Case Law Shorts

Case Law Shorts  4/15/13          New York Court of Appeals
Mortgage Foreclosure/Deficiency Judgment/90 Day Rule/Delivery & Acceptance of Deed:  Bank foreclosed on borrower. Referee attempted to deliver the deed to bank but bank refused in anticipation of assigning its bid. Bank ultimately took the deed and then moved for deficiency judgment. Borrower opposed, arguing that delivery occurred when the referee made its first mailing of the deed and that the request for deficiency was made without the 90 day window required by RPAPL 13761(2). The Supreme Court ruled in favor of bank, the Second Dept. reversed and the Court of Appeals ruled for bank. The Court reminded the parties that delivery is presumed to have occurred on the date of the deed. However, the presumption may be rebutted and here, delivery, according to common law, occurs upon delivery AND acceptance of the deed.  Therefore, inasmuch as the 90 day window did not begin to run until bank accepted the deed, the motion for deficiency was timely because the 90 day window was still open as calculated from the date of acceptance. M&T Real Estate Trust v Doyle, Court of Appeals, 2013 NY Slip Op 01996, 3/26/13
opinion                                        -Johnny D. Hall, Esq.

Case Law Shorts  4/15/13         New York Appellate Division, Second Dept.
Mortgage Foreclosure/Judicial Activism/Judge Admonished/Standing: Plaintiff bank foreclosed a mortgage. Defendant defaulted and plaintiff moved for an order of reference. The Supreme Court Kings County denied, and, after finding that plaintiff had used a “robo signer” dismissed the action sua sponte based upon standing, fined plaintiff 10K and plaintiffs attorney 5K. The Second Dept. reversed…“We note that in U.S. Bank, N.A. v Emmanuel (83 AD3d 1047), this Court reversed an order issued by the same Justice assigned to this case which similarly directed dismissal of a complaint in a mortgage foreclosure action, sua sponte, for lack of standing. In Emmanuel, we held, as we reiterate here, that a mortgagee's alleged lack of standing is not an "extraordinary circumstance" that warrants sua sponte dismissal of a foreclosure complaint. Indeed, lack of standing is an affirmative defense which is waived if not raised by the defendant in either an answer or a pre-answer motion to dismiss (see Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 242). Since Emmanuel was decided approximately two months before the Supreme Court improperly directed dismissal of the complaint in the instant action, sua sponte, for lack of standing, we take this opportunity to remind the Justice of his obligation to remain abreast of and be guided by binding precedent. We also caution the Justice that his independent internet investigation of the plaintiff's standing that included newspaper articles and other materials that fall short of what may be judicially noticed, and which was conducted without providing notice or an opportunity to be heard by any party (see HSBC Bank USA, N.A. v Taher, 32 Misc 3d 1208[A], 2011 NY Slip Op 51208 [U], *4 [Sup Ct, King County]), was improper and should not be repeated.” HSBC Bank USA, N.A. v Taher, Appellate Division, Second Department, 2013 NY Slip Op 01806, 3/20/13
                                        -Johnny D. Hall, Esq.