Deutsche Bank Nat'l Trust Co. v. McAvoy

188 A.D.3d 808

136 N.Y.S.3d 134

DEUTSCHE BANK NATIONAL TRUST COMPANY, etc., Respondent,

v.Mark J. MCAVOY, etc., et al., Appellants, et al., defendants.

2018–08557

Index No. 63331/14

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

Argued - May 22, 2020

November 12, 2020

The Law Office of Mark E. Nadjar, P.C., Commack, NY, for appellants.

Fidelity National Law Group, New York, N.Y. (David J. Wolkenstein of counsel), for respondent.

WILLIAM F. MASTRO, J.P., JOHN M. LEVENTHAL, SHERI S. ROMAN, LINDA CHRISTOPHER, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the defendants Mark J. McAvoy and Laura McAvoy appeal from an order of the Supreme Court, Suffolk County (Howard H. Heckman, Jr., J.), dated June 8, 2018. The order, insofar as appealed from, granted those branches of the plaintiff's motion which were for leave to amend the complaint to add causes of action to impose an equitable mortgage, for reformation, to recover damages for unjust enrichment, for equitable subrogation, in effect, for a judgment declaring the recorded mortgage a valid encumbrance against the entire property based on the defendant Laura McAvoy's ratification of the mortgage, and to direct the Suffolk County Clerk to accept for recording a copy of a mortgage purportedly signed by both the defendant Mark J. McAvoy and the defendant Laura McAvoy.

ORDERED that the order is modified, on the law, by deleting the provision thereof granting those branches of the plaintiff's motion which were for leave to amend the complaint to add causes of action to impose an equitable mortgage, for reformation, to recover damages for unjust enrichment, for equitable subrogation, and, in effect, for a judgment declaring the recorded mortgage a valid encumbrance against the entire property based on the defendant Laura McAvoy's ratification of the mortgage, and substituting therefor a provision denying those branches of the motion; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.

By deed dated March 13, 1992, the defendants Mark J. McAvoy and Laura McAvoy took title to real property located on Wall Street in Huntington. In 2006, Mark borrowed $520,000 from Wells Fargo Bank, N.A. (hereinafter Wells Fargo), and executed a note. Mark also executed a mortgage giving Wells Fargo a lien on the property, and Laura allegedly did as well. The mortgage and note were later assigned to the plaintiff. In 2011, there was a default on the note, and in 2014, the plaintiff commenced this action to foreclose the mortgage. The plaintiff later learned that its predecessor in interest recorded a copy of the mortgage with the Suffolk County Clerk which did not contain Laura's signature. The plaintiff asserts that while it subsequently located a copy of a mortgage signed by both Laura and Mark and certified by a Wells Fargo employee to be a true and correct copy of the original, it did not possess an original of that mortgage.

In 2017, the plaintiff moved, inter alia, pursuant to CPLR 3025(b) for leave to amend the complaint to add causes of action to impose an equitable mortgage, for reformation, to recover damages for unjust enrichment, for equitable subrogation, in effect, for a judgment declaring the recorded mortgage a valid encumbrance against the entire property based on Laura's ratification of the mortgage, and to direct the Suffolk County Clerk to accept for recording a bank certified copy of a mortgage purportedly signed and acknowledged by both Mark and Laura since the original of that document has not been located. The Supreme Court, among other things, granted those branches of the plaintiff's motion, and Mark and Laura appeal.

Motions pursuant to CPLR 3025(b) for leave to amend a pleading are addressed to the sound discretion of the court (see Hofstra Univ. v. Nassau County, N.Y. , 166 A.D.3d 861, 863, 89 N.Y.S.3d 1 ). They should be freely granted in the absence of prejudice or surprise resulting directly from delay in seeking leave, unless the proposed amendment is palpably insufficient or patently devoid of merit (see Wander v. St. John's Univ. , 163 A.D.3d 896, 896–897, 82 N.Y.S.3d 47 ; Lucido v. Mancuso, 49 A.D.3d 220, 227, 851 N.Y.S.2d 238 ). "The party opposing the application has the burden of establishing prejudice which requires a showing that the party has been hindered in the preparation of [its] case or has been prevented from taking some measure in support of [its] position" ( Redd v. Village of Freeport, 150 A.D.3d 780, 781, 53 N.Y.S.3d 692 [citation and internal quotation marks omitted] ).

A motion for leave to amend a complaint or other pleading to add a cause of action or...