In 1998, plaintiff obtained a $192,000 mortgage from Chase Manhattan Mortgage Corp. (the mortgagee) to purchase a cooperative apartment, unit 5J of 250 West 89th Street, New York, New York. In September 2000, plaintiff lost his job and stopped making his mortgage payments. The mortgagee sent plaintiff notices of default and sale of the property by regular and certified mail. While the notices of default misidentified plaintiffs apartment (A5J instead of 5J), and the notices of sale were sent to the wrong zip code (11514 instead of 10024), the record indicates that plaintiffs doorman signed for both certified letters. Chase Manhattan Mortgage Corp. also published notices of the sale of the property in Newsday on February 8, 15 and 22, 2001. The Newsday notices misstated the year of the sale as March 1, 2000, instead of 2001. On March 1, 2001, Chase Manhattan Mortgage Corp. sold the apartment at a public auction. The buyer, Mr. Pesochinsky, agreed to pay $200,000 plus all of plaintiffs maintenance arrears for the foreclosed property.
On March 9, 2001, plaintiff advised Chase Manhattan Mortgage Corp. that he had the funds to pay off his mortgage. However, according to the resident ledger for the coop, plaintiff had made no maintenance payments since July 24, 2000. Plaintiff alleges in his complaint that on March 9, 2001, he was notified, for the first time, that his apartment had been sold.
Plaintiff then commenced this action against Chase Manhattan Mortgage Corp. to annul the sale and to compel the mortgagee to allow him to redeem his stock. Chase Manhattan
In the first order appealed, the IAS court granted Chase Manhattan Mortgage Corp.’s motion. It concluded that the misidentification of the zip code did not nullify the notices of default and sale. The court further concluded that Uniform Commercial Code § 9-504 (3) does not require actual notice of sale, only that the secured creditor took reasonable steps to provide such notification. In the second order appealed, the IAS court denied plaintiffs application for reargument, deemed a motion for renewal, rejecting plaintiffs argument that publication of the sale in Newsday was insufficient to cover prospective purchasers in the New York City area. This appeal ensued.
On August 4, 2003, when the record on appeal was filed by the plaintiff, the caption of this matter was altered to read “JP Morgan Chase, sued herein as Chase Manhattan Mortgage Corp.” All of the submissions subsequently filed with this Court bore the altered caption. JP Morgan Chase, a party never served, became the lead defendant, with all of the attendant ramifications. Also, the record plaintiff filed with this Court includes 10 pages of excerpts from the trial court’s personal financial disclosure forms and election committee forms. These pages, which were denominated in the record on appeal only as financial forms, were not included among the papers plaintiff submitted to the trial court.
On appeal, plaintiff argues that the IAS court was statutorily disqualified from deciding the motions because it failed to disclose to the parties that it owned JP Morgan Chase stock. Ordinarily, this Court acquires jurisdiction over matters determined adversely to the appellant in Supreme Court once a notice of appeal is filed (CPLR 5701). However, this Court has authority to reach the merits of an argument first made on appeal, but only when the argument is clearly supported by facts already in the record (Matter of New Hampshire Indem. Co. v Vranica,
What is clear from the trial court record is that this action was brought by plaintiff against Chase Manhattan Mortgage Corp. and not JP Morgan Chase. There is no allegation that the IAS court had stock in Chase Manhattan Mortgage Corp. Significantly, no motion was ever made to the IAS court seeking recusal based upon the court’s ownership of JP Morgan Chase stock or stock of any other corporation.
Given that Chase Manhattan Mortgage Corp. and JP Morgan Chase are two separate corporate identities, there is no basis for a finding that the IAS court was statutorily disqualified from deciding the motions before it (see Advisory Comm on Judicial Ethics Op 04-17 [2004]). We reject the dissent’s contentions that reliance upon this advisory opinion is improper. The ethics opinion, though not binding, provides important guidance to courts faced with determining whether recusal is mandatory. Specifically, the ethics opinion states that a court should not have what could become an onerous burden of investigating its interests in any corporate entities which might be related to those before it, as was the case here. Further, when reviewing an order on appeal, this Court examines the papers and other evidence upon which the order appealed was founded (CPLR 5526), none of which name JP Morgan Chase as a defendant. Additionally, there was no motion to amend, a prerequisite to the substitution of JP Morgan Chase for Chase Manhattan Mortgage Corp. as a defendant on the appeal (CPLR 305 [c]; Indemini v Beth Israel Med. Ctr.,
On the merits of a motion to dismiss the complaint pursuant to CPLR 3211 (a) (7), the IAS court must determine whether, assuming that the allegations in the complaint are true, they state a cause of action upon which relief may be granted (see Becker v Schwartz,
Plaintiffs first challenge is based upon his purported failure to receive personal notice of the auction. However, it is undisputed that Chase Manhattan Mortgage Corp. sent plaintiff notices of the default and sale by regular and certified mail. Despite the errors in addressing these notices, the mortgagee also provided evidence that plaintiff’s doorman signed for the notification letters, proving, at the least, that the letters reached plaintiffs building. Even accepting plaintiffs contention that he never actually received these notices, this error would not afford a basis for setting aside the sale of the collateral (see generally Raschel v Rish,
Plaintiff next argues that the publication of the sale in Newsday violated RPAPL 231 (2) (a), which requires that publication take place in the same county where the property is located. However, the choice of paper would not, by itself, make the sale commercially unreasonable, and plaintiff has not otherwise shown that any other claimed defect precluded prospective bidders from attending the sale (see Amresco New England II v Denino,
Finally, plaintiff challenged the sale based upon the mortgagee’s acceptance of $200,000 plus outstanding maintenance for the collateral. Plaintiff contends, without any support, that this was only 45% of the market value of the property. UCC 9-507 (2)
Despite plaintiff’s protestations to specific aspects of the instant sale, we find that the totality of the record establishes that it was conducted in a commercially reasonable manner (Orix Credit Alliance, Inc. v Blevins,
Defendant mortgagee has established that it made reasonable
Andrias, J, dissents in part in a memorandum as follows: Because the motion court did not disclose its interest in Chase to the parties, under the express terms of Judiciary Law § 14, it was without power to hear the case and the orders appealed from are null and void. Thus, this Court should not address the merits of the motions, but simply remand the matter to Supreme Court for determination by another justice.
The majority ignores the well-established principle that a court’s lack of subject matter jurisdiction, which is the case where a judge is statutorily disqualified, is generally not waivable and may be challenged for the first time on appeal (Murray v State Liq. Auth.,
Aside from taking the opportunity to seek to impose sanctions upon plaintiff and his counsel for raising for the first time on appeal the disqualification issue, an issue he discovered for the first time after the motion court had decided the subject motions, the majority affirms what are clearly null and void orders.
The issue of the changed caption was fully raised by Chase in its respondent’s brief (point IV at 21-24). However, it argued not that JF Morgan Chase did not have a financial interest in this action, but that, even if Justice Diamond and her husband do in fact own JF Morgan Chase stock, that alone is an insufficient basis for judicial disqualification because “JF Morgan Chase Bank has a very large number of outstanding shares and it is highly unlikely that Judge Diamond’s and/or her husband’s ownership of shares would rise to the level as being deemed a ‘substantial interest’ in the corporate entity” (respondent’s brief, at 23-24). Chase went on to argue that plaintiff, who relied upon the Judge’s 2001 financial disclosure statement, had not
Implicit throughout Chase’s argument is its acknowledgment of the undisputed fact that defendant-respondent Chase Manhattan Mortgage Corp. is a wholly owned subsidiary of JP Morgan Chase and that the only way to have a financial interest in Chase Manhattan Mortgage Corp. is to own JP Morgan Chase stock. Plaintiffs appellate caption clearly identified defendant as “JP Morgan Chase, sued herein as Chase Manhattan Mortgage Corp.” and it would be disingenuous of us to now claim to have been misled.
The issue was fully argued by Chase and responded to by plaintiff, who relied in part upon the Second Circuit’s decision in Chase Manhattan Bank v Affiliated FM Ins. Co. (
Such statutory disqualification is not addressed to the motion court’s discretion, but is mandatory. Thus, any reliance upon a nonbinding advisory opinion of the Advisory Committee on Judicial Ethics (Op 04-17) rendered 20 months after Justice Diamond’s original decision and five months after the appeals were argued, which is also not part of the record before us and was not brought to our attention by any party, seems inappropriate. In any event, that opinion is based not upon Judiciary Law § 14, but upon the Rules of the Chief Administrator of the Courts and, referring to section 100.0 (D) of those rules (22 NYCRR 100.0 [D]), concludes that, because parent and subsidiary companies are treated separately and independently for purposes of contractual or tort liability, a judge who owns stock in a corporate party has an “economic interest” in that corporation, but not in any subsidiary, parent or related corporation. However, aside from its questionable logic and the fact that it ignores the de minimis requirement of section 100.0 (D) of those rules, such a general dispensation would not seem to apply to a wholly owned subsidiary such as Chase Manhattan Mortgage Corp., since an owner of JP Morgan Chase stock would have an
As to its concern about the possibly onerous burden on judges of investigating their interests in any corporate entities which might be related to a party before them, in this case the relationship of Chase Manhattan Mortgage Corp. to JP Morgan Chase is both obvious and conceded. Completely ignored by the majority is the obligation of a judge to “inform” herself about her personal financial interests and to make a “reasonable effort to keep informed” about the financial interests of her spouse (Code of Judicial Conduct Canon 3 [E] [2]; Rules of Judicial Conduct (22 NYCRR) § 100.3 [E] [2]), as well as the age-old stricture to avoid even an appearance of impropriety.
On the present record, other than Chase’s speculative arguments in its respondent’s brief about plaintiffs motives, there is no basis for sua sponte directing plaintiff and his counsel to show cause why a sanction should not be imposed upon them pursuant to part 130 of the Rules of the Chief Administrator. Such rules are specifically intended to sanction “frivolous” conduct. This is clearly not the case here. If Chase was offended by the caption or the inclusion of Justice Diamond’s financial statement in the record on appeal, its remedy was to move to alter the caption and strike the offending portions of the record.
As to the issue of possible sanctions, the majority’s sua sponte conclusions of impropriety are premature and, if there were any question of the motion court’s ownership of Chase stock, which ownership is presently undisputed, the proper procedure and the simplest solution would be to remand the matter for a factual determination of that issue.
Reargument granted to the extent of recalling and vacating the unpublished decision and order of this Court entered on March 23, 2004 (Appeal Nos. 1918-1919) and substituting a new decision and order therefor. Concur—Mazzarelli, J.P., Ellerin, Friedman and Gonzalez, JJ.
Andrias, J., dissents as follows: I respectfully dissent and would deny reargument.
To act as the nisi prius court and decide this motion as if it came directly to us sets an unfortunate precedent. In Matter of Harkness Apt. Owners Corp. v Abdus-Salaam (
Accordingly, inasmuch as plaintiff, as the moving party, has failed to demonstrate that this Court overlooked or misapprehended any of the legal or factual issues raised by him, the appropriate disposition is to simply deny plaintiff’s motion without further ado.
Notes
. This section is presently codified at UCC 9-610.
. This section is presently codified at UCC 9-627 (a).