Upon the foregoing papers, the motion and cross-motion are determined in accordance with this Decision and Order as follows:

This action was commenced on April 5, 2023, seeking to foreclose a mortgage (the "mortgage") executed by defendant Jack Schwartz, which encumbers the property known as 1159 57th Street, Brooklyn, NY 11219 (the "property"). On July 7, 2023, defendants Jack Schwartz and 1159 57th Street LLC (the "defendants") joined issue by filing an answer with affirmative defenses.

By order dated January 5, 2024, the Court granted plaintiffs motion for summary judgment, order of reference and related relief.

On April 23, 2025, the Hon. Carolyn Mazzu Genovesi denied plaintiffs previous motion to confirm the referee's report and judgment of foreclosure and sale because the report was not sufficiently substantiated in as much as the affidavit upon which the report was based did not indicate which records supported its computation of amounts due.

Plaintiff now moves to confirm a new report of the referee and for a judgement of foreclosure and sale. Defendant cross-moves to reject the report contending it is not substantially [*2]supported by the record and seeks entry of a judgment for nominal damages in the sum of $1.

"The report of a referee should be confirmed whenever the findings are substantially supported by the record, and the referee has clearly defined the issues and resolved matters of credibility." US Raf III Legal Tit. Tr. 2015-1 v John, 189 AD3d 1645 [2d Dept 2020] [internal quotation marks omitted], quoting Citimortgage, Inc. v Kidd, 148 AD3d 767 [2d Dept 2017]

A plaintiff seeking a judgment of foreclosure and sale bears the burden of submitting evidence in admissible form of the amount due under the note and mortgage. See TLOA Mtge., LLC v 109-08 N. Blvd, LLC, 241 AD3d 963 [2d Dept 2025][findings with respect to the amount due to foreclosing plaintiff cannot be supported by inadmissible hearsay; confirmation of referee's report of amount due and judgment of foreclosure and sale denied]; Deutsche Bank Natl. Tr. Co. v Light, 235 AD3d 946 [2d Dept 2025]), the same burden all other civil plaintiffs face. See generally Berley Industries, Inc. v City of New York, 45 NY2d 683 [1978]["It is fundamental to the law of damages that one complaining of injury has the burden of proving the extent of the harm suffered."]; Lewin v Levine, 146 AD3d 768 [2d Dept 2017] ["It is fundamental to the law of damages that one complaining of injury has the burden of proving the extent of the harm suffered, must demonstrate actual damages, and must lay a basis for a reasonable estimate of the extent of the harm."]

A hearing for the purposes of comput1ng the amount due under the note and mortgage-whether conducted before a referee or the court-is the procedural equivalent of an inquest on damages. See e.g. Wilmington Sav. Fund Socy., FSB v Aforiarty-Gentile, 190 AD3d 890 [2d Dept 2021]; "At an inquest, the plaintiff bears the burden of setting forth a prima facie case as to [the amount due on the mortgage."] Wells Fargo Bank, NA. v Bajnauth, 241 AD3d 759 [2d Dept 2025], quoting Bobbo Prop. Mgt., Inc. v Faulkner, 235 AD3d 615 [2d Dept 2024]; See also HSBC v Cherestal, 2025 NY Slip Op 30602[U][Sup Ct Kings County Jan. 8, 2025][Hon. Genine D. Edwards, J.S.C.])

Absent sufficient admissible evidentiary support, the Court is bound to find that "the referee's findings with respect to the total amount due upon the mortgage [a]re not substantially supported by the record" and must deny a request for its confirmation. Wells Fargo Bank, NA. v Campbell, l 96 AD3d 726, 727 [2d Dept 2021]) citing US Raf III Legal Tit. Trust 2015-1 v John, 189 AD3d 1645 [2d Dept. 2020]

Pursuant to CPLR § 4403, any party may move to confirm or reject a referee's report, and the Court must reject a referee's report when it is not supported by admissible evidence. See HSBC Bank USA, NA. v Cherestal, 178 AD3d 680 [2d Dept 2019]; JNG Constr., Ltd. v Roussopoulos, 170 AD3d 1136 [2d Dept 2019] [To the extent the referee's report was not supported by admissible evidence, it "should... have been rejected."]

Pursuant to CPLR 4403, the Court has the express authority to act "on its own initiative" regardless of whether parties so move. See Breland v Motor Veh. Acc. hzdem. Corp., 24 AD2d 881 [2d Dept 1965]["Rule 4403 of the CPLR was specifically enacted, in part, to overrule the holding in Rosenfield v. Rosenfield, 272 App.Div. 547, 74 N.Y.S.2d 82, that the court must await a formal motion before confirming or rejecting a referee's report, and to reaffirm the court's power to act on its own initiative."]

For several reasons, the Court finds that Plaintiff failed to sustain its burden of submitting evidence in admissible form demonstrating the amount due under the note and mortgage.

First, the referee predicated his report on the affidavit of Mary Monta-Adrovel, a "Foreclosure Specialist II" of NewRez LLC (NewRez), Plaintiffs purported attorney in fact, pursuant to a power of attorney annexed to her affidavit (NYSCEF Doc. 120, *47, 50-84). The Monta-Adrovel Affidavit is inadmissible, however, as the power of attorney attached is insufficient to demonstrate NewRez's purported authority to execute the affidavit on behalf of the Plaintiff. See Citimortgage, Inc. v. Lofria, 191 AD3d 838 [2d Dept. 2021]; 21st Mortgage Corp. v. Adames, 153 AD3d 474 [2d Dept. 2017]; US Bank NA. v. Cusati, 185 AD3d 870 [2d Dept. 2020]["the plaintiff failed to establish that Chase had the authority to act on its behalf at that time."] Here, the affidavit make no reference to the purported power of attorney, the power of attorney appoints "Specialized Loan Servicing LLC" without explaining any relationship to NewRez and only authorizes documents to be signed "if such documents are required or permitted under the terms of the related servicing agreements," (NYSCEF Doc. 120, *50) but Plaintiff has failed to ever produce any such servicing agreement. Even if the affidavit made reference to the power of attorney, and the same authorized NewRez, plaintiffs failure to submit a copy of the related servicing, management, servicing and oversight or any similar agreements under which its attorney-in-fact's actions "are required or permitted" renders the limited power of attorney insufficient to demonstrate the purported authority to make representations on behalf of the Plaintiff. See US Bank, NA. v. Tesoriero, 204 AD3d 1066 [2d Dept 2022]. As such, plaintiffs showing was insufficient to demonstrate NewRez's purported authority to make representations on behalf of the Plaintiff. Id.; US Bank NA. v Cusati, 185 AD3d 870 [2d Dept. 2020]; HSBC Bank USA, NA. v Cooper, 157 AD3d 775 [2d Dept. 2018]

Second, "[a] proper foundation for the admission of a business record must be provided by someone with personal knowledge of the maker's business practices and procedures" Citibank, NA v Cabrera, 130 AD3d 861, 861 [2d Dept 2015] [internal citations omitted]). Here, Ms. Monta-Adrovel fails to attest to personal knowledge of NewRez's business practices and procedures for incorporating records received from prior servicers into its own business records, and while Exhibit D appears to include records from a prior servicer (NYSCEF Doc. 120, *86 [line identified as "Escrow Balance at Loan Transfer"], 95 ["Money Type" listed as "Prior Servicer"], Ms. Monta Adrovel fails to identify the original maker of the that record, or allege that an identified, specific entity's records were incorporated into NewRez's business records as part of its established procedures. See PS Funding, Inc. v 1641 Park Place, LLC, 239 AD3d 681, 683 [2d Dept 2025]

Moreover, the alleged prior servicer's charges and escrow advances are not itemized or explained. While Ms. Monta-Adrovel claims that the unidentified previous servicer's loan records were integrated into Newrez' records, the same is apparently not true as there is no itemization of any of the charges and escrow advances or explanation as to when those charges were made and for what purpose. It is well settled that an affidavit attesting to the contents of unproduced business records is not admissible and insufficient to support a computation of amounts due and owing. See Bank of NY Mellon v Davis, 193 AD3d 803 [2d Dept 2021]["the affidavit of an employee of the plaintiffs loan servicer, submitted for the purpose of establishing the amount due and owing under the subject mortgage loan, constituted inadmissible hearsay and lacked probative value because the affiant did not produce any of the business records she purportedly relied upon in making her calculations."]; Nationstar Mtge., LLC v Cavallaro, 181 AD3d 688, 689 [2d Dept 2020]["the affidavit of its document execution specialist, submitted for the purpose of establishing the amount due and owing under the subject mortgage loan, [*3]constituted inadmissible hearsay and lacked probative value because the affiant did not produce any of the business records he purportedly relied upon in making his calculations."]

"Accordingly, [Ms. Monta-Adrovel] failed to demonstrate that the records relied upon in her affidavit were admissible under the business records exception to the hearsay rule" and, having relied exclusively on the Monta-Adrovel affidavit and the exhibits introduced thereby, "the referee's determination is not substantially supported by other evidence in the record." IndyMac Fed. Bank, FSB v Vantassell, 187 AD3d 725, 727 [2d Dept 2020]

Third, "[i]t is clear...that the document [NYSCEF Doc. 120, *86-96, entitled "Judgment Figures"] was not prepared in the regular course of business so as to qualify for admission as a business record, but, rather, was prepared in anticipation of litigation" Natl. States Elec. C01p. v LFO Const. Corp., 203 AD2d 49, 50 [1st Dept 1994] Therefore, the proffered "summary ... of charges and payments made under the [mortgage] was prepared solely in anticipation of litigation and should not... [be] received in evidence." 76-82 St. Marks, LLC v Gluck, 147 AD3d 1011, 1013 [2d Dept 2017]. The proffered breakdown "had no independent business function and was not prepared in the regular course of business so as to qualify for admission as a business record" Drake v Mundrick, 144 AD3d 1661, 1663 [4th Dept 2016] [internal quotation marks and citations omitted]. Furthermore, "[t]he underlying books and records from which the exhibit was prepared were not produced" Cameras for Indus., Inc. v I. D. Precision Components Corp., 30 AD2d 526 [1st Dept 1968]), which renders this two-page summary of amounts owed "hearsay within hearsay." People v Patterson, 28 NY3d 544, 547-549 [2016]

Fourth, the subject note is a variable rate note which provides for interest rate changes at various times in accordance with the terms set forth in the note and Ms. Monta-Adrovel fails to explain or substantiate the interest rate changes and interest charges in calculating the interest due on the note. Therefore, her contentions are unsubstantiated hearsay with respect to same. See Bank of NY Mellon v Singh, 205 AD3d 866, 868 [2d Dept 2022]["the plaintiff failed to present evidence that the interest on the loan was calculated using the method set forth in the note, and the referee's computations, including the amount due and owing and payments for taxes, insurance, and other advances, were premised upon unproduced business records."]

Thus, this Court must reject the referee's report yet again.

This action now squarely raises a recurring and significant question of foreclosure jurisprudence: what is the proper outcome when a foreclosing bank, given a full and fair opportunity, has failed to establish its damages with admissible proof? The answer, grounded in statute, common law, and principles of fairness, judicial economy, and finality, is clear: the plaintiff is relegated to nominal damages. New York law does not permit a litigant endless opportunities to prove what it should have proven in the first instance.

Plaintiff previously obtained a summary judgment and an order of reference, thereby establishing that the borrower defaulted in payment under the loan documents and that the loan was validly accelerated. Those determinations conclusively established liability. A summary or default judgment and order of reference in a foreclosure action constitutes a "liability" determination-a determination that the borrower breached the loan documents by failing to repay the loan in accordance with its terms. See e.g., Wells Fargo Bank, NA v Gonsalves, 44 Misc 3d 531, 536-37 [Sup Ct Westchester County 2014]; See also 1-2 Bergman on New York Mortgage Foreclosures §2.01[1]; A "referee's report serve[s] the function of an inquest on damages" Wilmington v Moriarty-Gentile, 190 AD3d 890, 893 [2d Dept 2021]). What remained was the [*4]proof of the amount due under the note and mortgage.

Even after liability has been established by summary judgment, a default judgment, or the issuance of an order of reference, a plaintiff in a foreclosure action must still thereafter carry the burden of proving the precise amount due under the note and mortgage with admissible evidence in order to obtain a judgment of foreclosure and sale for the amount sought. This requirement is not a mere formality. It reflects a critical safeguard: the borrower's liability for default is distinct from the lender's proof of the amount of damages (the amount of principal, interest and other charges and advances due under the note and mortgage). In theory, even after liability is determined, a borrower could have made subsequent payments, partial satisfactions, or other credits that would reduce the amount of total indebtedness. This is also evident from the order of reference statute itself: RPAPL 1321 directs that where the defendant is unable to so examine (because of its infancy or absenteeism), the order of reference shall direct the referee to examine the plaintiff concerning "any payments which have been made", thus underscoring that a critical inquiry in a foreclosure reference is the making of any payments, so that the trier of fact can "ascertain and determine the amount due". See RPAPL 1321. The Appellate Division therefore insists that the plaintiff establish, through competent business records, the actual balance due at the time of judgment of foreclosure through a complete loan and payment history. The Appellate Division has repeatedly underscored this principle, as reflected by the scores of decisions which deny entry of a judgment of foreclosure and sale because of inadmissible proof of the amount due under the note and mortgage, notwithstanding the prior award of summary judgment/default judgment/order of reference establishing a payment default under the note and mortgage. See TLOA Mtge., LLC v 109-08 N Blvd, LLC, 241 AD3d 963 [2d Dept 2025]; Deutsche Bank Natl. Tr. Co. v Light, 235 AD3d 946 [2d Dept 2025]; Countrywide Home Loans Servicing, L.P. v Weberman, 230 AD3d 632 [2d Dept 2024]; Ocwen Loan Servicing, LLC v Coles, 223 AD3d 678, 680 [2d Dept 2024]).

These decisions confirm that proof of damages in foreclosure actions must rest on actual, admissible loan records showing a complete and current payment history from the date of the loan's inception to the present-because only such records can accurately capture whether later payments, credits, or adjustments have reduced the outstanding balance. In short, New York appellate authority makes clear that liability and damages are analytically distinct stages in foreclosure litigation. A finding of liability-whether through summary judgment, default, or order of reference-does not relieve the lender of its obligation to prove, with admissible evidence, the precise sum currently due. To hold otherwise would risk imposing judgments untethered to the true state of the loan account, in derogation of both fairness and the evidentiary integrity of the foreclosure process.

Once liability has been established, the order of reference to report initiates a proceeding that must be conducted in the same manner as a nonjury trial. CPLR 4320[a]["A referee to report shall conduct the trial in the same manner as a court trying an issue without a jury"]. The question now before the Court is, with the report rejected for Plaintiff having failed to submit evidence in admissible form, what is the consequence? An action must terminate in the entry of a judgment [see CPLR 5011] and a judgment of foreclosure and sale is intended to finally resolve "all questions at issue between the parties", and "conclude all matters of defense which were or could have been litigated in the foreclosure action". Wheeler v Trifera, LLC, 209 AD3d 862, 864 [2d Dept 2022]). Is Plaintiff entitled to yet another attempt to prove the amount alleged to be due under the note and mortgage? Should the Court do so in absence of a request for same? Both [*5]statutory authority and a leading CPLR commentator would answer this question, "No".

There is unfortunately no Appellate Authority addressing when it would be a proper, improvident, or an abuse of discretion, to order a new hearing under CPLR 4403. Nor does it appear that the issue has been briefed, litigated or presented to an Appellate Court and rather it appears to be an issue of first impression. Commencing with Citimortgage, Inc v Kidd, 148 AD3d 767 [2d Dept 2017], the Second Department began holding plaintiffs submissions to the referee to the same standard as any other submission of the Court. That is, requiring the referee rely solely on admissible evidence in issuing reports in mortgage foreclosure proceedings. Nevertheless, to date, the Appellate Division has yet to directly address whether upon a rejection of a referee's report, a plaintiff is entitled to another opportunity to submit additional or new evidence to the referee. Basically, whether a plaintiff is entitled to a new hearing or trial on the issue of damages.

There is a significant distinction between what appears to be the principal enunciated in Kidd in remitting the matter back to the referee for new report and permitting the submission of additional or new evidence which should have been submitted to the referee or the Court in the first instance. In Countrywide Home Loans, Inc. v Hershkop, 188 AD3d 1148 [2d Dept 2020]; HSBC Bank USA, NA. v Tigani, 185 AD3d 796 [2d Dept 2020] and Aurora Loan Services, LLC v Taylor, 114 AD3d 627, 629-30 [2d Dept 2014], affd. 25 NY3d 355 [2015], the operative question was whether the defendant was provided adequate notice of the required hearing before the issuance of the report and wherein the Appellate Division remitted the cases back to the Supreme Court for a new hearing and issuance of a new report. This is contrast to a careful reading of the Appellate Division's holding in Kidd and it's progeny, where the Appellate Division specifically did not remit the matter back for a hearing but rather remitted the matter back solely for a new report [based on the evidence already submitted] and for an amended judgment.^[FN1]

This Court vehemently agrees with the Hon. Derefim B Neckles, J.S.C. in holding a plaintiff may not make repeated submissions to the referee until it meets it's burden of proof. See HSBC v Assanah, 2025 NY Slip Op. 32716[U][NY Sup Ct, Kings County 2025]["Plaintiff appears to be operating under the misapprehension that it can resubmit to the referee as many times as necessary until he comes around to its position. That is not so. The referee is correct that Plaintiff needed to provide all of the evidence that it wished to have considered and could not proffer additional evidence after he issued his report... An order of reference in a foreclosure action delegates the "inquest on damages" to an outside attorney but does not deputize him to assist Plaintiff in making its case. As such, the Court agrees with the referee's decision to reject the supplemental documentation proffered by Plaintiffs counsel."]

In absence of specific Appellate Division authority addressing the issue, the Court turns to Weinstein-Korn-Miller's commentary on CPLR 4403, which has been cited as persuasive authority by the Court of Appeals specifically on CPLR 4403. See Galiber v Previte, 40 NY2d 822 [1976]. Weinstein-Korn-Miller applies a similar standard to a motion to renew under CPLR 5015[a][2] and CPLR 2221[e]

Weinstein-Korn-Miller explains that CPLR 4404[b] governs whether a court sitting without a jury may order a new trial and provides guidance for when a court may order a new hearing under CPLR 4403. See 8 Weinstein-Korn-Miller, NY Civ. Prac. 4403.07.1. Under CPLR 4404[b], a new trial may be ordered only where newly discovered evidence is shown to have been previously unavailable despite due diligence and upon a showing of why the evidence could not have been previously presented. See 8 Weinstein-Korn-Miller, NY Civ. Prac. 4404.27. Likewise, CPLR 4404[a] permits a new trial in the interests of justice only where prejudicial error by the court or misconduct by counsel or a litigant affected the outcome of the trial. See, e.g., Rocco v. Ahmed, 146 AD3d 836 [2d Dept 2017]; Perry v'. Kone, Inc., 147 AD3d 1091 [2d Dept 2016]; Smith v. Rudolph, 151 AD3d 58, 63 [1st Dept 2017]

Critically, what CPLR 4404[b] does not permit, is the reopening of a record simply because a party failed to sustain its burden of proof. The Second Department has made clear that a litigant's failure to present admissible evidence of damages is not a ground for a new trial. See, e.g., Oparaji v. 245-02 Merrick Blvd, LLC, 149 AD3d 1092, 1093 [2d Dept 2017].

It has long been the law that in order to obtain a new trial or hearing to submit additional or new evidence, the movant must demonstrate that it could not, with reasonable diligence, have obtained such evidence for use on the first trial. See generally Trimarco v Data Treasury Corp., 146 AD3d 1008, 1009-1010 [2d Dept 2017][denying motion for new trial which was based upon "additional evidence that was available at the time of trial"; movant failed to "explain why the evidence could not have been produced prior to trial and the entry of judgment with the exercise of due diligence"]; Structural Concrete Corp. v Campbell Assoc. Corp., 224 AD2d 516, 517 [2d Dept 1996]["[T]he moving party must prove that the evidence proffered could not have been discovered earlier through the exercise of due diligence"; denying motion for new trial and relief from judgment where defendant failed to proffer any evidence to support such a finding]; see also 8 Weinstein Korn-Miller, New York Civil Practice: CPLR P4404.27-4404.29)

Such was the case, even under the predecessor to CPLR 4403, Civil Practice Act 556: "It is one of the primary principles of Anglo-Saxon jurisprudence that every man is entitled to his day in court on any issue affecting his life or fortune. There is, however, no law or policy which permits an individual to receive a second opportunity of this variety, when he has already enjoyed one fair trial of his alleged rights. The statutory specifications of the situations in which a new trial may be secured, Civil Practice Act, §§ 549- 556, and their interpreting decisions, limit the right to such an unusual privilege substantially to those cases in which the result of the trial was demonstrably contrary to the evidence or contrary to law or would presumably have been different had ce1iain evidence been introduced which 'could not with reasonable diligence have been obtained for use on the first trial." In re Goldberg's Estate, 165 Misc 354, 358 [Sur Ct Kings County 1937][internal citations omitted].

Plaintiff has not made the requisite showing of why such evidence could not have been introduced to the referee for his computation with the exercise of diligence. For the Court to sua sponte assume that such new or additional evidence even exists and that the same could not have been presented by the Plaintiff, had Plaintiff exercised diligence, on this barren record would be [*6]an improvident, if not abuse, of discretion. See Estate of Rothko, 84 Misc 2d 830 [Sur Ct New York County 1975], modified on other grounds, 56 AD2d 499 [1st Dept 1977], aff'd, 43 NY2d 305 [1977] [petitioner's motion for new trial to produce assertedly new evidence that had emerged from abroad was denied as untimely because this evidence was discoverable during preceding protracted trial, citing Weinstein, Korn & Miller].

That rule is both sensible and dispositive here. Plaintiff has already been afforded its right to prove its damages at the reference before the referee, not once, but twice. Plaintiff came up short. Under settled law, Plaintiffs inability to carry its burden does not entitle it to yet another attempt. To hold otherwise would subvert-the finality of trials and convert the orderly administration of justice into an endless cycle of trial-and-error litigation, with the expense borne by the taxpayer and the burden borne by the courts.

This Court declines to read Kidd and its progeny in a "unreasonable or absurd" manner to afford Plaintiff an automatic, second (let alone, a third as in the instant matter) opp01iunity to submit admissible evidence of the amount due after Plaintiffs previous efforts before the referee failed. This subjects the borrower and Court system to burdensome serial litigation. See e.g. Bank ofAm., NA. v Kessler, 39 NY3d 317, 324 [2023][We must also interpret a statute so as to avoid an unreasonable or absurd application of the law"]; Art. 13 LLC v Ponce De Leon Fed. Bank, 2025 NY Slip Op 06536 [Ct App Nov. 25, 2025][Identifying the Foreclosure Abuse and Prevention Act as the legislature's attempt to "relieve[] burdens on courts" and rejecting the plaintiffs lender's claimed right of "subjecting the borrower and court system to burdensome serial litigation and needlessly clouding the underlying property's title."]

The law simply does not afford foreclosure plaintiffs "as many chances as it takes for plaintiffs to get it right" to submit evidence in admissible form to prove the amount of its damages. Kidd and its progeny are silent as to any standard or numerical limit on the granting of a new trial or hearing, for a foreclosure plaintiff to submit admissible proof of the amount due. Importantly, the First, Third, and Fourth Departments have thus far not adopted plaintiffs likely absurd reading of Kidd and its progeny.

Far more than the abuse of successive motions for summary judgment in foreclosure proceedings, which at least may serve the purpose of judicial economy in limited circumstances, this Court finds this frustrating issue to be one of the most burdensome on a court's limited judicial resources. This is especially true when this Court has thousands of open foreclosure cases and hears approximately 75 motions on its weekly calendar. Not a week has passed since this Court has been presented with this very issue in multiple matters. Unlike rules and statutes like CPLR 3215[c], CPLR 3216, CPLR 3404 and 22 NYCRR 202.27 that can and must be utilized to serve the essential purpose of ensuring the orderly and efficient disposition of dormant matters before the Court. In contrast, this specific issue actively inundates this Court's already burdened docket with repetitive motions seeking confirmation of reports based on consistently deficient papers. See e.g. Amos Fin. LLC v Crapanzano, 2022 NY Slip Op 34864[U][Sup Ct, Rockland Cty 2022][Declining to afford the foreclosing bank a fifth opportunity to establish the amounts owing].

The repetitive nature of this problem also cuts against the legislative framework which limits litigants to a single post-trial motion. See CPLR 4406. See also Trimarco v Data Treasury Corp., 146 AD3d 1008 [2d Dept 2017]. Indeed, the referee becomes functus officio upon completing his function and issuance of the report which completes the directed order of reference. See Blumberg v Giorgio, 239 AD 799, 800 [2d Dept 1933]["The referee became [*7]functus officio thirty days after completing the sale, during which period he was required to file his report. Civil Practice Act, § 1088. There is no legal authority for a referee to make an amended report, particularly after the expiration of the 30-day period."] affd, 262 NY 650 [1933]

It defies logic that a litigant is entitled to a single post-trial motion yet would be entitled to unlimited hearings before the referee. While "move fast and break things" may work for Silicon Valley, the Courts are not a testing ground for plaintiff's attempts to comply with the simple rules of evidence as explained by the Appellate Division. As, stated by the Hon. Chief Justice Rowan D. Wilson, "we cannot fix that which do not know needs repair".^[FN2]

The issue can be summarized as follows: Whether a Court is required to interpret a line of decisional authority (i.e. Kidd and it progeny), to mandate sua sponte, automatic, potentially endless hearings on the issue of damages, when said authority provides no numerical limit, no explanation and no standard to guide a Court addressing what appears to be only relevant in the Appellate Division, Second Department, only in foreclosure matters and only on the issue of damages. Or rather, a Court may rely on the persuasive authority (i.e. Weinstein-Korn-Miller) that the Court of Appeals has relied upon in interpreting the relevant statute (i.e. CPLR 4403) as well as the settled principal of avoiding interpretations of authority in an absurd manner which applies equally to interpreting decisional law as it does statutory law. See e.g. Banko/Am., NA. v Kessler, 39 NY3d 317, 324 [2023][We must also interpret a statute so as to avoid an unreasonable or absurd application of the law"]; Matter of' Eckart'.s Estate, 39 NY2d 493, 498 [l 976]["Precedents and rules must be followed, unless flatly absurd or unjust"]

Indeed, even within the foreclosure context, this Court has not encountered a single case where a litigant had the audacity to, for example, request a second traverse hearing or trial on the merits, let alone claim entitlement to same in the absence of a duly noticed motion or appropriate request, which a stretched reading of Kidd would seem to require based solely on the litigants failure to make a proper showing of damages. A patently absurd unreasonable, if not absurd, reading of Kidd that conflicts with the legislature's goal of relieving the congestion of the Court system as explained by Chief Judge Wilson. See Art. 13 LLC v Ponce De Leon Fed. Bank, 2025 NY Slip Op 06536 [Ct App Nov. 25, 2025][finding the Foreclosure Abuse and Prevention Act served the legislature's espoused goal of "relieving our congested court system."]

This Court hereby answers the call of Chief Judge Wilson and brings this serious issue to the attention of the higher courts and the legislature so that the issue can be addressed with clarity. This Court hopes that the Appellate Division, the Court of Appeals or the legislature will address this important issue from the perspective of judicial economy. See e.g. People v Beige, 41 NY2d 60, 62 [1976]["We invite the attention of the Legislature to this predicament."]; People v Rickert, 58 NY2d 122 [l 983][finding that a Court's call to the legislature for urgent reform is proper arid common]

Indeed, just as the grieving widow who, after proving the defendant's liability on her wrongful death claim, failed to adduce admissible evidence of damages at inquest gets no do-over simply because she failed to prove damages with her first attempt, neither does Plaintiff nor any other litigant on any civil claim established under the laws of the State of New York. To the extent Plaintiff implicitly invites the Court's adoption of essentially a mortgage banker's CPLR, [*8]the correct forum for such relief is in Albany. See Bank of New York v Silverberg, 86 AD3d 274 [2d Dept 201 l]["the law must not yield to expediency and the convenience of lending institutions."]

Rather, as previously established, the referee's report was the equivalent of an inquest on damages. See, e.g., Wilmington Sav. Fund Socy., FSB v Moriarty-Gentile,190 AD3d 890 [2d Dept 2021], citing Okeke v Ewool, 106 AD3d 709 [2d Dept 2013] [which awarded nominal damages of $1 to a plaintiff who failed to prove actual damages]; Wells Fargo Bank, NA. v Bajnauth, 241 AD3d 759 [2d Dept 2025]; HSBC v Cherestal, 2025 NY Slip Op 30602[U][Sup Ct Kings County Jan. 8, 2025][Hon. Genine D. Edwards, J.S.C.]). Hence, the law of damages and inquests supplies the answer.

Mortgage foreclosures actions "are a unique hybrid of contract (the note) and equity (foreclosure on the premises)" Christiana Trust v Banta, 184 AD3d 140, 149 [2d Dept 2020]. But under New York law, damages are not presumed from the existence of a breach of a contract. They must be proven with competent, admissible evidence. Where a plaintiff fails to do so, the law relegates it to nominal damages only-an award that vindicates the breach of the loan documents without conferring an unproven (as a matter of law) windfall. "Nominal damages are always available in breach of contract actions" Barua, 184 AD3d at 149.

The Second Department has long enforced this principle. See Ross v Sherman, 95 AD3d 1100 [2d Dept 2012]["The Supreme Court properly awarded the plaintiffs only nominal damages on their cause of action alleging breach of contract. The plaintiffs failed to submit sufficient evidence to demonstrate actual damages"]; Clearview Concrete Products Corp. v S. Charles Gherardi, Inc., 88 AD2d 461, 470 [2d Dept 1982] ["Notwithstanding its failure to establish damages, Manorville is still entitled to nominal damages to vindicate its rights deriving from the...breach of warranty practiced upon it...Manorville also is entitled, as a matter of law, to an award of nominal damages for breach of warranty."]

The First Department applies the same rule. See Crown Wisteria, Inc. v Cibani, 226 AD3d 585, 587 [1st Dept 2024] [on a breach of contract claim, such as the case at bar, "[t]estimony based on documents not in evidence or that relies on unsupported assumptions or estimations will not support a damages award. A plaintiff who fails to prove actual damages is entitled to only nominal damages"][internal citation omitted]; Quik Park W. LLC v Bridgewater Operating Corp., 189 AD3d 488, 489 [1st Dept 2020]["plaintiffs failed to prove actual damages and therefore were entitled to nominal damages only"]. The Third Department is equally clear. See Buchwald v Waldron, 183 AD2d 1080, 1081 [3d Dept 1992]["in view of the court's finding, borne out by the record, that defendant had partially breached the contract and the inadequacy of plaintiffs proof regarding the amount of damages required to compensate him for such partial breach, only nominal damages are recoverable."]

This rule is grounded in the jurisprudence of the Court of Appeals. See Freund v. Washington Square Press, Inc., 34 NY2d 379, 384 [1974][damages must be proven with reasonable certainty, but "nominal damages are always available in a breach of contract action"; author which established liability for breach of contract to publish book failed to establish amount of actual damages and, thus, could recover nominal damages only]; Kronos, Inc. v. AVX Corp., 81 NY2d 90, 95 [1993][nominal damages are awarded "where there is a breach but no [admissible evidence of] substantial injury"]. These author1ties make clear that once liability is established-as it was here through the default judgment and order of reference-the failure to [*9]prove damages with admissible evidence limits the judgment to a nominal award.

As the Court of Appeals explained in Freund, "Though these [nominal damages] are damages in name only and not at all compensatory, they are nevertheless awarded as a formal vindication of plaintiffs legal right to compensation which has not been given a sufficiently certain monetary valuation." Freund, 34 NY2d at 384. Plaintiff has failed to prove the amount due under the note and mortgage with "sufficiently certain" [id.] evidence and hence the law relegates Plaintiff to the recovery of nominal damages to vindicate the heretofore established default by borrower under the loan documents.

The policy underlying this rule is equally important. Courts strictly limit recovery to nominal damages in the absence of admissible proof to prevent speculative awards and to safeguard the evidentiary integrity of foreclosure proceedings. To permit large money judgments without competent evidence would erode public confidence in the foreclosure process, unfairly prejudice homeowners, and undermine the Legislature's and judiciary's shared commitment to accuracy and fairness in debt enforcement.

A judgment for nominal damages is the natural consequence of Plaintiffs failure to prove the actual amount of damages with admissible evidence as opposed to being afforded a second bite at the apple. See Freund, 34 NY2d at 384; Ross, 95 AD3d at 1100. An action must terminate in the entry of a judgment [see CPLR 5011], and a judgment of foreclosure is intended to finally and conclusively resolve all matters of contest in the foreclosure action. See Wheeler, 209 AD3d at 864. A plaintiff is not entitled to limitless attempts to meet its burden. Litigation may not be conducted on the basis of trial and error.

The Court has already afforded Plaintiff a full and fair opportunity to establish the amount due under the note and mortgage, which it squandered by failing to sustain its burden with evidence in admissible form. The law gives no right to a second bite at the apple - not to the grieving widow on her wrongful death claim, or a bank on its foreclosure claim. Therefore, Plaintiffs failure to supply admissible evidence of damages, despite having been afforded a full and fair opportunity to do so, compels the conclusion that it is limited to nominal damages only. This outcome not only adheres to settled precedent, and affirms evenhanded treatment under the law, but also vindicates the fundamental principle that judicial resources shall not be wasted on indulging serial, unsuccessful attempts by a litigant to carry its burden of proof-an abuse of the judicial process. "A party...should anticipate having to lay bare its proof and should not expect that it will readily be granted a second or third chance" Wells Fargo Bank, NA. v Gittens, 217 AD3d 901, 903 [2d Dept 2023]. The evenhanded and consistent application of uniform rules to all litigants is a matter of fundamental fairness and promotes confidence in the integrity of the judicial process.

Accordingly, while Plaintiff proved that the borrower defaulted and the loan was accelerated, making liability law of the case, its failure to establish the amount due with competent business records requires that the judgment be relegated to nominal damages of $1 only.

For more than a century, New York has recognized that a mortgage is "but a pledge or security, always redeemable until foreclosure," and that an unconditional tender of the full amount due extinguishes the lien. Kortright v. Cady, 21 NY 343, 362-64 [1860] [tender of full sum after default "extinguish[es] the lien of the mortgage," and "the lien is gone" upon refusal]; [*10]See also Mackenna v. Fid. Tr. Co. of Buffalo, 184 NY 411, 415-16 [1906] [the equity of redemption is a necessary incident of every mortgage])

The Court of Appeals has carried forward these principles unequivocally:

"The equity of redemption, 'a doctrine long favored in New York as elsewhere,' allows property owners to redeem their property by paying the full amount of the debt at any point before the property is actually sold to a bona fide purchaser. . . An unconditional tender of the full amount due is all that is required."

Plaintiffs claim that Defendant lacks the equity of redemption is patently meritless. Plaintiff joined Defendant hereto for any potential deficiency [RPAPL 1313], and Plaintiff seeks a judgment of foreclosure and sale against him, such that Defendant must possess the right to satisfy the judgment of foreclosure and sale prior to the entry of a deficiency judgment against him. This satisfaction of the judgment has the exact same force and effect as exercising the equity of redemption. In any event, Defendant was served at the subject premises [NYSCEF Doc. 14], rendering him an occupant, and, as an occupant, Defendant enjoys the equity of redemption. See e.g. Empire Sav. Bank v Towers Co., 54 AD2d 574, 574 [2d Dept 1976].

In Grossman v. Pendant Realty Corp., 221 AD2d 240, 241 [1st Dept 1995], the First Department reaffirmed the enduring equitable principle that foreclosure judgments must preserve the mortgagor's right of redemption by providing for satisfaction of the mortgage upon full payment of the adjudged amount. The Court specifically approved the practice of reciting within the judgment itself that "upon payment by the mortgagor of the amount adjudged to be due, the mortgage shall be deemed satisfied." Id. at 241. In doing so, the Court recognized that a foreclosure judgment is not merely a decree authorizing sale, but also a conditional order that sets the precise terms by which the mortgagor may redeem and extinguish the lien before the sale occurs. Grossman reinforces that redemption is not an ancillary or discretionary remedy, but a core element of foreclosure itself. The judgment operates in two directions: it authorizes sale if payment is not made, and it mandates satisfaction if the mortgagor tenders the full adjudged sum. This structure prevents forfeiture and aligns with the Court of Appeals' insistence that "unconditional tender of the full amount due is all that is required." 573 Jackson, 13 NY3d at 579.

Consistent with Grossman and with the common law right to redeem, the judgment entered herein should recite that Defendant may redeem the mortgaged premises by tender via mailing to Plaintiffs counsel of record herein or to Plaintiffs current loan servicer, before the foreclosure auction, the $1 nominal damages and should further recite that upon such tender of payment via mail the mortgage lien shall be deemed satisfied, extinguished and discharged of record.

Finally, payment of the judgment amount must also terminate the notice of pendency, such that the judgment should also declare same cancelled and extinguished upon such payment. See CPLR 6514[a]; See e.g., Bayview Loan Servicing, LLC v Starr-Klein, 193 AD3d 807 [2d Dept 2021].

Plaintiff failed to sustain its burden of proving the amount due under the note and mortgage with evidence in admissible form. Accordingly, since the Plaintiff previously established that borrower defaulted in payment under the note and mortgage and that the debt [*11]was validly accelerated, Plaintiff is entitled to judgment of nominal damages in the amount of $1.

Accordingly, therefore; based on the foregoing, it is hereby:

ORDERED, that the motion is denied and the cross-motion is granted; and it is further

ORDERED, that the Referee's Report be, and the same is, hereby in all aspects rejected; and it is further

ORDERED, that a judgment of foreclosure and sale shall be entered in favor of Plaintiff fixing the amount due under the note and mortgage to the nominal amount of $1; and it is further

ORDERED, that Defendant Jack Schwartz, his counsel (Vivian Sobers, Esq.) and/or any or person with the equity of redemption may redeem the Property by unconditionally tendering payment of $1 by mail to Plaintiff, Plaintiffs counsel of record herein (Sheldon May & Associates, P.C.) or to Plaintiffs loan servicer (NewRez LLC, d/b/a Shellpoint Mortgage Servicing (fka Specialized Loan Servicing LLC)) at any time prior to the foreclosure sale, and upon such tender the mortgage shall be satisfied, cancelled and discharged of record; and it is further

ORDERED, that the Notice of Pendency [NYSCEF Doc. 4] be cancelled upon the presentation of a copy of the attached judgment of foreclosure and sale with a copy of an affirmation from counsel or Defendant Jack Schwartz attesting to the unconditional tender of payment of $1 by mail to Plaintiffs counsel of record herein (Sheldon May & Associates, P.C.) or to Plaintiffs loan servicer (NewRez LLC, d/b/a Shellpoint Mortgage Servicing (fka Specialized Loan Servicing LLC)), at any time prior to the foreclosure sale, and the Clerk shall note the cancellation thereof on its records; and it is further

ORDERED, that the Office of the City Register is directed to accept and record a certified copy of the Judgment and to mark the land records accordingly.

This constitutes the Decision and Order of the Court.