US Bank N.A. v. 927 E. 86th Residence Corp. (2025) – The Appellate Division Clarifies the Temporal Scope of Recoverable Mortgage Installments and Endorses Judicial Flexibility under CPLR 2001

1. Introduction

This commentary examines the Second Department’s decision in US Bank National Association v. 927 East 86th Residence Corp., 2025 NY Slip Op 03755 (June 18 2025). The appeal arose from an order and judgment of foreclosure and sale entered by the Supreme Court, Queens County. At stake were (a) the accuracy of the dollar amount awarded to the foreclosing plaintiff and (b) the propriety of curing a filing defect—submitting a signed referee’s report only in reply papers. The key questions were:

• May a referee include all unpaid installments dating back to the original default, or is recovery limited to installments falling within the six-year statute of limitations preceding suit?
• Can the Supreme Court overlook the plaintiff’s omission of the signed referee’s report in its moving papers under CPLR 2001?

By modifying the foreclosure judgment, the Appellate Division both limited the monetary award to installments accruing within six years before the action was commenced and upheld the lower court’s discretion to overlook the procedural irregularity, thereby establishing practical guidance for future foreclosure practice in New York.

2. Summary of the Judgment

The Appellate Division:

1. Deleted the portions of the Supreme Court’s order that confirmed the amount due and granted the corresponding branch of the plaintiff’s motion.
2. Remitted the case for a recalculation of the amount due, excluding all installments that became due before December 6 2010 (i.e., more than six years prior to the action’s commencement on December 6 2016).
3. Otherwise affirmed the order and judgment, expressly finding that:
   • The referee’s updated report was substantially supported by the record except for the statute-barred installments.
   • The Supreme Court acted within its discretion in curing the plaintiff’s failure to attach a signed report initially, treating it as a mere irregularity under CPLR 2001.

3. Detailed Analysis

3.1 Precedents Cited and Their Influence

• Pennymac Corp. v. Pryce, 211 AD3d 1029 (2d Dept 2022) – Restated the standard that a referee’s findings should be confirmed when “substantially supported” by the record. Used to justify confirmation of the updated report in principle.
• Matter of Cincotta, 139 AD3d 1058 (2d Dept 2016) – Cited for the same “substantial support” standard.
• Excel Capital Group Corp. v. 225 Ross St. Realty, Inc., 165 AD3d 1233 (2d Dept 2018) – Reiterated that a referee’s report is advisory; final authority remains with the court. Accordingly, the Appellate Division could correct the miscalculation itself.
• J.P. Morgan Mtge. Acquisition Corp. v. Tamaklo, 221 AD3d 873 (2d Dept 2023) – Highlighted that evidence submitted for the first time in reply papers is generally improper, yet the court may overlook the defect. Provided support for invoking CPLR 2001 to excuse the late-filed signed report.
• U.S. Bank N.A. v. Mahram, 230 AD3d 1265 (2d Dept 2024); Bank of Am., N.A. v. Barton, 199 AD3d 625 (2d Dept 2021); Bank of N.Y. Mellon v. Viola, 181 AD3d 767 (2d Dept 2020) – Confirmed that failure to hold a referee’s hearing is not prejudicial when parties could have submitted objections directly to the court. These cases negated defendant’s demand for an evidentiary hearing.
• NYCTL 2012-A Trust v. 1698 Lex Corp., 169 AD3d 577 (1st Dept 2019) – Cited to show that a referee acts within authority when computing the amount owed once appointed under CPLR 4311.
• U.S. Bank N.A. v. Singer, 192 AD3d 1182 (2d Dept 2021) – Critical precedent establishing that mortgagee recovery is limited to installment payments accruing within six years of the foreclosure complaint; relied upon to strike the pre-December 6 2010 installments.

3.2 Legal Reasoning

1. Statute of Limitations on Installments
   Each missed payment under an installment loan is independently subject to the six-year limitations period (CPLR 213[4]). Because the mortgage was not accelerated prior to suit, only installments due within six years of December 6 2016 are actionable. The referee’s inclusion of older sums violated Singer; hence the monetary portion of the judgment had to be vacated and recalculated.
2. Curing Procedural Irregularities – CPLR 2001
   The failure to attach the signed referee’s report in initial motion papers was a “defect, mistake, or irregularity” correctable if no substantial right was prejudiced. Because the defendant already had (a) an unsigned copy, (b) the affidavit and underlying business records validating the same total, and (c) notice and opportunity to object, the court found no prejudice and exercised its discretion to disregard the omission.
3. No Mandatory Referee Hearing
   CPLR 4313 allows computation “upon the proof submitted” unless the order explicitly directs a hearing. The defendant neither requested a hearing nor submitted timely objections, undermining its claim of prejudice.

3.3 Potential Impact

• Sharper Limits on Mortgagee Recovery – Referees, lenders, and their counsel must carefully omit time-barred installments when preparing amounts due, or risk a remand and delay.
• Heightened Borrower Defenses – Borrowers now possess a clear appellate pronouncement reinforcing the six-year cap on each installment, giving them a potent objection in foreclosure computations.
• Guidance on Correcting Motion Defects – Litigants may rely on CPLR 2001 to cure inadvertent documentary omissions, but must still demonstrate lack of prejudice and furnish substantive proof. Conversely, opponents should raise timeliness objections early.
• Efficiency in Foreclosure Practice – The decision encourages courts to balance procedural exactitude with judicial economy—overlooking curable irregularities yet strictly enforcing substantive statutory limits.

4. Complex Concepts Simplified

Referee (Foreclosure Context)

An attorney appointed by the court to perform ministerial tasks, chiefly calculating the amount owed and overseeing the foreclosure sale.

Order of Reference

The order that appoints the referee and delineates her duties under CPLR 4311.

CPLR 4311 / 4313

Sections of New York’s Civil Practice Law & Rules governing referees—4311 (scope of reference); 4313 (how hearings or submissions are handled).

CPLR 2001

Authorizes courts to disregard or correct defects, mistakes, and irregularities that do not affect substantial rights of the parties.

Installment Contract & Acceleration

Each mortgage payment is a separate “cause of action.” If the lender accelerates, the entire balance becomes due immediately, and the six-year clock starts on the whole debt. If not accelerated, each missed payment has its own limitations period.

5. Conclusion

The Second Department’s ruling in US Bank N.A. v. 927 E. 86th Residence Corp. reinforces two crucial propositions:

1. The six-year statute of limitations applies installment-by-installment unless the loan is accelerated; sums falling outside that window are unrecoverable.
2. Courts retain discretion under CPLR 2001 to cure non-prejudicial procedural defects—such as providing a signed referee’s report in reply—so long as the record substantively supports the relief sought.

As foreclosure litigation continues to dominate New York dockets, this decision offers a roadmap for both lenders and borrowers: accuracy in monetary computations is paramount, but minor filing missteps may be forgiven when they do not affect the parties’ substantive rights. Practitioners should treat Singer and the present case as twin touchstones for calculating recoverable sums, while leveraging CPLR 2001 to address inadvertent errors without derailing judicial efficiency.