CITIMORTGAGE INC v. FIMBEL (2025)

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Paul M. Hensley, J.), dated January 30, 2023.  The order denied the plaintiff's unopposed motion, inter alia, for an order of reference, for leave to enter a default judgment against the defendant Janice Fimbel, to amend the caption to delete the name of the defendant James Fimbel, and, in effect, to discontinue the action insofar as asserted against the defendant James Fimbel.

ORDERED that the order is reversed, on the law, without costs or disbursements, and the matter is remitted to the Supreme Court, Suffolk County, for a new determination on the merits of the plaintiff's motion, inter alia, for an order of reference, for leave to enter a default judgment against the defendant Janice Fimbel, to amend the caption to delete the name of the defendant James Fimbel, and, in effect, to discontinue the action insofar as asserted against the defendant James Fimbel.

In July 2019, the plaintiff commenced this action against, among others, the defendants James Fimbel (hereinafter the decedent) and Janice Fimbel (hereinafter Janice) to foreclose a mortgage on certain real property located in Smithtown.  In February 2020, the plaintiff rejected Janice's answer to the complaint as untimely.  The decedent died in May 2020.

In October 2022, the plaintiff moved, inter alia, for an order of reference, for leave to enter a default judgment against Janice, to amend the caption to delete the name of the decedent, and, in effect, to discontinue the action insofar as asserted against the decedent.

In an order dated January 30, 2023, the Supreme Court denied the motion on the ground that the action was stayed due to the decedent's death.  The plaintiff appeals.

“ ‘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’ ” (Wells Fargo Bank, N.A. v. Miglio, 197 A.D.3d 776, 777, 150 N.Y.S.3d 592, quoting Nationstar Mtge., LLC v. Azcona, 186 A.D.3d 614, 615, 129 N.Y.S.3d 438).  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” (Paterno v. CYC, LLC, 46 A.D.3d 788, 788, 850 N.Y.S.2d 131;  see Nationstar Mtge., LLC v. Azcona, 186 A.D.3d at 615–616, 129 N.Y.S.3d 438).  “[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” (DLJ Mtge. Capital, Inc. v. 44 Brushy Neck, Ltd., 51 A.D.3d 857, 859, 859 N.Y.S.2d 221).

Here, the 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” (Paterno v. CYC, LLC, 46 A.D.3d at 789, 850 N.Y.S.2d 131;  see U.S. Bank N.A. v. Auteri, 191 A.D.3d 729, 730–731, 142 N.Y.S.3d 64).  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 (see Wells Fargo Bank, N.A. v. Bachmann, 145 A.D.3d 712, 714, 43 N.Y.S.3d 107;  HSBC Bank USA v. Ungar Family Realty Corp., 111 A.D.3d 673, 673–674, 974 N.Y.S.2d 583).

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” (Wells Fargo Bank, N.A. v. Bachmann, 145 A.D.3d at 714, 43 N.Y.S.3d 107;  see HSBC Bank USA v. Ungar Family Realty Corp., 111 A.D.3d at 673–674, 974 N.Y.S.2d 583).

Accordingly, the action should not have been stayed, and the Supreme Court should have reached the merits of the plaintiff's motion, among other things, for an order of reference, for leave to enter a default judgment against Janice, to amend the caption to delete the name of the decedent, and, in effect, to discontinue the action insofar as asserted against the decedent (see U.S. Bank N.A. v. Auteri, 191 A.D.3d 729, 730–731, 142 N.Y.S.3d 64).

DILLON, J.P., CHAMBERS, VENTURA and MCCORMACK, JJ., concur.