DEUTSCHE BANK NATIONAL TRUST COMPANY v. FALES (2026)

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Lorraine S. Moller appeals from an order and judgment of foreclosure and sale (one paper) of the Supreme Court, Suffolk County (C. Stephen Hackeling, J.), entered July 2, 2024.  The order and judgment of foreclosure and sale, insofar as appealed from, upon an order of the same court dated June 14, 2024, inter alia, granting those branches of the plaintiff's motion which were to confirm a referee's report and for a judgment of foreclosure and sale and denying the cross-motion of the defendant Lorraine S. Moller pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against her as abandoned, granted the same relief to the plaintiff, confirmed the referee's report, and directed the sale of the subject property.

ORDERED that the order and judgment of foreclosure and sale is reversed insofar as appealed from, on the law, with costs, those branches of the plaintiff's motion which were to confirm the referee's report and for a judgment of foreclosure and sale are denied, the cross-motion of the defendant Lorraine S. Moller pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against her as abandoned is granted, and the order dated June 14, 2024, is modified accordingly.

In March 2008, the plaintiff's predecessor in interest commenced this action against the defendant Lorraine S. Moller (hereinafter the defendant), among others, to foreclose a mortgage on certain real property located in Suffolk County.  The defendant failed to answer the complaint or appear in the action.  In August 2017, the plaintiff moved, inter alia, for an order of reference.  In an order dated January 3, 2019, the Supreme Court granted the plaintiff's motion and referred the matter to a referee to compute the amount due to the plaintiff.  The plaintiff subsequently moved, among other things, to confirm the referee's report and for a judgment of foreclosure and sale.  The defendant cross-moved pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against her as abandoned.  The plaintiff opposed the cross-motion.  In an order dated June 14, 2024, the court, inter alia, granted those branches of the plaintiff's motion and denied the defendant's cross-motion.  On July 2, 2024, the court entered an order and judgment of foreclosure and sale, among other things, granting those branches of the plaintiff's motion, confirming the referee's report, and directing the sale of the property.  The defendant appeals.

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.”  “The language of CPLR 3215(c) is not, in the first instance, discretionary, but mandatory, inasmuch as courts ‘shall’ dismiss claims (CPLR 3215[c] ) for which default judgments are not sought within the requisite one-year period, as those claims are then deemed abandoned” (Giglio v. NTIMP, Inc., 86 AD3d 301, 307–308;  see U.S. Bank N.A. v. Pane, 237 AD3d 1237, 1238).  “To establish sufficient cause, the plaintiff must ‘proffer a reasonable excuse for the delay in timely moving for a default judgment and ․ demonstrate that the cause of action is potentially meritorious' ” (Deutsche Bank Natl. Trust Co. v O'Connor, 223 AD3d 872, 874, quoting HSBC Bank USA, N.A. v. Grella, 145 AD3d 669, 671).

Initially, contrary to the Supreme Court's determination, it was not precluded from considering the defendant's cross-motion pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against her as abandoned pursuant to the doctrine of law of the case.  The order dated January 3, 2019, did not resolve on the merits whether the plaintiff abandoned the action pursuant to CPLR 3215(c) (see Federal Natl. Mtge. Assn. v Marty, 219 AD3d 581, 583).  Further, the plaintiff failed to proffer a reasonable excuse for its lengthy delay in seeking a default judgment.  The plaintiff's conclusory and unsubstantiated assertions that periods of delay were attributable to “loss mitigation discussions with [the] Borrower,” compliance with a then newly issued administrative order, and a change in counsel were insufficient to constitute a reasonable excuse (see Deutsche Bank Natl. Trust Co. v Brathwaite, 197 AD3d 557, 558;  Bank of Am., N.A. v. Santos, 175 AD3d 449, 451).  Since the plaintiff failed to set forth a reasonable excuse, we need not determine whether it asserted a potentially meritorious cause of action (see Deutsche Bank Natl. Trust Co. v Brathwaite, 197 AD3d at 558).

Accordingly, the Supreme Court should have denied those branches of the plaintiff's motion which were to confirm the referee's report and for a judgment of foreclosure and sale and granted the defendant's cross-motion pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against her as abandoned.

DUFFY, J.P., WARHIT, VENTURA and OTTLEY, JJ., concur.