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PROOF OF POSSESSION OF THE NOTE WHEN THE ACTION WAS COMMENCED WAS HEARSAY; PLAINTIFF BANK DID NOT DEMONSTRATE STANDING TO FORECLOSE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank did not demonstrate standing to bring the foreclosure action. The assertions that the note was in plaintiff’s possession when the action was commenced were hearsay and were not supported by business records:

… [T]he plaintiff, to establish its standing to commence this mortgage foreclosure action, submitted an affirmation of Amber A. Jurek, a lawyer with Gross Polowy, LLC (hereinafter Gross Polowy), the plaintiff’s counsel. Jurek stated that she was familiar with Gross Polowy’s records and record-keeping practices. Jurek stated that on January 28, 2015, Gross Polowy received the plaintiff’s file, which included the original endorsed note. Gross Polowy commenced this action on the plaintiff’s behalf on February 26, 2015. According to Jurek, “[o]n that date, Gross Polowy, on behalf of Plaintiff, remained in physical possession of the collateral file, including the original endorsed Note dated March 20, 2012.” The plaintiff also submitted the note, which bore an undated endorsement to the plaintiff. However, Jurek did not set forth any facts based on her personal knowledge to support her statement that the note in the plaintiff’s file was the original endorsed note. Further, the plaintiff failed to attach the business records upon which Jurek relied in her affirmation, and since Jurek did not state that she personally witnessed Gross Polowy receive the plaintiff’s file, her statement is inadmissible hearsay … .

The plaintiff also submitted an affidavit of April H. Hatfield, vice president of loan documentation for the plaintiff. Hatfield stated that she was familiar with the plaintiff’s records and record-keeping practices. Although Hatfield attached the records upon which she relied, she did not state that the plaintiff had possession of the endorsed note at the time the action was commenced. Rather, she relied on Jurek’s affidavit for that fact. Accordingly, Hatfield’s affidavit was also insufficient to establish the plaintiff’s standing.

Finally, the plaintiff did not attach a copy of the note to the complaint when commencing this action. Therefore, the plaintiff failed to establish, prima facie, that it had standing to commence this action … . Wells Fargo Bank, N.A. v Bakth, 2020 NY Slip Op 01382, Second Dept 2-26-20

 

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NOTICE REQUIREMENTS OF RPAPL 1304 NOT PROVEN; PLAINTIFF BANK’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED IN THIS FORECLOSURE ACTION (SECOND DEPT)

The Second Department, reversing Supreme Court, determined the proof of compliance with the RPAPL 1304 notice requirements was deficient:

… [T]he plaintiff failed to submit an affidavit of service or any evidence of mailing by the post office demonstrating that it properly served the defendant pursuant to the terms of RPAPL 1304 … . Contrary to the plaintiff’s contention, the affidavit of a representative of its loan servicer was insufficient to establish that the notice was sent to the defendant in the manner required by RPAPL 1304, as the representative did not provide evidence “of a standard office mailing procedure designed to ensure that items are properly addressed and mailed” … , and provided no independent evidence of the actual mailing … . U.S. Bank N.A. v Herzberg, 2020 NY Slip Op 01201, Second Dept 2-19-20

 

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ALTHOUGH PLAINTIFF BANK DID NOT PROVE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304, THE DEFENDANT DID NOT PROVE PLAINTIFF DID NOT COMPLY WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 (SECOND DEPT).

The Second Department determined that, although plaintiff bank did not prove compliance with the notice requirements of RPAPL 1304, defendant did not prove plaintiff failed to comply with the notice requirements of RPAPL 1304:

“Even in the face of a plaintiff’s failure to establish, prima facie, that a notice was properly mailed on a motion for summary judgment on the complaint, . . . a defendant still has to meet its burden, on a cross motion for summary judgment dismissing the complaint, of establishing that the condition precedent was not fulfilled” … . …

… [W]hile RPAPL 1304 provides that “[t]he notices required by this section shall be sent . . . to the last known address of the borrower, and to the residence that is the subject of the mortgage” (RPAPL 1304[2]), the defendant did not allege, or provide any evidence, that the lender knew her address had changed. Wells Fargo Bank, N.A. v Tricario, 2020 NY Slip Op 01112, Second Dept 2-13-20

 

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MOTION TO EXTEND THE TIME TO SERVE DEFENDANT SHOULD HAVE BEEN GRANTED, DESPITE THE FACTS THAT THE FORECLOSURE ACTION HAD BEEN DISMISSED AND THE STATUTE OF LIMITATIONS HAD RUN (SECOND DEPT).

The Second Department, in an extensive opinion by Justice Leventhal, over a two-justice dissent, reversing Supreme Court, determined Supreme Court should have granted plaintiff’s motion to extend the time to serve defendant pursuant to CPLR 306-b, despite the facts that the action had been dismissed and the statute of limitations had run. The action had been dismissed after a hearing to determine whether defendant had been served in this foreclosure action. At the time of the hearing the process server had died and plaintiff could not, therefore, meet its burden of proof:

… [W]e agree with the plaintiff that an extension of time to serve the defendant with the summons and complaint was warranted in the interest of justice. The action was timely commenced in December 2009, based on the defendant’s alleged default that year in paying his indebtedness that was secured by the mortgage. The statute of limitations, however, had expired by the time the plaintiff moved pursuant to CPLR 306-b to extend the time for service … . The defendant had actual notice of the controversy. The Supreme Court, in its order dated December 17, 2013, wrote, among other things, that the defendant “is prepared to say anything and to conceal anything to stave off a foreclosure sale” and that “[i]t is clear that [the defendant] has been well-aware that a foreclosure action was pending. (The day before a previously-scheduled foreclosure sale, [the defendant] filed a Chapter 13 bankruptcy petition).” The plaintiff also demonstrated the existence of a potentially meritorious cause of action, and the lack of identifiable prejudice to the defendant attributable to the delay in service … . Moreover, as the interest of justice standard permits consideration of “any other relevant factor” … , we take into account that the process server’s death prior to the hearing on the issue of service hampered the plaintiff’s ability to meet its burden of proof at that hearing. State of New York Mtge. Agency v Braun, 2020 NY Slip Op 01107, Second Dept 2-13-20

 

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DEFENDANTS RAISED A QUESTION OF FACT ABOUT WHETHER THEY WERE SERVED WITH THE SUMMONS AND COMPLAINT AND PLAINTIFF FAILED TO PROVE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304; PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION 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. Defendants raised a question of fact whether they were served with the summons and complaint and plaintiff failed to prove compliance with the notice requirements of Real Property Actions and Proceedings Law (RPAPL) 1304:

… [T]he defendants submitted the affidavit of Vicki Erani, in which she expressly averred that she was never served. She also averred that, on Thursdays, which was the day of the week of the alleged service, she customarily was away from her residence, assisting her mother with errands. The defendants also submitted the affidavit of Vicki Erani’s mother confirming that Vicki Erani spent every Thursday with her. The defendants also submitted evidence that, in 2016, this particular process server’s application to renew his license as an individual process server had been denied by the New York City Department of Consumer Affairs on the basis that he had falsified affidavits of service. The defendants’ submissions rebutted the presumption of proper service established by the process server’s affidavit … . * * *

… [T]he plaintiff failed to establish, prima facie, that it complied with RPAPL 1304 because neither of the affidavits submitted by the plaintiff of two of its vice presidents asserted personal knowledge of the purported mailing and neither vice president made the requisite showing that she was familiar with the plaintiff’s mailing practices and procedures to establish “proof of a standard office practice and procedure designed to ensure that items are properly addressed and mailed” … . The plaintiff failed to attach, as exhibits to the motion, any documents to prove that the mailing actually happened. Since the plaintiff failed to provide evidence of the actual mailing, or evidence 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, the plaintiff failed to establish its strict compliance with RPAPL 1304 … . Citimortgage, Inc. v Erani, 2020 NY Slip Op 00843, Second Dept 2-5-20

 

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BY NOT SEEKING THE FULL AMOUNT OF THE DEBT IN THE 90-DAY NOTICE PLAINTIFF MAY HAVE DE-ACCELERATED THE DEBT MAKING THE FORECLOSURE ACTION TIMELY (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff, by demonstrating it did not demand the full debt, but rather demanded only the amount needed to cure the default, presented sufficient proof that the debt had not been accelerated, and therefore the action was timely, to warrant restoring the matter to the calendar. The action had been dismissed when plaintiff did not appear at a scheduled conference. Defendant had moved to dismiss alleging the debt had been accelerated and the action was time-barred:

Plaintiff … moved, pursuant to CPLR 5015(a)(1), to vacate the dismissal order and reinstate the claim. * * *

… [P]laintiff provided evidence that it took affirmative action to de-accelerate the mortgage, which would have stopped the running of the statute of limitations on the mortgage debt. The 90-day notice provided to defendant sought an amount lower than the accelerated amount, which may evidence an intent to de-accelerate. While seeking a lower amount in and of itself is not enough to establish, as a matter of law, that the 90-day notice “destroy[ed] the effect of the sworn statement that the plaintiff had elected to accelerate the maturity of the debt” … . it is sufficient to meet the “minimal showing” required on a motion to restore … . Federal Natl. Mtge. Assn. v Rosenberg, 2020 NY Slip Op 00814, First Dept 2-4-20

 

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THE BANK DID NOT PROVE IT HAD STANDING IN THIS FORECLOSURE ACTION, PRESENTING ONLY HEARSAY; SUPREME COURT REVERSED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff bank in this foreclosure proceeding did not prove it had standing, that the defendant was in default, or that the notice provisions of Real Property Actions and Proceedings La (RPAPL) 1304 were complied with. With respect to standing, the Second Department wrote:

… [T]he plaintiff submitted the note, which contains an undated endorsement in blank, as well as affidavits from two vice presidents of loan documents for its loan servicer, Wells Fargo Bank, N.A. (hereinafter Wells Fargo). In both affidavits … each vice president stated that review Wells Fargo’s business records relating to the subject mortgage loan had confirmed that the plaintiff was in possession of the note prior to November 7, 2012. Neither one identified the documents reviewed or any basis for the conclusion that the plaintiff was in possession of the note more than two years prior to the subject review of Wells Fargo’s files. The only document relevant to this issue attached to either affidavit was a copy of the note with the undated endorsement in blank. Under these circumstances, the affidavits constituted inadmissible hearsay and lacked any probative value … . HSBC Bank USA, N.A. v Campbell-Antoine, 2020 NY Slip Op 00578, Second Dept 1-29-20

 

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MOTION TO RENEW SHOULD NOT HAVE BEEN GRANTED, CRITERIA EXPLAINED (SECOND DEPT).

The Second Department, reversing Supreme Court in this foreclosure action, determined the motion to renew should not have been granted, explaining the criteria:

In general, a motion for leave to renew must be based upon new facts not offered on the prior motion that would change the prior determination, and must set forth a reasonable justification for the failure to present such facts on the prior motion … . It is well settled that a motion for leave to renew is not a second chance freely given to parties who have not exercised due diligence in making their first factual presentation … . Indeed, the Supreme Court lacks discretion to grant renewal where the moving party omits a reasonable justification for failing to present the new facts on the original motion … . Successive motions for summary judgment should not be entertained in the absence of good cause, such as a showing of newly discovered evidence. However, evidence is not newly discovered simply because it was not submitted on the prior motion; rather, the evidence must not have been available to the party at the time it made its initial motion and could not have been established through alternate evidentiary means … . Deutsche Bank Natl. Trust Co. v Elshiekh, 2020 NY Slip Op 00570, Second Dept 1-29-20

 

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SUPREME COURT SHOULD NOT HAVE, SUA SPONTE, REVOKED THE ACCELERATION OF THE DEBT IN THIS FORECLOSURE CASE BECAUSE PLAINTIFF DID NOT SEEK THAT RELIEF (SECOND DEPT).

The Second Department noted that Supreme Court in this foreclosure action should not have, sua sponte, revoked the previous acceleration of the debt because plaintiff did not request that relief:

… [T]he Supreme Court should not have revoked the previous acceleration of the mortgage debt and directed that the mortgage remain an installment contract, inasmuch as the plaintiff did not seek such relief in its motion or cross-move for it in response to the defendant’s cross motion … . CitiMortgage, Inc. v Salko, 2020 NY Slip Op 00566, Second Dept 1-29-20

 

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DEFENDANTS’ FAILURE TO ANSWER THE FORECLOSURE COMPLAINT WAIVED THE STATUTE OF LIMITATIONS DEFENSE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendants in this foreclosure action, by defaulting, had waived the statute of limitations defense:

CPLR 3211(e) provides that a defense based upon the statute of limitations is waived if not asserted in an answer or in a timely motion to dismiss pursuant to CPLR 3211(a). Such a motion is timely if it is made before service of the answer is required (see CPLR 3211[e]). Here, the defendants never answered the complaint, and their cross motion, inter alia, to dismiss the complaint was served at least six months after service of the answer was required. Thus, unless the defendants’ default is vacated or excused, the defendants waived their statute of limitations defense, and in their cross motion, the defendants did not seek relief from that waiver. Accordingly, the Supreme Court should not have granted that branch of the defendants’ cross motion which was to dismiss the complaint insofar as asserted against them as time-barred without first determining whether the defendants were properly held in default … . Nestor I, LLC v Moriarty-Gentile, 2020 NY Slip Op 00421, Second Dept 1-22-20

 

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