Opinion
14941/10
12-31-2015
Bank of New York as Trustee for SAMI 2006-AR8, Plaintiff, v. Eric Shurko; National City Bank; The Board of Managers of Oceana Condominium No. Five Homeowners Association; City of New York Environmental Control Board; City of New York Parking Violations Bureau, and "John Doe No.1" through "John Doe #10", the last ten names being fictitious and unknown to the Plaintiff, the person or parties intended being the person or parties, if any, having or claiming an interest in or lien upon the mortgaged premises described in the complaint, Defendants. Oceana Condominium No. Five Homeowners Association, Cross-Claim Plaintiff, v. t of Taxation and Finance, American Express Centurion Bank, Cach LLC, Cross-Claim Defendants
Counsel for plaintiff Eckert Law Firm 10 Bank Street, Suite 700 White Plain, New York 10606 Counsel for defendant Shurko Law Office of Erica T. Yitzhak 17 Barstow Road Great Neck, New York 11021 Counsel for defendant/third-party plaintiff The Board of Managers of Oceana Law Office of Olga Vinogradova, PC 136 Madison Avenue, Suite 501 New York, New York 10016 Counsel for Intervenor Adam Plotch Marisa Falero, Esq. P.O. Box 90632 Brooklyn, New York
Counsel for plaintiff Eckert Law Firm 10 Bank Street, Suite 700 White Plain, New York 10606 Counsel for defendant Shurko Law Office of Erica T. Yitzhak 17 Barstow Road Great Neck, New York 11021 Counsel for defendant/third-party plaintiff The Board of Managers of Oceana Law Office of Olga Vinogradova, PC 136 Madison Avenue, Suite 501 New York, New York 10016 Counsel for Intervenor Adam Plotch Marisa Falero, Esq. P.O. Box 90632 Brooklyn, New York Karen B. Rothenberg, J.
Upon the foregoing papers in this residential foreclosure action regarding condominium unit 6D at 45 Oceana Drive East in Brooklyn (Condo Unit), plaintiff, Bank of New York as Trustee for SAMI 2006-AR8 (BONY), moves (in Motion Seq. 6) "for a Judgment of Foreclosure and Sale, granting the relief sought in the complaint in this action."
See BONY's April 17, 2015 "Notice of Motion for Judgment of Foreclosure and Sale."
Non-party, Adam Plotch (Plotch), cross-moves (in Motion Seq. 7) for an order: (1) granting him leave to intervene in this foreclosure action, pursuant to CPLR 1012 (a) (3); (2) dismissing BONY's complaint, pursuant to CPLR 3215 and/or Part F, Rule 8, of the Kings County Supreme Court Uniform Civil Term Rules; (3) granting him a declaratory judgment that BONY's "foreclosure will not disturb his title" to the Condo Unit; and (4) reducing the accrued interest, pursuant to CPLR 3408 and CPLR 5001.
See Plotch's July 29, 2015 "Notice of Cross-Motion" at 2.
Defendant and cross- claim plaintiff, the Board of Managers of Oceana Condominium No. Five Homeowners Association (Oceana Condominium), moves (in Motion Seq. 8), pursuant to RPAPL §§ 1354, 1355, 1361 and 1362, for an order: (1) confirming the May 26, 2015 Referee's Report of Sale of the Condo Unit that was issued by Referee William R. Greenspan, Esq. (2015 Referee's Report of Sale and Referee Greenspan); (2) "dispensing with the appointment of a referee to ascertain and report the amount due to . . . Oceana Condominium . . . or any other person, which is a lien upon the surplus monies realized upon foreclosure of the mortgage premises and to ascertain the priorities of the lien on the premises"; and (3) releasing $15,347.27, plus interest and late fees, of the surplus moneys in this action to Oceana Condominium.
See Oceana Condominium's September 18, 2015 Notice of Motion at 2.
Background
2004 WAMU Loan
Defendant, Eric Shurko (Shurko), on September 8, 2004, financed his purchase of the Condo Unit by borrowing $499,000.00 from Washington Mutual Bank, F.A. (WAMU Loan).The WAMU Loan was secured by a September 8, 2004 mortgage between Shurko as "Borrower" and WAMU as "Mortgagor" encumbering the Condo Unit, which was recorded with the New York City Register's office on October 27, 2004 under City Register File Number (CRFN) 2004000667062 (WAMU Mortgage). The WAMU Mortgage Assignments
The WAMU Mortgage was assigned to "Wells Fargo Bank, N.A. as Trustee for SAMI 2006-AR8" by a May 21, 2009 "Assignment of Mortgage" (WAMU Mortgage Assignment), which reflects that it was executed by Jodi Sobotta as "Attorney in Fact" of "JPMorgan Chase Bank, National Association successor in interest to [WAMU]."
On September 25, 2008, WAMU failed and the Federal Deposit Insurance Company (FDIC) was appointed as receiver for WAMU.
One year later, the WAMU Mortgage was re-assigned to BONY by a June 9, 2010 "Correction Assignment of Mortgage" (WAMU Corrected Mortgage Assignment), which reflects that it was executed by Margaret Dalton as "Vice President" of "JPMorgan Chase Bank, National Association successor in interest to [WAMU]." BONY's Instant Foreclosure Action
The following week, BONY, on June 16, 2010, commenced this foreclosure action by filing a summons, an unverified complaint and a notice of pendency with the Kings County Clerk against Shurko, Oceana Condominium and others. Oceana Condominium's Answer
Oceana Condominium was the only defendant to respond to the complaint by serving a verified answer, on or about July 19, 2010, asserting four affirmative defenses, including: (1) "Plaintiff's mortgage may not be a first mortgage entitled to superiority . . ."; (2) "Defendant Board's claim for payment of monthly common charges and related fees during pendency of this action is superior to Plaintiff's claims . . ."; and (3) "Plaintiff failed to allege that it provided Defendant ERIC SHURCO with the required default notice . . ." (Oceana Condominium Answer at ¶¶ 4-7).
Oceana Condominium also asserted "a claim to any surplus monies that may arise out of any foreclosure of sale of the mortgaged premises . . . or so much of said surplus, as will satisfy any and all sums owing to the Defendant Board, including but not limited to common charges, interest, late charges, court costs, reasonable attorney's fees, advances for taxes, assessments, boarding and securing the premises and other charges affecting the mortgaged premises" (id. at 3). The 2010 Stipulation Between Oceana Condominium And BONY
Oceana Condominium and BONY, on September 3, 2010, entered into a stipulation providing that Oceana Condominium "withdraws its defenses raised in [its] Answer . . . without prejudice to its right to surplus monies" and "stipulates that the lien interest(s) of Plaintiff are prior and superior . . ." (2010 Stipulation). Oceana Condominium's Common Charge Lien
Oceana Condominium, on July 26, 2011, recorded a "Notice Under The Condominium Act for Unpaid Common Charges" with the City Register's office for $26,685.83 that was due from Shurko as of June 30, 2011 (Oceana Common Charge Lien). The Oceana Common Charge Lien reflects that it was verified by Yevgeny Tsyngauz of Oceana Condominium on July 1, 2011 and was subsequently recorded with the City Register's office on July 26, 2011 under CRFN 2011000263642. Oceana Condominium's Verified Cross Claim And Notice Of Pendency Subsequently, on October 5, 2011, Oceana Condominium filed a notice of pendency.
The next day, on October 6, 2011, Oceana Condominium filed its verified cross claim alleging that "[t]he nature of this cross-claim is to foreclose a lien for unpaid common charges against the real property . . . and to recover any deficiency judgment, which may remain after a sale of the Premises (Oceana Condominium's Cross Claim at ¶ 2). Oceana Condominium further alleges that "[t]hrough June 30, 2011, [Shurko] failed to pay common charges in the sum of $26,686.83" (id. at ¶ 15); "the Condominium caused a lien for unpaid common charges, dated July 1, 2011, to be recorded against the Premises . . ." (id. at ¶ 16); and "[t]his lien takes precedence over all other liens . . . except (i) liens for taxes . . . and except (ii) all sums unpaid on a first mortgage of record held by the Plaintiff" (id. at ¶ 17). Oceana Condominium's 2012 Order Of Reference
Oceana Condominium, in July 2012, made a motion for an order appointing a referee to compute. This Court, on November 8, 2012, awarded Oceana Condominium an order of reference appointing Referee Greenspan to ascertain the amount due. The 2013 Referee's Report
Referee Greenspan, on April 11, 2013, issued his Referee's Report in which he ascertained and calculated that $42,641.33 was due and owing to Oceana Condominium as of that date (2013 Referee's Report). BONY's 2013 Motion For An Order Of Reference Meanwhile, BONY, on April 2, 2013, successfully moved for an order appointing a referee to compute the amount due to it under the WAMU Mortgage. This Court, on October 9, 2013, awarded BONY an order reference, on default (October 2013 Order of Reference), appointing Frank Rio, Esq. as referee (Referee Rio). The October 2013 Order of Reference was entered by the Kings County Clerk on October 21, 2013. Oceana Condominium's November 2013 Foreclosure Judgment
Soon thereafter, on November 24, 2013, this Court awarded Oceana Condominium a Judgment of Foreclosure and Sale and ratified and confirmed Referee Greenspan's Report that "the sum of $42,641.33 was due as of 11th day of April 2013 . . ." (November 2013 Foreclosure Judgment). Specifically, Oceana Condominium's November 2013 Foreclosure Judgment provides that it is:
"ORDERED, ADJUDGED AND DECREED, that the said Report of William Roy Greenspan, Esq., dated the 11th day of April, 2013 be, and the same is hereby to the extent provided for herein ratified and confirmed; and it is further "ORDERED, ADJUDGED AND DECREED, that the above-described premises or such part thereof as may be sufficient to discharge the debt, the expenses of the sale and the costs of this action as provided by the Real Property Actions and Proceedings Law be sold in one parcel, subject to the Plaintiff's, Bank of New York as Trustee for SAMI 2006-AR8, first mortgage, at public auction in Room 224 of Kings County Supreme Court . . . by and under the direction of William Roy Greenspan, Esq. who is hereby appointed Referee for that purpose . . . and it is further "ORDERED, ADJUDGED AND DECREED, that said Referee shall accept at such sale the highest bid offered by a bidder . . . and it is further... "ORDERED, ADJUDGED AND DECREED that the closing of title shall take place at the office of the Referee . . . within forty-five days after such sale unless otherwise stipulated by all parties . . . and it is further... "ORDERED, ADJUDGED AND DECREED that said Referee on receiving the proceeds of such sale shall forthwith pay therefrom: FIRST: The statutory fees and commissions of said Referee . . . Where surplus monies will be available following distribution of sums as provided herein . . . application shall be made to this Court on notice to all parties known to be entitled to claim against any surplus monies, including the defaulting owner of the equity of redemption. Such application shall be promptly submitted to the Court within five days of the transfer of the deed and prior to filing the Report of Sale. The five day period for payment of surplus money into Court as set forth in RPAPL § 1354 (4), and the thirty day period set forth in RPAPL § 1355 for the filing of the Report of Sale shall be deemed extended pending the decision of the Court regarding such application. . . . "FOURTH: Said Referee shall then pay to the Defendant/Cross-Claim Plaintiff . . . Oceana Condominium . . . the sum of $1250.02 for costs and disbursements in this action to be taxed by the Clerk and inserted herein, with interest from the date hereof, and also the sum of $42,641.33, the amount so reported due as aforesaid, together with interest thereon pursuant to the statute and the declaration from 11th day of April, 2013, the date the amount due was calculated to in said Report, to the date of entry of this Order, and thereafter at the statutory post-judgment rate to the date of transfer of title, or so much thereof as the purchase money of the premises will pay of the same, together with $3,500.00 hereby awarded to . . . Oceana Condominium . . . as reasonable legal fees" (emphasis added). The November 2013 Foreclosure Judgment was entered on January 23, 2014. The 2015 Foreclosure Auction , Referee's Deed , Referee's Report Of Sale And Oceana Condominium's Notice Of Claim For Surplus
A copy of Oceana Condominium's November 2013 Foreclosure Judgment is annexed as Exhibit 2 to the September 18, 2015 affirmation of Olga Vinogradova, Esq. submitted in support of Oceana Condominium's motion (Vinogradova Affirmation).
Referee Greenspan, on April 2, 2015, conducted a public foreclosure auction of the Condo Unit at which Plotch emerged as the successful bidder for $76,000.00. Referee Greenspan, at the May 21, 2015 closing, issued a "Referee's Deed in Foreclosure" under which the Condo Unit was conveyed from Referee Greenspan as "Grantor" to Plotch as "Grantee" (Referee's Deed). The Referee's Deed provides: "WITNESSETH, that the Grantor, the Referee appointed in an action in the Supreme Court of the State of New York, County of Kings, Index No. 14941/2010 between Bank of New York as Trustee for SAMI 2006-AR8, plaintiff and Eric Shurko, National City Bank, [Oceana Condominium], City of New York Environmental Control Board, City of New York Parking Violations Bureau, defendants, and . . . Oceana Condominium, cross-claim plaintiff . . . foreclosing a lien recorded on the 26th day of July two thousand and eleven in the Office of the City Register of the City of New York, CRFN: 2011000263642 in pursuance of a judgment entered at a trial term of the Supreme Court of the State of New York, County of Kings on the 23rd day of January, two thousand and fourteen and in consideration of $76,000.00 Dollars paid by the Grantee, being the highest sum bid at the sale under said judgment does hereby grant and convey unto the Grantee [the Condo Unit]" (emphasis added). The Referee's Deed was duly recorded with the City Register on June 12, 2015 under CRFN 2015000201261.
See Exhibit 6 of the October 1, 2015 reply affirmation of Sarah J. Greenberg, Esq. submitted in further support of BONY's summary judgment motion and in reply to Shurko's opposition (Greenberg Reply Affirmation).
A few days after the closing, Referee Greenspan issued his May 26, 2015 Report of Sale, reporting that he conducted the public auction of the Condo Unit on April 2, 2015, and "offered the said premises for sale to the highest bidder, and sold the same to Adam Plotch, for the sum of $76,000.00, that being the highest sum so bid . . ." (2015 Referee's Report of Sale at 2). According to the 2015 Referee's Report of Sale, Oceana Condominium's counsel was paid "the sum of $57,815.28 in payment of judgment with interest . . . inclusive of costs, allowance, legal fees, referee fees, advertisement fees, disbursements, and advances as directed by the aforementioned judgment of foreclosure and sale . . ."; Referee Greenspan "made, executed and delivered to such purchaser a good and sufficient deed of conveyance of the premises so sold" and "there remains a surplus of $17,120.72 over and above the said judgment of foreclosure and sale" (id.). Four days later, on May 30, 2015, Oceana Condominium filed a Notice of Claim for Surplus with the Clerk of the Supreme Court, Kings County, advising that:
"PLEASE TAKE NOTICE that the undersigned, acting on behalf of the Board of Managers of Oceana Condominium . . . hereby claims title to surplus money, or some part thereof, arising out of the sale of the premises . . . which sale was made by William R. Greenspan, referee, on or about April 2, 2015 pursuant to the judgment of foreclosure and sale entered in this action on January 23, 2014, which surplus funds have been deposited in this Court.
"The claim is in the amount of $15,336.27, plus interest/late fees thereon, by virtue of common charges and assessments due to the Defendant/Cross-Claim Plaintiff by the Defendant Eric Shurko from April 11, 2013, to May 1, 2015, and the lien filed on July 26, 2011 by the Defendant/Cross-Claim Plaintiff against [the Condo] Unit . . . in accordance with Section 339-z and 339-aa of Article 9-B of Real Property Law" (Vinogradova Affirmation, Exhibit 7).
The Referee's Report of Sale was then filed with the County Clerk on June 1, 2015. BONY's Additional Notice Of Pendency And Its Motion For Summary Judgment , On Default Meanwhile, after the April 2, 2015 Foreclosure Auction and before the Condo Unit was transferred to Plotch on May 21, 2015, BONY: (1) filed an "Additional Notice of Pendency" on April 6, 2015 (April 2015 Notice of Pendency), and (2) filed a motion for summary judgment on April 17, 2015.
Notably, BONY had no notice of pendency on file regarding the Condo Unit for nearly two years, ever since its original notice of pendency had expired on June 16, 2013.
BONY moved for an order granting "the relief sought in the complaint, including an additional allowance pursuant to Section 8303 . . ." based only on its attorney's affirmation. BONY's counsel, Christen Corgi, Esq. (Attorney Corgi) from Shapiro, DiCaro & Barak, LLC (Shapiro Law Firm) requested an order granting BONY summary judgment, on default, without submitting copies of the pleadings, proof of the WAMU Loan, a fact affidavit or any affidavits of service.
CPLR 8303 (a) (1) provides, in relevant part, that "the court before which the trial was had, or in which judgment was entered, on motion, may award . . . to any party to an action to foreclose a mortgage upon real property, a sum not exceeding two and one half per cent of the sum due or claimed to be due upon such mortgage, and not exceeding the sum of three hundred dollars . . ."
See the April 17, 2015 moving affirmation of Christen Corgi, Esq. (Corgi Moving Affirmation) at 4.
Instead, BONY submitted the Corgi Moving Affirmation annexing only: (1) the September 15, 2014 oath and the February 20, 2015 "Report of Amount Due to Plaintiff" of Referee Rio (Referee Rio Report) (Corgi Moving Affirmation, Exhibit A); (2) purported "[evidence of the costs and disbursements related to the pending foreclosure action[,]" which appear to be invoices from the Shapiro Law Firm's vendors (id. at ¶ 4 and Exhibit B); (3) a March 18, 2014 "Limited Power of Attorney" granted by JPMorgan Chase Bank, National Association (Chase) to Select Portfolio Servicing, Inc. (Servicer SLS) with a March 13, 2014 "Limited Power of Attorney" granted by BONY to Chase "as servicer under those pooling and servicing agreements . . . to be the Trustee's true and lawful Attorney-in-Fact . . ." (id. at Exhibit C); (4) Attorney Corgi's April 17, 2015 "Non-Military Affidavit" (id. at Exhibit D); (5) the July 12, 2012 affirmation of Bridget M. Dehmler, Esq. of the Shapiro Law Firm, affirming that she communicated with Van Steven Chambers, Vice President of Chase (rather than a client representative of BONY), to confirm the factual accuracy of the allegations in BONY's complaint "pursuant to the October 2010 Administrative Order of the Chief Administrative Judge of the Courts of New York" (id. at ¶ 7 and Exhibit E); (6) a copy of BONY's April 2015 Notice of Pendency (id. at Exhibit F); and (7) a copy of the 2010 Stipulation between BONY and Oceana Condominium (id. at Exhibit G).
The Referee Report states that it was made pursuant to "an order of this Court, granted in this action on October 9, 2013[,]" when this court granted BONY's motion for an order of reference (October 2013 Order of Reference).
The Chief Administrative Judge of the State of New York, on October 20, 2010, issued Administrative Order 548/10. "Administrative Order 548/10 . . . which has since been replaced by Administrative Order 431/11, requires a plaintiff's counsel in a residential mortgage foreclosure action to file with the court an affirmation confirming the accuracy of the plaintiff's pleadings" (US Bank, NA v. Boyce, 93 AD3d 782, 782 [2012]; Wells Fargo Bank, N.A. v Hudson, 98 AD3d 576, 578 [2012] [same]).
Notably, the Rio Referee Report annexed to BONY's summary judgment motion as Exhibit A, references and annexes (as Schedules A, B and C) copies of documents that BONY provided to Referee Rio. Schedule C to the Rio Referee Report is an incomplete copy of the October 20, 2014 "Affidavit of Merit and Amounts Due" of Margaret L. Evans, the "Document Control Officer" of Servicer SLS without copies of the exhibits referenced therein. The 2014 Evans Affidavit states that it was made "in support of the appointment of a Referee and to aid said Referee in computing the sums due on the Note and Mortgage" (Corgi Moving Affirmation, Exhibit A [Schedule C to Rio Referee Report, 2014 Evans Servicer Affidavit at ¶ 2]). Thus, BONY did not submit the 2014 Evans Affidavit in support of the instant summary judgment motion.
Regarding BONY's right to foreclose, the Corgi Moving Affirmation affirms that: "This action has been brought to foreclose a Mortgage executed by Eric Shurko to Washington Mutual Bank, FA dated September 8, 2004, on real property known as 45 Oceana Drive East, Unit 6D, a/k/a 45 Oceana Drive East, Apartment #6D, Brooklyn, NY 11215, (Block 8720 Lot 1866), made in the original amount of $499,000.00, recorded in the Kings County Office of the City Register on October 27, 2004 at CRFN: 2004000667062. The Note and Mortgage were transferred to [BONY] as Trustee for SAMI 2006-AR8, and said transfer was memorialized by an Assignment of Mortgage executed on June 9, 2010 and recorded June 18, 2010 in CRFN: 2010000204201. Said mortgaged premises are more particularly described in the Complaint. The prior proceedings are summarized in the affirmation of John A. DiCaro, Esq., sworn to March 29, 2013, submitted in support of plaintiff's application for an order appointing a Referee to compute (id. at ¶ 2 [emphasis added]). Thus, Attorney Corgi generally summarizes the nature of the action and makes the conclusory assertion that BONY has the right to foreclose because "[t]he Note and Mortgage were transferred to [BONY] as Trustee for SAMI 2006-AR8 and said transfer was memorialized by [the WAMU Corrected Mortgage Assignment] executed on June 9, 2010 . . ." (emphasis added).
Attorney Corgi casually references BONY's pleading when she states that "said mortgaged premises are more particularly described in the Complaint" and, instead of providing a traditional recitation of the relevant procedural history, Corgi merely states that "[t]he prior proceedings are summarized in the affirmation of John A. DiCaro, Esq., sworn to March 29, 2013, submitted in support of plaintiff's application for an order appointing a Referee to compute" (id. at ¶ 2). The Corgi Moving Affirmation fails to annex BONY's complaint or the 2013 DiCaro Affirmation, although those documents are referenced therein.
Attorney Corgi seemingly contends that BONY's instant summary judgment motion is a mere formality because BONY's entitlement to judgment was already granted in the October 2013 Order of Reference: "An Order of Reference has been made and entered October 21, 2013, referring the matter to Frank J. Rio, Esq. as Referee, to ascertain and compute the amount due on the Note and Mortgage which are the subject of this action, which order provides that upon the filing of the Referee's Report, Plaintiff may have judgment for the relief demanded in the Complaint (id. at ¶ 3 [emphasis added]). Essentially, BONY argues that the October 2013 Order of Reference already directed that BONY was entitled to a foreclosure judgment, thereby obviating the need for BONY to prove its prima facie entitlement to a judgment of foreclosure and sale on this record.
Attorney Corgi also "respectfully requests" that this Court "excuse the delay and deem the Notice of Entry of the Order of Reference . . . timely" because BONY admittedly failed to comply with the service requirements set forth in the October 2013 Order of Reference based on "a clerical oversight" by the Shapiro Law Firm: "Due to a clerical oversight, Plaintiff's counsel failed to obtain a copy of the filed Order within 20 days of the filing of said Order. As a result, Plaintiff's counsel was unable to serve the Notice of Entry of the Order of Reference upon the designated Referee, owner of equity of redemption, any tenants named in this action and any other parties entitled to notice within 20 days of the entry and the Referee was unable to the Referee's Report within 60 days from the date of the Order of Reference as directed by the Court within said Order of Reference. As such, the Notice of Entry of the Order of Reference was served more than 20 days from the date of entry and Referee completed the Referee's Report more than 60 days from the date of the Order of Reference. Therefore, Plaintiff's counsel respectfully requests that [the] Court excuse the delay and deem the Notice of Entry of the Order of Reference and Referee's Oath and Report timely" (id. at ¶ 9 [emphasis added]). Attorney Corgi paraphrases the provisions, requirements and directives in the October 2013 Order of Reference, a copy of which was not included in BONY's moving papers.
Finally, Attorney Corgi affirms that all defendants were duly served with process in this action "as appears by the affidavits of service on file in this action" and that "[a]ll of the Defendants who require notice of this Application have been served . . ." (id. at ¶¶ 11-12 [emphasis added]). While BONY seeks a default judgment against all defendants except Oceana Condominium, BONY's motion papers do not include any affidavits of service. Apparently — instead of submitting a complete record to support a default judgment — the Shapiro Law Firm expects the court to cross-reference the Kings County Clerk's files to locate BONY's affidavits of service.
While Attorney Corgi affirms that all defendants (except for Oceana Condominium) are in default because their time within which to answer or otherwise respond to BONY's complaint has elapsed, she does not provide any information regarding the purported service of process upon defendants (such as the date, time and method of the purported service): "More than twenty days (thirty days in cases where service is made in any manner other than by personal service within the State) have elapsed since the service of the summons and complaint, and the Defendant(s) have not answered or made any motion raising an objection to the complaint, and their time to so answer or move has expired, except Defendant [Oceana Condominium] who withdrew the defenses raised in [its] Answer pursuant to a Stipulation . . ." (id at ¶ 9 [emphasis added]). BONY failed to submit any evidence to establish the dates of defendants' alleged defaults.
Finally, BONY submits Corgi's April 17, 2015 "Affirmation of Services Rendered" (Corgi Legal Services Affirmation) "to apprise the Court of the attorneys' fees incurred by the plaintiff herein" (Corgi Legal Services Affirmation at ¶ 1). Plotch's Cross Motion
Plotch, on July 30, 2015, opposed BONY's summary judgment motion and cross-movedfor an order: (1) granting him leave to intervene in this action as of a right, pursuant to CPLR 1012 (a) (3); (2) dismissing BONY's complaint, pursuant to CPLR 3215 and/or Part F, Rule 8, of the Kings County Supreme Court Uniform Civil Term Rules; or, alternatively, (3) granting Plotch a declaratory judgment that foreclosure "will not disturb [his] title" to the Condo Unit; and (4) "reducing the interest."
Plotch submitted an August 3, 2015 affidavit in support of his cross motion to intervene (Plotch Affidavit), explaining that "I seek to intervene in this action because I acquired title to the subject condominium at a Public auction conducted on April 2, 2015 pursuant to a judgment of foreclosure and sale that was entered on the counter-claim by. . . Oceana Condominium . . . and the motion for judgment of foreclosure and sale will affect my ownership interest" (Plotch Affidavit at ¶ 3). Plotch further attests that "[a]s owner of the property, I possess an interest therein sufficient to intervene in the action because my interest may be extinguished or affected if the action proceeds without me being represented" (id. at ¶ 6). Plotch also submitted the July 29, 2015 affirmation of his counsel, Marisa Falero, Esq., in opposition to BONY's summary judgment motion and in support of his cross motion (Falero Affirmation). The Falero Affirmation annexes copies of: (1) the 2015 Referee's Report of Sale; (2) the parties' June 25, 2015 stipulation setting forth a briefing schedule for the motions; (3) a copy of the General Foreclosure Rules (Part F) of the Kings County Supreme Court Uniform Civil Term Rules, reflecting that they were printed on July 9, 2015; (4) a copy of the WAMU Corrected Mortgage Assignment; and (5) a copy of the "Adjustable Rate Rider" to the WAMU Loan.
Attorney Falero contends that Plotch's cross motion is timely and meritorious because Plotch meets the requirements of CPLR 1012 (a) since "his ownership interest is not represented in the action and he will be bound and adversely affected by a judgment that affects title" (Falero Affirmation at ¶ 19).
Attorney Falero also contends that BONY's motion for a foreclosure judgment "is untimely and requires the mandatory dismissal of the action under CPLR 3215 and Rule 8 of Part F of the General Foreclosure Rules . . ." because BONY failed to move for a default judgment within one year of Shurko's default, which "requires dismissal of the action as abandoned unless [p]laintiff establishes a reasonable excuse for the delay and a potentially meritorious cause of action" (id. at ¶ 20 [italics in original]). Attorney Falero argues that BONY's "delays were the result of its own failures, including a deficient first motion for an order of reference and its admitted failure to timely serve that order when it was obtained" (id. at ¶ 21).
Attorney Falero argues that BONY "failed to establish a meritorious claim because it lacks standing to sue[,]" noting that BONY's counsel only referenced the corrective mortgage assignment recorded with the City Register's office on June 18, 2010 "because the initial assignment names the wrong assignee . . ." (id. at ¶ 22).
Attorney Falero further contends that Plotch is entitled to a declaratory judgment that his title to the Condo Unit is not subject to BONY's mortgage lien. Attorney Falero argues that "[p]laintiff had no valid Lis Pendens when Proposed Intervenor purchased the property because it had expired" and BONY did not file the April 2015 Notice of Pendency until after the 2015 Foreclosure Auction (id. at ¶ 24). Attorney Falero further contends that "[b]ecause the Additional Notice of Pendency was made with knowledge of the sale to Proposed Intervenor and was not filed until after the sale, the exception applies and the Additional Notice of Pendency should not bind Proposed Intervenor as a party although his conveyance was recorded after its filing" (id.). Attorney Falero also argues that "the applicable interest rate [should] be reduced to a rate that is equitable under the circumstances" because BONY delayed the prosecution of its foreclosure action (id. at ¶ 31).
Regarding BONY's summary judgment motion, Attorney Falero argues that denial is warranted because "[p]laintiff failed to include in its motion proof of service of the summons and complaint or proof of mailing of the notice required by CPLR 3215 (g)" and because there are "deficiencies in proof" (id. at ¶ 33).
BONY's Reply Submissions
BONY, in reply, submitted the September 14, 2015 affirmation of Riyaz G. Bhimani, Esq. (Bhimani Reply Affirmation), an attorney from Eckert Seamans Cherin & Mellott, LLC (Eckert Law Firm), and a September 14, 2015 reply memorandum of law mistakenly named "Memorandum in Further Support of [BONY's] Motion For An Order of Reference and Default Judgment and in Opposition to Adam Plotch's Cross-Motion to Intervene" (emphasis added) (BONY Reply Memorandum).
BONY changed counsel from the Shapiro Law Firm in the midst of briefing the instant motion. According to Sarah J. Greenberg, Esq. of the Eckert Law Firm, "[u]pon the receipt of [Plotch's] Motion to Intervene, Plaintiff retained the services of Eckert Seamans Cherin & Mellott, P.C. and filed a consent to change attorney on September 14, 2015" (see the November 25, 2015 affirmation of Sarah J. Greenberg in opposition to Oceana Condominium's motion to confirm the 2015 Referee's Report of Sale [Greenberg Opposition Affirmation] at ¶ 11 and Exhibit 8).
The Bhimani Reply Affirmation annexes only two exhibits: (1) "the index from the Automated City Register Information System identifying all conveyances related to the Mortgaged Premises from October 13, 2004 to the present," and (2) the Condominium Board's November 2013 Foreclosure Judgment (see Bhimani Reply Affirmation at ¶¶ 2-3 and Exhibits 1 and 2).
BONY's Reply Memorandum — like BONY's moving papers — references documents outside of the record, including "the Affidavit of Merit, sworn to by Caitin Marquardt on February 13, 2013 . . ." (2013 Marquardt Affidavit) and the 2013 DiCaro Affirmation, both of which were submitted more than two years ago in support of BONY's March 29, 2013 motion for an order of reference (see BONY Reply Memorandum at 3, fns. 2 and 3). BONY's Reply Memorandum erroneously states that those particular documents were "submitted with Plaintiff's opening papers," although they were never included in this record. Incredibly, despite the glaring deficiencies in BONY's own motion papers, BONY contends that the Falero Affirmation is "replete with legal argument that is improper and more appropriate for a legal brief and as such should be disregarded by the Court" (id. at 4).
BONY contends that it is entitled to a judgment of foreclosure and sale, on default, against all non-appearing defendants, including Shurko. Instead of submitting affidavits of service, BONY, once again, cites to the 2013 DiCaro Affirmation filed more than two years ago (and the exhibits presumably annexed thereto) as evidence that it "properly caused the Summons and Complaint to be served on all defendants . . ." (id. at 8). BONY relies entirely on the 2013 Marquardt Affidavit as "sufficient proof" of the facts constituting its claim for foreclosure against Shurko, contending that it "demonstrates that Plaintiff is the legal holder of the Note and Mortgage" and "that Shurko defaulted under same by virtue of his failure to make payments when due and that, despite due demand, he continues to be in default" (id.).BONY admits that it failed to move for entry of a default judgment within one year of Shurko's alleged 2010 default, yet contends that it has not abandoned this action because "there is sufficient cause to excuse the delay" (id.). BONY explains that "[h]ere, the delay is due to the time required to schedule and complete mandatory foreclosure conferences and due to the interceding litigation containing cross-claims by the Board" (id.).
Regarding Plotch's intervention motion, BONY contends that it should be denied because: (1) Plotch's interest was adequately represented in this action by the Condominium Board (id. at 6); (2) "Plaintiff, which has held the non-performing Mortgage for years, would be prejudiced by any additional delay in being able to pursue the foreclosure judgment" (id. at 7); and (3) "because Plotch took title to the Mortgaged Premises subject to the Mortgage lien and after [BONY's] Notice of Pendency was filed, he was on notice of Plaintiff's lien and took title only subject to it [and thus] Plotch does not have an interest that could be adversely affected by the judgment as required by CPLR § 1012 . . ." (id.).
Finally, BONY argues that "there is no basis to grant Plotch's request for the absurd relief that Plaintiff should be prohibited from collecting its contractually bargained for interest on Shurko's loan" (id. at 9). Shurko's Opposition
Shurko, in opposition to BONY's motion and Plotch's cross motion, submitted the September 18, 2015 affirmation of Giulia Palermo, Esq. (Palermo Opposition Affirmation), who contends that "there are still multiple issues of facts, which need to be decided" (Palermo Opposition Affirmation at ¶ 6). Without addressing Shurko's default status, defense counsel states that "[d]efendants are requesting the Court dismiss Plaintiff's motion for lack of standing" because "[d]efendant has and continues to assert that Plaintiff does not possess the appropriate standing to collect on this note and mortgage" (id. at ¶¶ 7-8).
Shurko's counsel further contends that "[d]efendant was late to obtain an attorney as soon as he did he has been working with the Plaintiff and with his Counsel to obtain a modification" and that "[t]his court has no jurisdiction to hear this case as Defendants contend that they were never properly served the 90 day notice . . . (id. at ¶¶ 21 and 25).
Regarding Oceana Condominium's common charge lien, Shurko's counsel contends that "[h]ad defendant been provided the proper amount that was owed to the [c]ross [c]laim Plaintiff he could have procured the money necessary to payoff the debt" (id. at ¶ 20). Plotch's Reply In Further Support Of His Cross Motion
Plotch submitted the September 23, 2015 reply affirmation of Marisa Falero, Esq. (Falero Reply Affirmation), in which she argues that "Plaintiff's contention that the cross-motion must be denied because Plotch had notice of its lien on the property is meritless" since "[t]he sole lis pendens Plaintiff had previously filed - on June 16, 2010 - was expired when Plotch acquired title" and "[w]hen a notice of pendency expires, it is a nullity and has no effect on subsequent purchasers" (Falero Reply Affirmation at ¶¶ 8, 9 and 10).
Plotch further contends that his interests were not adequately represented by Oceana Condominium, "which was merely a lienor without any ownership interest" (id. at ¶ 13). Plotch's counsel reasons that "[i]f Plotch can be said to be the successor-in-interest to any named defendant, it is not the former lienor (the Board), but the former owner, Shurko" (id.).
Plotch argues that dismissal is mandated because "five years have passed between the date that Shurko, Plotch's predecessor-in-interest, defaulted, and the date that Plaintiff sought a judgment of foreclosure" and that "[t]he record is bereft of any indication that the Board's pursuit of a default judgment in any way impeded, precluded, or stayed Plaintiff's ability to do the same" (id. at ¶¶ 23 and 25). Plotch asserts that accrued interest should be reduced or cancelled, pursuant to CPLR 5001, due to BONY's delay in prosecuting this action. BONY's Reply
BONY, in response to Shurko's opposition, submitted an October 2, 2015 reply memorandum of law (BONY Reply Memorandum) and the October 1, 2015 Greenberg Reply Affirmation.
Apparently, the Greenberg Reply Affirmation was submitted in an attempt to fill the glaring gaps in the record on BONY's instant summary judgment motion, since it annexes the following documents for the first time: (1) a copy of the 2013 DiCaro Affirmation that BONY submitted over two years ago in support of its motion for an order of reference (Greenberg Sur-Reply Affirmation at Exhibit 1); (2) a copy the 2013 Marquardt Affidavit that BONY submitted over two years ago in support of its motion for an order of reference (id. at Exhibit 2); (3) a copy of BONY's October 2013 Order of Reference with notice of its entry (id. at Exhibit 3); (4) a copy of Oceana Condominium's November 2013 Foreclosure Judgment with notice of its entry (id. at Exhibit 4); (5) copies of Shurko's rejected orders to show cause (id. at Exhibit 5); and (6) a copy of the May 2015 Referee's Deed, pursuant to which Plotch acquired his ownership interest in the Condo Unit (id. at Exhibit 6).
BONY contends that "Defendant Shurko has waived the defense of standing" and that it "need not establish its standing to demonstrate its entitlement to judgment of foreclosure" (BONY Reply Memorandum at 5). BONY also contends that the assertion that BONY failed to serve Shurko with a 90-day pre-foreclosure notice "is without any probative value as it was made by his attorney . . . who can have no personal knowledge of what Defendant Shurko did or did not receive" (id.). BONY clarifies that it "relies upon the testimony of Caitin Marquardt, Vice President of JPMorgan Chase Bank, National Association ("Chase"), Plaintiff's prior loan servicer [who] testifie[d] that Chase served Defendant Shurko with a ninety (90) day pre-foreclosure notice on February 4, 2010 . . ." (id. at 6). Oceana Condominium's Motion Meanwhile, Oceana Condominium, on September 25, 2015, proceeded to prosecute its cross claims by moving for an order: (1) confirming the 2015 Referee's Report of Sale; (2) "dispensing with the appointment of a referee to ascertain and report the amount due to [it] which is a lien upon the surplus monies realized upon foreclosure of the mortgage premises and to ascertain the priorities of the lien on the premises"; and (3) releasing $15,347.27 (plus interest and late fees) of the surplus to it.
Oceana Condominium acknowledges that, pursuant to RPL § 339-z, its common charge lien "takes precedence over all other liens . . . except (i) liens for taxes . . . and except (ii) all sums unpaid on a first mortgage of record held by the Plaintiff" (Vinogradova Affirmation at ¶ 13). However, Oceana Condominium contends that "no one other than the Condominium is entitled to the proceeds of the surplus monies" and that the appointment of a referee to ascertain the priorities of the surplus monies should be dispensed with because Oceana Condominium is the only party (besides National City Bank, a junior lienor) "who filed notices of claim for the surplus monies . . ." (id. at ¶ 21). Oceana Condominium relies on RPL § 339-aa, arguing that its common charge lien "continues to be in effect because although the Condominium was paid at foreclosure sale of what was owed on the lien up to April 11, 2013, the Condominium was not paid all sums secured by the lien" (id. at ¶ 16).
RPL § 339-aa provides that "[t]he lien provided for in the immediately preceding section shall be effective from and after the filing . . . and shall continue in effect until all sums secured thereby, with interest thereon, shall have been fully paid or until expiation six years from the date of filing, whichever occurs sooner."
Oceana Condominium submits the September 16, 2015 affidavit of Donna Weinberg (Weinberg Affidavit), an employee of First Service Residential, the managing agent of Oceana Condominium, who attests that she is "personally involved in the day-to-day operations of the Condominium, including the maintenance of statement of account for each unit owner of the Condominium" (Weinberg Affidavit at ¶ 2). According to Weinberg, Shurko failed to pay common charges and assessments during the pendency of this action, from April 11, 2013 through May 21, 2015 (when the Condo Unit was transferred to Plotch), consisting of an additional $15,347.27 (id. at ¶¶ 15 and 19). BONY's Opposition To Oceana Condominium's Motion
BONY, in opposition, submitted the Greenberg Opposition Affirmation, which annexes copies of the pleadings for the first time and contends that Oceana Condominium's motion should be denied as premature "as not all claims to the Property have been finally adjudicated" (Greenberg Opposition Affirmation at ¶ 14 and Exhibits 1 and 2).
Discussion
(1)
BONY's Summary Judgment Motion
CPLR 3212 (b) requires a summary judgment movant to submit with its motion a complete set of the pleadings in the action (see Tudisco v Mincer, 126 AD3d 1501 [2015] [holding that "(t)he failure of (defendant) to support (her) motion with a copy of the pleadings requires denial of the motion, regardless of the merits of the motion"]; Wider v Heller, 24 AD3d 433, 434 [2005] [holding that denial of summary judgment motion with leave to renew on proper papers was warranted where "the defendants failed to append a complete set of the pleadings to their motion for summary judgment as required by CPLR 3212(b)"]; Freeman v Easy Glider Roller Rink, Inc., 114 AD2d 436 [1985] [holding that plaintiff was not entitled to summary judgment in action to recover damages for personal injuries where papers in support of motion failed to include copy of pleadings as required by statute]).
Furthermore, CPLR 3212 (b) requires that a summary judgment motion be submitted with a fact affidavit because "an affirmation by an attorney who does not have personal knowledge of the essential facts is insufficient" to support an award of summary judgment (Caramanica v State Farm Fire & Cas. Co., 110 AD2d 869, 869 [1985]; see also Winter v Black, 95 AD3d 1208 [2012] [holding that plaintiff failed to make a prima facie showing of entitlement to judgment as a matter of law because "plaintiff's arguments regarding how the accident occurred were supported only by the affirmation of her attorney"]). "The affidavit or affirmation of an attorney, even if he has no personal knowledge of the facts, may, of course, serve as the vehicle for the submission of acceptable attachments which do provide evidentiary proof in admissible form', e. g., documents, transcripts" (Zuckerman v City of New York, 49 NY2d 557, 563 [1980]). However, the Court of Appeals has held that a bare affirmation from an attorney without personal knowledge "is without evidentiary value . . ." (id.). Similarly, "[a] conclusory affidavit or an affidavit by an individual without personal knowledge of the facts does not establish the proponent's prima facie burden" (JMD Holding Corp. v Cong. Fin. Corp., 4 NY3d 373, 384-385 [2005]). The Court of Appeals has long held 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 NY2d 320, 324 [1986]). "It is well-settled that on a motion for summary judgment, the moving party has the initial burden of demonstrating, by admissible evidence, its right to judgment" (Bendik v Dybowski, 227 AD2d 228, 228 [1996]). "To obtain summary judgment it is necessary that the movant establish his cause of action or defense sufficiently to warrant the court as a matter of law in directing judgment' in his favor (CPLR 3212, subd. [b]), and he must do so by tender of evidentiary proof in admissible form" (Friends of Animals, Inc. v Associated Fur Mfrs., Inc., 46 NY2d 1065, 1067 [1979]; Zuckerman v. City of New York, 49 NY2d 557, 562 [1980]). "If the moving party fails to meet this initial burden, summary judgment must be denied regardless of the sufficiency of the opposing papers" (Voss v Netherlands Ins. Co., 22 NY3d 728, 734 [2014] [internal quotations omitted]).
In addition, CPLR 3215 (f), regarding the proof required on a motion for a default judgment, provides, in relevant part: "[o]n any application for judgment by default, the applicant shall file proof of service of the summons and the complaint, or a summons and notice . . . and proof of the facts constituting the claim, the default and the amount due by affidavit made by the party . . . Proof of mailing the notice required by subdivision (g) of this section, where applicable, shall also be filed." See US Bank Natl. Assoc. v Poku, 118 AD3d 980 [2014] [citing CPLR 3215 (f)]; US Bank, N.A. v Razon, 115 AD3d 739 [2014]).
"In residential mortgage foreclosure actions, as here, a plaintiff establishes its prima facie entitlement to judgment as a matter of law by producing the mortgage and the unpaid note, and evidence of the default" (Midfirst Bank v Agho, 121 AD3d 343, 347 [2014]; see also Wells Fargo Bank, N.A. v Cohen, 80 AD3d 753, 755 [2010] [same]). "In a foreclosure case, the Plaintiff must plead and prove as part of its prima facie case that it owns the note and mortgage and has the right to foreclose" ( Bank of New York v Waters, 39 Misc 3d 1212(A), *3 [Sup Ct, Kings County 2013]). When a foreclosure plaintiff establishes its prima facie entitlement to judgment by producing the subject note, mortgage and proof of defendant's default, the burden then shifts to defendants to raise a triable issue of fact ( Redrick Kings, LLC v Kings Hotel, Inc., 109 AD3d 602, 603 [2013]).
Of particular relevance, the Appellate Division, Second Department, has held that a plaintiff cannot demonstrate its prima facie entitlement to judgment on its complaint, as a matter of law, based on "evidence submitted for the first time in its reply papers in support of its motion" (L'Aquila Realty, LLC v Jalyng Food Corp., 103 AD3d 692, 692 [2013]; see also GJF Const. Corp. v Cosmopolitan Decorating Co., 35 AD3d 535, 535 [2006]).
Here, BONY's motion for a judgment of foreclosure and sale, on default, is woefully deficient, as a matter of law, because BONY's moving papers fail to include the following documents that are critical to BONY's application: (1) BONY's summons and complaint; (2) Oceana Condominium's answer to the complaint; (3) BONY's proof of service of its pleadings upon the non-appearing defendants; (4) a promissory note evidencing Shurko's indebtedness; (5) the WAMU Mortgage, pursuant to which BONY seeks to foreclose; and (6) a fact affidavit from an individual with personal knowledge of BONY's right to foreclose, Shurko's payment default and BONY's compliance with the RPAPL's prerequisites to foreclosure, including service of the requisite 90-day pre-foreclosure notice.
While BONY eventually submitted copies of the pleadings, it only did so several months after its summary judgment motion was already sub judice. BONY annexed the pleadings to the November 2015 Greenberg Affirmation submitted in opposition to Oceana Condominium's motion.
Denial of BONY's motion for judgment, pursuant to CPLR 3212 and 3215, is warranted because BONY utterly failed to demonstrate its prima facie entitlement to summary judgment or a default judgment. BONY not only failed to establish proof of service of the summons and complaint upon the non-appearing defendants, as required by CPLR 3215, but it also failed to submit any proof of the facts constituting its only cause of action for foreclosure against Shurko.
BONY's newly retained counsel could not salvage BONY's summary judgment motion by re-submitting and recycling stale copies of the 2013 Marquardt Servicer Affidavit and the 2013 DiCaro Affirmation — the originals of which were submitted over two years ago in support of BONY's motion for an order of reference. Regardless of their substance, those documents cannot cure the glaring deficiencies in BONY's summary judgment motion, since they were belatedly submitted with BONY's reply papers, and therefore, will not be considered. Similarly, BONY's eleventh-hour submission of the pleadings for the first time in opposition to Oceana Condominium's motion to confirm the 2015 Referee's Report of Sale did not cure the deficiencies in BONY's motion, which was already sub judice. Accordingly, BONY's motion for summary judgment and a default judgment against the non-appearing parties is denied.
(2)
Plotch's Cross Motion
Plotch cross-moves for: (1) an order, pursuant to CPLR 1012 (a) (3), granting him leave to intervene in this foreclosure action based on his ownership of the Condo Unit; (2) an order, pursuant to CPLR 3215 and/or Part F, Rule 8, of the Kings County Supreme Court Uniform Civil Term Rules, dismissing BONY's complaint; (3) a declaratory judgment that BONY's foreclosure "will not disturb Plotch's title"; and (4) an order, pursuant to CPLR 3408 and 5001, reducing the interest that has accrued on the WAMU Loan.
Plotch seeks an order granting him leave to intervene in this action as of right, pursuant to CPLR 1012 (a) (3), which provides "[u]pon timely motion, any person shall be permitted to intervene in any action . . . when the action involves the disposition or distribution of, or the title or a claim for damages for injury to, property and the person may be affected adversely by the judgment."
It is undisputed that on April 2, 2015, Plotch was the successful auction bidder at the foreclosure sale of the Condo Unit and title was transferred to him on May 21, 2015. Because the instant action may adversely affect Plotch's interest in the Condo Unit, he is, thus, permitted to intervene pursuant to CPLR 1012 (a) (3) (see JP Morgan Chase Bank, Nat. Assoc. v Kalpakis, 91 AD3d 722, 723 [2012] [holding that "Supreme Court properly granted that branch of the movant's motion which was pursuant to CPLR 1012 (a) (3) for leave to intervene in the action, as the movants established that they may have an ownership interest in the property that is the subject of the foreclosure proceeding"]; Bayview Loan Servicing, LLC v Whitaker, 15 Misc 3d 1141 (A), *2 [Sup Ct Kings County 2007] [holding that successful bidder at foreclosure auction was entitled to intervene as of right because the action may adversely affect his title]). Plotch's motion to dismiss BONY's foreclosure complaint, pursuant to Part F, Rule 8, of the Kings County Supreme Court Uniform Civil Term Rules is granted because BONY failed to file a timely application for summary judgment within one year of the October 2013 entry of BONY's Order of Reference.
Part F, Rule 8, of the Kings County Supreme Court Uniform Civil Term General Foreclosure Rules, effective as of January 2, 2010 and amended on February 21, 2013 per Administrative Judge Lawrence Knipel, provides: "[w]ithin one year after the signing and entry of an Order of Reference, an application for a Judgment of Foreclosure and Sale must be made. Such period of time will be suspended by the filing of a Forbearance or Settlement Agreement with the clerk of this court. Failure to comply will result in an automatic dismissal of the action" (emphasis added). Importantly, the Appellate Division, Second Department, has upheld the enforcement of the Kings County Supreme Court Uniform Civil Term Rules, which were specifically adopted by the Judges of the Civil Term Supreme Court "in order to promote the efficient and impartial administration of justice . . ." (see, e.g., Davidson v Brisman, 40 AD3d 574 [2007] [enforcing Rule 13 of the Kings County Uniform Civil Trial Rules]; Bevilacqua v City of New York, 21 AD3d 340 [2005] [affirming court's order denying summary judgment because "motion was made more than 60 days after the plaintiff filed a note of issue . . . in violation of Rule 13 of the Uniform Civil Trial Rules of the Supreme Court, Kings County"]).
Contrary to the requirements of Part F, Rule 8, BONY failed to file its instant application for a judgment of foreclosure and sale within one year after the October 9, 2013 Order of Reference was issued and subsequently entered by the Kings County Clerk on October 21, 2013. Instead of filing a timely motion in compliance with Part F, Rule 8, BONY inexplicably waited until April 17, 2015 to file the instant summary judgment motion — two weeks after the April 2, 2015 Foreclosure Auction at which Plotch emerged as the successful bidder.
BONY admits that its motion is untimely, yet contends that the timing is excusable due to delays associated with mandatory foreclosure settlement conferencing and Oceana Condominium's assertion and prosecution of its cross-claims. It is not surprising that BONY's excuse lacks any factual details, since BONY's counsel has no personal knowledge of proceedings that took place before it was recently retained. BONY had the opportunity to oppose Oceana Condominium's 2012 and 2013 motions for an order of reference and a judgment of foreclosure and sale regarding its Common Charge Lien and BONY could and should have timely moved or cross-moved for summary judgment and/or a default judgment at that time. For the foregoing reasons, BONY's complaint is dismissed, pursuant to Part F, Rule 8, of the Kings County Supreme Court Uniform Civil Term General Foreclosure Rules.
Plotch seeks a declaratory judgment that BONY's foreclosure will not "disturb" his title to the Condo Unit. Essentially, Plotch seeks a declaratory judgment that the Condo Unit is no longer encumbered by the WAMU Loan, thereby quieting title to the Condo Unit.
Research has disclosed that this is not the first time that Plotch was the winning bidder of a distressed condominium unit at a foreclosure auction stemming from unpaid common charges and, thereafter, sought to quiet title to the property, which was previously encumbered by a mortgage lien.
In Plotch v Citibank, Plotch was "the winning bidder in a foreclosure action commenced by a condominium board to recover unpaid common charges [who] purchased the subject condominium unit . . . in 2010 for the sum of $15,100" (120 AD3d at 1210). Plotch, thereafter, commenced an action for a judgment declaring that defendant's second mortgage lien on the condominium unit was extinguished pursuant to the condominium's judgment of foreclosure and sale because it was subordinate to the common charges lien, pursuant to RPAPL § 339-z. The Appellate Division, Second Department, affirmed the denial of Plotch's summary judgment motion, granted the defendant bank's cross motion for summary judgment declaring that its consolidation agreement is the first mortgage of record against the property, pursuant to RPAPL § 339-z, and held that "the statutory right to priority must be narrowly construed" (120 AD3d at 1211). Plotch's motion for leave to appeal was granted on May 5, 2015 and is presumably still pending (see 25 NY2d 905 [2015]).
RPAPL § 339-z provides, in pertinent part, that a board of managers shall have a lien on each unit for the unpaid common charges "prior to all other liens except . . . all sums unpaid on a first mortgage of record" (emphasis added).
Importantly, in Plotch v Kapco Indus., a factually analogous case, the Appellate Division, First Department, affirmed the dismissal of Plotch's complaint by which Plotch, the winning bidder in a foreclosure action commenced by a condominium board to recover unpaid common charges, sought to quiet title to the condominium unit. In unanimously affirming the dismissal of Plotch's complaint, the First Department specifically held that "[t]he foreclosure proceeding's notice of sale, judgment of foreclosure and referee's deed expressly provided that the property at issue was being sold subject to the winning bidder's payment of defendant's mortgage lien, therefore, plaintiff is bound by those provisions" (110 AD3d at 432 [emphasis added]).
Similarly, in Plotch v US Bank Natl. Assoc. as Trustee for WFALT 2005-2, Plotch, "the highest bidder at a public auction," sought a declaration that a second mortgage was "extinguished and foreclosed pursuant to the Judgment of Foreclosure and Sale" in an action to foreclose a condominium common charge lien and that the defendant bank "is barred from all claims to an estate or interest in the subject property . . ." (39 Misc 3d 1204 [A] at *1). In dismissing Plotch's complaint, the trial court held that the second mortgage, which was consolidated with the first lien, had priority, pursuant to RPAPL § 339-z, and acknowledged that "the Referee's Deed dated January 25, 2011, specifically provides, in pertinent part, that said conveyance to Adam Plotch was [s]ubject to a prior mortgage . . . held by Wells Fargo Bank, N.A. . . .'" (id. at *2). In affirming the trial court's holding, the Appellate Division, Second Department, similarly noted that the condominium's judgment of foreclosure and sale "stated that the premises were to be sold subject to the first mortgage on the premises'" (129 AD3d at 814).
Thus, from past litigation experience, Plotch is well aware that he purchased the Condo Unit subject to the terms of Oceana Condominium's November 2013 Foreclosure Judgment, which expressly "ORDERED, ADJUDGED AND DECREED" that: "the above-described premises or such part thereof as may be sufficient to discharge the debt, the expenses of the sale and the costs of this action as provided by the Real Property Actions and Proceedings Law be sold in one parcel, subject to the Plaintiff's , Bank of New York as Trustee for SAMI 2006-AR8 , first mortgage , at public auction in Room 224 of Kings County Supreme Court . . . by and under the direction of William Roy Greenspan, Esq. who is hereby appointed Referee for that purpose . . ." (emphasis added). Additionally, the Referee's Deed — pursuant to which the Condo Unit was transferred to Plotch — explicitly states that it was issued "in pursuance of [the November 2013] judgment." According to the plain language of the November 2013 Foreclosure Judgment, Plotch purchased the Condo Unit subject to the WAMU Mortgage, and consequently, he is not entitled to a declaration that foreclosure of the WAMU Mortgage "will not disturb" his title.
(3)
Oceana Condominium's Motion RPAPL §1355 (2), governing the confirmation of reports of sale, provides: "2. A motion to confirm such report of sale shall not be made within three months after the filing of the report and shall in any event be made not later than four months after the filing of such report, except that if there be no surplus moneys arising from the sale of the mortgaged premises under such judgment, an application for confirmation of the report of sale may be made at any time after the report shall have been filed eight days. Where the report of sale shows surplus money the party moving for confirmation of the report of sale shall present with his motion papers a proper voucher for the surplus moneys showing that they have been paid into court, a certificate of the clerk specifying the notices of claim to the surplus moneys, if any, so filed with him, and an affidavit showing any other unsatisfied lien on the property" (emphasis added) Thus, there is a very narrow window of time within which a party can move to confirm a referee's report of sale. Specifically, a motion to confirm a referee's report of sale must be made no earlier than ninety days after the referee's report is filed and "not later than four months after the filing of the report . . ." Significantly, when there is a surplus, the statute also specifies certain proof that the moving party "shall present with his motion papers . . ."
Importantly, the Appellate Division, Second Department, has held that "[t]he report of a Referee should be confirmed whenever the findings are substantially supported by the record, and the Referee has clearly defined the issues and resolved matters of credibility" (Capili v Ilagan, 26 AD3d 354, 354 [2006] [citations and internal quotations omitted]). Here, Oceana Condominium seeks an order confirming Referee Greenspan's May 26, 2015 Report of Sale, which Referee Greenspan filed with the court on June 1, 2015 (Vinogradova Affirmation, Exhibit 3). In accordance with RPAPL § 1355 (2), Oceana Condominium timely filed its motion to confirm the Referee's Report of Sale by notice of motion filed on September 25, 2015 — more than three months after the June 1, 2015 filing of the Referee's Report of Sale and prior to the expiration of the four-month statutory deadline within which to do so. In addition, Oceana Condominium's motion papers include "a proper voucher for the surplus moneys showing that they have been paid into court, a certificate of the clerk specifying the notices of claim to the surplus moneys . . . and an affidavit showing any other unsatisfied lien on the property" in accordance with the statute (see Vinogradova Affirmation, Exhibits 4, 5 and 7 and the Weinberg Affidavit).
Referee Greenspan's 2015 Referee's Report of Sale amply details and reports that: (1) he was appointed and named by the November 2013 Foreclosure Judgment (id. at 1); (2) he "caused due notice of the sale . . . to be given and published . . ." (id. at ¶ 1); (3) he conducted a public auction on April 2, 2015, at which Plotch emerged as the highest bidder of the Condo Unit for $76,000.00 and deposited a 10% down payment of $7,600.00 (id. at ¶ 2); (4) he consummated the transfer of the Condo Unit and received the $68,400.00 balance of the purchase price from Plotch, which he deposited in an account at Chase Bank (id. at ¶¶ 3-4); (5) he paid Oceana Condominium's counsel "the sum of $57,815.28 in payment of judgment with interest . . . inclusive of costs, allowance, legal fees, referee fees, advertisement fees, disbursements, and advances as directed by the [November 2013] judgment of foreclosure and sale and as per attached statement of sale" (id. at ¶ 7); and "[t]hat there remains a surplus of $17,120.72 over and above the said judgment of foreclosure and sale" (id. at ¶ 10). Referee Greenspan's Referee's Report of Sale annexes "a statement showing the several items aforesaid, and the mode of computation of such surplus" (id. at 2).
Accordingly, confirmation of the 2015 Referee's Report of Sale is warranted, as a matter of law, because Referee Greenspan's reported findings in the 2015 Referee's Report of Sale are substantially supported by the record and no issues of credibility have been raised.
Oceana Condominium also seeks an order granting it the majority of the surplus ($15,347.27 plus interest and late fees), pursuant to RPAPL § 339-aa, based on the contention that "the Condominium's lien continues to be in effect because although the Condominium was paid at foreclosure sale of what was owed on the lien up to April 11, 2013, the Condominium was not paid all sums secured by the lien" (Vinogradova Affirmation at ¶ 16 [emphasis added]).
RPAPL § 339-aa provides, in pertinent part, that "[t]he lien provided for in the immediately proceeding section shall be effective from and after the filing . . . and shall continue in effect until all sums secured thereby, with the interest thereon, shall have been fully paid or until expiration six years from the date of filing, whichever occurs sooner."
Referee Greenspan, on April 11, 2013, issued his 2013 Referee's Report, in which he ascertained and computed that $42,641.33 was due to Oceana Condominium as of that date. The November 2013 Foreclosure Judgment ratified and confirmed the 2013 Referee's Report and directed that Referee Greenspan auction the Condo Unit and pay Oceana Condominium $42,641.33, plus costs, disbursements, interest and reasonable legal fees of $3,500.00. According to the 2015 Referee's Report of Sale, Oceana Condominium received "the sum of $57,815.28 in payment of judgment with interest . . . inclusive of costs, allowance, legal fees, referee fees, advertisement fees, disbursements, and advances as directed by the aforementioned judgment of foreclosure and sale . . ." and "there remains a surplus of $17,120.72 over and above the said judgment of foreclosure and sale" (Vinogradova Affirmation, Exhibit 3 at ¶¶ 7 and 10).
Oceana Condominium now contends that it is entitled to the majority of the $17,120.72 surplus because Shurko owes additional common charges and assessments that were due after the 2013 Referee's Report was issued. While Oceana Condominium's managing agent attests that Shurko owes $15,347.27 (without interest and late fees) calculated from April 11, 2013 through May 1, 2015, consisting of $14,872.27 in common charges and $475.00 in assessments (Weinberg Affidavit at ¶ 19), Oceana Condominium's Notice of Claim for Surplus states that "the claim is in the amount of $15,336.27, plus interest/late fees thereon . . ." (Vinogradova Affirmation, Exhibit 7).
Oceana Condominium explains that Plotch became responsible for paying the common charges as of June 1, 2015 because he took title to the Condo Unit at the May 21, 2015 closing.
BONY, the only party to oppose Oceana Condominium's motion for distribution of surplus, argues that Oceana Condominium's motion is premature because "not all claims to the Property have been finally adjudicated" (Greenberg Opposition Affirmation at ¶ 14). BONY's contention that Oceana Condominium's motion is premature is ridiculous in light of the fact that BONY's foreclosure complaint is subject to dismissal because BONY failed to timely prosecute its own foreclosure of the WAMU Mortgage. In any event, BONY has failed to establish that it has a prima facie claim to the proceeds of the foreclosure sale. Accordingly, it is ORDERED that BONY's motion for an order, pursuant to CPLR 3212 and 3215, granting it summary judgment and a judgment of foreclosure and sale on default is denied; and it is further
ORDERED that the branch of Plotch's cross motion seeking an order, pursuant to CPLR 1012 (a) (3), granting him leave to intervene in this action as of right is granted; and it is further
ORDERED that the branch of Plotch's cross motion seeking an order, pursuant to Part F, Rule 8, of the Kings County Supreme Court Uniform Civil Term Rules, dismissing BONY's foreclosure complaint is granted; and it is further
ORDERED that the branch of Plotch's cross motion seeking a declaratory judgment that BONY's foreclosure will not disturb his title to the Condo Unit is denied; and it is further
ORDERED that the branch of Plotch's cross motion for an order, pursuant to CPLR 5001 and CPLR 3408, "reducing the interest" that has accrued on the WAMU Loan is denied as moot; and it is further
ORDERED that the branch of Oceana Condominium's motion for an order confirming the 2015 Referee's Report of Sale is granted; and it is further
ORDERED that the branch of Oceana Condominium's motion for an order "dispensing with the appointment of a referee to ascertain and report the amount due to . . . Oceana Condominium . . . which is a lien upon the surplus monies realized upon foreclosure of the mortgage premises and to ascertain the priorities of the lien on the premises" is granted; and it is further
ORDERED that the branch of Oceana Condominium's motion for an order "releasing $15,347.27, plus interest and late fees, of the surplus moneys . . ." is granted to the extent that $15,336.27 of the $17,120.72 surplus shall be released to Oceana Condominium, consisting of the unpaid common charges that Shurko owed Oceana Condominium from April 11, 2013 through May 1, 2015, as set forth in Oceana Condominium's 2015 Notice of Claim, plus statutory post-judgment interest from April 11, 2013 through May 21, 2015, the date that title to the Condo Unit was transferred to Plotch.
This constitutes the decision, order and judgment of the court.
E N T E R,
__________________________
J. S. C.