WILMINGTON SAVINGS FUND SOCIETY v. Zong Lau, Nonparty Proposed Intervenor–Appellant. (2024)

Order, Supreme Court, New York County (Francis A. Kahn, III, J.), entered November 4, 2022, which, to the extent appealed from, denied nonparty proposed intervenor-appellant Zong Lau's motion for substitution and for a stay of the foreclosure sale, unanimously modified, on the law, to grant the motion to the extent of joining Zong Lau and Hui Lau as necessary party defendants to this action and otherwise affirmed, without costs.

In 2006, defendant Jsang Kei Lau executed a mortgage encumbering real property located at 62 Rivington Street, Unit 8B in Manhattan.  In February 2009, plaintiff commenced an action to foreclose on the mortgage, after defendant stopped making mortgage payments.  Jsang Kei Lau died intestate in November 2020 during the COVID–19 pandemic and is survived only by his two daughters, Zong Lau and Hui Lau. In April 2022, Supreme Court, after being informed by Zong Lau that defendant was deceased, nevertheless entered a judgment of foreclosure and sale against decedent.  The foreclosure sale was scheduled for November 9, 2022.  In October 2022 Zong Lau, appearing pro se, moved pursuant to CPLR 1001(a), 1015(a), 1018, and 1021 to be substituted for the decedent and for a stay of the foreclosure sale.  Supreme Court denied the motion for substitution and sua sponte cancelled the sale for lack of proper notice.  Zong Lau appeals.

Pursuant to RPAPL 1311(1) the necessary defendants to a foreclosure action are “[e]very person having an estate or interest in possession, or otherwise, in the property as tenant in fee, for life, by the curtesy, or for years, and every person entitled to the reversion, remainder, or inheritance of the real property, or of any interest therein or undivided share thereof, after the determination of a particular estate therein.”  “Where a property owner dies intestate, title to real property is automatically vested in his or her distributees” (U.S. Bank Trust, N.A. v. Gedeon, 181 A.D.3d 745, 747, 121 N.Y.S.3d 276 [2d Dept. 2020];  see also Matter of CIT Bank, N.A. v. Gould, 191 A.D.3d 424, 137 N.Y.S.3d 708 [1st Dept. 2021]).  In this case, Zong Lau and Hui Lau are the sole surviving issue and heirs-at-law to defendant's interest in the property.  Thus, they are necessary parties to this action as decedent's distributees (CPLR 1001[a];  see Gedeon, 181 A.D.3d at 747, 121 N.Y.S.3d 276).

Because the November 9, 2022 foreclosure sale was cancelled sua sponte by the court, that portion of the appeal seeking to stay the sale is moot.

The Decision and Order of this Court entered herein on May 21, 2024 is hereby recalled and vacated (see M–02762 decided simultaneously herewith).