DEUSTCHE BANK NATIONAL TRUST COMPANY v. Colin Chapman etc., Defendant–Respondent. (2026)

Order, Supreme Court, Bronx County (Naita A. Semaj, J.), entered on or about April 4, 2025, which granted defendant Colin Chapman's motion to dismiss the action as against all defendants pursuant to CPLR 3211(a)(5), unanimously reversed, on the law, without costs, the motion denied, and the complaint reinstated.

Chapman transferred his interest in the subject property by deed dated October 26, 2022.  Thus, he was divested of standing to defend the action (see Deutsche Bank Natl. Trust Co. v Patrick 173 AD3d 973, 974 [2d Dept 2019] ).  He has no liability for the debt and no ownership interest in the property, and so will not be impacted by the outcome of the action (see BHMPW Funding, LLC v. Lloyd–Lewis, 194 AD3d 780, 783 [2d Dept 2021] [“As a stranger to the note and mortgage agreement, P & Q lacked standing to raise defenses based on the plaintiff's alleged noncompliance with the terms of the note and mortgage agreement”] ).

Although the complaint broadly reserved deficiency rights as against all “obligors” and the period for seeking a deficiency judgment does not appear to have expired (RPAPL 1371[2] ), defendant is named solely as an heir-at-law and next of kin to deceased borrower Anne Chapman, is not an “obligor” on the underlying note, and did not assume the debt or execute the mortgage.  Accordingly, there is no threat of a deficiency judgment sufficent to create standing (see Nationstar Mtge. LLC v. Vassi, ––– AD3d ––––, 2026 N.Y. Slip Op 02375, *2 [1st Dept 2026] [“Because Vassi is subject to a potential deficiency judgment and is a debtor on the underlying mortgage, he has an interest in defending the action notwithstanding that he transferred the mortgaged property to IPA and as a result, no longer has the right to redeem the property”] ).