Justice Herbert Kramer
The court questioned whether it was equitable to permit Cayo to file an answer two years after commencement of a foreclosure action. It answered in the affirmativem finding Cayo alleged valid affirmative defenses and an excusable default, thus equity permitted the filing of a late answer. Plaintiff bank previously withdrew an order of reference and requested a settlement conference. Cayo alleged he was under the impression that during negotiations, both informal and statutorily mandated, the action would be stayed. The court noted the possibility of a short sale did not come to fruition, raising the question of whether good faith was present as required under CPLR 3408. It held that the enactment of Real Property Actions and Proceedings Law §1320 was evidence of the legislature’s desire to aid homeowners, not as a means to deny a defendant the opportunity to litigate. The court also noted the answer alleged a possible defect in assignment, stating there was no evidence that a physical delivery of the note actually occurred. Further, it would be inequitable to permit plaintiff to simultaneously delay an actio nand rely upon same as evidence of prejudice. Thus, Cayo’s motion was granted.
