The fallout of the 2008 housing market collapse in this country continues to be felt even today, and sometimes in unexpected ways. One of those is in the millions of properties where the loan amount vastly exceeded actual value, causing many homeowners to abandon to foreclosure. The glut of those pending foreclosures meant banks didn’t always act hastily to flip the properties, and many fell into disrepair.
This is where the wrongful death lawsuit of Lezama v. Cedano and Bank of New York Mellon resides. The case, weighed recently by the New York Supreme Court, Appellate District, First Department, was originally dismissed with regard to one of the defendants, a bank. However, the appellate court reinstated the case, allowing a grieving father to continues his claim.
According to the complaint, a fire broke out in a multiple dwelling unit in New York in April 2005. The fire blazed out-of-control, ultimately killing three residents – including the plaintiff’s 12-year-old son and the boy’s mother.
Plaintiff sued both the property owner and the mortgagee of the property (the bank). It is alleged defendants failed to adequately maintain the property, and had they done so, the fire could have been avoided.
Normally, a bank would not be a party to such action. However, in this case, the complainant asserts the defendant bank was aware the property owner defendant abandoned the property sometime earlier. Defendant bank had initiated foreclosure proceedings against the property and defendant property owner had not participated in those proceedings. It is on this basis, plaintiff alleges, the bank “knew full well from its dealings with (property owner defendant)” that the property was abandoned.
As the case dragged on, tenants continued to live on site. However, with the property owner having abandoned the site, it fell into serious disrepair. This, plaintiff argues, created a fire hazard – one that would not have existed had the bank appointed someone to maintain or even inspect the premises.
The bank filed a motion to dismiss, asserting it had no duty to maintain the subject property. The New York Supreme Court granted that motion, but the appellate court reversed as a matter of law, allowing the claim to proceed to trial.
Appellate court justices held they were obliged to give complainant’s factual allegations every possible favorable inference, and in so doing, determine whether defendant still established its case as a matter of law. Plaintiff adequately pleaded a claim against the bank, and further, the bank did not in its submitted evidence provide sufficient, conclusive support to indicate the property hadn’t been abandoned. In other words, there is evidence a reasonable jury could find the bank knew the property was abandoned and not maintained in a safe condition for tenants.
This does not mean plaintiff has won the case. It does mean, however, defendant is not entitled to a favorable judgment without the case first being heard by a jury.
The Law Offices of Nicholas Rose, PLLC offers free consultations. Call 1-877-313-7673.
Additional Resources:
Lezama v. Cedano and Bank of New York Mellon, July 17, 2014, New York Supreme Court Appellate Division, First Department
More Blog Entries:
New York City Wrongful Death Suit Filed in Fatal Hudson Boat Crash, Dec. 7, 2013, New York City Wrongful Death Lawyer Blog
