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35 » VISIT US ONLINE @ DSNEWS.COM A SECOND BITE AT THE BIG APPLE'S SETTLEMENT CONFERENCE By Roxanne L. Jones NY CPLR §3408(m), which took effect on December 20, 2016, not only changed the timing of when default on pleadings can occur but has also unexpectedly resulted in an extension of a defendant's time to amend an answer. NY CPLR §3408 governs settlement conferences in foreclosure cases. e new amendments to CPLR §3408 made several changes to conference requirements, but one of the most conspicuous changes was the addition of section (m), which provides that a defendant who fails to timely answer a foreclosure complaint, but appears at the first settlement conference, is presumed to have a reasonable excuse for his/her default and shall be permitted to file an answer, without any substantive defenses deemed to have been waived, within 30 days from the initial conference date. Provision (m) further provides that once the defendant serves and files an answer, his/her default shall be deemed vacated. Aside from the rule having a profound impact on New York's long-standing rules governing timeframes for responsive pleadings, See CPLR §3012, it has also unexpectedly resulted in defendants being given an additional 30 days to amend an answer if they already responded to the complaint prior to the conference. Since the addition of the new statutory section, courts have been strictly adhering to its mandate. Defendants who appear at the first settlement conference, who have not filed an answer, are advised of their rights—they are given a Bill of Rights—and are told to file an answer within 30 days, and have their default vacated. It would appear that this second bite at the apple, after a traditional default in answering pleadings, serves the purpose of educating consumers about the effects of default and encourages them to respond to legal actions. However, some courts have now taken the liberty of expanding the statute's terms even more and are permitting borrowers, who did file answers and are not in default, to file amended answers if they appear at the first settlement conference. CPLR §3408(m) makes no reference to nondefaulting parties and in fact, specifically limits its applicability to defendants who failed to timely answer. NY CPLR §3025 is the statute which governs the ability to file amended pleadings. Courts that allow nondefaulting parties to file amended answers, 30 days after the initial settlement conference, are now circumventing the requirements of this statute and allowing defendants to set forth additional defenses and claims not previously asserted. Whereas the justification for allowing defaults to be vacated can be viewed as necessary and fair, the reasoning behind permitting defendants to file amended answers, beyond the statutory timeframe, is not as easily understood. Was it the legislature's intent to extend the deadlines of NY CPLR §3025 when NY CPLR §3408(m) was enacted? It was hard to decipher the legislative intent of the amendments to §3408 because the information regarding legislative discussions is sparse. It was remarkable to learn that the discussions regarding the amendments were introduced to the floor and signed within three days. CPLR §3408(m) is still relatively new and there is not yet a body of case law sufficient to analyze the impact this amendment has had, but authorizing amended answers, beyond the current statutory framework in place, will hopefully be addressed in the months to come. Roxanne L. Jones, is a Partner and the Managing Attorney of the New York Mortgage Default - Settlement Conference Group at Frenkel, Lambert, Weiss, Weisman & Gordon, LLP. At the firm, Jones supervises the handling of the court-mandated residential settlement conferences pursuant to CPLR Sec. 3408. Sponsored Content "Whereas the justification for allowing defaults to be vacated can be viewed as necessary and fair, the reasoning behind permitting defendants to file amended answers, beyond the statutory timeframe, is not as easily understood."

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