How New York Homeowners’ Foreclosure Appeals Ended in 2021

Decided on December 29, 2021
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Second Judicial Department

REINALDO E. RIVERA, J.P.
VALERIE BRATHWAITE NELSON
ANGELA G. IANNACCI
WILLIAM G. FORD, JJ.

2018-08945
(Index No. 8008/08)

[*1]U.S. Bank National Association, etc., respondent,

v

Ming Kang Low, appellant, et al., defendants.

United Solutions Law Office, Flushing, NY (Chi-Yuan Hwang of counsel), for appellant.

Hinshaw & Culbertson LLP, New York, NY (Brian McGrath of counsel), for respondent.

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Ming Kang Low appeals from an order of the Supreme Court, Kings County (Lawrence Knipel, J.), dated May 16, 2018.

The order denied that defendant’s motion, in effect, pursuant to CPLR 5015(a) to vacate his default in answering the complaint and for leave to serve a late answer.

ORDERED that the order is reversed, on the law, with costs, and the matter is remitted to the Supreme Court, Kings County, for a hearing in accordance herewith and, thereafter, a new determination of the motion of the defendant Ming Kang Low.

In 2008, the plaintiff commenced this action against, among others, the defendant Ming Kang Low (hereinafter the defendant), to foreclose a mortgage on real property located in Brooklyn.

Based upon the plaintiff’s assertion that it was unable to ascertain the whereabouts of the defendant, the plaintiff was granted leave to serve the defendant by publication. The defendant failed to appear or answer the complaint.

The defendant subsequently moved, in effect, pursuant to CPLR 5015(a) to vacate his default in answering the complaint and for leave to serve a late answer. By order dated May 16, 2018, the Supreme Court denied the motion, and the defendant appeals.

“Under CPLR 5015(a)(4), a default must be vacated once the movant demonstrates lack of jurisdiction” (Greenwood Realty Co. v Katz, 187 AD3d 1153, 1153 [internal quotation marks omitted]), such as by demonstrating lack of proper service of process (see JPMorgan Chase Bank, N.A. v Perkin, 197 AD3d 468). “CPLR 308(5) provides that service of process upon a natural person may be effected ‘in such manner as the court, upon motion without notice, directs, if service is impracticable under paragraphs one, two and four of this section[,]’ which provide for service by personal delivery, delivery and mail, and nail and mail, respectively” (Contimortgage Corp. v Isler, 48 AD3d 732, 734; see Bayview Loan Servicing, LLC v Cave, 172 AD3d 985, 987).

“Whether service is impracticable depends on the facts and circumstances surrounding each case”

(Bayview Loan Servicing, LLC v Cave, 172 AD3d at 987 [internal quotation marks omitted]).

Here, the defendant’s submissions “raised a question of fact as to whether it was impracticable for the plaintiff to serve [him] with the summons and complaint pursuant to CPLR 308(1), (2), or (4), such that the plaintiff was entitled to an alternative method of court-authorized service pursuant to CPLR 308(5)” (Bayview Loan Servicing, LLC v Cave, 172 AD3d at 987).

In particular, the mortgage listed an address for the defendant in Queens and the defendant averred that he lived at that Queens address at the time, and for several years after this action was commenced.

Nothing in the plaintiff’s submissions established or even addressed whether or why it was impracticable to serve the defendant at the address listed on the mortgage.

Under these circumstances, the Supreme Court should not have determined the defendant’s motion without holding a hearing

(see id.; see also Contimortgage Corp. v Isler, 48 AD3d at 732-735).

Accordingly, we remit the matter to the Supreme Court, Kings County, for a hearing on the issue of whether service pursuant to CPLR 308(1), (2), or (4) was impracticable, such that the plaintiff was entitled to an alternative method of court-authorized service pursuant to CPLR 308(5), and, thereafter, a new determination of the defendant’s motion.

The defendant’s remaining contentions are not properly before this Court.

RIVERA, J.P., BRATHWAITE NELSON, IANNACCI and FORD, JJ., concur.

ENTER:
Maria T. Fasulo

Clerk of the Court

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Decided on December 29, 2021
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Second Judicial Department

SYLVIA O. HINDS-RADIX, J.P.
VALERIE BRATHWAITE NELSON
ANGELA G. IANNACCI
JOSEPH A. ZAYAS, JJ.

2018-11992
(Index No. 19750/10)

Friedman Vartolo, LLP, New York, NY (Ronald P. Labeck of counsel), for appellant.

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Queens County (Jeremy S. Weinstein, J.), entered May 30, 2018.

The order denied the plaintiff’s motion to vacate an order of the same court entered November 21, 2017, which, among other things, sua sponte, directed dismissal of the complaint without prejudice, and to restore the action to the calendar.

ORDERED that the order entered May 30, 2018, is affirmed, without costs or disbursements.

The plaintiff commenced this action in 2010 to foreclose a mortgage on certain real property owned by the defendant Sharin A. Hossain (hereinafter the defendant).

The defendant answered the complaint, raising various affirmative defenses. Settlement of the action was unsuccessful, and the Supreme Court denied the plaintiff’s motion, inter alia, for summary judgment on the complaint, on the ground that the plaintiff had failed to comply with the provisions of CPLR 3408, relating to mandatory settlement conferences in residential foreclosure actions.

A status conference order entered March 16, 2017 (hereinafter the March 2017 order), directed the plaintiff, among other things, to file a foreclosure affirmation/certificate of merit pursuant to Administrative Order 208/13 and to move for an order of reference by July 17, 2017, and warned that “failure to comply with the terms of this order may be grounds for dismissal without prejudice.”

Despite appearing at subsequent status conferences, the plaintiff failed to file the foreclosure affirmation/certificate of merit pursuant to Administrative Order 208/13 or to move for an order of reference, as directed by the March 2017 order.

In October 2017, a Court Attorney Referee (hereinafter the Referee) issued a report which found that the plaintiff had failed to comply with the March 2017 order without good cause and, therefore, recommended that the complaint be dismissed. In an order entered November 21, 2017 (hereinafter the 2017 order of dismissal), the Supreme Court, sua sponte, confirmed the Referee’s report, directed dismissal of the complaint without prejudice, and directed the cancellation and discharge of all notices of pendency filed in the action. In March 2018, the plaintiff moved to vacate the 2017 order of dismissal and to restore the action to the calendar.

The defendant opposed the motion. In an order entered May 30, 2018, the court denied the motion. The plaintiff appeals.

CPLR 5015(a)(1) authorizes a court to relieve a party from an order or judgment, on motion, upon the ground of “excusable default” (see Deutsche Bank Natl. Trust Co. v Morales, 170 [*2]AD3d 803, 804).

Here, the plaintiff failed to assert a reasonable excuse for its failure to comply with the March 2017 order, or any other basis pursuant to CPLR 5015(a) for vacatur of the 2017 order of dismissal (see U.S. Bank N.A. v Mitchell, 191 AD3d 731, 732; Deutsche Bank Natl. Trust Co. v Morales, 170 AD3d at 804; HSBC Bank USA v Josephs-Byrd, 148 AD3d 788, 790).

Accordingly, the Supreme Court properly denied the plaintiff’s motion to vacate the 2017 order of dismissal and to restore the action to the calendar.

The plaintiff’s remaining contention is without merit.

HINDS-RADIX, J.P., BRATHWAITE NELSON, IANNACCI and ZAYAS, JJ., concur.

ENTER:

Maria T. Fasulo

Clerk of the Court

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Decided on December 29, 2021
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Second Judicial Department

REINALDO E. RIVERA, J.P.
LEONARD B. AUSTIN
COLLEEN D. DUFFY
BETSY BARROS, JJ.

2019-05449
2019-05450
(Index No. 607551/16)

John J. Caracciolo, East Northport, NY, for appellant.

Robertson, Anschutz, Schneid, Crane & Partners, PLLC (Greenberg Traurig, LLP, New York, NY [Brian Pantaleo], of counsel), for respondent.

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Vito DeFeo appeals from two orders of the Supreme Court, Suffolk County (James C. Hudson, J.), both dated March 4, 2019.

The first order, insofar as appealed from, denied that defendant’s motion, inter alia, for summary judgment dismissing the complaint insofar as asserted against him and granted those branches of the plaintiff’s cross motion which were for summary judgment on the complaint insofar as asserted against that defendant, to strike his answer with affirmative defenses and to treat his answer as a limited notice of appearance, and for an order of reference.

The second order, insofar as appealed from, granted the same relief to the plaintiff and appointed a referee to ascertain and compute the amount due to the plaintiff.

ORDERED that the first order is modified, on the law, by deleting the provision thereof granting those branches of the plaintiff’s cross motion which were for summary judgment on the complaint insofar as asserted against the defendant Vito DeFeo, to strike his answer with affirmative defenses and to treat his answer as a limited notice of appearance, and for an order of reference, and substituting therefor a provision denying those branches of the plaintiff’s cross motion; as so modified, the first order is affirmed insofar as appealed from, without costs or disbursements, and so much of the second order as granted those branches of the plaintiff’s cross motion which were for summary judgment on the complaint insofar as asserted against the defendant Vito DeFeo, to strike his answer with affirmative defenses and to treat his answer as a limited notice of appearance, and for an order of reference, and appointed a referee to ascertain and compute the amount due to the plaintiff is vacated; and it is further,

ORDERED that the appeal from the second order is dismissed as academic, without costs or disbursements, in light of our determination on the appeal from the first order.

In May 2016, the plaintiff commenced this action against, among others, the defendant Vito DeFeo (hereinafter the defendant) to foreclose a mortgage on certain property in East Northport.

The defendant interposed an answer in which he asserted various affirmative defenses, and thereafter moved, inter alia, for summary judgment dismissing the complaint insofar as asserted [*2]against him.

The plaintiff opposed the motion and cross-moved, among other things, for summary judgment on the complaint insofar as asserted against the defendant, to strike his answer with affirmative defenses and to treat his answer as a limited notice of appearance, and for an order of reference.

By order dated March 4, 2019, the Supreme Court denied the defendant’s motion and granted the plaintiff’s cross motion.

In a second order, also dated March 4, 2019, the court, inter alia, granted the same relief to the plaintiff and referred the matter to a referee to ascertain and compute the amount due to the plaintiff.

The defendant appeals.

RPAPL 1304(1) provides that, “at least ninety days before a lender, an assignee or a mortgage loan servicer commences legal action against the borrower, . . . including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give notice to the borrower.”

“The statute further provides that the required content for the notice and provides that the notice must be sent by registered or certified mail and also by first-class mail to the last known address of the borrower” (Citibank, N.A. v Conti-Scheurer, 172 AD3d 17, 20; see RPAPL 1304[2]).

Strict compliance with RPAPL 1304 notice to the borrower is a condition precedent to the commencement of a foreclosure action

(see Citibank, N.A. v Conti-Scheurer, 172 AD3d at 20; Citimortgage, Inc. v Banks, 155 AD3d 936, 936-937).

“A defense based on noncompliance with RPAPL 1304 may be raised at any time during the action”

(Wells Fargo Bank, N.A. v Morales, 178 AD3d 881, 882).

Here, contrary to the defendant’s contention, he was not entitled to summary judgment dismissing the complaint insofar as asserted against him on the ground that the plaintiff failed to strictly comply with RPAPL 1304.

The defendant’s affidavit submitted in support of the motion was insufficient to demonstrate his prima facie entitlement to judgment as a matter of law (see Nationstar Mtge., LLC v Matles, 185 AD3d 703, 707) and the defendant did not carry his burden in moving for summary judgment by pointing to the gaps in the plaintiff’s proof (see id. at 707; see e.g. Pace v International Bus. Mach. Corp., 248 AD2d 690, 691).

Nevertheless, the Supreme Court should have denied those branches of the plaintiff’s cross motion which were for summary judgment on the complaint insofar as asserted against the defendant, to strike his answer with affirmative defenses and to treat his answer as a limited notice of appearance, and for an order of reference.

The “separate envelope” mandate of RPAPL 1304(2) provides that “[t]he notices required by this section shall be sent by the lender, assignee or mortgage loan servicer in a separate envelope from any other mailing or notice.”

Here, the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law, as it failed to show its strict compliance with RPAPL 1304(2).

Among other things, the copies of the 90-day notice submitted by the plaintiff in support of its cross motion included an additional notice not contemplated by RPAPL 1304(2).

The plaintiff acknowledged that the envelope that it sent to the defendant, which contained the requisite RPAPL 1304 notices, also included a separate notice concerning the Home Affordable Modification Program and bankruptcy issues.

This Court recently determined, in Bank of America, N.A. v Kessler (___ AD3d ___, 2021 NY Slip Op 06979 [2d Dept]), that RPAPL 1304(2) requires that the requisite notices under its provision must be mailed in an envelope separate from any other notice.

Since the plaintiff failed to demonstrate that the RPAPL 1304 notice was “served in an envelope that was separate from any other mailing or notice” (USBank N.A.v Haliotis, 185 AD3d 756, 758-759; see Bank of America, N.A. v Kessler, ___ AD3d ___, 2021 NY Slip Op 06979), it failed to establish its strict compliance with RPAPL 1304.

Accordingly, the court should have denied the relevant branches of the plaintiff’s cross motion regardless of the sufficiency of the opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).

The defendant’s remaining contentions are without merit.

RIVERA, J.P., AUSTIN, DUFFY and BARROS, JJ., concur.

ENTER:

Maria T. Fasulo

Clerk of the Court

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Decided on December 29, 2021
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Second Judicial Department

REINALDO E. RIVERA, J.P.
VALERIE BRATHWAITE NELSON
ANGELA G. IANNACCI
WILLIAM G. FORD, JJ.

2018-01054
(Index No. 14456/11)

Rodney Deas, Brooklyn, NY, appellant pro se.

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Rodney Deas appeals from an order of the Supreme Court, Kings County (Lawrence Knipel, J.), dated June 28, 2017.

The order, insofar as appealed from, granted those branches of the plaintiff’s motion which were for summary judgment on the complaint insofar as asserted against the defendant Rodney Deas, to strike his answer, and for an order of reference, and referred the matter to a referee to ascertain and compute the amount due to the plaintiff.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and those branches of the plaintiff’s motion which were for summary judgment on the complaint insofar as asserted against the defendant Rodney Deas, to strike his answer, and for an order of reference are denied.

The plaintiff commenced this action against the defendant Rodney Deas (hereinafter the defendant), among others, to foreclose a mortgage encumbering certain property in Brooklyn.

The defendant interposed an answer asserting, among other things, that the plaintiff lacked standing to commence the action.

Thereafter, the plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendant, to strike his answer, and for an order of reference.

The defendant opposed the motion. In an order dated June 28, 2017, the Supreme Court, inter alia, granted those branches of the plaintiff’s motion, and referred the matter to a referee to ascertain and compute the amount due to the plaintiff. The defendant appeals.

The Supreme Court erred in granting those branches of the plaintiff’s motion which were for summary judgment on the complaint insofar as asserted against the defendant, to strike his answer, and for an order of reference.

Where, as here, the plaintiff’s standing has been placed in issue by the defendant’s answer, the plaintiff must prove its standing as part of its prima facie showing (see Nationstar Mtge., LLC v Shivers, 179 AD3d 931, 932).

A plaintiff has standing to maintain a mortgage foreclosure action where it is the holder or assignee of the underlying note at the time the action is commenced (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361-362).

“Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident” (Dyer Trust 2012-1 v Global World Realty, Inc., 140 AD3d 827, 828).

Here, in support of its motion, the plaintiff submitted, inter alia, the note, the mortgage, and the affidavit of Rory McGowan, a vice president of the plaintiff’s loan servicer, Ocwen Loan Servicing, LLC (hereinafter Ocwen).

McGowan reviewed the records relating to the servicing of the subject loan, attested to the defendant’s default in payment, and stated that the [*2]plaintiff “was in possession of the Note at the time of commencement of this action.”

Annexed to the affidavit was a copy of the note, bearing a specific endorsement to “JPMorgan Chase Bank, as Trustee.”

“Although the foundation for admission of a business record usually is provided by the testimony of the custodian, the author or some other witness familiar with the practices and procedures of the particular business, it is the business record itself, not the foundational affidavit, that serves as proof of the matter asserted” (Bank of N.Y. Mellon v Gordon, 171 AD3d 197, 205 [citation and internal quotation marks omitted]). ”

Without submission of the business records, a witness’s testimony as to the contents of the records is inadmissible hearsay” (Wells Fargo Bank, N.A. v Atedgi, 189 AD3d 934, 936; see CPLR 4518[a]; Bank of N.Y. Mellon v Gordon, 171 AD3d at 206).

Here, McGowan failed to identify or attach the business records he relied upon evincing that the plaintiff was in physical possession of the note when it commenced this action

(see Deutsche Bank Natl. Trust Co. v Ezeji, 194 AD3d 909, 911; Arch Bay Holdings, LLC v Albanese, 146 AD3d 849, 852-853).

Since the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law, those branches of its motion which were for summary judgment on the complaint insofar as asserted against the defendant, to strike his answer, and for an order of reference should have been denied, regardless of the sufficiency of the defendant’s opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).

In view of our determination, we need not reach the defendant’s remaining contentions.

RIVERA, J.P., BRATHWAITE NELSON, IANNACCI and FORD, JJ., concur.

ENTER:

Maria T. Fasulo

Clerk of the Court