Foreclosure Against Heirs Is Not a Jurisdictional Nullity, but Unexplained Prosecution Delay Can Equitably Toll Mortgage Interest

1. Introduction

Case: Citizens Bank, N.A. v. Abrams, 2026 NY Slip Op 02819 (App. Div. 2d Dep’t May 6, 2026).
Parties: Plaintiff mortgagee (Citizens Bank, N.A.) and defendant homeowner-successor (Louise A. Abrams), the decedent borrower’s daughter (and later alleged sole heir), plus other defendants.
Context: A 2005 home equity line secured by a credit line mortgage. The borrower died in 2015; payments allegedly ceased shortly thereafter. The foreclosure was filed in 2018 naming, among others, “unknown heirs” and Abrams, with later amendment removing “unknown heirs,” adding Abrams in her individual capacity and as sole heir, and dropping any deficiency request.

Key issues:

  • Whether the action was a “legal nullity” for lack of subject matter jurisdiction based on the borrower’s death and the initial pleading posture.
  • Whether dismissal was required under CPLR 3215(c) for failure to seek a default judgment within one year of default.
  • Whether equity warranted tolling mortgage interest due to delay in prosecution, including the post-COVID stay period.
  • Appellate procedure: whether an appeal lies as of right from a sua sponte order.

2. Summary of the Opinion

The Second Department:

  • Held that the Supreme Court erred by dismissing sua sponte for lack of subject matter jurisdiction; this foreclosure was not commenced against a dead person or an unrepresented estate.
  • Denied Abrams’s CPLR 3215(c) abandonment motion on the merits because the plaintiff took qualifying proceedings within one year of the relevant default (including seeking amendment and requesting a foreclosure settlement conference).
  • Granted, in part, Abrams’s request to toll interest, holding that the plaintiff’s unexplained delay after the COVID-related stay justified equitable tolling of interest from February 27, 2021 to October 24, 2022.
  • Addressed appealability by deeming the notice of appeal from the sua sponte portion an application for leave to appeal and granting leave.

3. Analysis

3.1 Precedents Cited

A. Appealability of sua sponte orders

  • Sholes v Meagher, 100 NY2d 333 (2003): Reiterated the rule that “no appeal lies as of right” from an order not deciding a motion made on notice, including an order entered sua sponte. The Second Department used Sholes to convert the notice of appeal into an application for leave under CPLR 5701(c) so it could reach the merits.
  • M&T Bank v Friedmann, 217 AD3d 934 (2d Dep’t 2023): Cited as a Second Department example applying the same procedural mechanism—granting leave to appeal where the challenged portion was issued sua sponte.

B. “Nullity” doctrine: suing a deceased person or an unrepresented estate

  • Federal Natl. Mtge. Assn. v Tudor, 185 AD3d 905 (2d Dep’t 2020): Confirms that a party may not commence an action against a dead person.
  • Krysa v Estate of Qyra, 136 AD3d 760 (2d Dep’t 2016): Reinforces that commencement against a decedent (or under certain conditions, an “estate”) is a “legal nullity.”
  • Hollowell v Decaro, 118 AD3d 749 (2d Dep’t 2014): Holds an action cannot be commenced against a decedent’s estate before appointment of a personal representative; such an action is a nullity.
  • Matter of Enquire Print. & Publ. Co., Inc. [Turner], 26 Misc 3d 1035 (Sur Ct, Nassau County 2009): Used to support the conceptual distinction between suing an “estate” and proceeding against heirs/interest-holders; it helped frame why naming “unknown heirs” is not the same as suing the “estate.”

These cases formed the boundary the court policed: a foreclosure is void if truly commenced against a deceased person or an unrepresented estate, but not where it is commenced against living heirs/interest holders.

C. Necessary parties and deficiency judgments

  • Countrywide Home Loans, Inc. v Keys, 27 AD3d 247 (1st Dep’t 2006): Cited for the proposition that where no deficiency judgment is sought against the estate, the estate may not be a necessary party. The court relied on this to reject the premise that the estate’s non-joinder created a jurisdictional defect.

D. Contrasting cases where nullity/jurisdictional dismissal was appropriate

  • Deutsche Bank Natl. Trust Co. v Faden, 172 AD3d 817 (2d Dep’t 2019) (cited as “cf.”): Referenced as an example where the nullity rationale may apply; used to distinguish the present posture.
  • Citigroup Global Mkts. Realty Corp. v LaGreca, 167 AD3d 842 (2d Dep’t 2018) (cited as “cf.”): Similarly cited for contrast—supporting that jurisdictional nullity can exist in different factual settings than here.

E. Appellate economy: deciding issues labeled “academic” below

  • Wells Fargo Bank, N.A. v Rindenow, 186 AD3d 782 (2d Dep’t 2020): Provided the basis for reaching the CPLR 3215(c) and interest-tolling issues despite the trial court’s “academic” disposition, because they were litigated and briefed.

F. CPLR 3215(c): what counts as “proceedings for the entry of judgment”

  • U.S. Bank, N.A. v Duran, 174 AD3d 768 (2d Dep’t 2019): Emphasized that a plaintiff need not actually obtain a default judgment within one year; it must take proceedings manifesting an intent to seek judgment.
  • Aurora Loan Servs., LLC v Gross, 139 AD3d 772 (2d Dep’t 2016): Reinforced the same operational standard for avoiding dismissal.
  • Citimortgage, Inc. v Zaibak, 188 AD3d 982 (2d Dep’t 2020): Critical to the court’s “timing” conclusion—once qualifying steps are initiated within the one-year period, CPLR 3215(c) is satisfied; the statute does not require the plaintiff to justify subsequent delays to avoid abandonment dismissal (though equity may address delay in other ways).

G. Equity in foreclosure: tolling interest for delay

  • Bank of N.Y. Mellon v George, 186 AD3d 661 (2d Dep’t 2020): Anchored the general doctrine that foreclosure is equitable and interest awards are discretionary, guided by case-specific facts and prejudice.
  • BAC Home Loans Servicing, L.P. v Jackson, 159 AD3d 861 (2d Dep’t 2018): Quoted for the principle that interest recovery is discretionary in equity and may be affected by wrongful conduct or prejudice; also used (with pinpoint cite) to support tolling in this case.
  • People's United Bank v Patio Gardens III, LLC, 189 AD3d 1622 (2d Dep’t 2020): Supports tolling/cancellation of interest where there is unexplained delay in prosecuting a foreclosure.
  • GMAC Mtge., LLC v Yun, 206 AD3d 798 (2d Dep’t 2022): Cited as an example where tolling was warranted, reinforcing the remedial approach used here.

3.2 Legal Reasoning

A. Why the action was not a nullity (and why “subject matter jurisdiction” was the wrong frame)

The trial court treated the action as void “from the outset,” but the Second Department focused on who was actually sued:

  • The plaintiff did not commence against the decedent personally (forbidden under Federal Natl. Mtge. Assn. v Tudor).
  • The plaintiff did not commence against the “estate” before appointment of a representative (forbidden under Hollowell v Decaro).
  • Instead, it commenced against unknown heirs and Abrams (a living person with a putative interest), then amended to remove unknown heirs and name Abrams in her individual capacity and as sole heir.
  • The plaintiff also removed any deficiency request, and the court reasoned that the estate therefore was not a necessary party (citing Countrywide Home Loans, Inc. v Keys).

The core holding is pragmatic: where a foreclosure is directed at living persons who may claim the decedent’s interest (heirs/successors), the action is not automatically void simply because the borrower is dead, particularly when the pleadings are conformed to reflect the heir’s status and no deficiency is pursued against the estate.

B. CPLR 3215(c): compliance is measured by initial one-year proceedings, not later inactivity

Abrams argued abandonment under CPLR 3215(c). The court’s analysis proceeded in two steps:

  1. Identify the relevant default: Abrams defaulted “in answering the original complaint” to the extent she answered only as alleged executor (a capacity in which she was not sued).
  2. Assess whether the plaintiff took qualifying action within one year: Within one year, the plaintiff (i) moved to amend and serve a supplemental summons and amended complaint and (ii) filed a request for judicial intervention to schedule the mandatory foreclosure settlement conference (a step tied to the pathway toward a default judgment because of CPLR 3408 requirements).

Importantly, the court rejected the idea that, after the plaintiff shows timely qualifying steps, it must also justify subsequent delays to avoid CPLR 3215(c) dismissal. Relying on Citimortgage, Inc. v Zaibak, the panel treated the one-year “proceedings” requirement as the statute’s key threshold.

C. Equity as a “safety valve”: interest tolling for unexplained delay causing prejudice

Although the plaintiff cleared the statutory abandonment bar, the court used equity to address delay. The action was stayed from December 18, 2020 to February 27, 2021 due to the COVID-19 pandemic (see L 2020, ch 381). After the stay lifted, the plaintiff waited until October 24, 2022 to request a settlement conference date and offered no adequate explanation for that gap.

Applying Bank of N.Y. Mellon v George and BAC Home Loans Servicing, L.P. v Jackson, the court treated interest as a discretionary equitable component. It emphasized prejudice: Abrams was a successor in interest to a borrower whose default allegedly occurred “only because of his death.” Under those circumstances, the court found it inequitable to permit interest to accrue during the unexplained post-stay delay and tolled interest for the defined period.

This aspect harmonizes two lines of doctrine:

  • CPLR 3215(c) is not a general “delay sanction” once the initial one-year threshold is met.
  • Equity can still sanction delay through interest tolling where the plaintiff’s inaction is unexplained and prejudicial (see People's United Bank v Patio Gardens III, LLC; GMAC Mtge., LLC v Yun).

3.3 Impact

A. Pleading strategy in post-death foreclosure filings

The decision reinforces a practical route for lenders: foreclosure may proceed against heirs/successors rather than misnaming the deceased borrower or suing a non-represented estate. It also suggests that dropping a deficiency demand can matter to “necessary party” analysis, reducing arguments that the estate must be joined.

B. CPLR 3215(c) motions: narrower utility after timely “proceedings”

Defendants may face a higher bar when plaintiffs can show a timely motion practice step (e.g., amendment) and settlement-conference-related filings. The opinion reiterates that CPLR 3215(c) focuses on the first year after default, not on all later delays.

C. Delay will still “cost money”: interest-tolling becomes the corrective

For plaintiffs, the case is a warning that unexplained gaps—especially after statutory or emergency stays lift—can yield a tangible remedy even if abandonment dismissal is unavailable. For defendants, it highlights an alternative remedy: seek equitable tolling of interest by proving unexplained delay and prejudice.

4. Complex Concepts Simplified

  • “Legal nullity”: A lawsuit treated as void as if it never existed—commonly when filed against a dead person or an estate with no appointed representative.
  • “Subject matter jurisdiction” vs. “capacity/party defects”: Subject matter jurisdiction concerns the court’s power to hear the type of case; naming a deceased person typically creates a “nullity” problem, but where living heirs are sued, the action is not automatically void.
  • CPLR 3215(c) “abandonment”: If a defendant defaults and the plaintiff does nothing toward getting a judgment for one year, the complaint must be dismissed unless the plaintiff shows sufficient cause. “Doing something” can include motion practice and other steps that show intent to seek judgment.
  • Foreclosure settlement conference (CPLR 3408): In many residential foreclosures, a settlement conference is a required step; taking steps to schedule it can count as pursuing judgment-related proceedings.
  • Equitable tolling of interest: Even if the lender wins the right to foreclose, the court can stop interest from accumulating for a period if fairness requires it—often where the lender’s delay is unexplained and harms the defendant.

5. Conclusion

Citizens Bank, N.A. v. Abrams clarifies that a foreclosure filed against a decedent’s heirs/successors—rather than against the deceased borrower or an unrepresented estate—is not a jurisdictional nullity, particularly where no deficiency is pursued against the estate. The decision also underscores a dual-track approach to delay: timely “proceedings” within one year defeat CPLR 3215(c) abandonment, but unexplained post-stay inactivity can still be addressed through the court’s equitable power to toll interest. In practical terms, the case preserves foreclosure viability while imposing a meaningful financial consequence for unjustified prosecution delay.