HSBC Bank USA, National Association v Emanuel F. Saris, et al.
Attorneys and Parties
Brief Summary
Residential mortgage foreclosure: whether attendance at a mandatory settlement conference under CPLR 3408 [mandatory foreclosure settlement conferences] constitutes an 'appearance' triggering CPLR 3215(g) [notice requirement for default judgment applications to parties who have appeared].
The Supreme Court, Suffolk County, denied defendants' motion to vacate their default and the order and judgment of foreclosure and sale.
Nothing; the order was affirmed.
Attendance at a CPLR 3408 conference alone is not an appearance for CPLR 3215(g) notice; defendants also failed to show a reasonable excuse for their defaults.
Background
Plaintiff commenced a mortgage foreclosure action in July 2014. Defendants attended a March 6, 2015 CPLR 3408 settlement conference but did not answer, file a notice of appearance, or make a motion. Plaintiff moved unopposed for a default judgment and order of reference, which the court granted on October 23, 2015. An order and judgment of foreclosure and sale was entered on August 22, 2016, and the property was sold in May 2019. Defendants moved in February 2020 to vacate under CPLR 5015(a)(1) [vacatur for excusable default] and CPLR 5015(a)(4) [vacatur for lack of jurisdiction], arguing, among other things, that their conference attendance entitled them to five days’ notice of the default motion under CPLR 3215(g). The Supreme Court denied the motion on August 11, 2022.
Lower Court Decision
Denied vacatur under CPLR 5015(a)(1) for lack of a reasonable excuse (claimed incapacity was unsupported), and under CPLR 5015(a)(4) because defendants had not 'appeared' and thus were not entitled to CPLR 3215(g) five-day notice before the default judgment application.
Appellate Division Reversal
Affirmed: The defendants’ attendance at a CPLR 3408 conference did not constitute an appearance triggering CPLR 3215(g) notice; defendants also failed to demonstrate a reasonable excuse for their defaults.
Legal Significance
Issue of first impression in the Second Department: attendance at a mandatory CPLR 3408 conference, without more, is not a formal or informal appearance for CPLR 3215(g) purposes. The Court harmonized the meaning of 'appearance' with CPLR 3215(c) [dismissal/abandonment if plaintiff fails to take default judgment proceedings within one year], following Second Department precedents that such conferences are not participation on the merits, and aligning with the First Department (Wells Fargo Bank, N.A. v Martinez) and Third Department (Bank of N.Y. v Richards). The Court also reaffirmed that failure to provide CPLR 3215(g)(1) notice is a jurisdictional defect only when the defendant has appeared, and that a default can be vacated under CPLR 5015(a)(1) only with a reasonable excuse and a potentially meritorious defense.
Simply appearing at a mandatory CPLR 3408 settlement conference does not constitute an 'appearance' that triggers the CPLR 3215(g) five-day notice requirement for default judgment motions. To preserve notice rights, a defendant must serve an answer, file a notice of appearance, make a motion, or otherwise actively litigate the merits.