaintiffsubmitted the 2012 affirmation to establish compliance with Administrative OrderAO/548/10, as superseded by Administrative Order AO/431/11. In their June 2018affidavit in opposition, defendants asserted that plaintiff's motion was based on the 2012affirmation, which was discounted, and that plaintiff had otherwise failed to establishcompliance with the administrative orders. In August 2018, defendants filed a"[c]ross-motion against a [j]udgment of [f]oreclosure and [s]ale in favor of. . . defendants," again pointing out the discrepancy in plaintiff's reliance onthe 2012 affirmation. In January 2019, Supreme Court (Buchanan, J.) granted plaintiff'smotion for a judgment of foreclosure and sale without addressing the discrepancyregarding plaintiff relying on the 2012 affirmation. In my view, this was a foundationalerror that compels a reversal of the court's judgment.
Pursuant to CPLR 5015 (a) (3), a court may vacate a judgment or order obtainedthrough a misrepresentation. Although defendants, who were then proceeding pro se, didnot expressly cite to this provision in opposing plaintiff's application, they did highlightthe misuse of the 2012 affirmation. As such, their opposition should be as invoking suchrelief. This record confirms that both the June 2016 order of reference and the January2019 judgment were procured based upon plaintiff's presentation of the 2012affirmation. At best, this is a mistaken misrepresentation on plaintiff's part, but amisrepresentation nonetheless, which this Court should not countenance. Fundamentally,plaintiff's submissions fail to establish compliance with Administrative OrderAO/548/10, as superseded by Administrative Order AO/431/11. Absent compliance,plaintiff is not entitled to affirmative relief because plaintiff's counsel has yet to affirmthe validity of the documentation submitted in support of the June 2016 order ofreference or the January 2019 judgment. As such, it is my view that the January 2019judgment should be reversed. Additionally, under the circumstances presented,defendants' cross motion should be treated as including a request to vacate the June 2016order of reference, and such request should be granted.
Ordered that the judgment is affirmed, with costs.
Footnote 1:Defendants' notice ofappeal improperly references the order rather than the foreclosure judgment, but we deemthe appeal to have been taken from the latter (see CPLR 5520 [c]; Wells Fargo Bank, N.A. vKohli, 173 AD3d 941, 941 [2019]; Pidwell v Duvall, 28 AD3d 829, 831 n 3 [2006]).
Footnote 2:Defendants request thatwe deem their 2018 cross motion to be a timely pre-answer motion to dismiss thecomplaint and treat their opposition to plaintiff's motion for a judgment of foreclosureand sale as an application for relief that they did move for or clearly seek. Those requestswere not raised before Supreme Court and, as a result, they are not properly before us (see Sugar Foods De Mexico vScientific Scents, LLC, 88 AD3d 1194, 1196-1197 [2011]; Yellin vRogers, 261 AD2d 399, 399 [1999]).
Footnote *:"[T]he ChiefAdministrative Judge issued Administrative Order AO/548/10 in October 2010, whichwas superseded by Administrative Order AO/431/11 (retroactively effective Nov. 18,2010). Administrative Order AO/431/11 requires a plaintiff's attorney in a residentialmortgage foreclosure action to file an affirmation indicating that he or she communicatedwith a representative of the plaintiff, and that the representative informed the attorneythat he/she/they (a) personally reviewed [the] plaintiff's documents and records relatingto this case for factual accuracy; and (b) confirmed the factual accuracy of the allegationsset forth in the complaint and any supporting affidavits or affirmations filed with thecourt, as well as the accuracy of the notarizations contained in the supporting documentsfiled therewith" (Flagstar Bank,FSB v Pretto, 167 AD3d 1314, 1315 [2018] [internal quotation marks, bracketsand citations omitted]).