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HERE DEFENDANT’S NON-LAWYER HUSBAND REPRESENTED HER AT THE FORECLOSURE TRIAL; THE FACT THAT THE HUSBAND HAD A POWER OF ATTORNEY AUTHORIZING HIM TO ACT ON HIS WIFE’S BEHALF DID NOT AUTHORIZE HIM TO PRACTICE LAW; ALTHOUGH REPRESENTATION BY A NON-LAWYER DOES NOT RENDER THE PROCEEDINGS A “NULLITY,” HERE THE DEFENDANT WAS PREJUDICED BY HER HUSBAND’S REPRESENTATION AND THE JUDGE ERRED BY NOT ALLOWING THE HUSBAND TO TESTIFY; NEW TRIAL ORDERED (SECOND DEPT).

The Second Department, reversing the judgment of foreclosure and ordering a new trial, determined defendant was prejudiced by her non-attorney husband’s representation of her in the trial. Although the husband, John Chae, had a power of attorney authorizing him to act on his wife’s behalf, the power of attorney did not authorize him to practice law. In addition, Supreme Court erred by not allowing the husband to testify:

“‘New York law prohibits the practice of law in this State on behalf of anyone other than himself or herself by a person who is not an admitted member of the Bar, regardless of the authority purportedly conferred by execution of a power of attorney'” … . “The designation as an attorney-in-fact under General Obligations Law §§ 5-1502A-N does not confer upon a designated agent the right to provide representation as an attorney-at-law, and ‘cannot be read to displace the provisions of Judiciary Law § 478′” … .

In this case, none of the exceptions to Judiciary Law § 478 apply. Moreover, John Chae’s marriage to the defendant did not permit him to appear pro se on her behalf … . “As a general rule, the fact that a party has been represented by a person who was not authorized or admitted to practice law under the Judiciary Law—whether a disbarred attorney or a person practicing law without a license—does not create a ‘nullity’ or render all prior proceedings void per se” … . Here, however, the record demonstrates that the defendant was prejudiced as a result of being represented by an unauthorized attorney at the trial … . Further, the Supreme Court erred in precluding the defendant from testifying at the trial (see CPLR 321[a]). Ventus Props., LLC v Mo Chae, 2025 NY Slip Op 07429, Second Dept 12-31-25

 

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DEFENDANTS’ ATTENDANCE AT A MANDATORY SETTLEMENT CONFERENCE (CPLR 3408) IN THIS FORECLOSURE CASE DID NOT CONSTITUTE AN “APPEARANCE” IN THE ACTION; THEREFORE DEFENDANTS WERE NOT ENTITLED TO FIVE DAYS NOTICE (PURSUANT TO CPLR 3215 (G)) RE: PLAINTIFF’S MOTION FOR LEAVE TO ENTER A DEFAULT JUDGMENT (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Duffy, in a matter of first impression, determined defendants’ attendance at a mandatory settlement conference in this foreclosure action did not constitute an “appearance” such that defendants were entitled to five-days notice of an application for leave to enter a default judgment:

The issue on appeal, an issue of first impression for this Court, is whether a party’s attendance at a mandatory settlement conference pursuant to CPLR 3408 constitutes an appearance by a party for the purpose of CPLR 3215(g), which provides, among other things, that a party who has appeared in an action is entitled to at least five days’ notice of an application for leave to enter a default judgment. * * * Supreme Court properly determined that the defendants had not appeared in the action and, thus, the five-day notice provision set forth in CPLR 3215(g) was not applicable with respect to the plaintiff’s motion, inter alia, for leave to enter a default judgment against the defendants. HSBC Bank USA, N.A. v Saris, 2025 NY Slip Op 07287, Second Dept 12-24-25

Practice Point: A defendant’s attendance at a mandatory settlement conference (CPLR 3408) is not an “appearance” in the action and does not entitle defendant to five days notice (pursuant to CPLR 3215 (g)) re: plaintiff’s motion for leave to enter a default judgment.

 

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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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THE FORECLOSURE ABUSE PREVENTION ACT (FAPA) WAS PROPERLY APPLIED RETROACTIVELY IN THIS CASE; RETROACTIVE APPLICATION DOES NOT VIOLATE THE DUE PROCESS OR CONTRACT CLAUSES OF THE UNITED STATES CONSTITUTION (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Singas, determined the Foreclosure Prevention Abuse Act applied retroactively to the case before it. Retroactive application does not violate the Due Process or Contract Clauses of the United States Constitution:

We therefore hold that the provisions apply retroactively. Accordingly, because “a final judgment of foreclosure and sale has not been enforced” in this action … , FAPA §§ 4, 7, and 8 govern here by their terms. * * *

To comport with substantive due process, a statute’s retroactive application must be supported by “a legitimate legislative purpose furthered by rational means” … . That is, “the retroactive application of the legislation” must “itself [be] justified by a rational legislative purpose” … .

… FAPA’s legislative history identifies certain “abus[ive]” litigation practices engaged in by mortgage lenders and noteholders as the animating force behind FAPA’s enactment: the sponsors’ memoranda state “legislat[ive] find[ings]” to this effect … . In light of the legislature’s determination that these “abuses” should be curtailed, it is rational for FAPA to apply retroactively to shield as many borrowers as possible from those practices. Moreover, insofar as FAPA’s relevant provisions clarify or change the manner in which the six-year statute of limitations applies, FAPA’s retroactive application also rationally advances “the strong public policy favoring finality, predictability, fairness and repose” in human affairs … . Van Dyke v U.S. Bank, Natl. Assn., 2025 NY Slip Op 06537, CtApp 11-25-25

 

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IN ANSWERING TWO CERTIFIED QUESTIONS FROM THE SECOND CIRCUIT, THE COURT OF APPEALS HELD THAT THE FORECLOSURE ABUSE PREVENTION ACT (FAPA) APPLIED RETROACTIVELY AND DID NOT VIOLATE SUBSTANTIVE OR PROCEDURAL DUE PROCESS UNDER THE NEW YORK CONSTITUTION (CT APP)

The Court of Appeals, in a full-fledged opinion by Judge Wilson, answering two certified questions from the Second Circuit, determined (1) the Foreclosure Abuse Prevention Act (FAPA) took effect immediately upon enactment and applied to all foreclosure actions in which a final judgment of foreclosure has not been enforced, and (2), retroactive application of the statute does not violate substantive or procedural due process rights under the New York Constitution:

… FAPA Section 7 applies to “foreclosure actions commenced before the statute’s enactment.” FAPA achieved its clear purpose with straightforward statutory text. The portion of Section 7 of FAPA at issue in this case is codified at CPLR 213 (4) (b):

“[A] defendant shall be estopped from asserting that the period allowed by the applicable statute of limitation for the commencement of an action upon the instrument has not expired because the instrument was not validly accelerated prior to, or by way of commencement of a prior action, unless the prior action was dismissed based on an expressed judicial determination, made upon a timely interposed defense, that the instrument was not validly accelerated.”

FAPA Section 10 then provides that “[t]his act shall take effect immediately and shall apply to all actions commenced on[, as relevant here, a residential mortgage loan agreement,] in which a final judgment of foreclosure and sale has not been enforced.” Article 13 LLC v Ponce De Leon Fed. Bank, 2025 NY Slip Op 06536, CtApp 11-25-25

 

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THE SECOND DEPARTMENT HAD REVERSED ON APPEAL, DETERMINING THE COMPLAINT SHOULD HAVE BEEN DISMISSED; WHEN SUPREME COURT WROTE A JUDGMENT DISMISSING THE COMPLAINT BASED ON THE SECOND DEPARTMENT’S DECISION IT IMPROPERLY ADDED A SENTENCE WHICH WAS NOT IN THE DECISION; A JUDGMENT BASED UPON AN APPELLATE DECISION MUST STRICTLY CONFORM TO THE DECISION (SECOND DEPT).

The Second Department, modifying Supreme Court, determined the judgment entered by Supreme Court after reversal on apply did not strictly conform to the Second Department’s decision. Presumable the extra sentence added by Supreme Court was struck on appeal:

… [T]he judgment should not have included the provision directing “that Plaintiff is permitted to file a new action as against [the defendant] in accordance with Brothers v. Florence, 95 NY2d 290 (2000),” as the judgment was entered upon this Court’s decision and order dated December 28, 2022 … , which did not grant such relief to the plaintiff … . “A ‘written order [or judgment] must conform strictly to the court’s decision,’ and in the event of an inconsistency between a judgment and a decision or order upon which it is based, the decision or order controls” … . “Such an inconsistency may be corrected either by way of a motion for resettlement or on appeal” … . Deutsche Bank Trust Co. Ams. v Smith, 2025 NY Slip Op 06308, Second Dept 11-19-25

Practice Point: After reversal on appeal, any judgment written by the lower court must strictly conform to the language of the appellate decision. Here Supreme Court wrote a judgment dismissing the complaint but improperly added a sentence (which was not in the appellate decision) to the effect that plaintiff was permitted to file a new action.

 

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​ IN THIS FORECLOSURE ACTION, THE REQUEST FOR A SETTLEMENT CONFERENCE PURSUANT TO CPLR 3408 WAS NOT APPROPRIATE BECAUSE THE BORROWER WAS DECEASED; BECAUSE, UNDER THE FACTS, A SETTLEMENT CONFERENCE WAS NOT A PREREQUISITE FOR FILING A DEFAULT JUDGMENT, THE REQUEST FOR A CONFERENCE DID NOT HOLD THE FORECLOSURE ACTION IN ABEYANCE AND IT SHOULD HAVE BEEN DISMISSED AS ABANDONED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the foreclosure action must be dismissed as abandoned. Plaintiff argued that its request for a settlement conference pursuant to CPLR 3408 constituted “the taking of proceedings” within one year of the default and therefore dismissal of the action as abandoned was precluded. The First Department agreed that, under the circumstances contemplated by CPLR 3408, requesting a settlement conference would demonstrate the action was not abandoned. Here, however, CPLR 3408 did not apply because the borrower was deceased and the action was brought by an executor. Because CPLR 3408 did not apply, the request for a settlement conference did not qualify as “the taking of proceedings:”

… [T]his foreclosure action must be dismissed as abandoned, because plaintiff’s argument is premised on its mistaken assumption that it was required to file an RJI seeking a mandatory conference before it could move for a default judgment. …

… CPLR 3408(a)(1) requires a mandatory settlement conference in “a residential foreclosure action involving a home loan” where “the defendant is a resident of the property subject to foreclosure.” A mandatory conference is not required where the defendant does not reside at the property when the foreclosure action is commenced … . Watkins, the borrower, was not a resident of the property when the foreclosure action was commenced because he died two years earlier.

Additionally, a mandatory conference is required for “a home loan” which is defined, among other things, to include a requirement that “[t]he borrower is a natural person” (RPAPL 1304[6][a][1][i]). Here, the borrower was deceased when plaintiff commenced this action against Thomas in her capacity of executrix of Watkins’s estate. Thomas is neither a borrower, nor a natural person in this context … . Municipal Credit Union v Thomas, 2025 NY Slip Op 06260, First Dept 11-13-25

Practice Point: In a foreclosure action, where the criteria for a settlement conference pursuant to CPLR 3408 are met, a request for a conference within one year of a default will constitute “the taking of proceedings” and preclude dismissal of the action as abandoned. However where, as here, CPLR 3408 is inapplicable because the borrower is deceased, the request for a settlement conference did not constitute “the taking of proceedings” and did not preclude a finding of abandonment.

 

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THE REFEREE’S REPORT WAS BASED UPON BUSINESS RECORDS WHICH WERE NOT PRODUCED; PROOF OF DEFENDANT’S DEFAULT WAS BASED UPON BUSINESS RECORDS FOR WHICH NO FOUNDATION WAS LAID; THE MOTION TO CONFIRM THE REFEREE’S REPORT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the referee’s report in this foreclosure action should not have been confirmed because the report was based upon business records which were not produced. In addition defendant’s default was based upon records for which no foundation was laid:

“The report of a referee should be confirmed whenever the findings are substantially supported by the record, and the record has clearly defined the issues and resolved matters of credibility” … . “However, computations based on the review of unidentified and unproduced business records . . . constitute[ ] inadmissible hearsay and lack[ ] probative value” … .

Here, the referee’s report was improperly premised upon unproduced business records.

… [P]laintiff’s submissions reflected that Chase was not the loan servicer at the time of the default, which allegedly occurred in 2008. Since Chase’s employee, Brunton, did not state that the records of any other relevant entity, such as a prior loan servicer or the plaintiff, were provided to Chase and incorporated into Chase’s own records, that Chase routinely relied upon such records in its business, or that he had personal knowledge of the business practices and procedures of any other relevant entity, Brunton failed to lay a proper foundation for the admission of any records reflecting the defendant’s alleged default in 2008 … . Citimortgage, Inc. v Hassanin, 2025 NY Slip Op 05935, Second Dept 10-29-25

Practice Point: Consult this decision for insight into the proof necessary to confirm a referee’s report in a foreclosure action, as well as the necessary foundation for business records created by a prior loan servicer.

 

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THE PROCESS SERVER KNEW WHERE DEFENDANT LIVED AND WORKED AND MADE SEVERAL UNSUCCESSFUL ATTEMPTS TO SERVE DEFENDANT AT HOME; WITHOUT MAKING ANY ATTEMPT TO SERVE DEFENDANT AT WORK, THE PROCESS SERVER RESORTED TO “NAIL AND MAIL;” THE PROCESS SERVER DID NOT DEMONTRATE “DUE DILIGENCE;” THE COURT NEVER ACQUIRED PERSONAL JURISDICTION OVER DEFENDANT IN THIS FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court in this foreclosure action, determined the process server did not demonstrate due diligence in attempting to serve defendant, therefore the court did not acquire personal jurisdiction:

“Service of process upon a natural person must be made in strict compliance with the statutory methods of service set forth in CPLR 308” … . “Service pursuant to CPLR 308(4) may be used only where personal service under CPLR 308(1) and (2) cannot be made with due diligence” … . “The term due diligence is not defined by statute, and is interpreted on a case-by-case basis” … . To satisfy the “due diligence” requirement, the plaintiff must demonstrate that the process server made genuine inquiries about the defendant’s whereabouts and place of employment … . “The failure to serve process in an action leaves the court without personal jurisdiction over the defendant, and all subsequent proceedings are thereby rendered null and void” … .

… [T]he process server’s prior attempts at service did not demonstrate due diligence. Two out of three of the process server’s prior attempts at personal delivery at the defendant’s residence occurred during weekday hours when it could reasonably have been expected that the defendant was either working or in transit to or from work. The prior attempts were made on Thursday, April 17, 2008, at 6:15 p.m.; on Saturday, April 19, 2008, at 1:30 p.m.; and on Monday, April 21, 2008, at 8:20 a.m. The Saturday attempt occurred at a time when the defendant may have had reasons not to be home. The process server averred that a neighbor confirmed that the defendant resided at that address, but gave a negative reply when asked if the neighbor was aware of the defendant’s normal routine and place of business. Attached to the affidavit of service were the results of a “people at work” search, which revealed a company address for the defendant. Yet the process server made no inquiries about the defendant at that address before resorting to affix and mail service. Under the circumstances, the plaintiff failed to act with due diligence before relying on affix and mail service pursuant to CPLR 308(4) … . Bank of N.Y. Mellon v DeFilippo, 2025 NY Slip Op 05933, Second Dept 10-29-25

Practice Point: Consult this decision for insight into what constitutes “due diligence” in attempting to serve a defendant. Here several failed attempts at defendant’s residence was not enough. The process server did not attempt to serve defendant at work before resorting to “nail and mail.”​

 

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AT TRIAL IN THIS FORECLOSURE ACTION, PLAINTFF FAILED TO PROVE STANDING TO FORECLOSE AND FAILED TO PROVE COMPLIANCE WITH THE NOTICE-OF-FORECLOSURE MAILING REQUIREMENTS OF RPAPL 1304; COMPLAINT DISMISSED (SECOND DEPT).

The Second Department, reversing Supreme Court and dismissing the foreclosure complaint, determined the plaintiff did not demonstrate standing to foreclose and did not demonstrate compliance with the notice-of-foreclosure mailing requirements of RPAPL 1304:

… [S]ince the witness on the issue of standing proffered by the plaintiff at the trial testified, among other things, that the purported allonges that were with the original note were not stapled to the note, and further testified that he did not know when the allonges were executed or attached to the note, the plaintiff failed to establish its standing as the holder of the original note at the time of the commencement of the action. * * *

… [P]laintiff’s witness on the issue of notice did not have knowledge of the mailing practices of the entity which, according to the plaintiff, sent the requisite 30-day and 90-day notices … . Moreover, the business records that were submitted in evidence failed to show that the requisite certified and first-class mailings of the RPAPL 1304 notices or the default notices were actually made to the defendants or that the default notices were actually delivered to their notice address. Thus, the plaintiff failed to demonstrate its strict compliance with RPAPL 1304 and failed to show that the default notices were sent in accordance with the terms of the mortgage agreement … . Onewest Bank FSB v Thomas, 2025 NY Slip Op 05692, Second Dept 10-15-25

Practice Point: If a foreclosure action goes to trial and standing is contested, the bank must prove it has standing to foreclose. In addition, the bank must prove compliance with the notice-of-foreclosure mailing requirements of RPAPL 1304. Here the failure of proof on those issues resulted in dismissal of the complaint.​

 

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