Green Tree Servicing, LLC v. Feller

• Decision Date: 22 March 2018
• Docket Number: 525109
• Citation: 74 N.Y.S.3d 365,159 A.D.3d 1246
• Parties: GREEN TREE SERVICING, LLC, Appellant, v. Bruce FELLER et al., Defendants, and Nancy Ruth Feller, Also Known as Nancy Ruth Ferry, Respondent.
• Court: New York Supreme Court — Appellate Division

159 A.D.3d 1246
74 N.Y.S.3d 365

GREEN TREE SERVICING, LLC, Appellant,
v.
Bruce FELLER et al., Defendants,
and
Nancy Ruth Feller, Also Known as Nancy Ruth Ferry, Respondent.

525109

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

Calendar Date: January 8, 2018
Decided and Entered: March 22, 2018

74 N.Y.S.3d 367

Butler, Fitzgerald, Fiveson & McCarthy, New York City (David K. Fiveson of counsel), for appellant.

Shruti Joshi, Legal Aid Society of Northeastern New York, Albany, for respondent.

Before: Egan Jr., J.P., Lynch, Clark, Mulvey and Rumsey, JJ.

MEMORANDUM AND ORDER

Mulvey, J.

Appeal from an order of the Supreme Court (Nichols, J.), entered January 26, 2017 in Columbia County, which denied plaintiff's motion for leave to amend its complaint.

In December 2005, defendant Nancy Ruth Feller (hereinafter defendant) and her husband, defendant Bruce Feller, executed a note in favor of Option One Mortgage Corporation that secured a mortgage against real property that they jointly owned. Less than a year later, Feller alone executed a second mortgage on the same property in favor of Countrywide Bank. A portion of the proceeds from the Countrywide loan was used to satisfy the Option One mortgage. In December 2009, Countrywide commenced the instant foreclosure action against, among others, Feller and defendant, both of whom defaulted in answering the complaint. Following certain motion practice, an order was issued which, as relevant here,¹ granted Countrywide's motion for a judgment of foreclosure, but limited that judgment to the interest that Feller possessed in the premises. Thereafter, plaintiff moved for leave to file an amended complaint to add causes of action to quiet title, for a declaratory judgment and for equitable subrogation. Supreme Court denied the motion, finding that the causes of action set forth in the proposed amended complaint were palpably insufficient. Plaintiff appeals.

"The decision whether to grant leave to amend pleadings rests within the trial court's sound discretion and[,] absent a clear abuse of that discretion, will not be lightly cast aside" ( Cowsert v. Macy's E., Inc., 74 A.D.3d 1444, 1444–1445, 904 N.Y.S.2d 239 [2010] [internal quotation marks and citations omitted]; see Johnson v. State of New York, 125 A.D.3d 1073, 1074–1075 [2015] ). As we recently clarified,

74 N.Y.S.3d 368

the party seeking leave to amend a pleading "need not establish the merits of the proposed amendment" ( NYAHSA Servs., Inc., Self–Ins. Trust v. People Care Inc., 156 A.D.3d 99, 102, 64 N.Y.S.3d 730 [2017] ). Rather, the appropriate standard to be applied on a motion for leave to amend a pleading is that, " ‘in the absence of prejudice or surprise resulting directly from the delay in seeking leave, such applications are to be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit’ " ( id. [brackets omitted], quoting Lucido v. Mancuso, 49 A.D.3d 220, 222, 851 N.Y.S.2d 238 [2008] ; accord Bynum v. Camp Bisco, LLC, 155 A.D.3d 1503, 1504, 66 N.Y.S.3d 47 [2017] ; see Kimso Apts., LLC v. Gandhi, 24 N.Y.3d 403, 411, 998 N.Y.S.2d 740, 23 N.E.3d 1008 [2014] ).

Applying these principles to the matter at hand, we discern no abuse of discretion in Supreme Court's decision to deny that portion of the motion seeking to add causes of action to quiet title and for a declaratory judgment. Such causes of action are grounded upon plaintiff's assertion that defendant ratified Feller's execution of the Countrywide mortgage through her acceptance of the benefits of the resulting loan to satisfy the Option One mortgage. Ratification, however, is the express or implied "adoption of the acts of another by one for whom the other assumes to be acting, but without authority" ( Jayne v. Talisman Energy USA, Inc., 84 A.D.3d 1581, 1583, 923 N.Y.S.2d 271 [2011] [internal quotation marks and citations omitted], lv denied 17 N.Y.3d 710, 930 N.Y.S.2d 556, 954 N.E.2d 1182 [2011] ; see 57 N.Y. Jur, Estoppel, Ratification, and Waiver, § 94 [defining ratification as "the act of knowingly giving sanction or affirmance to an act that would otherwise be unauthorized"]; Lipman v. Vebeliunas, 39 A.D.3d 488, 490, 833 N.Y.S.2d 210 [2007] ). In other words, "[a] ratification presupposes an unauthorized act on behalf of someone else, which that person later authorizes or ratifies" ( Santaro v. Jack of Hearts Carpet Co., Inc., 6 Misc.3d 1024[A], 2005 N.Y. Slip. Op. 50170[U], 800 N.Y.S.2d 356 [Sup. Ct., Onondaga County 2005] [internal quotation marks and citation omitted], affd on op below 23 A.D.3d 1073, 803 N.Y.S.2d 501 [2005] ). Simply put, plaintiff has not alleged any unauthorized act on the part of Feller. It is undisputed that Feller and defendant held the property at issue as tenants by the entirety, and "there is nothing in New York law that prevents one of the co-owners from mortgaging or making an effective conveyance of his or her own interest in the tenancy. To the contrary, each tenant may sell, mortgage or otherwise encumber his or her rights in the property, subject to the continuing rights of the other" ( V.R.W., Inc. v. Klein, 68 N.Y.2d 560, 565, 510 N.Y.S.2d 848, 503 N.E.2d 496 [1986] ; accord John T. Walsh Enters., LLC v. Jordan, 152 A.D.3d 755, 757, 60 N.Y.S.3d 70 [2017] ; Rose v. Levine, 107...