Opinion
600306-2015
01-15-2019
US BANK NATIONAL ASSOCIATION AS TRUSTEE, Successor in Interest TO WACHOVIA BANK, N.A., as Trustee, for MASTR Alternative Loan Trust 2003-8, Plaintiff, v. Karen LOGUERCIO a/k/a Karen L. Loguercio; James Shook a/k/a James E. Shook ; Mortgage Electronics Registration Systems, Inc., as Nominee for Citibank, N.A,; Joseph Loguercio, Reynoldo Echevarria, and Nicole Loguercio, Defendants.
FEIN, SUCH & CRANE, LLP, Attorneys for Plaintiff, 1400 Old Country Road, Suite C 103, Westbury, NY 11590 DONALD NEIDHARDT, ESQ., Attorney for Defendants Loguercio & Shook, 3579 Bayview Street, Seaford, NY 11783
FEIN, SUCH & CRANE, LLP, Attorneys for Plaintiff, 1400 Old Country Road, Suite C 103, Westbury, NY 11590
DONALD NEIDHARDT, ESQ., Attorney for Defendants Loguercio & Shook, 3579 Bayview Street, Seaford, NY 11783
Robert F. Quinlan, J.
Upon the following papers read on this successive motion for summary judgment authorized by the order of January 30, 2017 seeking an order dismissing defendants' affirmative defenses challenging plaintiff's standing to bring the action, to establish plaintiff's compliance with the mailing requirements of RPAPL § 1304, striking defendants answer, appointing a referee to compute pursuant to RPAPL § 1321, and for an order that the Suffolk County Clerk be directed to accept for recording a copy of the June 3, 2009 loan modification executed by defendant Karen Loguercio upon the payment of all necessary fees; notice of motion, and supporting papers (NYSCEF Docs No.34-50); defendant's opposition (NYSCEF Doc # 53); and plaintiff's reply (NYSCEF Docs # 54-64); it is
ORDERED that portion of plaintiff's motion seeking dismissal of defendants' affirmative defenses challenging plaintiff's standing to bring the action is granted as plaintiff has established its standing; and it is further
ORDERED that the remaining portions of plaintiff's motion are denied, as plaintiff's submissions have failed to establish the mailing of the notices required by RPAPL § 1304 and plaintiff has failed to establish a legal basis for an order directing the Suffolk County Clerk to accept for recording a copy of a June 3, 2009 loan modification between defendant Karen Loguercio and EverHome Mortgage Company; and it if further
ORDERED that the court will entertain no further motions for summary judgment, and as plaintiff has filed a note of issue, the action is scheduled for trial date on February 11, 2019 at 9:30 AM before this part.
This is an action to foreclose a mortgage on residential real property known as 9 Heather Drive, Center Moriches, Suffolk County, New York ("the property") given by defendant borrower Karen Loguercio ("defendant borrower") to The New York Mortgage Company, LLC ("NY Mtg."), predecessor in interest to plaintiff US Bank National Association As Trustee, Successor In Interest To Wachovia Bank, N.A., As Trustee, For MASTR Alternative Loan Trust 2003-8 ("plaintiff"). The history of this action is set forth in the court's decision placed on the record after oral argument on January 30, 2017 (Mot. Seq. # 001), at which time the court granted plaintiff partial summary judgment setting the default of the non-appearing, non-answering defendants, dismissing all of the affirmative defenses raised in the answer of defendants Karen Loguercio and James Shook ("defendants"), except their affirmative defenses that raised the issue of plaintiff's standing to bring the action, denied plaintiff full summary judgment not only as the issue of standing remained, but also as plaintiff had not established its compliance with the mailing of the RPAPL § 1304 notices as plead in the complaint and denied by defendants in their answer, and further denied plaintiff's request to require the Suffolk County Clerk ("the Clerk") to accept for filing a copy of the loan modification signed by defendant borrower dated June 3, 2009. The court set the issues of standing and compliance with the mailing requirements of RPAPL § 1304 for a limited issue trial pursuant to CPLR 3212 (g) and 2218, issued a scheduling and discovery order which authorized a limited period of discovery on those issues and set a certification/compliance conference for June 7, 2017, further authorized successive summary judgment motions by the parties after the completion of discovery, but no later than thirty days after the filing of a note of issue.
Upon the failure of defendants' counsel to appear at the certification conference, and the court noting that he had also failed to appear at the oral argument of January 30, 2017 relying upon his submissions, the case was certified ready for trial and plaintiff was directed to file a note of issue. Plaintiff filed the note of issue July 14, 2017, but filed the present motion on September 13, 2017, thirty one days after the date authorized to submit a successive summary judgment motion by the order of January 30, 2017.
MOTION FOUND TIMELY
Although the order of January 30, 2017 authorized successive summary judgment motions by the parties within thirty days of the filing of the note of issue, the fact that plaintiff filed this motion sixty one days later is considered by the court and is found not to be a reason to deny the motion outright. Although CPLR 3212 (a) allows the court to require such motions be made within thirty days of the filing of the note of issue, it also sets the outside date for such motions at one hundred twenty days after filing. The court does not find the circumstance here to be a "late motion for summary judgment" as prohibited in cases such as Brill v. City of New York , 2 NY3d 648 (2004) or Nationstar Mtg., LLC v. Weisblum , 143 AD3d 866 (2d Dept 2016). The court believes that a second summary judgment motion where the court has already granted a party partial summary judgment and limited the issues to a few can eliminate the burden on judicial resources which would otherwise require 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 [1st Dept 2012] ). The delay here is de minimus , prejudices no one and accomplishes the goal set in the order of January 30, 2017. Additionally, although defendants could have objected to this submission, they did not raise the issue in their opposition, thereby waiving it. Therefore, the court has considered plaintiff's motion.
PLAINTIFF HAS STANDING
Plaintiff has standing to prosecute a foreclosure action if it establishes that it was the holder of the note at the time the action was commenced (see Aurora Loan Services, LLC v. Taylor , 25 NY3d 355 [2015] ). A "holder" of the note is a person in possession of the negotiable instrument that is payable either to bearer or an identified person that is in possession ( UCC 1-201 [b] [21], 3-202 [1], 3-204 [2]; see Deutsche Bank Natl. Trust Co. v. Brewton , 142 AD3d 683 [2d Dept 2016] ; US Bank Natl. Assoc. v. Cruz , 147 AD3d 1103 [2d Dept 2017] ). Plaintiff incorrectly argues that it established its standing by attaching a copy of the original note, indorsed in blank, to the complaint, proving its standing as a holder of the note at that time (see Nationstar Mortg., LLC v. Catizone , 127 AD3d 1151 [2d Dept 2015] ; Deutsche Bank Natl. Trust v. Leigh , 137 AD3d 841 [2d Dept 2016] ; Deutsche Bank Natl Trust Co. v. Carlin , 152 AD3d 491[2d Dept 2017] ; Deutsche Bank Natl. Trust Co. v. Homar , 163 AD3d 522 [2d Dept 2018] ). Unfortunately, that line of cases is inapplicable to plaintiff's proof, because although the note contains on its face a stamped indorsement in blank, the indorsement is not signed. The failure to execute the "indorsement" robs it of its effect.
Further, plaintiff's argument that the affidavit of a vice president of its supposed present servicer establishes plaintiff's possession of the note prior to the filing of the complaint also fails because the copy of the indorsement is not signed. It also fails because although that vice president establishes her ability to testify to her employer's business records pursuant to CPLR 4518 (a), she fails to establish any familiarity with plaintiff's business records which would allow her to testify to plaintiff's date of possession of the note. The affidavit of a representative of plaintiff, or its servicer, which failed to establish the affiant's personal knowledge of the business record keeping practices and procedures of plaintiff is inadmissable and as such fails to provide proof establishing plaintiff's possession of the note prior to commencement of the action and its standing (see Aurora Loan Servs., LLC v. Mercius , 138 AD3d 650 [2d Dept 2016] ; Aurora Loan Servs v. Komarovsky , 151 AD3d 924 [2d Dept 2017] ; Bank of New York Mellon v. Lopes , 158 AD3d 662 [2d Dept 2018] ; Nationstar HECM Acquisition Trust 2015-2 v. Andrews , ––– AD3d ––––, 2018 NY Slip Op 08944 [2d Dept 2018] ). Other issues concerning the admissibility of plaintiff's and servicer's business records will be discussed below.
However, a plaintiff may establish its lawful status as assignee of the note, and thereby its standing, by a written assignment, prior to the filing of the complaint (see US Bank, NA v. Collymore , 68 AD3d 752 [2d Dept 2009] ; Aurora Loan Services, LLC v. Weisblum , 85 AD3d 95 [2d Dept 2011] ; Bank of NY Mellon v. Gales , 116 Ad3d 723 [2d Dept 2014] ). Here, NY Mtg., executed an assignment of the mortgage dated June 19, 2003 and filed with the Clerk on March 31, 2009, which contained in it an assignment of the note. Plaintiff has provided a copy of the assignment of the mortgage from the Clerk's records. Defendants raise no questions or objections concerning this document, nor is there any claim or proof that the mortgage ever left plaintiff's possession before the action was filed. An assignment of the mortgage which includes language also assigning the note is sufficient to establish standing of the assignee (see Emigrant Bank v. Larizza , 129 AD3d 904 [2d Dept 2015] ; U. S. Bank N.A. v. Akande , 136 AD3d 887 [2d Dept 2016] ; Deutsche Bank Nat. Trust Co. v. Romano , 147 AD3d 10210 [2d Dept 2017]; Wells Fargo Bank. N. A. v. Archibald , 150 AD3d 937 [2d Dept 2017] ). This establishes plaintiff's standing and defendants' remaining affirmative defenses are dismissed.
RPAPL § 1304 MAILINGS REQUIRED
Plaintiff's argument that the mailing of the notices required by RPAPL § 1304 were not required as defendant borrower had filed a bankruptcy is a misreading of the language of the statute and without merit. The language of RPAPL 1304 (3) in existence at the time the notices here were sent stated that: "The ninety day period (emphasis added) contained in subdivision one of this section [ RPAPL 1304 (1) ] shall not apply, or shall cease to apply, if the borrower has filed an application for the adjustment of debts of the borrower or an order for relief from the payment of debts ...." The exemption applied to the requirement not to commence a suit until at least 90 days after the notices were mailed, not the requirement to mail the notices before suit.
The Legislature's use of the language "filed an application for the adjustment of debts of the borrower or an order for relief from the payment of debts," an arcane reference to filing for bankruptcy, led to further confusion in interpreting the statutory language and scheme by some lenders, servicers and their counsel. They misinterpreted the language thinking that it referred to the submission of a loan modification application, rather than filing a bankruptcy. Whether making this mistake, or realizing it meant filing a bankruptcy, some plaintiff's incorrectly read the terms "The "90 day notice period " to meant that the "90 notice " did not have to be sent. That reading was wrong. The notice and the 90-day period required by RPAPL § 1304 were recognized by the Legislature to be distinct concepts, as clearly indicated in a reading of the whole statute. RPAPL § 1304 (4) makes clear the legislature's differentiation between the "the notice and the ninety day period" (see Aurora Loan Servs., LLC v. Weisblum , 85 AD3d95 [2d Dept 2011] ). The bankruptcy filing merely made the ninety day period after mailing the notices before which an action could be filed inapplicable, it did not effect the requirement that the notice must still be sent by first class and certified mail before legal action was commenced. The 2016 amendment to RPAPL § 1304 (3) clarified the Legislature's intent. Therefore, although the defendant-borrower filed a bankruptcy before the action, the notices were still required to be sent.
NO PROOF OF COMPLIANCE WITH RPAPL § 1304 MAILING
First, assuming arguendo , that the affidavit of the vice president of plaintiff's present servicer, TIAA, FSB dba Everbank ("TIAA"), was sufficient to establish her ability to testify to her employer's business records pursuant to CPLR 4518 (a), as well as those of a prior servicer, her statements therein are insufficient to establish the mailings required by RPAPL § 1304.
Although, again assuming arguendo that she could testify to these business records pursuant to CPLR 4518 (a), the fact that these records include records from the US Postal Service that show the mailing, delivery and receipt of the certified mail, is only proof of one of the required mailings. Strict compliance with the mailing requirements of RPAPL § 1304 has been required by the decisions of the Second Department emanating from its decision in Aurora Loan Services, LLC v. Weisblum , supra. Plaintiff has not provided any authority that by establishing the mailing and receipt of the certified mailing, plaintiff negates the requirement of proof of compliance with the regular first class mail component of the statutory condition precedent, nor is the court aware of any such holdings.
Also, assuming arguendo , that the affiant could testify to these records pursuant to CPLR 4518 (a), she merely states that these records show that the notices, attached as exhibits, were mailed, along with the name and addresses of five housing counseling agencies, to defendant borrower. Such an affidavit, along with copies of the notices, has been held to be unsubstantiated, conclusory and insufficient to establish the mailing (see JPMorgan Chase Bank, N.A. v. Kutch , 142 AD3d 536 [2d Dept 2016] ; Cenlar FSB v. Censor , 139 AD3d 781 [2d Dept 2016] ; US Bank, NA v. Henderson , 163 AD3d 601[ 2d Dept 2018] ). The affiant must show her familiarity with office practices and procedures to establish office practices and procedures to insure proper addressing and mailing (see CitiMortgage, Inc v. Pappas , 147 AD3d 900 [2d Dept 2017] ; US Bank v. Henry , 157 AD3d 839 [2d Dept 2018] ; Bank of NY Mellon v. Zavolunov , 157 AD3d 754 [2d Dept 2018] ). Here the affidavit provides none of the indicia necessary to establish mailing. To establish mailing, plaintiff may provide proof of actual mailing or a description of its office's practice and procedure for mailing (see New York & Presbyt. Hosp. v. Allstate Ins. Co. (29 AD3d 547 [2d Dept 2006] ; Citibank, N.A. v. Wood , 150 AD3d 813 [2d Dept 2017] ; Citimortgage Inc. v. Banks 155 AD3d 936 [2d Dept 2017] ). Actual mailing of the notice is established by submission of an affidavit of service (see Emigrant Mortgage Co., Inc. v. Persad , 117 AD3d 676 [2d Dept 2014] ; Bank of NY Mellon v. Aquino , 131 AD3d 1186 [2d Dept 2015] ; Investors Savings Bank v. Salas , 152 AD3d 752 [2d Dept 2017] ), an affidavit of mailing (see Wells Fargo v. Moza , 129 AD3d 946 [2d Dept 2015] ; JPMorgan Chase Bank, NA v. Schott , 130 AD3d 875 [2d Dept 2015] ) or through business records that detail a standard of office practice or procedure designed to ensure that items are properly addressed and mailed (see Vivane Etienne Med. Care, P.C. v. Country Wide Ins. Co. , 25 NY3d 498 [2015] ; Residential Holding Corp. v. Scottsdale Ins. Co. , 286 AD2d 679 [2d Dept 2001] ); Citimortgage v. Banks , 155 AD3d 936 [2d Dept 2017] ; Deutsche Bank Natl. Trust Co. v. Heitner , 165 AD3d 1038 [2d Dept 2018] ). This affidavit fails to meet these requirements and fails to establish mailing, even if the affiant could establish her ability to testify to these records pursuant to CPLR 4518 (a).
Further defeating plaintiff's proof of mailing, the affiant does not establish her ability to testify as to the business records of "EverHome Mortgage" ("EverHome"), the entity whose letterhead appears on the notices mailed to defendant borrower and on the RPAPL § 1306 filing with the Department of Financial Services as the mailing entity, or the plaintiff. Her affidavit only refers to her employment by TIAA, that the information therein was taken from that entity's records and that she was familiar with that entity's procedures for creating those records. That establishes only her ability to testify to TIAA's business records pursuant to CPLR 4518 (a). Even if the court was to accept her statement concerning the incorporation of other servicer's records into TIAA's records, she refers to the prior servicer as only "Everbank," there is no mention of EverHome. Further complicating the issue is that the Limited Power of Attorney she refers to which she claims establishes TIAA's actions on behalf of plaintiff is with EverHome. There is nothing that connects TIAA with the limited power of attorney or EverHome.
If a representative of plaintiff's present servicer attempts to testify concerning business records of a prior holder of the note, that affiant must establish his/her ability to do so by showing personal knowledge and familiarity with the record keeping practices and procedures of that entity, (see Arch Bay Holding, LLC v. Albanese , 146 AD3d 849 [2d Dept 2017] ; Aurora Loan Svcs, LLC v. Ang , 150 AD3d 649 [2d Dept 2017] ; Wells Fargo Bank. N.A. v. Talley , 153 AD3d 583 [2d Dept 2017] ; Bank of New York Mellon v. Alli , 156 AD3d 957 [2d Dept 2017]; Fulton Holding Group, LLC v. Lindoff , 165 AD3d 1045 [2d Dept 2018] ). The same principles apply equally to the business records of a prior servicer when attempting to prove mailing of the RPAPL § 1304 notices. On the record before the court, the affidavit here fails to do this, failing to establish the mailings.
Although the court may have heard testimony at other trials as to the mergers of TIAA and Everbank and the relationship between EverBank and EverHome, the court cannot sua sponte take notice of that testimony, nor should it. Plaintiff's burden in moving for summary judgment requires it to provide affirmative evidence in evidentiary form to establish as a matter of law entitlement to that relief (see Winegrad v. New York University Medical Center , 64 NY2d 851[1985] ; Gilbert Frank Corp. v. Federal Insurance , 70 NY2d 966[1988] ; Torres v. Industrial Container , 305 AD2d 136 [1st Dept 2003] ). Failure to do so requires the denial of the motion regardless of the sufficiency of the opposition (see Jacobsen v. New York City Health & Hospital Corp , 22 NY3d 824 [2014] ; William J. Jenack Estate Appraiser and Auctioneers v. Rabizadeh , 22 NY3d 470 [2013].
The court notes that although defendants' counsel makes arguments that the affidavit here is inadmissible under CPLR 4518 and fails to establish the mailings required by RPAPL § 1304, a number of which arguments are unsupported by law or fact, defendants make no other claim as to plaintiff's compliance with RPAPL § 1304.
FILING OF LOAN MOD OF JUNE 3, 2009
Plaintiff also moved for an order directing the Clerk to accept for filing a loan modification purportedly executed on June 3, 2009 between defendant borrower and EverHome involving the property which modified the mortgage of record. As indicated above, there is no explanation provided of EverHome's involvement in this action, in fact no reference to this loan modification is made in the affidavit of TIAA's vice president submitted in support of the motion. The only reference to it is in the affirmation of plaintiff's counsel in support of the motion, who establishes no personal knowledge of facts concerning this document, merely notes it and asks the court to direct the Clerk to accept it for filing. No proof is offered as to whether plaintiff attempted to file this with the Clerk, if the Clerk rejected its filing, and if so, why. Without some clarification, the court will not direct the filing, which the court assumes plaintiff requests be done nunc pro tunc .
Defendant's proposed order submitted with this motion is marked "Not Signed."
As standing has now been eliminated as an issue for the limited issue trial set by the decision of January 30, 2017, the action is scheduled for trial on the remaining issue on February 11, 2019 at 9:30 AM before this part.
This constitutes the decision and order of the court.