Second Department Refuses to Extend Time for Lender to Serve Process on Borrower pursuant to CPLR 306-b
Print Article- Posted on: Feb 13 2026
We have previously written about CPLR 306-b[1] and will do so again today. As previously explained in prior articles, a lawsuit is generally commenced by filing a summons and complaint with the appropriate county clerk. CPLR 304(a). Once the action is commenced, the plaintiff is required to serve the summons and complaint on the defendant, which, generally, must occur within 120 days of the commencement of the action. CPLR 306-b. “If service is not made upon a defendant within the time provided in this section, the court, upon motion, shall dismiss the action without prejudice as to that defendant, or upon good cause shown or in the interest of justice, extend the time for service.” Id. The Leader Court made clear that, under CPLR 306-b, “good cause” and “the interest of justice” are “two separate standards by which to measure an application for an extension of time to serve” a defendant if service is not made within the requisite 120 day period. Leader, 97 N.Y.2d at 104; see also Davis v. ACS-Kings, 244 A.D.3d 850, 850 (2nd Dep’t 2025). In this regard, the Leader Court recognized that because “good cause” and “the interest of justice” are “stated separately, joined by the word ‘or’ [t]hey cannot be defined by the same criteria; otherwise, one would have been sufficient.” Id. (citation omitted).
“To establish good cause, a plaintiff must demonstrate reasonable diligence in attempting service.” Bumpus v. New York City Tr. Auth., 66 A.D.3d 26, 31 (2nd Dep’t 2009); see also Wilmington Savings Fund Society, FSB v. James, 174 A.D.3d 835, 837 (2nd Dep’t 2019); Rosen v. S&M Kings Borough Corp., 239 A.D.3d 683, 684 (2nd Dep’t 2025). “Good cause will not exist where a plaintiff fails to make any effort at service or fails to make at least a reasonably diligent effort at service.” Bumpus, 66 A.D.3d at 31 (citations omitted). However, “good cause may be found to exist where the plaintiff’s failure to timely serve process is a result of circumstances beyond the plaintiff’s control.” State of New York Mort. Agency v. Braun, 182 A.D.3d 63, 66 (2nd Dep’t 2020) (citation and internal quotation marks omitted). Where “good cause” is not established, “courts must consider the ‘interest of justice’ standard of CPLR 306-b.” Bumpus, 66 A.D.3d at 32 (citations omitted); see also Wilmington, 174 A.D.3d at 837; State of New York Mort., 182 A.D.3d at 66.
“The interest of justice standard is a broader standard to accommodate late service that might be due to mistake, confusion or oversight, so long as there is no prejudice to the defendant.” US Bank Nat. Ass’n. v. Fink, 206 A.D.3d 858, 860 (2nd Dep’t 2022) (citation and internal quotation marks omitted). Under the “interest of justice” standard, a court must analyze “the factual setting of the case and a balancing of the competing interests presented by the parties.” Gjurashaj v. ABM Industry Groups, LLC, 213 A.D.3d 479, 480 (1st Dep’t 2023) (citing Leader, internal quotation marks omitted); see also Wells Fargo Bank v. Barrella, 166 A.D.3d 711, 713 (2nd Dep’t 2018). In addition, while no single factor “is determinative,” courts may consider factors such as “diligence, or lack thereof, along with any other relevant factor in making its determination, including expiration of the statute of limitations, the meritorious nature of the cause of action, the length of delay in service, the promptness of a plaintiff’s request for the extension of time, and prejudice to defendant.” Id; see also State of New York Mort., 182 A.D.3d at 66.
Against this backdrop, we discuss Nationstar Mortgage, LLC v. Balsamo, a mortgage foreclosure action decided by the Appellate Division, Second Department, on February 11, 2026.[2] The action was commenced in 2009, and the borrower failed to file an answer. In 2018, the lender moved for a judgment of foreclosure and sale, and the borrower cross-moved to dismiss the complaint for lack of personal jurisdiction. The motion was granted, and the cross-motion was denied. On a prior appeal, the Second Department reversed the judgment of foreclosure and sale, finding that while the lender met its prima facie burden of demonstrating proper service, the borrower sufficiently rebutted the lender’s showing. Accordingly, the matter was sent back to the motion court for a traverse hearing.[3]
The lender failed to produce any witnesses at the traverse hearing, and the motion court determined that proper service was not effectuated. At the hearing, the lender also made an application pursuant to CPLR 306-b to extend the time to serve the borrower with process. The motion court denied the application. The lender appealed.
The Second Department affirmed and held that the lender failed to meet its burden under the “good cause” and the “interest of justice” standard. As to the former, the Court found that:
the [lender] failed to demonstrate that it had previously made a valid attempt to serve the [borrower] within the 120-day period after the complaint was filed. This Court previously determined that the [borrower] rebutted the [lender]’s prima facie showing of valid service. The [lender] did not produce any further evidence in support of its contention that service was valid. Therefore, the [lender] did not demonstrate good cause for an extension. [Citations omitted.]
In rejecting the lender’s “interest of justice” argument, the Court found that:
although the [lender] demonstrated a potentially meritorious cause of action, other factors weighed against granting an extension of time to serve the complaint in the interest of justice. After this Court remitted the matter to the Supreme Court, Nassau County, for a hearing to determine the validity of service of process upon the [borrower], the [lender] failed to promptly request an extension of time. The [lender] also failed to rebut the inference of substantial prejudice that arose from its protracted delay in serving the [borrower], as, contrary to the [lender]’s contention, there is no indication in the record that the [borrower] had notice of this action until nearly nine years after the action was commenced. Under these circumstances, the [lender] failed to establish its entitlement to an extension of time to serve the [borrower] under the interest of justice standard. [Citations omitted.]
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.
Unless otherwise stated, Freiberger Haber LLP’s BLOG articles are based on recently decided published opinions and not on matters handled by the firm.
[1] This BLOG has written numerous articles addressing CPLR 306-b. To find such articles, please see the BLOG tile on our website and type “306-b” into the “search” box. The history and import of CPLR 306-b, as discussed in prior BLOGS, is explained by the Court of Appeals in Leader v. Maroney, Ponzini & Spencer, 97 N.Y.2d 95, 101 (2001).
[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 to you.
[3] This BLOG has written numerous articles addressing issues related to service of process and personal jurisdiction. To find such articles, please see the BLOG tile on our website and type “service of process” or “personal jurisdiction” into the “search” box.
Tagged with: Commercial Litigation, CPLR 306-B, Mortgage Foreclosure
