Revenge of the Nerds Making the Most of Technical Defenses in Foreclosure Cases
February 22, 2017
Slides ................................................................................................................................................1
Relevant Statutes ............................................................................................................................30
RPAPL § 1303 ...................................................................................................................30
RPAPL § 1304 ...................................................................................................................33
RPAPL § 1306 ...................................................................................................................38
CPLR R. 4518 ....................................................................................................................40
Case Example: Bank of America v. Thompson .............................................................................43
Case Example: US Bank v. Crick ..................................................................................................86
Various Pro Se Papers ..................................................................................................................115
Reven
ge of th
e Nerd
sM
aking th
e Mo
st of Tech
nical D
efenses in
Foreclo
sure C
ases
Cath
erin
e Iso
be
Bro
oklyn
Legal Se
rvices
Jose
ph
Re
be
llaM
FY Le
gal Service
s, Inc.
Febru
ary 22
, 20
17
1
1
Ou
tline
I.In
trod
uctio
n
II.P
roced
ural Po
sture in
the Fo
reclosu
re Case
III.Th
e Defen
ses
IV.
Co
nclu
sion
and
Qu
estion
s
2
2
Proced
ural Po
sture: A
nsw
er
•First o
pp
ortu
nity to
assert defen
ses
•O
bvio
usly, every p
ossib
le defen
se is still on
the tab
le
•B
e sure to
assert waivab
led
efenses (stan
din
g!) that are likely to
arise
•R
ecent ch
anges to
CP
LR R
. 34
08
–rem
emb
er the exten
ded
timelin
e to
answ
er after the first settlem
ent co
nferen
ce
3
3
Proced
ural Po
sture:
Post-C
on
ference, Pre-M
otio
n, A
nsw
er In•
If there’s b
een an
answ
er, you
can m
ove to
amen
d to
assert any d
efenses th
at were n
ot raised
in
the A
nsw
er. You
do
no
t need
to su
pp
ly an excu
se for th
e failure to
raise it.
•“Leave sh
all be freely given
up
on
such
terms as m
ay be ju
st”. CP
LR R
. 30
25
(b). Leave to
amen
d is
app
rop
riate “pro
vided
the am
end
men
t is no
t palp
ably in
sufficien
t, do
es no
t preju
dice o
r surp
rise th
e op
po
sing p
arty, and
is no
t paten
tly devo
id o
f merit”. R
eyes v. Brin
ks Glo
b. Servs. U
SA, In
c., 11
2
A.D
.3d
80
5, 8
06
, 97
8 N
.Y.S.2d
63
, 64
(Ap
p. D
iv. 2d
De
p’t 2
01
3); Po
stiglio
ne
v. Ca
stro, 1
19
A.D
.3d
9
20
, 92
2, 9
90
N.Y.S.2
d 2
57
, 25
9 (A
pp
. Div. 2
d D
ep’t 2
01
4).
•P
rejud
ice to th
e op
po
sing p
arty relates on
ly to “p
rejud
ice or su
rprise resu
lting d
irectly from
the
delay in
seeking leave.” Tirp
ack
v. 12
5 N
. 10
, LLC, 1
30
A.D
.3d
91
7, 9
19
, 14
N.Y.S.3
d 1
10
, 11
3 (A
pp
. D
iv. 2d
De
p’t 2
01
5); see a
lso Lu
cido
v. Ma
ncu
so, 4
9 A
.D.3
d 2
20
, 22
9, 8
51
N.Y.S.2
d 2
38
, 24
5 (A
pp
. D
iv. 2d
De
p’t 2
00
8) (co
urt m
ust m
easure w
heth
er or n
ot “d
elay in seekin
g the am
end
men
t wo
uld
cau
se preju
dice o
r surp
rise”).
•A
pp
lies to d
efenses w
aived u
nd
er CP
LR 3
21
1(e). A
uro
ra Lo
an
Servs., LLC v. D
imu
ra, 1
04
A.D
.3d
7
96
, 79
7, 9
62
N.Y.S.2
d 3
04
, 30
6 (A
pp
. Div. 2
d D
ep’t 2
01
3) (h
old
ing th
at “defen
ses waived
un
der
CP
LR 3
21
1(e) can
neverth
eless be in
terpo
sed b
y leave of co
urt p
ursu
ant to
CP
LR 3
02
5(b
) so lo
ng
as the am
end
men
t do
es no
t cause th
e oth
er party p
rejud
ice or su
rprise resu
lting d
irectly from
th
e delay”).
4
4
Proced
ural Po
sture:
Post-C
on
ference, Pre-M
otio
n, N
o A
nsw
er•
Will n
eed to
file a mo
tion
to co
mp
el acceptan
ce of an
un
timely
answ
er. CP
LR §
30
12
(d).
•C
ou
rts have ro
utin
ely perm
itted service o
f a late answ
er wh
ere (1)
there is a reaso
nab
le excuse, (2
) the d
efend
ant h
as merito
riou
s d
efenses an
d (3
) service of th
e answ
er do
es n
ot u
nfairly p
rejud
ice the
plain
tiff. See, e.g., N
ickell v. Pa
thm
ark Sto
res, Inc., 4
4 A
.D.3
d 6
31
, 6
32
, 84
3 N
.Y.S.2d
17
7, 1
78
(Ap
p. D
iv. 2d
Dep
’t 20
07
); Jolko
vskyv.
Legem
an
, 32
A.D
.3d
41
8, 4
19
, 81
9 N
.Y.S.2d
56
1, 5
62
(Ap
p D
iv. 2d
D
ep’t 2
00
6); W
atso
n v. Po
llacch
i, 32
A.D
.3d
56
5, 5
65
-66
, 81
9 N
.Y.S.2d
6
12
, 61
3 (A
pp
. Div. 3
d D
ep’t 2
00
6); N
aso
nv. Fish
er, 30
9 A
.D.2
d 5
26
, 5
26
, 76
5 N
.Y.S.2d
32
, 33
(Ap
p. D
iv. 1st D
ep’t 2
00
3).
5
5
Proced
ural Po
sture:
Facing M
otio
n fo
r Sum
mary Ju
dgm
ent
•P
laintiff m
ust m
ake prim
a facie case and
refute asserted
defen
ses.
•If yo
u h
ave an u
np
led d
efense, yo
u m
ay be ab
le to raise it (R
og
off
v. Sa
n Ju
an
Ra
cing
Ass'n
, Inc., 5
4 N
.Y.2d
88
3, 8
85
, 42
9 N
.E.2d
41
8, 4
19
(1
98
1)) b
ut th
e cou
rt cou
ld also
find
that it h
as been
waived
. Do
n’t
try to b
ring u
p stan
din
g or statu
te of lim
itation
s for th
e first time.
•N
ot a d
efense, b
ut alw
ays loo
k for evid
entiary issu
es, especially
hearsay th
at do
esn’t m
eet the b
usin
ess record
s exceptio
n
requ
iremen
ts.
6
6
Bu
siness R
ecord
s Ru
le
Fou
nd
ation
requ
iremen
ts for ad
missio
n o
f a bu
siness reco
rd (o
r testim
on
y based
on
review o
f a bu
siness reco
rd:
1. Th
e record
mu
st be m
ade in
the o
rdin
ary cou
rse of b
usin
ess reflectin
g a rou
tine, regu
larly con
du
cted b
usin
ess activity need
ed an
d
relied o
n in
the p
erform
ance o
f the fu
nctio
n o
f the b
usin
ess;
2. It m
ust b
e the regu
lar cou
rse of th
e bu
siness to
make th
e record
;
3. Th
e record
mu
st have b
een m
ade at th
e time o
f the act,
transactio
n, o
ccurren
ce or even
t, or w
ithin
a reason
able tim
e th
ereafter, assurin
g the reco
llection
is fairly accurate an
d th
e entries
rou
tinely m
ade (See C
PLR
§4
51
8(a)).
7
7
Bu
siness R
ecord
s Ru
le
A p
rop
er fou
nd
ation
for th
e adm
ission
of th
e bu
siness reco
rd [o
r the
testimo
ny] m
ust b
e pro
vided
by so
meo
ne w
ith p
erson
al kno
wled
ge of
the m
aker’s bu
siness p
ractices and
pro
cedu
res. Seba
tino
v. Turf H
ou
se, 7
6 A
.D.2
d 9
45
, 94
6 (3
d D
ep’t 1
98
0). See also
, HSB
C M
ortg
ag
e Services, In
c. v. Ro
yal, 14
2 A
.D.3
d 9
52
(2d
Dep
’t 20
16
).
Wh
olesale ad
missio
n o
f files is un
acceptab
le; a fou
nd
ation
mu
st be
laid fo
r each reco
rd. V
ermo
nt C
om
missio
ner o
f Ba
nkin
g a
nd
Insu
ran
ce v. W
elbilt
Co
rp., 1
33
A.D
.2d
39
6 (2
d D
ep’t 1
98
7).
8
8
Bu
siness R
ecord
s Ru
le
•M
ost co
mm
on
plain
tiff misstep
is an in
app
rop
riate reliance o
n b
usin
ess reco
rds o
f oth
er entities. Th
is hap
pen
s in n
early every case in w
hich
servicin
g transfers after th
e case is b
rou
ght. Lo
ok at n
otices, stan
din
g, etc.
•Servicer actin
g as attorn
ey in fact fo
r plain
tiff cann
ot sw
ear to facts n
ot
with
in its o
wn
perso
nal kn
ow
ledge. Pero
siv. LiGreci, 9
8 A
.D.3
d 2
30
(2d
D
ep’t 2
01
2); C
ymb
olv. C
ymb
ol, 1
22
A.D
.2d
77
1 (2
d D
ep’t 1
98
6).
•Likew
ise, a servicer cann
ot sw
ear to even
ts pre-d
ating its servicin
g of th
e lo
an w
here kn
ow
ledge is b
ased o
n th
e bu
siness reco
rds o
f ano
ther en
tity. W
ells Farg
o B
an
k, N.A
. v. Jon
es, 13
9 A
.D.3
d 5
20
, 52
1-5
22
(1st
Dep
’t May
17
, 20
16
). C.f. Peo
ple v. C
ratsley, 8
6 N
.Y. 2d
81
, 90
(19
95
).
9
9
Examp
le of Im
perm
issible B
usin
ess Reco
rds
Lod
ato
v. Greyh
aw
k, 39
A.D
.3d
49
4, 4
95
, 83
4 N
.Y.S.2d
23
9, 2
40
(Ap
p. D
iv. 2d
Dep
't 20
07
) ("the m
ere filing o
f p
apers received
from
oth
er entities, even
if they are retain
ed in
the regu
lar cou
rse o
f bu
sine
ss, is insu
fficient
to q
ualify th
e do
cum
en
ts as bu
siness reco
rds b
ecau
se such
pap
ers simp
ly are no
t mad
e in th
e regu
lar cou
rse
of b
usin
ess o
f the
recipien
t").
“It is self-eviden
t, that w
ith th
e adven
t of
com
pu
ters and
electron
ic record
keep
ing, M
r. B
en
nett h
ad access to
all of th
e reco
rds related
to
the su
bje
ct loan
, inclu
din
g tho
se reco
rds
from
the p
rior servicers . . . th
at were
inco
rpo
rated w
ith, an
d in
to, th
e record
s of
Ru
shm
ore”.
10
10
Proced
ural Po
sture:
Facing M
otio
n fo
r Defau
lt Jud
gmen
t•
If there’s b
een d
elay pre-filin
g, you
can raise ab
and
on
men
t -C
PLR
3
21
5(c) –
and
seek dism
issal.
•A
ny ju
risdictio
nal ch
allenges, su
ch as im
pro
per service o
f pro
cess, can
be raised
in a cro
ss mo
tion
to d
ismiss.
•If th
e case h
asn’t b
een ab
and
on
ed an
d th
ere is no
jurisd
iction
al basis
to d
ismiss th
e action
, you
will p
rob
ably n
eed to
cross-m
ove to
com
pel
acceptan
ce of a late an
swer. G
enerally, th
is requ
ires a merito
riou
s d
efense an
d a reaso
nab
le excuse fo
r the d
elay –C
PLR
§3
01
2(d
).
11
11
Proced
ural Po
sture:
Facing M
otio
n fo
r Jud
gmen
t of Fo
reclosu
re & Sale
•A
t this p
oin
t, sum
mary ju
dgm
ent o
r defau
lt jud
gmen
t has b
een gran
ted.
Argu
men
t is goin
g to b
e limited
to issu
es with
the referee’s rep
ort itself.
•O
f cou
rse, jurisd
iction
al challen
ges (service of p
rocess, su
it bro
ugh
t against
a dead
perso
n) rem
ain.
•If th
e un
derlyin
g ord
er was d
ecided
on
defau
lt, you
may b
e able to
cross
mo
ve to vacate th
e un
derlyin
g ord
er if you
have a m
eritorio
us d
efense an
d
a reason
able excu
se for th
e defau
lt. CP
LR §
50
15
.
•A
dd
ition
ally, you
can raise an
y pro
cedu
ral pro
blem
s with
ob
tainin
g the
un
derlyin
g ord
er and
referral, such
as imp
rop
er service of th
e MSJ o
r b
ringin
g a mo
tion
for d
efault ju
dgm
ent ex p
arte w
hen
parties h
ave ap
peared
.
12
12
Defen
ses: Previou
s Cases
•Pen
din
g foreclo
sure su
it: RPA
PL §
13
01
(3) p
revents a m
ortgagee fro
m
brin
ging sim
ultan
eou
s suits w
itho
ut leave fro
m co
urt. Lo
ok o
ut fo
r it w
hen
the p
reviou
s suit h
as been
aban
do
ned
or th
e Plain
tiff has lo
st o
n M
SJ and
is overeager to
file a new
suit. U
nlike C
PLR
32
11
(a)(4), th
e o
perative fact is th
e mo
rtgage deb
t, no
t the p
arties.
•If th
ere have b
een m
ultip
le disco
ntin
uan
ces, see if CP
LR R
. 32
17
(c) ap
plies –
“a disco
ntin
uan
ce by m
eans o
f no
tice op
erates as an
adju
dicatio
n o
n th
e merits if th
e party h
as on
ce befo
re disco
ntin
ued
b
y any m
etho
d an
action
based
on
or in
clud
ing th
e same cau
se of
action
”
13
13
Defen
ses: RPA
PL §
13
03
•Fo
reclosin
g party b
ears the b
urd
en o
f sho
win
g strict com
plian
ce with
th
e statute. First N
at. B
an
k of C
hica
go
v. Silver,73
A.D
.3d
16
2, 1
70
, 8
99
N.Y.S.2
d 2
56
, 26
2 (A
pp
. Div. 2
d D
ep’t 2
01
0);P
ritcha
rd v. C
urtis,
10
1 A
.D.3
d 1
50
2, 1
50
4, 9
57
N.Y.S.2
d 4
40
, 44
3 (A
pp
. Div. 3
d D
ep’t
20
12
).
•See D
FS Ind
ustry Letter d
ated O
ctob
er 24
, 20
12
prescrib
ing
teleph
on
e con
tact for D
FS to b
e inclu
ded
in R
PAP
L §1
30
3 N
otice:
http
://ww
w.d
fs.ny.go
v/legal/ind
ustry/il1
21
02
4.h
tm
•In
recently b
rou
ght case
s, be su
re that th
e plain
tiff is usin
g the
up
dated
langu
age abo
ut th
e ho
meo
wn
er’s right to
remain
in th
e h
om
e wh
ile the fo
reclosu
re is pen
din
g.
14
14
Defen
ses: R
PAP
L §1
30
3
•C
heck fo
nts: title o
f the n
otice m
ust b
e in b
old
, 20
po
int typ
e; bo
dy o
f th
e no
tice mu
st be in
bo
ld, 1
4 p
oin
t type. P
rocess servers o
ften
redu
ce pap
ers by 1
0%
wh
en co
pyin
g or serve a co
py w
hich
is so fain
t th
at it cann
ot b
e con
sidered
in “b
old
” prin
t.
•Fo
nt size is d
efined
in G
eneral C
on
structio
n Law
§6
2.
•Is th
e no
tice prin
ted o
n co
lored
pap
er?
•D
id th
e defen
dan
t receive service of p
rocess b
ut w
aive his/h
er right
to co
ntest p
erson
al jurisd
iction
? If no
tice no
t received b
y defen
dan
t, can
still raise no
n-service o
f the R
PAP
L §13
03
No
tice as a defen
se.
16
16
Defen
ses: RPA
PL §
13
04
•N
otice th
at mu
st be sen
t at least 90
days b
efore th
e foreclo
sure is filed
•M
ust in
clud
e:
•List o
f Ho
usin
g Co
un
selors
•R
einstatem
ent A
mo
un
t
•R
einstatem
ent D
ate
•Statu
torily M
and
ated Lan
guage
•R
PAP
L §1
30
4 req
uires strict co
mp
liance. See, e.g
., Hu
dso
n C
ity Sav. B
an
k v. D
ePa
squ
ale, 1
13
A.D
.3d
59
5, 5
96
, 97
7 N
.Y.S.2d
89
5 (A
pp
. Div. 2
d D
ep’t
20
14
); Au
rora
Loa
n Servs., LLC
v. Weisb
lum
, 85
A.D
.3d
95
, 10
3, 9
23
N.Y.S.2
d
60
9, 6
14
(Ap
p. D
iv. 2d
Dep
’t 20
11). So
loo
k ou
t for an
ythin
g wro
ng w
ith th
e n
otice.
17
17
Prob
lems w
ith 1
30
4 N
otices
•List o
f Ho
usin
g Co
un
selo
rs is ou
tdated
or o
therw
ise inaccu
rate. See w
ayback
mach
ine
for earlie
r version
s of th
e cou
nse
lor list. Fo
r examp
le, A
CO
RN
, defu
nct
since 2
00
9, is still so
metim
es in
clud
ed
on
the
list. Co
mp
are the
curren
t list at: h
ttp://w
ww
.dfs.n
y.gov/co
nsu
me
r/mo
rtg_n
ys_np
_co
un
selin
g_agen
cies.htm
to th
e archived
version
s and
check fo
r errors su
ch as w
ron
g cou
nty.
•D
efault d
ate and
amo
un
t du
e d
o n
ot m
atch th
e d
escriptio
n o
f defau
lt in P
laintiff’s
affirmatio
n. Fo
r examp
le, th
e 1
30
4 n
otice w
as sent in
De
cem
be
r 20
14
, bu
t the
affid
avits state that d
efend
ant “failed
to co
mp
ly with
the term
s, coven
ants an
d
con
ditio
ns o
f said n
otes, m
ortgages an
d Fin
al Loan
Mo
dificatio
n b
y failing an
d
om
itting to
pay, to
the
plain
tiff, paym
ents d
ue
on
March
1, 2
01
5”.
•N
otice
no
t mailed
on
the
date stated
–ch
eck th
e certified m
ail tracking
info
rmatio
n if th
e n
otice w
as sent in
the
last two
years and
also ch
eck P
laintiff’s
wh
ich w
ill som
etime
s just state a d
ifferent d
ay.
18
18
Defen
ses: RPA
PL §
13
06
•A
fter send
ing th
e RPA
PL §
13
04
no
tice, the P
laintiff m
ust file w
ith th
e D
epartm
ent o
f Finan
cial Services with
in th
ree bu
siness d
ays.
•Th
e filing itself is a p
recon
ditio
n to
foreclo
sure.
•Th
is com
es up
in tw
o situ
ation
s:•
First, wh
ere the 1
30
4 N
otice
is defective d
ue to
an in
correct d
ate, you
sho
uld
also
argue th
at the 1
30
6 Filin
g is defective as w
ell becau
se it con
tains false
info
rmatio
n an
d/o
r wasn
’t mad
e with
in th
e pro
per tim
e perio
d.
•Seco
nd
, som
etimes th
e servicer will fin
d a d
efect in th
e 13
04
No
tice an
d sen
d
ano
ther o
ne to
correct th
e defect. I’ve n
ever seen th
e servicer file a secon
d
time w
ith D
FS.
21
21
Defen
ses: Co
ntractu
al No
tice of D
efault
•Th
e GSE Fo
rm M
ortgage in
clud
es in Paragrap
h 2
2 a p
rovisio
n
requ
iring th
at the m
ortgagee p
rovid
e a no
tice of d
efault givin
g at least 3
0 d
ays to rein
state the m
ortgage.
•N
Y Co
urts h
ave held
that it is a co
ntractu
al con
ditio
n p
receden
t to
foreclo
sure. See G
MA
C M
ortg
ag
e, LLC v. B
ell, 12
8 A
.D.3
d 7
72
, 11
N
.Y.S.3d
73
(Ap
p. D
iv. 2d
Dep
’t 20
15
); Wells Fa
rgo
Ba
nk, N
.A. v Eisler,
11
8 A
.D.3
d 9
82
, 98
8 N
.Y.S.2d
68
2 (A
pp
. Div. 2
d D
ep’t 2
01
4);
HSB
C
Mo
rtg. C
orp
. (USA
) v. Gerb
er, 10
0 A
.D.3
d 9
66
, 95
5 N
.Y.S.2d
13
1 (A
pp
. D
iv. 2d
Dep
’t 20
12
).
•In
FHA
mo
rtgages, the n
otice is o
nly ad
dressed
in th
e regulatio
ns.
(We’ll talk ab
ou
t this later in
the p
resentatio
n.)
22
22
Defen
ses: Co
ntractu
al No
tice of D
efault
•Lo
ok fo
r similar p
rob
lems to
tho
se that arise in
the 1
30
4 N
otice –
inco
nsisten
cy with
the 1
30
4 N
otice, in
con
sistency w
ith th
e Plain
tiff’s affid
avits/com
plain
t, etc.
•N
ote th
at wh
ile RPA
PL §
13
04
do
es no
t requ
ire that th
e defau
lt be re
-n
otice in
the even
t of a rein
statemen
t and
re-defau
lt with
in o
ne year,
the m
ortgage h
as no
such
pro
vision
.
•A
lso b
e sure th
at it was sen
t to th
e pro
per p
erson
. (Paragraph
15
of
GSE Fo
rm M
ortgage)
23
23
Defen
ses: FHA
& R
ESPA
•B
oth
HU
D (fo
r FHA
mo
rtgages) and
RESPA
(for all fed
erally related
mo
rtgages) pro
vide regu
lation
s limitin
g the ab
ility of servicers to
fo
reclose.
•H
UD
’s mo
rtgage servicing regu
lation
s –2
4 C
FR §
20
3.5
00
-61
6 –
lack an
y direct, p
rivate right o
f enfo
rcemen
t. Regu
lation
X –
12
CFR
§1
02
4 –
wh
ich im
plem
ents R
ESPA, o
nly p
rovid
es mo
netary d
amages.
•H
ow
ever, bo
th are (w
ith so
me excep
tion
s) inco
rpo
rated d
irectly into
th
e langu
age of th
e mo
rtgage con
tract, so yo
u sh
ou
ld rely o
n th
e co
ntractu
al ho
ok in
the m
ortgage rath
er than
the regu
lation
directly.
24
24
Defen
ses: FHA
•H
UD
’s regulatio
ns in
clud
e extensive p
re-foreclo
sure req
uirem
ents
•Th
ree fu
ll mo
nth
ly paym
en
t defau
lt requ
ired (2
03
.60
6)
•N
otice
of d
efault (2
03
.60
2, 6
06
)
•Face
to face
meetin
g (20
3.6
04
)
•R
einstatem
en
t allow
ance (2
03
.60
8)
•Evalu
ation
for lo
ss mitigatio
n b
efore 4
mo
nth
ly paym
en
ts are du
e (20
3.6
05
)
•In
mo
rtgages mad
e befo
re Septem
ber 2
01
4, th
e du
ty to fo
llow
HU
D
regulatio
ns is em
bo
died
in th
e No
te (Paragraph
6(b
)) and
Mo
rtgage (Paragrap
h 9
(d)).
25
25
Defen
ses: FHA
•N
Y Co
urts h
ave generally fo
un
d th
at the regu
lation
s can b
e used
to p
rovid
e a d
efense to
a foreclo
sure actio
n. See, e.g
., Green
Pla
net Servicin
g, LLC
v. M
artin
, 14
1 A
.D.3
d 8
92
, 89
3, 3
4 N
.Y.S.3d
91
1 (A
pp
. Div. 3
d D
ep’t 2
01
6);
HSB
C B
an
k USA
, N.A
. v. Teed, 4
8 M
isc. 3d
19
4, 1
97
, 4 N
.Y.S.3d
82
6, 8
28
(Steu
ben
Cty. C
t. 20
14
); Fed. N
at. M
ortg
. Ass'n
v. Ricks, 8
3 M
isc. 2d
81
4,
82
5, 3
72
N.Y.S.2
d 4
85
, 49
7 (K
ings C
ty. Sup
. Ct. 1
97
5).
•B
ut th
e langu
age inco
rpo
rating th
e regulatio
ns b
y reference w
as remo
ved
with
ou
t no
tice in Se
ptem
ber 2
01
4. In
Janu
ary, HU
D m
ade a p
relimin
ary d
ecision
to ad
d th
e langu
age back an
d accep
ted p
ub
lic com
men
ts on
it. W
e’ll see wh
at hap
pen
s!
26
26
Defen
ses: RESPA
•Likew
ise, RESPA
/Regu
lation
X is in
corp
orated
by referen
ce into
the G
SE Fo
rm M
ortgage.
•Paragrap
h 1
6 states “A
ll rights an
d o
bligatio
ns co
ntain
ed in
this Secu
rity In
strum
ent are su
bject to
any req
uirem
ents an
d lim
itation
s of A
pp
licable
Law.”
•A
pp
licable
Law is d
efined
in Paragrap
h I as “A
ll con
trollin
g app
licable
federal, state an
d lo
cal statutes, regu
lation
s, ord
inan
ces and
adm
inistrative
rules an
d o
rders (th
at have th
e effect of law
) as well as all ap
plicab
le final,
no
n-ap
pealab
le, jud
icial op
inio
ns”.
•So
, wh
ere Regu
lation
X lim
its the ab
ility of a servicer to
initiate fo
reclosu
re (1
2 C
.F.R. §
10
24
.41
), that lim
itation
sup
ersedes th
e right o
f the
mo
rtagageeto
brin
g suit u
po
n d
efault (Paragrap
h 2
2 o
f the m
ortgage).
27
27
Defen
ses: RESPA
•P
rior to
Janu
ary 10
, 20
14
, RESPA
did
no
t have an
y pro
vision
s that
limited
the righ
t of a servicer to
brin
g a foreclo
sure.
•A
s a result, th
e case law
on
usin
g RESPA
via the m
ortgage co
ntract is
basically n
on
existent, an
d th
ere is a lot o
f case law statin
g that R
ESPA
do
es no
t preven
t a foreclo
sure (b
ecause at th
e time, R
ESPA’s servicin
g ru
les were ab
ou
t QW
Rs –
with
no
limit o
n fo
reclosu
re wh
ile the Q
WR
w
as pen
din
g –an
d m
ainten
ance o
f escrow
accou
nts).
•Fo
cus o
n R
egulatio
n X
, wh
ich is n
ew, an
d th
e mo
rtgage con
tract to
differen
tiate you
rself from
old
case law
.
28
28
Co
nclu
sion
•Th
ank yo
u everyb
od
y.
•Th
ere are samp
le pap
ers in th
e materials.
•If yo
u h
ave any q
uestio
ns later, yo
u can
con
tact us at
jrebella@
mfy.o
rgan
d ciso
be@
lsnyc.o
rg.
29
29
§ 1303. Foreclosures; required notices, NY RP ACT & PRO § 1303
© 2017 Thomson Reuters. No claim to original U.S. Government Works. 1
McKinney's Consolidated Laws of New York AnnotatedReal Property Actions and Proceedings Law (Refs & Annos)
Chapter 81. Of the Consolidated Laws (Refs & Annos)Article 13. Action to Foreclose a Mortgage (Refs & Annos)
McKinney's RPAPL § 1303
§ 1303. Foreclosures; required notices
Effective: December 20, 2016Currentness
1. The foreclosing party in a mortgage foreclosure action, involving residential real property shall provide notice to:
(a) any mortgagor if the action relates to an owner-occupied one-to-four family dwelling; and
(b) any tenant of a dwelling unit in accordance with the provisions of this section.
2. The notice to any mortgagor required by paragraph (a) of subdivision one of this section shall be delivered with thesummons and complaint. Such notice shall be in bold, fourteen-point type and shall be printed on colored paper thatis other than the color of the summons and complaint, and the title of the notice shall be in bold, twenty-point type.The notice shall be on its own page.
3. The notice to any mortgagor required by paragraph (a) of subdivision one of this section shall appear as follows:
Help for Homeowners in Foreclosure
New York State Law requires that we send you this notice about the foreclosure process. Please read it carefully.
Summons and Complaint
You are in danger of losing your home. If you fail to respond to the summons and complaint in this foreclosure action,you may lose your home. Please read the summons and complaint carefully. You should immediately contact an attorneyor your local legal aid office to obtain advice on how to protect yourself.
Sources of Information and Assistance
The State encourages you to become informed about your options in foreclosure. In addition to seeking assistance froman attorney or legal aid office, there are government agencies and non-profit organizations that you may contact forinformation about possible options, including trying to work with your lender during this process.
To locate an entity near you, you may call the toll-free helpline maintained by the New York State Department ofFinancial Services at (enter number) or visit the Department's website at (enter web address).
Rights and Obligations
30
§ 1303. Foreclosures; required notices, NY RP ACT & PRO § 1303
© 2017 Thomson Reuters. No claim to original U.S. Government Works. 2
YOU ARE NOT REQUIRED TO LEAVE YOUR HOME AT THIS TIME. You have the right to stay in your homeduring the foreclosure process. You are not required to leave your home unless and until your property is sold at auctionpursuant to a judgment of foreclosure and sale.
Regardless of whether you choose to remain in your home, YOU ARE REQUIRED TO TAKE CARE OF YOURPROPERTY and pay property taxes in accordance with state and local law.
Foreclosure rescue scams
Be careful of people who approach you with offers to “save” your home. There are individuals who watch for notices offoreclosure actions in order to unfairly profit from a homeowner's distress. You should be extremely careful about anysuch promises and any suggestions that you pay them a fee or sign over your deed. State law requires anyone offeringsuch services for profit to enter into a contract which fully describes the services they will perform and fees they willcharge, and which prohibits them from taking any money from you until they have completed all such promised services.
3-a. No later than sixty days after the effective date of this subdivision, the department of financial services shall publisha Consumer Bill Of Rights, in consultation with all stakeholders, which shall detail the rights and responsibilities ofthe plaintiff and defendant in a foreclosure proceeding. Such Bill of Rights shall be updated on an annual basis and asappropriate.
4. The notice to any tenant required by paragraph (b) of subdivision one of this section shall be delivered within tendays of the service of the summons and complaint. Such notice shall be in bold, fourteen-point type, and the paragraphof the notice beginning with the words “ALL RENT-STABILIZED” and ending with the words “FULL HEARINGIN COURT” shall be printed entirely in capital letters and underlined. The foreclosing party shall provide its name,address and telephone number on the notice. The notice shall be printed on colored paper that is other than the colorof the summons and complaint, and the title of the notice shall be in bold, twenty-point type. The notice shall be onits own page. For buildings with fewer than five dwelling units, the notice shall be delivered to the tenant, by certifiedmail, return receipt requested, and by first-class mail to the tenant's address at the property if the identity of the tenantis known to the plaintiff, and by first-class mail delivered to “occupant” if the identity of the tenant is not known to theplaintiff. For buildings with five or more dwelling units, a legible copy of the notice shall be posted on the outside ofeach entrance and exit of the building.
5. The notice required by paragraph (b) of subdivision one of this section shall appear as follows:
Notice to Tenants of Buildings in Foreclosure
New York State Law requires that we provide you this notice about the foreclosure process. Please read it carefully.
We, (name of foreclosing party), are the foreclosing party and are located at (foreclosing party's address). We can bereached at (foreclosing party's telephone number).
The dwelling where your apartment is located is the subject of a foreclosure proceeding. If you have a lease, are not theowner of the residence, and the lease requires payment of rent that at the time it was entered into was not substantiallyless than the fair market rent for the property, you may be entitled to remain in occupancy for the remainder of your leaseterm. If you do not have a lease, you will be entitled to remain in your home until ninety days after any person or entitywho acquires title to the property provides you with a notice as required by section 1305 of the Real Property Actions and
31
§ 1303. Foreclosures; required notices, NY RP ACT & PRO § 1303
© 2017 Thomson Reuters. No claim to original U.S. Government Works. 3
Proceedings Law. The notice shall provide information regarding the name and address of the new owner and your rightsto remain in your home. These rights are in addition to any others you may have if you are a subsidized tenant underfederal, state or local law or if you are a tenant subject to rent control, rent stabilization or a federal statutory scheme.
ALL RENT-STABILIZED TENANTS AND RENT-CONTROLLED TENANTS ARE PROTECTED UNDERTHE RENT REGULATIONS WITH RESPECT TO EVICTION AND LEASE RENEWALS. THESE RIGHTSARE UNAFFECTED BY A BUILDING ENTERING FORECLOSURE STATUS. THE TENANTS IN RENT-STABILIZED AND RENT-CONTROLLED BUILDINGS CONTINUE TO BE AFFORDED THE SAME LEVELOF PROTECTION EVEN THOUGH THE BUILDING IS THE SUBJECT OF FORECLOSURE. EVICTIONSCAN ONLY OCCUR IN NEW YORK STATE PURSUANT TO A COURT ORDER AND AFTER A FULLHEARING IN COURT.
If you need further information, please call the New York State Department of Financial Services' toll-free helpline at(enter number) or visit the Department's website at (enter web address).
6. The department of financial services shall prescribe the telephone number and web address to be included in eithernotice.
7. The department of financial services shall post on its website or otherwise make readily available the name and contactinformation of government agencies or non-profit organizations that may be contacted by mortgagors for informationabout the foreclosure process, including maintaining a toll-free helpline to disseminate the information required by thissection.
Credits(Added L.2006, c. 308, § 4, eff. Feb. 1, 2007. Amended L.2007, c. 154, § 13, eff. July 3, 2007; L.2008, c. 472, § 1, eff. Aug.5, 2008; L.2009, c. 507, § 1, eff. Jan. 14, 2010; L.2010, c. 358, § 1, eff. Sept. 12, 2010; L.2011, c. 62, pt. A, § 104, eff. Oct.3, 2011; L.2012, c. 155, § 83, eff. July 18, 2012; L.2016, c. 73, pt. Q, § 5, eff. Dec. 20, 2016.)
McKinney's R. P. A. P. L. § 1303, NY RP ACT & PRO § 1303Current through L.2017, chapters 1 to 6.
End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works.
32
§ 1304. Required prior notices, NY RP ACT & PRO § 1304
© 2017 Thomson Reuters. No claim to original U.S. Government Works. 1
McKinney's Consolidated Laws of New York AnnotatedReal Property Actions and Proceedings Law (Refs & Annos)
Chapter 81. Of the Consolidated Laws (Refs & Annos)Article 13. Action to Foreclose a Mortgage (Refs & Annos)
McKinney's RPAPL § 1304
§ 1304. Required prior notices
Effective: December 20, 2016Currentness
1. [Eff. until Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a; L.2016, c.73, pt. Q, § 11. See, also, subd. 1 below.]Notwithstanding any other provision of law, with regard to a home loan, at least ninety days before a lender, an assigneeor a mortgage loan servicer commences legal action against the borrower, or borrowers at the property address and anyother address of record, including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give noticeto the borrower in at least fourteen-point type which shall include the following:
“YOU MAY BE AT RISK OF
FORECLOSURE. PLEASE READ THE FOLLOWING NOTICE CAREFULLY”
“As of ___, your home loan is ___ days and ___ dollars in default. Under New York State Law, we are required to sendyou this notice to inform you that you are at risk of losing your home.
Attached to this notice is a list of government approved housing counseling agencies in your area which provide freecounseling. You can also call the NYS Office of the Attorney General's Homeowner Protection Program (HOPP)toll-free consumer hotline to be connected to free housing counseling services in your area at 1-855-HOME-456(1-855-466-3456), or visit their website at http://www.aghomehelp.com/. A statewide listing by county is also available athttp://www.dfs.ny.gov/consumer/mortg nys np counseling agencies.htm. Qualified free help is available; watch out forcompanies or people who charge a fee for these services.
Housing counselors from New York-based agencies listed on the website above are trained to help homeowners who arehaving problems making their mortgage payments and can help you find the best option for your situation. If you wish,you may also contact us directly at _________ and ask to discuss possible options.
While we cannot assure that a mutually agreeable resolution is possible, we encourage you to take immediate steps totry to achieve a resolution. The longer you wait, the fewer options you may have.
If you have not taken any actions to resolve this matter within 90 days from the date this notice was mailed, we maycommence legal action against you (or sooner if you cease to live in the dwelling as your primary residence.)
If you need further information, please call the New York State Department of Financial Services' toll-free helpline at(show number) or visit the Department's website at (show web address).
IMPORTANT: You have the right to remain in your home until you receive a court order telling you to leave theproperty. If a foreclosure action is filed against you in court, you still have the right to remain in the home until a courtorders you to leave. You legally remain the owner of and are responsible for the property until the property is sold by
33
§ 1304. Required prior notices, NY RP ACT & PRO § 1304
© 2017 Thomson Reuters. No claim to original U.S. Government Works. 2
you or by order of the court at the conclusion of any foreclosure proceedings. This notice is not an eviction notice, and
a foreclosure action has not yet been commenced against you. 1
1. [Eff. Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a; L.2016, c.73, pt. Q, § 11. See, also, subd. 1 above.]Notwithstanding any other provision of law, with regard to a high-cost home loan, as such term is defined in sectionsix-l of the banking law, a subprime home loan or a non-traditional home loan, at least ninety days before a lender ora mortgage loan servicer commences legal action against the borrower, including mortgage foreclosure, the lender ormortgage loan servicer shall give notice to the borrower(s) at the property address and any other address of record inat least fourteen-point type which shall include the following:
“YOU MAY BE AT RISK OF
FORECLOSURE. PLEASE READTHE FOLLOWING NOTICE CAREFULLY”
“As of ___, your home loan is ___ days and _______ dollars in default. Under New York State Law, we are requiredto send you this notice to inform you that you are at risk of losing your home. There may be options available to youto keep your home. This may include applying for a loan modification of your mortgage, or reinstating your loan bymaking the payment.
Attached to this notice is a list of government approved housing counseling agencies in your area which provide free orvery low-cost counseling. You can also call the NYS Office of the Attorney General's Homeowner Protection Program(HOPP) toll-free consumer hotline to be connected to free housing counseling services in your area at 1-855-HOME-456(1-855-466-3456), or visit their website at http://www.aghomehelp.com/. A statewide listing by county is also available athttp://www.dfs.ny.gov/consumer/mortg nys np counseling agencies.htm. Qualified free help is available; watch out forcompanies or people who charge a fee for these services.
Housing counselors from New York-based agencies listed on the website above are trained to help homeowners who arehaving problems making their mortgage payments and can help you find the best option for your situation. If you wish,you may also contact us directly at __________ and ask to discuss possible options.
While we cannot assure that a mutually agreeable resolution is possible, we encourage you to take immediate steps totry to achieve a resolution. The longer you wait, the fewer options you may have.
If you have not taken any actions to resolve this matter within 90 days from the date this notice was mailed, we maycommence legal action against you (or sooner if you cease to live in the dwelling as your primary residence.)
If you need further information, please call the New York State Department of Financial Services' toll-free helpline at
(show number) or visit the Department's website at (show web address)”. 2
IMPORTANT: You have the right to remain in your home until you receive a court order telling you to leave theproperty. If a foreclosure action is filed against you in court, you still have the right to remain in the home until a courtorders you to leave. You legally remain the owner of and are responsible for the property until the property is sold byyou or by order of the court at the conclusion of any foreclosure proceedings. This notice is not an eviction notice, and
a foreclosure action has not yet been commenced against you. 3
34
§ 1304. Required prior notices, NY RP ACT & PRO § 1304
© 2017 Thomson Reuters. No claim to original U.S. Government Works. 3
2. [Eff. until Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a; L.2016, c.73, pt. Q, § 11. See, also, subd. 2 below.] Suchnotice shall be sent by such lender, assignee (including purchasing investor) or mortgage loan servicer to the borrower,by registered or certified mail and also by first-class mail to the last known address of the borrower, and to the residencethat is the subject of the mortgage. Such notice shall be sent by the lender, assignee or mortgage loan servicer in a separateenvelope from any other mailing or notice. Notice is considered given as of the date it is mailed. The notice shall containa current list of at least five housing counseling agencies serving the county where the property is located from the mostrecent listing available from department of financial services. The list shall include the counseling agencies' last knownaddresses and telephone numbers. The department of financial services shall make available on its websites a listing, bycounty, of such agencies. The lender, assignee or mortgage loan servicer shall use such lists to meet the requirementsof this section.
2. [Eff. Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a; L.2016, c.73, pt. Q, § 11. See, also, subd. 2 above.] Suchnotice shall be sent by the lender or mortgage loan servicer to the borrower, by registered or certified mail and also byfirst-class mail to the last known address of the borrower, and to the residence which is the subject of the mortgage.Notice is considered given as of the date it is mailed. The notice shall contain a current list of United States departmentof housing and urban development approved housing counseling agencies, or other housing counseling agencies servingthe county where the property is located from the most recent listing available from the department of financial services.The list shall include the counseling agencies' last known addresses and telephone numbers. The department of financialservices shall make available a listing, by county, of such agencies which the lender or mortgage loan servicer may useto meet the requirements of this section.
3. The ninety day period specified in the notice contained in subdivision one of this section shall not apply, or shall ceaseto apply, if the borrower has filed for bankruptcy protection under federal law, or if the borrower no longer occupiesthe residence as the borrower's principal dwelling. Nothing herein shall relieve the lender, assignee or mortgage loanservicer of the obligation to send such notice, which notice shall be a condition precedent to commencing a foreclosureproceeding.
4. The notice and the ninety day period required by subdivision one of this section need only be provided once in a twelvemonth period to the same borrower in connection with the same loan and same delinquency. Should a borrower cure adelinquency but re-default in the same twelve month period, the lender shall provide a new notice pursuant to this section.
5. For any borrower known to have limited English proficiency, the notice required by subdivision one of this sectionshall be in the borrower's native language (or a language in which the borrower is proficient), provided that the languageis one of the six most common non-English languages spoken by individuals with limited English proficiency in the stateof New York, based on United States census data. The department of financial services shall post the notice required bysubdivision one of this section on its website in the six most common non-English languages spoken by individuals withlimited English proficiency in the state of New York, based on the United States census data.
6. [Eff. until Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a; L.2016, c.73, pt. Q, § 11. See, also, subd. 6 below.](a) “Home loan” means a loan, including an open-end credit plan, other than a reverse mortgage transaction, in which:
(i) The borrower is a natural person;
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(ii) The debt is incurred by the borrower primarily for personal, family, or household purposes;
(iii) The loan is secured by a mortgage or deed of trust on real estate improved by a one to four family dwelling, or acondominium unit, in either case, used or occupied, or intended to be used or occupied wholly or partly, as the home orresidence of one or more persons and which is or will be occupied by the borrower as the borrower's principal dwelling;and
(iv) The property is located in this state.
(b) “Lender” means a mortgage banker as defined in paragraph (f) of subdivision one of section five hundred ninetyof the banking law or an exempt organization as defined in paragraph (e) of subdivision one of section five hundredninety of the banking law.
6. [Eff. Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a. See, also, subd. 6 above.] (a) “Annual percentage rate”means the annual percentage rate for the loan calculated according to the provisions of the Federal Truth-in-LendingAct (15 U.S.C. § 1601, et seq.), and the regulations promulgated thereunder by the federal reserve board (as said act andregulations are amended from time to time).
(b) “Home loan” means a home loan, including an open-end credit plan, other than a reverse mortgage transaction,in which:
(i) The principal amount of the loan at origination did not exceed the conforming loan size that was in existence at thetime of origination for a comparable dwelling as established by the federal national mortgage association;
(ii) The borrower is a natural person;
(iii) The debt is incurred by the borrower primarily for personal, family, or household purposes;
(iv) The loan is secured by a mortgage or deed of trust on real estate upon which there is located or there is to be locateda structure or structures intended principally for occupancy of from one to four families which is or will be occupied bythe borrower as the borrower's principal dwelling; and
(v) The property is located in this state.
(c) “Subprime home loan” for the purposes of this section, means a home loan consummated between January first, twothousand three and September first, two thousand eight in which the terms of the loan exceed the threshold as definedin paragraph (d) of this subdivision. A subprime home loan excludes a transaction to finance the initial construction ofa dwelling, a temporary or “bridge” loan with a term of twelve months or less, such as a loan to purchase a new dwellingwhere the borrower plans to sell a current dwelling within twelve months, or a home equity line of credit.
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(d) “Threshold” means, for a first lien mortgage loan, the annual percentage rate of the home loan at consummationof the transaction exceeds three percentage points over the yield on treasury securities having comparable periods ofmaturity to the loan maturity measured as of the fifteenth day of the month in which the loan was consummated; or fora subordinate mortgage lien, the annual percentage rate of the home loan at consummation of the transaction equalsor exceeds five percentage points over the yield on treasury securities having comparable periods of maturity on thefifteenth day of the month in which the loan was consummated; as determined by the following rules: if the terms ofthe home loan offer any initial or introductory period, and the annual percentage rate is less than that which will applyafter the end of such initial or introductory period, then the annual percentage rate that shall be taken into account forpurposes of this section shall be the rate which applies after the initial or introductory period.
(e) “Non-traditional home loan” shall mean a payment option adjustable rate mortgage or an interest only loanconsummated between January first, two thousand three and September first, two thousand eight.
(f) For purposes of determining the threshold, the department of financial services shall publish on its website a listingof constant maturity yields for U.S. Treasury securities for each month between January first, two thousand three andSeptember first, two thousand eight, as published in the Federal Reserve Statistical Release on selected interest rates,commonly referred to as the H.15 release, in the following maturities, to the extent available in such release: six month,one year, two year, three year, five year, seven year, ten year, thirty year.
(g) “Lender” means a mortgage banker as defined in paragraph (f) of subdivision one of section five hundred ninetyof the banking law or an exempt organization as defined in paragraph (e) of subdivision one of section five hundredninety of the banking law.
7. The department of financial services shall prescribe the telephone number and web address to be included in the notice.
Credits(Added L.2008, c. 472, § 2, eff. Sept. 1, 2008. Amended L.2009, c. 507, § 1-a, eff. Jan. 14, 2010; L.2011, c. 62, pt. A, § 104,eff. Oct. 3, 2011; L.2012, c. 155, § 84, eff. July 18, 2012; L.2012, c. 155, § 85; L.2016, c. 73, pt. Q, §§ 6, 7, eff. Dec. 20, 2016.)
Footnotes1 So in original. (closing quotation marks should be bracketed.)
2 So in original. (closing quotation marks should be bracketed.)
3 So in original. (closing quotation marks inadvertently omitted.)
McKinney's R. P. A. P. L. § 1304, NY RP ACT & PRO § 1304Current through L.2017, chapters 1 to 6.
End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works.
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§ 1306. Filing with superintendent, NY RP ACT & PRO § 1306
© 2017 Thomson Reuters. No claim to original U.S. Government Works. 1
McKinney's Consolidated Laws of New York AnnotatedReal Property Actions and Proceedings Law (Refs & Annos)
Chapter 81. Of the Consolidated Laws (Refs & Annos)Article 13. Action to Foreclose a Mortgage (Refs & Annos)
McKinney's RPAPL § 1306
§ 1306. Filing with superintendent
Effective: October 3, 2011Currentness
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 ofthis article or subsection (f) of section 9-611 of the uniform commercial code the information required by subdivisiontwo of this section. Notwithstanding any other provision of the laws of this state, this filing shall be made electronicallyas provided for in subdivision three of this section. Any complaint served in a proceeding initiated pursuant to this articleshall contain, as a condition precedent to such proceeding, an affirmative allegation that at the time the proceeding iscommenced, 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 includeat a minimum, the name, address, last known telephone number of the borrower, and the amount claimed as due andowing on the mortgage, and such other information as will enable the superintendent to ascertain the type of loan atissue. The superintendent may subsequently request such readily available information as may be reasonably necessaryto facilitate a review of whether the borrower might benefit from counseling or other foreclosure prevention services.
3. Within one hundred eighty days of the effective date of this section, or such later time as the superintendent maydetermine, the superintendent shall develop with the assistance of the commissioner of the division of housing andcommunity renewal, an electronic database that shall be capable of receiving all filings required by this section.
4. The information provided to the superintendent pursuant to this section shall not be subject to article six of thepublic officers law or paragraphs (a), (c) and (d) of subdivision one or subdivision six of section ninety-four of thepublic officers law. All such information shall be used by the superintendent exclusively for the purposes of monitoringon a statewide basis the extent of foreclosure filings within this state, to perform an analysis of loan types which werethe subject of a pre-foreclosure notice and directing as appropriate available public and private foreclosure preventionand counseling services to borrowers at risk of foreclosure. The superintendent may share information contained in thedatabase with housing counseling agencies designated by the division of housing and community renewal as well as withother state agencies with jurisdiction over housing, for the purpose of coordinating or securing help for borrowers atrisk of foreclosure.
5. The superintendent is hereby authorized to promulgate such rules and regulations as shall be necessary to implementthe purposes of this section.
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Credits(Added L.2009, c. 507, § 5, eff. Feb. 13, 2010. Amended L.2011, c. 62, pt. A, § 104, eff. Oct. 3, 2011; L.2011, c. 182, §9, eff. July 20, 2011.)
McKinney's R. P. A. P. L. § 1306, NY RP ACT & PRO § 1306Current through L.2017, chapters 1 to 6.
End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works.
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Rule 4518. Business records, NY CPLR Rule 4518
© 2017 Thomson Reuters. No claim to original U.S. Government Works. 1
McKinney's Consolidated Laws of New York AnnotatedCivil Practice Law and Rules (Refs & Annos)
Chapter Eight. Of the Consolidated LawsArticle 45. Evidence (Refs & Annos)
McKinney's CPLR Rule 4518
Rule 4518. Business records
Effective: August 15, 2007Currentness
(a) Generally. Any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandumor record of any act, transaction, occurrence or event, shall be admissible in evidence in proof of that act, transaction,occurrence or event, if the judge finds that it was made in the regular course of any business and that it was the regularcourse of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable timethereafter. An electronic record, as defined in section three hundred two of the state technology law, used or stored assuch a memorandum or record, shall be admissible in a tangible exhibit that is a true and accurate representation of suchelectronic record. The court may consider the method or manner by which the electronic record was stored, maintainedor retrieved in determining whether the exhibit is a true and accurate representation of such electronic record. All othercircumstances of the making of the memorandum or record, including lack of personal knowledge by the maker, may beproved to affect its weight, but they shall not affect its admissibility. The term business includes a business, profession,occupation and calling of every kind.
(b) Hospital bills. A hospital bill is admissible in evidence under this rule and is prima facie evidence of the facts contained,provided it bears a certification by the head of the hospital or by a responsible employee in the controller's or accountingoffice that the bill is correct, that each of the items was necessarily supplied and that the amount charged is reasonable.This subdivision shall not apply to any proceeding in a surrogate's court nor in any action instituted by or on behalf ofa hospital to recover payment for accommodations or supplies furnished or for services rendered by or in such hospital,except that in a proceeding pursuant to section one hundred eighty-nine of the lien law to determine the validity andextent of the lien of a hospital, such certified hospital bills are prima facie evidence of the fact of services and of thereasonableness of any charges which do not exceed the comparable charges made by the hospital in the care of workmen'scompensation patients.
(c) Other records. All records, writings and other things referred to in sections 2306 and 2307 are admissible in evidenceunder this rule and are prima facie evidence of the facts contained, provided they bear a certification or authentication bythe head of the hospital, laboratory, department or bureau of a municipal corporation or of the state, or by an employeedelegated for that purpose or by a qualified physician. Where a hospital record is in the custody of a warehouse, or“warehouseman” as that term is defined by paragraph (h) of subdivision one of section 7-102 of the uniform commercialcode, pursuant to a plan approved in writing by the state commissioner of health, admissibility under this subdivisionmay be established by a certification made by the manager of the warehouse that sets forth (i) the authority by whichthe record is held, including but not limited to a court order, order of the commissioner, or order or resolution of thegoverning body or official of the hospital, and (ii) that the record has been in the exclusive custody of such warehouseor warehousemen since its receipt from the hospital or, if another has had access to it, the name and address of suchperson and the date on which and the circumstances under which such access was had. Any warehouseman providinga certification as required by this subdivision shall have no liability for acts or omissions relating thereto, except for
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intentional misconduct, and the warehouseman is authorized to assess and collect a reasonable charge for providing thecertification described by this subdivision.
(d) Any records or reports relating to the administration and analysis of a genetic marker or DNA test, including recordsor reports of the costs of such tests, administered pursuant to sections four hundred eighteen and five hundred thirty-two of the family court act or section one hundred eleven-k of the social services law are admissible in evidence underthis rule and are prima facie evidence of the facts contained therein provided they bear a certification or authenticationby the head of the hospital, laboratory, department or bureau of a municipal corporation or the state or by an employeedelegated for that purpose, or by a qualified physician. If such record or report relating to the administration and analysisof a genetic marker test or DNA test or tests administered pursuant to sections four hundred eighteen and five hundredthirty-two of the family court act or section one hundred eleven-k of the social services law indicates at least a ninety-five percent probability of paternity, the admission of such record or report shall create a rebuttable presumption ofpaternity, and shall, if unrebutted, establish the paternity of and liability for the support of a child pursuant to articlesfour and five of the family court act.
(e) Notwithstanding any other provision of law, a record or report relating to the administration and analysis of a geneticmarker test or DNA test certified in accordance with subdivision (d) of this rule and administered pursuant to sectionsfour hundred eighteen and five hundred thirty-two of the family court act or section one hundred eleven-k of the socialservices law is admissible in evidence under this rule without the need for foundation testimony or further proof ofauthenticity or accuracy unless objections to the record or report are made in writing no later than twenty days beforea hearing at which the record or report may be introduced into evidence or thirty days after receipt of the test results,whichever is earlier.
(f) Notwithstanding any other provision of law, records or reports of support payments and disbursements maintainedpursuant to title six-A of article three of the social services law by the office of temporary and disability assistance orthe fiscal agent under contract to the office for the provision of centralized collection and disbursement functions areadmissible in evidence under this rule, provided that they bear a certification by an official of a social services districtattesting to the accuracy of the content of the record or report of support payments and that in attesting to the accuracyof the record or report such official has received confirmation from the office of temporary and disability assistanceor the fiscal agent under contract to the office for the provision of centralized collection and disbursement functionspursuant to section one hundred eleven-h of the social services law that the record or report of support payments reflectsthe processing of all support payments in the possession of the office or the fiscal agent as of a specified date, and thatthe document is a record or report of support payments maintained pursuant to title six-A of article three of the socialservices law. If so certified, such record or report shall be admitted into evidence under this rule without the need foradditional foundation testimony. Such records shall be the basis for a permissive inference of the facts contained thereinunless the trier of fact finds good cause not to draw such inference.
(g) Pregnancy and childbirth costs. Any hospital bills or records relating to the costs of pregnancy or birth of a childfor whom proceedings to establish paternity, pursuant to sections four hundred eighteen and five hundred thirty-two ofthe family court act or section one hundred eleven-k of the social services law have been or are being undertaken, areadmissible in evidence under this rule and are prima facie evidence of the facts contained therein, provided they bear acertification or authentication by the head of the hospital, laboratory, department or bureau of a municipal corporationor the state or by an employee designated for that purpose, or by a qualified physician.
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Credits(L.1962, c. 308. Amended Jud.Conf.1970 Proposal No. 2; L.1982, c. 695, § 3; L.1983, c. 311, § 1; L.1984, c. 792, § 3;L.1992, c. 381, § 1; L.1994, c. 170, § 350; L.1995, c. 81, § 236; L.1997, c. 398, §§ 87 to 89, eff. Nov. 11, 1997; L.2002, c.136, § 1, eff. July 23, 2002; L.2005, c. 741, § 1, eff. Oct. 18, 2005; L.2007, c. 601, § 10, eff. Aug. 15, 2007.)
McKinney's CPLR Rule 4518, NY CPLR Rule 4518Current through L.2017, chapters 1 to 6.
End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works.
42
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS: FORECLOSURE RESOLUTION PART 1 ----------------------------------------------------------------------------X BANK OF AMERICA, NATIONAL ASSOCIATION,
Plaintiff,
-against-
BRENDA V. THOMPSON; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; LENOX HILL MEDICAL ANESTHESIOLOGY; MUNICIPAL CREDIT UNION; CONSOLIDATED DEVELOPMENT OF CANARSIE; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; EMPIRE PORTFOLIOS INC, “JOHN DOE #1” through “JOHN DOE #12,” the last twelve names being fictitious and unknown to the 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.
----------------------------------------------------------------------------X
Index No. 505850/2014 Hon. Noach Dear
DEFENDANT’S MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AND IN SUPPORT OF HER CROSS-
MOTION FOR SUMMARY JUDGMENT DISMISSING THE COMPLAINT
BROOKLYN LEGAL SERVICES
Catherine P. Isobe, Of Counsel 1360 Fulton Street, Suite 301 Brooklyn, New York 11216
(718) 233-6434 (voice) (718) 398-6414 (fax)
Attorneys for Defendant Brenda V. Thompson
43
TABLE OF CONTENTS PRELIMINARY STATEMENT ................................................................................................................... 1 STATEMENT OF FACTS ............................................................................................................................ 1 ARGUMENT ................................................................................................................................................ 5 I. Should the Court Decline to Dismiss this Action, Plaintiff’s Motion for Summary
Judgment Must Be Denied ............................................................................................................... 5 A. Summary Judgment Standard .................................................................................................. 5
B. Summary Judgment Must Be Denied Because Plaintiff Has Failed To Establish Several Elements of Its Case ................................................................................... 6
1. Plaintiff’s Affidavit of Merit Is By an Individual Without Personal
Knowledge of the Facts and Without Competency to Testify Based on a Review of Business Records ......................................................................................... 7
2. Plaintiff Failed to Establish Its Standing to Foreclose ................................................... 11
3. Plaintiff Failed to Establish Compliance With RPAPL §1304 ...................................... 13 a. RPAPL §1304 Applies to this Action Because the Subject Loan Is a
Home Loan as Defined by RPAPL §1304 ............................................................... 14 b. Plaintiff’s Own Submissions Demonstrate Its Failure to Comply
with RPAPL §1304. ................................................................................................. 15
4. Plaintiff Failed to Establish Compliance With RPAPL §1306 ...................................... 16
5. Plaintiff Failed to Establish Compliance With RPAPL §1303 ...................................... 18
C. The Court Should Not Strike Defendant’s Answer Or Dismiss Her Counterclaim for Attorney’s Fees ........................................................................................ 19
II. The Court Should Grant Summary Judgment to Defendant and Dismiss this
Action ............................................................................................................................................. 22
A. Defendant Has Established that RPAPL §1304 Applies and that Plaintiff Did Not Strictly Comply with RPAPL §1304 ...................................................................... 22
B. Defendant Has Established that RPAPL §1306 Applies and that Plaintiff
Did Not Strictly Comply with RPAPL §1306 ...................................................................... 24 III. The Court Should Order a Hearing to Determine Interest Tolling Under CPLR
3012-b and Attorney’s Fees Under RPL §282 ............................................................................... 24 CONCLUSION ........................................................................................................................................... 26
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2
PRELIMINARY STATEMENT Defendant Brenda V. Thompson (“Defendant” or “Ms. Thompson”) respectfully
submits this memorandum in opposition to Plaintiff’s motion for summary judgment and
other relief and in support of her cross-motion for summary judgment dismissing this
action and. Plaintiff’s motion for summary judgment must be denied because Plaintiff
failed to establish compliance with New York Real Property Actions and Proceedings
Law (“RPAPL”) Sections1303, 1304, 1306 and CPLR §3012-b, and Plaintiff failed to
establish standing to foreclose. Ms. Thompson also raises numerous triable issues of fact
sufficient to preclude both summary judgment and the dismissal of her defenses and
counterclaim. Moreover, the Court should grant Ms. Thompson’s cross-motion for
summary judgment and dismiss this action because Ms. Thompson has established that
Plaintiff did not in fact comply with RPAPL §§ 1304 or 1306, both which are conditions
precedent to the maintenance of this action. In addition, the Court should award Ms.
Thompson attorney’s fees on this motion pursuant to RPL §282 and the Court should
order a hearing to determine whether and in what amount to toll interest due to Plaintiff’s
intentional violation of CPLR §3012-b and to determine the amount of attorney’s fees to
award Ms. Thompson’s counsel for the successful defense of this action.
STATEMENT OF FACTS
Background
Ms. Thompson lives with her husband Martin Duchene, her two adult daughters
and two grandchildren in her two-family home at 722A Logan Street, Brooklyn, NY
11208 (“the Subject Property”) (Affidavit of Brenda V. Thompson, dated June 28, 2016
(“Thompson Aff.”) ¶¶1-7, Exhs. 1-3). Ms. Thompson purchased the Subject Property in
45
3
1999 and has resided there ever since (Thompson Aff. ¶3). Ms. Thompson owns a
second, much smaller house at 150 Amboy Street (“Amboy Street Property”) in the
Brownsville section of Brooklyn in which she resided prior to purchasing the Subject
Property (Thompson Aff. ¶4). The Amboy Street Property is currently unoccupied due to
repair issues (Thompson Aff. ¶6).
In 2006, Ms. Thompson refinanced the Subject Property. She received a
misleading and predatory payment-option, negatively amortizing adjustable rate
mortgage in the amount of $360,000 (“the Mortgage”) issued by Countrywide Bank, A
Division of Treasury Bank, N.A. (“Countrywide”) with Mortgage Electronic Registration
Systems, Inc. (“MERS”) designated as the mortgagee of record. The promissory note
(“the Note”) secured by the Mortgage (together with the Note, the “Subject Loan”)
recites an initial annual interest rate of one percent, but that is an illusory rate because it
was only in effect for the first six weeks of the 30 year term of the Subject Loan
(Thompson Aff. Exh. 4).
Ms. Thompson lost her job in 2008 and she eventually fell behind on the
Mortgage (Thompson Aff. ¶¶15-16). On April 20, 2010, BAC Home Loans Servicing,
LP FKA Countrywide Home Loans Servicing, LP (“BAC”) filed an action, as purported
assignee of Countrywide, to foreclose on the Mortgage under index number 9759/2010,
(“2010 Foreclosure Action”) (Affirmation of Catherine P. Isobe, dated June 30, 2016
(“Isobe Aff.) Exh. I). BAC served papers in the 2010 Foreclosure Action to Ms.
Thompson at the Subject Property as her “Actual Place of Residence Within the State and
filed a Request for Judicial Intervention (RJI) in which it acknowledged that the action
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4
involved a “subprime/high-cost/non-traditional” on an “owner-occupied principal
dwelling” (Isobe Aff. Exhs. J, K).
Ms. Thompson appeared at several mandatory foreclosure settlement conferences
in the 2010 Foreclosure Action, but no settlement was reached (Thompson Aff. ¶18;
Isobe Aff. Exh. L). According to court records BAC filed but later withdrew an ex parte
application for an order of reference in 2010 and then abandoned the 2010 Foreclosure
Action for several years until it obtained an order of discontinuance on March 21, 2014
(Isobe Aff. Exhs. L, M).
Procedural History of This Action
On June 25, 2014, Plaintiff BOA, as the purported holder of the Note and owner
of the Mortgage, commenced this residential foreclosure action against Ms. Thompson
(Isobe Aff. Exh. A ¶6). Ms. Thompson first became aware of the action when a process
server delivered papers to her daughter Niki Thompson at the Subject Property and she
received several copies of the same papers addressed to individuals unknown to Ms.
Thompson (Thompson Aff. ¶¶21-23).
Brooklyn Legal Services1 (“BLS”) assisted Ms. Thompson in preparing her pro se
Verified Answer which BLS served on Plaintiff’s counsel on August 14, 2014 and filed
with the Kings County Clerk on August 18, 2014 (Isobe Aff. Exh. C). In her Verified
Answer, Ms. Thompson asserted, among other defenses, BOA’s lack of standing to
foreclose and its failure to comply with statutory conditions precedent to this action
(Isobe Aff. Exh. D). Plaintiff filed its Verified Reply to Counterclaims on August 25,
2014 (but did not include a copy of this pleading with its motion for summary judgment)
1 Previously known as Bedford-Stuyvesant Community Legal Services.
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5
(Isobe Aff. Exh. E). In violation Uniform Rule 202.12-a (b), Plaintiff did not file its RJI
until eighteen months after filing its proof of service of the Summons and Complaint
(Isobe Aff. Exh. E). On March 7, 2016, Plaintiff filed a non-compliant RJI without the
residential foreclosure addendum, misstating Ms. Thompson’s address despite being
informed of her correct address at the Subject Property upon receipt of her Verified
Answer (Isobe Aff. Exh. E).
Plaintiff now moves for summary judgment, which Ms. Thompson opposes for
multiple reasons. Ms. Thompson also cross-moves for summary judgment dismissing
this action because Plaintiff failed to comply with RPAPL §§1304 or 1306.
ARGUMENT
I. Should the Court Decline to Dismiss this Action, Plaintiff’s Motion for Summary Judgment Must Be Denied
A. Summary Judgment Standard
Summary judgment is appropriate only where a thorough examination of the
merits clearly demonstrates the absence of any triable issues of fact. E.g., Marine
Midland Bank, N.A. v. Dino & Artie’s Automatic Transmission Co., 168 A.D.2d 610, 610
(2d Dep’t 1990) (internal citations omitted). The party seeking summary judgment “must
make a prima facie showing of entitlement to judgment as a matter of law, tendering
sufficient evidence to eliminate any material issues of fact from the case.” Midfirst Bank
v. Agho, 121 A.D.3d 343, 347 (2d Dep’t 2014), citing Winegrad v. N.Y. Univ. Med.
Center, 64 N.Y.2d 851, 853 (1985). Without such a showing, summary judgment must
be denied. Id. at 348. Moreover, the summary judgment proponent must make this
showing by “tender of evidentiary proof in admissible form.” Friends of Animals v.
Associated Fur Mfrs., 46 N.Y.2d 1065, 1067 (1979) (emphasis supplied).
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6
Assuming the summary judgment proponent has met its prima facie burden, the
opponent need only “show facts sufficient to require a trial of any issue of fact” to defeat
the motion. Friends of Animals, 46 N.Y.2d at 1067-1068. Summary judgment “should
not be granted where the facts are in dispute, where conflicting inferences may be drawn
from the evidence, or where there are issues of credibility” Baker v. D.J. Stapleton, Inc.,
43 A.D.3d 839, 839 (2d Dep’t 2007) (citation omitted).
B. Summary Judgment Must Be Denied Because Plaintiff Has Failed to Establish Several Elements of Its Case
Plaintiff has not adduced sufficient probative evidence to establish several
elements of its case, and has instead submitted evidence in support of its motion which
demonstrates the existence of disputed issues of material fact. In particular, Plaintiff has
not established that it owned or held the Note and Mortgage at commencement of this
action or that it complied with conditions precedent to foreclosure as required by RPAPL
§§1304, 1306 and 1303. In addition, Plaintiff has not complied with CPLR §3012-b.
Accordingly, summary judgment must be denied.
Each of plaintiff’s three failures to comply with a statutory condition precedent is
an independent basis for plaintiff’s motion for summary judgment to be denied and for
this action to be dismissed. Furthermore, Plaintiff’s failure to establish that it owned or
held the Note at commencement of this action provides a fourth basis to deny summary
judgment. Accordingly, for each of these four independent reasons, plaintiff’s motion for
summary judgment must be denied.
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7
1. Plaintiff’s Affidavit of Merit Is by an Individual Without Personal Knowledge of the Facts and Without Competency to Testify Based on a Review of Business Records
A motion for summary judgment “shall be supported by affidavit.” CPLR
§3212(b). The affiant must have personal knowledge of the facts contained in the
affidavit, must recite all material facts and must show that there is no meritorious defense
to the cause of action for which judgment is sought. Id. On summary judgment, “[a]
conclusory affidavit or an affidavit made by one without personal knowledge of the facts
does not establish the proponent’s prima facie burden.” JMD Holding Corp. v. Congress
Fin. Corp., 4 N.Y.3d 373 at 384-385 (2005). See also Almonte v. 638 West 160 LLC, 29
N.Y.S.3d 178 (1st Dep’t 2016) (LLC Managing Member’s affidavit, which was not based
on personal knowledge, could not be considered in support of LLC’s summary judgment
motion); Currie v. Wilhouski, 93 A.D.3d 816 (2d Dep’t 2012) (affidavit of insurer’s
branch claims manager not based on personal knowledge was of no probative or
evidentiary significance on summary judgment).
In support of its motion, Plaintiff submits the affidavit of Jennifer Scott, dated
February 23, 2016 (“Scott Affidavit” or “Scott Aff.”),2 an “Authorized Signatory”
employed at Caliber Home Loans, Inc. (“Caliber”). Caliber is the servicer for U.S. Bank
Trust, N.A. as Trustee for LSF9 Master Participation Trust (“U.S. Bank Trust”) who is
the purported “assignee” of Plaintiff. Ms. Scott’s name and title are literally rubber
stamped onto the first and last pages of this pre-fabricated affidavit (Isobe Aff. Exh F).
Ms. Scott bases her authority to testify on her position as an employee of the loan
servicer Caliber (Isobe Aff. Exh. F, ¶1). Following the Scott Affidavit is a Limited 2 For ease of reference, the Scott Affidavit and the floating document which follows the Affidavit but which is not described or authenticated in the Scott Affidavit are annexed to these papers as Exhibit F to the Isobe Affirmation.
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Power of Attorney authorizing “any officer appointed by the Board of Directors of
[Caliber]” to act as attorney in fact for U.S. Bank Trust with regard to certain trusts
(Isobe Aff. Exh. F). However, Ms. Scott’s affidavit does not reference the Limited
Power of Attorney, and Ms. Scott does not allege that she is an officer appointed by
Caliber’s Board of Directors to act as attorney in fact for U.S. Bank Trust. Certainly, the
term “Authorized Signatory” does not establish this as a matter of law. Furthermore,
neither the Power of Attorney nor Ms. Scott’s affidavit establish that the Subject
Mortgage is included in one of the “certain trusts” covered by the Power of Attorney.
Annexing the Limited Power of Attorney and other unidentified documents included with
Plaintiff’s motion (see Isobe Aff. Exh. G at Certificate of Merger) without any
“identification, explanation or proper evidentiary foundation, is inadequate.” Groupex
Financial Corporation v. Giromas Trading Corp., 22 Misc.3d 1124(A), 2009 WL
399987 (Sup. Ct Kings Co) at *4, citing Higen Assoc. v. Serge El. Co., 190 A.D.2d 712,
713 (2d Dep’t 1993); Citimortgage, Inc. v. Burshtein, 45 Misc.3d 1226(A), 2014
WL6980568 (Sup. Ct Kings Co). Accordingly, the Court should not consider this
document (or other unexplained, unauthenticated documents) on Plaintiff’s motion, and
Plaintiff’s failure to establish Ms. Scott’s relevant authority precludes the admissibility of
her Affidavit.
Even if Ms. Scott had established that she was duly appointed to act as U.S. Bank
Trust’s attorney in fact, under New York law, an attorney in fact may not execute a
principal’s affidavit based on the principal’s knowledge. Perosi v. LiGreci, 98 A.D.3d
230 (2d Dep’t 2012). As an agent, an attorney in fact has no authority to swear to the
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truth of allegations from the principal’s knowledge but which are “not personally known
to the agent” Cymbol v. Cymbol, 122 A.D.2d 771, 772 (2d Dep’t 1986).
Here, Ms. Scott avers no personal knowledge of or involvement with the
transactions and occurrences about which she testifies (Scott Aff. ¶¶1-17). Ms. Scott
states:
I have reviewed the statements set forth herein as against the records kept by CALIBER (sic) I have duly executed this affidavit based upon that review and upon my knowledge of the stated facts and circumstances and books and records maintained by CALIBER.
(Scott Aff. ¶2). This testimony clearly establishes that Ms. Scott’s familiarity with the
facts extends no farther than Caliber’s processes and records. Based on Plaintiff’s own
submissions, Caliber did not service the Mortgage until some point after May 8, 2016, the
date Ocwen Loan Servicing, LLC purportedly sent the RPAPL §1304 Notice to Ms.
Thompson (Isobe Aff. Exh. G). Ms. Scott, whose testimony is based entirely on a review
of Caliber’s records, cannot testify about any transactions or events occurring before the
date on which Caliber began servicing the Mortgage, a date which she has failed to
specify (Scott Aff. ¶¶1-3). Cf. Wells Fargo Bank, N.A. v. Jones, 2016 NY Slip Op 03838,
__A.D.3d __ (1st Dep’t May 17, 2016) (motion to substitute affidavit of merit and
amount due nunc pro tunc properly denied because affiant could not attest to facts in
question because they pre-dated assignment to plaintiff).
Further, Ms. Scott’s “review” of Caliber’s records appears to have been cursory at
best, and lacks the requisite thoroughness and care to establish summary judgment as a
matter of law. Ms. Scott alleges an inaccurate and contradictory chain of title for the
Subject Loan. First, Ms. Scott claims that the Note and Mortgage were assigned to
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MERS by an assignment of mortgage dated October 7, 2005 (Isobe Aff. Exh. F, ¶7).
This claim is false, because the assignment Ms. Scott refers to in paragraph 7 does not
pertain to the Mortgage but to the second lien on the Subject Property, a mortgage issued
by America’s Wholesale Lender in the amount of $45,000 (Isobe Aff. Exh. G, pp.2-3).
Second, Ms. Scott alleges that the Note and Mortgage were assigned to BAC as
memorialized by an assignment dated February 16, 2010 (Isobe Aff. Exh. F, ¶8). Ms.
Scott then skips forward to December 16, 2015—a date after commencement of this
action—when the Note and Mortgage were purportedly (and conveniently) assigned by
Ms. Scott’s employer Caliber, acting as attorney in fact for Bank of America, N.A., to
U.S. Bank Trust, for which Caliber services the loan (Isobe Aff. Exh. F, ¶9; Exh. G).
The reader of the Scott Affidavit is left to “connect the dots” as to how the
Subject Loan went from BAC to Bank of America, N.A. Annexed to the Scott Affidavit
as part of Exhibit C is a somewhat illegible document which purports to be a Certificate
of Merger of BAC into BOA. However, this document is not authenticated by anyone
with the personal knowledge to authenticate it, and the document is not even mentioned
or explained by Ms. Scott. Like the Limited Power of Attorney, this unidentified and
authenticated document cannot be considered in support of Plaintiff’s motion. Higen
Assoc. v. Serge El. Co., 190 A.D.2d 712, 713 (2d Dep’t 1993).
The Scott Affidavit fails to meet the actual knowledge standard of CPLR
§3212(b). See, e.g., Currie v. Wilhouski, 93 A.D.3d 816, 817 (2d Dep’t 2012). Even
applying the lesser evidentiary standard under the business records rule and even
accepting for the sake of argument the conflation of Plaintiff’s and Caliber’s business
records, the Scott Affidavit still falls short. Ms. Scott generally alleges that Caliber’s
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records were made at or near the time of the occurrence of the matters recorded as a
regular practice of Caliber (Isobe Aff. Exh. F ¶2). However, Ms. Scott fails to provide
details concerning what records she reviewed to establish each specific allegation in her
affidavit and some of her allegations are incorrect (Isobe Aff. Exh. F ¶¶7-11). In
addition, the Scott Affidavit cites to the Complaint, verified only by Plaintiff’s counsel,
as proof of her allegations concerning the date of default and the acceleration of the
Mortgage (Isobe Aff. Exh. F ¶¶12-13). Therefore, the Scott Affidavit is not admissible
under the business records exception to the hearsay rule. Vermont Commissioner of
Banking and Insurance v. Welbilt Corp., 133 A.D.2d 396, 397 (2d Dep’t 1987)
(wholesale admission of files’ contents not permitted where proponent had not laid a
foundation for the admission of each individual document under CPLR § 4518).
2. Plaintiff Failed to Establish Its Standing to Foreclose
“Standing to sue requires an interest in the claim at issue in the lawsuit that the
law will recognize as a sufficient predicate for determining the issue at the litigant’s
request. Without. . . standing, a party lacks authority to sue.” Caprer v. Nussbaum, 36
A.D.3d 176, 182 (2d Dep’t 2006) (internal citations and punctuation omitted). Where, as
here, the issue of standing is raised by a defendant,3 “plaintiff must prove its standing if it
is to be entitled to relief.” U.S. Bank., N.A. v. Paulsen, 125 A.D.3d 909, 910 (2d Dep’t
2015). To establish standing to foreclose, Plaintiff must establish, as a matter of law, that
it was either the holder or assignee of the Note at the commencement of this action.
Plaintiff has utterly failed to establish such status.
3 See Ms. Thompson’s Verified Answer (Isobe Aff. Exh. D, p.1).
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The New York Uniform Commercial Code (UCC) governs the determination of
who is a “holder” of an instrument such as the note at issue herein. Slutsky v. Blooming
Grove Inn, 147 A.D.2d 208, 211-212 (2d Dep’t 1989). Indeed, Plaintiff’s counsel
acknowledges the applicability of the UCC in arguing for Plaintiff’s purported standing
to enforce the Note (Attorney Affirmation in Support by Samantha Sandler, Esq. dated
March 7, 2016 (“Sandler Aff.”), ¶37). An instrument “payable to order,” such as the
Note in this case which at origination was payable to Countrywide, is negotiated “by
delivery with any necessary indorsement.” UCC §3-202(1).
Plaintiff’s Complaint is verified by counsel and thus inadmissible as evidence on
its motion for summary judgment. Plaintiff’s only sworn allegations regarding its
purported acquisition of the Note (and indeed of its standing to foreclose) are contained
in the Scott Affidavit:
BANK OF AMERICA, NATIONAL ASSOCIATION, directly or through its agent/custodian, had possession of the original Note and was the owner of the Note and Assignee of the Mortgage prior to commencement of this action. Thereafter the Note was transferred to U.S. BANK TRUST, N.A. AS TRUSTEE FOR LSF9 MASTER PARTICIPATION TRUST.
(Isobe Aff. Exh. F, ¶10) (italics supplied). Ms. Scott alleges no familiarity with the
records of BOA or its unspecified “agent/custodian,” she gives no date when BOA or its
agent/custodian received the original Note, and she does not even specify which entity
actually had possession of the Note prior to commencement of this action (Isobe Aff.
Exh. F ¶¶1-3, 9-11).
These allegations lack the factual specificity required on summary judgment to
establish Plaintiff’s possession of the properly endorsed, original Note at commencement
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of this action. U.S. Bank, N.A. v. Weinman, 123 A.D.3d 1108, 1109 (2d Dep’t 2014);
Homecomings Fin., LLC v. Guldi, 108 A.D.3d 506, 508-509 (2d Dep’t 2013); Deutsche
Bank Nat’l Trust Co. v. Haller, 100 A.D.3d 680, 682 (2d Dep’t 2012) citing HSBC Bank
USA v. Hernandez, 92 A.D.3d 843, 844 (2d Dep’t 2012) (“The affidavit from the
plaintiff's servicing agent did not give any factual details of a physical delivery of the
note and, thus, failed to establish that the plaintiff had physical possession of the note
prior to commencing this action”)
Plaintiff’s lack of evidence that it possessed the Note containing the endorsement
in blank, at a date certain prior to commencement of this action, with details of the
physical delivery, prevents Plaintiff from establishing its status as holder of the Note.
Therefore Plaintiff has not established its standing to enforce the Subject Loan. U.S.
Bank, Nat. Ass’n. v. Faruque, 120 A.D.3d 575, 577 (2d Dep’t 2014) (affidavit without
factual details of physical delivery of note did not establish possession); see also HSBC
Bank, USA v. Hernandez, 92 A.D.3d 843, 844 (2d Dep’t 2012) (collecting cases).
3. Plaintiff Failed to Establish Compliance with RPAPL §1304 The law is clear that where a foreclosure Plaintiff fails to show it met conditions
precedent to foreclosure, such as compliance with the notice provisions of RPAPL §1304,
summary judgment must be denied. Aurora Loan Services, LLC v. Weisblum, 85 A.D.3d
95 (2d Dep’t 2011). RPAPL §1304 requires a lender to serve a pre-foreclosure notice
upon the borrower of a home loan at least 90 days before commencing an action to
foreclose. The RPAPL §1304 Notice must state the number of days the borrower is in
default on payment and the amount of money needed to cure the default, and provide
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contact information for five housing counseling agencies in the borrower’s area as well as
contact information for the lender or loan servicer.
Plaintiff argues somewhat implausibly that it had no obligation to serve a §1304
Notice because the Subject Loan is not a home loan but that it nevertheless did serve a
§1304 Notice on Ms. Thompson. In fact, the opposite is true on both counts. Ms.
Thompson’s loan is unequivocally a home loan and therefore she was clearly entitled to
receipt of a §1304 Notice (Thompson Aff. ¶¶3-7 and Exhs. 1-3). However, Ms.
Thompson did not receive an RPAPL §1304 Notice at any time prior to the
commencement of this action. Even if the Court credits the RPAPL §1304 Notice that
Plaintiff claims was sent, the Notice is defective on its face for being dated less than
ninety days prior to the commencement of this case.
a. RPAPL§1304 Applies to this Action Because the Subject Loan Is a Home Loan as Defined by RPAPL §1304
As established by Ms. Thompson’s Affidavit and its supporting exhibits, as well
as the exhibits to the Isobe Affirmation, the subject loan is a “home loan” and thus
RPAPL §1304 applies to this action. The borrower Ms. Thompson is a natural person.
The loan was taken primarily for household purposes (refinance of the underlying
mortgage on the Subject Property) (Thompson Aff. ¶¶12). The property to be foreclosed
is a one to four family home occupied by the borrower as her principal residence and the
property is within the state (Thompson Aff. ¶¶3-7 and Exhs. 1-3).
Plaintiff claims but does not substantiate that the subject loan is not a home loan
because Ms. Thompson does not reside in the Subject Property. However, the claim is
made only by Plaintiff’s attorneys and is unsupported by any credible evidence. In fact,
Plaintiff’s own purported evidence contradicts its own claim of Ms. Thompson’s non-
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residence. Specifically, in making its claim that it did serve Ms. Thompson with an
RPAPL §1304 Notice, Plaintiff attaches a notice that is addressed to Ms. Thompson at
the Subject Property. There is no credible explanation for why the RPAPL §1304 Notice
would be served on Ms. Thompson at the Subject Property if Plaintiff (or its
predecessors) truly believed she did not reside there. On the other hand, Ms. Thompson
establishes in her affidavit that she resides in the property, and she supports her
statements with credible evidence. Plaintiff therefore cannot possibly establish that
RPAPL§1304 does not apply in this case.
b. Plaintiff’s Own Submissions Demonstrate its Failure to Comply with RPAPL§1304
Ms. Thompson did not receive Plaintiff’s purported RPAPL §1304 Notice
(Thompson Aff. ¶26; Isobe Aff. Exh. D p. 1). Ms. Scott nevertheless claims in her
affidavit that “Defendant was sent, via certified and first class mail, the requisite 90-Day
Pre-Foreclosure Notice pursuant to RPAPL §1304 …” (Scott Affidavit ¶15). As
described more comprehensively in Section I. B. 1 above, Ms. Scott’s claim is
unsupported and, in fact, unsupportable by her. Her employer, Caliber, took over
servicing of Ms. Thompson’s loan after this notice had allegedly been sent by a different
servicer, and therefore Ms. Scott has no personal knowledge of the mailing of the notice
and no capacity to lay a proper foundation for the admission of testimony based on a
review of business records. Wells Fargo v. Tessler, 50 Misc.3d 1224(A), 2016 WL
818834 at *8 (Sup. Ct Kings Co); Ocwen Loan Servicing, LLC v. Dusenberry, 2016 NY
Slip Op 50252 (U), 2016 WL 1380856 at *3-4 (Sup. Ct Queens Co); Wells Fargo Bank,
N.A. v. Burke, 125 A.D.3d, 765, 767 (2d Dep’t 2015); Bank of New York Mellon v.
Aquino, 131 A.D.3d 1186, 1187-1187 (2d Dep’t 2015); Deutsche Bank Natl. Trust Co. v.
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Spanos, 102 A.D.3d 909, 910-911 (2d Dep’t 2013); See, generally, Aurora Loan
Services, LLC v. Weisblum, 85 A.D.3d 95, 106 (2d Dep’t 2011). Accordingly, Ms.
Thompson’s sworn statements concerning her non-receipt of the RPAPL §1304 Notice
are uncontradicted.
Even assuming that the purported RPAPL §1304 Notice annexed to the Scott
Affidavit was sent, it is defective on its face. The purported notice appears to have been
issued by Ocwen Loan Servicing, LLC (not Caliber), on May 8, 2014 and is addressed to
Ms. Thompson at the Subject Property (Isobe Aff. Exh. H). If Ocwen (or Plainitff)
believed Ms. Thompson resided at the subject property, the proffered notice is facially
defective, since this action was commenced on June 25, 2014, just 48 days after the date
on the notice. RPAPL §1304 (1). In the alternative, if Ocwen did not believe that Ms.
Thompson resided at the Subject Property, the notice is defective because Plaintiff did
not send the notice to whatever other address Plaintiff considered to be Ms. Thompson’s
“last known address.” RPAPL §1304(2), (3). M&T Bank v. Farrell, 2016 NY Slip Op
31010 (U), 2016 WL 3181917 at *6-8 (Sup. Ct Broome Co) (90 day period from sending
of RPAPL §1304 Notice to commencement of foreclosure may be shortened if borrower
no longer occupies premises; RPAPL §1304 Notice must be sent to borrower who no
longer occupies premises at premises and at last known address). Either way, the notice
is defective, and Plaintiff has failed to establish a condition precedent to this action.
4. Plaintiff Failed to Establish Compliance with RPAPL §1306 Plaintiff failed to comply with the pleading and filing requirements which
constitute compliance with RPAPL §1306. Effective February 13, 2010, RPAPL §1306
requires a foreclosing lender to file with the Department of Financial Services certain
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information regarding the borrower and the loan within three business days of mailing a
notice to a borrower under RPAPL §1304 (where such notice is required). RPAPL
§1306(1) provides that any complaint in a proceeding initiated pursuant to Article 13 of
the RPAPL shall contain an affirmative allegation that the plaintiff has complied with
RPAPL §1306 if applicable. Since this case was commenced on June 25, 2014 and
RPAPL §1304 applies, RPAPL §1306 also applies.
Where RPAPL §1306 applies, strict compliance is a condition precedent to
foreclosure. TD Bank, N.A. v Leroy, 121 A.D.3d 1256, 125901260 (3d Dep’t 2014);
JPMorgan Chase Bank, Nat. Ass’n v. Plaskett, 45 Misc.3d 531, 535-536 (Sup. Ct Kings
Co. 2014); Vanderbilt Mtge. & Fin., Inc. v. Davis, 2013 N.Y. Slip Op 32117(U) at *6
(Sup. Ct Suffolk Co). Here, Plaintiff did not plead compliance with RPAPL §1306 in its
Complaint at all, which is in itself fatal to Plaintiff’s motion for summary judgment
(Isobe Aff. Exh. A). U.S. Bank Nat. Ass’n v. Lampley, 46 Misc.3d 630, 634-635 (Sup. Ct
Kings Co 2014) (compliance with RPAPL §1306 must be sworn to with specificity). The
Scott Affidavit likewise failed to allege compliance with RPAPL §1306 (Isobe Aff. Exh.
F). An unidentified, unauthenticated Proof of Filing Statement is appended to the end of
Exhibit F to the Scott Affidavit but is inadequate to establish any facts on summary
judgment just as are the other miscellaneous unauthenticated documents that Plaintiff has
submitted with its motion. Groupex Financial Corporation v. Giromas Trading Corp., 22
Misc.3d 1124(A), 2009 WL 399987 (Sup Ct Kings Co) at *4, citing Higen Assoc. v.
Serge El. Co., 190 A.D.2d 712, 713 (2d Dep’t 1993); Citimortgage, Inc. v. Burshtein, 45
Misc.3d 1226(A), 2014 WL6980568 (Sup Ct Kings Co).
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5. Plaintiff Failed to Establish Compliance with RPAPL §1303
Plaintiff failed to establish that a statutorily compliant version of the required
Home Equity Theft Protection Act (“HETPA”) Notice, known as the RPAPL §1303
Notice, was served on Ms. Thompson. HETPA requires the Plaintiff in a residential
mortgage foreclosure to deliver to the homeowner a statutory-specific notice with the
summons and complaint. RPAPL §1303 (1). In First Nat. Bank of Chicago v. Silver, the
Second Department recited the requirements of RPAPL §1303(2):
The notice required by this section shall be delivered with the summons and complaint to commence a foreclosure action. The notice required by this section shall be in bold, fourteen-point type and shall be printed on colored paper that is other than the color of the summons and complaint, and the title of the notice shall be in bold, twenty-point type. The notice shall be on its own page.
73 A.D.3d 162, 165-166 (emphasis supplied). The Court also held that the foreclosing
bank has the burden of proving compliance with RPAPL § 1303. Id.
Here, Ms. Thompson was never served with her copy of the RPAPL §1303 Notice
(Thompson Aff. ¶23). Plaintiff’s specious affidavit of service of the RPAPL §1303
Notice upon Ms. Thompson was made by a thoroughly discredited process server (Alan
S. Feldman)4 and fails to attach a copy of the purported notice (Isobe Aff. Exh. B). The
Summons and Complaint did not attach a copy of the purported RPAPL §1303 Notice,
and Plaintiff’s motion for summary judgment also omitted a copy of the purported notice
(Isobe Aff. Exh. A; see, generally, Plaintiff’s motion). Thus the record is utterly devoid
of a copy of the purported notice, and there is no evidence that Plaintiff generated and
served Ms. Thompson a notice that complied with the requirements of RPAPL §1303. 4 See Section III. A below for further details concerning the findings of the New York City Department of Consumer Affairs dated February 22, 2016 in its denial of Mr. Feldman’s application to renew his process server license.
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Although RPAPL §1303 does not expressly prescribe the means for establishing
compliance and no appellate court has yet reviewed the issue, the vast majority of trial
courts that have addressed compliance in instances where service of the notice was in
doubt have unsurprisingly required the inclusion of a copy of the purported notice. A
number of lower courts have enunciated the requirement, including several recent
decisions emanating from Kings County:
Here the plaintiff has annexed affidavits of service attesting to service of the summons, complaint and RPAPL 1303 notice on the defendants. However, plaintiff did not annex a copy of the RPAPL 1303 notice that was purportedly sent to the defendants. Accordingly, the plaintiff did not provide a sufficient basis upon which the court may conclude as a matter of law that the plaintiff has complied with the statute.
Chase Home Finance, LLC v. Silver, 47 Misc.3d 1203(A), 2015 WL 1442418 at *4 (Sup.
Ct Kings Co 2015), citing Countrywide Loans v. Taylor, 17 Misc.3d 595 (Sup. Ct Suffolk
Co 2011); Wells Fargo Bank, N.A. v. Sylvester, 2015 WL 1442408 at *3 (Sup. Ct Kings
Co) (same). See, also, First United Mortg. Banking Corp. v. Valdivieso, 45 Misc.3d
1216(A), 2014 WL 5897720 at *3 (Sup. Ct Kings Co); Cit Group/Consumer Finance,
Inc. v. Platt, 33 Misc.3d 1231(A), 2011 WL 6118534 at *4, (Sup Ct Queens Co); Wells
Fargo Bank, N.A. v. Barrett, 33 Misc.3d 1207(A), 2011 WL 4838765 at *3 (Sup. Ct
Queens Co).
C. The Court Should Not Strike Defendant’s Answer or Dismiss Her Counterclaim for Attorney’s Fees
CPLR § 2214(a) requires that a notice of motion specify the relief demanded and
the grounds therefor. Plaintiff’s notice of motion does not request that Ms. Thompson’s
Answer be stricken, and therefore, Plaintiff has not technically demanded this particular
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relief. However, Plaintiff’s proposed order and Attorney Affirmation explicitly mention
the striking of Ms. Thompson’s Answer and certain of her defenses, although Plaintiff
provides no legal authority or factual basis for this Court to grant the extreme relief of
striking Ms. Thompson’s Answer, other than the statements in Plaintiff’s Attorney
Affirmation concluding that each of Ms. Thompson’s individual defenses is “meritless.”
Plaintiff’s request that the Court strike Ms. Thompson’s Answer implies that a
foreclosure defendant’s failure to hand over the keys to her property upon receipt of a
summons and complaint constitutes some form of misconduct. This is a preposterous and
galling proposition and, of course, Plaintiff gives no authority for it. However, to the
extent that Plaintiff may seek to have the Court strike Ms. Thompson’s answer as a
sanction, it is certainly not warranted. Stone v. Zinoukhova, 119 A.D.3d 928, 929-930 (2d
Dep’t 2014) (drastic remedy of striking an answer pursuant to CPLR § 3126 for failure to
comply with discovery demands and orders not appropriate unless conduct is clearly
willful and contumacious); Guiliano v. 666 Old Country Road, LLC, 100 A.D.3d 960,
961 (2d Dep’t 2012) (intentional or negligent spoliation of evidence did not warrant
striking of answer).
Nor should the Court strike Ms. Thompson’s timely asserted counterclaim for
attorney’s fees. Real Property Law § 282 (“RPL § 282”) provides as follows, in relevant
part:
Whenever a covenant contained in a mortgage on residential real property shall provide that in any action or proceeding to foreclose the mortgage that the mortgagee may recover attorneys' fees and/or expenses incurred as the result of the failure of the mortgagor to perform any covenant or agreement contained in such mortgage, or that amounts paid by the mortgagee therefor shall be paid by the mortgagor as additional payment, there shall be
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implied in such mortgage a covenant by the mortgagee to pay to the mortgagor the reasonable attorneys' fees and/or expenses incurred by the mortgagor as the result of the failure of the mortgagee to perform any covenant or agreement on its part to be performed under the mortgage or in the successful defense of any action or proceeding commenced by the mortgagee against the mortgagor arising out of the contract . . . .
RPL § 282(1) (emphasis supplied). The Mortgage provides, at Section 9:
If (a) I do not keep my promises and agreements made in this Security Instrument … then Lender may do and pay for whatever is reasonable and appropriate to protect Lender’s interest in the Property and Lender’s rights under this Security Instrument. Lender’s actions may include, but are not limited to: … (d) appearing in court; and (e) paying reasonable attorneys’ fees to protect its interest in the Property and/or rights under this Security Instrument … I will pay to Lender any amounts, with interest, which Lender spends under this Section 9.
(Thompson Aff. Exh. 4 p. 7, ¶9). Section 9 of the mortgage includes a covenant for Ms.
Thompson to pay attorney’s fees incurred by her purported lender in this action. Ms.
Thompson has retained counsel to represent her in this action. Thus Ms. Thompson has
met all the conditions required by RPL §282 and is subject only to the Court’s ultimate
decision as to whether she has mounted a successful defense. Even if the Court does not
grant Ms. Thompson summary judgment dismissing the action on her cross-motion, it is
nonetheless premature to strike her counterclaim for attorney’s fees until the action is
disposed.
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II. The Court Should Grant Summary Judgment to Defendant and Dismiss This Action
A. Defendant Has Established That RPAPL§1304 Applies and that
Plaintiff Failed to Comply with RPAPL §1304 Ms. Thompson has established, as a matter of law, that she lives at the Subject
Property as her primary residence, and that the Subject Loan is in fact a ‘home loan” as
defined by RPAPL §1304 (Thompson Aff. ¶¶3-8 and Exhs. 1-3; Isobe Aff. Exhs. D, F, J,
K). Plaintiff’s only evidence submitted concerning this fact are two affidavits of service
by Plaintiff’s process server, Alan S. Feldman. The first affidavit alleges service of the
Summons and Complaint on Ms. Thompson by delivery to a person who allegedly
identified herself as Ms. Thompson’s daughter, Kisha Thompson, at the Amboy Street
Property (Isobe Aff. Exh. B). This affidavit alleges, in boilerplate fashion, “[t]hat person
was also asked by deponent whether said premises was the defendant’s dwelling
place/usual place of abode and the reply was affirmative.” (Isobe Aff. Exh. B). This
statement is hearsay and thus it is not probative on the issue of Ms. Thompson’s primary
residence.
Plaintiff submits two additional hearsay affidavits by Mr. Feldman concerning
statements allegedly made by un-named individuals when Mr. Feldman attempted
delivery of a Debt Validation letter at Amboy Street and at the Subject Property (Isobe
Aff. Exh. B). The statements in these affidavits, dated April 22, 2014 and May 23, 2014,
but not filed until March 7, 2016, not only lack probity, they are inadmissible. In any
event, Ms. Thompson testifies that the Amboy Street Property has been vacant for several
years and that no person matching the description of the person Mr. Feldman supposedly
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spoke to when he allegedly attempted delivery of the Debt Validation Letter resides at the
Subject Property (Thompson Aff. ¶¶6-8; Isobe Aff. Exh. B).
Ms. Thompson’s detailed affidavit and supporting documents establish that her
primary residence is the Subject Property (Thompson Aff. ¶¶3-8 and Exhs. 1-3; Isobe
Aff. Exhs. D, F, J, K). Further, Kisha Thompson testifies that she lives at the Subject
Property and not at the Amboy Street Property and she denies ever receiving any
foreclosure papers from, or conversing with, process server Alan S. Feldman or indeed
any other process server (Affidavit of Kisha Thompson, dated June 28, 2016 (“Kisha
Thompson Aff.”) ¶¶3-7). In addition, Mr. Feldman’s physical description of Kisha
Thompson underestimates her weight by 75 pounds (Isobe Aff. Exh. B; Kisha Thompson
Aff. ¶¶8-9).
Moreover, the process server, Alan S. Feldman, has exhibited a pattern and
practice of swearing to false affidavits and misleading the courts. Therefore his
unsupported testimony is incredible as a matter of law, or, at a minimum, insufficiently
credible to contradict the sworn testimony of Ms. Thompson and her daughter Kisha
Thompson. Based on at least 25 instances of “sewer service” by Mr. Feldman
documented by multiple courts over an extended period of time, on February 22, 2016,
the New York City Department of Consumer Affairs rejected Mr. Feldman’s application
to renew his process server license, determining that he is “not fit to be licensed, pursuant
to New York City Administrative Code (“Code”) §20-101 due to [his] failure to maintain
standards of integrity, honesty and fair dealing …” (Isobe Aff. Exh. N, New York City
Department of Consumer Affairs Denial of Application No. 167-2016-RPSI5 (redacted)).
5 Obtained via the online records of the New York City Department of Consumer Affairs at: http://www1.nyc.gov/assets/dca/downloads/pdf/businesses/DenialLetter-Alan-Feldman.pdf
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Defendant respectfully requests that the Court take judicial notice of the records of the
New York City Department of Consumer Affairs. See, Headley v. New York City Transit
Authority, 100 A.D.3d 700, 701 (2d Dep’t 2012).
Mr. Feldman’s repeated false testimony, for profit, is ample reason for this Court
to refuse to credit or believe his testimony in this case. Washington Mutual Bank v. Holt,
113 A.D.3d 755, 756-757 (2d Dep’t 2014). Under the maxim of falsus in uno, falsus in
omnibus and in these particular circumstances, the Court should afford Plaintiff’s
affidavits of service by Alan S. Feldman no credit whatsoever and certainly not sufficient
credit to create an issue of fact.
B. Defendant Has Established That RPAPL§1306 Applies and that Plaintiff Failed to Comply with RPAPL §1306
Because Ms. Thompson has established RPAPL §1304 applies in this action, i.e.,
that Plaintiff was required to send her a 90-day pre-foreclosure notice, the pleading and
filing requirements of RPAPL §1306, which are a condition precedent to this action, also
apply. RPAPL §1306(1). Plaintiff failed to plead or allege compliance with RPAPL
§1306 or to submit any admissible evidence of purported compliance with the statute
(Isobe Aff. Exhs. A, F) and accordingly this action must be dismissed. TD Bank, N.A. v
Leroy, 121 A.D.3d 1256, 1259-1260 (3d Dep’t 2014) (complaint dismissed where
Plaintiff admitted it did not strictly comply with RPAPL §1306).
III. The Court Should Order a Hearing to Determine Interest Tolling Under CPLR § 3012-b and Attorney’s Fees Under RPL §282
CPLR §3012-b requires the plaintiff, in any residential foreclosure involving a
home loan as defined in RPAPL §1304, to file with the complaint an affidavit:
signed by the attorney for the plaintiff, certifying that the attorney has reviewed the facts of the case and that, based
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on consultation with representatives of the plaintiff identified in the certificate and the attorney's review of pertinent documents, including the mortgage, security agreement and note or bond underlying the mortgage executed by defendant and all instruments of assignment, if any, and any other instrument of indebtedness including any modification, extension, and consolidation, to the best of such attorney's knowledge, information and belief there is a reasonable basis for the commencement of such action and that the plaintiff is currently the creditor entitled to enforce rights under such documents.
CPLR §3012-b(a). Here Plaintiff, in contending that the Subject Loan is not a home loan,
has admittedly failed to submit an affirmation as required by CPLR §3012-b.
CPLR §3012-b provides that if a plaintiff “wilfully fails to provide copies of the
papers and document as required by Subdivision (a)” and the court finds that such
documents “ought to have been provided” the court may deny “the accrual of any
interest, costs, attorneys’ fees or other fees, relating to the mortgage debt” CPLR §3012-
b(e). Since Defendant has established the Subject Loan is a home loan, Plaintiff should
have filed a CPLR §3012-b affidavit with the Complaint, which Plaintiff has admittedly
and willfully failed to do. Accordingly, Ms. Thompson requests that the Court order a
hearing, on notice to the parties, at which the Court may determine the amount of interest
and other fees to be tolled on the Subject Mortgage on account of Plaintiff’s willful
failure to comply with CPLR §3012(b).
Because RPL §282 applies in this action and Ms. Thompson asserted a
counterclaim under that statute, Ms. Thompson likewise requests a hearing to determine
the amount of attorney’s fees to be awarded to Brooklyn Legal Services in its successful
defense of this action.
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CONCLUSION
Wherefore, for all the foregoing reasons, the Court should deny Plaintiff’s motion
for summary judgment, grant Ms. Thompson’s motion for summary judgment dismissing
this action, order a hearing to determine whether and in what amount to toll interest
pursuant to CPLR §§3012-b and to determine the amount of attorney’s fees payable to
Ms. Thompson’s attorneys Brooklyn Legal Services on this motion under to RPL §282
and award Ms. Thompson such other and further relief as the Court deems just and
proper.
Dated: Brooklyn, New York June 30, 2016
Brooklyn Legal Services
/s/ ______________________________ Catherine P. Isobe 1360 Fulton Street, Suite 301 Brooklyn, New York 11216 (718) 233-6434 [email protected] Attorneys for Defendant Brenda V. Thompson
To: Samantha Sandler, Esq. RAS Boriskin, LLC 900 Merchants Concourse Westbury, NY 11590 Attorneys for Plaintiff (By NYSCEF)
69
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS: FORECLOSURE RESOLUTION PART 1 ----------------------------------------------------------------------------X BANK OF AMERICA, NATIONAL ASSOCIATION,
Plaintiff,
-against-
BRENDA V. THOMPSON; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; LENOX HILL MEDICAL ANESTHESIOLOGY; MUNICIPAL CREDIT UNION; CONSOLIDATED DEVELOPMENT OF CANARSIE; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; EMPIRE PORTFOLIOS INC, “JOHN DOE #1” through “JOHN DOE #12,” the last twelve names being fictitious and unknown to the 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.
----------------------------------------------------------------------------X
Index No. 505850/2014 Hon. Noach Dear
DEFENDANT’S REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF HER CROSS-MOTION FOR SUMMARY JUDGMENT DISMISSING THE COMPLAINT AND IN FURTHER OPPOSITION TO PLAINTIFF’S MOTION
FOR SUMMARY JUDGMENT
BROOKLYN LEGAL SERVICES
Catherine P. Isobe, Of Counsel 1360 Fulton Street, Suite 301 Brooklyn, New York 11216
(718) 233-6434 (voice) (718) 398-6414 (fax)
Attorneys for Defendant Brenda V. Thompson
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TABLE OF CONTENTS PRELIMINARY STATEMENT .....................................................................................................1 ARGUMENT ...................................................................................................................................1 I. Plaintiff’s Opposition and Reply Mischaracterizes Ms. Thompson’s
Grounds for Summary Judgment and Repeatedly Misstates the Record .............................1
A. Ms. Thompson’s Motion for Summary Judgment Is Not a Pre-Answer Motion to Dismiss .........................................................................................1
B. Plaintiff’s Opposition to the Cross-Motion Misstates the Record and
Mischaracterizes Ms. Thompson’s Grounds for summary Judgment ........................2
II. Ms. Thompson Has Established that RPAPL §1304 Applies and that Plaintiff Failed To Strictly Comply with RPAPL §1304 .....................................................5
A. Ms. Thompson’s Loan Is a “Home Loan” Under RPAPL §1304...............................5
B. Plaintiff Failed To Raise a Triable Issue of Fact Concerning Ms.
Thompson’s Place of Residence .................................................................................7
C. Plaintiff’s Purported RPAPL §1304 Notice Is Deficient as a Matter of Law .........................................................................................................................9
III. Ms. Thompson Has Established that RPAPL §1306 Applies and that Plaintiff Failed To Strictly Comply with RPAPL §1306 ...................................................10
IV. Plaintiff’s New Evidence in Support of Its Summary Judgment Motion
Submitted for the First Time on Reply Is Inadmissible and Should Not Be Considered by the Court ....................................................................................................11
CONCLUSION .............................................................................................................................. 12
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PRELIMINARY STATEMENT
Defendant Brenda V. Thompson (“Defendant” or “Ms. Thompson”) respectfully
submits this memorandum in further support of her cross-motion for summary judgment
dismissing this action and in further opposition to Plaintiff’s motion for summary
judgment. The Court should grant Ms. Thompson’s cross-motion for summary judgment
and dismiss this action because Ms. Thompson has established as a matter of law that
Plaintiff did not strictly comply with RPAPL §§1304 or 1306, both which are conditions
precedent to the maintenance of this action. Plaintiff failed to raise a triable issue of fact
concerning its compliance with these statutes. In addition, Plaintiff’s summary judgment
motion must be denied, notwithstanding the new evidence Plaintiff submitted on reply.
ARGUMENT
I. Plaintiff’s Opposition and Reply Mischaracterizes Ms. Thompson’s Grounds for Summary Judgment and Repeatedly Misstates the Record
A. Ms. Thompson’s Motion for Summary Judgment Is Not a Pre-Answer Motion to Dismiss Plaintiff’s Attorney Affirmation in Opposition to Defendants’ (sic) Cross-Motion
and in Further Support of Plaintiff’s Motion, dated August 9, 2016 (“Plaintiff’s
Opposition and Reply”) includes a section entitled “Standard of Law for Dismissal” at
pages six through seven. This section recites the standard for a pre-answer motion to
dismiss under CPLR §3211, but does not specifically mention Ms. Thompson’s cross-
motion.
To the extent that Plaintiff argues Ms. Thompson’s cross-motion for summary
judgment is subject to the standard on a pre-answer motion to dismiss, i.e., that she was
required to move within her time to respond to the complaint and that all facts alleged in
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the complaint must be presumed true, this argument fails. Ms. Thompson’s motion for
summary judgment is subject to the applicable standard under CPLR §3212 and the
relevant case law. A party seeking summary judgment must demonstrate that “the cause
of action or defense shall be established sufficiently to warrant the court as a matter of
law in directing judgment” in the movant’s favor. CPLR §3212(b).
“The proponent of a summary judgment motion must make 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.” Alvarez v. Prospect Hosp., 68
N.Y.2d 320, 324 (1986). If the moving party meets this burden, the burden then shifts to
the non-moving party to “establish the existence of material issues of fact which require a
trial of the action.” Vega v Restani Constr. Corp., 18 N.Y.3d 499, 503 (2012). The non-
movant must tender admissible evidence of these material issues of disputed fact, but may
be excused from the strict requirements of admissibility if an acceptable excuse is given.
Zuckerman v. City of New York, 49 N.Y.2d 557, 562 (1980).
Ms. Thompson has established the merit of her affirmative defenses as a matter of
law under RPAPL §1304 and 1306. Thus the burden has shifted to Plaintiff to establish
the existence of material issues of disputed fact. Plaintiff has not met its burden and the
Court should accordingly award summary judgment to Ms. Thompson.
B. Plaintiff’s Opposition and Reply Repeatedly Misstates the Record
Plaintiff’s Opposition and Reply is replete with inaccurate characterizations of the
record before the Court, most of which pertain to statements and admissions Plaintiff
attributes to Ms. Thompson but which she never made. Not surprisingly, Plaintiff fails to
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cite to any specific pages or paragraphs in support of these contentions because the
alleged statements do not exist.
Plaintiff’s first misstatement of the record occurs at paragraph 65 of Plaintiff’s
Opposition and Reply, in which counsel affirms, under penalty of perjury, “Defendant’s
affidavit alleges that she was not properly served in that she did not reside at the property
were (sic) service was effectuated pursuant to CPLR 308(2).” In fact, Ms. Thompson
alleges no such thing. As stated in her affidavit, Ms. Thompson received a copy of the
summons and complaint from her daughter Nikki Thompson, to whom it had been
delivered at 722A Logan Street, Brooklyn, NY (Ms. Thompson’s home and the subject of
this action) by Plaintiff’s process server (see Affidavit of Brenda V. Thompson, dated
June 28, 2016 (“Thompson Affidavit”) at ¶21, annexed to Ms. Thompson’s cross-
motion). Having received the summons and complaint in time to defend the action, Ms.
Thompson elected not to dispute personal jurisdiction in her answer (Verified Answer of
Brenda V. Thompson dated August 14, 2014 (Thompson Answer”) Exh. C to cross-
motion). Nor does she dispute service of process in opposition to Plaintiff’s motion or in
support of her cross-motion (see, generally, Thompson Affidavit).
After falsely alleging that Ms. Thompson disputed personal jurisdiction, Plaintiff
points out with great emphasis that this (fictional) defense was asserted too late
(Plaintiff’s Opposition and Reply ¶¶66-68). Plaintiff next conflates a legal waiver of a
defense with a factual admission by Ms. Thompson that she does not reside at 722A
Logan Street (Plaintiff’s Opposition and Reply ¶¶69-70). Ms. Thompson made no such
admission. She explicitly swore to her place of residence in her answer and her affidavit
in support of the cross-motion. Ms. Thompson corroborated these assertions with
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documentary evidence of her residence at 722A Logan Street (Thompson Answer;
Thompson Affidavit ¶¶3-7 and Exhs. 1-3).
Next, in an attempt to attack Ms. Thompson’s credibility, Plaintiff’s counsel
falsely alleges, “While Defendant claims that she does not reside at the address where
service was effectuated, Defendant wholly fails to explain how she obtained the
Summons and Complaint, consulted with counsel and executed an Answer to Plaintiff’s
Complaint and interposed Counterclaims all within one (1) month of being served.”
(Plaintiff’s Opposition and Reply ¶81). In fact, Ms. Thompson did explain in her
affidavit that she got the summons and complaint from her daughter Nikki after a process
server delivered a copy to Nikki at Ms. Thompson’s home (Thompson Affidavit ¶21).
Plaintiff’s own affidavits of service state that copies of the summons and
complaint were delivered to Nikki Thompson at Ms. Thompson’s home before other
copies were purportedly delivered to Ms. Thompson’s other property at 150 Amboy
Street (“Amboy Street Property”) (Exh. G to Plaintiff’s Motion). Plaintiff studiously
ignores its own submissions in an attempt to convince the Court that Ms. Thompson
could only have received those copies of the summons and complaint allegedly delivered
to the Amboy Street Property. Plaintiff implies that Ms. Thompson’s timely response to
the complaint was improbable (Plaintiff’s Opposition and Reply ¶81). But there is
nothing miraculous about Ms. Thompson receiving a copy of foreclosure papers which
were delivered to her home. The fact that Ms. Thompson promptly sought and received
legal assistance with her pro-se answer is likewise no superhuman feat.
Lastly, Plaintiff’s counsel falsely alleges that “[w]hen served with Plaintiff’s Debt
Validation letter at 150 Amboy Street, Brooklyn, NY 11212 on May 23, 2014, Defendant
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confirmed that she resided at the referenced address.” (Plaintiff’s Opposition and Reply
¶87) (emphasis supplied). In yet another misstatement of the record, Plaintiff
conveniently ignores that its process server does not allege that he spoke with or gave any
papers to Brenda V. Thompson, he merely alleges he delivered a “Debt Validation Letter
to a “Mrs. Thompson” who did not identify her relationship to Brenda V. Thompson.
(Exh. J to Plaintiff’s Motion). This Court should not countenance these material
misrepresentations by counsel of the contents of papers submitted on Plaintiff’s motion
and Defendant’s cross-motion.
II. Ms. Thompson Has Established That RPAPL§1304 Applies and that Plaintiff Failed to Strictly Comply with RPAPL §1304
Ms. Thompson has established, as a matter of law, that RPAPL §1304 applies in
this case and that Plaintiff was therefore required to provide a statutorily compliant notice
including a list of approved housing counseling agencies at least 90 days before
commencing this action. In response, Plaintiff has failed to raise a triable issue of fact
and this action must therefore be dismissed.
A. Ms. Thompson’s Loan Is A “Home Loan” Under RPAPL §1304
RPAPL §1304(5)(a) defines a home loan requiring the provision of an RPAPL
§1304 Notice as one in which the real estate is “used or occupied, or intended to be used
or occupied wholly or partly, as the home or residence of one or more persons and which
is or will be occupied by the borrower as the borrower’s principal dwelling.” The statute
is not limited borrowers who occupy their property at commencement of foreclosure:
Had the Legislature intended that plaintiffs need not comply with RPAPL §1304 if the borrower did not currently reside at the subject premises, it would not have instructed, inter alia, that the notice be sent to the “last known address of the borrower” (RPAPL § 1304 [2]), or
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that the 90-day waiting period before commencing a foreclosure action would not apply or would cease to apply if the borrower no longer occupied the premises as his or her principal dwelling (RPAPL § 1304 [3]).
Wells Fargo Bank, N.A. v. Banks, 2015 WL7070063 at *2 (Sup. Ct. Qns. Cty.) (citation
omitted). C.f. M & T Bank v. Farrell, 2016 WL3181917 at *4 (Sup. Ct. Broome Cty.);
Onewest Bank, FSB v. Greenhut, 36 Misc.3d 1205(a) (Sup. Ct. West. Cty. 2012).
Further, a plaintiff’s or its process server’s conclusions about a borrower’s place of
residence cannot serve to establish that a loan is not a home loan:
The Court, likewise, will not rely on conclusory statements by the plaintiff or plaintiff's process server that the homeowner defendant does not reside at the subject premises and, therefore, is not entitled to a settlement conference. Pursuant to RPAPL §1304(5)(b)(iv), the definition of a particular “home loan” that may qualify for a mandatory settlement conference, includes one in which the premises “is or will be occupied by the borrower as the borrower's principal dwelling” (emphasis supplied). Therefore, a mere statement from a process server or plaintiff's counsel that states, for example, that the defendant resides or was served with process at an address other than the mortgaged premises, is not dispositive on the residency issue…
Butler Capital Corporation v. Cannistra, 26 Misc.3d 598, 604-605 (Sup. Ct. Suff. Cty.
2009) (additional emphasis supplied). Thus Plaintiff’s assertion that, “the subject loan is
not a home loan, as defined by RPAPL §1304, as the Defendant does not reside at the
Subject Premises” (Plaintiff’s Opposition and Reply ¶86) is not only factually incorrect
(because Ms. Thompson does reside at the “Subject Premises”), it is legally incorrect as
well. Plaintiff’s false allegation that Ms. Thompson did not reside in her home when this
action began, even if true, is no excuse for Plaintiff to skirt its obligation to strictly
comply with RPAPL §1304.
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B. Plaintiff Failed to Raise a Triable Issue of Fact Concerning Ms. Thompson’s Place of Residence
In support of her cross-motion, Ms. Thompson has established, as a matter of law,
that she lives in her home at 722A Logan Street, Brooklyn New York and that this loan is
in fact a “home loan” as defined by RPAPL §1304. Ms. Thompson has submitted
admissible and uncontroverted evidence of her residence at 722A Logan Street through
her sworn testimony, corroborated with documentary evidence of her home address.
(Thompson Affidavit ¶¶3-8 and Exhs. 1-3). Ms. Thompson also submitted the affidavit
of her daughter Kisha Thompson, who specifically and emphatically denied making the
statements attributed to her in a boilerplate affidavit of service (Affidavit of Kisha
Thompson, dated June 28, 2016 (“Kisha Thompson Affidavit”)).1
Plaintiff’s only “evidence” to support its contention that Ms. Thompson does not
reside at 722A Logan Street is a series of hearsay statements within boilerplate affidavits
of service by Plaintiff’s discredited process server, Alan S. Feldman2 (“Feldman”), in
which he was allegedly advised by others that Ms. Thompson does not live at 722A
Logan Street. (Exhs. G, J to Plaintiff’s Motion). It is well settled that “[t]he proponent of
hearsay evidence must establish the applicability of a hearsay rule exception.” Tyrrell v.
Wal-Mart Stores, Inc., 97 N.Y.2d 650, 652 (2001) (internal citation omitted). Even under
an exception to the hearsay rule, the proponent of a hearsay statement must establish its
reliability. Nucci ex. rel. Nucci v. Proper, 95 N.Y.2d 597, 602 (2001). Hearsay 1 The veracity of Feldman’s affidavit of service is further undermined by the fact that his physical description of Kisha Thompson underestimates her weight by 75 pounds (Kisha Thompson Affidavit ¶¶8-9 and Exh. G to Plaintiff’s Motion). 2 Based on at least 25 instances of “sewer service” by Mr. Feldman over an extended period of time, on February 22, 2016, the New York City Department of Consumer Affairs (“DCA”) rejected Mr. Feldman’s application to renew his process server license, determining that he is “not fit to be licensed, pursuant to New York City Administrative Code (“Code”) §20-101 due to [his] failure to maintain standards of integrity, honesty and fair dealing …” (Isobe Aff. Exh. N). Available at DCA website at: http://www1.nyc.gov/assets/dca/downloads/pdf/businesses/DenialLetter-Alan-Feldman.pdf.
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statements where the speaker is not even identified, such as Feldman’s allegations that
unnamed “family members” told him that Ms. Thompson does not reside in her home, are
inherently unreliable. Country-Wide Insurance Company v. Henderson, 50 A.D.3d 789,
790 (2d Dep’t 2008) (affidavit describing unidentified investigators’ efforts to locate
insured were inadmissible to establish such efforts).
By themselves, Feldman’s hearsay affidavits cannot contradict Ms. Thompson’s
testimony as to her residence and Kisha Thompson’s detailed affidavit denying the truth
of the statements Feldman attributes to her (Thompson Affidavit ¶¶3-8 and Exhs. 1-3;
Kisha Thompson Affidavit ¶¶4-7). Wynne v. Diaz, 102 A.D.3d 862, 864 (2d Dep’t 2013)
(hearsay accident report alone was ineffective to contradict defendant’s testimony and
thus no triable issue of fact existed to prevent summary judgment dismissing the
complaint). Based on Plaintiff’s utter failure to even attempt to bring Feldman’s hearsay
statements under any exception to the hearsay rule, combined with Feldman’s established
propensity to lie under oath, the Court should disregard Plaintiff’s unsupported
contention that Ms. Thompson does not reside in her home (Plaintiff’s Opposition and
Reply ¶¶71, 86-87).
Plaintiff also misconstrues RPAPL §1304’s requirements concerning where the
RPAPL §1304 Notice must be sent. (Plaintiff’s Opposition and Reply ¶94). In fact,
RPAPL §1304(2) states:
Such notice shall be sent by such lender, assignee or mortgage loan servicer to the borrower, by registered or certified mail and also by first-class mail to the last known address of the borrower, and if different, to the residence that is the subject of the mortgage.
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(emphasis supplied). As construed by the courts, this means that if a borrower no longer
resides at the mortgaged premises, the lender must send an RPAPL §1304 Notice to the
mortgaged premises and the borrower’s last known address. Only then may the lender
may shorten the 90 day waiting period. 2016 WL3181917 at *4; 2015 WL7070063 at *2.
Assuming the truth of the allegations in Feldman’s May 28, 2014 affidavits of
service of the Debt Validation Letter, Plaintiff would have been put on notice that Ms.
Thompson no longer resided at 722A Logan Street and thus is would have become
incumbent upon Plaintiff to serve an RPAPL §1304 Notice where Plaintiff then “knew”
Ms. Thompson to reside—150 Amboy Street (Exh. J to Plaintiff’s Motion). Admittedly
Plaintiff did not serve any RPAPL §1304 Notice to 150 Amboy Street and thus Plaintiff
did not strictly comply with RPAPL §1304 (Plaintiff’s Opposition and Reply pp. 3-4, 16-
19).
C. Plaintiff’s Purported RPAPL §1304 Notice is Deficient as a Matter of Law
Assuming for the sake of argument that Plaintiff sent its purported RPAPL §1304
Notice to Ms. Thompson at the mortgaged premises on May 8, 2014, the notice itself is
deficient because this action was commenced on June 25, 2014, just 48 days after the
date of the notice, instead of the 90 day required by the statute. RPAPL §1304 (1).
(Exhs. D, F to Plaintiff’s Motion). In opposition to Ms. Thompson’s cross-motion,
Plaintiff fails to rebut her argument that this action was commenced too soon after the
purported mailing of the RPAPL §1304 Notice. (Plaintiff’s Opposition and Reply pp. 3-4,
16-19). C.f. Hudson City Savings Bank v. DePasquale, 113 A.D.3d 595, 596 (2d Dep’t
2014) (where plaintiff submitted RPAPL §1304 Notice with a factual inaccuracy,
plaintiff’s failure to show, prima facie, strict compliance with RPAPL §1304 became
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defendant’s prima facie showing of entitlement to summary judgment dismissing
complaint). Because Plaintiff’s RPAPL §1304 Notice was admittedly served less than 90
days before this action was commenced, the Court should grant Ms. Thompson’s cross-
motion for summary judgment.
III. Ms. Thompson Has Established That RPAPL§1306 Applies and that Plaintiff Failed to Strictly Comply with RPAPL §1306
In opposition to Ms. Thompson’s cross-motion for summary judgment, Plaintiff
contends that “merely alleging compliance with RPAPL §1306 is sufficient to satisfy the
requirements of RPAPL §1306 as it pertains to the commencement of a Foreclosure
Action.” (Plaintiff’s Opposition and Reply ¶105). This argument ignores both the extant
case law interpreting the pleading requirement in RPAPL §1306 and the generally
applicable pleading requirements codified at CPLR §3013. U.S. Bank, National
Association v. Lampley, 46 Misc.3d 630, 634-635 (Sup. Ct. Kings Cty. 2014) (conclusory
statement of compliance with RPAPL §1306 in compliant was insufficient because it did
not allege any facts concerning such compliance); Greschler v. Greschler, 71 A.D.2d
322, 325 (2d Dep’t 1979) (“a complaint is not acceptable if it is drawn as though it had
been copied verbatim form a standard form book.”).
Plaintiff also contends, without any supporting authority, that Defendant, “is not
an intended beneficiary of the statute” and that, “Defendants (sic) do not have standing to
challenge Plaintiff’s compliance therewith.” (Plaintiff’s Opposition and Reply ¶112).
Nothing could be further from the truth about the purpose of RPAPL §1306. In fact, The
Foreclosure Prevention and Responsible Lending Act, Laws of New York, 2008, Chapter
472 of 2008, which instituted broad reforms to address the foreclosure crisis and other
laws governing foreclosure actions on home loans were amended by the Laws of New
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York, 2009, Chapter 507, of which RPAPL §1306 was a part. The Senate’s statement in
support explains the bill’s purpose:
This bill would build upon the reforms enacted in the 2008 legislation. In particular, this bill would: (1) allow a larger population of distressed homeowners to benefit from consumer protection laws and foreclosure prevention opportunities currently available only to borrowers of “high-cost,” “sub-prime,” and “non-traditional” home loans: (2) establish certain requirements for plaintiffs in foreclosure actions to maintain the foreclosed property; (3) establish protections for tenants residing in foreclosed properties; and (4) enhance consumer protection provisions to prevent distressed homeowners from falling prey to rescue scams.
N.Y. State S., Memo. In Support of Legis., S. 66007, 2009 Leg., 20th Extraordinary Sess.
(2009). The court should give no credence to Plaintiff’s disingenuous characterization of
this remedial legislation. It was explicitly intended to benefit homeowners like Ms.
Thompson.
IV. Plaintiff’s New Evidence in Support of Its Summary Judgment Motion Submitted for the First Time on Reply Is Inadmissible and Should Not Be Considered by the Court
On reply, Plaintiff submitted a new piece of evidence, a documents entitled
“Bailee Letter Agreement” attached to Plaintiff’s Opposition and Reply under Exhibit tab
L. (“Bailee Letter”). Plaintiff’s current counsel alleges (without providing an exhibit
letter) that the Bailee Letter “evidences that prior counsel for Plaintiff was physically
holding the Note in its possession as bailee for Plaintiff just prior to commencement of
the action.” (Plaintiff’s Opposition and Reply ¶47). The Bailee Letter was purportedly
issued by Bank of America, N.A. and signed to indicate receipt by a clerk at “Frenkle
(sic) Lambert Weiss LLP” a law firm which has not appeared in this action. Plaintiff has
set forth no basis for the admissibility of the Bailee Letter, which is covered by the
hearsay rule. CPLR §4518(a). C.f. Toth v. Carver Street Associates, 191 A.D2d 631, (2d
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Dep’t 1993) (letters from plaintiff’s attorney constituted inadmissible hearsay); Matter of
Rathbone, 111 A.D.2d 335, (2d Dep’t 1985) (letters from executors of decedent’s estate
admitted into evidence as business records under exception to hearsay rule).
Even if the Bailee Agreement Letter were somehow admissible, the Court should
still decline to consider it as part of Plaintiff’s prima facie case for summary judgment
because it violates the general proscription against the inclusion of such new evidence on
reply. Arriola v. City of New York, 128 A.D.3d 747, 749 (2d Dep’t 2015); Eleventh
Avenue Realty, LLC v. 6014 AH, LLC, 114 A.D.3d 661, 662 (2d Dep’t 2014). The Court
should therefore disregard the document and any contentions pertaining to it.
CONCLUSION
Wherefore, for all the foregoing reasons, the Court should deny Plaintiff’s motion
for summary judgment, grant Ms. Thompson’s cross-motion for summary judgment and
award Ms. Thompson such other and further relief as the Court deems just and proper.
Dated: Brooklyn, New York September 19, 2016
Brooklyn Legal Services
/s/ ______________________________ Catherine P. Isobe 1360 Fulton Street, Suite 301 Brooklyn, New York 11216 (718) 233-6434 [email protected] Attorneys for Defendant Brenda V. Thompson
To: Samantha Sandler, Esq. Jason Creech, Esq. RAS Boriskin, LLC 900 Merchants Concourse Westbury, NY 11590 Attorneys for Plaintiff (By NYSCEF)
83
FILED: KINGS COUNTY CLERK 01/12/2017 INDEX NO. 505850/2014
NYSCEF DOC. NO. 107 RECEIVED NYSCEF: 01/17/2017
1 of 284
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS: FRP1 ------------------------------------------------------------------------X U.S. BANK, NATIONAL ASSOCIATION, AS SUCCESSOR TRUSTEE TO BANK OF AMERICA, N.A. AS SUCCESSOR TRUSTEE TO LASALLE Index No. 507500/2013 BANK, N.A., AS TRUSTEE FOR THE FIRST FRANKLIN MORTGAGE LOAN TRUST, MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-H1, Hon. Noach Dear
Plaintiff, -vs-
MERLENE CRICK; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; NEW YORK CITY PARKING VIOLATIONS BUREAU; NEW YORK CITY TRANSIT ADJUDICATION BUREAU; and “JOHN DOE” and “MARY DOE,” (Said names being fictitious, it being the intention of Plaintiff to designate any and all occupants, tenants, persons or corporations, if any, having or claiming an interest in, or lien upon, the premises being foreclosed herein), Defendant(s). --------------------------------------------------------------------------X
DEFENDANT MERLENE CRICK’S MEMORANDUM OF LAW IN OPPOSITION TO
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
BROOKLYN LEGAL SERVICES Catherine P. Isobe, Of Counsel
1360 Fulton Street, Suite 301 Brooklyn, New York 11216
(718) 636-1155 (voice) (718) 398-6414 (fax)
Attorneys for Defendant Merlene Crick
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TABLE OF CONTENTS PRELIMINARY STATEMENT .....................................................................................................1 STATEMENT OF FACTS .......................................................................................................... 1-5 ARGUMENT ............................................................................................................................. 5-25
I. Summary Judgment Standard ................................................................................................5
II. Plaintiff Failed to Establish the Elements of Its Case ..................................................... 6-18
A. Plaintiff’s Affidavit in Support of Its Motion Is by an Individual Without Personal Knowledge of the Facts Alleged or Competency To Testify Based on a Review of Business Records ....................................................................................................... 6-9
B. Summary Judgment Should Be Denied Because Plaintiff Failed to Establish Strict Compliance with RPAPL §§1304 and 1303 ............................................................ 9-13 1. Plaintiff Failed to Establish Strict Compliance with RPAPL § 1304 ................ 9-11
2. Plaintiff Failed to Establish Strict Compliance with RPAPL § 1303 .............. 11-13
C. Plaintiff Has Not Established Standing to Foreclose ............................................ 13-18
1. Plaintiff Failed Allege Possession of the Note at Commencement ................. 14-16
2. Plaintiff Failed to Establish It Held the Note and Mortgage at Commencement by
Virtue of Written Assignment .......................................................................... 17-18
III. Plaintiff Failed to Establish a Basis on which the Court Could Strike Ms. Crick’s Amended Answer and Counterclaims ................................................................... 18-25
A. Plaintiff’s Notice of Motion Is Defective .............................................................. 18-19
B. Plaintiff Alleged no Facts to Justify Striking Ms. Crick’s Amended Answer and Counterclaims ........................................................................................................ 19-25 1. There Is no Basis to Strike Ms. Crick’s Unconscionability Defense ............... 21-23
2. Ms. Crick’s Truth in Lending Act Claim Is Not Barred by the Statute of
Limitations and Should Not Be Stricken ...............................................................23
3. Ms. Crick’s Counterclaim for Attorneys’ Fees Should Not Be Stricken ......... 23-25
CONCLUSION ..............................................................................................................................25
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PRELIMINARY STATEMENT
Defendant Merlene Crick (“Defendant” or “Ms. Crick”) respectfully submits this
memorandum in opposition to Plaintiff’s motion for summary judgment. Plaintiff U.S.
Bank, National Association (“Plaintiff” or “U.S. Bank”) has failed to establish, among
other elements required on this motion, its standing to foreclose and its compliance with
the applicable predicate notice and filing requirements under the Real Property Actions
and Proceedings Law (“RPAPL”) §§1304 and 1303. Moreover, Ms. Crick raises
numerous triable issues of fact sufficient to preclude summary judgment.
STATEMENT OF FACTS
The Subject Loan
Merlene Crick is a 61 year old babysitter from Barbados. She attended primary
and secondary school in Barbados but did not receive a high school diploma. While in
Barbados, Ms. Crick worked as a seamstress and grew vegetables. Ms. Crick came to the
United States in or about 1990. She supported herself working long hours as a babysitter
and she became a U.S. Citizen in April, 2011. (Affidavit of Merlene Crick, dated August
2, 2016 (“Crick Aff.”) at ¶¶4-7).
Ms. Crick purchased her three-family home at 34 Troy Avenue, Brooklyn, New
York in 2007, and she has lived there continuously since. Ms. Crick’s two daughters and
their children currently live with her (Crick Aff. ¶2). Prior to purchasing her home, Ms.
Crick had never owned a home or borrowed money from a bank (Crick Aff. ¶12).
When she purchased the home, Ms. Crick was earning approximately $20,000 per
year as a babysitter (Crick Aff. ¶¶7, 10). An unsophisticated first-time home-buyer with
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little education, Ms. Crick was duped into purchasing the home by a “one stop shop”1
operation that “flipped” the property shortly after purchasing it by selling it to Ms. Crick
at an inflated price (Affidavit of Catherine P. Isobe, dated August 5, 2016 (“Isobe Aff.”)
¶¶8-12 and Exh. A; Crick Aff. ¶¶4-12). Ms. Crick spent her entire life savings on the
down payment (Crick Aff. ¶13). She paid an inflated price for a seriously flawed house
and in the process she was sold an unaffordable, predatory, adjustable rate, interest only
$646,000 mortgage loan (“Subject Loan”) issued by First Franklin Financial Corp. (“First
Franklin”), with a floor of 9.4 percent annual interest and a cap of 15.45 percent (Crick
Aff. ¶¶4-31 and Exhs. 1-3). When Ms. Crick protested at the closing that the mortgage
was unaffordable to her, the mortgage broker assuaged her with promises that the
monthly payment would be reduced in just a few months (Crick Aff. ¶¶15-16).
Ms. Crick’s home was egregiously overvalued and her income was inflated by the
mortgage broker or other individual who prepared her loan application. (Crick Aff. ¶¶10-
11 and Exhs. 1, 3). Ms. Crick’s HUD-1 settlement statement shows that the mortgage
broker received over $26,000, or almost four percentage points of the loan amount, as
fees. Included in these fees was a $12,920 yield spread premium paid by the lender for
upselling Ms. Crick into a high interest, non-amortizing loan (Crick Aff. Exh. 2). Ms.
Crick, with help from relatives, was able to make only two or three payments on the
mortgage before she fell into arrears, leading to the filing of two separate foreclosure
actions (Crick Aff. ¶24, 32, 35, 37). 1 One stop shops “specialize in fixing up and selling houses bought through distress sales and foreclosure auctions, then offer buyers the services they need to purchase these houses. That includes finding mortgage lenders, appraisers and even lawyers to represent them at the closing.” Alex Ulam, Taking One-Stop Shops to Court: Lawsuits Allege Mortgage Businesses Practice Racial Targeting and Fraud, The Real Deal (June 2, 2008) http://therealdeal.com/issues_articles/taking-one-stop-shops-to-court/ See also, Where Credit is Due: Bringing Equity to Credit and Housing After the Market Meltdown (Rogers, Christy & Powell, John A. eds., University Press of America, Inc., 2013) Ch. 8, p. 188.
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History of Previous Foreclosure Action
On March 28, 2008, LaSalle Bank National Association as Trustee for Merrill
Lynch First Franklin Mortgage Loan Trust 2007-H, Mortgage Loan Asset-Backed
Certificates, Series 2007-H (“LaSalle Bank”), commenced a foreclosure against Ms.
Crick under index number 10321/2008 (“2008 Foreclosure Action”). La Salle Bank then
waited almost a year before filing a Request for Judicial Intervention and application for
an order of reference on March 2, 2009 (Isobe Aff. Exh. C).
On June 3, 2009, Ms. Crick, through counsel, filed a petition for Chapter 7
bankruptcy in the U.S. Bankruptcy Court for the Eastern District of New York, thus
triggering a stay of the 2008 Foreclosure Action (Crick Aff. ¶¶33-34; Isobe Aff. Exh. D).
The Chapter 7 Trustee, Robert J. Musso, declined to direct the sale of Ms. Crick’s home
and issued a report of no distribution on August 24, 2009 (Isobe Aff. Exh. D, pp. 1, 3-4).
The Bankruptcy Court issued an order discharging debtor on September 10, 2009 and the
case was closed on October 6, 2009 (Isobe Aff. Exh. D, p. 3).
By Order dated September 9, 2011, this Court dismissed the 2008 Foreclosure for
LaSalle Bank’s failure to submit the attorney affirmation required under Administrative
Order 548/10 of the Chief Administrative Judge of New York State (superceded by A/O
431/11) (Isobe Aff. Exh. F). Some four months after the dismissal of the 2008
Foreclosure Action—on January 13, 2012—Davidson Fink, LLP (“Davidson Fink”)
substituted in as new counsel for LaSalle Bank. Davidson Fink did not move to vacate
the dismissal but inexplicably filed a voluntary discontinuance of the already-dismissed
action (Isobe Aff. Exhs. C, F, H).
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Procedural History of this Action
On or about November 27, 2013, more than two years after the 2008 Foreclosure
Action was dismissed, U.S. Bank commenced this second foreclosure action against Ms.
Crick. In or about early December, 2013, Ms. Crick received papers including a “Help
for Homeowners in Foreclosure” (RPAPL §1303) notice, a “Notice of Commencement of
Case Subject to Mandatory Electronic Filing,”2 and the Summons and Complaint with
exhibits. (Crick Aff. Exh. 4). Plaintiff filed a one-page Affidavit of Service of these
documents on Ms. Crick on December 23, 2013 (Isobe Aff. Exh. J). Ms. Crick’s pro-se
Notice of No Consent to Electronic Service and Filing and Verified Answer were served
on Plaintiff’s counsel on December 23, 2013 and filed with the Kings County Clerk on
December 24, 2013 (Isobe Aff. Exhs. I, K).
This case was conferenced in the Mandatory Foreclosure Settlement Conference
Part and in Part 52, but no settlement was reached (Isobe Aff. Exh. I). In support of its
first motion for summary judgment filed on September 26, 2014, Plaintiff submitted the
affidavit of Michael Rosas, a Vice President of Nationstar Mortgage LLC (Isobe Aff.
Exh. L). Ms. Crick, now appearing by counsel, opposed Plaintiff’s motion and cross-
moved to amend her pro-se Answer. By Order dated January 23, 2015, the Court denied
Plaintiff’s motion and granted Ms. Crick’s cross-motion (Isobe Aff. Exh. M). Ms.
Crick’s counsel then served and filed Ms. Crick’s Amended Verified Answer dated
February 2, 2015, asserting six defenses (lack of standing; unconscionability; failure to
comply with RPAPL §§1304, 1306 and 1303 and failure to comply with CPLR §3012-b).
The amended answer also asserted counterclaims for violation of CPLR §3012-b;
2 Pursuant to Administrative Order 222/13 of the Chief Administrative Judge of the Courts, this case is subject to voluntary e-filing and not mandatory e-filing as Plaintiff stated in its notice to Ms. Crick.
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violations of the Truth in Lending Act and the Real Estate Settlement Procedures Act;
and a claim for attorney’s fees under RPL §282) (Isobe Aff. Exh. N). On or about April
14, 2016, Plaintiff served this second motion for summary judgment,3 which Ms. Crick
opposes a second time for the reasons enumerated below.
ARGUMENT
I. Summary Judgment Standard
Summary judgment is appropriate only where a thorough examination of the merits
clearly demonstrates the absence of any triable issues of fact. E.g., Marine Midland Bank,
N.A. v. Dino & Artie’s Automatic Transmission Co., 168 A.D.2d 610, 610 (2d Dep’t 1990)
(internal citations omitted). The party seeking summary judgment “must make a prima facie
showing of entitlement to judgment as a matter of law, tendering sufficient evidence to
eliminate any material issues of fact from the case.” Midfirst Bank v. Agho, 991 N.Y.S.2d
623, 627 (2d Dep’t 2014), citing Winegrad v. N.Y. Univ. Med. Center, 64 N.Y.2d 851, 853
(1985). Without such a showing, summary judgment must be denied. Id. at 853. Moreover,
the summary judgment proponent must make this showing by “tender of evidentiary proof in
admissible form.” Friends of Animals v. Associated Fur Mfrs., 46 N.Y.2d 1065, 1067 (1979)
(emphasis supplied).
Assuming the summary judgment proponent has met its prima facie burden, the
opponent need only “show facts sufficient to require a trial of any issue of fact” to defeat the
motion. Friends of Animals, 46 N.Y.2d at 1067-1068. Summary judgment “should not be
granted where the facts are in dispute, where conflicting inferences may be drawn from the
evidence, or where there are issues of credibility” Baker v. D.J. Stapleton, Inc., 43 A.D.3d
839, 839 (2d Dep’t 2007) (citation omitted).
3 On June 16, 2016, Plaintiff served a corrected version of the motion at the Court’s direction.
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II. Plaintiff Failed to Establish the Elements of its Case
Plaintiff has not adduced sufficient probative evidence to establish several elements
of its case, and has instead submitted evidence in support of its motion which demonstrates
the existence of disputed issues of material fact. In particular, Plaintiff has not established
that it owned or held the note and mortgage at commencement of this action or that it
complied with conditions precedent to foreclosure codified in the Real Property Actions
and Proceedings Law (“RPAPL”) §§1304 and 1303. Plaintiff has thus failed to make out
its prima facie case and is not entitled to summary judgment.
A. Plaintiff’s Affidavit in Support of its Motion is by an Individual Without Personal Knowledge of the Facts Alleged or Competency to Testify Based on a Review of Business Records
A motion for summary judgment “shall be supported by affidavit.” CPLR
§3212(b). The affiant must have personal knowledge of the facts contained in the
affidavit, must recite all material facts and must show that there is no meritorious defense
to the cause of action for which judgment is sought. Id. On summary judgment, “[a]
conclusory affidavit or an affidavit made by one without personal knowledge of the facts
does not establish the proponent’s prima facie burden.” JMD Holding Corp. v. Congress
Fin. Corp., 4 N.Y.3d 373, 384-385 (2005). See Almonte v. 638 West 160 LLC, 29
N.Y.S.3d 178 (1st Dep’t 2016) (LLC Managing Member’s affidavit, which was not based
on personal knowledge, could not be considered in support of LLC’s summary judgment
motion); Currie v. Wilhouski, 93 A.D.3d 816 (2d Dep’t 2012) (affidavit of insurer’s
branch claims manager not based on personal knowledge was of no probative or
evidentiary significance on summary judgment).
In support of its motion, Plaintiff submits an affidavit dated January 19, 2016 by
Frank Rosas, a Vice President at Nationstar Mortgage LLC (“Nationstar”) as servicer of
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the Loan (“Rosas Affidavit” (annexed to Isobe Aff. at Exhibit O)). In typical “robo-
signer” fashion, Mr. Rosas’ name and title are literally rubber stamped onto the first and
last pages of this boilerplate affidavit (Isobe Aff. Exh. O).
Mr. Rosas asserts “personal knowledge of the facts contained in this Affidavit by
virtue of my position at Nationstar, my familiarity with Nationstar’s processes and based
upon my review and analysis of the relevant business records of Nationstar referenced
and attached herein.” (Isobe Aff. Exh O ¶1). But key facts material to Plaintiff’s
summary judgment took place before Nationstar became the servicer of the loan, about
which Mr. Rosas lacks any personal knowledge. As revealed by Plaintiff’s own exhibits
and documents filed by Plaintiff’s purported predecessor in interest with the Bankruptcy
Court, the loan has been serviced by at least three different servicers prior to Nationstar
(Isobe Aff. Exhs. E, R). Bank of America ostensibly serviced the loan until at least June
24, 2013 (Isobe Aff. Exh. R). Thus Mr. Rosas lacks any personal knowledge of
transactions concerning the loan prior to June 24, 2013. His affidavit makes clear that
any familiarity with the facts extends no farther than Nationstar’s processes and records.
Mr. Rosas halfheartedly attempts to bootstrap the processes and records of Bank
of America into the realm of his knowledge (Isobe Aff. Exh. O ¶1), but he cannot and
does not testify as to the policies, practices or procedures of Bank of America (or indeed
any entity except Nationstar) and thus lays no foundation whatsoever for the introduction
of records not generated by Nationstar. C.f. Wells Fargo Bank, N.A. v. Jones, 139
A.D.3d 520, 521-522 (1st Dep’t 2016) (motion to substitute affidavit of merit and amount
due nunc pro tunc properly denied because affiant could not attest to facts in question
because they pre-dated loan’s assignment to plaintiff); Lodato v. Greyhawk North
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America, LLC, 39 A.D.3d 494, 496 (2d Dep’t 2007) (recipient of documents not made in
recipient’s regular course of business cannot lay a foundation for testimony based on
such documents). See also People v. Cratsley, 86 N.Y. 2d 81, 90 (1995).
The Rosas Affidavit regurgitates a lengthy chain of title (four transfers) for the
subject mortgage as reflected in assignments recorded, according to Mr. Rosas, “in the
Office of the Clerk of Kings County” (Isobe Aff. Exh. O ¶9). In fact, the mortgage
assignments state they were recorded with the New York City Department of Finance,
Office of the City Register (Isobe Aff. Exhs. B, G). Obviously Mr. Rosas’ review of
Nationstar’s second hand records was cursory at best.
The Rosas Affidavit attaches as an exhibit which is alleged to be a “copy of
Plaintiff’s computer database showing the date Plaintiff took possession of the original
note” (Isobe Aff. Exh. Q). This exhibit is certainly not a copy of a “database” since it is
comprised of just a single page. It appears to be an email containing a computer
screenshot of some kind, but it is so heavily redacted and illegible that it cannot have any
evidentiary value, even if Mr. Rosas, who claims no knowledge of Plaintiff’s record-
keeping procedures, were competent to authenticate it.
The Rosas Affidavit fails to meet the actual knowledge standard of CPLR
§3212(b). See, e.g., U.S. Bank v. Handler, 140 A.D. 3d 948, 949 (2d Dep’t 2016)
(summary judgment properly denied because servicer’s affidavit did not attest to personal
familiarity with record-keeping practices). See also Currie v. Wilhouski, 93 A.D.3d 816,
817 (2d Dep’t 2012). Even assuming a lesser evidentiary standard under the business
records rule, the Rosas Affidavit falls short. See Vermont Commissioner of Banking and
Insurance v. Welbilt Corp., 133 A.D.2d 396 (2d Dep’t 1987) (wholesale admission of
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files’ contents not permitted where proponent had not laid a foundation for the admission
of each individual document under CPLR §4518). Accordingly, summary judgment must
be denied because plaintiff has failed to support its motion with the admissible evidence
required by CPLR 3212(b).
B. Summary Judgment Should Be Denied Because Plaintiff Failed to Establish Strict Compliance with RPAPL §§1304 and 1303
1. Plaintiff Failed to Establish Strict Compliance with RPAPL §1304
The law is clear that where a foreclosure Plaintiff fails to show it met conditions
precedent to foreclosure, summary judgment must be denied. Aurora Loan Services, LLC
v. Weisblum, 85 A.D.3d 95, 106 (2d Dep’t 2011). RPAPL §1304 requires a lender to
serve a pre-foreclosure notice upon the borrower of a home loan at least 90 days before
commencing an action to foreclose. The RPAPL §1304 Notice must state the number of
days the borrower is in default on payment and the amount of money needed to cure the
default, and provide contact information for five housing counseling agencies in the
borrower’s area as well as contact information for the lender or loan servicer.
As established by Ms. Crick’s affidavit and the papers submitted on this motion,
the subject loan is a “home loan” and thus RPAPL §1304 applies. The borrower is a
natural person; the loan was primarily for household purposes (purchase of the home);
the property to be foreclosed is a one to four family home occupied by the borrower as
her principal residence; and the property is within the state (Crick Aff. ¶¶1-2). Ms. Crick
specifically denied receipt of the purported notice both in her Amended Verified Answer
and in her affidavit in opposition to this motion (Crick Aff. ¶36; Isobe Aff. Exh. N ¶45).
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In support of Plaintiff’s motion, the Rosas Affidavit merely recites purported
service of the RPAPL §1304 notice in conclusory, boilerplate fashion based on
unspecified “servicing records”:
The servicing records further show that the 90-day notices required by statute were mailed to Defendant by regular and certified mail to both the last known mailing address and to the property address on June 24, 2013. These letters were sent in separate envelopes from any other mailing or notice and were accompanied by a list of housing counseling agencies as required by statute.
(Isobe Aff. Exh. O ¶ 6). The Rosas Affidavit does not state who mailed the purported
RPAPL §1304 notice or what procedures were in place to insure proper mailing.
Inasmuch as the RPAPL §1304 Notice supposedly sent to Ms. Crick was not sent by Mr.
Rosas’ employer, Nationstar, but by Bank of America (Isobe Aff. Exh. R), the Rosas
Affidavit is of no evidentiary value concerning service of the RPAPL§1304 notice
whatsoever.
Failure to prove strict compliance with the unambiguously mandatory provisions
of RPAPL §1304 is fatal to a foreclosure, and Plaintiff has an affirmative obligation to
establish compliance. See Aurora Loan Services, LLC v. Weisblum, 85 A.D.3d 95, 106
(2d Dep’t 2011). Here, Plaintiff submitted a conclusory allegation of service of the
RPAPL §1304 notice within the Rosas Affidavit, along with an inadmissible copy of the
purported notice (Isobe Aff. Exh O ¶7 and Exh. R). The Rosas Affidavit provides no
basis for Mr. Rosas to testify about a notice sent by Bank of America, an entity with
which he has no connection (Isobe Aff. Exh O ¶¶1, 7). Plaintiff has therefore utterly
failed to satisfy its summary judgment burden of establishing, with an affidavit based on
personal knowledge, strict compliance with RPAPL §1304. See Cenlar, FSB v. Censor,
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139A.D. 3d 781, 782-783 (2d Dep’t 2016) (reversing, in part, grant of summary judgment
for plaintiff because plaintiff failed to establish compliance with RPAPL §1304 notice
requirement, where plaintiff's "litigation specialist" affidavit merely stated that notice was
mailed by both regular mail and certified mail but provided no affidavit of service); Wells
Fargo Bank, N.A. v. Burke, 125 A.D.3d 765, 766 (2d Dep’t 2015) (failure to submit
affidavit of proper service of RPAPL §1304 notice prevented plaintiff from
demonstrating absence of material issues regarding compliance with RPAPL §1304);
Deutsche Bank Nat’l Trust Co. v. Spanos, 102 A.D.3d 909, 910-911 (2d Dep’t 2013)
(same); TD Bank, N.A. v. Leroy, 121 A.D.3d 1256, 1257-1258 (3d Dep’t 2014) (copy of
RPAPL §1304 notice addressed to defendant with certified mail receipt lacking postmark
insufficient to establish compliance with RPAPL §1304 in the absence of an affidavit
from someone with personal knowledge of mailing). Because Plaintiff has failed to
establish strict compliance with the requirements of RPAPL §1304, the Court must deny
Plaintiff’s motion.
2. Plaintiff Failed to Establish Strict Compliance with RPAPL §1303
Plaintiff has also failed to establish that a statutorily compliant version of the
required Home Equity Theft Protection Act (“HETPA”) Notice, known as the RPAPL
§1303 Notice, was served on Ms. Crick. HETPA requires the Plaintiff in a residential
mortgage foreclosure to deliver to the homeowner a statutory-specific notice with the
summons and complaint, which must be delivered with the summons and complaint, with
the notice in bold, fourteen-point type and printed on colored paper in a different color
than the summons and complaint. NY RPAPL §1303(1)-(2). See generally First Nat.
Bank of Chicago v. Silver, 73 A.D.3d 162 (2d Dep’t 2010) (strict compliance with
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RPAPL § 1303 is a condition precedent and plaintiff bears the burden of proving strict
compliance therewith).
Here, Plaintiff’s counsel included what purports to be “a copy of the [RPAPL §
1303] notice that was delivered to the mortgagors” immediately after a copy of the
affidavit of service upon Ms. Crick as an exhibit to his attorney affirmation in support of
this motion (Isobe Aff. Exh. S ¶21 and Exh. T, pp. 1-2). The process server’s affidavit
of service of the summons and complaint upon Ms. Crick alleges service of “the within”
summons and complaint and RPAPL §1303 Notice, but no documents were attached to
the one page affidavit as filed with the Court on December 23, 2013 (Isobe Aff. Exh. I).
No RPAPL § 1303 Notice was attached to the Summons and Complaint as filed with the
Court at commencement of this action (Aff. Exh. G) By itself, the Powell Affirmation
cannot establish that Plaintiff served this particular version of the RPAPL §1303 notice
on Ms. Crick because he himself did not serve it, nor does he allege that he or anyone
from his firm provided the notice to the process server. Warrington v. Ryder Truck
Rental, Inc., 35 A.D.3d 445, 456 (2d Dep’t 2006).
The RPAPL §1303 notice Ms. Crick actually received differs from the version
submitted by Plaintiff’s counsel in support of this motion. (Crick Aff. ¶36 and Exh. 4;
Isobe Aff. ¶25 and Exh. T). The notice received by Ms. Crick directs the homeowner to
contact the “New York State Department of Financial Services” (“DFS”) at “1-877-226-
8657” (Crick Aff. Exh. 4), while the copy of the notice submitted for the first time on
summary judgment is an older version of the notice which directs the homeowner to
contact “The New York State Banking Department” at “1-877-BANK- NYS” (Isobe Aff.
Exh. T). Both versions of the notice are invalid because, as of July 18, 2012, RPAPL
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§1303 required the notice to refer borrowers to the DFS at 800-269-0990. Service of an
RPAPL §1303 Notice with incorrect contact information for the Department of Financial
Services does not strictly comply with the statute as amended effective July 18, 2012.
RPAPL §1303 (7); 2 NYMTG §33:23.50.
Plaintiff failed to serve Ms. Crick a statutorily compliant version of the RPAPL
§1303 Notice. Accordingly, summary judgment must be denied. U.S. Bank Nat.
Association v. Nicholson, 2013 WL 6409401 at *9 (Sup. Ct. Suff. Co.) (denying order of
reference where “the Plaintiff has failed to establish that it satisfied the statutory-specific
notice to the defendant with the service of the summons and complaint that was in effect
at the time the action was commenced.”).
C. Plaintiff Has Not Established Standing to Foreclose A foreclosure Plaintiff must demonstrate its interest in the mortgage and note as
part of its prima facie case because ownership of the mortgage and note gives rise to
standing to sue—a threshold element in a foreclosure action. “Standing to sue requires an
interest in the claim at issue in the lawsuit that the law will recognize as a sufficient
predicate for determining the issue at the litigant’s request. Without. . . standing, a party
lacks authority to sue.” Caprer v. Nussbaum, 825 N.Y.S.2d 55, (2d Dep’t 2006) (internal
citations and punctuation omitted). A plaintiff has standing in a mortgage foreclosure
action where it is the holder or assignee of the underlying note when the action is
commenced. See generally Aurora Loan Servs., LLC v. Taylor, 25 NY3d 355 (2015).
Plaintiff’s standing to foreclose hinges on Plaintiff establishing, as a matter of
law, that it was either the holder or assignee of the subject note at the commencement of
this action. As detailed below, Plaintiff failed to establish its status as a holder or assignee
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of the note at commencement and summary judgment is therefore properly denied. See,
e.g. U.S. Bank N.A. v Handler, 140 A.D. 3d 948 (2d Dep’t 2016) (affirming denial of
plaintiff's motion for summary judgment for lack of standing, because the evidence
submitted did not demonstrate, prima facie, that the note was physically delivered to
plaintiff prior to commencement of the action, where servicer's vice president's affidavit
did not attest that he was personally familiar with plaintiff's record keeping practices and
where plaintiff submitted two different copies of the note with endorsements that raised
triable issues of fact as to whether note was assigned to plaintiff prior to commencement
of the action); LaSalle Bank, N.A. v. Zaks, 138 A.D. 3d 788, 788-789 (2d Dep’t 2016)
(reversing summary judgment for plaintiff where plaintiff failed to establish that it had
standing to commence the action because the evidence tendered by plaintiff did not
establish either that the note was assigned to it prior to commencement of the action or
that the note was physically delivered to it prior to commencement of the action); Aurora
Loan Servs., LLC v. Mercius, 138 A.D.3d 650, 651-652 (2d Dep’t 2016) (affirming denial
of plaintiff's motion for summary judgment for lack of admissible evidence establishing
plaintiff's standing).
1. Plaintiff Failed to Allege Possession of the Note at Commencement
Under the NY UCC, in order to foreclose, Plaintiff must establish that the note
has been negotiated to it so that it has become the “holder” of the note. An instrument
“payable to order,” (such as the Note in its original state payable to First Franklin) is
negotiated “by delivery with any necessary indorsement” NY UCC §3-202(1).
The Rosas Affidavit is silent about who possessed the note at commencement of
this action, conclusorily asserting standing while providing no facts, merely reciting that,
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“[e]ither directly or through an agent, Plaintiff was the holder of the original Note,
Mortgage and Assignments of Mortgage prior to the instant action being commenced …”
(Isobe Aff. Exh. O ¶2). The only factual testimony Mr. Rosas can make concerning
possession of the Note is that “Nationstar, as servicer for Plaintiff, came into possession
of the original Note, endorsed in blank, on April 17, 2015” (Isobe Aff. Exh. O ¶2). This
contradicts the testimony of a different Nationstar Vice President, Michael Woods, who
swore that Nationstar had possession of the original Note endorsed in blank when he
made his affidavit on September 10, 2014 in support of the previously-denied motion for
summary judgment (Isobe Aff. Exh. L ¶2).
The note attached to the Rosas Affidavit bears two endorsements. The first is a
special endorsement from “First Franklin Financial Corp. an Op. Sub. Of MLB&T Co.,
FSB” to “First Franklin Financial Corporation.” (Isobe Aff. Exh. P). The second
endorsement is a blank endorsement from “First Franklin Financial Corporation.” Both
endorsements purport to be executed by the same individual, Tanya Rodriguez (Isobe
Aff. Exh. P).
Mr. Rosas recites in sequence that the Note was “delivered” to LaSalle Bank
(twice), then to First Franklin Financial Corporation, all “prior to commencement of the
instant action,” but Mr. Rosas does specify any of the dates on which these ostensible
deliveries took place. Nor does his affidavit divulge what First Franklin Corporation did
with the Note upon its receipt or where or in whose custody it was held (Isobe Aff. Exh.
O ¶9). Instead, he avers that the Note and Mortgage were assigned to “U.S. BANK,
NATIONAL ASSOCIATION, AS SUCCESSOR TRUSTEE TO BANK OF AMERICA,
N.A., AS SUCCESSOR TO LASALLE BANK, N.A., AS TRUSTEE FOR THE
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MERRILL LYNCH FIRST FRANKLIN MORTGAGE LOAN TRUST, MORTGAGE
LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-H1” by “Assignment dated
June 14, 2013” (Isobe Aff. Exh. O ¶9). As discussed below, the June 14, 2013
assignment is insufficient to imbue Plaintiff with standing to foreclose. Leaving that
issue aside, the Rosas Affidavit’s silence on what happened to the note between its
alleged delivery to First Franklin Financial Corporation and its alleged possession by
Nationstar as agent for Plaintiff is puzzling, to say the least. In addition, Plaintiff’s
omission of the Balloon Addendum calls into question whether Nationstar is in fact in
possession of the original Note (Isobe Aff. Exh O ¶¶1-11 and Exh. P; Crick Aff. Exh. 1).
Based on this gap in the recited chain of possession of the note, Plaintiff cannot
establish holder status as of commencement of this action because it has not established
delivery of the original, endorsed Note to it prior to commencement of this action. The
absence of any evidence that Plaintiff possessed the Note containing the endorsement in
blank at commencement prevents Plaintiff from establishing that it is a holder of the
Note. Federal Nat. Mortg. Assoc. v. Higgins, 2016 WL3232718 (Sup. Ct Kings Co.)
(mere production of a copy of note alone cannot establish standing as it does not establish
possession of original note); Deutsche Bank National Trust Company v. Weiss, 133
A.D.3d 704, 705-706 (2d Dep’t 2015) (affidavit’s conclusory statements without factual
details of delivery of note did not establish plaintiff’s standing); (collecting cases); See
also Deutsche Bank National Trust Company v. Idarecis, 133 A.D.3d 702, 703 (2d Dep’t
2015) (affidavit which did not allege date of delivery of note to plaintiff did not establish
standing).
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2. Plaintiff Failed to Establish It Held the Note and Mortgage at Commencement by Virtue of Written Assignment
Plaintiff also submits a series of documents whereby Mortgage Electronic
Registration Systems, Inc., (“MERS”), as nominee for First Franklin Financial Corp. an
Op. Sub. Of MLB&T Co., FSB, purported to assign the note and mortgage to three
different entities (Isobe Aff. Exhs. B, G and Exh. O ¶9). But MERS was not a party to
the note and it had no authority to assign the note; it is long-established that such
mortgage assignments from MERS are insufficient to confer standing because an
assignment of mortgage is a nullity without the attendant indorsement and delivery of the
note it secures. See HSBC Bank v. Hernandez, 92 A.D.3d, 843, 843-4, quoting Deutsche
Bank Natl. Trust Co. v Barnett, 88 A.D.3d 636, 637 (2d Dep’t 2011); Bank of N.Y. v
Silverberg, 86 A.D.3d at 280 (2d Dep’t 2011).
The last assignment in the chain was purportedly made by First Franklin Financial
Corporation to Plaintiff. However, for this assignment to be valid, First Franklin
Financial Corporation had to have possessed an interest in the note and mortgage. First
Franklin Financial Corporation cannot have acquired any such interest by virtue of the
MERS assignment to it. Accordingly, Plaintiff must establish that First Franklin Financial
Corporation was actually in possession of the endorsed note at the time it supposedly
assigned the note and mortgage to Plaintiff by written assignment. Instead, we have only
a boilerplate allegation, made by a person without personal knowledge of the facts,
averring that the note was delivered to First Franklin Financial Corporation “prior to
commencement” (Isobe Aff. Exh. O ¶ 9). Therefore, as an assignee, First Franklin
merely “stepped into the shoes of MERS, its assignor, and gained only that to which its
assignor was entitled.” Bank of N.Y. v. Silverberg, 86 A.D.3d at 283 (2d Dep’t 2011).
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Since MERS as assignor had no interest in the note, Plaintiff has not established that First
Franklin Financial Corporation was assigned anything at all.
III. Plaintiff Failed to Establish a Basis on which the Court Could Strike Ms. Crick’s Amended Answer and Counterclaims A. Plaintiff’s Notice of Motion is Defective
CPLR §2214(a) mandates that a notice of motion specify “the supporting papers
upon which the motion is based, the relief demanded and the grounds therefor.”
Plaintiff’s “Corrected Notice of Motion: (1) for Summary Judgment; (2) To Amend Title;
and (3) To Appoint Referee” cursorily requests as specific relief only “an Order for
Summary Judgment” (without naming the defendant or defendants against which it seeks
the Order) and refers to an attached proposed order. Plaintiff’s proposed “Order Granting
Summary Judgment” would award Plaintiff additional relief not sought in the notice of
motion, including the striking and dismissal of Ms. Crick’s Answer, conversion of Ms.
Crick’s appearance to a Notice of Appearance waiving service of all future papers except
the Notice of Sale and notice of proceedings to obtain surplus monies, amendment of the
caption to include purportedly defaulting tenants sued herein as “John Doe” or “Mary
Doe,” and referral of this action to a Referee to compute the amounts due Plaintiff.
Plaintiff’s counsel argues for striking Ms. Crick’s Amended Verified Answer and
Counterclaims, even though such relief was not demanded in the notice of motion. Ms.
Crick therefore addresses this branch of Plaintiff’s motion on its merits even though there
is no pending motion for such relief. Plaintiff has provided no legal authority or factual
basis for the grant of such extreme relief. Plaintiff’s repeated incantation that Ms. Crick’s
defenses and counterclaims are merely “bald” allegations is disingenuous and
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misleading4 (Isobe Aff. Exh. S ¶¶13-14, 19-25). Ms. Crick’s Amended Answer and
Counterclaims is replete with detailed allegations and references to documentary
evidence to support her claims (Isobe Aff. Exh. M). Plaintiff’s counsel was well aware of
such evidence before filing this motion because Ms. Crick submitted it in opposition to
Plaintiff’s previous, unsuccessful, motion for summary judgment (Isobe Aff. Exh. L).
B. Plaintiff Alleged No Facts to Justify Striking Ms. Crick’s Amended Answer and Counterclaims
The Rosas Affidavit alleges no factual basis for the Court to strike Ms. Crick’s
Amended Verified Answer or to grant any of the other expansive relief set forth in the
proposed order but not included in Plaintiff’s Corrected Notice of Motion (Isobe Aff.
Exh. O ¶¶1-11). Even if the Rosas Affidavit did assert facts which would warrant the
unrequested relief, Mr. Rosas is in no position to establish that any of Ms. Crick’s
defenses lack merit because he claims no personal knowledge of any transactions or
events concerning the Subject Loan and any business records of his employer Nationstar
concerning the Subject Loan cannot have been created before June 24, 2013, at which
time the loan was serviced by another entity (Isobe Aff. Exhs. E, O ¶¶1-11, R).
Residential Credit Solutions, Inc. v. Amsterdam, 2012 WL 3363358, 36 Misc.3d 1234(A)
at *3 (Sup. Ct. Kings Co.) (portion of motion which was to strike answer denied where
plaintiff’s affiant had no personal knowledge of the relevant transactions).
Plaintiff’s counsel alleges that “it is readily apparent that Defendant has
interposed [her Amended Verified Answer and Counterclaims] in this proceeding for no
other purpose than to delay the foreclosure of the Mortgage” (Isobe Aff. Exh. S ¶31).
4 Inexplicably, Plaintiff argues for striking defenses and counterclaims that were asserted in Ms. Crick’s initial December 2013 pro se Verified Answer, which has been superceded by the Amended Verified Answer and Counterclaims dated February 2, 2015 (Isobe Aff. Exh. O ¶14-18, 20).
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While Plaintiff makes this boilerplate argument in opposition to virtually every case in
which its claims are contested, Plaintiff’s accusations of “delay” against Ms. Crick are
especially disingenuous in light of the six years that have elapsed since the first
foreclosure action was commenced, only to be withdrawn on account of Plaintiff’s
predecessor’s inability to comply with the requirements of Administrative Order 548/10
(Isobe Aff. Exhs. C, F). After the 2008 Foreclosure Action was dismissed, Mr. Powell’s
own firm needlessly substituted in as counsel and added another year of delay, apparently
in order to “discontinue” an action which had already been dismissed by the Court (Isobe
Aff. Exh. G).
Not surprisingly, Plaintiff offers no support for its suggestion that Ms. Crick’s
assertion of defenses and counterclaims in this lawsuit that it commenced is somehow
improper. (Isobe Aff. Exh. S ¶31). To the extent that Plaintiff requests that this Court
strike Ms. Crick’s Amended Verified Answer and Counterclaims as a sanction, such
request is based on nothing more than counsel’s unsupported and calumnious suggestion
of some ill motive on the part of Ms. Crick. Cr. Henry v. Datson, 140 A.D.3d 1120,
1121-1122 (2d Dep’t 2016) (drastic remedy of striking an answer pursuant to CPLR §
3126 for failure to comply with discovery demands and orders not appropriate unless
conduct is clearly willful and contumacious); Guiliano v. 666 Old Country Road, LLC,
100 A.D.3d 960, 961 (2d Dep’t 2012) (intentional or negligent spoliation of evidence did
not warrant striking of answer). Plaintiff, needless to say, has neither articulated nor
demonstrated any such basis for striking Ms. Crick’s pleading in this action aside from
the apparent inconvenience that litigation of this action on the merits presents to Plaintiff
and its counsel’s preference for obtaining judgments on default.
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1. There is no Basis to Strike Ms. Crick’s Unconscionability Defense
Ms. Crick’s Amended Verified Answer and Counterclaims more than
sufficiently alleges that in providing a $646,000, non-amortizing loan at 9.45% interest to
a 53 year old babysitter who lacked even a high school education and earned $20,000 per
year, Plaintiff’s putative predecessor in interest, First Franklin, cannot have expected the
loan to be repaid. The doctrine of unconscionability “is primarily a means with which to
protect the ‘commercially illiterate’ consumer beguiled into a grossly unfair bargain by a
deceptive vendor finance company.” Gillman v. Chase Manhattan Bank, N.A., 135
A.D.2d 488, 491 (2d Dep’t 1987), aff’d. 73 N.Y.2d 1 (1988).
First Franklin’s predatory lending practices have been acknowledged by New
York courts in the extensive litigation surrounding the securitization of loans such as Ms.
Crick’s:
Far from a minor private wrong, First Franklin's lending practices, described as “basically criminal” resulted in thousands of borrowers receiving loans that they could not repay. This conduct by First Franklin, one of the nation's largest mortgage originators involved a high degree of moral culpability, contributed to the collapse of the real estate market, and resulted in hardship for millions of Americans. Motions to strike punitive damage claims in similar cases brought by insurers have often not been successful. (emphasis supplied).
AMBAC Assurance Corporation v. First Franklin Corporation, 2013 WL 3779636, 40
Misc.3d 1214(A) at *16 (Sup. Ct. N.Y. Co.) (internal citations omitted).
Summary judgment should not be granted and an affirmative defense of
unconscionability should not be stricken where, as here, the facts of the loan transaction
suggest unconscionability: an adjustable interest rate well above the market rate at the
time of the transaction; a non-amortizing loan provided to an unsophisticated consumer
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who was obviously unable to pay; and a subprime product sold to a minority borrower in
a minority community with a bonus yield spread premium paid by an established
predatory lender to the mortgage broker. C.f., Wells Fargo Bank, N.A. v. Weekes, 40
Misc.3d 1205(A) at *3-4 (Sup. Ct. Kings Co. 2014) (motion to dismiss unconscionability
defense denied where low income, minority borrower was given a high cost adjustable
rate loan in 2006; court noted that Banking Law 6-m(4)5 would have applied if the loan
had been made after September 2008); Wells Fargo Bank, N.A. v. Hughes, 27 Misc.3d
628, 629-630 (Sup. Ct. Erie Co. 2010) (court opined that lender’s practice of subprime,
hybrid ARM lending to unsophisticated borrowers was unconscionable and deceptive); M
& T Mortgage v. Foy, 20 Misc.3d 274 (Sup. Ct. Kings Co. 2008) (to avoid an
5 Ability to repay. No lender or mortgage broker shall make or arrange a subprime home loan unless the lender or mortgage broker reasonably and in good faith believes at the time of the loan closing that one or more of the borrowers, when considered individually or collectively, has the ability to repay the loan according to its terms and to pay applicable real estate taxes and hazard insurance premiums. If a lender or mortgage broker making or arranging a subprime home loan knows that one or more home loans secured by the same real property will be made contemporaneously to the same borrower with the subprime home loan being made or arranged by that lender or mortgage broker, the lender or mortgage broker making or arranging the subprime home loan must document the borrower's ability to repay the combined payments of all loans on the same real property. (a) A lender or mortgage broker's analysis of a borrower's ability to repay a subprime home loan according to the loan terms and to pay related real estate taxes and insurance premiums shall be based on a consideration of the borrower's credit history, current and expected income, current obligations, employment status, and other financial resources other than the borrower's equity in the real property that secures repayment of the subprime home loan. (b) In determining a borrower's ability to repay a subprime home loan, the lender or mortgage broker shall take reasonable steps to verify the accuracy and completeness of information provided by or on behalf of the borrower using tax returns, payroll receipts, bank records, reasonable alternative methods, or reasonable third-party verification. (c) In determining a borrower's ability to repay a subprime home loan according to its terms when the loan has an adjustable rate feature, the lender or mortgage broker shall calculate the monthly payment amount for principal and interest by assuming (i) the loan proceeds are fully disbursed on the date of the loan closing, (ii) the loan is to be repaid in substantially equal monthly amortizing payments of principal and interest over the entire term of the loan, with no balloon payment, and (iii) the interest rate over the entire term of the loan is a fixed rate equal to the higher of the initial interest rate or the fully indexed rate at the time of the loan closing, without considering any initial discounted rate (d) A lender or mortgage broker's analysis of a borrower's ability to repay a subprime home loan may utilize reasonable commercially recognized underwriting standards and methodologies, including automated underwriting systems, provided the standards and methodologies comply with the provisions of this section.
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unconscionable result, equity required shifting of burden of proof to plaintiff to show that
purchase money adjustable rate mortgage at 9.5 percent given to minority borrower in a
minority neighborhood was not discriminatory).
2. Ms. Crick’s Truth in Lending Act Claim Is Not Barred by the Statute of Limitations and Should Not Be Stricken Plaintiff incorrectly argues that Ms. Crick’s counterclaim under the Truth in
Lending Act (“TILA”) is barred by a one year statute of limitations, in support of which
Plaintiff cites to the statute and several cases brought by borrowers as plaintiffs against
lenders. (Isobe Aff. Exh. R ¶23). These cases do not apply here. Under CPLR §203(d)
and the doctrine of equitable recoupment, a defense or counterclaim arising from the
same transaction asserted in a complaint may be used by a defendant as a setoff up to the
amount demanded by plaintiff even if the defense or counterclaim is otherwise barred by
the statute of limitations. First Trust Nat’l. Ass’n. v. Chiang, 242 A.D.2d 599, 600 (2d
Dep’t 1997) (claims barred by TILA statute of limitations could be asserted as defense in
foreclosure). See also Balanoff v. Doscher, A.D.3d 995, 996 (2d Dep’t 2016); Carlson v.
Zimmerman, 63 A.D.3d 772, 774 (2d Dept. 2009); Moreover, Plaintiff has not eliminated
triable issues of fact concerning the TILA violations or even attempted to rebut Ms.
Crick’s detailed allegations (Isobe Aff. Exh. M ¶¶71-83), and therefore summary
judgment must be denied. First Trust Nat’l Ass’n., 242 A.D.2d at 600 (2d Dep’t 1997).
3. Ms. Crick’s Counterclaim for Attorney’s Fees Should Not Be Stricken
The Court should not strike Ms. Crick’s properly asserted counterclaim for
attorney’s fees (Isobe Aff. Exh. N ¶¶96-99). Real Property Law § 282 (“RPL § 282”)
provides as follows, in relevant part:
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Whenever a covenant contained in a mortgage on residential real property shall provide that in any action or proceeding to foreclose the mortgage that the mortgagee may recover attorneys' fees and/or expenses incurred as the result of the failure of the mortgagor to perform any covenant or agreement contained in such mortgage, or that amounts paid by the mortgagee therefor shall be paid by the mortgagor as additional payment, there shall be implied in such mortgage a covenant by the mortgagee to pay to the mortgagor the reasonable attorneys' fees and/or expenses incurred by the mortgagor as the result of the failure of the mortgagee to perform any covenant or agreement on its part to be performed under the mortgage or in the successful defense of any action or proceeding commenced by the mortgagee against the mortgagor arising out of the contract . . . .
RPL § 282(1) (emphasis supplied). Ms. Crick’s mortgage provides, at Section 9:
If: (a) I do not keep my promises and agreements made in this Security Instrument … then Lender may do and pay for whatever is reasonable and appropriate to protect Lender’s interest in the Property and Lender’s rights under this Security Instrument. … Lender’s actions may include, but are not limited to: … (d) appearing in court; and (e) paying reasonable attorneys’ fees to protect its interest in the Property and/or rights under this Security Instrument … I will pay to Lender any amounts, with interest, which Lender spends under this Section 9.
(Exh. C to Plaintiff’s motion, p. 8, ¶9). Section 9 of the mortgage includes a covenant for
Ms. Crick to pay attorney’s fees incurred by her purported lender in this action. Ms.
Crick has retained counsel to represent her in this action. Thus Ms. Crick has met all the
conditions required by RPL §282 and is subject only to the Court’s ultimate decision as
to whether she has mounted a successful defense. It is therefore premature to strike her
counterclaim for attorney’s fees until the action is disposed.
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As explained above, Ms. Crick’s defenses based on Plaintiff’s lack of standing,
and its failure to establish strict compliance with RPAPL §§ 1304 and 1303 have merit
and accordingly these defenses should not be stricken. Indeed none of Ms. Crick’s
defenses or counterclaims should be stricken as Plaintiff failed to set forth any legal or
factual basis for such draconian relief.
CONCLUSION
Wherefore, for all the foregoing reasons, the Court should deny Plaintiff’s motion
for summary judgment in its entirety and the Court should award Ms. Crick such other
and further relief as the Court deems just and proper.
Dated: Brooklyn, New York August 5, 2016
Brooklyn Legal Services
/s/ ______________________________ Catherine P. Isobe, Esq. 1360 Fulton Street, Suite 301 Brooklyn, New York 11216 (718) 246-3276 Attorneys for Defendant Merlene Crick
To: Davidson Fink LLP 28 East Main Street, Suite 1700 Rochester, NY 14614 (585) 760-8218 Attorneys for Plaintiff By NYSCEF
112
FILED: KINGS COUNTY CLERK 11/22/2016 INDEX NO. 507500/2013
NYSCEF DOC. NO. 115 RECEIVED NYSCEF: 11/23/2016
1 of 2113
1
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Supreme Court of the State of New York
County of Queens
Wells Fargo Bank, N.A.,
Plaintiff,
-against-
Ms. K, et al.
Defendants.
DEFENDANT MS. K’s AFFIDAVIT IN
SUPPORT OF ORDER TO SHOW CAUSE
Index No. REDACTED
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
Ms. K, being duly sworn, declares and states:
1. My name is Ms. K. I am a named defendant in this action.
2. I have resided at the property that is the subject of this action since 2002.
3. I hereby request that the Court (1) vacate the Order of Reference and Judgment of
Foreclosure and Sale issued in this case, (2) compel Plaintiff’s acceptance of a late answer and
(3) waive the filing fees and allow me to proceed as a poor person.
The Court Should Vacate the Order of Reference and Judgment of Foreclosure and Sale
4. The Court should vacate the Order of Reference and Judgment of Foreclosure and
Sale because (1) both were impermissibly obtained ex parte without proper notice and (2)
Plaintiff failed to prove its case as required by CPLR § 3215(f).
The Order of Reference and Judgment of Foreclosure and Sale Were Wrongly
Obtained Ex Parte without Proper Notice
5. The Order of Reference entered on March 10, 2016 and Judgment of Foreclosure
and Sale entered on May 17, 2016 should be vacated because Plaintiff impermissibly moved ex
parte without providing notice.
6. CPLR 2103(e) requires that “[e]ach paper served on any party shall be served on
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every other party who has appeared.”
7. A party appears by, inter alia, entering a notice of appearance. CPLR 320(a).
8. I appeared at the first court date and was represented by an attorney. I also
personally attended the court date.
9. At the first court date, my attorney entered a Notice of Appearance. This Notice
of Appearance is attached as Exhibit A.
10. When the referee in the Residential Foreclosure Conference Part released my case
from the Part, she made note that I had appeared along with two attorneys who represented me at
that conference. A copy of this Residential Foreclosure Conference Order is attached as Exhibit
B.
11. Since my attorney filed a notice of appearance during settlement conferences, I
appeared in the case, and Plaintiff was required to serve motion papers upon me. CPLR 320(a);
see also Emigrant Mortgage Co. v. Murray, 38 Misc. 3d 1208(A), 967 N.Y.S.2d 866 (Queens
Cty. Sup. Ct. 2013) (hold that appearing by counsel at foreclosure conference was an appearance
sufficient to confer personal jurisdiction).
12. Even if a Notice of Appearance had not been duly entered, courts have considered
participation in foreclosure settlement conferences to be informal appearances. See, e.g., Wells
Fargo Bank, N.A. v. Forde-White, 38 Misc. 3d 1209(A), 966 N.Y.S.2d 350 (Kings Cty. Sup. Ct.
2013) (“participation in mandatory settlement conferences is an ‘attempt to participate’ sufficient
to stave off a default”); Wells Fargo Bank v. Butler, 41 Misc. 3d 547, 552-553, 971 N.Y.S.2d 41
(Kings Cty. Sup. Ct. 2013) (finding that participation in settlement conferences was sufficient to
avoid default);
13. However, instead of providing proper notice of the motion, Plaintiff
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impermissibly proceeded ex parte.
14. “Ex parte applications are generally disfavored by the courts, unless expressly
authorized by statute, because of the attendant due process implications caused by proceeding
without notice.” Fosmire v. Nicoleau, 144 A.D.2d 8, 12, 536 N.Y.S.2d 492, 494 (1989), aff'd, 75
N.Y.2d 218, 551 N.E.2d 77 (1990) (citing Luckey v. Mockridge, 112 App.Div. 199, 98 N.Y.S.
335; Lohne v. City of New York, 25 A.D.2d 440, 266 N.Y.S.2d 909; Papacostopulos v. Morrelli,
122 Misc.2d 938, 472 N.Y.S.2d 284; Siegel, Practice Commentaries, McKinney's Cons. Laws of
N.Y., Book 7B, CPLR C2211:6, at 32–33)
15. Plaintiff’s ex parte applications for an Order of Reference and Judgment of
Foreclosure and Sale are without express statutory authority and caused me prejudice. Because
Plaintiff improperly proceeded ex parte, the resulting orders must be vacated.
In its Ex Parte Applications, Plaintiff Failed to Prove its Case
16. Even this court holds that I was not entitled to notice of Plaintiff’s motions,
Plaintiff simply failed to prove its case in the filings.
17. CPLR § 3215(f) requires that a party seeking default judgment file “proof of the
facts constituting the claim”.
18. Here, Plaintiff failed to offer proof that it satisfied the contractual and statutory
preconditions for foreclosure. Specifically, Plaintiff failed to show proof that it (1) properly sent
the Notice of Default required by the mortgage, (2) complied with the notice requirements set
forth by RPAPL § 1304, and (3) complied with the filing requirements set forth by RPAPL §
1306.
Plaintiff has Not Provided a Satisfactory Notice of Default
19. My mortgage requires that in the event of default, Plaintiff must provide a written
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Notice of Default before accelerating the debt and bringing a foreclosure action. See Mortgage ¶
22. A copy of my mortgage is attached as Exhibit C.
20. Plaintiff’s affidavit states that I fell behind on the mortgage on March 1, 2015.
Affidavit of Crescencia Jean-Noel ¶ 4 (“There is in fact a default under the terms and conditions
of the Promissory Note and Mortgage, because the March 1, 2015 and subsequent payments
were not made.”); Complaint ¶ 13 (“Ms. K failed to comply with the terms, covenants and
conditions of said notes, mortgages and Final Loan Modification by failing and omitting to pay,
to the plaintiff, payments due on March 1, 2015”).
21. Plaintiff’s affidavit also included a copy of the Notice of Default sent to me
pursuant to my mortgage. A copy of the Notice of Default attached to the Affidavit of Crescencia
Jean-Noel is attached to this affidavit as Exhibit D.
22. However, the Notice of Default is dated December 16, 2014, which is months
before the default date listed in Plaintiff’s papers. Plaintiff has offered no evidence that I was in
default on December 16, 2014.
23. Even if I was in default at that time and cured the default, Plaintiff would have
been required to issue a new notice of default after I re-defaulted on the loan. Mortgage ¶ 22. In
any case, I do not recall ever reinstating my mortgage. I made payments consistently until my
unemployment benefits ran out. Once those benefits ran out, I did not have enough funds to
make any payments.
24. I believe I fell behind in spring of 2015, not in late 2014. This belief is
corroborated by the allegations in Plaintiff’s Complaint and the testimony of its affiant.
25. Plaintiff’s reliance on a Notice of Default issued months before default is a fatal
flaw that should have precluded default judgment.
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Plaintiff’s RPAPL § 1306 Filing Does Not Comply with the Statute
26. RPAPL § 1306 requires that Plaintiff file a statement with the New York State
Department of Financial Services (“DFS”) with information about the mortgage within three
days after mailing the notices required by RPAPL § 1304.
27. Compliance with RPAPL § 1306 is a condition precedent to foreclosure. RPAPL
§ 1306(1) (“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.”)
28. In Exhibit E to its Complaint, Plaintiff included a copy of its Proof of Filing
Statement from DFS. A copy of this Proof of Filing Statement is attached as Exhibit E. The
Proof of Filing Statement shows that Plaintiff filed on December 16, 2014 and listed December
16, 2014 as the mailing date. Id.
29. In Exhibit D to its Complaint, Plaintiff included the tracking numbers for the
notice sent by certified mail. A copy of the notice sent by certified mail is attached as Exhibit D.
I searched the United States Postal Service’s (“USPS”) website for the tracking number listed -
9314710011700782958342. I have attached printouts of the USPS search results to my affidavit
as Exhibit F.
30. The USPS’s tracking information shows that Plaintiff falsified its filing with DFS.
Although the RPAPL § 1304 notices are dated December 16, 2014, Plaintiff did not actually
deliver the letter to the post office until December 19, 2014. This shows a difference of three
business days between when Plaintiff claimed to mail the notice and when Plaintiff actually did.
31. This creates two problems with Plaintiff’s filing: (1) Plaintiff provided false
information to DFS and therefore did not comply with the statute; (2) Plaintiff filed before
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mailing and therefore did not comply with the statute; and (3) as discussed in Paragraph XX,
supra, Plaintiff has not shown that I was in default at the date of filing.
32. Because compliance with RPAPL § 1306 is a precondition for foreclosure and
Plaintiff did not comply with the statute, Plaintiff should not have been awarded default
judgment.
The RPAPL § 1304 Notice Is Inaccurate and Therefore Defective
33. As discussed in Paragraph 28, supra, Plaintiff dated the RPAPL § 1304 notice as
being mailed on December 16, 2014, but did not actually mail it until December 19, 2014.
34. As a result, the mailing date on the notice was incorrect.
35. Because the ninety day period in the RPAPL § 1304 notice runs from the date of
mailing, a misrepresentation in the date of mailing is a substantive misrepresentation that serves
to defeat the purpose of the notice.
36. RPAPL § 1304 requires strict compliance. Aurora Loan Servs., LLC v. Weisblum,
85 A.D.3d 95, 103, 923 N.Y.S.2d 609, 614 (App. Div. 2d Dep’t 2011) (“proper service of the
RPAPL 1304 notice containing the statutorily-mandated content is a condition precedent to the
commencement of the foreclosure action. The plaintiff's failure to show strict compliance
requires dismissal.”).
37. An inaccurate notice does not meet the requirements of the statute. Hudson City
Sav. Bank v. DePasquale, 113 A.D.3d 595, 596, 977 N.Y.S.2d 895 (App. Div. 2d Dep’t 2014)
(“As the plaintiff concedes, its notice to the homeowners required by RPAPL 1304 contained a
factual inaccuracy. The plaintiff's failure to make a prima facie showing of strict compliance
with RPAPL 1304 requires denial of its motion for summary judgment”).
38. Additionally, as discussed in Paragraphs 20-22, supra, Plaintiff has not shown
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that I was in default at the date of the RPAPL § 1304 notice.
39. While RPAPL § 1304(4) allows Plaintiff to avoid provided a second notice in the
event of re-default, Plaintiff has not provided any evidence to suggest that I was in default in
December 2014 and that RPAPL § 1304(4) applies.
40. As stated in Paragraph 23, supra, I do not recall ever reinstating my mortgage. I
made payments consistently until my unemployment benefits ran out. Once those benefits ran
out, I did not have enough funds to make any payments.
41. I believe I fell behind in spring of 2015, not in late 2014. This belief is
corroborated by the allegations in Plaintiff’s Complaint and the testimony of its affiant.
42. Because this notice was clearly inaccurate, Plaintiff should not have been awarded
default judgment.
Pursuant to CPLR § 3012(d), the Court Should Compel Acceptance of a Late Answer
43. Under CPLR § 3012(d), “upon the application of a party, the court may…compel
the acceptance of a pleading untimely served, upon such terms as may be just and upon a
showing of reasonable excuse for delay or default.” See also Cirillo v. Macy's, Inc., 61 A.D.3d
538, 540, 877 N.Y.S.2d 281, 283 (App. Div. 1st Dep’t 2009).
44. Courts have routinely permitted service of a late answer where (1) the delay was
not willful, (2) the defendant has meritorious defenses and (3) service of the answer does not
unfairly prejudice the plaintiff. See, e.g., Nickell v. Pathmark Stores, Inc., 44 A.D.3d 631, 632,
843 N.Y.S.2d 177, 178 (App. Div. 2d Dep’t 2007); Jolkovsky v. Legeman, 32 A.D.3d 418, 419,
819 N.Y.S.2d 561, 562 (App Div. 2d Dep’t 2006); Watson v. Pollacchi, 32 A.D.3d 565, 565-66,
819 N.Y.S.2d 612, 613 (App. Div. 3d Dep’t 2006); Nason v. Fisher, 309 A.D.2d 526, 526, 765
N.Y.S.2d 32, 33 (App. Div. 1st Dep’t 2003).
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45. Allowance of the service of a late answer is consistent with New York’s strong
public policy in favor of a determination of controversies on the merits. See, e.g., Jones v. 414
Equities LLC, 57 A.D.3d 65, 81, 866 N.Y.S.2d 165, 178 (App. Div. 1st Dep’t 2008); Hosten v.
Oladapo, 52 A.D.3d 658, 658-59, 858 N.Y.S.2d 915, 916 (App. Div. 2d Dep’t 2008); Kaiser v.
Delaney, 255 A.D.2d 362, 362, 679 N.Y.S.2d 686, 687 (App. Div. 2d Dep’t 1998); Scagnelli v.
Pavone, 178 A.D.2d 590, 591, 577 N.Y.S.2d 484, 485 (App. Div. 2d Dep’t 1991) (with “the
existence of several viable defenses…[t]he determination of the Supreme Court [allowing
defendant to serve a late answer] is in furtherance of a public policy which favors the resolution
of cases on the merits.”).
I Have a Reasonable Excuse for Not Answering in a Timely Manner
46. When I was served with the summons and complaint, I did not realize that I had
to file an answer with the court.
47. I have limited knowledge of legal processes and have never been sued before.
48. At that time, I was trying to address the situation with the mortgage by selling the
home. But, the home requires cleaning and other work to be in saleable condition.
49. Because I am a breast cancer survivor, I still suffer physical aftereffects from
chemotherapy and a bilateral mastectomy. As a result, doing the work around the house
necessary to sell the home is very taxing physically and mentally. My financial situation does not
permit me to hire someone to prepare the home for sale.
50. Soon after I received the summons and complaint, I called Wells Fargo to discuss
the matter. Wells Fargo would not discuss the legal case with me.
51. After trying to speak with Wells Fargo, I called Plaintiff’s counsel, Frenkel,
Lambert, Weiss, Weisman & Gordon, LLP, on two separate occasions. Both times I was only
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*Prepared with the assistance of counsel licensed to practice law in New York State.
able to speak with someone who was not an attorney and I was told that the firm would not talk
to me unless I had an attorney.
52. At that time, I was unable to afford an attorney and did not know that I could find
an attorney who would take my case pro bono.
53. Later, a friend referred me to the Legal Aid Society in Queens. I spoke with an
attorney, Anna Stallmann, who told me that I should have filed an answer, but that my time to do
so had expired. This was the first that I had heard about filing an answer with the court. Ms.
Stallmann did not tell me that I could ask permission to file a late answer.
54. Additionally, I attended the mandated foreclosure settlement conferences and
have communicated to Wells Fargo multiple times my desire to settle the matter by selling the
home and paying off the mortgage.
55. Courts have repeatedly held that ongoing settlement negotiations constitute a
reasonable excuse for failure to timely answer a plaintiff’s complaint. See, e.g., Scarlett v.
McCarthy, 2 A.D.3d 623, 623-24, 768 N.Y.S.2d 342, 343 (App. Div. 2d Dep’t 2003); Pettinato
v. Sunscape at Bay Shore Home Owners Assoc., 97 A.D.2d 434, 435, 467 N.Y.S.2d 628, 630
(App. Div. 2d Dep’t 1983); HSBC Bank USA, N.A. v. Cayo, 34 Misc.3d 850, 934 N.Y.S.2d 792
(Kings County Sup. 2011).
56. The Cayo court held that a “good faith belief in settlement, supported by
substantial evidence, constitutes a reasonable excuse for default.” HSBC Bank USA, N.A. v.
Cayo, 34 Misc.3d 850, 856, 934 N.Y.S.2d 792, 796 (N.Y. Sup., 2011) (citing Armstrong
Trading, Ltd. v. MBM Enterprises, 29 A.D.3d 835, 815 N.Y.S.2d 689 (2006)). In that case, the
defendant stated that the delay in filing an answer was due to “ongoing settlement negotiations,
both in the court and privately.” Cayo at 854. The court held that denying defendant’s request
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*Prepared with the assistance of counsel licensed to practice law in New York State.
would be against the policy of the settlement conferences, stating that a “pro se litigant
attempting to negotiate with the plaintiff in good faith should not be divested of their right to
litigate the action as a result of those negotiations.”Id. at 856. The court further held that “where
the time period post-default is significant, but viable defenses are alleged, and there is evidence
of private or mandated settlement negotiations, a defendant should be granted leave to file a late
answer.” Id. at 857.
57. Even before the case was brought, I have told Wells Fargo that I am attempting to
sell the home, but I have been having difficulty doing the work necessary to get the home in
saleable condition.
58. I have agreed to have the home listed on the MLS and have been advised by
realtor that the proceeds from the sale of the home should be sufficient to pay off the mortgage.
I Have Shown That I Have Three Meritorious Defense
59. A defendant seeking leave to file a late answer pursuant to CPLR § 3012(d) must
demonstrate “the existence of potentially meritorious defenses.” See Shapiro v. Chawla, 55
A.D.3d 898, 899, 866 N.Y.S.2d 356, 356 (App. Div. 2d Dep’t 2008); Nickell v. Pathmark Stores,
44 A.D.3d 631, 632, 843 N.Y.S.2d 177, 178 (App. Div. 2d Dep’t 2007).
60. As discussed in Paragraphs 18-42, supra¸ Plaintiff’s papers show that it has not
complied with (1) the Notice of Default provision in my mortgage, (2) Real Property Actions and
Proceedings Law Section 1306 (“RPAPL § 1306”) or (3) Real Property Actions and Proceedings
Law Section 1304 (“RPAPL § 1304”).
61. A failure to comply with any of these three contractual and statutory
preconditions of foreclosure is an absolute defense to a foreclosure action.
Plaintiff Will Not Be Prejudiced By Allowing A Late Answer
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*Prepared with the assistance of counsel licensed to practice law in New York State.
62. When deciding motions under CPLR § 3012(d), courts consider whether or not
filing of an answer would prejudice the plaintiff. See, e.g., Jolkovsky v. Legeman, 32 A.D.3d
418, 419, 819 N.Y.S.2d 561, 561 (App. Div. 2d Dep’t 2006). In a decision by the Second
Department, U.S. Bank, Nat’l Assn. v. Sharif, the court found no prejudice to plaintiff where
defendant sought to amend an answer to raise the issue of standing before a judgment had
attached. 89 A.D.3d 723, 723-24, 933 N.Y.S.2d 293, 294-95 (App. Div. 2d Dep’t 2011). Sharif is
consistent with New York’s strong public policy in favor of determining controversies on the
merits. See, e.g., Jones v. 414 Equities LLC, 57 A.D.3d 65, 81, 866 N.Y.S.2d 165, 178 (App.
Div. 1st Dep’t 2008).
63. As discussed in Paragraphs XX, supra, while Plaintiff has furthered the case, it
has done so in violation of the CPLR and this Court must vacate both the Order of Reference and
the Judgment of Foreclosure and Sale. Once those wrongfully obtained orders are vacated,
Plaintiff will not be prejudiced by having to litigate the merits of its case.
Pursuant to CPLR § 1101, the Court Should Waive Filing Fees and Allow Me to Proceed as
a Poor Person
64. Because I am unable to pay the costs, fees and expenses necessary to defend
myself in this action, the Court should waive courts fees and allow me to proceed as a poor
person. See CPLR § 1101(a).
65. Because of my health problems, I am unable to work and have no income. I rely
on charities and friends to cover my living expenses. I am currently applying for public
assistance.
66. My only property is the house that is the subject of this foreclosure action. I am
not sure of its value, but I am in the process of attempting to sell it. I am unable to sell it in time
to pay for my court costs.
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*Prepared with the assistance of counsel licensed to practice law in New York State.
67. Because I live alone in the property, nobody else has a beneficial interest in
defending this suit.
68. On July 1, 2016, I mailed a copy of these papers to Corporation Counsel at 100
Church St., 5th Fl., New York, NY 10007 in accordance with CPLR § 1101(c).
Temporary Injunctive Relief Staying the Sale is Appropriate in this Case
69. I face significant prejudice if my home is sold at public auction on July 15th.
70. When the sale is concluded, the conveyance of the property will act as a complete
bar against my ownership rights in the property. See RPAPL § 1353(3).
71. Because my home is scheduled to be sold on July 15, 2016, I do not have time to
file this motion on notice.
72. I made a good faith effort to notify Plaintiff of this order to show cause.
73. On July 1, 2016, I called the offices of Plaintiff’s counsel at the number provided
on the complaint. During that call, I spoke with Sabrina Redman. I told Ms. Redman the index
number of the case and that I would be filing an emergency order to show cause on July 5, 2016
at 10 a.m. at Queens County Supreme Court.
74. I also requested a fax number to send a copy of the papers. Later in the afternoon
of July 1, 2016, I sent a copy of these papers by fax to (631) 982-4509.
WHEREFORE, I respectfully request that the Court issue an order:
1) cancelling the foreclosure sale scheduled for July 15, 2016;
2) vacating the ex parte Order of Reference entered on March 10, 2016;
3) vacating the ex parte Judgment of Foreclosure and Sale entered on May 17, 2016;
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4) canceling the sale of the subject property scheduled for July 15, 2016 at 10:00
a.m. in Courtroom 25 of the Queens County Courthouse, 88-11 Sutphin Blvd.,
Jamaica, NY;
5) compelling Plaintiff to accept a late answer;
6) deeming such answer, attached as Exhibit G, served;
6) waiving filing fees and allowing Ms. K to proceed as a poor person; and
7) granting such other and further relief as the Court may deem just and proper;
____________________________
Ms. K
Pro Se Defendant
Sworn before me on this
1st Day of July, 2016
___________________
Notary Public
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1
SUPREME COURT OF NEW YORK STATE
COUNTY OF KINGS
THE BANK OF NEW YORK MELLON FKA THE
BANK OF NEW YORK, AS TRUSTEE FOR THE
CERTIFICATEHOLDERS OF CWABS INC., ASSET-
BACKED CERTIFICATES, SERIES 2007-7
Plaintiff,
-against-
Ms. F, ET AL.
Defendants.
DEFENDANT MS. FULLER’S
OPPOSITION TO PLAINTIFF’S
MOTION FOR SUMMARY
JUDGMENT
Index No. REDACTED
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
Ms. F, being duly sworn, declares and states:
1. My name is Ms. F. I am a named defendant in this action, and the owner of the
property in question.
2. I have resided in the property for twenty years. I currently live there with my two
children, both of whom have disabilities.
3. These papers were prepared with the assistance of an attorney admitted to practice
law in New York State.
4. I write this affidavit in opposition to Plaintiff’s motion for summary judgment.
5. The Court should Plaintiff’s motion for summary judgment because (1) Plaintiff
has not supplied admissible evidence sufficient to make out its prima facie case, (2) Plaintiff did
not comply with the Notice of Default provision of the mortgage, (3) Plaintiff has not shown that
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2
it had standing at the commencement of the case, (4) Plaintiff has not filed a proper certificate of
merit, and (5) Plaintiff is seeking to foreclose upon an unexecuted mortgage modification.
I. The Affidavit of Cynthia Wallace is Inadmissible Hearsay
6. In support of its motion for summary judgment, Plaintiff has submitted the
affidavit of Cynthia Wallace, an employee of Specialized Loan Servicing LLC (“SLS”).
7. In her affidavit, Ms. Wallace does not claim to be testifying from personal
knowledge, but instead states that she is familiar with SLS’s business records for the loans that it
services on behalf of Plaintiff.
8. However, for all activities that occurred before SLS began servicing the loan, Ms.
Wallace’s testimony does not fit within the business records exception for hearsay, and is
therefore inadmissible.
9. CPLR Rule 4518 governs the business records exception. To establish foundation
for business records and render her testimony admissible, Ms. Wallace must satisfy the three
requirements of CPLR Rule 4518: (1) that the business record was “made in the regular course of
any business,” (2) “it was the regular course of such business to make [the record],” and (3) the
record was made “at the time of the act, transaction, occurrence or event, or within a reasonable
time thereafter.” CPLR Rule 4518(a); People v. Kennedy, 113 A.D.2d 843, 845, 493 N.Y.S.2d
509, 511 (1985) (refusing to admit records after applying CPLR Rule 4518(a)); Sabatino v. Turf
House, Inc., 76 A.D.2d 945, 946, 428 N.Y.S.2d 752, 753 (3d Dep’t 1980) (to admit hearsay
under CPLR Rule 4518, “it must first be demonstrated that the author made the report in the
regular course of his business, and in order to lay this foundation, the proponent must call as a
witness someone with personal knowledge of the maker's business practices and procedures”)
(internal citations omitted).
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3
10. Here, Ms. Wallace has testified that he works at SLS and that she is familiar with
the records maintained for the Plaintiff. She states that those records are made at or near the time
of the occurrence and kept in regularly conducted business activity.
11. These statements provide sufficient foundation to conclude that Ms. Wallace may
testify about occurrences during the period of time in which SLS serviced the loan for the
Plaintiff without running afoul of the general prohibition on hearsay testimony.
12. However, Ms. Wallace does not limit his testimony to occurrences made while
SLS serviced the loan. Instead, Ms. Wallace testifies as to (1) Plaintiff’s possession of the note
prior to the commencement of the suit in 2013, (2) the alleged default on the loan in May 2012,
(3) the 30 day default notice sent by Bank of America in September 2011, (4) the RPAPL § 1304
notice sent by Bank of America in December 2012, and (5) the filing with New York Statement
Department of Financial Services in December 2012.
13. It is undisputed that SLS was not servicing the loan at those times. As recently as
April 2014, Plaintiff filed a Request for Judicial Intervention in which it stated that the loan was
servicing by Bank of America, N.A.
14. SLS had no involvement with the loan prior to April 2014. Accordingly, to testify
to the occurrence of events before that date, Ms. Wallace must be relying on records that were
not made by SLS or records created that were not created contemporaneously.
15. Unless she can show a personal familiMs.y with the prior servicer’s policies and
practices, Ms. Wallace cannot testify to the business records policies and practices of a company
that does not employ her. CPLR Rule 3212(b)( affidavit in support of a motion for summary
judgment “shall be by a person having knowledge of the facts”); Standard Textile Co. v. Nat'l
Equip. Rental, Ltd., 80 A.D.2d 911, 437 N.Y.S.2d 398 (1981) (affiant “was not a qualified
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4
witness to testify as to the record keeping of another entity”); Reiss v. Roadhouse Rest., 70
A.D.3d 1021, 1025, 897 N.Y.S.2d 450, 452 (App. Div. 2d Dep't 2010) (denying admissibility of
business records where witness was not an employee of the entity that created the document);
Lodato v. Greyhawk, 39 A.D.3d 494, 495, 834 N.Y.S.2d 239, 240 (App. Div. 2d Dep't 2007)
("the mere filing of papers received from other entities, even if they are retained in the regular
course of business, is insufficient to qualify the documents as business records because such
papers simply are not made in the regular course of business of the recipient"); Chase Bank USA,
NA v. Gergis, 31 Misc.3d 1241(A), 932 N.Y.S.2d 759, *3 (Civ. Ct. Kings Cty 2011) ("because
Mr. Lavergne never worked for Washington Mutual Bank, it defies logic that he would have
personal knowledge of Washington Mutual Bank's business practices and procedures").
16. Because Plaintiff relies entirely on Ms. Wallace’s testimony and Ms. Wallace’s
testimony is inadmissible hearsay, Plaintiff has not made its prima facie case and is not entitled
to summary judgment.
II. Plaintiff Has Not Provided a Satisfactory Notice of Default
17. My mortgage requires that in the event of default, Plaintiff must provide a written
Notice of Default before accelerating the debt and bringing a foreclosure action. See Mortgage ¶
22.
18. Plaintiff’s affidavit states that I defaulted by failing to make the payment due
May 1, 2012. Plaintiff’s affidavit also included a copy of the Notice of Default sent by Bank of
America. (Plaintiff’s reliance on the testimony of an SLS employee as to the sending of a notice
by Bank of America years before SLS’s involvement with the mortgage is problematic for the
reasons listed in Section I, supra.)
19. But, this Notice of Default is dated September 2, 2011 – over six months before
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5
the mortgage default. Plaintiff has offered no evidence that the mortgage was in default on
September 2, 2011.
20. Even if I was in default at that time and cured the default, Plaintiff would have
been required to issue a new notice of default after I re-defaulted on the loan. Mortgage ¶ 22.
III. Plaintiff Has Not Provided An Accurate Copy of the Note
21. A plaintiff in a foreclosure case meets its prima facie burden by “producing a
mortgage, the unpaid note, and evidence of default”. Wachovia Bank, Nat. Ass'n v. Carcano, 106
A.D.3d 724, 725, 965 N.Y.S.2d 516 (App. Div. 2d Dep’t 2013). In this case, Plaintiff has failed
to meet this burden because Plaintiff has failed to produce the note.
22. The note that Plaintiff has attached to its papers is stretched horizontally to the
extent that the alleged endorsements stamped on the Note are illegible.
23. This is problematic for two reasons: (1) the Court cannot determine whether or
not the Note is properly endorsed if the endorsement stamps are illegible, and (2) the document
is inadmissible because it does not accurately reproduce the original.
24. Under New York’s evidence laws, a reproduction is admissible as the original
only when copied in a form that “accurately reproduces . . . the original”. CPLR Rule 4539(a).
The copy of the Note provided by Plaintiff does not accurately reproduce the original, which was
printed on a full 8.5” x. 11” page and not stretched horizontally.
25. Additionally, as discussed in Section I, supra, Plaintiff is relying on testimony
from SLS to establish which entity had possession of the note years before the case was brought.
Such testimony is inadmissible hearsay.
IV. Plaintiff Has Not Filed a Proper Certificate of Merit
26. In residential foreclosure cases, the Plaintiff must file a certificate of merit with
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6
the Court. CPLR § 3012-b(a).
27. That certificate must be signed by the attorney for the plaintiff and certify that the
attorney has reviewed the facts of the case and found them to have merit. Id.
28. Additionally, the attorney must consult with a representative of the Plaintiff, and
the certificate must identify the representative with whom the attorney consulted. Id.
(certification must be “based on consultation with representatives of the plaintiff identified in the
certificate”) (emphasis added). (In the statute, the adjective “identified” must apply to the noun
“representative”, since the identity of the plaintiff is clear and need not be established in a
certificate.)
29. Here, Plaintiff’s certificate, signed by Erinn K. Prestidge, Esq. does not identify
the representative consulted. As a result, it does not comply with CPLR § 3012-b(a).
30. If a Plaintiff willfully fails to provide a proper certificate of merit, the court may
dismiss the Complaint. CPLR § 3012-b(e).
V. Plaintiff Is Seeking To Enforce Loan Modifications That Were Not Fully Executed.
31. Plaintiff has attached two alleged loan modifications both of which increase the
principal balance of the loan by capitalizing delinquent interest and fees into the principal
balance.
32. Because each modification increases the balance of the loan, Plaintiff is able to
charge interest on interest. However, neither of these loan modifications are properly signed.
33. The first modification is between Mr. F and Countrywide, but Countrywide did
not sign the modification. By the terms of the modification agreement, the modification was not
in effect unless and until it was executed by both parties.
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7
34. The second modification is between Mr. F and Bank of America, but Bank of
America did not sign the modification. By the terms of the modification agreement, the
modification was not in effect unless and until it was executed by both parties.
35. Plaintiff is relying on these modifications to calculate the amount due in the
complaint and also to set the amount owed in each of the notices. But, neither of these
modifications ever took legal effect.
36. As a result, the amount that Plaintiff claims as owed is inflated by charging
interest upon interest and the RPAPL 1304 notice is incorrect because it is based on a
modification that was never given legal effect.
37. For all of these reasons, Plaintiff’s motion for summary judgment should be
denied.
_______________________
Ms. F
Sworn before me this
2nd day of February, 2017
____________________
Notary Public
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1
*Prepared with the assistance of counsel licensed to practice law in New York State.
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
BANK OF NEW YORK MELLON AS
TRUSTEE,
Plaintiff,
-against-
MR. N, ET AL.
Defendants.
DEFENDANT MR. N’S AFFIDAVIT IN
OPPOSITION TO PLAINTIFF’S MOTION
FOR SUMMARY JUDGMENT
Index No. REDACTED
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
Mr. N, being duly sworn, declares and states:
1. My name is Mr. N. I am a named defendant to this action.
2. I reside at the property that is the subject of this lawsuit.
3. I write this affidavit in opposition to Plaintiff’s Motion for Summary Judgment.
Plaintiff should be denied summary judgment because it has failed to make its prima facie case,
it failed to show that it has standing and its affidavits show that it failed to comply with RPAPL
§ 1304.
4. Given Plaintiff’s failure to meet its prima facie burden, the Court should exercise
its discretion to award summary judgment in my favor. See CPLR R. 3212(b) (“If it shall appear
that any party other than the moving party is entitled to a summary judgment, the court may
grant such judgment without the necessity of a cross-motion.”)
Plaintiff Failed to Submit Admissible Evidence to Meet its Prima Facie Burden.
5. Plaintiff failed to meet its prima facie burden because its papers fail to
authenticate any of its evidence.
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2
*Prepared with the assistance of counsel licensed to practice law in New York State.
6. Plaintiff’s affiant Sherry Dvon Davis submitted an affidavit in support of
Plaintiff’s motion (“Davis Affidavit” or “Davis Aff.”). In the affidavit Ms. Davis references the
following exhibits:
a. Exhibit 1 – Copies of the Note, Mortgage and Loan Modification (Davis Aff. ¶ 5);
b. Exhibit 2 – A schedule of indebtedness (Davis Aff. ¶ 8);
c. Exhibit 3 – A notice of default dated March 7, 2011 (Davis Aff. ¶ 9); and
d. Exhibit 4 – 90 day notice (Davis Aff. ¶ 14).
7. However, Plaintiff’s papers do not include Exhibits 1 through 4. Plaintiff’s
papers have no numerically indicated exhibits.
8. Moreover, this is not a mere problem of transposition (in which Exhibit 1 is
marked as Exhibit A, Exhibit 2 as Exhibit B, and so forth). The schedule of indebtedness and
notice of default dated March 7, 2011 that Ms. Davis describes as Exhibits 2 and 3, respectively
are absent entirely. The note, mortgage and loan modification are not included as a separate
exhibit but merely included as attachments to the summons and complaint.
9. A copy of a document that resembles a 90 day notice is attached as Exhibit D, but
“Exhibit D” is not referenced in either the Davis Affidavit or in the Affirmation of Christopher
Ahern (“Ahern Affirmation” or “Ahern Aff.”).
10. Based on the large discrepancy between Ms. Davis’s description of the exhibits to
her affidavit and the actual exhibits provided to the Court, Ms. Davis appears to have sworn her
affidavit without viewing any of the exhibits that Plaintiff’s counsel has attached to it.
Plaintiff Has Not Shown That It Has Standing, So Summary Judgment Must Be Denied.
11. Plaintiff has not shown that it has standing because: (1) Plaintiff’s copy of the
note of is not admissible, and (2) the copy of the note provided is not accurate.
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3
*Prepared with the assistance of counsel licensed to practice law in New York State.
12. First, as discussed in Paragraphs 6-8, supra, Plaintiff’s affiant did not authenticate
a copy of the note or mortgage. Instead, Plaintiff is relying entirely on copy of the note attached
as an exhibit to the complaint. (See Pl.’s Ex. A.)
13. This is unacceptable because the Complaint is not a sworn document. A motion
for summary judgment must be proven with admissible evidence. Alvord & Swift v. Stewart M.
Muller Const. Co., 46 N.Y.2d 276, 281, 385 N.E.2d 1238, 1241 (1978) (“plaintiff was obliged to
produce evidence, not just unsubstantiated allegations or assertions”). A complaint is only
admissible if it is verified. See CPLR § 105(u). Here, Plaintiff’s Complaint is not verified. (See
Pl.’s Ex. A.) Accordingly, Plaintiff cannot rely on the attachments to the Complaint to carry its
burden at the summary judgment stage.
14. Second, the note attached to the Complaint simply does not accurately reproduce
the original. Under New York’s evidence laws, a reproduction is admissible as the original only
when copied in a form that “accurately reproduces . . . the original”. CPLR Rule 4539(a). Here,
Plaintiff has produced a supposed copy of the note that is shrunk down and distorted – the
language of the note takes up about half of the page’s length. (See Pl.’s Ex. A, pp. 23-26.)
15. I know that the note attached to the Complaint does not accurately reproduce the
original note because I did not sign a distorted note that took up only half of the length of the
page. To the extent that Plaintiff claims that I signed a note identical to the note attached to the
Complaint, I dispute this fact based on my personal knowledge as a signer of the document at
issue.
Plaintiff’s Evidence Shows That Its RPAPL § 1304 Notice was Defective.
16. The Davis Affidavit shows that Plaintiff’s RPAPL § 1304 notice was inaccurate
as to the mailing date.
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4
*Prepared with the assistance of counsel licensed to practice law in New York State.
17. According to the Davis Affidavit, Plaintiff mailed the RPAPL § 1304 notices on
July 3, 2014. (Davis Aff. ¶ 12.)
18. But, the (completely unauthenticated) notice attached to Plaintiff’s motion is
dated July 2, 2014. (Pl.’s Ex. D.)
19. As a result, the mailing date on the notice was incorrect.
20. Because the ninety day period in the RPAPL § 1304 notice runs from the date of
mailing, a misrepresentation in the date of mailing is a substantive misrepresentation that serves
to defeat the purpose of the notice.
21. RPAPL § 1304 requires strict compliance. Aurora Loan Servs., LLC v. Weisblum,
85 A.D.3d 95, 103, 923 N.Y.S.2d 609, 614 (App. Div. 2d Dep’t 2011) (“proper service of the
RPAPL 1304 notice containing the statutorily-mandated content is a condition precedent to the
commencement of the foreclosure action. The plaintiff's failure to show strict compliance
requires dismissal.”).
22. An inaccurate notice does not meet the requirements of the statute. Hudson City
Sav. Bank v. DePasquale, 113 A.D.3d 595, 596, 977 N.Y.S.2d 895 (App. Div. 2d Dep’t 2014)
(“As the plaintiff concedes, its notice to the homeowners required by RPAPL 1304 contained a
factual inaccuracy. The plaintiff's failure to make a prima facie showing of strict compliance
with RPAPL 1304 requires denial of its motion for summary judgment”).
23. Because this notice was clearly inaccurate, Plaintiff cannot prevail in this suit.
____________________________
Mr. N
Pro Se Defendant
Sworn before me on this
1st Day of November, 2016
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5
*Prepared with the assistance of counsel licensed to practice law in New York State.
___________________
Notary Public
139
1
Prepared with the assistance of counsel admitted to practice in New York State
Supreme Court of the State of New York
County of Kings
Federal National Mortgage Association,
Plaintiff,
-against-
Mr. R, et al.
Defendants.
DEFENDANT MR. R’s OPPOSITION TO
PLAINTIFF’S MOTION FOR
SUMMARY JUDGMENT
Index No. REDACTED
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
Mr. R, being duly sworn, declares and states:
1. My name is Mr. R. I am a named defendant in this action, and I submit this
affidavit in opposition to Plaintiff’s Motion for Summary Judgment.
2. I have resided at the property that is the subject of this action since 1990.
3. Summary judgment should not be granted in this case because (1) Plaintiff has
failed to comply with its discovery obligations, (2) Plaintiff has not made the prima facie
showing necessary to obtain summary judgment and (3) triable issues of fact remain.
I. Plaintiff’s Motion for Summary Judgment Should Be Denied Pursuant to CPLR Rule
3212(f) Because It Has Not Responded to Discovery Requests
4. Where it appears “that facts essential to justify opposition may exist but cannot then
be stated, the court may deny the motion or may order a continuance to permit affidavits to be
obtained or disclosure to be had and may make such other order as may be just.” CPLR Rule
3212(f); see, e.g., Olmedo-Garcia v. Dobson, 31 A.D.3d 727, 728, 820 N.Y.S.2d 92, 93 (App. Div.
2d Dep’t 2006).
5. Accordingly, if a key fact at issue is in the exclusive knowledge of the moving
party, summary judgment will ordinarily be denied. See Morris v. Hochman, 296 A.D.2d 481, 482,
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745 N.Y.S.2d 549, 550 (App. Div. 2d Dep’t 2002) (plaintiff's motion denied because it “was made
before the defendants had any opportunity to conduct discovery, and there are essential issues of
fact which are within her exclusive knowledge”); Plaza Investments v. Kim, 208 A.D.2d 704, 617
N.Y.S.2d 496, 497 (App. Div. 2d Dep’t 1994) (summary judgment not warranted when “the
plaintiff's motion was made before any discovery was conducted, and many of the essential issues
of fact in this case are solely within the knowledge of the plaintiff”).
6. Here, Plaintiff has moved for summary judgment relying almost entirely on
business records within its sole possession. Moreover, Plaintiff has done so while failing to
respond to my requests for production of documents.
7. On December 15, 2015, I propounded a request for production of documents
pursuant to CPLR R. 3120. A true and accurate copy of these requests including the affidavit of
service is attached as Exhibit 1.
8. Plaintiff never responded to these requests.
9. The discovery at issue requested documents that would be useful to oppose
Plaintiff’s motion. For example, the documents requested included the loan file, a payment history
and all documents related to the sale or assignment of the loan.
10. Plaintiff cannot improperly refuse to provide relevant evidence and information,
and then contend that there are no triable issues of fact. Rosa v. Colonial Transit, Inc., 276 A.D.2d
781, 781, 715 N.Y.S.2d 426, 427 (App. Div. 2d Dep’t 2000) (“award of summary judgment would
be inappropriate” where movant failed to provide evidence); Soto v. City of Long Beach, 197
A.D.2d 615, 616, 602 N.Y.S.2d 691, 692 (App Div. 2d Dep’t 1993) (where movant “had failed to
comply with its discovery obligations, the motion was premature”); Nodelman v. L.C.V. Realty
Corp., 143 A.D.2d 122, 122, 531 N.Y.S.2d 362, 364 (App. Div. 2d Dep’t 1988) (“facts essential
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to oppose the cross motion may exist but could not be stated by the plaintiffs because of [cross-
movant’s] failure to comply with certain discovery requests made by the plaintiffs”).
11. Plaintiff cannot obtain summary judgment unless and until it has complied with its
discovery obligations. Because Plaintiff has not complied with those obligations, Plaintiff’s
motion must be denied.
II. Plaintiff’s Motion for Summary Judgment Should Be Denied Because Plaintiff Has
Not Made Its Prima Facie Case in its Papers
A. Plaintiff Has Not Made Its Prima Facie Case Because Its Proof of Default
Relies Entirely on Inadmissible Hearsay Evidence
12. Plaintiff relies entirely on the testimony of its affiant, Amy Gauthier. Ms. Gauthier
is an employee of the mortgage servicer, Seterus, Inc. (“Seterus”). (Gauthier Aff. ¶ 1.)
13. In her affidavit, Ms. Gauthier does not rely on her own person knowledge, but
instead relies entirely on Seterus’s business records. (Id.) Ms. Gauthier states that she is familiar
with the business records made and maintained by Seterus. (Id. at ¶ 2.)
14. However, Ms. Gauthier testifies to events, occurrences and transactions that took
place before Seterus serviced my loan. Her testimony as to these events is inadmissible hearsay.
15. CPLR Rule 4518 governs the business records exception. To establish foundation
for business records and render this hearsay admissible, Ms. Gauthier must satisfy the three
requirements of CPLR Rule 4518: (1) that the business record was “made in the regular course of
any business,” (2) “it was the regular course of such business to make [the record],” and (3) the
record was made “at the time of the act, transaction, occurrence or event, or within a reasonable
time thereafter.” CPLR Rule 4518(a); People v. Kennedy, 113 A.D.2d 843, 845, 493 N.Y.S.2d
509, 511 (1985) (refusing to admit records after applying CPLR Rule 4518(a)); Sabatino v. Turf
House, Inc., 76 A.D.2d 945, 946, 428 N.Y.S.2d 752, 753 (3d Dep’t 1980) (to admit hearsay under
CPLR Rule 4518, “it must first be demonstrated that the author made the report in the regular
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course of his business, and in order to lay this foundation, the proponent must call as a witness
someone with personal knowledge of the maker's business practices and procedures”) (internal
citations omitted).
16. Here, Ms. Gauthier testifies that she is familiar with the records maintained for
Plaintiff. (Gauthier Aff. ¶ 2.) She also states that those records are made at or near the time of the
occurrence and kept as part of Plaintiff’s regularly conducted business activity. (Id.)
17. These statements provide sufficient foundation for Ms. Gauthier to testify about
occurrences during the period of time in which Seterus serviced the loan for Plaintiff without
running afoul of the general prohibition on hearsay testimony.
18. However, Ms. Gauthier does not limit her testimony to that timeframe. Instead, Ms.
Gauthier testifies that Defendants breached the obligation by failing to “tender the installment
which became due and payable on January 1, 2009”. (Gauthier Aff. ¶ 8.)
19. At that time, Bank of America serviced the loan, not Seterus. In fact, Seterus was
not even licensed to do business in New York State as of January 1, 2009.
20. Ms. Gauthier states that “[t]o the extent that the business records were created by
prior holders and/or servicers of said loan, those records have been integrated into Seterus, Inc.’s
business records”. (Gauthier Aff. ¶ 2.)
21. However, Ms. Gauthier cannot testify to another entity’s business records simply
because Seterus uses those records. Lodato v. Greyhawk, 39 A.D.3d 494, 495, 834 N.Y.S.2d 239,
240 (App. Div. 2d Dep't 2007) ("the mere filing of papers received from other entities, even if they
are retained in the regular course of business, is insufficient to qualify the documents as business
records because such papers simply are not made in the regular course of business of the
recipient").
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22. Unless she can show a personal familiarity with the prior servicer’s policies and
practices, Ms. Gauthier cannot testify to the business records policies and practices of a company
that does not employ her. CPLR Rule 3212(b)(affidavit in support of a motion for summary
judgment “shall be by a person having knowledge of the facts”); Standard Textile Co. v. Nat'l
Equip. Rental, Ltd., 80 A.D.2d 911, 437 N.Y.S.2d 398 (1981) (affiant “was not a qualified witness
to testify as to the record keeping of another entity”); Reiss v. Roadhouse Rest., 70 A.D.3d 1021,
1025, 897 N.Y.S.2d 450, 452 (App. Div. 2d Dep't 2010) (denying admissibility of business records
where witness was not an employee of the entity that created the document); Chase Bank USA, NA
v. Gergis, 31 Misc.3d 1241(A), 932 N.Y.S.2d 759, *3 (Civ. Ct. Kings Cty 2011) ("because Mr.
Lavergne never worked for Washington Mutual Bank, it defies logic that he would have personal
knowledge of Washington Mutual Bank's business practices and procedures").
23. Because Plaintiff relies entirely on Ms. Gauthier’s affidavit to establish that the
mortgage is in default, and Ms. Gauthier’s testimony on that issue is inadmissible, Plaintiff has not
made its prima facie case and is not entitled to summary judgment.
24. In addition to its substantive deficiencies, Mr. Gauthier’s affidavit is also
inadmissible because it is an out of state affidavit that is not accompanied by a certificate of
conformity. CPLR § 2309(c).
B. Plaintiff Has Not Made Its Prima Facie Case Because It Failed to Provide a
Legible and Admissible Copy of the Mortgage
25. A plaintiff in a foreclosure case meets its prima facie burden by “producing a
mortgage, the unpaid note, and evidence of default”. Wachovia Bank, Nat. Ass'n v. Carcano, 106
A.D.3d 724, 725, 965 N.Y.S.2d 516 (App. Div. 2d Dep’t 2013). In this case, Plaintiff has failed to
meet this burden because Plaintiff has failed to produce a mortgage.
26. Plaintiff is suing upon a Consolidation, Extension and Modification Agreement
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(“CEMA”). (King Aff. ¶ 15.) The CEMA is included as pages 6 through 37 of Plaintiff’s Exhibit
D. This CEMA is completely illegible and inadmissible.
27. The illegibility of the CEMA creates several problems for Plaintiff.
28. First, this Court cannot determine whether or not the CEMA has been breached
without knowing the terms of the CEMA. Whole paragraphs and pages are missing. (See, e.g.,
Pl.’s Ex. D, pp. 6-7, 11, 16, 21, 26-28, 34.)
29. Second, the document is inadmissible because it does not accurately reproduce the
original. Under New York’s evidence laws, a reproduction is admissible as the original only when
copied in a form that “accurately reproduces . . . the original”. CPLR Rule 4539(a). The copy of
the CEMA provided by Plaintiff does not accurately reproduce the original.
30. I know that the CEMA attached to Plaintiff’s papers does not accurately reproduce
the original CEMA because I did not sign an illegible CEMA. To the extent that Plaintiff claims
that I signed a CEMA that matches the CEMA included in Exhibit D (with illegible pages and
paragraphs), I dispute this fact based on my personal knowledge as a signer of the document at
issue.
31. Third, Plaintiff cannot prove the terms of the CEMA by evidence aside from the
CEMA itself. To prevail in its foreclosure action, Plaintiff must prove the terms of the mortgage
that has allegedly been breached. Under the best evidence rule, Plaintiff must make that proof
through production of the original writing or an accurately reproduced copy. See Lipschitz v. Stein,
10 A.D.3d 634, 637, 781 N.Y.S.2d 773, 777 (App. Div. 2d Dep’t. 2004).
32. Because Plaintiff has not provided the original mortgage or a copy that accurately
reproduces the original, Plaintiff has not met its burden of production.
C. Plaintiff Has Failed to Show Compliance with a Condition Precedent Because
the Notice of Default Required by the Mortgage Was Not Sent To Me
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33. My mortgage requires that a notice of default be sent before the lender can initiate
a foreclosure action. (Mortgage1 ¶ 22 (“Lender may require Immediate Payment in Full under this
Section 22 only if all of the following conditions are met . . . Lender sends to me in the manner
described in Section 15 of this Security Instrument a notice”); see also King Aff. ¶ 18 (referring
to required default notice)).
34. The Gauthier Affidavit states that the “demand for payment of the mortgage arrears
was made by correspondence dated May 12, 2011” and that this “notice was mailed to the
Borrowers by first class mail at the Borrowers’ last known address.” (Gauthier Aff. ¶ 9.)
35. The notice of default is included in Plaintiff’s Exhibit F as pages 2 through 8. This
notice however is not addressed to me at my home address.
36. Instead, the notice was sent to Sanford Solny, Esq., 3813 13th Ave 3rd Floor,
Brooklyn, NY 11218.
37. Mr. Solny represented in a case arising from my second mortgage, and he was
authorized to receive information about this mortgage. But, I never told my servicer that his
address was my address. Therefore, Ms. Gauthier’s statement is plainly false because the address
to which the notice was sent was not my last known address.
38. Unfortunately, Paragraph 15 of the Mortgage, which deals with the manner in
which notices may be given, is mostly unintelligible. I can make out a phrase that says “The notice
address is the address of the Property”, but the rest of that sentence is illegible.
39. Nowhere in Paragraph 15 can I see a clause authorizing the Plaintiff to send notice
1 As discussed in Section II.B, supra, the mortgage in this case is part of a CEMA. The mortgage
is attached as an exhibit to the CEMA, and included in pages 20 through 37 of Plaintiff’s Exhibit
D. Although large portions of the mortgage are illegible, this provision regarding pre-foreclosure
notices is mostly intact.
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to a third party, and Ms. Gauthier’s affidavit suggests that the notice must be sent the borrowers’
last known address.
40. Because Plaintiff cannot show that a notice of default was properly sent pursuant
to the mortgage, Plaintiff has not shown that it met the conditions precedent for foreclosure.
D. Plaintiff Has Failed to Prove Standing Because The Purported Allonge
Plaintiff Has Produced is Clearly Not Attached to the Note
41. Where, as here, standing has been raised as a defense, the “plaintiff must prove its
standing in order to be entitled to relief”. Bank of New York v. Silverberg, 86 A.D.3d 274, 279,
926 N.Y.S.2d 532 (App. Div. 2d Dep’t 2011) (citing U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752,
753, 890 N.Y.S.2d 578 (App. Div. 2d Dep’t 2009); Wells Fargo Bank Minn., N.A. v Mastropaolo,
42 A.D.3d 239, 242, 837 N.Y.S.2d 247 (App. Div. 2d Dep’t 2007)). To show standing, the plaintiff
must show “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”. Silverberg, 86 A.D.3d 274, 279, 926
N.Y.S.2d 532 (internal citations omitted).
42. A person becomes a holder of a note through endorsement of that note. U.C.C. §
3-202. Any endorsement of the note “must be written . . . on the instrument or on a paper so firmly
affixed thereto as to become a part thereof”. U.C.C. § 3-202(2).
43. Here, the alleged endorsement is on a separate piece of paper: a purported allonge.
See U.C.C. § 3-202, cmt. 3 (defining allonge). If the allonge is not firmly affixed to the Note, then
it is ineffective. Id.; HSBC Bank USA, N.A. v. Thomas, 46 Misc.3d 429, 432, 999 N.Y.S.2d 671,
674 (Sup. Ct. Kings Cty. 2014) (“The endorsement must be made either on the face of the note or
on an allonge so firmly affixed to the note as to become a part thereof.”).
44. The note, including purported allonge, is included as pages 1 through 4 of Plaintiff’s
Exhibit D. Pages 1 through 3 are fairly pristine copies, with a minimal amount of copier noise
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along the edges of the page. Page 4, the purported allonge, is almost completely dark with copier
noise.
45. Because of the difference in copier noise, the allonge cannot have possibly been
scanned or copied at the same time as the rest of the note. Plaintiff has clearly merged together
two separate documents: a clean copy of the note itself and a heavily degraded image of a supposed
allonge. This merged image does not accurately reproduce any original document actually in
existence and is therefore inadmissible. See CPLR Rule 4539(a).
III. Plaintiff Should be Denied Summary Judgment Because Triable Issues of Fact
Remain
A. The Allonge Provided By Plaintiff Conflicts with Documents Provided By My
Servicer and Publicly Available Information
46. In 2010, I requested a copy of the note for my mortgage from my servicer, Bank of
America.
47. In a letter dated June 1, 2010, Bank of America provided a copy of the note
complete with an allonge.
48. A true and accurate copy of the note provided by Bank of America is attached as
Exhibit 2.
49. This allonge endorses the note to GreenPoint Mortgage Funding, Inc., but does not
include a further endorsement in blank. As a result, the note as provided by Bank of America in
June 2010 was still payable to GreenPoint Mortgage Funding, Inc. U.C.C. § 3-202(1).
50. However, the Plaintiff and purported owner of the note is Fannie Mae.
51. Plaintiff may claim that Fannie Mae took ownership after June 1, 2010 and the loan
was subsequently endorsed in blank. However, this claim contradicts Fannie Mae’s own policies.
52. Fannie Mae has publicly available policies stating under what conditions it buys
loans. These conditions are provided in its Selling Guide, available at
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https://www.fanniemae.com/content/guide/sel072616.pdf.
53. Section B.2-1.4-02 describes what mortgage loans are eligible for purchase by
Fannie Mae. Pages 256 through 258 describe Fannie Mae’s policies on purchase of “seasoned
mortgages”, meaning mortgages that are over one year old as of the purchase date. Fannie Mae
only allows purchase of these mortgages if “The borrower has not had a 30-day delinquency in the
12-month period that precedes the lender’s delivery of the mortgage to Fannie Mae.”
54. According to the Gauthier Affidavit, the loan has been in default since January 1,
2009. (Gauthier Aff. ¶ 8.) This means that per Fannie Mae’s publicly available policies, Plaintiff
would not have purchased this loan after June 1, 2010, when it would have been in default for at
least eighteen months.
55. A party admission that the note would not have been eligible for purchase by Fannie
Mae after June 1, 2010 along with an allonge showing that Fannie Mae did not own the note as of
June 1, 2010 create a triable question of fact as to whether or not Fannie Mae did in fact acquire
the note as an exception to its general policies.
B. The Note Included in Plaintiff’s Exhibit D Does Not Match the Note Attached
as an Exhibit to the CEMA
56. The CEMA that I signed with Plaintiff includes a copy of the consolidated note.
See CEMA ¶ III (“[illegible] . . . attached to the Agreement as Exhibit C The Consolidated Note
contains the . . . [illegible]”). This copy of the consolidated note, as attached to the CEMA, is
included as pages 16 through 18 of Plaintiff’s Exhibit D.
57. The signature on the Consolidated Note is visibly different than the signature on
the note that Plaintiff claims to possess. Compare Pl.’s Ex. D, p. 3 with Pl.’s Ex. D p. 18. The
discrepancy is most clearly seen by examining the placement of the R in my signature. On Page
18 of Exhibit D, the R dips below the signature line. This does not happen on the version included
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as Page 3 of Exhibit D.
58. Because the note is a negotiable instrument that can be assigned by transfer of
physical possession, it would not have been executed in duplicate originals because multiple notes
would create multiple debts.
59. The existence of at least two purported notes is sufficient evidence that a question
of fact remains with regards to Plaintiff’s standing to bring this suit. Additionally, Courts have
dismissed cases for lack of standing where the plaintiff provides a different note later in a
foreclosure action without any explanation. See Deutsche Bank Nat. Trust Co. v. Barnett, 88
A.D.3d 636, 638, 931 N.Y.S.2d 630, 631 (App. Div. 2d Dep’t 2011) (summary judgment denied
where the “plaintiff submitted copies of two different versions of an undated allonge”); Assets
Recovery 26, LLC v. Rivera, 39 Misc.3d 1240(A), 975 N.Y.S.2d 364 (Sup. Ct. Richmond Cty
2013) (holding that plaintiff “failed to demonstrate to the satisfaction of the [c]ourt that said
allonge was executed and/or the note delivered to the original plaintiff prior to the
commencement…” where plaintiff first presented the allonge late in the case).
IV. Conclusion
60. For the forgoing reasons, I request that Plaintiff’s motion for summary judgment
be denied. Because Plaintiff has failed to make its prima facie case, I request that the Court exercise
its discretion to dismiss the case pursuant to CPLR R. 3212(b). In the alternatively, I request that
Plaintiff be barred from re-filing a motion for summary judgment until it can show that it has
complied with its obligation to comply with my discovery requests.
_______________________
Mr. R
Sworn before me this
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22nd day of August, 2016
____________________
Notary Public
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Supreme Court of the State of New York
County of Queens
U.S Bank, N.A.,
Plaintiff,
-against-
Ms. E, et al.
Defendants.
OPPOSITION TO PLAINTIFF’S MOTION
FOR SUMMARY JUDGMENT
Index No. REDACTED
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
Ms. E, being duly sworn, declares and states:
1. My name is Ms. E. I am a named defendant in this action.
2. I have resided at the property that is the subject of this action since 2009.
3. I write this in opposition to Plaintiff’s motion for summary judgment.
Plaintiff Is Seeking To Maintain The Suit Under The Name Of A Nonexistent Entity
4. Plaintiff has requested that the caption be altered to record “U.S. Bank Nation
Trust, N.A., as Trustee for LSF9 Master Participation Trust” as the Plaintiff in this action. See
Malekan Aff. ¶ 18; Notice of Motion.
5. The abbreviation “N.A.” is used to indicate that an entity is a national bank
chartered and supervised by the Office of the Comptroller of the Currency.
6. However, “U.S. Bank Nation Trust” is not the name of any National Association
registered with the Office of the Comptroller of the Currency.1 U.S. Bank Nation Trust, N.A.,
therefore does not exist as a legal entity. It cannot act as a trustee or maintain a suit.
1 Indices of all national banks are available on the OCC’s website at
http://www.occ.treas.gov/topics/licensing/national-bank-lists/index-active-bank-lists.html.
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7. Because I have placed at issue Plaintiff’s standing to conduct the suit, the identity
of the entity maintaining the suit is material to the case. As a result, Plaintiff’s attempt to
maintain an action as a nonexistent entity cannot be corrected or disregarded. CPLR § 2001.
8. Because of its lack of clarity as to who is maintaining this suit, Plaintiff’s motion
must be denied.
The Affidavit of David Nilsen Consists Largely of Inadmissible Hearsay
9. My mortgage was originally insured by FHA, a division of HUD. At the outset of
this case, in February 2013, U.S. Bank, N.A. brought suit, claiming to be the holder of the loan.
At that time, U.S. Bank Home Mortgage was the servicer of my loan.
10. In 2014, my loan was purchased by HUD and sold at auction through HUD’s
DASP program. According to Plaintiff’s papers, U.S. Bank Nation Trust, N.A., as Trustee for
LSF9 Master Participation Trust is now the owner of the loan. But see Paragraphs 4-6, supra.
11. After the loan was sold through the DASP program in 2014, Caliber Home Loans,
Inc. became the new servicer of the loan.
12. Plaintiff has submitted as evidence the Affidavit of David Nilsen (“Nilsen Aff.”).
13. Mr. Nilsen is an employee of Caliber Home Loans, Inc. and states that he is
“familiar with business records maintained for the purpose of servicing U.S. Bank Trust, N.A. as
Trustee for LSF9 Master Participation Trust’s mortgage loans”. Nilsen Aff. ¶¶ 1-2.
14. This is problematic for two reasons: (1) Mr. Nilsen is speaking about the business
records concerning loans owned by U.S. Bank Trust, N.A., rather than U.S. Bank Nation Trust,
N.A.; and (2) Mr. Nilsen is relying on inadmissible business records for all information pre-
2014.
15. First, as discussed in Paragraphs 4-6, supra, Plaintiff’s papers are in conflict as to
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the identity of the proper party to maintain this foreclosure. As a result, Mr. Nilsen has offered
evidence suggesting that US Bank Trust, N.A. owns the note and mortgage in its capacity as
trustee, even as Plaintiff’s counsel requests that this court modify the caption to make US Bank
Nation Trust, N.A. the Plaintiff of record.
16. Second, for all activities that occurred before Caliber Home Loans, Inc. began
servicing the loan, Mr. Nilsen’s testimony does not fit within the business records exception to
hearsay.
17. CPLR Rule 4518 governs the business records exception. To establish foundation
for business records and render this hearsay admissible, Mr. Nilsen must satisfy the three
requirements of CPLR Rule 4518: (1) that the business record was “made in the regular course of
any business,” (2) “it was the regular course of such business to make [the record],” and (3) the
record was made “at the time of the act, transaction, occurrence or event, or within a reasonable
time thereafter.” CPLR Rule 4518(a); People v. Kennedy, 113 A.D.2d 843, 845, 493 N.Y.S.2d
509, 511 (1985) (refusing to admit records after applying CPLR Rule 4518(a)); Sabatino v. Turf
House, Inc., 76 A.D.2d 945, 946, 428 N.Y.S.2d 752, 753 (3d Dep’t 1980) (to admit hearsay
under CPLR Rule 4518, “it must first be demonstrated that the author made the report in the
regular course of his business, and in order to lay this foundation, the proponent must call as a
witness someone with personal knowledge of the maker's business practices and procedures”)
(internal citations omitted).
18. Here, Mr. Nilsen has testified that he works at Caliber Home Loans, Inc. and that
he is familiar with the records maintained for “U.S. Bank Trust, N.A. as Trustee for LSF9 Master
Participation Trust’s mortgage loans”. Nilsen Aff. ¶¶ 1-2. He states that those records are made
at or near the time of the occurrence and kept in regularly conducted business activity. Nilsen
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Aff. ¶ 2.
19. These statements provide sufficient foundation to conclude that Mr. Nilsen may
testify about occurrences during the period of time in which Caliber Home Loans, Inc. serviced
the loan for U.S. Bank Trust, N.A. as Trustee for LSF9 Master Participation Trust without
running afoul of the general prohibition on hearsay testimony.
20. However, Mr. Nilsen does not limit his testimony to occurrences made while
Caliber Home Loans, Inc. serviced the loan for U.S. Bank Trust, N.A. as Trustee for LSF9
Master Participation Trust. Instead, Mr. Nilsen testifies as to (1) delivery of the Note in October
2009, (2) the alleged default on the loan in July 2012, (3) the 30 day default notice sent in
September 2012, (4) the RPAPL § 1304 notice sent in July 2012, and (5) the filing with New
York Statement Department of Financial Services in July 2012. See Nilsen Aff. ¶ 4-9.
21. It is undisputed that Caliber Home Loans, Inc. was not servicing my loan at those
times, and that U.S. Bank Trust, N.A. as Trustee for LSF9 Master Participation Trust did not
own the loan at those times. Accordingly, Mr. Nilsen must be relying on records that were not
made by Caliber Home Loans, Inc. or records created that were not created contemporaneously.
22. Unless he can show a personal familiarity with the prior servicer’s policies and
practices, Mr. Nilsen cannot testify to the business records policies and practices of a company
that does not employ him. CPLR Rule 3212(b)( affidavit in support of a motion for summary
judgment “shall be by a person having knowledge of the facts”); Standard Textile Co. v. Nat'l
Equip. Rental, Ltd., 80 A.D.2d 911, 437 N.Y.S.2d 398 (1981) (affiant “was not a qualified
witness to testify as to the record keeping of another entity”); Reiss v. Roadhouse Rest., 70
A.D.3d 1021, 1025, 897 N.Y.S.2d 450, 452 (App. Div. 2d Dep't 2010) (denying admissibility of
business records where witness was not an employee of the entity that created the document);
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Lodato v. Greyhawk, 39 A.D.3d 494, 495, 834 N.Y.S.2d 239, 240 (App. Div. 2d Dep't 2007)
("the mere filing of papers received from other entities, even if they are retained in the regular
course of business, is insufficient to qualify the documents as business records because such
papers simply are not made in the regular course of business of the recipient"); Chase Bank USA,
NA v. Gergis, 31 Misc.3d 1241(A), 932 N.Y.S.2d 759, *3 (Civ. Ct. Kings Cty 2011) ("because
Mr. Lavergne never worked for Washington Mutual Bank, it defies logic that he would have
personal knowledge of Washington Mutual Bank's business practices and procedures").
23. Because Plaintiff relies entirely on Mr. Nilsen’s testimony and Mr. Nilsen’s
testimony is inadmissible hearsay, Plaintiff has not made its prima facie case and is not entitled
to summary judgment.
24. In addition to its substantive deficiencies, Mr. Nilsen’s affidavit is also
inadmissible because it is an out of state affidavit that is not accompanied by a certificate of
conformity. CPLR § 2309(c).
Plaintiff Has Provided Inaccurate and Ineffective RPAPL § 1304 Notices
25. Plaintiff has provided inaccurate pre-foreclosure notices.
26. The RPAPL § 1304 notice attached as Plaintiff’s Exhibit K is dated July 20, 2012.
It states that I am 49 days in default and must pay $8,342.13 by August 19, 2012 to avoid
foreclosure. I believe that $8,342.13 is roughly equal to three monthly payments including
principal, interest, taxes and insurance.
27. But, according to the Nilsen Affidavit, I defaulted “by failing to pay the monthly
mortgage payments which became due on July 01, 2012”. Nilsen Aff. ¶ 5.
28. Based on the Nilsen Affidavit, I should have only been 19 days in default as of
July 20, 2012 and I should have only been required to pay two monthly payments by August 19,
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2012 to cure the default.
29. RPAPL § 1304 requires strict compliance. Aurora Loan Servs., LLC v. Weisblum,
85 A.D.3d 95, 103, 923 N.Y.S.2d 609, 614 (App. Div. 2d Dep’t 2011) (“proper service of the
RPAPL 1304 notice containing the statutorily-mandated content is a condition precedent to the
commencement of the foreclosure action. The plaintiff's failure to show strict compliance
requires dismissal.”).
30. An inaccurate notice does not meet the requirements of the statute. Hudson City
Sav. Bank v. DePasquale, 113 A.D.3d 595, 596, 977 N.Y.S.2d 895 (App. Div. 2d Dep’t 2014)
(“As the plaintiff concedes, its notice to the homeowners required by RPAPL 1304 contained a
factual inaccuracy. The plaintiff's failure to make a prima facie showing of strict compliance
with RPAPL 1304 requires denial of its motion for summary judgment”).
31. Because Plaintiff’s RPAPL § 1304 notice is inaccurate as to the date of default
and amount required to reinstate the mortgage, it is legal insufficient and Plaintiff cannot receive
summary judgment.
Plaintiff Has Not Shown that It Complied With HUD’s Servicing Standards
32. Mortgagees are required to follow FHA’s servicing guidelines, including its loss
mitigation standards. 24 C.F.R. § 203.500 (“…failure to comply will be cause for imposition of a
civil money penalty, including a penalty under § 30.35(c)(2), or withdrawal of HUD's approval
of a mortgagee.”). These regulations are also incorporated by reference in my loan documents.
33. Under Paragraph 9(d) of the Mortgage, the Lender cannot accelerate the loan or
foreclose if not permitted by the Regulations of the HUD Secretary. Additionally, Paragraph
6(b) of the Note explicitly states that it “does not authorize acceleration when not permitted by
HUD regulations.”
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34. Under HUD’s regulations, “[t]he mortgagee must have a face-to-face interview
with the mortgagor, or make a reasonable effort to arrange such a meeting, before three full
monthly installments due on the mortgage are unpaid.” 24 C.F.R. § 203.604(b).
35. A reasonable effort is defined as at least one letter, and one trip to see a mortgagor
at the mortgagor's property. 24 C.F.R. § 203.604(d).
36. Plaintiff did not comply with these requirements.
37. In its papers, Plaintiff relies on (1) a denial letter dated February 15, 2013 and (2)
failure to obtain a loan modification during the settlement conference part. Malekan Aff. ¶ 56.
38. In the papers as served upon me, Plaintiff’s Exhibit O is lacking pages, leaving it
both without a date and without content. A true and accurate copy of Plaintiff’s Exhibit O as
served upon me is attached as Exhibit 1.
39. Even if Plaintiff’s Exhibit O was complete and contained the statements described
in the Malekan Affirmation, it would still be inadmissible. Exhibit O is completely
unauthenticated. It is only attached in the attorney’s affirmation; it is never described in the
Nilsen Affirmation.
40. There is no testimony from someone having knowledge of the facts that this letter
is accurate or was sent to me. See CPLR Rule 3212(b) (affidavit in support of a motion for
summary judgment “shall be by a person having knowledge of the facts”); Zuckerman v. City of
New York, 49 N.Y.2d 557, 563, 427 N.Y.S.2d 595, 598 (1980) (affirmation of attorney “who
demonstrated no personal knowledge” is “without evidentiary value and thus unavailing”).
41. Plaintiff’s facts regarding the settlement conference part is irrelevant. As stated in
Paragraphs 32-35, Compliance with HUD’s regulations is a pre-condition to acceleration.
Plaintiff cannot satisfy those conditions after the filing the suit.
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42. For the reasons above, I request that the Court deny Plaintiff’s motion for
summary judgment.
_______________________
Ms. E
Pro Se Defendant
Sworn before me this
8th day of July, 2016
____________________
Notary Public
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