Monday, July 12, 2010

Justice Minardo vacates a default judgment and dismisses Bank’s foreclosure action

By:  Kate Cavallaro

Justice Minardo of the Supreme Court, Richmond County, granted a defendant homeowner’s order to show cause to vacate a default judgment of foreclosure and dismissing the entire action without prejudice due to plaintiff bank’s lack of standing. The defendant was represented by the Law Offices of Robert E. Brown, P.C. This action to foreclose a mortgage was commenced by the filing of a summons and complaint in December of 2006. Defendant homeowner was never personally served and defendants did not receive any acceleration notice as required. Unbeknownst to the defendant, the Court granted Plaintiff’s unopposed default judgment in June of 2009. Remarkably, at the same time the default judgment was entered, the parties were involved in settlement discussion. This unilateral action of moving forward without defendants knowledge indicates plaintiffs breach of its duty of good faith. Additionally, an audit of the loan documents revealed numerous other violations on both the State and Federal level, including Truth in Lending Act violations. Furthermore, the audit indicated that the plaintiff bank lacked the necessary standing and capacity to prosecute the foreclosure action. Defendants through their counsel, the Law Offices of Robert E. Brown, P.C., also argued that plaintiff failed to elect its remedies by pursuing simultaneous actions for both a judgment on a note and a judgment of foreclosure under the mortgage should be dismissed. Defendant’s counsel argues that “New York law has long been clear that a plaintiff with rights on a note and a mortgage must elect between the remedy of an action on the note or the remedy in foreclosure…. A plaintiff may not have causes of action for both remedies in a single action.” Citing President and Directors, Etc. Co. v. Callister Bros., 526 A.D. 1097, 11 N.Y.S.2d 593 (2d Dep’t 1939), aff’ed 282 N.Y. 629 (1940); see also White v. Wielandt, 259 A.D. 676, 678, 20 N.Y.S.2d 560, 561-563 92d Dep’t 1940. The rule that a plaintiff cannot simultaneously seek a judgment on the note and a judgment of foreclosure is echoed in New York RPAPL § 1301(a,) which states that without prior leave of the Court, simultaneous actions of this kind are barred.

With regard to vacating the default judgment, Defendants further argue that pursuant to CPLR 317, the Court has discretion to grant relief from judgment where defendant was served with a summons other than by personal delivery and has a meritorious defense to the underlying foreclosure action, Larman v. Russel, 240 A.D.2d 473 (2d Dep’t 1997). Defendant was not personally served and submitted to the Court, an affidavit of merit. Pursuant to CPLR 317 “the movant may apply to the court for relief only if he or she was served other than by personal service under CPLR 308(1).” Wells Fargo Bank v. Mondesir, 13 Misc. 3d 1210A; 824 N.Y.A. 2d 759 (Sup. Ct. 2006). If service is effected other than by personal delivery a court may still vacate a default judgment under CPLR 317, if it it is shown that the defendant did not have an opportunity to make its meritorious defense to the court due to the lack of knowledge of the action because of failure to be personally served.

For the foregoing reasons, Justice Minardo found that Plaintiff LaSalle Bank failed to properly serve defendant homeowner and that defendant homeowner had therefore been unable to bring forth its meritorious defenses. Plaintiff’s default judgment was vacated pursuant to CPLR 317 and the foreclosure action was dismissed in its entirety without prejudice.

Justice Minardo currently holds the position of Administrative Judge in the Thirteen Judicial District (Appointed by Chief Administrative Judge Ann Pfau). Previously Justice Mianrdo was the Administrative Judge to the Supreme Court of Richmond Country from 2005 to 2009 and was elected as a Supreme Court Justice for Richmond County from 1996 to 2009 and has been recently re-elected for 2010 through 2023. Justice Minardo also served as Special Counsel to State Senator John Marchi, 1988 to 1995 and Richmond County Assistant District Attorney from 1969 to 1976. Justice Minardo was also in private practice from 1976 to 1995. Minardo received his Bachelor of Arts from Manhattan College and his juris doctor from St. John’s University School of Law. He is admitted to the New York State Bar, the Appellate Division and Second Department.


  1. So essentially these guys wanted to negotiate with the mortgagee on a re-payment plan of some sort and also forclose ... whichever came first.

    Sounds like you have a pretty solid Chinese Wall between the negotiating team and foreclosure team. Also sounds like you're dealing with some pretty venal people.

  2. That's exactly right--and this pretty standard practice for these banks.

  3. "Chinese Wall" is exactly right. No correspondence between the plaintiffs attorneys and the plaintiffs loss mitigation department. Sucks but stands true.