Mortgage Foreclosure-Related Handdowns - January 27, 2022 Edition
Lots of decisions this week! Defendant who did not reside at the property was not entitled to CPLR § 3408 conferencing; a foreclosure action filed against a deceased borrower was not subject to dismissal; multiple decisions concerning servicer affidavits and compliance with RPAPL § 1304 reached different conclusions; making payments on a note the borrower claimed was forged constituted ratification; voluntary discontinuance of an action more than six years from commencement of the first action did not de-accelerate the loan and reset the statute of limitations, and much more! See below.
Second Department
Bank of N.Y. Mellon v Lee, 2022 Slip Op 00392 (January 26, 2022)
The Second Department affirmed an order of reference, because it found that the defendant’s excuse for default was not reasonable, as he claimed he was waiting for a notification of a CPLR § 3408 conference. However, because the defendant did not reside at the subject property, he was not entitled to mandatory settlement conferencing and thus his default was not reasonable.
Bank of N.Y. Mellon v Sae Young Min, 2022 Slip Op 00393 (January 26, 2022)
The Second Department reversed summary judgment where the plaintiff failed to provide evidence of mailing the RPAPL § 1304 notice by certified mail in addition to first class mail. This was based on plaintiff’s affiant’s failure to provide evidence of actual mailing of the RPAPL 1304 notice by certified mail to the defendant at the subject property, "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."
Citimortgage, Inc. v Leitman, 2022 Slip Op 00397 (January 26, 2022)
A judgment of foreclosure and sale was reversed upon the Second Department’s finding that the plaintiff failed to evidence strict compliance with RPAPL § 1304, citing Bank of NY Mellon v. Gordon, 171 Ad3d 197 (2d Dep’t 2019). The affiant “did not attest to having personal knowledge of Venture's actual mailing procedure designed to ensure that the notices were properly mailed” and also testified that the plaintiff does not maintain certified mail receipts and that she did not compare the tracking numbers on the top of the 90-day notice with the numbers as set forth on the certified mail receipt kept on file with the United States Postal Service.
Deutsche Bank Natl. Trust Co. v Crosby, 2022 Slip Op 00402 (January 26, 2022)
The Second Department found that where a borrower claimed that the signature on the note and mortgage was forged, something “more than a bald assertion of forgery is required to create an issue of fact contesting the authenticity of a signature" and also found that the defendant ratified the note by making mortgage payments. However, the court also found that the plaintiff failed to evidence standing to foreclose, as no copy of the endorsed note was attached to the complaint at commencement, and the servicer’s affidavit did not contain an attestation that the affiant was “personally familiar with the plaintiff's record-keeping practices and procedures.” The affidavit was also insufficient to establish compliance with conditions precedent, as the servicer did not provide proof of a standard office mailing procedure and did not provide independent evidence of the mailing. The decision also contains “regardless of the sufficiency of opposition papers” language and reverses summary judgment.
Deutsche Bank Natl. Trust Co. v Zagari, 2022 Slip Op 00403 (January 26, 2022)
The Second Department found that there was nothing in the record to support a finding of bad faith under CPLR § 3408. “The fact that the terms of a proposed loan modification differed from a prior, interim forbearance agreement is not evidence of bad faith under the circumstances” and “[a] plaintiff's failure to make an exact offer desired by the defendant does not amount to bad faith within the meaning of CPLR 3408.”
Homebridge Fin. Servs., Inc. v Mauras, 2022 Slip Op 00406 (January 26, 2022)
Summary judgment was upheld, as the plaintiff annexed a copy of the note bearing a specific endorsement to the originator’s successor, demonstrating standing to foreclose. The plaintiff also evidenced compliance with RPAPL § 1304 because the affidavit of the servicer’s representative averred that “she was familiar with Cenlar's mailing practices and procedures, and described a standard office mailing procedure designed to ensure that items are properly addressed and mailed” and also included a copy of a letter log from Cenlar, and a copy of the 90-day notice with a tracking number.
JPMorgan Chase Bank, N.A. v Deblinger, 2022 Slip Op 00410 (January 26, 2022)
The Second Department found that while annexing a copy of the consolidated note endorsed in blank evidenced standing, the plaintiff failed to evidence the defendant’s default. The payment history was created by Chase, and the affiant was from Bayview; the affiant did not attest that she was familiar with Chase’s record-keeping practices and procedures or that Chase’s records were incorporated into Bayview’s and relied upon by Bayview in the ordinary course of business. The plaintiff also did not evidence strict compliance with RPAPL § 1304, because the notice did not include five housing agencies in the region where the defendant resided.
JPMorgan Chase Bank, N.A. v Rodriguez, 2022 Slip Op 00411 (January 26, 2022)
The Second Department reversed a judgment of foreclosure and sale as well as summary judgment on the basis that the defendant had raised a triable issue of fact as to whether the plaintiff had produced the note, as it had produced a different copy of the note with a different version of the defendant’s purported signature. In addition, “[i]n an affidavit submitted in opposition to the plaintiff's motion, the defendant averred that she only signed one copy of the note at closing, and denied that any of the copies of the note produced by the plaintiff were the note she signed.”
MLB Sub I, LLC v Clark, 2022 Slip Op 00420 (January 26, 2022)
The defendant established that the action was time-barred because the voluntary discontinuance of the prior foreclosure action was not filed until more than six years after the commencement of the first action. The plaintiff was not able to establish tolling pursuant to CPLR 204(a) and 11 U.SC. § 362, because the defendant was not the debtor in the bankruptcy proceeding.
Morequity, Inc. v Centennial Ins. Co., 2022 Slip Op 00422 (January 26, 2022)
The Second Department reversed a judgment of foreclosure and sale and summary judgment order because the plaintiff failed to establish standing. The plaintiff failed to demonstrate that the purported allonge was firmly affixed to the note prior to commencement of the action. The affidavit of the plaintiff's employee and the copy of the note attached thereto which were submitted in support of the plaintiff's motion for summary judgment did not clarify whether the allonge was firmly affixed to the note.
Nationstar Mtge., LLC v Calomarde, 2022 Slip Op 00428 (January 26, 2022)
The Second Department affirmed an order denying a cross-motion which was to joined as a necessary party. “Although the appellant took title to the premises after the original notice of pendency had lapsed, and prior to the filing of the subsequent notice of pendency, it is undisputed that the appellant had actual knowledge of the mortgage and of this foreclosure action at the time it obtained title. “
Nationstar Mtge., LLC v Gross, 2022 Slip Op 00429 (January 26, 2022)
The Second Department found that default judgment and an order of reference were properly granted. The court found that “Aurora was not required to demonstrate that it had standing in order to establish its prima facie entitlement to a default judgment, as standing is not an essential element of a cause of action to foreclose a mortgage.” The defendants were precluded from raising standing because they were in default and did not demonstrate a reasonable excuse for delay and a meritorious defense. The court also found that RPAPL 1302(1)(a) was inapplicable.
U.S. Bank N.A. v Coutryer, 2022 Slip Op 00456 (January 26, 2022)
The Second Department found that the plaintiff evidenced standing by attaching a copy of the original note endorsed in blank to the summons and complaint and that it also evidenced strict compliance with RPAPL § 1304 through its servicer’s affidavit. This case contains very little discussion.
MTGLQ Invs., L.P. v Makhnevich, 2022 Slip Op 00423 (January 26, 2022)
A pro se defendant’s motion, although afforded a liberal construction, was properly treated by the motion court as seeking dismissal only on the basis of alleged failure to comply with the default notice provision of the mortgage. No discussion of how the plaintiff proved compliance.
U.S. Bank N.A. v Rozo-Castellanos, 2022 Slip Op 00457 (January 26, 2022)
A judgment of foreclosure and sale was reversed and the summary judgment motion denied on the basis that the defendants had raised a triable issue of fact with respect to standing because a “note submitted by GMAC during a 2007 Chapter 7 bankruptcy proceeding involving the defendants appeared to lack any endorsement. The note submitted by GMAC in connection with the 2008 foreclosure action contained a special endorsement by GreenPoint to GMAC. And, as mentioned, the note submitted by the plaintiff in this action was endorsed in blank by GreenPoint.”
U.S. Bank Trust v McGlone, 2022 Slip Op 00458 (January 26, 2022)
The Second Department upheld an order granting summary judgment and a judgment of foreclosure and sale/order denying the defendants’ cross-motion pursuant to CPLR 5015(a)(3) on the basis that there was no evidence of fraud. The court also found that the absence of a certificate of conformity as a mere irregularity which can be disregarded in the absence of a showing of actual prejudice.
Wells Fargo Bank, N.A. v Dhanani, 2022 Slip Op 00460 (January 26, 2022)
A judgment of foreclosure and sale was reversed because the affidavit of amount due and owing did not have any records annexed to it, and "the referee's findings with respect to the total amount due upon the mortgage were not substantially supported by the record inasmuch as the computation was premised upon unproduced business records."
Wells Fargo Bank, N.A. v Dhanani, 2022 Slip Op 00461 (January 26, 2022)
This is a companion case to 2022 Slip Op. 00461. The Second Department found that “[a]n action commenced against a deceased defendant is a nullity only insofar as asserted against that defendant, not insofar as asserted against other defendants.” Because the plaintiff discontinued as against the deceased defendant, this also discontinued the cause of action for a deficiency judgment against that defendant. The remaining defendant was the deceased defendant’s son. The motion court had denied the son’s motion to dismiss on the basis that “the defendant, ‘along with . . . other defendants, deliberately failed to notify plaintiff of defendant Zikar Dhanani's death"’and that the defendant ‘knowingly appeared, [a]nswered and even appealed [sic] on behalf of the deceased defendant.’”
Wells Fargo Bank, N.A. v Shields, 2022 Slip Op 00462 (January 26, 2022)
The Second Department found that Wells Fargo failed to establish strict compliance with RPAPL § 1304, even though the affiant alleged familiarity with “standard practices and procedures used to create, mail and store data regarding the 90 day pre-foreclosure notice . . . that are designed to ensure that these letters are properly addressed, mailed and that data reflecting those events is stored in Wells Fargo's business records.” A copy of a window envelope did not have a visible sender address and had the defendant’s name handwritten in the top right corner. Additionally, the envelope was marked “return to sender illegible unable to forward” by the post office, and the certified mail return receipt car was returned unsigned and without a postmark. The return receipt card was addressed to both defendants. As a result, the court found that summary judgment should not have been granted.
Wells Fargo Bank, NA v Moussa, 2022 Slip Op 00463 (January 26, 2022)
The Second Department found that the plaintiff established standing to foreclose by annexing a copy of the note endorsed in blank to the complaint.
Wells Fargo Bank, N.A. v Fameux, 2022 Slip Op 00464 (January 26, 2022)
The Second Department found that dismissal was warranted where the plaintiff failed to serve the defendant within 120 days after it was granted an extension of time to serve the defendant, and failed to establish that it exercised reasonably diligent efforts in attempting to effectuate proper service upon the defendant within 120 days, this failing to show good cause for the grant of another extension.
Wilmington Sav. Fund Socy. v Theagene, 2022 Slip Op 00465 (January 26, 2022)
The Second Department found that plaintiff still proved standing even though a copy of the consolidated note contained slightly different signatures of the defendants than a copy appended to the CEMA, as the defendants did not deny that they signed the consolidated notes. Summary judgment should have been granted.