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SUPREME COURT SHOULD NOT HAVE, SUA SPONTE, DETERMINED DEFENDANT IN THIS FORECLOSURE ACTION WAIVED DISMISSAL FOR FAILURE TO TIMELY MOVE FOR A DEFAULT JUDGMENT BECAUSE THE ISSUE WAS DISPOSITIVE AND NEVER LITIGATED; THE BANK’S FAILURE TO TIMELY MOVE FOR A DEFAULT JUDGMENT PURSUANT TO CPLR 3215 (C) REQUIRED DISMISSAL OF THE BANK’S ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff-bank’s failure to move for a default judgment within one year required dismissal of the complaint pursuant to CPLR 3215 (c). The court noted that Supreme Court should not have, sua sponte, held defendant waived dismissal pursuant to CPLR 3215 (c) because the issue had never been litigated:

Although the Supreme Court keenly observed that the defendants had filed a notice of appearance in the first action in October 2014, it should not have, sua sponte, determined that such notice of appearance constituted a waiver of their right to seek dismissal of the complaint pursuant to CPLR 3215(c), as the parties never litigated the issue of waiver. Since that branch of the defendants’ cross motion which was pursuant to CPLR 3215(c) to dismiss the complaint had “‘dispositive import'” … , the court should have notified the parties of the waiver issue and afforded them an opportunity to be heard prior to determining the cross motion on a ground neither side argued. …

“The language of CPLR 3215(c) is not, in the first instance, discretionary, but mandatory, inasmuch as courts ‘shall’ dismiss claims (CPLR 3215[c]) for which default judgments are not sought within the requisite one-year period, as those claims are then deemed abandoned” … . “‘Failure to take proceedings for entry of judgment may be excused, however, upon a showing of sufficient cause,’ which requires the plaintiff to ‘demonstrate that it had a reasonable excuse for the delay in taking proceedings for entry of a default judgment and that it has a potentially meritorious action'” … . Wells Fargo Bank v Aucapina, 2021 NY Slip Op 02561, Second Dept 4-28-21

 

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