Opinion
901070–2015
01-22-2018
WELLS FARGO BANK NATIONAL ASSOCIATION as Trustee FOR SECURITIZED ASSET BACKED RECEIVABLES LLC TRUST 2005–FR2 MORTGAGE PASS–THROUGH CERTIFICATES SERIES 2005–FR2, Plaintiff, v. Davia Ann WOLCOTT; Arrow Financial Services, LLC, "John Doe No.1," through "John Doe #12," the last twelve names being fictitious and unknown to plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises, described in the complaint, Defendants.
RAS Boriskin, LLC, Attorneys for Plaintiff By: Lance K. Brubaker, Esq., and Nabeela Hamid, Esq., 900 Merchants Concourse, Suite 106, Westbury, New York 11590 Davia Ann Wolcott, Defendant Pro Se 3 Pierce Street, Albany, New York 12205
RAS Boriskin, LLC, Attorneys for Plaintiff By: Lance K. Brubaker, Esq., and Nabeela Hamid, Esq., 900 Merchants Concourse, Suite 106, Westbury, New York 11590
Davia Ann Wolcott, Defendant Pro Se 3 Pierce Street, Albany, New York 12205
David A. Weinstein, J.
This foreclosure action is before me on a motion by plaintiff Wells Fargo Bank National Association as Trustee for Securitized Asset Backed Receivables LLC Trust 2005–FR2 Mortgage Pass–Through Certificates Series 2005–FR2 ("Wells Fargo" or "WF") for summary judgment. Defendant Davia Ann Wolcott, the owner of the home on which WF seeks to foreclose, has submitted papers in opposition.
Arrow Financial Services, LLC is also named as a defendant, but has not made any submission on this motion. For simplicity's sake, references to "defendant" are to Wolcott.
Plaintiff commenced this action by filing a notice of pendency, summons, complaint and certificate of merit with the Albany County Clerk on August 24, 2015. Defendant served an answer setting forth various affirmative defenses, including that plaintiff lacked standing because "it was not the legal owner of the Note and/or Mortgage at the time it commenced this foreclosure lawsuit" (1st affirmative defense), and "90–day Pre–Foreclosure Notices were inadequate because two copies [were] not delivered [or the] foreclosure lawsuit [was] filed within 90 days of Pre–Foreclosure Notices" (6th affirmative defense). After numerous settlement conferences were conducted pursuant to CPLR 3408, the Court notified the parties by letter dated October 19, 2016 that plaintiff had met the requirements of that provision, and could proceed with the foreclosure action. This motion followed.
No motion had been made as of August 8, 2017, and the Court wrote plaintiff on that date, indicating that failure to move by September 18, 2017 would result in dismissal of the case without prejudice. The motion was filed on the deadline.
In support of its application, plaintiff provides the affirmation of counsel with various attachments and the affidavit of Tiffany Hollis, a contract management coordinator with Ocwen Loan Servicing, LLC ("Ocwen"), the servicer of the loan. The former states that Wolcott executed a $96,000 note with Fremont Savings and Loan ("Fremont") on November 12, 2004, and as security therefor executed a mortgage in favor of Mortgage Electronic Registration Systems ("MERS") as nominee for Fremont, secured by her residence at 3 Pierce Street in Albany, New York (the "premises" or "residence") (Aff in Supp ¶ 3). Copies of the note and mortgage are appended to the supporting affirmation (id. Exs A & B).
According to the affirmation, the note was endorsed "for the benefit of, and transferred to, plaintiff," and the mortgage was assigned to plaintiff by an assignment dated June 16, 2015, a copy of which is included in the submission (id. ¶ 4 & Ex C) ). Defendant then failed to make payments on the loan on October 1, 2014 and thereafter (id. ¶ 5). Counsel avers that Wolcott received a notice of default and the notice a homeowner must receive at least 90 days in advance of a foreclosure action pursuant to Real Property and Proceedings Law ("RPAPL") § 1304 (the " section 1304 Notice") (id. ¶¶ 6–7).
According to Hollis' affidavit, she is familiar with the facts of this matter based on her review of business records (id. Ex D ¶ 2). She states that records of prior servicers are incorporated into Ocwen's records, and all are "created and maintained in the regular course of business and are needed and relied upon in the performance of functions of the business" (id. ¶ 3). Hollis attests that Wolcott delivered the Note at issue on November 12, 2005 to "Plaintiff and/or Plaintiff's predecessor-in-interest," and plaintiff "confirmed physical possession of the original note on May 28, 2014," and "remained in physical possession of the Note up to and through the date upon which this action was commenced" (id. ¶¶ 4–5). Hollis also states that Wolcott defaulted on the note and lists the amount that she owes thereon (id. ¶¶ 7, 10).
As set forth below, the import of this particular date is not clear from the record.
Appended to the Hollis affidavit are copies of a demand letter and 90–day notice, which Hollis says were maintained as business records (see id. ¶ 3). She states that the former (a demand for outstanding payments) was sent by mailing on November 15, 2014 to the notice address set forth in the mortgage, and the latter was mailed by first-class and certified mail to the same address on January 9, 2015, and "not returned as undeliverable" (id. ¶¶ 8–9). Hollis does not claim personal knowledge of the mailing. As noted, she states that she derived this information from business records, although she identifies no such records except those appended to the motion.
The proffered copy of the Default Notice is dated November 15, 2014, has a notation in its upper-right hand corner stating "VIA certified mail (return receipt requested)" and bears a 22–digit "Certified Number" (id. Ex E). The loan number is redacted, but it is addressed to the 3 Pierce Street address on the mortgage. The document also contains an "Electronic Return Receipt" addressed to Ms. Wolcott at that address, but no indication that a signed copy thereof was returned (id. ). The appended 90–day notice dated January 9, 2015 also contains a notation in the upper right-hand corner, stating that it was sent "VIA first class mail" and "VIA certified mail (return receipt requested)," although unlike the demand notice, and for reasons that are unclear, the certified number is redacted (id. , Ex F). No return receipt, signed or unsigned, is included.
Plaintiff also presents a filing statement indicating that the section 1304 notice was mailed on January 9, 2015, and the statement was filed with the Department of Financial Services within three days of such mailing, on January 12. The complaint subsequently filed alleges generally that plaintiff complied with section 1304"[o]n information and belief" (id. , Ex H ¶ 7).
RPAPL § 1306 (1) and (2) require that "[e]ach lender, assignee or mortgage loan servicer ... 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" certain information, including "the name, address, last known telephone number of the borrower, and the amount claimed as due and owing on the mortgage."
In opposition, defendant submits her own statement , in which she raises three arguments against granting summary judgment. First, she states that plaintiff has failed to prove that it has standing to bring this action, because the note and mortgage were transferred to and from MERS, which "does not have a beneficial interest in any mortgage," plaintiff has not provided original copies of the note and mortgage, and plaintiff does not have a "sufficient stake in the outcome" (Opp ¶¶ 3–5). Second, she states that the bank failed to offer her a loan modification although she is eligible under the Home Affordable Modification Program ("HAMP") (id. ¶ 1). Third, she asserts that she never received the section 1304 notice (id. ¶ 2). The factual and evidentiary basis for each of these arguments is discussed in more detail below.
The submission is not labeled an affidavit, but it attaches a document labeled "Verification" stating: "I, Davia Ann Wolcott, being duly sworn, state that the within Answer is true to the best of my knowledge, except as to those matters alleged upon information and belief, which I believe to be true." Although this sort of attestation is typically used for a pleading, I find its clear intention is to attest to the veracity of the statements in the opposition submission, and is sufficient to allow for their consideration on summary judgment just as they would be if set forth in a verified pleading (see CPLR 105[u] [verified pleading "may be utilized as an affidavit whenever the latter is required."] ). Plaintiff does not argue otherwise.
Plaintiff responds with a reply affirmation, in which it argues that it has established its standing via the Hollis affidavit and supporting documents, demonstrating that it has possession of the note (Reply Aff ¶¶ 21–24). In regard to defendant's contention that WF never attempted to reach a resolution in good faith, plaintiff contends that it is under no duty to offer a loan modification (id. ¶¶ 13–20). No response is made to defendant's claim that she did not receive the section 1304 notice.
Discussion
On its motion for summary judgment, plaintiff must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any genuine material issues of fact (see Alvarez v Prospect Hosp. , 68 NY2d 320, 324, 508 N.Y.S.2d 923, 501 N.E.2d 572 [1986] ). The failure to make such a showing mandates denial of the motion, regardless of the sufficiency of the opposing papers (see Winegrad v New York Univ. Med. Ctr. , 64 NY2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 [1985] ). If, however, the movant presents a prima facie showing, the burden shifts to the party opposing the motion for summary judgment to come forward with evidentiary proof in admissible form to establish the existence of material issues of fact which require a trial (see Zuckerman v City of New York , 49 NY2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980] ).
Before addressing the specific proof on each of the matters at issue, I find that plaintiff has established the admissibility of its documentary exhibits as business records on the basis of the Hollis affidavit. Neither the fact that the record at issue may have been created by a different bank or servicer, nor that the affidavit establishing them as business records was submitted by an employee of the servicer rather than plaintiff, renders her showing deficient in this regard (see Bank of America, Nat. Ass'n v Brannon , 156 AD3d 1, 8 [2017] ["an assignee of an original lender or intermediary predecessor may use an original loan file prepared by its assignor, when it relies upon those records in the regular course of its business"] ). Hollis' statements under oath that she was personally familiar with Ocwen's business practices, and that the records at issue were integrated into Ocwen's and were used for its business purposes creates a sufficient predicate for their admissibility on this motion (see State of New York v 158th St. & Riverside Dr. Hous. Co. Inc. , 100 AD3d 1293, 1296, 956 N.Y.S.2d 196 [3d Dept 2012], lv denied 20 NY3d 858, 960 N.Y.S.2d 350, 984 N.E.2d 325 [2013] ["if the recipient can establish ... that the records provided by the maker were incorporated into the recipient's own records or routinely relied upon by the recipient in its business," they are admissible as business records]; Brannon , supra [business records admitted based on affidavit that affiant was familiar with the records of "Plaintiff and/or its loan servicer"]; cf. Aurora Loan Services, LLC v Ang , 150 AD3d 649, 650–651 [2d Dept 2017] [business record exception not established in foreclosure case where affiant "did not attest that she was personally familiar with the plaintiff's record-keeping practices"] ).
Because many of the citations to foreclosure decisions share the same plaintiff, in subsequent references these cases are referred to by the name of the defendant.
With this in mind, I address each of the three arguments made by defendant in opposition to the motion.
I. Standing
A plaintiff can make a prima facie showing of entitlement to a judgment of foreclosure by producing "evidence of the mortgage, unpaid note and the mortgagor's default" (see HSBC Bank USA, N.A. v Sage , 112 AD3d 1126, 1127, 977 N.Y.S.2d 446 [3d Dept 2013], lvs dismissed 22 NY3d 1172, 985 N.Y.S.2d 472, 8 N.E.3d 849 [2014] and 23 NY3d 1015, 992 N.Y.S.2d 774, 16 N.E.3d 1253 [2014] ). Where standing is placed at issue, "the plaintiff must ... prove its standing in order to be entitled to relief" ( Wells Fargo Bank, NA v Ostiguy , 127 AD3d 1375, 1376 [3d Dept 2015] ).
Here, defendant's answer challenges plaintiff's standing. Plaintiff can rebut this objection by showing "it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced" (id. ). Moreover, a showing of either written assignment of the underlying note, or physical delivery of the note before the action was commenced, shows a transfer of the obligation, and "the mortgage passes with the debt as an inseparable incident" ( U.S. Bank N.A. v Carnivale , 138 AD3d 1220, 1221 [3d Dept 2016] [citations omitted]; see also Aurora Loan Servs., LLC v Taylor , 25 NY3d 355, 361, 34 N.E.3d 363 [2015] ["The physical delivery of the note to the plaintiff from its owner prior to commencement of a foreclosure action may, in certain circumstances, be sufficient to transfer the mortgage obligation and create standing to foreclose"]; JP Morgan Chase v Venture , 148 AD3d 1269, 1270–1271 [3d Dept 2017] [standing shown where plaintiff had physical possession of note, even when it could not show valid assignment] ).
To this end, plaintiff has provided copies of the note and mortgage signed by the defendant, and submits the affidavit of Hollis attesting based on a review of the records that plaintiff had possession of the original note on May 28, 2014 (before commencement of the action) and confirmed that it still held the note at the time the action was brought (see supra p. 2–3). In response, defendant asserts that the transfer to and from MERS calls into question the proof for WF's ownership, and that plaintiff has not produced the original note or shown that it possesses it.
The first argument does not call WF's standing into question. MERS is a system created by several lenders to "track ownership interests in residential mortgages" (Matter of MERSCORP, Inc. v Romaine , 8 NY3d 90, 96, 828 N.Y.S.2d 266, 861 N.E.2d 81 [2006] ). Under the MERS system, it is designated as the mortgagee of record in county or municipal recording offices, even if the underlying mortgage is transferred (see Bank of New York v Silverberg , 86 AD3d 274, 278, 926 N.Y.S.2d 532 [2d Dept 2011] ). MERS does not lend money, receive payments or service loans ( id. at 279, 926 N.Y.S.2d 532 ). Because MERS has never been "the lawful holder or assignee of the notes" it is "without authority to assign the power to foreclose" ( id. at 283, 926 N.Y.S.2d 532 ).
But that is not the end of the story. Because plaintiff can show it has standing to pursue the foreclosure so long as it has obtained physical possession of the note prior to the commencement of the action, the Court of Appeals has held that the validity of a prior assignment of the mortgage to MERS is "irrelevant" to the question of standing ( Taylor , 25 NY3d at 362, 34 N.E.3d 363 ). That question depends, instead, on whether the plaintiff "adequately proved that it did, indeed, have possession of the note prior to commencement of this action" (id. ). I turn, then, to that issue.
Plaintiff's proof of standing is premised on Hollis' averment that "Plaintiff confirmed physical possession of the original note on May 28, 2014 and Plaintiff remained in physical possession of the Note up to and through the date on which the action was commenced" (Hollis Aff, ¶ 5).
This proof is quite thin. In most instances where standing has been found based on proof of possession of the note alone, plaintiff has shown its possession with some greater specificity, by indicating how it obtained the note, where it is stored, the legal basis for such acquisition and/or the manner in which the affiant learned of such possession (see e.g. BAC Home Loans Servicing, LP v Uvino , 155 AD3d 1155, 1158 [3d Dept 2017] [affidavit of servicer's employee stating she had reviewed the company's business records, which confirmed that company acting on behalf of plaintiff was custodian of original collateral documents during specific time period when action filed, and as part of "normal business practice" note was included in collateral file]; Bank of New York Mellon v Cronin , 151 AD3d 1504, 1507 [3d Dept 2017] [three affidavits stating, based on review of business records (including original note), when plaintiff received note and where and how it was stored]; Bank of New York Mellon v Rutkowski , 148 AD3d 1341, 1342 [3d Dept 2017] [employee affidavit based on review of business records stating that plaintiff's agent had possession of note since particular date, and maintained continuous possession thereof until shipped to counsel, along with attorney affidavit confirming that note was in firm's possession]; Everhome Mortg. Co. v Pettit , 135 AD3d 1054, 1055 [3d Dept 2016] [employee affidavit based on personal knowledge of how loan records kept and review of such records, along with proof of chain of ownership, the date on which the note was transferred to plaintiff, and testimony that it remained in its possession at the time of suit]; Bank of New York Mellon v McClintock , 138 AD3d 1372, 1374–1375 [3d Dept 2016] [affidavits stating plaintiff held note at time affidavits signed and on date bank took physical possession of it, along with agreement on which such possession was based]; Carnivale , 138 AD3d at 1221 [employee affidavit based on review of business records stating date on which note came into possession of plaintiff, where it was maintained, and separate employee affidavit saying note remained in plaintiff's possession at time action was commenced]; Deutsche Bank Nat. Trust Co. v Monica , 131 AD3d 737, 739 [3d Dept 2015] [affidavits of two employees stating how and when plaintiff acquired the underlying loan documentation] ).
In contrast, in this case, there is no indication in plaintiff's submission regarding what documents the affiant used to determine possession of the note, where it was held, or how it was obtained. The assignment of the mortgage does not reference the note, and no indorsement is reflected on it. Nonetheless, in the past year, it appears that the Third Department has erased any doubt as to whether this minimal standard suffices to meet plaintiff's burden. In particular, in Venture , supra , the Court held sufficient to show standing an averment in the complaint that plaintiff "was the current holder of the note," to which a copy of the note was attached (id. at 1271–72). Plaintiff here has made an equivalent submission.
On the basis of this—and two comparable recent Third Department rulings—I find that plaintiff has made a prima facie case of standing (see HSBC Bank USA, National Association v Szoffer , 149 AD3d 1400, 1401 [3d Dept 2017] [two affidavits from officers of the bank's servicing agent based on a review of relevant business records, stating that plaintiff was in possession of the note, indorsed in blank, prior to the commencement of the foreclosure action sufficient to show standing]; JP Morgan Chase Bank, Nat Ass'n v Verderose , 154 AD3d 1198, 1200 [3d Dept 2017] [standing shown by employee affidavit averring based on review of business records that plaintiff "directly or through its agent" held the original note at the time the complaint was filed," and allegation in complaint that plaintiff was the current owner and holder of the note and alleging "endorsement and delivery of the note to it prior to the commencement of this foreclosure action"] ).
Defendant presents no evidence to call this showing into question, stating only that plaintiff has failed to produce the original note. But there is no indication in the record before me that defendant sought the note in discovery or otherwise prior to the filing of this motion. In each of those cases where the Third Department has found that plaintiff failed to show standing despite providing a copy of the note, the defendant had specifically served a discovery request for the original note (see JP Morgan Chase, Nat Ass'n v Hill , 133 AD3d 1057, 1058 [3d Dept 2015], appeal dismissed 27 NY3d 1148, 62 N.E.3d 122 [2016] [affidavit in which plaintiff said its "custodial system" showed it had received the note on a specified date, and that it was maintained in a specific storage facility, insufficient to show standing absent any indication that the affiant had examined the original note or how plaintiff acquired possession thereof, where defendant had demanded its production in discovery] ; Wells Fargo Bank, N.A. v Walker, 141 A.D.3d 986, 987–988, 35 N.Y.S.3d 591 [3d Dept. 2016] [plaintiff failed to show standing based on averment by servicer upon a review of business records that plaintiff was in possession of a note since a specific date and "is still in possession of the [note] and can produce same if the [c]ourt so requires,", defendant had demanded and not received the original note in discovery] ).
In Carnivale , supra , the Third Department distinguished Hill on the ground that in that case plaintiff had demanded the original note during discovery, and a prior foreclosure action had been commenced by a different entity (Carnivale , 138 AD3d at 122 n 1).
Despite this holding, the Court found that plaintiff had standing on the basis of the mortgage assignment, which specifically assigned the note along with the mortgage, as well as other documents which set forth the legal authority for the assignment (Walker , 141 A.D.3d at 988–989, 35 N.Y.S.3d 591).
In light of the foregoing, plaintiff has demonstrated its entitlement to summary judgment on the issue of standing.
II. Loan Modification
Under CPLR 3408(f), the parties to a residential foreclosure action must participate in a settlement conference, at which they are required to negotiate in good faith to reach a mutually agreeable resolution. A lender has not met this requirement when the "totality of the circumstances demonstrates that [its] conduct did not constitute a meaningful effort at reaching a resolution" ( US Bank Nat. Ass'n v Sarmiento , 121 AD3d 187, 203, 991 N.Y.S.2d 68 [2d Dept 2014] ).
Defendant argues that plaintiff breached its obligation to negotiate in good faith pursuant to CPLR 3408 by not offering a modification for which she was originally judged eligible under HAMP. There is no dispute that WF was a participant in HAMP during the pendency of the settlement discussions in this case. The violation of HAMP regulations can constitute a failure to negotiate in good faith (see Onewest Bank, FSB v Colace , 130 AD3d 994, 995 [2d Dept 2015] ).
HAMP is a federal program established to provide relief to borrowers who defaulted on their loan payments, by providing loan servicers who participate with incentive payments for issuing loan modifications (see JP Morgan Chase, NY v Hardo , 36 Misc 3d 359, 366, 940 N.Y.S.2d 829 [Sup Ct, Suffolk County 2012] ).
HAMP expired at the close of 2016, and apparently was replaced by the new "Flex Mod" program (see Lawyer's Desk Book [Aspen Publishers 2018] § 10.12 n 133). Neither party addresses whether this change has any impact on Wells Fargo's obligations.
The application of HAMP requirements to this case was addressed during the settlement conference process. An initial settlement conference was conducted on February 19, 2016, at which a schedule was promulgated for defendant to apply for a modification of her mortgage payments. Her application was subsequently denied on the ground that the owner of the loan does not allow for modifications (Ltr of Ocwen to Wolcott dated 3/11/2016). By letter dated June 7, 2016, I directed plaintiff to provide legal support for its position that its refusal to offer a modification did not violate its obligation to seek to reach a settlement in good faith under CPLR 3408 and applicable federal law and regulations. On July 1, 2016, plaintiff submitted a letter citing the provisions of the Pool and Servicing Agreement ("PSA") with the loan investor stating that such modifications were forbidden. By letter order dated August 16, 2016, I found this to be insufficient, and directed plaintiff to "provide the Court with documentation as to the good faith efforts it has made to obtain a waiver of investor restrictions in compliance with this order, and any response it has received thereto" (Ltr of Ct to parties of 8/16/16).
Plaintiff then wrote the Court on August 26, 2016, providing correspondence with the trustee asking that it waive the no-modification provision. The trustee responded that it could not do so unilaterally, without approval of all certificate holders of the trust (Ltr from Shufelt to Ct of 8/26/16). The letter also listed other means for plaintiff to seek a home retention option, including a repayment plan for the loan (id. ).
Additional conferences were conducted, in an effort to determine what other options were available for resolving the default, without success. By letter dated October 19, 2016, I found that during multiple settlement conferences the parties had "made good faith efforts to resolve the case," and that while those efforts had not been successful, plaintiff had met its obligations under CPLR 3408, and could proceed with the foreclosure action (Ltr of Ct to parties of October 19, 2016).
Wolcott's argument, in essence, is that the decision outlined above was in error, and WF did not negotiate in good faith when it failed to offer her a modification.
I find, to the contrary, that plaintiff met its obligations under CPLR 3048 in this case. The HAMP program requires that a lender participating in the program seek to obtain a waiver of an investor prohibition barring modification (see US Bank Natl. Ass'n v Smith , 123 AD3d 914, 916 [2d Dept 2014] ). In Smith , the Court found that the lender had not acted in good faith when it failed to present proof that it had sought such a waiver.
Here, in response to the Court's directive, plaintiff presented evidence that it had made such a request, and the response was that no such waiver could be effectuated without the approval of every certificate holder. On that basis, and given the totality of the discussions at the settlement conferences regarding the practicability of a modification in this case, I determined that plaintiff had met its obligations under CPLR 3408. Indeed, I specifically authorized plaintiff to proceed with this action. That ruling is law of the case, and nothing in defendant's papers provides a basis to revisit it.
For these reasons, I find that Wolcott's argument regarding plaintiff's alleged failure to negotiate in good faith does not preclude a grant of summary judgment to plaintiff.
III. RPAPL § 1304 Notice
RPAPL § 1304 (1) provides in relevant part: "with regard to a home loan, at least ninety days before a lender, an assignee or a mortgage loan servicer commences legal action against the borrower, or borrowers at the property address and any other address of record, including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give notice to the borrower in at least fourteen-point type," containing language specifically stated in the statute, concerning available counseling services and the homeowner's rights. The statute requires that the notice be sent "by registered or certified mail and also by first-class mail to the last known address of the borrower, and to the residence that is the subject of the mortgage ... in a separate envelope from any other mailing or notice" ( RPAPL § 1304 [2 ] ).
The proper mailing of a section 1304 notice is a condition precedent to the commencement of a foreclosure action, and the foreclosing party "bear[s] the burden of showing compliance therewith" (see Pritchard v Curtis , 101 AD3d 1502, 1504, 957 N.Y.S.2d 440 [3d Dept 2012] ). A plaintiff's "failure to show strict compliance requires dismissal" ( TD Bank, NA v Oz Leroy , 121 AD3d 1256, 1257, 995 N.Y.S.2d 625 [3d Dept 2014], quoting Aurora Loan Servs, LLC v Weisblum , 85 AD3d 95, 103, 923 N.Y.S.2d 609 [2d Dept 2011] ). Demonstrating such compliance is part of plaintiff's prima facie case on a motion for summary judgment (id. ).
Here, plaintiff has sought to carry that burden through the Hollis affidavit. Hollis states that the 90–day notices are maintained by Ocwen as business records, and that all such records "are created and maintained in the ordinary course of business, and are needed and relied upon in the performance of functions of the business" (Hollis Aff ¶ 3). A prima facie case of such mailing may, indeed, be established through the use of business records (see Venture , 148 AD3d at 1271 n 2 [plaintiff demonstrated sending of notice by affidavit of employee who affirmed such "based on his review of the business records pertaining to the loan"]; HSBC Bank USA, Nat. Ass'n. v. Ozcan , 154 AD3d 822, 826 [2d Dept 2017] [although affidavit of service is preferred mode of proof for mailing section 1304 notice, plaintiff may rely for this purpose "on any particular set of business records to establish a prima facie case, so long as the plaintiff satisfies the admissibility requirements of CPLR 4518(a), and the records themselves actually evince the facts for which they are relied upon"] [citation omitted] ).
One dissenting justice in Ozcan disagreed with this conclusion. He expressed the view that mailing could be established by an affidavit of service or proof of mailing obtained from the post office, or via "evidence of the loan servicer's mailing procedures" (Ozcan , supra [Barros, J., dissenting] ).
Nevertheless, the proof adduced by plaintiff here suffers from several defects. First, Hollis does not indicate any regular business practice employed by the plaintiff or servicer in regard to mailings, nor does she offer any contemporaneous record of the notice being sent, except for the letter itself (see Flagstar Bank, FSB v Mendoza , 139 AD3d 898, 900 [2d Dept 2016] [plaintiff proved section 1304 mailing prima facie via "affidavit of an associate attorney with the firm that represented the plaintiff, in which the attorney described the firm's standard business practice with regard to sending RPAPL 1304 90–day notices to borrowers, and affirmed, based on the business records he reviewed regarding the subject loan, that the notices had been sent out to the appellants in compliance with the requirements of RPAPL 1304"] ). Second, while the notice of default contains an electronic return receipt, and the number thereon matches the certified mail identifier, no such receipt is included with the section 1304 notice, and the certified mail number is redacted.
In any case, even if I were to find plaintiff met its prima facie burden on the basis of the Hollis affidavit, defendant's submission is sufficient to establish a question of fact as to whether she was served with the requisite section 1304 mailing. In her opposition submission, defendant states the following in reference to this notice:
A.... Ms. Wolcott never received these initial Grace Period Notices. Ms. Wolcott retains all mail she receives from the Plaintiff and files it in labeled folders that she keeps in a filing cabinet in her home. Ms. Wolcott has reviewed these files to make sure that she had not missed any Notices and found no record of any Grace Period Notices" (Opp ¶ 2).
When a movant presents evidence that a mailing was made, the opposing party's "simple denial of receipt" is insufficient to rebut the "presumption of delivery" of the notice (see Grogg v South Road Associates , 74 AD3d 1021, 1022, 907 N.Y.S.2d 22 [2d Dept 2010] ; see also Ozcan , supra ["mere denial of receipt" of 1304 notice insufficient to establish homeowner's entitlement to judgment as a matter of law] ). But defendant's submission here, which includes a detailed averment of her standard practice, and testimony regarding her own review of her personal records, cannot be characterized as a "simple denial" (see Liriano v Eveready Ins. Co. , 65 AD3d 524, 524–525, 884 N.Y.S.2d 248 [2d Dept 2009 [defendant rebutted presumption of mailing by presenting affidavit containing "sworn denial of receipt" and showing "defendant's regular practices and procedures in retrieving, opening, and indexing its mail and in maintaining its files"] ). Indeed, if Wolcott's representations are insufficient to rebut evidence of a mailing, it is hard to know what else might suffice in this regard.
Therefore, summary judgment must be denied on this ground.
In light of the foregoing, the Court will conduct a conference with the parties on February 9, 2018 at 10:30 a.m. to schedule a trial date, and to address any other matters relating to this proceeding as may be necessary. Since the only material issue revealed by this motion to be in dispute is whether plaintiff complied with the notice requirements of section 1304, the trial will be limited to that question. For purposes of such trial, plaintiff's possession of the note, plaintiff's default on her obligations thereunder, and plaintiff's compliance with CPLR 3408, shall be deemed incontrovertible (see CPLR 3212 [g] ["If a motion for summary judgment is denied ..., the court, by examining the papers before it and, in the discretion of the court, by interrogating counsel, shall, if practicable, ascertain what facts are not in dispute or are incontrovertible [and shall] an order specifying such facts and they shall be deemed established for all purposes in the action"] ).
This constitutes the Decision & Order of the Court. This Decision & Order is being transmitted to plaintiff for filing and service. The signing of this Decision and Order shall not constitute entry or filing under CPLR Rule 2220, and counsel is not relieved from the applicable provisions of that Rule respecting filing, entry and Notice of Entry.
Dated: January 22, 2018
1. Plaintiff's Notice of Motion, dated September 15, 2017, Affirmation in Support with Exhibits annexed;
2. Defendant's Affirmation in Opposition, dated October 6, 2017; and
3. Plaintiff's Reply Affirmation, dated October 13, 2017.