CPLR 3215(c) Tolling Clarified: Mandatory Foreclosure Settlement Conferences Under CPLR 3408

Introduction

This commentary examines the Second Department’s decision in Wilmington Savings Fund Society, FSB v. Nifenecker (2025 NYSlipOp 01666), which addresses the strict one-year deadline of CPLR 3215(c) for seeking default judgments in mortgage foreclosure actions and the limited circumstances under which that deadline may be tolled by a mandatory settlement conference pursuant to CPLR 3408. The appeal arises from an order of foreclosure and sale entered against defendants Eugene C. Nifenecker II and Laura Reddy. While Nifenecker’s appeal was dismissed for lack of standing, Reddy successfully cross-moved to dismiss the complaint as abandoned under CPLR 3215(c), resulting in reversal of the foreclosure judgment.

Key issues:

Did the plaintiff take “proceedings for entry of judgment” within one year after Reddy’s default?
Is the one-year period tolled by a mandatory settlement conference under CPLR 3408?
Was there “sufficient cause” to excuse any delay?

Parties:

Plaintiff (assignee of the mortgage): Limosa, LLC (through successive assignments from Countrywide → MERS → BANA → Wilmington → Atlantica → Limosa)
Defendants/appellants: Eugene C. Nifenecker II and Laura Reddy (mortgagors)

Summary of the Judgment

The Appellate Division, Second Department, reversed the foreclosure and sale judgment insofar as it affected Laura Reddy. The court held:

Under CPLR 3215(c), if a plaintiff does not move for default judgment within one year after a defendant’s default, the complaint is deemed abandoned and must be dismissed.
BANA/Limosa took no steps toward default judgment against Reddy within one year after her default in August 2015; the first motion for leave to enter default was filed in December 2017.
The statutory one-year clock is tolled by mandatory settlement conferences under CPLR 3408 only when the action meets the residency requirement (defendants must occupy the property), which was not shown here.
Limosa proffered no “sufficient cause” for the delay, as required to avoid dismissal.

Accordingly, Reddy’s cross-motion to dismiss the complaint as abandoned was granted, and the foreclosure judgment was vacated as to her. Costs were awarded in her favor.

Analysis

Precedents Cited

Shields v. Cohen, 222 AD3d 1019 (2d Dept. 2023): Establishes that a defaulted foreclosure defendant’s claim is abandoned if no default‐judgment motion is made within one year, absent tolling or excuse.
Citibank, N.A. v. Kerszko, 203 AD3d 42 (2d Dept. 2022): Clarifies that “proceedings” toward default judgment—rather than final judgment—during the initial year suffice to avoid dismissal.
Giglio v. NTIMP, Inc., 86 AD3d 301 (1st Dept. 2011): Characterizes CPLR 3215(c) as mandatory; the court “shall” dismiss abandoned claims without discretion.
Aurora Loan Servs., LLC v. Hiyo, 130 AD3d 763 (2d Dept. 2015): Explains “sufficient cause” standard to excuse delay under CPLR 3215(c).
Deutsche Bank Natl. Trust Co. v. O’Connor, 223 AD3d 872 (2d Dept. 2024) & Deutsche Bank Natl. Trust Co. v. Lewin, 205 AD3d 677 (2d Dept. 2022): Hold that CPLR 3408 settlement‐conference tolling applies only to actions subject to mandatory foreclosure conferences (residency test).
HSBC Bank USA, N.A. v. Jean, 165 AD3d 632 (2d Dept. 2018) & HSBC Bank USA, N.A. v. Seidner, 159 AD3d 1035 (2d Dept. 2018): Reinforce the mandatory tolling rule in context of 3408 foreclosure parts.
Wells Fargo Bank, N.A. v. Jackson, 208 AD3d 613 (2d Dept. 2022) & U.S. Bank N.A. v. Moster, 196 AD3d 663 (2d Dept. 2021): Insist that motions to defend late answers do not excuse failure to move for default judgment within the one‐year period.

Legal Reasoning

The court’s analysis proceeded in three steps:

Compute the trigger date: Reddy was served July 16, 2015 (affidavit filed Aug. 4; service complete Aug. 14). She defaulted by failing to answer within 30 days.
Evaluate plaintiff’s diligence: No motion for leave to enter default judgment was filed until December 2017—well beyond the one‐year mark of August 2016.
Consider tolling and excuse:
- Tolling under CPLR 3408 applies only if the action was subject to a mandatory settlement conference (defendant occupancy at commencement), which here was not established.
- Limosa did not offer any “sufficient cause” for the delay—opposing motions by co-defendant Nifenecker did not hinder seeking default judgment against Reddy.

The mandatory language of CPLR 3215(c) (“shall dismiss”) left the court no discretion to preserve the abandoned claims in the absence of a valid tolling or excuse.

Impact

This decision sends a clear message to mortgage assignees and foreclosure practitioners:

One-Year Deadline is Strict. Foreclosure plaintiffs must move for default judgments within one year of each defendant’s default or risk outright dismissal.
Settlement-Conference Tolling is Narrow. Only actions clearly subject to CPLR 3408 (defendants residing in the property at commencement) will benefit from tolling of the one-year clock while settlement conferences are pending.
Excuse Must Be Concrete. General litigation delays or parallel motions will not satisfy the “sufficient cause” standard—plaintiffs must identify specific, unavoidable impediments to timely moving for default judgment.

Future foreclosure actions will require closer docket management to ensure motions for default judgment are filed within the statutory window. Lenders and servicers should verify residency status at the outset to determine application of 3408-conference tolling.

Complex Concepts Simplified

Default Judgment (CPLR 3215): A plaintiff’s motion to obtain judgment based on a defendant’s failure to respond, rather than a contested trial on the merits.
Abandonment (CPLR 3215(c)): When the plaintiff does not pursue a default‐judgment motion within one year of default, the claim is deemed abandoned and is automatically dismissed.
Mandatory Settlement Conference (CPLR 3408): Foreclosure actions on owner-occupied residences require a court-supervised settlement conference before litigation proceeds; these conferences toll certain deadlines.
Sufficient Cause Exception: A narrow safety valve allowing a late default‐judgment motion if the plaintiff shows a reasonable excuse for delay and a potentially meritorious case.
Assignment Chain: Mortgages may be transferred repeatedly; each assignee “steps into the shoes” of prior holders but must remain vigilant about procedural deadlines.

Conclusion

Wilmington Sav. Fund Socy. v. Nifenecker crystallizes the uncompromising nature of CPLR 3215(c)’s one-year requirement for default judgments in foreclosure actions and clarifies that tolling by CPLR 3408 settlement conferences is strictly limited to owner-occupied properties at the time of commencement. The decision underscores the imperative for foreclosure plaintiffs to track service and default dates meticulously and to act promptly on default-judgment motions. Absent clear entitlement to tolling or a persuasive “sufficient cause” showing, plaintiffs risk losing their mortgage enforcement rights by procedural default.