The Supreme Court ordered a referee to conduct a foreclosure sale of certain real property owned by the defendant. One week before the foreclosure sale, the defendant filed a bankruptcy petition. The Bankruptcy Court granted the defendant a discharge, issued a final decree that the defendant's estate had been fully administered, and closed the bankruptcy case.
The plaintiff moved for an extension of time to conduct the foreclosure sale. Pursuant to CPLR 3211(a)(5), the defendant moved to dismiss the complaint on the ground of discharge in bankruptcy. After the Supreme Court granted the plaintiff's motion and denied the defendant's motion, the defendant appealed.
The Appellate Division determined that the defendant's motion to dismiss was properly denied. A party may move to dismiss on the ground that the cause of action may not be maintained because of a discharge in bankruptcy. However, the defendant waived this defense by failing to timely raise it, pursuant to 3211[e]. The Appellate Division noted that, in any event, a creditor's right to foreclose on a mortgage survives bankruptcy.
Board of Directors of Colonial Sq. Homeowners' Assn., Ltd. v. Signorile, NY Slip Op 04653 (2d Dep't September 20, 2023)
