HSBC Bank United States v. Lafazan, N.Y. App. Div., Judgment, Law, casemine.com

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Attorney(S)

Gertler Law Group, LLC, East Meadow, N.Y. (Richard G. Gertler of counsel), for appellants. Fein, Such & Crane, LLP, Chestnut Ridge, N.Y. (Michael S. Hanusek and Richard Gerbino of counsel), for respondent.

Judges

Mark C. Dillon

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Smart Summary

Factual and Procedural Background

This case arises from an action to foreclose a mortgage initiated by HSBC Bank USA, National Association against defendants Jeffrey Lafazan and Sandra Lafazan. The defendants moved pursuant to CPLR 2004 and 3012(d) to compel the plaintiff to accept their late answer to the complaint. The Supreme Court, Nassau County, denied this motion, and the defendants appealed that order.

Legal Issues Presented

Whether the defendants provided a reasonable excuse for their delay in submitting a late answer to the foreclosure complaint.
Whether the defendants demonstrated a potentially meritorious defense to the foreclosure action sufficient to compel acceptance of their late answer.

Arguments of the Parties

Appellants' Arguments

The appellants participated in settlement conferences as required for residential mortgage foreclosure actions, which they argue showed their intent to save their home.
They contended that their reliance on settlement discussions excused their delay in answering the complaint.
They further argued that the plaintiff’s counsel should have informed them that they were in default, implying a lack of proper notice.

Respondent's Arguments

The plaintiff maintained that the appellants failed to provide a reasonable excuse for their delay, which was approximately 261 days beyond the deadline to answer.
The plaintiff pointed to the specialized summons served, which contained warnings about the consequences of not timely answering, negating the appellants’ excuse.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Ryan v. Breezy Point Coop., Inc., 76 A.D.3d 523, 904 N.Y.S.2d 910	Defendant must provide a reasonable excuse for delay and demonstrate a potentially meritorious defense to compel acceptance of a late answer.	Established the standard the court applied to evaluate the appellants' motion.
Community Preserv. Corp. v. Bridgewater Condominiums, LLC, 89 A.D.3d 784, 932 N.Y.S.2d 378	Clarifies that appearances at settlement conferences do not constitute a reasonable excuse for delay.	Used to reject appellants' argument that settlement participation excused their late answer.
Maspeth Fed. Sav. & Loan Assn. v. McGown, 77 A.D.3d 889, 909 N.Y.S.2d 403	Reasonableness of excuse for delay is within the Supreme Court’s discretion.	Supported the court’s discretion in denying the motion based on the facts.
Star Indus., Inc. v. Innovative Beverages, Inc., 55 A.D.3d 903, 866 N.Y.S.2d 357	Supports the discretionary nature of determining reasonable excuse for delay.	Reinforced the court’s authority to assess the reasonableness of the appellants’ excuse.
Antoine v. Bee, 26 A.D.3d 306, 812 N.Y.S.2d 557	Further confirms discretion in evaluating excuses for untimely answers.	Used to affirm the court’s discretionary denial of the motion.
Onewest Bank FSB v. Berry, 25 Misc.3d 1218[A], 2009 WL 3417852, 2009 N.Y. Slip Op. 52171[U]	Settlement discussions and counsel’s failure to notify do not constitute reasonable excuse for delay.	Supported rejection of appellants’ claim that plaintiff’s counsel should have advised them of default.
U.S. Bank N.A. v. Stewart, 97 A.D.3d 740, 948 N.Y.S.2d 411	Where no reasonable excuse is shown, it is unnecessary to consider whether a meritorious defense exists.	Justified the court’s decision not to address the merits of the appellants’ defense.

Court's Reasoning and Analysis

The court applied established New York precedent requiring a defendant seeking to compel acceptance of a late answer to show both a reasonable excuse for the delay and a potentially meritorious defense. The appellants’ participation in settlement conferences was insufficient to constitute a reasonable excuse because such appearances are procedural and do not excuse delay in answering. The delay of approximately 261 days past the deadline was significant, and the appellants’ reliance on settlement discussions and expectation that plaintiff’s counsel would notify them of default was rejected as unreasonable. The court emphasized that the specialized summons included warnings about the consequences of failing to timely answer, undermining the appellants' excuse. Because the appellants failed to demonstrate a reasonable excuse, the court found no need to evaluate the existence of a meritorious defense. Consequently, the Supreme Court's denial of the motion to compel acceptance of the late answer was affirmed.

Holding and Implications

The court affirmed the Supreme Court's order denying the appellants' motion to compel the plaintiff to accept their late answer, with costs awarded to the respondent. The direct effect is that the appellants remain subject to the foreclosure action without the benefit of the late answer. No new legal precedent was established; the decision adheres to existing standards governing late answers in mortgage foreclosure proceedings.

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HSBC BANK USA, NATIONAL ASSOCIATION, etc., respondent, v. Jeffrey LAFAZAN, et al., appellants, et al., defendants.

MARK C. DILLON

Gertler Law Group, LLC, East Meadow, N.Y. (Richard G. Gertler of counsel), for appellants. Fein, Such & Crane, LLP, Chestnut Ridge, N.Y. (Michael S. Hanusek and Richard Gerbino of counsel), for respondent.
MARK C. DILLON, J.P., RUTH C. BALKIN, CHERYL E. CHAMBERS, and JEFFREY A. COHEN, JJ.

In an action to foreclose a mortgage, the defendants Jeffrey Lafazan and Sandra Lafazan appeal from an order of the Supreme Court, Nassau County (Adams, J.), entered August 24, 2012, which denied their motion pursuant to CPLR 2004 and 3012(d) to compel the plaintiff to accept their late answer.

ORDERED that the order is affirmed, with costs.

“To compel the plaintiff to accept an untimely answer as timely, a defendant must provide a reasonable excuse for the delay and demonstrate a potentially meritorious defense to the action” ( Ryan v. Breezy Point Coop., Inc., 76 A.D.3d 523, 524, 904 N.Y.S.2d 910;see Community Preserv. Corp. v. Bridgewater Condominiums, LLC, 89 A.D.3d 784, 785, 932 N.Y.S.2d 378). “The determination of what constitutes a reasonable excuse lies within the sound discretion of the Supreme Court” ( Maspeth Fed. Sav. & Loan Assn. v. McGown, 77 A.D.3d 889, 890, 909 N.Y.S.2d 403;see Star Indus., Inc. v. Innovative Beverages, Inc., 55 A.D.3d 903, 904, 866 N.Y.S.2d 357;Antoine v. Bee, 26 A.D.3d 306, 306, 812 N.Y.S.2d 557).

Here, the appellants' appearance and participation, along with their counsel, at settlement conferences required for certain residential mortgage foreclosure actions ( see22 NYCRR 202.12–a) evinced a desire to save their home. However, such appearances do not provide a reasonable excuse for their delay in answering. At the time the first conference was held, approximately 261 days had passed since the appellants' time to answer the complaint had expired ( seeCPLR 3012[a] ). Under the circumstances of this case, the appellants' purported reliance on settlement discussions and their contention, in effect, that the plaintiff's counsel should have advised them that they were in default, do not constitute a reasonable excuse ( see Community Preserv. Corp. v. Bridgewater Condominiums, LLC, 89 A.D.3d at 785, 932 N.Y.S.2d 378;see also Onewest Bank FSB v. Berry, 25 Misc.3d 1218[A], 2009 WL 3417852, 2009 N.Y. Slip Op. 52171[U] [Sup.Ct., Suffolk County] ). Moreover, these assertions are belied by the content and warning contained in the specialized summons served in this action to foreclose a residential mortgage ( seeRPAPL 1320). Since the appellants failed to offer a reasonable excuse, it is unnecessary to consider whether they sufficiently demonstrated the existence of a potentially meritorious defense ( see U.S. Bank N.A. v. Stewart, 97 A.D.3d 740, 948 N.Y.S.2d 411).

Accordingly, the Supreme Court properly denied the appellants' motion pursuant to CPLR 2004 and 3012(d) to compel the plaintiff to accept their answer as timely.

HSBC Bank United States v. Lafazan