U.S. Bank Nat'l Ass'n v. Lomuto

• Decision Date: 06 October 2021
• Docket Number: 2018–00618,Index No. 35702/16
• Citation: 198 A.D.3d 707,156 N.Y.S.3d 55
• Parties: U.S. BANK NATIONAL ASSOCIATION, etc., respondent, v. Amanda LOMUTO, appellant.
• Court: New York Supreme Court — Appellate Division

198 A.D.3d 707

156 N.Y.S.3d 55

U.S. BANK NATIONAL ASSOCIATION, etc., respondent,

v.Amanda LOMUTO, appellant.

2018–00618

Index No. 35702/16

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

Submitted—June 8, 2021

October 6, 2021

Legal Aid Society of Rockland County, Inc., New City, N.Y. (Derek S. Tarson of counsel), for appellant.

Gross Polowy, LLC, Westbury, N.Y. (Stephen J. Vargas of counsel), for respondent.

MARK C. DILLON, J.P., LEONARD B. AUSTIN, COLLEEN D. DUFFY, BETSY BARROS, JJ.

DECISION & ORDER

In an action, inter alia, to reforeclose a mortgage pursuant to RPAPL 1503, the defendant appeals from an order of the Supreme Court, Rockland County (David S. Zuckerman, J.), dated December 5, 2017. The order granted the plaintiff's motion for summary judgment on the amended complaint and pursuant to CPLR 3211(b) to dismiss the defendant's affirmative defenses.

ORDERED that the order is reversed, on the law, with costs, and the plaintiff's motion for summary judgment on the amended complaint and pursuant to CPLR 3211(b) to dismiss the defendant's affirmative defenses is denied.

In January 2009, the plaintiff commenced an action to foreclose a mortgage on certain real property in Stony Point (hereinafter the underlying foreclosure action), naming the mortgagor and owner, Robert S. Wilson, but not the property's co-owner, Amanda Lomuto, among the defendants. The plaintiff obtained a judgment of foreclosure and sale, which was affirmed by this Court (see U.S. Bank N.A. v. Lomuto, 140 A.D.3d 852, 35 N.Y.S.3d 123 ). During the pendency of the appeal in the underlying foreclosure action, Wilson died and Lomuto was substituted as a defendant in her capacity as a personal representative of Wilson's estate, in place of Wilson (see id. ). Pursuant to the judgment of foreclosure and sale in the underlying foreclosure action, the property was sold at public auction to the plaintiff as the successful bidder.

Thereafter, the plaintiff commenced this action against Lomuto (hereinafter the defendant) to reforeclose the mortgage pursuant to RPAPL 1503 and 1523. The plaintiff moved for summary judgment on the amended complaint and pursuant to CPLR 3211(b) to dismiss the defendant's affirmative defenses. The defendant opposed the motion. By order dated December 5, 2017, the Supreme Court granted the plaintiff's motion and directed the defendant to give the plaintiff's attorney written notice of her desire and intent to redeem the property within 10 days from the mailing to her attorney of a copy of the order, and then to redeem the premises within 30 days thereafter. The defendant did not redeem, and now appeals from the order.

RPAPL 1311 requires the plaintiff in a mortgage foreclosure action to join, as a party defendant, any person "whose interest is claimed to be subject and subordinate to the plaintiff's lien." "The absence of a necessary party in a foreclosure action leaves that party's rights unaffected by the judgment and sale, and the foreclosure sale may be considered void as to the omitted party" ( 6820 Ridge Realty v. Goldman, 263 A.D.2d 22, 26, 701 N.Y.S.2d 69 ). "[I]n such cases, the purchaser of the foreclosed property has two potential remedies—the commencement of a strict foreclosure action pursuant to RPAPL 1352, or a reforeclosure action pursuant to RPAPL 1503" ( id. at 26, 701 N.Y.S.2d 69 ). "In contrast to RPAPL 1352, which governs strict foreclosure, RPAPL 1503 permits a reforeclosure action to be maintained even where[, as here,] an action against the defendant to foreclose the mortgage under which the foreclosure sale was held or to extinguish a right of redemption would be barred by the Statute of Limitations" ( id. at 27, 701 N.Y.S.2d 69 ).

To prevail in a reforeclosure action, the plaintiff must demonstrate that the defect in the original foreclosure action "was not due to fraud or wilful neglect of the plaintiff and that the defendant or the person under whom he claims was not actually prejudiced thereby" ( RPAPL 1523[2] [emphasis added]).

Here, there is no dispute that the defect in the underlying foreclosure action was the plaintiff's omission of the defendant as a party, despite the plaintiff having ordered a full title search and mortgage foreclosure certificate (see HSBC Bank USA, N.A. v. Guardian Preserv. LLC, 160 A.D.3d 1236, 1236–1237, 75 N.Y.S.3d 636 ). Pursuant to the language of RPAPL 1523, in order to establish its entitlement to summary judgment, the plaintiff had the burden of demonstrating, prima facie, both that the defect in the underlying foreclosure action was not the result of fraud or the wilful neglect of the foreclosure plaintiff, and that the defect did not prejudice the defendant (see RPAPL 1523[1], [2] ). To that end, the plaintiff submitted, inter alia, copies of the note and mortgage, executed on September 2, 1987, bearing the signature of Robert S. Wilson as the sole borrower/mortgagor, and the results of a title search conducted by Prime Title Search, LLC, certified as of November 10, 2008, naming Wilson as the sole mortgagor and holder of title to the property, and failing to reflect a...