Newrez LLC v Snowden

Supreme Court, Westchester County

Decided on April 16, 2026

Index No. 57678/2023

William J. Giacomo, J.

In a residential foreclosure action, in motion sequence 004, plaintiff Newrez LLC d/b/a Shellpoint Mortgage Servicing moves for an order amending the Judgment of Foreclosure and Sale dated February 5, 2025 and extending the time for the referee to conduct the sale. In motion sequence 005, Geovanny Hernandez, the winning bidder at the auction, moves by order to show cause, for an order permitting him to intervene in this action and for an order compelling [*2]plaintiff and the referee to close with him. Motion sequence numbers 004 and 005 are hereby consolidated for disposition.

Papers Considered

Motion Seq. 004 NYSCEF Doc. No. 76-82; 109-113; 116, 119

1. Notice of Motion/ Affirmation in Support by Max Saglimbeni, Esq./Affirmation of Timothy Jacobs/ Exhibits 1-2/ Proposed Order/ Affirmation of Service

2. Affirmation in Opposition by Glenn P. Warmuth, Esq./Exhibits A-B

3. Affirmation in Reply by Max Saglimbeni, Esq./Exhibit A

4. Correspondence to the Court

Motion Seq. 005 NYSCEF Doc. No. 83-108; 114-115; 117; 120

1. Proposed Order to Show Cause/ Affirmation in Support by Glenn P. Warmuth, Esq./Affirmation in Support by Geovanny Hernandez/ Affirmation in Support by Shalini Vohra, Esq./ Exhibits A-S/ Memorandum of Law/Order to Show Cause/Affirmation of Service

2. Affirmation in Opposition by Max Saglimbeni, Esq./Exhibits A

3. Correspondence to the Court

FACTUAL AND RELEVANT PROCEDURAL BACKGROUND

The Court assumes the familiarity with this residential foreclosure action. As relevant here, in December 27, 2024, plaintiff moved to confirm the referee's report and for a Judgment of Foreclosure and Sale. The referee calculated the amount due to plaintiff as $142,060.16, plus interest on the principal balance from October 16, 2024. Pursuant to a decision and order dated February 5, 2025, this Court granted plaintiff's motion for a judgment of foreclosure and sale and to confirm the referee's report.

The record reflects that the auction sale took place on October 1, 2025 and Geovanny Hernandez was the winning bidder with a bid of $175,000. Hernandez provided a deposit of $20,000. The terms of sale included a time of essence clause which set forth that the balance of the purchase price must be paid to the Referee on or before November 3, 2025 and that time is of the essence with respect to the closing date. Further, the failure of the purchaser to pay the balance of the purchase price will be a material default of the terms of sale, with no further notice being required from the Referee or plaintiff's counsel, subjecting purchaser to forfeiture of the deposit. In addition, "[n]either the Referee nor the Plaintiff is required to send any further notice to the Purchaser of the closing date; and if the Purchaser neglect to appear . . . to pay the balance of the purchase price and receive the deed, the Purchaser will be in material default of these terms."

Plaintiff sent Hernandez a time of the essence letter and a default letter, both to the wrong address. The default letter was dated November 5, 2025 and stated the following, in relevant part:

"Please take further notice that pursuant to the Terms of Sale the closing should have occurred on or before November 3, 2025, time being of the essence. In our correspondence on October 2, 2025, we further advised that if the closing did not take place on or before November 3, 2025 time being of the essence, you would be held in default, down payment retained as liquidated damages and a new foreclosure sale date set."

On November 13, 2025, counsel for Hernandez contacted plaintiff's counsel and advised that Hernandez is ready to close as soon as title clearance documents are provided. Counsel emailed, "[t]itle is not clear as proof was not provided that the correct Guardian Ad Litem was properly served. Moreover, our office was not served with the notice of default. Instead of proceeding with a motion to default the Purchaser (which will be opposed by my client), I request that your office provide the clearance documents so we may proceed to closing."

On December 2, 2025, plaintiff's counsel advised Hernandez's counsel that Hernandez "is being held in default due to their failure to close pursuant to the Terms of Sale and Time of the Essence letters sent."

As set forth below, after the correspondence between the parties, both plaintiff and Hernandez moved for relief. Oral argument was held on the motions.

Instant Motions

In motion sequence 004, plaintiff is seeking to amend the order and judgment. According to plaintiff, after this Court granted the Judgment of Foreclosure and Sale, plaintiff received a notice from Westchester County that taxes in the amount of $24,484.74 paid by plaintiff on behalf of the borrower were not going to be returned to plaintiff. Plaintiff is seeking to amend the Order to reflect the accurate judgment amount of $166,544.90 that is due and owing to plaintiff as of October 15, 2024. Plaintiff claims that it was unable to sell the premises within the timeframe permitted, as the third-party purchaser defaulted in closing and that defendant will not be prejudiced by granting the amendment. Plaintiff is seeking an amended order and requests an extension of time for the referee to sell the property.

An employee from plaintiff's loan servicer affirmed the following, in relevant part:

"Prior to the filing of Plaintiff's Motion for a Judgment of Foreclosure and Sale, Shellpoint was informed that it would receive a refund of taxes paid for the School Tax Bill dated February 12, 2024, ACHRef Number 184218 in the amount of $24,484.74. As a result, this amount, paid by Shellpoint on behalf of Plaintiff, was subtracted from the Judgment Amount submitted to the Court which totaled $142,060.16. A copy of the Financial Breakdown with Payment History evidencing the payment of said taxes is annexed hereto as Exhibit 1. Subsequent to Plaintiff being granted a Judgment of Foreclosure and Sale on February 5, 2025, Shellpoint was informed that the refund notice was issued in error and the $24,484.74 would not be returned to Plaintiff. As a result, the Judgment Amount granted by the February 5, 2025 Order was incorrect."

Hernandez argues that plaintiff's motion should be denied, as plaintiff cannot amend the judgment after the foreclosure auction has already taken place. Further, amending the judgment would be prejudicial because plaintiff seeks to avoid closing with Hernandez under the terms of the February 5, 2025 judgment.

In motion sequence 005, Hernandez moves by order to show cause to compel the plaintiff to close with him on his purchase of the property at the foreclosure sale. Hernandez argues that as the winning bidder he should be permitted to intervene and also be entitled to close. In support of his own motion and in opposition to plaintiff's motion, Hernandez argues that, contrary to plaintiff's contentions, he did not default in closing and still seeks to close on the property. Hernandez argues that he never received the time is of the essence letter as it was sent to the wrong address. Further, the letter had the wrong date listed in the letter.

Hernandez submitted an affirmation in support, affirming that he always intended to [*3]close. After he won the auction, he obtained a title search and retained counsel to represent him at the closing. As noted, plaintiff obtained a judgment in the wrong amount and is seeking to amend the judgment to increase the amount it is owed. According to Hernandez, although plaintiff claims that it failed to close with the winning bidder as the bidder defaulted, in reality, plaintiff refused to close because the amount owed is incorrect and plaintiff wants to obtain more money. Hernandez asserts that it would be inequitable to allow plaintiff to benefit from its own mistakes; allowing it to refuse to close with Hernandez and keep his deposit, and then proceed with an amendment to the Judgment to increase the amount it is owed.

In opposition, plaintiff argues that Hernandez should not be granted leave to intervene as he has failed to demonstrate a real and substantial interest in the outcome of the instant foreclosure. Plaintiff also argues that it is seeking to enforce its terms of sale. As Hernandez allegedly defaulted, plaintiff is seeking an order directing the referee to disburse the deposit from the prior sale and apply it to plaintiff's proceeds as liquidated damages, as required by the terms of sale.

DISCUSSION

Amending the Order and Compelling the Sale

At the outset, Hernandez is permitted to intervene, as he has "established that [he] may have an ownership interest in the property that is the subject of the foreclosure proceeding." JP Morgan Chase Bank, Natl. Assn. v Kalpakis, 91 AD3d 722, 723 (2d Dept 2012).

It is well settled that "[a] judgment of foreclosure and sale entered against a defendant is final as to all questions at issue between the parties, and concludes all matters of defense which were or might have been litigated in the foreclosure action." Nationstar Mtge., LLC v Phillip J. Coglietta, 189 AD3d 1435, 1436 (2d Dept 2020) (internal quotation marks omitted). Here, the initial amount due was calculated by the referee, based on records provided by the plaintiff, and converted into an order and judgment. Now, plaintiff claims that it is owed an additional $24,000 in taxes and the order dated February 5, 2025 should be amended to reflect the new amount due. In essence, after it realized its mistake, plaintiff now seeks to increase the amount of the judgment after it has been entered and after the sale has taken place. However, as the initial amount due is included in the final adjudication, changing the amount due is not merely clerical in nature, as alleged by plaintiff, but is a substantive modification of the Judgment, which is not properly brought as a motion to amend.

As argued by Hernandez, plaintiff's position is inconsistent. It is well settled that "one may not both affirm and disaffirm a contract . . . or take a benefit under an instrument and repudiate it." Sofi Classic S.A. de C.V. v Hurowitz, 444 F Supp 2d 231, 238 (SD NY 2006) (internal quotation marks omitted). Here, plaintiff seeks to hold Hernandez in default based on a sale held pursuant to an invalid Judgment.

In a contract, "where time is of the essence, performance on the specified date is a material element of the contract, and failure to perform on that date constitutes a material breach of the contract." Bank Am. v Petit, 89 AD3d 652, 653 (2d Dept 2011). Nonetheless, "[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, and, in the exercise of its equitable powers, it may set aside a foreclosure sale where fraud, collusion, mistake, or misconduct casts suspicion on the fairness of the sale." Manufacturers & Traders Trust Co. v Foy, 79 AD3d 825, 825-826 (2d Dept 2010) (internal quotation marks and citations omitted). Here, plaintiff does not seek to set aside the sale based on any of these grounds. Plaintiff seeks to treat the sale as valid in order [*4]to keep the purchaser's deposit while simultaneously rejecting the same Judgment which authorized the sale, in order to retroactively increase the amount due.

In this case, the plaintiff's conduct "casts suspicion on the fairness of the sale." Here, the winning bidder was ready and willing to close. He obtained the title search, retained counsel and then contacted plaintiff's counsel approximately one week after the time of the essence date in the terms of sale. While the terms of sale did not guarantee him any extra notice with time to close, plaintiff sent time of essence letters to him, and then relied on those letters as a basis for default. Hernandez never received these letters as they were sent to the wrong address, and when he contacted plaintiff to close, he was advised that he defaulted. Thereafter, plaintiff moved to amend the Foreclosure Judgment to increase the amount due.

Under the circumstances, the Court must exercise its inherent discretion to balance the equities between the parties. Allowing plaintiff to benefit from its mistake and increase the amount due, while simultaneously keeping the down payment from the prior bidder, would be inequitable and create a windfall for plaintiff. See e.g. Fleet Fin., Inc. v Gillerson, 277 AD2d 279, 280 (2d Dept 2000) ("In light of the inconsistent provisions of the judgment of foreclosure, the change in the law, and other evidence that the parties had differing beliefs regarding the responsibility for paying outstanding tax liens, the Supreme Court providently exercised its discretion in setting aside the foreclosure sale and ordering a new sale").

In sum, plaintiff's motion is granted to the extent that plaintiff is permitted to amend the Judgment to increase the amount due to $166,544.90, as of October 15, 2024. Plaintiff's request for an order extending the time within which the referee can conduct the sale of the premises is granted, only if, as set forth below, Hernandez does not seek to close on the property. In turn, Hernandez's motion is granted to the extent that he is granted leave to intervene. His motion to compel is granted to the extent that, as the previous winning bidder, he has the first right of refusal to purchase the property at the higher amount with credit given for his down payment already made. If Hernandez chooses not to purchase the property at the higher amount, plaintiff must return Hernandez's deposit, and may hold a new auction.

All other arguments raised on these motions and evidence submitted by the parties in connection thereto have been considered by this court notwithstanding the specific absence of reference thereto.

CONCLUSION

Accordingly it is hereby

ORDERED that plaintiff's motion is granted to the extent that the Order Discharging the Guardian Ad Litem, Confirming the Referee's Report and Judgment of Foreclosure and Sale dated February 5, 2025 is hereby deemed amended only to the extent that the sum of $166,544.90 is awarded to the plaintiff as of October 15, 2024 (motion sequence 004); and it is further

ORDERED that, if Geovanny Hernandez chooses not to close on the property, if the Referee does not conduct the sale within 90 days of the date of the judgment, in accordance with CPLR 2004, the time fixed by RPAPL 1351 (1) is extended for the Referee to conduct the sale no later than 6 months from the date of judgment without Court approval; and it is further

ORDERED that Geovanny Hernandez's motion is granted to the extent that he is permitted to intervene in this action and granted to the extent that he is entitled to the first right of refusal to purchase the property at the higher amount with credit given for his down payment [*5]already made. If Hernandez chooses not to purchase the property at the higher amount, plaintiff must return Hernandez's deposit, and may hold a new auction (motion sequence 005).

This constitutes the Decision and Order of this Court.

Dated: April 16, 2026

White Plains, New York

HON. WILLIAM J. GIACOMO, J.S.C.