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BANK’S PROOF OF THE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 INSUFFICIENT, BANK’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s (Nationstar’s) motion for summary judgment in this foreclosure action should not have been granted. Defendant alleged in her answer that plaintiff did not comply with the notice requirements of Real Property Actions and Proceedings Law (RPAPL) 1304. Therefore, in moving for summary judgment, the band was required to demonstrate compliance with RPAPL 1304 and its evidence of compliance was insufficient because it did not meet the requirements of the business records exception to the hearsay rule:

“Generally, in moving for summary judgment in an action to foreclose a mortgage, a plaintiff establishes its prima facie case through the production of the mortgage, the unpaid note, and evidence of default” … . However, where, as here, a defendant raises the issue of compliance with RPAPL 1304 as an affirmative defense, the moving party is also required to make a prima facie showing of strict compliance with RPAPL 1304 … . * * *

Here, Nationstar relied on the affidavit of its employee, Michael Woods, who averred, in relevant part, that “the 90-day notices required by statute were mailed to [d]efendant by regular and certified mail to the last known mailing address and to the property address on January 3, 2013,” and that the letters “were sent in separate envelopes from any other mailing or notice.” However, the record contains a single 90-day notice, bearing the plaintiff’s letterhead and addressed to the defendant at the subject property, with no clear indication as to whether the mailing was made by registered or certified mail, or by first-class mail. Moreover, Woods—who is not an employee of the plaintiff—did not aver in his affidavit to having any familiarity with the plaintiff’s mailing practices and procedures. Bank of Am., N.A. v Bittle, 2019 NY Slip Op 00086, Second Dept 1-9-19

Similar issue and result in Bank of Am., N.A. v Kljajic, 2019 NY Slip Op 00087, Second Dept 1-9-19

 

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DEFENDANT’S ALLEGATION THAT SHE DOES NOT LIVE AT THE ADDRESS WHERE HER BROTHER WAS SERVED IN THIS FORECLOSURE ACTION NECESSITATED A TRAVERSE HEARING (FIRST DEPT).

The First Department, reversing Supreme Court, found that a traverse hearing should have been held to determine whether defendant was properly served with the summons, complaint and Real Property Actions and Proceedings Law (RPAPL) 1303 notice:

In this foreclosure matter commenced in 2009, plaintiff’s affidavit of service indicated that service of the summons, complaint and RPAPL 1303 notice was effectuated upon defendant Nicola McCallum pursuant to CPLR 308(2) by serving an individual, who allegedly identified himself as her brother, at her “dwelling place,” and mailing the same documents to that address.

In response, defendant averred that she was never served with the summons and complaint, that she does not reside at the address where service was made, and that her primary residence has always been at the property that is the subject of this foreclosure action.

“While a proper affidavit of a process server attesting to personal delivery upon a defendant constitutes prima facie evidence of proper service, a sworn non-conclusory denial of service by a defendant is sufficient to dispute the veracity or content of the affidavit, requiring a traverse hearing”… . The competing averments concerning plaintiff’s residence at the time of service raise a factual issue concerning whether the service address was her “dwelling place or usual place of abode” at the time of service (CPLR 308[2]) warranting a traverse hearing concerning whether defendant was properly served with the summons, complaint and RPAPL 1303 notice … . Nationstar Mtge. LLC v McCallum, 2018 NY Slip Op 08755, First Dept 12-20-18

 

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BANK DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE PROVISIONS OF REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1304, 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 proof defendant was properly served with notice pursuant to Real Property Actions and Proceedings Law (RPAPL) 1304 was insufficient. The bank’s motion for summary judgment should not have been granted:

… [T]he bank 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 Supreme Court’s conclusion, the affidavit of the employee of the plaintiff’s successor in interest failed to establish that the notices were sent to the defendant in the manner required by RPAPL 1304. The affiant did not aver that she was familiar with the mailing practices and procedures of the entity that allegedly sent the RPAPL 1304 notice. Accordingly, her affidavit did not establish proof of a standard office practice and procedure designed to ensure that items are properly addressed and mailed … . Nor was the affidavit of the employee of the plaintiff’s successor in interest sufficient to lay a foundation for the admission of business records to establish a proper mailing. The affiant did not state that the records of the entity that allegedly sent the RPAPL 1304 notice had been incorporated into the records of the plaintiff’s successor in interest and were routinely relied upon by the successor in interest in its business … . Aurora Loan Servs., LLC v Vrionedes, 2018 NY Slip Op 08622, Second Dept 12-19-18

 

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LOST NOTE AFFIDAVIT INSUFFICIENT BECAUSE UCC REQUIREMENTS NOT MET, PROOF OF RPAPL 1304 NOTICE INSUFFICIENT, PROOF OF COMPLIANCE WITH NOTICE CONDITION OF THE MORTGAGE INSUFFICIENT, SUPREME COURT SHOULD NOT HAVE GRANTED THE BANK’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE PROCEEDING (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that plaintiff’s motion for summary judgment in this foreclosure action should not have been granted for three reasons: (1) the lost note affidavit was insufficient pursuant to the requirements of the Uniform Commercial Code (UCC); (2) the proof of compliance with the notice requirements of Real Property Actions and Proceedings Law (RPAPL) 1304 was not sufficient; and (3) the plaintiff did not show it had complied the notice condition of the mortgage (a condition precedent ro foreclosure):

Pursuant to UCC 3-804, the owner of a lost note may maintain an action “upon due proof of [1] his [or her] ownership, [2] the facts which prevent his [or her] production of the instrument and [3] its terms” (UCC 3-804). The party seeking to enforce a lost instrument is required to “account for its absence” … .

Here, although the plaintiff came forward with evidence establishing that the note was assigned to it and establishing the note’s terms, the affidavit of lost note submitted in support of its motion failed establish the facts that prevent the production of the original note … . …

… [T]he affidavit of a representative of its loan servicer was insufficient to establish that the notice was sent to the defendant in the manner required by RPAPL 1304, as the representative did not provide proof of a standard office mailing procedure and provided no independent proof of the actual mailing … . …

… [T]the plaintiff failed to establish, prima facie, that it complied with the condition precedent contained in the mortgage requiring it to give notice of default prior to demanding payment in full … . The affidavit of a representative of the plaintiff’s loan servicer claiming that notice of default was sent to the defendant …  was conclusory and unsubstantiated and … was insufficient to prove that the notice was sent in accordance with the terms of the mortgage … . U.S. Bank N.A. v Cope, 2018 NY Slip Op 08709, Second Dept 12-19-18

 

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QUESTIONS OF FACT ABOUT WHETHER PLAINTIFF HAS STANDING IN THIS FORECLOSURE ACTION AND WHETHER THE RPAPL 1304 NOTICE WAS SERVED, PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT)

The First Department, reversing Supreme Court, determined plaintiff’s motion for summary judgment in this foreclosure action should not have been granted. There exist questions of fact on whether plaintiff has standing and whether the RPAPL 1304 notice was served:

The borrower raised a meritorious standing defense based on questions as to the sufficiency of the content of the conclusory lost note affidavit, which does not state that a thorough and diligent search was made based on a review of the business records or anything else, does not state that any search was made or by whom, and does nothing to indicate when approximately the note was lost … .

The borrower also raised a plausible notice defense regarding plaintiff’s service of the requisite 90-day notice under RPAPL 1304 … . AS Helios LLC v Chauhan, 2018 NY Slip Op 08565, First Dept 12-13-18

 

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QUESTIONS OF FACT PRECLUDED SUMMARY JUDGMENT WITH RESPECT TO THE ADVERSE POSSESSION ACTION AND THE LACHES DEFENSE, THE ACTION INVOLVED LAND THAT WAS ONCE UNDER WATER CREATED BY THE MOVEMENT OF SAND DURING STORMS DECADES AGO (SECOND DEPT).

The Second Department, modifying Supreme Court, determined there were questions of fact in this adverse possession case concerning who owned the land and when the adverse possession began. The land in question was once under water and was created by the movement of sand decades ago:

CPLR 212(a) provides that “[a]n action to recover real property or its possession cannot be commenced unless the plaintiff, or his [or her] predecessor in interest, was seized or possessed of the premises within ten years before the commencement of the action.” However, the 10-year limitations period does not begin to run against a record owner of property until the occupiers of the property begin to adversely possess it (see RPAPL 311…).

We disagree with the Supreme Court’s determination that the defendants are entitled to summary judgment dismissing the complaint … on the ground that the action was barred by the statute of limitations. Calculation of the date from which the statute of limitations began to run on the plaintiffs’ causes of action requires a threshold determination as to whether the plaintiffs are the record owners of the disputed land, and secondly, whether, and if so, when, the defendants began to adversely possess the land… . The defendants failed to conclusively establish that the plaintiffs are not the record owners of the disputed land for the purposes of determining a date upon which the statute of limitations began to run … . …

The defendants also failed to establish … that they are entitled to judgment as a matter of law on their laches defense. “The essence of the equitable defense of laches is prejudicial delay in the assertion of rights” … . “In order for laches to apply to the failure of an owner of real property to assert his or her interest, it must be shown that [the] plaintiff inexcusably failed to act when [he or] she knew, or should have known, that there was a problem with [his or] her title to the property. In other words, for there to be laches, there must be present elements to create an equitable estoppel'” … .

Here, although the defendants established that the plaintiffs did not commence the action until a lengthy period of time after the alleged avulsive acts had occurred, the defendants failed to eliminate issues of fact as to whether the plaintiffs’ failure to act was excusable, whether the defendants were taking actions to adversely possess the disputed land, and whether and when the plaintiffs should reasonably have become aware of such alleged acts. Strough v Incorporated Vil. of W. Hampton Dunes, 2018 NY Slip Op 08525, Second Dept 12-12-18

 

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PROOF THAT DEFENDANT WAS SERVED WITH THE RPAPL 1304 NOTICE IN THIS FORECLOSURE PROCEEDING WAS NOT SUFFICIENT, THE BANK’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined that the bank’s motion for summary judgment in this foreclosure action should not have been granted. The proof of service of the RPAPL 1304 notice was deemed insufficient:

Plaintiff failed to establish a presumption that it properly served defendant with RPAPL 1304 notice through proof either of actual mailing or of a standard office practice or procedure for proper addressing and mailing … . Its business operations analyst testified at the hearing on this issue that she was familiar with plaintiff’s record keeping practices and procedures. However, she did not testify either that she was familiar with plaintiff’s mailing procedures or that she was personally aware that RPAPL 1304 notices had been mailed to defendant… . Nor does the fact that some of the RPAPL 1304 notices admitted into evidence at the hearing bear a certified mail number suffice to raise the presumption of proper service … . CitiMortgage, Inc. v Moran, 2018 NY Slip Op 08435, First Dept 12-11-18

 

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PLAINTIFF DID NOT PROVIDE SUFFICIENT PROOF IT HAD NOTIFIED DEFENDANT OF THE FORECLOSURE ACTION PURSUANT TO RPAPL 1304, DEFENDANT’S SUMMARY JUDGMENT MOTION SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s motion for summary judgment should have been granted. Plaintiff did not provide sufficient proof demonstrating it provided the notice required by RPAPL 1304:

… [T]he defendant established his prima facie entitlement to judgment as a matter of law by submitting his own affidavit attesting that he had not received any notice pursuant to RPAPL 1304 … . In opposition, the plaintiff submitted only a copy of the required notice, but failed to submit any evidence that the notice was mailed in the manner required by the statute. Specifically, the plaintiff did not submit “an affidavit of service, . . . proof of mailing by the post office, evincing that it properly served the defendant pursuant to RPAPL 1304 [by registered or certified mail and also by first-class mail to his last known address]” … , 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” … . Thus, the plaintiff failed to demonstrate that it strictly complied with the requirements of RPAPL 1304, notwithstanding the label on the notice stating “Certified Article Number” and “Senders Record” and listing a 20-digit number on the top of the letter … . Thus, since the plaintiff did not raise a triable issue of fact in opposition to the defendant’s prima facie showing that the plaintiff failed to satisfy the condition precedent of proper service of RPAPL 1304 notice upon him … . Deutsche Bank Natl. Trust Co. v Heitner, 2018 NY Slip Op 07090, Second Dept 10-24-18

FORECLOSURE (PLAINTIFF DID NOT PROVIDE SUFFICIENT PROOF IT HAD NOTIFIED DEFENDANT OF THE FORECLOSURE ACTION PURSUANT TO RPAPL 1304, DEFENDANT’S SUMMARY JUDGMENT MOTION SHOULD HAVE BEEN GRANTED (SECOND DEPT))/REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) (FORECLOSURE, PLAINTIFF DID NOT PROVIDE SUFFICIENT PROOF IT HAD NOTIFIED DEFENDANT OF THE FORECLOSURE ACTION PURSUANT TO RPAPL 1304, DEFENDANT’S SUMMARY JUDGMENT MOTION SHOULD HAVE BEEN GRANTED (SECOND DEPT))/EVIDENCE (FORECLOSURE, NOTICE, PLAINTIFF DID NOT PROVIDE SUFFICIENT PROOF IT HAD NOTIFIED DEFENDANT OF THE FORECLOSURE ACTION PURSUANT TO RPAPL 1304, DEFENDANT’S SUMMARY JUDGMENT MOTION SHOULD HAVE BEEN GRANTED (SECOND DEPT))

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AN ACCOUNTING WAS REQUIRED IN THIS PARTITION ACTION BETWEEN JOINT TENANTS WITH THE RIGHT OF SURVIVORSHIP (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that an accounting was required in this action for partition by joint tenants with the right of survivorship:

“Under New York law, joint tenancies may be severed by the court-ordered partition of the property that adjusts the rights of the parties and permits its sale if it appears that a partition cannot be made without great prejudice to the owners” … . ” [P]artition is an equitable remedy in nature and [the] Supreme Court has the authority to adjust the rights of the parties so each receives his or her proper share of the property and its benefits'” … . Further, “because a partition action is equitable in nature, an accounting is a necessary incident thereto” … . In light of the parties’ dispute as to their respective entitlements to the proceeds from the sale of the property, an accounting is necessary to determine the parties’ respective interests in the property … . Further, insofar as the defendant does not dispute that the court should direct a partition and sale of the property, and since “an accounting is a necessary incident thereto” … , the defendant failed to raise a triable issue of fact in opposition to the plaintiff’s prima facie showing on his causes of action for an accounting and a partition and sale of the property … . Khotylev v Spektor, 2018 NY Slip Op 07112, Second Dept 10-24-18

REAL PROPERTY LAW (PARTITION, AN ACCOUNTING WAS REQUIRED IN THIS PARTITION ACTION BETWEEN JOINT TENANTS WITH THE RIGHT OF SURVIVORSHIP (SECOND DEPT))/REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) (PARTITION, AN ACCOUNTING WAS REQUIRED IN THIS PARTITION ACTION BETWEEN JOINT TENANTS WITH THE RIGHT OF SURVIVORSHIP (SECOND DEPT))/PARTITION (AN ACCOUNTING WAS REQUIRED IN THIS PARTITION ACTION BETWEEN JOINT TENANTS WITH THE RIGHT OF SURVIVORSHIP (SECOND DEPT))/JOINT TENANTS (PARTITION, AN ACCOUNTING WAS REQUIRED IN THIS PARTITION ACTION BETWEEN JOINT TENANTS WITH THE RIGHT OF SURVIVORSHIP (SECOND DEPT))/ACCOUNTING (PARTITION, AN ACCOUNTING WAS REQUIRED IN THIS PARTITION ACTION BETWEEN JOINT TENANTS WITH THE RIGHT OF SURVIVORSHIP (SECOND DEPT))

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DEFENDANT’S MOTION TO CANCEL AND DISCHARGE THE MORTGAGE BASED ON THE EXPIRATION OF THE STATUTE OF LIMITATIONS SHOULD HAVE BEEN GRANTED, NO GROUNDS FOR IMPOSING AN EQUITABLE MORTGAGE IN FAVOR OF PLAINTIFF (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant's motion to cancel and discharge the mortgage based upon the expiration of the statute of limitations should have been granted. The court noted that Supreme Court's imposition of an equitable mortgage was improper under the facts:

RPAPL 1501(4) provides that “[w]here the period allowed by the applicable statute of limitation for the commencement of an action to foreclose a mortgage . . . has expired,” any person with an estate or interest in the property may maintain an action “to secure the cancellation and discharge of record of such encumbrance, and to adjudge the estate or interest of the plaintiff in such real property to be free therefrom”… .

Here, the defendant established her prima facie entitlement to judgment as a matter of law on her counterclaim pursuant to RPAPL 1501(4) to cancel and discharge the mortgage by demonstrating that more than six years had passed since the mortgage was accelerated and therefore this foreclosure action was time-barred … . The plaintiff did not raise a triable issue of fact in opposition … . Thus, the Supreme Court should have granted that branch of the defendant's cross motion which was for summary judgment on her counterclaim pursuant to RPAPL 1501(4) to cancel and discharge the mortgage (see CPLR 213[4]; RPAPL 1501[4]…).

We disagree with the Supreme Court's determination to impose an equitable mortgage in favor of the plaintiff. The plaintiff never requested this relief, and the defendant was not afforded any notice nor an opportunity to be heard on this issue which amounted to a denial of the defendant's due process rights … . In any event, the doctrine of equitable mortgage is inapplicable to the circumstances of this case, where a legal written mortgage existed … . 21st Mtge. Corp. v Nweke, 2018 NY Slip Op 06509, Second Dept 10-3-18

FORECLOSURE (DEFENDANT'S MOTION TO CANCEL AND DISCHARGE THE MORTGAGE BASED ON THE EXPIRATION OF THE STATUTE OF LIMITATIONS SHOULD HAVE BEEN GRANTED, NO GROUNDS FOR IMPOSING AN EQUITABLE MORTGAGE IN FAVOR OF PLAINTIFF (SECOND DEPT))/REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (FORECLOSURE, DEFENDANT'S MOTION TO CANCEL AND DISCHARGE THE MORTGAGE BASED ON THE EXPIRATION OF THE STATUTE OF LIMITATIONS SHOULD HAVE BEEN GRANTED, NO GROUNDS FOR IMPOSING AN EQUITABLE MORTGAGE IN FAVOR OF PLAINTIFF (SECOND DEPT))/CIVIL PROCEDURE (FORECLOSURE, DEFENDANT'S MOTION TO CANCEL AND DISCHARGE THE MORTGAGE BASED ON THE EXPIRATION OF THE STATUTE OF LIMITATIONS SHOULD HAVE BEEN GRANTED, NO GROUNDS FOR IMPOSING AN EQUITABLE MORTGAGE IN FAVOR OF PLAINTIFF (SECOND DEPT))/EQUITABLE MORTGAGE  (DEFENDANT'S MOTION TO CANCEL AND DISCHARGE THE MORTGAGE BASED ON THE EXPIRATION OF THE STATUTE OF LIMITATIONS SHOULD HAVE BEEN GRANTED, NO GROUNDS FOR IMPOSING AN EQUITABLE MORTGAGE IN FAVOR OF PLAINTIFF (SECOND DEPT))

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