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GENERALLY THE DEATH OF A PARTY TO AN ACTION DIVESTS THE COURT OF JURISDICTION AND REQUIRES A STAY OF THE PROCEEDINGS; HERE IN THIS FORECLOSURE ACTION HUSBAND AND WIFE OWNED THE PROPERTY AS TENANTS BY THE ENTIRETY; THE PROPERTY THEREFORE REMAINED WHOLLY OWNED BY WIFE UPON HUSBAND’S DEATH; BECAUSE PLAINTIFF WAS NOT SEEKING A DEFICIENCY JUDGMENT AGAINST HUSBAND’S ESTATE, A STAY OF THE PROCEEDINGS WAS NOT REQUIRED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the death of one of the parties in this foreclosure action did not require a stay of the proceedings. The defendant wife held the property with her husband as tenants by the entirety. When the husband died, the wife remained as the owner of the entire property. The plaintiff mortgage company, by moving to delete the husband’s name for the caption, elected not to seek a deficiency judgment against the decedent’s estate. Therefore the action should not have been stayed:

“‘Generally, the death of a party divests a court of jurisdiction to act, and automatically stays proceedings in the action pending the substitution of a personal representative for the decedent'” … . However, “where a party’s demise does not affect the merits of the case, there is no need for strict adherence to the requirement that the proceedings be stayed pending substitution” … . “[A] mortgagor who has made an absolute conveyance of all his [or her] interest in the mortgaged premises . . . is not a necessary party to foreclosure, unless a deficiency judgment is sought” … .

… [T]he plaintiff established that, upon the decedent’s death, Janice, “as a tenant by the entirety with her husband, remained seized of the entire ownership interest in the subject property” … . Moreover, by moving to amend the caption to delete the name of the decedent and, in effect, to discontinue the action insofar as asserted against him, the plaintiff, in effect, elected not to seek a deficiency judgment against the decedent’s estate … .

By virtue of the absolute conveyance of the property from the decedent to Janice, and the plaintiff’s waiver of its right to seek a deficiency judgment against the decedent or his estate, “strict adherence to the requirement that the proceedings be stayed pending substitution was not necessary” … . Citimortgage, Inc. v Fimbel, 2025 NY Slip Op 06600, Second Dept 11-26-25

Practice Point: Here in this foreclosure action against husband and wife as tenants by the entirety, the husband’s death did not require a stay of the proceedings because the wife continued to hold the entire ownership interest in the property and plaintiff was not seeking a deficiency judgment against the estate of the husband.

 

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