| HSBC Bank USA, N.A. v Simmons |
| 2015 NY Slip Op 01609 [125 AD3d 930] |
| February 25, 2015 |
| Appellate Division, Second Department |
[*1]
| HSBC Bank USA, National Association,Appellant, v Sherrilyn Simmons et al., Defendants. |
Hogan Lovells US LLP, New York, N.Y. (David Dunn, Chava Brandriss, andHeather R. Gushue of counsel), for appellant.
In an action to foreclose a mortgage, the plaintiff appeals from an order of theSupreme Court, Kings County (Schack, J.), dated December 16, 2013, which denied itsmotion for leave to enter a judgment of foreclosure and sale incorporating the findings ina report of a referee dated August 26, 2013, and, sua sponte, (a) vacated an order of thesame court (Knipel, J.) dated August 6, 2013, granting the plaintiff's motion, in effect, tohold the defendants in default upon their failure to appear or answer, and referred thematter to a referee, among other things, to compute the amount owed to the plaintiff, and(b) directed the dismissal of the complaint and the cancellation of the notice of pendencyfiled against the subject property.
Ordered that on the Court's own motion, the notice of appeal from so much of theorder as, sua sponte, vacated the order dated August 6, 2013, and directed the dismissalof the complaint and the cancellation of the notice of pendency is deemed to be anapplication for leave to appeal from those portions of the order, and leave to appeal fromthose portions of the order is granted (see CPLR 5701 [c]); and it is further,
Ordered that the order dated December 16, 2013, is reversed, on the law, withoutcosts or disbursements, and the plaintiff's motion for leave to enter a judgment offoreclosure and sale incorporating the findings in the report of the referee dated August26, 2013, is granted; and it is further,
Ordered that the matter is remitted to the Supreme Court, Kings County, for furtherproceedings on the complaint before a different Justice.
The Supreme Court had no authority to vacate an order dated August 6, 2013, andsigned by another Justice of the court, which granted the plaintiff's motion, in effect, tohold the defendants in default for failure to appear or answer, and referred the matter to areferee. "Pursuant to CPLR 5019 (a), a trial court has the discretion to correct an order orjudgment which contains a mistake, defect, or irregularity not affecting a substantial rightof a party, or is inconsistent with the decision upon which it is based" (Adams v Fellingham, 52 AD3d443, 444 [2008]; see CPLR 5019 [a]; Matter of Rospigliosi v Abbate, 31 AD3d 648, 650 [2006]).However, "a trial court has no revisory or appellate jurisdiction, sua sponte, to vacate" anorder or judgment of the same court (Merriwether v Osborne, 66 AD3d 851, 852 [2009]; see Johnson v Societe GeneraleS.A., 94 AD3d 663, 664-665 [2012]; Matter of Rospigliosi v Abbate, 31AD3d at 650; Matter of Owens v Stuart, 292 AD2d 677, 678-679 [2002]). [*2]Accordingly, the Supreme Court erred in, sua sponte,vacating the order dated August 6, 2013.
Moreover, the Supreme Court abused its discretion in, sua sponte, directing thedismissal of the complaint and the cancellation of the notice of pendency filed against thesubject property, based on its conclusion that the plaintiff lacked standing. A court'spower to dismiss a complaint, sua sponte, is to be used sparingly and only whenextraordinary circumstances exist to warrant dismissal (see HSBC Bank USA, N.A. vTaher, 104 AD3d 815, 817 [2013]; Aurora Loan Servs., LLC v Sobanke, 101 AD3d 1065,1066 [2012]; U.S. Bank, N.A. vEmmanuel, 83 AD3d 1047, 1048 [2011]). Here, the Supreme Court was notpresented with extraordinary circumstances warranting the sua sponte dismissal of thecomplaint and cancellation of the notice of pendency. Since the defendants did notanswer the complaint, and did not make a pre-answer motion to dismiss the complaint,they waived the defense of lack of standing (see JP Morgan Mtge. Acquisition Corp. v Hayles, 113 AD3d821, 822 [2014]; FreedomMtge. Corp. v Toro, 113 AD3d 815 [2014]; HSBC Bank USA, N.A. vTaher, 104 AD3d at 817; Bank of N.Y. v Alderazi, 99 AD3d 837, 838 [2012]).Furthermore, a party's lack of standing does not constitute a jurisdictional defect anddoes not warrant a sua sponte dismissal of the complaint by the court (see Wells Fargo Bank, N.A. vGioia, 114 AD3d 766, 767 [2014]; HSBC Bank USA, N.A. v Taher, 104AD3d at 817; Bank of N.Y. v Alderazi, 99 AD3d at 838; U.S. Bank, N.A. vEmmanuel, 83 AD3d at 1048-1049).
The Supreme Court also erred in denying the plaintiff's motion for leave to enter ajudgment of foreclosure and sale incorporating the findings set forth in a report of thereferee dated August 26, 2013. On its initial motion, which was, in effect, to hold thedefendants in default and for an order of reference, the plaintiff established itsentitlement to judgment as a matter of law. On its subsequent motion, which was forleave to enter a judgment of foreclosure and sale incorporating the findings set forth inthe referee's report, the plaintiff established the amount due under the note by submittingthat report. The defendants did not oppose the plaintiff's motion. Accordingly, theplaintiff's motion for leave to enter a judgment of foreclosure and sale incorporatingthose findings should have been granted (see 3-27 Bruce J. Bergman, Bergmanon New York Mortgage Foreclosures § 27.06 [2] [a] [2014]; RPAPL 1321;HSBC Bank USA vMartin-Lloyd, 45 Misc 3d 1203[A], 2014 NY Slip Op 51432[U] [Sup Ct, KingsCounty 2014]).
Since Justice Arthur Schack continues to ignore this Court's precedent, as articulatedin Wells Fargo Bank Minn.,N.A. v Mastropaolo (42 AD3d 239 [2007]), holding that the defense of lack ofstanding is waived if not raised by the defendant in an answer or pre-answer motion todismiss (see Deutsche BankNatl. Trust Co. v Islar, 122 AD3d 566 [2014]; HSBC Bank USA, N.A. vTaher, 104 AD3d at 817; U.S. Bank, N.A. v Emmanuel, 83 AD3d at1048-1049; cf. Bank of N.Y. vCepeda, 120 AD3d 451, 452 [2014]; Bank of N.Y. v Mulligan, 119 AD3d 716, 716 [2014];Wells Fargo Bank, N.A. v Gioia, 114 AD3d at 767), we deem it appropriate toremit the matter to the Supreme Court, Kings County, for further proceedings on thecomplaint before a different Justice. Rivera, J.P., Balkin, Duffy and LaSalle, JJ.,concur.