Fed. Nat'l Mortg. Ass'n v. Banks

• Decision Date: 28 October 2021
• Docket Number: 531597
• Citation: 198 A.D.3d 1222,156 N.Y.S.3d 496
• Parties: FEDERAL NATIONAL MORTGAGE ASSOCIATION, Appellant, v. William H. BANKS, Individually and as Executor of the Estate of William Banks Jr., Deceased, et al., Respondents, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

198 A.D.3d 1222

156 N.Y.S.3d 496

FEDERAL NATIONAL MORTGAGE ASSOCIATION, Appellant,

v.William H. BANKS, Individually and as Executor of the Estate of William Banks Jr., Deceased, et al., Respondents, et al., Defendants.

531597

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

Calendar Date: September 9, 2021

Decided and Entered: October 28, 2021

Robertson, Anschutz, Schneid, Crane & Partners, PLLC, Westbury (Joseph F. Battista of counsel), for appellant.

James M. Hartmann, Delhi, for respondents.

Before: Lynch, J.P., Aarons, Pritzker, Reynolds Fitzgerald and Colangelo, JJ.

MEMORANDUM AND ORDER

Colangelo, J. Appeals (1) from a judgment of the Supreme Court (Northrup Jr., J.), entered August 2, 2019 in Delaware County, which, among other things, directed the Delaware County Clerk to cancel and discharge the subject mortgage, and (2) from an order of said court, entered May 18, 2020 in Delaware County, which, among other things, denied plaintiff's motion to vacate a prior order.

Plaintiff commenced this action in 2016 against defendant William H. Banks and defendant Michelle Dumond (hereinafter collectively referred to as defendants),¹ seeking to foreclose on property in Delaware County that Banks inherited upon his father's death. The complaint alleges that Banks defaulted under the terms of the note and mortgage executed by his father in 2008 with Carnegie Mortgage LLC and Mortgage Electronic Registration Systems, Inc., as nominee for Carnegie. The complaint further alleges, among other things, that the note and mortgage were assigned to plaintiff in September 2015.

In December 2016, after the action was commenced and issue was joined, Supreme Court issued a preliminary conference stipulation and order related to the scheduling and production of discovery, which required plaintiff to respond to defendants’ discovery demands by January 27, 2017. Plaintiff failed to respond. In March 2017, defendants moved to dismiss the complaint or, in the alternative, preclude plaintiff from introducing evidence in support of the allegations contained in the complaint, based upon plaintiff's willful noncompliance. By order dated August 18, 2017, plaintiff was directed to comply with all outstanding discovery within 30 days from the service of the order upon plaintiff's counsel with notice of entry or be precluded from introducing evidence in support of the allegations contained in the complaint upon further application by defendants. No further disclosure was provided by plaintiff and, by decision and order dated December 11, 2017, plaintiff was precluded from introducing evidence related to disclosure requested in numbers 9, 10, 12 and 13 of defendants’ combined disclosure demands. Defendants thereafter requested that plaintiff be ordered to provide proper responses to their outstanding discovery demands, along with related documentation. Supreme Court deemed the request to be an application to enforce the August 18, 2017 order, and issued a conditional order of preclusion on September 11, 2018, ordering plaintiff to produce documents responsive to numbers 1–8, 11 and 14–17 of defendants’ combined disclosure demands within 14 days of service of the order or be precluded from introducing evidence in support of the allegations contained in the complaint on the ground that plaintiff "willfully failed and refused to comply" with the disclosure demands and the order of the court.

In December 2018, defendants moved for summary judgment dismissing the complaint. Plaintiff failed to oppose the motion and, by order dated June 7, 2019, Supreme Court granted the motion and dismissed the complaint with prejudice (hereinafter the summary judgment order). By judgment entered August 2, 2019, the court directed the Delaware County Clerk to cancel and discharge the mortgage and to cancel the notice of pendency. In December 2019, plaintiff moved to, among other things, vacate the summary judgment order and the preclusion orders and for an extension of time to complete discovery.² Defendants opposed the motion and cross-moved for sanctions. In May 2020, Supreme Court denied plaintiff's motion and defendants’ cross motion. Plaintiff appeals.

Plaintiff contends that Supreme Court erred in failing to vacate the preclusion orders on the basis that law office failure, which led to entry of the orders, constitutes a reasonable excuse to vacate the orders, and that plaintiff submitted sufficient documentary evidence to demonstrate a meritorious cause of action. We disagree.

"To prevail on a motion to vacate pursuant to CPLR 5015(a)(1), a [litigant] must demonstrate both a reasonable excuse for [his or her] failure to timely answer and the existence of a potentially meritorious defense to the underlying causes of action" ( Kelly v. Hinkley, 186 A.D.3d 1842, 1843, 131 N.Y.S.3d 426 [2020] [internal quotation marks and citations omitted]; see Gibbs v. St. Barnabas Hosp., 16 N.Y.3d 74, 80, 917 N.Y.S.2d 68, 942 N.E.2d 277 [2010] ; Hayes v. Village of Middleburgh, 140 A.D.3d 1359, 1361–1362, 34 N.Y.S.3d 659 [2016] ). "A motion to vacate a prior judgment or order is addressed to the court's sound discretion, subject to reversal only where there has been a clear abuse of that discretion" ( Inwald Enters., LLC v. Aloha Energy, 153 A.D.3d 1008, 1010, 61 N.Y.S.3d 358 [2017] [internal quotation marks and citations omitted]; accor...