June 7, 2013
by Bruce J. Bergman
Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. – USFN Member (New York)
Lenders and servicers know about the attorney affirmation needed in New York home loan foreclosures. A foreclosure action cannot proceed unless an affirmation by plaintiff’s counsel is submitted attesting to the accuracy of the plaintiff’s documents. The purpose of the affirmation was to assure courts that all was truly in order and that goal seemed reachable if attorneys had to join in swearing to the bona fides of the plaintiff. But it was not designed to become a trap to avoid the ability to foreclose, which in some instances it has. [Aurora Loan Services v. Sobanke, 101 A.D.3d 1065, 957 N.Y.S.2d 379 (2d Dept. 2012)].
This began as an ordinary case. The foreclosure was instituted; no defendant answered. (Thus there were no defenses.) There being no answers, the plaintiff submitted an order to appoint a referee — the usual next step. The court responded, however, stating that the order could not be considered, and no referee would be appointed, unless within sixty days the plaintiff submitted the “attorney affirmation.” The court also decided that if the affirmation were not filed within sixty days, not only would the order of reference be denied, but the complaint would be dismissed as well.
Experience suggests that for many reasons, it can be time-consuming to get the information necessary and locate the proper parties to prepare the attorney affirmation. It can be surmised that such is what occurred in this case and, facing some delay in being able to prepare the attorney’s affirmation, the plaintiff’s counsel took the rational step, prior to expiration of the court-imposed deadline, to withdraw its order of reference, to then allow it to obtain the information required for the affirmation. Instead of responding to the request to withdraw the order of reference, however, and just after the sixty-day deadline had passed, the court on its own volition ordered that the complaint be dismissed — with prejudice — and that the notice of pendency be cancelled. This all meant that the mortgage holder could never foreclose the subject mortgage, even though it was undeniably in default and no one had assaulted the legitimacy of the mortgage or the actuality of the default.
Upon appeal, the offending court order was reversed. The appellate court cited the rule that a court’s power to dismiss a complaint on its own volition must be used sparingly and then only when extraordinary circumstances exist to warrant dismissal of a case. (Citing U.S. Bank, N.A. v. Emmanuel, 83 A.D.3d 1047, 1048, 921 N.Y.S.2d 320).
Mindful of that principle, and finding that there were no extraordinary circumstances supporting dismissal of the complaint with prejudice and cancellation of the notice of pendency, the appellate court found the trial court to be in error. There was, it found, no delinquent conduct on the part of the foreclosing party’s counsel, nor was there any evidence of a pattern of willful noncompliance with court-ordered deadlines. Instead, the attorneys had simply requested an opportunity to withdraw the proffered order of reference within the sixty-day deadline so that time could be garnered to respond to the request for the attorney’s affirmation.
As it turns out, the plaintiff prevailed in the end — but at the cost of facing a shocking order and then being constrained to incur the costs and the time of an appeal.
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