Deutsche Bank National Trust Company v. David
Attorneys and Parties
Brief Summary
Mortgage foreclosure; whether leave to amend the complaint under CPLR 3025(b) [permits amendment of pleadings by leave of court; leave should be freely given] to add the homeowner in her individual capacity and to amend the notice of pendency nunc pro tunc could be denied based on alleged noncompliance with RPAPL 1304 [requires a 90-day pre-foreclosure notice to the borrower] that the defendant never raised.
The Supreme Court denied leave to amend as patently devoid of merit because the plaintiff purportedly failed to establish service of the 90-day notice required by RPAPL 1304, and later denied a motion to renew.
The denial of leave to amend; the Appellate Division granted leave to amend and to file an amended notice of pendency nunc pro tunc and dismissed the appeal from the renewal denial as academic.
The proposed amendment was not palpably insufficient because David was a record owner and mortgagor and thus a proper defendant under RPAPL 1311(1) [identifies necessary defendants in mortgage foreclosure]; no evidentiary showing of merit was required under CPLR 3025(b); the trial court improperly raised RPAPL 1304 sua sponte; and David failed to show prejudice or surprise.
Background
Plaintiff commenced a 2015 foreclosure against, among others, Lisa David as administrator and heir of Josephine Armando, based on a mortgage executed by Anthony J. Armando, Josephine Armando, and their daughter, Lisa David. A 2004 deed conveyed the property solely to David. Both parents died in 2008, and David received letters of administration for Josephine’s estate in 2011. David answered pro se with a counterclaim. Plaintiff later moved to amend to add David in her individual capacity and to serve a second amended complaint and an amended notice of pendency nunc pro tunc.
Lower Court Decision
By order dated November 2, 2022, the Supreme Court (Suffolk County) denied leave to amend, finding the amendment patently devoid of merit because the plaintiff did not establish compliance with RPAPL 1304’s 90‑day notice. By order dated December 13, 2022, the court denied plaintiff’s motion, in effect, to renew.
Appellate Division Reversal
The Appellate Division reversed the November 2, 2022 order, granted leave to amend to add David in her individual capacity, and granted leave to serve and file a second amended complaint and an amended notice of pendency nunc pro tunc. It held the amendment was not palpably insufficient because David, as record owner and mortgagor, is a proper foreclosure defendant, no evidentiary showing is required under CPLR 3025(b), the trial court erred in sua sponte invoking RPAPL 1304 (a defense not raised by David), and David showed no prejudice or surprise from the delay. The appeal from the December 13, 2022 order was dismissed as academic. One bill of costs was awarded to the plaintiff.
Legal Significance
Reaffirms New York’s liberal amendment standard under CPLR 3025(b) and that noncompliance with RPAPL 1304 is a defense that cannot be raised sua sponte at the leave‑to‑amend stage. Clarifies that a record owner/mortgagor is a proper, necessary party under RPAPL 1311(1) in foreclosure actions and that plaintiffs need not prove RPAPL 1304 compliance to obtain leave to amend absent the defense being pled, especially where the opposing party cannot show prejudice or surprise.
In New York foreclosure actions, leave to amend to add a homeowner in her individual capacity should be freely granted absent prejudice; courts should not deny amendment based on RPAPL 1304 compliance unless the defense is raised, and a record owner/mortgagor is a proper necessary defendant.