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THE BANKS’ 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 plaintiff bank’s motion for summary judgment in this foreclosure action should not have been granted because compliance with the notice requirements of RPAP 1304 was not demonstrated with admissible evidence:

… [T]he plaintiff submitted, inter alia, an affidavit of a business operations analyst employed by the plaintiff, together with copies of 90-day notices sent to the defendants and proof of filing statements from the New York State Department of Financial Services. Although some of the copies of the 90-day notices contain what appear to be bar codes with 22-digit numbers that include the words “USPS CERTIFIED MAIL,” the plaintiff failed to submit any evidence that the mailings were sent by first-class mail in addition to certified mail … . The plaintiff also failed to submit evidence of a standard office mailing procedure or an affidavit of the individual(s) who effected the service … . The submission by the plaintiff of evidence that it filed statements with the New York State Department of Financial Services, without more, is insufficient to establish that the mailing was accomplished pursuant to RPAPL 1304 … . CitiMortgage, Inc. v McGregor, 2020 NY Slip Op 07855, Second Dept 12-23-20

 

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THE DEFENDANTS DEFAULTED IN THIS FORECLOSURE ACTION; THE JUDGE SHOULD NOT HAVE, SUA SPONTE, DISMISSED THE COMPLAINT BASED ON THE BANK’S ALLEGED FAILURE TO COMPLY WITH THE NOTICE REQUIREMENTS OF RPAPL 1304, WHICH IS NOT A JURISDICTIONAL DEFECT AND THEREFORE MUST BE RAISED AS A DEFENSE (SECOND DEPT).

The Second Department determined the judge should not have, sua sponte, dismissed the complaint in this foreclosure action on the ground the bank did not comply with the notice requirements of RPAL 1304. The defendants defaulted and failure to comply with RPAPL 1304 is not a jurisdictional defect. Therefore it must be raised as a defense before a judge can rule on it:

In this action to foreclose a mortgage, in which the defendants failed to appear or answer the complaint, the Supreme Court should have granted the plaintiff’s motion for leave to enter a default judgment and for an order of reference, and should not have, sua sponte, directed dismissal of the complaint based on its determination that the plaintiff failed to establish that it complied with RPAPL 1304 … . Therefore, a plaintiff is not required to disprove the defense unless it is raised by defendants, and in this case the defendants failed to appear in the action or answer the complaint … . Chase Home Fin., LLC v Guido, 2020 NY Slip Op 07854, Second Dept 12-23-20

 

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ONCE THE PLAINTIFFS-TENANTS PROPERLY SOUGHT TO EXERCISE THEIR OPTION TO PURCHASE, THE LANDLORD, WHO IMPROPERLY REFUSED TO HONOR THE OPTION, NO LONGER HAD A RIGHT TO USE AND OCCUPANCY PAYMENTS (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiffs’ cause of action for return of the rent paid to defendant after the plaintiffs exercised their option to purchase the property should have been granted. Plaintiffs were defendant landlord’s tenants. Plaintiffs sought to exercise an option to purchase the property which was in the lease. Once the plaintiffs properly exercised the option to purchase, the landlord, who refused to honor the option, could no longer seek payment for plaintiffs’ use and occupancy:

… “[I]t is well settled that the legal owner of real property is not entitled to an award for use and occupancy from a contract vendee in possession unless there also exists a landlord-tenant relationship between the parties” … . Under the merger doctrine, “execution of a contract of sale [for real property] between landlord and tenant serves to merge the landlord-tenant relationship into the vendor-vendee relationship and thus effectively terminates the former, unless the parties clearly intend the contrary result” … . “An intention to deviate from the general rule and to avoid a merger may be directly expressed in the agreement or may be inferred from a medley of factors such as the terms of the agreement, the circumstances of its making, and the subsequent behavior of the parties” … .

Here … the parties did not express an intention to deviate from the general rule or to avoid a merger upon the exercise of the purchase option. To the contrary, the terms of the rider provided, in relevant part, that “[i]n the event that Tenant decides not to exercise its option to purchase, all provisions herein remain in full force and effect and Tenant remains liable for all payments hereunder, including but not limited to rent” … . Since the plaintiffs validly exercised their option to purchase on July 21, 2015, and became a contract vendee in possession, it follows that the landlord-tenant relationship terminated on that date by application of the merger doctrine … . Blackburn Food Corp. v Ardi, Inc., 2020 NY Slip Op 07850, Second Dept 12-23-20

 

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FAILURE TO FILE A NOTICE OF CLAIM AGAINST THE NEW YORK TRANSIT AUTHORITY (AS OPPOSED TO THE CITY OF NEW YORK) IN THIS SLIP AND FALL CASE, AND THE FAILURE TO APPLY FOR PERMISSION TO FILE A LATE NOTICE OF CLAIM, GAVE RISE TO THIS LEGAL MALPRACTICE AND JUDICIARY LAW 487 ACTION WHICH SHOULD NOT HAVE BEEN DISMISSED; THE DISTINCTION BETWEEN THE TWO CAUSES OF ACTION EXPLAINED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the legal malpractice and Judiciary Law 487 causes of action against one of two groups of attorney-defendants should not have been dismissed. The first group of attorneys (the Schneider defendants) failed to file a timely notice of claim against the New York Transit Authority (NYTA) in this slip and fall case. Then plaintiff retained the second group of attorneys (the Kletzkin defendants) and the action was dismissed with prejudice. Then plaintiff sued both groups of attorneys for legal malpractice and for violations of Judiciary Law 487. Supreme Court granted the Kletzkin defendants motion to dismiss and denied the Schneider defendants’ motion to dismiss. The facts were not discussed, but the court noted the difference between a legal malpractice and a Judiciary Law 487 cause of action:

… [T]he plaintiff adequately pleaded the cause of action alleging legal malpractice against the Kletzkin defendants and the Schneider defendants. Contrary to the contentions of those defendants, neither conclusively established that an application for leave to serve a late notice of claim or to deem the late notice of claim timely served upon the NYCTA nunc pro tunc would have been futile … .

Contrary to the Kletzkin defendants’ contention, the complaint adequately states a cause of action to recover damages for violation of Judiciary Law § 487. Contrary to the Schneider defendants’ contention, the cause of action alleging violation of Judiciary Law § 487 is not duplicative of the cause of action alleging legal malpractice. “A violation of Judiciary Law § 487 requires an intent to deceive (see Judiciary Law § 487), whereas a legal malpractice claim is based on negligent conduct” … . Bianco v Law Offs. of Yuri Prakhin, 2020 NY Slip Op 07849, Second Dept 12-23-20

 

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PLAINTIFF IN THIS SLIP AND FALL CASE ALLEGED HE WAS INJURED WHEN HE STEPPED ON A LOOSE MANHOLE COVER OWNED BY DEFENDANT-TOWN; THE TOWN DEMONSTRATED IT DID NOT HAVE NOTICE OF THE CONDITION BUT DID NOT DEMONSTRATE IT DID NOT CREATE THE CONDITION; THE TOWN’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant-town’s motion for summary judgment in this slip and fall case should not have been granted. Plaintiff alleged he stepped on a loose manhole cover which swung out from under him crushing his leg. The town demonstrated it did not have written notice of the condition, but did not demonstrate it did not create the condition:

Where, as here, the plaintiff alleged that the affirmative negligence exception applies, the defendant must show, prima facie, that the exception does not apply … .

Here, the plaintiff alleged that the defendant created the alleged dangerous condition, inter alia, through its initial placement of the manhole and by the use of an ill-fitting manhole cover, and the defendant’s submissions in support of its motion for summary judgment do not address these allegations. Accordingly, the defendant failed to establish, prima facie, that it did not create the alleged defect … . Dejesus v Town of Mamaroneck, 2020 NY Slip Op 07542, Second Dept 12-16-20

 

IN THIS SLIP AND FALL CASE, DEFENDANTS DID NOT DEMONSTRATE THE WHEEL STOP, WHICH HAD BEEN MOVED FROM ITS POSITION AT THE TOP OF THE PARKING SPACE, WAS OPEN AND OBVIOUS AND NOT INHERENTLY DANGEROUS; DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT PROPERLY DENIED (SECOND DEPT).

The Second Department determined the defendants in this slip and fall case did not demonstrate the wheel stop which was an open and obvious condition that was not inherently dangerous. The wheel stop had been moved from its normal position at the top of a parking space. Plaintiff tripped over it after getting out of her car and taking a few steps while looking toward the store:

A landowner has a duty to maintain its premises in a reasonably safe condition … . There is, however, no duty to protect or warn against conditions that are open and obvious and not inherently dangerous … . “Proof that a dangerous condition is open and obvious does not preclude a finding of liability against an owner for failure to maintain property in a safe condition” … . “The determination of whether an asserted hazard is open and obvious cannot be divorced from the surrounding circumstances, and whether a condition is not inherently dangerous, or constitutes a reasonably safe environment, depends on the totality of the specific facts of each case” … . Brett v AJ 1086 Assoc., LLC, 2020 NY Slip Op 07532, Second Dept 12-16-20

 

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THE INSURER’S ACCEPTANCE OF PREMIUM PAYMENTS AFTER IT LEARNED OF THE MISREPRESENTATION ABOUT THE SPRINKLER SYSTEM WAIVED THE INSURER’S RIGHT TO RESCIND THE POLICY (SECOND DEPT).

The Second Department determined that the insurer’s (Hamilton’s) acceptance of premiums after disclaiming coverage for fire damage when it learned the building did not have a sprinkler system waived the insurer’s right to rescind the policy. The insured had indicated the building had a sprinkler system it its application for the policy:

The continued acceptance of premiums by an insurance carrier after learning of sufficient facts which allow for the rescission of the policy, constitutes a waiver of the right to rescind … . Here, … the record demonstrated, as a matter of law, that Hamilton waived its right to assert the plaintiff’s misrepresentation as a basis for rescinding the policy and disclaiming coverage by renewing the policy and accepting further premiums after it discovered the misrepresentation … . 5512 OEAAJB Corp. v Hamilton Ins. Co., 2020 NY Slip Op 07525, Second Dept 12-16-20

 

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PLAINTIFFS’ MOTIONS FOR SUMMARY JUDGMENT ON THEIR ADVERSE POSSESSION AND TRESPASS CAUSES OF ACTION SHOULD HAVE BEEN GRANTED; A DEFENDANT’S MISTAKEN BELIEF HE OR SHE HAD A RIGHT TO ENTER DOES NOT DEFEAT LIABILITY FOR TRESPASS (SECOND DEPT).

The Second Department, reversing Supreme Court in this adverse possession and trespass action, determined plaintiffs were entitled to summary judgment on their adverse possession and trespass actions. With regard to trespass, the court noted that liability is not defeated by a defendant’s belief he or she has a right to enter the property:

The Supreme Court also should have granted that branch of the plaintiffs’ cross motion which was, in effect, for summary judgment on the issue of liability on the trespass cause of action. To meet their prima facie burden, the plaintiffs were required to demonstrate that the defendant intentionally entered onto the land belonging to the plaintiffs without justification or permission … . “‘Liability may attach regardless of defendant’s mistaken belief that he or she had a right to enter'” … . Here, the plaintiffs established their prima facie entitlement to judgment as a matter of law on the trespass cause of action by submitting the affidavit of the plaintiff Jamie Montanaro, who averred that, in December 2016, the defendant removed a portion of the retaining wall on the disputed property and built a garage which encroaches upon the disputed property … . The plaintiffs also submitted the affidavit of a land surveyor who averred that the new garage encroached upon the disputed property … . Montanaro v Rudchyk, 2020 NY Slip Op 07560, Second Dept 12-16-20

 

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THE PROPERTY TRANSFERRED TO THE DEFENDANT BY WILL UPON THE DEATH OF THE PROPERTY OWNER; THEREFORE THE ESTATE WAS NOT A NECESSARY PARTY IN THIS FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the estate was not a necessary party in this foreclosure action because the property transferred upon the property owner’s death by operation of the will:

Pursuant to a deed dated March 27, 1991, Marjorie Colwell became the owner of certain real property located in Brooklyn (hereinafter the subject property). Colwell died on November 8, 2004. Colwell’s will bequeathed the subject property to the defendant Sonia Gaines, and also named Gaines as the executrix of the estate. …

We disagree with the Supreme Court’s determination that the estate was a necessary party to this action, and that the failure to join the estate warranted vacatur of the order of reference and the judgment of foreclosure and sale and dismissal of the complaint insofar as asserted against Gaines … . Pursuant to RPAPL 1311(1), “necessary defendants” in a mortgage foreclosure action include, among others, “[e]very person having an estate or interest in possession, or otherwise, in the property as tenant in fee, for life, by the curtesy, or for years, and every person entitled to the reversion, remainder, or inheritance of the real property, or of any interest therein or undivided share thereof, after the determination of a particular estate therein.” Under the circumstances of this case, the estate was not a necessary party to this mortgage foreclosure action. “Generally, title to real property devised under the will of a decedent vests in the beneficiary at the moment of the testator’s death and not at the time of probate” … . US Bank Trust, N.A. v Gaines,2020 NY Slip Op 07623, Second Dept 12-16-20

 

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PLAINTIFF BANK DID NOT PROVE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304; JUDGMENT AFTER TRIAL REVERSED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff bank in this foreclosure action did not demonstrate strict compliance with the notice requirements of RPAPL 1304. The judgment after trial was reversed:

… [T]he plaintiff relied upon the testimony of DeCaro [loan verification officer], who, when shown a copy of the 90-day notice, testified that the notice was printed on October 13, 2011, the same date that appears on the notice, that it was sent to the defendants at the subject property, and that such notice was maintained by Wells Fargo in the regular course of business as the plaintiff’s loan servicer. Contrary to the plaintiff’s contention, DeCaro’s testimony was insufficient to demonstrate that it complied with RPAPL 1304. DeCaro did not testify that she had personal knowledge of the purported mailing or of Wells Fargo’s mailing practices, and did not describe the procedure by which the RPAPL 1304 notice was mailed to the defendants by both certified mail and first-class mail … . Although the notice itself stated in bold print, “FIRST CLASS MAIL and CERTIFIED MAIL,” no receipt or corresponding document issued by the United States Postal Service was submitted proving that the notice was actually sent by certified mail more than 90 days prior to commencement of the action. Moreover, the mailing manifest submitted by the plaintiff failed to establish that the notice was actually mailed to the defendants by both certified mail and first-class mail … .

Since the plaintiff failed to provide evidence 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 someone with personal knowledge of the procedure,” the plaintiff failed to establish its strict compliance with RPAPL 1304 … . US Bank N.A. v Pierre, 2020 NY Slip Op 07622, Second Dept 12-16-20

 

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