Second Department Holds that Defendant Waived Right to Vacate a Foreclosure Sale Not Held Within 90 Days of Judgment of Foreclosure and Sale
Print Article- Posted on: May 30 2025
In today’s Blog, we revisit the requirement in RPAPL 1351(1) that a foreclosure sale occur within 90 days of the date of the judgment of foreclosure and sale.[1] By way of brief background, and as previously discussed in this BLOG, the 90-day requirement became effective in December of 2016. However, the rule does not apply in situations where the sale occurred prior to the effective date of the amendment. U.S. Bank, N.A. v. Peralta, 191 A.D.3d 924, 925 (2nd Dep’t 2021). Moreover, in order to set aside a foreclosure sale pursuant to RPAPL 1351(1), the borrower must demonstrate that the delay “prejudiced a substantial right.” Wells Fargo Bank, N.A. v. Singh, 204 A.D.3d 732, 734 (2nd Dep’t 2022); Bank of America, N.A. v. Lynch, 85 Misc.3d 1273(A), *5 (Supreme Court Suffolk Co. 2025).
Also relevant to today’s BLOG is CPLR 5015(a)(1), which permits a court to “relieve a party” from a judgment or order on the ground of “excusable default, if such motion is made within one year after service of a copy of the judgment or order with written notice of its entry upon the moving party, or, if the moving party has entered the judgment or order, within one year after such entry.” “A party seeking to vacate a default pursuant to CPLR 5015(a)(1) must demonstrate a reasonable excuse for his or her delay in appearing and answering the complaint and a potentially meritorious defense to the action.” Wells Fargo Bank, N.A. v. Besemer, 131 A.D.3d 1047, 1049 (2nd Dep’t 2015) (citations, internal quotation marks and brackets omitted). Whether an excuse is “reasonable” is a determination “within the sound discretion” of the motion court. HSBC Bank USA, N.A. v. Gias, 215 A.D.3d 810, 812 (2nd Dep’t 2023).
Against this backdrop, we can discuss HSBC Bank USA, N.A. v. Gallo, a mortgage foreclosure action[2] decided on May 28, 2025, by the Appellate Division, Second Department. The borrower in Gallo defaulted in her repayment obligation under a note and mortgage. The lender commenced suit, and the defendant answered the complaint. The lender served motions for summary judgment and for a judgment of foreclosure and sale on the borrower’s counsel, who failed to oppose either motion. Both motions were granted. A judgment of foreclosure and sale was entered on January 18, 2017, and a foreclosure sale was held on September 28, 2018.
The borrower moved, pursuant to CPLR 5015(a)(1), to vacate the summary judgment order and the judgment of foreclosure and sale, to set aside the foreclosure sale, and to vacate the referee’s deed because the property was not sold within 90 days of the judgment of foreclosure and sale. The borrower supported her application with, inter alia, the claim that her attorney was negligent and was publicly censured for professional misconduct. The lender opposed the motion by submitting evidence of the borrower’s bankruptcy proceeding and her two orders to show cause seeking to stay the foreclosure sale.
The motion court denied the motion and the borrower appealed. In affirming, the Second Department rejected the borrower’s arguments under CPLR 5015(a)(1). The Court noted that even though CPLR 5015(a)(1) requires a motion to vacate be made within one year after the service of the order or judgment with notice of entry, “the Supreme Court has the inherent authority to vacate an order in the interest of justice, even where the statutory one-year period under CPLR 5015(a)(1) has expired.” (Citation omitted.) The borrower’s motion was made more than two and a half years after notice of entry of the judgment of foreclosure and sale. In any event, the Court found that the borrower failed to demonstrate a reasonable excuse for failing to oppose the summary judgment motion or the motion for a judgment of foreclosure and sale and, accordingly did not have to consider whether the borrower “demonstrated the existence of a potentially meritorious opposition to those motions.” (Citation omitted.)
The Court also rejected the Borrower’s arguments pursuant to RPAPL 1351(1) and stated:
The Supreme Court properly rejected the [borrower’s] contention that the foreclosure sale should be set aside and the referee’s deed should be vacated pursuant to RPAPL 1351(1). RPAPL 1351(1) was amended, effective December 20, 2016, to provide that a judgment of foreclosure and sale shall direct that the subject property be sold “within ninety days of the date of the judgment”. Here, the [borrower] waived any objection to the omission of the language required by RPAPL 1351(1) by failing to oppose the plaintiff’s motion to confirm the referee’s report and for a judgment of foreclosure and sale, and by waiting more than two years to move to vacate the order and judgment of foreclosure and sale. In any event, under the circumstances of this case, the court providently exercised its discretion in excusing the [lender]’s delay in conducting the foreclosure sale pursuant to CPLR 2004. (Citations and internal quotation marks omitted, hyperlink added.]
Jonathan H. Freiberger is a partner and co-founder of Freiberger Haber LLP.
This article is for informational purposes and is not intended to be and should not be taken as legal advice.
[1] This BLOG has previously written about RPAPL 1351(1) [here].
[2] This BLOG has written dozens of articles addressing numerous aspects of residential mortgage foreclosure. To find such articles, please see the BLOG tile on our website and search for any foreclosure, or other commercial litigation, issue that may be of interest you.
