Federal National Mortgage Association v Cassis
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Attorneys and Parties
Brief Summary
Residential mortgage foreclosure procedure, specifically whether a borrower waived a personal-jurisdiction defense by filing a general notice of appearance without timely asserting the defense, and whether an untimely motion to vacate a note of issue could be granted.
The Supreme Court, Kings County, restored the defendant's earlier cross-motion to dismiss for lack of personal jurisdiction and effectively granted dismissal of the complaint against her, and also granted her motion under CPLR 5015(a)(3) [rule permitting relief from a judgment or order based on fraud, misrepresentation, or other misconduct] to vacate the plaintiff's note of issue.
The Appellate Division reversed those portions of the order, denied restoration of the defendant's jurisdictional cross-motion, and denied the motion to vacate the note of issue.
The defendant waived any objection to personal jurisdiction by filing a general notice of appearance in 2012 and waiting about 3½ years to raise the defense. Her earlier participation in settlement conferences under CPLR 3408 [rule governing settlement conferences in residential foreclosure actions] and limited appearance for that purpose did not constitute a general appearance, but the later general notice did. The motion to vacate the note of issue was also untimely under 22 NYCRR 202.21 [rule governing notes of issue and readiness for trial], and the defendant failed to show unusual or unanticipated circumstances.
Background
The plaintiff commenced this mortgage foreclosure action in October 2009 concerning residential property in Brooklyn. In December 2010, counsel filed a limited notice of appearance on behalf of Madeleine Cassis solely for settlement conferences under CPLR 3408 [rule governing settlement conferences in residential foreclosure actions]. In October 2012, her counsel filed a general notice of appearance. In April 2016, after the plaintiff moved for leave to enter a default judgment, Cassis cross-moved to dismiss for lack of personal jurisdiction. The Supreme Court held the motion and cross-motion in abeyance pending a traverse hearing on service. A court attorney referee later found that the plaintiff had not proved proper service. The plaintiff then moved under CPLR 306-b [rule permitting an extension of time for service], and the Supreme Court granted that motion, but the Appellate Division reversed in 2020 and denied the extension. In March 2021, the plaintiff filed a note of issue. Cassis then moved to restore her 2016 jurisdictional cross-motion and separately moved to vacate the note of issue.
Lower Court Decision
The Supreme Court, Kings County, granted the defendant's request to restore to the calendar the branch of her April 2016 cross-motion seeking dismissal for lack of personal jurisdiction and, in effect, granted that dismissal relief. The court also granted the defendant's separate motion under CPLR 5015(a)(3) to vacate the note of issue filed by the plaintiff.
Appellate Division Reversal
The Appellate Division reversed insofar as appealed from and denied both forms of relief. It held that Cassis waived the personal-jurisdiction defense because, after filing a general notice of appearance in October 2012, she neither moved promptly to dismiss nor asserted the defense in a responsive pleading, instead waiting another 3½ years before raising it. The court rejected the argument that the plaintiff had waived this waiver issue by not raising it earlier. The court further held that the motion to vacate the note of issue was untimely under 22 NYCRR 202.21(e), since it was made more than 20 days after filing, and that Cassis failed to satisfy the stricter standard applicable to untimely motions under 22 NYCRR 202.21(d), which requires unusual or unanticipated circumstances and substantial prejudice.
Legal Significance
This decision reinforces that in New York foreclosure litigation, participation in CPLR 3408 settlement conferences and a limited appearance for that purpose do not amount to a general appearance. However, once a defendant files a general notice of appearance, failure to assert lack of personal jurisdiction in an answer or pre-answer motion results in waiver under CPLR 320 [rule governing appearances]. The decision also underscores that untimely attacks on a note of issue face a heightened burden under 22 NYCRR 202.21(d).
A borrower who files a general notice of appearance must promptly preserve a personal-jurisdiction objection or lose it, and a late motion to vacate a note of issue will fail absent unusual or unanticipated circumstances and substantial prejudice.