Bank of N.Y. Mellon v. George

186 A.D.3d 661

127 N.Y.S.3d 310 (Mem)

BANK OF NEW YORK MELLON, etc., respondent,

v.Denise L. GEORGE, et al., defendants,Feinmore St. Realty, Inc., appellant.

2017–09255

Index No. 23817/11

Supreme Court, Appellate Division, Second Department, New York.

Submitted—May 19, 2020

August 19, 2020

Avi Rosenfeld, Lawrence, NY, for appellant.

Frenkel, Lambert, Weiss, Weisman & Gordon, LLP, Bay Shore, N.Y. (Ruth O'Connor of counsel), for respondent.

RUTH C. BALKIN, J.P., SYLVIA O. HINDS–RADIX, COLLEEN D. DUFFY, VALERIE BRATHWAITE NELSON, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Fenimore St. Realty, Inc., appeals from an order and judgment of foreclosure and sale (one paper) of the Supreme Court, Kings County (Noach Dear, J.), dated March 28, 2017. The order and judgment of foreclosure and sale, upon an order of the same court, also dated March 28, 2017, inter alia, denying those branches of that defendant's cross motion which were, in effect, to reject the referee's report and to toll and cancel accrued interest, granted the plaintiff's motion to confirm the referee's report and for a judgment of foreclosure and sale, confirmed the referee's report, and directed the sale of the subject property.

ORDERED that the order and judgment of foreclosure and sale is affirmed, with costs.

On July 24, 2006, the defendants Denise L. George and Euhart Thompson executed a note in the sum of $445,200, which was secured by a mortgage on real property located on Fenimore Street, in Brooklyn. On October 20, 2011, the plaintiff commenced an action to foreclose the mortgage. The plaintiff filed a notice of pendency with respect to the subject property on the same date. On February 3, 2014, Fenimore St. Realty, Inc. (hereinafter Fenimore), purchased the subject property from George and Thompson. The plaintiff re-filed the notice of pendency on September 29, 2014. On February 20, 2015, the Supreme Court granted the plaintiff's motion for an order of reference upon the default of the defendants, and appointed a referee to compute the amount due to the plaintiff. The referee executed her report on January 6, 2016, finding, inter alia, that the plaintiff was due the total sum on the note and mortgage of $620,157.75, as of July 31, 2015, including, inter alia, principal and accrued interest.

In March 2016, the plaintiff moved to confirm the referee's report and for a judgment of foreclosure and sale. Fenimore cross-moved to be added to the action as a party defendant as the successor in interest to George and Thompson, and for permission to oppose the plaintiff's motion. Fenimore asked the Supreme Court, in effect, to reject the referee's report due to the plaintiff's failure to timely serve the order of reference and the referee's failure to provide notice of a hearing before preparing her report. Fenimore also asked the court to toll and cancel the accrued interest. In an order dated March 28, 2017, the court, inter alia, granted those branches of Fenimore's cross motion which were to be added to the action as a party defendant and for permission to oppose the plaintiff's motion, but denied those branches of Fenimore's cross motion which were, in effect, to reject the referee's report and to toll and cancel the accrued interest. In an order and judgment of foreclosure and sale, also dated March 28, 2017, the court granted the plaintiff's motion, confirmed the referee's report, and directed the sale of the subject property. Fenimore appeals.

We agree with the Supreme Court's determination denying that branch of Fenimore's cross motion which was, in effect, to reject the referee's report. It is undisputed that, as Fenimore asserts, the plaintiff did not timely serve the order of reference, and the referee failed to provide notice of, or hold a hearing on, the issues addressed in the referee's report. Nonetheless, Fenimore, which purchased the subject property after the plaintiff filed a notice of pendency with respect to the property, is bound by all proceedings taken in the action after the filing of the notice of pendency to the same extent as a party (see CPLR 6501 ; Sharestates Invs., LLC v. Hercules, 178 A.D.3d 1112, 1114, 116 N.Y.S.3d 299 ; Novastar Mtge., Inc. v. Mendoza, 26 A.D.3d 479, 479, 811 N.Y.S.2d 411 ). Moreover, "as long as a defendant is not prejudiced by the inability to submit evidence directly to the referee, a referee's failure to notify a defendant and hold a hearing is not, by itself, a basis to reverse a judgment of foreclosure and sale and remit the matter for a hearing and a new determination of amounts owed" ( Bank of N.Y. Mellon v. Viola, 181 A.D.3d 767, 770, 122 N.Y.S.3d 55 ; see Excel Capital Group Corp. v. 225 Ross St. Realty, Inc., 165...