Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Eastern Savings Bank v. Strez

United States District Court, E.D. New York

February 7, 2017



          ERIC N.VITALIANO United States District Judge

         The Great Recession of 2008 plunged the nation into a frightening crisis in the home mortgage market. In the darkness of the crisis, many home owning families saw their dreams dashed. Here, we finally see, and warmly welcome, the light of a new day.

         In this long-lived foreclosure action, plaintiff Eastern Savings Bank, fsb, ("ESB"), without objection, moves to (i) vacate the February 14, 2014 Judgment of Foreclosure and Sale ("JFS") pursuant to Federal Rule of Civil Procedure 60(b)(5), and (ii) discontinue the action pursuant to Rule 41(a)(2). For the reasons that follow, ESB's motion is granted.


         Nearly six years ago, ESB brought this mortgage foreclosure action against Peter K. Strez, Catherine A. Strez (collectively, the "borrowers"), and a collection of nominal defendants - the City of New York Environmental Control Board ("ECB"), and John Doe #1 through John Doe #12. See Dkt. No. 1. On July 26, 2013, the Court granted plaintiffs motion for summary judgment of foreclosure, denied the borrowers' cross-motion for summary judgment, dismissed the John Doe defendants, and granted plaintiffs motion for default against the non-appearing ECB. See Dkt. No. 41. On December 23, 2013, judgment was entered against the borrowers in the amount of $587, 615.47, and against the defaulting ECB, thereby foreclosing ECB's interest in the subject premises. Dkt. No. 48. The JFS was entered on February 14, 2014. Dkt. No. 51.

         Following an appeal to the Second Circuit, the borrowers entered into a settlement, resulting in a Forbearance Extension Agreement (the "Agreement"), which was approved by this Court on June 25, 2015. Dkt. No. 67. The Agreement, inter alia, provided that:

(i) if the Borrower reinstates the Note and Mortgage[, ] [ESB] [would] undertake to vacate the JFS without prejudice or (ii) if the full contractual payoff of the Note and Mortgage [was] made[J [ESB] [would] report to the court the [JFS] as fully satisfied by voluntary payment.

Dkt. No. 67 at 8.

         The borrowers fulfilled their obligation to ESB in or around November 2016. See Dkt. No. 68 ("Mot. to Vacate"). In short, according to ESB, "the borrowers fully performed" under a subsequent extension of the original Agreement, "pursuant to which it was agreed upon [b]orrowers' strict compliance[, ] no sale would occur, the subject Mortgage would be reinstated, and the JFS vacated." Mot. to Vacate at 1. The pending motion would restore the lending relationship ante bellum.


         Rule 60(b)(5) empowers a district court to "relieve a party or its legal representative from a final judgment, order, or proceeding [when]... the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable[, ]" if the motion has been made within a "reasonable time." Fed.R.Civ.P. 60(b)(5) & (c)(1); cf. PRC Harris, Inc. v. Boeing Co., 700 F.2d 894, 897 (2d Cir. 1983) ("In considering whether a [Rule 60(b)(5)] motion is timely, we must scrutinize the particular circumstances of the case, and balance the interest in finality with the reasons for delay."). The elapse of time - a sure enemy of litigation - is a less significant consideration where adverse interests join in the application.

         At the same time, the Second Circuit has cautioned that vacatur of judgment following settlement should not be granted as a matter of course. See Mfrs. Hanover Trust Co. v. Yanakas, 11 F.3d 381, 385 (2d Cir. 1993). In United States Bancorp Mortgage Co. v. Bonner Mall Partnership, the Supreme Court similarly cautioned against the use of vacatur following settlement absent a showing of "equitable entitlement to the extraordinary remedy of vacatur." 513 U.S. 18, 26, 115 S.Ct. 386, 130 L.Ed.2d 233 (1994). Indeed, "[s]ince 60(b) allows extraordinary judicial relief, it is invoked only upon a showing of exceptional circumstances." United States v. Int'lBhd. of Teamsters, 51 F.Supp.2d 314, 317 (S.D.N.Y.1999) (citing Nemaizer v. Baker, 793 F.2d 58, 61 (2d Cir. 1986)). The trend in this circuit, then, is that judgments should be vacated only after a careful balancing of "the interests of honoring settlements reached by the parties against the public interest in the finality of judgments and the development of decisional law." Jewelers Vigilance Comm., Inc. v. Vitale Inc., Ill. F.R.D. 184, 186 (S.D.N.Y. 1998) (citations omitted).

         Here, it appearing from the unopposed representations of ESB that the borrowers are now able to fulfill, and have been fulfilling, their obligations under the home mortgage agreement with ESB, applying the JFS prospectively, following the successful negotiation of and compliance by the Strezes with the Agreement, is no longer equitable. Moreover, no litigant has opposed relief from the judgment. Indeed, it bears repeating that there is no opposition to the motion from any nominal or third party, nor, at this juncture, is any such opposition even conceivable. To be sure, "[n]othing before the Court suggests that the parties are attempting to 'game the system' in some fashion." Am. Home Assur. Co. v. Kuehne & Nagel (AG & CO.) KG, No. 06 CIV. 6389 (JLC), 2010 WL 1946718, at *2 (S.D.N.Y. May 7, 2010) (citing 13C Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice & Procedure. § 3533.10.2 at 597 (3d ed. 2008)).

         An appropriate balancing of competing interests tips heavily in favor of vacating the JFS. Quite frankly, the concerns that would ordinarily militate against permitting settling parties to contract around a litigated judgment are of little or no relevance in this context. Those contrary interests zero in on public policy values in the finality of judicial proceedings and the collateral impacts such absence of finality might have on the development of decisional law. Decisional law was hardly advanced in this proceeding. See Am. Home Assur. Co., 2010 WL 1946718, at *2. The litigation was quite simply an action to foreclose on a home mortgage - an unfortunate, standard and all too frequent occurrence. Nor, though final for purposes of procedural rules and appellate rights, was the judgment ever truly final in a practical sense. Quite to ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.