Opinion
Index No. 600936/2016 Mot Seq 002-MD
07-18-2022
RESIDENTIAL MORTGAGE LOAN TRUST 2013-TT2, BY U.S. BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS TITLE TRUSTEE RMLT 2013-TT2, Plaintiff, v. PETER E. FIORITA a/k/a PETER FIORITA, ANNA FIORITA a/k/a ANNA NACCHIA et al. Defendants.
BERKMAN. HENOCH. PETERSON. PEDDY &FENCHEL. P.C. (Rajdai D. Singh. Esq., of counsel) Garden City'. New York for Plaintiff YOUNG LAW GROUP (Justin F. Pane. Esq., of counsel) Bohemia. New York for Defendant
Unpublished Opinion
BERKMAN. HENOCH. PETERSON. PEDDY &FENCHEL. P.C. (Rajdai D. Singh. Esq., of counsel) Garden City'. New York for Plaintiff
YOUNG LAW GROUP (Justin F. Pane. Esq., of counsel) Bohemia. New York for Defendant
SHORT FORM ORDER DENYING MOTION
HON. PAUL M. HENSLEY, AJSC
Upon e-filed documents 82-116, read and considered on plaintiff s motion to restore this action to the active calendar and for ancillary relief, it is hereby
ORDERED that the plaintiff s motion (002) be, and it hereby is. DENIED in all respects.
The Appellate Division - Second Judicial Department affirmed the supreme court's dismissal of the action in respect of Anna Fiorita. a necessary and indispensable party, because the action is time barred against Anna Fiorita. Hence, the motion before this Court to restore this action to the calendar as against all other defendants must be denied.
This is a residential foreclosure action that was dismissed against Anna Fiorita, one of the mortgagors and a fee simple title holder to the subject realty (Affirmation in Support [Dkt. 84] Exhibit L [Dkt. 99]: Affirmation in Opposition [Dkt. 105] Exhibit 3 [Dkt. 108]). Plaintiff appealed the order dismissing the action, and the Appellate Division affirmed the supreme court (Residential Mtge. Loan Trust 2013-TT2 v Fiorita, 194 A.D.3d 974, 144 N.Y.S.3d 372 [2d Dept 2021]).
Plaintiff seeks to restore the action to the calendar as to all defendants except Anna Fiorita. Plaintiff quotes from the Appellate Division order setting forth, "[t]he judgment upon the order, is in favor of that defendant [Anna Fiorita] and against plaintiff dismissing the complaint insofar as asserted against her" (Memorandum of Law in Support of Plaintiffs Motion to Restore the Action to the Court's Active Calendar and For Order of Reference [Dkt. 86] at 3 quoting Fiorita, supra, 194 A.D.3d at 974. 144 N.Y.S.3d at 373 [2d Dept 2021] [emphasis added in the Memorandum of Law]). From this language, plaintiff reasons, "the Appellate Division, in holding that the action is only dismissed against Defendant Anna, unequivocally establish (sic) that the action must continue against the other named defendants" (Memorandum of Law [Dkt. 86] at 8).
Plaintiff s argument has an initial flaw. The language it quotes from the Appellate Division decision and order describes what the trial court did. That language is not a holding of the Appellate Division. The last paragraph of the Appellate Division decision and order sets forth, "the Supreme Court properly granted the defendant's motion to dismiss the complaint insofar as asserted against her as time barred" (Fiorita. 194 A.D.3d at 975, 144 N.Y.S.3d at 373 [2d Dept 2021 ]). Even if plaintiff cited this language, plaintiff s interpretation of the language's effect is incorrect. The language of description and limitation-"insofar as asserted against her as time barred"-describes the lower court's order and does not carry the implication plaintiff claims. This language guides future courts and litigants relying on the body of published case law to the obvious point that a time-barred claim against one defendant does not mean, a fortiori, that the law time bars the claim against other defendants. Such is the case here. The action was not time barred against Peter Fiorita. However, the law of necessary7 and indispensable parties requires that the action proceed neither against Peter Fiorita nor against anyone else because a necessary and indispensable party cannot, as a matter of Appellate Division affirmed law, be joined.
Defendant argues a key point about mortgage foreclosure actions which differs from other contract actions. In mortgage foreclosures, clear case and clear statutory law governs what parties are necessary and indispensable parties to the litigation. "[A] fee owner of the property which was subject to the mortgage was a necessary and indispensable party to the [mortgage foreclosure action]" (LaSalle Bank, N.A. v Benjamin. 164 A.D.3d 1223. 1225, 83 N.Y.S.3d 592, 594 [2d Dept 2018]). "Each of the following persons, whose interest is claimed to be subject and subordinate to the plaintiff s lien, shall be made a party defendant to the action: (1) Every person having an estate or interest in possession" (RPAPL § 1311 [1]). Thus, Anna Fiorita. who is a fee holder of the subject property, is a necessary party to any foreclosure action. In fact, Benjamin, upon which defendant bases a portion of its position, stands as controlling precedent that decides this application.
In Benjamin, two individuals borrowed money and gave the lender a mortgage to secure the debt. In the mortgage foreclosure action, one borrower answered, but the other did not. When the Benjamin plaintiff moved for summary judgment against the answering borrower and a default judgment against the non-answering borrower, the answering borrower cross-moved to dismiss because the plaintiff has abandoned the action as against the non-answering borrower (CPLR 3215 [c]). 1 he trial court dismissed against the answering defendant because the abandoned claim meant that the non-answering borrower, a necessary and indispensable party by virtue of being a fee title holder, was no longer a party to the action. The Appellate Division affirmed.
Here, Anna Fiorita successfully defended against the claim against her. Anna Fiortia is and was at all relevant times a fee title holder of the subject property. The reasoning of Benjamin applies here. Because one of the fee title holders, a necessary7 and indispensable party, has a complete defense to the mortgage foreclosure action, the entire action must be dismissed.
Plaintiff makes the prudent decision to respond by reply to the Benjamin argument. Plaintiff explains that in Benjamin the trial court dismissed against both individual borrowers while, in contrast, here, the trial court dismissed only against one of the individual borrowers. The language of Benjamin, however, explains why the Appellate Division affirmed the dismissal as to all defendants: "Once the complaint was dismissed against [one necessary and indispensable party], the plaintiff could not continue the action against the other defendants" (Benjamin, 164 A.D.3d at 1225, 83 N.Y.S.3d at 594 [2d Dept 2018] [citations omitted]). Here, once the complaint was dismissed against Anna Fiorita, the plaintiff could not and may not continue the action against the other defendants.
Plaintiff s argument that the Benjamin dismissal was based on abandonment instead of time-barring is a distinction without a difference. In both this action and in Benjamin, the trial court dismissed against a necessary and indispensable party. Here and in Benjamin, the action was dismissed against a necessary and indispensable party, so plaintiff may not continue that action against the others.
Plaintiff also attacks Benjamin s applicability by citing to Polish Natl Alliance v White Eagle Hall Co.. 98 A.D.2d 400, 470 N.Y.S.2d 642 [2d Dept 1983]). In Polish Natl Alliance, the Appellate Division, acting within the equitable powers of the judiciary', established a rule that a contract vendee is a necessary party. The Polish Natl Alliance court continued, "that the ... vendees were necessary parties to the foreclosure action does not make them indispensable parties whose absence mandates dismissal of the action" (Polish Natl Alliance. 98 A.D.2d at 406. 470 N.Y.S.2d at 648 [2d Dept 1983]). This judicially-created rule of equity extends no further than its language which demonstrates the carefully circumscribed scope of the rule-vendees are necessary' but not indispensable. In contrast. Benjamin and RPAPL section 1311 (1) establish that fee simple title holders are both necessary and indispensable parties. Because of that dual status- necessary and indispensable-even Polish Natl Alliance court would agree than Anna Fiorita's absence from the action "mandates dismissal of the action."
Next, plaintiff notes that Anna Fiorita's estate in the realty converted from that of a tenants by the entireties to that of a tenant in common when the two individual mortgagors were divorced. Plaintiff makes the cogent argument that as tenant in common. Anna Fiorita could find that the co-tenant transferred the co-tenant's fee interest to another, leaving Anna Fiorita in a co-tenancy with a stranger. Thus, plaintiff s reasoning goes, permitting foreclosure against Peter Fiorita does not work prejudice to Anna Fiorita who might end up in a tenant in common with a stranger by virtue of the foreclosure sale. Whether a mortgage foreclosure should, as a matter of sound policy, create a co-tenancy among unwilling or unfamiliar co-tenants is beyond the judiciary's role to determine because the real property actions and proceedings law, as applied to this action, precludes that result, not only through RPAPL section 1311 (1) but also through RPAPL section 1501, which was the statute at issue in Vargas v Deutsch Bank Natl. Trust Co., a case the Court of Appeals consolidated with Engel for appeal.
RPAPL section 1501 (4) establishes that where the statute of limitations for the commencement of an action to foreclose a mortgage has expired, any person having an estate or interest in the property may maintain an action against the lender to be free of such encumbrances.
Plaintiff s action against Anna Fiorita was dismissed due to a statute of limitations bar, and as such, contrary to plaintiffs position, Anna Fiorita would be prejudiced by allowing this action to proceed against other defendants. The result could be that all or a portion of the realty to be in the plaintiffs possession prior to commencement of an RPAPL section 1501 (4) action, which may defeat the action.
The language of section 1501 does not require that the party bringing the action even be the entity or person against whom the statute of limitations has run. A contract vendee, for example, may bring such an action (RPAPL § 1501 [5]).
The result here comports precisely with the goal of the statute of limitations. Our law "favor[s] consistent, straightforward application of the statute of limitations which serves the objectives of finality, certainty' and predictability, to the benefit of both borrowers and noteholders" (Freedom Mtge. Corp, v Engel, 37 N.Y.3d 1,32,146 N.Y.S.3d 542,556 [2021 ] [citations and internal quotation marks omitted]). In plain terms, once the statute of limitations in a residential mortgage foreclosure action has run against a defendant in such action, foreclosure is not an available remedy against any defendant. Noteholders are able to structure their affairs accordingly, and defendants are too. This is the sort of "straightforward" application of the statute of limitations discourages, rather than "invites costly and time-consuming litigation to determine" issues (Id.).
Thus, even when addressing plaintiffs no-prejudice-to-Anna argument. Benjamin's rule seems to have foreshadowed the Court of Appeals bright line rule language in Engel. Again, "[o]nce the complaint was dismissed against [one necessary and indispensable party], the plaintiff could not continue that action against the other defendants" (Benjamin, 164 A.D.3d at 1225, 83 N.Y.S.3d at 594 [2d Dept 201 8] [citations omitted]). Here, once the complaint was dismissed against Anna Fiorita, the plaintiff could not and my not continue the action against the other defendants.
The remainder of plaintiff s argument treats the motion as one to restore an action to the calendar. This action's procedural posture is different from a case marked off the calendar pending appeal or for some other reason. Here, because of the interplay of the necessary' and indispensable party rule with the time-barred status against Anna Fiorita. the issue of restoring an action is not properly before the Court. Moreover, as plaintiff correctly argues, one element on which plaintiff has the burden of proof in an application to restore is that plaintiff has a meritorious cause of action (Memorandum of Law [Dkt. 86] 9). As set forth above, plaintiff does not have a meritorious cause of action because it cannot join a necessary and indispensable party.
Therefore, the plaintiff s motion is denied.