| Onewest Bank, FSB v Colace |
| 2015 NY Slip Op 06321 [130 AD3d 994] |
| July 29, 2015 |
| Appellate Division, Second Department |
[*1]
| Onewest Bank, FSB, Respondent, v EstherColace, Appellant, et al., Defendants. |
Nassau/Suffolk Law Services Committee, Inc., Hempstead, N.Y. (Rosina Caputo ofcounsel), for appellant.
In an action to foreclose a mortgage, the defendant Esther Colace appeals, as limitedby her brief, from so much of an order of the Supreme Court, Nassau County (Adams,J.), entered January 18, 2013, as granted those branches of the plaintiff's motion whichwere for summary judgment on the complaint and to strike her answer, and denied hercross motion for leave to amend her answer.
Ordered that the order is modified, on the law, (1) by deleting the provisions thereofgranting those branches of the plaintiff's motion which were for summary judgment onthe complaint and to strike the answer of the defendant Esther Colace, and substitutingtherefor provisions denying those branches of the plaintiff's motion without prejudice torenewal, and (2) by deleting the provision thereof denying the cross motion of thedefendant Esther Colace for leave to amend her answer, and substituting therefor aprovision denying that cross motion without prejudice to renewal; as so modified, theorder is affirmed insofar as appealed from, with costs to the defendant Esther Colace, andthe matter is remitted to the Supreme Court, Nassau County, for further proceedingsconsistent herewith.
The plaintiff commenced this action against the defendant Esther Colace (hereinafterthe defendant) seeking to foreclose the mortgage on the defendant's home in Levittown.As mandated by CPLR 3408 (a), the plaintiff and the defendant subsequently participatedin settlement conferences for the statutorily intended purpose of determining whetherthey could reach "a mutually agreeable resolution to help the defendant avoid losing. . . her home." At the second settlement conference, the defendant'sattorney raised the issue of whether the plaintiff was negotiating in good faith as requiredby CPLR 3408 (f). However, the action was transferred out of the foreclosure settlementconference part without any resolution of that issue. The defendant's attorney claims thatshe consented to transferring the action out of the foreclosure settlement conference partbecause she mistakenly believed that the purpose of the transfer was to conduct a hearingto determine whether the plaintiff had negotiated in good faith. It is undisputed that whenthe defendant's attorney asked the plaintiff's attorney to consent to return the action to theforeclosure settlement conference part one day after the transfer, the plaintiff's attorneyrefused to so consent. Following the transfer, the plaintiff moved, inter alia, for summaryjudgment on the complaint and to strike the defendant's answer, and the defendantcross-moved for leave to amend her answer. The Supreme Court granted [*2]those branches of the plaintiff's motion, and denied thecross motion.
Under the circumstances of this case, it was premature for the Supreme Court toentertain the plaintiff's motion and the defendant's cross motion. CPLR 3408 requires theparties to a residential foreclosure action to attend settlement conferences at an earlystage of the litigation, at which they must "negotiate in good faith to reach a mutuallyagreeable resolution, including a loan modification, if possible" (CPLR 3408 [f]). Duringsettlement conferences, "[m]otions shall be held in abeyance" (22 NYCRR 202.12-a [c][7]). Here, the defendant submitted evidence that the plaintiff may have failed to exercisegood faith during the settlement conference phase of this action with respect to herapplications seeking a loan modification pursuant to the federal Home AffordableModification Program (hereinafter HAMP). Specifically, she presented evidence that theplaintiff may have violated HAMP regulations and guidelines, which would constitute afailure to negotiate in good faith as required by CPLR 3408 (f) (see U.S. Bank N.A. v Smith,123 AD3d 914, 917 [2014]). She also presented evidence that the plaintiff engagedin dilatory conduct, such as making piecemeal document requests, providingcontradictory information, and repeatedly requesting documents which had already beenprovided (see One W. Bank,FSB v Greenhut, 36 Misc 3d 1205[A], 2012 NY Slip Op 51197[U] [Sup Ct,Westchester County 2012]; USBank N.A. v Alejandra Padilla, 31 Misc 3d 1208[A], 2011 NY Slip Op50535[U] [Sup Ct, Dutchess County 2011]). Since the defendant's submissions raise afactual issue as to whether the plaintiff failed to negotiate in good faith, thus deprivingher of a meaningful opportunity to resolve this action through loan modification or otherpotential workout options (see CPLR 3408 [a]), the Supreme Court should haveheld a hearing to determine this issue prior to consideration of the plaintiff's motion andthe defendant's cross motion.
Accordingly, we remit the matter to the Supreme Court, Nassau County, for ahearing to determine whether the plaintiff met its obligation to negotiate in good faithpursuant to CPLR 3408 (f). In the event that the Supreme Court finds that the plaintiffdid not meet its obligation to negotiate in good faith, it shall direct the parties toparticipate in further settlement conferences for the purposes of "determining whether theparties can reach a mutually agreeable resolution" of this action (CPLR 3408 [a]) prior toconsidering and thereafter making a new determination, should the parties seek renewal,of those branches of the plaintiff's motion which were for summary judgment on thecomplaint and to strike the defendant's answer, and the defendant's cross motion for leaveto amend her answer. In the event that the Supreme Court finds that the plaintiff did meetits obligation to negotiate in good faith, it shall thereafter make a new determination,should the parties seek renewal, of the subject branches of the plaintiff's motion and thedefendant's cross motion. Skelos, J.P., Hall, Sgroi and Barros, JJ., concur.