FILED: NEW YORK COUNTY CLERK 12/30/ :54 PM INDEX NO /2015 NYSCEF DOC. NO. 51 RECEIVED NYSCEF: 12/30/2016

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1 FILED NEW YORK COUNTY CLERK 12/30/ PM INDEX NO /2015 NYSCEF DOC. NO. 51 RECEIVED NYSCEF 12/30/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK x THE BOARD OF MANAGERS OF 50 WEST 127TH STREET CONDOMINIUM, Index No /2015 Plaintiff, - against - CHEKESHA KIDD, CHRISTIANA TRUST as Trustee of ALRP Trust 4, UNITED GUARANTY RESIDENTIAL INSURANCE COMPANY OF NORTH CAROLINA, OLD REPUBLIC INSURANCE COMPANY, Defendants x MEMORANDUM OF LAW IN SUPPORT OF MOTION TO VACATE DEFAULT AND DEFAULT JUDGMENT AND TO SET ASIDE FORECLOSURE SALE Defendant Chekesha Kidd ( Kidd ) was the owner of unit 5B (the Unit ) in the condominium known as the 50 West 127 th Street Condominium (the Condo ). 1 Based on the allegation in its Verified Complaint (the Complaint ) in this action (the Action ) that Kidd had not paid common charges totaling $9,245.12, Plaintiff The Board of Managers of 50 West 127th Street Condominium (the Condo Board ) obtained a default Judgment of Foreclosure and Sale (the Foreclosure Judgment ), and foreclosed upon and sold the Unit. The Unit was sold at the foreclosure auction. 1 Capitalized terms not otherwise defined herein shall have the same meaning ascribed to them in the accompanying Affidavit in Support of Motion to Vacate Default and Default Judgment of Chekesha Kidd sworn to on December 23, 2016 (the Kidd Aff. ). 1 of 10

2 Kidd s default and the Foreclosure Judgment should be vacated, and the resulting foreclosure sale should be set aside, since the Court lacked jurisdiction over Kidd due to improper service. In particular, Plaintiff s nail and mail service fails as a matter of law since the process server did not satisfy the due diligence requirement of Civil Practice Law and Rules ( CPLR ) section 308(4) before resorting to such substituted service. Since service was not properly made, the Court was without jurisdiction and thus, everything undertaken in this Action including the Foreclosure Judgment and the foreclosure sale was a nullity. In addition, Kidd s default is excusable. Kidd was unaware of the Action in time to defend it and has a meritorious defense namely, payment of the amounts claimed due. Statement of Facts The relevant facts are fully set forth in the Kidd Aff. and will not be repeated at length herein. Some of the more significant facts are highlighted below. Service of the Summons and Complaint was not by personal delivery to Kidd; rather, Plaintiff relies on a purported nail and mail service. (Kidd Aff., at 7.) According to the affidavit of service, the process server made only the following three attempts at personal delivery Tuesday, April 14, 2015 at 721 p.m.; Wednesday, April 15, 2015 at 153 p.m.; and Thursday, April 16, 2015 at 1048 a.m. (Kidd Aff., at 9 and Exhibit D.) From the Condo s virtual doorman, it does not appear that the process server made any attempt to go to the Unit on the date of the alleged nail and mail service (Kidd Aff., at 12 and Exhibit E.) 2 2 of 10

3 As appears from the affidavit of service, the process server made no attempt at personal delivery on a weekend day before resorting to nail and mail. (Kidd Aff., at 9 and Exhibit D.) As appears from the affidavit of service, the process server made no effort to contact Kidd s neighbors to determine her place of employment before resorting to nail and mail. (Kidd Aff., at 10 and Exhibit D.) Kidd never received a copy of the Summons and Complaint by mail or by any other means. (Kidd Aff., at 6-7.) Kidd was not even aware of the pendency of this Action until August 22, the day before the foreclosure auction. (Kidd Aff., at 27.) 2 Notwithstanding her ignorance of the foreclosure proceedings, Kidd attempted to work with the Condo Board to pay all outstanding arrears. (Kidd Aff., at ) On September 21, 2015, Kidd delivered a certified check to the Condo Board paying $16, more than the full amount stated due by the Condo Board s managing agent as of that date. (Kidd Aff., at and Exhibits G.) The certified check cleared on September 25, (Kidd Aff., at 17 and Exhibit G.) This payment of $16, was not reflected in the Referee s Report of sale (which was executed after the funds had cleared) and was never reflected in any of the Plaintiff s submissions to this Court prior to the entry of the Foreclosure Judgment. (Kidd Aff., at ) 2 While the Foreclosure Judgment was entered on November 20, 2015, Plaintiff did not purport to serve Notice of Entry of the Foreclosure Judgment until July 20, 2016 eight months later. (Kidd Aff., at Exhibit C.) 3 3 of 10

4 On May 19, 2016, Kidd delivered a check to the Condo Board paying $10, the full amount stated due by the Condo Board s managing agent for common charges and late fees as of that date. (Kidd Aff., at and Exhibits J and K.) The check was cashed by the Condo Board on May 27, (Kidd Aff., at 23 and Exhibit L.) Thereafter, the Condo Board refused to deal with Kidd in any way so as to allow Kidd to even discuss with them the amounts alleged to be due for attorneys fees and disbursements. (Kidd Aff., at ) Despite Kidd having paid all common charges and late fees due as alleged in the Complaint and in the Report of Sale and in the Foreclosure Judgment, and having paid all common charges and late fees alleged to be due from and after the entry of the Foreclosure Judgment to May 12, 2016, Plaintiff continued the foreclosure action and sold Kidd s apartment at a foreclosure auction. Argument POINT I THE COURT LACKED JURISDICTION DUE TO IMPROPER SERVICE Rule 5015(a)(4) of the CPLR provides in relevant part The court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested person with such notice as the court may direct, upon the ground of lack of jurisdiction to render the judgment or order.... N.Y. Civ. Prac. L. & R. 5015(a)(4). 4 4 of 10

5 In this regard, [i]t is axiomatic that the failure to serve process in an action leaves the court without personal jurisdiction over the defendant, and all subsequent proceedings are thereby rendered null and void. McMullen v. Arnone, 79 A.D.2d 496, 499, 437 N.Y.S.2d 373, 375 (2d Dep t 1981) (vacating default judgment pursuant to CPLR 5015(a)(4) and dismissing action due to improper service). Indeed, when personal jurisdiction has not been obtained, the court is without authority to take any action and a default judgment itself is a nullity. Community State Bank v. Haakonson, 94 A.D.2d 838, 839, 463 N.Y.S.2d 105, 106 (3d Dep t 1983) (vacating default judgment and dismissing the complaint due to impropriety of nail and mail service). See also Falvo v. Cerra, 127 A.D.3d 919, 920, 6 N.Y.S.3d 643, 644 (2d Dep t 2015) (vacating default judgment pursuant to CPLR 5015(a)(4) due to lack of jurisdiction); Bank One Nat l Ass n v. Osorio, 26 A.D.3d 452, 453, 811 N.Y.S.2d 416, 417 (2d Dep t.2006) (reversing the court below and holding that the judgment of foreclosure and sale must be vacated as against the appellant for lack of personal jurisdiction and the foreclosure sale must be set aside ). Here, Plaintiff s attempted nail and mail service was improper as a matter of law. Pursuant to CPLR 308(4), where service of process cannot be made with due diligence by personal delivery ([CPLR] 308[1]) or by the deliver and mail alternative ([CPLR] 308[2]), service can be effected, inter alia, by [ nail and mail ]. Spath v. Zack, 36 A.D.3d 410, , 829 N.Y.S.2d 19, 21 (1st Dep t 2007). However, as indicated by the First Department in Spath, and under the very terms of CPLR 308(4), resort to nail and mail is only available where service under paragraphs one and two [of CPLR 308] cannot be made with due diligence. N.Y. Civ. Prac. L. & R. 308(4) 5 5 of 10

6 (emphasis added). Further, [t]he due diligence requirement of CPLR 308(4) should be strictly observed, given the reduced likelihood that a summons served pursuant to that section will be received. Walker v. Manning, 209 A.D.2d 691, 692, 619 N.Y.S.2d 137, 138 (2d Dep t 1994) (emphasis added). And where the due diligence requirement is not satisfied, the attempted service of the summons and complaint... pursuant to CPLR 308(4) [is] defective as a matter of law. Walker, 209 A.D.2d at 692, 619 N.Y.S.2d at 138. In the present case, according to the affidavit of service, the process server allegedly visited the Unit three times on consecutive weekdays, but never on the weekend. (Kidd Aff., at 9 and Exhibit D.) Under these very circumstances, the First Department in Spath found the due diligence requirement was unsatisfied and the nail and mail service therefore improper. The First Department explained The three previous attempts to serve [the defendant] at the Sammis Lane address referred to in the affidavit of service was insufficient to satisfy the due diligence requirement. None of these attempts was made on a weekend, nor is there any indication that the process server made any inquiries to ascertain [the defendant s] whereabouts or her place of business. Spath, 36 A.D.3d at 413, 829 N.Y.S.2d at 21. Like the process server in Spath, Plaintiff s process server made no attempts to serve Kidd on a weekend, and made no inquiries to ascertain Kidd s whereabouts. In fact, on two of the three weekdays, the process server alleges that he attempted to make service during regular working hours that is, on days when Kidd could not have reasonably been expected to be at the Unit. (Kidd Aff., at 8-9.) Consistent with Plaintiff s clear intention (based on their refusals to deal with Kidd prior to the foreclosure auction (Kidd Aff., at 19-28)) to push the foreclosure through without 6 6 of 10

7 giving Kidd a fair opportunity to defend her ownership of the Unit, Plaintiff s process server failed to attempt service under CPLR 308(1) and (2) with due diligence. Consequently, the purported nail and mail service on Kidd is invalid. The Foreclosure Judgment must be vacated, the foreclosure sale must be set aside, and the Action must be dismissed. POINT II KIDD S DEFAULT IS EXCUSABLE While the lack of jurisdiction discussed above ends the inquiry, Kidd s default and the Foreclosure Judgment should be vacated, and the foreclosure sale should be set aside, since Kidd has a reasonable excuse for her default and a meritorious defense. Relief is thus appropriate under CPLR 317 and 5015(a)(1). CPLR 317 provides in relevant part A person served with a summons other than by personal delivery to him..., who does not appear may be allowed to defend the action within one year after he obtains knowledge of entry of the judgment..., 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. N.Y. Civ. Prac. L. & R By the terms of the statute, in order to be entitled to relief, a defendant must demonstrate two things (1) she did not receive notice in time to defend the action, and (2) she has a meritorious defense. CPLR 5015(a)(1) provides in relevant part The court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested person with such notice as the court may direct, upon the ground of of 10

8 1. excusable default, if such motion is made within one year after service of a copy of the judgment or order with written notice of its entry upon the moving party.... N.Y. Civ. Prac. L. & R. 5015(a)(1). Similar to CPLR 317, Rule 5015(a)(1) requires that the moving defendant have a reasonable excuse for her default and a meritorious defense. Kidd here satisfies both of these prongs. 3 Kidd was Unaware of the Action. As Kidd makes clear in the Kidd Aff., she was not aware of the Action until August 22, 2016 when a neighbor notified her of the foreclosure sale being held the next day. (Kidd Aff., at 27.) This was some nine months after the entry of the Foreclosure Judgment. At this point Kidd had no opportunity to defend the Action. In addition to being unaware of the pendency of the Action, Kidd was actively communicating with Plaintiff in an effort to resolve the outstanding amounts due. As Kidd explains (and Plaintiff cannot deny), in September 2015 nearly two months prior to the entry of the Foreclosure Judgment Kidd paid the amount that the Condo s managing agent represented to her was due. (Kidd Aff., at and Exhibits F and G.) Thus, even if Kidd was aware of 3 A motion under CPLR 317 must be made within one year after he obtains knowledge of the entry of the judgment. As Kidd explains, she had no idea that the Foreclosure Judgment was entered until being advised by a neighbor on August 22, 2016 that the foreclosure sale was scheduled for just two days later. (Kidd Aff., at 27.) Significantly, the Notice of Entry of the Foreclosure Judgment was not even allegedly served by Plaintiff until July 20, (Kidd Aff., at 6 and Exhibit C.) This motion is within a year of both of those events. A motion under CPLR 5015(a)(1) must be made within one year after service of a copy of the judgment... with written notice of its entry. Again, Plaintiff did not even purportedly serve a copy of the Foreclosure Judgment with Notice of Entry until July 20, (Kidd Aff., at 6 and Exhibit C.) This motion is timely. 8 8 of 10

9 the Action (which she was not), the fact that she fully paid what she was told to pay in September 2015 in order to bring her account current certainly gives her a reasonable excuse. 4 Kidd Has a Meritorious Defense. As Kidd s payment history shows, she made payments to the Condo Board covering in full the common charges and late fees alleged due in the Complaint, and the common charges and late fees demanded eight months after the first payment. (Kidd Aff., at ) Thereafter, the Condo Board refused to communicate with Kidd, making further attempts to resolve the outstanding balances due impossible. (Kidd Aff., at ) In any event, once the past due common charges and late fees were paid in September 2015, the very basis for Plaintiff s Complaint was lost. At the moment Kidd paid the amount represented to be due by the Condo Board s managing agent, there was no longer a debt due supporting the Complaint. The entry of the Foreclosure Judgment was therefore inappropriate. Kidd thus has a meritorious defense to the Action, and the Foreclosure Judgment should be vacated and the foreclosure sale set aside. Conclusion Given the failure of service as demonstrated in Point I above, this Court was without jurisdiction over Kidd and all proceedings had in this Action were a nullity as a matter of law. Kidd s default and the default Foreclosure Judgment (and all proceedings arising therefrom) must be vacated, the foreclosure sale must be set aside, and the Action must be dismissed. Even if this Court should find that the nail and mail service was appropriate in spite of the lack of due diligence by Plaintiff s process server, Kidd s default and the default Foreclosure 4 Plaintiff cannot dispute that the amount paid in September 2015 covered in full the common charges and late fees alleged due in the Complaint. 9 9 of 10

10 Judgment should be vacated pursuant to CPLR 317 and rule 5015(a)(1), and the foreclosure sale should be set aside. Dated White Plains, New York December 28, 2016 KURZMAN EISENBERG CORBIN & LEVER, LLP By John C. Re Attorneys for Defendant Chekesha Kidd One North Broadway, 10 th Floor White Plains, New York Ph of 10