Opinion
Index No. 65054/2020 Motion Seq. Nos. 3 4
03-14-2024
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION FKA THE BANK OF NEW YORK TRUST COMPANY. N.A. AS SUCCESSOR TO JPMORGAN CHASE BANK, N.A., AS TRUSTEE FOR RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC., MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES, SERIES 2006-RS1, Plaintiff, v. JEAN BANCES; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; FIRST NATIONAL BANK OF ARIZONA; BRANDI TAYLOR. AS HEIR AND DISTRIBUTEE TO THE ESTATE OF VERNA V. TAYLOR; UNKNOWN HEIRS AND DISTRIBUTEES OF THE ESTATE OF VERNA V. TAYLOR, any and all persons unknown to plaintiff, claiming, or who may claim to have an interest in, or general or specific lien upon the real property described in this action: such unknown persons being herein generally described and intended to be included in the following designation, namely: the wife, widow, husband, widower, heirs at law, next of kin. descendants, executors, administrators, devisees, legatees. creditors, trustees, committees, lienors, and assignees of such deceased, any and all persons deriving interest in or lien upon, or title to said real property by, through or under them, or either of them, and their respective wives, widows, husbands, widowers, heirs at law. next of kin. descendants, executors, administrators, devisees, legatees, creditors, trustees, committees, lienors and assigns, all of whom and whose names, except as stated, are unknown on plaintiff; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; UNITED STATES OF AMERICA; "JANE DOE" - NAME REFUSED S/H/A JOHN DOE #1; "JOHN DOE" - NAME REFUSED S/H/A JOHN DOE #2, "JOHN DOE #3" through "JOHN DOE #12," the last ten names being fictious and unknown to plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises, described in the complaint, Defendants.
Unpublished Opinion
To commence the statutory time period for appeals as of right (CPLR 5513(a)), you are advised to serve a copy of this order, with notice of entry, on all parties.
DECISION &ORDER
QUINONES, J.
The papers filed electronically as NYSCEF 81-97 were read on (1) this Notice of Motion by defendant Jean Bances for an Order pursuant to CPLR. 3211 (a)(10) dismissing this action for failure to join a necessary party or. in the alternative, granting leave to file a late answer (Motion #3); and (2) this Notice of Cross Motion by plaintiff for an Order denying defendant's motion or, in the alternative, granting leave to amend its complaint pursuant to CPLR 3025(b) to add nonparty Hugo Bances as party defendant (Motion #4).
Upon the foregoing papers and all prior papers and proceedings in this action, the motions are consolidated for purposes of decision and are determined as follows:
Background and Party' Contentions
As this Court (Quinones, J.) most recently narrated by Decision and Order entered on June 20, 2023 (NYSCEF 61) ("Underlying Order"), this residential foreclosure matter concerns the real property located at 180 Sutton Manor Road in New Rochelle. New York. Plaintiffs commencement papers filed on November 23, 2020, allege that on October 12, 2005, nonparty Hugo Bances ("Hugo") took out a $532,000.00 loan from original lender, defendant First National Bank of Arizona ("FNBA"), secured by a mortgage on the subject residence extended by Hugo and his wife, defendant Jean Bances ("Jean"). By undated allonges to the note, FNBA assigned the loan to First National Bank of Nevada, which assigned the loan to Residential Funding Corporation, which assigned the loan to JPMorgan Chase, which assigned the note to plaintiff. Plaintiff s complaint alleges that Hugo defaulted on the loan as of January' 1,2008 -over 15 years ago - leaving a principal balance of $531.067.13, and seeks to recover from Jean. Plaintiff also alleged that decedent Verna V. Taylor ("Verna") had an ownership interest in the subject property, and therefore named her Estate and unknown heirs as co-defendants. The complaint annexed what plaintiff contends arc the original note, mortgage, assignment instruments and recordation instruments for the same (NYSCEF 1-2).
Jean answered with general denials and a bevy of affirmative defenses including that this action is time barred (NYSCEF 6), and counterclaims for offset and RPL § 282 attorneys' fees. Plaintiff s affidavit of service attests to service of the commencement papers on FNBA as of November 30, 2020 (NYSCEF 5), and on defendant Brandi Taylor ("Brandi"), as heir of Verna's Estate, as of July 1.2022 (NYSCEF 25-27). Neither FNBA nor Brandi has appeared.
The Underlying Order narrated that Hugo currently resides in Guatemala, and that plaintiff, via former attorney Steven J. Baum, had commenced a prior action against Hugo and Jean to collect on the loan (see Hank of N. K Trust Co. v Bances, Index No. 6942/2008 [Sup Ct Westchester Co ["Prior Action'']), which resulted in a judgment of foreclosure and sale dated December 5, 2008. By Order entered March 17, 2011, this Court (Murphy, J.), vacated the judgment of foreclosure and sale upon a stipulation by plaintiff and counsel for Jean only to discontinue the Prior Action. The papers supporting plaintiffs vacatur application in the Prior Action attested that Hugo had not appeared (see NYSCEF 51), and that plaintiff "voluntarily elected not to proceed" (id. [Aff of Douglas C. Weinert, Esq., dated Feb 14, 2011]).
The Underlying Order granted plaintiff s motion to appoint a guardian ad litem for Verna's unknown heirs, but held that the Estate itself is not a necessary party because plaintiff seeks no deficiency judgment against it (see Underlying Order, at 3, citing U.S. Bank Trust, N.A. v Gedeon, 181 A.D.3d 745, 747 [2d Dept 2020]). The Underlying Order also granted Jean's cross motion, in effect, for summary judgment on her timeliness defense to the extent of limiting any plaintiff recovery to mortgage debt accrued within six years of commencement of this successor action. The Underlying Order reasoned that under Freedom Mtg. Corp, v Engel, 37 N.Y.3d 1 [2021 ]), plaintiffs 2011 voluntary discontinuance of the Prior Action de-accelerated the mortgage debt, thereby rendering the current action timely as to all installment payments due and owing within such six years. Plaintiffs appeal from that Order remains pending.
Neither party raised on the underlying motion practice the potential implications of the Foreclosure Abuse Prevention Act (see L 2022, c 821 ["FAPA"]) and, in particular, FAPA's express abrogation of Engel (see CPLR 203[h], 3217[e]). As such, this Court cannot reach that issue here (see Kaufman v Kaufman, 189 A.D.3d 31, 60 [2d Dept 2020]; HSBC Bank USA, N.A. v Simmons, 125 A.D.3d 930, 931 [2d Dept 2015]). The Court notes, however, that FAPA applies retroactively (see Genovese v Nationstar Mtg. Co., 223 A.D.3d 37 [1st Dept 2023]; Bank of N.Y.Mellon v MS Global Group, LLC, 222 A.D.3d 831 [2d Dept 2023]).
Upon the resulting amended summons and complaint, the appointed guardian ad litem and military attorney filed an answer for Verna's unknown heirs asserting a raft of affirmative defenses, again including that this action is untimely, along with counterclaims for RPL § 282 attorneys' fees and to quiet title on grounds that the Prior Action's 2011 discontinuance did not revoke the acceleration and therefore plaintiff is barred from proceeding on the mortgage.
Jean now moves to dismiss this action for failure to join Hugo as a necessary party under RPAPL 1311(1) (Motion #3), and plaintiff cross moves for an Order denying dismissal and. in the alternative, for CPLR 3025(b) leave to implead Hugo. Jean asserts that RPAPL 1311(1) is equitable in nature to avoid substantial injustice to a nonjoined property owner, but concedes that a judgment of foreclosure and sale arising from nonjoinder remains valid as against all joined parties (see Jean Mem [NYSCEF 82], at ¶ 15). In opposition, plaintiff asserts that Hugo and Jean transferred the property to Jean by quitclaim deed dated November 21,2017, and therefore Hugo is not a necessary party to this action; plaintiff attaches the deed to its opposition papers (NYSCEF 94). In reply, Jean does not dispute the quitclaim deed but asserts that Hugo nevertheless is still a necessary' party under the note and mortgage.
The guardian ad litem did not file papers on this application.
Analysis
It is well settled that notwithstanding CPLR 1311, a "mortgagor who has made an absolute conveyance of all his [or her] interest in the mortgaged premises, including his [or her] equity of redemption, is not a necessary' party to foreclosure, unless a deficiency judgment is sought on his [or hcr| bond" (Nationstar Mtge., LLC v Leib, 216 A.D.3d 651, 651-652 [2d Dept 2023]; Specialized Loan Serv. v Kalini, 189 A.D.3d 1107, 1108 [2d Dept 2020] [collecting cases]; Fed. Natl. Mtge. Assn, v Connelly, 84 A.D.2d 805, 805 |2d Dept 1981]). Such is precisely the case here based on the quitclaim deed and plaintiff s disclaimer of deficiency relief against Hugo. As such. Hugo is not a necessary party. Jean's CPLR 3211 (a)(10) dismissal motion is denied, and plaintiffs cross motion to implead Hugo is denied as moot.
Now over 18 years since plaintiff commenced the Prior Action, and well over three years since plaintiff commenced this successor action, it is long past time to finally determine the underlying foreclosure dispute. While the Underlying Order contained the equitable concerns arising from this dispute's extraordinary duration, the Court notes that there have been no CPLR. 3215 proceedings taken against defaulting defendants FNBA and Brandi, no record of discovery demands despite multiple compliance conferences, and no proper treatment of FAPA's implications for this action. Continued delays serve no legitimate interest, and therefore all counsel are admonished that this Court will not allow this action to linger.
The Court has considered the parties' remaining contentions and deems them to lack merit or to be moot in light of the foregoing. Accordingly it is hereby
ORDERED that defendant Jean Bances' motion to dismiss this action (Sequence #3) is denied; and it is further
ORDERED that plaintiff s cross motion (Sequence #4) is denied as moot; and it is further
ORDERED that upon the Compliance Conference Orders filed on October 6, 2023 (NYSCEF 78), and December 11, 2023 (NYSCEF 91), discovery is waived and this action is ready for trial; and it is further
ORDERED that plaintiff shall file a Note of Issue and Certificate of Readiness within 20 days hereof; and it is further
ORDERED that all summary judgment motions (including cross motions) shall be filed within 60 days of the filing of the Note of Issue, any opposition papers shall be filed within 30 days of the making of any such motion, and any reply papers shall be filed within seven days of the filing of opposition papers; and it is further
ORDERED that no claim of a loss mitigation hold shall be in order except upon affidavit of plaintiff by a person with knowledge attesting with particularity to the basis for the loss mitigation hold, whether defendant sought it, the date on which it commenced, the date on which it is due to expire, the particular pendency of loan-modification or other loss-mitigation consideration, and the papers remaining due or under consideration thereon; and it is further
ORDERED that all counsel are reminded of the provisions of CPLR 203(h), CPLR 205-a and CPLR 3217(a) as added by FAPA; and it is further
ORDERED that, on this Court's own motion pursuant to CPLR 3215(c). by the deadline for making a summary judgment motion, plaintiff shall show cause why this Court should not dismiss this action as abandoned against defendants Federal National Bank of Arizona and Brandy Taylor, as Heir and Distributee to the Estate of Verna V. Taylor; and it is further
ORDERED that the electronic filing of this instrument via NYSCEF shall constitute good and sufficient service hereof on all counsel; and it is further
ORDERED that within five days hereof, counsel for plaintiff shall serve this Decision and Order, with Notice of Entry, on all non-joined defendants and anonymous tenants by U.S. Mail to their respective record addresses, and file via NYSCEF a suitable affirmation of such service; and it is further
ORDERED that plaintiff is admonished to proceed diligently in this action on pain of interest tolling nunc pro tunc.
The foregoing constitutes the Decision and Order of this Court.