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THE BANK’S MOTION TO RESTORE THE 2009 FORECLOSURE ACTION WHICH HAD BEEN ADMINISTRATIVELY, BUT NOT FORMALLY, DISMISSED SHOULD HAVE BEEN GRANTED; THE BANK HAD PREVIOUSLY STATED ITS INTENTION TO DISCONTINUE THE 2009 FORECLOSURE BUT THE MOTION TO RESTORE WAS NOT PRECLUDED BY THE JUDICIAL ESTOPPEL DOCTRINE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank should have been allowed to restore a 2009 foreclosure action which had been administratively, but not formally, dismissed. The court noted that the bank’s prior statement of its intention to discontinue the 2009 action did not trigger the judicial estoppel doctrine:

While, in an effort to successfully prosecute the 2015 foreclosure action, the Bank represented that it would seek to discontinue the 2009 action, it is not judicially estopped from changing its position. ” [A] party who assumes a certain position in a prior legal proceeding and secures a favorable judgment therein is precluded from assuming a contrary position in another action simply because his or her interests have changed'” … . The Bank did not obtain a favorable judgment in the 2015 foreclosure action.

The Supreme Court should have granted that branch of the Bank’s motion which was to restore the 2009 action to the active calendar. The 2009 action was never formally dismissed, as the marking-off procedures of CPLR 3404 do not apply to pre-note of issue actions such as this one … . Since the 2009 action could not properly be marked off pursuant to CPLR 3404, the Bank was not required to move to restore within any specified time frame and was not obligated to demonstrate a reasonable excuse and a potentially meritorious claim … . Further, there was neither a 90-day notice pursuant to CPLR 3216 … , nor an order dismissing the complaint pursuant to 22 NYCRR 202.27 … . Finally, [defendant] does not contend that the 2009 action was dismissed pursuant to CPLR 3215(c). Deutsche Bank Natl. Trust Co. v Gambino, 2020 NY Slip Op 01476, Second Dept 3-4-20

 

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