| U.S. Bank, N.A. v Dick |
| 2009 NY Slip Op 08609 [67 AD3d 900] |
| November 17, 2009 |
| Appellate Division, Second Department |
| U.S. Bank, N.A., Appellant, v Dexter Dick et al.,Defendants, and Janet Pirrelli et al., Respondents. |
—[*1] James D. Reddy, Lindenhurst, N.Y., for respondents.
In an action to foreclose a mortgage, the plaintiff appeals, as limited by its brief, from somuch of an order of the Supreme Court, Suffolk County (R. Doyle, J.), dated March 10, 2008, asgranted those branches of the motion of the defendants Janet Pirrelli and Ronald Pirrelli whichwere, in effect, pursuant to CPLR 5015 to vacate their default in answering to the extent ofconditionally vacating a judgment of foreclosure and sale of the same court dated March 12,2007, and staying the foreclosure sale, and, in effect, pursuant to CPLR 2004, for leave to serve alate answer to the complaint.
Ordered that the order is affirmed insofar as appealed from, with costs.
On December 22, 2004 the defendant Dexter Dick mortgaged the property located at 74 BayView Drive West in Sag Harbor (hereinafter the property) to the defendant WMC MortgageCorp. (hereinafter WMC) in exchange for a loan of $500,000. Subsequently, the mortgage waspurchased by the plaintiff U.S. Bank, N.A., as trustee for the registered holders of MASTR AssetBacked Securities Trust 2005-WMCI, Mortgage Pass-Through Certificates (hereinafter theappellant). On February 15, 2006 the appellant commenced a foreclosure action against Dick,Mortgage Electronic Registration Systems, Inc., as nominee for WMC, and "John Doe #1through John Doe #10," representing any parties unknown to the plaintiff who might claim aninterest in the property.
In April 2006 the defendants Janet Pirrelli and Ron Pirrelli (hereinafter together therespondents), the purported owners of the property, served a notice of appearance by theirattorney, who stated in an accompanying letter that he had reviewed the complaint, although therespondents failed to serve an answer. Enclosed with the notice of appearance were copies of anotice of pendency filed against the property by the respondents on December 21, 2005, alongwith a summons and complaint filed the same day, by which the respondents commenced anaction, inter alia, to set aside the deed purporting to convey the property from them to Dick. Inthat complaint, the respondents alleged, among other things, that they had been victims of a"scheme to defraud" and had never intended to sell their home.[*2]
On March 12, 2007 a judgment of foreclosure and salewas signed in favor of the appellant, upon the respondents' default in answering the complaint,and an auction sale was noticed and advertised for July 12, 2007. On July 9, 2007 therespondents moved, inter alia, in effect, to vacate their default in answering the complaint in theinstant action. The Supreme Court, among other things, granted that branch of the motion whichwas, in effect, to vacate the default to the extent of vacating the foreclosure judgment on thecondition that the respondents serve an answer within 30 days of the order.
The Supreme Court providently exercised its discretion in granting those branches of therespondents' motion which were, in effect, to vacate their default in answering, and for leave toserve an answer. Considering the lack of any prejudice to the appellant, especially in light of thenotice of pendency filed against the property of which the appellant was aware or should havebeen aware before it purchased the mortgage, and considering the appellant's default and lateintervention in the respondents' December 2005 action, the existence of a potentially meritoriousdefense, and the public policy favoring the resolution of cases on the merits, the respondents'delay in answering was properly excused (see CPLR 2004; Schonfeld v Blue & White Food Prods.Corp., 29 AD3d 673 [2006]; Yonkers Rib House, Inc. v 1789 Cent. Park Corp., 19 AD3d 687[2005]; Curran v Graf, 13 AD3d409 [2004]).
The appellant's remaining contentions are without merit. Skelos, J.P., Covello, Santucci andBalkin, JJ., concur.