Matthew Rosio, appellant, v. MTGLQ (2026)

Submitted—January 5, 2026

DECISION & ORDER

W/

In an action, inter alia, to recover damages for violation of General Business Law § 349, the plaintiff appeals from an order of the Supreme Court, Queens County (Leonard Livote, J.), dated November 4, 2024.  The order, insofar as appealed from, granted that branch of the defendant's motion which was pursuant to CPLR 3211(a) to dismiss the third cause of action.

ORDERED that the order is affirmed insofar as appealed from, with costs.

In 2015, Nationstar Mortgage, LLC (hereinafter Nationstar), commenced an action to foreclose a mortgage (hereinafter the 2015 foreclosure action) against, among others, the plaintiff in this action, Matthew Rosio.  Rosio failed to answer, and in an order dated October 17, 2016, the Supreme Court, inter alia, granted Nationstar's unopposed motion for leave to enter a default judgment and for an order of reference.  In an order and judgment of foreclosure and sale (one paper) dated February 24, 2020, the court, among other things, substituted MTGLQ Investors, L.P. (hereinafter MTGLQ), as the plaintiff in the 2015 foreclosure action, confirmed the referee's report, and granted a judgment of foreclosure and sale in favor of MTGLQ.

On December 11, 2023, Rosio commenced this action against MTGLQ, inter alia, to recover damages for deceptive practices in violation of General Business Law § 349.  Rosio alleged, among other things, that MTGLQ did not obtain valid possession of the note and consequently lacked standing to foreclose the mortgage.  Rosio thus alleged that MTGLQ's actions taken in furtherance of the foreclosure amounted to a deceptive practice in violation of General Business Law § 349.

MTGLQ moved pursuant to CPLR 3211(a) to dismiss the complaint on the ground, inter alia, that the action was barred by res judicata.  In an order dated November 4, 2024, the Supreme Court granted MTGLQ's motion.  Rosio appeals from so much of the order as dismissed the third cause of action, alleging violation of General Business Law § 349, as barred by the doctrine of res judicata, pursuant to CPLR 3211(a)(5).

“Under the doctrine of res judicata, a final adjudication of a claim on the merits precludes relitigation of that claim and all claims arising out of the same transaction or series of transactions by a party or those in privity with a party” (Ciraldo v. JP Morgan Chase Bank, N.A., 140 AD3d 912, 913;  see Gramatan Home Invs. Corp. v Lopez, 46 N.Y.2d 481, 486–487;  Harrison DGR44, LLC v. Luiso 44 Harrison, LLC, 219 AD3d 1413, 1414).  “The doctrine of res judicata bars a party from relitigating any claim which could have been or should have been litigated in a prior proceeding” (Montoute v. Wells Fargo Bank, N.A., 208 AD3d 474, 475 [internal quotation marks omitted];  see Sheodial v. U.S. Bank N.A., 218 AD3d 511, 512).  Thus, “[a] judgment of foreclosure and sale is final as to all questions at issue between the parties, and concludes all matters of defense which were or could have been litigated in the foreclosure action” (Sheodial v. U.S. Bank N.A., 218 AD3d at 512 [internal quotation marks omitted];  see Eaddy v. U.S. Bank N.A., 180 AD3d 756, 758).  “Moreover, [a] judgment by default that has not been vacated is conclusive for res judicata purposes and encompasses the issues that were raised or could have been raised in the prior action” (Sheodial v. U.S. Bank N.A., 218 AD3d at 512 [internal quotation marks omitted];  see Eaddy v. U.S. Bank N.A., 180 AD3d at 758).  “[A] defendant who fails to assert a counterclaim is not barred by the doctrine of res judicata from subsequently commencing a new action on that claim unless the claim would impair the rights or interests established in the first action” (Wax v. 716 Realty, LLC, 151 AD3d 902, 904;  see Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N.Y. 304, 306–308;  Sweet Constructors, LLC v. Wallkill Med. Dev., LLC, 106 AD3d 810, 811).

Here, MTGLQ is in privity with Nationstar as its successor-in-interest (see Gramatan Home Invs. Corp. v Lopez, 46 N.Y.2d at 486–487;  Harrison DGR44, LLC v. Luiso 44 Harrison, LLC, 219 AD3d at 1414;  Ciraldo v. JP Morgan Chase Bank, N.A., 140 AD3d at 913).  As such, the judgment of foreclosure and sale encompassed all issues that were raised or could have been raised in the foreclosure action, including whether MTGLQ had standing to foreclose on the mortgage, to engage in loan modification reviews with Rosio, or to negotiate with him (see Sheodial v. U.S. Bank N.A., 218 AD3d at 512;  Montoute v. Wells Fargo Bank, N.A., 208 AD3d at 475;  Eaddy v. U.S. Bank N.A., 180 AD3d at 758).  Consequently, Rosio is precluded from asserting a cause of action alleging violation of General Business Law § 349 that is predicated on those same issues (see Sheodial v. U.S. Bank N.A., 218 AD3d at 512;  Montoute v. Wells Fargo Bank, N.A., 208 AD3d at 475).  Moreover, if Rosio were successful on the cause of action asserted in this proceeding, it would impair the rights established by Nationstar in the foreclosure action (see Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N.Y. at 306–308;  Wax v. 716 Realty, LLC, 151 AD3d at 904;  Sweet Constructors, LLC v. Wallkill Med. Dev., LLC, 106 AD3d at 811).

Thus, the Supreme Court correctly determined that the third cause of action, alleging violation of General Business Law § 349, was barred by res judicata.

The parties' remaining contentions either are without merit or need not be reached in light of our determination.

CONNOLLY, J.P., FORD, VOUTSINAS and LOVE, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court