Deutsche Bank National Trust Company AS TRUSTEE FOR MASTR 2007-01, Plaintiff, v. Kenneth Jimenez, DEBRA JIMENEZ A/K/A DEBRA LYNCH, MIDLAND FUNDING LLC D/B/A IN NEW YORK AS MIDLAND FUNDING OF DELAWARE LLC, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. AS NOMINEE FOR E-LOANS, INC., JOHN DOE (SAID NAME BEING FICTITIOUS IT BEING THE INTENTION OF PLAINTIFF TO DESIGNATE ANY AND ALL OCCUPANTS OF PREMISES BEING FORECLOSED HEREIN, AND ANY PARTIES, CORPORATIONS OR ENTITIES, IF ANY, HAVING OR CLAIMING AN INTEREST OR LIEN UPON THE MORTGAGED PREMISES.), Defendants.
Upon the following papers read on these motions: for summary judgment by defendants Jimenez dismissing the complaint (Mot. Seq. #002): 1-41; plaintiff's submissions in opposition including memorandum of law: 42-86; plaintiff' summary judgment motion dismissing defendants' remaining affirmative defenses, for appointment of a referee and to amend the caption including memorandum of law (Mot. Seq. #003): 87-130; defendants' opposition: 131-142; plaintiff's memorandum of law in reply: 143-170; it is
For the purposes of this decision, Mot. Seq. #002 and Motion Seq. #003 have been consolidated by the court.
ORDERED that defendants Kenneth and Debra Jimenez' motion for summary judgment dismissing plaintiff Deutsche Bank National Trust Company as Trustee for MASTR 2007-01's complaint for failure to comply with proof of mailing of the notices of default required by the mortgage as well as the notices required by RPAPL § 1304, for failure to prove its standing and for violation of Judiciary § 489 (Mot. Seq. # 002) is granted to the extent set forth below; and it is further
ORDERED that plaintiff's motion seeking to dismiss those affirmative defenses raised by defendants Kenneth and Debra Jimenez' answer that were not dismissed by this court's order of April 6, 2017, to grant plaintiff full summary judgment, to amend the caption, to appoint a referee to compute pursuant to RPAPL § 1321 and for the costs of the motion (Mot. Seq. #003), upon the granting of defendants' motion, is denied as moot.
The prior history of this action to foreclose a mortgage on residential real property located in Suffolk County, New York is set forth in the court's decision placed on the record on April 6, 2017 after oral argument of plaintiff's first motion for summary judgment (Mot. Seq. #001). At that time the court granted plaintiff Deutsche Bank National Trust Company as Trustee for MASTR 2007-01's ("plaintiff") defaults against the non-appearing, non-answering defendants, partial summary judgment dismissing defendant Kenneth and Debra Jimenez' ("defendants") first and fourth through twelfth affirmative defenses raised in their answer, but denied full summary judgment striking defendants' answer and set the action for a limited issue trial on plaintiff's proof of defendants' default in payment, its standing to bring the action, its proof of mailing of the notice of default required by the mortgage, and the sufficiency of the notices required by RPAPL § 1304, as well as proof of their mailing.
At that time the court issued a written discovery and scheduling order authorizing a limited period of discovery on those issues, after which a certification/compliance conference would be held, the case certified "ready" for trial and a note of issue filed. As the court had granted partial summary judgment and limited the issues for trial to a few, the order further authorized the parties to file successive summary judgment motions on those limited issues within thirty days of the filing of the note of issue, in the hope of eliminating the burden on judicial resources which would otherwise be expended on a trial (CPLR 3212 [a]; see Rose v Horton Med. Ctr., 29 AD3d 977 [2d Dept 2006]; Landmark Capital Investments, Inc. v Li-Shan Wang, 94 AD3d 418 [1st Dept 2012]; Detko v McDonald's Restaurants of New York, Inc, 198 Ad2d 208 [2d Dept 1993]; Valley National Bank v INI Holding, LLC, 95 AD3d 1108 [2d Dept 2012]; Graham v City of New York, 136 AD3d 754 [2d Dept 2016]; Kolel Damsek Eliezer, Inc. v Schlesinger, 139 AD3d 810 [2d Dept 2016]). In the Compliance Conference Order (w/Cert) of August 16, 2017 signed by the court after conference with counsel, the court modified the order of April 6, 2017 to allow the parties to file all successive motions for summary judgment by December 18, 2017, three months after September 18, 2017, the date by which the note of issue was to be filed (CPLR 3212 [a] ). The court's records show plaintiff filed the note of issue timely.
Defendants filed their motion for summary judgment on December 12, 2017; rather than cross-moving plaintiff filed opposition, to which defendant did not reply. The court's records indicate that plaintiff's motion for summary judgment was received for filing by the court on December 19, 2017, defendant's filed opposition and plaintiff replied. In opposition to plaintiff's motion defendants did not raise a claim that plaintiff's motion was untimely although it was filed one day after the deadline set by the order of August 16, 2017. As the delay of one day is de minimis, and as the court had modified its original timetable for the motions at the request of the parties at the Compliance Conference, the court would have granted a one day extension to file the motion which would still have been within the maximum period of one hundred-twenty days set by CPLR 3212 (a); therefore, the court will not consider this delay in filing sua sponte.
"AFFIRMATION IN OPPOSITION" SUBMITTED PREMATURELY NOT CONSIDERED
Before discussing the pending motions, the court must discuss an odd, unexplained "pre-motion filing" by defendants. Before the filing of defendants' motion on December 12, 2017 (Mot. Seq. #002), on December 11, 2017 the court received papers from defendants' counsel John J. Caracciolo, Esq. entitled "Affirmation In Opposition To Motion For Summary Judgment," although no motion had yet been filed by plaintiff. The submission consists of an affirmation from Mr. Caracciolo dated December 8, 2017, an affidavit from defendant Kenneth Jimenez also dated December 8, 2017 and attached exhibits. In the affirmation Mr. Caracciolo refers to himself as "of counsel to Moodie Law Group. P. C.," although the "blue back" states the "Henry Law Group," who were counsel for defendants at the time (court records show that Mr. Caracciolo appeared for the Henry Law Group at the oral argument on April 6, 2017, but subsequently on April 11, 2018 a consent to change counsel was filed substituting him individually as defendants' counsel). This affirmation by Mr. Caracciolo is the same one he submitted in opposition to plaintiff's original motion (Mot. Seq. #001) executed June 30, 2016, a copy of which is submitted as Exhibit 9 to plaintiff's motion (Mot. Seq. #003), except for the change of date and the deletion of paragraph 49 of that first affirmation. The affidavit of Mr. Jimenez is the same as the one submitted in opposition to Mot. Seq. #001, other than being "re- sworn to" on December 8, 2017. Neither document refers to the court's decision of April 6, 2017, the limited issues trial set by that decision, or the history of the case after the court's decisions up to and including the filing of the note of issue.
In support of defendants' present motion (Mot. Seq. #002) , there is a "third affirmation" by Mr. Caracciolo executed on December 12, 2017 which contains a fuller history of the proceedings and addresses the limited issues set for trial, as well as a new issue, along with another affidavit from Mr. Jimenez notarized on December 12, 2017. Another affirmation by a different attorney of the Henry Law Group was submitted in opposition to plaintiff's motion (Mot. Seq. #003), along with a new affidavit from Mr. Jimenez. No where in defendants' submissions in Mot. Seq. #002 or Motion Seq. #003 is the "Affirmation In Opposition" filed December 11, 2017 mentioned or explained, nor does plaintiff address it at anytime.
The court will ignore what it assumes was the errant filing of December 11, 2017 "affirmation in opposition" in rendering its decision on Mot. Seq. #002 and 003, but keep it as part of the court's file.
DEFENDANTS' BURDEN ON SUMMARY JUDGMENT DISMISSAL
Rather than waiting for plaintiff's motion and counterattacking by cross-motion for dismissal, defendants chose to move for dismissal offensively. But in doing so, at least as to some of the issues raised for dismissal, defendants fail to recognize that their burden for a summary judgment dismissal requires more than a defensive pointing to issues with what defendants believe will be plaintiff's eventual proof of its compliance and entitlement to judgment, rather it requires them to establish that plaintiff has not established its compliance and entitlement to judgment. The proponent of summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, providing sufficient evidence to establish the absence of any material issues of fact, failure to do so requires the motion to be denied regardless of the sufficiency of the opposition (see Jacobsen v New York City Health & Hospitals Corp., 22 NY3d 824 ; William J Jenack Estate Appraiser and Auctioneers v Rabizadeh, 22 NY3d 470 ). A party seeking summary judgment may not merely point to gaps in an opponent's proof to obtain relief, it must adduce affirmative evidence of entitlement to that relief (see Winegrad v. New York University Medical Center, 64 NY2d 851 ; Gilbert Frank Corp. v. Federal Insurance, 70 NY2d 966 ; Torres v. Industrial Container, 305 AD2d 136 [1st Dept 2003]; Deutsche Bank Natl. Trust Co. v Homar, 163 AD3d 522 [2d Dept 2018]).
NO VIOLATION OF JUDICIARY LAW § 489 (1) ESTABLISHED, CLAIM DISMISSED
For the first time on this motion defendants raise a claim for dismissal based upon an alleged violation of Judiciary Law § 489. This was not one of the issues set for the limited issue trial, nor an issue which the court authorized to be raised in a successive summary judgment motion. Defendants' claim to dismissal for violation of the rule against champerty set forth in Judiciary Law § 489 (1) merely alleges, in terms chosen by defendants, that plaintiff "appears" to have violated that law because the debt became non-performing six months before an assignment of the mortgage and note to plaintiff by Mortgage Electronic Registration Systems Inc. ("MERS") dated May 4, 2011 and as the debt was under $500,000.00 it did not meet the exception allowed by Judiciary Law § 489 (2), propositions defendants claim are supported by the holding in Justinian Capital SPC v WestLB AG, 28 NY3d 160 (2016). Defendants do not clearly set forth how they determine this violation. There is no direct reference in either counsel's affirmation or Mr. Jimenez' affidavit as to what evidence in admissible form defendants have presented that supports dismissal. The court is left to search through defendants' submitted exhibits to try to find supporting proof in evidentiary form.
Although defendants do not explain how they came up with the date of December 1, 2010 as proof of when the loan became non-performing, a copy of the complaint is attached as Exhibit F to their motion and in paragraph "FIFTH" thereof plaintiff alleges the default occurred on that day. That constitutes an admission by plaintiff establishing that fact. Among the other exhibits submitted by defendants is the copy of the assignment of the mortgage by MERS to plaintiff filed with the Suffolk County Clerk (the Clerk") on May 23, 2011. As defendants provide a copy of the Clerk's records, that document is admissible, but, as pointed out in plaintiff's opposition, does not establish when plaintiff purchased the loan nor that the loan was purchased solely to commence a lawsuit upon it. Plaintiff's submissions in opposition are sufficient to raise the issue that plaintiff purchased the note from a prior holder on March 1, 2007, well before defendants' default in payment subsequent to that date. Plaintiff's submissions in opposition raise enough questions of fact to preclude the granting of summary judgment on this issue and dismissing the action pursuant to Judiciary Law § 489 (1).
Although not raised by plaintiff, the court dismisses defendants' champerty claim on the clear language of the statute and case law as discussed in Justinian Capital SPC v WestLB AG, 28 NY3d 160 (2016) cited by defendants. As stated in the majority opinion of Judge DiFiore, it has long been required for champerty to be a defense to a foreclosure action that it must be established that the foreclosure was not merely an incidental or secondary purpose of the assignment of the debt, but the very essence of it (see Justinian Capital SPC at 168). For the defense of champerty to be successful, defendants must establish that the primary purpose of purchasing the debt was to bring a lawsuit (see Bluebird Partners, LLC v First Fidelity Bank, N.A., 94 NY2d 726 ). New York has recognized this primary purpose test since at least Moses v McDivitt, 88 NY 62 (1882). Here, defendants have failed to establish the primary purpose for the acquisition of their loan was to bring a foreclosure action, in fact their submissions, whether admissible or not, show an attempt by plaintiff to offer opportunities to avoid foreclosure. There is no merit to this claim by defendants, that portion of their motion seeking dismissal on this ground is denied and the claim is dismissed.
PLAINTIFF'S LACK OF STANDING NOT ESTABLISHED
By rehashing issues raised and documents submitted as exhibits by plaintiff in Mot. Seq. #001 in their present motion, defendants may raise questions of fact concerning plaintiff's potential proof of its standing, but they have not established as a matter of law that plaintiff has no standing to bring the action. Defendants moving to dismiss for lack of standing have the burden to establish plaintiff's lack of standing as a matter of law (see LGF Holdings, LLC v Skydel, 139 AD3d 814 [2d Dept 2016]; MLB Sub I, LLC v Bains, 148 AD3d 881 [2d Dept 2017]; US Bank, N. A. v Cohen, 156 AD3d 844 [2d Dept 2017]). The burden on the moving defendants is to establish prima facie plaintiff's lack of standing, rather than pointing to plaintiff's inability to establish its standing. If defendant fails to establish plaintiff's lack of standing, its motion is to be denied (see Flagstar Bank, FSB v Campbell, 137 AD3d 853 [2d Dept 2016]; US Bank N.A. v Weinman, 123 AD3d 1108 [2d Dept 2014]; Wells Fargo Bank, NA v Talley, 153 AD3d 583 [2d Dept 2017]; One West Bank, FSB v Berino, 158 AD3d 811 [2d Dept 2018]). To defeat defendant's motion, plaintiff has no burden of establishing its standing as a matter of law (see Deutche Bank Trust Co. Ams. v Vitallas, 131 AD3d 52 [2d Dept 2015]; Aurora Loan Servs., LLC v Mercius, 138 AD3d 650 [2d Dept 2016]; Wells Fargo Bank, NA v Talley, 153 AD3d 583 [2d Dept 2017]), it is sufficient if its submission raises questions of fact (see HSBC Bank USA v Lewis, 134 AD3d 764 [2d Dept 2015]; U. S. Bank, Nat. Assoc. v Noble, 144 AD3d 786 [2d Dept 2016]; New York Community Bank v McClendon, 138 AD3d 805 ; Aurora Loan Servs, LLC v. Komarvsky, 151 AD3d 924 [2d Dept 2017] ). Where defendants' submissions on their motion for summary judgment dismissal fail to eliminate triable issues of fact as to whether plaintiff had standing, it's motion is to be denied (see OneWest Bank, NA v FMCDH Realty Inc., 165 AD3d 128 [2d Dept 2018]).
Clearly, all defendants submissions accomplish is to raise a claim, as indicated in the caption addressing the motion in defendants' counsel's affirmation that "PLAINTIFF CANNOT PROVE ITS STANDING." By merely raising such issues, defendants fail to meet their burden of establishing that plaintiff has no standing as a matter of law. That part of defendants' motion seeking summary judgment and dismissal for plaintiff's lack of standing to bring the action is denied.
DEFENDANTS FAILED TO PROVE PLAINTIFF DID NOT MAIL THE RPAPL § 1304 NOTICES
Before further discussion the court notes a flaw in defendants' motion that would preclude dismissal of the action against both defendants on the basis of the mailings were not made, even if the court accepted many of the arguments for dismissal made by defendant Kevin Jimenez, based upon the alleged failure of plaintiff to establish the mailings not only of the RPAPL § 1304 notices, but also the default notice required by the mortgage. The flaw is that only Mr. Jimenez provided an affidavit stating that he did not receive the RPAPL § 1304 mailings. Although he states therein that "We both, however, deny ever receiving these 90 day notices," that statement as to his wife is inadmissable hearsay. If the court was to accept his statement, and if the court found that plaintiff's submissions in opposition were not sufficient to at least raise issues of fact as to the mailings, and if the court was to apply the line of cases following Citimortgage v Pappas, 147 AD3d 900 (2d Dept 2017), the court would only dismiss the action as to him. Without a similar denial by affidavit submitted by Debra Jimenez, even in the light most favorable to defendants, the action could not be dismissed as to her. There is no argument made by defendants that if the action was dismissed against Mr. Jimenez , then the action against Ms. Jimenez must be dismissed because a necessary party is no longer joined. The court will not act sua sponte in that regard.
Unlike the line of cases emanating from Citimortgage v Pappas, to establish the mailing of the RPAPL § 1304 notices, plaintiff has submitted an affidavit from Richard Schwiner, an employee of Ocwen Financial Corporation. His affidavit establishes the relationship between Ocwen Financial Corporation and Ocwen Loan Servicing, LLC ("Ocwen"), a limited liability company of which Ocwen Financial Corporation is the sole member. Ocwen is the present servicer for plaintiff, having taken over those responsibilities from GMAC Mortgage, LLC ("GMACM"), the prior servicer in 2013.
The RPAPL § 1304 notices were allegedly mailed by GMACM on January 6, 2011, more than ninety days prior to the filing of this action, to defendants at the property address. Through his affidavit Mr. Schwiner establishes his ability to testify as to Ocwen's business records pursuant to the requirements of CPLR 4518 (a). Mr. Schwiner's affidavit and the submissions establish that Ocwen assumed servicing responsibilities for plaintiff from GMACM in 2013. Although plaintiff argues that the incorporation by Ocwen of GMACM's business records into its own upon assuming the servicing of the loan is sufficient to establish GMACM's business records as Ocwen's business records, and as such Mr. Schwiner is able to testify to them as Ocwen's records pursuant to CPLR 4518, the court is compelled to disagree. The Second Department has long and consistently held that the mere filing of papers received from other entities which are retained in the recipient's regular course of business do not qualify those papers as business records of the recipient so as to meet the requirements of CPLR 4518 as an exception to the rule against hearsay (see Standard Textile Company, Inc. v National Equipment Rental, Ltd., 80 AD2d 911 [2d Dept 1981]). If an employee of plaintiff's present servicer attempts to testify concerning business records of a prior servicer, that affiant must establish his/her ability to do so by showing personal knowledge and familiarity with the record keeping practices and procedures of that prior entity, (see Arch Bay Holding, LLC v Albanese, 146 AD3d 849 [2d Dept 2017]; Aurora Loan Svcs, LLC v Ang, 150 AD3d 649 [2d Dept 2017]; Wells Fargo Bank. N.A. v Talley, 153 AD3d 583 [2d Dept 2017]; Bank of New York Mellon v Alli, 156 AD3d 957 [2d Dept 2017]; Fulton Holding Group, LLC v Lindoff, 165 AD3d 1053 [2d Dept 2018]).
But Mr. Schwiner also attests to the fact that prior to his employment at Ocwen, he was employed by GMACM, and although not in the same detail as to Ocwen's records keeping practices, he sufficiently establishes his familiarity with GMACM's business practices and procedures to establish his ability to testify to GMACM's records pursuant to CPLR 4518 (a). His affidavit presents in detail the standard office practices and procedures used by GMACM to ensure and establish the mailings of the RPAPL § 1304 notices to defendants which are reflected in their records. To establish mailing, plaintiff may provide proof of actual mailing or a 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]; Citimortgage Inc. v Banks 155 AD3d 936 [2d Dept 2017]). Business records that detail a standard of office practice or procedure designed to ensure that items are properly addressed and mailed are sufficient to establish mailing (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]; U.S. Bank, N.A. v Sims, 162 AD3d 825 [2d Dept 2018]; Deutsche Bank Natl. Trust Co. v Heitner, 165 AD3d 1038 [2d Dept 2018]). Internal computer records of a sender, supplied by an affiant able to testify as to sender's business records pursuant to CPLR 4518 (a), have been held sufficient to demonstrate that the notices were indeed mailed to defendants (see One West Bank, FSB v Simpson, 148 AD3d 920 [2d Dept 2017]; Citimortgage, Inc. v Wallach, 163 AD3d 520 [2d Dept 2018]). By his affidavit testimony Mr. Schwiner is able to provide proof of his review of the both Ocwen's records and those records of GMACM contained in Ocwen's records, a description of computer entries made upon mailing by GMACM and GMACM's practices to ensure proper mailing of the RPAPL § 1304 notices to defendants at the property address.
Mr. Jimenez' protestation that he did not receive them is to no avail, as the statutory condition precedent is not to establish receipt by defendants, but only their mailing be established, which Mr. Schwiner's affidavit does. That portion of defendants' motion seeking dismissal of the action because plaintiff cannot establish the mailing of the RPAPL § 1304 notices is denied.
DISMISSAL FOR DEFECTIVE NOTICE OF DEFAULT DENIED
Defendants also claim that plaintiff failed to mail them a notice of default as required by the terms of the mortgage and, alternatively, that the notice of default purportedly mailed by plaintiff failed to meet the requirements set forth in the mortgage. This argument is based upon defendants' reliance upon plaintiff's submission in Mot. Seq. #001 of a letter dated April 6, 2011, and addressed to defendants' then attorney, which plaintiff claimed was the notice of default required by the mortgage. At oral argument, and in the decision placed on the record on April 6, 2017, the court agreed with defendants that this document failed to contain the information required by paragraphs 19 and 22 of the mortgage, and that at that time plaintiff had not established the mailing of the default notice required by the mortgage. As at that time defendants had not moved or cross-moved for dismissal on that basis, the court did not sua sponte dismiss the action, and upon denying plaintiff's motion, listed this as one of the issues to be determined at the limited issues trial.
As plaintiff had submitted that exhibit originally, defendants had every reason to submit that letter now in their motion, believing that plaintiff would still rely upon it in an attempt to establish this contractual condition precedent. In opposition to defendants' motion plaintiff has now submitted a different default letter which is attached as an exhibit to Mr. Schwiner's affidavit (Exhibit M). This letter from GMACM is dated March 7, 2011 and does contain the information required by the mortgage. As indicated above, Mr. Schwiner had established his ability to testify to the mailings made by GMACM and attests in his affidavit to the mailing of the letter of March 7, 2011, which is also addressed to defendants' former counsel. He also provides a copy of a certified letter dated February 16, 2011 to GMACM in which that attorney directs GMACM to have no further contact with his clients, the borrowers/defendants, that all communications shall be through his law firm, except for regularly issued bills and statements, and that any other communications with the borrowers/defendants would be in violation of "The Fair Debt Collection Practices Act" (15 USC 1692e), enclosing with his letter authorizations from defendants to this effect. Mr. Schwiner attests to the fact that it is for this reason that GMACM mailed the notice of default to counsel, not defendants at the property address.
Although Mr. Jimenez' affidavit claims that the defective notice was not mailed to him and his wife at the property, he does so in relation to the defendants' submitted exhibit from Mot. Seq. #001, and nowhere in his affidavit does he address the issue that the letter was sent to his counsel. In arguing for dismissal, and referring to the April 6, 2011 letter, defendants' counsel never raises any argument about the mailing of the letter to prior counsel as one of the numerous defects he points to for dismissal. Defendants never filed a reply to plaintiff's opposition and the evidence presented by Mr. Schwiner concerning the "actual" default letter, leaving this admissible evidence unchallenged. Upon the evidence presented it appears that plaintiff's submission has at least raised a question of fact that an adequate default letter had been sent to defendants through their attorney, which defendant chose not to refute. On that basis defendants, as indicated by the cases cited previously on a movant's burden in summary judgment, have not established their burden of proof for the granting of summary judgment and dismissal on this claim, and that portion of their motion is denied.
RPAPL § 1304 NOTICES LISTED MORE THAN 5 HOUSING AGENCIES
The claim that the RPAPL § 1304 notices were deficient because they failed to include a list of at least five housing counseling agencies in Suffolk County is also without merit. The submissions by plaintiff through the affidavit of Mr. Schwiner identifying the practices of GMACM and the notices, establishes an enclosed list which contained eleven housing counseling agencies in Suffolk County, and as at the time the statute required those agencies to be in the "region," and not the "county" as now required, there were also a number of agencies in Nassau County listed. The listed agencies fulfill this requirement of the statute, and the claim for dismissal on this ground also fails.
NO SEPARATE NOTICE IN VIOLATION OF RPAPL § 1304 (2)
The claim by defendants that the notice was also defective because there was a "separate notice" including a bankruptcy notice and a warning required by federal law is also without merit and dismissed. When defendants' argument is tested against the clear statutory language of RPAPL §§ 1304 (1) and (2) its lack of merit is apparent. There are no multiple notices here, only a single notice consisting of multiple pages. At the time the notices were mailed RPAPL § 1304 did not, and does not now even after the most recent amendment, require that the notice "only" contain the language mentioned in the body of RPAPL § 1304 (1). The statute states that plaintiff or servicer "shall give notice to the borrower in at least fourteen-point type which shall include the following" (emphasis added). This clearly implies that more than just the statutory language may be part of the RPAPL § 1304 notice (RPAPL § 1304 (1); see Citimortgage, Inc. v Bunger, 58 Misc 3d 333, 341 [Sup Ct, Suffolk County 2017]; Beneficial Homeowner Services Corp v Jordon-Thompson, 57 Misc 3d 1213(A), 2017 NY Slip Op. 51424(U) [Sup Ct, Suffolk County 2017]). RPAPL § 1304 (2) states in pertinent part: "The notices required by this section shall be sent by the lender...in a separate envelope from any other mailing or notice." Plaintiff sent one notice, which as indicated contains three pages which include the language required by RPAPL § 1304, as well as the federally required warning and information concerning bankruptcy Defendants' unsupported assumption that somehow it was the unexpressed intent of the legislature that the RPAPL § 1304 notices must contain only the language set forth in RPAPL § 1304 (1), and nothing else, and that anything else contained within the one notice is a "separate notice" is contradicted by this plain and literal language of the statute. If defendants' claims had been the intent of the Legislature, the Legislature would have said so in the original statute or one of the six amendments since its first effective date. It has not and the Court of Appeals has clearly and frequently stated: "A court cannot amend a statute by inserting words that are not there nor will a court read into a statute a provision which the Legislature did not see fit to enact.... an inference must be drawn that what is omitted or not included was intended to be omitted and excluded." (Chemical Specialties Mfrs. Ass'n v Jorling, 85 NY2d 382, 394; see also People v Silburn, 31 NY3d 144, 174 ; People v Tiger, 32 NY3d 91 ). The court will not read into RPAPL § 1304 (1) and (2) the requirement that the mandated notice must only contain the statutorily required language, making anything else included a "separate notice." That portion of defendants' motion raising this claim is denied.
NOT ESTABLISH NOTICE CONTAINED INCORRECT CURE AMOUNT
Defendants' also claim that the RPAPL § 1304 notice was defective because it contained an incorrect amount of $14,476.37 to be paid by February 5, 2011 to cure the default and avoid foreclosure. Defendants provide no proof in admissible form that the default amount is incorrect. Mr. Jimenez's affidavit makes reference to how he calculates a different amount, only making the conclusory statement in paragraph 11 of his affidavit that "They included an incorrect 'cure' amount." Defendants' counsel, who provides no proof of personal knowledge of the facts surrounding the amounts due, makes the conclusory assertion in his affirmation that as the monthly payment for principal and interest at the time of the loan modification was $3,033.86/month, considering the period of default referred to in the notice "the 'cure' amount...appears grossly inflated and incorrect." Obviously defendants' counsel fails to consider that in addition to principal and interest, defendants' monthly payments also included taxes and insurance, increasing the "cure" amount. Defendants offer no proof in admissible form to establish their assertion, and as indicated by the case law cited previously, a proponent of summary judgment dismissal must make a prima facie showing of entitlement to judgment as a matter of law, providing sufficient evidence to establish the absence of any material issues of fact, failure to do so requires the motion to be denied regardless of the sufficiency of the opposition. Defendants have failed to do that as to this claim and their motion to dismiss the action upon this basis is denied.
The court notes plaintiff's oppositions raises a question of fact as to the default amount due, but does not establish that amount, as plaintiff has not supplied sufficient evidence in admissible form to support their assertion that the cure amount is correct and therefore not a defect in the notices (see Hudson City Savings Bank v DePasquale, 113 AD3d 595 [2d Dept 2014]; Flagstar Bank FSB v Damaro, 145 AD3d 858 [2d Dept 2016]). As with defendants' counsel's affirmation, the statements by plaintiff's counsel in his affirmation as to the amounts due to cure are not based upon his personal knowledge, and although Mr. Schwiner in his affidavit states the default amount is correct, he claims to base this upon the information contained in Exhibit J to his affidavit. The court has viewed that exhibit which contains information from the records of GMACM and Ocwen, but it inexplicably contains defendants' payment history from January 21, 2006 through November 1, 2010, but then there is a gap in the records until July 3, 2015 and they continue through December 16, 2015. Perhaps Mr. Schwiner reviewed records not submitted, but those submitted are insufficient to cover the "cure period" and establish the bona fides of the cure amount in the notice.
COMPLAINT DISMISSED -MAILING ADDRESSED TO BOTH BORROWERS
Defendants' remaining argument for dismissal is that RPAPL § 1304 requires that the notices must be mailed to both borrowers individually, therefore the mailing of notices addressed to both of them at the property fails to comply with the statutory condition precedent. This is a logical argument in the spirit of providing each borrower with the notifications that the Legislature thought important enough to incorporate into RPAPL § 1304, yet, as the court pointed out to defendants' counsel at oral argument, that is not the holding in Aurora Loan Services v Weisblum, 85 AD3d 95 (2d Dept 2011) which defendants rely upon. In that case plaintiff acknowledged that it sent only one notice, by both regular first class mail and certified mail, to Mr. Weisblum, acknowledging that it never mailed any notice to Ms. Weisblum. This was done upon the incorrect assumption that the term "borrower" in RPAPL meant the person who signed the note and "borrowed" the money as the signatory of the note. Therefore, that holding is not directly controlling on these facts as defendant argues.
But similar to the argument made here by plaintiff that notice to one borrower is notice to both, the Second Department rejected the argument of plaintiff that Ms. Weisblum received either actual or constructive notice of the mailings because her husband had received them. Instead it held that the RPAPL § 1304 required that the notices should also have been mailed to her. Plaintiff here appears to have read too much into the court's colloquy with defendants' counsel at oral argument where the court refuted counsel's assertion that Aurora Loan Services v Weisblum, supra, (herein after referred to as "Weisblum" for brevity) held that both borrowers must be mailed separate notices and therefore the mailings here were in violation of the statutory condition precedent. At the time defendants' counsel was only opposing plaintiff's first motion for summary judgment and only needed to raise a question of fact as to the sufficiency of the mailings to defeat the motion, no cross-motion to dismiss had been made.
Plaintiff appears to argue in opposition to defendants' present motion that based upon the courts back and forth questioning of defendants' counsel on the above issue at oral argument, this court held that the mailing of the notice addressed to both borrowers was sufficient to comply with RPAPL § 1304 (1) and (2) and that this is "the law of the case." That is incorrect. Plaintiff submitted a full copy of the April 6, 2017 oral argument and decision placed upon the record by the court as its Exhibit 2 in opposition to defendants' motion. The court directs plaintiff's attention to page 46, line 18 through page 81, line 21 where the court set forth its decision on the record. The decision makes it clear that the court found plaintiff, at that time, had not established any mailings, either those required by the default conditions of the mortgage or those required by RPAPL § 1304. Particular attention is drawn to page 76, line 18 through page 78, line 8, where the court discusses strict compliance with RPAPL § 1304 and defendants' argument that the one notice addressed to both is insufficient. At page 77, lines 10 through 17 the court specifically said that it was not directly deciding this claim by defendants and expected that the argument would be raised by defendants in subsequent proceedings. Defendants have met the court's expectations in this motion.
There appears to be no appellate case law that holds that the statutory condition precedent of RPAPL § 1304 is satisfied by mailing one notice addressed to both borrowers by first class regular mail and certified mail. In Aurora Loan Servs v. Komarvsky 151 AD3d 924 (2d Dept 2017), where only one borrower had originally signed the note, but both signed the mortgage, and later both signed a CEMA, the court held both must be "served"with the RPAPL § 1304 notice, but did not state that the mailings must be made separately to each. From that decision it is not clear whether separate mailings were made. The court has found four trial court decisions that address the issue; two state that a notice addressed to both borrowers complies with the statutory scheme (Hudson City Savings Bank v D'Ancona, 2017 NY Slip Op 31917 (U) (Sup Ct, Suffolk County 2017, Heckman, J) and Wells Fargo Bank v Frank, Index # 26871-2013 (Sup Ct, Suffolk County 2018, Hinrichs, J); and two hold that a separate notice to each borrower is required (US Bank National Association v Diaz, 2018 NY Slip Op 30436 (U) (Sup Ct, Queens County 2018, Gavrin, J) and Wells Fargo Bank, N.A. v Yapkowitz, 59 Misc 3d 1227 (A), 2018 NY Slip Op 50726 (U) (Sup Ct, Rockland County 2018, Marx, J).
The two decisions sustaining the mailings, merely state that the proof of the mailings had been sufficiently established, noting that the fact that the notices were addressed to both borrowers does not violate the requirements of the statute.
In US Bank National Association v Diaz, supra, the court found the mailing of the notice addressed to both defendants was insufficient to comply with the requirements of RPAPL § 1304, citing Weisblum and adding a short discussion in a footnote referring to Aurora Loan Servs v. Komarvsky, supra. Justice Marx in Wells Fargo Bank, N.A. v Yapkowitz, supra, relied upon the rationale of Weisblum, as do defendants here. His decision provides discussion of the arguments in that case and the legislative purposes in enacting the HEPTA statutes to preserve and guard home ownership and equity and to aid borrowers by making them aware of alternatives to foreclosure and providing them with housing counseling agencies to assist them. He recognized that the facts before him, similar to those here, varied from those in Weisblum, but concludes that the fact that there was only one notice addressed to both, just as in Weisblum, shifts the responsibility to provide the information contained in the RPAPL § 1304 notice from the lender/servicer, as the Legislature intended in the statute, to the borrower who accepted the mail delivery. Pointing to the fact that Weisblum clearly held that actual or constructive notice/receipt of the mailed notice by one borrower is insufficient and contravenes the policy of the statute, he also points out in a footnote that such a result flies in the face of reality when many of the foreclosures seen before him either are the result of, or result in, divorces where the parties cannot be relied upon to communicate with each other. He goes on to conclude that from Weisblum, it is clear that one joint notice is insufficient to satisfy RPAPL § 1304.
This court agrees with and adopts Justice Marx' rationale, but also points to another factor in the statutory scheme which supports the conclusion that the Legislature intended each borrower to receive a separate notice. Since its original enactment there have been five amendments to RPAPL § 1304. The version of RPAPL §§ 1304 (1) and (2) in effect when plaintiff mailed the notice referred only to "borrower" in the singular. That reference continued through the following two amendments until the amendment effective December 20, 2016. This amendment made a change to RPAPL § 1304 (1), which continues in effect now, by adding a plural reference to "borrowers," reading: "before a lender... commences a legal action against a borrower, or borrowers...such lender ...shall give notice to the borrower ...which shall include the following...." (emphasis added). The requirements of RPAPL § 1304 (2) was not changed and continued to read "Such notice shall be sent by such lender ... to the borrower,...." as in all prior versions. The court finds the addition of the term "borrowers" to RPAPL § 1304 (1), and the continued use of "borrower" later in RPAPL § 1304 (1) and in RPAPL § 1304 (2) to be significant. It recognizes the Legislature's realization of the consequence of holdings stemming from Weisblum, and that the use of the words "borrower" and "borrowers" have significance in the statutory scheme. By adding the plural "borrowers," the Legislature recognized that there is often more than one borrower/defendant. Although recognizing that "plural," it retained the "singular" in the requirements for the giving of the notice. This would be in keeping with the intent of the HEPTA statutes that all borrowers be aware of their rights and options. It is also consistent with the previously stated principle that a statute should be read literally as enacted (see Chemical Specialties Mfrs. Ass'n v Jorling, supra; People v Silburn, supra; People v Tiger, supra). This confirms that the intent of the Legislature in the original enactment in using the "singular" term "borrower" was literal, each borrower was to receive the notice advising him or her of what they were facing, their rights and how to obtain assistance.
The Legislature has in the past similarly amended sections of RPAPL § 1304 which had caused confusion among practitioners to clarify its intent. One such amendment was the amendment in to RPAPL § 1304 (3), also effective December 20, 2016, which clarified the waiver of the 90 day period before suit could be filed when a borrower had "filed an application for the adjustment of debts... or an order for relief for payment of debts." This arcane reference to filing a bankruptcy caused some lenders and servicers to think that a loan modification met the definition, and that they were not required to serve the RPAPL § 1304 notice at all if an application for a loan modification or a bankruptcy was made. The 2016 amendment substituted for the above quoted language "if the borrower filed for bankruptcy protection under federal law," and also amplified the statute so that it was clear that although the 90 day period before commencing a lawsuit was unnecessary if a borrower had filed a bankruptcy, the lender/servicer was still required to send the RPAPL § 1304 notice to the borrower as a condition precedent to a foreclosure proceeding. Although perhaps not as clear as this amendment, the addition of the term "borrowers" to RPAPL § 1304 (1) had a similar effect to emphasize that the Legislature was differentiating between the use of "borrower" and "borrowers" within RPAPL § 1304, so that when it stated it in the singular, it meant that singular term to apply to the requirement.
As plaintiff acknowledges that it sent only a notice by regular first class mail and certified mail addressed to both defendants, which the court has found on defendants' motion to be insufficient to comply with the requirements of RPAPL § 1304, plaintiff's complaint is dismissed for its failure to comply with this condition precedent to a foreclosure action (see Aurora Loan Services v Weisblum, 85 AD3d 95 (2d Dept 2011);US Bank National Association v Diaz, supra; Wells Fargo Bank, N.A. v Yapkowitz, supra).
As defendant's motion was granted and plaintiff's action dismissed, it is unnecessary for the court to address plaintiff's motion, which is denied as moot.
This constitutes the decision and order of the court.
Dated: November 30, 2018
Hon. Robert F. Quinlan, J.S.C.
Robert F. Quinlan, J.