NY Appellate Court: Money Paid In Court Does Not Stay Foreclosure Sale Without a Motion
Plaintiffs in New York foreclosure actions are aware that they must follow procedure carefully to foreclose a mortgage on real property. A New York appellate court remindsus that the same is true of the defendant.
The case is NYCTL 1999-1 Trust v. 573 Jackson Avenue Realty Corp., 2008 N.Y. Slip Op 08173.
The defendant paid all the money due on the mortgage into court. Since the foreclosure sale was pending, the defendant notified the plaintiff and stated that the sale should be stayed (halted, for nonlawyers) “per statute.” The Court noted that the governing statute, NY RPAPL sec. 1341, requires the trial court to dismiss the complaint and stay all proceedings. In fact, the court has no discretion about it, all proceedings are to be stayed.
The sale went on anyway. The First Department of New York’s Appellate Division, in disposing of the appeal, pointed out the statute is not “self-executing.” The defendant needed to make a motion. Since no motion was made, the foreclosure sale stands. Not only that, but even though the plaintiff was notified, the plaintiff had no obligation to warn the defendant that the sale was going to go on anyway in the absence of a motion.
The lesson here is more for attorneys than business managers although the latter should certainly be aware of that there are procedural pitfalls in foreclosure proceedings, for either side.
