Bank of N.Y. Mellon Trust Co. Nat'l Ass'n v. Hsu

204 A.D.3d 874

167 N.Y.S.3d 129

BANK OF NEW YORK MELLON TRUST CO. NATIONAL ASSOCIATION, etc., appellant,

v.William H. HSU, etc., respondent, et al., defendants.

2020–02424

Index No. 703556/16

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

Submitted—February 10, 2022

April 20, 2022

Akerman LLP, New York, NY (Jason D. St. John and Jordan M. Smith of counsel), for appellant.

Taylor & Cohen LLP, New York, NY (Robert Cohen of counsel), for respondent.

BETSY BARROS, J.P., JOSEPH J. MALTESE, PAUL WOOTEN, JOSEPH A. ZAYAS, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Queens County (Pam B. Jackman–Brown, J.), entered January 30, 2020. The order denied the plaintiff's motion for a judgment of foreclosure and sale and to confirm a referee's report, and granted those branches of the motion of the defendant William H. Hsu which were, in effect, to vacate so much of two orders of the same court dated April 10, 2017, and September 5, 2018, as granted the plaintiff's unopposed motion for an order of reference and for leave to enter a default judgment against that defendant, entered upon his failure to appear in the action or answer the complaint, and for leave to serve a late answer.

ORDERED that the order entered January 30, 2020, is reversed, on the law and in the exercise of discretion, with costs, the plaintiff's motion for a judgment of foreclosure and sale and to confirm the referee's report is granted, and those branches of the motion of the defendant William H. Hsu which were, in effect, to vacate so much of the two orders of the same court dated April 10, 2017, and September 5, 2018, as granted the plaintiff's unopposed motion for an order of reference and for leave to enter a default judgment against that defendant, and for leave to serve a late answer are denied.

In November 2001, the defendant William H. Hsu (hereinafter the defendant) executed a promissory note in the sum of $316,000 in favor of ABN AMRO Mortgage Group, Inc. The note was secured by a mortgage encumbering residential property in Queens.

In March 2016, the plaintiff commenced this action to foreclose the mortgage against the defendant, among others, alleging that he breached his obligations under the mortgage by failing to make the payment due on April 1, 2010, and all payments due thereafter. The defendant failed to appear or interpose an answer. In two orders dated April 10, 2017, and September 5, 2018 (hereinafter the two default orders), the Supreme Court, inter alia, granted the plaintiff's unopposed motion for an order of reference and for leave to enter a default judgment against the defendant.

In April 2019, the plaintiff moved for a judgment of foreclosure and sale and to confirm a referee's report. The defendant opposed, and separately moved, in effect, pursuant to CPLR 5015(a)(1) to vacate so much of the two default orders as granted the plaintiff's unopposed motion for an order of reference and for leave to enter a default judgment against him, and for leave to file a late answer. In support of his motion, the defendant submitted an affidavit in which he claimed that he hired a foreclosure advisory firm to assist him, but that the company failed to do so and ultimately went out of business. By order entered January 30, 2020, the Supreme Court denied the plaintiff's motion for a judgment of foreclosure and sale and to confirm the referee's report, and granted those branches of the defendant's motion which were to vacate the subject portions of the two default orders, and for leave to serve a late answer, invoking the court's power to vacate a judgment in the interest of justice. The plaintiff appeals.

"Under CPLR 5015(a), a court is empowered to vacate a default judgment for several reasons, including excusable neglect; newly-discovered evidence; fraud, misrepresentation or other misconduct by an adverse party; lack of jurisdiction; or upon the reversal, modification or vacatur of a prior order" ( Woodson v. Mendon Leasing Corp., 100 N.Y.2d 62, 68, 760 N.Y.S.2d 727, 790 N.E.2d 1156 ; see CPLR 5015[a] ). "However, CPLR 5015(a) does not provide an exhaustive list as to when a default judgment may be vacated, and a court may vacate its own judgment for sufficient reason and in the interests of substantial justice" ( JPMorgan Chase Bank, N.A. v. Dev, 176 A.D.3d 691, 692, 110 N.Y.S.3d 127, quoting 40 BP, LLC v. Katatikarn, 147 A.D.3d 710, 711, 46 N.Y.S.3d 217 ; see Hudson City Sav. Bank v. Cohen, 120 A.D.3d 1304, 1305, 993 N.Y.S.2d 66 ).

"Although the Supreme Court retains the inherent discretionary power to relieve a party from a judgment for sufficient reason and in the interest of substantial justice, this power is not plenary and should only be exercised to grant relief where a judgment was taken through fraud, mistake, inadvertence, surprise, or excusable neglect" ( Wells Fargo Bank, N.A. v. Hyun Jung Kim, 189 A.D.3d 1673, 1674–1675, 135 N.Y.S.3d 267 ; see Matter of McKenna v. County of Nassau, Off. of County Attorney, 61 N.Y.2d 739, 742, 472 N.Y.S.2d 913, 460 N.E.2d 1348 ; JPMorgan Chase Bank, N.A. v. Dev, 176 A.D.3d at 692, 110 N.Y.S.3d 127 ; CitiMortgage, Inc. v. Maldonado, 171 A.D.3d 1007, 1008, 98 N.Y.S.3d 607 ; Wells Fargo Bank, N.A. v. Choo, 159 A.D.3d 938, 939, 72 N.Y.S.3d 150 ). Here, the defendant failed to provide any evidence that the two default orders entered in this action were the result of fraud, mistake, inadvertence, surprise, or excusable neglect that would warrant vacatur in the interest of substantial justice (see Wells Fargo Bank, N.A. v. Hyun Jung Kim, 189 A.D.3d at 1674–1675, 135 N.Y.S.3d 267 ; JPMorgan Chase Bank, N.A. v. Dev, 176 A.D.3d at 693, 110 N.Y.S.3d 127 ; Wells Fargo Bank, N.A. v. Choo, 159 A.D.3d at 939, 72 N.Y.S.3d...