Recitation, as required by CPLR 2219(a), of the papers considered in the review of plaintiff’s motion to appoint a substitute referee to hold the foreclosure auction to amend the caption and for an order permitting the late filing of a Notice of Sale and a cross motion to intervene, dismiss, reduce the interest and reduce the payoff amount.Papers NumberedNotice of Motion, Affirmation and Exhibits Annexed 1-10, 11-20Answering Affirmation and Exhibits Annexed 21Reply Affirmation 22-23DECISION/ORDER Upon the foregoing cited papers, the Decision/Order on these motions is as follows:This is a post-judgment motion in an action to foreclose a mortgage executed by defendant Cynthia Registe to plaintiff EquiCredit Corporation of New York, dated December 3, 1999, to secure a $195,000 loan. The property is a multiple dwelling. Registe does not live there now, and it is not known if she lived there when this action was commenced. Upon Registe’s default in making payments, a Judgment of Foreclosure and Sale was issued on December 22, 2003, which was entered on January 23, 2004. However, the foreclosure sale was thwarted by Registe’s numerous Bankruptcy Court filings (Exhibit C lists ten petitions between 2003-2015) and a temporary restraining order issued in connection with Registe’s Order to Show Cause in this action.In the meanwhile, a foreclosure proceeding on a subordinate mortgage executed by Registe in 2000 to defendant New Jersey Mortgage and Investment Corp. and assigned in 2005 to Southwest Capital Investments, LLC was commenced on January 6, 2005 in a separate action entitled Southwest Capital v. Registe (Ind. 431/05). In that action, a Judgment of Foreclosure and Sale was entered on March 29, 2006. The foreclosure sale in that action was also delayed by Registe’s Bankruptcy Court filings and orders to show cause. However, this junior mortgagee ultimately held an auction first, on May 19, 2016, and the property was sold to the proposed intervener Yonaton Almagor, by deed dated July 27, 2016 and recorded on September 7, 2016. By the terms of sale and by operation of law, the sale to Almagor was subject to the senior mortgage held by plaintiff herein, and their judgment (see Sands v. Church, 6 NY 347, 351 [1852]). After paying off Southwest Capital’s Judgment and closing expenses, surplus monies of $125,758.20 remained and were deposited with the court on July 29, 2016.In 2016, Registe brought an action against plaintiff (Ind 5361/16) and Almagor brought an action against plaintiff and Registe (Ind 521019/16). Both are presently marked “disposed” and are inactive, as a result of an apparent failure to prosecute them. In any event, the two foreclosure actions are the proper forum to litigate their claims, not their plenary actions.Plaintiff now moves (Motion Seq. 5) to appoint a substitute referee to hold the foreclosure sale, to amend the caption to reflect the assignment of the plaintiff’s mortgage, and to permit the late filing of a Notice of Sale.1 Almagor cross-moves (Motion Seq. 6) to intervene, to dismiss the complaint based upon plaintiff’s alleged lack of standing, to reduce or strike the interest that has accrued on the judgment and to reduce the “payoff” amount by the surplus monies on deposit with the court from the foreclosure sale conducted by the junior mortgagee. Oral argument was held on March 22, 2018, plaintiff and proposed intervenor represented by counsel and Registe appeared pro se and did not submit any papers.First, it must be noted that there is no time limit on the viability of a Judgment of Foreclosure and Sale (see Wing v. De La Rionda, 125 NY 678, 680 [1890]; The Consequences of Sitting on a Foreclosure Judgment, Bruce J. Bergman, NYLJ, May 13, 2015). This is because it is an equitable action which results in an in rem judgment against the property and not a money judgment (see Nationstar Mtge. LLC v. Russo, 2018 NY Misc LEXIS 553 [Sup Ct Suffolk Co], citing Citibank N.A. v. Cambel, 119 AD2d 720 [2d Dept 1986]).Under the circumstances, there is no reason that plaintiff’s motion should not be granted. The court has signed the long form order submitted by plaintiff, which appoints a substitute referee to hold the sale, amends the caption to reflect the assignment of the mortgage and permits the late filing of a Notice of Sale.Turning to the cross motion, there is no question that the movant Almagor, as the successful purchaser at the foreclosure sale of the junior mortgage, who took title subject to the plaintiff’s judgment and subject to the first mortgage, is an interested party with a right to intervene (see CPLR 1012[a][3]; Westchester Fed. Sav. & Loan Ass’n v. H. E. W. Const. Corp., 29 AD2d 670, 671 [2d Dept 1968]). His interest in the property could be wiped out in a foreclosure sale of the first mortgage. While there may have been some delay in his moving to intervene, plaintiff identifies no prejudice engendered by the delay in its opposition (see Yuppie Puppy Pet Prods., Inc. v. Street Smart Realty, LLC, 77 AD3d 197, 201 [1st Dept 2010] ["In examining the timeliness of the motion, courts do not engage in mere mechanical measurements of time, but consider whether the delay in seeking intervention would cause a delay in resolution of the action or otherwise prejudice a party"]). The movant’s failure to include a proposed pleading with the motion to intervene (CPLR 1014), which was provided with the movant’s reply, should be excused (see CPLR 2001). The pleading is of little consequence in this matter, as there is already a judgment. Almagor’s interest is clear, regardless of the specifics in his proposed answer, and Almagor is entitled to intervene solely to insure that he receives notice and the right to be heard in any further postjudgment proceedings herein. Plaintiff’s failure to move to amend the caption and name him as a defendant provides no basis to dismiss the action, as Almagor avers. He is not a necessary party, having taken his interest in the property subject to the judgment and the senior mortgage (see Polish Nat’l Alliance v. White Eagle Hall Co., 98 AD2d 400, 404 [2d Dept 1983] ["Necessary parties include persons with title to the premises, tenants, and those holding subordinate liens, or subordinate judgments, unless the interest in the property was obtained after the mortgagee filed a notice of pendency"] [emphasis added and internal citations omitted]).Moving to the next branch of the cross motion, the court finds that, contrary to Almagor’s argument, he cannot at this late juncture allege that plaintiff doesn’t have standing to pursue this mortgage foreclosure, regardless of any post-commencement or post-judgment assignments (see Emigrant Mtge. Co., Inc. v. Persad, 117 AD3d 676, 677 [2d Dept 2014]; Wells Fargo Bank, N.A. v. Hudson, 98 AD3d 576, 577 [2d Dept 2012]; IndyMac Bank F.S.B. v. Thompson, 99 AD3d 669 [2d Dept 2012]). In fact, it is Almagor who does not have standing to attack the validity of the judgment of foreclosure. The plaintiff’s post-commencement assignment of the mortgage and note qualifies the assignee for substitution as plaintiff under CPLR 1018, although substitution is technically not necessary for the post-judgment assignment (see Citibank, N.A. v. Van Brunt Prop., LLC, 95 AD3d 1158 [2d Dept 2012]). Plaintiff has demonstrated, by the exhibits to its motion, that the mortgage was assigned once prejudgment, and the that assignee also possessed the note at that time, (Exhibit A) which is sufficient. In any event, it is too late to object now, more than fourteen years after this assignment was recorded and more than fourteen years after the judgment was entered (see Aurora Loan Servs., LLC v. Weisblum, 85 AD3d 95, 108 [2d Dept 2011]). Similarly, Almagor’s claim that there are errors in the assignment documents is unavailing.With regard to the branch of Almagor’s motion which seeks to reduce the interest on the judgment, insofar as this is an action in equity, the recovery of interest is within the court’s discretion. The court notes that the judgment amount is $215,414.34 with interest from October 31, 2003. It appears that some reduction in the amount of Post-judgment interest due plaintiff is appropriate, given the fact that the junior lienholder’s foreclosure sale resulted in a deed which was recorded more than a year before the plaintiff served this motion, a motion for permission to proceed with its foreclosure. Plaintiff clearly delayed in moving ahead with the foreclosure sale (see CPLR 5001 [a]; Dayan v. York, 51 AD3d 964, 965 [2d Dept 2008]; Danielowich v. PBL Dev., 292 AD2d 414, 415 [2d Dept 2002] Citimortgage v. Gueye, 52 Misc 3d 1203 (A) [Sup Ct NY Co 2016]).To be clear, most, but not all, of the delay is chargeable to Registe. Her last case in Bankruptcy Court was dismissed on December 22, 2015, not including one she filed after the referee’s closing with Almagor, which was dismissed three months later. Consequently, in the exercise of this court’s discretion, post-judgment interest shall stop on September 7, 2016, the date Almagor’s deed was recorded for all the world (and plaintiff) to see. Almagor was fully aware he was taking title subject to the judgment herein. However, plaintiff should not be rewarded indefinitely with 9 percent interest per annum, as that would be both a windfall and an incentive for further delay.Finally, contrary to Almagor’s contention, the surplus monies from the 2016 sale of the property to satisfy the junior lien must go to the mortgagor Registe, whose interest in the property was cut off by the sale (see Emigrant Mtge. Co., Inc. v. Biggio, 110 AD3d 673, 675 [2d Dept 2013]; Chase Manhattan Mtge. Corp. v. Hall, 18 AD3d 413, 414 [2d Dept 2005]). The surplus monies may not be applied to pay down the amount due on the first mortgage. A motion for distribution of the surplus funds is required, in the other foreclosure action, before the court is able to direct the distribution of the funds on deposit.2Accordingly, the plaintiff’s motion is granted to the extent of appointing a substitute referee, amending the caption to substitute The Bank of New York Mellon Trust Company, National Association, FKA The Bank of New York Trust Company, N.A. as Successor to JP Morgan Chase Bank, as Trustee for Mortgage Asset-Backed Pass Through Certificates, Series 2002-RP2, as plaintiff, and plaintiff is granted leave to file a new Notice of Sale. This relief is provided for in the long form order issued simultaneously herewith.The cross motion is granted to the extent of permitting Yonaton Almagor to intervene as a defendant herein, solely so that he shall be entitled to receive any and all notices, motions or other papers served in this action. Further, the court has determined that it is appropriate to limit the running of interest payable on the Judgment of Foreclosure and Sale herein, which shall be calculated from the date of the judgment through September 7, 2016, regardless of the date of any sale or satisfaction hereunder.Dated: April 5, 2018
