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QUESTIONS OF FACT ABOUT WHETHER DECEDENT’S WIFE IS A BORROWER WITHIN THE MEANING OF THE REVERSE MORTGAGE DOCUMENTS PRECLUDES SUMMARY JUDGMENT, IF DECEDENT’S WIFE IS A BORROWER SHE MAY REMAIN IN THE MORTGAGED PREMISES, IF NOT, FORECLOSURE CAN PROCEED.

The Third Department, over a two justice dissent, determined questions of fact about whether decedent’s wife (defendant) is a “borrower” within the meaning of the reverse mortgage documents precluded summary judgment. If decedent’s wife is a borrower, foreclosure on the mortgage cannot proceed while she resides in the home. If she is not a borrower, foreclosure can proceed upon her husband’s death. The dissent argued that the documents drafted by plaintiff mortgage company were internally inconsistent and the company should therefore be precluded from claiming decedent’s is not a borrower:

Undoubtedly, where there is no extrinsic evidence relevant to an ambiguity in an agreement, “the issue is to be determined as a question of law for the court” … . In contrast, however, “[i]f there is ambiguity in the terminology used . . . and determination of the intent of the parties depends on the credibility of extrinsic evidence or on a choice among reasonable inferences to be drawn from extrinsic evidence, then such determination is to be made by the jury”… . This precedent establishes that the rule “that any ambiguity in a document is resolved against its drafter[] is a rule of construction that should be employed only as a last resort”… .

Here, the extrinsic evidence is relevant to the parties’ intentions as to whether defendant is a “[b]orrower” and is also conflicting on that point. Viewing this evidence in the light most favorable to the nonmoving party in regard to the respective motions for summary judgment, the determination of the parties’ intentions depends on the credibility of extrinsic evidence — including the credibility of defendant’s claim that the parties to the note and mortgage intended for her to be able to remain in the home in the event of her husband’s death — and the choices between the reasonable inferences that can be drawn from the extrinsic evidence. Nationstar Mtge. LLC v Goeke, 2017 NY Slip Op 04521, 3rd Dept 6-8-17

 

FORECLOSURE (REVERSE MORTGAGE, QUESTIONS OF FACT ABOUT WHETHER DECEDENT’S WIFE IS A BORROWER WITHIN THE MEANING OF THE REVERSE MORTGAGE DOCUMENTS PRECLUDES SUMMARY JUDGMENT, IF DEFENDANT IS A BORROWER SHE MAY REMAIN IN THE MORTGAGED PREMISES, IF NOT, FORECLOSURE CAN PROCEED)/CONTRACT LAW (REVERSE MORTGAGE, QUESTIONS OF FACT ABOUT WHETHER DECEDENT’S WIFE IS A BORROWER WITHIN THE MEANING OF THE REVERSE MORTGAGE DOCUMENTS PRECLUDES SUMMARY JUDGMENT, IF DEFENDANT IS A BORROWER SHE MAY REMAIN IN THE MORTGAGED PREMISES, IF NOT, FORECLOSURE CAN PROCEED)/REVERSE MORTGAGE (FORECLOSURE, QUESTIONS OF FACT ABOUT WHETHER DECEDENT’S WIFE IS A BORROWER WITHIN THE MEANING OF THE REVERSE MORTGAGE DOCUMENTS PRECLUDES SUMMARY JUDGMENT, IF DEFENDANT IS A BORROWER SHE MAY REMAIN IN THE MORTGAGED PREMISES, IF NOT, FORECLOSURE CAN PROCEED)

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STATUTE OF LIMITATIONS STARTED TO RUN IN THE FIRST FORECLOSURE PROCEEDING WHEN THE DEBT WAS ACCELERATED, THE ELECTION TO ACCELERATE WAS NEVER REVOKED, THE INSTANT FORECLOSURE ACTION IS TIME-BARRED.

The Second Department, in finding the foreclosure action time-barred, noted that the debt was accelerated (in a prior foreclosure proceeding) which started the six-year statute. The election to accelerate a debt can be revoked but was not here:

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An action to foreclose a mortgage is subject to 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, in support of her cross motion, the defendant submitted proof that the mortgage debt was accelerated on May 15, 2007, when the plaintiff commenced the first action to foreclose the subject mortgage. Thus, the six-year limitations period expired prior to the commencement of the instant action on July 9, 2013. Moreover, while a lender may revoke its election to accelerate the mortgage… , the record in this case is barren of any affirmative act of revocation occurring during the six-year limitations period subsequent to the initiation of the prior action … . U.S. Bank N.A. v Barnett, 2017 NY Slip Op 04490, 2nd Dept 6-7-17

 

FORECLOSURE (STATUTE OF LIMITATIONS, STATUTE OF LIMITATIONS STARTED TO RUN IN THE FIRST FORECLOSURE PROCEEDING WHEN THE DEBT WAS ACCELERATED, THE ELECTION TO ACCELERATE WAS NEVER REVOKED, THE INSTANT FORECLOSURE ACTION IS TIME-BARRED)/CIVIL PROCEDURE (STATUTE OF LIMITATIONS, FORECLOSURE, STATUTE OF LIMITATIONS STARTED TO RUN IN THE FIRST FORECLOSURE PROCEEDING WHEN THE DEBT WAS ACCELERATED, THE ELECTION TO ACCELERATE WAS NEVER REVOKED, THE INSTANT FORECLOSURE ACTION IS TIME-BARRED)/STATUTE OF LIMITATIONS (FORECLOSURE, STATUTE OF LIMITATIONS STARTED TO RUN IN THE FIRST FORECLOSURE PROCEEDING WHEN THE DEBT WAS ACCELERATED, THE ELECTION TO ACCELERATE WAS NEVER REVOKED, THE INSTANT FORECLOSURE ACTION IS TIME-BARRED)

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NOTICE OF APPEARANCE FILED BY AN ATTORNEY WAIVES ANY DEFENSE BASED UPON LACK OF PERSONAL JURISDICTION, DEFENSE OF LACK OF STANDING IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN RAISED BY SUPREME COURT SUA SPONTE.

The Second Department, reversing Supreme Court, determined defendant’s motion to dismiss based upon a lack of personal jurisdiction in this foreclosure action should have been denied. Defendant had appeared by an attorney (notice of appearance) and thereby waived any “lack of personal jurisdiction” argument. The Second Department further noted that Supreme Court should not have raised the defendant’s lack of standing sua sponte:

… [T]he defendant waived any claim that the Supreme Court lacked jurisdiction over her. Pursuant to CPLR 320(a), “[t]he defendant appears by serving an answer or a notice of appearance, or by making a motion which has the effect of extending the time to answer.” Subject to certain exceptions not applicable here (see CPLR 320[c]), “an appearance of the defendant is equivalent to personal service of the summons upon him, unless an objection to jurisdiction under [CPLR 3211(a)(8)] is asserted by motion or in the answer as provided in [CPLR 3211]” (CPLR 320[b]). “By statute, a party may appear in an action by attorney (CPLR 321), and such an appearance constitutes an appearance by the party for purposes of conferring jurisdiction” … . Here, the defendant’s attorney appeared in the action on her behalf by filing a notice of appearance  … , and neither the defendant nor her attorney moved to dismiss the complaint on the ground of lack of personal jurisdiction at that time or asserted lack of personal jurisdiction in a responsive pleading … . Accordingly, the defendant waived any claim that the Supreme Court lacked personal jurisdiction over her in this action … . To the extent that prior decisions of this Court could be interpreted to require a different result … , they should no longer be followed. American Home Mtge. Servicing, Inc. v Arklis, 2017 NY Slip Op 04242, 2nd Dept 5-31-17

CIVIL PROCEDURE (NOTICE OF APPEARANCE FILED BY AN ATTORNEY WAIVES ANY DEFENSE BASED UPON LACK OF PERSONAL JURISDICTION)/JURISDICTION (CIVIL PROCEDURE, NOTICE OF APPEARANCE FILED BY AN ATTORNEY WAIVES ANY DEFENSE BASED UPON LACK OF PERSONAL JURISDICTION)/FORECLOSURE (STANDING, SUPREME COURT SHOULD NOT HAVE RAISED THE DEFENSE OF LACK OF STANDING SUA SPONTE)

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NOTICE REQUIREMENTS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW NOT DEMONSTRATED, PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THE FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED.

The Second Department determined the proof of notice requirements of Real Property Actions and Proceedings Law (RPAPL) 1304 was insufficient and the bank’s motion for summary judgment in this foreclosure proceeding should not have been granted:

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Here, the plaintiff failed to demonstrate, prima facie, its strict compliance with RPAPL 1304 … . In support of its motion, the plaintiff submitted the affidavit of Monica I. Montalvo Rivas, its vice president of loan documentation, stating that she had “reviewed the 90 day pre-foreclosure notice sent to Borrower on October 31, 2013 to the last known address of Borrower, which is the residence that is [the] subject of the Mortgage, by first class mail and certified mail.” Annexed to Rivas’s affidavit was a copy of the notice, along with a copy of a “Certified Mail Receipt” containing the defendant’s address and a “Certified Mail Number.” The receipt contained no language indicating that it was issued by the United States Postal Service. “While mailing may be proved by documents meeting the requirements of the business exception records exception to the rule against hearsay,” here, Rivas did not aver that she 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 … . In any event, the plaintiff failed to submit any proof substantiating Rivas’s assertion that the notice was mailed to the defendant by first class mail. Wells Fargo Bank, N.A. v Trupia, 2017 NY Slip Op 03986, 2nd Dept 5-17-17

FORECLOSURE (NOTICE REQUIREMENTS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW NOT DEMONSTRATED, PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THE FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED)/REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (FORECLOSURE, NOTICE REQUIREMENTS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW NOT DEMONSTRATED, PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THE FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED)/EVIDENCE (FORECLOSURE, NOTICE REQUIREMENTS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW NOT DEMONSTRATED, PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THE FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED)

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NOTICE REQUIREMENTS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW NOT DEMONSTRATED, PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THE FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED.

The Second Department, reversing Supreme Court, determined plaintiff in this foreclosure action did not demonstrate it met the notice requirements of the Real Property Actions and Proceedings Law (RPAPL):

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… [P]laintiff submitted an affidavit of its vice president, who averred that he had reviewed the business records, maintained in the regular course of business by the plaintiff, relating to [the] loan. Based upon his review, he averred that the RPAPL 1304 notice was “sent in accordance with New York RPAPL 1304” on January 10, 2011. This unsubstantiated and conclusory statement was insufficient to establish that the required RPAPL 1304 notice was mailed … by registered or certified mail and also by first-class mail… . Further, since the plaintiff was not an assignee of the mortgage at the time the notice allegedly was served, the basis of the vice president’s knowledge is unclear … .

Moreover, [defendant] raised a triable issue of fact with respect to whether the RPAPL 1303 notice was in the proper form … . Central Mtge. Co. v Abraham, 2017 NY Slip Op 03929, 2nd Dept 5-17-17

FORECLOSURE (NOTICE REQUIREMENTS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW NOT DEMONSTRATED, PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THE FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED)/REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (FORECLOSURE, NOTICE REQUIREMENTS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW NOT DEMONSTRATED, PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THE FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED)/EVIDENCE (FORECLOSURE, NOTICE REQUIREMENTS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW NOT DEMONSTRATED, PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THE FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED)

REAL PROPERTY ACTIONS AND PROCEEDINGS LAW 90-DAY NOTICE REQUIREMENT FOR FORECLOSURE PROCEEDINGS NOT MET, PROOF OF MAILING INSUFFICIENT.

The Second Department, reversing Supreme Court, determined the 90 notice requirement of Real Property Actions and Proceedings Law (RPAPL) for foreclosure proceedings was not met:

Here, contrary to the Supreme Court’s determination, the plaintiff failed to establish, prima facie, that it complied with RPAPL 1304. The plaintiff failed to submit an affidavit of service or any proof of mailing by the post office demonstrating that it properly served the appellant 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, which referenced purported tracking numbers stamped on the notice, was insufficient to establish that the notice was sent to the appellant 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 … .  Citibank, N.A. v Wood, 2017 NY Slip Op 03727, 2nd Dept 5-10-17

FORECLOSURE (REAL PROPERTY ACTIONS AND PROCEEDINGS LAW 90 NOTICE REQUIREMENT FOR FORECLOSURE PROCEEDINGS NOT MET, PROOF OF MAILING INSUFFICIENT)/REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (FORECLOSURE, NOTICE, REAL PROPERTY ACTIONS AND PROCEEDINGS LAW 90 NOTICE REQUIREMENT FOR FORECLOSURE PROCEEDINGS NOT MET, PROOF OF MAILING INSUFFICIENT)

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DEFENDANT IN THIS CONDOMINIUM ACTION WAS NOT ENTITLED TO A MANDATORY FORECLOSURE SETTLEMENT CONFERENCE.

The First Department determined the defendant in this condominium foreclosure action was not entitled to a mandatory mortgage foreclosure settlement conference. The court had ordered settlement conferences in the past and defendant had refused to participate:

The express language of the condominium’s bylaws permitted the appointment of a receiver, without notice, to collect unpaid common charges in this foreclosure action. Further, the record demonstrates that while defendant, an owner of an apartment in the condominium, paid maintenance arrears after plaintiff board filed a notice of lien and commenced the action to foreclose on the lien, she still owed plaintiff for assessments, late fees and associated attorney’s fees. Accordingly, plaintiff was entitled to seek judgment for these fees, which constitute common charges under the bylaws… . We reject defendant’s claim that she was entitled to a mandatory mortgage foreclosure settlement conference, particularly since the court directed the parties to engage in settlement conferences to resolve this matter, and it appears that defendant, for the most part, refused to participate. Board of Mgrs. of St. James’s Tower Condominium v Kutler, 2017 NY Slip Op 03605, 1st Dept 5-4-17

FORECLOSURE (CONDOMINIUMS, DEFENDANT IN THIS CONDOMINIUM FORECLOSURE ACTION WAS NOT ENTITLED TO A MANDATORY FORECLOSURE SETTLEMENT CONFERENCE)/CIVIL PROCEDURE (FORECLOSURE, MANDATORY SETTLEMENT CONFERENCE, DEFENDANT IN THIS CONDOMINIUM FORECLOSURE ACTION WAS NOT ENTITLED TO A MANDATORY FORECLOSURE SETTLEMENT CONFERENCE)/CONDOMINIUMS (FORECLOSURE, MANDATORY FORECLOSURE SETTLEMENT CONFERENCE, DEFENDANT IN THIS CONDOMINIUM FORECLOSURE ACTION WAS NOT ENTITLED TO A MANDATORY FORECLOSURE SETTLEMENT CONFERENCE)

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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)

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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)

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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:

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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)

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