REMOVING OR DISCHARGING A GUARDIAN

MATTER OF LOEW, 2022 NY Slip Op 6436 - NY: Appellate Div., 1st Dept. 2022:

"The Mental Hygiene Law does not support appellants' contention that they were entitled to a testimonial hearing in this case before being removed. Mental Hygiene Law § 81.35 provides that a guardian may be removed when she or he "fails to comply with an order, is guilty of misconduct, or for any other cause which to the court shall appear just" (see Matter of Mary Alice C., 56 AD3d 467, 468 [2d Dept 2008]). A motion on notice, served on the persons specified in Mental Hygiene Law § 81.16(c), is required but there is no statutory right to a hearing (see Mental Hygiene Law §§ 81.16[c]; 81.35). This relaxed requirement stands in distinction to Mental Hygiene Law § 81.11(a), which provides that the petition for the appointment of a guardian for an alleged IP, whose liberty interests are at stake, "shall be made only after a hearing" (Matter of Eggleston [Muhammed], 303 AD2d 263, 266 [1st Dept 2003]; Matter of Ruth TT, 267 AD2d 553, 554-55 [3d Dept 1999]). The reason a guardian has "no due process right to a full hearing," nor is a "full blown" hearing necessary for their removal, is that a guardian has no "property interest" to protect (Matter of Bauer, 216 AD2d 25, 26 [1st Dept 1995], appeal dismissed 86 NY2d 867 [1995], lv dismissed and denied 87 NY2d 952 [1996]).

Although a guardian cannot be summarily removed in the absence of a fully developed record or without any findings, and a hearing may be required where material facts are disputed (see Matter of Roberts, 205 AD3d 562, 563 [1st Dept 2022]), here the parties had not only fully briefed Ferreira's motion, but the salient facts were also known to the court and largely undisputed. A decision to remove a guardian of the person and property of an IP is within the sound discretion of the trial court (Matter of Agam S. B.-L. [Janna W. - Richard P.] 198 AD3d 962, 963 [2d Dept 2021]). Contrary to appellants' contention, a testimonial hearing was not necessary in this case because the court already possessed enough information for it to make findings justifying Mock's and Elias's removal, and they had an opportunity to be heard (cf. Matter of Roberts, 205 AD3d 562).

On the merits, the court properly exercised its discretion in removing Mock and discharging Elias. Undisputed before the court was the fact that Mock did not investigate and make a reasoned determination about the bona fides of the marriage and the prenuptial agreement. The circumstances presented throughout this case were alarming, raising red flags that at the time of the marriage and the prenuptial agreement Edgar was not competent. Mock's defense, that it was what Edgar wanted, misses the point. While it is important to solicit the views of an IP, those views cannot be the sole basis for action (or inaction). Were that the case, there would be no reason to appoint a guardian in the first place. Moreover, Mock is incorrect in adopting the position that she had no duty to investigate. The order did not have to expressly direct her to investigate these troubling circumstances, which implicated possible serious financial abuse. A guardian's duties under the Mental Hygiene Law require that such action be taken. While such an investigation need not be undertaken in every case, here the issue was squarely raised in the court evaluator's report, identified by the court as an issue for Mock to address as guardian, and warranted given that the prenuptial agreement and marriage occurred so close in time to the filing and granting of the article 81 petition, further buttressed by the evidence demonstrating how severely compromised Edgar was. Mock's failure to investigate was in dereliction of her duties.

Moreover, also undisputed in this record is the fact that Mock did not comply with the court's order that she report back on the feasibility of Edgar's safe discharge from the hospital to his apartment, rather than the ALF. Once again, Mock's reliance on Edgar's preference, without further elaboration as to why he preferred the ALF or an independent inquiry to determine whether it was the best option for him, was a dereliction of duties, undermining the very reason she was appointed. The court was direct in requesting that some evaluation be made as to why, given Edgar's considerable financial worth, he could not be cared for in his home.

These undisputed facts provide a sufficient basis for Mock's removal and Elias's discharge because it was in Edgar's best interest (see Matter of Bauer, 216 AD2d at 26; Mental Hygiene Law § 81.35). The March 8, 2022, appointment of a successor guardian was unavoidable and necessary given that once Mock was removed, Edgar still needed a guardian of the person and property."

A DISCHARGE OF MORTGAGE

This is what happens after the statute of limitations runs out on a mortgage foreclosure.

BH 263, LLC v Bayview Loan Servicing, LLC, 2019 NY Slip Op 06586, Decided on September 18, 2019, Appellate Division, Second Department:

"In March 2007, nonparty Noel Palmer obtained a loan from Washington Mutual Bank, FA (hereinafter WaMu), secured by a mortgage on real property located in Brooklyn. In July 2008, WaMu commenced an action to foreclose the mortgage (hereinafter the 2008 foreclosure action), and sought, in the complaint, to recover the full balance due. In an order dated September 10, 2013, the Supreme Court directed the dismissal of the complaint in the 2008 foreclosure action as abandoned pursuant to CPLR 3215(c), and vacated the notice of pendency. In April of 2014, the mortgage was assigned to Bayview Loan Servicing, LLC (hereinafter Bayview).

In January 2015, the plaintiff purchased the subject property from Palmer. In March 2016, the plaintiff commenced this action to cancel and discharge the mortgage of record. The plaintiff subsequently moved, inter alia, for summary judgment on the complaint, and Bayview cross-moved for summary judgment dismissing the complaint. The Supreme Court, inter alia, granted the motion and denied the cross motion, and Bayview appeals.

Pursuant to RPAPL 1501(4), a person having an estate or an interest in real property subject to a mortgage can seek to cancel and discharge that encumbrance where the period allowed by the applicable statute of limitations for the commencement of an action to foreclose the mortgage has expired, provided that the mortgagee or its successor was not in possession of the subject real [*2]property at the time the action to cancel and discharge the mortgage was commenced (see Lubonty v U.S. Bank N.A., 159 AD3d 962, 963, lv granted 32 NY3d 903). An action to foreclose a mortgage is governed by a six-year statute of limitations (see CPLR 213[4]; Lubonty v U.S. Bank N.A., 159 AD3d at 962; Kashipour v Wilmington Sav. Fund Socy., FSB, 144 AD3d 985, 986). "[E]ven if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt" (Lubonty v U.S. Bank N.A., 159 AD3d at 963 [internal quotation marks omitted]; see Kashipour v Wilmington Sav. Fund Socy., FSB, 144 AD3d at 986).

Here, in support of its motion the plaintiff established that it was the current owner of the subject property, that "[a]n acceleration of the full amount of the debt occurred in this instance upon the filing of the summons and complaint in the [2008] foreclosure action" (Milone v US Bank N.A., 164 AD3d 145, 152), i.e., on July 23, 2008, and that, accordingly, the statute of limitations expired six years later, on July 23, 2014 (see id. at 152-153). Thus, by establishing that the commencement of a new foreclosure action would be time-barred by the applicable six-year statute of limitations (see Milone v US Bank N.A., 164 AD3d at 152-153; Deutsche Bank Natl. Trust Co. v Gambino, 153 AD3d 1232, 1234; Kashipour v Wilmington Sav. Fund Socy., FSB, 144 AD3d at 986), the plaintiff met its prima facie burden of demonstrating its entitlement to judgment as a matter of law on the complaint (see Alvarez v Prospect Hosp., 68 NY2d 320, 324; Zuckerman v City of New York, 49 NY2d 557, 562). In opposition to the plaintiff's prima facie showing, Bayview failed to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d at 324). Bayview also failed to demonstrate its prima facie entitlement to judgment as a matter of law dismissing the complaint."

ERRONEOUS DISCHARGE OF MORTGAGE

Recently, I conferred with a client, who was in foreclosure, and they had discovered a satisfaction of mortgage was filed - yet admitted that they did not pay off the mortgage. So this situation is not unique.

Beltway Capital, LLC v Soleil, 2019 NY Slip Op 06057, Decided on August 7, 2019, Appellate Division, Second Department:

"The underlying facts and procedural history of this case can be found in our decision and order on a prior appeal in this action (see Beltway Capital, LLC v Soleil, 104 AD3d 628). On that prior appeal, this Court reversed an order of the Supreme Court, Kings County, dated January 7, 2011, and concluded that, while the discharge of a mortgage held by Beltway Capital, LLC [*2](hereinafter Beltway), on the subject property (hereinafter the Soleil mortgage), was accomplished by the fraud and misrepresentation of the defendant Andre Soleil, whether Beltway was entitled to reinstatement of the Soleil mortgage turned on the question of whether the defendant Deborah Hughes, a subsequent purchaser of the subject property, was a bona fide purchaser for value. On the record before us, and with only limited discovery having been conducted, this Court concluded that the Supreme Court erred in determining conclusively that Hughes was a bona fide purchaser for value. As such, we reversed the order insofar as appealed from, reinstated the Soleil mortgage, and, effectively, remitted the matter for further discovery (see id. at 631-632).

Upon the completion of that discovery, Hughes and Sperry Associates Federal Credit Union (hereinafter Sperry), an alleged subsequent encumbrancer, separately moved for summary judgment dismissing the complaint insofar as asserted against each of them. Hughes also moved for summary judgment declaring her a bona fide purchaser for value and discharging the mortgage as to her, and Sperry also moved for summary judgment declaring it a bona fide encumbrancer with first priority of lien on the property, and discharging the Soleil mortgage as to it. In an order dated February 9, 2016, the Supreme Court granted the motions. Judgment was thereafter entered on May 17, 2016, in Hughes's and Sperry's favor. Beltway appeals from both the order and the judgment.

The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241, 248). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]).

"A mortgagee may have an erroneous discharge of mortgage, without concomitant satisfaction of the underlying mortgage debt, set aside, and have the mortgage reinstated where there has not been detrimental reliance on the erroneous recording" (New York Community Bank v Vermonty, 68 AD3d 1074, 1076; see Bank of Am. N.A. v Snyder, 154 AD3d 671; Deutsche Bank Trust Co., Ams. v Stathakis, 90 AD3d 983, 984). Only bona fide purchasers and lenders for value are entitled to protection from an erroneous discharge based upon their detrimental reliance thereon (see Bank of Am., N.A. v Snyder, 154 AD3d at 672; Beltway Capital, LLC v Soleil, 104 AD3d at 631).

Here, Hughes and Sperry each met their prima facie burden of establishing their status as bona fide purchaser and encumbrancer for value, respectively.

Hughes demonstrated that, at the time she purchased the subject property for value from Soleil, an order of the Supreme Court dated July 18, 2008, which, inter alia, cancelled and discharged the Soleil mortgage (hereinafter the 2008 order) had been duly recorded and that she was entitled to rely upon that order without conducting any further inquiry. Her deed was recorded on October 14, 2008, well before Beltway moved, in February 2009, inter alia, to vacate the 2008 order discharging the Soleil mortgage. Thus, Hughes was not on notice at the time of the purchase of any prior lien against the property which would lead a reasonably prudent purchaser to make inquiry, and there was nothing on the face of the 2008 order that would have alerted Hughes to Beltway's claim. Contrary to Beltway's contention, Hughes had no duty to conduct any further inquiry into the propriety of the discharge of the Soleil mortgage by the Supreme Court (see DLJ Mtge. Capital, Inc. v Windsor, 78 AD3d 645, 647; Baron Assoc. v Latorre, 74 AD3d 714, 716; Regions Bank v Campbell, 291 AD2d 437, 438).

Similarly, Sperry met its prima facie burden by demonstrating that, at the time it granted a mortgage to, among others, Hughes, secured against the subject property, the 2008 order had been duly recorded, that a title search did not reveal the prior lien, and that it was entitled to rely upon the title search and 2008 order without conducting any further inquiry into the propriety of the recorded order (see Andy Assoc. v Bankers Trust Co., 49 NY2d 13, 22-23; Maiorano v Garson, 65 AD3d 1300, 1302; Emerson Hills Realty v Mirabella, 220 AD2d 717)."

ANOTHER TIME BARRED FORECLOSURE CLAIM

Karpa Realty Group, LLC v Deutsche Bank Natl. Trust Co., 2018 NY Slip Op 05921, Decided on August 29, 2018, Appellate Division, Second Department:

"Pursuant to RPAPL 1501(4), a person having an estate or an interest in real property subject to a mortgage can seek to cancel and discharge that encumbrance where the period allowed by the applicable statute of limitations for the commencement of an action to foreclose the mortgage has expired, provided that the mortgagee or its successor is not in possession of the subject real property at the time the action to cancel and discharge the mortgage is commenced (see Lubonty v U.S. Bank N.A., 159 AD3d 962, 963). An action to foreclose a mortgage has a six-year statute of [*2]limitations (see CPLR 213[4]; Lubonty v U.S. Bank N.A., 159 AD3d at 963). "[E]ven if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt" (Lubonty v U.S. Bank N.A., 159 AD3d at 963 [internal quotation marks omitted]).

Here, the plaintiff made a prima facie showing of its entitlement to judgment as a matter of law by establishing that the foreclosure action commenced by Deutsche Bank in 2008 was dismissed pursuant to CPLR 3216, and that the commencement of a new foreclosure action would be time-barred by the applicable six-year statute of limitations (see U.S. Bank N.A. v Martin, 144 AD3d 891, 891; JBR Constr. Corp. v Staples, 71 AD3d 952, 953). Thus, in opposition, Deutsche Bank was required to raise a triable issue of fact as to whether the statute of limitations was tolled or revived (see JBR Constr. Corp. v Staples, 71 AD3d at 953).

"General Obligations Law § 17-101 effectively revives a time-barred claim when the debtor has signed a writing which validly acknowledges the debt" (Lynford v Williams, 34 AD3d 761, 762; see Mosab Constr. Corp. v Prospect Park Yeshiva, Inc., 124 AD3d 732, 733). To constitute a valid acknowledgment, a "writing must be signed and recognize an existing debt and must contain nothing inconsistent with an intention on the part of the debtor to pay it" (Sichol v Crocker, 177 AD2d 842, 843 [internal quotation marks omitted]; see U.S. Bank N.A. v Martin, 144 AD3d at 892-893; Mosab Constr. Corp. v Prospect Park Yeshiva, Inc., 124 AD3d at 733). Contrary to Deutsche Bank's contention, a letter written by Aird that accompanied his second short sale package submitted to Deutsche Bank's loan servicer did not constitute an unqualified acknowledgment of the debt or manifest a promise to repay the debt sufficient to reset the running of the statute of limitations (see U.S. Bank, N.A. v Kess, 159 AD3d 767, 768-769; U.S. Bank N.A. v Martin, 144 AD3d at 892-893; Hakim v Peckel Family Ltd. Partnership, 280 AD2d 645; Sichol v Crocker, 177 AD2d at 843)."

TIME BARRED FORECLOSURE CLAIM

Yadegar v Deutsche Bank Natl. Trust Co., 2018 NY Slip Op 05957, Decided on August 29, 2018, Appellate Division, Second Department:

"Pursuant to RPAPL 1501(4), a person having an estate or an interest in real property subject to a mortgage can seek to cancel and discharge that encumbrance where the period allowed by the applicable statute of limitations for the commencement of an action to foreclose the mortgage has expired, provided that the mortgagee or its successor is not in possession of the subject real property at the time the action to cancel and discharge the mortgage is commenced (see RPAPL 1501[4]; Lubonty v U.S. Bank N.A., 159 AD3d 962, 963). An action to foreclose a mortgage is governed by a six-year statute of limitations (see CPLR 213[4]; Lubonty v U.S. Bank N.A., 159 AD3d at 963). "[E]ven if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt" (Lubonty v U.S. Bank N.A., 159 AD3d at 963 [internal quotation marks omitted]).

Here, the plaintiff met her prima facie burden for summary judgment on her complaint by establishing that the commencement of a new foreclosure action would be time-barred by the applicable six-year statute of limitations (see U.S. Bank N.A. v Martin, 144 AD3d 891, 891; JBR Constr. Corp. v Staples, 71 AD3d 952, 953). Thus, the burden shifted to the defendant to raise a triable issue of fact as to whether the statute of limitations was tolled or revived (see JBR Constr. Corp. v Staples, 71 AD3d at 953).

"General Obligations Law § 17-101 effectively revives a time-barred claim when the debtor has signed a writing which validly acknowledges the debt" (Lynford v Williams, 34 AD3d 761, 762; see Mosab Constr. Corp. v Prospect Park Yeshiva, Inc., 124 AD3d 732, 733). To constitute a valid acknowledgment, a "writing must be signed and recognize an existing debt and must contain nothing inconsistent with an intention on the part of the debtor to pay it" (Sichol v Crocker, 177 AD2d 842, 843 [internal quotation marks omitted]; see U.S. Bank N.A. v Martin, 144 AD3d at 892-893; Mosab Constr. Corp. v Prospect Park Yeshiva, Inc., 124 AD3d at 733).

Contrary to the defendant's contention, the plaintiff's letter accompanying her request for the defendant to authorize a short sale of the property, and the other documents relied on by the defendant, did not constitute an unqualified acknowledgment of the debt sufficient to reset the statute of limitations (see U.S. Bank, N.A. v Kess, 159 AD3d 767, 768; U.S. Bank N.A. v Martin, 144 AD3d at 892-893; Hakim v Peckel Family Ltd. Partnership., 280 AD2d 645; Sichol v Crocker, 177 AD2d at 843). The plaintiff's letter, while arguably acknowledging the existence of the mortgage, disclaimed any intent to pay it with the plaintiff's own funds (see Lew Morris Demolition Co. v Board of Educ. of City of N.Y., 40 NY2d 516, 520-521; U.S. Bank, N.A. v Kess, 159 AD3d at 768-769; Sichol v Crocker, 177 AD2d at 843). Thus, the defendant failed to raise a triable issue of fact in opposition to the plaintiff's motion for summary judgment and, with respect to its cross motion, the defendant failed to establish its prima facie entitlement to summary judgment dismissing the complaint insofar as asserted against it."

MORTGAGE FORECLOSURE - STATUTE OF LIMITATIONS AND DE-ACCELERATE DEFENSE

In Milone v US Bank Natl. Assn., 2018 NY Slip Op 05760, Decided on August 15, 2018, Appellate Division, Second Department, the court held that summary judgment could not be granted for either party in an action pursuant to RPAPL 1501(4) to cancel and discharge a mortgage and note. As noted by the court: "The instant appeal provides us with an occasion to address the timeliness and required proofs for the valid de-acceleration of note obligations underlying residential mortgage foreclosure actions."

The full decision can be viewed here: Milone v US Bank Natl. Assn. 2018 NY Slip Op 05760 Decided on August 15, 2018 Appellate Division, Second Department

NEW YORK UNEMPLOYMENT INSURANCE - DELAY IN DISCHARGE DATE

If an employee violates company policy or commits some act of alleged misconduct on Day 1 but is not discharged until Day 160, an issue arises. As explained in In re AB 566212 (Decided November 29, 2012):
 
"OPINION: The credible evidence establishes that the employer discharged the claimant on November 4, 2011. The law is settled that there must be a direct nexus in time between the alleged act and the discharge to establish misconduct for unemployment insurance purposes, and if there is a delay, there must be a reasonable explanation for such delay. We find that the employer has failed to put forth any compelling explanation for the delay in discharge from May to November of 2011. Although an employer is entitled to a reasonable period of inquiry to investigate the matter and consider the proper consequences, we note that the investigation of the incident was essentially complete the following day. Even considering that school may have been out of session after June 26, 2011, we are not convinced that this adequately explains all of the inordinate delay in discharge, particularly considering that the claimant continued working for employer well into the next school year, and for some six weeks after the "personnel performance conference" in September.”