Deutsche Bank National Trust Company v Unknown Heirs to the Estate of Jacinto Ortiz, et al.
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Judges
Attorneys and Parties
Brief Summary
Mortgage foreclosure procedure involving a deceased mortgagor, whether a foreclosure action may proceed directly against intestate distributees, and whether commencement against a deceased person invalidates the entire action.
The Supreme Court, Richmond County, granted Carmen Ortiz's motion under New York Civil Practice Law and Rules (CPLR) 1021 [rule governing substitution after a party's death] and CPLR 3211(a)(8) [rule permitting dismissal for lack of personal jurisdiction] to dismiss the amended complaint insofar as asserted against her.
The Appellate Division reversed the order dismissing the amended complaint against Carmen Ortiz and denied her motion.
Because the mortgagor died intestate, title to the real property vested automatically in the distributees, and since the plaintiff no longer sought a deficiency judgment, the estate was not a necessary party. The action was a nullity only as against the deceased mortgagor, not as against the other defendants, so the plaintiff could proceed directly against the heirs.
Background
In August 2013, Deutsche Bank National Trust Company commenced a mortgage foreclosure action concerning Richmond County property against Jacinto Ortiz and others. The plaintiff later learned that Ortiz had died before the action was started, apparently intestate. The plaintiff then filed an amended complaint removing the decedent as a defendant and naming the heirs of his estate instead. Carmen Ortiz, as an heir, moved to dismiss the amended complaint insofar as asserted against her.
Lower Court Decision
The Supreme Court, Richmond County, granted Carmen Ortiz's motion pursuant to CPLR 1021 and CPLR 3211(a)(8), dismissing the amended complaint as against her.
Appellate Division Reversal
The Appellate Division held that an action commenced against a deceased defendant is a nullity only as to that deceased person, not as to the remaining defendants. It further held that when a property owner dies intestate, title to the real property automatically passes to the distributees. Therefore, where the mortgagee does not seek a deficiency judgment, a foreclosure action may generally be brought directly against those distributees. Since the plaintiff no longer sought a deficiency judgment, the estate was not a necessary party, and dismissal of the amended complaint against Carmen Ortiz was improper.
Legal Significance
This decision reinforces New York foreclosure law that a lender may continue or commence foreclosure directly against intestate heirs when the mortgagor died before suit and no deficiency judgment is being pursued. It also clarifies that naming a deceased person at commencement does not void the entire action; the defect is limited to the claims against the deceased defendant.
In a New York mortgage foreclosure, if the mortgagor died intestate before the action began and the lender is not seeking a deficiency judgment, the lender may sue the distributees directly, and the initial naming of the deceased mortgagor does not invalidate the whole case.