CPLR 3215(c) requires a plaintiff to take proceedings for entry of judgment within one year of default or face dismissal of the action as abandoned, except where sufficient cause is shown why the complaint should not be dismissed.  The purpose of this provision is to prevent a plaintiff from taking advantage of a defendant’s default where the plaintiff has also been guilty of inaction.  See Myers v. Slutsky, 139 A.D.3d 2d 709 (2d Dep’t 2012).

In a mortgage foreclosure action, the requirements of CPLR 3215(c) are satisfied by moving for an order of reference within a year of the default in answering.  Failure to comply with CPLR 3215(c) is an argument frequently raised by a defaulting borrower or other defendant, or even by the court, sua sponte, when the order of reference is not timely sought.  Notably, as long as a lender moves for an order of reference within one year of a defendant’s default, it has complied with CPLR 3215(c), even if the timely filed order of reference is subsequently withdrawn.  U.S. Bank Nat. Assn. v. Poku, 118 A.D.3d 980 (2d Dep’t 2014).

Where the lender fails to make the timely motion in compliance with CPLR 3215(c) whether based on circumstances outside its control – including ongoing foreclosure conferencing or a bankruptcy filing – or otherwise, the issue then becomes what constitutes sufficient cause for delay.  As discussed below, in each Appellate Department, that is, essentially, an individualized, fact-specific inquiry.[1]

At one end of the spectrum, CPLR 3215(c) violations in residential foreclosures are repeatedly excused where the delay is a result of settlement conferencing, which, if extended, arguably precludes a timely motion.  For example, in U.S. Bank N.A. v. Nunez, 2021 N.Y. App. Div. LEXIS 488 (App. Div. 1stDep’t Jan. 28, 2021), the First Department excused U.S. Bank’s CPLR 3215(c) violation in light of the parties’ participation in settlement conferencing which caused the delay.  Likewise, in Cumanent, LLC v. Murad, 188 A.D.3d 1149 (2d Dep’t 2020), the Second Department upheld the denial of defendant’s motion to dismiss pursuant to CPLR 3215(c) which held all motions “in abeyance while settlement conferences are being held.”  Similarly, the Second Department in U.S. Rof III Legal Tit. Trust 2015-1 v. John, 2020 N.Y. App. Div. LEXIS 8240 (2d Dep’t Dec. 30, 2020) held that “active participation” by defendant in the litigation (which presumably includes engaging in settlement conferencing) results in a waiver by defendant to seek dismissal pursuant to CPLR 3215(c).

Similarly, where a delay is due to a borrower’s bankruptcy filing, the First Department has forgiven a lender’s non-compliance with CPLR 3215(c). See Citimortgage, Inc. v. Sahai, 172 A.D.3d 552 (1st Dep’t 2019).  The Second Department has also treated a bankruptcy filing as an appropriate basis for delay in Deutsche Bank National Trust Co. v. Iovino, 171 A.D.3d 1011 (2d Dep’t 2019), although ultimately the Court there dismissed the action due to plaintiff’s inaction for another two years following the lifting of the bankruptcy stay therein.

At the other extreme, where lenders have failed to offer any excuse for the delay – even a short delay — appellate departments have — not surprisingly — failed to forgive CPLR 3215(c) violations, dismissing these matters outright as abandoned. See, e.g., MTGLQ Inv., L.P. v. Shay, 2021 N.Y. App. Div. LEXIS 226 (1st Dep’t Jan. 14, 2021) (affirming dismissal on CPLR 3215(c) grounds where plaintiff failed to offer any excuse for its over one year delay in seeking default judgment); BAC Home Loans Servicing, L.P. v. Mazza, 2021 N.Y. App. Div. LEXIS 418 (2d Dep’t 2021) (upholding dismissal pursuant to CPLR 3215(c) where plaintiff failed to proffer excuse for its four-year delay in moving for an order of reference following defendant’s default); Bazile v. Saleh, 2021 N.Y. App. Div. LEXIS 286 (2d Dep’t Jan. 20, 2021) (finding dismissal under CPLR 3215(c) “properly directed” where movant failed to address any reasonable excuse for its untimeliness); HSBC Bank USA N.A. v. Jean, 2018 N.Y. App. Div. LEXIS 6528 (2d Dep’t 2018) (dismissing foreclosure action commenced in March 2012, followed by a motion for Order of Reference in September 2013 absent any explanation for the brief delay).

In the cases essentially between these extremes – instances where the delay was not out of the plaintiff’s control but some justification for non-compliance is offered – the appellate courts have tended to focus on the gap between the last event causing delay and the filing of the motion, with courts dismissing actions with gaps of inactivity longer than one year.  In Bank of Am., N.A. v. Rahl, 178 A.D.3d 1293 (3d Dep’t 2019), for example, although plaintiff proffered detailed explanations for its delay including its need to comply with certain administrative orders, Hurricane Sandy and its resulting moratorium on foreclosures, plaintiff’s retention of new counsel and withdrawal of defendant’s counsel, and the parties’ participation in settlement conferencing, the action was dismissed as abandoned because there was no explanation for the one year gap following all of those events. See also BAC Home Loans Servicing LP v. Bertram, 171 A.D. 3d 994 (2d Dep’t 2019) (finding that, even accepting plaintiff’s assertions that the action was delayed for a certain period of time due to FEMA foreclosure holds, after two major hurricanes, the plaintiff still provided no explanation for the approximately 16-month period from the time the FEMA holds were no longer in effect until plaintiff took action in the matter).

In some instances, courts have found not the timing but the excuse for the delay, itself, to simply be an inadequate justification for non-compliance.  In HSBC Bank USA N.A. v. Rothbeind, 179 A.D.3d 1323 (3d Dep’t 2020), the Third Department upheld the dismissal of a foreclosure action as abandoned under CPLR 3215(c) where the delay by plaintiff was due its need to correct the prior assignment of mortgage to obtain an affidavit of indebtedness from the loan servicer to support a motion for default judgment, finding same to be an “insufficient explanation” for plaintiff’s two-year delay in taking default judgment.

Similarly, any recitation of excuse based on events which occurred entirely after the one year period has passed will result in a dismissal.  See, e.g., IXIS Real Estate Capital, Inc. v. Herbst, 170 A.D.3d 691 (2d Dep’t 2019).

Finally, it should  be noted that, in at least two recent instances, the Second Department has found that a request for judicial intervention (“RJI”) constitutes “proceedings for entry of judgment” pursuant to CPLR 3215(c), and that because the RJI was filed within a year of the default, no reasonable excuse for the delay or showing of a meritorious defense was necessary.  See Citimortgage, Inc. v. Zaibak, 2020 N.Y. App. Div. LEXIS 6946 (2d Dep’t 2020) (“Where, as here, a settlement conference is a necessary prerequisite to obtaining a default judgment, a formal judicial request for such conference in connection with an ongoing demand for the ultimate relief sought in the complaint constitutes “proceedings for entry of judgment” within the meaning of CPLR 3215(c).”); Fed. Natl. Mtge. Assn. v. Edmund-Henry, 188 A.D.3d 652, 655 (2d Dep’t 2020) (finding no CPLR 3215(c) violation where plaintiff “took the preliminary step toward obtaining a default judgment of foreclosure and sale by filing an RJI as a step towards seeking an ex parte order of reference within four months after [defendant’s] default in appearing or answering.”).

In sum, a plaintiff in a residential foreclosure must seek a default judgment (whether as part of its motion for an order of reference or, in some instances, by requesting an RJI in connection with mandatory settlement conferencing) within one year of default.  However, if there are good reasons by which a plaintiff is impeded from doing so, plaintiff should be able to avoid a CPLR 3215(c) dismissal.[2]  But if the excuse lacks merit or immediate action is not immediately taken once the basis for the delay has ended, the case will be subject to dismissal.  As Bergman on New York Mortgage Foreclosures states, “[f]oreclosing plaintiffs certainly need to pay attention to this aspect of the foreclosure process in New York.”  2 Bergman on New York Mortgage Foreclosures § 20.02.

[1] Beyond having to establish sufficient cause for delay, a movant must also set forth a meritorious claim to warrant forgiveness of a CPLR 3215(c) violation.

[2] This issue is likely to increasingly arise given the pandemic and resulting foreclosure moratoriums and it remains to be seen under what circumstances courts will forgive CPLR 3215(c) delays relating to these moratoriums and other COVID-related delays.