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CASCADE FUNDING MORTGAGE TRUST 2017-1, Plaintiff, v. Christopher TURNER a/k/a Christopher G. Turner; Christine Turner a/k/a Christine R. Turner; Mortgage Electronic Registration Systems, Inc. as nominee for GMAC Mortgage Corporation dba Ditech.com; Capital One Bank (USA), N.A.; Petro, Inc.; Clerk of the Suffolk County District Court, Defendants.
ORDERED that, after trial, plaintiff's complaint against defendant Christopher Turner is dismissed for failing to establish by the preponderance of credible evidence that plaintiff had complied with the mailing requirements of RPAPL § 1304 as to him.
This is an action to foreclose a mortgage on residential real property located at 93 Old Brook Road, Dix Hills, Suffolk County, New York given by defendants Christopher Turner and Christine Turner to a predecessor in interest to plaintiff Cascade Funding Mortgage Trust 2017-1 (“plaintiff”) to secure a note given by defendant Christopher Turner (“defendant”). The prior history of this action is contained in the court's decision set forth on the record on June 12, 2017 after oral argument of plaintiff's prior motion for summary judgment (Mot. Seq. No. 001) and defendant's cross-motion to dismiss (Mot. Seq. #002), which granted plaintiff partial summary judgment pursuant to CPLR 3212 (g), amended the caption by substituting plaintiff for prior plaintiff, set the default of the non-appearing, non-answering defendants including defendant Christine Turner, and dismissed all of defendant's affirmative defenses except defendant's 3rd affirmative defense as questions of fact remained as to plaintiff's compliance with the mailing requirements of RPAPL § 1304, and plaintiff's proof of defendant's default in payment under the terms of the note and mortgage; as well as the court's decision dated May 20, 2019. The decision of May 20, 2019 decided the parties' successive summary judgment motions authorized by the decision of June 12, 2017, denied defendant's cross-motion to dismiss the action (Mot. Seq. #004) and granted plaintiff further partial summary judgment finding that defendant had acknowledged his default in payment, but denied full summary judgment as plaintiff's proof again failed to establish compliance with the mailing requirements of RPAPL § 1304 (Mot. Seq. #003). That decision set the remaining issue for trial which was held on August 2, 2019 at 9:30 AM.
At the trial plaintiff presented Michael Dolan, a Senior Litigation Associate employed by plaintiff's present servicer, Statebridge Servicing (“Statebridge”). Mr. Dolan claimed to have forty (40) years of experience in the servicing of mortgages and attempted to support his testimony based upon this experience. He established his ability to testify to his employer's business records pursuant to CPLR 4518. He explained the “boarding” process used by Statebridge to place and incorporate the computer records of prior servicers, including Residential Credit Solutions, Inc. (“Residential”) into its computer records and that it relied upon these records in its every day business activities. He identified plaintiff's exhibits #1-4 as having been among those “boarded” by Statebridge into its computer records from Residential, that they were of the type regularly relied upon by Statebridge in its business and that in preparation for his testimony he had viewed those computer records, printing the copies produced for trial. The court, over objection from defendant, admitted these four documents into evidence pursuant to CPLR 4518 in line with the recent decision of the Second Department in Bank of New York Mellon v. Gordon,171 AD3d 197, 209 (2d Dept 2019). In doing so the court noted that although these documents may be admitted as business records, their meaning and ability to establish the mailing of the notices required by RPAPL § 1304 was subject to explanation and connection.
Plaintiff attempted to establish proof of mailing through the testimony of Mr. Dolan, as there were no affidavits of mailing or service by Residential included in the business records “boarded.” Mr. Dolan testified that plaintiff's exhibit #1 was the notice required by RPAPL § 1304 sent to defendant by certified mail, and that plaintiff's exhibit #2 was the same notice sent by first class, regular mail. He opined that the date on each letter, February 8, 2013, was the date that each was mailed by Residential to defendant. In part, he based this opinion upon his review of plaintiff's exhibit # 3, a computer print out of Residential's records.
Among the entries on that document, he claimed that one dated February 9, 2013 showed a charge by Residential for $8.00 for “NOR/Breach Fee.” Although acknowledging that he had not been trained in Residential's business or mailing practices, he opined that this showed that Residential paid for the mailing of the RPAPL § 1304 notices (“notices”) dated the previous day and that the mailing of the notices occurred on February 8, 2013.
He further opined that plaintiff's exhibit #4, another printout from Residential's computer records contained two entries dated February 7, 2013 and February 9, 2013 which he claimed also established the mailing of the notices on February 8, 2013. The “020713” entry stated “NY 90-Day Notice, sent to WALZ for processing,” and the “020913” entry stated “NY 90-Day Notice Mailing Date: 02/08/13; Expiration Date: 3/14/13, sent to borrower and image sent for upload.” Mr. Dolan testified that in his experience all FNMA lenders and servicers used the “Fidelity” computer system, and that Residential was such a servicer. From his experience the “Fidelity system” required that the servicer itself mail both notices, and testified that the entry “WALZ” was the name of an employee at Residential who was to mail the notice by first class, regular mail. When asked if he had ever heard of the Walz processing system used to mail such notices by many servicers and lenders through Walz as a mailing house, he said “No.” Plaintiff's counsel asked for a short recess in testimony, and which was granted over objection by defendant. After the recess, where plaintiff's counsel spoke with Mr. Dolan, he continued his testimony acknowledging that the entry “WALZ” was not the name of a Residential employee, and that some servicers used mailing services to mail notices. He stated that he was not familiar with Walz or its Track Right system, but eventually acknowledged on cross-examination that it appeared from plaintiff's exhibit #4 that the notice to be mailed by first class, regular mail had been sent by Residential to Walz to be mailed, that he was not familiar with Walz process for mailing, believed that the notice was mailed, but stated that he did not know that for a fact. He continued to insist that the exhibits established that the notice to be mailed by certified mail had been mailed directly by Residential based upon the exhibits and his familiarity with the “Fidelity” computer system. At the conclusion of Mr. Dolan's testimony, plaintiff rested and defendant moved to dismiss based upon plaintiff's failure to establish that it had mailed the notices in compliance with the requirements of RPAPL § 1304; the court reserved decision. Defendant then rested without presenting any evidence, and the court indicated to the parties that it would issue this written decision after trial.
DECISION OF THE COURT
Where defendant, as here, has properly asserted non-compliance with the notice requirements of RPAPL § 1304, including proof of mailing by both certified mail and first class mail, as a defense or raised it in a response to plaintiff's motion, plaintiff must adduce evidentiary proof in admissible form that the pre-action foreclosure 90 day notice requirements have been satisfied (see Aurora Loan Services v. Weisblum, 85 AD3d 95 [2d Dept 2011]; Deutsche Bank Natl. Trust Co. v. Spanos, 102 AD3d 909 [2d Dept 2013]; Citimortgage Inc. v. Espinal, 134 AD3d 876 [2d Dept 2015]; M & T Bank v. Joseph, 152 AD3d 579 [2d Dept 2017]; Bank of New York Mellon v. Zavolunov, 157 AD3d 754 [2d Dept 2018];Deutsche Bank Natl. Trust Co. v. Starr, 173 AD3d 836 [2d Dept 2019]). Before the court on this trial was the sufficiency of plaintiff's proof of the mailings required by RPAPL § 1304.
To establish mailing, plaintiff may provide proof of actual mailing or description of its office's practice and procedure for mailing (see New York & Presbyt. Hosp. v. Allstate Ins. Co. (29 AD3d 547 [2d Dept 2006]; Citibank, N.A. v. Wood, 150 AD3d 813 [2d Dept 2017]; Wells Fargo Bank, N.A. v. Taylor, 170 AD3d 921 [2d Dept 2019])).
Due proof of the mailing of the RPAPL § 1304 notices may be established by submission of an affidavit of service (see Emigrant Mortgage Co., Inc. v. Persad, 117 AD3d 676 [2d Dept 2014]; Investors Savings Bank v. Salas, 152 AD3d 752 [2d Dept 2017]), an affidavit of mailing (see JPMorgan Chase Bank, NA v. Schott, 130 AD3d 875 [2d Dept 2015]; Wells Fargo v. Moza, 129 AD3d 946 [2d Dept 2015]), or through business records that detail a standard of office practice or procedure designed to ensure that items are properly addressed and mailed (see Vivane Etienne Med. Care, P.C. v. Country Wide Ins. Co., 25 NY3d 498 ; Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679 [2d Dept 2001]); Citimortgage v. Banks, 155 AD3d 936 [2d Dept 2017]; Aurora Loan Servs., LLC v. Vrionedes, 167 AD3d 829 [2d Dept 2018]; LNV Corp. v. Sofer, 171 AD3d 1033 [2d Dept 2019]; Wells Fargo Bank, N.A. v. Kohli, 173 AD3d 941[2d Dept2019]; U.S. Bank, N.A. v. Ahmed, –––AD3d––––, 2019 NY Slip Op 05577 [2d Dept 2019]).
Here, the court admitted into evidence plaintiff's exhibits # 1-4 as business records maintained by Statebridge, as the witness established Statebridge's “boarding” of Residential records, which Statebridge relied upon in its every day business operations (see Bank of New York Mellon v. Gordon, supra). Though those records may give some indication of mailing, they in and of themselves fail to provide the proof of mailing required by the cases set forth above. Just as in a summary judgment motion, if a witness establishes his ability to testify as to the business records pursuant to CPLR 4518 but merely states that a review of the admitted records establish that the notices were mailed by a prior servicer by both regular and certified mail on a certain date, based upon records that are conclusory and unsubstantiated to provide proof of mailing as required by the cases referred to above, such testimony is insufficient to establish the mailings required by the statute. If the records do not include an affidavit of mailing, affidavit of service or other intrinsic proof of mailing, the witness must show his familiarity with the office practices and procedures of the mailing entity to insure proper addressing and mailing in order to establish the notices were mailed (see LNV Corp. v. Sofer, 171 AD3d 1033 [2d Dept 2019]; CitiBank, N.A. v. Conti-Scheurer, 172 AD3d 17 [2d Dept 2019]). Here, the testimony of Mr. Dolan, even if deemed credible by the trier of fact, is insufficient to meet this burden.
The court notes that the credibility of Mr. Dolan based upon his forty years of experience in the mortgage servicing industry was clearly placed in question when he testified that the entry concerning WALZ in plaintiff's exhibit #4 referred to an employee of Residential who mailed the notice by first class, regular mail. Upon reconsideration of his statement after the short recess, and conversation with plaintiff's counsel, he acknowledged that he was incorrect, that WALZ was not the name of an employee of Residential. Plaintiff's reliance upon Mr. Dolan's forty years of experience to validate the “proof of mailing” claimed established by his employer's “boarded records” of Residential, was seriously placed in issue with the court, and the validity of his experience made even more questionable by his statements that he had never heard of Walz as a mailing house, nor was he familiar Walz and its “Track Right” system used to mail the notices and to provide proof of mailing in a servicer's or lenders computer systems. The court cannot ignore the fact that it has become familiar with Walz during the course of the four years it has been assigned foreclosure actions and has reviewed many affidavits is support of summary judgment motions establishing Walz' use by many servicers and lenders, as well as having heard testimony at a number of trials concerning Walz and its Track Right system.
Since on cross-examination Mr. Dolan candidly acknowledged that it was his “belief” that Walz mailed the notice required to be sent by first class, regular mail, and that he did not know for a fact that it was mailed, the court does not have to place on the record a determination as to his credibility. As plaintiff's witness acknowledged this, there is no need to discuss the trier of fact's opinion as to whether proof of mailing of the notice by certified mail has been established by plaintiff's proof. The court finds that plaintiff has failed to establish by a fair preponderance of the credible evidence the mailing of the notice required by RPAPL § 1304 to be mailed to defendant by first class, regular mail. As plaintiff has failed to establish the strict compliance required with the mailing requirements of RPAPL § 1304, a statutory condition precedent to this residential foreclosure action, its action against defendant is dismissed (see Aurora Loan Services v. Weisblum, supra). As the action against the defaulting defendants, including co-mortgagor Christine Turner, continues, the court cannot cancel and discharge any notice of pendency filed against the property.
This constitutes the Order and decision of the Court.
Robert F. Quinlan, J.
Response sent, thank you
Docket No: 1683-2014
Decided: August 06, 2019
Court: Supreme Court, Suffolk County, New York.
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