WELLS FARGO BANK v. BURKE (2026)

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Kings County (Cenceria P. Edwards, J.), dated September 13, 2023.  The order denied the plaintiff's unopposed motion, inter alia, to vacate a conditional order of dismissal of the same court (Lawrence Knipel, J.) dated February 13, 2014, to restore the action to the active calendar, to appoint a referee to compute the amount due to the plaintiff, and for leave to enter a default judgment against all nonanswering and nonappearing defendants, and, sua sponte, directed dismissal of the complaint as abandoned pursuant to CPLR 3215(c).

ORDERED that on the Court's own motion, the notice of appeal from so much of the order as, sua sponte, directed dismissal of the complaint as abandoned pursuant to CPLR 3215(c) is deemed to be an application for leave to appeal from that portion of the order, and leave to appeal is granted (see id. § 5701[c] );  and it is further,

ORDERED that the order is affirmed, without costs or disbursements.

On February 3, 1999, the defendant Windsor Burke (hereinafter the borrower) executed a note in the amount of $45,000 in favor of Delta Funding Corporation (hereinafter Delta).  The note was secured by a mortgage on certain real property located in Brooklyn.  By deed dated June 29, 2006, the borrower conveyed the property to NB 105 4th Apts, LLC, which subsequently conveyed the property to the defendant 105 4th Units, LLC (hereinafter the LLC).

In October 2009, the plaintiff, Delta's successor in interest, commenced the instant action to foreclose the mortgage against the borrower and the LLC, among others.  A process server stated in an affidavit that he served the LLC on October 14, 2009, by delivering a copy of the summons and complaint to an attorney authorized to accept service on behalf of the LLC.

In an order dated February 1, 2010, the Supreme Court denied the LLC's pre-answer motion to dismiss the complaint insofar as asserted against it as time-barred.  In an order dated December 16, 2010, the court, inter alia, granted the LLC leave to reargue its motion to dismiss the complaint insofar as asserted against it, but the court adhered to its original determination upon reargument.  The LLC appealed, and in a decision and order dated April 17, 2012, this Court affirmed the order dated December 16, 2010, insofar as appealed from (see Wells Fargo Bank, N.A. v. Burke, 94 A.D.3d 980, 943 N.Y.S.2d 540).  In a decision and order on motion dated September 17, 2012, this Court denied the LLC's motion, among other things, for leave to reargue its appeal.

In a conditional order of dismissal dated February 13, 2014, the Supreme Court found that the plaintiff had unreasonably neglected to prosecute the action.  The court stated, “Accordingly, this action is dismissed pursuant to CPLR 3216 and the County Clerk is directed to cancel the Notice of Pendency unless plaintiff files a note of issue or otherwise proceeds by motion for entry of judgment within 90 days from the date hereof.”  The court did not issue an order formally directing dismissal of the complaint pursuant to CPLR 3216.

On December 17, 2021, the plaintiff moved, inter alia, to vacate the conditional order of dismissal dated February 13, 2014, to restore the action to the active calendar, to appoint a referee to compute the amount due to the plaintiff, and for leave to enter a default judgment against all nonanswering and nonappearing defendants.  The plaintiff argued that dismissal pursuant to CPLR 3216 was improper because issue had never been joined in the action.  The plaintiff's motion was unopposed.

In an order dated September 13, 2023, the Supreme Court denied the plaintiff's motion.  The court noted that it had erroneously issued the conditional order of dismissal pursuant to CPLR 3216, since issue had not been joined in the action.  The court further noted that it had not issued a formal order directing dismissal of the complaint pursuant to CPLR 3216.  The court also, sua sponte, directed dismissal of the complaint as abandoned pursuant to CPLR 3215(c).  The plaintiff appeals.

Initially, the Supreme Court correctly found that it was without authority to dismiss the complaint pursuant to CPLR 3216, since issue had not been joined (see id. § 3216[b][1];  South Point, Inc. v. John, 230 A.D.3d 825, 826, 218 N.Y.S.3d 637;  U.S. Bank N.A. v. Bassett, 137 A.D.3d 1109, 1110, 28 N.Y.S.3d 109).  Moreover, it is evident from the record that the action was ministerially dismissed without a motion or notice to the plaintiff, and there was no order of the Supreme Court directing dismissal of the complaint (see HSBC Mtge. Corp. [USA] v. Gewirtz, 235 A.D.3d 627, 628, 226 N.Y.S.3d 552).

However, the Supreme Court properly, sua sponte, directed dismissal of the complaint as abandoned pursuant to CPLR 3215(c).  Pursuant to CPLR 3215(c), “[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned ․ unless sufficient cause is shown why the complaint should not be dismissed.”  It is not necessary for a plaintiff to actually obtain a default judgment within one year of the default in order to avoid dismissal pursuant to CPLR 3215(c) (see U.S. Bank N.A. v. Jerriho–Cadogan, 224 A.D.3d 788, 789, 206 N.Y.S.3d 307;  Deutsche Bank Natl. Trust Co. v. Khalil, 208 A.D.3d 555, 557–558, 173 N.Y.S.3d 568).  “Rather, ‘as long as proceedings are being taken, and these proceedings manifest an intent not to abandon the case but to seek a judgment, the case should not be subject to dismissal’ ” (US Bank N.A. v. Jerriho–Cadogan, 224 A.D.3d at 789, 206 N.Y.S.3d 307, quoting Brown v. Rosedale Nurseries, 259 A.D.2d 256, 257, 686 N.Y.S.2d 22).  Contrary to the plaintiff's contention, the court did not err by raising the issue of CPLR 3215(c) sua sponte, as the statute expressly directs a court to dismiss the complaint “upon its own initiative” where the plaintiff has failed to take proceedings for the entry of judgment within one year after the default (see Deutsche Bank Natl. Trust Co. v. Marcelin, 245 A.D.3d 796, 797, 249 N.Y.S.3d 212).

Also contrary to the plaintiff's contention, the LLC did not waive its right to seek dismissal of the complaint pursuant to CPLR 3215(c) by appearing in the action.  A defendant may waive the right to seek dismissal pursuant to CPLR 3215(c) by serving an answer or taking any other steps that may be viewed as a formal or informal appearance (see Deutsche Bank Natl. Trust Co. v. Garriques, 235 A.D.3d 620, 621, 227 N.Y.S.3d 622;  Christiana Trust v. Victor, 224 A.D.3d 869, 872, 207 N.Y.S.3d 85;  Myers v. Slutsky, 139 A.D.2d 709, 710, 527 N.Y.S.2d 464).  However, for defendants to waive the right to seek dismissal pursuant to CPLR 3215(c), they must have answered or appeared after their right to seek dismissal pursuant to CPLR 3215(c) accrued (see CIT Group/Consumer Fin., Inc. v. Kaiser, 206 A.D.3d 791, 793, 171 N.Y.S.3d 507;  Myers v. Slutsky, 139 A.D.2d at 710, 527 N.Y.S.2d 464).  Here, the LLC appeared in the action by making a pre-answer motion to dismiss.  That appearance occurred prior to the LLC's default in answering the complaint (see CPLR 3211[f] ), and thus, the appearance occurred prior to the accrual of the LLC's right to seek dismissal of the complaint pursuant to CPLR 3215(c).  There is no evidence in the record that the LLC appeared after that right accrued.

The plaintiff does not dispute that it failed to take proceedings toward the entry of judgment within one year of the LLC's default.  The plaintiff's contention that its need to defend the appeal from the order, inter alia, adhering to the Supreme Court's prior determination denying the LLC's pre-answer motion to dismiss constituted a reasonable excuse for its failure to timely “take proceedings” is without merit, as the plaintiff failed to demonstrate how the defense of that appeal hindered it from taking steps toward the entry of a default judgment (see Wilmington Sav. Fund Socy., FSB v. Nifenecker, 236 A.D.3d 971, 975, 231 N.Y.S.3d 507).  Since the LLC, as the fee owner of the property, is a necessary and indispensable party to the foreclosure action (see LaSalle Bank N.A. v. Benjamin, 164 A.D.3d 1223, 1225, 83 N.Y.S.3d 592), the court properly, sua sponte, directed dismissal of the complaint as abandoned.

CHAMBERS, J.P., DOWLING, WAN and MCCORMACK, JJ., concur.