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HSBC Bank, USA, N.A. v. Bouchard

Supreme Court, Suffolk County

September 4, 2018

HSBC Bank, USA, N.A., AS INDENTURED TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2006-2, Plaintiff,
v.
Patricia, Bouchard, BANK OF AMERICA, NA, CLERK OF THE SUFFOLK COUNTY DISTRICT COURT, "JOHN DOE #1" through "JOHN DOE #12" the last twelve names being fictitious and unknown to plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises, described in the complaint, Defendants.

          LEOPOLD & ASSOCIATES, PLLC Attorneys for Plaintiff

          PATRICIA BOUCHARD, SHAPIRO, DICARO & BARAK, LLC, Attorneys for Defendant Bank of America, NA.

          Robert F. Quinlan, J.

         Upon the following papers read on this application for a combined order for default judgment and judgment of foreclosure and sale, Notice of Motion dated June 15, 2018 and supporting papers NYSCEF Docs# 16-38; it is

         ORDERED that this unopposed motion by plaintiff is denied, without prejudice to renewal within ninety (90) days.

         This is an action to foreclose a mortgage on the premises known as 82 Indian Head Road, Kings Park, Suffolk County, NY given by defendant mortgagor Patricia Bouchard ("defendant"). Plaintiff HSBC Bank, USA, N.A., as Indentured Trustee for the Registered Noteholders of Renaissance Home Equity Loan Trust 2006-2 ("plaintiff") commenced this action by filing a summons, complaint and notice of pendency with the Suffolk County Clerk ("Clerk") on November 11, 2016. The only defendant to appear or answer in the action was Bank of America, NA, whose counsel filed a notice of appearance and notice of intent to make an application pursuant to RPAPL §§ 1351 (3) and 1354 (3) upon the filing of a judgment of foreclosure and sale by plaintiff, all other defendants are in default.

         Pursuant to RPAPL § 1321 (1), upon the default of a defendant, a plaintiff may move the court to set the defendant's default and ascertain the amount due, at which time the court will either make the required determinations itself, or appoint a referee to do so. The decision to do the calculations and make the other findings required by RPAPL § 1321 or to refer those issues to a referee is within the discretion of the court. Traditionally, courts have most often chosen to appoint a referee to compute, who upon being supplied with the required information, prepares a report which the plaintiff submits to the court for confirmation and acceptance with its motion for a judgment of foreclosure and sale (RPAPL § 1351). This two stage process adds many months of delay to what is already a time consuming process to obtain a judgment of foreclosure and sale.

         To accelerate this process in cases where a defendant has defaulted and clearly shown no interest in resolving the case by failing to appear at the CPLR 3408 conference in the court's Foreclosure Settlement Conference Part, the Suffolk County District Administrative Judge issued Administrative Order 125-17 ("AO # 125-17"), dated November 27, 2017, which authorized plaintiff to file a "combined motion" under RPAPL §§ 1321 and 1351 entitled "Fixing Default and Judgment of Foreclosure and Sale." AO # 125-17 directed that any such motions be assigned to this Part 27, and further provided that this part would promulgate rules for "Expedited Proceeding In Certain Foreclosure Actions," upon approval of such rules by the District Administrative Judge. Those approved rules, also dated November 27, 2018, were published to the 10th Judicial District, Suffolk County's Website (https://www.nycourts.gov/courts/10jd/suffolk/SC_Rules.shtml). The provisions of AO # 125-17 were recently superseded by AO # 77-18 of the Suffolk County District Administrative Judge (August 30, 2018), which amendment allows combined motions to be heard by any of Justice of the court, not just Part 27. The provisions of AO # 125-17, and this court's rules for filing "Expedited Proceeding In Certain Foreclosure Actions," are still applicable to this action, as plaintiff's motion was filed when AO # 125-17 was in effect.

         On November 28, 2017, the Chief Administrative Judge of the Courts issued Administrative Order 356-17 ("AO/356/17") which promulgated "templates for use in residential mortgage foreclosure proceedings in Supreme Court in cases where a homeowner has defaulted....;" copies of the templates were attached to the order. The use of these forms became effective January 1, 2018. Among the templates was one for a "Motion for default judgment, order of reference, and judgment of foreclosure and sale." This form "combined motion" contains many optional paragraphs which may be inserted "if applicable," either by choice of counsel, by necessity or by court directive.

         Although this part's rules for filing "combined motions" have been available on the court website since the fall of 2017, plaintiff appears to have not read them and merely used the template form provided by AO/356/17 to prepare and submit its "combined motion," using or ignoring the "if applicable" sections contained in the template at will. Paragraph 17 of the template provides "[If Applicable] Plaintiff hereby waives any deficiency judgment pursuant to RPAPL § 1371." It appears to the court that plaintiff read the template attached to AO/356/17 as authorization to proceed with a "combined motion" without exercising the option therein to waive a deficiency, without reference to this part's published rules, and as pointed out further below, also without meeting the requirement for a default judgment pursuant to CPLR § 3215.

         Pursuant to Part 27 Rule #5 for "Expedited Proceeding In Certain Foreclosure Actions," to be eligible for consideration for the expedited procedure of a combined motion, plaintiff must waive a deficiency judgment. Part 27 Rule # 14 provides that the preamble of the proposed order must acknowledge that a deficiency judgment is waived. This criteria for eligibility for a "combined motion" was set because it was determined that to balance the benefit of a substantial reduction in the time to obtain a judgment of foreclosure and sale, a concomitant benefit to a defendant of a waiver of a deficiency judgment would be fair and just. There is no right to submit a "combined motion," it is an exercise of the court's discretion, just as is a court's decision not to appoint a referee under RPAPL § 1321, but to do the calculations and findings itself. If plaintiff has interpreted the "template" as a "right" to make a combined motion, it has done so in error.

         This court will exercise its discretion to make the decisions required by RPAPL § 1321 itself, and therefore approve a "combined motion'" only if a plaintiff waives a deficiency judgment. Plaintiff failed to directly provide that waiver here, but as the motion was submitted while the published rules governing such applications in Suffolk County were in effect, the court believes that it could impose such a condition upon granting the motion. It would do so, if plaintiff's application was otherwise sufficient.

         Part 27 Rule # 7, states the fundamental requirement that an application for a combined motion also provide that all legal requirements applicable to any application to set a default and for an order pursuant to RPAPL § 1321, including compliance with CPLR § 3215, must be met. CPLR § 3215 governs any motion based upon a default, and the fact that there is nothing in the "template" set by AO/356/17 addressing CPLR § 3215 (c) is for the obvious reason that the form "template" was intended to be used by plaintiffs looking for swift resolution of the action and therefore would be expected to move within a year period upon the default.

         Plaintiff's submissions show that defendant was served outside of New York on November 17, 2016, and that the affidavit of this service was filed with the Clerk on November 29, 2016. Plaintiff did not file this motion until June 20, 2018, well over a year after defendant defaulted in answering. Even if the court could some how calculate the one year requirement to move upon a default set forth in CPLR § 3215 (c) from the date of the release from the Foreclosure Settlement Conference Part on March 16, 2017 (a questionable assumption in light of Aurora Loan Svcs, LLC v Hiyo, 130 A.D.3d 763 [2d Dept 2015] and US Bank Natl Assoc v Dorvelus, 140 A.D.3d 850');">140 A.D.3d 850 [2d Dept 2016]), the motion was still filed over one year after release from that part. CPLR § 3215 (c) provides a saving provision for such circumstances that would preclude dismissal if sufficient cause is shown why the complaint should not be dismissed. This saving provision has been found when the plaintiff's conduct has shown that there was no intent to abandon the complaint (see LNV Corp v Forbes,122 A.D.3d 805');">122 A.D.3d 805 [2d Dept 2014]; US Bank National Assoc v Wolnerman, 135 A.D.3d 850 [2d Dept 2016]). The determination as to what is a reasonable excuse is committed to the sound discretion of the motion court (see Maspeth Fed. Sav. & Loan Assn. ...


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