Foreclosure Archives - New York Appellate Digest

LAW OFFICE FAILURE WARRANTED VACATING THE DISMISSAL OF THE FORECLOSURE ACTION STEMMING FROM PLAINTIFF BANK’S FAILURE TO APPEAR AT A SCHEDULED CONFERENCE (THIRD DEPT).

The Third Department determined Supreme Court properly exercised its discretion and vacated the dismissal of this foreclosure action for plaintiff bank’s failure to appear at a scheduled conference (22 NYCRR 202.27):

“22 NYCRR 202.27 gives a court the discretion to dismiss an action where [a] plaintiff fails to appear at any scheduled call of a calendar or at any conference” … . “To vacate a dismissal under 22 NYCRR 202.27, it [is] incumbent upon [a] plaintiff to provide a reasonable excuse for his [or her] failure to appear and to demonstrate a potentially meritorious cause of action” … . “A motion to vacate a prior judgment or order is addressed to the court’s sound discretion, subject to reversal only where there has been a clear abuse of that discretion” … .

Here, plaintiff’s counsel explained that, due to a scheduling error, the assigned attorney actually appeared in court on the conference date but missed the calendar call. Law office failure may constitute a reasonable excuse for an appearance default … Given the isolated nature of this nonappearance, we find that Supreme Court acted within its discretion in reconsidering and vacating the default dismissal … . Notably, plaintiff supported its vacatur motion with a duly executed affidavit of merit from its representative. We further recognize that plaintiff has a meritorious cause of action, as we affirmed the award of summary judgment in plaintiff’s favor … . Under the circumstances presented, we conclude that the court acted within its discretion in granting the motion to vacate. Onewest Bank, F.S.B. v Mazzone, 2020 NY Slip Op 05011, Third Dept 9-17-20

September 17, 2020/0 Comments/by Bruce Freeman

Bankruptcy, Foreclosure, Real Property Actions and Proceedings Law (RPAPL)

THE FACT THAT THE DEFENDANT IN THIS FORECLOSURE ACTION FILED FOR BANKRUPTCY DID NOT RELIEVE THE PLAINTIFF OF THE OBLIGATION TO COMPLY WITH THE NOTICE REQUIREMENTS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1304; PLAINTIFF’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the fact that defendant had filed for bankruptcy did not relieve the plaintiff in this foreclosure action from the obligation to comply with the notice requirements of Real Property Actions and Proceedings Law (RPAPL) 1304:

… [T]he plaintiff submitted, among other things, the affidavit of Kyle Lukas, a Senior Loan Analyst for … the purported parent company of the plaintiff’s loan servicer. Lukas averred that a 90-day notice was not required to be sent to the defendant pursuant to RPAPL 1304(3) due to the defendant’s bankruptcy filing … . In addition, while the plaintiff submitted, inter alia, copies of the note and mortgage, the pleadings, and the notice of default, it did not submit any documentation evidencing service of the 90-day notice required by RPAPL 1304. Contrary to the plaintiff’s contention, the fact that the defendant previously filed for bankruptcy protection did not relieve the plaintiff of its obligation to send the RPAPL 1304 notice to her prior to commencing the action … . Accordingly, since the plaintiff did not demonstrate its strict compliance with the statute, the Supreme Court should have denied those branches of the plaintiff’s motion which were for summary judgment on the complaint insofar as asserted against the defendant, to strike her answer, and for an order of reference, regardless of the sufficiency of the opposing papers … . Mastr Adjustable Rate Mtges. Trust 2007-1 v Joseph, 2020 NY Slip Op 04935, Second Dept 9-16-20

September 16, 2020/0 Comments/by Bruce Freeman

Civil Procedure, Foreclosure, Judges

ALTHOUGH THE MOTION TO VACATE THE JUDGMENT OF FORECLOSURE FOR LACK OF PERSONAL JURISDICTION WAS PROPERLY GRANTED FOR THE MOVING DEFENDANT, THE JUDGE SHOULD NOT HAVE, SUA SPONTE, GRANTED THE SAME RELIEF TO DEFENDANTS WHO DID NOT SO MOVE (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, noted that the judge should not have, sua sponte, vacated the judgment of foreclosure as against those defendants who did not move for that relief:

“A court’s power to dismiss a complaint, sua sponte, is to be used sparingly and only when extraordinary circumstances exist to warrant dismissal” … . “[T]he defense of lack of jurisdiction based on improper service is personal in nature and may only be raised by the party improperly served'” … . Here, Hickson was the only defendant who moved to vacate the judgment of foreclosure and sale and to dismiss the complaint for lack of personal jurisdiction. Accordingly, under the circumstances of this case, the Supreme Court had no basis to, sua sponte, vacate so much of the judgment of foreclosure and sale as was against the defendants other than Hickson and to direct the dismissal of the complaint insofar as asserted against those defendants for lack personal jurisdiction. Lehman Bros. Bank v Hickson, 2020 NY Slip Op 04932, Second Dept 9-16-20

September 16, 2020/0 Comments/by Bruce Freeman

Civil Procedure, Evidence, Foreclosure

THE STIPULATION OF DISCONTINUANCE DID NOT DEMONSTRATE THE MORTGAGE DEBT WAS DE-ACCELERATED WITHIN THE SIX-YEAR STATUTE OF LIMITATIONS PERIOD IN THIS FORECLOSURE ACTION; THE BANK’S MOTION FOR SUMMARY JUDGMENT WAS PROPERLY DENIED (SECOND DEPT).

The Second Department determined plaintiff bank did not prove the debt had been acceleration and therefore did not demonstrate the foreclosure action was time-barred. It was not demonstrated that the stipulation of discontinuance affirmatively revoked the initial acceleration of the debt:

“A lender may revoke its election to accelerate the mortgage, but it must do so by an affirmative act of revocation occurring during the six-year statute of limitations period subsequent to the initiation of the prior foreclosure action” … .

Here, there is no evidence in the record of any affirmative act of revocation occurring during the six-year statute of limitations period following the initiation of the 2008 foreclosure action … . The only evidence submitted by the plaintiff to establish its affirmative act of revocation was a printout of the Queens County Clerk Minutes, showing that a stipulation of discontinuance and a consent to cancel the lis pendens were filed in the 2008 foreclosure action on July 1, 2013. The plaintiff did not submit a copy of the stipulation of discontinuance. A stipulation of discontinuance will not, by itself, constitute an affirmative act of revocation where the stipulation is silent on the issue of the election to accelerate, and does not otherwise indicate that the plaintiff would accept installment payments from the defendant … . Wells Fargo Bank, N.A. v Hussain, 2020 NY Slip Op 04997, Second Dept 9-16-20

September 16, 2020/0 Comments/by Bruce Freeman

Evidence, Foreclosure, Real Property Actions and Proceedings Law (RPAPL)

PLAINTIFF BANK DID NOT LAY A SUFFICIENT FOUNDATION FOR BUSINESS RECORDS SUBMITTED TO PROVE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s motion for summary judgment in this foreclosure action should not have been granted because the evidence of compliance with the notice requirements of Real Property Actions and Proceedings Law (RPAPL) 1304 was insufficient:

The plaintiff in this mortgage foreclosure action, on its motion, inter alia, for summary judgment on the complaint … failed to demonstrate, prima facie, its compliance with RPAPL 1304 because it failed to lay a proper foundation for the business records submitted as proof that the RPAPL 1304 notice was sent by first-class mail (see RPAPL 1304[2]; CPLR 4518[a]). In particular, the representative of the plaintiff who attempted to lay such a foundation failed to attest either that the records, which were created by a different entity, were incorporated into the plaintiff’s records and routinely relied upon by the plaintiff in its business, or that she had personal knowledge of that entity’s business practices and procedures … . Wells Fargo Bank, N.A. v Hirsch, 2020 NY Slip Op 04996, Second Dept 9-16-20

September 16, 2020/0 Comments/by Bruce Freeman

Evidence, Foreclosure, Real Property Actions and Proceedings Law (RPAPL)

THE DEFENDANT BANK’S MOTION FOR SUMMARY JUDGMENT IN PLAINTIFF’S ACTION TO CANCEL AND DISCHARGE A MORTGAGE SHOULD HAVE BEEN GRANTED; THE BANK PROVED THE DE-ACCELERATION NOTICE WAS PROPERLY TRANSMITTED TO PLAINTIFF, RENDERING THE UNDERLYING FORECLOSURE ACTION TIMELY (SECOND DEPT).

The Second Department, reversing Supreme Court in plaintiff’s action to discharge and cancel a mortgage pursuant to RPAPL 1501 (4), determined defendant bank demonstrated that the de-acceleration notice were properly transmitted to plaintiff, rendering the defendant bank’s underlying foreclosure action timely:

Wells Fargo’s vice president of loan documentation averred that she was familiar with the mailing practices for such notices; that Wells Fargo followed its practices in this instance; that it was Wells Fargo’s practice to generate and mail such notices to borrowers on the date indicated on the notice; that Wells Fargo’s practice also included keeping a copy of any notice in the corresponding mortgage loan file as a record that the notice was mailed; that the de-acceleration notice was sent on March 11, 2015, by both certified mail and regular mail to the property address and the plaintiff’s address; and that a copy of the de-acceleration notice for each of the two addresses was in the plaintiff’s loan file in accordance with Wells Fargo’s mailing procedures. Contemporaneous business records were attached to the affidavit, showing that a de-acceleration letter was “mailed to property address on 31115.” Through the submission of that evidence, Wells Fargo established that de-acceleration letters were, in fact, sent by regular mail in compliance with the expressed terms of the mortgage … . The mailing procedures described in this case appear identical to those that this Court recognized as satisfactory in Pennymac Holdings, LLC v Lane (171 AD3d 774, 775). Indeed, it is difficult to identify what additional evidence could be expected or required for Wells Fargo to demonstrate that it had transmitted the de-acceleration notice to the proper addresses by regular mail on the date indicated. The de-acceleration notice dated March 11, 2015, was mailed within six years from the debt acceleration occurring upon the commencement of the first action on March 24, 2009. Wells Fargo, in moving for summary judgment, therefore met its prima facie burden of establishing its entitlement to judgment as a matter of law dismissing the complaint … . Assyag v Wells Fargo Bank, N.A., 2020 NY Slip Op 04908, Second Dept 9-16-20

September 16, 2020/0 Comments/by Bruce Freeman

Civil Procedure, Foreclosure, Vehicle and Traffic Law

DEFENDANT PRESENTED SUFFICIENT PROOF SHE DID NOT LIVE AT THE ADDRESS WHERE THE FORECLOSURE COMPLAINT WAS SERVED TO WARRANT A HEARING; THERE WAS NO SHOWING THAT HER FAILURE TO UPDATE HER ADDRESS WITH THE DEPARTMENT OF MOTOR VEHICLES WAS TO PREVENT SERVICE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff’s motion to enter a default judgment in this foreclosure action should not have been granted without first holding a hearing on defendant’s claim she was never served with the complaint. The defendant presented proof, including a lease, demonstrating she did not live at the address where service was made. The fact that defendant had not updated her address with the Department of Motor Vehicles did preclude defendant from demonstrating she lived at a different address because there was no evidence of a deliberate misrepresentation to prevent service:

… [T]he defendant successfully rebutted the process servers’ affidavits through her specific averments that, at the time of each purported service, neither the New York Avenue address, nor the subject premises, was her residence, actual dwelling place, or usual place of abode … . Rather, the defendant averred that at the time of each purported service, she resided at an address on Albany Avenue in Brooklyn. The defendant annexed to her affidavit her lease for the Albany Avenue premises covering the period from January 25, 2014, through January 31, 2015, money orders made payable to the Albany Avenue landlord within the lease period, the defendant’s 2015 W-2 bearing the Albany Avenue address, utility bills during the lease period bearing the Albany Avenue address, and bank statements during the lease period bearing the Albany Avenue address. These records, in conjunction with the defendant’s sworn statements, are evidence that the defendant did not reside at the locations where process was served, and were sufficient to warrant a hearing … . Nationstar Mtge., LLC v Esdelle, 2020 NY Slip Op 04956, Second Dept 9-16-20

September 16, 2020/0 Comments/by Bruce Freeman

Civil Procedure, Foreclosure

A 2009 AMENDED COMPLAINT SERVED WITHOUT THE REQUIRED LEAVE OF COURT, ALTHOUGH INVALID AS A PLEADING, RE-ACCELERATED THE MORTGAGE DEBT IN THIS FORECLOSURE ACTION, RENDERING THE ACTION TIME-BARRED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the mortgage debt had been re-accelerated by an amended complaint in 2009, rendering the instant foreclosure action time-barred:

… [T]he defendants also submitted the supplemental summons and amended complaint filed on July 13, 2009, in the 2005 action. In the amended complaint, PCG elected to re-accelerate the debt, which started the running of a new six-year period.

The supplemental summons and amended complaint were filed without the required leave of court (see CPLR 3025[b]). However, PCG’s counsel, in an affirmation dated October 9, 2013, submitted with a stipulation to discontinue the 2005 action and a stipulation cancelling the notice of pendency, agreed that the amended complaint, “while arguably insufficient as a pleading, provided that the loan was again accelerated,” and stated that “[t]hus, the loan remains accelerated from July 22, 2009, the date the amended complaint was served up and delivered to [the defendants], as per the corresponding affidavits of service.”

By the submission of these documents, the defendants established that the time in which to sue expired on July 22, 2015, six years after the service of the supplemental summons and amended complaint (see CPLR 213[4]), PCG’s counsel having conceded that the loan was accelerated as of that time. Goshen Mtge., LLC v DePalma, 2020 NY Slip Op 04830, Second Dept 9-2-20

September 2, 2020/0 Comments/by Bruce Freeman

Foreclosure, Real Property Actions and Proceedings Law (RPAPL)

THE NOTICE REQUIREMENTS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1304 WERE NOT PROVEN; THE BANK’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff bank did not demonstrate compliance with the notice requirements of Real Property Actions and Proceedings Law (RPAPL) 1304 in this foreclosure action:

… [T]he plaintiff submitted, inter alia, the affidavit of Sherry W. McManus, a Vice President of Loan Documentation for the plaintiff. Although McManus stated in her affidavit that the RPAPL 1304 notice was mailed by regular and certified mail, and attached copies of the notice, the plaintiff failed to attach, as exhibits to the motion, any documents establishing that the notice was actually mailed … . Specifically, the plaintiff failed to submit a copy of any United States Post Office document indicating that the notice was sent by registered or certified mail as required by the statute … . Further, although McManus attested that she had personal knowledge of the plaintiff’s mailing practices, the substance of her affidavit was contradicted by the documents attached to it that purportedly evidenced the plaintiff’s compliance with RPAPL 1304, and her averments were contradicted by those made in another affidavit submitted by the plaintiff in support of its motion … . Since the plaintiff failed to provide evidence of the actual mailing, or reliable evidence of a standard office mailing procedure designed to ensure that the items were properly addressed and mailed, sworn to by someone with personal knowledge of the procedure, the plaintiff failed to establish its strict compliance with RPAPL 1304 … . Wells Fargo Bank, N.A. v Bedell, 2020 NY Slip Op 04891, Second Dept 9-2-2020

September 2, 2020/0 Comments/by Bruce Freeman

Evidence, Foreclosure, Real Property Actions and Proceedings Law (RPAPL)

THE PROPER FOUNDATION FOR BUSINESS RECORDS WAS NOT LAID AND COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 WAS NOT DEMONSTRATED, THE BANK’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s motion for summary judgment in this foreclosure action should not have been granted:

Harrell [bank vice president] failed to establish that Wells Fargo was servicing the subject loan at the time of Bhatti’s [defendant’s] alleged default, and that she was personally familiar with the recordkeeping practices and procedures of the plaintiff and/or the loan servicer at that time. Therefore, the plaintiff failed to establish a proper foundation for the admission of the records relied upon to establish Bhatti’s default under the business records exception to the hearsay rule (see CPLR 4518[a] …). …

“By requiring the lender or mortgage loan servicer to send the RPAPL 1304 notice by registered or certified mail and also by first-class mail, the Legislature implicitly provided the means for the plaintiff to demonstrate its compliance with the statute, i.e., by proof of the requisite mailing, which can be established with proof of the actual mailings, such as affidavits of mailing or domestic return receipts with attendant signatures, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure” … .

Here, the … affidavits were insufficient to establish that the plaintiff mailed the 90-day pre-foreclosure notice required by RPAPL 1304, “as the representative[s] did not provide evidence of a standard office mailing procedure and provided no independent evidence of the actual mailing” … .

Moreover, the Harrell and Green affidavits were also insufficient to establish that a notice of default was in fact mailed to Bhatti by first-class mail, or actually delivered to the designated address if sent by other means, which was required by the terms of the mortgage … . HSBC Bank USA, Natl. Assn. v Bhatti, 2020 NY Slip Op 04734, Second Dept 8-26-20

August 26, 2020/0 Comments/by Bruce Freeman

LAW OFFICE FAILURE WARRANTED VACATING THE DISMISSAL OF THE FORECLOSURE ACTION STEMMING FROM PLAINTIFF BANK’S FAILURE TO APPEAR AT A SCHEDULED CONFERENCE (THIRD DEPT).

ALTHOUGH THE MOTION TO VACATE THE JUDGMENT OF FORECLOSURE FOR LACK OF PERSONAL JURISDICTION WAS PROPERLY GRANTED FOR THE MOVING DEFENDANT, THE JUDGE SHOULD NOT HAVE, SUA SPONTE, GRANTED THE SAME RELIEF TO DEFENDANTS WHO DID NOT SO MOVE (SECOND DEPT).

THE STIPULATION OF DISCONTINUANCE DID NOT DEMONSTRATE THE MORTGAGE DEBT WAS DE-ACCELERATED WITHIN THE SIX-YEAR STATUTE OF LIMITATIONS PERIOD IN THIS FORECLOSURE ACTION; THE BANK’S MOTION FOR SUMMARY JUDGMENT WAS PROPERLY DENIED (SECOND DEPT).

PLAINTIFF BANK DID NOT LAY A SUFFICIENT FOUNDATION FOR BUSINESS RECORDS SUBMITTED TO PROVE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 (SECOND DEPT).

THE DEFENDANT BANK’S MOTION FOR SUMMARY JUDGMENT IN PLAINTIFF’S ACTION TO CANCEL AND DISCHARGE A MORTGAGE SHOULD HAVE BEEN GRANTED; THE BANK PROVED THE DE-ACCELERATION NOTICE WAS PROPERLY TRANSMITTED TO PLAINTIFF, RENDERING THE UNDERLYING FORECLOSURE ACTION TIMELY (SECOND DEPT).

DEFENDANT PRESENTED SUFFICIENT PROOF SHE DID NOT LIVE AT THE ADDRESS WHERE THE FORECLOSURE COMPLAINT WAS SERVED TO WARRANT A HEARING; THERE WAS NO SHOWING THAT HER FAILURE TO UPDATE HER ADDRESS WITH THE DEPARTMENT OF MOTOR VEHICLES WAS TO PREVENT SERVICE (SECOND DEPT).

A 2009 AMENDED COMPLAINT SERVED WITHOUT THE REQUIRED LEAVE OF COURT, ALTHOUGH INVALID AS A PLEADING, RE-ACCELERATED THE MORTGAGE DEBT IN THIS FORECLOSURE ACTION, RENDERING THE ACTION TIME-BARRED (SECOND DEPT).

THE NOTICE REQUIREMENTS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1304 WERE NOT PROVEN; THE BANK’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

THE PROPER FOUNDATION FOR BUSINESS RECORDS WAS NOT LAID AND COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 WAS NOT DEMONSTRATED, THE BANK’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

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