The Supreme Court of New York, Tompkins County, recently granted the “drastic remedy” of dismissing plaintiff bank’s residential foreclosure action against defendant debtors, cancelling the notice of pendency filed in the action and discharging and cancelling the mortgage which plaintiff sought to foreclose, all because of plaintiff’s “pattern of conduct which gave rise to an inference of willfulness.”  See Citibank, N.A. v. Bravo, 2017 WL 935519 (N.Y. Sup. Ct. March 7, 2017).  There, plaintiff commenced a foreclosure action in 2013.  In 2014, after a series of delays caused by plaintiff, the trial court issued an order precluding plaintiff “from offering at the trial of this action, or upon any dispositive motion made herein, proof of the indebtedness alleged in the complaint or that the plaintiff is the current holder of the note.”  Specifically, in granting the preclusion motion, the Court found that plaintiff engaged in a pattern of conduct which gave rise to an inference of willfulness, such as refusing to appear for a deposition, cancelling depositions at the last minute, missing a CPLR 3408 mandatory conference, and failing to comply with a court-ordered deposition deadline.  The Third Department affirmed this decision.  See Citibank, N.A. v. Bravo, 140 A.D.3d 1434, 1435-36 (3d Dept. 2016).

Defendants then moved for summary judgment dismissing the complaint with prejudice, on the basis that the preclusion order prevents plaintiff from establishing that it is the holder of the underlying indebtedness, which is necessary to permit foreclosure of the mortgage.  In granting defendants’ motion for summary judgment, the Court acknowledged that the remedy sought by defendants is drastic, “however, that course was chartered when the Appellate Division affirmed that the preclusion order was an appropriate sanction for plaintiff’s own wrongful conduct.”  Therefore, “dismissal on the merits is a proper sanction where a party willfully fails to provide disclosure or where an order of preclusion prevents a party from proffering evidence in support of its claims.”  Accordingly, the Court dismissed the action with prejudice, discharged and cancelled the mortgage and cancelled the notice of pendency.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Clarissa Gomez at cgomez@riker.com.