Opinion
130776/11
06-08-2015
U.S. Bank, National Association, TRUSTEE FOR STRUCTURED ASSET INVESTMENT LOAN TRUST, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2003-BC7, Plaintiff, v. Marietta Calvanico, CANDICE BLUE, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY PARKING VIOLATIONS BUREAU, NEW YORK CITY TRANSIT ADJUDICATION BUREAU and JOHN DOE (Said name being fictitious, it being the intention of Plaintiff to designate any and all occupants of the premises being foreclosed herein, and any parties, corporations or entities, if any, having or claiming an interest in or lien upon the mortgaged premises), Defendants.
Upon the foregoing papers, plaintiff's motion for a default judgment reforming the legal description of the realty encumbered by its mortgage to conform with the description contained in that certain instrument of conveyance, dated April 10, 2003, entered into between defendants Candice Blue and Marietta Calvanico is denied.
To the extent relevant, it appears that on or about April 10, 2003, defendant Candice Blue conveyed to co-defendant Marietta Calvanico, the residential premises located at 44 Labau Avenue, Staten Island, New York (then known as Block 673, Lot 29 [see Plaintiff's Exhibit "A"]), which consisted of a home and vacant realty. It further appears that Ms. Blue simultaneously took back a purchase money mortgage in the principal sum of $77,000.00 and, to complete the purchase, plaintiff's predecessor in interest loaned the sum of $150,000.00 to Ms. Calvanico pursuant to the terms of an adjustable rate note secured by a mortgage of like character and amount. It is undisputed that this mortgage was executed in favor of the lender, Option One Mortgage Corporation, and subsequently conveyed to plaintiff (see Defendants' Exhibit "B"). Upon Ms. Calvanico's failure to make the required payments due on May 1, 2010 and thereafter, plaintiff commenced this action for a judgment of foreclosure and sale upon the realty described in the Calvanico mortgage as reformed to include the entirety of the premises conveyed to said defendant by its former owner, co-defendant Blue. Insofar as it appears, defendant Blue interposed an answer containing affirmative defenses on October 30, 2011. All of the remaining defendants have neither appeared nor answered.
Following numerous conferences in the Foreclosure Settlement Part, a "workout" agreement was executed by plaintiff and Ms. Calvanico, and the foreclosure action was discontinued. At this point, the cause of action for reformation was transferred to this Part, and a Preliminary Conference was scheduled for January 23, 2014. It appears that defendant Blue (hereinafter defendant) appeared thereat by the same attorney who had represented her during the closing, but in a motion returnable the same date, plaintiff moved to disqualify defendant's attorney on the ground that he would be a necessary witness at any ensuing trial of the action for reformation. At that time, decision was reserved on the motion, and the conference was adjourned, first, to February 13, 2014, and then to the following week, when the motion was granted (see Defendants' Exhibit "E"). As a result, the Preliminary Conference was re-scheduled for April 17, 2014 in order to allow defendant sufficient time to retain new counsel. When neither defendant or her attorney appeared in court on April 17th, the conference was again adjourned to May 22nd and then to June 18, 2014. Following defendant's repeated failures to appear, plaintiff moved for a default judgment on its reformation cause of action pursuant to 22 NYCRR 202.27(a). Insofar as applicable, that section of the Uniform Rules for the Trial Parts provides that if a plaintiff appears at, e.g., a scheduled conference, and the defendant does not, the court may grant a judgment by default and order an inquest.
In opposing plaintiff's motion, defendant contends that the mortgages sought to be reformed represent the true interest of both the buyer and Ms. Blue, who sought to divide the original lot (Lot 29) into two parcels (Lots 28 and 29), so that Calvanico could erect a second residence on the adjacent parcel of vacant land (the above Lot 28). Accordingly, defendant Blue "took back" a purchase money mortgage which, by its terms, was to be secured by the "improved" portion of the original Lot 29, as described by the metes and bounds in her mortgage with Calvanico. This would leave the remainder of the original Lot 29 (hereinafter "Parcel 2") to serve as security for the Calvanico note, which, as granted that same day, encumbered Parcel 2, also described by the metes and bounds, in a simultaneously-executed mortgage in favor of plaintiff's predecessor in interest ( see Defendants' Exhibits "A-D"). This much is not disputed. Moreover, the execution of both mortgages, neither of which has been challenged, is completely consistent with the terms of the deed, as the "metes and bounds" description in each mortgage, when combined, fully describe the entire parcel formerly owned by Blue and conveyed to Calvanico, i.e., the original Lot 29. As alleged by defendant, if the description in Calvanico's mortgage is reformed in the manner suggested, it would operate to encumber both parcels for plaintiff's benefit, and simultaneously relegate Blue's purchase money first mortgage on Parcel 1 to the status of a junior lien, i.e., second mortgage, on that portion of the original Lot 29, while elevating plaintiff's status to that of a primary lienor on the entire parcel originally owned by Blue. According to defendant, this would be contrary to the intent plainly expressed in the present mortgages, which were formally executed in a manner suitable for recording. Although plaintiff attributes the discrepancy essentially to scrivener's error, and has supported this claim by the submission of affidavits from two individuals who allegedly possess some personal knowledge of the transaction, defendant has submitted two affidavits of her own which support the terms of the formally executed mortgages upon which she relies in opposing the motion. As a result, should defendant's default in appearing for the Preliminary Conferences be vacated, her response to plaintiff's motion is sufficient to raise triable issues of fact which would preclude summary judgment ( see Capelin Assoc. v Globe Mfg. Corp., 34 NY2d 338, 341).
On the subject of vacatur, it is incontrovertible that the law favors a resolution on the merits of a dispute (see e.g. Orwell Bldg. Corp. v Beesaha, 5 AD23d 573). Nevertheless, section 202.27(a) of the Uniform Rules for the New York State Trial Courts (22 NYCRR § 202.27[a]) clearly provides, inter alia, that if a plaintiff appears at a scheduled conference but the defendant does not, the court may grant a judgment by default and order an inquest (see 22 NYCRR §202.27[a]). However, by including the word "may", the drafters of the foregoing rule undoubtedly intended to place, e.g., the entry of a default judgment within the sound discretion of the court, which can withhold such relief upon the showing of a reasonable excuse for the non-appearance and a meritorious claim or defense (see Siculan v Koukos, 74 AD3d 946).
In the case at bar, the aforementioned demonstration of a triable issue of fact on the question of whether or not plaintiff's mortgage should be reformed in the manner requested is more than sufficient to demonstrate that defendant's opposition has merit. As for the demonstration of a reasonable excuse for Blue's alleged failures to appear at the respective conferences, the facts adduced would appear to indicate that the Preliminary Conference originally scheduled for February 13, 2014 was first adjourned at plaintiff's request to February 23, 2014 in order to allow for sufficient time to prepare a motion to disqualify defendant's attorney. Plaintiff has failed to demonstrate that defendant defaulted on the adjourned date, but upon the granting of plaintiff's motion, the court, in compliance with CPLR 321 adjourned the Preliminary Conference to April 17, 2014 in order to allow defendant sufficient time to retain substitute counsel (see Defendants' Exhibit "E"). There is no proof that defendant was ever advised of this decision or the adjourned date, but on or about May 27, 2014, when she did receive a letter from plaintiff's counsel advising her that a Preliminary Conference would be held on June 18, 2014 ( see Defendants' Exhibit "F"), it is uncontroverted that defendant retained another attorney to represent her thereat. Moreover, there is no evidence to rebut defendant's assertion that she was unaware of her counsel's apparent failure to appear until August of 2014, when an associate of that attorney apprised her that the former would no longer be representing her. Although no explanation was provided at that time, the associate apparently gave plaintiff a printout from the court's website indicating that on June 18, 2014, plaintiff's motion for leave to discontinue the action had been granted ( see Defendants' Exhibit "G"), a fact which she purportedly confirmed with Ms. Calvanico, who stated that an agreement had been reached and that the case was being discontinued . Pertinently, the motion papers are devoid of any evidence to the contrary, or negating defendant's contention that she was not notified of the subsequent conferences at which she failed to appear (September 11, 2014, November 18, 2014 or January 8, 2015). In addition, there is no proof that defendant's failures to appear on these occasions were wilful, deliberate or contumacious, or that she had abandoned her opposition to reforming plaintiff's mortgage. Neither has plaintiff made any showing of prejudice.
Although, in reality, only the foreclosure action had been discontinued and the reformation action was still active, it would not be unreasonable for a lay person to believe, on the basis of the foregoing information that the case was over, and that there was nothing more she was required to do.
Under these circumstances, plaintiff's motion for summary judgment is denied (see M.S. Hi-Tech, Inc. v Thompson, 23 AD3d 442).
The parties are directed to appear for a Preliminary Conference on July 9, 2015 at 9:30 a.m.
So Ordered.
____/s/______________________
Hon. Thomas P. Aliotta
J.S.C.
Dated: June 8, 2015
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