Opinion
35803/2015E
06-20-2018
HSBC BANK USA, N.A., as Trustee for The Registered Holders of Renaissance Home Equity Loan Trust 2006-1, Plaintiff, v. Rafael SARITSON, et al., Defendants.
Counsel for plaintiff: McCabe, Weisberg & Conway, LLC (Heino J. Muller, Esq.) Counsel for EVBD: Anderson, Bowman, & Zalewski, PLLC (Matthew J. Routh, Esq.)
Counsel for plaintiff: McCabe, Weisberg & Conway, LLC (Heino J. Muller, Esq.)
Counsel for EVBD: Anderson, Bowman, & Zalewski, PLLC (Matthew J. Routh, Esq.)
Mary Ann Brigantti, J.
The following papers numbered 1 to 8 read on the below motions noticed on September 27, 2017 and February 5, 2018 and duly submitted on the Part IA15 Motion calendar of February 5, 2018 :
Papers Submitted Numbered
EVBD's Order to Show Cause, Exhibits 1,2
Pl.'s Aff. In Opp., Exhibits 3,4
EVBD's Reply Aff., Exhibits 5,6
Pl.'s Motion for Judgment of Foreclosure and Sale 7,8
Upon the foregoing papers by way of order to show cause, proposed intervenor EVBD LLC ("EBVD") moves for an order (1) pursuant to CPLR 3211(a)(10), dismissing this complaint and cancelling the lis pendens attached to the subject premises; (2) in the alternative, pursuant to CPLR 1001, joining EVBD as a necessary party to this action; (3) in the alternative, pursuant to CPLR 1012 and 1013, permitting EVBD to intervene in this action; (4) vacating the default of EVBD and permitting EVBD to interpose an answer, or in the alternative; (5) ordering a traverse hearing; (6) vacating and restoring Plaintiff's motion for an order of reference and default judgment pursuant to CPLR 5015, and allowing EVBD to interpose opposition; (7) staying the execution of the instant judgment; (8) staying a decision on Plaintiff's motion for judgment of foreclosure and sale. Plaintiff HSBC Bank USA, N.A., as Trustee for The Registered Holders of Renaissance Home Equity Loan Trust 2006-1 ("Plaintiff") opposes the motion. In a separate motion, Plaintiff moves for leave to enter a judgment of foreclosure and sale. This motion has been held in abeyance pending the resolution of EVBD's order to show cause.
For the foregoing reasons, EVBD's motion is granted in part and denied in part. CPLR 1012(a) provides that upon a timely motion, any person shall be permitted to intervene in an 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" (subd. 3) (see Yuppie Puppy Pet Products, Inc. v. Street Smart Realty, LLC. , 77 AD3d 197, 201 [1st Dept. 2010] ). CPLR 1013 further provides that upon a timely motion, a court may, in its discretion, permit intervention when inter alia , the person's claim or defense and the main action have common questions of law or fact, provided that the intervention does not unduly delay the determination of the main action or prejudice the rights of any party (id ). In this matter, EVBD established that it was deeded the property in 2014, however it was never made a defendant in this 2015 action. Individuals holding title to property or acquiring any right to or lien on property subsequent to the mortgage should be made parties in a foreclosure action (see RPAPL § 1311 ; New Falls Corp. v. Board of Managers. of Parkchester N. Condominium , 10 AD3d 574, 575-76 [1st Dept. 2004] ). Since EVBD had a possessory interest in the subject premises, it is entitled to intervene because it may be adversely affected by a judgment in this action (see CPLR 1012[a][3] ; Country-Wide Home Loans, Inc. v. Harris , 136 AD3d 570 [1st Dept. 2016] ).
EVBD's motion to intervene will not be denied as untimely. In considering whether a motion to intervene is timely, Courts may assess whether the movant's "delay in seeking intervention would cause a delay in resolution of the action or otherwise prejudice a party" (see Yuppie Puppy Pet Products, Inc. v. Street Smart Realty, LLC. , 77 AD3d at 202, citing Teichman v. Community Hosp. of W. Suffolk , 87 NY2d 514, 522 [1996], and Poblocki v. Todoro , 55 AD3d 1346 [4th Dept. 2008] ). In this matter, even assuming that EVBD offered no competent evidence that it was unaware of the pending foreclosure action before filing this motion, the motion was made within five months after Plaintiff obtained its order of reference/default judgment order, and Plaintiff has not yet been granted a judgment of foreclosure and sale. Moreover, intervention is required as of right under these circumstances, and Plaintiff has not articulated any operative prejudice it will endure as a result of EVBD's intervention. In addition, Plaintiff has failed to show that there is an improper conflict of interest between EVBD's counsel's representation of both EVBD and its prior representation of the borrower defendant.
EVBD is also entitled to vacatur of the order of reference. It is not disputed that EVBD had a recorded interest in the property before this action was commenced. Plaintiff by due diligence should have known of this interest, yet it offers no explanation as to why EVBD was never made a defendant to this action. Moreover, Plaintiff fails to present any admissible evidence alleging or establishing that it was unaware of EVBD's interest in the property. Accordingly, vacatur of the default judgment entered is appropriate because it was obtained through extrinsic fraud (see Country-Wide Home Loans, Inc. v. Harris , 136 AD3d at 570-71 ; see also Li Xian v. Tat Lee Supplies Co., Inc. , 126 AD3d 424, 424 [1st Dept. 2015] ). Under these circumstances, a defendant need not establish a reasonable excuse for its default or the existence of a potentially meritorious defense to the action, and therefore this Court does not address that issue (see Country-Wide Home Loans, Inc. v. Harris , Index No. 381387/2008 [Sup. Ct., Bx. County 2014][Danziger, J.], aff'd , 136 AD3d 570 [1st Dept. 2016] ; Shaw v. Shaw , 97 AD2d 403, 404 [2nd Dept. 1983] ; Morel v. Clacherty , 186 AD2d 638, 639 2nd Dept. 1992] ). Although these specific contentions were not made by EVBD in support of its motion to vacate, a court has the discretion to "grant relief that is warranted by the facts plainly appearing on the papers on both sides, if the relief granted is not too dramatically unlike the relief sought, the proof offered supports it, and there is no prejudice to any party" (see Frankel v. Stavsky , 40 AD3d 918, 918-19 [2nd Dept. 2007] ).
However, since EVBD is being made a party to this action, it is not entitled to dismissal for failure to name a necessary party pursuant to CPLR 3211(a)(10) (see Country Wide Home Loans, Inc. v. Harris , 136 AD3d at 571, citing Matter of Crabtree v. New York State Div. of Hous. & Community Renewal , 294 AD2d 287, 290 [1st Dept. 2002], aff'd , 99 NY2d 606 [2003] ).
Finally, in light of the foregoing, Plaintiff's pending motion for leave to enter a judgment of foreclosure and sale is denied, without prejudice, with leave to renew.
Accordingly, it is hereby
ORDERED, that EVBD's motion for leave to intervene as a party defendant in this action is granted, and it is further,
ORDERED, that EVBD's proposed answer annexed to its moving papers is deemed served as of the date of this Order, and it is further,
ORDERED, that the order of reference and related relief dated July 17, 2017 is hereby vacated, without prejudice and with leave to renew, and it is further,
ORDERED, that EVBD's motion to dismiss is denied, and it is further,
ORDERED, that Plaintiff's motion for a judgment of foreclosure and sale (motion seq. No. 005) is denied without prejudice, with leave to renew, and it is further,
ORDERED, that any requested relief that is not granted herein is specifically denied.
This constitutes the Decision and Order of this Court.