The following papers numbered 1 to 16 were read on this motion by defendant ANITA K. LALJI for an order staying the foreclosure sale of the premises located at 97-17 133rd Street, South Richmond Hill, New York:

Papers

Numbered

Notice of Motion Affidavits-Exhibits..................1 - 7

Affirmation in Opposition-Affidavits..................8 - 12

Reply Affirmation.....................................13 - 16

In this mortgage foreclosure action, defendant ANITA K. LALJI moves for an order staying the foreclosure sale of the premises located at 97-17 133RD Street, South Richmond Hill, New York.

This is an action to vacate a satisfaction of mortgage and [*2]to foreclose on a consolidated mortgage of defendant MANKAD LALJI, JR., in the amount of $436,500.00 given to American Home Mortgage on July 11, 2007. The consolidation, extension and modification agreement was recorded with the Queens County Clerk on August 21, 2007. After commencement of the within action the consolidated mortgage was assigned to plaintiff, Residential Credit Solutions, by assignment dated March 7, 2012. The defendant Anita K. Lalji was made a party to this action as she is the record owner pursuant to a deed from Mankad Lalji, Jr., to the defendant on November 27, 2007.

Based upon the record before this court, Mankad Lalji defaulted on his mortgage when he failed to make his monthly mortgage payments beginning February 1, 2008. Plaintiff subsequently accelerated the defendant's mortgage and brought an action to foreclose its mortgage by filing a lis pendens and a summons and complaint on June 3, 2008. None of the defendants answered the complaint. Movant Anita K. Lalji was personally served with a copy of the summons and complaint on June 8, 2008 and failed to serve an answer.

By decision dated January 13, 2010, this Court granted the plaintiff's motion for an order amending the caption of the action, extinguishing and nullifying a satisfaction of mortgage bearing the date July 30, 2007, and appointing a referee to compute the amount due to the plaintiff. None of the defendants opposed the motion. On May 28, 2010, this Court signed an order appointing Christopher Renfroe as referee. On September 16, 2010 the referee rendered his report finding that $507,053.11 was due to the plaintiff. On September 26, 2012, this Court signed a Judgment of Foreclosure instructing the referee to sell the premises at a foreclosure auction. The sale was initially scheduled to take place on December 14, 2012. On December 11, 2012 this Court granted defendant's application for a temporary stay of the foreclosure sale pending the determination of the instant motion.

Defendant Anita K. Lalji now moves to continue the stay of the foreclosure sale on the ground that on December 8, 2012 the defendant and one Rick Cotton entered into a residential contract of sale wherein the purchaser agreed to purchase the premises for $250,000. Defendant's counsel, Bruce J. Bergman, Esq., states that he is holding a deposit from the purchaser in his escrow account in the amount of $15,000. Defendant moves for an order pursuant to pursuant to CPLR 2201 staying the foreclosure sale in the interest of justice to enable the plaintiff to have sufficient time to approve the short sale. [*3]

In addition, defendant contends that the Judgment of Foreclosure is voidable as defaulting defendant, Randy Lalji, a 26 year old tenant in the premises, died on February 1, 2012 prior to the date when the judgment was obtained.

Plaintiff opposes the motion for a further stay. Counsel for plaintiff, David V. Mignardi, Esq., states that he provided the defendant's counsel with a short sale package to be completed and submitted by the defendant. Defendant provided a short sale package on February 12, 2013. However, since that date the short sale package has not been approved by the plaintiff.

Plaintiff also contends that the moving defendant, Anita K. Lalji, is in default and therefore lacks standing to pursue the application for a further stay unless and until the default judgment is vacated. Further, counsel argues that because the decedent, Randy Lalji, was a tenant in the premises his demise does not affect the merits of the underlying foreclosure action (citing Paterno v CYC LLC, 46 AD3d 788 [2d Dept. 2007]). Counsel asserts that when said defendant died, his possessory interest in the premises terminated and his equity of redemption was extinguished. Counsel claims, therefore, that a stay of the proceedings in order to substitute an administrator of decedent's estate as a party-defendant would be academic as the sucessor would not have any claim to the defendants equity of redemption (citing Alaska Seaboard Partners Partnership v Grant, 20 AD3d 436 [2d Dept. 2005][where a party's demise does not affect the merits of the case, there is no need for strict adherence to the requirement that the proceedings be stayed pending substitution]). Lastly, plaintiff argues the defendant's attempt to secure a short sale is not a defense to the foreclosure action and does not affect the plaintiff's right to sell the property pursuant to the Judgment of Foreclosure and Sale.

In reply, defendant's counsel states that the movant is not seeking to vacate her default. Counsel argues, rather, that in the interest of justice the defendant owner of the property should be permitted to proceed with the short sale as the fair market value of the property is only slightly more that than the price the defendant has contracted to sell the property for. Counsel claims that the defendant is not seeking to undo the judgment of foreclosure but merely asking the court to afford the defendant additional time so that the bank can respond to the short sale offer.

Upon review and consideration of the defendant's motion, the plaintiff's affirmation in opposition and the defendant's reply thereto, this court finds that the defendant's motion for a [*4]further stay of the foreclosure sale is denied.

As stated above, the order to show cause which contained a temporary stay of the scheduled foreclosure sale was signed on December 11, 2012. Over four months has elapsed since that time and the bank has not yet approved the short sale. It is apparent that the contract of sale entered into by defendant Anita K. Lalji subsequent to the entry of the judgment of foreclosure is not acceptable to the plaintiff. The plaintiff is not obligated to agree to a short sale which has not been accomplished within the past four months and the short sale does not appear to be a viable alternative at this time.

Therefore, the bank is entitled to proceed with the foreclosure sale. The moving defendant has not served an answer and did not oppose the motion for the appointment of a referee or the application for a judgment of foreclosure. The defaulting defendant's attempt to secure a short sale is not a defense to the foreclosure action and does not affect the plaintiff's rights to sell the property pursuant to the Judgment of Foreclosure and Sale. Defendant is required to comply with the redemption requirements mandated by RPAPL § 1341 in order to redeem the property prior to the foreclosure sale.

In addition, the fact that Randy Lalji, one of the tenant defendants died prior to the entry of the judgment of foreclosure does not affect the merits of the action as against the defaulting defendant and therefore there is no need to stay the proceedings pending the substitution of a personal representative (see DLJ Mtge. Capital, Inc. v. 44 Brushy Neck, Ltd., 51 AD3d 857 [2d Dept. 2008]; Paterno v. CYC, LLC, 46 AD3d 788 [2d Dept. 2007]; Alaska Seaboard Partners Ltd. Partnership v Grant, 20 AD3d 436 [2d Dept. 2005][the mortgagor defaulted in appearing long before his death, and neither he nor any successor in interest was entitled to notice of the judgment of foreclosure]).

Moreover, although tenants are clearly necessary parties to a foreclosure action, the tenant is not an indispensable party and his death and the absence of an administrator will not effect the validity of the judgment (see Board of Mgrs. of the Parkchester N. Condominium v Alaska Seaboard, 37 AD3d 332 [2d Dept. 2007]; Ridge Realty LLC v. Goldman, 263 AD2d 22 [2d Dept. 1999]; Polish Natl. Alliance v White Eagle Hall Co., 98 AD2d 400 [2d Dept. 1983]). The absence of a necessary party in a foreclosure action leaves that party's rights unaffected by the judgment and sale, and the foreclosure sale may be considered void only as to the omitted party (see U.S. Bank Natl. Assn. v. [*5]Patterson, 102 AD3d 858 [2d Dept. 2013]).

Accordingly, this court finds that the failure to substitute a representative for the estate of the deceased tenant does not void the Judgment of Foreclosure and Sale and does not prevent the plaintiff from proceeding with the foreclosure sale. The eventual purchaser has the right to bring a second action to foreclose a tenant's possessory interest should the tenant still have such interest. Therefore, for all of the above stated reasons, it is hereby

ORDERED, that the defendant' s motion to stay the foreclosure sale is denied in its entirety, and it is further

ORDERED, the stay of the sale of the premises located at 97-17 133rd Street, South Richmond Hill, New York is hereby vacated, and it is further

ORDERED, the plaintiff may proceed with this foreclosure action and conduct a foreclosure sale unless the mortgage is reinstated or paid off prior to the date scheduled for the sale.

The foregoing constitutes the decision and order of this court.

Dated: April 23, 2013

Long Island City, NY

______________________________

ROBERT J. MCDONALD

J.S.C.