HSBC Bank USA, Nat'l Ass'n v. Fortini

189 A.D.3d 1373

138 N.Y.S.3d 570

HSBC BANK USA, National Association, etc., respondent,

v.James FORTINI, etc., et al., defendants,Courtwood Capital, LLC, appellant.

2019-01775

2019-01776

Index No. 520835/16

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

Submitted—June 11, 2020

December 23, 2020

Einig & Bush LLP, New York, N.Y. (Dan Rice and Michael R. Bush of counsel), for appellant.

McCalla Raymer Leibert Pierce, LLC, New York, N.Y. (Richard P. Haber of counsel), for respondent.

REINALDO E. RIVERA, J.P., LEONARD B. AUSTIN, ANGELA G. IANNACCI, LINDA CHRISTOPHER, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Courtwood Capital, LLC, appeals from two orders of the Supreme Court, Kings County (Noach Dear, J.), both dated January 2, 2019. The first order, insofar as appealed from, granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against that defendant and for an order of reference, and denied that defendant's cross motion pursuant to CPLR 3216 to dismiss the complaint insofar as asserted against it for failure to prosecute or, in the alternative, in effect, pursuant to CPLR 3124 to compel disclosure. The second order, insofar as appealed from, granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant Courtwood Capital, LLC, to strike that defendant's answer, and to appoint a referee to compute the amount due to the plaintiff.

ORDERED that the first order dated January 2, 2019, is modified, on the law, (1) by deleting the provision thereof granting those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant Courtwood Capital, LLC, and for an order of reference, and substituting therefor a provision denying those branches of the plaintiff's motion, and (2) by deleting the provision thereof denying that branch of the cross motion of the defendant Courtwood Capital, LLC, which was, in effect, pursuant to CPLR 3124 to compel disclosure; as so modified, the order is affirmed insofar as appealed from, and the matter is remitted to the Supreme Court, Kings County, for a new determination of that branch of the cross motion of the defendant Courtwood Capital, LLC, which was, in effect, pursuant to CPLR 3124 to compel disclosure; and it is further,

ORDERED that the second order dated January 2, 2019, is reversed insofar as appealed from, on the law, and those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant Courtwood Capital, LLC, to strike that defendant's answer, and to appoint a referee to compute the amount due to the plaintiff are denied; and it is further,

ORDERED that one bill of costs is awarded to the defendant Courtwood Capital, LLC.

The plaintiff commenced this action to foreclose a mortgage on real property owned by the defendant Courtwood Capital, LLC (hereinafter the defendant). The plaintiff moved for summary judgment on the complaint insofar as asserted against the defendant and for an order of reference. In an order dated December 26, 2017, the Supreme Court denied the plaintiff's motion. The court found a triable issue of fact existed as to whether the note and mortgage had been superseded by a loan modification, based upon the averment of the plaintiff's former counsel, in support of the voluntary discontinuance of a prior foreclosure action, that the loan had been modified.

The plaintiff thereafter moved again, inter alia, for summary judgment on the complaint insofar as asserted against the defendant and for an order of reference, submitting an affidavit of an employee of its loan servicer attesting that a review of the servicer file confirmed that there was no loan modification, with an attached payment history. The defendant cross-moved pursuant to CPLR 3216 to dismiss the complaint insofar as asserted against it for failure to prosecute or, in the alternative, in effect, pursuant to CPLR 3124 to compel disclosure. In an order dated January 2, 2019, the Supreme Court granted the plaintiff's motion and denied the defendant's cross motion. In a second order of the same date, the court, inter alia, granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant, to strike the defendant's answer, and to appoint a referee to compute the amount due to the plaintiff. The defendant appeals.

The Supreme Court providently exercised its discretion in denying that branch of the defendant's cross motion which was pursuant to CPLR 3216 to dismiss the complaint for failure to prosecute (see CPLR 3216[a] ; Western Union N. Am. v. Chang, 176 A.D.3d 1138, 1139, 108 N.Y.S.3d 868 ). Although the plaintiff failed to comply with the demand for a note of issue, or move to vacate the demand or to extend the 90–day period (see HSBC Bank USA, N.A. v. Williams, 177 A.D.3d 950, 952, 111 N.Y.S.3d 654 ), the plaintiff established a reasonable excuse for its failure to comply with the demand, in that it moved for summary judgment on the complaint within the 90–day period (see CPLR 3216[e] ; Baczkowski v. Collins Constr. Co., 89 N.Y.2d 499, 503–505, 655 N.Y.S.2d 848, 678 N.E.2d 460 ; see generally S.J. Capelin Assoc. v. Globe Mfg. Corp., 34 N.Y.2d 338, 341, 357 N.Y.S.2d 478, 313 N.E.2d 776 ). There was no evidence of a pattern of neglect, and the pendency of the plaintiff's summary judgment motion " ‘negated any inference that the plaintiff intended to abandon [its] action’ " ( Davis v. Goodsell, 6 A.D.3d 382, 384, 774 N.Y.S.2d 568, quoting Martinisi v. Cornwall Hosp., 177 A.D.2d 549, 551, 576 N.Y.S.2d 150 ; see Angamarca v. 47–51 Bridge St. Prop., LLC, 167 A.D.3d 559, 560, 90 N.Y.S.3d 70 ). Additionally, the plaintiff demonstrated a meritorious cause of action for the purposes of avoiding dismissal (see generally Rugieri v. Bannister, 22 A.D.3d 299, 302, 802 N.Y.S.2d 140, mod 7 N.Y.3d 742, 819 N.Y.S.2d 861, 853 N.E.2d 231 ).

Under the circumstances of this case, the Supreme Court providently exercised its discretion in entertaining the plaintiff's successive motion for summary judgment (see Cioffi v. S.M. Foods, Inc., 178 A.D.3d 1006, 1012, 116 N.Y.S.3d 306 ; Kolel Damsek Eliezer, Inc. v. Schlesinger, 139 A.D.3d 810, 811, 33 N.Y.S.3d 284 ). In any event, "as an appellate court, [this Court is] not precluded from addressing the merits of the motion" ( Sexstone v. Amato, 8 A.D.3d 1116, 1117, 778 N.Y.S.2d 635 [internal quotation marks omitted]; see Town of Angelica v. Smith, 89 A.D.3d 1547, 1549, 933 N.Y.S.2d 480 ; McIvor v. Di Benedetto, 121 A.D.2d 519, 522, 503 N.Y.S.2d 836 ).

Upon consideration of the merits, however, we agree with the defendant that the Supreme Court should...