Why Do You Think They Are Called “Necessary Defendants” In Mortgage Foreclosure Actions?

• Posted on: Mar 28 2025

By: Jonathan H. Freiberger

There are certain categories of individuals and entities that are required to be named as defendants in mortgage foreclosure actions[1] and the failure to name such “necessary defendants” can have serious implications. New York’s Real Property Actions and Proceedings Law § 1311, which sets forth such “necessary defendants,” provides:

Each of the following persons, whose interest is claimed to be subject and subordinate to the plaintiff’s lien, shall be made a party defendant to the action:

1. Every person having an estate or interest in possession, or otherwise, in the property as tenant in fee, for life, by the curtesy, or for years, and every person entitled to the reversion, remainder, or inheritance of the real property, or of any interest therein or undivided share thereof, after the determination of a particular estate therein.

2. Every person having a right of dower or an inchoate right of dower in the real property or any part or share thereof.

3. Every person having any lien or incumbrance upon the real property which is claimed to be subject and subordinate to the lien of the plaintiff.

4. Where the mortgage is upon any of the public utilities regulated by the public service law, the public service commission.

The Second Department, in Polish Nat. Alliance of Brooklyn, U.S.A. v. White Eagle Hall Co., Inc., 98 A.D.2d 400 (1983), explained that “RPAPL 1311 codifies the equitable principle that persons holding title to the premises or acquiring any right to or lien on the property subsequent to the mortgage should be made defendants in the foreclosure action.” Id. at 403 (citations omitted). The Polish Nat. Court further noted that the “rationale for joinder of these interests derives from the underlying objective of foreclosure actions — to extinguish the rights of redemption of all those who have a subordinate interest in the property and to vest complete title in the purchaser at the judicial sale. Id. at 404 (citations omitted); see also 71-21 Loubet, LLC v. Bank of America, N.A., 208 A.D.3d 736, 739 (2^nd Dep’t 2022). When a necessary party is not named as a defendant in a foreclosure action “that party’s rights [are] unaffected by the judgment and sale, and the foreclosure sale may be considered void as to the omitted party.” 71-21 Loubet, 208 A.D.3d at 404 (citations and internal quotation marks omitted).

The omission of a necessary party was devastating to the lender in Deutsche Bank Nat. Trust co. v. Ennis, a case decided by the Appellate Division, Second Department, on March 26, 2025. The borrower in Ennis borrowed money from the lender and secured the repayment obligation with a mortgage on real property (the “Property”). The borrower subsequently transferred the ownership of the Property to Bennett. Thereafter, the lender commenced a foreclosure action. While the borrower and others were named as defendants, Bennett was not. In May of 2018, the Property was sold to the lender at public auction pursuant to a judgment of foreclosure and sale and conveyed to the lender by referee’s deed. The lender served Bennett with a copy of the summons and complaint in September of 2018. The plaintiff then moved to “amend the caption to add Bennett as a defendant and [pursuant to CPLR 306–b] to validate the late service upon her nunc pro tunc”, which motion was granted in January of 2019 without opposition.[2] (Hyperlink added.) In October of 2019, the lender conveyed the Property to MHL (a non-party) by “special warranty deed”.

In January 2020, Bennett moved to, inter alia, vacate the judgment of foreclosure and sale, set aside the foreclosure sale, vacate the referee’s deed and the special warranty deed, and dismiss the action as abandoned pursuant to CPLR 3215(c), which requires a court to dismiss the complaint as abandoned, absent good cause shown, when the plaintiff fails to take steps within one year to enter a default against the defendant.[3] Bennett’s motion was granted by the motion court and MHL appealed.

Relying on law along the lines set forth herein, the Second Department affirmed and found that “Bennett’s rights were unaffected by the sale of the [P]roperty, that the sale was void and the resulting referee’s deed to the plaintiff and the special warranty deed to MHL were invalid. Contrary to MHL’s contention, the doctrine of laches cannot be used to defeat an application to vacate a judgment that was issued in the absence of personal jurisdiction.” (Citations omitted.)

The Court also rejected MHL’s argument that Bennett’s motion should have been denied because it was a bona fide purchaser for value because such an argument is unavailable where “the purchaser fails to use due diligence in examining the title [because] he or she is chargeable, as a matter of law, with notice of the facts which a proper inquiry would have disclosed.” (Citations and internal quotation marks omitted.) The Court also noted that if a conveyance is void “it conveys nothing, and a subsequent bona fide purchaser or bona fide encumbrancer for value receives nothing.” (Citations and internal quotation marks omitted.)

Also unsuccessful were MHL’s arguments in opposition to Bennett’s claim that the action should be dismissed pursuant to CPLR 3215(c). In Ennis, the lender’s motion to amend the caption and serve Bennett nunc pro tunc was granted and Bennett was so served. Bennett never appeared but the lender failed to move for a default judgment against her. Accordingly, the Court found that the action was abandoned as against Bennett.

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 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, issues that may be of interest you.

[2] This Blog has written about CPLR 306-b. See, e.g., [here],[here], [here], and [here].

[3] This BLOG has written numerous articles about CPLR 3215(c). To find such articles, visit the “BLOG” tile on our website and enter “3215(c)” in the “search” box.