Summary
This Appellate Division, First Department decision addresses whether a trial court properly denied a lender's motion for a deficiency judgment without first granting an opportunity to submit additional evidence of the mortgaged property's fair market value. Relying on New York Court of Appeals precedent, the appellate court held that when a lender's initial proof is insufficient, the court must remand the matter for further proceedings rather than denying the motion outright. The order was modified to remand for a determination of fair market value pursuant to RPAPL 1371(2), while affirming the trial court's refusal to consider the plaintiff's unauthorized supplemental submissions.
Topics
Practice areas
Questions Presented
- Whether the trial court erred in denying the deficiency‑judgment motion without giving the lender an additional opportunity to submit proof of fair market value under RPAPL 1371(2) and Flushing Sav. precedent.
Holdings
- The trial court’s denial was improper; the appellate division reverses and remands for further proceedings to determine the fair and reasonable market value, and otherwise affirms.
Key quotations
“"a lender in a foreclosure action moving for a deficiency judgment 'bears the initial burden of demonstrating, prima facie, the property's fair market value as of the date of the auction sale'" (Flushing Sav., 25 N.Y.3d at 312).”
“"[t]he price paid at a public auction can reflect a foreclosed property's fair market value" (Adirondack Trust Co. v. ROS Assoc., 144 AD2d at 828).”
Factual background
The plaintiff, successor‑in‑interest to Valley National Bank, sought a deficiency judgment after a foreclosure sale. It submitted the referee’s report of sale and deed but later, without leave, filed an appraisal report and affidavit. The trial court found no fair market value evidence and denied the motion outright.
Procedural history
The Supreme Court, New York County, denied the plaintiff‑lender’s motion for a deficiency judgment on the ground that no fair market value evidence was submitted and refused to consider supplemental appraisal filings. The appellant appealed that denial.
Remand instructions
Both parties will have an opportunity to submit additional evidence of the fair and reasonable market value of the mortgaged premises.