BANK TRUST v. LLC (2026)

DECISION & ORDER

In an action, inter alia, to foreclose a mortgage, the defendant Visachu Miller, LLC, appeals from an order of the Supreme Court, Kings County (Lawrence Knipel, J.), dated March 24, 2022.  The order denied that defendant's motion pursuant to CPLR 5015(a) to vacate an order and judgment of foreclosure and sale (one paper) of the same court (Peter Sweeney, J.) dated May 14, 2018, and to dismiss the complaint insofar as asserted against it.

ORDERED that the order is reversed, on the law, with costs, and the motion of the defendant Visachu Miller, LLC, pursuant to CPLR 5015(a) to vacate the order and judgment of foreclosure and sale and to dismiss the complaint insofar as asserted against it is granted.

In December 2009, the plaintiff's predecessor in interest commenced this action against, among others, the defendant Vishnu Bandhu to foreclose a mortgage on certain real property located in Brooklyn (hereinafter the property).  In July 2012, Bandhu transferred title to the property to the defendant Visachu Miller, LLC (hereinafter the LLC).  In August 2017, the plaintiff moved to confirm a referee's report, for a judgment of foreclosure and sale, and to amend the caption to add the LLC as “a necessary party defendant to this action.”  In an order and judgment of foreclosure and sale dated May 14, 2018, the Supreme Court granted the plaintiff's motion, confirmed the referee's report, amended the caption, and directed the sale of the property.

In December 2019, prior to the sale of the property, the LLC moved pursuant to CPLR 5015(a) to vacate the order and judgment of foreclosure and sale and to dismiss the complaint insofar as asserted against it.  In support of the motion, the LLC submitted, inter alia, an affirmation from Joseph Banda, a member of the LLC, who averred, among other things, that the LLC, which was not in existence at the time the summons and complaint were filed, was never served with the pleadings and did not receive any notice of the plaintiff's motion, inter alia, for a judgment of foreclosure and sale.  The plaintiff opposed the motion.  In an order dated March 24, 2022, the Supreme Court denied the LLC's motion.  The LLC appeals.

The Supreme Court improperly denied the LLC's motion, among other things, to vacate the order and judgment of foreclosure and sale on the ground that the LLC had “actual notice of the open and unsatisfied mortgage” and, therefore, was “bound by the [judgment of foreclosure and sale].”  The plaintiff did not address that ground in opposition to the LLC's motion (see Ron Wish, LLC v. Myung Ja Kim, 227 A.D.3d 1022, 1024, 212 N.Y.S.3d 176;  Associates First Capital Corp. v. Roth, 226 A.D.3d 636, 637, 209 N.Y.S.3d 440).  Moreover, the LLC's notice of the mortgage, standing alone, was insufficient to provide notice of the foreclosure action (see U.S. Bank N.A. v. 1702 Dean, LLC, 240 A.D.3d 928, 933, 241 N.Y.S.3d 87).

Further, contrary to the plaintiff's contention, a notice of pendency filed before the LLC acquired the property was insufficient to provide constructive notice of the action, as the notice of pendency was not indexed against the correct lot (see id.).  The plaintiff's contention that after the commencement of this action, Bandhu obtained subdivision approval, resulting in the renumbering of lots, is improperly raised for the first time on appeal (see Wells Fargo Bank v. Islam, 174 A.D.3d 670, 672, 106 N.Y.S.3d 76).  Thus, under the circumstances of this case, the LLC's interest in the property was not “effectively foreclosed upon entry of the judgment of foreclosure and sale” (HSBC Bank USA, N.A. v. Minogue, 202 A.D.3d 662, 663, 158 N.Y.S.3d 607).

“It is axiomatic that the failure to serve process in an action leaves the court without personal jurisdiction over the defendant, and all subsequent proceedings are thereby rendered null and void” (Bank of N.Y. Trust Co., N.A. v. Herbin, 241 A.D.3d 1247, 1248, 242 N.Y.S.3d 27 [internal quotation marks omitted] ).  Here, it is undisputed that the LLC was never served with the summons and complaint and, therefore, the Supreme Court lacked personal jurisdiction over it (see Kinder v. Braunius, 63 A.D.3d 885, 886, 882 N.Y.S.2d 188).  Accordingly, the court should have granted the LLC's motion to vacate the order and judgment of foreclosure and sale and to dismiss the complaint insofar as asserted against it for lack of personal jurisdiction (see Bank of N.Y. Mellon v. DeFilippo, 242 A.D.3d 1165, 1167, 244 N.Y.S.3d 567;  Mortgage Elec. Registration Sys., Inc. v Congregation Shoneh Halochos, 189 A.D.3d 820, 823, 137 N.Y.S.3d 440).

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

CHAMBERS, J.P., WOOTEN, WAN and HOM, JJ., concur.