11 36 31ST AVENUE LENDER LLC v. RM NEWMAN LLC (2026)

DECISION & ORDER

In an action to foreclose a mortgage, the defendants RM Newman, LLC, and Ronni Newman appeal from (1) an order of the Supreme Court, Queens County (Joseph J. Esposito, J.), entered February 7, 2024, and (2) a judgment of the same court entered February 15, 2024.  The order granted the plaintiff's motion to confirm a referee's report of sale and for leave to enter a deficiency judgment against the defendant Ronni Newman in the total sum of $1,222,732.14.  The judgment, upon the order, is in favor of the plaintiff and against the defendant Ronni Newman in the total sum of $1,222,732.14.

ORDERED that the appeal from the order is dismissed;  and it is further,

ORDERED that the judgment is reversed, on the law, that branch of the plaintiff's motion which was for leave to enter a deficiency judgment against the defendant Ronni Newman in the total sum of $1,222,732.14 is denied, and the order is modified accordingly;  and it is further,

ORDERED that one bill of costs is awarded to the defendants RM Newman, LLC, and Ronni Newman.

The appeal from the order must be dismissed because the right of direct appeal therefrom terminated with the entry of the judgment in the action (see Matter of Aho, 39 N.Y.2d 241, 248, 383 N.Y.S.2d 285, 347 N.E.2d 647).  The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1] ).

The plaintiff's predecessor in interest commenced an action against the defendants RM Newman, LLC, and Ronni Newman (hereinafter together the defendants), among others, to foreclose a mortgage on certain commercial property located in Queens (hereinafter the property).  After entry of an order and judgment of foreclosure and sale, the property was sold at public auction to the plaintiff for $2,100,000.

The plaintiff thereafter moved to confirm a referee's report of sale and for leave to enter a deficiency judgment against Newman in the sum of $1,222,732.14.  In an order entered February 7, 2024, the Supreme Court granted the plaintiff's motion.  A judgment was entered on February 15, 2024, upon the order, in favor of the plaintiff and against Newman in the total sum of $1,222,732.14.  The defendants appeal.

RPAPL 1371(2) specifies the manner in which notice of such motions shall be served, and upon whom the notice shall be served, as follows:  “Simultaneously with the making of a motion for an order confirming the sale, ․ the party to whom such residue shall be owing may make a motion in the action for leave to enter a deficiency judgment upon notice to the party against whom such judgment is sought or the attorney who shall have appeared for such party in such action.  Such notice shall be served personally or in such other manner as the court may direct.”

Here, the plaintiff's electronic filing of the motion papers on the New York State Courts Electronic Filing System did not constitute proper service in accordance with RPAPL 1371(2) (see generally Matter of Jones v. Berman, 37 N.Y.2d 42, 371 N.Y.S.2d 422, 332 N.E.2d 303;  Sciara v. Surgical Assoc. of W. N.Y., P.C., 104 A.D.3d 1256, 961 N.Y.S.2d 640).  Consequently, “ ‘this constitutes a complete bar to the entry of a deficiency judgment’ ” (JDRMDBP–SM, LLC v. Hossain, 221 A.D.3d 875, 876, 198 N.Y.S.3d 595, quoting First Nationwide Bank v. Pegasus Agency, Inc., 253 A.D.2d 536, 536, 676 N.Y.S.2d 512).

The parties' remaining contentions need not be reached in light of our determination.

DILLON, J.P., BRATHWAITE NELSON, WAN and HOM, JJ., concur.