Defendant Awoleye Gbenga aka Gbenga Awoleye (henceforth "Gbenga" or "Defendant") filed the instant Order to Show Cause seeking to stay the pending foreclosure sale of 64 Hancock Street, a property purchased and mortgaged in his name. Plaintiff, not surprisingly opposes the motion.

I. Relevant History

Service of the Summons, Verified Complaint, and Notice of Pendency pursuant to CPLR §308 was unsuccessful and the Court allowed service by publication and appointed a guardian ad litem to protect Gbenga's interests. After an Order of Reference and Judgement of Foreclosure and Sale were signed by the Honorable Allen Hurkin-Torres (in 2008 and 2009, respectively), Defendant filed an Order to Show Cause on August 11, 2010 seeking to stop the foreclosure [*2]auction scheduled for the next day. Therein, he asserted that the property was purchased at a greatly inflated price by someone who stole his identity. In support, he noted that the supporting documentation is, to say the least, defective and that someone with his limited income would never be given such a large mortgage.

This Court adjourned the matter to December of 2011 to allow Defendant to attempt a short-sale. Thereafter, Defendant failed to appear on the hearing date and for a subsequent pre-settlement conference. As such, Plaintiff was instructed in early 2012 to proceed with the foreclosure auction which was subsequently scheduled for October 11, 2012, at which point the instant OSC was filed.

II. The Instant OSC

A. The Motion and Opposition

Defendant's motion seeks additional time to either arrange a settlement with the bank or complete a short sale to minimize his losses and walk away with no personal liability. This Court notes that the paragraph of the Judgment of Foreclosure and Sale pertaining to personal liability for the deficiency has been crossed out and an explanatory footnote initialed by Judge Hurkin-Torres. Thus, it would seem that Gbenga's concern is unwarranted. Further, in its opposition papers, Plaintiff has offered to take a deed-in-lieu, whereby Defendant would grant any and all ownership interest he may have in the property to the Plaintiff, or a general release absolving the Defendant from liability for any deficiency judgment. Both of these would also appear to address and eliminate Gbenga's concerns and, were the opposition the final paper considered, this Court would have expected Defendant to accept one of the presented options.

B. The Reply

In his reply affirmation, Defendant's counsel, Abraham Hoschander, challenges Plaintiff's standing to bring this action. This Court must as a threshold matter determine whether it should (and, for that matter, may) consider this argument. Not only is this newly introduced in a reply paper, it was not raised in an answer or pre-answer pleading.

1. Introduction of New Material in a Reply Brief

Generally, new material may not be introduced in reply papers. "The function of reply papers is to address arguments made in opposition to the position taken by the movant, not to permit the movant to introduce new arguments or new grounds for the requested relief" (Allstate Ins. Co. v Dawkins, 52 AD3d 826, 827 [2d Dept. 2008]). A court may consider the newly introduced material when the other party had an opportunity to respond. (Zernitsky v Shurka, 94 AD3d 875 [2d Dept. 2012]; Hoffman v Kessler, 28 AD3d 718, 719 [2d Dept 2006]; Guarneri v St. John, 18 AD3d 813 [2d Dept. 2005]). Were this Court so inclined, then, Plaintiff could be granted leave to file a sur-reply and the challenge to standing considered.

2. Defendant's Right To Challenge Standing

The Judgment of Foreclosure and Sale was entered on default and, as such, Gbenga neither filed an answer nor a pre-answer motion raising the issue of standing. Accordingly, his affirmative defense of lack of standing is waived pursuant to CPLR §3211(e) (U.S. Bank Nat. Ass'n v Denaro, 98 AD3d 964, 965 [2d Dept 2012]; Deutsche Bank Nat. Trust Co. v Hussain, 78 AD3d 989, 990 [2d Dept. 2010]; Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 244 [2d Dept 2007]) and seemingly cannot be used as a "meritorious defense" under CPLR §5015(a)(1) (Deutsche Bank, supra, at 990 [after stating that standing defense was waived, notingthat movant "failed to demonstrate any other potentially meritorious defense" for purposes of §5015(a)(1) ]; HSBC Bank, USA v. Dammond, 59 AD3d 679, 680 [2d Dept 2009][same]). [*3]

As his default in appearing prevents Defendant from raising standing as an affirmative defense absent the judgment being vacated and leave to file an answer or motion, this Court will consider whether such relief is sought here. While Gbenga's motion does not seek to vacate the default judgment, paragraph 6 of his reply arguably does. Pursuant to CPLR §5015(a)(1), a defendant seeking to vacate a default in appearing or answering must demonstrate both a reasonable excuse for the default and a potentially meritorious defense to the action (Sussman v Jo-Sta Realty Corp., 99 AD3d 787, 788 [2d Dept. 2012]). The only relevant information provided in Hoschander's affidavit pertains to standing which is, as discussed above, likely unavailable as a defense. There is neither an excuse for default nor another potentially meritorious defense advanced. Accordingly, vacatur of the default judgment would be inappropriate.

III. Concluding Thoughts

This matter appears like it can be resolved such that each party will get what it wants. Gbenga has asserted that he did not purchase the premises in question and sign the related mortgage. Per his papers, his goal is to extricate himself from this case without personal liability. Plaintiff would like to go forward with the foreclosure sale and is willing to forego any potential deficiency judgment against Defendant. Further, Judge Hurkin-Torres has already ordered that Gbenga will not be held personally liable. Thus, this Court will suggest, but not order, that the parties come to an agreement, whether deed-in-lieu, general release, or some other arrangement with the same result.

Upon the foregoing cited papers, the Decision/Order on this Motion is as follows:

Based on the above it is hereby

ORDERED that Defendant's motion seeking to stay the foreclosure sale is DENIED.

The foregoing constitutes the decision and order of the Court.

ENTER:

_______________________________

Hon. Noach Dear, A.J.S.C.