Those writing on civil procedure often focus on the obligations of the plaintiff to timely interpose her claims. This is appropriate because if the plaintiff cannot negotiate this task, the case will often suffer a sudden and cruel death at the hands of the statute of limitations, rendering the merits of the claims moot.

In that it is the primary season in the political world, and this publication is a member of the media, we will do our best to be fair and balanced and now turn our focus to the obligations of a defendant at the outset of litigation. While far less attention is paid to the obligations of the defendant at the inception of litigation, this is a critical moment in the litigation and the failure to take prompt action to appear and preserve relevant affirmative defenses can compromise the defense of the action. Recent caselaw and statutory amendments in this area also warrant a careful review.

Avoiding a Default Judgment

The first obligation of any defendant is to render a timely appearance in the action to avoid a default judgment. There are essentially three ways to appear in a New York State court action that is commenced with a summons and complaint: (1) make a CPLR 3211(a) pre-answer motion to dismiss, (2) serve an answer, or (3) make a motion under CPLR 3024 to correct the complaint. See CPLR 320(a); David D. Siegel & Patrick M. Connors, New York Practice §110 (Thomson, 6th ed. 2018). One of these steps must be taken within 20 days of service, if the defendant is personally served in New York, or within 30 days for virtually every other method of service. CPLR 320(a); Siegel & Connors, New York Practice §§66-76A, 110. If the action is commenced by a summons and notice, the defendant serves a notice of appearance, which is usually accompanied by a demand for the complaint, within the above time frames to avoid a default. CPLR 320(a); Siegel & Connors, New York Practice §60.

Preserving the Affirmative Defense of Lack of Personal Jurisdiction

After appearing in the action, the defendant will want to be sure that she has asserted all relevant affirmative defenses to avoid a waiver. One of the most important affirmative defenses is lack of personal jurisdiction, which can arise if there has been a failure to properly file or serve the initiatory papers, or if there is a lack of basis of jurisdiction over the defendant. See Siegel & Connors, New York Practice §58.

There are two ways to preserve the defense of lack of personal jurisdiction. See Siegel & Connors, New York Practice §111. First, the defendant can make a CPLR 3211(a) pre-answer motion to dismiss and include lack of personal jurisdiction as one of the grounds for dismissal. See CPLR 3211(a)(8). This motion route is usually preferable because if it succeeds, the action is quickly dismissed. It must be stressed, however, that if a defendant appears through a CPLR 3211(a) motion and does not include lack of personal jurisdiction as one ground for the motion, the defense is waived. See CPLR 3211(e); Siegel & Connors, New York Practice §274.

Second, the defendant can choose not to make a CPLR 3211(a) motion and simply serve an answer including the affirmative defense of lack of personal jurisdiction. The answer route may be preferable if the expiration of the statute of limitations is close at hand and the defendant desires to move for summary judgment on the defense at some later point in time after the statute of limitations has expired. If the motion is successful at that point, it will be too late to timely commence a new action and the plaintiff will not receive the benefit of CPLR 205(a)'s six-month extension. See Siegel & Connors, New York Practice §52.

This second route contains an important caveat. If the defendant's affirmative defense of lack of personal jurisdiction is based on improper service, the motion for summary judgment must be made within 60 days of the service of the answer or the defense is waived. CPLR 3211(e); see U.S. Bank N.A. v. Roque, 172 A.D.3d 948 (2d Dept. 2019); Siegel & Connors, New York Practice §§111, 266, 269, 274.

Preserving Additional Affirmative Defenses

Turning to affirmative defenses other than lack of personal jurisdiction, a defendant can make a pre-answer motion to dismiss on any of the grounds listed in CPLR 3211(a) and/or raise any applicable affirmative defenses in the answer. Lawyers drafting answers for defendants need to have a checklist at the ready to ensure that all relevant affirmative defenses are sufficiently pleaded. The checklist should include all of the affirmative defenses listed in CPLR 3018(b) and all of the grounds listed in CPLR 3211(a).

These items are not exhaustive, however, as CPLR 3018(b) expressly recognizes that additional defenses can be deemed affirmative defenses. See Siegel & Connors, New York Practice §223; Practice Commentary C3018:14 ("List in CPLR 3018(b) Not Preemptive") on McKinney's CPLR 3018 (containing listing of additional affirmative defenses recognized by courts). Therefore, the courts have treated such matters as lack of standing, CPLR Article 16's exceptions to joint and several liability, and the deductions for settlements under General Obligations Law §15-108 as affirmative defenses that must be pleaded in the answer or are deemed waived.

Plaintiff Pleads Affirmative Defense?

In Green Bus Lines v. Consol. Mut. Ins. Co., 74 A.D.2d 136, 142-43 (2d Dept. 1980), the Second Department ruled that if the plaintiff introduces in the complaint a matter that would ordinarily be an affirmative defense for the defendant to plead, the defendant's omission to plead it should not necessarily be deemed a waiver of the defense. The Green Bus Lines holding has recently been called into doubt by the Second Department's decision in US Bank Nat'l Ass'n v. Nelson, 169 A.D.3d 110 (2d Dept. 2019), a mortgage foreclosure action. In Nelson, the complaint alleged that plaintiff bank was the owner and holder of the note and mortgage, which are the requirements for establishing standing. See Aurora Loan Servs. v. Taylor, 25 N.Y.3d 355 (2015); Siegel & Connors, New York Practice §136. The defendants denied knowledge or information sufficient to form a belief as to the truth of these allegations. See CPLR 3018(a); Siegel & Connors, New York Practice §223.

The appeal before the Second Department raised the question of whether the plaintiff's pleading of facts to establish standing in a mortgage foreclosure action, coupled with defendants' denials of those contentions, are sufficient to preserve the affirmative defense of lack of standing. The court held that it was not, and that the affirmative defense had been waived.

The Nelson court highlighted the difference between pleading denials authorized by CPLR 3018(a) and affirmative defenses under CPLR 3018(b). The court noted that a party's "[d]enials generally relate to allegations setting forth the essential elements that must be proved in order to sustain the particular cause of action." Nelson, 169 A.D.3d at 113. Therefore, a denial of one or more elements of a cause of action will place those allegations in issue and require the proponent to bear the burden of proof on the matter. If a party denies an allegation in a pleading that constitutes an element of a proponent's cause of action, there is no need for that party to also plead the matter as an affirmative defense.

By contrast, CPLR 3018(b) requires a party to plead "all matters which if not pleaded would be likely to take the adverse party by surprise or would raise issues of fact not appearing on the face of a prior pleading." According to the Nelson court, the pleading of an affirmative defense is required when a party seeks "to interpose new matter in defense to the cause of action that goes beyond the essential elements of the cause of action." Nelson, 169 A.D.3d at 113. Stated otherwise, "where a defendant seeks to inject into the litigation 'matters [that] are not the plaintiff's burden to prove as part of the cause of action,' those matters must be affirmatively pleaded as defenses (Siegel, N.Y. Prac. §223 [6th ed. Dec. 2018 Update]…)." Id.

Applying these pleading principles, the Nelson court observed that the elements for a cause of action to foreclose on a mortgage include the existence of the mortgage, the unpaid note, and the defendant's default. The plaintiff need not, however, plead its standing to bring the action. The Nelson court ruled that "it is only where the plaintiff's standing is placed in issue by the defendant that the plaintiff must shoulder the additional burden of establishing its standing to commence the action." Nelson, 169 A.D.3d at 114.

In other words, the affirmative defense of lack of standing is waived if it is not asserted in a pre-answer motion to dismiss the complaint under CPLR 3211(a) or in the defendant's answer. While the plaintiff in Nelson pleaded the essential facts for establishing standing in a mortgage foreclosure action, the defendants' mere denials of those allegations were insufficient to preserve the affirmative defense.

A Change in the Law?

The Second Department acknowledged that some of its recent decisions "have strayed from the foregoing principles by indicating that a mere denial in the answer of factual allegations set forth in the complaint will suffice to place standing in issue, thereby injecting uncertainty into this formerly settled area." Nelson, 169 A.D.3d at 118; see, e.g., Bank of Am., N.A. v. Barton, 149 A.D.3d 676, 678 (2d Dept. 2017); Nationstar Mortg. v. Wong, 132 A.D.3d 825, 826 (2d Dept. 2015). The court expressly noted that these holdings, which follow the rule announced in Green Bus Lines, should no longer be followed.

A one-judge dissent would have adhered to the above line of precedent and found the affirmative defense of lack of standing preserved by the defendants' denials of plaintiff's factual allegations. Under this precedent, according to the dissent, when a plaintiff pleads facts establishing standing, "a denial or DKI should suffice to put the plaintiff on notice as to the issue of standing" and preserve that affirmative defense. Nelson, 169 A.D.3d at 124 (Duffy, J., dissenting). Applying the language in CPLR 3018(b), the dissent reasoned:

[A] plaintiff such as the one here which has asserted that it is the "owner and holder of [the] note and mortgage being foreclosed," to which the defendants have asserted a denial or DKI, cannot contend that it did not assert such facts [on the face of a prior pleading] or that it is surprised that those facts are in controversy.

Id. at 125 (Duffy, J. dissenting).

The Second Department granted leave to appeal in Nelson, 2019 N.Y. Slip Op. 74318(U) (2d Dept. 2019), and the Court of Appeals will likely entertain oral argument in the matter at some point this year. While the holding in Nelson may be seen as a departure from Second Department precedent, one can avoid any confusion by following an important rule of thumb. When there is any doubt about whether a party must plead matter as an affirmative defense, or can simply inject the matter with a mere denial, it is best to treat it as an affirmative defense and plead it. See Siegel & Connors, New York Practice §223.

The New RPAPL §1302-a

As noted above, the courts have designated standing as an affirmative defense even though it is not expressly listed in CPLR 3018(b) or in the CPLR 3211(a) dismissal grounds. The Nelson decision demonstrates that defendants in mortgage foreclosure actions frequently waive this affirmative defense by failing to affirmatively raise it.

The new RPAPL §1302-a, entitled "Defense of lack of standing; not waived," became effective on Dec. 23, 2019. It provides:

Notwithstanding the provisions of [CPLR 3211(e)], any objection or defense based on the plaintiff's lack of standing in a foreclosure proceeding related to a home loan, as defined in paragraph (a) of subdivision six of section thirteen hundred four of this article, shall not be waived if a defendant fails to raise the objection or defense in a responsive pleading or pre-answer motion to dismiss.

The intent here is to allow the defendant in a foreclosure action related to a "home loan" as defined in the RPAPL, to raise the affirmative defense of standing at any time during the litigation. That grants the defense of lack of standing in these actions the same special treatment generally afforded to the affirmative defenses of subject matter jurisdiction, CPLR 3211(a)(2), failure to state a cause of action, CPLR 3211(a)(7), and the nonjoinder of a necessary party. CPLR 3211(a)(10). CPLR 3211(e) permits a motion to dismiss on these grounds at any time regardless of whether the defense is asserted in a CPLR 3211(a) motion or in the answer. See Siegel & Connors, New York Practice §§272, 274.

This new statute is a blockbuster of sorts, and even purports to permit a defaulting defendant in such action the opportunity to raise lack of standing after the judgment of foreclosure and sale! It is discussed in further detail in the July 2020 supplement to Siegel & Connors, New York Practice §223 (forthcoming).

Patrick M. Connors is the Albert and Angela Farone Distinguished Professor in New York Civil Practice at Albany Law School. He is the author of Siegel & Connors, New York Practice (Thomson, 6th ed. 2018), which is supplemented bi-annually in January and July.