Citibank, N.A. v. Kerszko

203 A.D.3d 42

161 N.Y.S.3d 232

CITIBANK, N.A., etc., appellant,

v.Ryan KERSZKO, respondent, et al., defendants.

2019–00175

Index No. 5252/09

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

Argued—April 2, 2020

January 5, 2022

Sandelands Eyet LLP, New York, NY (Kathleen Cavanaugh of counsel), for appellant.

MARK C. DILLON, J.P., LEONARD B. AUSTIN, COLLEEN D. DUFFY, BETSY BARROS, CHERYL E. CHAMBERS, JJ.

OPINION & ORDER

DILLON, J.

This appeal raises a variety of interesting and unusual issues. We address for the first time in this Department whether the presentment to a court of a proposed ex parte order to show cause for an order of reference, which is rejected by the court for defects inherent in the papers, qualifies as a taking of proceedings for the entry of judgment pursuant to CPLR 3215(c), so as to avoid dismissal of the complaint as abandoned under that statute. It does qualify. We also address whether the basis of a court's reasoning in determining a motion, when raised by the court sua sponte, self-preserves that basis for an appeal by a party aggrieved by it. It does. We also address certain limitations upon the application of the doctrine of Bray v. Cox, 38 N.Y.2d 350, 379 N.Y.S.2d 803, 342 N.E.2d 575, as relevant to the unique circumstances of this appeal.

I. Relevant Facts

This appeal arises from a residential mortgage foreclosure action commenced in the Supreme Court on March 5, 2009. The plaintiff alleged that the defendant Ryan Kerszko defaulted on the monthly installment payment obligations set forth in the note evidencing the loan. In the complaint, the plaintiff accelerated the balance of the outstanding debt and sought to foreclose on the mortgaged premises, located in St. Albans. Kerszko failed to appear, answer, or otherwise move to dismiss the complaint. A mandatory CPLR 3408 settlement conference was conducted on May 27, 2009, but was unproductive.

On or about November 12, 2009, the plaintiff presented to the Supreme Court a proposed ex parte order of reference. The proposed order of reference was presented ex parte as a result of Kerszko's continued default in failing to answer the complaint. The affidavit submitted in support of the proposed ex parte order of reference was incomplete, as it had left blank various important dates, and on that basis, the court declined to sign it. Although the proposed ex parte order of reference is not contained in the record, the court, in the order appealed from, acknowledged that it had been presented, and explained that the incompleteness of the supporting affidavit was the reason the proposed order was not signed.

More than five years then passed. In March 2015, the plaintiff, represented by new counsel, moved for an order of reference.¹ In April 2015, the motion was marked off the calendar of the Supreme Court's Centralized Motion Part (hereinafter CMP) without prejudice, as the motion had been erroneously made returnable on a date when the CMP was not open.² By notice of motion dated December 1, 2015, the plaintiff moved once again, inter alia, for an order of reference.³ The plaintiff anticipatorily argued that any dismissal of the complaint pursuant to CPLR 3215(c) would be unwarranted, for reasons that sought to excuse the lengthy delay in bringing the motion. That argument placed the question of a CPLR 3215(c) dismissal squarely before the court. In its moving papers, the plaintiff made no reference to its presentment of the proposed ex parte order of reference in November 2009. The December 1, 2015 motion, among other things, for an order of reference was unopposed by Kerszko, consistent with his pattern of defaults. In an order entered February 10, 2016, the court denied the plaintiff's motion and, sua sponte, directed dismissal of the complaint as abandoned pursuant to CPLR 3215(c) and cancellation of the notice of pendency. In its order, the court directed dismissal of the complaint not only because it rejected the plaintiff's "good cause" argument for the lateness of its motion, but also because, in its view, the presentation to the court of the proposed ex parte order of reference in November 2009, which the court refused to sign, did not qualify as a taking of proceedings for the entry of judgment pursuant to CPLR 3215(c). The plaintiff appeals from the order entered February 10, 2016.

The plaintiff also moved in the Supreme Court to vacate the order entered February 10, 2016, arguing that the presentment of the proposed ex parte order of reference in November 2009, within one year after Kerszko's default, rendered the abandonment provision of CPLR 3215(c) inapplicable.⁴ The court remained unpersuaded, and in an order entered January 18, 2017, denied the plaintiff's motion to vacate the February 10, 2016 order. The plaintiff appealed from the order entered January 18, 2017, but that appeal was deemed dismissed for failure to perfect.

II. The Supreme Court's CPLR 3215(c) Dismissal is Preserved and Appealable

A threshold issue that needs to be addressed, as raised by our dissenting colleagues, is whether the plaintiff's contention that the Supreme Court erred in directing dismissal of the complaint for reasons unrelated to those specifically argued in the motion papers before the court, is preserved and appealable. We conclude that the court's reasoning, that the plaintiff's presentment of an ex parte order to show cause, which the court refused to sign, did not qualify as a taking of proceedings for the entry of judgment pursuant to CPLR 3215(c), is preserved and appealable under our precedent.

The plaintiff, in its moving papers submitted in support of its December 2015 motion, inter alia, for an order of reference, argued that it had "good cause" pursuant to CPLR 3215(c) for seeking an order of reference as late as 2015. It is unclear how or why, given the nature of the arguments in the moving papers, the Supreme Court delved into the circumstances of the November 2009 proposed ex parte order of reference, and upon finding it infirm, directed dismissal of the complaint pursuant to CPLR 3215(c) based on that infirmity. Likely, the court was aware of the history of this litigation from its own file, particularly as the court described in the order appealed from the specific reason for which the proposed ex parte order of reference had been rejected in November 2009. Our dissenting colleagues suggest that while "good cause shown" arguments included in the plaintiff's moving papers are preserved and appealable, the court's related sua sponte discussion of the proposed ex parte order of reference, under the same CPLR statute, is not preserved and is therefore not appealable. That construct, which parses the arguments of counsel from any different but related reasoning employed sua sponte by the court in its dispositive order, is not a reflection of our decisional law. Our colleagues cite no specific legal authority in support of their position.

Indeed, our law holds just the opposite, as reflected by two opinions, Rosenblatt v. St. George Health & Racquetball Assoc., LLC, 119 A.D.3d 45, 984 N.Y.S.2d 401 (opinion by Leventhal, J.), and Tirado v. Miller, 75 A.D.3d 153, 901 N.Y.S.2d 358 (opinion by Dillon, J.). Tirado addressed the propriety of the Supreme Court's granting of a motion to quash a subpoena and for a protective order after the filing of a note of issue for reasons that were not argued by the parties in their papers but raised sua sponte by the court. Rosenblatt addressed the denial of a motion for summary judgment where the Supreme Court sua sponte raised issues affecting the admissibility of the deposition transcripts proffered by the movant.

We held in Tirado that since the Supreme Court's sua sponte reasoning for denying late discovery was not dispositive to the action, the court had the latitude to employ reasoning not argued by the parties, but which resolved the very branch of the motion that it was asked by the parties to decide (see Tirado v. Miller, 75 A.D.3d at 154, 901 N.Y.S.2d 358 ). Comparatively, we held in Rosenblatt that the Supreme Court's sua sponte reasoning finding deposition transcripts inadmissible for summary judgment purposes, which had not been argued by any of the parties among other summary judgment issues, was inappropriate because, unlike Tirado, the motion before the court was dispositive to the action (see Rosenblatt v. St. George Health & Racquetball Assoc., LLC, 119 A.D.3d at 54, 984 N.Y.S.2d 401 ).

Here, the Supreme Court's sua sponte reasoning, that the plaintiff's proposed ex parte order of reference did not qualify as taking proceedings for the entry of judgment pursuant to CPLR 3215(c), was the dispositive basis on which the court directed dismissal of the action—rendering the circumstances consistent with what occurred in Rosenblatt. The court employed CPLR 3215(c) reasoning, never argued by the parties, to decide a CPLR 3215(c) motion, just as in Rosenblatt, the court employed reasoning under CPLR 3212, which was never argued by the parties, to decide a CPLR 3212 summary judgment motion. Under the authority of either Rosenblatt or Tirado, the analysis and reasoning of the court, in the order appealed from, although sua sponte, self-preserved the issues for appellate review because it was pursuant to the same CPLR section within which the plaintiff's motion was based and was dispositive to the action. In both actions, the sua sponte reasoning of the court was recognized and addressed by this Court on the merits. Due to the dispositive import of the motion, Rosenblatt is controlling to this appeal. It is only where a court acts wholly outside the parameters of the CPLR basis of a noticed motion, unlike here, where a sua sponte order or ruling is not subject to appeal as of right (see CPLR 5701[a][2][v] ; Sholes v. Meagher, 100 N.Y.2d 333, 335, 763 N.Y.S.2d 522, 794 N.E.2d 664 ; Kwang Bok Yi v. Open Karaoke Corp., 161 A.D.3d 971, 76 N.Y.S.3d 222 ). CPLR 5701(a)(2)(v) specifically confers...