Toiny LLC v. Gill

1

TOINY LLC, Plaintiff, v. CAROL GILL, as heir and distributee of the Estate of Eugene Clement also known as Eugene Robert Clement, JARED CLEMENT, as heir and distributee of the Estate of Eugene Clement also known as Eugene Robert Clement, NEKISHA CLEMENT, as heir and distributee of the Estate of Eugene Clement also known as Eugene Robert Clement, JEWEL CLEMENT, as heir and distributee of the Estate of Eugene Clement also known as Eugene Robert Clement, CRIMINAL COURT OF THE CITY OF NEW YORK, SUPREME COURT OF THE CITY OF NEW YORK, COUNTY OF KINGS, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, 585 LEX CORP., FANTASIA HUNT and PUBLIC ADMINISTRATOR OF KINGS COUNTY, Defendants.

No. 18 Civ. 40 (NGG) (VMS)

United States District Court, E.D. New York

August 16, 2022

REPORT AND RECOMMENDATION

VERA M. SCANLON United States Magistrate Judge

Plaintiff Toiny LLC (“Plaintiff”) brings this action against Defendants Carol Gill, Jared Clement, Nekisha Clement and Jewel Clement, as heirs and distributees of the Estate of Eugene Clement, as well as against the Criminal Court of the City of New York, Supreme Court of the City of New York County of Kings, New York City Environmental Control Board New York City Transit Adjudication Bureau, 585 Lex Corp. Fantasia Hunt and the Public Administrator of Kings County (collectively, “Defendants”), pursuant to New York Real Property Actions & Proceedings Law (“RPAPL”) § 1301 et seq., to inter alia, foreclose a mortgage encumbering property located at 585 Lexington Avenue, Brooklyn, New York 11221 (the “Property”). See generally Amended Complaint (“Am. Compl.”), ECF No. 7. Presently before the Court is Plaintiff's unopposed motion for summary judgment.^[1] ECF Nos. 56-59. For the following reasons, this Court respectfully recommends that Plaintiff's motion for summary judgment be denied.

I. BACKGROUND

a. Procedural History

On January 3, 2018, Plaintiff commenced this action against those individuals and entities that may have an interest in Mr. Clement's estate, including heirs and distributees. See ECF No. 1. On the same date, Plaintiff's Counsel filed a Certificate of Merit pursuant to CPLR 3012-b. ECF No. 2. Plaintiff attached a copy of the Note and Mortgage to the Complaint. ECF Nos. 1-2, 1-3. Plaintiff filed an Amended Complaint on February 28, 2018. See Am. Compl. When all Defendants failed to answer or otherwise respond to the Amended Complaint, Plaintiff sought and received certificates of default for all Defendants. See ECF Nos. 23-24, 26-27. Plaintiff then filed a motion for default judgment of foreclosure and sale of the Property against all Defendants. See ECF Nos. 28-30. Subsequent to the motion's filing, Defendants Carol Gill and Jared Clement appeared before the Court, and attorney Michael Andrew Lehrman entered an appearance for Ms. Gill. See ECF Nos. 33-34. Given the two Defendants' participation in this case, and Ms. Gill's and Mr. Jared Clement's representations that they had never received a copy of the Summons and Amended Complaint, the undersigned vacated the certificates of default against Ms. Gill and Mr. Jared Clement, and recommended that the non-appearing Defendants' certificates of default be vacated and that Plaintiff's motion for default judgment be denied as premature. See ECF No. 37. The District Court adopted the undersigned's recommendation. See ECF No. 39.

Ms. Gill and Mr. Lehrman then participated in this litigation, to a certain point. Ms. Gill filed an answer to the Amended Complaint, see ECF No. 42, and appeared via her attorney at Court conferences related to a potential mediation and discovery. See ECF Nos. 44-45. Ms. Gill raised as an affirmative defense that Plaintiff named the Public Administrator of Kings County, so as to obtain jurisdiction over Mr. Clement's estate, but the Public Administrator of Kings County only held Limited Letters of Administration for the sole purpose of defending Mr. Clement's estate in an unrelated Kings County Supreme Court action. See ECF No. 42 ¶ 21. As such, Ms. Gill's affirmative defense asserts that Plaintiff failed to include a necessary party to this action. See id.

During the pendency of this action, Ms. Gill petitioned to revoke the Limited Letters of Administration from the Public Administrator of Kings County and acquire full Letters of Administration to make herself the administrator of Mr. Clement's estate.^[2] See Verified Petition to Remove the Public Administrator and Appoint Administrator D.B.N., No. 2011-2195/C/D, Petition filed 2/7/2018 (Kings Cnty. Sur. Ct.) (“Petition”); see also Order dated 2/1/2019; ECF Nos. 35, 41. The Court notes that in Ms. Gill's Petition for full Letters of Administration before the Kings County Surrogate's Court, Cheyvonne Clement and Jeanette Richards are listed as additional distributees. See Verified Petition to Remove the Public Administrator and Appoint Administrator D.B.N., No. 2011-2195/C/D, Affidavit filed 5/11/2018 (Kings Cnty. Sur. Ct.) (“Affidavit”). On December 18, 2018, Ms. Gill's Petition was approved by the Kings County Surrogate's Court, and Ms. Gill was subsequently issued the full Letters of Administration. See Verified Petition to Remove the Public Administrator and Appoint Administrator D.B.N., No. 2011-2195/C/D, Decision filed 12/18/2018 (Kings Cnty. Sur. Ct.) (“Decision”); Ex. I; ECF No. 37 at 5. In the Decision, Jared Clement, Nekisha Clement, Jewel Clement, Jeanette Richards and Cheyvonne Clement are listed as Mr. Clement's children. See Decision; ECF No. 37 at 5 n.2.

Plaintiff did not file an amended complaint naming Ms. Gill as the administrator of Mr. Clement's estate, did not serve Ms. Gill in her capacity as the administrator of Mr. Clement's estate, did not join Mr. Clement's estate as a party to this action, and, as previously noted in this Court's Report and Recommendation denying Plaintiff's motion for default judgment, did not name Cheyvonne Clement and Jeanette Richards as parties to this action. See ECF No. 37 at 5 n.2; see also id. at 8 (“In addition, the omission of possibly necessary parties Jeanette Richards and Cheyvonne Clement as Defendants to this action may be a defense to complete relief.”). This Court also had previously discussed with counsel the need to conduct research and propose a way to amend this action to join Ms. Gill as the administrator after the issuance of the Letters of Administration to Ms. Gill. See Minute Entry dated 2/1/2019, FTR 11:22-11:24.

II. DISCUSSION

“The necessary parties to a foreclosure action are those whose interest is claimed to be subject and subordinate to the plaintiff's lien, such as the record owner or person having an estate or interest in the property or one holding a later lien.” See Dye v. Lewis, 67 Misc.2d 426, 429 (Sup. Ct. Monroe Cnty. 1971), order modified on other grounds, 39 A.D.2d 828 (4th Dep't 1972). “[T]he absence of a necessary party may be raised at any stage of the proceedings, by any party or by the court on its own motion.” Estate of Prospect v. New York State Teachers' Ret. Sys., 13 A.D.3d 699, 700 (3d Dep't 2004) (internal quotation marks & citation omitted); see Lezette v. Bd. of Educ., Hudson City School Dist., 35 N.Y.2d 272, 282 (N.Y. 1974). Under New York law and procedure, the estate is usually a necessary party to a foreclosure action when the mortgagor has died. See Bayview Loan Servicing, LLC v. Sulyman, 130 A.D.3d 1197, 1199 (3d Dep't 2015) (“We find that decedent's estate is therefore a necessary party to this action, as the rights, interests and equities of all of the parties claiming an interest in the mortgaged premises should be settled and determined before any judgment of foreclosure and sale is entered[.]” (quotations & alterations omitted)); see RPAPL § 1311(1) (listing as a necessary defendant “[e]very person having an estate or interest in possession, or otherwise, in the property as tenant in fee, for life, by the curtesy, or for years, and every person entitled to the reversion, remainder, or inheritance of the real property, or of any interest therein or undivided share thereof, after the determination of a particular estate therein”). “In certain circumstances, the estate of the mortgagor is not a necessary party to a mortgage foreclosure action.” U.S. Bank Trust, N.A. v. Gedeon, 181 A.D.3d 745, 747 (2d Dep't 2020). For example, “‘where a mortgagor/property owner dies intestate and the mortgagee does not seek a deficiency judgment, generally a foreclosure action may be commenced directly against the distributees,' in whom title to the real property automatically vests.” NRZ Pass-Through Trust IV v. Tarantola, 192 A.D.3d 819, 821 (2d Dep't 2021) (quoting U.S. Bank Trust, 181 A.D.3d at 747).

Plaintiff commenced this action by naming as Defendants Carol Gill Jared Clement, Nekisha Clement and Jewel Clement, as the heirs and distributees of Mr. Clement's estate. On this summary judgment motion, this pleading is insufficient because “[t]he record contains insufficient information as to whether [they are] the only distributee[s].” See U.S. Bank Trust, 181 A.D.3d at 747 (holding the lower court properly vacated the judgment of foreclosure because, without evidence all distributees had been named in the action, the estate was therefore a necessary party, and because the estate was also not named in the action, the court lacked jurisdiction). Plaintiff has not submitted an affidavit or other evidence regarding whether any other distributees exist, or regarding Plaintiff's diligence to determine their existence. As noted above, a review of the docket of the Kings County Surrogate's Court shows that Ms. Gill's Petition for Administration identified Jeanette Richards and Cheyvonne Clement as distributees. See Affidavit, Decision. ...