Adam Friedman

We are pleased to share a recent decision of a case handled by Friedman Vartolo, LLP.  In Christiana Trust, a division of Wilmington Savings Fund Society, FSB, as Trustee v. Adalgisa Bonafede as Administratrix of the Estate of Christopher Bonafede , etal  Index 135139/2016, Richmond County decided July 8, 2019.  Plaintiff’s cross motion for release of earnest money was granted.

An underlying Order to Show cause was brought by proposed intervenor City View Homes Corp. to vacate the foreclosure sale completed on March 7, 2019.  The Cross Motion sought an order directing referee to release the earnest money in the amount of $46,500.00 deposited by City View pursuant to the foreclosure sale when they failed to appear at the closing on April 8, 2019.

City View’s original stated reason for backing out of the sale was an “undisclosed homicide” dating back to 2013.  However, thereafter, they admit it was not ground to vacate the sale.  But, only after discovery of the homicide did, they begin raising issues with the building violation and service upon a minor.  The building violation did not warrant vacatur of the sale as the terms of sale outlined that same was “subject to building and zoning ordinances and…. possible violations of same”.  Additionally, the terms of sale did not provide any right for City View to “reject” the time of the essence letter. 

City View went on to argue that the title company declined to insurance the transaction due to improper service on Defendant Vincent Bonafede.  Correspondence revealed that the title company went from “we have been advised that the deal is dead” to “title could not be insured”.  Additionally, City View would not avail itself to the terms of sale which provided Plaintiff or it’s counsel arrange for a title company. 

Accordingly. the Court found that purchaser had acted in bad faith and granted Plaintiff’s cross motion in its entirety and directed release of the earnest money of $46,500 to Plaintiff’s counsel.

A great job by P. David Seibert, Esq. of our firm! For more information regarding this case, please contact  Deborah Gallo, Director of Operations at [email protected].

The U.S. Supreme Court held in Taggart v. Lorenzen that a creditor can be held in civil contempt for violating a bankruptcy court’s discharge order, if there is “no fair ground of doubt” as to whether the order barred the creditor’s conduct. Taggart v. Lorenzen, No. 18-489, 2019 U.S. LEXIS 3890 (June 3, 2019). The Court vacated and remanded the Ninth Circuit’s holding in 888 F.3d 438, 445 (9th Cir. 2018), which allowed creditors an “unreasonable belief” defense to alleged discharge violations. Under that standard, even a creditor that subjectively but unreasonably believed their actions were permissible despite the discharge injunction could not be sanctioned.

Supreme Court established a more moderate standard: civil contempt sanctions may be appropriate “when the creditor violates a discharge order based on an objectively unreasonable understanding of the discharge order or the statutes that govern its scope.” Thus, the Court found the middle ground between the “strict liability” standard Taggart proposed, requiring preapproval from the bankruptcy court to act, and the “even if unreasonable” defense to discharge violations advocated for by Taggart’s creditors.

The Court’s opinion allows a “good faith belief” defense so creditors do not risk contempt for any discharge violations, so long as they had a reasonable belief, even if mistaken,  that their conduct was permissible.  However, the Court did decide that an unreasonable mistake should not shield creditors from liability. It remains to be seen if the “no fair ground of doubt” standard for assessing discharge injunction violations can be extended to automatic stay violations.   The application of the new standard is bound to create more caselaw, and further litigation, in the coming months and years.

For more information regarding this law, please contact Deborah Gallo, Director of Operations at [email protected]

On June 14, 2019, Governor Cuomo signed into law the Housing Stability and Tenant Protection Act of 2019, which he described as “the strongest possible set of reforms that the Legislature was able to pass and are a major step forward for tenants across New York.” The Act is a sweeping reform of laws governing rent control, rent stabilization, landlord duties, and procedure for landlord-tenant proceedings.

Under the Act, the window to serve the petition has been shifted forward, and service must now be between ten (10) and seventeen (17) days before the initial appearance date.[1] The practical import of this change is that petitioners will need to choose an initial appearance date that is, on average, five days later than before. RPAPL 733(1).

Notices are required for Terminating Tenancies: Less then a year = 30 days; More than 1 year, but, less than 2 years = 60days; more than 2 years = 90 days.

Under the Act, however, either party can get an adjournment of the first trial date by simply stating that they have not been able to gather the necessary evidence or witnesses.[1] The second trial date, and any subsequent trial dates, can also be adjourned in the discretion of the court.  The practical effect of this is that once a case has been set down for trial, it is certain to take a much longer time before the petitioner is able to actually present evidence and testimony and receive a final disposition of the case. RPAPL 745.

Under the act, the Notice of eviction has increased from 72 hours to 14 days.  RPAPL 749  The stays of the warrant were authorized for six months, which under the act, as increased to one year. RPAP 753.  We can expect, therefore, that Courts will be inclined to stay warrants more often and for longer periods.  .

The Act makes one change specifically directed at post-foreclosure cases: they will be sealed and kept confidential. The intention is to enable post-foreclosure occupants to find a new apartment once a judgment has been entered against them. In this sense, this is a positive change for our clients, since occupants should be able to vacate sooner. On the other hand, this may create an obstacle in on-boarding transfer files: If prior counsel has not kept a complete record, it will be more difficult to obtain the records from court.  RPAPL 757.

The Act provides a new statewide provision on unlawful evictions. Any person committing an unlawful eviction, or assisting one, can be prosecuted for a class A misdemeanor and subject to civil penalties. The civil penalties are between $1,000 and $10,000 per occurrence, with an additional penalty of $100 per day after an occupant requests to be reinstated. RPAPL 768.

These changes, although numerous, have a principal effect of prolonging various aspects of our cases. They do not fundamentally alter the way these cases are brought, the proof we need to collect, or our drafting. As the courts adjust to these new procedures, we will seek to develop strategies for minimizing these new delays.

For more information regarding this law, please contact Deborah Gallo, Director of Operations at [email protected]

We are pleased to share a recent decision of a case handled by Friedman Vartolo, LLP.  In NYCTL 2014-A TRUST, and the Bank of New York As collateral Agent and Custodian for NYCTL 2014-A Trust v. Nadia Vargas, et al Index 3289/2015, Queens County decided June 28, 2019.   The order to show cause to renew/reargue and vacate the Court’s prior order was denied and motion by third party for distribution of the surplus funds was also denied.

By decision dated September 17, 2018 the Court granted defendant Wilmington’s motion to confirm the referee’s report and direct disbursement of the surplus monies.  Thereafter, a nonparty appeared for the first time and filed a motion on September 25, 2018 for distribution of surplus funds.  The movant alleged that it purchased the property between the commencement and the foreclosure occurred and thus that it had the equity of redemption.

The Court found that movant filed to oppose the earlier motion and the arguments were not previously before the Court – thus the Motion to Reargue was denied.  The order to show cause to renew the earlier decision was also denied.  Movant was charged with notice of the entered Judgment of foreclosure and sale and failed to provide reasonable excuse for failing to appear.  As to the surplus, the movant had no judgment or lien against the property.  They obtained no interest in the property from Vargas until after the foreclosure sale – when Nadia Vargas’ interest was already extinguished.  Thus, they were not entitled to a share in the surplus.   

A great job by Richard O’Brien, Esq. of our firm! For more information regarding this case, please contact  Deborah Gallo, Director of Operations at [email protected].

We are pleased to share a recent decision of a case handled by Friedman Vartolo, LLP.  In HSBC BANK,USA, NA, v. Mihai Margineanu, etal  Index 609027/2015, Suffolk County decided June 12, 2019.  Plaintiff’s motion for summary judgment was granted and defendant’s cross motion to renew denied.

The defendants sought leave to renew their prior cross motion for summary judgment and order seeking dismissal of the complaint.  However, there were no new facts or demonstration of change in the law.  Defendant, alleged a change in law, based on the recent Dieudonne case (Bank of New York Mellon v. Dieudonne (171 AD3rd 34, 96 NYS3d 354 (2^nd Dept 2019).  Second, they allege the de-acceleration letter was improperly mailed to prior counsel instead of defendant.

The Court found, that defendant correctly argued Dieudonne rejected the interpretation of the mortgage contract language as one that does not trigger an acceleration of the entire debt, until Judgment.  However, Dieudonne, only addresses one argument from the Court’s October 9, 2018 decision.  Thus, the Court’s position that the action was not timely was unchanged based on the remaining three reasons in the decision.  As to the de-acceleration, the Court found that the defendant’s failed to provide reasonable justification for failure to present such facts in the original motion.

The plaintiff met the prima facie burden in the motion for summary judgment, however, the defendants’ submission did not oppose plaintiff’s application.

A great job by Annette Gershovich, Esq. and Zachary Gold, Esq. of our firm! For more information regarding this case, please contact  Deborah Gallo, Director of Operations at [email protected].