Opinion
602788-2015
04-26-2019
The BANK OF NEW YORK MELLON fka, the Bank of New York, AS TRUSTEE FOR the CERTIFICATEHOLDERS OF THE CWABS, INC. ASSET-BACKED CERTIFICATES, Series 2006-22, Plaintiff, v. Caleb VASQUEZ a/k/a Caleb M. Vasquez; Rosario Vasquez a/k/a Rosario L. Vasquez; Great South Bay YMCA ; People of the State of New York; LLC APO GE Money Bank; Astoria Federal Savings and Loan Association; Long Island Jewish Medical Center; Luis "Doe;" "Jane Doe," Defendant(s).
SHAPIRO DICARO & BARAK, Attorneys for Plaintiff, 175 Mile Crossing Boulevard, Rochester, NY 14624 HOWARD B. ARBER, ESQ., Attorney for Defendants Vasquez, 64 Hilton Ave, Hempstead, NY 11550
SHAPIRO DICARO & BARAK, Attorneys for Plaintiff, 175 Mile Crossing Boulevard, Rochester, NY 14624
HOWARD B. ARBER, ESQ., Attorney for Defendants Vasquez, 64 Hilton Ave, Hempstead, NY 11550
Robert F. Quinlan, J.
PRIOR PROCEEDINGS
This is an action to foreclose a mortgage on residential real property located at 1017 Carlls Straight Path, Dix Hills, Suffolk County, New York ("the property") given by defendants Caleb Vasquez and Rosario Vasquez ("defendants")to a predecessor in interest to plaintiff The Bank of New York Mellon FKA The Bank of New York, as Trustee for the certificateholders of the CWABS, Inc., Asset-Backed Certificates, Series 2006-22's ("plaintiff"). The prior history of this action is contained in the court's decision set forth on the record on December 4, 2017 after oral argument of plaintiff's prior motion for summary judgment (Mot. Seq. No.001), as well as in the court's written decision of February 25, 2019. In the decision of December 4, 2017 the court granted plaintiff partial summary judgment pursuant to CPLR 3212 (g), setting the default of the non-appearing, non-answering defendants, amending the caption and dismissing all of defendants' affirmative defenses except their second affirmative defense which raised plaintiff's standing to prosecute the action, and as plaintiff had pled its compliance with the requirements of RPAPL § 1304 and proof of filing of the notices required by RPAPL § 1306 in its complaint but failed to establish compliance with those statutory conditions precedent in its submissions. The court set those issues for a limited issue trial pursuant to CPLR § 2218, issued a discovery and scheduling order which allowed a limited period of discovery on those issues, directed the plaintiff to file a note of issue after a compliance conference and authorized the parties to file successive summary judgment motions within 30 days of the filing of a note of issue.
At a certification conference held March 27, 2018 the parties certified the action as ready for trial and the court signed the certification/compliance order; plaintiff filed a note of issue on April 25, 2018, and then filed its successive summary judgment motion as to the limited issues (Mot. Seq. # 002) within the time authorized and the motion was marked fully submitted on August 2, 2018.
The court issued a written decision dated February 25, 2019 which found that plaintiff had established its standing to prosecute the action and dismissed defendants' second affirmative defense, but found that although plaintiff's affiant established his ability to testify to his employer's business practices and procedures pursuant to CPLR 4518, and his familiarity with the mailing practices and procedures of his employer, which had purportedly mailed the RPAPL § 1304 notices, the submissions failed to include copies of the business records upon which his statement relied and was therefore insufficient to prove the mailings. Further, the court found that although plaintiff's submissions established the filing of the information required by RPAPL § 1306 with the Department of Financial Services as to defendant Caleb Vasquez, a similar filing as to defendant Rosario was not established. The decision of February 29, 2019 set the remaining issues for trial on April 15, 2019 at 2 PM.
TRIAL
The limited issue trial was held on April 15, 2019. Plaintiff presented Loretta Poch, who after being duly sworn, testified that she was a High Risk Analyst employed by Specialized Loan Servicing, LLC ("SLS"), the mortgage servicer for plaintiff at the time that the notices required by RPAPL § 1304 ("the notices") were mailed to defendants by both first class and certified mail. She testified to her familiarity with SLS's business records, practices and procedures and established her ability to testify as to SLS's business records pursuant to CPLR 4518. She also established the responsibilities that SLS assumed as servicer for plaintiff, which included the mailing of the notices to mortgagors who are in default in payment, such as defendants. Defendants through the course of the action, including the prior motions and at trial did not contest that they were in default in payment pursuant to the terms of the note and mortgage. Through her testimony plaintiff had admitted into evidence, pursuant to CPLR 4518 (a), copies of the notices individually addressed to each defendant at the property by first class mail and certified mail and which were maintained as "electronic" copies in the computer records of SLS. Those notices, along with the enclosed list of at least 5 housing counseling agencies, all within Suffolk County and the Long Island Region, met the requirements of RPAPL § 1304 as to content, a fact conceded by defendants. The notices were dated May 12, 2014.
Ms. Poch established her familiarity with the mailing practices and procedures of SLS, detailing a standard office practice and procedure designed to ensure that the notices were properly addressed and mailed. Also through Ms. Poch's testimony, and pursuant to CPLR 4518 (a), a copy of a "print out" from SLS's computer maintained records, referred to as a "Mortgage Servicer's Note History," was admitted into evidence. She testified that three entries in the lower third of the document under a heading entitled "Date of Message" bearing the date "05/12/2014" showed that the information was entered into this computer program by an employee of SLS on May 12, 2014. She further testified that it was the practice and procedure of SLS to only enter that information after the mailing of the notices by both certified and first class mail had been accomplished. As stated above, her testimony, more fully set forth on the record, established the detailed practices and procedures used by SLS to mail the notices to defendants in compliance with RPAPL § 1304.
Although defendants' counsel skillfully pointed out some weaknesses in Ms. Poch's testimony and the other evidence, that was not enough to raise a significant question in the court's mind that her testimony was not credible and believable, and that her testimony, along with the exhibits admitted into evidence, did not establish by a preponderance of the credible evidence that plaintiff had mailed to defendants the notices by both certified and first class mail at the property in a form in compliance with the requirements of the statute.
DECISION
COMPLIANCE WITH RPAPL § 1304 ESTABLISHED
Due proof of the mailing of the RPAPL § 1304 notice is established by submission of an affidavit of service (see Emigrant Mortgage Co., Inc. v. Persad, 117 AD3d 676 [2d Dept 2014] ), an affidavit of mailing (see 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] ; US Bank, N.A. v. Cope , 167AD3d 965 [2d Dept 2018]; Wells Fargo Bank, N. A. v. Heiney , 168 AD3d 1126 [2d Dept 2019] ; Wells Fargo Bank, N.A. v. Taylor , ––– AD3d ––––, 2019 NY Slip Op 01817 [2d Dept 2019] ; Bank of New York Mellon v. Gordon, ––– AD3d ––––, 2019 NY Slip Op 02306 [2d Dept 2019] ). Affiant must show her familiarity with office practices and procedures to establish office practices and procedures to insure proper addressing and mailing (see Citibank, N.A. v. Wood , 150 AD3d 813 [2d Dept 2017] ; Wells Fargo Bank, NA v. Trupia , 150 AD3d 1049 [2d Dept 2017] ; Bank of NY Mellon v. Zavolunov , 157 AD3d 754 [2d Dept 2018] ; Wells Fargo Bank, N.A. v. Moran , 168 AD3d1128 [2d Dept 2019]; Wells Fargo Bank, N.A. v. Taylor , ––– AD3d ––––, supra ; Bank of New York Mellon v. Gordon, supra ). Ms. Poch's testimony, as well as the other evidence admitted, met this burden. Additionally, internal tracking records of plaintiff, supplied by an witness, such as Ms. Poch, able to testify as to sender's business records pursuant to CPLR 4518 (a), show that the notices were mailed, and have been held sufficient to demonstrate that the notices were indeed mailed to defendants (see One West Bank, FSB v. Simpson, 148 AD3d 920 [2d Dept 2017] ; Citimortgage, Inc. v. Wallach , 163 AD3d 520 [2d Dept 2018] ).
The court further notes that defendants presented no evidence that could lead the court to conclude that the notices were not mailed in conformity with the statute, and in fact did not deny receiving the notices.
Plaintiff's proof has established the mailing of the notices in compliance with RPAPL § 1304.
COMPLIANCE WITH RPAPL § 1306 MET
The court's decision of February 25, 2019 found that plaintiff's submissions had established the filing of the information required by RPAPL § 1306 with the Department of Financial Services ("DFS") as to defendant Caleb Vasquez, but not a filing as to defendant Rosario Vasquez. Proof of compliance with the filing provisions of RPAPL § 1306 has been held to be a condition precedent to the commencement of a foreclosure action governed by the requirements of RPAPL Article 13 (see TD Bank v. Leroy , 121 AD3d 1256 [3rd Dept 2014], cited with approval in Hudson City Savings Bank v. Seminario , 149 AD3d 706 [2d Dept 2017] ). Where plaintiff's submissions fail to establish proof of filing of mailing of the notices required by RPAPL § 1304 with the State Banking Department or the DFS, it has been held that summary judgment is to be denied, regardless of the sufficiency of defendants opposition papers (see Hudson City Savings Bank v. Seminario , supra ), but in that case, unlike here, there was no proof of filing made at all. Here the information required by the statute has been proven to have been filed as to one "borrower," but not both. As discussed below, the court finds this distinction from the facts in Hudson City Savings Bank v. Seminario , supra to be significant.
When this action was commenced in 2015, RPAPL § 1306 (1) and (2) required that:
1. Each lender, assignee or mortgage loan servicer shall file with the superintendent of financial services (superintendent) within three business days of the mailing of the notice required by subdivision one of section thirteen hundred four of this article or subsection (f) of section 9-611 of the uniform commercial code the information required by subdivision two of this section. Notwithstanding any other provision of the laws of this state, this filing shall be made electronically as provided for in subdivision three of this section. Any complaint served in a proceeding initiated pursuant to this article shall contain, as a condition precedent to such proceeding, an affirmative allegation that at the time the proceeding is commenced, the plaintiff has complied with the provisions of this section.
2. Each filing delivered to the superintendent shall be on such form as the superintendent shall prescribe, and shall include at a minimum, the name, address, last known telephone number of the borrower, and the amount claimed as due and owing on the mortgage, and such other information as will enable the superintendent to ascertain the type of loan at issue. The superintendent may subsequently request such readily available information as may be reasonably necessary to facilitate a review of whether the borrower might benefit from counseling or other foreclosure prevention services.
As set forth in RPAPL § 1306 (3) and (4), the purpose for providing the "type of information of the loan at issue" was so that the superintendent of financial services and the commissioner of the division of housing and community renewal might develop an electronic database of loans that have gone into default to monitor the extent of foreclosure filings statewide, to analyze the type of loans that go into default so that both public and private assets could be properly directed to foreclosure counseling and prevention services. RPAPL § 1306 (4) provided:
All such information shall be used by the superintendent exclusively for the purposes of monitoring on a statewide basis the extent of foreclosure filings within this state, to perform an analysis of loan types which were the subject of a pre-foreclosure notice and directing as appropriate available public and private foreclosure prevention and counseling services to borrowers at risk of foreclosure. The superintendent may share information contained in the database with housing counseling agencies designated by the division of housing and community renewal as well as with other state agencies with jurisdiction over housing, for the purpose of coordinating or securing help for borrowers at risk of foreclosure.
RPAPL § 1306, unlike RPAPL §§ 1303 and 1304 which were intended to provide direct information and assistance to potentially defaulting/defendant mortgagors, was not intended to, nor does it, confer any notification of information, assistance, benefits or rights to the now defendant mortgagors. It was only to be a source of statistics for the state to analyze the types of residential loans going into foreclosure so that resources could be properly apportioned and assigned to help prevent future foreclosures to alleviate the "mortgage crisis" (see Bank of America, N.A. v. Colagrande , ––– AD3d ––––, 2019 NY Slip Op 03020 [2d Dept 2019] ). To accomplish this purpose it is totally irrelevant whether both borrower/defendants had separate filings made, filing for either one would provide the state with the same statistical information it needed to evaluate future allocation of public and private resources to address the "foreclosure crisis."
The condition precedent to suit contained in RPAPL § 1306 is also unlike the conditions precedent in RPAPL §§ 1303 and 1304, where the conditions precedent deal with providing information to borrowers/mortgagors who are eventually defendants. The condition precedent required by RPAPL § 1306 is merely to place a statement in the complaint that plaintiff has filed the required information electronically with DFS. In this case, plaintiff provided that statement in the complaint, meeting the statutory condition precedent, and has established that it filed with DFS the information required by RPAPL § 1306. As previously stated, the information provided to DFS in the filing made as to only one mortgagor, Caleb Vasquez, is the same information that would have been provided had a second filing be made as to Rosario Vasquez. Such a "second filing" as to Rosario Vasquez would have provided no new information to satisfy the purposes of the RPAPL § 1306 filing.
Plaintiff having set forth in the complaint the required affirmative allegation, provided proof of the filing of the information concerning the mortgage in foreclosure through the filing made as to Caleb Vasquez, the court finds plaintiff has complied with the condition precedent required by RPAPL § 1306. As the filing required by RPAPL § 1306 confers no right or benefit upon either defendant, nor does it deny them any right or benefit, there is no substantial right of either defendant that this purported error, omission or defect has prejudiced. This "error," is the type that the court can ignore pursuant to CPLR 2001 (see this court's decisions in Citimortgage, Inc. v. Bunger , 58 Misc 3d 333 [Sup. Ct., Suffolk County 2017] ; Castle Peak 2012-1 Loan Trust Mortg. Backed Notes, Series 2012-1 v. Connor , 2018 NY Slip Op 31131 (U) [Sup Ct, Suffolk Co., 2018]; Bank of New York Mellon v. Dougherty , 63 Misc 3d 216 [Sup. Ct., Suffolk County 2019] ). This is not the situation facing the court in Hudson City Savings Bank v. Seminario , supra , where no filing with DFS was made, a failure which defeated the purpose of the statute, as well as a misrepresentation in the complaint. Nor is it the circumstances found by the Appellate Division, Third Department in TD Bank v. Leroy , supra , where a late filing was made three months after the filing of the summons and complaint. Such a late filing not only contradicted the assertion of compliance in the complaint, but it also defeated the statutory purpose of RPAPL § 1306 to provide the state with current and accurate information on mortgage defaults so that public and private resources could timely be brought to bear.
Upon the facts before it, the court applies the principles and remedies available to it pursuant to CPLR 2001 and finds that any error or omission in failing to provide proof of filing of the information required by RPAPL § 1306 as to Rosario Vasquez is an error, omission, mistake or defect that may be disregarded by the court as no substantial right of either defendant has been violated, nor have they been prejudiced ( CPLR 2001 ; see US Bank, N.A. v. Eaddy , 109 AD3d 908 [2d Dept 2013] ; Deutsche Bank National Trust Co. v. Lawson , 134 AD3d 760 [2d Dept 2015] ; Citimortgage, Inc. v. Bunger , supra ; Castle Peak 2012-1 Loan Trust Mortg. Backed Notes, Series 2012-1 v. Connor , supra ; Bank of New York Mellon v. Dougherty , supra ).
Therefore, plaintiff having established at trial the mailing of the notices required by RPAPL § 1304 and compliance with RPAPL § 1306, the only issues remaining to be resolved pursuant to the granting of partial summary judgment by the decisions of December 4, 2017 and February 25, 2019, defendants' answer is dismissed and stricken, plaintiff is granted judgment on its complaint, and it's application for the appointment of a referee pursuant to RPAPL § 1321 is granted. Contemporaneously with this decision the court signs the proposed order of reference submitted by plaintiff, as modified by the court.
A compliance conference is et for August 26, 2019 at 9:30 AM in Part 27 to monitor compliance with the filing of a judgment of foreclosure and sale. If a judgment of foreclosure and sale is filed prior to that date, no appearance will be necessary; failure to file a judgment of foreclosure and sale by that date will not form the basis for a motion to dismiss and further compliance will be discussed at that conference.
This constitutes the decision of the Court.