Opinion
No. 33/2011.
2012-11-16
37–40 REALTY, INC., Plaintiff, v. A.P. ZHENG, INC.; K.J. Zheng, Inc.; Ming Hiu Cheung; Ying Lam; Ming Chiu Chang; George Li; Amy Lee; Lina Cheung, Defendants.
CHARLES J. MARKEY, J.
Plaintiff commenced this reforeclosure action pursuant to article 15 of the RPAPL to fix and determine the rights, if any, of defendants to the real property known as 37–40 103rd Street, Corona, New York (the subject property), and foreclose defendants' rights, title, interests, claims, liens and equity of redemption relative to the real property known as 37–40 103rd Street, Corona, New York (the subject property), unless defendants redeem the premises and pay the mortgage debt with interest and costs to plaintiff within a period to be fixed by the court. Plaintiff alleges that it is the assignee of the successful bid made by Value Mate Management, Inc. at a foreclosure sale held on September 24, 2010 of the subject property, pursuant to a judgment entered in a foreclosure action entitled Wells Fargo Bank, NA v. Jin Xu (Supreme Court, Queens County, Index No. 13402/2008) ( Wells Fargo action), brought by Wells Fargo Bank, NA (Wells Fargo) against the former fee owner. Plaintiff also alleges that defendants own, or claim to own, an interest in or lien upon the property which is subordinate to the mortgage under which the foreclosure sale was held. Plaintiff further alleges that Wells Fargo Bank, NA failed to name or join defendants herein as party defendants in the Wells Fargo action due to inadvertence and mistake. Plaintiff additionally alleges that defendants' rights, title, interests, claims, liens and equity of redemption and interests in the property were not foreclosed by virtue of the judgment in the Wells Fargo action, and the premises were not offered for sale subject to defendants' rights, title, interests, claims and liens. According to plaintiff, it purchased the successful bid by way of assignment in good faith, and defendants' claimed rights, title, interests or liens constitute a cloud upon the title to the premises.
Defendants A.P. Zheng Inc. and K.J. Zheng, Inc. served a joint answer, admitting they were not joined as party defendants in the Wells Fargo action, and that they filed a notice of pendency in connection with the action entitled A.P. Zheng, Inc. v. Waterstone Development, Inc. (Supreme Court, Queens County, Index No. 9550/2007) ( A.P. Zheng, Inc. action). They asserted various affirmative defenses based upon their claim that they are holders of a lien against the subject property by virtue of a judgment entered on January 6, 2010 in the A.P. Zheng, Inc. action in their favor against Waterstone Development Inc., which was docketed on February 19, 2010.
Defendants Ming Hiu Cheung, Ying Lam and Ming Chiu Chang served a combined answer, also admitting that they were not joined as party defendants in the Wells Fargo action, and asserting four affirmative defenses.
The remaining defendants have not appeared or answered the complaint.
Plaintiff moves for summary judgment foreclosing defendants' right of redemption in the subject property and to strike the answers of defendants A.P. Zheng, Inc., K.J. Zheng, Inc., Ming Hiu Cheung, Ying Lam and Ming Chiu Chang and deem them to constitute an appearance and waiver in foreclosure. Defendants Ming Hiu Cheung, Ying Lam, and Ming Chiu Cheung s/h/a Ming Chiu Chang oppose the motion and cross move to dismiss the complaint pursuant to CPLR 3126, or in the alternative, to compel plaintiff to provide to defendants Ming Hiu Cheung, Ying Lam, and Ming Chiu Chang all outstanding disclosure as sought in their combined demand for discovery and inspection and interrogatories, and to appear for an examination before trial on a date certain. The remaining defendants have not appeared in relation to the motion or cross motion.
It is well settled that the proponent of a summary judgment motion “must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact” (Alvarez v. Prospect Hosp ., 68 N.Y.2d 320, 324 [1986];Zuckerman v. City of New York, 49 N.Y.2d 557 [1980] ).
Reforeclosure is a procedure codified in RPAPL 1503, whereby a purchaser at the foreclosure sale from which a junior lienor or encumbrancer has been omitted, brings his own foreclosure action and joins the previously omitted junior lienor or encumbrancer ( see Bergman, 3 New York Mortgage Foreclosures § 32.02[1] ). A reforeclosure “is an actual foreclosure action, which may proceed all the way to a foreclosure sale” (Bergman, 3 New York Mortgage Foreclosures § 32.02[3] ), and the effect of a reforeclosure is that an omitted junior lienor or encumbrancer is given a specific period of time in which to exercise the right to redeem or foreclose, that is either within the time specified in a judgment entered pursuant to RPAPL 1532 or within the time the reforeclosure action is pending ( seeRPAPL 1503; Bergman, 3 New York Mortgage Foreclosures § 32.02[3] ). Reforeclosure is available only when the defect in the original foreclosure action was not occasioned by the fraud or wilful neglect of the plaintiff (RPAPL 1523[1]; 6820 Ridge Realty v. Goldman, 263 A.D.2d 22 [1999] ).
Plaintiff has established that the mortgage which was the subject of the Wells Fargo action was recorded on September 17, 2003, defendants A.P. Zheng, Inc. and K.J. Zheng, Inc. filed a notice of pendency on April 13, 2007 against the subject property in connection with the A.P. Zheng, Inc. action (Index No. 9550/2007), defendants Ming Hiu Cheung, Ying Lam and Ming Chiu Chang filed a notice of pendency on February 5, 2008, against the subject property relative to an action entitled Ming Hiu Cheung v. Waterstone Development, Inc. (Supreme Court, Queens County, Index No. 3056/2008), the Wells Fargo action was commenced on May 29, 2008, and defendants A.P. Zheng, Inc., K.J. Zheng, Inc. Ming Hiu Cheung, Ying Lam, and Ming Chiu Chang were not named or joined as party defendants in the Wells Fargo action. In addition, plaintiff has shown that the judgment in the Wells Fargo action did not foreclose those defendants' claims, liens, title, interests and rights, including the right to enforce an equity of redemption in relation to the property.
The burden shifts to defendants to demonstrate by admissible evidence the existence of a triable issue of fact (Zuckerman v. City of New York, 49 N.Y.2d 557 [1980] ).
To the extent defendants Ming Hiu Cheung, Ying Lam and Ming Chiu Chang asserted in their answer that the court lacks subject matter jurisdiction, the Supreme Court is a court of original, unlimited and unqualified jurisdiction ( see Kagen v. Kagen, 21 N.Y.2d 532, 537 [1968];NY Const., art VI, § 7) and is competent to entertain all causes of action unless its jurisdiction has been specifically proscribed (Thrasher v. United States Liab. Ins. Co., 19 N.Y.2d 159, 166). The court has the competence to adjudicate the strict foreclosure or reforeclosure claim asserted by plaintiff ( see e.g. 6820 Ridge Realty LLC v. Goldman, 263 A.D.2d 22 [1999];2035 Realty Co. v. Howard Fuel Corp., 77 A.D.2d 870 [1980] ).
To the extent defendants Ming Hiu Cheung, Ying Lam and Ming Chiu Chang asserted lack of personal jurisdiction due to improper service of process as an affirmative defense in their answer, they failed to move to dismiss the complaint upon such ground within 60 days of service of a copy of their answer, and have made no application to extend the period of time upon the ground of undue hardship (CPLR 3211[e] ). As a consequence, the defense is deemed waived (CPLR 3211[e]; see Federici v. Metropolis Night Club, Inc., 48 AD3d 741 [2008] ).
Defendants Ming Hiu Cheung, Ying Lam and Ming Chiu Chang make no claim that their interests in the property are superior to the mortgage. Rather, they admit they were necessary party defendants to the Wells Fargo action, and because they were not joined therein, there was a defect in it. They assert their filing of the notice of pendency constituted constructive notice to Wells Fargo, as the foreclosing plaintiff in the Wells Fargo action, of their claims with respect to the property. They argue, therefore, that plaintiff herein should not be permitted to obtain reforeclosure.
Contrary to the argument of defendants Ming Hiu Cheung, Ying Lam and Ming Chiu Chang, plaintiff's right to seek reforeclosure is not precluded as a consequence of the failure by Wells Fargo to join them as party defendants in the Wells Fargo action. Defendants Ming Hiu Cheung, Ying Lam and Ming Chiu Chang make no claim that Wells Fargo fraudulently did not add them as defendants in that action. Nor have they shown that Wells Fargo's failure to discover their notice of pendency in advance of instituting the Wells Fargo action, or include them as party defendants, constituted “wilful neglect.” Although RPAPL 1523 does not define “wilful neglect,” the phrase connotes a knowing, conscious and voluntary act ( see generally M.M. v. T.M., 35 Misc.3d 1231[A] ), not a simply neglectful one. Furthermore, in Ahern v. Pierce (236 A.D.2d 343 [1997] ), the Appellate Division, Second Department, reaffirmed its prior holding in 2035 Realty Co. v. Howard Fuel Corp. (77 A.D.2d 870 [1980] ), to the effect that a successor in interest of a purchaser at foreclosure has standing to institute a reforeclosure action pursuant to RPAPL 1503 to cut off liens which had inadvertently been omitted in a prior foreclosure action. Defendants Ming Hiu Cheung, Ying Lam and Ming Chiu Chang also have failed to demonstrate they have been prejudiced by the failure of Wells Fargo to join them as defendants in the Wells Fargo action (RPAPL 1523 [2] ). Moreover, the right to reforeclose against a junior lien is an absolute right ( see 2035 Realty Co. v. Howard Fuel Corp., 77 A.D.2d 870, 870–871 [1980];Monday Props. v. A–1 Plumbing & Heating Co., 25 Misc.2d 625 [1960];RPAPL 1503).
In addition, defendants Ming Hiu Cheung, Ying Lam and Ming Chiu Chang have failed to prove that facts essential to justify opposition to the motion may emerge upon discovery from plaintiff. “A grant of summary judgment cannot be avoided by a claimed need for discovery unless some evidentiary basis is offered to suggest that discovery may lead to relevant evidence ( see Auerbach v. Bennett, 47 N.Y.2d 619, 636 [1979];Ruttura & Sons Constr. Co. v. Petrocelli Constr., 257 A.D.2d 614, 615 [1999],lv dismissed93 N.Y.2d 956 [1999] )” (Bailey v. New York City Tr. Auth., 270 A.D.2d 156 [2000] ). In this instance, the reason for Wells Fargo's failure to join defendants Ming Hiu Cheung, Ying Lam and Ming Chiu Chang in the Wells Fargo action is within the exclusive knowledge of Wells Fargo, and defendants Ming Hiu Cheung, Ying Lam and Ming Chiu Chang have made no showing that they have attempted to conduct discovery of Wells Fargo, as a nonparty witness, or that any relevant evidence may be obtained from plaintiff on the issue.
Defendants have failed to come forward with any evidence showing the existence of a triable issue of fact with respect to any defense. Plaintiff, therefore, is entitled to summary judgment in its favor against them ( see Zuckerman v. City of New York, 49 N.Y.2d 557, 562 [1980],supra ). The motion by plaintiff is granted to the extent of granting summary judgment against defendants. The cross motion is denied.
Plaintiff, in the order to be entered hereon, shall provide defendants with an opportunity to exercise their right of redemption for a period of 60 days from entry thereof, and shall further provide that in the event that defendants fail to redeem within the specified time period, shall be excluded from claiming any title or interest in the subject property, and their interest in the property shall be extinguished and terminated ( seeRPAPL 1523).
Settle order.