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FILING A REQUEST FOR JUDICIAL INTERVENTION CONSTITUTED TAKING PROCEEDINGS FOR THE ENTRY OF JUDGMENT WITHIN ONE YEAR OF DEFENDANT’S DEFAULT; THE FORECLOSURE ACTION SHOULD NOT HAVE BEEN DISMISSED AS ABANDONED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined this foreclosure action should not have been dismissed as abandoned on the ground plaintiff failed to take action within one year of defendant’s default. In fact plaintiff filed a request for judicial intervention which constituted taking “proceedings for the entry of judgment within one year after the default:”

Pursuant to CPLR 3215(c), “[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned . . . unless sufficient cause is shown why the complaint should not be dismissed.” To avoid dismissal pursuant to CPLR 3215(c), “[i]t is not necessary for a plaintiff to actually obtain a default judgment within one year of the default” … . “Rather, ‘as long as proceedings are being taken, and these proceedings manifest an intent not to abandon the case but to seek a judgment, the case should not be subject to dismissal'” … .

Here, the plaintiff demonstrated that, within one year after the defendant’s default, the plaintiff filed a request for judicial intervention that sought a foreclosure settlement conference as mandated by CPLR 3408. “Where, as here, a settlement conference is a necessary prerequisite to obtaining a default judgment (see CPLR 3408[a], [m]), a formal judicial request for such a conference in connection with an ongoing demand for the ultimate relief sought in the complaint constitutes ‘proceedings for entry of judgment’ within the meaning of CPLR 3215(c)” … . U.S. Bank N.A. v Newson, 2025 NY Slip Op 04269, Second Dept 7-23-25

Practice Point: The CPLR does not require a plaintiff to obtain a default judgment within a year of the default to preclude dismissal. Plaintiff need only take some action which indicates it does not intend to abandon the action. Here the filing of a request for judicial intervention was sufficient.

 

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PLAINTIFF’S FAILURE TO COMPLY WITH A STATUS CONFERENCE ORDER REQUIRING THE FILING OF AN APPLICATION FOR AN ORDER OF REFERENCE DID NOT JUSTIFY THE SUA SPONTE DISMISSAL OF THE COMPLAINT (SECOND DEPT).

The Second Department, reversing Supreme Court in this foreclosure action, determined plaintiff’s failure to comply with status conference order to file an application for an order of reference by a date certain did not warrant a sua sponte dismissal of 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 comply with the status conference order directing it to file an application for an order of reference was not a sufficient ground upon which to direct dismissal of the complaint” … . … Supreme Court should have granted those branches of the plaintiff’s motion which were pursuant to CPLR 5015(a) to vacate the dismissal order and to restore the action to the active calendar … . Federal Natl. Mtge. Assn. v Davis, 2025 NY Slip Op 04232, Second Dept 7-23-25

Practice Point: Failure to comply with a status conference order to apply for an order of reference by a certain date does not justify a judge’s sua sponte dismissal of the complaint.

 

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A PARTY WHO IS NOT A OBLIGOR ON THE NOTE, BUT IS A SIGNATORY ON THE MORTGAGE, IS SUBJECT TO FORECLOSURE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that defendant (Lucy), who was not an obligor on the note, but who executed the mortgage, was subject to foreclosure:

A party who is not an obligor on a note but is a signatory on the corresponding mortgage, while not personally liable for the debt, is a mortgagor and has agreed to mortgage his or her interest in the property as security for the debt … . Here, although Lucy did not execute the Obligation to Pay and is not personally liable for the payment obligation, she executed the mortgage whereby she pledged her interest in the property as security for the obligations set forth in the co-ownership agreement and the Obligation to Pay, and thus, Lucy’s interest in the property is subject to foreclosure … . Deutsche Bank Trust Co. Ams. v Zzoha, 2025 NY Slip Op 03793, Second Dept 6-25-25

Practice Point: A party who is not on obligor on the note but is a signatory on the corresponding mortgage is subject to foreclosure.

 

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RPAPL 1306 REQUIRES INFORMATION TO BE FILED WITH THE SUPERINTENDENT OF FINANCIAL SERVICES WITHIN THREE BUSINESS DAYS OF THE MAILING OF THE NOTICE OF FORECLOSURE; THE FILING IS A CONDITION PRECEDENT TO A FORECLOSURE ACTION; HERE THE FILING WAS EIGHT DAYS LATE, REQUIRING DISMISSAL OF THE COMPLAINT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant in this foreclosure action was entitled to dismissal of the complaint because the plaintiff failed to timely file the information required by RPAPL 1306. The information must be filed within three business days of the mailing of the foreclosure notice pursuant to RPAPL 1304:

“Compliance with RPAPL 1306 is a condition precedent to the commencement of a foreclosure action” … . “RPAPL 1306 requires that within three business days of the mailing of the foreclosure notice pursuant to RPAPL 1304(1), each lender or assignee ‘shall file’ certain information with the superintendent of financial services” … . “[S]trict compliance” with the statutory requirement of making the appropriate filing within three business days of the mailing of the RPAPL 1304 notice is required … .

… [I]t is undisputed that the plaintiff did not make the requisite filing pursuant to RPAPL 1306 until … eight business days after the purported mailing of the RPAPL 1304 notice … . Since the plaintiff failed to strictly comply with the statutory requirement of making the appropriate filing within three business days of the mailing of the RPAPL 1304 notice, the Supreme Court should have granted that branch of the defendant’s motion which was for summary judgment dismissing the complaint insofar as asserted against him … . Bank of N.Y. Mellon v Peralta, 2025 NY Slip Op 03790, Second Dept 6-25-25

Same issue and result in Deutsche Bank Natl. Trust Co. v Goetz, 2025 NY Slip Op 03792, Second Dept 6-25-25

Practice Point: The bank’s failure to file the information required by RPAPL 1306 within three business days of the mailing of the notice of foreclosure mandates dismissal of the foreclosure action.​

 

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“BEACH 12,” A NONPARTY WHICH BECAME TITLE OWNER OF THE PROPERTY AFTER PLAINTIFF FILED THE NOTICE OF PENDENCY, WAS ENTITLED TO INTERVENE IN THE FORECLOSURE ACTION AS OF RIGHT; CRITERIA EXPLAINED (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined an nonparty (Beach 12) was entitled to intervene in the foreclosure action as of right:

“Upon a timely motion, a person is permitted to intervene as of right when the representation of that person’s interest by the parties is or may be inadequate and the person is or may be bound by the judgment, or when the action involves the disposition of property and that person may be affected adversely by the judgment” (… CPLR 1012[a][2], [3]). “In addition, CPLR 1013 provides that a court has discretion to permit a person to intervene, inter alia, when the person’s claim or defense and the main action have a common question of law or fact” … . “Whether intervention is sought as a matter of right under CPLR 1012(a), or as a matter of discretion under CPLR 1013, is of little practical significance, since intervention should be permitted where the intervenor has a real and substantial interest in the outcome of the proceedings” … . “Intervention may occur at any time, provided that it does not unduly delay the action or prejudice existing parties” … .

… Beach 12 was entitled to intervene [because] this “action involve[s] the disposition of title to real property” and … Beach 12, which became the title owner of the premises after the plaintiff’s filing of a notice of pendency, “would be bound and adversely affected by a judgment of foreclosure and sale” … . Bank of Am., N.A. v Reed, 2025 NY Slip Op 03695, Second Dept 6-18-25

Practice Point: Consult this decision the criteria for a nonparty’s intervention in a foreclosure action.

 

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THE ACCOMPANYING AFFIDAVIT DID NOT LAY A PROPER FOUNDATION FOR THE ADMISSIBILITY OF THE DOCUMENTS RELIED UPON BY THE REFEREE IN THIS FORECLOSURE ACTION; THEREFORE THE REFEREE’S REPORT SHOULD NOT HAVE BEEN CONFIRMED (SECOND DEPT).

The Second Department determined the referee’s report in this foreclosure action should not have been confirmed because a proper foundation for the admissibility of the records relied upon by the referee was not provided by the accompanying affidavit:

“The report of a referee should be confirmed whenever the findings are substantially supported by the record and the referee has clearly defined the issues and resolved matters of credibility” … . Here, in computing the amount due on the mortgage loan, the referee relied upon the affidavit of Frank Rosas, a vice president of Nationstar Mortgage, LLC (hereinafter Nationstar), the servicer of the mortgage loan. Rosas stated in his affidavit that Nationstar’s records pertaining to the mortgage loan included records of PHH Mortgage, a prior servicer. However, Rosas did not state when Nationstar began servicing the loan, did not state that “[he] was personally familiar with the record-keeping practices and procedures” of PHH Mortgage … , and did not “establish that the records provided by [PHH Mortgage] were incorporated into [Nationstar’s] own records and routinely relied upon by [Nationstar] in its own business” … . Thus, Rosas’s affidavit failed to satisfy the admissibility requirements of CPLR 4518(a) … . HSBC Bank USA, N.A. v Coxall, 2025 NY Slip Op 03557, Second Dept 6-11-25

Practice Point: An affiant’s failure to lay a proper foundation for the admissibility of business records in a foreclosure action results in reversal.

 

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HERE A MOTION TO RENEW AN APPEAL WAS GRANTED AND THE PRIOR APPELLATE DECISION WAS VACATED BASED ON THE ENACTMENT OF THE FORECLOSURE ABUSE PREVENTION ACT (FAPA); THE THIRD DEPARTMENT HAD HELD THE FORECLOSURE ACTION WAS TIMELY BECAUSE THE BANK HAD DE-ACCELERATED THE DEBT; BUT FAPA RENDEREDTHE DE-ACCELERATION INVALID; SO THE INITIAL SUPREME COURT DECISION GRANTING SUMMARY JUDGMENT TO THE DEFENDANTS WAS REINSTATED (THIRD DEPT).

The Third Department granted defendants’ motion to renew an appeal and vacated its prior decision because of the subsequent enactment of the Foreclosure Abuse Prevention Act (FAPA). The Third Department had reversed summary judgment in defendants’ favor on the ground the bank had de-accelerated the debt rendering the foreclosure action timely. But the FAPA now precludes such a de-acceleration and applies retroactively. Therefore Supreme Court’s decision granting summary judgment dismissing the foreclosure action was reinstated:

Defendants now move to renew, contending that the enactment of the Foreclosure Abuse Prevention Act (hereinafter FAPA) is a change in law that requires reversal of our prior decision. Specifically, defendants claim that the second action is now barred by the statute of limitations because FAPA applies retroactively, and such law prohibits the reset of a statute of limitations by the unilateral act of a party such as by a de-acceleration letter. * * *

… [S]ince the second action was brought more than six years after plaintiff accelerated the debt, it is barred by the statute of limitations applicable to foreclosure actions … . Thus, defendants’ motion to renew is granted and this Court’s previous decision is vacated. On the merits of the underlying appeal, pursuant to FAPA, defendants were entitled to summary judgment dismissing the complaint. Accordingly, we affirm the judgment of Supreme Court, albeit on different grounds. HSBC Bank, USA, N.A. v Bresler, 2025 NY Slip Op 03363, Third Dept 6-5-25

Practice Point: Although the issue was not discussed in the Third Department’s decision, apparently CPLR 2221 [e] [2] applies to a motion for renewal of an appeal.

 

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HERE AN ARGUMENT RAISED FOR THE FIRST TIME IN PLAINTIFF’S REPLY PAPERS WAS DEEMED NOT PROPERLY BEFORE THE APPELLATE COURT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff-bank’s argument in this foreclosure action should not have been considered because it was raised for the first time in reply papers. In its reply, the plaintiff argued that the foreclosure action was not time-barred because defendant revived the statute of limitations by making payments within the six years prior to the commencement of the action:

[Plaintiff] failed to establish, prima facie, that this action was not time-barred. The plaintiff’s submissions revealed that the mortgage debt was accelerated in January 2007, when the plaintiff commenced the first prior action to foreclose the mortgage … . This action was commenced in July 2018, more than six years later. The plaintiff’s contention that payments the defendant made on the loan as late as September 2013 served to renew the statute of limitations, making this action timely, is not properly before this Court, as it was raised for the first time in reply papers submitted to the Supreme Court, and there is no indication that the defendant was afforded an opportunity to submit a surreply or that this new argument responded to allegations the defendant raised for the first time in his opposition papers … . Bank of N.Y. Mellon v Cooper, 2025 NY Slip Op 03297, Second Dept 6-4-25

Practice Point: Here the Second Department noted that an argument raised for the first time in reply papers was not properly before the appellate court. There was no indication sur-reply papers were submitted or that the reply-argument was a response to an issue raised by the other party.

 

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RPAPL 1304 REQUIRES THAT THE NOTICE OF FORECLOSURE BE MAILED SEPARATELY TO EACH BORROWER; HERE THE NOTICE WAS SENT TO BOTH BORROWERS IN A SINGLE ENVELOPE; THE BANK’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s motion for summary judgment in this foreclosure action should not have been granted. The bank did not prove its “strict compliance” with the notice of foreclosure provisions of RPAPL 1304:

RPAPL 1304 requires that at least 90 days before a lender, an assignee, or a mortgage loan servicer commences an action to foreclose the mortgage on a home loan as defined in the statute, such lender, assignee, or mortgage loan servicer give notice to the borrower. The statute prescribes the required content for the notice and provides that the notice must be sent by registered or certified mail and also by first-class mail to the last known address of the borrower … . “Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action” … , “and the plaintiff has the burden of establishing satisfaction of this condition” … . “[T]he mailing of a 90-day notice jointly addressed to two or more borrowers in a single envelope is not sufficient to satisfy the requirements of RPAPL 1304, and . . . the plaintiff must separately mail a 90-day notice to each borrower as a condition precedent to commencing the foreclosure action” … .

Here, in support of its motion, among other things, for summary judgment on the complaint insofar as asserted against Esther, Wilmington failed to establish strict compliance with RPAPL 1304. Although the RPAPL 1304 notice was mailed to the borrowers by both certified and first-class mail, Wilmington failed to establish that Wells Fargo sent a 90-day notice individually addressed to each borrower in a separate envelope, as required by the statute … . Instead, as 1900 Capital concedes, the RPAPL 1304 notice was not mailed individually, in a separate envelope, to Esther. Rather, the envelope purportedly providing the RPAPL 1304 notice to Esther was jointly addressed to her and Marvin in one envelope. This was insufficient to establish compliance with RPAPL 1304 … . Wells Fargo Bank, N.A. v Welz, 2025 NY Slip Op 03355, Second Dept 6-4-25

Practice Point: The “notice of foreclosure” provisions in RPAPL 1304 must be strictly complied with. Here the bank mailed the notice to both borrowers in a single envelope. The statute requires separate mailings to each borrower. Therefore the bank was not entitled to summary judgment.

 

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THE BANK’S FAILURE TO OFFER A REASONABLE EXCUSE FOR FAILURE TO COMPLY WITH A COURT RULE REQUIRING THAT A MOTION FOR A JUDGMENT OF FORECLOSURE BE FILED WITHIN ONE YEAR OF THE ENTRY OF THE ORDER OF REFERENCE WARRANTED DISMISSAL OF THE FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s failure to comply with Kings County Supreme Court Uniform Civil Term Rule 8, which requires the bank to file a motion for judgment of foreclosure withing one year of entry of the order of reference, warranted dismissal of the action:

“Rule 8 requires a plaintiff in a foreclosure action to file a motion for a judgment of foreclosure within one year of entry of the order of reference” … . “Where the plaintiff offers an excuse for its failure to comply with Rule 8, ‘[t]he determination of whether [the] excuse is reasonable is committed to the sound discretion of the motion court'” … . “Reversal is warranted ‘if that discretion is improvidently exercised'” … .

Here, the Supreme Court improvidently exercised its discretion in denying that branch of the defendant’s motion which was to dismiss the complaint insofar as asserted against her for failure to comply with Rule 8. The order of reference was entered on August 28, 2012, * * * [and] the plaintiff failed to provide a reasonable excuse as to why [the bank] did not move for a judgment of foreclosure and sale prior to August 28, 2013. Contrary to the court’s determination, the failure to comply with Rule 8 is a sufficient ground upon which to dismiss a foreclosure action … . Wells Fargo Bank N.A. v Kahan, 2025 NY Slip Op 03354, Second Dept 6-4-25

Practice Point: Here the bank’s failure to comply with a Kings County Supreme Court Uniform Civil Term Rule warranted dismissal of the foreclosure action.

 

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