In this mortgage foreclosure action, the following papers were read and considered on defendant Marvil Building Corp.’s (defendant) motion, pursuant to CPLR 5015(4) and CPLR 317, to vacate the order granting plaintiff summary judgment upon default against defendant entered on February 13, 2023: Papers Considered NYSCEF Doc. No. 51-73 1. Proposed Order to Show Cause/Affidavit of Joseph C. Messina/Affirmation in Support of Joshua E. Kimerling, Esq./Exhibit 1 2. Affirmation of Adam E. Mikolay, Esq. in Opposition/Exhibits AH/ Order to Show Cause/Affidavit of Service 3. Reply Affirmation of Adam E. Mikolay, Esq./Exhibits A-C DECISION & ORDER FACTUAL AND PROCEDURAL BACKGROUND Plaintiff brought this action to foreclosure on two mortgages ($1.3 million and $225,000) encumbering a commercial premises located at 418-424 Mamaroneck Avenue, Mamaroneck, New York. The mortgages were executed by defendant and secured by two notes/loans. On July 12, 2021, plaintiff’s predecessor in interest, Mariner’s Bank, issued a default accelerating the two loans. Mariner’s Bank assigned the two loans to plaintiff on April 4, 2022. On September 13, 2022, plaintiff commenced this foreclosure action by filing a summons and complaint. Defendant was served by delivery to the Secretary of State (BCL 306) on September 21, 2022. The affidavit of service states that the address of record with the Secretary of State is 424 Mamaroneck Ave, Mamaroneck, NY 10543. Defendant failed to answer or appear in the action. By decision and order dated January 12, 2023, and entered on February 13, 2023, this Court granted summary judgment to plaintiff and an order of reference was issued. A judgment of foreclosure and sale was entered on June 27, 2023. An auction was scheduled to take place on September 6, 2023. On September 1, 2023, defendant moved by order to show with temporary restraining order to stay the foreclosure sale. In the order to show cause, the defendants also moved, pursuant to CPLR 5015 (a) (4), for an order vacating the order granting plaintiff summary judgment upon default of defendant, on the ground that the Court lacked jurisdiction to render the judgment or order. Defendant also moved pursuant to CPLR 317, to vacate the default and foreclosure judgment on the ground that the summons and complaint were not personally delivered to defendant and defendant has a meritorious defense. Defendant further claimed that the Court should, in its discretion, vacate the default and foreclosure judgment in the interest of substantial justice. In the alternative, defendant moved to stay the imminent foreclosure sale noticed to take place on September 6, 2023. This Court held a hearing on September 5, 2023. During oral argument, the Court advised the parties that it would render a decision on the jurisdictional issues raised by defendant. In the interim, the foreclosure sale was stayed until October 10, 2023 and the Court directed the referee to conduct a hearing on the calculation of the amounts due and allow defendants to respond by October 10, 2023. Although, as of the date of the instant decision the stay on the foreclosure sale has been lifted, the Court will render a formal decision on the jurisdictional arguments. Also, in relevant part, defendant has advised the Court that a hearing is not required as it is not challenging the amount due. In support of its order to show cause, defendant submits the affidavit of Joseph Messina (Messina), President of Marvil Building Corp. According to Messina, he never had the opportunity to contest or defend the action. In brief, Messina claims that he nor anyone else on behalf of defendant received a copy of the summons and complaint. He continues that he never received the notice of default. He states that it was only around May 2023 that he learned about the pending foreclosure action. Messina also states that he is retired, medically compromised, that the property has been owned by his family for approximately 73 years and that he would have responded to the complaint to protect his equity. Lack of Jurisdiction Defendant argues that the foreclosure should be vacated for lack of jurisdiction because the promissory notes executed in connection with the mortgages contain mandates that New Jersey law is applicable to this proceeding. According to defendant, among other defects, the complaint does not comply with New Jersey pleading requirements as it did not meet the certification requirements required under the law, and therefore it was an error to enter a judgment. Defendant further argues that the Court should vacate the default and foreclosure judgment pursuant to CPLR 317 because the summons and complaint were not personally served on the defendant. Although the affidavit of service of the summons and complaint alleges service upon the New York State Secretary of State, Messina purportedly never received the papers. In addition, defendant allegedly has meritorious defenses to the foreclosure, as for example, plaintiff’s complaint was defective under New Jersey law. Among other arguments, defendant also asserts that the Court should vacate the default and judgment of foreclosure in the interest of substantial justice because defendant has owned the property for two generations and never received the notice of default and would have willingly attempted to work something out if he did. In opposition, plaintiff argues, among other things, that defendant only offers conclusory statements denying service and notice which are insufficient to support vacating a default judgment pursuant to CPLR 317. According to plaintiff, the corporate defendant was served by delivery of the summons and complaint to the Secretary of State on September 21, 2022, which is not disputed by defendant. In addition, the proper mailing address was on file with the Secretary of State, which then mailed a copy of the complaint to Marvil. Plaintiff also claims that Messina emailed plaintiff on November 8, 2022, acknowledging the summons and complaint. In the email made part of the record in this case, Messina requests an extension of time to answer the papers. Thus, defendant incorrectly stated that it did not receive notice of this action until May 2023. Plaintiff also argues that the substantive New Jersey rules identified by defendant do not form a basis to vacate the default. Plaintiff points to the New Jersey choice of law provision in the promissory notes and states that it only applies to a suit on the note and not in a foreclosure action. According to plaintiff, since the property is located in New York, New York procedural law would still govern. As a result, the claimed noncompliance with New Jersey law, which is procedural in nature, does not create a jurisdictional issue. DISCUSSION CPLR §5015 (a) (4) provides that the court may relieve a party from a judgment upon the ground of “lack of jurisdiction to render the judgment or order.” Courts have held that, “under common law rules matters of procedure are governed by the law of the forum. On the other hand, matters of substantive law fall within the course chartered by choice of law analysis. New York courts therefore apply contractual choice of law clauses only to substantive issues.” Education Res. Inst., Inc. v. Piazza, 17 AD3d 513, 513 (2d Dept 2005) (internal quotation marks and quotation marks omitted). In addition, “the law of the forum normally determines for itself whether a given question is one of substance or procedure….” Mason-Mahon v. Flint, 166 AD3d 754, 756 (2d Dept 2018) (internal quotation marks omitted). At the outset, while the notes contain the New Jersey choice of law provision, at least one mortgage contains the provision that the laws of the State of New York shall apply to the determination of deficiency judgments. In any event, plaintiff’s alleged deficiencies stem from procedural requirements, not matters of substantive law. Thus, any alleged failure to comply with the certification and notice of entry requirements of New Jersey foreclosure law does not bar this Court from entering judgment in the instant foreclosure action. Pursuant to CPLR 317, in relevant part, “[a] person served with a summons other than by personal delivery to him or to his agent for service designated under rule 318…who does not appear may be allowed to defend the action…upon a finding of the court that he did not personally receive notice of the summons in time to defend and has a meritorious defense.” As the summons and complaint herein were served upon the Secretary of State, this was not “personal delivery,” and defendant moves under CPLR 317 to vacate the default judgment. The record indicates that the corporate defendant was served on September 21, 2022. Defendant failed to answer or appear and an order granting summary judgment and appointing a referee to compute was entered on February 13, 2023. While defendant claims to have no knowledge of the pending foreclosure action, this is belied by the record. Regardless, defendant does not argue that the address on file with the Secretary of State was incorrect, nor does he offer more than a “mere denial of receipt of the summons and complaint.” See e.g. Trini Realty Corp. v. Fulton Ctr. LLC, 53 AD3d 479, 480 (2d Dept 2008) (“The defendant, however, did not contend that the address on file with the Secretary of State was incorrect, and the mere denial of receipt of the summons and the complaint was insufficient to rebut the presumption of proper service created by the affidavit of service”). Accordingly, defendant’s motion to vacate under CPLR 317 is denied. Finally, defendant requests the Court vacate the default judgment in the interest of substantial justice, because, among other reasons set forth in the Messina affidavit, the property has been in the Messina family for two generations. Although the Supreme Court retains “inherent discretionary power to relieve a party from a judgment or order for sufficient reason and in the interest of substantial justice, a court’s inherent power to exercise control over its judgment is not plenary, and should be resorted to only to relieve a party from judgments taken through [fraud], mistake, inadvertence, surprise or excusable neglect.” Nationstar Mtge., LLC v. Russo, 167 AD3d 913, 915 (2d Dept 2018) (internal quotation marks and citations omitted). Here, although defendant cites various reasons for why the Court should vacate the default judgment, defendant “failed to provide any evidence of fraud, mistake, inadvertence, surprise, or excusable neglect that would warrant vacatur in the interest of substantial justice.” Id. As there is no ground for relief from the Judgment, the defendant’s motion for vacatur of the Judgment is denied. All other arguments raised on this motion and evidence submitted by the parties in connection thereto have been considered by this court, notwithstanding the specific absence of reference thereto. CONCLUSION Accordingly, it is hereby, ORDERED, defendant Marvil Building Corp.’s motion, pursuant to CPLR 5015 (4) and CPLR 317, to vacate the order granting plaintiff summary judgment upon default against defendant Marvil Building Corp. entered on February 13, 2023, is denied. This constitutes the Decision and Order of the Court. Dated: October 18, 2023
