How Much Delay From Borrower’s Motion To Dismiss?

This might appear a bit obscure for our lender and servicer readers (much less so for the attorneys) but it will bring a smile to mortgage holders and may be worth knowing for that too rare result.

Mortgage holders are regularly (and understandably) dismayed by the protracted pace of mortgage foreclosure actions; they just take much too long – especially in the New York City metropolitan area.  Among the fertile devices defaulting borrowers can employ to delay a foreclosure is the motion to dismiss the complaint.  We are reminded of this by a recent case, Vigo v. 501 Second Street Holding Corp., 100 A.D.3d 871, 955 N.Y.S.2d 99 (2d Dept. 2012).

New York’s practice statue [CPLR Rule 3211(a)] provides a defendant the opportunity to move to dismiss the complaint before the time to answer has expired.  Let’s immediately put this in context.

After a foreclosing lender files its summons and complaint (and typically its lis pendens as well) service of process is then to be effected upon all defendants.  For many reasons (discussed in our alerts over the years) process service can consume many months, especially when parties may be difficult to find or are purposefully avoiding service.  This is an entirely different subject, but the point is that service of process will often consume those many months.

Finally then, there comes a time where the defendants – and we will concentrate here on the borrower – must actually file an answer to the complaint, lest they be in default.  If they file an answer, then it empowers the foreclosing lender or servicer to make a motion for summary judgment to dispose of that answer, which itself takes long enough.  But, the borrower is also by statute afforded an opportunity to make a motion to dismiss the complaint on any number of grounds, which need not be discussed here, save to note that these would typically be fanciful in most mortgage foreclosure cases.

There is considerable potential significance to this: the motion to dismiss extends the time for the moving party to answer until ten days after the resultant order is served with notice of entry.

In lay terms, here is what this means.  Months have gone by and the time for the borrower to answer has now arrived.  Instead of answering, the borrower makes a motion to dismiss.  They will often schedule the return date of the motion – when it is to be heard – some months down the road.  Adjournment requests can further extend this time.  After all those months have passed, the motion is finally submitted to the court and then (usually) many months ensue until a decision or order issues.  It then takes some period of time for the order to be entered in the court clerk’s office and only then can the order be served with notice of entry.  So, even if the borrower loses, as would be most common, the time to answer has now been extended for ten days after service of that now entered order with that notice of entry.  If one added up all the time consumed by this process, it is clear that it would be most disconcerting – to the lender or servicer. (The borrower would be delighted by the delay.)

Recently – in the cited case — when a borrower lost a motion to dismiss, it had the temerity to move to reargue the denial of its motion.  (That is of course its right and the reargument is not the criticism here.)  What the borrower was intending was that the reargument motion would likewise extend its time to answer yet another motion cycle.  Accordingly, the borrower did not deign to answer the complaint, assuming of course that it had plenty of time.

“No” said the court when later this all came to a head, a motion to reargue a motion to dismiss does not extend the time to answer.  Therefore, this defendant was in default and the foreclosure was allowed to proceed.

In sum, the dilatory borrower was hoisted on its own petard and this perhaps obscure aspect of law – albeit important – leads to some satisfaction on the side of lenders and servicers.

Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2017), is a partner with Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. in Garden City, New York. He is also a member of the USFN, The American College of Real Estate Lawyers, The American College of Mortgage Attorneys, an adviser to the New York Times on foreclosure issues and writes a regular servicing column for the New York Law Journal. He is AV rated by Martindale-Hubbell, his biography appears in Who’s Who In American Law and he has been for years listed in Best Lawyers In America and New York Super Lawyers.