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THE BANK IN THIS FORECLOSURE ACTION DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304, INCLUDING THE “ONE ENVELOPE” RULE (SECOND DEPT).

The Second Department, reversing Supreme Court. determined the bank in this foreclosure action did not demonstrate strict compliance with the notice provisions of RPAPL 1304, including compliance with the “one envelope” rule:

… [T]he plaintiff failed to establish … that it strictly complied with the requirements of RPAPL 1304 … . Moreover, in support of their cross motion, the defendants … demonstrated, prima facie, that the plaintiff included additional material in the same envelope as the RPAPL 1304 notice, in violation of the separate mailing requirement of RPAPL 1304(2) … . US Bank N.A. v Kaplan, 2022 NY Slip Op 01201, Second Dept 2-23-22

 

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THE BANK FAILED TO SUBMIT THE BUSINESS RECORDS RELIED ON IN ITS AFFIDAVIT IN THIS FORECLOSURE ACTION RENDERING THE AFFIDAVIT INADMISSIBLE HEARSAY; SUPREME COURT’S DETERMINATION THE BANK HAD COMPLIED WITH THE NOTICE PROVISIONS OF RPAPL 1304 AND THE MORTGAGE WAS THE LAW OF THE CASE PRECLUDING RECONSIDERATION OF THE ISSUE PURSUANT TO DEFENDANTS’ CROSS MOTION (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the failure to identify and attach the documents demonstrating the defendants’ default in this foreclosure action rendered the bank’s affidavit inadmissible hearsay. The court noted that Supreme Court’s determination the bank had complied with the notice requirements of RPAL 1304 was the law of the case precluding reconsideration of the issue pursuant to defendants’ cross motion:

The plaintiff relied upon the affidavit of Richard L. Penno, a vice president of loan documentation for Wells Fargo Bank, N.A. (hereinafter Wells Fargo), the plaintiff’s loan servicer. Based upon his review of Wells Fargo’s books and records concerning the defendants’ loan, Penno attested to the defendants’ default in payment. However, Penno did not identify the records he relied upon in order to attest to the defendants’ default and did not attach them to his affidavit … . “While a witness may read into the record from the contents of a document which has been admitted into evidence, a witness’s description of a document not admitted into evidence is hearsay” … . Thus, Penno’s assertions as to the contents of Wells Fargo’s servicing records were inadmissible … . Contrary to the plaintiff’s contention, a review of records maintained in the normal course of business does not vest an affiant with personal knowledge … . …

… [C]ontrary to the defendants’ … contention, the Supreme Court properly denied that branch of their cross motion which was to dismiss the complaint insofar as asserted against them for failure to comply with RPAPL 1304 and the notice of default provision of the mortgage agreement. The plaintiff’s strict compliance with RPAPL 1304 and the notice of default provision of the mortgage agreement were both considered and decided in the plaintiff’s favor on its motion for summary judgment. Therefore, while it is true that a defense based on noncompliance with RPAPL 1304 may be raised at any time … , the doctrine of law of the case precluded the court from reconsidering those issues on the defendants’ cross motion … . U.S. Bank N.A. v Ramanababu, 2022 NY Slip Op 01199, Second Dept 2-23-22

 

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THE BANK’S PROOF OF COMPLIANCE WITH THE NOTICE PROVISIONS OF RPAPL 1304 IN THIS FORECLOSURE ACTION WAS DEFICIENT; THE FAILURE TO SUBMIT THE BUSINESS RECORDS REFERRED TO IN THE BANK’S AFFIDAVIT RENDERED THE AFFIDAVIT INADMISSIBLE HEARSAY (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s proof of compliance with the notice requirements of RPAPL 1304 in this foreclosure action was deficient, and the failure to submit the business records referred to in the bank’s affidavit rendered the affidavit inadmissible hearsay:

In support of its motion for summary judgment, the plaintiff submitted the affidavit of Becky J. Layman, an officer of the plaintiff. Layman’s assertions that the plaintiff complied with the notice of default provision of the mortgage and that the plaintiff complied with the notice provision of RPAPL 1304 were insufficient, since she failed to provide proof of the actual mailings or attest to knowledge of the plaintiff’s mailing practices and procedures … . Layman’s affidavit was also insufficient to establish, prima facie, that the defendant defaulted under the note and mortgage, since her purported knowledge was based upon review of unidentified business records which were not attached to her affidavit … . Thus, her assertions regarding the defendant’s default, without the business records upon which she relied in making those assertions, constituted inadmissible hearsay … . U.S. Bank N.A. v Campbell, 2022 NY Slip Op 01198, Second Dept 2-23-22

 

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THE BANK’S PROOF OF COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 IN THIS FORECLOSURE ACTION WAS INSUFFICIENT; THE BUSINESS RECORDS REFERRED TO IN THE AFFIDAVIT WERE NOT PRODUCED (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court in this foreclosure action, determined the bank’s proof of compliance with the notice requirements of RPAPL 1304 was insufficient. The court noted that, under the facts, standing to contest the bank’s compliance with RPAPL 1304 was personal to each borrower, one borrower could not assert that defense on behalf of another borrower:

JPMorgan submitted an affidavit, entitled an “Affidavit of Mailing,” signed by James A. Ranaldi, an “Authorized Signer” employed by JPMorgan. Ranaldi, however, did not attest to personal knowledge of the actual mailings. Nor did he state that he had personal knowledge “of a standard office mailing procedure designed to ensure that items are properly addressed and mailed” … . Although Ranaldi asserted, based upon his review of business records associated with the subject loan, that “a ninety-day (90) pre-foreclosure notice dated 12/04/2009 was sent by regular first class and certified mail under the exclusive care and custody of the United States Postal Service addressed to [the defendant at the subject property],” “it is the business record itself, not the foundational affidavit, that serves as proof of the matter asserted”… . The records attached to Ranaldi’s affidavit provided evidence that the 90-day notice was sent to the defendant by certified mail. But none of the documents, considered individually or together, including the copies of the notice letters themselves, provided any information as to whether the 90-day notice was sent to the defendant by regular first-class mail … . Without business records proving the matter asserted, Ranaldi’s “unsubstantiated and conclusory” statement, by itself, was insufficient to establish that the RPAPL 1304 notice was mailed to the defendant by first-class mail … . Wilmington Sav. Fund Socy., FSB v Kutch, 2022 NY Slip Op 01066, Second Dept 2-16-22

 

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IN AN ACTION FOR A LICENSE PURSUANT TO RPAPL 881 TO ALLOW PETITIONER ACCESS TO RESPONDENTS’ ABUTTING BUILDING TO FACILITATE CONSTRUCTION WORK ON PETITIONER’S BUILDING, RESPONDENTS ARE ENTITLED TO LICENSE FEES, ATTORNEY’S FEES, ENGINEERING FEES, ETC., ASSOCIATED WITH PROTECTING THEIR BUILDING AND TO COMPENSATE FOR INTERFERERENCE WITH THE USE OF THEIR BUILDING, IRRESPECTIVE OF WHETHER THERE IS ANY DAMAGE TO RESPONDENTS’ BUILDING (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Acosta, affirmed the grant of a license to petitioner, pursuant to RPAPL 881, to enter respondents’ abutting property to protect the abutting property during construction work on petitioner’s building, but vacated or reduced some of the specific costs and/or damages awarded. The First Department noted that attorney’s fees, license fees and engineering fees, etc., associated with the respondents’ efforts to protect their building and the loss of use and enjoyment of their building during construction are properly assessed to the petitioner:

What petitioner seeks is essentially to compel respondents to grant it a license on its own terms. However, as we have recognized, because “[t]he respondent to an 881 petition has not sought out the intrusion and does not derive any benefit from it . . . [e]quity requires that the owner compelled to grant access should not have to bear any costs resulting from the access” … . Thus, the grant of licenses pursuant to RPAPL 881 often warrants the award of contemporaneous license fees … . Contrary to petitioner’s contention that a license fee constitutes a windfall unless there are some actual damages, such as lost business, we have found that a license fee is warranted “where the granted license will entail substantial interference with the use and enjoyment of the neighboring property during the [license] period, thus decreasing the value of the property during that time” … .

Similarly, a compulsory licensor should be entitled to reasonable attorneys’ and engineering fees … . Matter of Panasia Estate, Inc. v 29 W. 19 Condominium, 2022 NY Slip Op 00975, First Dept 2-15-22

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SUPREME COURT SHOULD NOT HAVE DISMISSED THE FORECLOSURE ACTION AFTER TRIAL ON THE GROUND PLAINTIFF DID NOT LAY A PROPER FOUNDATION FOR THE ADMISSION OF THE DOCUMENTS REQUIRED TO MAKE OUT A PRIMA FACIE CASE; COMPLAINT REINSTATED AND JUDGMENT AWARDED TO PLAINTIFF (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff in this foreclosure action properly laid a proper foundation at trial for the admission of documents making out a prima facie case. Therefore the action should not have been dismissed and a judgment in favor of plaintiff should have been entered. At trial plaintiff established standing to bring the action, the defendant’s default, and compliance with the notice provisions of RPAPL 1304. Bank of Am., N.A. v Bloom, 2022 NY Slip Op 00839, Second Dept 2-9-22

 

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THE AFFIDAVITS DID NOT PROVE THE RPAPL 1304 WAS ACTUALLY MAILED TO DEFENDANTS; PLAINTIFF’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined the proof of compliance with the notice requirements of RPAPL 1304 was insufficient. Therefore plaintiff in this foreclosure action was not entitled to summary judgment:

Since HSBC failed to provide evidence of the actual mailing, or evidence of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, it failed to establish, prima facie, its strict compliance with RPAPL 1304 … . MTGLQ Invs., L.P. v Cutaj, 2022 NY Slip Op 00858, Second Dept 2-9-22

Similar issues and result in U.S. Bank N.A. v Adams, 2022 NY Slip Op 00896, Second Dept 2-9-22

Similar issues and result in Wells Fargo Bank, N.A. v Davidson, 2022 NY Slip Op 00901, Second Dept 2-9-22 which also held the bank’s failure to comply with the “one envelope” rule for the RPAPL 1304 notice can be raised for the first time on appeal.

 

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THE RPAPL 1304 NOTICE DID NOT INLUDE A LIST OF FIVE HOUSING COUNSELING AGENCIES SERVING THE COUNTY WHERE THE PROPERTY IS LOCATED; THE BANK’S SUMMARY JUDGMENT MOTION IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank did not demonstrate compliance with the RPAPL 1304 required that the notice of foreclosure include a list of five housing counseling agencies serving the county were the property is located:

… [T]he plaintiff failed to establish, prima facie, its strict compliance with RPAPL 1304, as it failed to demonstrate that the 90-day notices it sent to the defendants contained the requisite list of five housing counseling agencies serving the county in which the subject property is located … . In support of its motion, the plaintiff submitted the notices pursuant to RPAPL 1304, annexed to which was a list of five agencies. Four of the agencies were located in Queens, and one of the agencies, Hispanic Brotherhood of Rockville Centre, Inc., was located in Nassau County. Thus, the plaintiff failed to establish, prima facie, that all five of the agencies served Queens County. U.S. Bank N.A. v Gordon, 2022 NY Slip Op 00898, Second Dept 2-9-22

Similar issues and result in Wells Fargo Bank, N.A. v McMahon, 2022 NY Slip Op 00903, Second Dept 2-9-22

 

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THE BANK IN THIS FORECLOSURE ACTION DID NOT DEMONSTRATE STANDING TO BRING THE ACTION AND DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE PROVISIONS OF THE MORTGAGE AND RPAPL 1304 (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank in this foreclosure action did not prove standing to bring the action and compliance with the notice requirements of the mortgage and RPAPL 1304:

Although the plaintiff attached to the complaint copies of the note and an undated purported allonge endorsed in blank, the plaintiff did not demonstrate that the purported allonge, which was on a piece of paper completely separate from the note, was “so firmly affixed thereto as to become a part thereof,” as required by UCC 3-202(2) … . …

… [T}he plaintiff failed to demonstrate, prima facie, that a notice of default in accordance with sections 15 and 22 of the mortgage was properly transmitted to the defendant prior to the commencement of this action … . …

… [T]he plaintiff failed to establish, prima facie, its strict compliance with RPAPL 1304. The plaintiff failed to provide proof of the actual mailing of the 90-day notice required by RPAPL 1304, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed … . Further, although Victoria Wolff, an assistant secretary for the plaintiff, stated in an affidavit that the notices required under RPAPL 1304 were mailed, she did not aver that she had mailed the notices herself or otherwise claim to have personal knowledge of the mailing … . Raymond James Bank, NA v Guzzetti, 2022 NY Slip Op 00888, Second Dept 2-9-22

 

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PLAINTIFF IN THIS FORECLOSURE ACTION DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304, INCLUDING THE “SINGLE ENVELOPE” RULE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff in the foreclosure action did not demonstrate compliance with the notice and “one envelope” requirements of RPAPL 1304:

… [P]laintiff failed to demonstrate … that it strictly complied with the mailing requirements of RPAPL 1304. The affidavit of Kyle Lucas, a senior loan analyst employed by the plaintiff, did not make the requisite showing that Lucas 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 also failed to establish that it complied with the “separate envelope” requirement of RPAPL 1304(2). “[I]nclusion of any material in the separate envelope sent to the borrower under RPAPL 1304 that is not expressly delineated in these provisions constitutes a violation of the separate envelope requirement of RPAPL 1304(2)” … . … [T]he plaintiff acknowledged that the envelope … , which contained the requisite notice under RPAPL 1304, also included other information in two notices pertaining to the Federal Fair Debt Collection Practices Act and bankruptcy. Ocwen Loan Servicing, LLC v Sirianni, 2022 NY Slip Op 00677, Second Dept 2-2-22

 

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