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THE DISMISSAL OF A FORELCOSURE ACTION ON THE GROUND THE BANK FAILED TO COMPLY WITH THE NOTICE OF DEFAULT PROVISIONS IN RPAPL 1304 IS NOT AN EXPRESS JUDICIAL DETERMINATION THAT THE ACTION DID NOT VALIDLY ACCELERATE THE DEBT; THEREFORE, HERE, THE 2013 FORECLOSURE ACTION IS TIME-BARRED PURSUANT TO THE FORECLOSURE ABUSE PREVENTION ACT (FAPA) (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the foreclosure action was time-barred. The bank’s argument that the the foreclosure complaint filed in 2013 did not accelerate the debt was rejected. The 2013 action was dismissed in 2018 because the bank did not comply with the notice of default requirement in Real Property Actions and Proceedings Law (RPAPL) 1304. That dismissal did not constitute an express judicial finding that the debt had not been validly accelerated when the 2013 complaint was filed:

Deutsche Bank’s argument that the complaint in the 2013 action did not constitute a valid acceleration of the debt is precluded by the Foreclosure Abuse Prevention Act (hereinafter FAPA) … . FAPA amended CPLR 213(4) to provide that in an action pursuant to RPAPL 1501(4) to cancel and discharge of record a mortgage, “a defendant shall be estopped from asserting that the period allowed by the applicable statute of limitation for the commencement of an action upon the instrument has not expired because the instrument was not validly accelerated prior to, or by way of commencement of a prior action, unless the prior action was dismissed based on an expressed judicial determination, made upon a timely interposed defense, that the instrument was not validly accelerated” … . Here, the Supreme Court directed dismissal of the complaint in the 2013 action upon a determination that Deutsche Bank failed to establish … its strict compliance with RPAPL 1304. The mailing of a RPAPL 1304 notice, while a condition precedent to commencing a foreclosure action, is not a precondition for acceleration of the debt … , and thus, the 2013 action was not dismissed upon an expressed judicial determination that the debt was not validly accelerated. Brennan v Deutsche Bank Trust Co. Ams., 2025 NY Slip Op 02308, Second Dept 4-23-25

Practice Point: A foreclosure action is time-barred six years after the debt was accelerated by the filing of the complaint, unless there is an express judicial determination that the filing of the complaint did not accelerate the debt. A dismissal of the foreclosure action based upon the bank’s failure to comply with the RPAPL 1304 notice of default requirements is not an express judicial determination that the foreclosure complaint did not validly accelerate the debt. Therefore, in this case, the 2013 foreclosure action, which was dismissed in 2018 for failure to comply with RPAPL 1304, is time-barred.

 

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THE TREBLE DAMAGES PROVISION IN RPAPL 861 FOR THE IMPROPER TRIMMING OR REMOVAL OF TREES FROM ANOTHER’S PROPERTY IS PUNITIVE IN NATURE; HERE THE TOWN TRIMMED AND REMOVED TREES FROM PLAINTIFF’S LAND; BECAUSE A MUNICIPALITY CANNOT BE ASSESSED PUNITIVE DAMAGES, THE TREBLE DAMAGES AWARD WAS REVERSED (CT APP).

The Court of Appeals, reversing the Appellate Division, determined the treble damages provision in RPAPL 861 is punitive in nature and therefore cannot be imposed upon a municipality. Here the town removed and trimmed trees along a roadway. Plaintiff, the owner of the land abutting the road, sued and was awarded treble damages. The Appellate Division had concluded the treble damages provision was compensatory, not punitive:

RPAPL 861 provides that “[i]f any person, without the consent of the owner thereof, cuts, removes, injures or destroys . . . tree[s] or timber on the land of another . . . an action may be maintained against such person for treble the stumpage value of the tree or timber or two hundred fifty dollars per tree, or both and for any permanent and substantial damage caused to the land or the improvements thereon . . . .” … .

* * * Treble damages are the default measure for any recovery, but the statute also provides that “if the defendant establishes by clear and convincing evidence, that when the defendant committed the violation, he or she had cause to believe the land was his or her own, or that he or she had an easement or right of way across such land which permitted such action, or he or she had a legal right to harvest such land, then he or she shall be liable for the stumpage value or two hundred fifty dollars per tree, or both . . . .” …

In other words, the defendant’s good faith “does not insulate that person from the imposition of statutory damages, but merely saves him or her from having to pay the plaintiff treble damages” .. . * * *

The “good faith” provision in RPAPL 861 demonstrates the punitive nature of the treble damages available under the statute. Matter of Rosbaugh v Town of Lodi, 2025 NY Slip Op 01406, CtApp 3-13-25

Practice Point: Here the statute allowed treble damages for the removal of trees only if the removal was not in good faith. Therefore the treble damages provision was punitive in nature. Punitive damages cannot be assessed against a municipality, here the town which removed the trees.​

 

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RECORDING THE DEED IS NOT NECESSARY FOR THE TRANSFER OF TITLE; THEREFORE A FORGED SIGNATURE ON THE TRANSFER DOCUMENT DOES NOT RENDER THE DEED VOID (SECOND DEPT).

The Second Department noted that a forged signature on the transfer document necessary to record a deed would not render the deed void:

“A deed that is forged is a legal nullity, which conveys nothing, and a mortgage based on such a deed is likewise invalid” … . A deed that is “acquired by fraudulent means,” however, is merely voidable … . A “voidable deed, ‘until set aside, . . . has the effect of transferring the title to the fraudulent grantee, and . . . being thus clothed with all the evidences of good title, may incumber the property to a party who becomes a purchaser in good faith'” … .

… [T]he plaintiff claims that [the grantor’s] signature on an RP-5217-NYC transfer document necessary to record the deed was forged. However, “recording is not required in order to transfer title to real property” … . “In order to transfer title, an executed deed must be delivered to and accepted by the grantee” … . Consequently, title to the property was transferred to [the grantee] upon delivery to and acceptance of the executed deed by [the grantee], and any forged signature on the RP-5217-NYC transfer document necessary to record the deed would not affect the validity of the transfer of title or of the subsequent mortgage … . Canecchia v Richmond Assoc. NY, LLC, 2025 NY Slip Op 01341, Second Dept 3-12-25

Practice Point: Title is transferred by delivery and acceptance of an executed deed. Recording the deed is not a necessary component of the transfer of title.

 

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THE FAILURE TO INCLUDE THE PHONE NUMBER FOR THE NYS DEPARTMENT OF FINANCIAL SERVICES IN THE RPAPL 1304 NOTICE OF FORECLOSURE RENDERED THE NOTICE FACIALLY DEFECTIVE; DEFENDANT ENTITLED TO SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s cross-motion for summary judgment in this foreclosure action should have been granted. The bank did not demonstrate strict compliance with the notice-of-foreclosure requirements of RPAPL 1304. The notice did not include the phone number for the NYS Department of Financial Services’ toll-free helpline:

“Where an RPAPL 1304 notice fails to reflect information mandated by the statute, . . . the statute will not have been strictly complied with and the notice will not be valid” … . Here, at the time the RPAPL 1304 notices were purportedly sent to the defendant, the version of RPAPL 1304 in effect required the notice to include the following sentence: “If you need further information, please call the New York State Department of Financial Services’ toll-free helpline at (show number) or visit the Department’s website at (show web address)” … .

Both RPAPL 1304 notices purportedly sent to the defendant included the sentence: “If you need further information, please call the toll-free helpline at or visit the Department’s website at .” Since the notices failed to include the telephone number for the Department of Financial Services’ toll-free helpline—a piece of information specifically required by the version of RPAPL 1304 in effect at the time the notices were sent—the notices were facially defective, and the defendant’s motion for summary judgment dismissing the complaint insofar as asserted against her should have been granted … . Federal Natl. Mtge. Assn. v Williams-Jones, 2025 NY Slip Op 01081, Second Dept 2-26-25

Practice Point: Strict compliance with the mandated contents of a RPAPL 1304 notice of foreclosure is required. Here the failure to include the phone number for the NYS Department of Financial Services rendered the notice facially defective and warranted a grant of summary judgment to the defendant.

 

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THE FORECLOSURE ACTION BROUGHT IN 2011 WAS DISMISSED BECAUSE THE BANK FAILED TO COMPLY WITH THE NOTICE OF DEFAULT PROVISIONS IN THE MORTGAGE AGREEMENT; THEREFORE THE 2011 ACTION DID NOT ACCELERATE THE DEBT AND THE STATUTE OF LIMITATIONS FOR FORECLOSURE NEVER STARTED RUNNING (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the mortgage was never validly accelerated when the foreclosure proceeding was brought in 2011. The 2011 action was dismissed because the notice of default was not served in accordance with the mortgage agreement (a condition precedent to foreclosure). Because the debt was never accelerated in 2011, the statute of limitations never started running and plaintiffs’ action to cancel and discharge the mortgage (RPAPL 1501 (4)) should not have been granted:

… [T]he defendants established … that the acceleration of the debt alleged in the complaint was a nullity due to the Supreme Court’s determination … that GMAC failed to establish … proper mailing of the notice of default, a contractual condition precedent to acceleration of the debt. Accordingly, the statute of limitations to foreclose the mortgage never accrued … . …

Contrary to the plaintiffs’ contention, CPLR 213(4)(b), as amended by the Foreclosure Abuse Prevention Act …, … does not preclude the defendants from asserting that the statute of limitations for an action to foreclose the mortgage has not expired. … [T]he defendants demonstrated that the statute of limitations had not previously accrued because the 2011 action was dismissed upon an expressed judicial determination made upon a timely interposed defense that the notice of default was not mailed in accordance with the terms of the mortgage agreement … . Nichols v U.S. Bank, 2025 NY Slip Op 00665, Second Dept 2-5-25

Practice Point: If a foreclosure action is dismissed because the bank did not comply with the notice of default provisions in the mortgage agreement, a condition precedent to foreclosure, the debt was never accelerated and the foreclosure statute of limitations never started running.

 

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THE INCLUSION OF ADDITIONAL INFORMATION IN THE ENVELOPE CONTAINING THE RPAPL 1304 90-DAY NOTICE OF FORECLOSURE DID NOT VIOLATE THE “SEPARATE ENVELOPE” RULE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the inclusion of additional information the the envelope with the RPAPL 1304 90-day notice of foreclosure did not invalidate the notice (in light of a recent Court of Appeals decision):

The Court of Appeals held that RPAPL 1304 does not prohibit the inclusion of additional information in the envelope that may help borrowers avoid foreclosure and is not false or misleading … .

Here, information about HAMP [Home Affordable Modification Program] was sent with the 90-day notice. This information was relevant to avoiding foreclosure and was not false or misleading. Therefore, pursuant to the Court of Appeals’ decision in Kessler ]39 NY3d 317] and the subsequent case law, the inclusion of this information with the 90-day notice did not violate the “separate envelope” requirement of RPAPL 1304(2). The plaintiff otherwise established that it sent the RPAPL 1304 notice as required by the statute. Thus, the plaintiff established, prima facie, that it complied with the notice requirements of RPAPL 1304. Wells Fargo Bank, N.A. v Smart, 2025 NY Slip Op 00476, Second Dept 1-29-25

Practice Point: The inclusion of additional information in the envelope containing the RPAPL 1304  90-day notice of foreclosure does not violate the “separate envelope” rule if the information is not misleading and may help the borrower avoid foreclosure.

 

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PLAINTIFF BANK WAS NOT ENTITLED TO SUMMARY JUDGMENT IN THIS REFORECLOSURE ACTION; THERE WAS A QUESTION OF FACT WHETHER WILLFUL NEGLECT BY PLAINTIFF BANK OR ITS PREDECESSOR IN INTEREST RESULTED IN THE DEFECT IN THE ORIGINAL FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank was not entitled to summary judgment in this reforeclosure action:

Where the interest of a necessary party has not been foreclosed upon in a judgment of foreclosure and sale, the purchaser of the foreclosed property has two potential remedies: a strict foreclosure action pursuant to RPAPL 1352, or a reforeclosure action pursuant to RPAPL 1503. RPAPL 1503 provides … that, when real property has been sold at a foreclosure sale ‘and it appears from the public records or from the allegations of the complaint that such judgment, sale or conveyance was or may have been, for any reason, void or voidable as against any person, including an owner of the real property mortgaged, the purchaser . . . may maintain an action as provided in this article to determine the right of any person to set aside such judgment, sale or conveyance or to enforce an equity of redemption or to recover possession of the property, or the right of any junior mortgagee to foreclose a mortgage'” … . “[T]o prevail in a reforeclosure action, the plaintiff must demonstrate that the defect in the original foreclosure action ‘was not due to fraud or wilful neglect of the [foreclosure] plaintiff and that the defendant or the person under whom he [or she] claims was not actually prejudiced thereby'” … .

Here, US Bank’s [plaintiff’s] predecessor in interest allowed the notice of pendency in the foreclosure action to lapse. During that lapse, Wilkshire obtained and recorded title to the property by a referee’s deed pursuant to the foreclosure of a lien for unpaid homeowners association dues. Subsequently, US Bank filed a new notice of pendency, which was not served upon Wilkshire. Thereafter, US Bank obtained an order and judgment of foreclosure and sale in the foreclosure action. On its motion for summary judgment in the instant action, US Bank failed to submit any evidence to establish, prima facie, that the defect in the foreclosure action was not due to willful neglect by itself or by its predecessors in interest. Thus, US Bank failed to establish its entitlement to judgment as a matter of law … . U.S. Bank N.A. v 18 Wilkshire Circle, LLC, 2024 NY Slip Op 06372, Second Dept 12-18-24

Practice Point: Consult this decision for some discussion of the remedies of “strict foreclosure” and “reforeclosure” under the Real Property Actions and Proceedings Law (RPAPL) where there was some defect in the original foreclosure proceedings.

 

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FAILURE TO PROVE COMPLIANCE WITH THE NOTICE-OF-FORECLOSURE PROVISIONS OF RPAPL 1304 REQUIRED REVERSAL OF SUMMARY JUDGMENT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff’s failure to prove compliance with the notice requirements in RPAPL 1304 required reversal in this foreclosure action:

… [T]he plaintiff failed to demonstrate, prima facie, its strict compliance with RPAPL 1304. To that end, the plaintiff submitted an affidavit of Sarah L. Stonehocker, a vice president of loan documentation employed by the plaintiff’s loan servicer, Wells Fargo Bank, N.A. (hereinafter Wells Fargo), with attachments, which were insufficient to establish compliance with RPAPL 1304. While Stonehocker averred that she had personal knowledge of Wells Fargo’s business records and that, according to the business records she reviewed, 90-day notices were served via certified and first-class mail at the subject property, Stonehocker did not attest that she was familiar with the standard office mailing procedures of LenderLive, LLC (hereinafter LenderLive), the third-party vendor that apparently sent the RPAPL 1304 notices on behalf of the plaintiff. Thus, Stonehocker’s “affidavit did not establish proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed” … .

Moreover, Stonehocker’s affidavit failed to address the nature of Wells Fargo’s relationship with LenderLive and whether LenderLive’s records were incorporated into Wells Fargo’s own records or routinely relied upon in its business… . Thus, Stonerhocker’s affidavit failed to lay a foundation for the admission of a transaction report generated by LenderLive (see CPLR 4518[a] …). “Finally, the tracking numbers on the copies of the 90-day notices submitted by the plaintiff, standing alone, did not suffice to establish, prima facie, proper mailing under RPAPL 1304” … . U.S. Bank N.A. v Nahum, 2024 NY Slip Op 05581, Second Dept 11-13-24

Practice Point: Reversal of summary judgment because the bank failed to prove the RPAPL 1304 notice of foreclosure was properly mailed to defendant(s) is becoming less frequent, but there have been hundreds of reversals on this same ground over at least the last ten years.

 

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RETROACTIVE APPLICATION OF THE FORECLOSURE ABUSE PREVENTION ACT (FAPA) WHERE FINAL JUDGMENT HAS NOT BEEN RENDERED DOES NOT VIOLATE PLAINTIFF’S DUE PROCESS RIGHTS; HERE THE DEBT WAS ACCELERATED IN 2008 AND THE CURRENT FORECLOSURE PROCEEDING IS THEREFORE UNTIMELY PURSUANT TO THE FAPA (THIRD DEPT). ​

The Third Department, in a full-fledged opinion by Justice Clark, determined the Foreclosure Abuse Prevention Act (FAPA) applied retroactively to render the foreclosure action untimely because the debt had been accelerated by a prior foreclosure proceeding in 2008. The Third Department determined the retroactive application of the FAPA to foreclosure actions where final judgment has not been rendered did not violate plaintiff’s due process rights:

In drafting FAPA, the Senate and Assembly sponsors both expressed an urgent need to correct judicial interpretation with unintended consequences which allowed noteholders to unilaterally “manipulate statutes of limitations to their advantage” and to the detriment of homeowners … . … [W]e find that FAPA should be applied retroactively to effect its beneficial purpose … . * * *

… [W]e find that retroactive application of FAPA to foreclosure actions where a final judgment has not been enforced does not violate plaintiff’s due process rights … . U.S. Bank N.A. v Lynch, 2024 NY Slip Op 05261, Third Dept 10-24-24

Practice Point: Where there has been no final judgment, retroactive application of the Foreclosure Abuse Prevention Act (FAPA) to render a foreclosure action untimely does not violate a plaintiff’s due process rights.

 

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THE BANK SUFFICIENTLY PROVED COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 IN THIS FORECLOSURE PROCEEDING; STRONG DISSENT (SECOND DEPT).

The Second Department, affirming summary judgment in favor of plaintiff in this foreclosure action, over a detailed dissent, determined plaintiff had demonstrated compliance with the RPAPL 1304 mailing requirements for the notice of foreclosure. The dissent argued the notice requirements were not strictly complied with. The decision is too detailed to fairly summarize here, but it should be consulted for its discussion of the proof a bank must present on the “RPAPL 1304” notice requirements to warrant summary judgment. U.S. Bank N.A. v Romano, 2024 NY Slip Op 05235, Second Dept 10-23-24

Practice Point: For at least a decade, the appellate courts have reversed summary judgment in foreclosure cases because proof of the bank’s compliance with the notice requirements of RPAPL 1304 was found deficient. Here, over a strong dissent, the proof was deemed adequate. The detailed discussion of the proof requirements, in the majority decision and in the dissent, is instructive on the issue.

 

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