Foreclosure – Page 79 – New York Appellate Digest

PLAINTIFF BANK SHOULD HAVE BEEN ALLOWED TO AMEND THE COMPLAINT BY ADDING PARTIES AND TO EXTEND THE REACH OF THE ACTION TO THE ENTIRE PREMISES WHICH HAD BEEN ACQUIRED BY ADVERSE POSSESSION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank should have been allowed to amend its complaint in this foreclosure action to add parties and extend the reach of the action to the entire premises. There was evidence a party acquired title to the entire premises by adverse possession:

In the absence of prejudice or surprise to the opposing party, leave to amend a pleading should be freely granted “unless the proposed amendment is palpably insufficient or patently devoid of merit” … . Moreover, pursuant to CPLR 1003, “[p]arties may be added at any stage of the action by leave of court” … .

Here, the plaintiff’s proposed cause of action was not “palpably insufficient or patently devoid of merit” … . RPAPL 1501 provides that any person who “claims an estate or interest in real property’ may maintain an action against any other person . . . to compel the determination of any claim adverse to that of the plaintiff which the defendant makes, or which it appears from the public records, . . . the defendant might make'”… . Pursuant to RPAPL 1501(5), the interest held by any mortgagee of real property is an “interest in real property” as that phrase is used in article 15… . Thus, contrary to the Supreme Court’s determination, the plaintiff, as mortgagee of the subject premises, asserted a cause of action to quiet title pursuant to RPAPL 1501 based on its claim that the mortgage encumbered the entire premises because the mortgagor acquired title to the entire premises by adverse possession … . Moreover, the plaintiff properly sought leave to amend the summons and complaint to add as defendants certain persons who might claim interests in the premises that are adverse to its own interest. Emigrant Sav. Bank v Walters, 2017 NY Slip Op 07976, Second Dept 11-15-17

CIVIL PROCEDURE (AMEND COMPLAINT, FORECLOSURE, PLAINTIFF BANK SHOULD HAVE BEEN ALLOWED TO AMEND THE COMPLAINT BY ADDING PARTIES AND TO EXTEND THE REACH OF THE ACTION TO THE ENTIRE PREMISES WHICH HAD BEEN ACQUIRED BY ADVERSE POSSESSION (SECOND DEPT))/FORECLOSURE (CIVIL PROCEDURE, PLAINTIFF BANK SHOULD HAVE BEEN ALLOWED TO AMEND THE COMPLAINT BY ADDING PARTIES AND TO EXTEND THE REACH OF THE ACTION TO THE ENTIRE PREMISES WHICH HAD BEEN ACQUIRED BY ADVERSE POSSESSION (SECOND DEPT))/REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (FORECLOSURE, PLAINTIFF BANK SHOULD HAVE BEEN ALLOWED TO AMEND THE COMPLAINT BY ADDING PARTIES AND TO EXTEND THE REACH OF THE ACTION TO THE ENTIRE PREMISES WHICH HAD BEEN ACQUIRED BY ADVERSE POSSESSION (SECOND DEPT))/ADVERSE POSSESSION (FORECLOSURE, CIVIL PROCEDURE, PLAINTIFF BANK SHOULD HAVE BEEN ALLOWED TO AMEND THE COMPLAINT BY ADDING PARTIES AND TO EXTEND THE REACH OF THE ACTION TO THE ENTIRE PREMISES WHICH HAD BEEN ACQUIRED BY ADVERSE POSSESSION (SECOND DEPT))

November 15, 2017

Foreclosure

STATUTORY NOTICE REQUIREMENTS NOT MET IN THIS FORECLOSURE ACTION, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the bank did not demonstrate it had met the statutory notice requirements of the Real Property Actions and Proceeding Law (RPAPL). Therefore the bank’s motion for summary judgment should have been denied:

RPAPL 1304 notice “shall be sent by [the] lender, assignee (including purchasing investor) or mortgage loan servicer to the borrower, by registered or certified mail and also by first-class mail to the last known address of the borrower, and to the residence that is the subject of the mortgage” (RPAPL 1304[2]). Proper service of a RPAPL 1304 notice containing the statutorily-mandated content is a condition precedent to the commencement of a foreclosure action, and plaintiff has the burden of establishing its strict compliance with this condition … .

Plaintiff failed to establish that it strictly complied with RPAPL 1304. Plaintiff submitted an affidavit of its loan servicer, supported by copies of the 90-day notice it alleges was served and a copy of the unsigned, undated return receipt. These documents were insufficient to establish plaintiff’s prima facie entitlement to summary judgment. In the affidavit, the loan servicer’s vice president of loan documentation fails to demonstrate a familiarity with the servicer’s mailing practices and procedures. Therefore, plaintiff did not establish proof of a standard office practice and procedure … . Moreover, portions of the receipt in the record are blank, and an undated and unsigned return receipt is not sufficient to establish proof of the actual mailing … . HSBC Bank USA v Rice, 2017 NY Slip Op 07936, First Dept 11-14-17

FORECLOSURE (STATUTORY NOTICE REQUIREMENTS NOT MET IN THIS FORECLOSURE ACTION, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT))/NOTICE (FORECLOSURE, STATUTORY NOTICE REQUIREMENTS NOT MET IN THIS FORECLOSURE ACTION, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT))/REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) (FORECLOSURE, STATUTORY NOTICE REQUIREMENTS NOT MET IN THIS FORECLOSURE ACTION, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT))

November 14, 2017

Civil Procedure, Foreclosure

BANK MOVED FOR AN ORDER OF REFERENCE WITHIN ONE YEAR OF DEFAULT IN THIS FORECLOSURE ACTION, THE ACTION SHOULD NOT HAVE BEEN DISMISSED AS ABANDONED (SECOND DEPT).

The Second Department determined Supreme Court should not have dismissed this foreclosure action as abandoned because the bank moved for an order of reference within one year of the default:

CPLR 3215(c) provides that “[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after [a] default, the court shall not enter judgment but shall dismiss the complaint as abandoned, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed.” However, “[i]t is not necessary for a plaintiff to actually obtain a default judgment within one year of the default in order to avoid dismissal pursuant to CPLR 3215(c)” … . Rather, it is enough that the plaintiff timely takes “the preliminary step toward obtaining a default judgment of foreclosure and sale by moving for an order of reference” to establish that it “initiated proceedings for entry of a judgment within one year of the default” for the purpose of satisfying CPLR 3215(c) … . “[A]s long as proceedings are being taken, and these proceedings manifest an intent not to abandon the case but to seek a judgment, the case should not be subject to dismissal” … . This is so even where, as here, a timely motion for an order of reference is subsequently withdrawn … .

Here, the plaintiff took the preliminary step toward obtaining a default judgment of foreclosure and sale by moving for an order of reference (see RPAPL 1321[1]) … within one year of the defendant’s default. Accordingly, the plaintiff did not abandon the action … . Wells Fargo Bank, N.A. v Mayen, 2017 NY Slip Op 07768, Second Dept 11-8-17

CIVIL PROCEDURE (ABANDONMENT, BANK MOVED FOR AN ORDER OF REFERENCE WITHIN ONE YEAR OF DEFAULT IN THIS FORECLOSURE ACTION, THE ACTION SHOULD NOT HAVE BEEN DISMISSED AS ABANDONED (SECOND DEPT))/ABANDONMENT (CIVIL PROCEDURE, BANK MOVED FOR AN ORDER OF REFERENCE WITHIN ONE YEAR OF DEFAULT IN THIS FORECLOSURE ACTION, THE ACTION SHOULD NOT HAVE BEEN DISMISSED AS ABANDONED (SECOND DEPT))/FORECLOSURE (CIVIL PROCEDURE, (ABANDONMENT, BANK MOVED FOR AN ORDER OF REFERENCE WITHIN ONE YEAR OF DEFAULT IN THIS FORECLOSURE ACTION, THE ACTION SHOULD NOT HAVE BEEN DISMISSED AS ABANDONED (SECOND DEPT))/CPLR 3215 (c) (ABANDONMENT, BANK MOVED FOR AN ORDER OF REFERENCE WITHIN ONE YEAR OF DEFAULT IN THIS FORECLOSURE ACTION, THE ACTION SHOULD NOT HAVE BEEN DISMISSED AS ABANDONED (SECOND DEPT))/DEFAULT JUDGMENT (ABANDONMENT, BANK MOVED FOR AN ORDER OF REFERENCE WITHIN ONE YEAR OF DEFAULT IN THIS FORECLOSURE ACTION, THE ACTION SHOULD NOT HAVE BEEN DISMISSED AS ABANDONED (SECOND DEPT))

November 8, 2017

Evidence, Foreclosure

AFFIDAVIT WAS SUFFICIENT TO DEMONSTRATE PLAINTIFF BANK’S ENTITLEMENT TO SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION UNDER THE CONTROLLING ADMINISTRATIVE ORDER AND THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE (FIRST DEPT).

The First Department, reversing Supreme Court, in a full-fledged opinion by Justice Andrias, over a dissent, determined plaintiff bank (BOA) was entitled to summary judgment in this foreclosure action. At issue was whether an affidavit (by Mattera) in support of a prior summary judgment proceeding satisfied the the operative Administrative Order and the business records exception to the hearsay rule:

Administrative Order 431/11 … requires the plaintiff’s counsel in a residential mortgage foreclosure action to file an affirmation confirming that he or she communicated with a representative of the plaintiff who confirmed the factual accuracy of the plaintiff’s pleadings, supporting documentation and submissions to the court … . …

To fulfill his obligations under Administrative Order 431/11, plaintiff’s counsel submitted an affidavit that comported with the form provided in Administrative Order 431/11. Counsel stated that … he had communicated with Mattera … . …

The dissent finds this affidavit deficient, stating that “because Mattera’s affidavits do not establish a complete review of, or the indicia of reliability necessary to lay a business records foundation for, the records pre-dating … acquisition of defendant’s mortgage, counsel may not rely upon alleged communications with Mattera to comply with the requirements of the Administrative Order.” However, defendant, who has continued to reside on the premises for the last 10 years without paying her mortgage, did not dispute her default or challenge the accuracy or sufficiency of Mattera’s affidavit on the third summary judgment motion.

Furthermore, CLPR 4518(a) does not require a person to have personal knowledge of each of the facts asserted in the affidavit of merit put before the court as evidence of a defendant’s default in payment … . Thus, in seeking to enforce a loan, an assignee of an original lender or intermediary predecessor may use an original loan file prepared by its assignor, when it relies upon those records in the regular course of its business… ..

Here, Mattera … satisfied these standards … . Bank of Am., N.A. v Brannon, 2017 NY Slip Op 07578, First Dept 10-31-17

FORECLOSURE (AFFIDAVIT WAS SUFFICIENT TO DEMONSTRATE PLAINTIFF BANK’S ENTITLEMENT TO SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION UNDER THE CONTROLLING ADMINISTRATIVE ORDER AND THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE (FIRST DEPT))/EVIDENCE (FORECLOSURE, AFFIDAVIT WAS SUFFICIENT TO DEMONSTRATE PLAINTIFF BANK’S ENTITLEMENT TO SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION UNDER THE CONTROLLING ADMINISTRATIVE ORDER AND THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE (FIRST DEPT))/HEARSAY (BUSINESS RECORDS EXCEPTION, FORECLOSURE, AFFIDAVIT WAS SUFFICIENT TO DEMONSTRATE PLAINTIFF BANK’S ENTITLEMENT TO SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION UNDER THE CONTROLLING ADMINISTRATIVE ORDER AND THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE (FIRST DEPT))/BUSINESS RECORDS (EXCEPTION TO HEARSAY RULE, FORECLOSURE, AFFIDAVIT WAS SUFFICIENT TO DEMONSTRATE PLAINTIFF BANK’S ENTITLEMENT TO SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION UNDER THE CONTROLLING ADMINISTRATIVE ORDER AND THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE (FIRST DEPT))

October 31, 2017

Civil Procedure, Foreclosure

QUESTION OF FACT IN THIS FORECLOSURE ACTION WHETHER NAIL AND MAIL SERVICE ON A SATURDAY VIOLATED THE GENERAL BUSINESS LAW BECAUSE PLAINTIFF BANK WAS AWARE DEFENDANTS RECOGNIZED SATURDAY AS A HOLY DAY (SECOND DEPT).

The Second Department, reversing Supreme Court, determined a question of fact was raised whether plaintiff bank was aware defendants observed Saturday as a holy day, thereby invalidating nail and mail service on Saturday in this foreclosure action:

General Business Law § 13 provides: “Whoever maliciously procures any process in a civil action to be served on Saturday, upon any person who keeps Saturday as holy time, and does not labor on that day, or serves upon him any process returnable on that day, or maliciously procures any civil action to which such person is a party to be adjourned to that day for trial, is guilty of a misdemeanor.”

The defendants contend that the plaintiff’s counsel was aware that they are observant, Orthodox Jewish persons who adhere to the Sabbath, and thus, the Saturday affixation of process to the door of their residence was invalid. This appears to be an issue of first impression for this Court. We agree with the other courts that have addressed the issue, which have consistently held, for more than a century, that service in violation of General Business Law § 13, or its predecessor statute, is void, and personal jurisdiction is not obtained over the party served … . Moreover, we hold that the statute applies not only to personal service upon a defendant, but also to the affixation portion of “nail and mail” service pursuant to CPLR 308(4) on the door of a defendant’s residence, as occurred here … . JPMorgan Chase Bank, N.A. v Lilker, 2017 NY Slip Op 06434, Second Dept 9-13-17

CIVIL PROCEDURE (NAIL AND MAIL, QUESTION OF FACT IN THIS FORECLOSURE ACTION WHETHER NAIL AND MAIL SERVICE ON A SATURDAY VIOLATED THE GENERAL BUSINESS LAW BECAUSE PLAINTIFF BANK WAS AWARE DEFENDANTS RECOGNIZED SATURDAY AS A HOLY DAY (SECOND DEPT))/NAIL AND MAIL (GENERAL BUSINESS LAW, NAIL AND MAIL, QUESTION OF FACT IN THIS FORECLOSURE ACTION WHETHER NAIL AND MAIL SERVICE ON A SATURDAY VIOLATED THE GENERAL BUSINESS LAW BECAUSE PLAINTIFF BANK WAS AWARE DEFENDANTS RECOGNIZED SATURDAY AS A HOLY DAY (SECOND DEPT))/FORECLOSURE (CIVIL PROCEDURE, NAIL AND MAIL, QUESTION OF FACT IN THIS FORECLOSURE ACTION WHETHER NAIL AND MAIL SERVICE ON A SATURDAY VIOLATED THE GENERAL BUSINESS LAW BECAUSE PLAINTIFF BANK WAS AWARE DEFENDANTS RECOGNIZED SATURDAY AS A HOLY DAY (SECOND DEPT))/GENERAL BUSINESS LAW (CIVIL PROCEDURE, NAIL AND MAIL, QUESTION OF FACT IN THIS FORECLOSURE ACTION WHETHER NAIL AND MAIL SERVICE ON A SATURDAY VIOLATED THE GENERAL BUSINESS LAW BECAUSE PLAINTIFF BANK WAS AWARE DEFENDANTS RECOGNIZED SATURDAY AS A HOLY DAY (SECOND DEPT))

September 13, 2017

Appeals, Civil Procedure, Foreclosure

FORECLOSURE ACTION SHOULD NOT HAVE BEEN DISMISSED, ISSUE WAS NEVER JOINED, EVEN THOUGH THE DEFENSE WAS FIRST RAISED IN REPLY PAPERS, IT COULD BE CONSIDERED ON APPEAL (SECOND DEPT).

The Second Department, reversing Supreme Court, determined this foreclosure action should not have been dismissed because issue was never joined. Even though the defense was first raised in the reply papers, it could be considered on appeal because the issue is apparent on the face of the record and the lower court would have been required to address it:

… [T]he Supreme Court conditionally dismissed the action pursuant to CPLR 3216 unless the plaintiff filed a note of issue or otherwise moved for entry of a judgment within 90 days. The action was thereafter administratively dismissed … .

… [T]he plaintiff moved, inter alia, to vacate the conditional order of dismissal and to restore the action to the calendar. … [T]he Supreme Court denied the plaintiff’s motion, finding that the plaintiff failed to present a reasonable excuse for not complying with the conditional 90-day order to dismiss and that the delay since the time that the referee was appointed was substantial. …

… [D]ismissal of the action pursuant to the … conditional order was improper, as issue was never joined inasmuch as none of the defendants served an answer to the complaint… .. Since at least one precondition set forth in CPLR 3216 was not met here, the Supreme Court was without power to dismiss the action pursuant to that statute … .

Although the plaintiff did not raise, until its reply papers, the argument that this action was improperly dismissed pursuant to CPLR 3216 because issue had not been joined, we may consider it on appeal since the reply papers did not present new facts but only raised an issue of law which appeared on the face of the record and could not have been avoided if brought to the attention of the Supreme Court at the proper juncture … . U.S. Bank N.A. v Ricketts, 2017 NY Slip Op 06475, Second Dept 9-13-17

CIVIL PROCEDURE (FORECLOSURE ACTION SHOULD NOT HAVE BEEN DISMISSED, ISSUE WAS NEVER JOINED, EVEN THOUGH THE DEFENSE WAS FIRST RAISED IN REPLY PAPERS, IT COULD BE CONSIDERED ON APPEAL (SECOND DEPT))/APPEALS (CIVIL PROCEDURE, FORECLOSURE ACTION SHOULD NOT HAVE BEEN DISMISSED, ISSUE WAS NEVER JOINED, EVEN THOUGH THE DEFENSE WAS FIRST RAISED IN REPLY PAPERS, IT COULD BE CONSIDERED ON APPEAL (SECOND DEPT))/FORECLOSURE (FORECLOSURE ACTION SHOULD NOT HAVE BEEN DISMISSED, ISSUE WAS NEVER JOINED, EVEN THOUGH THE DEFENSE WAS FIRST RAISED IN REPLY PAPERS, IT COULD BE CONSIDERED ON APPEAL (SECOND DEPT))

September 13, 2017

Civil Procedure, Evidence, Foreclosure

DEFAULT JUDGMENT DISCHARGING THE MORTGAGE SHOULD HAVE BEEN GRANTED, THE SIX YEAR STATUTE OF LIMITATIONS FOR FORECLOSURE STARTED WHEN THE DEBT WAS ACCELERATED BY THE FORECLOSURE ACTION WHICH WAS ULTIMATELY DISMISSED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff’s motion for a default judgment discharging a mortgage after the statute of limitations on the foreclosure action had expired should have been granted. The court explained that the six year statute started to run when the debt was accelerated by the foreclosure action that was ultimately dismissed. The plaintiff demonstrated that the dismissed foreclosure action was commenced by a party with standing:

… [W]ith respect to an action pursuant to RPAPL 1501(4), a person having an estate or an interest in real property subject to a mortgage can seek to cancel and discharge that encumbrance where the period allowed by the applicable statute of limitations for the commencement of an action to foreclose the mortgage had expired, provided that the mortgagee or its successor was not in possession of the subject real property at the time the action to cancel and discharged the mortgage was commenced … . An action to foreclose a mortgage has a six-year statute of limitations… . “The law is well settled that, even if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt”… .

Here, the plaintiff submitted a copy of the summons and complaint filed in the mortgage foreclosure action commenced by the defendant’s predecessor-in-interest and the order dismissing that action pursuant to CPLR 3216 which demonstrated that the mortgage was accelerated in 2008 more than six years before the commencement of this action and that there was no longer a pending mortgage foreclosure action … . In addition, the summons and the complaint, along with the subject mortgage documents, submitted by the plaintiff on its motion, demonstrated that the defendant’s predecessor-in-interest had standing to commence the mortgage foreclosure action ….

Further, the plaintiff demonstrated that the applicable statute of limitations had expired even if the limitations period was calculated … the date by which the Federal Deposit Insurance Corporation was appointed as receiver for the defendant’s predecessor-in-interest …. . 53 PL Realty, LLC v US Bank N.A., 2017 NY Slip Op 06345, Second Dept 8-30-17

FORECLOSURE (DEFAULT JUDGMENT DISCHARGING THE MORTGAGE SHOULD HAVE BEEN GRANTED, THE SIX YEAR STATUTE OF LIMITATIONS FOR FORECLOSURE STARTED WHEN THE DEBT WAS ACCELERATED BY THE FORECLOSURE ACTION WHICH WAS ULTIMATELY DISMISSED (SECOND DEPT))/CIVIL PROCEDURE (FORECLOSURE, STATUTE OF LIMITATIONS, DEFAULT JUDGMENT DISCHARGING THE MORTGAGE SHOULD HAVE BEEN GRANTED, THE SIX YEAR STATUTE OF LIMITATIONS FOR FORECLOSURE STARTED WHEN THE DEBT WAS ACCELERATED BY THE FORECLOSURE ACTION WHICH WAS ULTIMATELY DISMISSED (SECOND DEPT))/STATUTE OF LIMITATIONS (FORECLOSURE, DEFAULT JUDGMENT DISCHARGING THE MORTGAGE SHOULD HAVE BEEN GRANTED, THE SIX YEAR STATUTE OF LIMITATIONS FOR FORECLOSURE STARTED WHEN THE DEBT WAS ACCELERATED BY THE FORECLOSURE ACTION WHICH WAS ULTIMATELY DISMISSED (SECOND DEPT))/EVIDENCE (FORECLOSURE, STATUTE OF LIMITATIONS, DEFAULT JUDGMENT DISCHARGING THE MORTGAGE SHOULD HAVE BEEN GRANTED, THE SIX YEAR STATUTE OF LIMITATIONS FOR FORECLOSURE STARTED WHEN THE DEBT WAS ACCELERATED BY THE FORECLOSURE ACTION WHICH WAS ULTIMATELY DISMISSED (SECOND DEPT))

August 30, 2017

Foreclosure

BANK DID NOT DEMONSTRATE COMPLIANCE WITH REAL PROPERTY ACTIONS AND PROCEEDINGS LAW, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED IN THIS FORECLOSURE PROCEEDING (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 bank did not demonstrate compliance with statutory notice requirements:

… [T]he plaintiff failed to demonstrate, prima facie, its strict compliance with RPAPL 1304 … . In support of its motion, the plaintiff submitted, inter alia, the affidavit of Rodolfo Arias, its vice president of loan documentation, along with a copy of a 90-day notice to the defendants dated May 9, 2010, and Proof of Filing Statements from the New York State Department of Financial Services, demonstrating that the plaintiff filed the information required by RPAPL 1306. Arias stated in his affidavit that the letter dated May 9, 2010, was forwarded to the defendants “by regular and certified mail,” and annexed to his affidavit a copy of the letter. The letter 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… . While mailing may be proved by documents meeting the requirements of the business records exception to the rule against hearsay, Arias 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” … . The plaintiff’s submission of the Proof of Filing Statements pursuant to RPAPL 1306 was also unavailing. While the statements constituted some proof that a mailing was done, they contained no information indicating that the mailing was done by both registered or certified mail and first-class mail in accordance with RPAPL 1304 … . Wells Fargo Bank, N.A. v Lewczuk, 2017 NY Slip Op 06318, Second Dept 8-23-17

FORECLOSURE (BANK DID NOT DEMONSTRATE COMPLIANCE WITH REAL PROPERTY ACTIONS AND PROCEEDINGS LAW, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED IN THIS FORECLOSURE PROCEEDING (SECOND DEPT))/REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) (FORECLOSURE, BANK DID NOT DEMONSTRATE COMPLIANCE WITH REAL PROPERTY ACTIONS AND PROCEEDINGS LAW, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED IN THIS FORECLOSURE PROCEEDING (SECOND DEPT))

August 23, 2017

Civil Procedure, Foreclosure

LAW OFFICE CONFUSION NOT A SUFFICIENT EXCUSE FOR BANK ATTORNEY’S FAILURE TO ATTEND A SETTLEMENT CONFERENCE, DEFAULT JUDGMENT DISMISSING THE COMPLAINT SHOULD NOT HAVE BEEN VACATED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s (OneWest’s) motion to vacate a default judgment dismissing the complaint should not have been granted. One West’s attorney did not show up for a scheduled settlement conference:

OneWest moved pursuant to CPLR 5015(a)(1) to vacate the order entered upon its default in appearing at the conferences and to restore the action to the active calendar. In support of its motion, OneWest alleged that it was unaware of the scheduled conferences “due to law office confusion” following the substitution of counsel. The Supreme Court granted the motion. [Defendant] appeals.

A plaintiff seeking to vacate a default in appearing at a conference is required to demonstrate both a reasonable excuse for its default and a potentially meritorious cause of action… . Although “[a] motion to vacate a default is addressed to the sound discretion of the motion court” … , the defaulting party must submit evidence in admissible form establishing both a reasonable excuse and a potentially meritorious cause of action or defense … .

A court has the discretion to accept law office failure as a reasonable excuse for a party’s default … . However, “it was not the Legislature’s intent to routinely excuse such defaults” … , and mere neglect is not a reasonable excuse… .

Contrary to OneWest’s contention, it failed to provide a detailed and credible explanation of the default… . Rather, counsel’s affirmation in support of the motion contained only the conclusory and undetailed allegation of “law office confusion” after being substituted as counsel for OneWest, which does not constitute a reasonable excuse… . No other evidence was submitted to corroborate the allegation. OneWest, therefore, failed to demonstrate a reasonable excuse for its default … . OneWest Bank, FSB v Singer, 2017 NY Slip Op 06184, Second Dept 8-16-17

FORECLOSURE (LAW OFFICE CONFUSION NOT A SUFFICIENT EXCUSE FOR BANK ATTORNEY’S FAILURE TO ATTEND A SETTLEMENT CONFERENCE, DEFAULT JUDGMENT DISMISSING THE COMPLAINT SHOULD NOT HAVE BEEN VACATED (SECOND DEPT))/CIVIL PROCEDURE (FORECLOSURE, SETTLEMENT CONFERENCE, LAW OFFICE CONFUSION NOT A SUFFICIENT EXCUSE FOR BANK ATTORNEY’S FAILURE TO ATTEND A SETTLEMENT CONFERENCE, DEFAULT JUDGMENT DISMISSING THE COMPLAINT SHOULD NOT HAVE BEEN VACATED (SECOND DEPT))/ATTORNEYS (FORECLOSURE, LAW OFFICE CONFUSION NOT A SUFFICIENT EXCUSE FOR BANK ATTORNEY’S FAILURE TO ATTEND A SETTLEMENT CONFERENCE, DEFAULT JUDGMENT DISMISSING THE COMPLAINT SHOULD NOT HAVE BEEN VACATED (SECOND DEPT))/SETTLEMENT CONFERENCE LAW OFFICE CONFUSION NOT A SUFFICIENT EXCUSE FOR BANK ATTORNEY’S FAILURE TO ATTEND A SETTLEMENT CONFERENCE, DEFAULT JUDGMENT DISMISSING THE COMPLAINT SHOULD NOT HAVE BEEN VACATED (SECOND DEPT))(FORECLOSURE)

August 16, 2017

Evidence, Foreclosure

PLAINTIFF BANK FAILED TO MEET THE CRITERIA FOR THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE TO DEMONSTRATE STANDING, SUMMARY JUDGMENT SHOULD HAVE BEEN DENIED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank did not demonstrate standing to foreclose because the criteria for the business records exception to the hearsay rule were not met. The court noted that the bank’s failure to demonstrate standing did not require granting defendant’s motion for summary judgment on that ground. Defendant failed to affirmatively demonstrate plaintiff did not have standing:

… [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 Selena Mitcherson, a vice president of the plaintiff’s loan servicer. Mitcherson averred, based upon her review of the loan servicer’s business records, that “prior [to] commencement and at all times thereafter,” the plaintiff remained in possession of the original promissory note, which bears an indorsement payable to the plaintiff’s order and was “delivered to it, or its agent, on or about March 31, 2010.” However, the plaintiff failed to demonstrate the admissibility of the records relied upon by Mitcherson under the business records exception to the hearsay rule (see CPLR 4518[a]), since Mitcherson did not attest that she was personally familiar with the record-keeping practices and procedures of the plaintiff … . The plaintiff also failed to establish standing based upon the purported assignment of the note and mortgage … . …

Nevertheless, the Supreme Court properly denied that branch of the defendant’s cross motion which was for summary judgment dismissing the complaint insofar as asserted against him for lack of standing. “[T]he burden is on the moving defendant to establish, prima facie, the plaintiff’s lack of standing, rather than on the plaintiff to affirmatively establish its standing in order for the motion to be denied. To defeat a defendant’s motion, the plaintiff has no burden of establishing its standing as a matter of law” … . Here, on his cross motion, the defendant failed to make a prima facie showing that the plaintiff lacked standing … . Wells Fargo Bank, N.A. v Talley, 2017 NY Slip Op 05996, Second Dept 8-2-17

FORECLOSURE (PLAINTIFF BANK FAILED TO MEET THE CRITERIA FOR THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE TO DEMONSTRATE STANDING, SUMMARY JUDGMENT SHOULD HAVE BEEN DENIED (SECOND DEPT))/EVIDENCE (FORECLOSURE, BUSINESS RECORDS, PLAINTIFF BANK FAILED TO MEET THE CRITERIA FOR THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE TO DEMONSTRATE STANDING, SUMMARY JUDGMENT SHOULD HAVE BEEN DENIED (SECOND DEPT))/BUSINESS RECORDS (FORECLOSURE, PLAINTIFF BANK FAILED TO MEET THE CRITERIA FOR THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE TO DEMONSTRATE STANDING, SUMMARY JUDGMENT SHOULD HAVE BEEN DENIED (SECOND DEPT))/HEARSAY (BUSINESS RECORDS, PLAINTIFF BANK FAILED TO MEET THE CRITERIA FOR THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE TO DEMONSTRATE STANDING, SUMMARY JUDGMENT SHOULD HAVE BEEN DENIED (SECOND DEPT))

August 2, 2017

PLAINTIFF BANK SHOULD HAVE BEEN ALLOWED TO AMEND THE COMPLAINT BY ADDING PARTIES AND TO EXTEND THE REACH OF THE ACTION TO THE ENTIRE PREMISES WHICH HAD BEEN ACQUIRED BY ADVERSE POSSESSION (SECOND DEPT).

STATUTORY NOTICE REQUIREMENTS NOT MET IN THIS FORECLOSURE ACTION, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT).

BANK MOVED FOR AN ORDER OF REFERENCE WITHIN ONE YEAR OF DEFAULT IN THIS FORECLOSURE ACTION, THE ACTION SHOULD NOT HAVE BEEN DISMISSED AS ABANDONED (SECOND DEPT).

AFFIDAVIT WAS SUFFICIENT TO DEMONSTRATE PLAINTIFF BANK’S ENTITLEMENT TO SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION UNDER THE CONTROLLING ADMINISTRATIVE ORDER AND THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE (FIRST DEPT).

QUESTION OF FACT IN THIS FORECLOSURE ACTION WHETHER NAIL AND MAIL SERVICE ON A SATURDAY VIOLATED THE GENERAL BUSINESS LAW BECAUSE PLAINTIFF BANK WAS AWARE DEFENDANTS RECOGNIZED SATURDAY AS A HOLY DAY (SECOND DEPT).

FORECLOSURE ACTION SHOULD NOT HAVE BEEN DISMISSED, ISSUE WAS NEVER JOINED, EVEN THOUGH THE DEFENSE WAS FIRST RAISED IN REPLY PAPERS, IT COULD BE CONSIDERED ON APPEAL (SECOND DEPT).

DEFAULT JUDGMENT DISCHARGING THE MORTGAGE SHOULD HAVE BEEN GRANTED, THE SIX YEAR STATUTE OF LIMITATIONS FOR FORECLOSURE STARTED WHEN THE DEBT WAS ACCELERATED BY THE FORECLOSURE ACTION WHICH WAS ULTIMATELY DISMISSED (SECOND DEPT).

BANK DID NOT DEMONSTRATE COMPLIANCE WITH REAL PROPERTY ACTIONS AND PROCEEDINGS LAW, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED IN THIS FORECLOSURE PROCEEDING (SECOND DEPT).

LAW OFFICE CONFUSION NOT A SUFFICIENT EXCUSE FOR BANK ATTORNEY’S FAILURE TO ATTEND A SETTLEMENT CONFERENCE, DEFAULT JUDGMENT DISMISSING THE COMPLAINT SHOULD NOT HAVE BEEN VACATED (SECOND DEPT).

PLAINTIFF BANK FAILED TO MEET THE CRITERIA FOR THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE TO DEMONSTRATE STANDING, SUMMARY JUDGMENT SHOULD HAVE BEEN DENIED (SECOND DEPT).

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