Background
Federal National Mortgage Association began a Brooklyn residential foreclosure in 2009. Counsel initially filed a limited appearance for the homeowner, Madeleine Cassis, solely for mandatory CPLR 3408 settlement conferences. In October 2012, however, counsel filed a general notice of appearance without raising lack of personal jurisdiction in an answer or pre-answer motion.
Cassis waited until April 2016 to cross-move to dismiss for defective service. A referee later found that Fannie Mae had not proved service, and years of motion practice followed over an extension of the service period, restoration of the dismissal motion, and a note of issue. Supreme Court ultimately restored and granted Cassis’s jurisdictional motion and vacated the lender’s note of issue. Fannie Mae appealed.
The Court’s Holding
The Second Department reversed. Participation limited to a CPLR 3408 settlement conference does not, by itself, show a clear intent to litigate the merits and therefore does not waive a service objection. The 2010 limited appearance was consequently not the problem. The later general notice of appearance was different: it formally placed Cassis in the action without preserving the jurisdictional defense.
By filing that general appearance and then waiting approximately three and a half years to seek dismissal, Cassis waived any claim that the court lacked personal jurisdiction. The panel held that the lender had not forfeited its waiver argument merely because it did not press the point during earlier service-related proceedings. Once waiver occurred, restoring and granting the old dismissal motion was error even though the referee had found service unproved.
The panel also reinstated the note of issue. A motion to vacate must ordinarily be made within 20 days of service under 22 NYCRR 202.21(e). A later motion faces the more demanding standard requiring unusual or unanticipated circumstances and substantial prejudice. Cassis moved more than 20 days after the March 2021 filing and did not identify qualifying circumstances arising after it.
Key Takeaways
- A CPLR 3408-only appearance preserves service objections, but an unrestricted general appearance can waive them.
- Counsel must assert lack of personal jurisdiction promptly in an answer or pre-answer motion rather than rely on an unresolved service dispute.
- An untimely motion to vacate a note of issue requires unusual or unanticipated circumstances plus substantial prejudice.
Why It Matters
The decision draws a useful line for New York foreclosure practice. Residential defendants may participate in mandatory settlement conferences without surrendering jurisdictional defenses, but that protection does not extend automatically to later filings. Notices of appearance should state their scope precisely, and any answer or motion should preserve CPLR 3211(a)(8) defenses at the first available point.
For lenders and servicers, the ruling shows why the full appearance history matters even when service proof is weak. A service defect and a jurisdictional waiver can coexist; waiver may keep the case alive despite the defect. The case also reinforces disciplined note-of-issue practice. Parties who believe discovery or motion issues remain should act within 20 days or build a record satisfying the stricter post-deadline standard.
The lengthy chronology is itself a practice lesson. Substituted counsel should audit every appearance, pleading, conference stipulation, and prior motion before advancing a jurisdictional theory. A later referee finding about service does not necessarily undo an earlier waiver. Likewise, counsel seeking to restore an old motion must assess intervening procedural acts rather than assume that proving defective service will automatically produce dismissal.
Foreclosure cases often last long enough for limited engagements to evolve into full representation. Firms should document exactly when that transition occurs and communicate which defenses remain available. Borrower counsel should not enter a general appearance as an administrative convenience before analyzing service. Lender counsel should raise waiver promptly, even though the panel held that Fannie Mae had not lost the argument here, because early resolution avoids years of unnecessary jurisdictional litigation.