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APPELLANT, WHICH HAD PURCHASED THE PROPERTY WHILE THE FORECLOSURE ACTION WAS PENDING, SHOULD HAVE BEEN ALLOWED TO INTERVENE, CRITIERIA EXPLAINED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the motion to intervene in this foreclosure proceeding should have been granted. The foreclosure action was commenced by the plaintiff in 2007 and defendants never answered. When plaintiff moved for a default judgment, MAK (the appellant in this case), which had purchased the property while the foreclosure was pending, moved to intervene:

“Upon timely motion, any person shall be permitted to intervene in any action . . . 2. when the representation of the person’s interest by the parties is or may be inadequate and the person is or may be bound by the judgment; or 3. when the action involves the disposition or distribution of, or the title or a claim for damages for injury to, property and the person may be affected adversely by the judgment” ([CPLR] § 1012[a]). “‘[I]ntervention may occur at any time, provided that it does not unduly delay the action or prejudice existing parties'” … . “[N]either the fact that the appellant obtained its interest in the subject property after this action was commenced and the notice of pendency was filed, nor the fact that the defendants defaulted in answering or appearing, definitively bars intervention” … . “‘In examining the timeliness of the motion, courts do not engage in mere mechanical measurements of time, but consider whether the delay in seeking intervention would cause a delay in resolution of the action or otherwise prejudice a party'” … .

… MAK was entitled to intervene as of right “since it established that the representation of its interest by the parties would be inadequate, that the action involved the disposition of title to real property, and that it would be bound and adversely affected by a judgment of foreclosure and sale” … . Under the circumstances, MAK’s cross-motion … was timely. “Significantly, it was made in response to the plaintiff’s motion … for leave to enter a default judgment and for an order of reference, . . . [and] since it was made before an order of reference or a judgment of foreclosure and sale was issued, the plaintiff was not prejudiced by the timing of the cross motion” … . HSBC Bank USA, N.A. v Islam, 2023 NY Slip Op 06356, Second Dept 12-13-24

Practice Point: Here the party which purchased the property while the foreclosure on the property was pending should have been allowed to intervene when the plaintiff moved for a default judgment and an order of reference. The criteria for a successful motion to intervene in this context are explained.

 

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