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THE DEATH OF A DEFENDANT IN THIS FORECLOSURE PROCEEDING AFFECTED THE MERITS OF THE ACTION; THEREFORE THE DEATH TRIGGERED A STAY OF THE PROCEEDINGS PENDING SUBSTITUTION OF A REPRESENTATIVE; HERE ALL THE DETERMINATIONS OF SUPREME COURT MADE AFTER DEFENDANT’S DEATH WERE A NULLITY (SECOND DEPT).

The Second Department, reversing Supreme Court in this foreclosure action, determined the death of a defendant affected the merits of the action triggering a stay of all proceedings. Therefore the determinations made by Supreme Court after defendant’s death were a nullity:

“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” … . “Any determination rendered without such a substitution is ordinarily deemed a nullity” … . However, “if a party’s death does not affect the merits of a case, there is no need for strict adherence to the requirement that the proceedings be stayed pending substitution” … . “A judgment of foreclosure and sale entered against a defendant is final as to all questions at issue between the parties, and concludes all matters of defense which were or might have been litigated in the foreclosure action” … . However, “[a] judgment of foreclosure and sale does not divest the mortgagor of its title and interest in the property until the sale is actually conducted” … .

Here, the decedent answered the complaint and was entitled to service of all papers in the action, including any motions to extend the time in which to conduct the foreclosure sale and any notice of sale (see CPLR 2103 …). … [T]he decedent’s death did affect the merits of this action and triggered a stay of all proceedings in the action pending substitution of a legal representative … . Any determinations made by the Supreme Court after the decedent’s death were a nullity, including the amended order and judgment of foreclosure and sale and the orders appealed from … . Real Estate Mtge. Network, Inc. v Perez, 2026 NY Slip Op 05562, Second Dept 9-30-26

Practice Point: Where a defendant’s death affects the merits of the action, the action is stayed pending substitution of a representative.

Practice Point: All rulings made while the action was stayed were a nullity.

Practice Point: A judgment of foreclosure and sale does not divest a mortgagor of title to and interest in the property until the sale is conducted.

 

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THE EVIDENCE PRESENTED BY DEFENDANT WAS NOT SUFFICIENT TO REBUT THE PRIMA FACIE PROOF OF PROPER SERVICE PRESENTED IN THE PROCESS SERVER’S AFFIDAVIT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s affidavit was not sufficient to rebut the prima facie demonstration of proper service in the process server’s affidavit:

… [T]he affidavit of service constituted prima facie evidence of valid service pursuant to CPLR 308(1) … . The process server alleged therein that on July 24, 2010, at 8:50 a.m., at the premises, he served the summons and complaint and RPAPL 1303 notice on the defendant by delivery to the defendant personally.

… [T]he defendant failed to rebut the presumption of proper service established by the affidavit of service. In her affidavit submitted in support of the motion, the defendant generally denied receipt of service but failed to specifically address the alleged service at the premises on July 24, 2010 … , or aver that she did not meet the description included in the affidavit of service … . The defendant further provided a letter from the New York City Police Department, Human Resources Division. Although the defendant averred that she was at work at the time she allegedly was served, the evidence submitted failed to establish that she was not at the premises at the time of service … . Rather, the letter merely established that she was employed as a “Police Comm Tech” from July 20, 1987, to January 26, 2018, and that she worked 35 hours per week. Wilmington Sav. Fund Socy., FSB v Bryant, 2026 NY Slip Op 05570, Second Dept 9-30-26

Practice Point: Consult this decision for insight into the nature of the evidence necessary to rebut the prima facie proof of proper service presented in a process server’s affidavit. Here, defendant failed to rebut the presumption of proper service.​

 

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HERE THE FORECLOSURE SALE TOOK PLACE ABOUT AN HOUR BEFORE DEFENDANTS CLOSED WITH ANOTHER BUYER; THE FORECLOSURE SALE EXTINGUISHED DEFENDANTS’ RIGHT TO REDEEM THE MORTGAGE; THE SUCCESSFUL BIDDER AT THE FORECLOSURE SALE THEREFORE PREVAILED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the foreclosure sale to the successful bidder, Pekich, took place before the purported sale of the same property by defendants to Ore on the same day. Therefore defendants’ right to redeem the property was extinguished by the foreclosure sale:

“‘A mortgagor or other owner of the equity of redemption of a property subject to a judgment of foreclosure and sale may redeem the mortgage at any time prior to the foreclosure sale'” … . However, “[t]he right to redeem is extinguished as a matter of law upon the foreclosure sale, whether or not the deed has been delivered, and once the right to redeem is lost, it cannot be revived, even by court order” … .

Here, the record demonstrates that the foreclosure sale of the property at which Pekich was the successful bidder concluded at 3:15 p.m. on June 21, 2024, and that the payoff sum was wired to the plaintiff during Ore and the [defendants’] closing more than one hour later, at 4:23 p.m. on June 21, 2024. Under these circumstances, Pekich became the equitable owner of the property upon the completion of the foreclosure sale, and any right to redeem the mortgage had already been extinguished by the time Ore and the [defendants] purported to close on the property … . JPMorgan Chase Bank, N.A. v Gezlev, 2026 NY Slip Op 05387, Second Dept 9-23-26

Practice Point: A foreclosure sale to a successful bidder extinguishes a mortgagor’s right to redeem the mortgage. Here the foreclosure sale took place one hour before defendants attempted to redeem the mortgage with proceeds from another purported sale of the property. The successful bidder prevailed.

 

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IN THIS FORECLOSURE ACTION DEFENDANT’S MOTION TO VACATE THE NOTE OF ISSUE SHOULD HAVE BEEN DENIED; THE MOTION WAS UNTIMELY AND DID NOT DEMONSTRATE ANY UNANTICIPATED CIRCUMSTANCES SINCE THE FILING OF THE NOTE OF ISSUE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s motion to vacate the note of issue in this foreclosure action should have been dismissed as untimely:

… [S]upreme Court also should have denied the defendant’s … motion pursuant to CPLR 5015(a)(3) to vacate the note of issue filed by the plaintiff. A motion to vacate a note of issue is governed by 22 NYCRR 202.21, pursuant to which any party to an action may, within 20 days of service of the note of issue and certificate of readiness, move to vacate the note of issue upon an affidavit demonstrating that the case is not ready for trial … . Where a party’s motion to vacate a note of issue is timely, “the party is ‘required only to demonstrate why the case [is] not ready for trial'” … . However, where the motion is not timely, the party seeking relief must meet the “‘more difficult standard'” of 22 NYCRR 202.21(d) which “‘requires the movant to demonstrate unusual or unanticipated circumstances and substantial prejudice'” … .

Here, the defendant’s motion to vacate the note of issue was untimely as it was made … more than 20 days after the note of issue was filed … . Moreover, the defendant failed to demonstrate the existence of unusual or unanticipated circumstances since the filing of the note of issue warranting its vacatur … . Federal Natl. Mtge. Assn. v Cassis, 2026 NY Slip Op 05381, Second Dept 9-23-26

Practice Point: Where a motion to vacate the note of issue is made more than 20 days after the note of issue was filed it must demonstrate “the existence of unusual or unanticipated circumstances since the filing of the note of issue warranting its vacatur.” If the motion to vacate is timely made it must demonstrate only that the case is not ready for trial.

 

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DEFENDANTS’ PARTICIPATION IN FORECLOSURE SETTLEMENT CONFERENCES DID NOT CONSTITUTE AN “APPEARANCE” IN THE FORECLOSURE ACTION; THEREFORE DEFENDANTS COULD MOVE TO DISMISS THE ACTION AS ABANDONED WHERE PLAINTIFF FAILED TO TAKE A TIMELY DEFAULT JUDGMENT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendants in this foreclosure action did not waive their right to seek dismissal pursuant to CPLR 3215(c) by participating in settlement conferences. Pursuant to CPLR 3215(c) a defendant who has not appeared in an action may move to dismiss the action as abandoned where plaintiff has not obtained a default judgment within six years:

… [T]he defendants did not waive their right to seek dismissal pursuant to CPLR 3215(c). A defendant may waive the right to seek dismissal pursuant to CPLR 3215(c) by serving an answer or taking “any other steps which may be viewed as a formal or informal appearance” … . Here, the defendants did not serve an answer or participate in the action on the merits prior to cross-moving in July 2018, inter alia, pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against them as abandoned … . The defendants’ participation in settlement conferences pursuant to CPLR 3408 “did not demonstrate a clear intent to participate in the lawsuit on the merits” and thus, did not constitute a formal or informal appearance in the action … . Wilmington Sav. Fund Socy., FSB v Dresdner, 2026 NY Slip Op 05350, Second Dept 9-16-26

Practice Point: Participation in foreclosure settlement conferences does not constitute an “appearance” in a foreclosure action.

 

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HERE PLAINTIFF BANK FAILED TO PROVE THAT THE RPAPL 1304 NOTICE INCLUDED A LIST OF AT LEAST FIVE HOUSING COUNSELING AGENCIES IN THE REGION WHERE DEFENDANT LIVED; FAILURE TO DEMONSTRATE STRICT COMPLIANCE WITH THE RPAPL 1304 NOTICE REQUIREMENTS REQUIRED DENIAL OF THE BANK’S MOTION FOR SUMMARY JUDGMENT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s failure to strictly comply with the content requirements of the RPAPL 1304 notice of foreclosure precluded summary judgment:

… [I]n support of its motion … for summary judgment on the complaint, the plaintiff submitted … an affidavit of Shae Smith, a vice president of loan documentation for the plaintiff, who averred therein that a 90-day notice was mailed to the defendant on April 14, 2010. Smith annexed to the affidavit a copy of the notice, which included a list of 17 “HUD Approved Housing Counseling Agencies.” However, the plaintiff failed to establish, prima facie, that, of the 17 agencies listed in the RPAPL 1304 notice to the defendant, at least 5 of those agencies served the region where the defendant resided … . Contrary to the plaintiff’s contention, the failure to provide a list of five housing counseling agencies as required by the statute is not a defect that may be disregarded pursuant to CPLR 2001 … .

Since the plaintiff failed to establish its strict compliance with RPAPL 1304, the Supreme Court should have denied those branches of the plaintiff’s motion which were for summary judgment on the complaint and for an order of reference without regard to the sufficiency of the defendant’s opposition papers … . Wells Fargo Bank, N.A. v Curtis, 2026 NY Slip Op 05348, Second Dept 9-16-26

Practice Point: Proof of strict compliance with the content-requirements of an RPAPL 1304 notice of foreclosure is a prerequisite for summary judgment.

 

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PLAINTIFF BANK’S FAILURE TO MOVE FOR A JUDGMENT OF FORECLOSURE AND SALE AS DIRECTED IN A 2017 ORDER WAS NOT SUFFICIENT GROUNDS FOR THE COURT, SUA SPONTE, TO DISMISS THE COMPLAINT (SECOND DEPT).

The Second Department, reversing Supreme Court in this foreclosure action, determined plaintiff bank’s failure to move for a judgment of foreclosure and sale as directed by a 2017 order was not sufficient grounds for the court, sua sponte, to dismiss the complaint:

“‘A court’s power to dismiss a complaint, sua sponte, is to be used sparingly and only when extraordinary circumstances exist to warrant dismissal'” … . Here, the plaintiff’s failure to move for a judgment of foreclosure and sale as directed by the March 2017 order was not a sufficient ground upon which to, sua sponte, direct dismissal of the complaint … . Accordingly, the Supreme Court should have granted those branches of the plaintiff’s motion which were to vacate the August 2017 order and to restore the action to the active calendar. U.S. Bank, N.A. v Morrison, 2026 NY Slip Op 05346, Second Dept 9-16-26

Practice Point: Appellate courts don’t like sua sponte dismissals of complaints.

Similar issue and result in Wilmington Sav. Fund Socy., FSB v Hilario, 2026 NY Slip Op 05351, Second Dept 9-16-26

 

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A MOTION TO RENEW A SUMMARY JUDGMENT MOTION IS THE APPROPRIATE VEHICLE FOR ADDRESSING A CHANGE IN THE LAW; HERE THE FORECLOSURE ABUSE PREVENTION ACT, EFFECTIVE DECEMBER 30, 2022, WARRANTED VACATING THE MAY 15, 2019, ORDER, GRANTING THE MOTION TO RENEW AND DISMISSING THE COMPLAINT AS UNTIMELY (SECOND DEPT)

The Second Department, reversing Supreme Court, determined a motion to renew a prior summary judgment motion was the proper vehicle for asserting the Foreclosure Abuse Prevention Act (FAPA) which became effective December 30, 2022. The motion for summary judgment was denied May 15, 2019:

35 Pleasure moved for leave to renew its prior cross-motion for summary judgment dismissing the complaint insofar as asserted against it and on its counterclaim pursuant to RPAPL 1501(4) to cancel and discharge of record the mortgage. In support of its motion, 35 Pleasure argued that the plaintiff’s commencement and voluntary discontinuance of the 2011 action rendered this action untimely under FAPA, which constituted a change in the law. The plaintiff opposed 35 Pleasure’s motion, contending, inter alia, that FAPA should not be given retroactive application, and cross-moved, among other things, to confirm the referee’s report and for a judgment of foreclosure and sale. *  *  *

A motion for leave to renew “shall be based upon new facts not offered on the prior motion that would change the prior determination or shall demonstrate that there has been a change in the law that would change the prior determination” (CPLR 2221[e][2]). “Therefore, a motion for leave to renew is the appropriate vehicle for seeking relief from a prior order based on a change in the law … . * * *

The six-year statute of limitations for this action began to run in December 2011, when the plaintiff commenced the 2011 action and elected in the complaint to call due the entire amount secured by the mortgage … . In light of the statutory amendments enacted by FAPA, the voluntary discontinuance of the 2011 action did not de-accelerate the mortgage debt, and, thus, the applicable limitations period expired in December 2017. This action, which was commenced in May 2018, therefore, was untimely … . Moreover, the plaintiff’s contentions challenging FAPA’s retroactive application and constitutionality are without merit … . Bank of N.Y. Mellon v Conforti, 2026 NY Slip Op 05262, Second Dept 9-16-26

Practice Point: A motion to renew is the appropriate vehicle for addressing a change in the law, here the Foreclosure Abuse Prevention Act (FAPA). The cross-motion for summary judgment was denied in 2019. The FAPA became effective December 20, 2022. The motion to renew the cross-motion for summary judgment was denied by Supreme Court in 2024, reversed in 2026.

Similar issues and results in Pryce v Nationstar Mtge., LLC, 2026 NY Slip Op 05331, Second Dept 9-16-26

 

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THE RPAPL 1304 NOTICE REQUIREMENTS WERE CHANGED BETWEEN THE TIME THE NOTICE WAS SENT TO THE DEFENDANTS AND WHEN THE FORECLOSURE PROCEEDINGS WERE BROUGHT; THEREFORE THE RPAPL 1304 NOTICE WAS DEFECTIVE (SECOND DEPT).

The Second Department, reversing Supreme Court in this foreclosure action, determined plaintiff’s motion for summary judgment should not have been granted. The RPAPL 1304 notice requirements were changed between the time the notice was sent to defendants and when foreclosure action was commenced. Therefore the RPAPL 1304 notice, a condition precedent to any foreclosure action, was invalid:

Here, the plaintiff’s RPAPL 1304 notice, dated July 15, 2016, contained the statutory language that was in effect at the time of the notice. However, RPAPL 1304 was amended effective December 20, 2016, and the amendment changed the language that the statute required the notice to contain … . Thus, the plaintiff’s July 15, 2016 RPAPL 1304 notice did not satisfy the condition precedent to litigation for this action commenced in August 2017, after the effective date of the amendment … . Although this issue is raised for the first time on appeal, it may be reached as it involves a pure question of law that appears on the face of the record and could not have been avoided if brought to the court’s attention at the proper juncture … . Wilmington Sav. Fund Socy., FSB v Fischman, 2026 NY Slip Op 05212, Second Dept 9-2-26

Practice Point: The RPAPL 1304 foreclosure notice provisions were changed by amendment between the time the notice was sent to defendants and the action was brought, rendering the notice defective. The issue was properly raised for the first time on appeal.​

 

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ELECTRONIC FILING OF A MOTION TO CONFIRM A REFEREE’S REPORT AND FOR LEAVE TO ENTER A DEFICIENCY JUDGMENT IS NOT IN ACCORDANCE WITH THE SERVICE METHOD CODIFIED IN RPAPL 1371(2); HERE THE IMPROPER SERVICE WAS A BAR TO ENTRY OF THE DEFICIENCY JUDGMENT (SECOND DEPT). ​

The Second Department, reversing Supreme Court in this foreclosure action, determined the electronic filing of the motion to confirm the referee’s report and for leave to file a deficiency judgment was not proper service pursuant to RPAPL 1371(2). The improper service constituted a complete bar to the entry of a deficiency judgment:

The plaintiff … moved to confirm a referee’s report of sale and for leave to enter a deficiency judgment against Newman in the sum of $1,222,732.14. … Supreme Court granted the plaintiff’s motion. A judgment was entered … in favor of the plaintiff … . …

RPAPL 1371(2) specifies the manner in which notice of such motions shall be served, and upon whom the notice shall be served, as follows: “Simultaneously with the making of a motion for an order confirming the sale, . . . the party to whom such residue shall be owing may make a motion in the action for leave to enter a deficiency judgment upon notice to the party against whom such judgment is sought or the attorney who shall have appeared for such party in such action. Such notice shall be served personally or in such other manner as the court may direct.”

Here, the plaintiff’s electronic filing of the motion papers on the New York State Courts Electronic Filing System did not constitute proper service in accordance with RPAPL 1371(2) … Consequently, “‘this constitutes a complete bar to the entry of a deficiency judgment'” … . 11-36 31st Ave. Lender, LLC v RM Newman, LLC, 2026 NY Slip Op 05151, Second Dept 9-2-26

Practice Point: Electronic filing of a motion to confirm a referee’s report and for leave to enter a default judgment is improper service. The correct method of service is codified in RPAPL 1371(2).

 

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