Opinion
35293–2012
12-28-2017
CITIBANK, NATIONAL ASSOCIATION as Trustee FOR GSAA HOME EQUITY TRUST 2007–9, ASSET–BACKED CERTIFICATES SERIES 2007–9, Plaintiff, v. Noel FEUSTEL; Victoria Peterson ; Barry A. Kamen, PLLC; Bruce A. Rich as Trustee of the Village of Saltaire, Suffolk County, Capital One Bank USA, NA, George Roy Hill III, Hillary Richard as Trustee of the Village of Saltaire, Suffolk County ; Jennifer Friedberg; Midland Funding of Delaware LLC as Successor in Interest to a Chase Account, Patricia Lama; Robert Lynn Cox II as Trustee of the Village of Saltaire, Suffolk County ; Scott S. Rosenblum as Mayor of the Village of Saltaire, Suffolk County Susan Okon, the Incorporated Village of Saltaire, Suffolk County, Wells Fargo Bank, N.A.; John Doe (Said Name Being Fictitious, it Being the Intention of Plaintiff to Designate Any and All Occupants of Premises Being Foreclosed Herein, and Any Parties, Corporations or Entities, if Any, Having or Claiming an Interest or Lien Upon the Mortgaged Premises.), Defendants.
GROSS POLOWY, LLC, 1775 Wehrle Drive, Suite 100, Williamsville, New York 14221, Ivan E. Young, Esq., Attorneys for Plaintiff YOUNG LAW GROUP, 80 Orville Drive, Suite 100, Bohemia, New York 11716, Attorneys for Defendant, Noel Feustel
GROSS POLOWY, LLC, 1775 Wehrle Drive, Suite 100, Williamsville, New York 14221, Ivan E. Young, Esq., Attorneys for Plaintiff
YOUNG LAW GROUP, 80 Orville Drive, Suite 100, Bohemia, New York 11716, Attorneys for Defendant, Noel Feustel
Robert F. Quinlan, J.
Upon the following papers numbered 1 to 100 read on these motions by plaintiff for summary judgment and appointment of a referee pursuant to RPAPL § 1321 and defendant's cross-motion and opposition denyng plaintiff's motion as procedurally defective, to renew pursuant to CPLR 2221 (e) and upon renewal to dismiss the complaint for failure to comply with RPAPL § 1304 : Notice of Motion, supporting papers and memorandum of law 1–55 ; Cross-motion, opposition and supporting papers 56–78 ; plaintiff's opposition and reply 79–97 and defendant's reply 97–100; (and after hearing counsel in support and opposed to the motion) it is,
ORDERED that the motion of plaintiff Citibank, National Association as Trustee for GSAA Home Equity Trust 2007–9, Asset–Backed Certificates Series 2007–9 is denied; and it is further
ORDERED that the cross-motion by defendant Noel Feustel to renew his prior motion for summary judgment due to an alleged change in the law, and upon granting of renewal to dismiss the complaint for plaintiff's alleged failure to comply with the mailing requirements of RPAPL § 1304 is denied; and it is further
ORDERED that the limited issue trial set by the court's order of August 11, 2016 is scheduled for March 2, 2018 at 9:30 AM in this part.
This is an action to foreclose a mortgage on residential real property known as 39 South Snedecor Avenue, Bayport, Suffolk County, New York given by defendants Noel Feustel and Victoria Petersen ("defendant-mortgagors") to Wells Fargo Bank, N.A. ("Wells"), a predecessor in interest to plaintiff Citibank, National Association as Trustee for GSAA Home Equity Trust 2007–9, Asset–backed Certificate Series 2007–9 ("plaintiff") on May 23, 2007 to secure a note given the same day to Wells by defendant Noel Feustel ("defendant"). Plaintiff subsequently brought this action upon the default of defendant-mortgagors in their payment obligations under the note and mortgage by filing a summons, complaint and notice of pendency with the Suffolk County Clerk on November 20, 2012. Defendant filed an answer raising affirmative defenses. Defendant Victoria Petersen never answered.
Defendant and plaintiff ("the parties") engaged in discovery, resulting in a Differentiated Case Management Order/Stipulation dated November 7, 2013 while the case was assigned to Justice Arthur G. Pitts of this court. Plaintiff moved for summary judgment, an order of reference pursuant to RPAPL § 1321 and other associated relief (Mot. Seq. # 001) and defendant cross-moved to dismiss the complaint (Mot. Seq. # 002). Both motions were submitted before Justice Pitts on July 16, 2014. On June 29, 2015, by an Administrative Order of Suffolk County District Administrative Judge C. Randall Hinrichs, the case was transferred to Acting Supreme Court Justice Richard I. Horowitz, who conferenced it in an unsuccessful attempt to reach a settlement, and in January 2016 the case was transferred to this part.
On August 11, 2016 the motions were orally argued before the court and an oral decision was placed upon the record by the court ("the decision"). The decision denied defendant's cross-motion and granted plaintiff's application to amend the caption by removing defendant Barry A. Kamen, PLLC and the "John Doe" defendant and fixed and set the default of the non-appearing, non-answering defendants. Plaintiff was granted partial summary judgment pursuant to CPLR 3212 (g) dismissing all of defendant's affirmative defenses except the Sixth Affirmative Defense, as the court found that plaintiff had not established the mailing of the notices required by RPAPL § 1304 ("the limited issue"). As a result, plaintiff's application for the appointment of a referee was denied and the court set the limited issue for trial pursuant to CPLR § 2218.
To assist in that trial, the court issued a written Discovery Order and Schedule ("the order") on August 11, 2016, which authorized discovery only as to the limited issue, required all discovery demands to be filed within 30 days of the order and all discovery was to be completed within 120 days of the order. The order further authorized second summary judgement motions as to the limited issue by the parties upon the completion of discovery and within thirty (30) days of the filing of the note of issue ( CPLR 3212 [a] ). The order also set a certification conference in the part for December 21, 2016, at which defendant failed to appear. The certification conference was adjourned to January 18, 2017 and although notified of the date by the court, defendant again failed to appear. At that time the court directed that plaintiff sign the certification order and directed that a note of issue be filed. Plaintiff filed the note of issue dated January 25, 2017.
NOTE OF ISSUE TIMELY FILED
Defendant moved to vacate the Note of Issue and strike plaintiff's complaint for failure to comply with defendant's untimely discovery demand, which motion is denied in a separate opinion (Mot. Seq. # 003), signed contemporaneously with this decision. Not raised in that motion is defendant's claim, made three months later in defendant's cross-motion (Mot. Seq. # 005), that plaintiff failed to file the Note of Issue by February 22, 2017, the time set in the certification order. Although defendant makes no further argument for dismissal based upon this error, the court must address it. The court's computer records show that the Clerk's office returned the filed Note of Issue to plaintiff on January 30, 2017 because of a clerical error in plaintiff's submission. Upon return, plaintiff corrected the error and correctly re-submitted the Note of Issue. Under such circumstances, even if defendant argued to vacate the note of issue as untimely filed or for dismissal, the court, in its discretion, would deny such a request (see 22 NYCRR 202.21 (e) ; CPLR 3126 [3 ]; Kihl v. Pfeffer, 94 NY2d 118 [1999] ; Bernal v. Singh, 72 AD3d 716 [2d Dept 2010] ).
SECOND MOTION FOR SUMMARY JUDGMENT APPROPRIATE
Defendant's argument that plaintiff's motion is procedurally defective and should be denied because plaintiff failed to establish a basis for renewal is without merit. Defendant's broad assertion that "there is no such thing as a second motion for summary judgment" is incorrect. Here in the decision and the order, this court authorized the parties to file successive motions for summary judgment upon the limited issue after completion of discovery. Suffolk County has strained under the burden of the largest number of pending foreclosure actions in the State as a result of the financial crisis of the mid–2000s. The District Administrative Judge established this dedicated foreclosure part, as well as others, to deal with this burden and to bring cases to a final resolution. It was towards this goal, and in the interests of judicial economy, that the court authorized successive motions for summary judgment on the limited issue. The limited issue is a simple and narrow one, and by allowing the filing of successive summary judgment motions the court hoped to eliminate the burden on judicial resources that would otherwise be required for a trial (see Rose v. Horton Med. Ctr., 29 AD3d 977 [2d Dept 2006] ; Landmark Capital Investments, Inc. v. Li–Shan Wang , 94 AD3d 418 [2d Dept 2012] ). Although multiple summary judgment motions are discouraged without a showing of newly discovered evidence, or other sufficient cause, a court may properly entertain a subsequent summary judgment motion when it is substantively valid and when granting the motion will further the ends of justice while eliminating an unnecessary burden on court resources (see Detko v. McDonald's Restaurants of New York, Inc , 198 Ad2d 208 [2d Dept 1993] ; Valley National Bank v. INI Holding, LLC , 95 AD3d 1108 [2d Dept 2012] ; Kolel Damsek Eliezer, Inc. v. Schlesinger , 139 AD3d 810 [2d Dept 2016] ). The denial of a subsequent dispositive summary judgment motion for the sole reason of the prohibition against second summary judgment motions has been held to be an improvident exercise of a court's discretion (see Burbige v. Siben & Ferber , 152 AD3d 641 [2d Dept 2017] ).
For the same reason, defendant was authorized to make his cross-motion to dismiss on the limited issue without the need to establish that there had been a "change in the law" allowing renewal pursuant to CPLR 2221 (e).
PLAINTIFF FAILS TO PROVE MAILING OF RPAPL § 1304 NOTICES
The decision granted plaintiff partial summary judgment pursuant to CPLR 3212 (g) dismissing all of defendant's affirmative defenses except the Sixth Affirmative Defense, as the court found that plaintiff had not established the mailing of the notices required by RPAPL § 1304 ("the notices"), set the limited issue for trial, allowed successive motions for summary judgment on that limited issue after completion of a short discovery period, fixed and set the defaults of the non-appearing, non-answering defendants and granted plaintiff's request to amend the caption. Plaintiff does not appear to recognize the narrowing of the issues by the decision, as its submissions on this motion relate not just to the limited issue (see the order, Plaintiff's Exhibit "U") but also to the general issues of summary judgment, amending the caption and fixing the default of the non-appearing, non-answering defendants already determined (see a copy of the transcript of the decision, Defendant's Exhibit "5"). The court will only deal herein with the arguments and submissions relating to the limited issue, plaintiff's last impediment to the granting of full summary judgment.
RPAPL § 1304 requires that at least 90 days before commencing a foreclosure action involving a "home loan" as defined by the statute, a lender, assignee or mortgage loan servicer must send a notice containing the language required by the statute to "the borrower" by certified or registered mail and also by first class mail to the borrower's last known address and, if different, to the residence which is the subject of the mortgage. There is no dispute that the mortgage here is a "home loan," or that defendant is a "borrower." Proper mailing of the notices is a condition precedent to the commencement of a residential foreclosure action (see Deutsche Bank Natl. Trust Co. v. Spanos , 102 AD3d 909 [2d Dept 2013] ). Where defendant has properly asserted non-compliance with the notice requirements of RPAPL § 1304 as a defense or raised it in a response to plaintiff's motion, plaintiff must adduce due proof that the pre-action foreclosure 90 day notice requirements have been satisfied (see Bank of New York v. Aquino , 131 AD3d 1186 [2d Dept 2015] ; Citimortgage. Inc v. Espinal , 134 AD3d 876 [2d Dept 2015] ; Cenlar FSB v. Weisz , 136 AD3d 855 [2d Dept 2016] ; Zarabi v. Movahedian , 136 AD3d 895 [2d Dept 2016] ; M & T Bank v. Joseph , 152 AD3d 579 [2d Dept 2017] ). Here defendant raised compliance in his Sixth Affirmative Defense.
Plaintiff has failed to establish the mailings of the notices through evidentiary proof in admissible form, requiring denial of plaintiff's motion for summary judgment on the limited issue. The affidavits of two employees of Wells, purported servicer for plaintiff, Armenia L. Harrell and James Green, are offered to establish the mailings. They both establish their ability to testify to the business records of Wells pursuant to CPLR 4518 (a), but even under the standard for proof of mailing required by the recent decision in HSBC Bank USA, NA v. Ozcan, 154 AD3d 822 (2d Dept 2017), these affidavits are insufficient to establish the mailings. In HSBC Bank USA, NA v. Ozcan , supra the majority held that an affiant who established her ability to testify pursuant to CPLR 4518 (a), who stated that a review of those business records showed that the notices were mailed in the regular course of business, and referred to copies of the notices attached to her affidavit provided sufficient proof of mailing of the notices in compliance with the statute. Although there is no reference by either affiant to "digital barcodes" on the envelopes, as done by the affiant in HSBC Bank USA, NA v. Ozcan , supra, the court does not find this a fatal defect, as the standard for proof of mailing under HSBC Bank USA, NA v. Ozcan , supra is the admissible review of the business records which showed the mailing, and the attached copy of the notice.
Plaintiff's submission has not met this standard. Strict compliance with the requirements of RPAPL § 1304 is required, failure to do so will result in denial of summary judgment, no matter the sufficiency of opposing papers (see Hudson City Sav. Bank v. DePasquale , 113 AD3d 595 [2d Dept 2014] ; Flagstar Bank, FSB v. Damaro , 145 AD3d 856 [2d Dept 2016] ). The affidavit of Ms. Harrell (Plaintiff's Exhibit "B") states "Submitted with Plaintiff's motion is a copy of the 90 day pre-foreclosure notice." There is no reference as to what exhibit she is referring to, and in any event, her form affidavit merely states she reviewed these notices which were "sent" but gives no indication as to when they were mailed (see Paragraph 5). Even under HSBC Bank USA, NA v. Ozcan , supra, and certainly under prior holdings, this affidavit is nothing more than an unsubstantiated and conclusory statement insufficient to establish the required mailings (see Cenlar, FSB v. Weisz , 136 AD3d 855 [2d Dept 2016] ; U. S. Bank, N.A. v. Carey, 137 AD3d 894 [2d Dept 2016] ; Cenlar FSB v. Censor , 139 AD3d 781 [2d Dept 2016] ; JPMorgan Chase Bank, N.A. v. Kutch, 142 AD3d 536 [2d Dept 2016] ; US Bank, NA v. Sabloff , 153 Ad3d 879 [2d Dept 2017] ).
The affidavit of Mr. Green (Plaintiff's Exhibit "C") states that proof of certified mailing is attached (see paragraph 3) and that a copy of the notice sent is attached to his affidavit (see paragraph 5). There are no attachments to his affidavit, nor is there an attempt to reference any of this "proof" which may be attached as exhibits to plaintiff's motion. Additionally, in paragraph 4, he states the notice was "mailed on or about June 04, 2012." Although the action was not filed until November 2012, this is still no proof of actual mailing. This affidavit, referred to as an "Affidavit of Mailing," does not meet the standard set in HSBC Bank USA, NA v. Ozcan , supra for sufficient proof of mailing.
Further, a copy of one notice addressed to both defendant-mortgagors at the property is attached as Exhibit "I" to plaintiff's motion, along with a copy of the filing with the NYS Dept. of Financial Services required by RPAPL § 1306 for defendant. The notice is captioned as coming from Wells Fargo Home Mortgage ("Home Mortgage"), not the affiants' employer, Wells. Although copies of documents relating to the merger of Wells and Home Mortgage in 2004 are attached as Exhibit "H" to plaintiff's motion, there is no explanation in any affirmation of counsel or either affidavit of what they mean, how they apply to the case or how Home Mortgage continued to operate after the merger, as the documents indicate that the "surviving corporation" was Wells. The court can guess that Home Mortgage continued to operate in some "subsidiary" or "department" capacity on behalf of Wells after 2004, but the burden of proof on a moving party is not to give the court information from which it can guess, the proponent of summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, providing sufficient evidence to establish the absence of any material issues of fact; failure to do so requires the motion be denied regardless of the sufficiency of the opposition (see Jacobsen v. New York City Health & Hospitals Corp. , 22 NY3d 824 [2014] ; William J Jenack Estate Appraiser and Auctioneers v. Rabizadeh , 22 NY3d 470 [2013] ). The proponent must show its entitlement to judgment by tendering evidentiary proof in admissible form (see Zuckerman v. City of New York , 49 NY2d 557 [1980] ). Although at a trial a party may waive evidentiary admissible proof by failing to object, the court in determining summary judgment may not deem evidence admissible because of a failure to object; if an issue is not established by admissible evidence the motion is to be denied no matter the proof and arguments in opposition (see Winegrad v. New York Univ. Med. Ctr. , 64 NY2d 851 [1985] ). The movant for summary judgment bears the heavy burden of establishing a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact (see Deleon v. NY City Sanitation Dept. , 25 NY3d 1102, 1106 [2015] ).
Additionally, although the affiants may have established their ability to testify as to their employer's, Wells's, business records, it has not been established that the notice submitted as Plaintiff's Exhibit "I" is part of Wells' business records, that there is a relationship between Wells and Home Mortgage, nor that the affiants are familiar with Home Mortgage's business records.
Finally, the submissions raise questions of fact as to whether Wells was plaintiff's servicer at the time the notices were sent. Although the affidavits of Ms. Harrell and Mr. Green by themselves may have been sufficient to establish Wells' status as servicer for plaintiff, the submission of the limited power of attorney given by plaintiff to Wells (Plaintiff's Exhibit "S") raises questions as to when that status arose. It states in the first paragraph on page 3 of that document that it is effective as of October 23, 2015, over three years after the notices were dated. This may be the most recent agreement and there had been a previous one in place at the time in 2012, but this document is just thrown in the motion with no explanation by counsel or by the affiants. As such it raises a question of fact as to the authority of Wells and/or Home Mortgage to act on behalf of plaintiff.
Plaintiff's motion for full summary judgment dismissing defendant's Sixth Affirmative Defense and establishing the proof of mailing of the notices required by RPAPL § 1304 set for the limited issue trial is denied, as is its application for an order of reference pursuant to RPAPL § 1321. Plaintiff's proposed order submitted with its motion is marked "Not Signed."
DEFENDANT'S CROSS–MOTION IS DENIED
As the prior decision of the court (Mot. Seqs. # 001–# 002) had already granted defendant the opportunity, after the completion of discovery, to file a successive motion for summary judgment pursuant to CPLR 3212 (b) to dismiss the complaint on the limited issue, defendant did not need to move for renewal pursuant to CPLR 2221 (e).
If renewal had been required, the court would have been compelled to deny defendant's motion, as the holding in Citimortgage v. Pappas , 147 AD3d 900 (2d Dept 2017) relied upon by defendant was disavowed by the majority in HSBC Bank USA, NA v. Ozcan , supra., as well as in the analogous case of US Bank, NA v. Sabloff , 153 AD3d 879 [2d Dept 2017]. In both cases, the Second Department held that where, as here, plaintiff's proof failed to establish the mailing of a notice which was a condition precedent to bringing a foreclosure action, defendant was not entitled to summary judgment dismissing the complaint based merely upon his own affidavit claiming non-receipt. The courts reasoned in each case that a mere denial of receipt failed to present sufficient evidence to prove as a matter of law that the condition precedent of mailing had not been fulfilled.
As defendant's cross-motion is based upon the disavowed rationale of Citimortgage v. Pappas , supra; for the same reason that the court would have denied a motion for renewal, the cross-motion must be denied (see US Bank, NA v. Sabloff , supra; HSBC Bank USA, NA v. Ozcan , supra).
LIMITED ISSUE TRIAL SET
As each party's motion for summary judgment has been denied, the action will proceed to the limited issue trial already scheduled by the court for March 2, 2018 at 9:30 AM in this part, without further motions.
This constitutes the Order and decision of the Court.