MATTER OF GRIFFIN v. Panzarin

• Decision Date: 19 May 2003
• Citation: 759 N.Y.S.2d 745,305 A.D.2d 601
• Parties: In the Matter of WILLIE GRIFFIN et al., Appellants,<BR>v.<BR>TERRY PANZARIN et al., Respondents.
• Court: New York Supreme Court — Appellate Division

305 A.D.2d 601

759 N.Y.S.2d 745

In the Matter of WILLIE GRIFFIN et al., Appellants,

v.TERRY PANZARIN et al., Respondents.

Decided May 19, 2003.

Florio, J.P., Feuerstein, Friedmann and Crane, JJ., concur.

Ordered that on the Court's own motion, the notice of appeal from so much of the order and judgment as, sua sponte, imposed a sanction upon the appellants pursuant to 22 NYCRR 130-1.1 (d) is treated as an application for leave to appeal from that portion of the order and judgment, and leave to appeal is granted (see CPLR 5701 [c]); and it is further,

Ordered that the appeal from so much of the order and judgment as, sua sponte, imposed a sanction upon the petitioners' attorney, Nicholas Leo, Jr., is dismissed, as the petitioners are not aggrieved by that portion of the order and judgment (see CPLR 5511; Scopelliti v Town of New Castle, 92 NY2d 944 [1998]); and it is further,

Ordered that the order and judgment is modified, on the law and as a matter of discretion, by deleting the provisions thereof (1) denying so much of the petition as seeks to cancel and discharge the subject mortgages pursuant to RPAPL 1921 and (2) imposing a sanction upon the petitioners in the sum of $750; as so modified, the order and judgment is affirmed insofar as reviewed, without costs or disbursements, so much of the petition as seeks to cancel and discharge the subject mortgages pursuant to RPAPL 1921 is reinstated, and the matter is remitted to the Supreme Court, Westchester County, for further proceedings consistent herewith.

The Supreme Court erred in declining to sign the petitioners' order to show cause and in dismissing the proceeding in its entirety. Although the petitioners failed to set forth in their petition the exact subsection of RPAPL 1921 upon which they relied, this defect was not fatal and should not have prevented the Supreme Court from signing the order to show cause, thereby permitting the petitioners to be heard on their application (see Howard v Murray, 38 NY2d 695, 699-700 [1976]). Moreover, the Supreme Court erred in finding that the petitioners failed to allege or establish that they ever sought satisfaction of the mortgages from the respondents or that the respondents failed or refused such satisfaction in response thereto. The verified petition does contain these allegations.

However, the Supreme Court correctly determined that RPAPL 1501 does not authorize the commencement of a special proceeding; rather, it contemplates the commencement by way of summons and complaint of an action to cancel and discharge a mortgage on real property after the statute of limitations to foreclose it has expired. "[T]he courts are empowered and indeed directed to convert a civil judicial proceeding not brought in the proper form into one which would be in proper form, rather than to grant a dismissal, making whatever order is necessary for its proper prosecution" (Matter of First Natl. City Bank v City of N.Y. Fin. Admin., 36 NY2d 87, 94 [1975]). However, the court must have jurisdiction over all of the parties before converting the special proceeding into an action (see CPLR 103 [c]; Siegel, NY Prac § 547 at 905 [3d ed]). Here, since the order to show cause was never signed, there was no service of the petition on the respondents and jurisdiction was not obtained over them. Thus, the Supreme Court properly dismissed that portion of the petition seeking relief pursuant to RPAPL 1501 on the ground that it was improperly brought as a special proceeding rather than as an action. The petitioners may, if they be so advised, commence a separate action pursuant to RPAPL 1501 so as to preserve their remedies (see Matter of Key Bank of N.Y. v Del Norte, Inc., 251 AD2d 740 [1998]; Matter of Goldin, 227 AD2d 401 [1996]; Matter of Lester v Bickford, 88 AD2d 730 [1982]).

The Supreme Court improvidently exercised its discretion in, sua sponte, imposing a sanction on the petitioners pursuant to 22 NYCRR 130-1.1. A court may impose a sanction sua sponte, but the party to be...