Opinion
No. 2021-01378 Index No. 515917/17
05-29-2024
Wells Fargo Bank, N.A., appellant, v. Clayvan St. Louis, respondent, et al., defendants.
Hinshaw & Culbertson LLP, New York, NY (Kyle B. Stefanczyk of counsel), for appellant. John J. Caracciolo, East Northport, NY, for respondent.
APPEAL by the plaintiff, in an action to foreclose a mortgage, from an order of the Supreme Court (Robin K. Sheares, J.), dated November 12, 2020, and entered in Kings County. The order, insofar as appealed from, sua sponte, awarded the defendant Clayvan St. Louis summary judgment dismissing the complaint insofar as asserted against him on the ground that the action was time-barred.
Hinshaw & Culbertson LLP, New York, NY (Kyle B. Stefanczyk of counsel), for appellant.
John J. Caracciolo, East Northport, NY, for respondent.
MARK C. DILLON, J.P. JOSEPH J. MALTESE JANICE A. TAYLOR CARL J. LANDICINO, JJ.
OPINION & ORDER
DILLON, J.P.
The plaintiff, Wells Fargo Bank, N.A., appeals from so much of an order as, sua sponte, awarded the defendant Clayvan St. Louis (hereinafter the defendant) summary judgment dismissing the complaint insofar as asserted against him on the ground that the action was time-barred. This appeal does not present us with an opportunity to resolve a novel legal question. It does, however, present us with an opportunity to emphasize to trial courts the due process importance of not directing the dismissal of a complaint absent notice and an opportunity to be heard, which has been occurring with unwarrantable frequency.
I. Factual Background
The plaintiff commenced this action to foreclose a mortgage against, among others, the defendant. The defendant answered the complaint. The plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendant, to strike his answer, and for an order of reference. The defendant cross-moved pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against him as time-barred and for summary judgment dismissing the complaint insofar as asserted against him.
In an order dated September 25, 2019, the Supreme Court, Kings County (Noach Dear, J.), inter alia, denied the defendant's cross-motion and denied those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant, to strike his answer, and for an order of reference. The court concluded, among other things, that triable issues of fact existed regarding whether the action was timely commenced. These issues of fact, the court determined, included whether a certain letter supposedly sent to the defendant in 2016 had, in fact, been sent, and whether that letter had the effect of "de-accelerat[ing]" the mortgage debt within the statute of limitations period applicable to this action.
Thereafter, the defendant moved pursuant to CPLR 3126 to impose discovery sanctions against the plaintiff or, in the alternative, pursuant to CPLR 3124 to compel the plaintiff to comply with certain discovery demands, for an extension of time to make any dispositive motions once discovery had been completed, and for other and further relief. The plaintiff cross-moved pursuant to CPLR 3126 to impose discovery sanctions against the defendant, for an award of costs and attorneys' fees pursuant to 22 NYCRR 130-1.1 for frivolous conduct, and for other and further relief.
In an order dated November 12, 2020, the Supreme Court, Kings County (Robin K. Sheares, J.), denied both the motion and the cross-motion but, sua sponte, awarded the defendant summary judgment dismissing the complaint insofar as asserted against him on the ground that the action was time-barred. In that order, the court stated that "Summary judgment is GRANTED to Defendant, based upon review of Defendant's Opposition to Plaintiff's Cross-Motion and Reply Affirmation in support of Defendant's Motion, dismissing this action with prejudice as time barred based upon the invalid and improper deceleration letter dated February 2, 2016, submitted by both Plaintiff and Defendant into evidence, which invalid and improper letter failed to decelerate the subject loan." The plaintiff appeals from the November 12, 2020 order.
II. Appealability
At the outset, since so much of the order as, sua sponte, awarded the defendant summary judgment dismissing the complaint insofar as asserted against him did not decide a motion made on notice, that portion of the order is not appealable as of right (see CPLR 5701[a][2]). Thus, to address the issue presented, we deem the notice of appeal to be an application for leave to appeal from that portion of the order, and we grant such leave (see id. § 5701[c]).
For reasons set forth below, the plaintiff correctly contends that the Supreme Court erred in sua sponte awarding the defendant summary judgment dismissing the complaint insofar as asserted against him on the ground that the action was time-barred. We therefore reverse the order insofar as appealed from. But beyond that, we take this opportunity to underscore the reasons that sua sponte dismissals of complaints are held to be reversible error in nearly every instance.
III. Legal Analysis
A court's power to dismiss a complaint sua sponte is to be used sparingly, and only when extraordinary circumstances exist to warrant such a dismissal (see e.g. Anonymous v Anonymous, 217 A.D.3d 619, 619-620; Bank of N.Y. Mellon v Stewart, 216 A.D.3d 720, 724; U.S. Bank N.A. v Bhagwandeen, 216 A.D.3d 700, 701; Newrez, LLC v City of Middletown, 216 A.D.3d 657, 658-659; U.S. Bank N.A. v Turner, 215 A.D.3d 889, 890; Deutsche Bank Trust Co. Ams. v Martinez, 214 A.D.3d 704, 705; CRC Ins. Servs., Inc. v Kullman, 211 A.D.3d 903, 905; Citimortgage, Inc. v Dedalto, 210 A.D.3d 628, 630). According to Westlaw, this legal principle has been enunciated by the Appellate Division, Second Department, 91 times since and including 2011, 6 times in the Appellate Division, First Department, during the same period, and 2 times each in the Appellate Division, Third and Fourth Departments. No string cite of these various cases is needed, nor would one be desirable to the reader.
Statewide, the instances of improper sua sponte dismissals occur disproportionally in the Second Department. Of the 91 instances in the Second Department where orders have been reversed on appeal for violating this principle from 2011 onward, the bulk of them-76 of the cases-involve residential mortgage foreclosure actions. The remaining 15 cases are spread among a wide variety of other actions (see e.g. CRC Ins. Servs., Inc. v Kullman, 211 A.D.3d at 903 [breach of contract]; Matter of Hersh, 198 A.D.3d 773 [estate]; Aguilar v Feygin, 151 A.D.3d 798 [medical malpractice]; Wallace v BSD-M Realty, LLC, 142 A.D.3d 701 [fraud]; Maynard v Maynard, 138 A.D.3d 794 [matrimonial]; Menardy v Gladstone Props., Inc., 100 A.D.3d 840 [personal injury]) .
Significantly, in all of the judicial departments where complaints were dismissed sua sponte or where the trial court later denied the vacatur of sua sponte dismissals, the orders appealed from have been consistently and predictably reversed in almost every instance . In one case consistent with the foregoing, where the trial court vacated its earlier sua sponte dismissal resulting in an appeal of that order by the defendant, the vacatur was affirmed because, as stated, sua sponte dismissals are to be used sparingly and only when extraordinary circumstances exist to warrant them (see Deutsche Bank Trust Co. Ams. v Gonzales, 215 A.D.3d 636, 638). Conversely, where a trial court denied the vacatur of an earlier sua sponte dismissal, the order denying vacatur was reversed (see e.g. Newrez, LLC v City of Middletown, 216 A.D.3d 655).
Appellate decisions affirming the sua sponte dismissals of complaints are difficult to find, though some may be found in context of dismissals directed by CPLR 3215 subdivision (a) or subdivision (c). Under CPLR 3215(a), a party moving for leave to enter a default judgment must establish service of the pleading, evidence of the default, and the facts constituting the claim (see e.g. Travelon, Inc. v Maekitan, 215 A.D.3d 710, 712; Yan Ping Xu v Van Zwienen, 212 A.D.3d 872, 873; Wachovia Mtge. FSB v Macwhinnie, 175 A.D.3d 1587, 1588). Courts do not have a mandatory, ministerial duty to grant default judgment motions, as they retain the obligation to determine whether the moving party has established a viable claim (see Newrez, LLC v City of Middletown, 216 A.D.3d 655, 656-657; Lugo v Corso, 215 A.D.3d 944, 945). Where the pleadings or other proof establish the absence of a viable cause of action, default judgment motions under CPLR 3215(a) should not only be denied, but courts may, in a rare but appropriate case, properly dismiss the action sua sponte (see Morris v Zimmer, __ A.D.3d __, 2024 NY Slip Op 02314 [2d Dept]; Martocci v Bowaski Ice House, LLC, 31 A.D.3d 1021, 1022). While reported cases such as Morris and Martocci style such dismissals as "sua sponte," they are not so in the truest sense of the term, as parties moving for leave to enter a default judgment necessarily invite the court to examine whether the cause of action is viable. CPLR 3215(c) provides that complaints shall be dismissed on the court's "own initiative" or upon motion if the plaintiff has failed to take proceedings within one year of an adversary party's default. Dismissals pursuant to that subdivision are specifically directed and permissible by the statute itself, though subject to a plaintiff showing sufficient cause as to why the complaint should not be dismissed (see e.g. Noteworthy Foreclosure, LLC v Rodney-Ross, 220 A.D.3d 676).
Most of the appellate decisions reversing sua sponte dismissals tend to be fairly short and to the point, as their results are simple and clear, and often render academic additional issues raised in those appeals. Upon remittal, the parties and the trial courts in these actions necessarily revert to square one, which is not in the interests of judicial economy because of the time lost and attorneys' fees incurred in the interim.
Sua sponte dismissals are not appealable as of right (see CPLR 5701[a][2]; Sholes v Meagher, 100 N.Y.2d 333, 335; Anonymous v Anonymous, 217 A.D.3d at 619; Matter of Kissous v Futerman, 217 A.D.3d 1002; Kwang Bok Yi v Open Karaoke Corp., 161 A.D.3d 971). The reason is that such dismissals are not, by definition, the product of motions made on notice for that particular relief as otherwise statutorily required. Nevertheless, the Second Department has consistently recognized the gravity of sua sponte dismissals and the lack of opportunity for aggrieved parties to have been heard on the dispositive issue at the trial level. Those circumstances have caused the Second Department to typically grant discretionary applications for leave to appeal (see CPLR 5701[c]), or relatedly, to deem notices of appeal to be applications for leave to appeal, which have been liberally granted (see e.g. Wells Fargo Bank, N.A. v Cascarano, 208 A.D.3d 729, 729; Wachovia Bank, N.A. v Cyril, 207 A.D.3d 686, 687; U.S. Bank N.A. v Green, 205 A.D.3d 755, 755; Lehman Bros. Bank v Hickson, 186 A.D.3d 1348, 1349; J.P. Morgan Chase Bank, N.A. v Laszlo, 169 A.D.3d 885, 886; Onewest Bank, FSB v Tarantola, 156 A.D.3d 711, 711). Indeed, of the 91 decisions rendered by this Court involving sua sponte dismissals from 2011 onward, an even 50 of them are the product of this Court deeming the notice of appeal to be an application for leave to appeal and, upon granting such leave, reaching the sua sponte dismissals and reversing them. Almost no case is found where this Court has declined to review a sua sponte dismissal on the ground that it was not properly appealable, either by motion or by deeming the parties' notice of appeal to be an application for leave to appeal ( but see Kwang Bok Yi v Open Karaoke Corp., 161 A.D.3d 971 ).
This Court has stated that where an order directing dismissal of a complaint is not appealable as of right because it did not decide a motion made on notice, it is procedurally proper for the aggrieved party to move pursuant to CPLR 2221(a) to vacate that order (see Deutsche Bank Natl. Trust Co. v Campbell, 219 A.D.3d 701, 702).
The oft-repeated phrase that a court's power to dismiss a complaint, sua sponte, is to be used sparingly, and only when extraordinary circumstances exist to warrant such relief, should not be taken lightly by our trial-level colleagues. A survey of the case law in this area reveals that improper sua sponte dismissals have been occurring consistently from 2011 to the present, on a rolling basis, despite appellate case law defining the practice as error. Using 2011 as a baseline year, there have been an average of several reversals each year in the Second Department, with no discernible drop-off in more recent years. For instance, there were six Second Department reversals of sua sponte dismissals in 2012, seven in 2017, and seven in 2023. In other words, the problem of sua sponte dismissals has been perpetuated from year to year, much more so in some counties than others, but seemingly without any "brake" applied despite the multiple dozens of Appellate Division decisions that have repeatedly and collectively advised against the practice during the same time period.
The importance that courts not dismiss actions sua sponte absent extraordinary circumstances is grounded in a fundamental concept that lawyers and judges know well-that due process requires parties to be given notice and an opportunity to be heard about litigation issues (see Deutsche Bank Natl. Trust Co. v Winslow, 180 A.D.3d 1000, 1001; First United Mtge. Banking Corp. v Lawani, 147 A.D.3d 912, 913; Chase Home Fin., LLC v Kornitzer, 139 A.D.3d 784, 785; U.S. Bank N.A. v Ahmed, 137 A.D.3d 1106, 1108; Dossous v Corporate Owners Bayridge Nissan, Inc., 101 A.D.3d 937, 938). Courts are to be bastions of due process. It is not the role of the court, within the moat of that bastion, to seize upon an issue not raised by any party in a motion and to unilaterally dismiss an action on the basis of that discrete issue, without providing the party whose claim is dismissed so much as notice of the issue and an opportunity for all parties to be heard on it. The Court of Appeals has cautioned the judiciary that "[w]e are not in the business of blindsiding litigants, who expect us to decide [matters] on rationales advanced by the parties, not arguments their adversaries never made" (Misicki v Caradonna, 12 N.Y.3d 511, 519).
Due process protections are ensconced in the CPLR. CPLR 2211 acknowledges that a motion is made when a notice of the motion, or order to show cause, is served upon the parties to a litigation (see Hamilton v National Amusements, Inc., 177 A.D.3d 449, 449; see also Ortega v Trefz, 44 A.D.3d 916, 916-917). CPLR 2214(a) and (b) define the information that notices of motion must contain and the specific timetable for when the papers must be served, with parallel provisions for cross-motions set forth in CPLR 2215. Among the statutory requirements is that notices of motion set forth "the relief demanded and the grounds therefor" (id. § 2214[a]; see Northside Studios v Treccagnoli, 262 A.D.2d 469, 469-470; Condon v Condon, 53 A.D.2d 622, 623). The failure to give a party proper notice of a motion deprives the court of jurisdiction to entertain the motion and renders a resulting order void (see MTGLQ Invs., L.P. v White, 179 A.D.3d 790, 791; Citimortgage, Inc. v Reese, 162 A.D.3d 847, 848; Wells Fargo Bank, N.A. v Whitelock, 154 A.D.3d 906, 907-908; Golden v Golden, 128 A.D.2d 672, 673; Crown Waterproofing, Inc. v Tadco Constr. Corp., 99 A.D.3d 964, 965). Considerations of dispositive relief, such as those for dismissals in lieu of answers under CPLR 3211 and motions for summary judgment under CPLR 3212, therefore have built-in safeguards for due process notice and the opportunity for parties to be heard.
Other provisions of the CPLR ensure that the dismissal of complaints comports with due process notice and the opportunity to be heard. Dismissals for want of prosecution require that a 90-day notice first be served upon the recalcitrant party by registered or certified mail (see id. § 3216[b][3]; Bankunited v Kaur, 208 A.D.3d 622, 623-624) or be provided in open court (see Rijo v McLaughlin, 309 A.D.2d 716), and in the event that a note of issue is not filed, a motion for dismissal based upon a party's unreasonable neglect to proceed must also be made on notice (see CPLR 3216[b][3]; Cadichon v Facelle, 18 N.Y.3d 230, 235-236; Onewest Bank, FSB v N & R Family Trust, 200 A.D.3d 900, 901-902). The striking of a party's pleading under CPLR 3126(3) as a penalty for the willful nondisclosure of discovery, which is tantamount to the dismissal of a claim or defense, emanates from a motion made on notice (see Korsinsky & Klein, LLP v FHS Consultants, LLC, 214 A.D.3d 961, 963-964; see also Vasquez v Sokolowski, 277 A.D.2d 370, 371). A sua sponte order striking or "marking off" a post-note of issue action from a trial calendar under CPLR 3404 for a plaintiff's failure to prosecute assumes that the nonappearing party had notice of the date of trial, and the action is automatically restored upon a motion made within one year (see One W. Bank, FSB v Rosenberg, 189 A.D.3d 1600, 1601-1602; Plotkin v J.J. Nazzaro Assoc., Ltd., 108 A.D.3d 757, 758) before a case is deemed abandoned (see Carrero v Pena, 217 A.D.3d 915, 916; Patriarca v Oreckinto, 185 A.D.3d 710).
Nor may courts rely upon general relief clauses in noticed motions- "for such other and further relief the court deems just and proper"-to justify the sua sponte dismissal of complaints. The phrase "for such other and further relief" is not recognized in either the CPLR or in its pre-1962 predecessor, the Civil Practice Act. It instead appears to be an invention of the practicing bar to provide flexibility to courts in fashioning potential remedies. But the phrase has its limits. In an opinion of former Justice John M. Leventhal in 2009, this Court explained that the Supreme Court may not unilaterally raise and decide issues not put forward by the parties, where doing so would grant dispositive relief against a party (see Rosenblatt v St. George Health & Racquetball Assoc., LLC, 119 A.D.3d 45, 54; see also Citibank, N.A. v Kerszko, 203 A.D.3d 42, 47; Bowman v Bowman, 130 A.D.3d 661, 663-664). Contrastingly, courts may properly rely upon a general prayers for "such other and further relief" in rendering non-dispositive orders, on issues not specifically argued by parties but which fall within the family of relief contained in the notice of motion, or relief that is not unlike that which is actually sought and argued (see Tirado v Miller, 75 A.D.3d 153, 158; see also Citibank, N.A. v Kerszko, 203 A.D.3d at 47; North Oyster Bay Baymen's Assn. v Town of Oyster Bay, 150 A.D.3d 865, 867-868).
Here, the defendant moved pursuant to CPLR 3126 to impose discovery sanctions against the plaintiff or, in the alternative, pursuant to CPLR 3124 to compel the plaintiff to comply with certain discovery demands, for an extension of time to make any dispositive motions once discovery had been completed, and for other and further relief. The plaintiff cross-moved pursuant to CPLR 3126 to impose discovery sanctions against the defendant, for an award of costs and attorneys' fees pursuant to 22 NYCRR 130-1.1 for frivolous conduct, and for other and further relief. The quintessential issues before the Supreme Court were related to the parties' discovery obligations. The scope of the court's order therefore should have been limited to issues of discovery and any spillover issues involving the note of issue and the parties' trial readiness. The court's attention should not have extended to any dispositive issue, not raised or argued by either party, regarding the viability of the plaintiff's 2016 letter purportedly de-accelerating the balance due on the note and the effect of that determination on the applicable statute of limitations (see Citibank, N.A. v Kerszko, 203 A.D.3d at 47; Bowman v Bowman, 130 A.D.3d at 663-664; Rosenblatt v St. George Health & Racquetball Assoc., LLC, 119 A.D.3d at 54). By addressing and determining this issue, that it viewed to be dispositive, the court deprived the plaintiff of notice of the issue and an opportunity to be heard on it.
To the extent the plaintiff's counsel disclosed during the oral argument of this appeal that the viability of the 2016 de-acceleration letter had been raised at the oral argument before the Supreme Court, as to provide the plaintiff with notice and an opportunity to be heard, the oral argument before the Supreme Court is not part of the record on appeal and we cannot give credence to matters dehors the record (see Matter of Civil Serv. Empls. Assn., Inc. v Baldwin Union Free School Dist., 84 A.D.3d 1232, 1235; Matter of Russo v New York State Dept. of Envtl. Conservation, 61 A.D.2d 824). Additionally, the court should not have sought or entertained oral argument about the sufficiency of the de-acceleration letter as that document, which previously had been exchanged, was not a contested issue in the parties' discovery-related motion and cross-motion (cf. FranPearl Equities Corp. v 124 W. 23rd St., LLC, 164 A.D.3d 1190, 1191).
Further, this action does not present an extraordinary circumstance as would warrant a sua sponte dismissal of the complaint (see e.g. Atkins-Payne v Branch, 95 A.D.3d 912). Far from it. The sufficiency of the plaintiff's 2016 de-acceleration letter had been adjudicated in a prior motion made by the plaintiff seeking at that time, inter alia, summary judgment on the complaint and for an order of reference, and the defendant's related cross-motion to dismiss the complaint insofar as asserted against him based upon the purported defects of the same de-acceleration letter. That motion resulted in the order dated September 25, 2019, concluding that triable issues of fact had been raised about whether the plaintiff's 2016 letter de-accelerated the mortgage debt from a prior 2010 action and rendered the instant action timely, and whether the same de-acceleration letter had been sent. That these issues had been previously adjudicated by a prior assigned justice of the court, in finding the existence of triable issues of fact, undermines any argument that extraordinary circumstances existed for later directing dismissal of the action on the same basis.
Further on the issue of extraordinary circumstances, we reject the defendant's argument that, under CPLR 5019(a), the Supreme Court had the authority to "correct" the prior order of the previously-assigned justice which had found issues of fact as to the validity of the plaintiff's 2016 de-acceleration letter. CPLR 5019(a) permits a court to unilaterally cure any mistake, defect, or irregularity in papers, but only those" not affecting a substantial right of a party" (emphasis added). The statute is intended to allow courts to correct clerical-type errors that may be contained in orders and judgments, such as mathematical errors in calculations, corrections to the statutory rate of interest, and the proper spelling of names (see Sokoloff v Schor, 176 A.D.3d 120, 130). The statute does not permit a court to sua sponte correct perceived errors that involve new exercises of discretion or fact-finding (see id. at 130; Matter of Fiorillo v New York State Dept. of Envtl. Conservation, 162 A.D.2d 929, 930) or that reconsider the merits of summary judgement (see Merriwether v Osborne, 66 A.D.3d 851, 852). The Supreme Court's dismissal of the complaint here, in substitution of the prior justice's order finding issues of fact for trial on the same issue, affected a substantial right of the plaintiff and therefore falls outside the ambit of CPLR 5019(a).
The foregoing analysis leads to only one conclusion, that the order be reversed insofar as appealed from.
IV. Miscellaneous
The defendant's remaining procedural contentions are without merit. In light of our determination, we do not reach the plaintiff's argument regarding whether the Supreme Court's prior order triggers the law of the case doctrine or the parties' arguments addressing the timeliness of this action.
Accordingly, on the Court's own motion, the notice of appeal from so much of the order as, sua sponte, awarded the defendant summary judgment dismissing the complaint insofar as asserted against him on the ground that the action was time-barred, is deemed to be an application for leave to appeal from that portion of the order, leave to appeal is granted (see CPLR 5701[c]), and the order is reversed insofar as appealed from, on the law.
MALTESE, TAYLOR and LANDICINO, JJ., concur.
ORDERED that on the Court's own motion, the notice of appeal from so much of the order as, sua sponte, awarded the defendant Clayvan St. Louis summary judgment dismissing the complaint insofar as asserted against him on the ground that the action was time-barred, is deemed to be an application for leave to appeal from that portion of the order, and leave to appeal is granted (see CPLR 5701[c]); and it is further, ORDERED that the order is reversed insofar as appealed from, on the law, with costs.