On August 17, 2022, Justice Knipel of the Kings County Commercial Division issued a decision in Dean Capital Partners LLC v. 556 Dean Holdings LLC, 2022 NY Slip Op. 32809(U), denying a motion to intervene as untimely, explaining:
CPLR 1012(a)(3) provides that a patty may intervene as of right when the action involves the disposition or distribution of, or the title or a claim for damages for injury to, property and the person may be affected adversely.’ CPLR 1013 provides that a court has discretion to permit a person to intervene when the person’s claim or defense and the main action have a common question of law or fact and, in exercising its discretion the court shall consider whether the intervention will unduly delay the determination of the action or prejudice the substantial rights of any party.
The Second Department has held that a property owner’s motion for leave to intervene in an action to foreclose the property must be made upon a timely motion. The Second Department has held that a motion for leave to intervene in a foreclosure action more than a year after the proposed intervenor took title to the property is untimely. The Second Department has also held that a motion for leave to intervene in a foreclosure action is untimely where it was made approximately eight months after the appellant acquired notice that the foreclosure action was pending.
Here, the proposed intervenors have failed to demonstrate that they would be adversely affected by the outcome of this commercial foreclosure of the Property, since they are minority members of Dean Capital, the foreclosing plaintiff, and they already asserted an action and a special proceeding against Shimura regarding their minority investment in Dean Capital, which are currently pending in New York County Supreme Court. In any event, the proposed intervenors, who admittedly invested in Dean Capital on June 7, 2018, when they executed Dean Capital’s Operating Agreement, inexplicably waited until February 8, 2022 (about three years and eight months) before moving for leave to intervene in this commercial foreclosure action. Third-party defendant Shimura demonstrated, through uncontroverted testimonial and documentary evidence, that he advised the proposed intervenors about the subject mortgage and the potential of foreclosure litigation more than five years ago in 2017. Consequently, the proposed intervenors’ motion for leave to intervene in this foreclosure action is denied because the proposed intervenors failed to demonstrate a basis for intervention, ether by right or permission, and their February 2022 motion is untimely.
(Internal quotations and citations omitted).