Judges

Attorneys and Parties

Brief Summary

Background

In February 2010, the plaintiffs began an action to foreclose a tax lien on a vacant Brooklyn lot owned by Grace Christian Church. The lot, identified as Lot 10, was used as a parking lot for church members attending services at the sanctuary located on three adjoining lots also owned by the Church. A process server stated that service was made on March 22, 2010, by delivering the summons and complaint to Dennis Orwell, identified as the pastor and an authorized person to accept service. On October 5, 2011, attorney Peter J. Goodman filed a notice of appearance for the Church, and plaintiffs accepted it even though it was late. The Church did not answer the complaint or move to dismiss. In July 2017, the court entered an order and judgment of foreclosure and sale on default. The property was sold at foreclosure in October 2017 and conveyed by referee's deed in May 2018. In December 2018, the Church moved to vacate the judgment and sale, arguing lack of personal jurisdiction and substantial justice, and asserting that it did not learn of the foreclosure until summer 2018 and that its adjoining lots had tax-exempt status.

Lower Court Decision

The Supreme Court, Kings County, granted the Church's motion under CPLR 5015(a), vacated the default foreclosure judgment, dismissed the complaint insofar as asserted against the Church, set aside the foreclosure sale, permitted the Church to redeem the property, and revoked any deed issued by the referee.

Appellate Division Reversal

The Appellate Division held that the Church's notice of appearance waived any personal jurisdiction defense because the Church neither served an answer asserting that defense nor made a pre-answer jurisdictional motion. The court rejected the Church's argument that an untimely notice of appearance could not confer personal jurisdiction, citing authority that such an appearance still waives the objection. The court further ruled that the Supreme Court improvidently exercised its discretion in vacating the judgment in the interests of substantial justice, because the Church had not filed for or demonstrated tax-exempt status for Lot 10 under RPTL § 420-a. Accordingly, the appellate court denied the motion and reinstated the foreclosure judgment and sale.

Legal Significance

This decision reinforces that a defendant who appears in an action through counsel waives objections to personal jurisdiction unless the objection is timely preserved in an answer or by a CPLR 3211(a)(8) motion. It also shows that courts will not use equitable or substantial-justice grounds to undo a completed tax lien foreclosure where the claimed tax exemption was never actually obtained for the parcel at issue.