Opinion
L&T 73409/19
09-03-2020
WILMINGTON TRUST, National Association, Not in Its Individual Capacity, but Solely as Trustee for the MFRA Trust 2015-1, Petitioner, v. Gina HOLMES, Angel Holmes, "John Doe(s)," and "Jane Doe(s)," Respondents.
Matthew Lizotte, Esq., Lizotte PLLC, 3 E Evergreen Road, No.323, New City, NY 10956, Attorney for Petitioner Rohit Chandan, Esq., Julia McNally, Esq., The Legal Aid Society, 120-46 Queens Blvd., 3rd Floor, Kew Gardens, NY 11415, Attorneys for Respondent Gina Holmes
Matthew Lizotte, Esq., Lizotte PLLC, 3 E Evergreen Road, No.323, New City, NY 10956, Attorney for Petitioner
Rohit Chandan, Esq., Julia McNally, Esq., The Legal Aid Society, 120-46 Queens Blvd., 3rd Floor, Kew Gardens, NY 11415, Attorneys for Respondent Gina Holmes
Clinton J. Guthrie, J.
Recitation, as required by CPLR § 2219(a), of the papers considered in the review of Respondent Gina Holmes' motion to dismiss pursuant to CPLR § 3211(a)(7) :
Papers/Numbered
Notice of Motion & Affirmation/Exhibit Annexed 1
Affirmation in Opposition & Exhibits Annexed 2
Affirmation in Reply & Exhibits Annexed 3
Upon the foregoing cited papers, the decision and order on Respondent's motion to dismiss is as follows.
PROCEDURAL HISTORY
This post-foreclosure holdover proceeding brought pursuant to RPAPL § 713(5) is based on a Notice of Petition and Petition dated December 10, 2019. After an initial adjournment on January 24, 2020, The Legal Aid Society appeared for Respondent Gina Holmes and made a motion to dismiss pursuant to CPLR § 3211(a)(7). Petitioner submitted opposition papers and the proceeding was adjourned for submission of reply papers and argument to March 18, 2020. Respondent submitted reply papers on March 10, 2020, but due to the shutdown of normal court operations due to the COVID-19 public health emergency, argument was delayed. The court heard argument on Respondent's motion via Skype on August 26, 2020 and reserved decision.
RESPONDENT'S MOTION
Respondent's motion argues that the predicate "Combined Ten (10) Day Notice to Quit With Alternative Ninety (90) Day Notice to Quit" (hereinafter "Notice to Quit") is defective, on two primary grounds. First, Respondent alleges that the Notice to Quit does not sufficiently describe the nexus between Petitioner and the notice's signatory. Second, Respondent asserts that Petitioner, in the notice, improperly placed the burden upon Respondents to demonstrate bona fide tenant status, in violation of the federal Protecting Tenants at Foreclosure Act (PTFA) and RPAPL § 1305. Alternatively, Respondent requests leave to interpose an answer pursuant to CPLR § 3211(f). Petitioner opposes Respondent's motion in all respects.
ANALYSIS
I. Nexus between Petitioner and Notice to Quit signatory
Respondent, citing to Siegel v. Kentucky Fried Chicken of Long Island, Inc. , 108 AD2d 218 [2d Dept 1985], affd 67 NY2d 792 [1986], argues that the Notice to Quit is defective insofar as it lacked proof that the signatory, Sarah Nelson, was authorized to sign on behalf of Petitioner. On the signature page of the Notice to Quit, Ms. Nelson's signature, printed name, date, title, and address appear directly below a typewritten closing salutation and the following: "Wilmington Trust, National Association, not in its individual capacity, but solely as trustee for MFRA Trust 2015-1, by its attorney-in-fact, Fay Servicing LLC." Annexed to the Notice to Quit is a certified deed and certified "Limited Power of Attorney" dated December 15, 2015, which appoints Fay Servicing LLC as attorney-in-fact for Petitioner.
In Siegel , the notices of default therein were defective specifically because the lease between the parties required service of the notices by the "landlord" and the notices at issue, from an attorney with whom the tenant had never dealt, were not authenticated or accompanied by proof to bind the landlord. Siegel , 108 AD2d at 223. Subsequent to Siegel , the Appellate Division, Second Department has stressed the narrowness of its holding. In Matter of QPII-143-45 Sanford Ave., LLC v. Spinner , 108 A.D3d 558, 559-560 [2d Dept 2013], the Appellate Division specifically noted that "Siegel is limited to the ‘factual peculiarities’ of the lease in that case" and held that "the failure to include evidence of the agent's authority to bind the landlord did not render [the owner] noncompliant with the requirements of the notice provision and did not render the notice invalid." Respondent does not annex any lease between the parties to her motion. Therefore, the court does not find Siegel to be applicable to this proceeding.
Respondent also cites to two Nassau County District Court decisions for the proposition that a signer of a predicate notice must attach evidence that they have authority to sign in post-foreclosure eviction cases. In the first, Fannie Mae v. Lindo , 177 Misc 2d 1003, 1005 [Dist Ct, Nassau County 1998], Judge Joel B. Gewanter held that a notice to quit was defective where it was signed by a new attorney for the petitioner unknown to the respondent. In the second, GMAC Mortg. Corp. v. Toureau , 15 Misc 3d 1139[A], 2007 NY Slip Op 51056[U] [Dist Ct, Nassau County 2007], Judge Scott Fairgrieve similarly held that a notice to quit was defective because the attorney issuing the notice failed to attach proof of authorization to sign notices on behalf of the petitioner. Here, however, unlike in the two aforementioned Nassau County cases and the two Queens County cases cited in the reply papers (Chen v. Villacis , 2008 NY Misc. LEXIS 5223, 240 N.Y.L.J. 36 [Civ Ct, Queens County 2008] and Washington Mutual Home Loans, Inc. v. Calderon , 30 HCR 554A, N.Y.L.J. September 25, 2002, 23:3 [Civ Ct, Queens County 2002] ), the Notice to Quit includes the Limited Power of Attorney authorizing Fay Servicing, LLC as its attorney-in-fact for the purpose of, inter alia , pursuing and prosecuting eviction cases. In Deutsche Bank National Trust Company for New Century Home Equity Loan Trustem Series 2005-C v. Cordova , 62 Misc 3d 1219[A], 2019 NY Slip Op 50178[U] [Dist Ct, Nassau County 2019], Judge Fairgrieve held that a limited power of attorney annexed to a notice to quit was sufficient authorization for an employee of the attorney-in-fact to sign on behalf of the petitioner. An analogous holding was reached in Bank of NY Mellon v. Salahuddin , 60 Misc 3d 999, 1005 [Poughkeepsie City Ct 2018], where the court observed that the notice of quit "was not invalid simply because it was signed by an attorney-in-fact instead of the landlord."
The court notes at the outset that both cases predate the Appellate Division's opinion in Matter of QPII-143-45 Sanford Ave., LLC v. Spinner .
To the extent that Respondent argues that the Notice to Quit was impermissibly opaque in its description of Ms. Nelson as "Assistant Vice President of REO," the court disagrees. Ms. Nelson's name appears directly below the statement that the notice is issued by Fay Servicing LLC, as attorney-in-fact for Petitioner (with the preposition "By" before her name). Ms. Nelson's title, "Assistant Vice President of REO," is perhaps not readily understandable by a layperson but the inclusion of the title merely provides identification of Ms. Nelson's role as an employee (and thus an agent) of the attorney-in-fact. See Cordova , 2019 NY Slip Op 50178[U], *4 [Identification of name, title, and address was sufficient to provide notice of employee's authority to act on behalf of attorney-in-fact as an agent]; see also Port Royal Owners Corp. v. Navy Beach Rest. Group, LLC , 57 Misc 3d 13, 15 [App Term, 2d Dept, 9th & 10th Jud Dists 2017] [Affirming that an agent may sign predicate notice in the absence of a lease provision providing otherwise].
REO is typically an acronym for "Real Estate Owned" in this context. See e.g. Salinas v. Wells Fargo Bank, N.A. , 45 Misc 3d 1216[A], 2014 NY Slip Op 51602[U] [Sup Ct, Queens County 2014].
Accordingly, Respondent's motion fails to establish that the Notice to Quit is defective because of an insufficient nexus between Petitioner and Sarah Nelson, the signer of the notice.
II. Shifting of bona fide tenant burden and applicability of PTFA and RPAPL § 1305
Respondent also argues in her motion that the Notice to Quit is defective because its language puts the burden upon Respondents to provide proof of bona fide tenancy status, in violation of the PTFA and RPAPL § 1305. In assessing this argument, it is necessary to note that the Notice to Quit is a combined 10- and 90-day notice, with alternative provisions for each portion of the notice. Of relevance here, the first page of the notice states that "pursuant to RPAPL 713(5) within ten (10) days after service on you of this Notice, you and all other persons occupying the premises EITHER produce acceptable evidence to the law firm listed below that you are entitled to the protections of RPAPL Section 1305 OR you are required to vacate and surrender possession of the Premises to [Petitioner] within ten (10) days of receiving this Notice." Under the "90 Day Notice" section that begins on Page 2 of the Notice to Quit, specific documents are requested, including a copy of the lease or proof of rent payment, proof of public assistance rental assistance, a phone number and email address, and proof of the last six (6) rent payments or the length of the residence if less than six (6) months.
In a post-foreclosure holdover proceeding brought pursuant to RPAPL § 713(5), the statute specifically states that the cause of action is "[s]ubject to the rights and obligations set forth in section thirteen hundred five [1305] of this chapter." Of relevance here, RPAPL § 1305(3) requires that:
"Notwithstanding any other provision of law, and consistent with subdivision two of this section, a successor in interest of residential real property shall provide written notice to all tenants: (a) that they are entitled to remain in occupancy of such property for the remainder of the lease term, or a period of ninety days from the date of mailing of such notice, whichever is greater, on the same terms and conditions as were in effect at the time of entry of the judgment of foreclosure and sale, or if no such judgment was entered, upon the terms and conditions as were in effect at the time of transfer of ownership of such property; and (b) of the name and address of the new owner."
In RPAPL § 1305(1)(c), "tenant" is defined as:
"[A]ny person who [within 10 days of service of the summons and complaint in the foreclosure action] appears as a lessee on a lease of one or more dwelling units of residential property that is subordinate to the mortgage on such residential real property; or who at such time is a party to an oral or implied rental agreement with the mortgagor and obligated to pay rent to the mortgagor or such mortgagor's representative, for the use and occupancy of one or more dwelling units of a residential real property."
The time period set out in RPAPL § 1303(4).
The 90-day notice requirement in RPAPL § 1305(3) mirrors the requirement in Section 702(a)(1) of the PTFA that a "bona fide tenant" receive a 90-day notice to vacate. Under Section 702(b) of the PTFA, a tenancy is bona fide only if: (1) the mortgagor (or child, spouse, or parent of the mortgagor) is not the tenant; (2) the lease or tenancy was the result of an arms-length transaction; and (3) the rent is not substantially less than fair market rent for the property or the rent is reduced or subsidized due to a federal, state, or local subsidy. See Bank of Am., N.A. v. Owens , 28 Misc 3d 328, 331 [Rochester City Court 2010]. In Owens , cited at length by Respondent, the court held that the petitioner, a purchaser after foreclosure, failed to comply with the PTFA when it sent questionnaires to the respondents (inquiring about tenancy status) with its 90-day notice and commenced an eviction proceeding less than 90 days later, when the respondents failed to return the questionnaires. In reaching this determination, the court in Owens noted that "Congress' unequivocal intent in enacting the PTFA was to protect tenants in foreclosed rental properties against abrupt evictions" and that "the PTFA does not require bona fide tenants to prove their status before they are entitled to receive 90 days' advance notice to vacate from a successor property owner." Owens , 28 Misc 3d at 333, 334.
Originally codified at P.L. 111-22, Div A, Title VII, § 702, 123 Stat. 1660 (2009).
The protections of both RPAPL § 1305 and the PTFA are available to tenants of foreclosed properties in New York. See e.g. 956 Rogers Ave NDB LLC v. Blair , 67 Misc 3d 403, 406 [Civ Ct, Kings County 2020].
Respondent argues that the instant facts are analogous to those in Owens , insofar as the "90 Day Notice" portion of the Notice to Quit includes a demand for specific documents evidencing tenancy and Petitioner commenced this proceeding before the 90-day period in the notice expired. The Petition states that "[u]pon information and belief, none of the Respondent(s) named herein are not bona fide tenants as defined by RPAPL 1305." (Petition, ¶ 10). However, Petitioner argues in the opposition papers that Respondent was not entitled to a 90-day notice because she is not a tenant, but rather is the former owner of the subject premises (and annexes a copy of the deed from 2007 that transferred the property to Respondent). Respondent does not annex any proof to her motion that she had any rental agreement for the subject premises, and her attorney acknowledged at the argument on the motion that she is the former owner.
In assessing the adequacy of a predicate notice, "the appropriate test is one of reasonableness in view of the attendant circumstances." Hughes v. Lenox Hill Hosp. , 226 AD2d 4, 18 [1st Dept 1996], lv denied 90 NY2d 829 [1997] ; see also Oxford Towers Co. v. Leites , 41 AD3d 144 [1st Dept 2007] ; 1123 Realty LLC v. Treanor , 62 Misc 3d 326 [Civ Ct, Kings County 2018]. Here, the Notice to Quit includes alternative (albeit combined) notices. Petitioner is solely proceeding under the 10-day notice portion of the Notice to Quit. Although a proceeding brought pursuant to RPAPL § 713(5) must comport with RPAPL § 1305, Respondent has not even alleged that she would be entitled to a 90-day notice as either a "tenant" as defined by RPAPL § 1305(1)(c) or a "bona fide tenant" as defined by Section 702(b) of the PTFA. Rather, Respondent's argument is that the shifting of the burden to demonstrate a tenancy on Respondents invalidates the entire notice, regardless of whether a 90-day notice would even be required. Since only a 10-day notice is required in a post-foreclosure holdover proceeding where the tenancy provisions of RPAPL § 1305 and Section 702 of the PTFA are inapplicable, the Notice to Quit served by Petitioner is "reasonable" in view of the facts and circumstances before the court. See GMAC Mtge., LLC v. Taylor , 27 Misc 3d 550, 555 [Dist Ct, Suffolk Count 2010] ; see also 956 Rogers Ave NDB LLC , 67 Misc 3d at 406-407 ; McManus v. Marte , 60 Misc 3d 1219[A], 2018 NY Slip Op 51172[U] [Dist Ct, Nassau County 2018]. Although the issue of burden-shifting raised by Respondent would be relevant in assessing the adequacy of a 90-day notice, the court declines to address it here, where only the 10-day notice portion of the Notice to Quit is applicable. Finally, although the Petition's awkward double negative allegation implies that Respondents are bona fide tenants, it is apparent from Petitioner's opposition papers that this was a "mistake defect, or irregularity" that would be subject to correction pursuant to CPLR § 2001 and/or amendment pursuant to CPLR § 3025(b). See e.g. Villas of Forest Hills Co. v. Lumberger , 128 AD2d 701, 702 [2d Dept 1987].
For each of these reasons, Respondent's motion to dismiss is denied.
CONCLUSION
Respondent's motion to dismiss is denied. In accordance with CPLR § 3211(f), Respondent shall be permitted to serve an answer within 10 days of service of this Decision/Order with notice of entry. This proceeding will be restored to the Part E calendar for a virtual conference on September 30, 2020 at 11:00 AM, per Administrative Order 160A/20. An invitation will be sent to the parties' attorneys in advance of the conference.
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.