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PLAINTIFF BANK DID NOT LAY A SUFFICIENT FOUNDATION FOR BUSINESS RECORDS SUBMITTED TO PROVE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s motion for summary judgment in this foreclosure action should not have been granted because the evidence of compliance with the notice requirements of Real Property Actions and Proceedings Law (RPAPL) 1304 was insufficient:

The plaintiff in this mortgage foreclosure action, on its motion, inter alia, for summary judgment on the complaint … failed to demonstrate, prima facie, its compliance with RPAPL 1304 because it failed to lay a proper foundation for the business records submitted as proof that the RPAPL 1304 notice was sent by first-class mail (see RPAPL 1304[2]; CPLR 4518[a]). In particular, the representative of the plaintiff who attempted to lay such a foundation failed to attest either that the records, which were created by a different entity, were incorporated into the plaintiff’s records and routinely relied upon by the plaintiff in its business, or that she had personal knowledge of that entity’s business practices and procedures … . Wells Fargo Bank, N.A. v Hirsch, 2020 NY Slip Op 04996, Second Dept 9-16-20

 

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THE DEFENDANT BANK’S MOTION FOR SUMMARY JUDGMENT IN PLAINTIFF’S ACTION TO CANCEL AND DISCHARGE A MORTGAGE SHOULD HAVE BEEN GRANTED; THE BANK PROVED THE DE-ACCELERATION NOTICE WAS PROPERLY TRANSMITTED TO PLAINTIFF, RENDERING THE UNDERLYING FORECLOSURE ACTION TIMELY (SECOND DEPT).

The Second Department, reversing Supreme Court in plaintiff’s action to discharge and cancel a mortgage pursuant to RPAPL 1501 (4), determined defendant bank demonstrated that the de-acceleration notice were properly transmitted to plaintiff, rendering the defendant bank’s underlying foreclosure action timely:

Wells Fargo’s vice president of loan documentation averred that she was familiar with the mailing practices for such notices; that Wells Fargo followed its practices in this instance; that it was Wells Fargo’s practice to generate and mail such notices to borrowers on the date indicated on the notice; that Wells Fargo’s practice also included keeping a copy of any notice in the corresponding mortgage loan file as a record that the notice was mailed; that the de-acceleration notice was sent on March 11, 2015, by both certified mail and regular mail to the property address and the plaintiff’s address; and that a copy of the de-acceleration notice for each of the two addresses was in the plaintiff’s loan file in accordance with Wells Fargo’s mailing procedures. Contemporaneous business records were attached to the affidavit, showing that a de-acceleration letter was “mailed to property address on 31115.” Through the submission of that evidence, Wells Fargo established that de-acceleration letters were, in fact, sent by regular mail in compliance with the expressed terms of the mortgage … . The mailing procedures described in this case appear identical to those that this Court recognized as satisfactory in Pennymac Holdings, LLC v Lane (171 AD3d 774, 775). Indeed, it is difficult to identify what additional evidence could be expected or required for Wells Fargo to demonstrate that it had transmitted the de-acceleration notice to the proper addresses by regular mail on the date indicated. The de-acceleration notice dated March 11, 2015, was mailed within six years from the debt acceleration occurring upon the commencement of the first action on March 24, 2009. Wells Fargo, in moving for summary judgment, therefore met its prima facie burden of establishing its entitlement to judgment as a matter of law dismissing the complaint … . Assyag v Wells Fargo Bank, N.A., 2020 NY Slip Op 04908, Second Dept 9-16-20

 

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THE NOTICE REQUIREMENTS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1304 WERE NOT PROVEN; THE BANK’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff bank did not demonstrate compliance with the notice requirements of Real Property Actions and Proceedings Law (RPAPL) 1304 in this foreclosure action:

… [T]he plaintiff submitted, inter alia, the affidavit of Sherry W. McManus, a Vice President of Loan Documentation for the plaintiff. Although McManus stated in her affidavit that the RPAPL 1304 notice was mailed by regular and certified mail, and attached copies of the notice, the plaintiff failed to attach, as exhibits to the motion, any documents establishing that the notice was actually mailed … . Specifically, the plaintiff failed to submit a copy of any United States Post Office document indicating that the notice was sent by registered or certified mail as required by the statute … . Further, although McManus attested that she had personal knowledge of the plaintiff’s mailing practices, the substance of her affidavit was contradicted by the documents attached to it that purportedly evidenced the plaintiff’s compliance with RPAPL 1304, and her averments were contradicted by those made in another affidavit submitted by the plaintiff in support of its motion … . Since the plaintiff failed to provide evidence of the actual mailing, or reliable evidence of a standard office mailing procedure designed to ensure that the items were properly addressed and mailed, sworn to by someone with personal knowledge of the procedure, the plaintiff failed to establish its strict compliance with RPAPL 1304 … . Wells Fargo Bank, N.A. v Bedell, 2020 NY Slip Op 04891, Second Dept 9-2-2020

 

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THE PROPER FOUNDATION FOR BUSINESS RECORDS WAS NOT LAID AND COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 WAS NOT DEMONSTRATED, THE BANK’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s motion for summary judgment in this foreclosure action should not have been granted:

Harrell [bank vice president]  failed to establish that Wells Fargo was servicing the subject loan at the time of Bhatti’s [defendant’s] alleged default, and that she was personally familiar with the recordkeeping practices and procedures of the plaintiff and/or the loan servicer at that time. Therefore, the plaintiff failed to establish a proper foundation for the admission of the records relied upon to establish Bhatti’s default under the business records exception to the hearsay rule (see CPLR 4518[a] …). …

“By requiring the lender or mortgage loan servicer to send the RPAPL 1304 notice by registered or certified mail and also by first-class mail, the Legislature implicitly provided the means for the plaintiff to demonstrate its compliance with the statute, i.e., by proof of the requisite mailing, which can be established with proof of the actual mailings, such as affidavits of mailing or domestic return receipts with attendant signatures, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure” … .

Here, the … affidavits were insufficient to establish that the plaintiff mailed the 90-day pre-foreclosure notice required by RPAPL 1304, “as the representative[s] did not provide evidence of a standard office mailing procedure and provided no independent evidence of the actual mailing” … .

Moreover, the Harrell and Green affidavits were also insufficient to establish that a notice of default was in fact mailed to Bhatti by first-class mail, or actually delivered to the designated address if sent by other means, which was required by the terms of the mortgage … . HSBC Bank USA, Natl. Assn. v Bhatti, 2020 NY Slip Op 04734, Second Dept 8-26-20

 

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ALTHOUGH THE QUESTION WHETHER THE NOTICE REQUIREMENTS OF RPAPL 1304 APPLIED ONLY TO HIGH-COST OR SUBPRIME LOANS WAS NOT RAISED BELOW, THE QUESTION WAS CONSIDERED AND REJECTED ON APPEAL; PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department considered an issue raised for the first time on appeal because it raised an issue of law which could not have been avoided if raised below. The defendant argued that the strict compliance with the notice requirements of RPAPL 1304 applies only to high-cost or subprime loans, not the loan at issue in the case. The Second Department rejected the argument and reversed Supreme Court finding the plaintiff did not demonstrate compliance with RPAPL 1304:

We decline to construe RPAPL 1302(2) in a manner that would render the amendment to RPAPL 1304 superfluous and the requirements set forth in that statute ineffective. Thus … compliance with RPAPL 1304 was a component of its prima facie burden on its motion for summary judgment … . …

Although Mahdak [plaintiff’s representative] stated in her affidavit that the notices were sent to the defendant at his last known address and the subject property, Mahdak did not have personal knowledge of the mailing, and [plaintiff] failed to provide any documents to prove that the notices were actually mailed … . [Plaintiff] also failed to submit a copy of any United States Post Office document indicating that the notices were sent by registered or certified mail as required by the statute … . Furthermore, Mahdak did not aver that she was familiar with [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 … . H&R Block Bank, FSB v Liles, 2020 NY Slip Op 04733, Second Dept 8-26-20

 

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THE RPAPL 1304 NOTICE WAS DEFECTIVE ON ITS FACE; PLAINTIFF’S SUMMARY JUDGMENT MOTION IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff did not demonstrate compliance with RPAPL 1304 in this foreclosure action:

… [T]he plaintiff failed to establish, prima facie, its strict compliance with RPAPL 1304. In support of its motion, the plaintiff submitted copies of both its RPAPL 1304 notice and the 30-day notice of default required by the mortgage agreement. Both notices were dated April 15, 2013; however, these notices contained a factual discrepancy regarding the cure date, to wit, the cure date stated in the RPAPL 1304 90-day notice was May 15, 2013, whereas the cure date stated in the 30-day notice was May 20, 2013. Given the factual inaccuracy contained in at least one of the notices, and because the potential inaccuracy in the 90-day notice involved information that was required under RPAPL 1304, the plaintiff’s submissions did not eliminate the existence of a triable issue of fact as to whether the RPAPL 1304 notice was defective on its face … . Sparta GP Holding Reo Corp. v Lynch, 2020 NY Slip Op 04803, Second Dept 8-26-20

 

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PETITION FOR A LICENSE PURSUANT TO RPAPL 881 TO ENTER A CONDOMINIUM TO MAKE REPAIRS PROPERLY GRANTED (SECOND DEPT).

The Second Department determined the petition for a license pursuant to Real Property Actions and Proceedings Law (RPAPL) 881 to temporarily enter a condominium to make repairs was properly granted:

RPAPL 881 allows the owner of “real property” to petition for a license to enter the “premises” of an adjoining owner when such entry is necessary for making improvements or repairs to the petitioner’s property and the adjoining owner has refused such access … . RPAPL 881 applies to “real property,” defined as “lands, tenements and hereditaments” (Real Property Law § 2). Similarly, Real Property Law § 339-g provides that “[e]ach unit, together with its common interest, shall for all purposes constitute real property.” Thus, the petitioners’ condominium unit constitutes “real property” within the meaning of RPAPL 881. …

… [W]e agree with the Supreme Court’s determination to grant that branch of the petition which was pursuant to RPAPL 881 for a license to temporarily access the appellants’ unit. The court directed that access be limited to 10 consecutive days, that the petitioners return the unit to its original condition, that the appellants be financially protected by the naming of the appellants as additional insureds on the relevant construction insurance policy, that the petitioners pay the appellants a license fee of $100 per day, and that the petitioners indemnify the appellants for any loss … . Matter of Voron v Board of Mgrs. of the Newswalk Condominium, 2020 NY Slip Op 04747,  Second Dept 8-26-20

 

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BANK DID NOT COMPLY WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 IN THIS FORECLOSURE ACTION; THE BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s motion for summary judgment should not have been granted in this foreclosure action because compliance with the notice requirements of RPAPL 1304 was not demonstrated:

RPAPL 1304 provides that at least 90 days before a lender, an assignee, or a mortgage loan servicer commences an action to foreclose the mortgage on a home loan as defined in the statute, such lender, assignee, or mortgage loan servicer must give notice to the borrower. The statute provides the required content for the notice and provides that the notice must be sent by registered or certified mail and also by first-class mail to the last known address of the borrower (see RPAPL 1304[2]). “Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action” … “and the plaintiff has the burden of establishing satisfaction of this condition” … . Here, although the plaintiff provided a photocopy of a “US Postal Service Receipt for Certified Mail” with a 20-digit number along with the purported 90-day notice, the receipt is undated and does not demonstrate that the notice was actually sent by certified mail more than 90 days prior to commencement of the action. The plaintiff also failed to submit sufficient evidence to demonstrate that the notice was sent by first-class mail. M&T Bank v Barter, 2020 NY Slip Op 04548, Second Dept 8-19-20

 

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THE BANK’S COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1303 AND 1304 WAS NOT DEMONSTRATED IN THIS FORECLOSURE ACTION, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN AWARDED TO THE BANK (SECOND DEPT).

The Second Department determined plaintiff bank’s motion for summary judgment should not have been granted in this foreclosure action. There was a question of fact whether plaintiff complied with the notice requirements of Real Property Actions and Proceedings Law (RPAPL) 1303, and plaintiff did not establish it complied with the notice requirements of RPAPL 1304:

… [D]efendant raised a triable issue of fact with respect to whether the RPAPL 1303 notice was in the proper form, as he asserted in his affidavit that the notice with which he was served “was on white colored paper, the same color papers as the summons and complaint and the heading entitled Help for Homeowners in Foreclosure’ was smaller than twenty-point type” … .

… [T]he affidavit of Lorene Alford Marsh, an Assistant Vice President of the plaintiff, was insufficient to establish that the notice was sent to the defendant in the manner required by RPAPL 1304. Although Marsh attested that the 90-day notices of default were sent to the defendant by certified mail and first-class mail on March 8, 2013, and attached copies of those notices, the plaintiff failed to attach, as exhibits to the motion, any documents to prove that the mailings actually occurred … . Nor did Marsh attest that she had personal knowledge of the mailing practices of her employer at the time the RPAPL 1304 notices allegedly were sent. Instead, she merely stated that she had personal knowledge of the plaintiff’s procedures for creating and maintaining notices mailed in connection with the loan. Moreover, rather than establish proof of a standard office practice and procedure designed to ensure that items are properly addressed and mailed, Marsh, in her affidavit, merely described the mailing requirements listed in the statute … . Bank of Am., N.A. v Lauro, 2020 NY Slip Op 04531, Second Dept 8-19-20

 

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ALTHOUGH PLAINTIFF BANK DID NOT DEMONSTRATE THE RPAPL 1304 NOTICE WAS MAILED TO DEFENDANT IN THIS FORECLOSURE ACTION, DEFENDANT’S DENIAL OF RECEIPT OF THE NOTICE WAS NOT SUFFICIENT TO WARRANT SUMMARY JUDGMENT IN FAVOR OF DEFENDANT (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined defendant’s cross motion for summary judgment in this foreclosure action should not have been granted. Supreme Court properly found that the bank did not provide sufficient proof that the Real Property Actions and Proceedings Law (RPAPL) 1304 notice was mailed to defendant. But defendant’s mere denial of receipt of the notice was not enough to warrant summary judgment in defendant’s favor:

The plaintiff failed to establish, prima facie, that it mailed the RPAPL 1304 notice, because “the plaintiff failed to provide proof of the actual mailing, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by an individual with personal knowledge of that procedure” … .

We disagree, however, with the Supreme Court’s determination to grant [defendant] Parker’s cross motion for summary judgment dismissing the complaint insofar as asserted against her. Parker offered only a mere denial of receipt of the RPAPL 1304 notice in support of her cross motion, and such a mere denial is insufficient to establish entitlement to such relief … . Bank of N.Y. Mellon v Parker, 2020 NY Slip Op 04376, Second Dept 8-5-20

 

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