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BE CAREFUL WHAT YOU STIP FOR

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  • Posted on: Jul 16 2021

Summary judgment is a procedural device permitting a litigant to seek judgment without a trial in circumstances where all issues in a case can be decided by a judge as a matter of law.  The rules related to motions for summary judgment can be found in CPLR 3212.  The Court of Appeals has described the virtues of summary judgment as follows:

Since New York established its summary judgment procedure in 1921, summary judgment has proven a valuable, practical tool for resolving cases that involve only questions of law.  Summary judgment permits a party to show, by affidavit or other evidence, that there is no material issue of fact to be tried, and that judgment may be directed as a matter of law, thereby avoiding needless litigation cost and delay. Where appropriate, summary judgment is a great benefit both to the parties and to the overburdened New York State trial courts.

Brill v. City of New York, 2 N.Y.3d 648, 650-51 (2004) (citations omitted).  Similarly, “[s]ince summary judgment is the equivalent of a trial, it has been a cornerstone of New York jurisprudence that the proponent of a motion for summary judgment must demonstrate that there are no material issues of fact in dispute, and that it is entitled to judgment as a matter of law (Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 [1985]).”  Ostrov v. Rozbruch, 91 A.D.3d 147, 152 (1st Dep’t 2012) (hyperlink supplied).  

Despite the burden that a movant must meet on a summary judgment motion, such motions are frequently made due to the efficiencies recognized by the Brill Court, among others.  Accordingly, it is prudent to preserve the right to make a summary judgment motion.  Similarly, a summary judgment motion should be made if possible and meritorious.  

Against this backdrop, we take a look at One West Bank, FSB v. Bernstein, decided on July 14, 2021, by the Appellate Division, Second Department.  Significant to a discussion of One West, is the requirement in CPLR 3212(a), that “[a]ny party may move for summary judgment in any action, after issue is joined….”  (Emphasis supplied.)

The One West facts are simple.  In December 2010, plaintiff commenced an action to foreclose a mortgage “that was given by defendants’ predecessor in interest.”  “By stipulation dated January 15, 2011, defendants agreed to submit to the jurisdiction of the court, and agreed that they would not submit an answer to the complaint or make a pre-answer motion to dismiss.”  Supreme court denied lender’s motion for an order of reference “on the ground that the plaintiff was not in possession of the most current note and mortgage at the time of the commencement of the action.”  Thereafter, defendants “moved for summary judgment dismissing the complaint, arguing that the fact that the plaintiff lacked standing to commence the action was now law of the case.”  [Editor’s Note — this BLOG has addressed the issue of “standing” in residential mortgage foreclosure actions, inter alia, [here], [here], [here], [here], [here], [here] and [here].]  Supreme court denied the motion because “issue was never joined.”

The Second Department affirmed the denial of defendant’s summary judgment motion and, in so doing, stated:

Where, as here, the defendants have not served an answer before moving for summary judgment, issue has not been joined and the defendants are precluded from seeking summary judgment (see JBBNY, LLC v. Begum, 156 A.D.3d 769, 67 N.Y.S.3d 284). The requirement that a motion for summary judgment may not be made before issue is joined (see CPLR 3212[a]), “is strictly adhered to” (City of Rochester v. Chiarella, 65 N.Y.2d 92, 101, 490 N.Y.S.2d 174, 479 N.E.2d 810). Therefore, summary judgment was not warranted (see Cremosa Food Co., LLC v. Amella, 164 A.D.3d 1300, 81 N.Y.S.3d 749).  (Hyperlinks added.)

The defendants also argued that the complaint should be dismissed pursuant to CPLR 3215(c), which encourages the prompt entry of default judgments, because plaintiff failed to “take proceedings for the entry of judgment within one year after the default.”  [Editor’s Note — this BLOG has addressed CPLR 3215(c) [here], [here] and [here].]  In rejecting defendants’ argument, the Second Department stated:

The defendants’ contention that the complaint must be dismissed pursuant to CPLR 3215(c) is without merit. A defendant may waive the right to seek dismissal pursuant to CPLR 3215(c) by serving an answer or taking “any other steps which may be viewed as a formal or informal appearance” (Myers v. Slutsky, 139 A.D.2d 709, 711, 527 N.Y.S.2d 464; see De Lourdes Torres v. Jones, 26 N.Y.3d 742, 772, 27 N.Y.S.3d 468, 47 N.E.3d 747). Here, the defendants appeared in this action by stipulating to the jurisdiction of the court, and waived all defenses that they might have had, including their right to dismissal upon the plaintiff’s failure to timely seek a default judgment under CPLR 3215(c), by stipulating that they would not serve an answer or make a pre-answer motion to dismiss and adhering to those terms (see De Lourdes Torres v. Jones, 26 N.Y.3d at 772, 27 N.Y.S.3d 468, 47 N.E.3d 747).  (Hyperlinks added.)

[Editor’s Note — this BLOG has addressed informal appearances [here] and, as to formal appearances, the same article, noted that “[s]ection 320(a) of New York’s Civil Practice Law and Rules …, which sets forth, inter alia, the manner in which a defendant can appear in an action, provides that ‘[t]he defendant appears by serving an answer or a notice of appearance, or by making a motion which has the effect of extending the time to answer.’”]  

TAKEAWAY

It is not clear from One West why defendants executed the subject stipulation, pursuant to which they seem to have given up valuable and perhaps dispositive rights.  Litigants should be careful when entering into stipulations that may impact their rights in a litigation.  This is particularly so early on in litigation before all the relevant facts have had a chance to develop.  And so the time honored maxim goes – “be careful what you wish stip for”.

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