H & R Block Bank, FSB v. Liles

• Citation: 130 N.Y.S.3d 521,186 A.D.3d 813
• Decision Date: 26 August 2020
• Docket Number: 2018-13030,2017-05477,2017-05480,Index No. 9502/13
• Parties: H & R BLOCK BANK, FSB, respondent, v. Jon LILES, etc., appellant, et al., defendants.
• Court: New York Supreme Court Appellate Division

186 A.D.3d 813
130 N.Y.S.3d 521

H & R BLOCK BANK, FSB, respondent,
v.
Jon LILES, etc., appellant, et al., defendants.

2017-05477
2017-05480
2018-13030
Index No. 9502/13

Supreme Court, Appellate Division, Second Department, New York.

Submitted - October 1, 2019
August 26, 2020

130 N.Y.S.3d 522

Kenneth C. Henry, Jr., P.C., Westbury, NY, for appellant.

Shapiro, DiCaro & Barak, LLC, Rochester, N.Y. (Jason P. Dionisio and Austin T. Shufelt of counsel), for respondent.

MARK C. DILLON, J.P., JEFFREY A. COHEN, ROBERT J. MILLER, FRANCESCA E. CONNOLLY, JJ.

DECISION & ORDER

186 A.D.3d 813

In an action to foreclose a mortgage, the defendant Jon Liles appeals from (1) an order of the Supreme Court, Nassau County (Thomas A. Adams, J.), entered March 17, 2017, (2) an order of the same court, also entered March 17, 2017, and (3) a judgment of foreclosure and sale of the same court entered August 27, 2018. The first order, insofar as appealed from, granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant Jon Liles, to strike that defendant's answer, and for an order of reference. The second order, insofar as appealed from, granted the same relief as the first order and appointed a referee to compute the amount due to the plaintiff. The judgment of foreclosure and sale, upon the orders entered March 17, 2017, inter alia, confirmed the referee's report and directed the sale of the subject property.

ORDERED that the appeals from the orders entered March 17, 2017, are dismissed; and it is further,

ORDERED that the judgment of foreclosure and sale is reversed, on the law, those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant Jon Liles, to strike that defendant's answer, and for an order of reference are denied, and the orders entered March 17, 2017, are modified accordingly; and it is further,

ORDERED that one bill of costs is awarded to the defendant Jon Liles.

The appeals from the orders entered March 17, 2017, must be dismissed because the right of direct appeal therefrom terminated with the entry of the judgment of foreclosure and

186 A.D.3d 814

sale in the action (see Matter of Aho, 39 N.Y.2d 241, 248, 383 N.Y.S.2d 285, 347 N.E.2d 647 ). The issues raised on the appeals from the orders are brought up for review and have been considered on the appeal from the judgment of foreclosure and sale (see CPLR 5501[a][1] ; Matter of Aho, 39 N.Y.2d at 248, 383 N.Y.S.2d 285, 347 N.E.2d 647 ).

In October 2006, the defendant Jon Liles (hereinafter the defendant) executed an adjustable rate note in the principal sum of $408,600 in favor of Option One Mortgage Corporation, a California Corporation (hereinafter Option One). The note

130 N.Y.S.3d 523

was secured by a mortgage encumbering certain real property located in Levittown. In August 2013, H & R Block Bank, FSB (hereinafter H & R Block), commenced this action to foreclose the mortgage, alleging, among other things, that the defendant defaulted under the terms of the note and mortgage, and that it had complied with RPAPL 1304. H & R Block attached to the complaint a copy of the underlying note, to which was annexed an allonge bearing an endorsement in blank by Option One. The defendant interposed an answer denying the allegation in the complaint regarding compliance with RPAPL 1304 and asserting as affirmative defenses, among others, noncompliance with that statute and lack of standing. Thereafter, H & R Block assigned the mortgage to HRB Mortgage Holdings, LLC.

In December 2016, H & R Block moved for, among other relief, summary judgment on the complaint insofar as asserted against the defendant, to strike the defendant's answer, and for an order of reference. In relevant part, H & R Block maintained that it had complied with the notice requirements of RPAPL 1304, and submitted an affidavit from Courtney Mahdak, a document execution specialist employed by Nationstar Mortgage, LLC—H & R Block's loan servicer—along with copies of the 90–day notices addressed to the defendant, in support. The defendant opposed the motion, arguing, among other things, that H & R Block's submissions failed to establish, prima facie, its strict compliance with RPAPL 1304. In an order entered March 17, 2017, the Supreme Court granted H & R Block's motion. In a second order also entered March 17, 2017, the court granted the same relief and appointed a referee to compute the amount due to the plaintiff. Thereafter, in a judgment of foreclosure and sale entered August 27, 2018, upon the orders entered March 17, 2017, the court confirmed the referee's report and directed the sale of the property. The defendant appeals.

As a threshold matter, H & R Block contends that the statutory defense created by RPAPL 1302(2) for noncompliance with RPAPL 1304 applies only "to an action to foreclose a

186 A.D.3d 815

mortgage for a high-cost home loan or subprime home loan" ( RPAPL 1302[2] ), and that the subject loan was neither a "high-cost home loan," as such term was defined under Banking Law § 6–l at the time the loan was issued, nor a "subprime home loan" under Banking Law § 6–m (see former Banking Law § 6–l[1][e][i], as amended by L 2008, ch 472, § 4; Banking Law §...