JPMORGAN CHASE BANK NATIONAL ASSOCIATION v. GEZLEV (2026)

DECISION & ORDER

In an action to foreclose a mortgage, nonparty Peter Pekich appeals from an order of the Supreme Court, Suffolk County (Christopher Modelewski, J.), dated January 8, 2025.  The order (1) granted the motion of nonparty Ana P. Ore, inter alia, for leave to intervene in the action and, thereupon, pursuant to CPLR 5015(a) to vacate an order and judgment of foreclosure and sale (one paper) of the same court entered March 13, 2024, (2) denied the motion of nonparty Peter Pekich, the successful bidder at a foreclosure sale of the subject property held on June 21, 2024, for leave to intervene in the action and to compel the referee to close title to the subject property with nonparty Peter Pekich pursuant to the terms of sale, and (3) granted the cross-motion of nonparty Ana P. Ore, inter alia, to set aside the foreclosure sale of the subject property.

ORDERED that the order is reversed, on the law, with costs payable by nonparty Ana P. Ore, the motion of nonparty Ana P. Ore, inter alia, for leave to intervene in the action and, thereupon, pursuant to CPLR 5015(a) to vacate the order and judgment of foreclosure and sale is denied, the motion of nonparty Peter Pekich for leave to intervene in the action and to compel the referee to close title to the subject property with nonparty Peter Pekich pursuant to the terms of sale is granted, the cross-motion of nonparty Ana P. Ore, inter alia, to set aside the foreclosure sale of the subject property is denied, and the order and judgment of foreclosure and sale and the foreclosure sale of the subject property are reinstated.

On August 4, 2022, the plaintiff commenced this action against the defendants Senol Gezlev and Funda Gezlev (hereinafter together the Gezlevs), among others, to foreclose a mortgage on certain real property located in Suffolk County.  On March 13, 2024, an order and judgment of foreclosure and sale was entered, inter alia, confirming a report of a referee, who computed the amount due to the plaintiff to be $43,368.84, and directing the sale of the property.  On June 21, 2024, pursuant to the order and judgment of foreclosure and sale, a referee conducted an auction sale of the property at which Peter Pekich was the successful bidder.  Pekich and the referee both executed a memorandum of sale dated June 21, 2024, reflecting that Pekich had purchased the property at auction for the sum of $53,000 and that both Pekich and the referee agreed to be bound by the terms of sale.  The property was sold subject to a second mortgage in the sum of $65,830.47.

On July 12, 2024, Ana P. Ore moved, among other things, for leave to intervene in the action and, thereupon, pursuant to CPLR 5015(a) to vacate the order and judgment of foreclosure and sale.  In support, Ore submitted evidence that she and the Gezlevs entered into a contract of sale on April 2, 2024, to purchase the property for the sum of $425,000 and that a closing took place on June 21, 2024, the same date as the foreclosure sale.  Ore also submitted evidence that the mortgage allegedly had been redeemed at the closing by wiring the plaintiff a payoff sum pursuant to a payoff letter the Gezlevs had received reflecting a total payoff sum of $53,478.17, which was good through June 20, 2024.  On August 9, 2024, Pekich moved for leave to intervene in the action and to compel the referee who conducted the foreclosure sale to close title to the property with Pekich pursuant to the terms of sale.  Thereafter, Ore cross-moved, inter alia, to set aside the foreclosure sale on the ground that Pekich's bid price was unconscionably low.  In an order dated January 8, 2025, the Supreme Court granted Ore's motion and cross-motion, and denied Pekich's motion.  Pekich appeals.

“Upon a timely motion, a person is permitted to intervene in an action as of right when, inter alia, ‘the action involves the disposition or distribution of, or the title or a claim for damages for injury to, property and the person may be affected adversely by the judgment’ ” (Global Team Vernon, LLC v. Vernon Realty Holding, LLC, 93 AD3d 819, 820, quoting CPLR 1012[a][3] ).  “Additionally, a court, in its discretion, may permit a person to intervene, inter alia, ‘when the person's claim or defense and the main action have a common question of law or fact’ ” (id., quoting CPLR 1013).  “Whether intervention is sought as a matter of right under CPLR 1012(a), or as a matter of discretion under CPLR 1013, is of little practical significance, since intervention should be permitted ‘where the intervenor has a real and substantial interest in the outcome of the proceedings' ” (id., quoting Wells Fargo Bank, N.A. v. McLean, 70 AD3d 676, 677;  accord Atlantic Ave. Capital, LLC v 980 Atl. Holdings, LLC, 231 AD3d 692, 694).

“ ‘A mortgagor or other owner of the equity of redemption of a property subject to a judgment of foreclosure and sale may redeem the mortgage at any time prior to the foreclosure sale’ ” (Liberty Dabar Assoc. v. Mohammed, 183 AD3d 880, 882, quoting Norwest Mtge., Inc. v. Brown, 35 AD3d 682, 683).  However, “[t]he right to redeem is extinguished as a matter of law upon the foreclosure sale, whether or not the deed has been delivered, and once the right to redeem is lost, it cannot be revived, even by court order” (id.;  see LIC Assets, LLC v. Chriker Realty, LLC, 131 AD3d 946, 947).

Here, the record demonstrates that the foreclosure sale of the property at which Pekich was the successful bidder concluded at 3:15 p.m. on June 21, 2024, and that the payoff sum was wired to the plaintiff during Ore and the Gezlevs' closing more than one hour later, at 4:23 p.m. on June 21, 2024.  Under these circumstances, Pekich became the equitable owner of the property upon the completion of the foreclosure sale, and any right to redeem the mortgage had already been extinguished by the time Ore and the Gezlevs purported to close on the property (see Liberty Dabar Assoc. v. Mohammed, 183 AD3d at 882;  LIC Assets, LLC v. Chriker Realty, LLC, 131 AD3d at 947;  Norwest Mtge., Inc. v. Brown, 35 AD3d 682, 683).

“ ‘[I]n the exercise of its equitable powers, a court has the discretion to set aside a foreclosure sale where there is evidence of fraud, collusion, mistake, or misconduct’ ” (Wilmington Sav. Fund Socy., FSB v Kelly, 229 AD3d 659, 660 [internal quotation marks omitted], quoting Bank of N.Y. Mellon Trust Co., N.A. v Gambino, 212 AD3d 756, 757).  “Mere inadequacy of price does not provide a basis to vacate a [foreclosure] sale, unless there are additional circumstances warranting invocation of equity powers such as fraud, mistake, or exploitive overreaching, ․ or unless the price is so inadequate as to shock the court's conscience” (NYCTL 1998–2 Trust v. McGill, 138 AD3d 1077, 1078 [citation omitted] ).

Here, the issue of inadequacy must be resolved by comparing the combined sum of Pekich's successful bid and the balance of the second mortgage on the property with the actual value of the property (see Polish Natl. Alliance of Brooklyn v White Eagle Hall Co., 98 AD2d 400, 408).  Comparing these amounts, the price does not shock the conscience (see NYCTL 1998–2 Trust v. McGill, 138 AD3d at 1078;  Polish Natl. Alliance of Brooklyn v White Eagle Hall Co., 98 AD2d at 407).

Accordingly, the Supreme Court erred in granting Ore's motion, among other things, for leave to intervene in the action and Ore's cross-motion, inter alia, to set aside the foreclosure sale, and erred in denying Pekich's motion for leave to intervene in the action and to compel the referee to close title to the property with Pekich pursuant to the terms of sale.

Ore's and Pekich's remaining contentions need not be reached in light of our determination.

DILLON, J.P., DOWLING, TAYLOR and MCCORMACK, JJ., concur.