Opinion
2017–01539 Index No. 511109/15
01-08-2020
US BANK NATIONAL ASSOCIATION, etc., Respondent, v. Shawn A. CARRINGTON, et al., Defendants; 1698 Management Corp., Nonparty-Appellant.
Tsyngauz & Associates, P.C., New York, N.Y. (Simon I. Malinowski and Yevgeny Tsyngauz of counsel), for nonparty-appellant. Hogan Lovells U.S. LLP, New York, N.Y. (Allison J. Schoenthal, Chava Brandriss, and Richard A. Sillett of counsel), for respondent.
Tsyngauz & Associates, P.C., New York, N.Y. (Simon I. Malinowski and Yevgeny Tsyngauz of counsel), for nonparty-appellant.
Hogan Lovells U.S. LLP, New York, N.Y. (Allison J. Schoenthal, Chava Brandriss, and Richard A. Sillett of counsel), for respondent.
RUTH C. BALKIN, J.P., SYLVIA O. HINDS–RADIX, FRANCESCA E. CONNOLLY, ANGELA G. IANNACCI, JJ.
DECISION & ORDER In an action to foreclose a mortgage, nonparty 1698 Management Corp. appeals from an order of the Supreme Court, Kings County (Noach Dear, J.), dated January 3, 2017. The order denied the motion of nonparty 1698 Management Corp. for leave to intervene in the action and, thereupon, to dismiss the complaint or, in the alternative, for leave to interpose an answer.
ORDERED that the order is modified, on the law, by deleting the provision thereof denying those branches of the appellant's motion which were for leave to intervene in the action and, thereupon, to interpose an answer, and by substituting therefor a provision granting those branches of the appellant's motion; as so modified, the order is affirmed, with costs to the appellant.
On September 10, 2015, the plaintiff commenced this action to foreclose a mortgage on premises owned by the defendant Shawn A. Carrington. Carrington failed to answer the complaint. On March 23, 2016, Carrington sold the premises to the appellant 1698 Management Corp. On August 17, 2016, the appellant moved by order to show cause for leave to intervene in the action pursuant to CPLR 1012(a) or 1013 and, thereupon, to dismiss the complaint or, in the alternative, for leave to interpose an answer. In an order dated January 3, 2017, the Supreme Court denied the appellant's motion. This appeal ensued.
We disagree with the Supreme Court's determination denying that branch of the appellant's motion which was for leave to intervene in this action. The appellant was entitled to intervene as of right pursuant to CPLR 1012(a) since it established that the representation of its interest by the parties would be inadequate, that the action involved the disposition of title to real property, and that it would be bound and adversely affected by a judgment of foreclosure and sale (see CPLR 1012[a][2], [3] ; 6501; Roman Catholic Diocese of Brooklyn, N.Y. v. Christ the King Regional High Sch. , 164 A.D.3d 1394, 1396, 84 N.Y.S.3d 182 ; Mauro v. Atlas Park, LLC , 99 A.D.3d 872, 872, 951 N.Y.S.2d 915 ; Yuppie Puppy Pet Prods., Inc. v. Street Smart Realty, LLC , 77 A.D.3d 197, 201, 906 N.Y.S.2d 231 ). Contrary to the court's determination, the appellant was not limited to continuing the action in Carrington's name pursuant to CPLR 1018. The fact that the appellant obtained its interest in the premises after the action was commenced and the notice of pendency was filed does not definitively bar intervention (see Citimortgage, Inc. v. Dulgeroff , 138 A.D.3d 419, 419, 29 N.Y.S.3d 291 ; Westchester Fed. Sav. & Loan Assn. v. H.E.W. Constr. Corp. , 29 A.D.2d 670, 671, 286 N.Y.S.2d 382 ), nor does the fact that Carrington defaulted in answering the complaint (see Yuppie Puppy Pet Prods., Inc. v. Street Smart Realty, LLC , 77 A.D.3d at 201, 906 N.Y.S.2d 231 ). Furthermore, under the circumstances of this case, the appellant's motion, made less than five months after it purchased the premises, and before an order of reference was issued, was timely (see Roman Catholic Diocese of Brooklyn, N.Y. v. Christ the King Regional High Sch. , 164 A.D.3d at 1397, 84 N.Y.S.3d 182 ; ABM Resources Corp. v. Doraben, Inc. , 89 A.D.3d 773, 774, 933 N.Y.S.2d 296 ).
However, we agree with the Supreme Court's determination denying that branch of the appellant's motion which was to dismiss the complaint. The estate of the original borrower under the note and mortgage was not a necessary party to this action. The estate had no interest in the property at the time of suit and the plaintiff agreed not to seek a deficiency judgment against it (see U.S. Bank N.A. v. Esses , 132 A.D.3d 847, 848, 18 N.Y.S.3d 672 ; HSBC Bank USA v. Ungar Family Realty Corp. , 111 A.D.3d 673, 673–674, 974 N.Y.S.2d 583 ). Contrary to the appellant's contention, the identical issue was not necessarily decided against the plaintiff in a prior foreclosure action, and the doctrine of collateral estoppel does not apply (see 23 E. 39th St. Dev., LLC v. 23 E. 39th St. Mgt. Corp. , 172 A.D.3d 964, 967, 101 N.Y.S.3d 199 ). Furthermore, as a stranger to the note and mortgage, the appellant lacks standing to assert the defense of the plaintiff's alleged noncompliance with the notice requirements of RPAPL 1304 (see Citimortgage, Inc. v. Etienne , 172 A.D.3d 808, 810, 101 N.Y.S.3d 59 ). Similarly, the appellant lacks standing to raise as a defense to this action the plaintiff's alleged failure to serve a notice of default in accordance with the terms of the note and mortgage (see Nash v. Duroseau , 39 A.D.3d 719, 720, 835 N.Y.S.2d 611 ; Ashkenazy Acquisition Corp. v. Rela Realty Corp. , 296 A.D.2d 332, 333, 745 N.Y.S.2d 161 ; County of Tioga v. Solid Waste Indus. , 178 A.D.2d 873, 874–875, 577 N.Y.S.2d 922 ).
Accordingly, the Supreme Court should have granted those branches of the appellant's motion which were for leave to intervene in the action and, thereupon, to interpose an answer.
BALKIN, J.P., HINDS–RADIX, CONNOLLY and IANNACCI, JJ., concur.