Wednesday, December 13, 2017

FAMILY LAW - DERIVATIVE NEGLECT VS. DERIVATIVE ABUSE



MATTER OF NAYOMI M., 147 AD 3d 413 - NY: Appellate Div., 1st Dept. 2017:

"The finding of derivative neglect with respect to the two youngest children was supported by a preponderance of the evidence. The violent and repeated abuse of the oldest children was "so proximate in time to the derivative proceeding that it c[ould] reasonably be concluded that" respondent had "a faulty understanding of the duties of parenthood" and thus that the youngest children's physical or emotional conditions were "in imminent danger of becoming impaired" (Matter of Matthew O. [Kenneth O.], 103 AD3d 67, 76 [1st Dept 2012] [internal quotation marks omitted]). Family Court did not err in finding derivative neglect, rather than derivative abuse. There was no evidence that the youngest child, who was a baby, was ever directly exposed to any of the abuse. Although the second youngest child appears to have been locked in the room with the other children, he was only two years old at the time and was apparently not subjected to many of the more severe forms of abuse perpetrated by respondent."

Tuesday, December 12, 2017

HANUKKAH GREETINGS


Monday, December 11, 2017

VOLUNTEER LAWYERS PROJECT



Today I will be a volunteer lawyer with Nassau Suffolk Law Services at Landlord/Tenant court in Hempstead. From the Nassau/Suffolk Law Services website:

"The Volunteer Lawyers Project (Nassau) and The Pro Bono Project (Suffolk)
Nassau/Suffolk Law Services operates a nationally lauded pro bono program with the Bar Association of Nassau County and the Suffolk County Bar Association. Established in 1981, the program provides legal representation in civil cases for individuals meeting low income guidelines.

Volunteer Lawyers Project and Pro Bono Project:

The Projects strive to supplement the funded civil legal services provided by Law Services’ staff with the generous volunteer assistance of the private bar. The Project staff refers a variety of legal matters to private volunteer attorneys, usually in the areas of matrimonial, bankruptcy and landlord-tenant law. The demand for pro bono services is great and may involve a waiting list, as in the case of divorce matters.  However, we maintain an active outreach and recruitment program in an effort to meet the challenge. The Projects also screen prospective clients for the Modest Means Panel, private attorneys who have agreed to accept divorce cases at a reduced fee. The Volunteer Lawyers and Pro Bono Projects are supported in part by The Nassau Bar Association, the We Care Fund, and The Suffolk County Bar Association, the Suffolk County Bar Pro Bono Foundation, as well as by The Legal Services Corporation. For information in Nassau County call 516-292-8299 and in Suffolk County 631-232-2400. HOW MANY LAWYERS  DOES  IT  TAKE TO CHANGE. . . The World ? It’s a simple idea. Use your powers for good. When you represent the poor and disabled, you also represent the best of our profession. A profession full of caring, committed people who firmly believe a just world is possible. Our clients don’t pay.  But the rewards —-that’s another story entirely. Once you’ve made a difference in the life of another , it can’t but help make a difference in yours. You’ve been given a gift, a powerful skill –you can put it to no better use than to help the powerless. You can help.  The only question is: will you? The Collateral Rewards:
  • Free CLE credits
  • Free pass to a CLE course
  • Access to expert consultation and mentoring
  • Eligibility for Pro Bono Attorney of the Month award and Pro Bono Recognition Reception
  • Free professional liability insurance
  • Networking with attorney colleagues and judges
  • Expand your knowledge and experience in various disciplines of law
How can you help?
  • Provide direct client representation
  • Be a mentor to other volunteer attorneys
  • Assist Project staff with intake, case analysis, referral and recruitment of volunteer attorneys
  • Volunteer to work alongside Nassau Suffolk Law Services staff in landlord/tenant court, assist in disability, access to health care, Social Security advocacy, etc
Help is especially needed in the following areas:
  • Matrimonial and Family Law
  • Bankruptcy
  • Guardianships (Article 17A)
  • Foreclosure
  • Consumer Issues
  • Access to Medical Care and Public Benefits
  • Wills, Trusts, and Estates
Take the challenge! You can make a difference. Call Maria Dosso for more information about volunteering. 631 232-2400 x 3369 Each month Nassau Suffolk Law Services celebrates the labors of individual attorneys who have demonstrated an outstanding commitment to the Pro Bono effort and who serve as a role model for the legal profession and its commitment to pro bono work."

Friday, December 8, 2017

MORTGAGE FORECLOSURE - SUMMARY JUDGMENT AGAIN DENIED IF HEARSAY RULES NOT FOLLOWED




Bank of N.Y. Mellon v Alli, 2017 NY Slip Op 0850,1 Decided on December 6, 2017, Appellate Division, Second Department:

"Generally, in moving for summary judgment in an action to foreclose a mortgage, a plaintiff establishes its prima facie case through the production of the mortgage, the unpaid note, and evidence of default" (Deutsche Bank Natl. Trust Co. v Abdan, 131 AD3d 1001, 1002 [internal quotation marks omitted]; see Hudson City Sav. Bank v Genuth, 148 AD3d 687). Where a plaintiff's standing to commence a foreclosure action is placed in issue by a defendant, it is incumbent upon the plaintiff to prove its standing to be entitled to relief (see Deutsche Bank Trust Co. Ams. v Garrison, 147 AD3d 725; Wells Fargo Bank, N.A. v Arias, 121 AD3d 973, 973-974). A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that, when the action was commenced, it was either the holder or assignee of the underlying note (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361-362; U.S. Bank, N.A. v Noble, 144 AD3d 786; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753-754). Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident (see Deutsche Bank Trust Co. Ams. v Garrison, 147 AD3d at 726; U.S. Bank N.A. v Saravanan, 146 AD3d 1010, 1011; Deutsche Bank Natl. Trust Co. v Logan, 146 AD3d 861, 862).

Here, the plaintiff failed to meet its prima facie burden of establishing its standing (see Wells Fargo Bank, N.A. v Talley, 153 AD3d 583). In support of its motion, the plaintiff submitted the affidavit of Dara Foye, a document coordinator for Bayview Loan Servicing, LLC (hereinafter Bayview), the loan servicer. Foye averred, based on her review of Bayview's business records, that the original, endorsed consolidated note was delivered to the plaintiff on January 24, 2007, and that the plaintiff "maintained possession of the original note since that date up until and including the date the action was commenced on May 24, 2010." However, the plaintiff failed to demonstrate the admissibility of the records relied upon by Foye under the business records exception to the hearsay rule (see CPLR 4518[a]), since Foye did not attest that she was personally familiar with the record-keeping practices and procedures of the plaintiff (see Wells Fargo Bank, N.A. v Talley, 153 AD3d at 583; Arch Bay Holdings, LLC v Albanese, 146 AD3d 849, 853; Aurora Loan Servs., LLC v Baritz, 144 AD3d 618, 620; Deutsche Bank Natl. Trust Co. v Brewton, 142 AD3d 683, 685). The plaintiff also failed to establish its standing based on the purported assignment of the note and mortgage to it by MERS, as it failed to submit any evidence establishing delivery or assignment of the note to MERS prior to its execution of the assignment to the plaintiff (see Arch Bay Holdings, LLC v Albanese, 146 AD3d at 853). Since the plaintiff failed to meet its prima facie burden, the Supreme Court should have denied those branches of its motion which were for summary judgment on the complaint insofar as asserted against the defendants and for an order of reference, without regard to the sufficiency of the defendants' opposition papers (see Alvarez v Prospect Hosp., 68 NY2d 320, 324)."

Thursday, December 7, 2017

DIVORCE - A SUGGESTION WHEN SUBMITTING SEPARATION AGREEMENTS



It has been suggested to add Tables of Contents to Stipulations of Settlements/Separation Agreements. A Table of Contents makes it much easier for the clerk to locate the necessary provisions in the lengthy Stipulations/Agreements that need to be reviewed when the Judgments of Divorces are being processed. That in turn makes the review process go faster and could result in the Judgments being processed faster.

Wednesday, December 6, 2017

A LENGTHY COMMERCIAL FORECLOSURE



JP Morgan Chase Bank, NA v Adventure Corp., 2017 NY Slip Op 08358, Decided on November 29, 2017,  Appellate Division, Second Department:

"In 2007, the plaintiff commenced this action against Adventure Corp. (hereinafter the defendant), among others, to foreclose a mortgage. The defendant failed to answer the complaint or appear in the action. Summary judgment on the complaint was thereafter awarded to the plaintiff, and a referee was appointed to compute the amount due under the mortgage loan, by order entered January 27, 2014. A judgment of foreclosure and sale was entered on September 16, 2015.


The defendant subsequently moved, inter alia, pursuant to CPLR 5015(a) and 317 to vacate the order entered January 27, 2014, and the judgment of foreclosure and sale, and pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against it. The Supreme Court denied the motion, and the defendant appeals.


The Supreme Court improperly denied, without a hearing, the subject branches of the defendant's motion. The defendant asserted that the plaintiff failed to properly serve it with process and that it did not receive notice of the action in time to defend it. "Ordinarily, the affidavit of a process server constitutes a prima facie showing of proper service" (FV-1, Inc. v Reid, 138 AD3d [*2]922, 923; see Bank of America, N.A. v Latif, 148 AD3d 967, 968). Here, however, questions of fact exist as to whether proper service was effected upon the Secretary of State as the defendant's agent, pursuant to Business Corporation Law § 306(b)(1). In particular, the process server's affidavit was ambiguous as to whether "duplicate copies" of process were delivered to the Secretary of State as required by Business Corporation Law § 306(b)(1). Under the circumstances, a hearing was required on the issue of whether the defendant was properly served with process.


Accordingly, we reverse the order, and remit the matter to the Supreme Court, Nassau County, to conduct a hearing to determine whether service of process was properly effected upon the defendant, and for a new determination thereafter of those branches of the defendant's motion which were pursuant to CPLR 5015(a) and 317 to vacate the order entered January 27, 2014, and the judgment of foreclosure and sale, and pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against it."


NOTE: This property is actually a single family home in Glen Cove New York. Further research revealed that a Chapter 11 was filed during the pendency of this appeal in EDNY. See Case 8-17-74506-ast    Doc 1    Filed 07/25/17    Entered 07/25/17 09:52:14

Tuesday, December 5, 2017

CAREGIVER DESIGNATION



At the end of January 2005, Governor Pataki signed into law a bill that created a “Designation of Person in Parental Relation” section in New York’s General Obligation Law. The General Obligations Law includes statutes about powers of attorney. This new law creates a limited parental power of attorney by legalizing the common practice of parents writing notes to schools or to medical providers in order to permit other persons to assume responsibility for children.

A form can be found at this link:

http://www.ocfs.state.ny.us/main/Forms/kinship/OCFS-4940%20Designation%20of%20Person%20in%20Parental%20Relationship.pdf

Monday, December 4, 2017

FREE MORTGAGE FORECLOSURE CLINIC TODAY



I will be volunteering today at the Nassau County Bar Association's free clinic for Mortgage Foreclosure, Bankruptcy and Superstorm Sandy issues, from 3pm to 6pm.

For more information, contact Nassau County Bar Association, 15th and West Streets, Mineola, NY 11501 at (516) 747-4070

Thursday, November 30, 2017

MORTGAGE FORECLOSURE - RECOMPUTING INTEREST DUE AND COUNSEL FEES



Greenpoint Mtge. Corp. v Lamberti, 2017 NY Slip Op 08353, Decided on November 29, 2017, Appellate Division, Second Department:

"This is an action to foreclose a mortgage on real property owned by the defendant Mary M. Lamberti (hereinafter the defendant) in Woodbury. The Supreme Court granted the motion of the plaintiff PE-NC, LLC (hereinafter PE-NC), the current holder of the note and mortgage, for summary judgment on the complaint, and appointed a Referee to compute the amount due pursuant to the note and mortgage. Following a hearing, the Referee issued a report finding, inter alia, that $1,134,630.81 was due and owing to PE-NC, inclusive of counsel fees and interest on the unpaid balance, on counsel fees, and on money advanced to protect the lender's rights in the property. PE-NC moved to confirm the Referee's report and the computation contained therein and for leave to enter a judgment of foreclosure and sale. The defendant cross-moved to reject the report. In an order entered February 26, 2015, the court granted PE-NC's motion and denied the defendant's cross motion. Thereafter, in a judgment of foreclosure and sale entered July 13, 2015, the court, upon the order, confirmed the report, awarded PE-NC the sum of $1,134,630.81, and directed that the subject property be sold. The defendant appeals. We reverse the judgment insofar as appealed from and [*2]remit the matter to the Supreme Court, Nassau County, for the Referee to recompute the amount due and for the court to determine the reasonableness of the counsel fees included in the Referee's computation, following a hearing on the issue, if necessary.
The Referee must recompute the amount due. "In an action of an equitable nature, the recovery of interest is within the court's discretion. The exercise of that discretion will be governed by the particular facts in each case, including any wrongful conduct by either party" (Dayan v York, 51 AD3d 964, 965 [citations omitted]; see CPLR 5001[a]). Here, in view of the lengthy delay by PE-NC's predecessors in interest in prosecuting this action, PE-NC should recover no interest for the roughly three-year period of time from when the action was commenced in 2005 to when the defendant filed a request for judicial intervention in 2008. While PE-NC did not cause this delay, it should not benefit financially, in the form of accrued interest, from this delay caused by its predecessors in interest. Furthermore, PE-NC should not recover interest on the counsel fees awarded to it. Paragraphs 7 and 21 of the mortgage are inconsistent regarding whether interest could be recovered on counsel fees. Since "ambiguities in a contractual instrument will be resolved contra proferentem, against the party who prepared or presented it" (151 W. Assoc. v Printsiples Fabric Corp., 61 NY2d 732, 734), this ambiguity must be resolved against PE-NC, whose predecessors in interest presented the mortgage. Moreover, interest awarded under paragraph 7 of the mortgage, on money advanced to protect the lender's rights in the property, should not have been awarded at the rate of 17%, but at the "Note rate," which, in this case, was 7.25%.
"An award of an attorney's fee pursuant to a contractual provision may only be enforced to the extent that the amount is reasonable and warranted for the services actually rendered. In determining reasonable compensation for an attorney, the court must consider such factors as the time, effort, and skill required; the difficulty of the questions presented; counsel's experience, ability, and reputation; the fee customarily charged in the locality; and the contingency or certainty of compensation" (Vigo v 501 Second St. Holding Corp., 121 AD3d 778, 779-780 [citation omitted]; see SO/Bluestar, LLC v Canarsie Hotel Corp., 33 AD3d 986, 988). In this case, a determination must be made on the reasonableness of the counsel fees, following a hearing on that issue, if necessary.
The defendants' remaining contentions, including those concerning an intermediate order dated June 13, 2014, which are brought up for review on this appeal from the judgment of foreclosure and sale (see CPLR 5501[a][1]; Greenpoint Mortgage Corp. v Lamberti, _____ AD3d _____ [Appellate Division Docket No. 2014-08300; decided herewith]), are without merit."

Wednesday, November 29, 2017

CONTEMPT - NON PAYMENT OF CHILD SUPPORT



Avraham v Avraham, 2017 NY Slip Op 08253, Decided on November 22, 2017, Appellate Division, Second Department:

"Appeal by the plaintiff from an order of the Supreme Court, Kings County (Eric I. Prus, J.), dated June 9, 2015. The order granted that branch of the defendant's motion which was to hold the plaintiff in contempt for failing to pay the full amount of child support required under pendente lite orders dated July 26, 2012, and January 29, 2013, respectively.

ORDERED that the order dated June 9, 2015, is affirmed, with costs.

Contrary to the plaintiff's contention, the applicable standards in this case were those of civil, not criminal, contempt, as the Supreme Court gave the plaintiff the opportunity to purge his contempt and thereby avoid incarceration by paying his child support arrears in full (see Matter of Rubackin v Rubackin, 62 AD3d 11, 16; New York City Tr. Auth. v Transport Workers Union of Am., AFL-CIO, 35 AD3d 73, 86). The defendant established by clear and convincing evidence that there was "an unequivocal mandate" that the plaintiff pay the sum of $1,400 per month in pendente lite child support, that the plaintiff had knowledge of that mandate, that the plaintiff disobeyed that mandate, and that this disobedience prejudiced the defendant (El-Dehdan v El-Dehdan, 114 AD3d 4, 16, affd 26 NY3d 19; see Matter of Hughes v Kameneva, 96 AD3d 845, 846). The defendant was not required to show that she had exhausted other enforcement remedies before moving to hold the plaintiff in contempt (see L 2016, ch 365, §§ 1, 2; Cassarino v Cassarino, 149 AD3d 689, 691). The burden then shifted to the plaintiff either to refute the defendant's showing or to establish a defense (see El-Dehdan v El-Dehdan, 114 AD3d at 17). The plaintiff failed to raise a factual dispute as to the amount of the arrears, and thus, contrary to his argument, no hearing was required on this issue (see id. at 18). A hearing was not required on the plaintiff's defense that he could not afford to pay $1,400 per month in child support. The facts underpinning this defense were addressed at a trial before a special referee, and the court was not required to hold a new hearing on this issue (see CPLR 4403). Accordingly, the court providently exercised its discretion in finding the plaintiff in civil contempt without holding a new hearing on that branch of the defendant's motion (see El-Dehdan v El-Dehdan, 114 AD3d at 16-17; Matter of Hughes v Kameneva, 96 AD3d at 846)."

Tuesday, November 28, 2017

ETHICS - ATTORNEY AS BROKER AND ATTORNEY



Can an attorney serve as lawyer and broker in same real estate transaction? According to New York State Bar Association Committee on Professional Ethics Opinion 1117 (4/4/17), a lawyer who receives a broker’s commission in a real estate transaction may not also serve as the lawyer for the buyers, even if the buyers are long-time clients and friends and have requested both kinds of services and even if the legal services are provided pro bono.

"Such personal interest conflicts are generally present when a lawyer provides brokerage services as well as legal services in the same real estate transaction. We have opined on numerous occasions that a lawyer may not act as an attorney on behalf of any party to a real estate transaction in which the lawyer is also acting as a broker. See, e.g. N.Y. State 1013 ¶ 1 (2014); N.Y. State 933 ¶ 7 (2012); N.Y. State 919 ¶ 3 (2012). In N.Y. State 753 (2002), we explained our reasoning:

The rationale for these opinions is that a lawyer should not have a personal stake in the advice rendered, and a broker who is paid only if the transaction closes cannot be fully independent in advising the client as a lawyer.

See also N.Y. State 1015 (2014) (quoting N.Y. State 753 and citing later opinions)."

Monday, November 27, 2017

DIVORCE - DIVIDING ASSETS WHEN ONE SPOUSE COMMITS CRIME



LINDA G. v. James G., 2017 NY Slip Op 7968 - NY: Appellate Div., 1st Dept. 2017:

".......

In 2010, the husband was indicted on charges of conspiracy and insider trading. At trial, the husband maintained his innocence and claimed that a woman with whom he was having an affair stole his BlackBerry and used the information to engage in insider trading. He was found guilty and served a one year and one day sentence in federal prison from May 2010 through January 2011. The SEC investigation and criminal trial depleted the joint assets of the parties. The divorce proceedings started on January 26, 2010.
........

Section 236(B)(5)(d) of the Domestic Relations Law, which specifies the factors to be considered in making an award of equitable distribution, includes a catch-all provision that empowers a court to look at "any other factor which the court shall expressly find to be just and proper" (DRL § 236[B] [5][d][14]). However, marital fault may not be considered as "just and proper" except in "a truly exceptional situation, due to outrageous or conscience-shocking conduct on the part of one spouse, that will require the court to consider whether to adjust the equitable distribution of the assets" (Howard S. v Lillian S., 14 NY3d 431, 436 [2010] [adultery, by itself, is not egregious conduct]; Havell v Islam, 301 AD2d 339 [1st Dept 2002] [malicious assault of a spouse in the proximity of children amounts to egregious conduct]; Pierre v Pierre, 145 AD3d 586 [1st Dept 2016] [stabbing and physically assaulting wife is egregious conduct]).

Supreme Court took into account the husband's "adulterous and criminal behavior" in awarding the wife 75% of the marital home. The husband's adulterous conduct is not sufficiently egregious and shocking to the conscience to justify making an unequal distribution of the marital home. However, we hold that the impact of the husband's criminal conduct on the family may be considered in making an unequal distribution. In Kohl v Kohl (6 Misc 3d 1009[A], 2004 NY Slip Op 51759[U], *24 [Sup Ct, NY County 2004], affd 24 AD3d 219 [1st Dept 2005]), the wife sought an unequal distribution of the marital estate based on the husband's criminal conviction. The trial court denied the request as the father supported his family by borrowing money from friends and business acquaintances until such time that he was able to resume his career (id. at *25). The husband accepted a plea that allowed him to resume his career and business (id.). Within a few years after his indictment, he was earning as much income as he had prior to the criminal proceeding (id.). Also, the parties' standard of living did not change as a result of the husband's actions (id.). On that record, we affirmed the distribution of the value of the parties' residences at 50%/50% (id. at *25, 26, 27).

Unlike Kohl, the record in this case supports an unequal distribution. The parties were required to spend down their savings from 2007 through 2010 when the husband was forced to resign due to the SEC investigation. He refused to take a plea bargain and insisted on going to trial, blaming a woman with whom he had an extramarital affair for his insider trading. He was convicted of a felony and lost his license to practice law. The husband's post-incarceration earnings at the time of the trial dropped significantly to less than 20% of his prior income. His income never returned to the level he earned prior to the conviction. As a result of the husband's criminal actions, the wife, who had left a lucrative career to raise their children, was compelled to return to work after being out of the work force for almost a decade. This meant that the wife could no longer remain at home with the children. During this time, the younger son suffered from psychiatric issues and the older son from significant emotional issues.

In short, the husband's insider trading, and ensuing criminal trial, conviction and incarceration caused the family to undergo financial losses and a substantial decrease in the standard of living. These events also significantly disrupted the family's stability and well-being. Based on our review of the record, we find that a 60%/40% equitable division of the value of the marital estate is just and proper when taking into account the hardship that the husband put his family through as a result of his volitional and irresponsible behavior."

Tuesday, November 21, 2017

THE MORTGAGE MODIFICATION SCAMS ARE STILL WAITING FOR YOU



Yesterday at the Mortgage Foreclosure Clinic at the Nassau County Bar Association, I consulted with a client who appeared to have been scammed. Several thousand dollars were paid to either an attorney or a company to seek a modification of the mortgage payments while a foreclosure action was commenced. Although this attorney or company prepared an answer for the homeowner: (1) the answer was a pro se answer and there was no attorney appearance (2) the homeowner was advised not to attend the settlement conference and (3) although a motion was thereafter made by the bank for summary judgment, the homeowner was assured that the modification papers were submitted and that no further papers need to be submitted - of course, the motion for summary judgment was granted. Although it appeared the client did not have any real defense and the real problem was home affordability, nevertheless, monies were paid to an apparent scam and the client was advised to file appropriate complaints.

ALERT:

1. If you are working with an attorney, make sure there is a written retainer agreement which outlines the duties and scope of representation.

2. Attend all scheduled court appearances.

3. Follow your case on New York State E Courts. You can sign up for an email track of the case.
eTrack is a case tracking service which enables you to track active Civil Supreme Court cases from all 62 counties of New York State, and cases from all currently available Local Civil and Criminal Courts.

For further information on such scams and what to do, see

http://www.preventloanscam.org/states/new-york#Long%20Island

Monday, November 20, 2017

ON NEW YORK'S NEW "SEALING RULE"



In today's Newsday, the main story discussed a new state law aimed at giving nonviolent offenders a clean slate. As of October 7, 2017, New York courts may expunge eligible offenses under Section 160.59 of the Criminal Procedure Law.

The Law Offices of Robert Briere, a ​New York City Criminal Defense Lawyer,  ​30 Wall Street, New York, NY 10005, had noted on their web site that CPL 160.05 was not the only statute dealing with the sealing of criminal records:

"Remember that CPL 160.59 requires a ten year waiting period before the conviction can be sealed. So, in the meantime, what records can be sealed in New York before the ten year period has run?

Prior to the ten year period running, a record of a criminal conviction, which is any misdemeanor or felony except a youthful offender adjudication, cannot be sealed and is considered a public record available to anyone through the OCA website for a $55 fee. It does not matter if the person had the charge reduced from a felony to a misdemeanor or only received probation. There are no exceptions to the rule.

In New York, the only records that get completely sealed outside of the provisions of CPL 160.59 (pursuant to CPL 160.50) are cases that result in complete dismissals including:

ACD's and other forms of dismissals and acquittals. whenever a case is fully dismissed either through an ACD an acquittal after trial or if the case is dismissal in the interests of justice for dismissed for facial insufficiency...whatever the reason for the dismissal... these get the full sealing treatment of CPL 160.50. On the other hand, charges that are reduced from a misdemeanor or felony to a violation or infraction get the partial seal treatment of CPL 160.55.

How does sealing of a New York Record differ between CPL 160.59 and CPL 160.50 and CPL 160.55?

A sealing under CPL 160.59 occurs upon application of a person with two or less criminal convictions and no more than one felony conviction (that are at least ten years old) pursuant to the process outlined above. A sealing under 160.50 occurs in New York when a criminal charge is dismissed completely, while a sealing under 160.55 occurs when a criminal charge is reduced from a misdemeanor or felony to a violation or infraction.

A sealing under CPL 160.50 is the most favorable of the three since the 160.50 sealing mandates destruction of the arrest record and the sealing of the court file. A sealing under 160.55 is not as comprehensive as the 160.50 sealing. The 160.55 sealing occurs when someone is arrested or charged with a criminal offense, but is ultimately convicted of a violation or infraction, the sealing of the arrest records is accomplished pursuant to CPL 160.55 (1) (c), which means that records of the arrest, such as mugshots, arrest reports and fingerprints are destroyed but the Court file stays open.

The CPL 160.59 is a hybrid of the 160.50 and the 160.55 as is allows for the court file to be sealed but the arrest records remain unsealed." ​

Friday, November 17, 2017

CAN A LANDLORD EXEMPT RENT REGULATION COVERAGE BY CONVERSION OF UNITS



U 31st ST., LLC v. Montalvo, 2017 NY Slip Op 51435 - NY: Appellate Term, 1st Dept. 2017:

"Landlord's possessory claim, based on allegations that tenant's unregulated lease agreement expired by its terms, is not susceptible to summary disposition. The record presents triable issues of fact as to whether the building in which tenant's apartment was located had at least six residential units on July 1, 1974, or thereafter, and, thus, was subject to rent stabilization (see Rent Stabilization Law [Administrative Code of City of NY] § 26-504[a]; Rent Stabilization Code [9 NYCRR] § 2520.11[d]; Matter of Loventhal Mgt. v New York State Div. of Hous. & Community Renewal, 183 AD2d 415 [1992];see generally Sharabi v Morales, 23 AD3d 544 [2005]).

Pertinent records on file with City agencies, including a 1926 certificate of occupancy and "I-Cards," show that the subject building consisted of six residential units. While landlord and the motion court relied heavily upon a "Maximum Base Rent Building Profile and Owner's Order," issued by the Office of Rent Control, indicating that the building contained five residential units as of January 1, 1972, we do not view this document as dispositive as a matter of law, especially given that an amended certificate of occupancy showing less than six residential units was not issued until 1982 and no alteration permit was filed prior to 1980. Thus, it is unclear if the reduction from six units to five, which occurred at some undetermined time between 1926 and 1972, was the result of a legal conversion (see Matter of Loventhal Mgt. v New York State Div. of Hous. & Community Renewal, 183 AD2d at 415 [illegal renovation cannot be used by landlord as a basis to exempt the premises from coverage under the Rent Stabilization Law]). In the circumstances, the issue of whether the building contained six residential units on or after July 1, 1974, must be resolved at trial."

Thursday, November 16, 2017

STUDENT MENTORS



This morning I will be a Student Mentor.

One of the Pro Bono & Volunteer Opportunities sponsored by the Nassau County Bar Association is the Student Mentor Program. Attorneys can provide valuable adult guidance and serve as a role model for at-risk middle school students in one-on-one sessions at a local middle school. The commitment is twice a month for less than an hour and Mentors are always in demand.

Contact Demi Tsiopelas at NCBA 516-747-4070 or dtsiopelas@nassaubar.org

Wednesday, November 15, 2017

WHEN LANDLORD DOES NOT GIVE A WRITTEN RENT RECEIPT



NY Real Prop L § 235-e imposes a duty  upon a landlord to provide tenant with a written receipt when a personal check is not used for payment:

"(a) Upon the receipt of rent for residential premises in the form of cash or any instrument other than the personal check of the tenant, it shall be the duty of the landlord to provide the payor with a written receipt containing the following:

1. The date;
2. The amount;
3. The identity of the premises and period for which paid; and
4. The signature and title of the person receiving the rent."

But what if a landlord fails or refuses to give a written receipt. The statute provides no penalty and this was addressed in Robinson v. Robles, 28 Misc. 3d 868 - NY: City Court 2010:

"The Attorney General considered the absence of "a specific penalty for a landlord's breach of the created duty" in the statute to be a defect, but urged that the problem be remedied later.[18] Unfortunately, after the passage of almost 30 years and two amendments expanding the scope of Real Property Law § 235-e,[19] we are still without statutory sanctions for a landlord's failure to provide a written receipt.[20] During that time, this statutory vacuum has been filled by court decisions imposing various judicial remedies.[21]

One court has held that failure to comply with the statute "may be considered in weighing the testimony of the landlord... and where the landlord has clearly violated Real Property Law § 235-e, the doubt should be resolved in favor of the tenant."[22] Another found that "where the only evidence before the court is the contradictory statements given under oath by the respective parties, and where the landlord has clearly violated section 235-e of the Real Property Law, the doubt should be resolved in favor of the tenant."[23] A third judge has ruled that a "rebuttable presumption in favor of the tenant as to payment of rent is an appropriate judicial response to a violation of Real Property Law Section 235-e by the landlord."[24] One judge awarded back rent finding there had been substantial compliance with the statute as the landlord gave the tenant monthly statements and the tenant did not deny owing rent or contradict the landlord's testimony.[25] Although none of these remedies have yet to be considered by an appellate court, the issue was recently briefed before the Appellate Division, First Department. The court seems to have implicitly acknowledged the statutory violation while the judges found it unnecessary to consider any remedy for the landlord's "misconduct"[26] due to the tenant's conflicting testimony.

........

The legislature should finally provide for a statutory remedy and insure consistency in application of its provisions statewide by establishing a six-month statute of limitations on actions for past-due rent in cases where the landlord has failed to provide appropriate written rent receipts[38] by adding the following language to Real Property Law § 235-e: "(c) Any action for residential rent under this or any other provision of law wherein the landlord has failed to provide the written receipts required above must be commenced within six months of the alleged default." This amendment would serve as an incentive to provide such proof of payment since landlords who fully comply with Real Property Law § 235-e would be able to avail themselves of the full six-year statute of limitations.[39]"

Tuesday, November 14, 2017

ESTABLISHING IMPROPER SERVICE WHEN SEEKING TO VACATE A DEFAULT JUDGMENT



U.S. Bank, N.A. v Cepeda, 2017 NY Slip Op 07767, Decided on November 8, 2017, Appellate Division, Second Department:

"The plaintiff commenced this action to foreclose a mortgage. The defendant Raymond Cepeda (hereinafter the homeowner) failed to appear or answer the complaint. A judgment of foreclosure and sale was subsequently entered upon his default in answering. The homeowner moved pursuant to CPLR 5015(a)(4) to vacate the judgment of foreclosure and sale for lack of personal jurisdiction. The homeowner asserted that the plaintiff did not exercise due diligence in attempting to make personal service on him before resorting to affix and mail service pursuant to CPLR 308(4). The Supreme Court granted the homeowner's motion, vacated the judgment of foreclosure and sale and, sua sponte, in effect, directed the dismissal of the complaint. We reverse.

Service pursuant to CPLR 308(4) may be used only where personal service under CPLR 308(1) and (2) cannot be made with "due diligence" (CPLR 308[4]; see Deutsche Bank Natl. Trust Co. v White, 110 AD3d 759, 759-760; Estate of Waterman v Jones, 46 AD3d 63, 65). The term "due diligence," which is not defined by statute, has been interpreted and applied on a case-by-case basis (see Estate of Waterman v Jones, 46 AD3d at 66).

Here, the affidavit of the process server demonstrated that three visits were made to the homeowner's residence, each on different days and at different times of the day. The process server also described in detail his unsuccessful attempt to obtain an employment address for the [*2]homeowner, including interviewing a neighbor. Under these circumstances, the Supreme Court improperly concluded that the due diligence requirement was not satisfied (see Lasalle Bank N.A. v Hudson, 139 AD3d 811, 811; Wells Fargo Bank, NA v Besemer, 131 AD3d 1047, 1048; JP Morgan Chase Bank, N.A. v Baldi, 128 AD3d 777, 777-778; Wells Fargo Bank, N.A. v Cherot, 102 AD3d 768; JPMorgan Chase Bank, N.A. v Szajna, 72 AD3d 902; Lemberger v Khan, 18 AD3d 447, 447-448)."

Monday, November 13, 2017

A LONG JOURNEY TO COLLECT LEGAL FEES OWED



In November 2001, the defendant retained the plaintiff (actually predecessor in interest) for a matrimonial.  And 16 years later, the issue of collecting fees due is still at issue. Jones Morrison, LLP v Schloss, 2017 NY Slip Op 07712, Decided on November 8, 2017, Appellate Division, Second Department:

"This action arises out of the entry of a judgment in November 2004 (hereinafter the original judgment), in favor of the plaintiff and against the defendant for unpaid legal fees in the sum of $97,119.17 for services the plaintiff had performed on behalf of the defendant in a matrimonial action. This Court dismissed the defendant's appeal from the original judgment as untimely (see [*2]Jones Sledzik Garneau & Nardone, LLP v Schloss, 37 AD3d 417).

Subsequent to the dismissal of her appeal, the defendant commenced an action against the plaintiff seeking damages for, inter alia, fraud. In July 2008, the Supreme Court, Westchester County (Loehr, J.), granted dismissal of the action on the merits, and this Court affirmed that determination (see Schloss v Jones, 67 AD3d 770). In May 2014, the plaintiff commenced this action by summary judgment in lieu of complaint, seeking a renewal judgment for the unsatisfied portion of the original judgment. The defendant cross-moved, inter alia, to vacate the original judgment. The Supreme Court, Westchester County (Jamieson, J.), granted the plaintiff's motion and denied the defendant's cross motion, noting that the arguments raised by the defendant had been raised in the prior actions. These appeals ensued.

The Supreme Court properly granted the plaintiff's motion for summary judgment and entered a renewal judgment pursuant to CPLR 5014(1). The plaintiff established its prima facie entitlement to a renewal judgment as a matter of law by showing: (1) the existence of the original judgment; (2) that the defendant was the judgment debtor; (3) that the original judgment was docketed at least nine years prior to the commencement of this action; and (4) that the original judgment remains partially or completely unsatisfied (see Rose v Gulizia, 104 AD3d 757, 758; Premier Capital, LLC v Best Traders, Inc., 88 AD3d 677, 678; Schiff Food Prods. Co., Inc. v M & M Import Export, 84 AD3d 1346, 1348).

In opposition, the defendant failed to raise a triable issue of fact. Her arguments in opposition to the motion and in support of her cross motion were or could have been made in the prior actions, and are therefore barred by res judicata (see O'Brien v City of Syracuse, 54 NY2d 353, 357; Schloss v Jones, 67 AD3d at 770; Matter of City of New York v Schmitt, 50 AD3d 1032, 1033)."

Friday, November 10, 2017

VETERAN'S DAY


My father Albert -  eventually a Sargent. Pacific theater.

Thursday, November 9, 2017

WHEN NEIGHBORS FIGHT OVER A FENCE - AND CONTEMPT



This litigation is over a common driveway and the hindrance by one neighbor over the use of it via a fence. It was commenced in 2012 and then settled by stipulation in 2015 as to how the fence would be moved after a survey was done. However, one neighbor, despite the so ordered stipulation, failed to comply with the stipulation and unilaterally removed the fence prior to the survey. That neighbor claimed the other neighbor was stalling with the prerequisite survey and the removal was necessary for safety reasons. A motion for criminal and civil contempt was made.

Dreher v Martinez, 2017 NY Slip Op 07707, Decided on November 8, 2017, Appellate Division, Second Department:

"The imposition of punishment for criminal contempt requires a showing that the alleged contemnor knowingly, wilfully, and contumaciously violated a clear and unequivocal court mandate (see Judiciary Law § 750[A][3]; Wheels Am. N.Y., Ltd v Montalvo, 50 AD3d 1130, 1130-1131; City of Poughkeepsie v Hetey, 121 AD2d 496, 497; Matter of Holtzman v Beatty, 97 AD2d 79, 82). Here, the defendants failed to meet their burden of showing that plaintiff had knowingly, wilfully, and contumaciously violated a clear and unequivocal mandate in a stipulation of settlement, which was agreed to by the parties on August 31, 2015, and so-ordered by the Supreme Court on [*2]October 6, 2015 (hereinafter the settlement agreement) (see Wheels Am. N.Y., Ltd v Montalvo, 50 AD3d at 1130-1131; City of Poughkeepsie v Hetey, 121 AD2d at 497; Matter of Holtzman v Beatty, 97 AD2d at 82).

The defendants also failed to establish that the plaintiff refused or wilfully neglected to obey a clear and unequivocal mandate in the settlement agreement which could give rise to a finding of civil contempt pursuant to CPLR 5104 (see CPLR 5104; Matter of Lombardi v Habicht, 293 AD2d 476, 477). Likewise, the record does not support the defendants' contention that the plaintiff disobeyed a clear and unequivocal mandate in the settlement agreement which defeated, impaired, impeded, or prejudiced the rights of the defendants (see Judiciary Law § 753[A]; Chambers v Old Stone Hill Rd. Assoc., 66 AD3d 944, 946; Denaro v Rosalia, 50 AD3d 727; Hom v Weintraub, 6 AD3d 579, 580). In addition, the record does not indicate that there are any relevant factual issues warranting a hearing (see Jaffe v Jaffe, 44 AD3d 825, 826).

Accordingly, although the Supreme Court properly denied those branches of the defendants' motion which were to hold the plaintiff in criminal contempt pursuant to Judiciary Law § 750(A) and in civil contempt pursuant to CPLR 5104, the court also should have denied that branch of the motion which was to hold the plaintiff in civil contempt pursuant to Judiciary Law § 753."

Wednesday, November 8, 2017

SEEKING A DISMISSAL UNDER CPLR 3215 (c)



CPLR 3215 (c) provides:

"(c) Default not entered within one year.  If the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed.  A motion by the defendant under this subdivision does not constitute an appearance in the action."

But what if the Defendant makes a motion and files a notice of appearance. Bank of Am., N.A. v Rice, 2017 NY Slip Op 0758,1 Decided on November 1, 2017, Appellate Division, Second Department:

"CPLR 3215(c) provides that "[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned . . . unless sufficient cause is shown why the complaint should not be dismissed" (Wells Fargo Bank, N.A. v Bonanno, 146 AD3d 844, 845 [internal quotation marks omitted]; see Pipinias v J. Sackaris &  Sons, Inc., 116 AD3d 749, 750). "The language of CPLR 3215(c) is not, in the first instance, discretionary, but mandatory, inasmuch as courts shall' dismiss claims (CPLR 3215[c]) for which default judgments are not sought within the requisite one-year period, as those claims are then deemed abandoned" (Giglio v NTIMP, Inc., 86 AD3d 301, 307-308; see HSBC Bank USA, N.A. v Grella, 145 AD3d 669, 671; Pipinias v J. Sackaris & Sons, Inc., 116 AD3d at 751).

"Failure to take proceedings for entry of judgment may be excused, however, upon a showing of sufficient cause," which requires the plaintiff to "demonstrate that it had a reasonable [*2]excuse for the delay in taking proceedings for entry of a default judgment and that it has a potentially meritorious action" (Aurora Loan Servs., LLC v Hiyo, 130 AD3d 763, 764; see HSBC Bank USA, N.A. v Grella, 145 AD3d at 671; Pipinias v J. Sackaris Sons, Inc., 116 AD3d at 750). Moreover, "[t]he mere fact that the legislative intent underlying CPLR 3215(c) was to prevent the plaintiffs from unreasonably delaying the determination of an action, does not foreclose the possibility that a defendant may waive the right to seek a dismissal pursuant to the section by his or her conduct" (Myers v Slutsky, 139 AD2d 709, 710). A defendant may waive the right to seek dismissal pursuant to CPLR 3215(c) by serving an answer or taking "any other steps which may be viewed as a formal or informal appearance" (Myers v Slutsky, 139 AD2d at 711; see De Lourdes Torres v Jones, 26 NY3d 742, 772; HSBC Bank USA v Lugo, 127 AD3d 502, 503; Hodson v Vinnie's Farm Mkt., 103 AD3d 549).

Here, the defendant Gustavia Home, LLC, waived its right to seek dismissal of the complaint insofar as asserted against it pursuant to CPLR 3215(c) by filing a notice of appearance (see CPLR 320[a]; Meyers v Slutsky, 139 AD2d 709; cf. HSBC Bank USA, N.A. v Grella, 145 AD3d at 671). Accordingly, the Supreme Court properly denied that branch of its motion which was pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against it as abandoned."

Monday, November 6, 2017

Friday, November 3, 2017

SOME PARENTING ADVICE FROM KINGS COUNTY SURROGATE


Some sound parenting advice which may also apply to parents of non-special needs adults, also from Matter of Michelle M., 2016 NY Slip Op 51114 - NY: Surrogate's Court, Kings 2016:

"It is evident that the petitioners deeply love and care for Michelle, wanting what they believe is best for her. But while parents' desire for peace of mind and natural instinct to protect their loved one may be assuaged by the appointment of a guardian, it is not, however, in the best interest of a person with the capacity to make independent decisions to have her decision making wholly removed through Article 17-A guardianship, no matter how well-intentioned the guardian. The appropriate legal standard is not whether the petitioners can make better decisions than Michelle, it is whether or not Michelle has the capacity to make decisions for herself, albeit with supportive services. See Matter of Raymond J.R., Sur Ct, Kings County, Dec. 9, 2011, L√≥pez Torres, S., File No. 2011-XXX. Upon the record presented, the credible evidence clearly demonstrates that Michelle is an adult who, despite cognitive limitations, has capacity to make decisions affecting the management of her own affairs with the support of her family and supportive services. Like the rest of us, Michelle makes decisions about her affairs — where to live, where to work, what to buy, whom to date — with the advice of those whom she chooses to consult. This does not render her in need of guardianship any more than it does an adult of typical intelligence and functioning who consults with trusted friends and family prior to making important decisions." 


Thursday, November 2, 2017

ARTICLE 17 A: NOT ALL SPECIAL NEEDS ADULTS REQUIRE A GUARDIAN



Matter of Michelle M., 2016 NY Slip Op 51114 - NY: Surrogate's Court, Kings 2016:

"Michelle has an inherent right and ability to make her own choices, with dignity, independence, and support. The long-standing view of plenary guardianship as the best and only mechanism available to meet the needs of every person with intellectual and developmental disabilities is challenged by the emerging recognition that persons with disabilities have varying degrees and areas of functional capacity and need, the availability of less restrictive alternatives to guardianship which provide targeted assistance and supported, instead of substituted, decision making, and the growing emphasis on empowering, integrating, and preserving the rights of persons with mental and physical disabilities. To allow Michelle to retain the legal right to make personal decisions about her own affairs, while providing her with any necessary assistance to make or communicate those decisions in a supported decision-making framework which she already has in place, is ultimately in her best interest.

For all the foregoing reasons, the court finds that petitioners have failed to meet their burden of showing that Michelle is in need of an Article 17-A guardianship. Accordingly, the petition is dismissed."

Wednesday, November 1, 2017

ACTION FOR DAMAGES FOR ILLEGAL APARTMENT



Mateo v. ANOKWURU, 2017 NY Slip Op 27330 - NY: Appellate Term, 1st Dept. 2017:

"Plaintiff-tenant leased a studio apartment in a house owned by defendant-owner. Defendant subsequently relocated plaintiff to a basement "apartment" in the house, which was not a legal residential unit. In March 2014, the New York City Department of Housing Preservation and Development's (HPD) issued a vacate order requiring plaintiff to vacate the basement unit within one day. This action arises from plaintiff's residence in that basement unit.

A fair interpretation of the evidence supports the trial court's conclusion that the conditions in the basement were "deplorable and disgusting." However, the court applied an incorrect measure of damages when it awarded tenant a refund of some 35 months of rent. Having received the benefit of shelter, plaintiff is not entitled to recover the rent paid (see Elkar Realty Corp. v Kamada, 6 AD2d 155 [1958]; Goho Equities v Weiss, 149 Misc 2d 628 [App Term, 1st Dept 1991]; Schotz-Powers Co., Inc. v Treidler, 128 Misc 466 [App Term, 1st Dept 1926]).

When the warranty of habitability is breached, a tenant may seek an abatement irrespective of whether the unit is a lawful dwelling. The correct measure of damages for breach of the warranty of habitability "is the difference between the fair market value of the premises if they had been as warranted, as measured by the rent reserved under the lease, and the value of the premises during the period of the breach" (Park W. Mgt. Corp. v Mitchell, 47 NY2d 316, 329 [1979], cert denied 444 US 992 [1979]). The matter is remanded for a new trial limited to the issue of damages."

Monday, October 30, 2017

HEARSAY AND MORTGAGE FORECLOSURE SUMMARY JUDGMENT

Bank of N.Y. Mellon v Cutler, 2017 NY Slip Op 07424, Decided on October 25, 2017, Appellate Division, Second Department:

"The plaintiff commenced this mortgage foreclosure action following the default of the defendants Gregg E. Cutler and Mirela S. Cutler, also known as Mirela Cutler (hereinafter together the defendants), on a note executed by them in the principal amount of $372,000 and issued in favor of Countrywide Home Loans, Inc., the plaintiff's predecessor in interest. The defendants asserted, inter alia, the defense of lack of standing in their answer. The parties engaged in pretrial disclosure, and the plaintiff subsequently moved, among other things, for summary judgment on the complaint insofar as asserted against the defendants and for the appointment of a referee to facilitate the sale of the property mortgaged by the defendants as security for the debt. The defendants [*2]opposed the motion, inter alia, on the ground that the plaintiff lacked standing to maintain the action, and cross-moved to compel further discovery. The Supreme Court granted those branches of the plaintiff's motion and, apparently in light of that determination, denied the defendants' cross motion. The defendants appeal.

Where, as here, a plaintiff's standing to commence a foreclosure action is placed in issue by the defendant, it is incumbent upon the plaintiff to prove its standing to be entitled to relief (see Bank of N.Y. v Willis, 150 AD3d 652, 652; Citimortgage, Inc. v Klein, 140 AD3d 913, 914; Bank of N.Y. Mellon v Visconti, 136 AD3d 950, 950). A plaintiff has standing in a mortgage foreclosure action where it is the holder or assignee of the underlying note at the time the action is commenced (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361; Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 207-209; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 754). "Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident" (U.S. Bank, N.A. v Collymore, 68 AD3d at 754; see Aurora Loan Servs., LLC v Taylor, 25 NY3d at 361-362).

Here, the plaintiff attempted to establish its standing by submitting the affidavit of Katherine Cacho, a vice president at Bank of America, N.A., which serviced the defendants' loan on behalf of the plaintiff. Cacho averred, in relevant part, that her affidavit was based upon her review of unspecified records indicating that the note was physically transferred to the plaintiff on August 16, 2007. The plaintiff failed to demonstrate that the records relied upon by Cacho were admissible under the business records exception to the hearsay rule (see CPLR 4518[a]) because Cacho did not attest that she was personally familiar with the plaintiff's record-keeping practices and procedures (see Bank of N.Y. v Willis, 150 AD3d at 652; Arch Bay Holdings, LLC v Albanese, 146 AD3d 849; Deutsche Bank Natl. Trust Co. v Brewton, 142 AD3d 683, 685; Aurora Loan Servs., LLC v Mercius, 138 AD3d 650, 652).

Since the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law on the issue of standing, we need not consider the sufficiency of the defendants' opposition papers (see Alvarez v Prospect Hosp., 68 NY2d 320, 324).

Inasmuch as the Supreme Court's denial of the defendants' cross motion to compel further discovery appears to have been premised on its granting of the plaintiff's motion for summary judgment, we remit the matter to that court for a new determination of the cross motion."

Friday, October 27, 2017

WHEN BUYER FAILS TO GET A MORTGAGE COMMITMENT BECAUSE BUYER CAN'T SELL THEIR CURRENT HOME



The standard form residential contract of sale (jointly Prepared by the Real Property Section of the New York State Bar Association, the New York State Land Title Association, the Committee on Real Property Law of the Association of the Bar of the City of New York and the Committee on Real Property Law of the New York County Lawyers' Association) has a clause (if the sale is conditioned on a mortgage) which states in part:

"To the extent a Commitment is conditioned on the sale of Purchaser's current home, payment of any outstanding debt, no material adverse change in Purchaser's financial condition or any other customary conditions, Purchaser accepts the risk that such conditions may not be met;"

That clause came into issue earlier this year in Gonzalez v. CHAR & HERZBERG, LLP, 2017 NY Slip Op 30473 - NY: City Court, Civil Court 2017:

"Plaintiffs received a Mortgage Loan Commitment from loanDepot.com, LLC dated August 29, 2016 (Ex 4). The document listed conditions that had to be met prior to closing and at closing, including that Plaintiffs had to have a contract of sale executed for their current home prior to the closing.

Plaintiffs submitted a "Statement of Credit Denial, Termination or Change" dated September 1, 2016 (Exs 3 & 5) which provided that Plaintiffs application was denied, because the institution did not" . . Grant Credit to Any Applicant on the terms and conditions . . ." requested and that Plaintiffs were unable to meet the condition for sale of their current residence prior to closing.

On September 2, 2016, Plaintiffs' counsel notified Defendant that Plaintiffs' mortgage application had been denied, and requested return of their security deposit (Ex 7). Defendant responded pursuant to a letter dated September 9, 2016, stating the cancellation provision was only contingent upon a commitment letter which had been issued, and advising that they intended to proceed with the scheduled closing on or about September 10, 2016 (Ex 1). Plaintiffs' counsel responded on September 9 that no "firm" commitment has ever been issued and the commitment that was issued had conditions which could not be met. Plaintiffs' counsel again requested return of the funds or stated legal action would be instituted against Defendant as escrow agent (Ex 8).

Further correspondence between counsel ensued. Defendant alleged that the conditions in the original commitment letter could have easily been met, and that Plaintiffs "bad faith" actions resulted in the denial (Ex 9). Defendant set a closing date pursuant to a Time Is of the Essence demand for October 21, 2016 (Ex 11) and stated that failure to close would result in retention of the down payment for breach of contract."

The court held:

"Where, as here, a mortgage commitment letter is revoked after issuance Plaintiffs' right to return of the escrowed down payment turns on whether the commitment revocation and consequent failure of the transaction was attributable to bad faith on the part of the Plaintiffs (Kapur v Stiefel 264 AD2d 602). There is no evidence of any bad faith on the part of Plaintiffs in the underlying record at inquest."

NOTE - an inquest was held. That is because the defendant in this action was the attorney for the seller who was also the escrow agent. The attorney refused service and defaulted. The court awarded a judgment for the down payment plus interest and costs.