You are here: / Foreclosure
,

BANK DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, CRITERIA FOR BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET.

The Second Department determined plaintiff bank failed to demonstrate standing to bring the foreclosure action because the criteria for the business records exception to the hearsay rule were not met:

Here, the plaintiff attempted to establish its standing by submitting the affidavit of Kelly Thompson, an Assistant V.P., Operations Team Manager, at Bank of America, N.A. (hereinafter BANA), the servicer of the defendant Juliet Willis’s loan on behalf of the plaintiff. Thompson averred, in relevant part, that her affidavit was based upon her review of BANA’s business records, and that upon review of such records, the note was physically transferred to the plaintiff “in or about March 2007.” The plaintiff failed to demonstrate that the records relied upon by Thompson were admissible under the business records exception to the hearsay rule (see CPLR 4518[a]) because Thompson, an employee of BANA, did not attest that she was personally familiar [*2]with the plaintiff’s recordkeeping practices and procedures … . Bank of N.Y. v Willis, 2017 NY Slip Op 03468, 2nd Dept 5-3-17

FORECLOSURE (BANK DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, CRITERIA FOR BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET)/EVIDENCE (FORECLOSURE, STANDING, BANK DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, CRITERIA FOR BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET)/HEARSAY (FORECLOSURE, STANDING, (BANK DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, CRITERIA FOR BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET)/BUSINESS RECORDS EXCEPTION TO HEARSAY RULE (FORECLOSURE, STANDING, (BANK DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, CRITERIA FOR BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET)

,

NEW INFORMATION IN REPLY PAPERS PROPERLY CONSIDERED BY THE COURT.

The Second Department, in finding plaintiff bank had established standing to bring the foreclosure action, explained when a court may consider new information in a reply affidavit (re: a motion for summary judgment):

… [I]t was not error for the Supreme Court to consider the reply affidavit, which was submitted in reply to the appellant’s opposition. A party moving for summary judgment generally cannot meet its prima facie burden by submitting evidence for the first time in reply … . However, there are exceptions to this general rule, including when the evidence is submitted in response to allegations raised for the first time in the opposition papers or when the other party is given an opportunity to respond to the reply papers… . Further, “[t]he function of reply papers is to address arguments made in opposition to the position taken by the movant” … .

Here, the Supreme Court properly considered the reply affidavit because the affidavit was offered in response to the appellant’s allegation in opposition to the motion that the plaintiff never had possession of the note, and merely clarified the plaintiff’s initial submissions as to its possession of the note at the time of commencement … . Central Mtge. Co. v Jahnsen, 2017 NY Slip Op 03474, 2nd Dept 5-3-17

CIVIL PROCEDURE (NEW INFORMATION IN REPLY PAPERS PROPERLY CONSIDERED BY THE COURT)/SUMMARY JUDGMENT (NEW INFORMATION IN REPLY PAPERS PROPERLY CONSIDERED BY THE COURT)/REPLY PAPERS (SUMMARY JUDGMENT, FORECLOSURE, NEW INFORMATION IN REPLY PAPERS PROPERLY CONSIDERED BY THE COURT)/FORECLOSURE (SUMMARY JUDGMENT, NEW INFORMATION IN REPLY PAPERS PROPERLY CONSIDERED BY THE COURT)

,

REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1501 WAS THE PROPER BASIS FOR THE ACTION SEEKING TO SET ASIDE THE DEED AND MORTGAGES WHICH WERE THE BASES FOR THE BANK’S JUDGMENT OF FORECLOSURE.

The Second Department, reversing Supreme Court, determined plaintiff should have been granted summary judgment in the Real Property Actions and Proceedings Law (RPAPL) 1501 action to set aside the deed and mortgages which were the bases for foreclosure by defendant Wells Fargo bank. Plaintiff demonstrated the initial deed was a forgery. Wells Fargo argued the proper procedure required that plaintiff move to vacate the judgment of foreclosure:

​

RPAPL 1501(1) 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.” A deed based on forgery or obtained by false pretenses is void ab initio, and a mortgage based on such a deed is likewise invalid … .

Contrary to Wells Fargo’s contention, the plaintiff, who, like the decedent, was not a defendant in the foreclosure action… , properly commenced the instant action … .

Wells Fargo otherwise failed to carry its prima facie burden on its motion by demonstrating the absence of a triable issue of fact as to whether the subject deed was valid … . Accordingly, the Supreme Court erred in granting Wells Fargo’s motion … . Deramo v Laffey, 2017 NY Slip Op 02772, 2nd Dept 4-12-17

REAL PROPERTY (REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1501 WAS THE PROPER BASIS FOR THE ACTION SEEKING TO SET ASIDE THE DEED AND MORTGAGES WHICH WERE THE BASES FOR THE BANK’S JUDGMENT OF FORECLOSURE)/FORECLOSURE (REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1501 WAS THE PROPER BASIS FOR THE ACTION SEEKING TO SET ASIDE THE DEED AND MORTGAGES WHICH WERE THE BASES FOR THE BANK’S JUDGMENT OF FORECLOSURE)/DEEDS (FORGED, REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1501 WAS THE PROPER BASIS FOR THE ACTION SEEKING TO SET ASIDE THE DEED AND MORTGAGES WHICH WERE THE BASES FOR THE BANK’S JUDGMENT OF FORECLOSURE)

,

LENDER DID NOT NEGOTIATE A MORTGAGE MODIFICATION IN GOOD FAITH AND WAS PROPERLY SANCTIONED.

The Second Department determined plaintiff-lender did not negotiate a mortgage modification in good faith and was properly sanctioned by the tolling of interest, costs and attorney’s fees accrued during the four years of negotiations:

Pursuant to CPLR 3408(f), the parties at a mandatory foreclosure settlement conference are required to negotiate in good faith to reach a mutually agreeable resolution … . “The purpose of the good faith requirement . . . is to ensure that both plaintiff and defendant are prepared to participate in a meaningful effort at the settlement conference to reach resolution” … . Compliance with the good faith requirement is measured by the totality of the circumstances and whether the party’s conduct demonstrates a meaningful effort at reaching a resolution … .

Here, the totality of the circumstances supports the finding that the plaintiff failed to negotiate in good faith. The hearing evidence demonstrated that the plaintiff, among other things, engaged in dilatory conduct by making piecemeal document requests, providing contradictory information, and repeatedly requesting documents that had already been provided … . Aurora Loan Servs., LLC v Diakite, 2017 NY Slip Op 01528, 2nd Dept 3-1-17

 

FORECLOSURE (LENDER DID NOT NEGOTIATE A MORTGAGE MODIFICATION IN GOOD FAITH AND WAS PROPERLY SANCTION)/CIVIL PROCEDURE (FORECLOSURE, LENDER DID NOT NEGOTIATE A MORTGAGE MODIFICATION IN GOOD FAITH AND WAS PROPERLY SANCTION)

,

BANK EMPLOYEE’S AFFIDAVIT DID NOT DEMONSTRATE 90 DAY NOTICE WAS PROPERLY SERVED.

The Second Department determined plaintiff bank did not demonstrate compliance with Real Property Actions and Proceedings Law (RPAPL) 1304 in serving the 90-day notice. The documents submitted by plaintiff’s employee (Gantner) did not meet the requirements of the business records exception to the hearsay rule:

Here, the plaintiff failed to submit an affidavit of service … or proof of mailing by the post office, evincing that it properly served the defendant pursuant to RPAPL 1304. Contrary to the plaintiff’s contention, Gantner’s affidavit and attached business records were not sufficient to establish that the notices were sent to the defendant in the manner required by RPAPL 1304. While mailing may be proven by documents meeting the requirements of the business records exception to the rule against hearsay under CPLR 4518 … , here, Gantner did not aver 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 … . Therefore, Gantner’s unsubstantiated and conclusory statements were insufficient to establish that the 90-day notice required by RPAPL 1304 was mailed to the defendant by first-class and certified mail … . CitiMortgage, Inc. v Pappas, 2017 NY Slip Op 01177. 2nd Dept 2-15-17

FORECLOSURE (BANK EMPLOYEE’S AFFIDAVIT DID NOT DEMONSTRATE 90 DAY NOTICE WAS PROPERLY SERVED)/EVIDENCE (FORECLOSURE, BANK EMPLOYEE’S AFFIDAVIT DID NOT DEMONSTRATE 90 DAY NOTICE WAS PROPERLY SERVED)

,

CPLR 205 (a), WHICH ALLOWS SIX MONTHS FOR RECOMMENCING AN ACTION AFTER DISMISSAL, APPLIES TO FORECLOSURE PROCEEDINGS, EVEN WHEN THE CURRENT HOLDER OF THE NOTE IS A SUCCESSOR IN INTEREST TO THE PARTY WHICH STARTED THE FORECLOSURE ACTION.

The Second Department, in a full-fledged opinion by Justice Maltese, determined the six-month extension of a statute of limitations provided by CPLR 205 (a) applied in this foreclosure action. The court summarized the rulings as follows:

Under certain conditions, CPLR 205(a) provides an additional six months in which to recommence a prior action that has been dismissed on grounds other than voluntary discontinuance, lack of personal jurisdiction, neglect to prosecute, or a final judgment on the merits. The first question in this case is whether a prior action to foreclose the same mortgage was dismissed for neglect to prosecute, a category of dismissal that renders CPLR 205(a) inapplicable. We answer this question in the negative, concluding that the prior action was not dismissed for neglect to prosecute.

The second question is more novel. We must determine whether the plaintiff in this mortgage foreclosure action, which was assigned the note and mortgage during the pendency of the prior foreclosure action, is entitled to the savings provision—or grace period—of CPLR 205(a) even though the prior action was commenced by a prior holder of the note. … [W]e conclude that a plaintiff in a mortgage foreclosure action which meets all of the other requirements of the statute is entitled to the benefit of CPLR 205(a) where, as here, it is the successor in interest as the current holder of the note. Wells Fargo Bank, N.A. v Eitani, 2017 NY Slip Op 01015, 2nd Dept 2-8-17

 

CIVIL PROCEDURE (CPLR 205 (a), WHICH ALLOWS SIX MONTHS FOR RECOMMENCING AN ACTION AFTER DISMISSAL, APPLIES TO FORECLOSURE PROCEEDINGS, EVEN WHEN THE CURRENT HOLDER OF THE NOTE IS A SUCCESSOR IN INTEREST TO THE PARTY WHICH STARTED THE FORECLOSURE ACTION)/FORECLOSURE (CPLR 205 (a), WHICH ALLOWS SIX MONTHS FOR RECOMMENCING AN ACTION AFTER DISMISSAL, APPLIES TO FORECLOSURE PROCEEDINGS, EVEN WHEN THE CURRENT HOLDER OF THE NOTE IS A SUCCESSOR IN INTEREST TO THE PARTY WHICH STARTED THE FORECLOSURE ACTION)

,

HEARING NECESSARY TO ASSESS ATTORNEY’S FEES, CRITERIA EXPLAINED.

The Third Department, over a partial dissent, reversing Supreme Court, determined a hearing must be held to assess the validity of an $80,000 attorney’s fee in a foreclosure proceeding. Supreme Court granted the fee without a hearing and without making the requisite findings:

While a hearing on counsel fees is not required when a determination can be made on the papers alone … , this is not the case here inasmuch as plaintiff’s “affidavit of services rendered . . . fail[ed] to set forth counsel’s experience, ability, and reputation, and fail[ed] to detail the prevailing hourly rate for similar legal work in the community” … . Furthermore, the itemized legal bills submitted by plaintiff are insufficient to assess the reasonableness of the fees in the absence of proof showing “the necessity of the services rendered, the benefit achieved, the difficulty of the issues involved, or any other of the considerations normally involved in calculating [counsel] fees” … .

Notwithstanding Supreme Court’s discretion in this realm and the fact that the court awarded plaintiff an amount less than what was sought, before an award of counsel fees may be fixed, “the court must possess sufficient information upon which to make an informed assessment of the reasonable value of the legal services rendered” … . In our view, Supreme Court did not have before it sufficient information to summarily determine the reasonableness of the sought counsel fees. Furthermore, “to permit intelligent review, a court must provide a concise but clear explanation of its reasons for the [counsel] fee award” … . Although Supreme Court, in its order, recited the necessary factors relevant to determining the reasonableness of counsel fees, it did not provide a clear explanation for its ultimate counsel fee award. Rather, the $80,000 awarded by Supreme Court appears to derive merely from adding up all of the fees attributable to one of the attorneys who represented plaintiff — i.e., the attorney who submitted the affidavit of services — without regard to the necessary factors used to reach an award of counsel fees and with insufficient information in light of the block billing and vague and redacted time entries in the legal invoices. Accordingly, given that plaintiff’s proof was insufficient for Supreme Court to fix an award of counsel fees on the papers alone and that defendants were never afforded an opportunity in the first instance to challenge the reasonableness of the requested counsel fees, the matter must be remitted for an evidentiary hearing. Lehman Commercial Paper, Inc. v Point Prop. Co., LLC, 2017 NY Slip Op 00358, 3rd Dept 1-19-17

 

ATTORNEYS (FEES, FORECLOSURE, HEARING NECESSARY TO ASSESS ATTORNEY’S FEES, CRITERIA EXPLAINED)/FORECLOSURE (ATTORNEY’S FEES, HEARING NECESSARY TO ASSESS ATTORNEY’S FEES, CRITERIA EXPLAINED)

,

BANK DID NOT DEMONSTRATE STANDING (REQUIREMENTS OF BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET), SUPREME COURT REVERSED.

The Second Department, reversing Supreme Court, determined plaintiff bank did not demonstrate standing to bring the action:

In support of its motion, Arch Bay submitted the affidavit of Selena Mitcherson, an assistant vice president of Rushmore Loan Management Services (hereinafter Rushmore), the loan servicer for Arch Bay’s assignee [Wachovia]. Mitcherson averred, based upon her review of Rushmore’s business records, that “[t]he note . . . was in Plaintiff’s physical possession of the note [sic] when the action was commenced.” Under these circumstances, Arch Bay 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 Wachovia … . Arch Bay Holdings, LLC v Albanese, 2017 NY Slip Op 00284, 2nd Dept 1-18-17

FORECLOSURE (BANK DID NOT DEMONSTRATE STANDING (REQUIREMENTS OF BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET), SUPREME COURT REVERSED)/EVIDENCE (FORECLOSURE, BANK DID NOT DEMONSTRATE STANDING (REQUIREMENTS OF BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET), SUPREME COURT REVERSED)/HEARSAY (FORECLOSURE, BANK DID NOT DEMONSTRATE STANDING (REQUIREMENTS OF BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET), SUPREME COURT REVERSED)/STANDING (FORECLOSURE, BANK DID NOT DEMONSTRATE STANDING (REQUIREMENTS OF BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET), SUPREME COURT REVERSED)

,

COURTS OF EQUITY HAVE BROAD POWERS TO ACT IN THE INTEREST OF JUSTICE, FORECLOSURE IS EQUITABLE IN NATURE, MOTION TO VACATE DEFAULT SHOULD HAVE BEEN GRANTED.

The Second Department, reversing Supreme Court, determined that defendant’s motion to vacate a default judgment in this foreclosure action should have been granted in the interest of justice. The court explained the “interest of justice” powers in this context:

“In addition to the grounds set forth in section 5015(a), a court may vacate its own judgment for sufficient reason and in the interests of substantial justice” … . Moreover, “[a] foreclosure action is equitable in nature and triggers the equitable powers of the court … . “Once equity is invoked, the court’s power is as broad as equity and justice require” … . Thus, a court may rely on “its inherent authority to vacate [a judgment] in the interest of substantial justice, rather than its statutory authority under CPLR 5015(a),” as the “statutory grounds are subsumed by the court’s broader inherent authority” … . U.S. Bank Natl. Assn. v Losner, 2016 NY Slip Op 08560, 2nd Dept 12-21-16

CIVIL PROCEDURE (COURTS OF EQUITY HAVE BROAD POWERS TO ACT IN THE INTEREST OF JUSTICE, FORECLOSURE IS EQUITABLE IN NATURE, MOTION TO VACATE DEFAULT SHOULD HAVE BEEN GRANTED)/FORECLOSURE (COURTS OF EQUITY HAVE BROAD POWERS TO ACT IN THE INTEREST OF JUSTICE, FORECLOSURE IS EQUITABLE IN NATURE, MOTION TO VACATE DEFAULT SHOULD HAVE BEEN GRANTED)/EQUITY (COURTS OF EQUITY HAVE BROAD POWERS TO ACT IN THE INTEREST OF JUSTICE, FORECLOSURE IS EQUITABLE IN NATURE, MOTION TO VACATE DEFAULT SHOULD HAVE BEEN GRANTED)/DEFAULT, MOTION TO VACATE (FORECLOSURE, COURTS OF EQUITY HAVE BROAD POWERS TO ACT IN THE INTEREST OF JUSTICE, FORECLOSURE IS EQUITABLE IN NATURE, MOTION TO VACATE DEFAULT SHOULD HAVE BEEN GRANTED)

,

MOTION TO VACATE DEFAULT DID NOT WAIVE RIGHT TO MOVE TO DISMISS THE FORECLOSURE ACTION AS ABANDONED.

The Second Department, reversing Supreme Court, determined the defendant’s right to make a motion to dismiss the foreclosure cause of action as abandoned was not waived by defendant’s motion to vacate the default and file a late answer:

Contrary to the plaintiff’s contention, the defendant did not waive the right to seek dismissal of the complaint pursuant to CPLR 3215(c) by moving to vacate her default and for leave to serve a late answer. “The mere fact that the legislative intent underlying CPLR 3215(c) was to prevent the plaintiffs from unreasonably delaying the determination of an action, does not foreclose the possibility that a defendant may waive the right to seek a dismissal pursuant to the section by his or her conduct” … . A defendant may waive the right to seek a dismissal pursuant to CPLR 3215(c) by serving an answer or taking “any other steps which may be viewed as a formal or informal appearance” … . However, a motion pursuant to CPLR 3012(d) for leave to serve an untimely answer does not constitute either a formal (see CPLR 320) or informal appearance … . HSBC Bank USA, N.A. v Grella, 2016 NY Slip Op 08199, 2nd Dept 12-7-16

FORECLOSURE (MOTION TO VACATE DEFAULT DID NOT WAIVE RIGHT TO MOVE TO DISMISS THE FORECLOSURE ACTION AS ABANDONED)/DISMISS, MOTION TO (CIVIL, MOTION TO VACATE DEFAULT DID NOT WAIVE RIGHT TO MOVE TO DISMISS THE FORECLOSURE ACTION AS ABANDONED)/DEFAULT, MOTION TO VACATE (MOTION TO VACATE DEFAULT DID NOT WAIVE RIGHT TO MOVE TO DISMISS THE FORECLOSURE ACTION AS ABANDONED)/ABANDONMENT OF ACTION (MOTION TO VACATE DEFAULT DID NOT WAIVE RIGHT TO MOVE TO DISMISS THE FORECLOSURE ACTION AS ABANDONED)

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