Carver Federal Savings Bank v. Shaker Gardens, Inc. ( 2016 )

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: January 21, 2016 520681
________________________________
CARVER FEDERAL SAVINGS BANK,
Respondent,
v MEMORANDUM AND ORDER
SHAKER GARDENS, INC., et al.,
Appellants,
et al.,
Defendants.
________________________________
Calendar Date: November 16, 2015
Before: McCarthy, J.P., Egan Jr., Rose, Lynch and Clark, JJ.
__________
Kalter Kaplan Zieger & Forman, Woodbourne (Terry S. Forman
of counsel), for appellants.
Jaspan Schlesinger, LLP, Garden City (Scott B. Fisher of
counsel), for respondent.
__________
Egan Jr., J.
Appeals (1) from an amended order of the Supreme Court
(Cahill, J.), entered June 21, 2013 in Sullivan County, which,
among other things, granted plaintiff's motion for a deficiency
judgment, and (2) from the judgment entered thereon.
In October 2009, plaintiff commenced this mortgage
foreclosure action against, among others, defendant Shaker
Gardens, Inc. and Shaker Gardens' president, defendant Yehuda
Nelkenbaum, the latter of whom had executed a personal guaranty
in conjunction with the underlying transaction. In December
2010, Supreme Court (Sackett, J.) issued a judgment of
foreclosure and sale and appointed a referee; plaintiff
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thereafter purchased the property at a public auction in November
2011 for $4 million, leaving a deficiency of more than $5
million.
Plaintiff subsequently moved to confirm the report of sale
and for leave to enter a deficiency judgment and, to that end,
enlisted a process server to effectuate service upon Nelkenbaum.
According to plaintiff, Nelkenbaum twice was served with a copy
of the subject motion – once in a hallway of the US Bankruptcy
Court for the Eastern District of New York — located at 271
Cadman Plaza East in Brooklyn — in January 2012 and again
approximately one month later in front of a residence in
Brooklyn. Neither Shaker Gardens nor Nelkenbaum submitted papers
in opposition to plaintiff's motion but, following the return
date thereof, Nelkenbaum moved by order to show cause seeking a
determination that he was not personally served. Supreme Court
(Cahill, J.) then conducted a traverse hearing,1 at which
Nelkenbaum elected not to testify. By amended order entered June
21, 2013, Supreme Court found that service of process upon
Nelkenbaum was valid and thereafter entered judgment against,
among others, Shaker Gardens, Nelkenbaum and defendant Shaker
Heights Apartments (hereinafter collectively referred to as
defendants) for approximately $3 million. Defendants now appeal.
We affirm. A party seeking a deficiency judgment may,
"[s]imultaneously with the making of a motion for an order
confirming the sale, . . . make a motion . . . for leave to enter
a deficiency judgment upon notice to the party against whom such
judgment is sought or the attorney who shall have appeared for
such party in the action. Such notice shall be served personally
or in such other manner as the court may direct" (RPAPL 1371 [2];
see CPLR 308 [1]; D'Ambra v Haynor, 293 AD2d 858, 859 [2002]).
"If a defendant resists service of process, service may be
effected pursuant to CPLR 308 (1) by leaving a copy of the
summons in the defendant's general vicinity, provided that the
1
Where a sworn denial of service is sufficient to raise a
question of fact as to the content or veracity of an affidavit of
service, a traverse hearing is required (see Finkelstein Newman
Ferrara LLP v Manning, 67 AD3d 538, 538-539 [2009]).
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defendant is made aware that this is being done" (Hall v Wong,
119 AD3d 897, 897 [2014]; see Bossuk v Steinberg, 58 NY2d 916,
918 [1983]; Personnel Sys. Intl. v Clifford R. Gray, Inc., 146
AD2d 831, 832 [1989]). As a general proposition, "a process
server's affidavit of service establishes a prima facie case as
to the method of service and, therefore, gives rise to a
presumption of proper service" (Caci v State of New York, 107
AD3d 1121, 1123 [2013] [internal quotation marks and citations
omitted]; accord Emigrant Mtge. Co., Inc. v Westervelt, 105 AD3d
896, 897 [2013], lv dismissed 22 NY3d 947 [2013]; see Kurlander v
Willie, 45 AD3d 1006, 1007 [2007]). Although a vague and
unsupported denial of service is "insufficient to dispute the
veracity or content of the [process] server's affidavit" (Owens v
Freeman, 65 AD3d 731, 733 [2009], lv dismissed 13 NY3d 855
[2009]; see Kurlander v Willie, 45 AD3d at 1007), "where there is
a sworn denial that a defendant was served with process, the
affidavit of service is rebutted, and the plaintiff must
establish jurisdiction at a hearing by a preponderance of the
evidence" (Wells Fargo Bank, NA v Chaplin, 65 AD3d 588, 589
[2009]; accord Caci v State of New York, 107 AD3d at 1123;
Emigrant Mtge. Co., Inc. v Westervelt, 105 AD3d at 897). Upon
reviewing the record before us, and according due deference to
Supreme Court's credibility assessments (see Caci v State of New
York, 107 AD3d at 1124; Matter of DeMeo v City of Albany, 63 AD3d
1272, 1272 [2009]), we are satisfied that plaintiff met that
burden here.
During the course of the traverse hearing, the process
server, Robert Urena, testified that he first attempted to serve
Nelkenbaum following a court proceeding in January 2012. Urena
waited in the hallway and, when the individual he believed to be
Nelkenbaum exited the courtroom with an attorney, Urena
approached the man and asked if he was Nelkenbaum. When the man
refused to answer, Urena informed him that he had legal papers
for him; when this individual did not accept the papers, Urena
told the man that he was going to leave the papers and "dropped
them at his feet." Urena thereafter completed an affidavit of
service, wherein he described the individual served as a white
male with black hair, glasses and a beard, approximately 45 to 55
years old, 5 feet 8 inches tall and weighing 190 to 200 pounds.
A second attempt at service was made in February 2012 at a
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residence located at 970 East 18th Street in Brooklyn, at which
time Urena observed "the same individual as in the courthouse
. . . coming out [of the residence] with a bicycle." Urena
approached the man, asked if he was Nelkenbaum and, after
receiving no response, informed the individual that he "had legal
papers for . . . Yehuda Nelkenbaum." When the man did not accept
the papers, Urena again informed him that he would be leaving the
papers and dropped them at the man's feet. Urena thereafter
completed an affidavit of service, describing the individual
served as a white male with brown hair, a mustache and a beard,
approximately 40 to 50 years old, 5 feet 9 inches tall and
weighing 190 to 200 pounds.
Contrary to defendants' assertions, the physical
descriptions contained in the respective affidavits of service
are substantially similar to one another and, further, parallel
the physical description given by Urena – from memory at the
traverse hearing – of the individual served on the dates in
question. To the extent that defendants argue that there is
insufficient proof that Urena served Yehuda Nelkenbaum (as
opposed to a relative thereof), Urena plainly testified that – at
least with respect to the February 2012 attempt at service – he
informed the individual that he had legal papers for "Yehuda
Nelkenbaum," and nothing in the record suggests that this
individual made any attempt to correct Urena on this point (see
TD Banknorth, N.A. v Olsen, 112 AD3d 1169, 1171 [2013]).
Further, the record reflects that although Nelkenbaum was in the
vicinity of the courthouse at the time of the traverse hearing,
he elected not to testify, thereby permitting Supreme Court "to
draw the strongest possible inference against him that the
evidence would allow" (Matter of Emmett RR. [Scott RR.], ___ AD3d
___, ___, 2015 NY Slip Op 08883, *2 [2015]; see Matter of Adam K.
v Iverson, 110 AD3d 168, 178 [2013]; Stein v McDowell, 74 AD3d
1323, 1325 [2010]). Finally, to the extent that Nelkenbaum's
driver testified that, following the January 2012 court
proceeding and while Nelkenbaum was in the bathroom, "[s]omebody
dropped something at me, mumbled something and walked away,"
thereby implying that Urena served the driver instead of
Nelkenbaum, we defer to Supreme Court's credibility assessment of
this witness – particularly in view of the fact that the physical
description of Nelkenbaum's driver did not match the physical
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description of the individual set forth in Urena's January 2012
affidavit of service. In short, we are satisfied that plaintiff
established – by a preponderance of the credible evidence – that
Nelkenbaum was personally served in compliance with CPLR 308 (1).
Defendants' remaining contentions are either unpreserved for our
review or lacking in merit.
McCarthy, J.P., Rose, Lynch and Clark, JJ., concur.
ORDERED that the amended order and judgment are affirmed,
with costs.
ENTER:
Robert D. Mayberger
Clerk of the Court