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THE DEATH OF A PARTY TO THIS FORECLOSURE ACTION AFFECTED THE MERITS OF THE CASE; SUPREME COURT DID NOT HAVE JURISDICTION TO DETERMINE DEFENDANT’S MOTION AND THE RELATED ORDER IS A NULLITY; THE APPEAL THEREFORE MUST BE DISMISSED (THIRD DEPT).

The Third Department determined the death of a party to this foreclosure proceeding deprived the court of jurisdiction. Therefore the court should not have considered defendant’s motion and the related order was a nullity:

In 2003, defendant Sharon A. Harris (hereinafter defendant) and defendant Marion D. Schubnel executed a note in favor of plaintiff that was secured by a mortgage on real property located in Albany County. Defendant and Schubnel owned the subject property as joint tenants with rights of survivorship. …

… [P]laintiff commenced this mortgage foreclosure action against defendant and Schubnel, among others. Defendant served an answer but Schubnel failed to do so. In November 2016, Schubnel died. In July 2017, defendant moved for leave to serve an amended answer and, as relevant here, sought to add a statute of limitations affirmative defense. In an amended order entered November 2017, Supreme Court granted the motion and sua sponte dismissed the complaint as time-barred. …

The death of a party generally stays an action until a personal representative is substituted for the deceased party … . Strict adherence to this rule, however, is unnecessary where a party’s demise does not affect the merits of the case … .

It is true that defendant, as the surviving joint tenant, obtained Schubnel’s interest in the subject property upon Schubnel’s death. Notwithstanding this transfer of interest, Schubnel’s estate can still be held liable for any deficiency in the event that a sale of the subject property fails to satisfy the debt. Indeed, the complaint specifically requests that such relief be granted should it be necessary … . In the absence of a substitution of Schubnel, a discontinuance of the action insofar as asserted against Schubnel or a representation by plaintiff that it would be waiving its right to seek a deficiency judgment against Schubnel, the death of Schubnel affects the merits of the case … . Because an automatic stay was in effect upon Schubnel’s death, Supreme Court was without jurisdiction to consider defendant’s motion and, therefore, the November 2017 amended order is a nullity … . Wells Fargo Bank, N.A. v Schubnel, 2019 NY Slip Op 07462, Third Dept 10-17-19

 

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