62 LLC v. 192 LLC (2026)

Submitted—March 5, 2026

DECISION & ORDER

M/

In an action to foreclose a tax lien, the defendant Housing Trust Fund Corporation appeals from an order of the Supreme Court, Nassau County (Jeffrey A. Goodstein, J.), entered April 29, 2024.  The order denied that defendant's motion, inter alia, to vacate an order of the same court (Anthony J. Provenzano, Ct. Atty. Ref.) dated February 22, 2023, which, upon the defendants' failure to appear at a residential tax lien foreclosure conference, directed that the plaintiff may proceed with the action, and so much of an order of the same court (David P. Sullivan, J.) dated May 22, 2023, as granted those branches of the plaintiff's unopposed motion which were for leave to enter a default judgment against the defendant Housing Trust Fund Corporation and for an order of reference.

ORDERED that the order entered April 29, 2024, is reversed, on the law and in the exercise of discretion, with costs, and the motion of the defendant Housing Trust Fund Corporation, inter alia, to vacate the order dated February 22, 2023, and so much of the order dated May 22, 2023, as granted those branches of the plaintiff's unopposed motion which were for leave to enter a default judgment against it and for an order of reference is granted.

The plaintiff purchased from Nassau County a tax lien for unpaid taxes on certain real property located in Hempstead.  The taxes were assessed to the defendant 192 East Lindbergh, LLC (hereinafter Lindbergh).  Lindbergh had purchased the property in 2015 from the defendant Housing Trust Fund Corporation (hereinafter HTFC).  As per the deed, HTFC retained a reversionary interest in the property.

In June 2022, the plaintiff commenced this action to foreclose the tax lien against HTFC, among others.  HTFC failed to appear or answer the complaint.  In November 2022, the plaintiff moved, inter alia, for leave to enter a default judgment against HTFC and for an order of reference.  In February 2023, a residential tax lien foreclosure conference was held, and HTFC failed to appear.  In an order dated February 22, 2023, the Supreme Court, upon the defendants' failure to appear at the residential tax lien foreclosure conference, directed that the plaintiff may proceed with the action.  In an order dated May 22, 2023, the court, among other things, granted those branches of the plaintiff's unopposed motion which were for leave to enter a default judgment against HTFC and for an order of reference.

HTFC subsequently moved, inter alia, to vacate the order dated February 22, 2023, and so much of the order dated May 22, 2023, as granted those branches of the plaintiff's motion which were for leave to enter a default judgment against it and for an order of reference.  In an order entered April 29, 2024, the Supreme Court denied HTFC's motion.  HTFC appeals.

“CPLR 5015(a) ‘does not provide an exhaustive list as to when a default judgment may be vacated’ ” (Dorji v. Maruti Ravami, LLC, 238 AD3d 855, 856, quoting Woodson v. Mendon Leasing Corp., 100 N.Y.2d 62, 68).  “ ‘In addition to the grounds set forth in section 5015(a), a court may vacate its own judgment for sufficient reason and in the interests of substantial justice’ ” (id.).  “However, this discretion is reserved for unique or unusual circumstances that warrant such action” (Kopsick v. Town of Hempstead, 213 AD3d 830, 832 [alteration and internal quotation marks omitted] ).

Under the unique circumstances of this case, the Supreme Court improvidently exercised its discretion in denying HTFC's motion, among other things, to vacate the order dated February 22, 2023, and so much of the order dated May 22, 2023, as granted those branches of the plaintiff's motion which were for leave to enter a default judgment against HTFC and for an order of reference in the interests of justice based upon HTFC's proposed affirmative defense that the property, which is State owned, cannot be subject to foreclosure for unpaid taxes (see RPTL 1174;  Matter of County of Fulton v. State of New York, 76 N.Y.2d 675, 678–679).

Accordingly, HTFC's motion, inter alia, to vacate the order dated February 22, 2023, and so much of the order dated May 22, 2023, as granted those branches of the plaintiff's motion which were for leave to enter a default judgment against it and for an order of reference should have been granted.

GENOVESI, J.P., WARHIT, GOLIA and HOM, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court