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WHEN DEFENDANT’S ATTORNEY WAS SUSPENDED ANY FURTHER PROCEEDINGS IN THIS FORECLOSURE ACTION WERE STAYED; NEITHER PROCEDURE FOR LIFTING THE STAY WAS INVOKED; DEFENDANT’S MOTION TO VACATE SUMMARY JUDGMENT SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined a stay of the foreclosure action was in effect because of the suspension of defendant McGrath’s attorney. Because plaintiff never served McGrath with the required notice to lift the stay, the summary judgment order should have been vacated:

When an attorney is suspended from the practice of law, “as with an attorney’s death, incapacitation, removal from an action, or other disability, CPLR 321(c) protects the client by automatically staying the action from the date of the disabling event” … . “The express language of CPLR 321(c) sets no particular time limit to the stay of proceedings that is automatically triggered by a qualifying event” … .

“[D]uring the stay imposed by CPLR 321(c), no proceedings against the party will have any adverse effect” … , and “[o]rders or judgments that are rendered in violation of the stay provisions of CPLR 321(c) must be vacated” … .

“[T]here are actually two ways in which a CPLR 321(c) stay may be lifted. One way is if the party that lost its counsel retains new counsel at its own initiative, or otherwise communicates an intention to proceed pro se” … . “The second way is by means of [a] notice procedure pursuant to CPLR 321(c)” … .

Here, the plaintiff did not serve McGrath with the notice to appoint “either personally or in such manner as the court direct[ed]” (CPLR 321[c]). It is undisputed that no attempt was made to personally serve the required notice, nor is it alleged that the Supreme Court directed that service of the notice be made in some other manner … . Moreover, it is undisputed that McGrath did not communicate an intention to proceed pro se … . Therefore, the automatic stay was not lifted until McGrath opposed the plaintiff’s motion to confirm the referee’s report and for a judgment of foreclosure and sale and cross-moved to vacate the summary judgment order … . HSBC Bank USA, N.A. v McGrath, 2025 NY Slip Op 01614, Second Dept 3-19-25

Practice Point: When a party’s attorney is suspended, the proceedings are automatically stayed. There are two statutory procedures for lifting the stay, neither of which was invoked here.

 

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