Opinion
No. 20599/10.
12-21-2015
WELLS FARGO BANK, NA, Plaintiff, v. Traci BALK a/k/a Traci Springer, Executrix of the Estate of Barry Springer a/k/a Barry W. Springer, Ford Motor Credit Company d/b/a Land Rover Capital Group, People of the State of New York, United States of America acting through the IRS, “John Doe 1 to John Doe 25”, said names being fictitious, the persons or parties intended being the persons, parties, corporations or entities, if any, having or claiming an interest in or lien upon the mortgaged premises described in the complaint, Defendants.
Woods, Oviate, Gilman, LLP, Rochester, Atty. for plaintiff. Scott Lockwood, Esq., No. Babylon, Atty. for defendant, Traci Balk.
Woods, Oviate, Gilman, LLP, Rochester, Atty. for plaintiff.
Scott Lockwood, Esq., No. Babylon, Atty. for defendant, Traci Balk.
THOMAS F. WHELAN, J.
Upon the following papers numbered 1 to 8 read on this motion by the defendant to vacate her default; Notice of Motion/Order to Show Cause and supporting papers 1–4; Notice of Cross Motion and supporting papers; Answering papers 5–6; Reply papers 7–8; Other; (and after hearing counsel in support and opposed to the motion) it is,
ORDERED that this motion (# 004) by defendant, Traci Balk, for an order vacating her default in answering and granting her leave to serve a late answer is considered under CPLR 5015 and 3012(d) and is denied.
The plaintiff commenced this action to foreclose the lien of a September 7, 2007 mortgage given Barry Springer, deceased, to the World Savings Bank, F.S.B., to secure a mortgage note of the same date likewise given by Barry Springer. Defendant Balk executed both the mortgage note and mortgage of September 7, 2007 in her capacity as attorney-in-fact for her principal, Barry Springer, who died in 2007. In December of 2009, the loan went into default and this action was commenced on June 8, 2010 to foreclose the lien of the mortgage which had been transferred to the plaintiff. Defendant Balk was joinded herein as a party defendant in her capacity as Executrix of the Estate of Barry Singer, the borrower/mortgagor under the terms of the loan documents. Defendant Balk defaulted in answering the summons and complaint served upon her as did the other defendants joined herein by service of process.
In September of 2010, the plaintiff moved for an order of reference on default but such motion was withdrawn by notice dated November 24, 2010. By order dated January 11, 2011, the plaintiff's motion was disposed of as withdrawn. In May of 2014, the plaintiff moved anew for an order of reference on default. Pursuant to procedures in effect in this court, the motion was forwarded to the specialized mortgage foreclosure conference part and held in abeyance while personnel assigned thereto scheduled a settlement conference of the type contemplated by CPLR 3408 for September 23, 2014. Thereat, the action was marked “not eligible” since the borrower in this action was deceased and only borrowers who reside in the mortgaged premises are entitled to the settlement conference provided under CPLR 3408 (see also RPAPL 1304 ). The plaintiff's pending motion (# 002) for an order fixing the defaults in answering of all defendants served with process and the appointment of a referee to compute amounts due under the note and mortgage was granted by order dated February 6, 2015.
Defendant Balk then moved for an order (# 003) dismissing the plaintiff's complaint as abandoned pursuant to CPLR 3215(c), or in the alternative, for a dismissal on the grounds of a purported lack of compliance with the ninety day notice provisions set forth in RPAPL § 1304. That motion was denied by order dated August 27, 2015 as the asserted abandonment defense was found to be without merit due to the plaintiff's prior interposition of a motion within the one year period prescribed by CPLR 3215(c). The RPAPL § 1304 defense was also found to be lacking in merit, since none of the remedies afforded to borrowers under certain statutory enactments, such as the notice provisions of RPAPL §§ 1303 and 1304 and the settlement conference procedures set forth in CPLR 3408, are applicable to non-borrower defendants, such as defendant Balk.
By the instant motion, which was served during the pendency of her prior motion, defendant Balk moves (# 004) for an order vacating her default in answering and for leave to serve a late answer. For the reasons stated below, this motion (# 004) is also denied.
It is well established that to obtain a discretionary vacatur of an order or judgment pursuant to CPLR 5015(a)(1) that fixed a defendant's default in timely answering the summons and complaint and/or for leave to serve a late answer pursuant to CPLR 3012(d), the moving defendant must demonstrate “excusable default grounds” which require a showing of a reasonable excuse for the default and a demonstration of a potentially meritorious defense, the material facts of which, are advanced in an affidavit of the defendant or proposed verified answer attached to the moving papers (see PHH Mtge. Corp. v. Celestin, 130 AD3d 703, 11 NYS3d 871 [2d Dept 2015] ; Citimortgage, Inc. v. Kowalski, 130 AD3d 558, 13 NYS3d 468 [2d Dept 2015] ; Wells Fargo Bank, N.A. v. Combs, 128 AD3d 812, 10 N.Y.S.2d 121 [2d Dept 2015] ; Emigrant Bank v. O. Carl Wiseman, 127 AD3d 1013, 6 NYS3d 670 [2d Dept 2015] ; Deutsche Bank Trust Co. Americas v. Marous, 127 AD3d 1012, 5 NYS3d 883 [2d Dept 2015] ; E*Trad Bank v. Vasquez, 126 AD3d 933, 7 NYS3d 285 [2d Dept 2015] ; Citimortgage, Inc. v. Stover, 124 AD3d 575, 2 NYS3d 147 [2d Dept 2015] ; HSBC Bank USA, N.A. v. Rotimi, 121 AD3d 855, 855, 995 N.Y.S.2d 81 [2d Dept 2014] ; Chase Home Fin., LLC v.. Minott, 115 AD3d 63, 981 N.Y.S.2d 757 [2d Dept 2014] ; HSBC Bank USA, N.A. v. Lafazan, 115 AD3d 647, 983 N.Y.S.2d 32 [2d Dept 2014] ; Diederich v. Wetzel, 112 AD3d 883, 979 N.Y.S.2d 605 [2d Dept 2013] ; New York Hosp. Med. Ctr. of Queens v. Insurance Co. of State of Pa ., 16 AD3d 391, 392, 791 N.Y.S.2d 145 [2d Dept 2005] ). This two prong standard is applicable to applications made prior or subsequent to the issuance of an order adjudicating the defendant's default in answering or a final judgment in favor of the plaintiff (see Eugene Di Lorenzo, Inc. v. A.C. Dutton Lbr. Co., 67 N.Y.2d 138, 141, 501 N.Y.S.2d 8 [1986, judgment issued]; Bac Home Loans Serv., LP v. Reardon, 132 AD3d 790, 18 N.Y.S.2d 664 [2d Dept 2015, no order of reference nor judgment issued]; Wells Fargo Bank v. Besemer, 131 AD3d 1047, 16 NYS3d 819 [2d Dept 2015, judgment issued] ; Morgan Stanley Mortgf. Laon Trust 2006–17XS v. Waldman, 131 AD3d 1140, 16 N.Y.S.2d 331 [2d Dept 2015, order of reference issued]; U.S. Bank N.A. v. Alba, 130 AD3d 715, 11 NYS3d 864, 11 N.Y.S.2d 864 [2d Dept 2015, judgment issued]; HSBC Bank USA v. Desrouilleres, 128 AD3d 1013, 11 N.Y.S.2d 93 [2d Dept 2015, judgment issued] ; U.S. Bank Nat. Ass'n. v. Sachdev, 128 AD3d 807, 9 NYS3d 337 [2d Dept 2015; order of reference issued]; Citimortgage, Inc., v. Stover, 124 AD3d 575, 2 N.Y.S.2d 147 [2d Dept 2015, order of reference issued]; JP Morgan Chase Bank v. Palma, 114 AD3d 645, 979 N.Y.S.2d 832 [2d Dept 2014, no order of reference or judgment issued]; Bank of New York v. Espejo, 92 AD3d 707, 939 N.Y.S.2d 105 [2d Dept 2012, judgment issued] ; Midfirst Bank v. Al–Rahman, 81 AD3d 797, 917 N.Y.S.2d 871[2d Dept 2011, judgment issued] ; c.f., Guzetti v. City of New York, 32 AD3d 234, 820 N.Y.S.2d 29 [1st Dept 2006] ).
Here, defendant Balk asserts that she had conversations with the plaintiff or its servicing agent shortly after receipt of a pre-foreclosure notice papers and conversations with plaintiff's counsel after receipt of the summons and complaint. These conversation were allegedly aimed at achieving a loan modification or other resolution but none were successful. Defendant Balk then attended a CPLR 3408 conference on September 23, 2014 that was scheduled by personnel assigned to the specialized mortgage foreclosure conference part of this court. However, the quasi-judicial officer presiding over the conference determined this proceeding was not “eligible” for a settlement conference under CPLR 3408 because the borrower was deceased and was thus not an occupier or resident of the mortgaged premises (see RPAPL 1304 ). Although defendant Balk did confer with plaintiff's counsel on September 23, 2014, no offer of a loan modification or other resolution was made to defendant Balk.
These circumstances do not, however, constitute a reasonable excuse for defendant's default in answering that occurred more than five years ago. It is now well settled law that unsubstantiated claims of engagement in pre-action, out-of-court conversations with the plaintiff or its servicing agent that are purportedly aimed at securing a restructuring or other modification of a loan does not constitute a reasonable excuse within the contemplation of CPLR 5015(a)(1) or 3012(d) (see Wells Fargo Bank v. Besemer, 131 AD3d 1047, 16 NYS3d 819 [2d Dept 2015], supra; Deutsche Bank Natl. Trust Co. v. Gutierrez, 102 AD3d 825, 958 N.Y.S.2d 472 [2d Dept 2013] ; Bank of New York Mellon v. Izmirigil, 88 AD3d 930, 931 N.Y.S.2d 667 [2d Dept 2011] ; Garal Wholesalers, Ltd. v. Raven Brand's, Inc., 82 AD3d 1041, 919 N.Y.S.2d 358 [2d Dept 2011] ; US Bank Natl. Assn. v. Slavinski, 78 AD3d 1167, 912 N.Y.S.2d 285 [2d Dept 2010] ).
Nor did defendant Balk's attendance at the CPLR 3408 court scheduled settlement conference on September 23, 2014 and the conduct of the plaintiff's counsel, who declined to engage in loan modification discussions with the plaintiff, provide the requisite reasonable excuse for the default in answering or grounds for granting leave to serve a late answer. The obligation imposed by CPLR 3408 to appear at court initiated settlement conferences and to negotiate a settlement in good faith does not extend to all mortgage foreclosure actions. Rather, it applies only to “any residential foreclosure action involving a home loan” as that term is defined in RPAPL § 1304. Pursuant to this statute, the mortgaged premises must be occupied by the borrower as his or principal residence as the negotiations mandated thereby are aimed at helping defendant borrowers to avoid losing their homes (see RPAPL § 1304 ; CPLR 3408[a] ; see Richlew Real Estate Venture v. Grant, 131 AD3d 1223, 17 N.Y.S.2d 475 [2d Dept 2015] ). Here, the obligor, mortgagor borrower was deceased at the time of the commencement of this action. His successors-in-interest are thus not entitled to any of the protections afforded under the various statutory provisions that were enacted in the later half of the last decade, which were aimed at foreclosure avoidance, including the settlement conference procedures set forth in CPLR 3408 (see e.g., L.2008, c. 472, § 3, eff. Aug. 5, 2008; Amended L.2009, c. 507, § 9, eff. Feb. 13, 2010; L.2013, c. 306, § 2, eff. Aug. 30, 2013).
In any event, a borrower's participation in CPLR 3408 conferences would not give rise to a reasonable excuse for a default in answering since participation in such settlement conferences, which are scheduled by court personnel after the time in which an answer is due, may not serve as a de facto extension of the time to answer and/or a reasonable excuse for a default (see Mannino Dev., Inc. v.. Linares, 117 AD3d 995, 986 N.Y.S.2d 578 [2d Dept 2014] ; Chase Home Fin., LLC v. Minott, 115 AD3d 634, 981 N.Y.S.2d 757 [2d Dept 2014] ; HSBC Bank USA, Natl. Ass'n v. Lafazan, 115 AD3d 647, supra ). To hold otherwise would effect an unfounded judicial transformation of the limited scope and objectives of the simple settlement conference procedures legislatively imposed by CPLR 3408 into a revocation of longstanding laws governing defaults which the legislature chose not to alter (see e.g., CPLR 320 ; cf., L.2008, c. 472, § 3, eff. Aug. 5, 2008; Amended L.2009, c. 507, § 9, eff. Feb. 13, 2010; L.2013, c. 306, § 2, eff. Aug. 30, 2013).
Nor did defendant Balk advance a potentially meritorious defense to the plaintiff's claims for foreclosure and sale in her affidavit in support of her motion. Her assertion of a defense premised upon a violation of the notice provisions of RPAPL § 1304 is without merit for the reasons stated above which were advanced in the prior order of this court dated August 27, 2015. In addition, the proposed answer attached to the moving papers contains no verification by defendant Balk and she addressed only the RPAPL § 1304 defense in her affidavit in support of this motion. The court thus finds that none of the affirmative defenses advanced in the proposed amended answer qualify as potentially meritorious defenses for purposes of this application to vacate the default and leave to serve the late answer.
To the extent that defendant Balk's motion may be considered as one to vacate her default under the inherent powers this court possesses, it is denied. The defendant failed to demonstrate that the circumstances of this action warrant invocation of the court's inherent power to vacate the prior order fixing her default in answering in the interest of substantial justice (see Woodson v. Mendon Leasing Corp., 100 N.Y.2d 62, 68, 760 N.Y.S.2d 727 [2002] ; Chase Home Fin., LLC v. Minott, 115 AD3d 634, 981 N.Y.S.2d 757 [2d Dept 2014] ; Citimortgage, Inc. v. Brown, 111 AD3d 593, 974 N.Y.S.2d 272 [2d Dept 2013] ; HSBC Mtge. Serv. v. Talip, 111 AD3d 889, 975 N.Y.S.2d 887 [2d Dept 2013] ; U.S. Bank N.A. v. Slavinski, 78 AD3d 1167, 1168, 912 N.Y.S.2d 285 [2d Dept 2010] ; Katz v. Marra, 74 AD3d 888, 905 N.Y.S.2d 204 [2d Dept 2010] ).
In view of the forgoing, this motion (# 004) by defendant Balk is denied.