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BANK DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE PROVISIONS OF RPAPL 1304 IN THIS FORECLOSURE ACTION, DEFENDANT’S MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank did not demonstrate compliance with the notice provisions of Real Property Actions and Proceedings Law (RPAPL) in this foreclosure action. Therefore defendant’s motion for summary judgment should have been granted:

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The plaintiff failed to submit an affidavit of service or any proof of mailing by the post office demonstrating that it properly served the defendant pursuant to the terms of the statute … . Contrary to the plaintiff’s contention, the affidavit of a vice president for loan documentation of the loan servicer was insufficient to establish that the notice was sent to the defendant in the manner required by RPAPL 1304, as the loan servicer did not provide proof of a standard office mailing procedure and provided no independent proof of the actual mailing … .

The Supreme Court erred in denying the defendant’s cross motion for summary judgment dismissing the complaint insofar as asserted against him based upon the plaintiff’s failure to comply with RPAPL 1304. The defendant established his prima facie entitlement to judgment as a matter of law dismissing the complaint insofar as asserted against him, submitting, inter alia, his own affidavit attesting that he did not receive any notice pursuant to RPAPL 1304 … . U.S. Bank N.A. v Henry, 2018 NY Slip Op 00326, Second Dept 1-17-18

FORECLOSURE (BANK DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE PROVISIONS OF RPAPL 1304 IN THIS FORECLOSURE ACTION, DEFENDANT’S MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN GRANTED (SECOND DEPT))/REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) (FORECLOSURE, BANK DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE PROVISIONS OF RPAPL 1304 IN THIS FORECLOSURE ACTION, DEFENDANT’S MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN GRANTED (SECOND DEPT))

BANK DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE PROVISIONS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW 1304, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank did not demonstrate compliance with the notice provisions of the Real Property Actions and Proceedings Law (RPAPL). Therefore the bank’s summary judgment motion should not have been granted:

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… [T]he plaintiff failed to establish, prima facie, that it complied with the requirements of RPAPL 1304 … .. In moving for summary judgment, the plaintiff submitted the affidavit of Jason Ussery, a representative of its loan servicer, who stated that “[a]t least 90 days prior to the commencement of the action, notice was sent to Defendant by certified mail and first class mail to the last known address of the Defendant and, if different, to the residence that is the subject of the mortgage.” Ussery annexed copies of the 90-day notices mailed to the defendant, all of which contained a bar code with a 20-digit number below it, but no language indicating that a mailing was done by first-class or certified mail, or even that a mailing was done by the U.S. Postal Service … . Moreover, Ussery did not make the requisite showing that he was familiar with the plaintiff’s mailing practices and procedures, and therefore did not establish “proof of a standard office practice and procedure designed to ensure that items are properly addressed and mailed” … . Bank of N.Y. Mellon v Zavolunov, 2018 NY Slip Op 00271, Second Dept 1-17-18

FORECLOSURE (BANK DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE PROVISIONS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW 1304, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) (FORECLOSURE, NOTICE, BANK DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE PROVISIONS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW 1304, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))

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2008 LETTER INFORMING DEFENDANT SHE WAS IN DEFAULT DID NOT ACCELERATE THE DEBT, THEREFORE THE STATUTE OF LIMITATIONS DID NOT BEGIN TO RUN AND THE CURRENT FORECLOSURE PROCEEDING IS TIMELY (THIRD DEPT).

The Third Department determined a 2008 letter from the bank's counsel informing defendant she was in default did not expressly accelerate the debt. Therefore the statute of limitations did not begin to run in 2008 and the current proceeding is timely:

“The six-year statute of limitations in a mortgage foreclosure action begins to run from the due date for each unpaid installment unless the debt has been accelerated; once the debt has been accelerated by a demand or commencement of an action, the entire sum becomes due and the statute of limitations begins to run on the entire mortgage”  … . …

The August 2008 letter advised defendant and Luma that they had violated the terms of the note and mortgage by failing to make monthly payments and that counsel had been retained “to exercise all of [the loan servicer's] rights and remedies at law, and in equity, including, but not limited to, the right to sell the above captioned premises at a public sale.” The letter therefore left all legal and equitable avenues open, did not indicate that immediate payment was demanded and, indeed, went on to state that the debt's validity would not be assumed unless there was an absence of timely written objection to some or all of it. There was, moreover, neither an explicit demand for payment in the letter nor the use of the word “accelerate.” Bank of Am., Natl. Assn. v Luma, 2018 NY Slip Op 00214, Third Dept 1-11-18

FORECLOSURE (STATUTE OF LIMITATIONS, 2008 LETTER INFORMING DEFENDANT SHE WAS IN DEFAULT DID NOT ACCELERATE THE DEBT, THEREFORE THE STATUTE OF LIMITATIONS DID NOT BEGIN TO RUN AND THE CURRENT FORECLOSURE PROCEEDING IS TIMELY (THIRD DEPT))/CIVIL PROCEDURE (FORECLOSURE, STATUTE OF LIMITATIONS,  2008 LETTER INFORMING DEFENDANT SHE WAS IN DEFAULT DID NOT ACCELERATE THE DEBT, THEREFORE THE STATUTE OF LIMITATIONS DID NOT BEGIN TO RUN AND THE CURRENT FORECLOSURE PROCEEDING IS TIMELY (THIRD DEPT))/STATUTE OF LIMITATIONS (FORECLOSURE, 2008 LETTER INFORMING DEFENDANT SHE WAS IN DEFAULT DID NOT ACCELERATE THE DEBT, THEREFORE THE STATUTE OF LIMITATIONS DID NOT BEGIN TO RUN AND THE CURRENT FORECLOSURE PROCEEDING IS TIMELY (THIRD DEPT))

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IN MOVING FOR SUMMARY JUDGMENT PLAINTIFF COULD NOT MAKE OUT A PRIMA FACIE CASE WITH EVIDENCE SUBMITTED FOR THE FIRST TIME IN REPLY PAPERS, PLAINTIFF’S SUMMARY JUDGMENT MOTION SHOULD HAVE BEEN DENIED (SECOND DEPT).

The Second Department, reversing Supreme Court, explained an aspect of the rigid proof requirements for summary judgment. Here plaintiff bank moved for summary judgment in a foreclosure action. Defendant, in opposition, raised plaintiff’s failure to demonstrate compliance with a condition precedent in the note. Plaintiff submitted reply papers with proof the condition precedent had been met. The Second Department determined the reply could not be considered and therefore the plaintiff had not made out a prima facie case in its papers:

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As part of her affirmative defenses and counterclaim, the defendant asserted, inter alia, that the plaintiff l… failed to show that it complied with the condition precedent contained in paragraph 7, subsection C, of the note. * * *

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… [T]he plaintiff failed to establish, prima facie, that it complied with the condition precedent contained in paragraph 7, subsection C, of the note…  “[A] party moving for summary judgment cannot meet its prima facie burden by submitting evidence for the first time in reply, and generally, evidence submitted for the first time in reply papers should be disregarded by the court”… . Here, since the defendant raised the issue of compliance with paragraph 7, subsection C, of the note in her affirmative defenses and counterclaim, the plaintiff’s submission for the first time of a copy of the requisite default notice with its reply to the defendant’s opposition to the summary judgment motion was not sufficient to establish its prima facie compliance … . Since the plaintiff failed to meet its prima facie burden on the motion, we need not consider the sufficiency of the defendant’s opposition papers … . Wells Fargo Bank, N.A. v Osias, 2017 NY Slip Op 09195, Second Dept 12-27-17

 

CIVIL PROCEDURE (IN MOVING FOR SUMMARY JUDGMENT PLAINTIFF COULD NOT MAKE OUT A PRIMA FACIE CASE WITH EVIDENCE SUBMITTED FOR THE FIRST TIME IN REPLY PAPERS, PLAINTIFF’S SUMMARY JUDGMENT MOTION SHOULD HAVE BEEN DENIED (SECOND DEPT))/EVIDENCE (SUMMARY JUDGMENT, (IN MOVING FOR SUMMARY JUDGMENT PLAINTIFF COULD NOT MAKE OUT A PRIMA FACIE CASE WITH EVIDENCE SUBMITTED FOR THE FIRST TIME IN REPLY PAPERS, PLAINTIFF’S SUMMARY JUDGMENT MOTION SHOULD HAVE BEEN DENIED (SECOND DEPT))/FORECLOSURE (CIVIL PROCEDURE, EVIDENCE, IN MOVING FOR SUMMARY JUDGMENT PLAINTIFF COULD NOT MAKE OUT A PRIMA FACIE CASE WITH EVIDENCE SUBMITTED FOR THE FIRST TIME IN REPLY PAPERS, PLAINTIFF’S SUMMARY JUDGMENT MOTION SHOULD HAVE BEEN DENIED (SECOND DEPT))/SUMMARY JUDGMENT (EVIDENCE, IN MOVING FOR SUMMARY JUDGMENT PLAINTIFF COULD NOT MAKE OUT A PRIMA FACIE CASE WITH EVIDENCE SUBMITTED FOR THE FIRST TIME IN REPLY PAPERS, PLAINTIFF’S SUMMARY JUDGMENT MOTION SHOULD HAVE BEEN DENIED (SECOND DEPT))/REPLY (SUMMARY JUDGMENT, EVIDENCE, N MOVING FOR SUMMARY JUDGMENT PLAINTIFF COULD NOT MAKE OUT A PRIMA FACIE CASE WITH EVIDENCE SUBMITTED FOR THE FIRST TIME IN REPLY PAPERS, PLAINTIFF’S SUMMARY JUDGMENT MOTION SHOULD HAVE BEEN DENIED (SECOND DEPT))

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DEFENDANTS LOST TITLE TO THE PROPERTY WHEN THE FORECLOSURE SALE TOOK PLACE, NOT WHEN THE JUDGMENT OF FORECLOSURE WAS ENTERED, THEREFORE PLAINTIFFS’ ALLEGED EXPOSURE TO LEAD PAINT TOOK PLACE WHEN THE DEFENDANTS STILL HELD TITLE (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined that the lead-paint exposure complaint should not have been dismissed because, although the exposure occurred after the judgment of foreclosure on the property, it occurred before the foreclosure sale, when defendants still held title:

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… [D]efendants sought partial summary judgment dismissing those claims because defendants had lost title to the property by order of foreclosure entered on that date. We agree with plaintiff that the court erred in granting that part of defendants’ motion.

Although defendants established in support of that part of their motion that a judgment of foreclosure had been entered, it is well settled that ” [t]he entry of a judgment of foreclosure and sale does not divest the mortgagor of its title and interest in the property until [a] sale is actually conducted’ ” … . It is undisputed that the actual sale of the property did not take place until April 1993, after plaintiff had allegedly been exposed to lead paint, and thus defendants failed to meet their burden on that part of their motion. Nero v Kendrick, 017 NY Slip Op 08980, Fourth Department 12-22-17

NEGLIGENCE (LEAD PAINT, DEFENDANTS LOST TITLE TO THE PROPERTY WHEN THE FORECLOSURE SALE TOOK PLACE, NOT WHEN THE JUDGMENT OF FORECLOSURE WAS ENTERED, THEREFORE PLAINTIFFS’ ALLEGED EXPOSURE TO LEAD PAINT TOOK PLACE WHEN THE DEFENDANTS STILL HELD TITLE (FOURTH DEPT))/FORECLOSURE (TITLE, DEFENDANTS LOST TITLE TO THE PROPERTY WHEN THE FORECLOSURE SALE TOOK PLACE, NOT WHEN THE JUDGMENT OF FORECLOSURE WAS ENTERED, THEREFORE PLAINTIFFS’ ALLEGED EXPOSURE TO LEAD PAINT TOOK PLACE WHEN THE DEFENDANTS STILL HELD TITLE (FOURTH DEPT))/REAL PROPERTY (FORECLOSURE, TITLE, DEFENDANTS LOST TITLE TO THE PROPERTY WHEN THE FORECLOSURE SALE TOOK PLACE, NOT WHEN THE JUDGMENT OF FORECLOSURE WAS ENTERED, THEREFORE PLAINTIFFS’ ALLEGED EXPOSURE TO LEAD PAINT TOOK PLACE WHEN THE DEFENDANTS STILL HELD TITLE (FOURTH DEPT))/LEAD PAINT (DEFENDANTS LOST TITLE TO THE PROPERTY WHEN THE FORECLOSURE SALE TOOK PLACE, NOT WHEN THE JUDGMENT OF FORECLOSURE WAS ENTERED, THEREFORE PLAINTIFFS’ ALLEGED EXPOSURE TO LEAD PAINT TOOK PLACE WHEN THE DEFENDANTS STILL HELD TITLE (FOURTH DEPT))

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BANK WAS UNABLE TO DEMONSTRATE STANDING AND FAILED TO MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank did not demonstrate it had standing to foreclose. Therefore the bank’s motion for summary judgment should not have been granted. Among other failings, the requirements of the business records exception to the hearsay rule were not met:

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Here, the plaintiff produced the mortgage, the unpaid note, and evidence of the appellant’s default. However, the plaintiff failed, prima facie, to establish its standing. Where, as here, the note has been endorsed in blank, the purported holder of the note must establish its standing by demonstrating that the original note was physically delivered to it prior to the commencement of the action … . The plaintiff attempted to establish its standing through the affidavit of Myron D. Keyes, Vice President Loan Documentation of Wells Fargo Bank, N.A. (hereinafter Wells Fargo), the servicing agent to the plaintiff. However, Keyes averred only that the plaintiff was “in possession of” the note. The plaintiff subsequently submitted a further affidavit from April J. Linn, another Vice President Loan Documentation of Wells Fargo. Unlike Keyes, Linn submitted documentary evidence showing that Wells Fargo was appointed the plaintiff’s servicing agent on February 21, 2014. Linn further averred, based on her familiarity with the business records maintained by Wells Fargo, that the plaintiff “had possession of the [note] as of November 28, 2006.” However, Linn’s affidavit failed, among other things, to explain how a review of the business records of a servicing agent appointed in 2014 could prove that the plaintiff had obtained physical possession of the note more than seven years earlier. In sum, Keyes’ affidavit, as well as Linn’s subsequent affidavit, provided neither sufficient factual details to establish the physical delivery of the note to the plaintiff prior to the commencement of this action … , nor the foundational knowledge required to admit such factual details under the business records exception to the hearsay rule … . U.S. Bank N.A. v Brody, 2017 NY Slip Op 08873, Second Dept 12-20-17

FORECLOSURE (STANDING, EVIDENCE, BANK WAS UNABLE TO DEMONSTRATE STANDING AND FAILED TO MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/EVIDENCE (FORECLOSURE, STANDING, BANK WAS UNABLE TO DEMONSTRATE STANDING AND FAILED TO MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/STANDING (FORECLOSURE, BANK WAS UNABLE TO DEMONSTRATE STANDING AND FAILED TO MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/HEARSAY (FORECLOSURE, BUSINESS RECORDS EXCEPTION,  BANK WAS UNABLE TO DEMONSTRATE STANDING AND FAILED TO MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/BUSINESS RECORDS (HEARSAY EXCEPTION, FORECLOSURE, BANK WAS UNABLE TO DEMONSTRATE STANDING AND FAILED TO MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))

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MOTION FOR SUMMARY JUDGMENT CANNOT BE BROUGHT WHERE DEFENDANT HAS ONLY FILED A NOTICE OF APPEARANCE, FORECLOSURE ACTION PROPERLY DISMISSED AS ABANDONED PURSUANT TO CPLR 3215 (SECOND DEPT).

The Second Department determined the bank’s motion for summary judgment in this foreclosure proceeding could not be entertained because issue had not been joined, only a notice of appearance had been filed by defendant. The action was properly deemed abandoned pursuant to CPLR 3215:

Contrary to the plaintiff’s contention, the Supreme Court properly denied those branches of its motion which were for summary judgment on the complaint and for an order of reference. “A motion for summary judgment may not be made before issue is joined (CPLR 3212[a]) and the requirement is strictly adhered to” … . Where, as here, a defendant has served a notice of appearance, but has not served “a responsive pleading,” in this case, an answer (see CPLR 3011), issue has not been joined, and the plaintiff is barred from seeking summary judgment … . …

Here, the defendants were served with the summons and complaint on December 30, 2010. The defendant had “twenty days after service of the summons” to appear “by serving an answer or a notice of appearance, or by making a motion which has the effect of extending the time to answer” (CPLR 320[a]). … [T]he plaintiff’s time to bring a motion for leave to enter a default judgment expired on February 3, 2012, a year after the defendants’ default, but the plaintiff did not make such a motion until January 2015.

The plaintiff contends that the “sufficient cause shown” standard was met by the “significant delay” caused by an improper stipulation of discontinuance that was filed on February 22, 2013, and the proceedings it had to take to obtain an order dated August 15, 2013, vacating the stipulation and restoring the action to the calendar. However, … actions taken in 2013 and thereafter “offer no excuse as to why no action was taken within one year of the default, as required by statute.” In fact, this Court has held that “[a]n excuse which matures after the expiration of the statutory limit for entering a default judgment with the Clerk is legally insufficient to justify a plaintiff’s failure to enter the default judgment” … . For the same reason, there is no merit to the plaintiff’s argument that the same proceedings in 2013 established that it had not abandoned the action … . JBBNY, LLC v Begum, 2017 NY Slip Op 08816, Second Dept 12-20-17

 

FORECLOSURE (MOTION FOR SUMMARY JUDGMENT CANNOT BE BROUGHT WHERE DEFENDANT HAS ONLY FILED A NOTICE OF APPEARANCE, FORECLOSURE ACTION PROPERLY DISMISSED AS ABANDONED PURSUANT TO CPLR 3215 (SECOND DEPT))/CIVIL PROCEDURE (FORECLOSURE, JOINDER OF ISSUE, ABANDONMENT, MOTION FOR SUMMARY JUDGMENT CANNOT BE BROUGHT WHERE DEFENDANT HAS ONLY FILED A NOTICE OF APPEARANCE, FORECLOSURE ACTION PROPERLY DISMISSED AS ABANDONED PURSUANT TO CPLR 3215 (SECOND DEPT)))/NOTICE OF APPEARANCE (FORECLOSURE, JOINDER OF ISSUE, MOTION FOR SUMMARY JUDGMENT CANNOT BE BROUGHT WHERE DEFENDANT HAS ONLY FILED A NOTICE OF APPEARANCE, FORECLOSURE ACTION PROPERLY DISMISSED AS ABANDONED PURSUANT TO CPLR 3215 (SECOND DEPT))/JOINDER OF ISSUE (NOTICE OF APPEARANCE, MOTION FOR SUMMARY JUDGMENT CANNOT BE BROUGHT WHERE DEFENDANT HAS ONLY FILED A NOTICE OF APPEARANCE, FORECLOSURE ACTION PROPERLY DISMISSED AS ABANDONED PURSUANT TO CPLR 3215 (SECOND DEPT))/ABANDONMENT (CIVIL PROCEDURE, FORECLOSURE, MOTION FOR SUMMARY JUDGMENT CANNOT BE BROUGHT WHERE DEFENDANT HAS ONLY FILED A NOTICE OF APPEARANCE, FORECLOSURE ACTION PROPERLY DISMISSED AS ABANDONED PURSUANT TO CPLR 3215 (SECOND DEPT))/CPLR 3215 (FORECLOSURE, ABANDONMENT, MOTION FOR SUMMARY JUDGMENT CANNOT BE BROUGHT WHERE DEFENDANT HAS ONLY FILED A NOTICE OF APPEARANCE, FORECLOSURE ACTION PROPERLY DISMISSED AS ABANDONED PURSUANT TO CPLR 3215 (SECOND DEPT))

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FORECLOSURE ACTION PROPERLY DISMISSED FOR FAILURE TO COMPLY WITH 90-DAY DEMAND AND OVERALL DELAY AND NEGLECT (SECOND DEPT).

The Second Department determined this foreclosure proceeding was properly dismissed for failure to comply with a 90-day demand pursuant to CPLR 3216 (b)(3):

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Where, as here, a plaintiff has been served with a 90-day demand pursuant to CPLR 3216(b)(3), that plaintiff must comply with the demand by filing a note of issue or by moving, before the default date, either to vacate the demand or to extend the 90-day period … . The plaintiff failed to do either within the 90-day period. Therefore, in order to excuse the default, the plaintiff was required to demonstrate a justifiable excuse for its failure to timely file the note of issue or move to either vacate the demand or extend the 90-day period, as well as a potentially meritorious cause of action… . Nevertheless, it has been said that CPLR 3216 is “extremely forgiving” … , “in that it never requires, but merely authorizes, the Supreme Court to dismiss a plaintiff’s action based on the plaintiff’s unreasonable neglect to proceed” … .

Under the circumstances of this case, the Supreme Court providently exercised its discretion in granting the defendant’s motion pursuant to CPLR 3216 to dismiss the action insofar as asserted against him. The plaintiff took no action whatsoever in the five years from the time the case was released from the foreclosure settlement part on October 15, 2009, until the defendant served his 90-day demand on October 10, 2014. Moreover, after failing to comply with the 90-day deadline, the plaintiff took no action for five months before belatedly filing a note of issue. The plaintiff failed to provide a justifiable excuse for its delay in filing a note of issue and failed to demonstrate a potentially meritorious cause of action. The plaintiff’s further contention that dismissal was too harsh a sanction, and that a lesser sanction was more appropriate under the circumstances, is unavailing, given the plaintiff’s “pattern[ ] of persistent neglect, a history of extensive delay, evidence of an intent to abandon prosecution and lack of any tenable excuse for such delay”  … . Deutsche Bank Natl. Trust Co. v Inga, 2017 NY Slip Op 08810, Second Department 12-20-17\

 

FORECLOSURE (CIVIL PROCEDURE, FORECLOSURE ACTION PROPERLY DISMISSED FOR FAILURE TO COMPLY WITH 90-DAY DEMAND AND OVERALL DELAY AND NEGLECT (SECOND DEPT))/CIVIL PROCEDURE (FORECLOSURE ACTION PROPERLY DISMISSED FOR FAILURE TO COMPLY WITH 90-DAY DEMAND AND OVERALL DELAY AND NEGLECT (SECOND DEPT))/CPLR 3216(b)(3) (FORECLOSURE ACTION PROPERLY DISMISSED FOR FAILURE TO COMPLY WITH 90-DAY DEMAND AND OVERALL DELAY AND NEGLECT (SECOND DEPT))/ABANDONMENT OF ACTION (CIVIL PROCEDURE, FORECLOSURE ACTION PROPERLY DISMISSED FOR FAILURE TO COMPLY WITH 90-DAY DEMAND AND OVERALL DELAY AND NEGLECT (SECOND DEPT))/NEGLECT TO PROSECUTE (CIVIL PROCEDURE, FORECLOSURE ACTION PROPERLY DISMISSED FOR FAILURE TO COMPLY WITH 90-DAY DEMAND AND OVERALL DELAY AND NEGLECT (SECOND DEPT))

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DEFENDANTS’ MOTION TO FILE A LATE ANSWER PURSUANT TO CPLR 3012 AFTER A DEFAULT IN THIS FORECLOSURE PROCEEDING WAS PROPERLY DENIED, FIVE FACTORS TO BE CONSIDERED EXPLAINED, ALLEGATION DEFENDANTS WERE CHEATED WAS NOT A DEFENSE (FIRST DEPT).

The First Department, over an extensive dissent, determined defendants’ motion to file a late answer in this foreclosure proceeding was properly denied. Shortly after giving their son, Luigi, powers of attorney, Luigi took out a mortgage to buy a condominium, using his parents’ (defendants’) home as collateral. Luigi defaulted and eventually the foreclosure action was started. After a default in the foreclosure proceedings, the defendants hired counsel and moved to file a late answer. The First Department went through each of the five factors to be considered, noting that the defendants’ claim to have first learned of the mortgage when they were served in the foreclosure action was not credible, and the allegation defendants were cheated by their son is not a defense (the powers of attorney were not fraudulently obtained):

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Under CPLR 3012(d), a trial court has the discretionary power to extend the time to plead, or to compel acceptance of an untimely pleading “upon such terms as may be just,” provided that there is a showing of a reasonable excuse for the delay. In reviewing a discretionary determination, the proper inquiry is whether the court providently exercised its discretion.

In Artcorp Inc. v Citirich Realty Corp. (140 AD3d 417 [1st Dept 2016]), we adopted the factors set forth in Guzetti v City of New York (32 AD3d 234, 238 (id.) [1st Dept 2006] [McGuire, J., concurring]) as those that “must . . . be considered and balanced” in determining whether a CPLR 3012(d) ruling constitutes an abuse of discretion. Those factors include the [*4]length of the delay, the excuse offered, the extent to which the delay was willful, the possibility of prejudice to adverse parties, and the potential merits of any defense … . * * *

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Of these five factors, three — – the lack of a potential meritorious defense, which is the most notable, the length of the delay, and the willfulness of the default — weigh against granting the motion. The remaining factors, whether the delay was excusable and whether there was any possibility of prejudice to an adverse party, are arguably neutral. Therefore, considering and weighing the five Artcorp/Guzzetti factors, we conclude that Supreme Court properly denied the … motion. Emigrant Bank v Rosabianca, 2017 NY Slip Op 08716, First Dept 12-14-17

 

CIVIL PROCEDURE (LATE ANSWER, DEFENDANTS’ MOTION TO FILE A LATE ANSWER PURSUANT TO CPLR 3012 AFTER A DEFAULT IN THIS FORECLOSURE PROCEEDING WAS PROPERLY DENIED, FIVE FACTORS TO BE CONSIDERED EXPLAINED, ALLEGATION DEFENDANTS WERE CHEATED WAS NOT A DEFENSE (FIRST DEPT))/LATE ANSWER (DEFENDANTS’ MOTION TO FILE A LATE ANSWER PURSUANT TO CPLR 3012 AFTER A DEFAULT IN THIS FORECLOSURE PROCEEDING WAS PROPERLY DENIED, FIVE FACTORS TO BE CONSIDERED EXPLAINED, ALLEGATION DEFENDANTS WERE CHEATED WAS NOT A DEFENSE (FIRST DEPT))/FORECLOSURE (CIVIL PROCEDURE, DEFENDANTS’ MOTION TO FILE A LATE ANSWER PURSUANT TO CPLR 3012 AFTER A DEFAULT IN THIS FORECLOSURE PROCEEDING WAS PROPERLY DENIED, FIVE FACTORS TO BE CONSIDERED EXPLAINED, ALLEGATION DEFENDANTS WERE CHEATED WAS NOT A DEFENSE (FIRST DEPT))

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BANK DID NOT MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE AND THEREFORE DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank did not demonstrate standing to bring the foreclosure proceeding and therefore the bank’s motion for summary judgment should not have been granted:

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… [T]he plaintiff failed to meet its prima facie burden of establishing its standing … . In support of its motion, the plaintiff submitted the affidavit of Dara Foye, a document coordinator for Bayview Loan Servicing, LLC … , the loan servicer. Foye averred, based on her review of Bayview’s business records, that the original, endorsed consolidated note was delivered to the plaintiff on January 24, 2007, and that the plaintiff “maintained possession of the original note since that date up until and including the date the action was commenced on May 24, 2010.” However, the plaintiff failed to demonstrate the admissibility of the records relied upon by Foye under the business records exception to the hearsay rule (see CPLR 4518[a]), since Foye did not attest that she was personally familiar with the record-keeping practices and procedures of the plaintiff … . The plaintiff also failed to establish its standing based on the purported assignment of the note and mortgage to it by MERS [Mortgage Electronic Registration Systems, Inc.], as it failed to submit any evidence establishing delivery or assignment of the note to MERS prior to its execution of the assignment to the plaintiff … . Bank of N.Y. Mellon v Alli, 2017 NY Slip Op 08501, Second Dept 12-6-17

 

FORECLOSURE (BANK DID NOT MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE AND THEREFORE DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/EVIDENCE (FORECLOSURE, BUSINESS RECORDS, (BANK DID NOT MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE AND THEREFORE DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/BUSINESS RECORDS (FORECLOSURE, EVIDENCE, BANK DID NOT MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE AND THEREFORE DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/HEARSAY (FORECLOSURE, BUSINESS RECORDS, BANK DID NOT MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE AND THEREFORE DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/CPLR 4518 [a] (FORECLOSURE, EVIDENCE, BUSINESS RECORDS, BANK DID NOT MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE AND THEREFORE DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))

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