Mortgage Foreclosure-Related Handdowns - February 16, 2022 Edition
Second Department
Bank of N.Y. Mellon Trust Co. v Kyung Soon Lee, 2022 Slip Op 00996 (February 16, 2022)
The Second Department reversed a decision denying a borrower’s motion pursuant to CPLR § 3215(c). The borrower moved for relief under CPLR § 3215(c) in March 2018, and the complaint had been filed on October 30, 2013. The plaintiff did not file a request for judicial intervention seeking a foreclosure settlement conference until December 28, 2015, approximately 22 months after the defendant's default and then did not move for an order of reference after the case was released from the conference part in 2016. The Court found that the plaintiff did not demonstrate a reasonable excuse for delay in seeking default judgment.
Bayview Loan Servicing, LLC v Caracappa, 2022 Slip Op 00997 (February 16, 2022)
A judgment of foreclosure and sale was affirmed where the plaintiff attached a copy of the note to the complaint and defendant interposed a bare, conclusory and unsubstantiated allegation that plaintiff failed to comply with RPAPL 1303.
DLJ Mtge. Capital, Inc. v Christie, 2022 Slip Op 01004 (February 16, 2022)
The Second Department modified an order that had granted a judgment of foreclosure and sale and denied relief pursuant to CPLR § 5015(a)(4), in a case with a complicated procedural history.
The defendants had cross-moved pursuant to CPLR 3211(a)(5) and (8) when the plaintiff moved for an order of reference, but the Supreme Court only ordered a traverse hearing and did not rule on either motion otherwise. More than a month after the traverse hearing, the plaintiff filed new affidavits of service asserting nail and mail service, and then two months after that, moved for pursuant to CPLR 306-b to extend the time to serve and file proof of service of the summons and complaint upon the defendants "nunc pro tunc." The defendants cross-moved and again sought dismissal pursuant to CPLR 3211(a)(5) and (8). The Supreme Court granted plaintiff’s motion and denied defendants’ cross-motion.
Two months after that, the Supreme Court granted the prior motion for an order of reference and for default judgment that had been held in abeyance.
The defendants filed an answer roughly six months after that, and plaintiff rejected the answer as untimely.
The plaintiff then moved for a judgment of foreclosure and sale. This time, the defendants cross-moved pursuant to CPLR 5015(a)(2) and (3) to vacate the order that had granted nunc pro tunc relief and to vacate the order of reference pursuant to CPLR 5015(a)(4). The Supreme Court granted plaintiff’s motion and denied Defendant’s motion.
The Second Department found that the Supreme Court providently exercised its discretion in granting the plaintiff's motion pursuant to CPLR 306-b to extend the time to serve and file proof of service of the summons and complaint. However, the order granting the motion for an order of reference that had been held in abeyance was “without effect and must be vacated” because the court lacked personal jurisdiction over the defendants when it was filed. The judgment of foreclosure and sale was vacated because it was predicated upon entry of the order of reference.
Note that CPLR § 3211(f) permitted an answer to be filed within 10 days from the service of notice of entry of the order denying the cross-motion to dismiss.
HSBC Bank USA, N.A. v Kahan, 2022 Slip Op 01013 (February 16, 2022)
The Second Department affirmed a judgment of foreclosure and sale on the basis that there was no fraud, misrepresentation or other conduct in filing two separate actions to foreclose a first mortgage and a separate mortgage, then moving to combine them, and thus no relief available to defendants under CPLR 5015(a)(3).
HSBC Bank USA, N.A. v Cruz, 2022 Slip Op 01014 (February 16, 2022)
The Second Department affirmed a judgment of foreclosure and sale, rejecting appellant’s argument that the filing of bankruptcy in 2008 by the originator of the note and mortgage did not create a triable issue of fact with regard to the plaintiff’s standing to foreclose, as plaintiff did not aver that the transfer of the note took place in 2009, but merely that it had possession of the note in 2009, since “[w]here the note is affixed to the complaint, it is unnecessary to give factual details of the delivery in order to establish that possession was obtained prior to a particular date."
HSBC Bank USA, N.A. v Rini, 2022 Slip Op 01016 (February 16, 2022)
The Second Department reversed an order denying a defendant’s motion to vacate an order and for leave to renew a prior unopposed motion to dismiss pursuant to CPLR § 3215(c). The case was brought against two borrowers, one of whom died and one of whom did not answer the complaint. The appellant later moved pursuant to CPLR 3215(c) to dismiss the complaint as against her and as against the deceased borrower as a nullity. Justice Whelan instead discontinued the action without prejudice and sua sponte declared the acceleration of the loan revoked. The appellant then moved to vacate that order pursuant to CPLR 5015(a) and CPLR 2221(e), which motion was also denied. On appeal, the Second Department found that the “Supreme Court erred in discontinuing the action based upon a purported stipulation of discontinuance, and then interceding on the plaintiff's behalf to declare the acceleration of the loan revoked. The stipulation was clearly ineffective as it was only signed by the attorney for the plaintiff.” The stipulation was found ineffective because it was signed only by the plaintiff. Dismissal pursuant to CPLR 3215(c) was warranted because plaintiff did not oppose the motion and did not demonstrate a reasonable excuse for its delay in seeking default judgment. Finally, since Ned Rini died prior to the commencement of this action, the action insofar as asserted against him was a legal nullity from its inception, and the Supreme Court should have granted that branch of the appellant's prior motion which was to dismiss the complaint insofar as asserted against Ned Rini.
Oparaji v ABN Amro Mtge. Group, Inc., 2022 Slip Op 01033 (February 16, 2022)
This action was brought by a borrower who alleged that a note and mortgage were forgeries. ABN Amro and CitiMortgage moved to dismiss the complaint pursuant to CPLR 3211(a), which was granted. “Documentary evidence submitted in support of the motion of ABN and CitiMortgage included copies of the mortgage and note dated March 31, 2004, as well as judicial records relating to [a] prior foreclosure action and [an] action commenced in the Civil Court [in which the borrowers claimed that CitiMortgage had failed to credit mortgage payments made and had harassed them]. This documentary evidence conclusively established that the mortgage and note were not forgeries and, thus, conclusively established a defense to the action as a matter of law.” The Second Department affirmed the order granting the motion to dismiss accordingly.
Oparaji v ABN Amro Mtge. Group, Inc., 2022 Slip Op 01034 (February 16, 2022)
The Second Department affirmed an order denying a motion for leave to renew on the basis that the plaintiff failed to present any new fact not offered on the prior motion and cross motion that would have changed the prior determination.
Nationstar Mtge., LLC v Rao, 2022 Slip Op 01031 (February 16, 2022)
This case involves an initial finding that an order that denies a motion without prejudice to renew is appealable. The Second Department affirmed an order denying a motion, which was brought by notice of motion, for a temporary restraining order prohibiting the plaintiff from entering a judgment of foreclosure and sale until the Supreme Court ruled on the motion.
Rattner v Fessler, 2022 Slip Op 01058 (February 16, 2022)
The Second Department reversed a judgment of foreclosure and sale but also vacated part of an order that granted default judgment against certain defendants. Here, the plaintiff had moved for default judgment and an order of reference against four defendants. The defendants cross-moved to dismiss the complaint pursuant to CPLR § 3211 (a)(1), which was granted. The plaintiff moved to reargue, and the Supreme Court vacated its prior decision, granted default judgment and reversed its dismissal of the complaint. On appeal, the Second Department found that default judgment had been warranted against two of the defendants, as one was found to have been properly served by CPLR 308(4) and the other by CPLR 308(2).
With respect to CPLR 308(4), the defendant admitted that the affidavit of process identified her residence, and merely denied receipt of the summons and complaint. With respect to CPLR 308(2), while the defendant denied being married at the time of service and stated that “she did not know ‘any person by the name of “Seth Fessler,’”” she did not deny that a person matching the physical description identified as “Seth Fessler, husband” in the affidavit of service was present at the time of service.
The Second Department found that two of the defendants had not been properly served. The first was a woman whose doorman was provided with a copy of the summons and complaint. The defendant “averred in her affidavit submitted by the defendants in support of their cross motion that she had never received the summons and complaint, and that there was no restricted access to the apartment where the plaintiff sought to effectuate service.” This was enough to convince the Second Department that the general rule that “if a process server is not permitted to proceed to the actual apartment by the doorman or some other employee, the outer bounds of the actual dwelling place must be deemed to extend to the location at which the process server's progress is arrested" did not apply.
The Second Department also found that where the fourth defendant “averred in an affidavit submitted by the defendants in support of their cross motion that he had never received the summons and complaint, and that there was ‘easy access’ to the address where service was to be effectuated.”
Judgment of foreclosure and sale was reversed because the motion for order of reference could not be decided until the Supreme Court held a hearing to determine whether personal jurisdiction was obtained over the third and fourth defendants.
Savory v Wells Fargo Bank, NA, 2022 Slip Op 01060 (February 16, 2022)
The Second Department affirmed an order dismissing a quiet title complaint against MERS and Wells Fargo as barred by collateral estoppel. The order also sua sponte dismissed as against other defendants. Prior to the quiet title action, Wells Fargo had filed a foreclosure action against the appellant. The appellant filed a quiet title action that also alleged fraud, intentional infliction of emotional distress, slander of title, “violation of certain federal statutes, unjust enrichment, breach of the implied covenant of good faith and fair dealing, and negligence, and sought declaratory relief and to rescind the loan.” Once Wells Fargo had obtained a judgment of foreclosure and sale in the foreclosure action, it moved to dismiss the quiet title action. “’A judgment of foreclosure and sale is final as to all questions at issue between the parties, and concludes all matters of defense which were or could have been litigated in the foreclosure action’ (Ciraldo v JP Morgan Chase Bank, N.A., 140 AD3d 912, 913).”
U.S. Bank N.A. v Williams Family Trust, 2022 Slip Op 01063 (February 16, 2022)
The Second Department affirmed a judgment of foreclosure and sale, finding that the plaintiff established strict compliance with RPAPL § 1304. The affidavit of an employee of SPS averred that the required notice was sent by both certified mail and first-class mail, and also attested to a standard mailing practice. The 90-day notice also contained a list of five housing counseling agencies where the borrower resided. The plaintiff additionally demonstrated compliance with RPAPL § 1306.
U.S. Bank N.A. v Stathakis, 2022 Slip Op 01064 (February 16, 2022)
The Second Department affirmed an order denying the borrower’s motion pursuant to CPLR § 5015(a) and 22 NYCRR 202.48 on the basis that defendant did not demonstrate a reasonable excuse for defaulting in opposing a motion for summary judgment. “[T] he defendant's assertions that his former attorney neglected to oppose the plaintiff's motion and led him to believe that ‘everything was fine’ were conclusory and unsubstantiated, and thus, were insufficient to establish a reasonable excuse for his default.”
Wilmington Sav. Fund Socy., FSB v Kutch, 2022 Slip Op 01066 (February 16, 2022)
The Second Department reversed a judgment of foreclosure and sale and order granting summary judgment to the plaintiff on the basis that plaintiff did not demonstrate compliance with RPAPL § 1304. The affiant did not attest to personal knowledge of the mailings or of a standard office mailing procedure. While the documents annexed to his affidavit demonstrated that a 90-day notice was sent to the defendant by certified mail, none of the documents proved that a 90-day notice had been sent by first-class mail. This rendered his affidavit conclusory and unsubstantiated.
“The plaintiff's reliance on the ‘long-standing common-law presumption’ that ‘a letter or notice that is properly stamped, addressed, and mailed is presumed to be received by the addressee,’ is unavailing.”
However, the Second Department also found that the Supreme Court properly denied the defendant’s motion to dismiss the complaint on the basis that the plaintiff failed to send a 90-day notice to a separate borrower who was on the mortgage but not the note, because the moving defendant lacked standing to contest the bank’s compliance with RPAPL § 1304 with respect to the other borrower.