The residential property at issue in this matter was owned in the entirety by Luciano A. Navarro and his wife Deborah Navarro who purchased it in 1986. In 1989, Mr. Navarro executed a note and mortgage creating a lien of $20,000 on the property in favor of one James Mercaldo. Deborah Navarro was not a signatory to this mortgage. The house was allegedly worth $350,000 in 1991 and is currently worth some $800,000. Mr. Mercaldo moved to foreclose on this mortgage. A foreclosure judgment against Mr. Navarro was entered in February of 1995. Prior to the public sale of Mr. Navarro's one half interest in the house, James Mercaldo assigned his interest in the mortgage to Yitta Weiss and Vincent Longobardi [hereinafter Weiss and Longobardi]. Thereafter in December of 1996, a sale was conducted wherein Weiss and Longobardi took, by means of a referee's deed, Mr. Navarro's one-half interest in the premises for $21,000. The Navarros were divorced in the year 2000. Mrs. Navarro continues to live in this house with her children and indeed her former husband deeded his one-half interest to her in 1999 as part of their divorce settlement. In May of 2003, Longobardi and Weiss commenced a partition action against Mrs. Navarro which is currently pending in another Part of this Court. The referee assigned to conduct a traverse hearing found and this finding is now confirmed as undisputed that Mrs. Navarro was not named in the foreclosure proceeding nor was she served with the summons and complaint.

Deborah Navarro seeks to intervene in the foreclosure action, vacate the judgment of foreclosure and sale, revoke the public sale and set aside the referee's deed conveying the premises to Yitta Weiss and Vincent Longobardi. She argues that she was a necessary party to the foreclosure proceeding and maintained a real and substantial interest in same and the [*2]plaintiff's failure to give her such notice mandates vacatur of the underlying judgment of foreclosure. In response, Weiss and Longobardi argue that Mrs. Navarro was not required to be joined in the foreclosure action because the foreclosed mortgage only encompassed her husband's share of the property and not her own. In so arguing they attempt to distinguish a case in the Second Department, Capital Resources Co. v. Prewitt, 266 AD2d 176(2d Dept. 1999), which in this Court's view is not distinguishable.

In Prewitt as here the wife sought to intervene and vacate a foreclosure judgment entered against her former husband with respect to his undivided one half interest in the former marital residence. The former wife was not named or served in the action. The Prewitt Court held that "Contrary to the conclusion of the Supreme Court, [the former wife] was a necessary party to the foreclosure action by virtue of her co-tenancy ownership interest in the property being foreclosed. Notwithstanding that [the former wife's] half interest in the property was not directly subject to the plaintiff's mortgage, we are satisfied that [the former wife] has demonstrated a real and substantial interest in the outcome of the foreclosure action warranting her intervention'. Although the plaintiff may possess a viable foreclosure claim as against [the former husband], the plaintiff's ultimate goal is to force the partition and sale of [the former wife's] home. Accordingly, [the former wife's] motion for leave to intervene and vacate the judgment . . . should have been granted, allowing her to defend against the plaintiff's complaint and raise any and all defenses available to a party to a foreclosure action." Capital Resources Co. v. Prewitt, supra, 266 AD2d at 176-177.

The Prewitt case is indistinguishable from our own in that the mortgage sought to be foreclosed was the mortgage on the one half interest owned by her former husband. However, the determination in Prewitt does not quite resolve the issue at bar, because there the motion to intervene came at a time before the property was sold at auction, whereas here the property was sold at auction to Longobardi and Weiss. They argue that the foreclosure sale cannot be set aside in the absence of fraud, collusion or mistake particularly where as here there was a bona fide purchaser for value.

Indeed, the law is very parsimonious in giving out second chances once the auctioneer's gavel has fallen and the property has been struck down. The inadequacy of the bid price has to be "very gross indeed" and the disparity between the successful bid and the alleged market value of the property has to verge on that which could be called "fundamentally unfair" Polish Nat. Alliance of Brooklyn, U.S.A. v. White Eagle Hall Co, Inc. 98 AD2d 400, 409(2d Dept. 1983), in order for the sale to be vacated on the gross inadequacy of price alone. And while specified irregularities in the sale process may provide the grounds for vacatur, Wayman v. Zmyewski, 218 AD2d 843(3d Dept. 1995), vacaturs based upon this ground seem to be more the exception than the rule.

Here, however, it would seem that a just result calls for consideration of matters beyond a calculation of the adequacy of the sales price or a specified irregularity in the process, but rather requires the sensitive application of a right sense of justice that compels a result grounded in concepts of fairness. "A court has the inherent equitable power to ensure that a sale conducted pursuant to a judgment of foreclosure is not made the instrument of injustice'." Alkaifi v. Celestial Church of Christ Calvary Parish, 24 AD3d 476(2d Dept. 2005).

Although the parties dispute what it is that Mrs. Navarro knew about the situation and [*3]when she knew it and both parties are accusing one another of latches, and the post sale deed purporting to convey Mr. Navarro's share of this house to Mrs. Navarro is arguendo of no legal consequence, nonetheless, in this Court's view, justice and fairness calls for a determination that weighs in on the side of the resident home owner. The purchasers of the former husband's one-half share were not arm's length strangers to the deal, but were the very individuals who purchased the mortgage presumably as an investment vehicle for a nominal sum. If this sale is not vacated, they may well receive an undeserved windfall at the expense of the home-owner resident who it must be emphasized had no notice of the original foreclosure action and who has been in continued occupancy of this house which is her home, maintaining it and making all necessary payments including mortgage payments towards its upkeep. Had she received proper notice, she may well have been able to take steps to avoid this outcome by arranging to make the payments against the relatively modest mortgage balance.

Accordingly, the intervenor's motion is granted, the judgment of foreclosure and sale is vacated, the public sale is revoked and the referee's deed conveying the premises to Yitta Weiss and Vincent Longobardi is set aside.

This constitutes the decision and order of the Court.

J.S.C.