Defendant-respondent bank obtained a default judgment against plaintiffs in a Queens County Supreme Court foreclosure action. That court thereafter denied two motions by plaintiffs to vacate the default judgment and for leave to file an answer to the complaint, in which motions plaintiffs blamed their defaults on the ineffectiveness of prior counsel and argued that the bank had been negligent in releasing proceeds of their construction loan to the contractor, without having in place controls ensuring that the contractor, who is not amenable to suit, had performed the work. Plaintiffs abandoned their appeal from the first Queens County order and commenced the instant action asserting, as against the bank, claims of fraud and malfeasance in the administration of their mortgage loan. The IAS Court correctly dismissed on res judicata grounds. New York's permissive counterclaim rule does not allow a party "to remain silent in an action in which he is the defendant and then bring a second action seeking relief inconsistent with the judgment in the first action by asserting what is simply a new legal theory" (Modell Co. v. Minister of Refm. Prot. Dutch Church, 68 N.Y.2d 456, 461; cf., Classic Autos. v. Oxford Resources Corp., 204 A.D.2d 209). Thus plaintiffs' present claim is barred by res judicata because it could have been raised as a defense in the first action, and would, if recognized, "destroy or impair the `rights * * * established by the first [action]'" (supra, at 461; see, Robbins v. Growney, 229 A.D.2d 356). We have considered plaintiffs' other contentions and find them to be without merit.

Concur — Ellerin, J. P., Nardelli, Rubin and Mazzarelli, JJ.