First Department Clarifies: No CPLR 3408 Conference or CPLR 3215(c) Tolling in Estate-Representative Foreclosures; Filing an RJI Does Not Prevent Abandonment

Introduction

In Municipal Credit Union v. Thomas, 2025 NY Slip Op 06260 (1st Dept Nov. 13, 2025), the Appellate Division, First Department, reversed a Bronx County judgment of foreclosure and sale, granted a nonparty purchaser’s cross-motion to dismiss the action as abandoned under CPLR 3215(c), and dismissed the complaint. The decision resolves two recurring questions in New York mortgage foreclosure practice:

When does a CPLR 3408 mandatory settlement conference apply, particularly where the borrower has died and the defendant is an estate representative?
What actions by a foreclosing plaintiff suffice to “take proceedings for the entry of judgment” within one year of default under CPLR 3215(c), thereby avoiding abandonment?

The court held that the CPLR 3408 settlement-conference regime does not apply where the borrower is deceased and the action is brought against an executrix of the estate. Consequently, filing a request for judicial intervention (RJI) to obtain a “mandatory” settlement conference did not qualify as “taking proceedings” for CPLR 3215(c) purposes, nor did it toll the one-year period. The opinion further confirms that an RJI can satisfy CPLR 3215(c) only when a CPLR 3408 conference is truly mandated by statute. The court also reaffirmed that a nonparty purchaser at a related lien foreclosure sale is an “interested party” with standing to oppose a mortgage foreclosure and to move for CPLR 3215(c) dismissal without first intervening.

Summary of the Opinion

The First Department reversed the judgment of foreclosure and sale and vacated the order confirming the referee’s report.
It granted nonparty West Fork Funding, LLC’s cross-motion to dismiss under CPLR 3215(c), finding the mortgage foreclosure action abandoned because the plaintiff failed to take timely proceedings for entry of judgment within one year of the defendant’s default.
Filing an RJI to seek a “mandatory settlement conference” under CPLR 3408 does not constitute “taking proceedings” or toll the CPLR 3215(c) period unless a CPLR 3408 conference is actually mandated by statute.
CPLR 3408 does not apply in a foreclosure action against an executrix when the borrower is deceased and the defendant is not a resident borrower of the subject property; such a case is not a “residential foreclosure action involving a home loan” under RPAPL 1304(6).
West Fork, though a nonparty, had standing as an “interested party” to oppose the foreclosure and seek dismissal due to its acquisition of title by referee’s deed in a prior condominium lien foreclosure.
Because plaintiff expressly declined to show “sufficient cause” for missing the one-year CPLR 3215(c) deadline, dismissal was mandated; the court noted that a reasonable (albeit mistaken) belief that CPLR 3408 applied might in some cases constitute sufficient cause, but plaintiff did not make that showing.

Factual and Procedural Background

The borrower, Edward Watkins, died on or about January 25, 2019. Kim Thomas was appointed executrix on or about March 18, 2019.
Municipal Credit Union (MCU) commenced a mortgage foreclosure on February 14, 2022, naming Thomas as executrix. A notice of pendency was filed the same day.
Thomas was served March 11, 2022 but did not appear. Appellant asserted her time to respond expired May 2, 2022, creating the default date for CPLR 3215(c).
MCU filed an RJI on May 10, 2022 seeking a CPLR 3408 mandatory settlement conference and sent follow-up letters in October 2022, July 2023, and October 2023. The court later scheduled a “Mandatory Settlement Conference” for February 1, 2024, adjourned to April 25, 2024.
On April 22, 2024, West Fork Funding, LLC acquired title to the property via a referee’s deed in a separate condominium common-charge lien foreclosure.
On April 25, 2024, the foreclosure was released from the settlement conference part. MCU sought and obtained an order of reference on August 19, 2024, with a directive to serve it on the “owner of the equity of redemption” (West Fork). MCU did not serve West Fork.
MCU moved for a judgment of foreclosure and sale on September 9, 2024, submitting a CPLR 3408 compliance affirmation. West Fork opposed and cross-moved to dismiss under CPLR 3215(c).
The motion court granted MCU’s motion and denied West Fork’s cross-motion. On appeal, the First Department reversed.

Analysis

Precedents Cited and Their Influence

MTGLQ Invs., L.P. v. Shay, 190 AD3d 527 (1st Dept 2021), lv denied 37 NY3d 908 (2021), and JP Morgan Chase Bank, N.A. v. White, 182 AD3d 469 (1st Dept 2020):
These cases recognize that a nonparty who acquires an interest in the property (e.g., via a referee’s deed in another foreclosure) is an “interested party” with standing to oppose a pending mortgage foreclosure. Relying on this authority, the court held West Fork had standing to oppose MCU’s motion and to seek dismissal, even without formally intervening.
Citimortgage, Inc. v. Zaibak, 188 AD3d 982 (2d Dept 2020), and progeny (U.S. Bank N.A. v. Newson, 240 AD3d 821 (2d Dept 2025); U.S. Bank N.A. v. 63 Holiday Dr. Realty Corp., 230 AD3d 713 (2d Dept 2024); U.S. Bank N.A. v. Jerriho-Cadogan, 224 AD3d 788 (2d Dept 2024)):
These Second Department decisions hold that when a CPLR 3408 settlement conference is mandated, filing an RJI for that conference within one year of default can constitute “taking proceedings” under CPLR 3215(c). The First Department found this approach persuasive in principle—but emphasized it applies only when CPLR 3408 actually mandates a conference.
Citibank, N.A. v. Kerszko, 203 AD3d 42, 49–50 (2d Dept 2022):
Interprets CPLR 3408(n)’s “abeyance” clause to toll the one-year CPLR 3215(c) period while mandatory settlement conferences are pending. The First Department endorsed this tolling approach as consistent with the Legislature’s preference for settlement over adversarial litigation and for judicial economy. But the toll exists only if the action falls within CPLR 3408.
Wells Fargo Bank, N.A. v. Gwebu, 226 AD3d 578 (1st Dept 2024):
The plaintiff there filed the RJI more than a year after default; the case did not address whether a timely RJI could satisfy CPLR 3215(c) when CPLR 3408 applies. The First Department distinguished Gwebu and rejected the suggestion that it foreclosed the Zaibak line of cases.
U.S. Bank N.A. v. Pane, 237 AD3d 1237, 1239–1240 (2d Dept 2025), and Wilmington Sav. Fund Socy., FSB v. Nifenecker, 236 AD3d 971, 974 (2d Dept 2025):
Stand for the proposition that CPLR 3408 conferences are not required if, at commencement, the defendant is not a resident of the property; and that a plaintiff’s reasonable (even if mistaken) belief about CPLR 3408 applicability can, in some cases, constitute “sufficient cause” to avoid CPLR 3215(c) dismissal. The First Department cited Pane to note that MCU expressly declined to argue “sufficient cause,” forfeiting a potential safety valve.
RPAPL 1304(6)(a)(1) (definition of “home loan”) and CPLR 3408(a)(1):
These provisions together limit CPLR 3408’s reach to residential mortgage foreclosures involving “home loans” where the defendant is a resident of the property. The court applied these statutory thresholds, concluding they were not met in an action against an executrix after the borrower’s death.
Island Fed. Credit Union v. Smith, 60 AD3d 730, 732 (2d Dept 2009), and 20 NYCRR 642.3(b)(2):
These authorities reinforce that an estate is not a “natural person” and that an executor acts in a fiduciary capacity. The court used this logic to underscore why the suit against an executrix did not qualify as a “home loan” foreclosure under RPAPL 1304(6).

Legal Reasoning

Standing of the nonparty purchaser:
West Fork acquired title via a referee’s deed in a separate condominium lien foreclosure before the mortgage foreclosure judgment. Under First Department precedent (Shay; White), such a titleholder is an “interested party” who may oppose motions in the foreclosure and even move for dismissal without first intervening. The motion court therefore erred in overlooking West Fork’s opposition and cross-motion.
CPLR 3215(c) abandonment:
CPLR 3215(c) requires dismissal if the plaintiff fails to “take proceedings for the entry of judgment” within one year after a defendant’s default, absent “sufficient cause.” Here, defendant Thomas defaulted no later than May 2, 2022. MCU did not move for default or an order of reference within a year. Instead, it filed an RJI to seek a settlement conference.
Does filing an RJI count as “taking proceedings”? Only when CPLR 3408 applies:
The court accepted the Second Department’s view that, where a CPLR 3408 conference is mandated, filing an RJI for that conference is a qualifying “proceeding” under CPLR 3215(c). It also endorsed Kerszko’s tolling rule during the pendency of mandated conferences. However, those principles presuppose that CPLR 3408 actually applies.
CPLR 3408 did not apply:
- Borrower status: RPAPL 1304(6)(a)(1) defines “home loan” to require that “the borrower is a natural person.” When MCU commenced suit, the original borrower (Watkins) was deceased, and the defendant was the executrix, acting in a fiduciary capacity—not the borrower and not a “natural person” for purposes of the statutory regime.
- Occupancy: CPLR 3408(a)(1) also requires that the defendant be a resident of the property at commencement. Watkins could not be a resident; he had died two years earlier. The executrix was not alleged to be the borrower-resident. Thus, this was not “a residential foreclosure action involving a home loan” with a resident defendant.
- Labels do not govern: The trial court’s scheduling of a session labeled “Mandatory Settlement Conference” did not itself trigger CPLR 3408’s statutory regime or toll CPLR 3215(c). Statutory criteria—not docket labels—control.
Consequences for CPLR 3215(c):
Because CPLR 3408 did not apply, the RJI did not qualify as “taking proceedings,” and no tolling applied. MCU thus failed to act within one year of default, mandating dismissal as abandoned unless “sufficient cause” was shown.
No “sufficient cause” shown:
MCU explicitly disclaimed any obligation to show a reasonable excuse or a potentially meritorious claim. The court underscored that, in some circumstances, a reasonable but erroneous belief that CPLR 3408 applies could supply “sufficient cause” (Pane). But MCU declined to make that argument, foreclosing relief.
Other issues unnecessary to reach:
Given the dispositive CPLR 3215(c) ruling, the court did not address West Fork’s additional challenges, including MCU’s failure to serve the order of reference on the “owner of the equity of redemption” (West Fork) as directed by the motion court.

Impact and Practical Implications

Clear boundary for CPLR 3408 applicability:
Actions against estate representatives following a borrower’s death typically fall outside CPLR 3408. Courts and practitioners should not rely on the mere scheduling or labeling of a “Mandatory Settlement Conference” to assume 3408 applies or that the CPLR 3215(c) clock is tolled.
RJI as “taking proceedings” is conditional:
The First Department aligns with the Second Department in principle: an RJI can satisfy CPLR 3215(c) and tolling applies—but only where a CPLR 3408 conference is mandated. Outside 3408’s scope, an RJI does not prevent abandonment.
Heightened diligence in deceased-borrower cases:
When the borrower dies before commencement and the defendant is an executor/administrator, foreclosing plaintiffs must assume no 3408 conference, no abeyance, and no tolling. They must move for default and an order of reference within one year of default or be prepared to demonstrate “sufficient cause” for any delay.
Preservation of the “sufficient cause” pathway:
If a plaintiff mistakenly yet reasonably believed 3408 applied, it should affirmatively assert that belief as a reasonable excuse under CPLR 3215(c) and show a potentially meritorious foreclosure claim. Failing to make that record may doom the case to dismissal.
Standing of post-foreclosure purchasers:
Titleholders who acquire property through HOA/condo lien foreclosures or other avenues can, as “interested parties,” oppose mortgage foreclosure steps and seek CPLR 3215(c) dismissal without intervening. Supreme Court should entertain their submissions.
Service on the owner of the equity of redemption:
Orders often direct service on current owners. Failure to serve can jeopardize subsequent relief. While not reached here, the opinion signals careful scrutiny of service compliance going forward.
System-wide consistency:
The decision brings the First Department’s approach into harmony with the Second Department on key points: what counts as “taking proceedings” under CPLR 3215(c) and the tolling effect of CPLR 3408(n)—but strictly within 3408’s statutory boundaries.
Strategic consequences for timelines and statutes of limitation:
Dismissal for abandonment is generally without prejudice, but refiling may be barred by the six-year statute of limitations or acceleration rules. Plaintiffs must track 3215(c) and SOL concurrently.

Complex Concepts Simplified

CPLR 3215(c) (Abandonment):
If a defendant defaults and the plaintiff does not take steps toward getting a judgment within one year, the case must be dismissed as “abandoned,” unless the plaintiff shows a good reason (sufficient cause) and a potentially meritorious claim.
“Take proceedings for the entry of judgment”:
More than filing a default motion can qualify, but context matters. In mortgage foreclosure cases, filing an RJI to obtain a statutorily mandated CPLR 3408 conference can count; if 3408 does not apply, an RJI is not enough.
CPLR 3408 (Mandatory settlement conferences):
Applies in residential mortgage foreclosure actions involving “home loans” as defined in RPAPL 1304(6) and where the defendant is a resident of the mortgaged property. During the conference process, other motions are held “in abeyance,” which the case law treats as tolling the 3215(c) one-year clock.
“Home loan” (RPAPL 1304(6)(a)(1)):
Among other elements, the borrower must be a natural person. Where the borrower is deceased and the defendant is an executor acting in a fiduciary capacity, the action is not a “home loan” foreclosure for 3408 purposes.
Resident defendant requirement:
CPLR 3408 applies only if the defendant resides at the mortgaged premises at the time the action is commenced. If not, no mandatory conference is required.
“Owner of the equity of redemption”:
The current titleholder to the property, who retains the right to redeem before a mortgage foreclosure sale, even if title was acquired subject to the mortgage. Courts may require service on this owner when granting orders in the foreclosure.
“Interested party” standing:
Someone who is not named as a defendant but holds a substantial property interest (e.g., acquired title by a separate foreclosure) may participate in the case to protect that interest, including opposing motions or seeking dismissal.

Practice Pointers

At case intake, determine 3408 applicability:
- Is the action a residential foreclosure of a “home loan” with a living borrower who is a natural person?
- Does the named defendant reside at the mortgaged premises at commencement?
If 3408 applies:
- File the RJI promptly to trigger the conference and tolling under Kerszko.
- Keep a clear record showing the conference’s pendency to support tolling if challenged.
If 3408 does not apply (e.g., borrower deceased; defendant is executor/administrator or nonresident):
- Do not rely on an RJI or court-scheduled “mandatory” conference to stop the 3215(c) clock.
- Move for default judgment and order of reference within one year of default.
- If the one-year deadline is missed, affirmatively demonstrate “sufficient cause” and a potentially meritorious claim.
Always serve orders as directed on the “owner of the equity of redemption” and other interested stakeholders to protect the integrity of subsequent relief.
Nonparty owners should monitor the docket and assert their rights early; they can oppose motions and seek dismissal without formal intervention in the First Department.

Key Takeaways

CPLR 3408 does not apply where the borrower is deceased and the defendant is an estate representative who is not a resident borrower; consequently, no 3408 “abeyance” tolling of CPLR 3215(c) occurs.
Filing an RJI to seek a “mandatory settlement conference” qualifies as “taking proceedings” under CPLR 3215(c) only if a conference is statutorily mandated.
The First Department endorses the Second Department’s tolling rule (Kerszko) for the duration of mandated CPLR 3408 conferences, aligning interdepartmental practice.
Nonparty purchasers with title are “interested parties” who can oppose foreclosure relief and move to dismiss as abandoned without intervening.
To avoid abandonment, plaintiffs must act within one year of default or show “sufficient cause.” A reasonable—but mistaken—belief that 3408 applies may suffice if timely and properly argued; silence will not.

Conclusion

Municipal Credit Union v. Thomas establishes a clear and consequential rule in the First Department: the CPLR 3408 conference framework—and its tolling and “RJI-as-proceedings” benefits—does not extend to estate-representative foreclosure actions where the borrower is deceased and the defendant is not a resident borrower within RPAPL 1304’s “home loan” definition. Plaintiffs cannot rely on an RJI alone to satisfy or toll CPLR 3215(c) under those circumstances. The opinion also cements “interested party” standing for nonparty titleholders to seek CPLR 3215(c) dismissals and underscores the necessity of demonstrating “sufficient cause” if the one-year deadline is missed. Together, these holdings sharpen procedural discipline in foreclosure practice, promote fidelity to the statutory design of the residential settlement-conference regime, and provide a coherent roadmap for litigants navigating default timelines in the wake of borrower death.

Note on the Record

The court’s footnote reflects that plaintiff sent multiple letters (October 14, 2022; July 25, 2023; October 18, 2023) urging the court to schedule a settlement conference. While indicative of diligence, those efforts could not substitute for statutory applicability of CPLR 3408 or toll CPLR 3215(c) in this estate-representative foreclosure.