HSBC Bank U.S. v. Yosi Shem-Tov, Check, Cashed, Etc., LLC

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2023 NY Slip Op 31937(U)

HSBC BANK USA, NA AS TRUSTEE FOR NOMURA ASSET ACCEPTANCE CORPORATION MORTGAGE PASS THROUGH CERTIFICATION SERIES, 2006-API, Plaintiff, v. YOSI SHEM-TOV, CHECK, CASHED, ETC., LLC, MORTGAGE REGISTRATION SYSTEMS, INC. AS NOMINEE FOR FAIRMONT FUNDING, LTD., NEW YORK CITY DEPARTMENT OF FINANCE, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, PEOPLE OF THE STATE OF NEW YORK, GULAN DARVISTT, Defendants.

Index No. 710141/2021, Motion Seq. No. 7, Motion Cal. No. 15

Supreme Court, Queens County

June 6, 2023

Unpublished Opinion

Motion Date: 12.21.2022

MOJGAN C. LANCMAN JUDGE

The order to show cause, affirmation in support and exhibits that were filed in paper form were read on the motion of the plaintiff, HSBC Bank USA, NA as Trustee for Nomura Asset Acceptance Corporation Mortgage Pass Through Certification Series, 2006-APl(the "Plaintiff"), to, in effect lift the stay of this action. The e-filed papers designated by NYSCEF Doc. Nos. 6-17 and 21-38 were read on the cross-motion filed by the defendant Yosi Shem-Tov (the "Defendant") to dismiss this cause and in opposition to the Plaintiff s motion. On June 6, 2023, a virtual motion conference was held. Upon the foregoing papers and the motion conference, the motion and cross-motion are determined as follows:

The Plaintiff commenced this cause on October 29, 2007 seeking to foreclose a mortgage encumbering the real property located 13782 70^th Avenue, Flushing, New York 11367 (the "Property"). A judgment of foreclosure and sale was filed on November 20,2018. Presently before the Court are two motions. The Plaintiff, in effect, seeks to lift the stay of this action. The Defendant cross-moves to dismiss this cause on the basis of the Plaintiff s lack of standing and lack of personal jurisdiction. For the following reasons, the Plaintiffs motion is granted and the Defendant's motion is denied.

I. Background and Procedural History

In October 2007, the Plaintiff commenced this cause due to the Defendant's default in payment of the monthly installment required on July 1, 2007 under the note and mortgage.

The Defendant was served pursuant to CPLR § 308 [2] on November 28, 2007. Thereafter, on November 29, 2007, the process server mailed a copy of the pleadings to the Defendant.

The Defendant is in default, having failed to answer. The Plaintiff s application for an Order of Reference was granted on January 21, 2009. The Defendant subsequently Filed for Chapter 11 Bankruptcy. The bankruptcy case was dismissed on July 8, 2010.

A settlement conference was held on March 28, 2012. The Defendant's brother, Orin Shem-Tov appeared; however, the Defendant did not. The Defendant's brother indicated that the Property is a rental property and is not owner occupied.

In January 2014, the Plaintiff Filed an application seeking an Order to vacate the previously granted Order of Reference and for a new Order of Reference. After the motion was adjourned twice at the Defendant's request, the Defendant made a cross-motion on March 28, 2014 seeking to vacate his default and for permission to serve a late answer.

By Memorandum Filed on January 23, 2015, the Honorable Valerie Brathwaite Nelson granted the Plaintiffs motion and denied the Defendant's cross-motion. Among other things, Justice Brathwaite Nelson concluded that the Defendant failed to establish a reasonable excuse for his default in answering the complaint.

Following unsuccessful settlement negotiations between the parties, the Defendant Filed a Chapter 13 Bankruptcy case on March 30 2017, which was subsequently dismissed on June 28, 2017.

On November 2, 2018, a judgment of foreclosure and sale was Filed and recorded. The Defendant's prior counsel Filed a notice of appeal relative thereto on March 7, 2019.

On May 8, 2019, the Honorable Cheree Buggs signed an order to show cause Filed by the Defendant to stay the foreclosure auction of the Property pending the determination of his appeal. The order to show cause stayed the foreclosure sale pending the hearing of the motion. Thus, foreclosure sale scheduled for May 10, 2019 was cancelled. The motion was subsequently granted by Order dated August 5, 2019 to the extent that this cause was stayed pending the determination of the appeal.

The Defendant submitted a request on September 6, 2019 to the Appellate Division for an enlargement of time to perfect the appeal. The application was granted to the extent of extending this deadline to October 7, 2019.

The Defendant Filed a second request on October 7, 2019 to the Appellate Division for an enlargement of time to perfect his appeal. The application was granted to the extent of extending this deadline to November 6, 2019.

Despite two enlargements of time, the Defendant failed to perfect the appeal. Consequently, the appeal, assigned docket number 2019-03477, was automatically dismissed.

On January 21, 2020, the Plaintiff presented an Order to Show Cause seeking to, in effect, vacate the stay because the appeal had been dismissed. Justice Buggs signed same on January 23, 2020. In response, on June 16, 2021, the Defendant filed the present cross-motion. Following the reassignment of this cause to the undersigned, multiple settlement conferences were held, which proved unsuccessful. The motions shall thus now be decided.

II. Discussion

A. The Plaintiffs Motion

The Plaintiff moves, in effect, to lift the stay imposed by the Order dated August 5, 2019 and to proceed with the foreclosure auction of the Property. In relevant part, the subject Order states: "ORDERED, that this matter is stayed pending determination of the matter on appeal [the Defendant's appeal from the judgment of foreclosure and sale]."

The Defendant's appeal from the judgment of foreclosure and sale was dismissed because it was not perfected (see NYSCEF Doc. No. 19). Therefore, the stay must be lifted and the Plaintiff may proceed with the foreclosure sale (see HSBC Bank USA, National Association v Sage, 196 A.D.3d 1016 [3d Dept 2021]; HSBC Bank USA NA. v Pacyna, 112 A.D.3d 1246, 1247-1248 [3d Dept 2013]; Citicorp Mtge. v Rodelli, 249 A.D.2d 736, 738 [3d Dept 1998]).

The Defendant's opposition is baseless. Here, he argues, among other things, that the August 5, 2019 Order "is still fully enforceable" and that "[i]t is well established that the failure to perfect an appeal is not a determination of the underlying order appealed from." It is difficult to fathom how these arguments could be made in good faith, much less at all. The dismissal of an appeal for lack of prosecution "... constitutes an adjudication on the merits with respect to all issues which could have been reviewed on that appeal" (Spiritis v Village of Hempstead Community Dev. Agency, 63 A.D.3d 907, 908 [2d Dept 2009]; see Bray v Cox, 38 N.Y.2d 350 [1976]; Directional Lending, LLC v Guerrera, 147 A.D.3d 909 [2d Dept 2017]; Green Tree Credit, LLC v Jelks, 120 A.D.3d 1300 [2d Dept 2014]; Matter of Curtis &Assoc., P.C. v Callaghan, 119 A.D.3d 783 [2d Dept 2014]). Although it is true that the Appellate Division, as an exception to said general rule, has the discretion to consider an issue on a subsequent appeal that was raised or could have been raised in an earlier appeal which was dismissed for lack of prosecution (see Bray v Cox, 38 N.Y.2d 350), there is no pending subsequent appeal before it. The Defendant's remaining opposition arguments are without merit.

The Plaintiffs motion is therefore granted; the stay of this cause imposed by the Order dated August 5, 2019 is vacated and lifted; and the Plaintiff may proceed with the foreclosure sale of the Property.

B. The Defendant's Cross-Motion

The Defendant cross-moves to dismiss this cause on various grounds that are considered and ruled upon below.

First, the Defendant argues that despite his default in answering the complaint, he is entitled to assert a defense of lack of standing and to have this cause dismissed on that ground. As explained below, the Defendant is wrong because the loan at issue is not a "home loan."

RPAPL § 1302-a provides as follows:

Notwithstanding the provisions of subdivision (e) of rule thirty-two hundred eleven of the civil practice law and rules, any objection or defense based on the plaintiffs lack of standing in a foreclosure proceeding related to a home loan, as defined in paragraph (a) of subdivision six of section thirteen hundred four of this article, shall not be waived if a defendant fails to raise the objection or defense in a responsive pleading or pre-answer motion to dismiss. A defendant may not raise an objection or defense of lack of standing following a foreclosure sale, however, unless the judgment of foreclosure and sale was issued upon defendant's default [emphasis added].

In relevant part to the consideration of this motion, RPAPL § 1304 6. [a] [1 ] [iii] states:

"Home loan" means a loan, including an open-end credit plan, in which:

(iii) The loan is secured by a mortgage or deed of trust on real estate improved by a one to four family dwelling, or a condominium unit, in either case, used or occupied, or intended to be used or occupied wholly or partly, as the home or residence of one or more persons and which is or will be occupied by the borrower as the borrower's principal dwelling; and ...

The Property is not a "home loan" because it is not the Defendant's principal dwelling for a number of different reasons.

First the Defendant admits in his affidavit in support of his motion and in opposition to the Plaintiffs motion that he did not reside at the Property but rather at "19353 McLaughlin Avenue, Hollis, New York 11423." His affidavit continues: "[a]s clearly identified in my mortgage documents, I lived there [19353...