CHILD CUSTODY - WHO PAYS FOR ATTORNEY FOR CHILD

Matter of Young v Young, 2018 NY Slip Op 03850, Decided on May 30, 2018, Appellate Division, Second Department:

"Courts are authorized to direct that " a parent who has sufficient financial means to do so pay some or all of the [attorney for the child's] fees'" (Pascazi v Pascazi, 65 AD3d 1202, 1203, quoting Matter of Plovnick v Klinger, 10 AD3d 84, 89; see 22 NYCRR 36.4; Judiciary Law § 35[3]; Rupp-Elmasri v Elmasri, 8 AD3d 464; Jain v Garg, 303 AD2d 985, 986; Pascarelli v Pascarelli, 283 AD2d 472). Further, the mere fact that the attorney for the child adopted positions that were not favorable to the father does not demonstrate that the attorney for the child was biased against the father (see Matter of Luizzi v Collins, 60 AD3d 1062, 1063). In custody proceedings, the role of the attorney for the child is to "zealously advocate the child's position," not the positions of the parents (22 NYCRR 7.2[d]). Under the circumstances of this case, we agree with the Family Court's determination to direct the father to pay half of the total amount of counsel fees awarded to the attorney for the child (see Pascazi v Pascazi, 65 AD3d at 1203; Pedreira v Pedreira, 34 AD3d 225; Matter of Plovnick v Klinger, 10 AD3d at 91)."

MORTGAGE FORECLOSURE - STANDING NOT A REAL DEFENSE

I note this case because summary judgment was granted in November 2015: this appeal gave the homeowner at least an additional 2.5 years in the home, if not more. The action was commenced in 2013.

CitiMortgage, Inc. v McKenzie, 2018 NY Slip Op 03659, Decided on May 23, 2018, Appellate Division, Second Department:

"To establish prima facie entitlement to judgment as a matter of law in an action to foreclose a mortgage, a plaintiff must produce the mortgage, the unpaid note, and evidence of default (see Deutsche Bank Natl. Trust Co. v Abdan, 131 AD3d 1001; HSBC Bank, USA v Hagerman, 130 AD3d 683, 683-684; Plaza Equities, LLC v Lamberti, 118 AD3d 688, 689). In addition, "[w]here, as here, 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" (Wells Fargo Bank, N.A. v Arias, 121 AD3d 973, 973-974 [internal quotation marks omitted]; see Security Lending, Ltd. v New Realty Corp., 142 AD3d 986, 987; Deutsche Bank Natl. Trust Co. v Brewton, 142 AD3d 683, 684; Deutsche Bank Natl. Trust Co. v Cunningham, 142 AD3d 634, 635). "A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that, when the action was [*2]commenced, it was either the holder or assignee of the underlying note" (Dyer Trust 2012-1 v Global World Realty, Inc., 140 AD3d 827, 828; see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361-362; Flagstar Bank, FSB v Mendoza, 139 AD3d 898). "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" (Dyer Trust 2012-1 v Global World Realty, Inc., 140 AD3d at 828; see Aurora Loan Servs., LLC v Taylor, 25 NY3d at 361-362).

Here, attached to the plaintiff's complaint was a copy of the underlying note, to which was annexed an allonge dated August 8, 2010. The allonge, which made the note payable to the plaintiff, also bore a separate blank endorsement by the plaintiff making the note payable to bearer. Thus, the plaintiff established, prima facie, that it had standing to commence this action by demonstrating that it was the holder of the note when the action was commenced (see Nationstar Mtge., LLC v Catizone, 127 AD3d 1151, 1152; see also Deutsche Bank Trust Co. Ams. v Garrison, 147 AD3d 725, 726). Additionally, the plaintiff made a prima facie showing of entitlement to judgment as a matter of law by producing the mortgage, the unpaid note, and evidence of default (see Deutsche Bank Natl. Trust Co. v Leigh, 137 AD3d 841, 842). Further, the plaintiff established, prima facie, that it strictly complied with the requirements of RPAPL 1304 (see Citimortgage, Inc. v Banks, 155 AD3d 936; Flagstar Bank, FSB v Mendoza, 139 AD3d at 900).

In opposition, the defendants failed to raise a triable issue of fact (see Onewest Bank, N.A. v Mahoney, 154 AD3d 770, 772)."

MORTGAGE FORECLOSURE - LOST NOTE

Deutsche Bank Natl. Trust Co. v Anderson, 2018 NY Slip Op 03661, Decided on May 23, 2018, Appellate Division, Second Department:

"On July 26, 2006, Floyd Bailey executed a promissory note in the principal sum of $470,250 in favor of IMPAC Funding Corporation, doing business as IMPAC Lending Group (hereinafter IMPAC), which was secured by a mortgage on residential property located in South Ozone Park. Bailey defaulted on the loan by failing to make the monthly installment payment due on December 1, 2007. Thereafter, Bailey died and, by a decree of the Surrogate's Court dated August 23, 2012, the defendant Sandra Anderson was appointed as executrix of his estate. On November 21, 2013, the plaintiff commenced this action to foreclose the mortgage against, among others, Anderson, as executrix of Bailey's estate. After issue was joined, the plaintiff moved, inter alia, for summary judgment on the complaint and for leave to appoint a referee. In support of the motion, the plaintiff asserted, inter alia, that the note had been lost or destroyed and it would seek to prove the promissory note using a lost note affidavit along with a copy of the original note. Anderson opposed the motion. The Supreme Court denied those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against Anderson and for leave to appoint a referee. The plaintiff appeals.

"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, 1001; see Hudson City Sav. Bank v Genuth, 148 AD3d 687). Pursuant to UCC 3-804, which is intended to provide a method of recovery on instruments that are lost, destroyed, or stolen, a plaintiff is required to submit "due proof of [the plaintiff's] ownership, the facts which prevent [its] production of [the note,] and its terms" (UCC 3-804; see Weiss v Phillips, 157 AD3d 1; US Bank N.A. v Richards, 153 [*2]AD3d 522).

Here, the Supreme Court properly concluded that, although the plaintiff was unable to produce the note, a copy of the note submitted by the plaintiff provided sufficient evidence of its terms (see NY Community Bank v Jennings, 2015 NY Slip Op 31591[U], *4 [Sup Ct, NY County]). However, the lost note affidavit of Michael Matz and the affidavit of Debra Lee Wojciechowski, both officers of Bank of America, N.A., the purported servicer of the subject loan, are inconsistent with each other and contain vague and conclusory statements. Matz's affidavit states that the loan servicer "or its predecessor (as servicer or by merger) or the custodian" acquired possession of the note on or before August 4, 2006, and the loss of the note was not due to transfer or seizure. Wojciechowski's affidavit claimed that the loan servicer acquired possession of the lost note affidavit on or before December 28, 2012, and maintained continuous physical possession of the note until the loss occurred. It was not clear when the loan servicer or its agent acquired possession of the note, or whether the loan servicer or an agent of the loan servicer acquired the note. Moreover, Matz's affidavit fails to provide sufficient facts as to when the search for the note occurred, who conducted the search, the steps taken in the search for the note, or when or how the note was lost (see US Bank N.A. v Richards, 155 AD3d 522; Ventricelli v DeGennaro, 221 AD2d 231, 232; Marrazzo v Piccolo, 163 AD2d 369; cf. Citibank, N.A. v Benedict, 2000 WL 322785, 2000 US Dist LEXIS 3815 [SD NY, Mar. 28, 2000, No. 95-CIV-9541(AGS)]). Thus, the affidavits failed to sufficiently establish the plaintiff's ownership of the note."

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MORE ON DEATH OF A PARTY

Wells Fargo Bank, NA v Emma, 2018 NY Slip Op 03728, Decided on May 23, 2018, Appellate Division, Second Department:

"On August 23, 2002, Mary Emma, now deceased (hereinafter the decedent), executed a consolidated note and mortgage on real property located in Staten Island (hereinafter the property) in favor of nonparty Washington Mutual Bank, FA. In January 2006, the decedent transferred title to the property to her son, the defendant Leonard Emma (hereinafter the defendant). On February 18, 2007, the decedent passed away. On December 24, 2013, the plaintiff commenced this action to foreclose the consolidated mortgage against, among others, the defendant, alleging that the plaintiff was the holder of the consolidated note and mortgage. Thereafter, the plaintiff moved to vacate a stay, which was imposed by the Supreme Court due to the death of the decedent, and for leave to enter a default judgment and an order of reference. In an order dated September 3, 2015, the court denied the plaintiff's motion. The plaintiff appeals from the order.

Pursuant to CPLR 1015(a), "[i]f a party dies and the claim for or against him [or her] is not thereby extinguished the court shall order substitution of the proper parties" (emphasis added). "Generally, the death of a party divests a court of jurisdiction to act, and automatically stays proceedings in the action pending the substitution of a personal representative for the decedent" (Neuman v Neumann, 85 AD3d 1138, 1139). Here, the decedent's death did not divest the court of jurisdiction and warrant the imposition of a stay, since the decedent is not a party in this action (see Sample v Temkin, 87 AD3d 686, 687-688). Moreover, since the decedent made an absolute conveyance of all her interest in the property to the defendant and the plaintiff elected not to seek a deficiency judgment against the decedent's estate, the decedent was not a necessary party to the action (see Wells Fargo Bank, N.A. v Bachmann, 145 AD3d 712, 714; HSBC Bank USA v Ungar Family Realty Corp., 111 AD3d 673). Accordingly, the Supreme Court should have granted that [*2]branch of the plaintiff's motion which was to vacate the stay."

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DIVORCE - AWARDING COUNSEL AND EXPERT FEES

Greco v Greco, 2018 NY Slip Op 03509, Decided on May 16, 2018, Appellate Division, Second Department:

"The parties were married in 1999 and have two children together. In May 2010, the plaintiff commenced this action for a divorce and ancillary relief. Following a custody trial, the plaintiff was awarded full custody of the children. Thereafter, a trial was held on the financial issues, and the Supreme Court issued a judgment of divorce. Following the conclusion of the trial on financial issues, the defendant moved for awards of counsel fees and expert witness fees. The court granted those branches of the motion which were for awards of counsel fees in the sums of $70,000 payable to Lawrence J. Glynn and $37,500 payable to John A. Gemelli, and for an award of expert witness fees in the sum of $12,700 payable to the defendant. The plaintiff appeals.

In a matrimonial action, an award of counsel fees is a matter committed to the sound discretion of the trial court (see Montoya v Montoya, 143 AD3d 865, 865; Vitale v Vitale, 112 AD3d 614, 614-615). However, court rules impose certain requirements upon attorneys who represent clients in domestic relations matters (see 22 NYCRR part 1400). These rules were designed to [*2]address abuses in the practice of matrimonial law and to protect the public, and the failure to substantially comply with the rules will preclude an attorney's recovery of a fee from his or her client (see Montoya v Montoya, 143 AD3d at 865; Hovanec v Hovanec, 79 AD3d 816, 817; Pillai v Pillai, 15 AD3d 466; Bishop v Bishop, 295 AD2d 382) or from the adversary spouse (see Rosado v Rosado, 100 AD3d 856; Wagman v Wagman, 8 AD3d 263). A showing of substantial compliance must be made on a prima facie basis as part of the moving party's papers (see Montoya v Montoya, 143 AD3d at 866; Gottlieb v Gottlieb, 101 AD3d 678, 679).

Here, the evidence proffered by the defendant in support of that branch of her motion which was for an award of counsel fees for work performed by Glynn demonstrates that Glynn failed to substantially comply with the rules requiring periodic billing statements at least every 60 days (see 22 NYCRR 1400.2, 1400.3[9]; Montoya v Montoya, 143 AD3d at 866; Rosado v Rosado, 100 AD3d at 856; Gahagan v Gahagan, 51 AD3d 863). Accordingly, the Supreme Court erred in granting that branch of the defendant's motion which pertains to Glynn's counsel's fees. However, the evidence before the court showed that Gemelli substantially complied with the rules (see Matter of Felix v Felix, 110 AD3d 805, 806). Accordingly, we agree with the court's determination to grant that branch of the defendant's motion which pertains to Gemelli's counsel fees.

"The award of expert witness fees in a matrimonial action is left to the sound discretion of the trial court, and should be made upon a detailed showing of the services to be rendered and the estimated time involved" (Vistocco v Jardine, 116 AD3d 842, 844). "Absent affidavits from the expert witnesses at issue, the Supreme Court lacks a sufficient basis to grant a motion for the award of such fees" (Avello v Avello, 72 AD3d 850, 852; see Corrao v Corrao, 209 AD2d 573, 574; Ahern v Ahern, 94 AD2d 53, 58). Here, the defendant failed to submit such expert affidavits. Thus, the Supreme Court improvidently exercised its discretion in awarding the defendant expert witness fees."

CHILD CUSTODY - A CHANGE IN CIRCUMSTANCES

Matter of Edwards v Edwards, 2018 NY Slip Op 03524, Decided on May 16, 2018, Appellate Division, Second Department:

"Where modification of an existing custody arrangement is sought, the petitioner must make a showing that there has been a change in circumstances such that modification is necessary to protect the best interests of the child (see Matter of Nixon v Ferrone, 153 AD3d 625, 626; Matter of Scott v Powell, 146 AD3d 964, 965; Matter of Zall v Theiss, 144 AD3d 831, 832). In determining whether such a change has occurred, the court should consider the totality of the circumstances (see Matter of Moore v Gonzalez, 134 AD3d 718, 719; Matter of Connolly v Walsh, 126 AD3d 691, 693; Matter of Miedema v Miedema, 125 AD3d 971, 971).

As custody determinations largely depend upon the Family Court's assessments of [*2]the credibility, character, temperament, and sincerity of the parties, the Family Court's findings should be accorded great weight and its determination not disturbed unless it lacks a sound and substantial basis in the record (see Eschbach v Eschbach, 56 NY2d 167, 173; Matter of Harrison v McClellan, 151 AD3d 723, 723; Matter of Lao v Gonzales, 130 AD3d 624, 625).

Here, the father established a change in circumstances such that modification of the existing custody arrangement between the parties was necessary to protect the interests of the children. The Family Court's determination to award sole custody of the children to the father is supported by a sound and substantial basis in the record (see Matter of Feliccia v Spahn, 108 AD3d 702, 703; Matter of DeViteri v Saldana, 95 AD3d 1221, 1222). The record demonstrates that the mother interfered in the relationship between the father and the children in a manner inconsistent with the best interests of the children, and also demonstrates that the father is more likely than the mother to foster a relationship between the children and the noncustodial parent (see Musachio v Musachio, 137 AD3d 881, 883; Matter of Feliccia v Spahn, 108 AD3d at 703)."

MORE ON VACATING DEFAULT

Nationstar Mtge., LLC v Dekom, 2018 NY Slip Op 03533, Decided on May 16, 2018, Appellate Division, Second Department:

"We agree with the Supreme Court's rejection of the defendant's claim of lack of personal jurisdiction. A process server's affidavit of service constitutes prima facie evidence of [*2]proper service (see Summitbridge Credit Invs., LLC v Wallace, 128 AD3d 676; JPMorgan Chase Bank, N.A. v Todd, 125 AD3d 933). "Although a defendant's sworn denial of receipt of service generally rebuts the presumption of proper service established by a process server's affidavit and necessitates an evidentiary hearing, no hearing is required where the defendant fails to swear to specific facts to rebut the statements in the process server's affidavits" (Deutsche Bank Natl. Trust Co. v Quinones, 114 AD3d 719, 719 [internal quotation marks omitted]; see Bank of N.Y. v Samuels, 107 AD3d 653). Affix and mail service pursuant to CPLR 308(4) may be used only where service under CPLR 308(1) by personal delivery or CPLR 308(2) by delivery to a person of suitable age and discretion cannot be made with due diligence (see CPLR 308[4]; 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). As a general matter, the "due diligence" requirement may be met with "a few visits on different occasions and at different times to the defendant's residence or place of business when the defendant could reasonably be expected to be found at such location at those times" (id.; see Deutsche Bank Natl. Trust Co. v White, 110 AD3d at 760). In this case, the plaintiff submitted affidavits from the process server which demonstrated that four visits were made to the defendant's residence at different times when the defendant could reasonably have been expected to be found at home. The process server also described the means she used to verify the defendant's residential address, and described her unsuccessful attempt to ascertain the defendant's place of employment. We agree with the Supreme Court that the affidavits constituted prima facie evidence that the due diligence requirement was satisfied (see JP Morgan Chase Bank, N.A. v Baldi, 128 AD3d 777, 777-778). The affidavits also constituted prima facie evidence that the process server properly affixed a copy of the summons and complaint to the door of the defendant's residence, and mailed a copy to the residence by first class mail. Contrary to the defendant's contention, he failed to rebut the presumption of proper service arising from the process server's affidavits. Further, the summons contained statutorily mandated language warning the defendant that the failure to serve an answer to the complaint may result in a default judgment and advising him to speak to an attorney (see generally RPAPL 1320).

We agree with the Supreme Court's denial of the defendant's motion, in effect, to vacate his default in answering, and his motion to vacate the default judgment and/or stay its enforcement, since he failed to proffer a reasonable excuse for his default (see Wells Fargo Bank, N.A. v Mazzara, 124 AD3d 875, 875, citing Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141). In view of the lack of a reasonable excuse, it was unnecessary for the Supreme Court to consider whether the defendant demonstrated the existence of a potentially meritorious defense (see Wells Fargo Bank, N.A. v Mazzara, 124 AD3d at 875)."

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SEEKING VISITATION WHILE INCARCERATED

Matter of Irizarry v Jorawar, 2018 NY Slip Op 03360, Decided on May 9, 2018, Appellate Division, Second Department:

"The mother and the father are the parents of two minor children. The father has been incarcerated since December 2005 for his conviction of murder in the second degree. His earliest possible parole date is in 2023. He last saw the children in 2007 or 2008, when they were both under five years old. In 2008, the mother was granted an order of protection against the father for threats he allegedly made against her by mail and telephone. Other than an exchange of correspondence between the father and the mother and children several years ago, there had been no communication between the father and the children since 2010. In 2014, the father filed a petition for visitation with the children. After a fact-finding hearing, at which the forensic evaluator, the mother, and the father testified, the Family Court determined that visitation between the father and the children was not in the children's best interests and directed, instead, that the father be permitted to send mail correspondence to the children at an address to be provided by the mother. The father appeals.

Initially, contrary to the mother's contention, the father is aggrieved by the order since it did not award him the complete relief he requested (see CPLR 5511; Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d 539, 544-545).

The Family Court properly denied that branch of the father's petition which sought in-person visitation. The paramount concern when making a visitation determination is the best interests of the children under the totality of the circumstances (see Matter of Wilson v McGlinchey, 2 NY3d 375, 380-381; Matter of Diaz v Garcia, 119 AD3d 682; Matter of Boggio v Boggio, 96 AD3d 834). "[V]isitation with a noncustodial parent is presumed to be in the best interests of a child, even when that parent is incarcerated" (Matter of Georghakis v Matarazzo, 123 AD3d 711; [*2]see Matter of Granger v Misercola, 21 NY3d 86, 90; Matter of Franklin v Richey, 57 AD3d 663, 664). That presumption may be rebutted, however, by demonstrating, by a preponderance of the evidence, that "under all the circumstances visitation would be harmful to the child's welfare, or that the right to visitation has been forfeited" (Matter of Granger v Misercola, 21 NY3d at 91). Here, there is a sound and substantial basis in the record for limiting the father's contact with the children to mail correspondence (see Matter of Granger v Misercola, 96 AD3d 1694, 1695, affd 21 NY3d 86). A preponderance of the evidence demonstrated that visitation would be harmful to the children's welfare."

WHAT IS A FAMILY OFFENSE?

Matter of Lashlee v Lashlee, 2018 NY Slip Op 03362, Decided on May 9, 2018, Appellate Division, Second Department:

"The parties are divorced and have two children together. In April 2016, during the pendency of the divorce action, the petitioner (hereinafter the father) commenced this family offense proceeding against the respondent (hereinafter the mother), alleging that the youngest child "came running over to him, yelling at [him], Mommy said you're nothing but a liar, you don't have a job" and, on another occasion, stated "Mommy said that you kidnapped my brother." The petition alleged, inter alia, that these acts constituted the family offenses of harassment in the first and second degrees. Thereafter, the mother moved, inter alia, pursuant to CPLR 3211(a)(7) to dismiss so much of the petition as alleged that she had committed acts constituting those two family offenses. The Family Court, inter alia, granted those branches of the motion. The father appeals.

In a family offense proceeding, the petitioner has the burden of establishing the offense by a fair preponderance of the evidence (see Family Ct Act § 832; Matter of Davis v Wright, 140 AD3d 753, 754; Matter of Frimer v Frimer, 143 AD3d 895; Matter of Jordan v Verni, 139 AD3d 1067; Matter of Ramdhanie v Ramdhanie, 129 AD3d 737). However, "[a] family offense petition may be dismissed without a hearing where the petition fails to set forth factual allegations which, if proven, would establish that the respondent has committed a qualifying family offense" (Matter of Brown-Winfield v Bailey, 143 AD3d 707, 708; see Matter of Davis v Venditto, 45 AD3d 837). "In determining a motion to dismiss a family offense petition pursuant to CPLR 3211(a)(7), the petition must be liberally construed, the facts alleged in the petition must be accepted as true, and the petitioner must be granted the benefit of every favorable inference'" (Matter of Xin Li v Ramos, 125 AD3d 681, 682, quoting Matter of Arnold v Arnold, 119 AD3d 938, 939).

Contrary to the father's contention, liberally construing the allegations of the family offense petition and giving it the benefit of every possible favorable inference, the petition failed to allege acts which, if committed by the mother, would constitute the family offenses of harassment in the first or second degree (see Family Ct Act § 812[1]; Penal Law §§ 240.25, 240.26). Accordingly, the Family Court properly granted those branches of the mother's motion which were to dismiss so much of the father's family offense petition as alleged that the mother committed acts that constituted the family offenses of harassment in the first and second degrees (see CPLR 3211[a][7]; see Leon v Martinez, 84 NY2d 83)."

DEATH OF A PARTY

American Airlines Fed. Credit Union v Costello, 2018 NY Slip Op 03335, Decided on May 9, 2018, Appellate Division, Second Department:

"The plaintiff commenced this action against, among others, the defendants Michael Costello and Susan Costello (hereinafter together the homeowners) to foreclose a mortgage. In addition to the judicial sale of the subject property, the complaint sought a deficiency judgment against the homeowners.

After the action was commenced, the defendant Michael Costello died. The plaintiff thereafter moved for summary judgment on the complaint and dismissing the affirmative defenses [*2]asserted by the homeowners in their joint answer, and for an order of reference.

.......

As a general matter, "the death of a party divests a court of jurisdiction to act, and automatically stays proceedings in the action pending the substitution of a legal representative for that decedent pursuant to CPLR 1015(a)" (NYCTL 2004-A Trust v Archer, 131 AD3d 1213, 1214; see CPLR 1015, 1021; Aurora Bank FSB v Albright, 137 AD3d 1177, 1178; U.S. Bank N.A. v Esses, 132 AD3d 847, 847-848; JPMorgan Chase Bank, N.A. v Rosemberg, 90 AD3d 713, 714). "[A]ny determination rendered without such a substitution will generally be deemed a nullity" (Singer v Riskin, 32 AD3d 839, 840; see Aurora Bank FSB v Albright, 137 AD3d at 1178; NYCTL 2004-A Trust v Archer, 131 AD3d at 1214).

Here, the defendant Michael Costello died before the plaintiff's motion was made and before the orders appealed from were issued. Since a substitution had not been made, the Supreme Court should not have determined the merits of the plaintiff's motion, even to the extent that the plaintiff sought relief against the other defendants (see Aurora Bank FSB v Albright, 137 AD3d at 1178; U.S. Bank Natl. Assn. v Esses, 132 AD3d at 847-848; NYCTL 2004-A Trust v Archer, 131 AD3d at 1214; JPMorgan Chase Bank, N.A. v Rosemberg, 90 AD3d at 714). Furthermore, although this Court has recognized, under certain limited circumstances, that "where a party's demise does not affect the merits of a case, there is no need for strict adherence to the requirement that the proceedings be stayed pending substitution" (U.S. Bank N.A. v Esses, 132 AD3d at 848), those circumstances are not present here (see Aurora Bank FSB v Albright, 137 AD3d at 1178; U.S. Bank N. A. v Esses, 132 AD3d at 847-848; cf. HSBC Bank USA v Ungar Family Realty Corp., 111 AD3d 673, 673; Bank of N.Y. Mellon Trust Co. v Ungar Family Realty Corp., 111 AD3d 657, 658-659; DLJ Mtge. Capital, Inc. v 44 Brushy Neck, Ltd., 51 AD3d 857, 858)."

A CERTIFICATE OF RECOGNITION

PROVING AN ORAL LOAN AGREEMENT

Licata v Cuzzi, 2018 NY Slip Op 03348, Decided on May 9, 2018, Appellate Division, Second Department:

"The plaintiff commenced this action to recover damages for breach of contract, and moved for summary judgment on the complaint after issue was joined. In support of his motion for summary judgment, the plaintiff submitted his own affidavit in which he averred, among other things, that on November 28, 2014, he loaned the defendant the sum of $200,000 by issuing a personal check to him in that amount. He submitted a copy of a canceled check demonstrating that the check was deposited into the defendant's personal bank account. According to the parties' verbal agreement, the defendant was required to repay the loan to the plaintiff in four quarterly installments of $50,000, with the last installment due on November 28, 2015. The plaintiff averred that the defendant made the first three quarterly payments, but failed to make the last payment. The plaintiff submitted canceled checks showing that the defendant made three of the quarterly payments totaling the sum of $150,000. The plaintiff averred that, upon demand, the defendant refused to pay the last [*2]installment. The plaintiff's submission of his affidavit, along with the canceled checks, was sufficient to meet his burden of establishing his prima facie entitlement to judgment as a matter of law (see Bell v Xanthopoulos, 202 AD2d 910, 911; Costantini v Bimco Indus., 125 AD2d 531, 531).

In opposition, the defendant failed to raise a triable issue of fact. The defendant's affidavit did not rebut the plaintiff's evidence showing, inter alia, that the plaintiff loaned him the sum of $200,000, that the defendant made three of the installment payments, and that the defendant failed to make the last payment. The defendant's unsupported, vague, and conclusory allegations of alleged wrongdoing on the part of the plaintiff or a company affiliated with the plaintiff were insufficient to raise a triable issue of fact (see Griffon V, LLC v 11 E. 36th, LLC, 90 AD3d 705, 707; Jin Sheng He v Sing Huei Chang, 83 AD3d 788, 789; Ihmels v Kahn, 126 AD2d 701, 702). Moreover, given that the information necessary to oppose the motion was within the personal knowledge of the defendant, summary judgment was not premature. "The mere hope that evidence sufficient to defeat the motion might be uncovered during the discovery process is an insufficient basis for denying the motion" (Lamore v Panapoulos, 121 AD3d 863, 864; see Merchant v Greyhound Bus Lines, Inc., 45 AD3d 745, 746).

Accordingly, we agree with the Supreme Court that the plaintiff was entitled to summary judgment on the complaint."

UNEMPLOYMENT INSURANCE - ANOTHER MISCLASSIFICATION CASE

MATTER OF COWAN v. BIMBO FOODS BAKERIES DISTRIBUTION, INC., 2018 NY Slip Op 2229 - NY: Appellate Div., 3rd Dept. 2018:

""Whether an employment relationship exists within the meaning of the unemployment insurance law is a question of fact, no one factor is determinative and the determination of the . . . [B]oard, if supported by substantial evidence on the record as a whole, is beyond further judicial review even though there is evidence in the record that would have supported a contrary conclusion" (Matter of Concourse Ophthalmology Assoc. [Roberts], 60 NY2d 734, 736 [1983] [citations omitted]; see Matter of Empire State Towing & Recovery Assn., Inc. [Commissioner of Labor], 15 NY3d 433, 437 [2010]). "An employer-employee relationship exists when the evidence demonstrates that the [purported] employer exercises control over the results produced by claimant or the means used to achieve the results" (Matter of Hertz Corp. [Commissioner of Labor], 2 NY3d 733, 735 [2004] [citation omitted]). The control over the means employed is the more important factor to be considered (see Matter of Empire State Towing & Recovery Assn., Inc. [Commissioner of Labor], 15 NY3d at 437; Matter of Ted Is Back Corp. [Roberts], 64 NY2d 725, 726 [1984]). "All aspects of the arrangement must be examined to determine whether the degree of control and direction reserved to the [purported] employer establishes an employment relationship" (Matter of Villa Maria Inst. of Music [Ross], 54 NY2d 691, 692 [1981] [citations omitted]).

Initially, we are unpersuaded by the company's contention that the Board erred in determining that claimant was an employee as a matter of law pursuant to Labor Law § 511 (1) (b). Labor Law § 511 (1) (b) defines "[e]mployment" for unemployment insurance purposes to include "any service by a person for an employer . . . as an agent-driver or commission-driver engaged in distributing . . . bakery products." According to the company, claimant did not earn a commission but earned revenue upon selling the bakery products that he purchased at prices set by him. The record, however, supports the Board's finding that the actual relationship between the parties did not constitute that of a buyer and seller. No money was exchanged in connection with claimant's alleged purchases and, pursuant to the terms of the distribution agreement, he was credited for returned stale products. Further, any hypothetical change in pricing negotiated by claimant with customers would only have resulted in a smaller commission as calculated by a set percentage. The company also asserts that the remuneration earned by claimant was not a "commission" as defined in Labor Law § 191-a (a), but overlooks that said definition is limited to issues relating to the payment of wages under Labor Law article 6 (see Klepner v Codata Corp., 139 Misc 2d 382, 385 [1988], affd 150 AD2d 994 [1989]). In view of the foregoing, substantial evidence supports the Board's finding that claimant earned a commission and qualified as an employee under Labor Law § 511 (1) (b).

Additionally, we find that substantial evidence supports the Board's finding that the company exercised sufficient supervision, direction and control over claimant to establish an employer-employee relationship under common-law principles. The company retained numerous rights under the distribution agreement, including the right to set the price of the products sold to claimant and the right to negotiate with chain outlets to determine price and terms of sale, and it retained the authority to sell distribution rights purchased by claimant or perform his delivery obligations under certain circumstances. Claimant was further required to deliver fresh products and remove stale products in a defined area, sell any additional products provided by the company, cooperate with its marketing programs, remit settlement information to it each week, maintain certain chain outlet customers even if not profitable to him and not engage in any business activity that directly competed with the company or interfered with his obligations under the distribution agreement. In addition, claimant was interviewed by the company, relied on certain equipment and supplies provided by it, was paid on a weekly basis and was trained, instructed, supervised and monitored by a company manager regarding his deliveries. Considering the foregoing, we find no reason to disturb the Board's finding that the company exercised sufficient control over claimant and those similarly situated to establish an employer-employee relationship, despite evidence in the record that could support a contrary conclusion (see Matter of Mastroianni Bros., Inc. [Commissioner of Labor], 130 AD3d 1117, 1119 [2015]; Matter of Francis [West Sanitation Servs.-Sweeney], 246 AD2d 751, 752 [1998], lvs dismissed 92 NY2d 886 [1998], 93 NY2d 833 [1999]; Matter of Pepsi Cola Buffalo Bottling Corp. [Hartnett], 144 AD2d 220, 222 [1988]; Matter of Oakes [Stroehman Bakeries-Roberts], 137 AD2d 927, 928 [1988])."

ARBITRATING A DIVORCE

Zar v Yaghoobzar, 2018 NY Slip Op 03170, Decided on May 2, 2018, Appellate Division, Second Department:

"The parties were married in 1968 and have two adult children together. In April 2013, the wife, who was represented by counsel, commenced an action in Nassau County for a divorce and ancillary relief. The action was voluntarily discontinued on August 13, 2013, after the parties agreed to submit to binding arbitration before the Beit Din Tzedek Bircat Mordechai (hereinafter the Beit Din) "any matter relating to the dissolution of their marriage and divorce," including "any issues of division of property." It is undisputed that both parties participated in the arbitration, and the Beit Din thereafter issued its award on August 23, 2014.

In March 2015 the wife subsequently commenced the instant action for a divorce and ancillary relief, and the husband raised an affirmative defense asserting that the Supreme Court lacked jurisdiction based on the existence of the agreement to arbitrate and the Beit Din's award. The husband also commenced a separate proceeding pursuant to CPLR article 75 to confirm the Beit Din's award and for the entry of a judgment pursuant to CPLR 7514. The wife opposed the petition [*2]and moved to vacate the award. The wife also separately moved, inter alia, to strike the husband's affirmative defense in the divorce action. The action and proceeding were eventually joined, and each party thereafter submitted papers in support of their respective motions and in opposition to the relief sought by the other party.

By order entered July 5, 2016, the Supreme Court denied the husband's petition and, in effect, granted that branch of the wife's motion which was to vacate the Beit Din's award. The order also, in effect, granted that branch of the wife's separate motion which was to strike the husband's affirmative defense in the divorce action and directed both parties to file and exchange affidavits of net worth and retainer statements and to appear for a preliminary conference. The court determined, inter alia, that the Beit Din's award was irrational, violative of public policy, and unconscionable on its face. The husband appeals, and we reverse.

As a threshold matter, the wife's contentions that she was coerced by the husband to sign the agreement to arbitrate and that she could not understand the agreement because of her limited comprehension of English cannot be entertained, as such contentions speak to the validity of the underlying agreement to arbitrate, which, in the context of a proceeding to confirm an award, may only be challenged by "a party who neither participated in the arbitration nor was served with a notice of intention to arbitrate" (CPLR 7511[b][2][ii]). Since it is undisputed that the wife participated in the arbitration, she is precluded at this juncture from claiming that there was no valid agreement to arbitrate (see Matter of Meisels v Uhr, 79 NY2d 526, 538).

Judicial review of an arbitration award is extremely limited (see CPLR 7510, 7511; Matter of Reddy v Schaffer, 123 AD3d 935, 936). "Outside of the narrowly circumscribed exceptions of CPLR 7511, courts lack authority to review arbitral decisions, even where an arbitrator has made an error of law or fact'" (Dedvukaj v Parlato, 136 AD3d 733, 733-734, quoting Matter of Eastman Assoc., Inc. [Juan Ortoo Holdings, Ltd.], 90 AD3d 1284, 1284).

"An award is irrational only where there is no proof whatever to justify the award" (Matter of Reddy v Schaffer, 123 AD3d at 937). Moreover, that showing must be made by clear and convincing evidence (see Matter of County of Nassau v Civil Serv. Empls. Assn., 150 AD3d 1230). Here, the very limited record does not even reveal what evidence was submitted to the arbitrators regarding, among other things, the parties' assets and financial condition. Therefore, the Supreme Court lacked any basis upon which to conclude that the award was irrational.

"An arbitration award violates public policy only where a court can conclude, without engaging in any extended fact-finding or legal analysis, that a law prohibits the particular matters to be decided by arbitration, or where the award itself violates a well-defined constitutional, statutory, or common law of this state" (Matter of Reddy v Schaffer, 123 AD3d at 937). Here, the Supreme Court found that the award was per se violative of public policy because the arbitrator failed to apply Domestic Relations Law § 236(B) (hereinafter the Equitable Distribution Law) in deciding issues relating to maintenance and the distribution of marital assets. This was error.

The fact that parties may contractually elect to depart from the provisions of the Equitable Distribution Law (see Domestic Relations Law § 236[B][3]) supports the view that strict compliance with its terms is not mandated as a matter of New York public policy (cf. Hirsch v Hirsch, 37 NY2d 312, 315-316; Matter of Luttinger, 294 NY 855). Unlike in matters of child support, for instance, where closer scrutiny of awards for compliance with Domestic Relations Law § 240(1-b) and the best interests of the children is warranted by reason of the court's duty as parens patriae (see e.g. Matter of Goldberg v Goldberg, 124 AD3d 779, 780; Berg v Berg, 85 AD3d 952, 953), public policy does not generally preclude spouses from charting their own course with respect to financial matters affecting only themselves.

Moreover, we disagree with the Supreme Court's determination that the Beit Din's award was unconscionable on its face. Unconscionability is a doctrine grounded in contract law, which can be applied to invalidate an agreement to arbitrate (see Sablosky v Gordon Co., 73 NY2d 133, 138; Arabian v Arabian, 79 AD3d 517) or a marital agreement entered into before or during the marriage (see Domestic Relations Law § 236[B][3]). The doctrine, which requires proof of both procedural unconscionability in the formation of the contract, as well as substantive unconscionability in the terms of the contract (see generally Simar Holding Corp. v GSC, 87 AD3d [*3]688), is not a statutory ground upon which an arbitration award may be reviewed, let alone set aside (see CPLR 7511). If the arbitral procedure was tainted by corruption, fraud, or misconduct, or the partiality of an arbitrator appointed as a neutral, the proper remedy is to move to vacate the award pursuant to CPLR 7511(b)(1)(i) or (ii). Here, the wife failed to establish any such grounds to vacate the award."

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, 15^th and West Streets, Mineola, NY 11501 at (516) 747-4070

MORTGAGE FORECLOSURE - WAIVING LACK OF JURISDICTION

In this case, three years after failing to appear, defendant retains counsel but it appears that defendant, after retaining counsel, does not make a motion to vacate default and file a late answer pursuant to CPLR 3012. Only a motion to dismiss for lack of jurisdiction is made after judgment of foreclosure.

U.S. Bank N.A. v Pepe, 2018 NY Slip Op 03168, Decided on May 2, 2018, Appellate Division, Second Department:

"In November 2009, the plaintiff commenced this action against Anthony Pepe (hereinafter the defendant), among others, to foreclose a mortgage. The defendant failed to timely appear or answer the complaint. Thereafter, the Supreme Court, upon the plaintiff's motion, issued a judgment of foreclosure and sale dated October 27, 2014. In June 2015, the defendant moved, inter alia, to vacate the judgment of foreclosure and sale and to dismiss the complaint insofar as asserted against him for lack of personal jurisdiction based on improper service. In opposition, the plaintiff argued that the defendant waived any objection to personal jurisdiction by appearing in the action. By order dated October 7, 2015, the Supreme Court referred the matter to a referee for a hearing to determine the validity of service of process. After the hearing, the referee issued a report in which she found that service was not properly made and that jurisdiction was not obtained over the defendant. The defendant moved pursuant to CPLR 4403 to confirm the referee's report, to vacate the judgment of foreclosure and sale, and to dismiss the action insofar as asserted against him for lack of personal jurisdiction. The plaintiff again argued in opposition that the defendant waived any objection to personal jurisdiction by appearing in the action. In an order dated September 7, 2016, the court granted the defendant's motion. The plaintiff appeals, and we reverse.

The filing of a notice of appearance in an action by a party's counsel serves as a waiver of any objection to personal jurisdiction in the absence of either the service of an answer which raises a jurisdictional objection, or a motion to dismiss pursuant to CPLR 3211(a)(8) for lack [*2]of personal jurisdiction (see American Home Mtge. Servicing, Inc. v Arklis, 150 AD3d 1180, 1181-1182; Countrywide Home Loans Servicing, LP v Albert, 78 AD3d 983, 984; National Loan Invs., L.P. v Piscitello, 21 AD3d 537, 537-538). Here, the defendant's counsel filed a notice of appearance dated September 4, 2012. The record does not show that the defendant asserted lack of personal jurisdiction in a responsive pleading. Moreover, the defendant did not move to dismiss the complaint for lack of personal jurisdiction until almost three years after appearing in the action, after the judgment of foreclosure and sale had been issued. Under those circumstances, the defendant waived any claim that the court lacked personal jurisdiction over him in this action (see American Home Mtge. Servicing, Inc. v Arklis, 150 AD3d at 1182)."

NEW RULES - POST FORECLOSURE SUMMARY PROCEEDING

PLOTCH v. Dellis, 2018 NY Slip Op 28116 - NY: Appellate Term, 2nd Dept. 2018:

In Home Loan Servs., Inc. v Moskowitz (31 Misc 3d 37 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]), this court held that attaching a certified copy of the referee's deed to the notice to quit did not satisfy the requirement of RPAPL 713 (5) that the deed be exhibited to the respondent, where the notice to quit was served by conspicuous-place service. Petitioner here, in effect, asks this court to reconsider this ruling, arguing, among other things, that the exhibition requirement dates from the time that the statute required exhibition of the original deed and that, under the language subsequently added to the statute permitting exhibition of a certified copy of the deed, service of such a certified copy by means other than personal delivery should suffice.

Upon reconsideration, this court agrees with petitioner's contention. Civil Practice Act § 1411 (6) required the exhibition to the respondent of an original referee's deed, and this requirement was carried over when the Civil Practice Act provision was replaced in 1962 by RPAPL 713 (5). However, in 1976 (L 1976, ch 642), because of the difficulties attendant in exhibiting an original deed, and in response to the decision in Rome v White (82 Misc 2d 356 [Civ Ct, NY County 1975]) disallowing exhibition of a photostatic copy of the deed (see Sponsor's Mem, Bill Jacket, L 1976, ch 642), the legislature amended RPAPL 713 (5) to permit, in addition to exhibition of an original deed, exhibition of a certified copy of the deed. We are persuaded that service by means other than personal delivery of a certified copy of the deed, i.e., service of a certified copy of the deed which is left at the premises for the respondent to retain and examine, satisfies the exhibition requirement.

MORTGAGE FORECLOSURE - RPAPL 1304

Wells Fargo Bank, NA v Mandrin, 2018 NY Slip Op 02826, Decided on April 25, 2018, Appellate Division, Second Department:

"However, reversal is required in light of the plaintiff's failure to establish strict compliance with the 90-day notice requirement of RPAPL 1304. " [P]roper service of RPAPL 1304 notice on the borrower or borrowers is a condition precedent to the commencement of a foreclosure action, and the plaintiff has the burden of establishing satisfaction of this condition'" (Wells Fargo Bank, N.A. v Trupia, 150 AD3d 1049, 1050, quoting Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95, 106). "The statute requires that such notice must be sent by registered or certified mail, and also by first-class mail, to the last known address of the borrower" (Wells Fargo Bank, N.A. v Trupia, 150 AD3d at 1050; see RPAPL 1304). By requiring the lender or mortgage loan servicer to send the RPAPL 1304 notice by registered or certified mail and also by first-class mail, the Legislature implicitly provided the means for the plaintiff to demonstrate its compliance with the statute, i.e., by proof of the requisite mailing (see Wells Fargo Bank, N.A. v Trupia, 150 AD3d at 1050). Proof of the requisite mailing is established with proof of the actual mailings, such as affidavits of mailing or domestic return receipts with attendant signatures, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure (see M & T Bank v Joseph, 152 AD3d 579; Wells Fargo Bank, N.A. v Trupia, 150 AD3d at 1050-1051; Citibank, N.A. v Wood, 150 AD3d 813, 814; Citimortgage, Inc. v Pappas, 147 AD3d 900, 901-902; Flagstar Bank, FSB v Mendosa, 139 AD3d 898, 900).

Here, in moving for summary judgment, the plaintiff failed to submit an affidavit of service or other proof of mailing by the post office establishing that it properly served Mandrin pursuant to RPAPL 1304. The unsubstantiated and conclusory statement of a vice president of the plaintiff that a 90-day pre-foreclosure notice "was forwarded by regular and certified mail" to Mandrin "in full compliance with all requirements of RPAPL § 1304" was insufficient to establish that the notice was actually mailed to Mandrin by first-class and certified mail (see M & T Bank v Joseph, 152 AD3d 579; Wells Fargo Bank, N.A. v Trupia, 150 AD3d at 1050-1051; Citibank, N.A. v Wood, 150 AD3d at 814; Cenlar, FSB v Censor, 139 AD3d 781, 782-783). Because the plaintiff failed to satisfy its prima facie burden with respect to RPAPL 1304, that branch of its motion which was for summary judgment on the complaint insofar as asserted against Mandrin should have been denied, regardless of the sufficiency of Mandrin's opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853)."

FORGED SIGNATURE ON MORTGAGE?

U.S. Bank Natl. Assn. v Goldin, 2018 NY Slip Op 02825, Decided on April 25, 2018, Appellate Division, Second Department:

"Here, the plaintiff demonstrated its prima facie entitlement to judgment as a matter of law by submitting the note, the mortgage, annexed to which was a certificate of acknowledgment, and an affidavit of merit by a document control officer for the loan servicer, setting forth that the appellant defaulted on the mortgage loan by failing to make the monthly payments due on May 1, 2011, and thereafter. In opposition, however, the appellant raised a triable issue of fact as to the validity of the mortgage produced by the plaintiff and, thus, as to whether the mortgage was enforceable (see Countrywide Home Loans, Inc. v United Gen. Tit. Ins. Co., 109 AD3d 950, 952).

"A certificate of acknowledgment attached to an instrument such as a deed or a mortgage raises the presumption of due execution, which presumption . . . can be rebutted only after being weighed against any evidence adduced to show that the subject instrument was not duly executed'" (ABN AMBRO Mtge. Group, Inc. v Stephens, 91 AD3d 801, 803, quoting Son Fong Lum v Antonelli, 102 AD2d 258, 260-261, affd 64 NY2d 1158; see Kanterakis v Minos Realty I, LLC, 151 AD3d 950, 951; Tribeca Lending Corp. v Huseinovic, 151 AD3d 901, 902; Cunningham v Baldari, 100 AD3d 584, 585). Here, the appellant's submissions were sufficient to raise a triable issue of fact as to whether the mortgage was duly executed. Contrary to the appellant's contention, the unsworn letter from his forensic expert stating that, in her opinion, it was "probable" that the appellant did not sign the mortgage or the mortgage rider, was insufficient to raise a triable issue of fact as to the validity of the signatures (see Banco Popular N. Am. v Victory Taxi Mgt., 1 NY3d 381, 384). However, the appellant also submitted his detailed affidavit, along with other supporting documents, which raised a triable issue of fact as to whether the challenged signatures were forged (see Countrywide Home Loans, Inc. v Gomez, 138 AD3d 670, 671; Estaba v Estaba, 129 AD3d 601, 601; Cooper Capital Group, Ltd. v Densen, 104 AD3d 898, 898; Seaboard Surety v Earthline Corp., 262 AD2d 253, 253; Hoffman v Kraus, 260 AD2d 435, 436).