HSBC Bank USA, N.A. v. Williams

177 A.D.3d 950

111 N.Y.S.3d 654

HSBC BANK USA, N.A., etc., Respondent,

v.Kirk WILLIAMS, appellant, et al., Defendants.

2017–00411

2017–00414

Index No. 29408/09

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

Submitted—February 7, 2019

November 27, 2019

Biolsi Law Group, P.C., New York, N.Y. (Steven Alexander Biolsi of counsel), for appellant.

Duane Morris LLP, New York, N.Y. (Brett L. Messinger of counsel), for respondent.

REINALDO E. RIVERA, J.P., LEONARD B. AUSTIN, JEFFREY A. COHEN, ANGELA G. IANNACCI, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Kirk Williams appeals from (1) an order of the Supreme Court, Queens County (Duane A. Hart, J.), entered April 6, 2016, and (2) an order of the same court also entered April 6, 2016. The first order, insofar as appealed from, denied the motion of the defendant Kirk Williams pursuant to CPLR 3216 to dismiss the complaint insofar as asserted against him and granted those branches of the plaintiff's cross motion which were for summary judgment on the complaint insofar as asserted against that defendant, to strike his affirmative defenses, and for an order of reference. The second order, insofar as appealed from, also granted those branches of the plaintiff's cross motion which were for summary judgment on the complaint insofar as asserted against that defendant, to strike his affirmative defenses, and for an order of reference, and referred the matter to a referee to compute the amount due on the mortgage loan.

ORDERED that the first order is modified, on the law, by deleting the provision thereof granting those branches of the plaintiff's cross motion which were for summary judgment on the complaint insofar as asserted against the defendant Kirk Williams, to strike his affirmative defenses, and for an order of reference, and substituting therefor a provision denying those branches of the cross motion; as so modified, the first order is affirmed insofar as appealed from, without costs or disbursements, and so much of the second order as granted those branches of the plaintiff's cross motion and referred the matter to a referee to compute the amount due on the mortgage loan is vacated; and it is further,

ORDERED that the appeal from the second order is dismissed as academic, without costs or disbursements, in light of our determination on the appeal from the first order.

On December 21, 2004, the defendant Kirk Williams executed a note in the amount of $399,000 in favor of Fremont Investment & Loan (hereinafter Fremont) and a mortgage in favor of Mortgage Electronic Registration Systems, Inc., as nominee for Fremont. Williams defaulted on the note by failing to make the payment due on April 1, 2009. On November 2, 2009, the plaintiff commenced this action to foreclose the mortgage. On March 23, 2010, and June 18, 2010, respectively, the plaintiff obtained an order of reference and a judgment of foreclosure and sale, on default. On October 13, 2010, the order of reference and the judgment of foreclosure and sale were vacated. On November 9, 2010, Williams served an amended answer dated October 27, 2010, in which he generally denied the allegations of the complaint and asserted six affirmative defenses, including lack of standing.

On June 18, 2015, Williams filed and served a "Demand for Resumption of Prosecution of Action and For Note of Issue." When the plaintiff failed to comply, Williams moved pursuant to CPLR 3216 to dismiss the complaint insofar as asserted against him. The plaintiff opposed the motion and cross-moved, inter alia, for summary judgment on the complaint insofar as asserted against Williams, to strike his affirmative defenses, and for an order of reference. The plaintiff asserted that it had a justifiable excuse for not proceeding with the action and a potentially meritorious cause of action. The Supreme Court, among other things, denied Williams's motion and granted those branches of the plaintiff's cross motion. Williams appeals.

Where, as here, a plaintiff has been served with a 90–day demand pursuant to CPLR 3216(b)(3), that plaintiff must comply with the demand by filing a note of issue or by moving, before the default date, either to vacate the demand or to extend the 90–day period (see Deutsche Bank Natl. Trust Co. v. Inga, 156 A.D.3d 760, 67 N.Y.S.3d 264 ). The plaintiff here failed to do either within the 90–day period. Therefore, in order to excuse the default, the plaintiff was obliged to demonstrate a justifiable excuse for its failure to take timely action in response to the 90–day demand, as well as a potentially meritorious cause of action (see Baczkowski v. Collins Constr. Co., 89 N.Y.2d 499, 655 N.Y.S.2d 848, 678 N.E.2d 460 ; Bischoff v. Hoffman, 112 A.D.3d 659, 976 N.Y.S.2d 406 ). CPLR 3216 is "extremely forgiving" ( Baczkowski v. Collins Constr. Co., 89 N.Y.2d at 503, 655 N.Y.S.2d 848, 678 N.E.2d 460 ), "in that it never requires, but merely authorizes, the Supreme Court to dismiss a plaintiff's action based on the plaintiff's unreasonable neglect to proceed" ( Davis v. Goodsell, 6 A.D.3d 382, 384, 774 N.Y.S.2d 568 ; see Angamarca v. 47–51 Bridge St. Prop., LLC, 167 A.D.3d 559, 90 N.Y.S.3d 70 ; Deutsche Bank Natl. Trust Co. v. Inga, 156 A.D.3d at 761, 67 N.Y.S.3d 264 ).

Here, the plaintiff demonstrated the existence of a justifiable excuse for the delay and a potentially meritorious cause of action. Furthermore, there was no evidence of its intent to abandon the action (see generally Angamarca v. 47–51 Bridge St. Prop., LLC, 167 A.D.3d at 559, 90 N.Y.S.3d 70 ; Vera v. New York El. & Elec. Corp., 150 A.D.3d 927, 55 N.Y.S.3d 114 ; Altman v. Donnenfeld, 119 A.D.3d 828, 990 N.Y.S.2d 542 ). Under the circumstances of this case, the Supreme Court providently exercised its discretion in denying Williams's motion pursuant to CPLR 3216 to dismiss the complaint insofar as asserted against him.

In moving for summary judgment, a plaintiff in a mortgage foreclosure action establishes its prima facie entitlement to judgment as a matter of law by producing the mortgage, the unpaid note, and evidence of the default (see James B. Nutter & Co. v. Feintuch, 164 A.D.3d 485, 486, 77 N.Y.S.3d 890 ; Onewest Bank, N.A. v. Mahoney, 154 A.D.3d 770, 771, 62 N.Y.S.3d 144 ; Deutsche Bank Trust Co. Ams. v. Garrison, 147 A.D.3d 725, 726, 46 N.Y.S.3d 185 ). In addition, where, as here, a plaintiff's standing to commence the foreclosure action is placed in issue by the defendant, it is incumbent upon the plaintiff to prove its standing to be entitled to relief (see Deutsche Bank Natl. Trust Co. v. Brewton, 142 A.D.3d 683, 684, 37 N.Y.S.3d 25 ; Wells Fargo Bank, N.A. v. Arias, 121 A.D.3d 973, 974, 995 N.Y.S.2d 118 ).

"A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that, when the action was commenced, it was either the holder or assignee of the...