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