Citibank, N.A. v. Conti-Scheurer

• Decision Date: 17 April 2019
• Docket Number: 2016–02042,Index No. 13892/10
• Citation: 172 A.D.3d 17,98 N.Y.S.3d 273
• Parties: CITIBANK, N.A., etc., respondent, v. Elizabeth I. CONTI–SCHEURER, et al., defendants.
• Court: New York Supreme Court — Appellate Division

172 A.D.3d 17

98 N.Y.S.3d 273

CITIBANK, N.A., etc., respondent,

v.Elizabeth I. CONTI–SCHEURER, et al., defendants.

2016–02042

Index No. 13892/10

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

Submitted—May 29, 2018

April 17, 2019

Law Offices of Terence Christian Scheurer, P.C. (Mitchell Dranow, Sea Cliff, NY, of counsel), for appellant.

RUTH C. BALKIN, J.P., LEONARD B. AUSTIN, HECTOR D. LASALLE, ANGELA G. IANNACCI, JJ.

OPINION & ORDER

IANNACCI, J.

On this appeal we take the opportunity to address the evidence required to establish prima facie compliance with RPAPL 1304 by a mortgage holder, and conversely the evidence required to establish prima facie noncompliance with RPAPL 1304 by a mortgagor, on a motion for summary judgment in an action to foreclose a mortgage.

Factual and Procedural History

In May 2007, the defendant Elizabeth I. Conti–Scheurer (hereinafter the defendant) executed a note in the sum of $ 975,000 in favor of Countrywide Home Loans, Inc. (hereinafter Countrywide). The note was secured by a mortgage on residential property located in Manhasset, NY. By Assignment of Mortgage dated July 10, 2010, Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), as nominee for Countrywide, purportedly assigned the mortgage to the plaintiff, Citibank, N.A. as Trustee of the Holders of Bear Stearns ALT–A Trust II, Mortgage Pass–Through Certificates, Series 2007–1. Thereafter, on July 22, 2010, the plaintiff commenced this action against the defendant, among others, to foreclose the mortgage. The defendant served an answer in which she asserted, inter alia, the affirmative defense that the plaintiff lacked standing. On November 7, 2014, by "Correction Assignment of Mortgage," MERS, as nominee for Countrywide, purportedly assigned the mortgage to Wilmington Trust, National Association, as Successor Trustee to Citibank, N.A. as Trustee of Structured Asset Mortgage Investments II Inc., Bear Sterns ALT–A Trust II, Mortgage Pass–Through Certificates Series 2007–1 (hereinafter Wilmington).

In July 2015, the plaintiff moved, inter alia, for summary judgment on the complaint, for an order of reference, and to substitute Wilmington as the plaintiff. In support of the motion, the plaintiff submitted the affidavit of Michele Crampton, assistant vice president of Specialized Loan Servicing, LLC, as attorney-in-fact for Wilmington. Crampton averred that 90–day pre-foreclosure notices were sent to the defendant on February 4, 2010, pursuant to RPAPL 1304, and that the notices were sent via certified mail and regular first-class mail to the last known address of the defendant and were not returned as undeliverable. Crampton attested that Wilmington's records pertaining to the mortgage account consisted of, but were not limited to, the account ledgers and the prior loan servicer's records. She further attested that she had "personal knowledge of [Wilmington's] records and record making practices." She also averred that it was "the regular business practice of [Wilmington] to deposit items to be delivered by regular and certified mail in a postage-paid properly addressed envelope in an official depository under the exclusive care and custody of the United States Post Office." In addition to Crampton's affidavit, the plaintiff submitted copies of two RPAPL notices, dated February 4, 2010, from Bank of America, a predecessor-in-interest to Wilmington, addressed to the defendant. The notices did not indicate on which date they were mailed or how they were mailed. The defendant cross-moved, in effect, for summary judgment dismissing the complaint insofar as asserted against her on the grounds that the plaintiff lacked standing and that the plaintiff failed to comply with RPAPL 1304. The defendant submitted an affidavit in support of her cross motion, wherein she stated, "Plaintiff has ... failed to prove its strict compliance with RPAPL [ ] 1304 with regard to the mailing of the required 90 day notice which I never received."

In an order entered November 30, 2015, the Supreme Court, among other things, granted the plaintiff's motion, amended the caption to substitute Wilmington as the plaintiff, denied the defendant's cross motion, and referred the matter to a referee to ascertain and compute the amount due on the mortgage loan. The defendant appeals.

The Plaintiff's Motion for Summary Judgment

RPAPL 1304(1) provides that, "at least ninety days before a lender, an assignee or a mortgage loan servicer commences legal action against the borrower ..., including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give notice to the borrower." The statute further provides the required content for the notice and provides that the notice must be sent by registered or certified mail and also by first-class mail to the last known address of the borrower (see RPAPL 1304[2] ). Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action (see Citimortgage, Inc. v. Banks, 155 A.D.3d 936, 936–937, 64 N.Y.S.3d 121 ; HSBC Bank USA, N.A. v. Ozcan, 154 A.D.3d 822, 825–826, 64 N.Y.S.3d 38 ; Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d 95, 923 N.Y.S.2d 609 ). By requiring the lender or mortgage loan servicer to send the RPAPL 1304 notice by registered or certified mail and also by first-class mail, " ‘the Legislature implicitly provided the means for the plaintiff to demonstrate its compliance with the statute, i.e., by proof of the requisite mailing,’ which can be ‘established with proof of the actual mailings, such as affidavits of mailing or domestic return receipts with attendant signatures, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure’ " ( Bank of Am., N.A. v. Bittle, 168 A.D.3d 656, 658, 91 N.Y.S.3d 234, quoting Wells Fargo Bank, NA v. Mandrin, 160 A.D.3d 1014, 1016, 76 N.Y.S.3d 182 ; see Viviane Etienne Med. Care, P.C. v. Country–Wide Ins. Co., 25 N.Y.3d 498, 508–509, 14 N.Y.S.3d 283, 35 N.E.3d 451 ; Nassau Ins. Co. v. Murray, 46 N.Y.2d 828, 829–830, 414 N.Y.S.2d 117, 386 N.E.2d 1085 ).

Here, the plaintiff failed to establish, prima facie, that it complied with RPAPL 1304. Although Crampton stated in her affidavit that the RPAPL 1304 notices were mailed by certified and regular first-class mail, and attached copies of those notices, the plaintiff failed to attach, as exhibits to the motion, any documents to prove that the mailing actually happened. There is no copy of any United States Post Office document indicating that the notice was sent by registered or certified mail as required by the statute. Further, while Crampton attested that she was in receipt of the prior loan servicer's records, that she had personal knowledge of the business practices for mailing of notices by Wilmington, and that the 90–day notice was sent in compliance with RPAPL 1304, she did not attest to knowledge of the mailing practices of Bank of America, the entity that allegedly sent the notices to the defendant. Since the plaintiff failed to provide proof of the actual mailing, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure, the plaintiff failed to establish its strict compliance with RPAPL 1304 (see U.S. Bank Natl. Assn. v. Cope, 167 A.D.3d 965, 90 N.Y.S.3d 227 ; Nationstar Mtge., LLC v. LaPorte, 162 A.D.3d 784, 79 N.Y.S.3d 70 ; U.S. Bank N.A. v. Henry, 157 A.D.3d 839, 841, 69 N.Y.S.3d 656 ; Investors Sav. Bank v. Salas, 152 A.D.3d 752, 753, 58 N.Y.S.3d 600 ; Citibank, N.A. v. Wood, 150 A.D.3d 813, 814, 55 N.Y.S.3d 109 ).

Accordingly, the Supreme Court should have denied those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant and for an order of reference.

While we need not reach the issue of standing in light of our determination, we note that the plaintiff also failed to establish its prima facie entitlement to judgment as a matter of law by failing to submit sufficient evidence that it had standing to commence the action (see CPLR 4518[a] ; OneWest Bank, FSB v. Berino, 158 A.D.3d 811, 813, 71 N.Y.S.3d 563 ; Arch Bay Holdings, LLC v. Albanese, 146 A.D.3d 849, 852–853, 45 N.Y.S.3d 506 ; Aurora Loan Servs., LLC v. Baritz, 144 A.D.3d 618, 620, 41 N.Y.S.3d 55 ).

The Defendant's Cross Motion for Summary Judgment

On a cross motion for summary judgment dismissing the complaint based upon the plaintiff's alleged lack of standing, the burden is on the moving defendant to establish, prima facie, the plaintiff's lack of standing as a matter of law (see Cenlar FSB v. Lanzbom, 168 A.D.3d 670, 671, 90 N.Y.S.3d 285 ; Deutsche Bank Natl. Trust Co. v. Homar, 163 A.D.3d 522, 523, 80 N.Y.S.3d 409 ). Here, the defendant failed to demonstrate her prima facie entitlement to judgment as a matter of law dismissing the complaint on the ground that the plaintiff lacked standing, as she offered no evidence relating to standing on her motion and thus failed to eliminate all triable issues of fact regarding the plaintiff's status as the holder of the note on the date the action was commenced (see BAC Home Loans Servicing, LP v. Rychik, 161 A.D.3d 924, 77 N.Y.S.3d 522 ; Citicorp Mtge. v. Adams, 153 A.D.3d 779, 780, 60 N.Y.S.3d 337 ; LGF Holdings, LLC v. Skydel, 139 A.D.3d 814, 815, 32 N.Y.S.3d 243 ; Bank of N.Y. Mellon v. Green, 132 A.D.3d 706, 707, 17 N.Y.S.3d 651 ). Accordingly, we agree with the Supreme Court's denial of that branch of the defendant's cross motion which was, in effect, for summary judgment dismissing the complaint insofar as asserted against her for lack of standing.

With regard to that branch of the defendant's cross motion which was for summary judgment dismissing the complaint insofar as asserted against her based upon the...