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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: September 18, 2019

Dismissal of Foreclosure Action for Failure to Prosecute Vacated

On September 11, 2019, the Second Department issued a decision in U.S. Bank Natl. Assn. v. Spence, 2019 NY Slip Op. 06529, vacating the dismissal of a foreclosure action for failure to prosecute, explaining:

A pleading cannot be dismissed pursuant to CPLR 3216(a) unless a written demand is served upon the party against whom such relief is sought in accordance with the statutory requirements, along with a statement that the default by the party upon whom such notice is served in complying with such demand within said ninety day period will serve as a basis for a motion by the party serving said demand for dismissal as against him for unreasonably neglecting to proceed. While a conditional order of dismissal may have the same effect as a valid 90-day notice pursuant to CPLR 3216, the conditional order here was defective in that it did not state that the plaintiff’s failure to comply with the notice will serve as a basis for a motion by the court to dismiss the complaint for failure to prosecute. Additionally, it appears that the complaint was ministerially dismissed, without a motion, and without the entry of any formal order by the court dismissing the complaint.

Since the Supreme Court acknowledged in the order appealed from that issue was not joined in the action when it entered its conditional order pursuant to CPLR 3216, the court was without authority to issue the conditional order, and it should have granted the Bank’s motion to vacate the conditional order. However, considering the Bank’s prolonged delay of more than two years in moving to vacate the conditional order, and the fact that it failed to raise this issue in two prior motions to restore the action to the calendar, we find that the court should have granted the Bank’s motion on the condition that the Bank waive interest, late charges, and outstanding fees and costs on the loan, as well as attorney’s fees, commencing on February 20, 2014, the date of the conditional order, and running through the date of this decision and order.

(Internal quotations and citations omitted).

If you are served with a complaint and fail timely to answer, or if you answer and do not appear at schedule court appearances, the court can enter judgment against you: a default judgment. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding whether you have been properly served or if a default judgment has been entered against you.

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