Foreclosure Sale and Set Aside of Foreclosure Sale in New York

What Is a Foreclosure Sale and Set Aside of Foreclosure Sale?

Background

“RPAPL § 231 details the requirements for conducting a foreclosure sale. The only requirements set forth in connection with the publication of notice of sale is ‘the time and place of sale’ and ‘description of the property to be sold.’” (Chase v. Rajendran (2015) 20 N.Y.S.3d 865, 868 citing RPAPL § 231[2][a].)

General Information for Complaints and Motions

“[R]eferees appointed to conduct judicial sales are vested with discretion to address unforeseen circumstances that may arise in the context of the sale.” (Chase, surpa, id., citing Glenville and 110 Corp. v. Tortora (1988) 137 A.D.2d 654, 655.)

However, a referee must retain limited flexibility, while still acting within the authority of the court as conferred in the judgment of foreclosure, to meet those unforeseen circumstances that might otherwise jeopardize the success of a foreclosure sale. (Chase, supra, citing E.Q.C. Co. v. Plainview Country Club (1965) 258 N.Y.S.2d 567.)

Setting Aside Foreclosure Sale

“Pursuant to CPLR 2003, ‘[a]t any time within one year after a sale made pursuant to a judgment or order, but not thereafter, the court, upon such terms as may be just, may set the sale aside for a failure to comply with the requirements of the civil practice law and rules as to the notice, time or manner of such sale, if a substantial right of a party was prejudiced by the defect.’” (Guardian Loan Co. v Early, 47 NY2d 515, 520; Mortgage Elec. Registration Sys., Inc. v Schotter, 50 AD3d 983, 984).

Standard of Review and Burdens of Proof

”It is well settled that, even after a judicial sale to a good faith purchaser, ‘[a] court may exercise its inherent equitable power over a sale made pursuant to its judgment or decree to ensure that it is not made the instrument of injustice.... Although this power should be exercised sparingly and with great caution, a court of equity may set aside its own judicial sale upon grounds otherwise insufficient to confer an absolute legal right to a resale in order to relieve [a party] of oppressive or unfair conduct.’” (Altshuler Shaham Provident Funds, Ltd. v. GML Tower LLC (2015) 129 A.D.3d 1439, 1442 citing Guardian Loan Co. v. Early (1979) 47 N.Y.2d 515, 520–521.)

”Generally, such discretion, ‘which is separate and distinct from any statutory authority’, is exercised where fraud, mistake, exploitive overreaching, misconduct, irregularity or collusion 'casts suspicion on the fairness of the sale.' It may also be exercised where ‘the price is so inadequate as to shock the court's conscience,’ or where the judicial sale has been ‘made the instrument of injustice.’” (Altshuler Shaham Provident Funds, Ltd. v. GML Tower LLC (2015) 129 A.D.3d 1439, 1442 [internal citations omitted].)

Moreover, RPAPL § 231(6) permits a Court to set aside a foreclosure sale any time within one year after the sale upon such terms as may be just. (Id.)

The Court’s Decision

“Courts have held that denying a bidder a brief recess to obtain the proper form of payment constitutes an improvident exercise of the referee's discretion.” (Chase, supra, 20 N.Y.S.3d 869 citing United States Trust Co. v. Simon (1996) 228 A.D.2d 580, 580 [“The Supreme Court properly exercised its discretion in setting aside the foreclosure sale based on the Referee's misunderstanding as to his authority to accept uncertified funds as a down payment.”])

In Glenville & 110 Corp. v. Tortora (137 A.D.2d 654 at 655 [1988]) the Court held that “[b]y accepting an uncertified deposit check, after a short adjournment, with assurances of the buyer's financial wherewithal, the Referee exercised his discretion to consummate the foreclosure sale so as to best protect the rights of the mortgagees while simultaneously ensuring a successful completion of the sale.” (Id.)

Documents for Foreclosure Sale and Set Aside of Foreclosure Sale in New York

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Jpmorgan Chase Bank, National Association v. Michael Liegey A/K/A MICHAEL V. LIEGEY, Kathleen Liegey A/K/A KATHLEEN M. LIEGEY, Clerk Of The Suffolk County Traffic & Parking Violations Agency, Joy E. Jorgensen, Esq., Foster Riyaz & Howard, Pc, The Law Offices Of Harvey A. Arnoff, Justinas Majauskas, Law Offices Of Steven D. Kommor Pc, John Doe #1-5, Jane Doe #1-5 Said Names Being Fictitious, It Being The Intention Of Plaintiff To Designate Any And All Occupants, Tenants, Persons Or Corporations, If Any, Having Or Claiming An Interest In Or Lien Upon The Premises Being Foreclosed Herein document preview

EXHIBIT(S) - C - Complaint - Schedule C

9 pages

FILED: SUFFOLK COUNTY CLERK 05/01/2024 07:34 AM INDEX NO. 610822/2024 NYSCEF DOC. NO. 6 RECEIVED NYSCEF: 05/01/2024 SCHEDULE "C" FILED: SUFFOLK COUNTY CLERK 05/01/2024 07:34 AM INDEX NO. 610822/2024 NYSCEF DOC. NO. 6 RECEIVED NYSCEF: 05/01/2024 …

Case Name Jpmorgan Chase Bank, National Association v. Michael Liegey A/K/A MICHAEL …