USBank Nat'l Ass'n v. Haliotis

• Decision Date: 08 July 2020
• Docket Number: 2017–07324,Index No. 10147/12
• Citation: 185 A.D.3d 756,128 N.Y.S.3d 17
• Parties: USBANK NATIONAL ASSOCIATION, etc., Respondent, v. Antonia HALIOTIS, et al., Appellants, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

185 A.D.3d 756

128 N.Y.S.3d 17

USBANK NATIONAL ASSOCIATION, etc., Respondent,

v.Antonia HALIOTIS, et al., Appellants, et al., Defendants.

2017–07324

Index No. 10147/12

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

Argued—January 13, 2020

July 8, 2020

Solomon Rosengarten, Brooklyn, NY, for appellants.

Hogan Lovells U.S. LLP, New York, N.Y. (Gabrielle Mannuzza, David Dunn, and Christian Fletcher of counsel), for respondent.

ALAN D. SCHEINKMAN, P.J., SHERI S. ROMAN, SYLVIA O. HINDS–RADIX, HECTOR D. LASALLE, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the defendants Antonia Haliotis and George Haliotis appeal from a judgment of foreclosure and sale of the Supreme Court, Kings County (Lawrence S. Knipel, J.), dated May 1, 2018. The judgment of foreclosure and sale, upon an order of the same court dated April 6, 2017, inter alia, granting those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants Antonia Haliotis and George Haliotis, dismissing their affirmative defenses and counterclaims, and for an order of reference, and denying the cross motion of the defendants Antonia Haliotis and George Haliotis to dismiss the complaint insofar as asserted against them, and upon an order of the same court, also dated April 6, 2017, inter alia, referring the matter to a referee to ascertain and compute the amount due to the plaintiff, confirmed the referee's report and directed the sale of the subject property.

ORDERED that the judgment of foreclosure and sale is reversed, on the law, with costs, those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants Antonia Haliotis and George Haliotis, dismissing their fourth and eighth affirmative defenses, and for an order of reference are denied, the first order dated April 6, 2017, is modified accordingly, and the second order dated April 6, 2017, is vacated.

The plaintiff commenced this action against the defendants Antonia Haliotis and George Haliotis (hereinafter together the defendants), among others, to foreclose a mortgage on residential property located in Brooklyn. The defendants interposed an answer in which they asserted various affirmative defenses, including that the plaintiff failed to comply with RPAPL 1304, and counterclaims. The plaintiff moved, inter alia, for summary judgment on the complaint, dismissing the defendants' affirmative defenses and counterclaims, and for an order of reference. The defendants cross-moved to dismiss the complaint insofar as asserted against them. The Supreme Court granted the plaintiff's motion and denied the defendants' cross motion. Thereafter, the court issued a judgment of foreclosure and sale, dated May 1, 2018.

In support of its motion for summary judgment, the plaintiff submitted a copy of a 90–day notice that it demonstrated it had served upon the defendants in October 2011 in accordance with the provisions of RPAPL 1304(2). The version of RPAPL 1304(2) as it existed at that time required that the 90–day notice provide a list of five housing counseling agencies "that serve the region where the borrower resides." The 90–day notice mailed by the plaintiff to the defendants set forth the names, addresses, and telephone numbers of three housing counseling agencies located in Brooklyn, of one housing counseling agency located in Manhattan, and of one housing counseling agency located in Watertown. In support of their cross motion to dismiss, the defendants argued that the plaintiff's 90–day notice failed to comply with the requirements of the statute because Watertown is at least 321 miles from Brooklyn and is not in the same region as Brooklyn, and the plaintiff thus did not provide the names of five housing counseling agencies serving the region where the defendants reside. While the plaintiff did not respond to this contention in their reply papers in the Supreme Court, the plaintiff argues on appeal that its notice was proper and the defendants are not entitled to dismissal because the defendants failed to submit evidence that they asked for and were denied service by the Watertown agency. We disagree.

"Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action" ( Citibank, N.A. v. Conti–Scheurer, 172 A.D.3d 17, 20, 98 N.Y.S.3d 273 ). "[P]roper service of RPAPL 1304 notice on the borrower or borrowers is a condition precedent to the commencement of a foreclosure action, and the plaintiff has the burden of establishing satisfaction of this condition" ( Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d 95, 106, 923 N.Y.S.2d 609 ). Here, the notice prepared by the plaintiff listed, as one of the required five housing counseling agencies, an agency located more than 300 miles away from the defendants' residence. While it may be, as the plaintiff argues on appeal, that there is no basis...