Bank of Am. v. Ali

• Decision Date: 09 February 2022
• Docket Number: 2019-05181,Index No. 11869/09
• Citation: 2022 NY Slip Op 00838
• Parties: Bank of America, N.A., appellant, v. Mohammed Ali, respondent, et al., defendants.
• Court: New York Supreme Court

2022 NY Slip Op 00838

Bank of America, N.A., appellant,
v.
Mohammed Ali, respondent, et al., defendants.

No. 2019-05181

Index No. 11869/09

Supreme Court of New York, Second Department

February 9, 2022

Argued - December 14, 2021

D68511 G/afa

Leopold & Associates, PLLC, Armonk, NY (Stephanie Rojas of counsel), for appellant.

Berg & David PLLC, Brooklyn, NY (Abraham David and Sholom Wohlgelernter of counsel), for respondent.

MARK C. DILLON, J.P. BETSY BARROS FRANCESCA E. CONNOLLY SYLVIA O. HINDS-RADIX ROBERT J. MILLER, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Kings County (Lawrence Knipel, J.), dated April 4, 2019. The order denied the plaintiff's motion to vacate an order of the same court dated July 30, 2013, conditionally dismissing the action, and to restore the action to the active calendar.

ORDERED that the order dated April 4, 2019, is reversed, on the law, with costs, and the plaintiff's motion to vacate the order dated July 30, 2013, conditionally dismissing the action, and to restore the action to the active calendar is granted.

In or about May 2009, the plaintiff commenced this action to foreclose a mortgage on certain real property located in Brooklyn against, among others, the defendant Mohammed Ali (hereinafter the defendant). On July 30, 2013, at a status conference, the Supreme Court issued a conditional order of dismissal for want of prosecution pursuant to CPLR 3216, directing dismissal of the instant action unless the plaintiff filed a note of issue or otherwise proceeded by motion for the entry of judgment within 90 days. The plaintiff took no further action, and the action was administratively dismissed.

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In 2015, the plaintiff commenced a new action against the defendant, among others, to foreclose the same mortgage (hereinafter the 2015 action). In the complaint and the amended complaint, the plaintiff recited that "a prior action was commenced but has been discontinued." In an order dated December 5, 2017, the Supreme Court granted the defendant's motion pursuant to CPLR 3211(a) to dismiss the complaint in the 2015 action insofar as asserted against him as time-barred.

In or about November 2018, the plaintiff moved in the instant action to vacate the conditional order of dismissal and to restore the action to the active calendar. By order dated April 4, 2019, the Supreme Court denied the plaintiff's motion. The plaintiff appeals.

"A court may not dismiss an action based on neglect to prosecute unless the CPLR 3216 statutory preconditions to dismissal are met" (Delgado v New York City Hous. Auth., 21 A.D.3d 522, 522; see Private Capital Group, LLC v Llobell, 189 A.D.3d 1483, 1485). Here, the Supreme Court was without authority to issue a 90-day notice since issue was not joined in the action (see CPLR 3216[b][1]; U.S. Bank N.A. v Ricketts, 153 A.D.3d 1298, 1299; Wells Fargo Bank, N.A. v Pinargote, 150 A.D.3d 1311, 1311; U.S. Bank N.A. v Bassett, 137 A.D.3d 1109, 1110).

Moreover, an action cannot be dismissed pursuant to CPLR 3216 "unless a written demand is served upon 'the party against whom such relief is sought' in accordance with the statutory requirements, along with a statement that the 'default by the party upon whom such notice is served in complying with such demand within said ninety day period will serve as a basis for a motion by the party serving said demand for dismissal as against him [or her] for unreasonably neglecting to proceed'" (Cadichon v Facelle, 18 N.Y.3d 230, 235 [emphasis omitted], quoting CPLR 3216[b][3]; see HSBC Bank USA, N.A. v Arias, 187 A.D.3d 1158; Element E, LLC v Allyson Enters., Inc., 167 A.D.3d 981, 982).

Here, the conditional order of dismissal, which, in effect, served as a 90-day notice pursuant to CPLR 3216, was defective in that it did not state that the plaintiff's failure to comply with the demand would serve as a basis for the Supreme Court, on its own motion, to dismiss the action for failure to prosecute (see id. § 3216[b][3]; Cadichon v Facelle, 18 N.Y.3d at 235-236; Nationstar Mtge., LLC v Retemiah, 195 A.D.3d 628, 629; Deutsche Bank Natl. Trust Co. v Henry, 189 A.D.3d 1357, 1358; HSBC Bank USA, N.A. v Arias, 187 A.D.3d at 1158; Element E, LLC v Allyson Enters., Inc., 167 A.D.3d at 982). Further, the record demonstrates that no such motion was ever made, nor was there entry of an order of dismissal.

Therefore, the Supreme Court should not have administratively dismissed the instant action.

Contrary to the defendant's contention, the plaintiff did not waive the right to challenge the administrative dismissal of the instant action. In Onewest Bank, FSB v McKay (172 A.D.3d 887, 887-888), the Supreme Court conditionally dismissed the action pursuant to CPLR 3216 unless the plaintiff filed a note of issue or otherwise proceeded by motion for entry of a judgment within 90 days. Thereafter, the plaintiff voluntarily discontinued the action and cancelled the notice of pendency (see Onewest Bank, FSB v McKay, 172 A.D.3d at 888). This Court held that by

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voluntarily discontinuing the action, the plaintiff, in effect, waived any right to challenge the propriety of the conditional order, and the conditional order became a nullity (see id.; see also GMAC Mtge., LLC v Ortiz, 177 A.D.3d 421). As the conditional order was a nullity, the issue of the propriety of the conditional order was academic (see Onewest Bank, FSB v McKay, 172 A.D.3d at 888).

CPLR 3217 provides the procedural mechanisms by which a plaintiff may voluntarily discontinue an action (see id.; Rodrigues v Samaras, 117 A.D.3d 1022, 1024). Pursuant to CPLR 3217, a plaintiff may voluntarily discontinue an action by serving and filing a notice of discontinuance, by filing a written stipulation that is signed by the attorneys of record for the parties, or by obtaining a court order discontinuing the action (see id.; Rodrigues v Samaras, 117 A.D.3d at 1024).

Here, the plaintiff did not take any of the actions provided in CPLR 3217. We disagree with our dissenting colleagues that "the plaintiff's service of a summons and complaint in the second action was the equivalent of a notice of discontinuance" in the first action. There is no support for the proposition that a plaintiff's statement in the complaint in one action can serve as a notice of discontinuance in another action in accordance with CPLR 3217. Thus, the plaintiff did not voluntarily discontinue the instant action (see Rodrigues v Samaras, 117 A.D.3d at 1024; Millicent Bender, Inc. v J.D. Posillico, Inc., 144 A.D.2d 548, 548; see also Pena v Deutsche Bank Natl. Trust Co., 192 A.D.3d 697, 698; cf. GMAC Mtge., LLC v Ortiz, 177 A.D.3d at 421; Onewest Bank, FSB v McKay, 172 A.D.3d at 888). Accordingly, the plaintiff did not waive the right to challenge the propriety of the conditional order, the conditional order did not become a nullity, and the issue of the propriety of the conditional order is not academic (cf. Onewest Bank, FSB v McKay, 172 A.D.3d at 888).

We reject the defendant's contention that the plaintiff effectively abandoned the instant action by commencing the 2015 action. Our dissenting colleagues' reliance upon U.S. Bank N.A. v Chait (178 A.D.3d 448), U.S. Bank Trust, N.A. v Humphrey (173 A.D.3d 811), and Old Republic Natl. Tit. Ins. Co. v Conlin (129 A.D.3d 804) to support the proposition that the commencement of the 2015 action effected a de facto discontinuance of the instant action is misplaced. In all of those cases, the plaintiffs or the plaintiffs' alleged predecessors in interest commenced actions to foreclose the mortgages in those actions (see U.S. Bank N.A. v Chait, 178 A.D.3d at 448; U.S. Bank Trust, N.A. v Humphrey, 173 A.D.3d at 811; Old Republic Natl. Tit. Ins. Co. v Conlin, 129 A.D.3d at 805; see also MLB Sub I, LLC v Grimes, 170 A.D.3d 992, 994). Subsequently, the plaintiffs commenced second actions to foreclose the same mortgages or to collect on the mortgage debt, and the defendants moved pursuant to RPAPL 1301(3) to dismiss the second actions (see U.S. Bank N.A. v Chait, 178 A.D.3d at 448; U.S. Bank Trust, N.A. v Humphrey, 173 A.D.3d at 811; Old Republic Natl. Tit. Ins. Co. v Conlin, 129 A.D.3d at 805; see also MLB Sub I, LLC v Grimes, 170 A.D.3d at 994).

RPAPL 1301(3) provides that "[w]hile [an] action is pending or after final judgment for the plaintiff therein, no other action shall be commenced or maintained to recover any part of the mortgage debt, without leave of the court in which the former action was brought." The statute contemplates a stay or dismissal of the later commenced action if leave is not obtained, not a dismissal of the first action (see First Nationwide Bank v Brookhaven Realty Assoc., 223 A.D.2d 618, 621-622).

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The purpose of RPAPL 1301(3) "is to protect the mortgagor 'from the expense and annoyance' of simultaneously defending against two independent actions to recover the same mortgage debt" (Old Republic Natl. Tit. Ins. Co. v Conlin, 129 A.D.3d at 805, quoting Central Trust Co. v Dann, 85 N.Y.2d 767, 772; see U.S. Bank Trust, N.A. v Humphrey, 173 A.D.3d at 811). This Court has explained that RPAPL 1301(3) "should be strictly construed since it is in derogation of a plaintiff's common-law right to pursue the alternate remedies of foreclosure and recovery of the mortgage debt at the same time" (Old Republic Natl. Tit. Ins. Co. v Conlin, 129 A.D.3d at 805 [internal quotation marks omitted]).

This Court held, in Humphrey and Conlin, and the Appellate Division, First Department, held, in Chait, that although the first actions were not formally discontinued, the effective abandonment of those actions was a "de facto discontinuance" which militated against dismissal of the second action pursuant to RPAPL 1301(3) (see U.S. Bank N.A. v Chait, 178 A.D.3d at 448-449; U.S. Bank Trust, N.A. v Humphrey, 173 A.D.3d at 812; Old...