New York and Connecticut Business Litigation Lawyer & Attorney : Rogers & Tartaro Law Firm : Commercial Litigation : Westchester County NY, Fairfield County CT

Cousin Vinny (yes, the character in the movie comedy, My Cousin Vinny) inspired the first venture in scholarly writing by our firm’s two partners and we are pleased to have received permission to re-print it as a post on this blog. 

The article, “Comparing The Rules In Three Jurisdictions: Can Extrinsic Evidence Be Considered On a Motion To Dismiss or Strike” was originally published in Volume 35, No.1 of the Westchester Bar Journal at pages 19-24, and is hereby reprinted with the approval of the Westchester Bar Association. 

To access the article,click on the title above or click here.

It is a serious article; the comedic reference is meant as a dash of sweetener to keep it from being excessively dry.

For our non-lawyer readers and for our colleagues not inclined to parse the scholarly exposition, we offer the following as a summary, with the disclaimer that the summary simplifies complex issues. 

The motion to dismiss or the motion to strike is an important procedure for cutting short litigation at the early stages, before the clients on either side have gone to a lot of expense. Comparing similar rules in the three jurisdictions (federal, Connecticut and New York), we note the following as to whether a certain type of evidence is to be considered:

• ·In one jurisdiction, the judge has to make a close call and the case may turn on that call;
• In a second, there is no decision to make because the evidence is never considered;
• And, in the third, there is no decision to make because the evidence is always considered.

There is an obvious lesson: whether one is on the plaintiff or defendant side, one needs to fully understand how the facts of the case will interact with the pleading and motion rules of the jurisdiction which will decide the case.

For details and to find out what Cousin Vinny had to do with it, you have to read the article for which we now offer one more link.

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Many people remember the long-running Broadway (and national) show, Les Miserables, or, at least, its music. Some may also remember that it was based on Victor Hugo’s 19^th century novel Les Miserables and that both the old TV program and the movie, The Fugitive, loosely reflect the same novel in story and concept. The character, Inspector Javert, the detective who doggedly pursues the main character, Jean Valjean, for years, may be less-well remembered.

I was reminded by a recent court decision that many prospective plaintiffs need to contemplate whether they will have to become Javerts themselves in order to gain any benefits from their litigation. 

Thus was I thinking when I read the decision reported recently in the private blog of the Real Property Law Section of the New York State Bar Association. A New York County Appellate Division decision (for out-of-staters: first level of appeal after a trial in the court of general jurisdiction, the Supreme Court), held that a renewal judgment is entered as of the date it was granted, and the liens of mortgages (recorded prior to that date) receive priority over that judgment. Gletzer v. Harris, 2008 WL 678589 (Sup.Ct., N.Y. Co.). The controversy arose when a judgment creditor applied for renewal of a judgment lien for a second ten-year run and was ultimately granted the renewal but nunc pro tunc (retroactively) to a date four years earlier.

The decision is somewhat technical and its impact may not be appreciated without a great deal of background. However, the decision affords the opportunity to fill-in some of that background by reviewing fundamentals that should be reviewed with a client before commencing a lawsuit. One can start with a very fundamental question: what do you win when you win at trial?

In most cases, you win a judgment. If it is a money judgment, you hope that the defendant will simply pay it. And, many do pay, which in that case ends the discussion. If the defendant doesn’t pay it, what have you won? 

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Only a few days ago we thought we were being lawyerly and careful in observing that it’s not often that the tables will be turned on a foreclosing lender as they were in the LaSalle case on which we were commenting at the time. The Law Blog of the Wall Street Journal recently reported another lender had been “dinged” (LB’s term) in court. The LB post provides a link to the Wall Street Journal news story.

The situation, in this case, involved some letters that were possibly forged and used as a basis to threaten foreclosure. The lender’s explanation, as reported in the WSJ news story was that the letters were re-created electronically by an employee.

The WSJ also reports that an executive of Countrywide Financial, the lender, testifying before Congress, admitted that sometimes employees made mistakes but denied that the lender intentionally abused its homeowners. 

I would give Countrywide the benefit of the doubt. Mistakes are probably more common than outright, systematic abuse. But, in our post we were making a limited point: that the borrower/homeowner, threatened or in the midst of foreclosure, should consult an attorney and explore all options. That is just as true when dealing with “employees’ mistakes” as it is in the case of intentional wrong-doing.  

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The tables have apparently been turned on the lender in a foreclosure case involving allegations of  predatory lending and coercion to accept a sub-prime mortgage. The case, reported by the Real Estate Section of the Westchester County Bar Association in its private blog is LaSalle Bank NA v. Shearon, 19 Misc.3d 433, 850 N.Y.S.2d 871, 2008 N.Y. Slip Op. 28032 (Sup.Ct. Richmond Co. 2008), and was before the New York Supreme Court in Richmond County.  

(For our non-New York and non-lawyer readers: the Supreme Court is not the highest court in the State, it is the trial court in this case;  and Richmond County is better known as Staten Island.)

In LaSalle, the Court refused to grant summary judgment to the foreclosing lender, instead, granted summary judgment to the borrower and scheduled a hearing on what damages were to be awarded to the borrower.  The damage award possibilities included: voiding the mortgage, returning all payments, returning all expenses of making the loan and attorneys fees. The Court found the lender had violated N.Y. Banking Law section 6-L (“High Cost Home Loans”). Apparently, the following acts of the lender brought on the reversal of fortunes:

• Lending in excess of the purchase price to finance points and closing fees;
• Leaving the borrower with negative equity;
• financing fees and points in excess of 3% of the loan;
• failure to undertake due diligence regarding borrower’s ability to pay a high-cost mortgage;
• Not issuing to the borrower a required consumer caution notice.

The borrower had been loaned $355,100 to purchase property for $335,000. The contract reflected a “seller’s concession” of $20,100. A $5,000 deposit had been lost in the shuffle.

Interestingly, the borrower did not make a cross-motion for summary judgment. This was an instance where the Court “searched the record” and exercised its authority to grant summary judgment to either of the parties, not necessarily the one making the motion.  For our non-lawyer readers, a summary judgment motion involves a contention by the side making the motion that the facts are not disputed and the Court can decide the case on the law without a trial.  In this case, the lender made the motion.  

The Supreme Court decision and any award of damages are subject to appeal so we don’t know whether any of this will stand. Still, it’s a remarkable turn of events at this point in the case.

It would be unrealistic to expect an outcome such as this to happen very often in foreclosures. However, the case does illustrate that the careful borrower should consult an attorney and examine all options, whether available through negotiations with the lender or through the appropriate legal process.

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