Monday, June 14, 2010

Flushing Sav. Bank v. Ataraxis Props. Ltd.

By:  Kate Cavallaro

In Flushing Sav. Bank v. Ataraxis Props. Ltd., a foreclosure action was commenced on Oct. 5 2009 after Ataraxis defaulted on its loan payments due on May 1, 2009.  The principal balance of the loan was $600,000.00.  This opinion clearly articulates the plaintiff’s burden of proof and the burden shifting on the defendant that occurs in a motion for summary judgment in a foreclosure action.  In this matter, the plaintiff moved for summary judgment and an order of reference appointing a referee in addition to other procedural claims.  The court states that in order to establish prima facie entitlement to summary judgment in a foreclosure action, “ a plaintiff must submit the mortgage and unpaid note, along with evidence of default”, citing Capstone Business Credit, LLC v. Imperia Family Realty, LLC, 70 AD3d 882, 883, 895 NYS2d 199 [2d Dept 2010]).  Once the plaintiff has supplied such proof, the burden then shifts to the defendant.  At this juncture it is required that the defendant “demonstrate the existence of a triable issue of fact as to a bona fide defense to the action, such as waiver, estoppel, bad faith, fraud, or oppressive or unconscionable conduct n the part of the plaintiff” (id. quoting Mahopac Natl. Bank v. Bisley, 244 AD2d 466, 664 NS2d 345 [2d Dept 1997]).  In this particular matter, Flushing Savings Bank has met its initial burden by supplying the required documents proving its prima facie entitlement to summary judgment.  In attempting to meet its burden, the defendant argues that it is unable to fully and completely respond due to the plaintiff’s failure to comply with the defendant’s discovery demands. Defendant also cites the pendency of another action between itself and the real estate broker involved in the same transaction.  Defendant contends that the motion for summary judgment on behalf of plaintiff in premature in light of the forgoing arguments.  The Court states the plaintiffs motion for summary judgment is not premature “inasmuch as Atarxis and Biskup (Defendants) have failed to offer an evidentiary basis to suggest that discovery may lead to relevant evidence; their hope and speculation that evidence sufficient to defeat the motion might be uncovered during discovery is an insufficient basis for denying the motion.” Therefore, the court granted plaintiff’s motion for summary judgment.Bank of New York v. Bestbuydigital, Inc.
Defendant moves to vacate default due to excusable default/meritorious defense, lack of jurisdiction and meritorious defense and failure to receive notice in time to defend.  The Court in this matter denied all motions and all stays were vacated and lifted.  Additionally the defendant alleged that proof of service was not filed as required by CPLR § 308(2), but offered no proof in support of this contention.  Defendant relied solely on his failure to receive process in order to argue his excusable default.  The Court cites Maldonado v. County of Suffolk, 229 AD 2d 376 (2d Dept. 1996), stating that “an affidavit of service by a process server which specified the papers served, the person who was served, and the date, time, address and sets forth facts showing that service was made by an authorized person, and in an authorized manner, constituted prima facie evidence of proper service.”  Further, the Court notes that “a conclusory denial of receipt … is insufficient to raise an issue of fact which would entitle defendant to a traverse hearing.”  The Court states that the defendant did not meet his burden of showing a meritorious defense—i.e. some minimal showing of merit.  Had the defendant offered any additional showing of proof or supplied his argument in the form of an affidavit, a sworn statement, then perhaps the Defendant would have rebutted the presumption created by the process server’s affidavit of service.   Due to defendant’s failure to meet his burden of proof and his failure to supply any evidence beyond a conslusory denial, the Court denied defendant’s motion to vacate the foreclosure judgment and vacated all stays. 

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