Josovich v. Ceylan

• Court: New York Supreme Court — Appellate Division
• Citation: Josovich v. Ceylan, 2015 NY Slip Op 7952, 133 A.D.3d 570, 19 N.Y.S.3d 554 (N.Y. App. Div. 2015)
• Decision Date: 04 November 2015
• Parties: Dora JOSOVICH, plaintiff-respondent, v. Michael CEYLAN, et al., defendants third-party plaintiffs-appellants, et al., defendants; Michael F. Kelly, et al., third-party defendants-respondents.

133 A.D.3d 570

19 N.Y.S.3d 554

2015 N.Y. Slip Op. 07952

Dora JOSOVICH, plaintiff-respondent,

v. Michael CEYLAN, et al., defendants third-party plaintiffs-appellants, et al., defendants;Michael F. Kelly, et al., third-party defendants-respondents.

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

Nov. 4, 2015.

J.G. Toth, Flushing, N.Y., for defendants third-party plaintiffs-appellants.

David M. Namm, Mineola, N.Y., for plaintiff-respondent.

Furman Kornfeld & Brennan LLP, New York, N.Y. (A. Michael Furmanand Alex T. Paradisoof counsel), for third-party defendant-respondent Michael F. Kelly.

Lewis Brisbois Bisgaard & Smith LLP, New York, N.Y. (Brian Peteand Peter T. Shapiroof counsel), for third-party defendant-respondent David Fainkich.

Opinion

In an action to foreclose a mortgage, the defendants third-party plaintiffs appeal (1), as limited by their brief, from so much of an order of the Supreme Court, Kings County (Solomon, J.), dated February 14, 2013, as denied that branch of their motion which was for leave to enter a judgment against the third-party defendant Michael F. Kelly upon his failure to appear or answer the third-party complaint, and granted the cross motion of Michael F. Kelly to compel them to accept his late answer; (2) from an order of the same court dated October 31, 2013, which denied their motion to vacate an order dated June 17, 2013, granting the motion of the third-party defendant David Fainkich pursuant to CPLR 3211(a)to dismiss the third-party complaint insofar as asserted against him; (3), as limited by their brief, from so much of an order of the same court dated February 21, 2014, which denied that branch of their motion which was for leave to renew their opposition to the motion of the third-party defendant David Fainkich pursuant to CPLR 3211(a)to dismiss the third-party complaint insofar as asserted against him; (4) from an order of the same court dated February 26, 2014, which denied their application to sign an order to show cause; (5) from an order of the same court, also dated February 26, 2014, which denied, without prejudice, the application of David Fainkich to sign an order to show cause; and (6) from an order of the same court dated March 3, 2014, which denied their motion for a mandatory settlement conference pursuant to CPLR 3408and for leave to amend their amended answer, and granted the plaintiff's cross motion for summary judgment on the complaint and for an order of reference.

ORDERED that the appeals from the two orders dated February 26, 2014, are dismissed; and it is further,

ORDERED that the orders dated October 31, 2013, and March 3, 2014, respectively, are affirmed; and it is further,

ORDERED that the orders dated February 14, 2013, and February 21, 2014, respectively, are affirmed insofar as appealed from, and it is further,

ORDERED that one bill of costs is awarded to the respondents.

To avoid the entry of a default judgment, a party must show a reasonable excuse for the default and a potentially meritorious defense (see U.S. Bank N.A. v. Alba,130 A.D.3d 715, 11 N.Y.S.3d 864; Fried v. Jacob Holding, Inc.,110 A.D.3d 56, 60, 970 N.Y.S.2d 260; King v. King,99 A.D.3d 672, 951 N.Y.S.2d 565). Here, the affirmation of the attorney representing the third-party defendant Michael F. Kelly was sufficient to establish that the failure to submit a timely answer was not willful, but rather, was due to law office failure (see Thompson v. County of Suffolk,61 A.D.3d 962, 963, 878 N.Y.S.2d 181; Valure v. Century 21 Grand,35 A.D.3d 591, 826 N.Y.S.2d 418; CPLR 2005). Further, Kelly demonstrated a potentially meritorious defense to at least a portion of the third-party action (see Taylor v. Markus,224 App.Div. 865, 231 N.Y.S. 899; CPLR 105[u]). Additionally, the defendants third-party plaintiffs failed to show any prejudice from the short delay in Kelly's service of an answer (see Arias v. First Presbyt. Church in Jamaica,97 A.D.3d 712, 948 N.Y.S.2d 665; Westchester Med. Ctr. v. Hartford Cas. Ins. Co.,58 A.D.3d 832, 872 N.Y.S.2d 196). Accordingly, the Supreme Court providently exercised its discretion in denying that branch of the defendants third-party plaintiffs' motion which was for leave to enter a default judgment against Kelly, and granting Kelly's cross motion pursuant to CPLR 3012(d)to compel the defendants third-party plaintiffs to accept his late answer (see Klein v. Yeshiva M'kor Chaim,116 A.D.3d 672, 982 N.Y.S.2d 787; Thompson v. County of Suffolk,61 A.D.3d 962, 878 N.Y.S.2d 181).

The Supreme Court properly denied the defendants third-party plaintiffs' motion to vacate an order dated June 17, 2013, made on the ground that the order was violative of the automatic stay occasioned by the filing of a bankruptcy petition by the defendant third-party plaintiff Michael Ceylan (see11 U.S.C. § 362[a] ). An order issued in violation of an automatic bankruptcy stay is void (see Valiotis v. Psaroudis,69 A.D.3d 610, 899 N.Y.S.2d 55). Here, however, the order was issued in a third-party action that was commenced by the debtor and not in the main action commenced against him (see Cook v. Wells Fargo Bank, N.A. [In re Cook],520 Fed.Appx. 697, 704, 2013 WL 1297590 [10th Cir.]; Koolik v. Markowitz,40 F.3d 567 [2d Cir.]; Gordon v. Whitmore [In re Merrick],175 B.R. 333, 337 [9th Cir.BAP]).

In any event, the Supreme Court stayed the effectiveness of the order pending disposition of Ceylan's bankruptcy petition, and the bankruptcy petition was dismissed on August 27, 2013 (see Matter of Ceylan,U.S. Bankruptcy Ct., E.D.N.Y., 1–13–42999, Craig, J., 2013).

The Supreme Court properly denied that branch of the motion of the defendants third-party plaintiffs which was for leave to renew their opposition to the motion of the third-party defendant David Fainkich to dismiss the third-party complaint insofar as asserted against him. The new facts offered would not change the prior determination (seeCPLR 2221[e][2]; AG Capital Funding Partners, L.P. v. State St. Bank & Trust Co.,5 N.Y.3d 582, 595, 808 N.Y.S.2d 573, 842 N.E.2d 471; Courtview Owners Corp. v. Courtview Holding B.V.,113 A.D.3d 722, 978 N.Y.S.2d 859).

The Supreme Court properly denied that branch of the motion of the defendants third-party plaintiffs which was for a mandatory settlement conference pursuant to CPLR 3408(a). The subject loan did not qualify as a “home loan” pursuant to RPAPL 1304(5)(a)because the debt was not incurred primarily for personal, family, or household purposes (seeRPAPL 1304[5][a][ii]; Independence Bank v. Valentine,113 A.D.3d 62, 66, 976 N.Y.S.2d 504).

The Supreme Court providently exercised its discretion in denying that branch of the motion of the defendants third-party plaintiffs which was for leave to amend their answer (seeCPLR 3025[b]; Bank of Smithtown v. 219 Sagg Main, LLC,107 A.D.3d 654, 968 N.Y.S.2d 95). The proposed defense of lack of consideration was palpably insufficient (see Hollander v. Lipman,65 A.D.3d 1086, 885 N.Y.S.2d 354). Further, the proposed affirmative defenses and counterclaims were palpably insufficient and/or set forth allegations already contained in the answer (see Marton Assoc. v. Vitale,172 A.D.2d 501, 568 N.Y.S.2d 119).

The plaintiff demonstrated her prima facie entitlement to judgment as a matter of law by producing the mortgage, the unpaid note, and evidence of default (see Onewest Bank, FSB v. Prince,130 A.D.3d 700, 14 N.Y.S.3d 66; Bayview Loan Servicing, LLC v. 254 Church St., LLC,129...