Judge Slammed For Dismissing A Foreclosure And Sanctioning The Plaintiff Based On His Independent Investigation Of Robo-signing

The Supreme Court, Kings County, New York was admonished by a state appellate court in HSBC Bank USA, N.A. v. Taher, 104 A.D.3d 815 (N.Y. App. Div. March 2013) for dismissing a foreclosure, voiding the notice of pendency filed against the subject property and sanctioning the plaintiff $000 for filing the case. In Taher, the plaintiff commenced foreclosure which the mortgagors did not appear or contest. When it moved for an order of reference, the Supreme Court denied the motion and sua sponte dismissed the complaint with prejudice. It also cancelled the notice of pendency and set a hearing on the issue of sanctions against the plaintiff and its law firm where it found against them. The rationale it gave was that the plaintiff lacked standing to foreclose and sanctions were appropriate because the court’s independent research had revealed that the plaintiff and the law firm had relied upon a robosigner employed by the plaintiff’s loan servicer. The appellate court was not impressed. It held that an order of reference should have been made because the plaintiff submitted documentary proof that the defendants failed to timely answer the complaint, that it was the holder of the mortgage note, and that the mortgagor’s were in default. The Supreme Court was not presented with any extraordinary circumstances warranting dismissal of the complaint. Moreover, because the mortgagors failed to answer the complaint, and did not move to dismiss the complaint, they waived the defense of lack of standing which, anyway, would not constitute a jurisdictional defect warranting dismissal of a complaint. The appellate court also found that the Supreme Court abused its discretion in directing a hearing on sanctions. It noted that in another case, _U.S. Bank, N.A. v. Emmanuel_ , 83 AD3d 1047, it reversed an order issued by the same Justice assigned to this case which similarly directed dismissal of a complaint in a mortgage foreclosure action, sua sponte, for lack of standing. Since Emmanuel was decided approximately two months before the Supreme Court improperly directed dismissal of the complaint in the instant action, sua sponte, for lack of standing, we take this opportunity to remind the Justice of his obligation to remain abreast of and be guided by binding precedent. We also caution the Justice that his independent internet investigation of the plaintiff’s standing that included newspaper articles and other materials that fall short of what may be judicially noticed, and which was conducted without providing notice or an opportunity to be heard by any party (citation omitted ), was improper and should not be repeated.

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