THE BANK DID NOT OFFER A REASONABLE EXCUSE FOR FAILURE TO TAKE PROCEEDINGS FOR A DEFAULT JUDGMENT WITHIN A YEAR AND DID NOT SUBMIT AN ADEQUATE LOST NOTE AFFIDAVIT; THE DEFAULT JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED; THE ACTION IS DEEMED ABANDONED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank in this foreclosure action did not submit sufficient evidence to support a late motion for default judgment against the borrower. The bank did not offer a reasonable excuse for failure to take proceedings for a default judgment within a year, and did not submit a sufficient lost note affidavit. The Second Department deemed the action abandoned pursuant to CPLR 3215:

… [T]he plaintiff failed to proffer a reasonable excuse for its failure to take proceedings for the entry of a judgment within one year after the action was released from the foreclosure settlement part … .

Further, a plaintiff moving for leave to enter default judgment against a defendant must submit proof of service of the summons and complaint, proof of the facts constituting the claim, and proof of the defendant’s failure to answer or appear … . Pursuant to UCC 3-804, “[t]he owner of an instrument which is lost, whether by destruction, theft or otherwise, may maintain an action in his [or her] own name and recover from any party liable thereon upon due proof of his [or her] ownership, the facts which prevent his [or her] production of the instrument and its terms.” Here, the plaintiff failed to set forth the facts that prevented the production of the original note … . The lost note affidavit submitted by the plaintiff in support of its motion, inter alia, for leave to enter a default judgment did not identify who conducted the search for the lost note or explain when or how the note was lost … . LaSalle Bank N.A. v Carlton, 2022 NY Slip Op 02785, Second Dept 4-27-22

Practice Point: If the bank does not present an adequate excuse for failing to take proceedings for a default judgment in a foreclosure action within one year, the action will be deemed abandoned pursuant to CPLR 3215.