Plaintiff moves for a deficiency judgment against defendants Wilson O. Rigdon, Jr. and Wilson O. Ridgon, III only in relation to two separate foreclosure actions, as well as an order confirming the Referee's Reports of Sale. Defendants Wilson O. Rigdon, Jr. and Wilson O. Ridgon, III oppose the motions.

The court heard oral argument from counsel on March 19, 2010.

These foreclosure actions were commenced on June 19, 2008 upon the filing of a Summons & Complaint in the respective actions. Since that time the actions have followed similar paths as set forth herein. Defendants Southside Storage, LLC, Wilson O. Ridgon, and Wilson O. Ridgon, Jr. interposed Verified Answers on July 3, 2008. On October 15, 2008 this court signed Conditional Orders granting Summary Judgment and striking said Answers. On November 7, 2008, the court issued Orders appointing David F. Crowley as Referee in both actions. On February 20, 2009, the court signed Orders Appointing Mark J. Huebner as Temporary Receiver in both actions. On April 8, 2009, this court signed Judgments of [*2]Foreclosure and Sale. On October 30, 2009, Referee David F. Crowley held a public auction of all properties.

Plaintiff argues that the operative date is November 6, 2009 when the Referee physically gave the deeds to plaintiff's counsel and that ninety days from November 6, 2009 is February 4, 2010. Plaintiff argues service on defense counsel on February 3, 2010 was both timely and proper.

RPAPL § 1371 (2) provides, in pertinent part, as follows:

[s]imultaneously with the making of a motion for an order confirming the sale, provided such motion is made within ninety days after the date of the consummation of the sale by the delivery of the proper deed of conveyance to the purchaser, the party to whom such residue shall be owing may make a motion in the action 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 such action. Such notice shall be served personally or in such other manner as the court may direct.

(Emphasis added).

It is well-settled that "[o]nly substantial compliance with RPAPL § 1371 (2) is necessary where there is proof that actual notice was timely received" (D'Ambra v Haynor, 293 AD2d 858

[3rd Dept 2002]). That having been said, however, this benefit is only conferred when there is sufficient proof in the record establishing actual notice within 90 days of the delivery of the referee's deed in the first instance (Citicorp Mtge. v Strong, 227 AD2d 818 [3rd Dept 1996]).

In examining whether the motion for a deficiency judgment was properly and timely made, the court is concerned with two points in time, namely the date of the delivery of the proper deed of conveyance to the purchaser compared to the date of the making of the motion.

With respect to the delivery of the deed to the purchaser, the two competing dates are November 4, 2009 and November 6, 2009. Defendants argue the Referee signed the Referee's Reports of Sale on November 4, 2009 and stated therein that he had "delivered to said purchaser the usual Referee's deed for said premises" - presumably on that date (Referee's Report of Sale, ¶ [*3]3). Plaintiff's counsel argues that although the Referee signed the Reports on November 4, 2009, the deed was not actually delivered to him (plaintiff's counsel) until November 6, 2009 due to a delay in the signing of additional documents.

While the court does not doubt the veracity of plaintiff's counsel's representations, the court is troubled by the form of the competing representations. Plaintiff's counsel's representations are contained in a letter dated March 18, 2010 in which he states "[t]he referee's deed in foreclosure was delivered to your deponent on November 6, 2009....", as well as his statements at oral argument. The Referee's Reports of Sale which are dated November 4, 2009 are sworn affidavits, but they do use the word "delivered" in the past tense and, as such, it is unclear when the deeds were delivered. Consequently, the court finds that the evidence submitted by the parties raises a question of fact regarding the actual date the deeds were delivered, thereby warranting a hearing on the issue.

With respect to the making of the motion, defendants argue that delivery of the motion papers to the receptionist of the defendants' law firm on February 3, 2010 was insufficient. The court disagrees. Service of the papers upon the receptionist/secretary was sufficient to satisfy the requirement (Sarasota Inc. v Homestead Acres at Greenpoint, 249 AD2d 290 [2nd Dept 1998]).

Consequently, the court will schedule an evidentiary hearing on notice to counsel to establish the date of the delivery of the proper deeds of conveyance from the Referee to plaintiff's counsel.

II.VALUATION/APPRAISAL

A.Index No. 2008-1668

Plaintiff has submitted a market analysis by Jennifer Lynch, a licensed real estate salesperson for Realty, USA dated February 2, 2010 opining that the fair and reasonable value of the premises on October 30, 2009 was $184,900 which would result in a net deficiency of $80,286.52.

Defendants argue that plaintiff's submission is insufficient because it is not in affidavit form, there in no supporting documentation regarding comparable sales, and that the comparables may have been residential, not commercial, in nature. Defendants have also submitted their own appraisal through the affidavit of Susan Millham. Ms. Millham is a licensed real estate salesperson for Pyramid Brokerage Company and opines that the value of the property ranges from $262,000 to $290,000 which would eliminate the projected deficiency.

B.Index No. 2008-1669

Plaintiff has submitted a market analysis by Jennifer Lynch, a licensed real estate salesperson for Realty, USA dated February 2, 2010 opining that the fair and reasonable value of the premises on October 30, 2009 was $137,000 which would result in a net deficiency of $20,206.67. [*4]

Defendants make the same arguments as above regarding the insufficiencies of plaintiff's submission and, again, submit their own appraisal by Ms. Millham. Ms. Millham opines that the value of the property ranges from $211,000 to $255,000 which would negate the projected deficiency.

C.Analysis

RPAPL § 1371(2) provides that Supreme Court "shall determine, upon affidavit or otherwise as it shall direct, the fair and reasonable market value of the mortgaged premises." In this court's view, defendants' arguments regarding the insufficiency of plaintiff's comparables are directed more to the reliability of the valuations, rather than the admissibility in the first instance. As such, the court finds that a hearing is warranted so that the court or a referee may determine credibility and that witnesses may be subject to observation and cross-examination (Trustco Bank, Natl. Assn. v 400 Delaware Ave. Prop. Co., 256 AD2d 762, 763 [3rd Dept 1998], lv dismissed/denied in part 93 NY2d 869 [1999]). Consequently, in view of the conflicting appraisals, the court will schedule evidentiary hearings on the fair market value of the properties (TPZ Corp. v Block 7589 Corp., 233 AD2d 496 [2nd Dept 1996]).

In view of the foregoing, the court will schedule an evidentiary hearing on notice to counsel to establish the consummation of the sales (e.g., the delivery of the proper deed of conveyance from the Referee to plaintiff's counsel). At the conclusion of said hearing, the parties should be prepared, if necessary, to proceed directly to an evidentiary hearing on the fair market value of the properties including the amounts due.

The foregoing constitutes an Order of the court. The mailing of a copy of this Decision and Order by this court shall not constitute notice of entry.

It is so ordered.

Dated:April 13, 2010

Binghamton, New York

s/ Ferris D. Lebous

Hon. Ferris D. Lebous

Justice, Supreme Court