Further Thoughts On Law Of The Case – An Aid To Lenders
A new case [Horn v. Nestor, 213 A.D.3d 435, 184 N.Y.S.3d 15 (1st Dept. 2023)] reminds that the doctrine of law of the case is often of meaningful service to foreclosing lenders.
As a general proposition, if an issue has previously been determined between the parties (and of course here we are thinking between lender and borrower), there may be preclusion as to its being argued anew. To the extent that foreclosure litigation can generate exceptional zeal, a party dedicated to a position – like a disgruntled borrower – may be impelled to pursue that argument repeatedly, thus making the issue about serially taking a certain posture particularly relevant in the foreclosure arena.
In this regard, the doctrine of law of the case provides that once an issue is judicially determined, it is not to be reconsidered by the courts in the course of the same litigation. It is also been said to apply to legal determinations necessarily resolved on the merits in a prior decision upon the same question in the same case. Accordingly, once an issue has been judicially determined, that should be the end of the matter for judges of coordinate jurisdiction.
The new mentioned case clarifies this point quite well. A borrower fighting the foreclosure made the argument that her mortgage was a home loan thereby entitling her to a mandatory settlement conference (pursuant to CPLR § 3408). The issue arose on a motion for summary judgment and the borrower was defeated; the court found that she had waived her right to raise any defense as to the character of the mortgage being a home loan. The details of how she waived were not recited in this case but is not that relevant. The point is that the borrower propounded the argument and it was found to be lacking in merit leading to an award of summary judgment.
Later, upon the motion for judgment of foreclosure and sale, the borrower opposed that motion, argued (baselessly) that the referee’s computation was wrong, raised anew the position that this was a home loan and she was entitled to that mandatory settlement conference. Lenders and their attorneys can readily attest to this variety of shenanigans on borrowers’ part raising favorite issues time and time again. This is where the doctrine of law of the case is employed. The earlier un-appealed order upon summary judgment which ruled that the borrower had waived the right to raise this defense of a “home loan” was found to be law of the case. That meant that it could not be mentioned yet again – it had already been disposed of.
The lender won, certainly as to this particular point, because the issue had been banished pursuant to this useful doctrine of law of the case.
Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2022), is a partner with Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. in Garden City, New York. He is also a member of the USFN, The American College of Real Estate Lawyers, The American College of Mortgage Attorneys, an adviser to the New York Times on foreclosure issues and writes a regular servicing column for the New York Law Journal. He is AV rated by Martindale-Hubbell, his biography appears in Who’s Who In American Law and he has been for years listed in Best Lawyers In America and New York Super Lawyers.