Handdowns

Recent Appellate Decisions Relating to Mortgage Foreclosure

Mortgage Foreclosure-Related Handdowns - February 9, 2022 Edition

First Department

Wells Fargo Bank, N.A. v Hayden, 2022 Slip Op 00748 (February 03, 2022)

The First Department affirmed an order vacating a previous judgment of foreclosure and sale, directing the County Clerk to resettle the judgment of foreclosure and sale, and extending the time in which to conduct a foreclosure sale, rejecting appellant’s argument that CPLR § 2220(a) required the prevailing party to serve the order appealed from. CPLR § 2220(a) only requires the prevailing party to file an order and the papers used on the motion when a statute or civil practice rule requires such filing and entry in a county other than that in which the order was made.

 

Second Department

Bayview Loan Servicing, LLC v Zelyakovsky, 2022 Slip Op 00840 (February 09, 2022)

The Second Department found that the defendants did not waive the issue of personal jurisdiction by informally appearing in the foreclosure action and not raising the defense, even though the defendants had appeared at court conferences, including at least one mandatory settlement conference. However, notwithstanding its finding that the defendants did not waive their personal jurisdiction defense, the court affirmed the judgment of foreclosure and sale on the basis that the court “properly confirmed” the “Court Attorney Referee’s” finding that the defendant was properly served with the summons and complaint.  

Citimortgage, Inc. v Doomes, 2022 Slip Op 00846 (February 09, 2022)

The Second Department affirmed a judgment of foreclosure and sale, finding that attaching a copy of the note, endorsed in blank, to the complaint evidenced standing, and that plaintiff submitted the note, mortgage, and proof of defendant’s default in payment.

Emigrant Bank v Estate of Maurice Robinson, 2022 Slip Op 00848 (February 09, 2022)

The Second Department affirmed a decision granting summary judgment to the plaintiff and denying defendant’s cross-motion for summary judgment on a counterclaim brought pursuant to RPL § 274-a. Standing was evidenced by attaching a copy of the note, endorsed in blank, to the complaint. Summary judgment on defendants’ counterclaim was denied because a letter requesting a payoff sent by defendants’ counsel to plaintiff’s attorney apparently failed to establish that the defendants had made a written demand for a payoff statement by registered or certified mail upon the plaintiff.

HSBC Bank USA, N.A. v Sharon, 2022 Slip Op 00852 (February 09, 2022)

The Second Department reversed a judgment of foreclosure and sale on the basis that the “referee's findings and recommendations are advisory only and have no binding effect on the court, which remains the ultimate arbiter of the dispute.” The affidavit of plaintiff’s servicing agent was inadmissible because the affiant did not produce any of the business records he relied upon in making his calculations.

HSBC Bank USA, N.A. v Trincilla, 2022 Slip Op 00853 (February 09, 2022)

The Second Department affirmed two orders granting summary judgment to the plaintiff and appointing a referee. The court found that the servicer’s affidavit evidenced compliance with RPAPL § 1304 because the affiant attested to a standard office mailing procedure designed to ensure that items were properly addressed and mailed. The servicer affidavit also demonstrated compliance the default notice provisions in paragraphs 15 and 22 of the subject mortgage.

Christiana Trust v Campbell, 2022 Slip Op 00845 (February 09, 2022)

The Second Department reversed a judgment of foreclosure and sale on the basis that the referee’s report was not substantially supported by the record. “Ostermann did not set forth when Carrington began servicing the loan and did not provide a power of attorney appointing it as attorney-in-fact.” The affiant also did not state that she was personally familiar with the record-keeping practices and procedures of Carrington. Note that the court found that “the failure of the referee to conduct a hearing does not require reversal of the order and judgment of foreclosure and sale in this matter, since the defendant had the opportunity to submit relevant evidence to the Supreme Court.“

JP Morgan Chase v Twersky, 2022 Slip Op 00855 (February 09, 2022)

The Second Department found that the plaintiff did not prove that the subject loan was not a “high-cost home loan,” which was the criterion in place under RPAPL § 1304 at the time of commencement of the action. The plaintiff failed to show that the historical conventional loan limits produced by plaintiff constituted the definition of a conforming loan under former RPAPL 1304(5)(b). The court affirmed the motion court’s decision denying summary judgment on the basis that plaintiff did not prove compliance with RPAPL § 1304.

Sy Wald, LLC v Wells Fargo Bank, N.A., 2022 Slip Op 00893 (February 09, 2022)

The Second Department affirmed a decision dismissing an action filed to quiet title pursuant to RPAPL § 1501(4) on statute of limitations grounds, because the prior action in which the complaint accelerated the mortgage was voluntarily discontinued by the plaintiff before six years had lapsed from the commencement of the action.

Bank of Am., N.A. v Bloom, 2022 Slip Op 00839 (February 09, 2022)

The Second Department reversed a dismissal of a foreclosure action after trial. The trial court had found that the plaintiff failed to lay a proper foundation for the admission of documents essential to establishing its prima facie case. However, the appellate division found that the testimony of an assistant vice president at trial, along with a copy of the note, was sufficient to evidence standing to foreclose. ‘The defendant's contention that the copy of the note was inadmissible because the plaintiff failed to satisfy the requirements of CPLR § 4539(b) is unpreserved for appellate review.” The payment history introduced at trial through the witness’ testimony was sufficient to evidence default. The Second Department also found that the plaintiff’s assistant vice president’s testimony with respect to the mailing practices and procedures of the Walz Group was admissible and sufficient to evidence compliance with RPAPL § 1304.

MTGLQ Invs., L.P. v Cutaj, 2022 Slip Op 00858 (February 09, 2022)

The Second Department reversed a judgment of foreclosure and sale on the basis that the plaintiff failed to establish compliance with RPAPL § 1304. The 90-day notice relied upon by plaintiff did not indicate that it was sent by registered, certified, or first class mail. The court found that the servicer’s affidavit was unsubstantiated and conclusory with respect to those methods and also failed to constitute proof of a standard office mailing procedure.

Nationstar Mtge., LLC v Stroman, 2022 Slip Op 00869 (February 09, 2022)

The Second Department reversed an order denying the defendant’s motion pursuant to CPLR § 5015(a)(4) for vacatur of a judgment of foreclosure and sale, even though the defendant’s attorney had attended a mandatory foreclosure settlement conference. “By participating in the mandatory settlement foreclosure conference and subsequently contacting the plaintiff for settlement purposes, the defendant did not demonstrate a clear intent to participate in the lawsuit on the merits, and therefore she did not formally or informally appear in the action .” The court found that the defendant had properly rebutted the process server’s affidavit of service, as she denied residing at the subject address at the time of purported service and averred that she had not lived there since September 2011. The matter was remitted for a traverse hearing.

Raymond James Bank, NA v Guzzetti, 2022 Slip Op 00888 (February 09, 2022)

The Second Department reversed an order granting summary judgment on the basis that the plaintiff failed to evidence standing, because there was no evidence that the allonge was firmly affixed to the note. Additionally, the plaintiff failed to evidence strict compliance with RPAPL § 1304 because it did not provide proof of the actual mailing or proof of a standard office mailing procedure. Additionally, it did not evidence mailing of a default notice as required by sections 15 and 22 of the mortgage.

U.S. Bank N.A. v Adams, 2022 Slip Op 00896 (February 09, 2022)

The judgment of foreclosure and sale was reversed and the motion denied, and motion for summary judgment and order of reference denied. The Second Department found that the plaintiff did not establish compliance with RPAPL § 1304, in part because the plaintiff’s affiants did not attest to personal knowledge of Walz Facility’s business practices and procedures. The court found that plaintiff did prove compliance with RPAPL § 1306.

U.S. Bank N.A. v Gordon, 2022 Slip Op 00897 (February 09, 2022)

The Second Department affirmed an order granting the plaintiff’s motion to vacate its default in serving a reply to counterclaims, on the basis that the plaintiff’s attorney provided a detailed and credible explanation for its failure to timely serve the reply to counterclaims, as well as potentially meritorious defenses to the counterclaims.

U.S. Bank N.A. v Gordon, 2022 Slip Op 00898 (February 09, 2022)

Summary judgment and an order of reference was reversed on RPAPL § 1304 grounds, but the defendants were not entitled to dismissal based upon the plaintiff’s failure to comply with RPAPL § 1304. "The defendants failed to offer evidence showing that the list annexed to the RPAPL 1304 notices included fewer than five housing counseling agencies that serve the county in which the mortgaged property is located.” It was defendants’ burden to prove that the Hispanic Brotherhood of Rockville Centre, Inc. did not serve Queens County. However, because the plaintiff did not list five housing agencies in Queens, summary judgment in its favor also was not warranted.  

Wells Fargo Bank, N.A. v Davidson, 2022 Slip Op 00901 (February 09, 2022)

The Second Department vacated a judgment of foreclosure and sale as well as the summary judgment decision and order of reference. The court found that because RPAPL § 1304 is a defense that can be raised at any time prior to the entry of a judgment of foreclosure and sale, it had not been waived. Here, while the court found that plaintiff had evidenced proof of mailing of the 90-day notice, its failure to send the notices in separate envelopes to each borrower was not strict compliance with RPAPL § 1304. The “separate envelope” argument was raised for the first time on appeal, but the Second Department found that compliance with RPAPL § 1304 was raised in the motion papers, and thus was a question of law that appeared on the face of the record.

Wells Fargo Bank, N.A. v Gross, 2022 Slip Op 00902 (February 09, 2022)

The Second Department found that defendants’ motion to dismiss on personal jurisdiction grounds was properly denied as untimely, but also found that plaintiff had failed to demonstrate prima facie entitlement to judgment. The motion to dismiss was filed more than 60 days after the defendants filed their answer. Plaintiff failed to submit evidence of default, because its witness did not annex business records to her affidavit and did not have personal knowledge of the default.

Wells Fargo Bank, N.A. v McMahon, 2022 Slip Op 00903 (February 09, 2022)

Judgment of foreclosure and sale was reversed along with summary judgment decision and order of reference because the RPAPL § 1304 notice listed a housing agency that was 350 miles from the mortgaged premises and thus did not list five agencies in Suffolk County. “By failing to submit evidence that the Watertown agency served the region wherein the defendants resided, the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law and thus its motion for such relief should have been denied.” The Second Department found that dismissal was not warranted because “[w]hile the defendant offered some evidence that the Watertown agency does not serve Suffolk County, it was insufficient to establish her prima facie entitlement to judgment as a matter of law.”

Bank of Am., N.A. v Ali, 2022 Slip Op 00838 (February 09, 2022)

The Second Department reversed the denial of a motion to vacate a Kings County (Knipel) conditional order of dismissal from 2013. The conditional order was made pursuant to CPLR § 3216, and the matter was dismissed after 90 days passed with no action by the plaintiff. Because issue had not been joined, the lower court did not have the authority to issue a 90-day notice to plaintiff.

Erin Wietecha