HSBC Bank USA, N.A. v. Rubin
| Docket Number | 2019-10475,Index No. 26907/08 |
| Decision Date | 12 October 2022 |
| Citation | 210 A.D.3d 73,176 N.Y.S.3d 649 |
| Parties | HSBC BANK USA, N.A., appellant, v. Eliezer RUBIN, respondent, et al., defendants. |
| Court | New York Supreme Court — Appellate Division |
McCabe, Weisberg & Conway, LLC, Melville, NY (Kenneth Britt of counsel), for appellant.
Berg & David, PLLC, Brooklyn, NY (Abraham David and Sholom Wohlgelernter of counsel), for respondent.
MARK C. DILLON, J.P., ANGELA G. IANNACCI, JOSEPH A. ZAYAS, LARA J. GENOVESI, JJ.
DILLON, J.P.
This appeal presents an opportunity to discuss the interplay between CPLR 306–b, which vests trial courts with discretion to extend the time for service of process, CPLR 5011, which defines and describes the content of a judgment, CPLR article 64, which authorizes the appointment of temporary receivers, and Real Property Law § 254(10) and RPAPL 1325(1), which under certain circumstances allow ex parte applications for the appointment of temporary receivers. Here, the Supreme Court exercised its discretion in denying the plaintiff's second motion pursuant CPLR 306–b to extend the time for service of process. While that denial preceded the entry of a judgment, meaning that the action was still extant, the court should have considered the plaintiff's motion for the appointment of a temporary receiver for the rents and profits of the mortgaged property, as the parties’ mortgage and controlling statutory authorities permit such an appointment without notice to the defendant.
The plaintiff, HSBC Bank USA, N.A., commenced this action on September 25, 2008, to foreclose a mortgage encumbering certain real property in Brooklyn. The defendant mortgagor, Eliezer Rubin (hereinafter the defendant), failed to appear or answer. Also named as defendants in the action were Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), as nominee for E–Loan, Inc., New York City Environmental Control Board (hereinafter ECB), New York City Transit Adjudication Bureau (hereinafter NYCTAB), and a John Doe (hereinafter Doe).
On January 10, 2010, the Supreme Court issued an order of reference upon the defendant's default. Thereafter, the plaintiff moved for a judgment of foreclosure and sale. That motion was denied in an order dated May 7, 2013, without prejudice, on the ground, inter alia, that the plaintiff had not yet complied with then-Administrative Order 431/11.
On May 18, 2015, the defendant moved pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against him, for lack of personal jurisdiction, based upon the plaintiff's alleged failure to validly serve process on him. On October 8, 2015, the Supreme Court referred the issue to a court attorney referee who conducted an evidentiary hearing to determine the vaildity of service of process. Upon completion of the hearing, the referee rendered a report dated May 31, 2016, recommending that the plaintiff failed to establish valid service of process on the defendant. Thereafter, the defendant moved to confirm the referee's report and to dismiss the complaint insofar as asserted against him for lack of personal jurisdiction. On July 7, 2016, the plaintiff moved pursuant to CPLR 306–b to extend the time to serve the defendant with process.
In an order dated March 20, 2017, the Supreme Court granted the defendant's "motion to confirm the Referee's Report and dismiss the action" and also granted the plaintiff's "motion to extend its time to serve" the defendant. The court stated that the plaintiff had 120 days from the date of its order to serve the defendant.
Approximately 15 months later, on June 13, 2018, the plaintiff moved a second time pursuant to CPLR 306–b to extend the time to serve the defendant. The motion for the further time extension was denied in an order dated October 24, 2018.
On this record, no judgment was ever executed or entered.
On January 31, 2019, the plaintiff moved for the appointment of a temporary receiver for the rents and profits of the mortgaged property. Paragraph H of the Family Rider to the mortgage provided that, in the event of a default, a "judicially appointed receiver" could enter upon, take control, and maintain the property, without the appointment curing the default or waiving any of the lender's rights. Paragraph H(vi) provided that the "Lender shall be entitled to have a receiver appointed to take possession of and manage the [p]roperty and collect the [r]ents and profits derived from the [p]roperty without any showing as to the inadequacy of the [p]roperty as security." The defendant opposed the motion for the appointment of a temporary receiver and cross-moved for sanctions on the grounds that the action had already been "dismissed" for lack of personal jurisdiction, and the plaintiff had failed to serve the defendant during the additional 120–day grace period provided by the Supreme Court.
In an order dated June 19, 2019, the Supreme Court denied the plaintiff's motion for the appointment of a temporary receiver on the ground that The merits of the motion for the appointment of a temporary receiver were not reached. The court noted that the plaintiff had failed to serve the defendant despite two opportunities, the first presumably being after the filing of the summons and complaint in late 2008 and early 2009, and the second being the 120–day CPLR 306–b extension that was granted in 2017. The defendant's cross-motion for sanctions was denied.
The plaintiff appeals from so much of the order dated June 19, 2019, as denied its motion for the appointment of a temporary receiver. For reasons set forth below, we reverse the order insofar as appealed from and remit for a determination of that motion on its merits.
The defendant argued to the Supreme Court, and reiterates on appeal, that the order dated March 20, 2017, had "dismissed" the action, meaning that there was no pending action on which the court could entertain the motion for the appointment of a temporary receiver. The defendant therefore posits that in the order appealed from, dated June 19, 2019, the Supreme Court correctly denied the plaintiff's motion for the appointment of a temporary receiver on that procedural basis.
Contrary to the defendant's argument and the determination of the Supreme Court, an order of dismissal is not the same as a judgment under CPLR 5011. CPLR 5011 is routinely utilized by practitioners and courts without controversy, as its mechanics are well-understood and not particularly complicated. A judgment is a paper that reflects the resolution of an action or proceeding (see Slewett & Farber v. Board of Assessors of County of Nassau, 80 A.D.2d 186, 200–201, 438 N.Y.S.2d 544, mod on other grounds, 54 N.Y.2d 547, 446 N.Y.S.2d 241, 430 N.E.2d 1294 ). A judgment may be either interlocutory or final. It "shall refer to, and state the result of, the verdict or decision, or recite the default upon which it is based" ( CPLR 5011 ; see Selby Mktg. Assoc., Inc. v. Als, Inc., 169 Misc.2d 1043, 1044, 647 N.Y.S.2d 927 [Rochester City Ct.] ). A judgment is entered by the clerk at the conclusion of an action or proceeding (see CPLR 5016[a] ). An action is not actually concluded until a final judgment is entered (see State of New York Mtge. Agency v. Braun, 182 A.D.3d 63, 119 N.Y.S.3d 522 ; Cooke–Garrett v. Hoque, 109 A.D.3d 457, 970 N.Y.S.2d 81 ; Paola Vista Clothing v. V.R.P. Calzaturificio, 148 A.D.2d 593, 595, 539 N.Y.S.2d 59 ).
This Court addressed the question of whether a party is eligible for affirmative relief during the interstitial time existing between an order of dismissal and the entry of a judgment, in ( State of New York Mtge. Agency v. Braun , 182 A.D.3d 63, 119 N.Y.S.3d 522 ). The facts underlying Braun are in many respects similar to the facts here. In Braun , the defendant homeowner moved to dismiss a residential mortgage foreclosure complaint insofar as asserted against him on the ground of invalid service of process on him. The issue was referred to a hearing to determine the validity of service, which resulted in a finding that process had not been validly served, as here. On that basis, the Supreme Court rendered an order which granted the defendant's motion to dismiss the complaint insofar as asserted against him for lack of personal jurisdiction, also as here. Before the entry of any judgment, the plaintiff in Braun moved for an extension of time to serve the defendant in the same action, as permissible under CPLR 306–b, presumably to avoid a statute of limitations problem that would exist by filing a new action with a new index number. The Supreme Court denied the plaintiff's motion for a CPLR 306–b time extension. A legal question presented on the subsequent appeal to this Court was whether the Supreme Court's order of dismissal had "ended" the action so as to preclude any further service of process; or whether, as argued by the plaintiff therein, the action remained viable and active prior to the entry of a final judgment. In a signed opinion of Justice John Leventhal, this Court held that the action was still "pending" so long as no final judgment was entered, and that the Supreme Court could therefore appropriately entertain the plaintiff's CPLR 306–b motion on its merits (see State of New York Mtge. Agency v. Braun, 182 A.D.3d at 69, 119 N.Y.S.3d 522 ). Incidental to that issue, this Court determined in Braun that, under the circumstances of that action, the Supreme Court had improvidently exercised its discretion in denying the plaintiff's motion for an interest of justice extension of time to serve process (see id. at 67, 119 N.Y.S.3d 522 ).
The logic of Braun is illustrated by two considerations that involve the different roles played by an order of dismissal on the one hand...
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