Opinion
Index No. 511598/2015
01-12-2024
HSBC Bank USA N.A., Plaintiff, v. Michael Deangelis, Enza Gatto a/k/a Enza M. Vitiello as voluntary administratrix and heir to the Estate of Angelina Vitiello, United States of America, o/b/o Internal Revenue Service, New York State Dept of Taxation and Finance, HSBC Mortgage Corp., Commissioner of Labor of the State of New York, ford Motor Cr., City of New York, Department of Finance, Parking Violations, ECB, Justin Giaquinto, Theresa Pezza, Clara Pezza, Michele Pezza, Anthony Pezza, Defendants.
Unpublished Opinion
PRESENT: HON. CENCERIA P. EDWARDS, Justice.
DECISION AND ORDER
Hon. Cenceria P. Edwards, JSC, CPA.
The following e-filed papers read herein: NYSCEF Doc. Nos.
Order to Show Cause and Affidavits (Affirmations) ___ 107-115, 117-118
Opposing Affidavits (Affirmations) ___ 120-124
Upon the foregoing papers in this action to foreclose the residential property at 119 Battery Avenue in Brooklyn ("the Property"), non-parties Henry Vitiello and John Vitiello move, by order to show cause ("OSC"), for an order: (1) enjoining and restraining plaintiff HSBC Bank USA, N.A. ("HSBC") from auctioning or otherwise selling the Property; (2) dismissing this action for failure to include necessary parties to the action; and (3) "[g]ranting such other, further and different relief. . . as this Court deems just and proper" (NYSCEF Doc No. 118).
Background
HSBC's predecessor loaned defendant Michael DeAngelis $400,000.00, secured by the August 10, 2006 mortgage executed by DeAngelis and the other owner of the Property, Angelina Vitiello, who died three years later. On September 22, 2015, HSBC commenced this action against, inter alia, DeAngelis and defendant Enza Gatto, a/k/a Enza M. Vitiello as Voluntary Administratrix and heir of the Estate of Angelina Vitiello ("Gatto"), to foreclose on the mortgage encumbering the Property, alleging that the defendants defaulted under the mortgage loan by failing to pay principal, interest and other charges that came due on August 1, 2008 (see NYSCEF Doc No. 1 at ¶ 8). DeAngelis never answered the complaint, but Gatto, who is decedent Angelina Vitiello's daughter, submitted a letter to HSBC's counsel, dated November 24, 2015, stating that she was "not the only heir to this property" and that she had "younger brothers" (see NYSCEF Doc. No. 51). There is no indication that Gatto filed her letter with the Court.
In January of 2017, HSBC moved, inter alia, for summary judgment against Gatto (apparently having deemed her letter an answer), default judgment against DeAngelis and the other defendants, and for an order of reference (see NYSCEF Doc. Nos. 40-55). By order dated April 28, 2017, the Court (Noach Dear, J.) granted the motion in full, and appointed a referee to compute the amount due and owing under the mortgage (see NYSCEF Doc No. 56). On November 2, 2017, HSBC moved for a judgment of foreclosure and sale ("JFS"), which motion was granted by order and judgment (one paper) dated October 4, 2018 (see NYSCEF Doc Nos. 58 and 83). In the interim, defendant DeAngelis moved to vacate his default, dismiss the complaint and/or order a traverse hearing, which motion HSBC opposed (see NYSCEF Doc Nos. 71-81). By a November 27, 2018 decision and order, the Court (Dear, J.) denied DeAngelis's motion, rejecting his challenges to substituted service at one address, and to "leave and mail" service at a second address (see NYSCEF Doc No. 84).
On January 30, 2019, HSBC moved for an order extending the time to hold a foreclosure sale/auction of the Property, which was granted by an April 5, 2019 decision and order (see NYSCEF Doc Nos. 87-96). In that order, the Court extended the time within which to conduct a sale/auction of the Property for one (1) year from the date of entry of the order (see NYSCEF Doc No. 96 at 1). On October 31, 2019, plaintiffs counsel filed a Notice of Sale of the Property for Decembers, 2019 (see NYSCEF Doc No. 97). The sale was stayed when the law firm representing defendant DeAngelis moved for an order relieving it as counsel, which was granted by order dated December 20, 2019 and entered January 8, 2020 (see NYSCEF Doc Nos. 98-105).
On June 30, 2022, after a substantial delay due to the COVID-19 pandemic, plaintiffs counsel filed another Notice of Sale of the Property for July 7, 2022 (see NYSCEF Doc No. 106).
Non-Parties Henry and John's OSC
On July 6, 2022, the day before the scheduled foreclosure sale/auction, non-parties Henry Vitiello (Henry) and his brother, John Vitiello (John), moved, by OSC, to stay the foreclosure sale/auction and dismiss the complaint for failure to include them as necessary parties (see NYSCEF Doc No. 118). Henry submits an affidavit attesting that:
"I am not named as a defendant in this foreclosure action involving the property . . . which I have an interest in, as a distribute[] and heir at law, of my mother, Angelina Vitiello.
"I was not named in the instant proceeding and was not served with the summons and complaint.
"Plaintiff named and served my sister, Enza Gatto, a/k/a Enza M. Vitiello as Voluntary Administratrix and heir of the Estate of Angelina Vitiello, as a defendant.
"My attorney has explained to me that a Voluntary Administrator is a fiduciary; however, an appointment as Voluntary Administrator is restricted in that the Voluntary Administrator only has authority to, recover and collect estate assets that do not exceed $50,000 ($30,000.00 at my mother's death-SCPA 1306). A Voluntary Administrator does not have power to bind the decedents estate in a foreclosure proceeding.
"The Plaintiff also named Enza Gatto a/k/a Enza M. Vitiello as heir to the estate of Angelina Vitiello. This fails to address the other heirs at law to the Estate of Angelina Vitiello, specifically my interest as an heir to the Estate; and the interest of my brother, John Vitiello.
"Under RPAPL 1311, every person having an estate or interest in possession or otherwise, in the property as tenant in fee, for life . . . or for the years and every person entitled to the reversion remainder or inheritance of the real property (emphasis added) et al.
"I have an interest in the property due to my relationship with Angelina Vitiello, as her heir at law and distributee, as her son; and the Plaintiff has failed to add me as a necessary party in accordance with RPAPL 1311" (NYSCEF Doc No. 110 at ¶¶ 4-10).
Henry's brother, John, submits a nearly identical affidavit (see NYSCEF Doc No. 112).
The non-party movants also submit a memorandum of law arguing that a preliminary injunction is warranted enjoining a sale of the Property because plaintiff "failed to include the heir[s] at law for the decedent" (NYSCEF Doc No. 116 at 3). They argue that they are necessary parties to this foreclosure action, pursuant to RPAPL 1311 which "codifies the equitable principle that persons holding title to the premises or acquiring any right to or lien on the property subsequent to the mortgage should be made defendants in the foreclosure action" (id. at 4). They also assert that "[t]he rationale for joinder of these interests derives from the underlying objective of foreclosure actions - to extinguish the rights of redemption of all those who have a subordinate interest in the property and to vest complete title in the purchaser at the judicial sale" (id.). While movants discuss joinder of necessary parties under CPLR 1001, they inexplicably seek dismissal of the complaint rather than joinder and/or intervention as of right (see id. at 7-8).
HSBC's Opposition
HSBC argues that Henry and John's motion should be denied as untimely because they purportedly inexplicably sat on their rights for years after this action was commenced and the JFS was issued (see NYSCEF Doc. No. 120 at ¶¶ 9-10). Next, HSBC contends that even if the movants had an interest in the premises, "said interest was encompassed in the naming of Gatto as the Administratrix of Decedent's Estate as a defendant in this action. Here),] Gatto filed an Answer),] after which Plaintiff moved for summary judgment. As such, the Decedent's rights in the Premises were properly represented through the naming of her Administrator as a Defendant." (id. at ¶12).
HSBC alternatively argues that "were this court to hold that Movants are necessary parties to this matter the proper remedy would not be dismissal, but rather the amendment of the caption and pleadings to include the Movants" (NYSCEF Doc No. 120 at ¶ 3). It correctly notes that "[although Movants seek affirmative relief, they have failed to include in their application leave to intervene in these proceedings" and "[i]n order to have standing to move, a prospective intervenor must make the appropriate motion to intervene" (id. at ¶ 9). HSBC also asserts that "should the Court deem Movants . .. necessary parties], dismissal is not the proper remedy" but "[r]ather, leave permitting Plaintiff to file an application to serve amended pleadings on the Movants in question would be the proper and just remedy" (id. at ¶ 13). Plaintiff s counsel further asserts that "[m]ovants would in no way be prejudiced by the amendment of the captions and service of amended pleadings upon them as they would then have the ability to file an Answer and assert any defenses they so choose" (id).
Discussion
HSBC's initial argument that this motion by nonparties Henry and John should be denied as untimely rings hollow for two reasons. First, there is no evidence in this record as to when either movant learned of this action to foreclose on the Property. Second, HSBC can hardly raise an objection as to the movants' purported lack of due diligence in protecting their rights, when the record evinces that HSBC also failed to exercise due diligence. As noted, HSBC moved for summary judgment against the movants' sister, Gatto, treating her November 24, 2015 letter as an answer to the complaint. However, in said letter, dated just three months after this action was commenced, Gatto expressly advised HSBC's attorneys that she was not the only heir and she mentions having brothers, although she provided no additional information about them. Nonetheless, this was sufficient to place HSBC on notice that additional heirs possess an ownership interest in the premises sufficient to render them necessary parties, thus, evincing that HSBC has known of their existence since nearly the inception of this case.
Moreover, included as Exhibit "G" with HSBC's motion for summary judgment made on January 4, 2017, is a copy of Angelina Vitiello's death certificate and the papers comprising Gatto's voluntary administrator application to the Surrogate's Court, made in May of 2009 (see NYSCEF Doc. No. 53). Said papers include two separate affidavits by Gatto, wherein she discloses that the decedent has two living sons, identifies them by name (i.e., as the movants Henry and John Vitiello), and also provides their addresses (see id. at 3-5, 7-8). This shows that HSBC has had sufficient information about the identities and past addresses of these additional distributees for many years before the instant application was made. However, the record does not indicate, nor does HSBC even allege, that it took any steps to locate the movants and bring them I within the jurisdiction o f this Court. Under these circumstances, the Court finds that HSBC cannot be heard to complain that the movants did not timely seek to intervene, when it was HSBC that inexplicably omitted them from this litigation at the outset.
HSBC's second argument that Henry and John's intervention is unnecessary because the rights of the decedent Angelina Vitiello were properly represented during this case, by naming of Gatto as the administrator of the estate, is unavailing. HSBC named Gatto as the "Voluntary Administratrix," not as a regular administrator. A voluntary administrator only has the authority to recover assets for a "small estate," which exists when a person dies leaving personal property having a gross value of $50,000 or less (see SCPA §§ 1301 and 1306). The subject premises is real property, not personal property, and there is no dispute that its value well exceeds the small estate monetary threshold, which was $30,000 when Angelina Vitiello died. Gatto, thus, had no I power to represent the decedent's interest (or, properly, the interest of the decedent's estate) in the instant foreclosure action. In any event, contrary to HSBC's contention, Gatto's status as an estate representative is of no moment. In New York, when an owner of real property dies intestate, title vests immediately in the owner's distributes or heirs-at-law (see U.S. Bank Trust, N.A. v Gedeon, 181 A.D.3d 745, 747 [2d Dept 20207; Matter of Blango, 166 A.D.3d 767, 768 [2d Dept 2018]). In such situations, the real property never passes into the decedent's estate (see In re Estate of Torricini, 249 A.D.2d 401, 402 [2d Dept 1998]). When decedent Angelina Vitiello died intestate in 2009, her ownership interests immediately vested in her distributees, i.e., Gatto, Henry, and John. Hence, whether Gatto was a duly appointed administrator, rather than a voluntary administrator of a small estate, is irrelevant because the estate of Angelina Vitiello had no interest in the premises for an administrator to represent (see id.).
On this record, the Court finds that non-party movants Henry Vitiello and John Vitiello are necessary parties, as they are the sons of mortgagor-owner Angelina Vitiello, who died intestate, and so they have an ownership interest in the Property but were excluded from this action to foreclose on same. However, they cannot seek affirmative relief in this action, such as dismissal of the complaint, without obtaining prior leave to intervene herein as party-defendants pursuant to CPLR §§ 1001 (a) and/or 1012 (a) (3), which they did not request. Nonetheless, in addition to seeking an injunction and dismissal, the movants specifically request "such other, further and different relief. . . as this Court deems just and proper" (see NYSCEF Doc No. 118 at 2), which permits this Court to order intervention and joinder of Henry and John as party-defendants.
The Court, thus, finds that joinder is the appropriate and most equitable relief. Once added as party-defendants, Henry and John Vitiello will have a legal right, like others with a vested interest in the Property, to assert affirmative defenses to foreclosure, move for dismissal, if warranted, and/or exercise their right of redemption prior to the next scheduled foreclosure sale/auction of the Property. Accordingly, it is hereby, ORDERED that the above-referenced motion (mot. seq. six) is only granted to the extent that movants Henry Vitiello and John Vitiello are permitted leave to intervene in this action as of right, pursuant to CPLR 1012 (a) (3), and are hereby joined as party-defendants to this foreclosure action, pursuant to CPLR 1001 (a); the motion is otherwise denied; and it is further
ORDERED that within 30 days after the entry of this decision and order, plaintiff HSBC shall serve all defendants with a supplemental summons and an amended complaint adding Henry Vitiello and John Vitiello as party-defendants, and for those defendants who are natural persons, such service shall be pursuant to Article 3 of CPLR; and it is further
ORDERED that plaintiff HSBC and its agents and all persons acting in concert with HSBC or on its behalf, directly or indirectly, are hereby restrained and enjoined from serving notice of a sale/auction of the Property until further order of this Court; and it is further
ORDERED that the caption shall be amended to read as follows;
HSBC BANK USA N.A., Plaintiff,
- against -
MICHAEL DEANGELIS, ENZA GATTO a/k/a ENZA M. VITIELLO as voluntary administratrix and heir to the Estate of Angelina Vitiello, HENRY VITIELLO, JOHN VITIELLO, UNITED STATES OF AMERICA, o/b/o INTERNAL REVENUE SERVICE, NEW YORK STATE DEPT OF TAXATION AND FINANCE, HSBC MORTGAGE CORP., COMMISSIONER OF LABOR OF THE STATE OF NEW YORK, FORD MOTOR CR., CITY OF NEW YORK, DEPARTMENT OF FINANCE, PARKING VIOLATIONS, ECB, JUSTIN GIAQUINTO, THERESA PEZZA, CLARA PEZZA, MICHELE PEZZA, ANTHONY PEZZA, Defendants.
This constitutes the Decision and Order of this Court.