Mortgage Foreclosure-Related Handdowns - February 2, 2022 Edition

Two very interesting decisions this week. One is Everbank v. Kelly, which was a case of first impression in the Second Department and related to CPLR 308(2) where a family member misrepresented the residence of the defendant. The second is Ocwen v. Sirianni, which applies the Kessler decision and finds that strict compliance with RPAPL § 1304 was not met.

Second Department

Everbank v Kelly, 2022 Slip Op 00651 (February 02, 2022)

A judgment of foreclosure and sale was reversed in a case of first impression. At issue was a CPLR § 5015(a)(4) motion to vacate the order of reference and to dismiss pursuant to CPLR § 3211(a)(8). Service of process was made pursuant to CPLR 308(2) by delivering a copy of the summons and complaint to a woman who identified herself as the defendant’s daughter and stated that he lived at that location in Mastic Beach. Defendant submitted an affidavit in which he stated that he had lived in Center Moriches for 40 years. The Second Department found that a representation, or misrepresentation, of a family member does not override the plain language of CPLR 308(2) that service be made at the defendant's actual "dwelling place or usual place of abode” and that service was thus not properly made.

HSBC Bank USA, N.A. v Minogue, 2022 Slip Op 00653 (February 02, 2022)

The Second Department found that intervention was not warranted where the notice of pendency was recorded prior to the appellants’ having taken title to the property. Because the appellants had constructive notice of the foreclosure action, and their interest in the property was effectively foreclosed upon entry of the judgment of foreclosure and sale, they failed to demonstrate a real and substantial interest in the outcome of the action so as to warrant intervention.

Ocwen Loan Servicing, LLC v Sirianni, 2022 Slip Op 00677 (February 02, 2022)

This is a decision that cites the Kessler RPAPL § 1304 decision. The Second Department found that the plaintiff did not demonstrate compliance with RPAPL § 1304 because the 90-day notice contained FDCPA and bankruptcy notices. The court also found that the servicer affidavit was insufficient to demonstrate mailing, because the affiant did not demonstrate familiarity with the plaintiff’s mailing practices and procedures.

US Bank, N.A. v Rufai, 2022 Slip Op 00689 (February 02, 2022)

Summary judgment in favor of plaintiff was affirmed because the plaintiff established that the defendant defaulted in payment and that the prior loan servicer had physical possession of the original endorsed note, as the plaintiff's attorney-in-fact, prior to the commencement of the action. The plaintiff was not collaterally estopped from asserting that it had standing based upon the Supreme Court's ruling on the issue in a prior action.

US Bank, N.A. v Rufai, 2022 Slip Op 00690 (February 02, 2022)

The Second Department affirmed an order granting plaintiff's motion to appoint a receiver for the rents and profits of the mortgaged property, as the mortgage provided for such an appointment upon the borrowers' default.