You are here: / Foreclosure
,

THE COURT NEVER ENTERED AN ORDER RE: DEFENDANT’S MOTION TO DISMISS; THEREFORE THE TIME FOR DEFENDANT TO INTERPOSE AN ANSWER IN THIS FORECLOSURE ACTION NEVER STARTED TO RUN (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the time for interposing an answer in this foreclosure action never started to run because the court never entered an order deciding defendant’s motion to dismiss:

The Supreme Court, however, erred in granting those branches of the plaintiff’s motion which were for leave to enter a default judgment against the defendant and for an order of reference. In the order … , the court held that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(3) in abeyance pending the framed-issue hearing, and the defendant therefore had until 10 days after service of notice of entry of the order deciding that branch of the motion to file an answer … . Since the court failed to issue an order deciding that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(3) prior to granting those branches of the plaintiff’s motion which were for leave to enter a default judgment against the defendant and for an order of reference, the defendant’s time to file an answer had not yet begun to run and the defendant therefore was not in default … .

Contrary to the plaintiff’s contention, the referee’s report cannot be considered a determination that, in effect, denied that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(3) to dismiss the complaint … , as there is no evidence in the record that the parties consented to the reference, and the referee therefore lacked the authority to determine the issue of standing conclusively … . HSBC Bank USA, N.A.. v Sewell, 2021 NY Slip Op 05850, Second Dept 10-27-21

 

, , ,

PURSUANT TO CPLR 3408 (B), WHEN DEFENDANTS IN THIS FORECLOSURE ACTION APPEARED WITHOUT COUNSEL AT THE SETTLEMENT CONFERENCE, SUPREME COURT SHOULD HAVE DETERMINED WHETHER THEY WERE ENTITLED TO ASSIGNED COUNSEL, MATTER REMITTED (THIRD DEPT).

The Third Department, remitting the matter for a finding whether defendants in this foreclosure action are eligible for assigned counsel, determined the judge did not comply with CPLR 3408 (b) at the settlement conference:

[CPLR 3408 (b)] provides that, at the initial foreclosure settlement conference, “any defendant currently appearing pro se[] shall be deemed to have made a motion to proceed as a poor person under [CPLR 1101]. The court shall determine whether such permission shall be granted pursuant to standards set forth in [CPLR 1101]” (CPLR 3408 [b]). Because defendants appeared at the June 2016 settlement conference without representation, each was “deemed to have made a motion to proceed as a poor person” and Supreme Court was required to determine such motion (CPLR 3408 [b]). Although Supreme Court erred in failing to adhere to its obligations under CPLR 3408 (b), the question remains whether defendants would have been eligible for the assignment of counsel based upon their financial circumstances. The record does not contain adequate information to render such a determination (see CPLR 1101 [a]). The eligibility for assigned counsel is a threshold issue that must be resolved before we can determine the merits of this appeal. As such, we withhold decision and remit the matter to Supreme Court to render a determination as to defendants’ eligibility for assigned counsel as of the June 2016 settlement conference … . Carrington Mtge. Servs., LLC v Fiore, 2021 NY Slip Op 05743, Third Dept 10-21-21

 

,

THE BANK’S FAILURE TO ATTACH THE BUSINESS RECORDS REFERRED TO IN THE FOUNDATIONAL AFFIDAVIT PRECLUDED SUMMARY JUDGMENT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank’s motion for summary judgment in this foreclosure action should not have been granted. The affidavit of the loan servicer’s vice president (Lee) was deficient in content and did not identify or attach the records referenced:

Lee failed to aver to familiarity with the record-keeping practices and procedures of the entity that generated the records or establish that the records provided by the maker were incorporated into the recipient’s own records and routinely relied upon by the recipient in its own business … .

… [E]ven if Lee’s affidavit set forth a proper foundation for the admissibility of the unspecified records he relied on … , Lee “failed to identify the records upon which [ ]he relied in making the statements, and the plaintiff failed to submit copies of the records themselves” … . It is the business record itself, not the foundational affidavit, that serves as proof of the matter asserted … . Deutsche Bank Trust Co. Ams. v Miller, 2021 NY Slip Op 05690, Second Dept 10-20-21

Similar issues and result in Freedom Mtge. Corp. v Engel, 2021 NY Slip Op 05694, Second Dept 10-20-21

 

, ,

IN A FORECLOSURE ACTION, ANY DEFICIENCIES IN PLAINTIFF’S COUNSEL’S CERTIFICATE OF MERIT (CPLR 3012-B) CAN NOT BE THE BASIS FOR DEFENDANT’S MOTION TO DISMISS ALLEGING PLAINTIFF’S LACK OF STANDING (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Dillon, over a partial dissent, determined deficiencies in the certificate of merit filed by plaintiff’s counsel in this foreclosure action (pursuant to CPLR 3012-b) cannot be the basis for defendants’ motion to dismiss alleging plaintiff’s lack of standing:

This appeal implicates the extent to which there is interplay between a CPLR 3211(a) motion to dismiss in the context of a residential mortgage foreclosure action, the attorney certification requirements of CPLR 3012-b, and the moving party’s burden of proof. For reasons analyzed below, we hold that a defendant moving to dismiss a complaint on the ground of the plaintiff’s lack of standing does not meet the affirmative burden of proof by merely relying upon any defects that might exist with the certificate of merit submitted by the plaintiff’s attorney under CPLR 3012-b, or otherwise, if the certificate of merit fails to address all potential aspects of standing. * * *

… [I]n a mortgage foreclosure action, a motion to dismiss pursuant to CPLR 3211(a) on the ground of the plaintiff’s lack of standing is not necessarily determined based on the adequacy or inadequacy of the certificate of merit filed by the plaintiff’s counsel pursuant to CPLR 3012-b. … The complaint serves the legal purpose of giving notice to defendants of the transactions, occurrences, or series of transactions or occurrences intended to be proved, and the material elements of each cause of action … . The certificate of merit serves the ministerial and ethical purpose of requiring counsel to take good faith steps to assure that the action has merit, and to certify to the best of counsel’s knowledge, information, and belief that a reasonable basis exists for commencing the action and that the plaintiff has standing to recover on the note underlying the action.

Counsel’s reasonable beliefs contained in a certificate of merit are irrelevant to whether defendants, in moving to dismiss a complaint under CPLR 3211(a), establish their own defined burden of proof for the dispositive relief of dismissal. Wilmington Sav. Fund Socy., FSB v Matamoro, 2021 NY Slip Op 05741, Second Dept 10-20-21

 

,

PLAINTIFF RELIED ON BUSINESS RECORDS WHICH WERE NOT PRODUCED TO DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION; PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff’s proof of standing was insufficient because it was based on business records which were not produced:

[The] assertion that the plaintiff’s predecessor in interest was the holder of the note when it commenced this action is based upon unproduced business records, and is therefore not probative on the issue of the plaintiff’s standing … .Thus, the plaintiff failed to establish, prima facie, that it had standing to commence this action. SK Indus., LLC v Jackson, 2021 NY Slip Op 05601, Second Dept 10-13-21

 

, ,

PLAINTIFF DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the plaintiff in this foreclosure action did not demonstrate standing to bring the action. Therefore the lack-of-standing affirmative defense should not have been struck:

… [A] plaintiff may demonstrate its standing in a foreclosure action through evidence that it was in possession of the subject note endorsed in blank, or the subject note and a firmly affixed allonge endorsed in blank, at the time of the commencement of the action (see UCC 3-202[2] …).

… The plaintiff attempted to demonstrate that it was the holder of the underlying note by attaching to the complaint a copy of the note with an allonge. The purported allonge contains an endorsement in blank, has no pagination, is undated, and contains no writing in any way to demonstrate its connection to the note or that it was firmly affixed thereto. An affirmation of the plaintiff’s counsel and an affidavit of a representative of the plaintiff’s loan servicer, submitted in support of the plaintiff’s motion, also failed to indicate that the purported allonge is connected to the note or that it was firmly affixed thereto. Therefore, the plaintiff failed to establish that the purported allonge was so firmly attached to the note as to become a part thereof, and thus failed to establish, prima facie, its standing to commence this foreclosure action … . Federal Natl. Mtge. Assn. v Hollien, 2021 NY Slip Op 05321, Second Dept 10-7-21

 

, ,

THE PLAINTIFF DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE PROVISION OF THE MORTGAGE IN THIS FORECLOSURE ACTION; PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined plaintiff’s motion for summary judgment in this foreclosure action should not have been granted. Plaintiff did not demonstrate compliance with the notice requirements in the mortgage:

… Supreme Court improperly determined that the plaintiff established, prima facie, that it complied with the notice requirement of paragraph 22 of the mortgage. Statements in Johnson’s [plaintiff’s vice president’s] affidavit, “‘which asserted that the notice of default was sent in accordance with the terms of the mortgage, [were] unsubstantiated and conclusory and . . . , even when considered together with the copy of the notice of default, failed to show that the required notice was in fact mailed by first class mail or actually delivered to the designated address if sent by other means, as required by the subject mortgage'” … . Johnson did not purport to have personal knowledge of the mailing of the default notice or any familiarity with the plaintiff’s mailing practices … . Ditech Fin., LLC v Naidu, 2021 NY Slip Op 05320, Second Dept 10-7-21

 

, ,

THERE WAS A QUESTION OF FACT WHETHER THE PLAINTIFF’S FAILURE TO INCLUDE DEFENDANT IN THE ORIGINAL FORECLOSURE PROCEEDING WAS THE RESULT OF “WILFUL NEGLECT;” THEREFORE, PURSUANT TO RPAPL 1523, DEFENDANT’S “WILFUL-NEGLECT” AFFIRMATIVE DEFENSE IN THIS REFORECLOSURE ACTION SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s affirmative defense to the reforeclosure should not have been dismissed. Plaintiff had not named defendant in its original foreclosure action, apparently because a quitclaim deed adding defendant to the title was not discovered in the title search. Defendant demonstrated there had been a prior foreclosure action in which defendant had been named as a party. Therefore, there was a question of fact whether the failure to name defendant in the original foreclosure action was the result of “wilful neglect:”

To prevail in a reforeclosure action, the plaintiff must demonstrate that the defect in the original foreclosure action “was not due to fraud or wilful neglect of the plaintiff and that the defendant or the person under whom he claims was not actually prejudiced thereby” (RPAPL 1523[2] [emphasis added]).

Pursuant to the language of RPAPL 1523 … the plaintiff had the burden of demonstrating … both that the defect in the underlying foreclosure action was not the result of fraud or the wilful neglect of the foreclosure plaintiff, and that the defect did not prejudice the defendant (see RPAPL 1523[1], [2]). * * *

Contrary to the plaintiff’s contention, the evidence of the prior foreclosure action in which the defendant was named as a party raised a triable issue of fact as to whether the plaintiff’s failure to name her as a defendant in the underlying foreclosure action was the result of “wilful neglect” (RPAPL 1523[2] …). U.S. Bank N.A. v Lomuto, 2021 NY Slip Op 05363, Second Dept 10-6-21

 

,

SENDING THE 90-DAY FORECLOSURE NOTICE TO TWO BORROWERS IN THE SAME ENVELOPE DOES NOT COMPLY WITH THE REQUIREMENTS OF RPAPL 1304, WHICH IS A CONDITION PRECEDENT TO A FORECLOSURE ACTION; BECAUSE THE NOTICE WAS NOT SENT TO EACH BORROWER IN A SEPARATE ENVELOPE THE FORECLOSURE ACTION WAS PROPERLY DISMISSED (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Wooten, over a strong dissent, determined RPAPL 1304 requires that the 90-day notice of foreclosure proceedings be sent to each borrower in separate envelopes. Here a single envelope with the RPAPL 1304 notice addressed to both borrowers did not comply with the statute and the foreclosure action was properly dismissed by Supreme Court:

… [W]hile 30-day notices of default were separately mailed to each of the defendants, the 90-day notice, which was sent via certified and first-class mail, was jointly addressed to the defendants. While the record reflects that “F. Yapkowitz” signed for and accepted delivery of the 90-day notice sent via certified mail, receipt of the notice is inconsequential. Even assuming, arguendo, that both of the defendants had signed for and accepted delivery of the 90-day notice, the plaintiff would not have demonstrated strict compliance with the requirements of RPAPL 1304 by mailing a notice jointly addressed to both of the borrowers in the same envelope. Since it is undisputed that the 90-day notice to each of the borrowers was sent in the same envelope, the plaintiff failed to establish its compliance with RPAPL 1304, a condition precedent to the commencement of the action. Wells Fargo Bank, N.A. v Yapkowitz, 2021 NY Slip Op 05139, Second Dept 9-29-21

 

,

THE REFEREE’S REPORT WAS BASED UPON INFORMATION IN BUSINESS RECORDS WHICH WERE NOT ATTACHED TO THE AFFIDAVIT IN WHICH THE RECORDS WERE DESCRIBED; THE INFORMATION IN THE AFFIDAVIT WAS THEREFORE INADMISSIBLE HEARSAY (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the referee in this foreclosure action relied on information in business records which were not provided along with the affidavit describing them:

The defendant argues … that the Supreme Court erred in confirming the referee’s report because the referee’s computation was premised upon unproduced business records. “The report of a referee should be confirmed whenever the findings are substantially supported by the record, and the referee has clearly defined the issues and resolved matters of credibility” … . Here, the affidavit executed by an employee of the plaintiff submitted for the purpose of establishing the amount due and owing under the subject mortgage loan constituted inadmissible hearsay and lacked probative value because the affiant did not produce any of the business records she purportedly relied upon in making her calculations … . Consequently, the referee’s findings with respect to the total amount due under the mortgage were not substantially supported by the record … . Wells Fargo Bank, NA v Clerge, 2021 NY Slip Op 05038, Second Dept 9-22-21

 

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy