Opinion
Case Nos. 99-CV-270 (FB), 99-CV-272 (FB).
February 16, 2005
ERIK VESKI, ESQ., Hastings-on-Hudson, Ny, for the Plaintiff.
ROBERT P. O'NEILL, ESQ., Sherry O'Neill New York, NY, For the Defendants Robert Jones and Chandra Samaroo.
MELISSA S. SEIGEL, ESQ., New York City Dept. of Finance Office of Legal Affairs, Brooklyn, Ny., For the Defendant City of New York.
MEMORANDUM ORDER
The Court issued a Memorandum and Order ("MO") on April 29, 2004, concerning two foreclosure actions filed by Plaintiff, Debcon Financial Services, Inc. ("Debcon"). In regard to both actions, the Court, inter alia, (1) granted a default judgment of foreclosure and sale against certain defendants, (2) granted summary judgment against others, (3) denied summary judgment against the Environmental Control Board of the City of New York and the City of New York Department of Finance (collectively, the "City"), and the State of New York ("State") because the Court concluded that the City and State had "no interest that would preclude foreclosure and sale of the property," and (4) declined to extend Notices of Pendency that had lapsed. Thereafter, on December 23, 2004, the Clerk of the Court entered a Judgment, which "ORDERED and ADJUDGED that plaintiff take nothing of the defendants."
Before Judgment had been entered, in a letter submitted on July 8, 2004, Debcon moved for reconsideration of the Court's MO to the extent that it (1) denied Debcon's request for an order extending the Notices of Pendency that had lapsed, and (2) declared that the City and State had no interest in either action. See Letter from Erik Veski (July 8, 2004). In a supplemental letter, submitted after Judgment had been entered, Debcon informed the Court that the Judgment that "plaintiff take nothing of the defendants" was inconsistent with the Court's MO awarding default and summary judgments in favor of Debcon. See Letter from Erik Veski (Jan. 20, 2005), at 1. The motion for reconsideration, as supplemented, is granted.
1. Notices of Pendency
As the Court noted in its MO, a party is generally barred from filing a successive notice of pendency after it has lapsed. See N.Y. CPLR § 6513 (an extension order of a Notice of Pendency "shall be filed, recorded and indexed before expiration of the prior period."). However, because N.Y. Real Prop. Acts. Law § 1331 requires "the plaintiff, at least twenty days before a final judgment directing a sale is rendered, [to] file . . . a notice of the pendency of the action," courts have construed an exception to this general bar to permit a party to file a successive notice of pendency for the "specific purpose of prosecuting the mortgage foreclosure to final judgment." See Campbell v. Smith, 309 A.D.2d 581 (1st Dep't 2003); see also Chiarelli v. Kotsifos, 5 A.D.3d 345, 345 (2d Dep't 2004) (same); United Companies Lending Corp. v. Candela, 11 A.D.3d 883, 884 (4th Dep't 2004) (same). In light of this exception, which Debcon did not point out to the Court until its motion for reconsideration, the Court grants Debcon's request for an order to file the Notices of Pendency to prosecute the foreclosure actions.
2. The City and State's Interests
N.Y. Real Prop. Acts. Law § 1311 requires a plaintiff in a mortgage foreclosure action to join as a party defendant, any person "whose interest is claimed to be subject and subordinate to the plaintiff's lien." Debcon avers that certain liens possessed by the City and State, including General Corporation taxes, State Franchise taxes, and New York City Environmental Control Board judgments, are subordinate to Debcon's lien. Because the City and State may have subordinate interests, the Court should not have dismissed the City and State as parties to these actions.
The Court must therefore rule on Debcon's motion for summary judgment against the City and State. Summary judgment, however, is not appropriate because the City has appeared in both actions for the limited purpose of waiving service of all proceedings except "amended complaint, notice of sale, Referee's report of sale, and notice of proceedings to obtain surplus monies[,]" Notice[s] of Appearance and Waiver in Foreclosure, and the State has not appeared in either action. Nonetheless, default judgment is appropriate because both the City and State were properly served and have failed to file Answers to Debcon's Complaint. See Fed.R.Civ.P. 55(b)(2); see also Singh v. Jackson, 1986 WL 12514 (S.D.N.Y. Oct. 31, 1986) ("This Court's inherent power to manage its caseload, however, provides the authority to sua sponte enter a default judgment against a litigant who has failed to prosecute his case with reasonable diligence and who has not complied with the Court's rules of procedure." (citing Flaksa v. Little River Marine Construction Co., Inc., 389 F.2d 885, 887 (5th Cir. 1968))).
CONCLUSION
The Court (1) grants Debcon's request for an order to file the Notices of Pendency to prosecute the foreclosure actions, and (2) awards default judgment against the City and State. Consistent with its limited appearance, the City shall receive "notice of sale, Referee's report of sale, and notice of proceedings to obtain surplus monies." Debcon is directed to submit a proposed Judgment to encompass the Court's prior MO as modified herein, within twenty (20) days of the date of this Order.
SO ORDERED.