- Court
- New York Supreme Court, Appellate Division, Second Department
- Case
- OneWest Bank, FSB v. Johnson
- Docket
- 2024-00719
- Filed
- May 27, 2026
- Slip Op
- 2026 NY Slip Op 03315
- Citation
- 2026 NY Slip Op 03315 (N.Y. App. Div. 2d Dep’t 2026)
Background
In December 2007, Trenia Johnson executed a note for $656,000 in favor of IndyMac Bank, F.S.B., secured by a mortgage on property in Brooklyn. In April 2010, OneWest Bank, FSB, as IndyMac’s purported successor, commenced this action to foreclose the mortgage. The defendant was personally served but failed to answer. In December 2013, the Supreme Court issued a conditional order of dismissal under CPLR 3216, directing that the complaint would be dismissed if the plaintiff failed to file a note of issue or proceed within 90 days.
In November 2017, a second foreclosure action was commenced against Johnson. In August 2019, the Supreme Court dismissed the second action as time-barred. In May 2023 — nearly a decade after the conditional dismissal order — OneWest moved to vacate the conditional order and restore this original action to the active calendar. The Supreme Court denied the motion, and OneWest appealed.
Holding
The Appellate Division, Second Department affirmed the denial, though on different grounds than the Supreme Court may have relied upon. The court acknowledged that the Supreme Court lacked authority to dismiss the complaint under CPLR 3216 because issue had not been joined (the defendant never answered), as CPLR 3216(b)(1) requires joinder of issue as a prerequisite to a dismissal for failure to prosecute. The court also noted that the action appeared to have been “ministerially dismissed” without a proper motion or order.
Nevertheless, the court found an alternative ground to affirm: RPAPL 1301(3), as amended by the Foreclosure Abuse Prevention Act (L 2022, ch 821), which provides that while a foreclosure action is pending, “no other action shall be commenced or maintained to recover any part of the mortgage debt . . . without leave of the court in which the former action was brought.” When the second foreclosure action was commenced in 2017 without leave of court, and the defendant did not raise RPAPL 1301(3) as a defense, the first action was “deemed discontinued” by operation of the statute. Because the first action was deemed discontinued, it could not be restored to the calendar.
Takeaways
This decision illustrates the far-reaching consequences of the Foreclosure Abuse Prevention Act (FAPA), which was enacted to prevent abusive foreclosure practices including the strategic commencement and discontinuance of multiple foreclosure actions to reset the statute of limitations. Under RPAPL 1301(3) as amended, when a lender commences a second foreclosure action without obtaining leave of court in the original action, the original action is deemed discontinued — effectively eliminating the lender’s ability to return to the original action if the second one fails.
The case also highlights an important procedural nuance: CPLR 3216 dismissals for failure to prosecute require that issue be joined. When a defendant defaults and never answers, the court lacks authority to dismiss under CPLR 3216. However, this procedural error did not help the plaintiff here because the FAPA’s deemed-discontinuance provision operated independently of the CPLR 3216 issue.
Why It Matters
For mortgage lenders and servicers, this case demonstrates the trap that FAPA creates for foreclosure plaintiffs who commence successive actions without court authorization. The deemed-discontinuance provision of RPAPL 1301(3) can permanently extinguish a lender’s ability to foreclose when it commences a second action without leave. For homeowners and their attorneys, the decision confirms that FAPA provides powerful protections against serial foreclosure actions, even in cases where the original action was improperly dismissed. The interaction between FAPA’s provisions and traditional procedural rules creates complex issues that both sides must carefully navigate in foreclosure litigation.