Process Server's Failure To Keep Adequate Records Sinks NY Foreclosure; May Open Floodgates In Effort To Vacate Judgments

In Nassau County, New York, Reuters reports:

• A process server working for a once-prolific foreclosure law firm in upstate New York broke the law by failing to keep any record of papers served in a 2008 foreclosure case, a Long Island judge has ruled, giving defense attorneys a new angle to explore in foreclosure cases as they seek to buy time for their financially beleaguered clients to modify or refinance their mortgages.



• Gary Cardi, a former police officer contracted by A&J Process Service -- which has offices on the same floor in the same building as the foreclosure firm Steven J. Baum PC -- admitted in Nassau County court last October that he didn't have any record of serving foreclosure papers on Soledad Murillo in 2008. In fact, he told state Supreme Court Justice F. Dana Winslow during an October hearing, he hasn't kept records of any of the "thousands" of cases he served over the last six years.



• An attorney for the Baum firm, Victor Spinelli, representing foreclosing bank U.S. Bank NA, told Winslow that he thought the failure to keep tabs on service wasn't a reason to overturn a foreclosure judgment against Murillo under New York law.



• But Winslow disagreed. Not only was Cardi required to keep some record of his attempts to serve Murillo, Winslow ruled, but his failure to do so violated New York General Business Law Article 8, which defines and outlines the duties for process servers -- including, Winslow said, the need to keep "legible" records of service.



• "The duty to keep comprehensive records may have been unnoticed, or underestimated, by litigants and the courts," Winslow wrote in a ruling dated Dec. 22. "Past practice, however, cannot be the motivating force for future conduct and determinations.



• "The need, particularly in this economic environment and under these telling circumstances, for valid and reliable proof of service, mandates the rejection of 'trust me,' and the adoption of 'show me,'" Winslow wrote.

***

• Traverse hearings -- which are held to determine whether parties were properly served -- are still a relative rarity in foreclosure cases, said Rebecca Grammatico, an attorney at the Empire Justice Center who works on foreclosure issues.



• But defense attorneys in foreclosure cases may find a useful new approach in the wake of Winslow's ruling, Grammatico said. "Time is frequently the thing you really need," she said. "This will, for many petitioners across the state, become the tool."



• It is possible that other defendants who were served by Cardi or another server who failed to keep records could use Winslow's ruling as a way to get judgments against them vacated, Grammatico added.

For the story, see NY judge: Sloppy service has legal consequences.