Emigrant Bank v. Cohen

• Decision Date: 20 April 2022
• Docket Number: 2019–11801,Index No. 609593/18
• Parties: EMIGRANT BANK, etc., respondent, v. Seymour COHEN, appellant, et al., defendants.
• Court: New York Supreme Court — Appellate Division

205 A.D.3d 103
164 N.Y.S.3d 863 (Mem)

EMIGRANT BANK, etc., respondent,
v.
Seymour COHEN, appellant, et al., defendants.

2019–11801
Index No. 609593/18

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

Argued—March 14, 2022
April 20, 2022

Christopher Thompson, West Islip, NY, for appellant.

Terenzi & Confusione, P.C., Garden City, NY (Jacqueline M. Della Chiesa of counsel), for respondent.

HECTOR D. LASALLE, P.J., MARK C. DILLON, SHERI S. ROMAN, LARA J. GENOVESI, JJ.

OPINION & ORDER

DILLON, J.

205 A.D.3d 105

This appeal presents an issue of first appellate impression. The defendant homeowner, Seymour Cohen, argues, among other issues, that an alleged inaccuracy in the default amount set forth in the plaintiff's RPAPL 1304 notice warrants denial of the plaintiff's motion for summary judgment, as an inaccuracy represents a lack of strict compliance with the requirements of the statute. We disagree, and for reasons set forth below, conclude that strict compliance with RPAPL 1304 is satisfied so long as the duration and an amount of the default is contained in the notice, and that any continuing dispute over the specific amount is an issue that must await the parties’ later litigation.

I. Relevant Facts

On August 27, 2010, Cohen executed a note in the sum of $2,100,000 in favor of nonparty Emigrant Mortgage Company, Inc. (hereinafter EMC). The note was secured by a mortgage on residential property located in the Village of Brookville. The monthly payments on the note were to be $10,636.81.

On July 19, 2018, the plaintiff, Emigrant Bank, successor by merger with Emigrant Savings Bank–Long Island (hereinafter the plaintiff), commenced this action to foreclose the mortgage against Cohen, among others. The plaintiff attached to the complaint a copy of the note and mortgage, along with an assignment of the note and mortgage from the original lender, EMC, to Emigrant Savings Bank–Long Island (hereinafter

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ESB–LI). On August 13, 2018, Cohen submitted his answer in which he denied the material allegations of the complaint and asserted multiple affirmative defenses and counterclaims. The affirmative defenses included the plaintiff's alleged noncompliance with the requirements of RPAPL 1304 and lack of standing.

In May 2019, the plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against Cohen, to strike his answer, and for an order of reference. In support of the motion, the plaintiff submitted the affidavit of service of Aaron Smalls, who attested that he personally mailed to Cohen at the Brookville address an RPAPL 1304 notice, by both certified and regular mail. Smalls’ affidavit was supported by certified mail receipts and signed acknowledgment cards where

164 N.Y.S.3d 864

the postal tracking numbers matched each other. A copy of the RPAPL 1304 notice, which was also attached to the moving papers, identified the default amount as $64,862.12 over 57 days.

Also in support of the motion, the plaintiff submitted the affidavit of Greg Williamson, who was identified as an assistant treasurer of the plaintiff. Williamson averred that he was personally familiar with the plaintiff's recordkeeping practices and that he had knowledge relevant to this action based on his review of the note, mortgage, and other loan documents and business records. He attached several documents to his affidavit, including the purported mortgage payment history and notices to Cohen, which were apparently produced by EMC in its capacity as the plaintiff's servicer. Williamson also attached a forbearance agreement between the plaintiff and Cohen, dated October 9, 2017, which was printed on EMC letterhead, and which was to be in effect pending the potential private sale of the mortgaged property.

Cohen opposed the plaintiff's motion by arguing, inter alia, that the plaintiff failed to establish its standing to commence the action, and that it had failed to strictly comply with RPAPL 1304. As to standing, Cohen argued that the plaintiff did not provide evidence that the note had been personally delivered or assigned to it. Regarding the RPAPL 1304 notice, Cohen argued, inter alia, that the Smalls affidavit addressing the mailing of the notices was not executed contemporaneously with the events described, and that it therefore did not qualify as an admissible business record.

In reply, on the issue of standing, the plaintiff provided to the Supreme Court for the first time, through another Williamson

205 A.D.3d 107

affidavit, a certificate of merger and related documents, reflecting a merger between ESB–LI and the plaintiff prior to the commencement of the action. The plaintiff argued that the assignment of the mortgage to ESB–LI and the merger of that entity with the plaintiff established the plaintiff's standing.

In an order entered October 7, 2019, the Supreme Court granted the plaintiff's motion, finding that the plaintiff had standing to prosecute the action and had established its strict compliance with the requirements of RPAPL 1304. Cohen appeals.

We reverse the order insofar as appealed from for the reasons set forth below. While the Supreme Court correctly found that the plaintiff established its strict compliance with the requirements of RPAPL 1304, the plaintiff's standing was not established absent sufficient evidence of a merger between ESB–LI and the plaintiff. Therefore, the court should have denied those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against Cohen, to strike his answer, and for an order of reference.

II. The Mailings of the RPAPL 1304 Notice Were Established

Contrary to Cohen's contention, the plaintiff established its compliance with the mailing requirements of RPAPL 1304.

The RPAPL 1304 notice must be sent by registered or certified mail and regular mail at least 90 days before the commencement of any foreclosure action, to the mortgagor's last known address and the property address (see id. § 1304[2] ; MTGLQ Invs., L.P. v. Cutaj, 202 A.D.3d 778, 162 N.Y.S.3d 431 ; U.S. Bank Trust, N.A. v. Mohammed, 197 A.D.3d 1205, 154 N.Y.S.3d 80 ; Nationstar Mtge., LLC v. Paganini, 191 A.D.3d 790, 142 N.Y.S.3d 548 ). The plaintiff submitted the affidavit of Smalls who, rather than relying upon business records and the actions of others as is more common in these matters, described

164 N.Y.S.3d 865

how he had personally mailed the notice to the proper identified address on July 28, 2017, by both regular and certified mail. Our Court has held such direct knowledge affidavits, however rare they are, to be sufficient evidentiary proof of statutory compliance (see McCormick 110, LLC v. Gordon, 200 A.D.3d 672, 159 N.Y.S.3d 83 ; Ditech Fin., LLC v. Naidu, 198 A.D.3d 611, 614, 156 N.Y.S.3d 27 ; Wells Fargo Bank, N.A. v. Cherot, 197 A.D.3d 773, 775–776, 150 N.Y.S.3d 597 ). Smalls’ execution of his affidavit of service, while not contemporaneous with the mailings

205 A.D.3d 108

themselves, does not under the circumstances of this case render the proof of service infirm (see CIT Bank N.A. v. Schiffman, 36 N.Y.3d 550, 557–558, 145 N.Y.S.3d 1, 168 N.E.3d 1138 ). Further, the Smalls affidavit was supported by, inter alia, copies of the two certified mail receipts, with corresponding signed acknowledgment cards.

III. The Alleged Inaccuracy in the RPAPL 1304 Notice as to the Stated Default Amount Does Not Render the Notice Defective

Cohen's contention that the plaintiff did not strictly comply with RPAPL 1304 because of a discrepancy in the alleged amount due on the default is also without merit.

RPAPL 1304(1) provides that with regard to home loans, the lender or its assignee or servicer must provide notice to the homeowner of the default in payment, and warn that the homeowner is at risk of losing the home in a foreclosure proceeding. As particularly relevant here, RPAPL 1304(1) also requires that the notice provide the following template information: "As of ___, your home loan is ___ days and ___ dollars in default." In other words, the homeowner is entitled to know from the mortgagee's notice the durational extent and dollar amount of the alleged payment default.

Here, the RPAPL 1304 notice to Cohen stated that as of July 28, 2017, "your home is 57 days, and $64,862.12 dollars in default." The notice therefore complied with the directive of RPAPL 1304 that the homeowner be notified of the duration and amount of the default. A 30–day contractual notice was also transmitted to Cohen in satisfaction of Paragraph 22 of the subject mortgage, and reflected the same date as the statutory notice. The 30–day notice identified the same amount as due at that time—$64,862.12—with a schedule reflecting a prospective escalation of the default amount based on future continuing interest, escrow adjustments, and late fees. While the 30–day notice misdescribed the demand amount of the 90–day notice, both notices plainly identified the actual default amount owed...