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Because Prior Mortgage Foreclosure Action Had Been Abandoned Plaintiff Was Not Entitled to Dismissal of the Instant Action Pursuant to Real Property Actions and Proceedings Law (RPAPL) 1301(3) (Which Prohibits More than One Such Action at a Time)

The Second Department determined Real Property Actions and Proceedings Law (RPAPL) 1301(3) did not require dismissal of plaintiff’s foreclosure action.  Although the statute prohibits more than one action to recover a mortgage debt at a time, the pending action had been abandoned (although not formally discontinued). Therefore plaintiff’s action was viable:

RPAPL 1301(3) provides that “[w]hile [an] action is pending or after final judgment for the plaintiff therein, no other action shall be commenced or maintained to recover any part of the mortgage debt, without leave of the court in which the former action was brought.” The purpose of this statute is to protect the mortgagor “from the expense and annoyance” of simultaneously defending against two independent actions to recover the same mortgage debt … . Courts have recognized that this statute “should be strictly construed since it is in derogation of a plaintiff’s common-law right to pursue the alternate remedies of foreclosure and recovery of the mortgage debt at the same time” … .

Under the circumstances of this case, the Supreme Court properly determined that the defendant John Conlin was not entitled to dismissal of the complaint pursuant to RPAPL 1301(3). The record supports the conclusion that the plaintiff’s assignor, the former mortgagee, effectively abandoned its prior action to foreclose the mortgage because its status as a junior mortgagee made it improbable that foreclosure would satisfy the underlying debt. Although the foreclosure action was not formally discontinued, the effective abandonment of that action is a “de facto discontinuance” which militates against dismissal of the present action pursuant to RPAPL 1301(3) … . Old Republic Natl. Tit. Ins. Co. v Conlin, 2015 NY Slip Op 04826, 2nd Dept 6-10-15

 

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