You are here: / Real Property Actions and Proceedings Law (RPAPL)
, ,

THE BANK DID NOT DEMONSTRATE IT WAS THE HOLDER OR ASSIGNEE OF THE NOTE AT THE TIME THE ACTION TO RECORD THE MORTGAGE WAS BROUGHT; THE BANK DID NOT HAVE STANDING TO BRING THE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank did not demonstrate standing in 2017 to record a mortgage securing a note issued in 2008:

A plaintiff has standing where it is the holder or assignee of the underlying note at the time the action is commenced … . “Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the . . . action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident” … . “[A]n assignment of a note and mortgage need not be in writing and can be effectuated by physical delivery” .. .

Here, the affidavits of Fernandez were insufficient to establish the plaintiff’s standing to record the mortgage. Although Fernandez’s second affidavit provided a proper foundation for the admission of business records, and attached a business record … , “[i]t is the business record itself, not the foundational affidavit, that serves as proof of the matter asserted” … . The business record attached to Fernandez’s second affidavit failed to establish, prima facie, that the plaintiff had possession of the note prior to commencing the instant action, as it failed to mention the defendant or otherwise identify the note to which it was referring. Moreover, the business record identifies itself merely as a “Certification.” It does not state when the note was either delivered to or assigned to the plaintiff. Bayview Loan Servicing, LLC v Healey, 2024 NY Slip Op 04054, Second Dept 7-31-24

Practice Point: Here the note was issued in 2008 and plaintiff bank sought to record the mortgage in 2017. The bank did not have standing to record the mortgage because it did not present proof it was the holder or assignee of the note when the action was brought.​

 

,

ALL OF THE PROPERTY OWNERS POTENTIALLY AFFECTED BY THE DECLARATION OF RIGHTS TO A RECREATIONAL EASEMENT ARE NECESSARY PARTIES BUT NOT ALL WERE INCLUDED AS PLAINTIFFS; ALTHOUGH THE JUDGMENT WAS REVERSED, THE ACTION MAY BE RECOMMENCED WITH ALL THE PROPER PARTIES (FOURTH DEPT). ​

The Fourth Department, reversing Supreme Court, determined all the necessary parties were not included in this suit seeking a declaration of the rights of property owners with respect to a recreational easement:

CPLR 1001 (a) provides, in relevant part, that all “[p]ersons who ought to be parties if complete relief is to be accorded between the persons who are parties to the action or who might be inequitably affected by a judgment in the action shall be made plaintiffs or defendants.” It is well established that “[t]he absence of a necessary party may be raised at any stage of the proceedings, by any party or by the court on its own motion” … . In an action seeking to determine the extent of a recreational easement, the owners of all parcels of land burdened or benefitted by the easement are necessary parties because there is a potential that their real property rights will be affected by the outcome of the litigation … . Inasmuch as owners of real property who are not currently named as parties may be affected by the outcome of litigation concerning the subject parcel, we reverse the judgment and dismiss the complaint without prejudice (see CPLR 1003). Plaintiffs are thus “not precluded from recommencing the action in the proper manner naming all necessary parties” … . Follett v Dumond, 2024 NY Slip Op 03272, Fourth Dept 6-4-24

Practice Point: All property owners who may be affected by a declaration of rights to a recreational easement are necessary parties.

 

,

ALTHOUGH ONLY STEPHEN BOTT SIGNED THE NOTE, BOTH HE AND CHRISTINE BOTT SIGNED THE MORTGAGE; THEREFORE CHRISTINE BOTT WAS A “BORROWER” ENTITLED TO SEPARATE NOTICE OF THE FORECLOSURE PURSUANT TO RPAPL 1304; THE JOINT NOTICE WAS INVALID (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s failure to notify both borrowers of the foreclosure action violated RPAPL 1304 and required that defendants’ summary judgment motion be granted. Although only Stephen Bott signed the note, he and Christine Bott executed the mortgage instrument. Therefor the joint RPAPL 1304 notice was invalid:

Although Stephen Bott was the only signatory to the note, both he and Christine Bott executed the mortgage, and Christine Bott is identified as a borrower on the first page of the mortgage. “Where, as here, a homeowner defendant is referred to as a ‘borrower’ in the mortgage instrument and, in that capacity, agrees to pay amounts due under the note, that defendant is a ‘borrower’ for the purposes of RPAPL 1304, notwithstanding . . . any ambiguity created by a provision in the mortgage instrument to the effect that parties who did not sign the underlying note are not personally obligated to pay the sums secured” … . Therefore, Christine Bott was entitled to notice pursuant to RPAPL 1304 … . Since it is undisputed that a jointly addressed 90-day notice, rather than individually addressed notices in separate envelopes, was sent to the defendants, the plaintiff failed to comply with RPAPL 1304, and the defendants established their prima facie entitlement to judgment as a matter of law dismissing the complaint insofar as asserted against them … . HSBC Bank USA, N.A. v Bott, 2024 NY Slip Op 02524, Second Dept 5-8-24

Practice Point: A person obligated to pay the mortgage is a “borrower” within the meaning of RPAPL 1304 even if that person did not sign the note. Each “borrower” is entitled to separate notice of the foreclosure. Here, the joint notice was invalid and defendant-borrowers’ motion for summary judgment should have been granted.

 

,

DISPUTES ABOUT ENCROACHMENTS ON EASEMENTS RESOLVED; UNCLEAN HANDS AND LACHES DEFENSES REINSTATED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Moulton, modifying Supreme Court, determined the unclean hands and laches defenses should not have been dismissed in this complicated case resolving the removal of encroachments from easements. The case is too complex and entails too much minutia to fairly summarize. 214 Lafayette House LLC v Akasa Holdings LLC, 2024 NY Slip Op 01762, First Dept 3-28-24

 

, ,

TRESPASS BY PERMANENT PHYSICAL ENCROACHMENT (PLUMBING PIPES) IS NOT SUBJECT TO THE SAME STATUTE OF LIMITATIONS ANALYSIS AS TRESPASS BY THE ARTIFICIAL DIVERSION OF WATER; TRESPASS BY PERMANENT PHYSICAL ENCROACHMENT IS A CONTINUING TRESPASS UNTIL THE EXPIRATION OF THE TIME PERIOD FOR ADVERSE POSSESSION OR AN EASEMENT BY PRESCRIPTION (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the trespass cause of action should not have been dismissed as time-barred. A trespass claim based upon a permanent physical encroachment (here plumbing pipes connected to a septic system) is a continuing trespass which gives rise to successive trespass causes of action until the expiration of the time period for an easement by prescription or adverse possession:

… [P]laintiff’s claim for trespass seeking monetary damages should not be analyzed for statute of limitations purposes in the same way as a claim for the artificial diversion of water onto an adjoining property … , inasmuch as plaintiff’s trespass claim is based upon a permanent physical encroachment, i.e., the underground plumbing that defendants installed on plaintiff’s property. “[The] encroaching structure is a continuing trespass [that] gives rise to successive causes of action, except where barred by acquisition of title or an easement by operation of law” … . ” ‘Thus, for purposes of the statute of limitations, suits will only be time-barred by the expiration of such time as would create an easement by prescription or change of title by operation of law,’ [namely], by adverse possession” … . Inasmuch as the complaint, which was filed on July 23, 2021, alleges that defendants’ “plumbing material” was unlawfully installed on plaintiff’s property in 2014, plaintiff’s claim for damages here is not barred by the statute of limitations (see RPAPL 501 [2]). Kramer v Kleiber, 2024 NY Slip Op 01387, Fourth Dept 3-15-24

Practice Point: Trespass by artificial diversion of water is not subject to the same statute of limitations analysis as trespass by a permanent physical encroachment (plumbing pipes in this case). Trespass by permanent physical encroachment is a continuing trespass until the expiration of the time period required for adverse possession or an easement by prescription.

 

PETITIONER SOUGHT A TEMPORARY LICENSE PURSUANT TO RPAPL 881 TO ENTER RESPONDENT’S ADJOINING PROPERTY TO INSTALL PROTECTIONS PRIOR TO DEMOLITION WORK ON PETITIONER’S BUILDINGS; RESPONDENT WAS ENTITLED TO FULL INDEMNIFICATION FOR ANY DAMAGE (AS OPPOSED TO INDEMNIFICATION “TO THE EXTENT COVERED BY INSURANCE”) AND TO REASONABLE EXPERT’S AND ATTORNEY’S FEES (SECOND DEPT).

The First Department, modifying Supreme Court, determined the respondent adjoining property owner was entitled to unrestricted indemnification from petitioner for damage to respondent’s property plus reasonable expert’s and attorney’s fees in this action by petitioner pursuant to RPAPL 881 for a temporary license to enter respondent’s property. Petitioner was doing demolition work on petitioner’s buildings and sought the license to install protections on respondent’s property. Supreme Court should not have limited respondent’s indemnification “to the extent covered by insurance.” And Supreme Court should have awarded respondent expert’s and attorney’s fee to the extent the fees are deemed reasonable:

RPAPL 881 allows a property owner to petition for a license to enter the premises of an adjoining owner when entry is necessary for making improvements or repairs to the petitioner’s property and the adjoining owners have refused access. The statute is designed to strike a balance between the petitioner’s interest in improving its property and the harm to the adjoining property owner’s enjoyment of its property … , and it gives the motion court the discretion to craft an appropriate remedy in connection with license and access “upon such terms as justice requires” … . Since a respondent compelled to grant access under RPAPL 881 does not seek out the intrusion and does not derive any benefit from it, equity requires that the respondent should not have to bear any costs resulting from the access … .

… [T]he judgment’s indemnity provision provides indemnification for third-party damage claims only “to the extent covered by insurance,” which unreasonably fails to shift the full risk to petitioner as is appropriate under RPAPL 881. Matter of 1643 First LLC v 1645 1st Ave. LLC, 2024 NY Slip Op 01111, First Dept 2-29-24

Practice Point: When a property owner seeks a temporary license to enter an adjoining property pursuant to RPAPL 881 in connection with construction work, the adjoining property owner is entitled to full indemnification for any damage as well as reasonable expert’s and attorney’s fees incurred because of the temporary license.

 

, ,

A “HIGH COST LOAN” AS DEFINED BY THE BANKING LAW IS A DEFENSE TO A FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined there was a question of fact whether the loan in this foreclosure action violated the Banking Law such that there is a defense to foreclosure pursuant to RPAPL 1302(2):

RPAPL 1302(2) provides, in pertinent part, that “[i]t shall be a defense to an action to foreclose a mortgage [for a high-cost home loan] that the terms of the home loan or the actions of the lender violate any provision of,” among other things, Banking Law § 6-l … . “A home loan is a ‘high-cost home loan’ if, among other things, the total points and fees charged exceed five percent of the total loan amount” … . Here, the defendants demonstrated potential merit to their defense that their loan constituted a “high-cost home loan,” because the lender allegedly financed certain closing costs, thereby receiving indirect compensation related thereto … , and that the terms of the loan or actions of the lender violated provisions of Banking Law § 6-l. Wilmington Trust, N.A. v Newman, 2023 NY Slip Op 06557, Second Dept 12-20-23

Practice Point: Pursuant to RPAPL 1302(2), a “high cost loan” within the meaning of the Banking Law is a defense to a foreclosure action.

 

, ,

THE FORECLOSURE ABUSE PREVENTION ACT (FAPA) APPLIES RETROACTIVELY; THE DEFENDANT MORTGAGE COMPANY IS ESTOPPED BY CPLR 213(4)(A) FROM ASSERTING THE STATUTE OF LIMITATIONS FOR A FORECLOSURE HAS NOT EXPIRED; PLAINTIFF’S COMPLAINT SEEKING DISCHARGE AND CANCELLATION OF THE MORTGAGE SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing Supreme Court, in a full-fledged opinion by Justice Higgitt, determined (1) the Foreclosure Abuse Prevention Act (FAPA) applies retroactively; and (2) because the defendant mortgage company is estopped by CPLR 213(4)(b) from asserting the six-year statute of limitations for foreclosure had not expired, plaintiff’s RPAPL 1501(4) complaint (seeking cancellation and discharge of the mortgage) should not have been dismissed:

Having concluded that FAPA applies retroactively, we must next consider whether defendant is estopped under CPLR 213(4)(b) from asserting that the statute [*6]of limitations for the commencement of a mortgage foreclosure action has not expired because the debt secured by the mortgage was not validly accelerated in connection with the prior foreclosure action. CPLR 213(4)(b)’s potent estoppel bar will not be imposed, and a defendant will be free to assert that the debt secured by the mortgage was not validly accelerated in connection with a prior action, if, and only if, the prior action was dismissed based on an express judicial determination, made upon a timely interposed defense, that the instrument was not validly accelerated.

Here, defendant is estopped from asserting that the statute of limitations on a cause of action to foreclose on the mortgage has not expired. An action to foreclose on the mortgage was previously commenced and dismissed. Defendant is not saved by the limited exception afforded by CPLR 213(4)(b) because Supreme Court, in dismissing the foreclosure action, did not make an express determination that the debt secured by the mortgage was not validly accelerated. Rather, the court dismissed the foreclosure action on the ground that the court lacked personal jurisdiction over the defendants therein … . Genovese v Nationstar Mtge. LLC, 2023 NY Slip Op 06477, First Dept 12-19-23

Practice Point: The Foreclosure Abuse Prevention Act (FAPA) applies retroactively. Here the defendant mortgage company was estopped by CPLR 214(4)(b) from asserting the six-year statute of limitations for a foreclosure action had not expired.

 

,

THE RIGHT TO SEEK REMOVAL OF A CLOUD ON TITLE IS NEVER BARRED BY A STATUTE OF LIMITATIONS (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the causes of action which sought to remove a cloud on title should not have been dismissed as time-barred because the right to that relief is never barred by a statute of limitations:

Supreme Court erred in granting those branches of the defendants’ motion which were pursuant to CPLR 3211(a)(5) to dismiss as time-barred the first and second causes of action, which sought to set aside and cancel, as null and void, the two mortgages held by the defendants. The Trust, as the alleged owner of the subject property, is “presumptively entitled to possession” … , and the first and second causes of action seek to remove the cloud on title resulting from the allegedly fraudulent mortgages. “[W]here a plaintiff seeks to remove a cloud on title, the right to such relief ‘is never barred by the Statute of Limitations. It is a continuing right which exists as long as there is an occasion for its exercise'” … . Mostafa v Pension Solutions, LLC, 2023 NY Slip Op 06134, Second Dept 11-29-30

Practice Point: The right to seek removal of a cloud on title is never barred by a statute of limitations.

 

,

A DEEDED EASEMENT CAN ONLY BE CREATED WHEN THE GRANTOR OWNS THE DOMINANT AND SERVIENT PROPERTY; HERE THE CRITERIA FOR A DEEDED EASEMENT WERE NOT MET; BUT THE CRITERIA FOR A PRESCRIPTIVE EASEMENT WERE MET (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiffs did not demonstrate they had a deeded easement over the disputed land, but did demonstrate they had a prescriptive easement, although the extent of the easement must be determined at trial:

“An easement is not a personal right of the landowner but is an appurtenance to the land benefitted by it . . . and a grant of the land carries with it the grant of the easement” … . “An easement appurtenant occurs when [an] easement is created in writing, subscribed by the creator, and burdens the servient estate for the benefit of the dominant estate” … . However, “[t]he long-accepted rule in this State holds that a deed with a reservation or exception by the grantor in favor of a third party, a so called ‘stranger to the deed,’ does not create a valid interest in favor of that third party” … . Thus, “[f]or an easement by grant to be effective, the dominant and servient properties must have a common grantor” … .

Here, the defendant made a prima facie showing of his entitlement to judgment as a matter of law declaring that the plaintiffs do not have a deeded easement over the disputed area by “establishing that, at the time the easement was purportedly created, the grantor owned the servient property, but not the dominant property … .  * * *

… [P]laintiffs established … their predecessors in interest acquired an easement by prescription over the disputed area, which easement ran with the land when the plaintiffs purchased the property in 2018 … . Notably, the defendant learned of the purported deeded easement in 2005 and assumed that it was valid until at least July 2019. Therefore, the defendant’s relationship to the dominant estate’s use of the driveway area was one of acquiescence, rather than permission … . … Supreme Court erred in denying that branch of the plaintiffs’ cross-motion which was for summary judgment declaring that they have a prescriptive easement over the disputed area. Daniello v Wagner, 2023 NY Slip Op 06116, Second Dept 11-29-23

Practice Point: The criteria for a deeded easement and a prescriptive easement are clearly explained.

 

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 © 2025 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy