In a significant ruling, the Appellate Division of the Supreme Court of the State of New York reversed a foreclosure judgment against Lorraine S. Moller on October 7, 2026. The court found that Deutsche Bank National Trust Company, the plaintiff in the case, failed to take necessary legal steps within the required timeframe, leading to the abandonment of its complaint. This decision impacts Moller and could set a precedent for similar foreclosure cases.
The case, officially titled Deutsche Bank Natl. Trust Co. v. Fales, was filed under docket number 2024-10675. It originated from a mortgage foreclosure action initiated by Deutsche Bank’s predecessor in interest against Moller and others in March 2008. Moller did not respond to the complaint or participate in the proceedings, which led to a lengthy legal battle that culminated in the recent ruling.
The dispute began when Deutsche Bank sought to foreclose on a mortgage for a property located in Suffolk County. After Moller failed to answer the complaint, Deutsche Bank moved for an order of reference in August 2017. The court granted this motion in January 2019, allowing the matter to be referred to a referee to compute the amount owed to the bank. However, the case saw delays, and Moller later cross-moved to dismiss the complaint, claiming it had been abandoned due to the bank's failure to seek a judgment within the required one-year period.
On June 14, 2024, the Supreme Court ruled in favor of Deutsche Bank, confirming the referee's report and allowing the foreclosure to proceed. Moller appealed this decision, arguing that the complaint should have been dismissed as abandoned under New York law.
The Appellate Division reviewed the case and ultimately sided with Moller. The court ruled that the plaintiff, Deutsche Bank, did not provide a reasonable excuse for the delay in seeking a default judgment. According to the court, "the language of CPLR 3215(c) is not, in the first instance, discretionary, but mandatory, inasmuch as courts 'shall' dismiss claims for which default judgments are not sought within the requisite one-year period."
The judges involved in the ruling included Colleen D. Duffy, Barry E. Warhit, Lourdes M. Ventura, and Lisa S. Ottley. They emphasized that the plaintiff's explanations for the delays, which included discussions with the borrower and changes in counsel, were insufficient to justify the lengthy inaction.
This ruling has significant implications for future foreclosure cases in New York. It reinforces the importance of timely action by plaintiffs in foreclosure proceedings. If a plaintiff fails to seek a judgment within one year after a defendant's default, the court is required to dismiss the complaint as abandoned, unless a valid excuse is presented.
As a result of this decision, Lorraine Moller is no longer facing foreclosure on her property. This outcome may encourage other defendants in similar situations to challenge foreclosure actions based on delays in legal proceedings.
Looking ahead, it remains to be seen whether Deutsche Bank will seek to appeal this ruling. The court's decision stands as a reminder of the strict timelines imposed on plaintiffs in foreclosure cases. As of now, there are no related cases pending that could directly affect this ruling.