Wells Fargo Bank, N.A. v. Yapkowitz

• Decision Date: 29 September 2021
• Docket Number: 2019–00133, 2019–00134, 2019–00135, 2019–00136,Index No. 33182/13
• Citation: 199 A.D.3d 126,155 N.Y.S.3d 163
• Parties: WELLS FARGO BANK, N.A., etc., appellant, v. Fred J. YAPKOWITZ, et al., respondents, et al., defendants.
• Court: New York Supreme Court — Appellate Division

199 A.D.3d 126

155 N.Y.S.3d 163

WELLS FARGO BANK, N.A., etc., appellant,

v.Fred J. YAPKOWITZ, et al., respondents, et al., defendants.

2019–00133, 2019–00134, 2019–00135, 2019–00136

Index No. 33182/13

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

Argued—November 16, 2020

September 29, 2021

McCalla Raymer Leibert Pierce, LLC, New York, N.Y. (Daniel LoPresti of counsel), for appellant.

Becker Law Firm, PLLC, New City, N.Y. (Steven H. Becker of counsel), for respondents.

MARK C. DILLON, J.P., SYLVIA O. HINDS–RADIX, BETSY BARROS, PAUL WOOTEN, JJ.

OPINION & ORDER

WOOTEN, J.

This appeal presents an issue of first impression before this Court as to whether a plaintiff in a foreclosure action may satisfy the requirements of RPAPL 1304 by mailing a 90–day notice jointly addressed to two or more borrowers. We hold that this practice is insufficient to satisfy the requirements of RPAPL 1304, and that the plaintiff is required to mail a 90–day notice addressed to each borrower in separate envelopes as a condition precedent to commencing the foreclosure action.

I. Background

On May 6, 2005, the married defendants Fred J. Yapkowitz and Elaine M. Yapkowitz (hereinafter together the defendants) borrowed the sum of $532,000 from Argent Mortgage Company, LLC (hereinafter Argent), which was secured by a mortgage encumbering their real property in Pomona. The loan was memorialized by a note which was signed by each of the defendants as "Borrower."

On or about January 1, 2009, the defendants defaulted on their payment obligations. On January 22, 2009, Wilshire Credit Corporation (hereinafter Wilshire), the loan servicer at that time, mailed separate 30–day notices of default to each of the defendants. The 30–day notices advised each of the defendants that they were obligated to pay the sum of $6,189.30 by February 26, 2009, and that the failure to make payment by that date could result in acceleration of the entire indebtedness of the loan and the commencement of a foreclosure action.

In a letter dated February 26, 2010, jointly addressed to the defendants, Bank of America Home Loans notified the defendants that servicing of the loan was transferred from Wilshire to BAC Home Loans Servicing, LP (hereinafter BAC). The defendants were subsequently notified that servicing of the loan was transferred from BAC to Bank of America, N.A. (hereinafter BANA). Thereafter, the defendants were notified that servicing of the loan was transferred from BANA to Nationstar Mortgage, LLC (hereinafter Nationstar).

In April 2013, Argent assigned the mortgage to the plaintiff. Thereafter, the plaintiff commenced this foreclosure action against, among others, the defendants. In their answer, the defendants asserted affirmative defenses, including that the plaintiff failed to comply with the requirements of RPAPL 1304.

In June 2017, the plaintiff moved, inter alia, for summary judgment on the complaint. In support of the motion, the plaintiff submitted, among other things, a copy of a 90–day notice pursuant to RPAPL 1304 sent by BANA via certified and first-class mail to the defendants’ address, and a certified mail receipt for the 90–day notice signed for by "F. Yapkowitz." The 90–day notice was jointly addressed to both of the defendants.

The plaintiff also submitted an affidavit from Edward Hyne, a litigation resolution analyst for Nationstar. Hyne averred, inter alia, that Nationstar's business records, which incorporated the records of the prior loan servicer, BANA, reflected that "90–day pre-foreclosure notices ... were sent, via certified and first class mail, to Defendants," that "each 90–Day Notice was sent in a separate envelope from any other mailing," and that "F. Yapkowitz" "signed for and accepted the delivery of the ... 90–Day Notice." Hyne also indicated that "each 90–Day Notice listed in the upper left-hand corner the name of the recipients (the Borrowers), the recipient's address ... and the specific Mortgage Loan number."

In opposition to the plaintiff's motion, the defendants submitted, inter alia, an affidavit from both of them, wherein they averred, in pertinent part, that "[n]either of us remembers receiving and reading any 90–day notice of default," or "whether the 90–day notice ... addressed to both of us, ... and signed for by Fred [Yapkowitz,] ... was ever shown to Elaine [Yapkowitz]." The defendants’ attorney argued, among other things, that the plaintiff failed to establish its strict compliance with RPAPL 1304, a condition precedent to the commencement of the foreclosure action, since the 90–day notice submitted by the plaintiff was addressed to both defendants jointly, and the plaintiff only presented a certified mail receipt signed by "F. Yapkowitz." Thus, the defendants’ attorney asserted that apparently "only one 90–day notice was mailed, rather than single notices addressed to each of the defendants individually and in separate envelopes, as required by RPAPL 1304."

In an order dated September 26, 2017, the Supreme Court denied the plaintiff's motion. The court determined that the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law by relying on the affidavit of Hyne, who had no personal knowledge of the mailing of the 90–day notice, and relied on inadmissible hearsay.

At a pretrial conference on February 7, 2018, the parties stipulated to the submission of papers in lieu of testimony on the issue of, inter alia, whether the plaintiff complied with RPAPL 1304. Thereafter, the plaintiff submitted, among other things, an affidavit from Jamie Turner, assistant vice president of BANA, the former loan servicer. Turner averred, inter alia, that BANA's business records reflected that "BANA sent 90–day pre-foreclosure notices ... via certified and first class mail to Defendants ... in accordance with BANA's established and routinely followed business practices and procedures designed to ensure that documents are properly addressed and mailed," and that the 90–day notice was signed for by "F. Yapkowitz." Turner added that "each 90–Day Notice listed in the upper left-hand corner the names of the recipients (Defendants), the recipients’ mailing address ... and the specific Mortgage Loan number."

In a decision dated May 21, 2018, made after the submission of papers, the Supreme Court determined, inter alia, that "Turner possesse[d] the requisite knowledge of BANA's standard office practices and procedures to attest that BANA properly sent the 1304 Notice and ... substantiate[d] the mailing with documentary proof" ( Wells Fargo Bank, N.A. v. Yapkowitz, 59 Misc.3d 1227[A], 2018 N.Y. Slip Op. 50726[U], *7, 2018 WL 2326174 [Sup. Ct., Rockland County] ). Nevertheless, the court determined that the plaintiff failed to establish its strict compliance with RPAPL 1304, which "requires a separate notice to each borrower in a separate envelope" ( Wells Fargo Bank, N.A. v. Yapkowitz, 59 Misc.3d 1227[A], 2018 N.Y. Slip Op. 50726[U], *8, 2018 WL 2326174 ), and thus, the foreclosure action must be dismissed. The court rejected the plaintiff's contention that it could be presumed that Fred J. Yapkowitz informed his wife, Elaine M. Yapkowitz, of his receipt of the RPAPL 1304 notice, since the lender cannot "shift[ ] its responsibility to provide the 1304 Notice to both borrowers from itself ... [to] the borrower who signed for the certified mailing or opened the first-class mailing" ( Wells Fargo Bank, N.A. v. Yapkowitz, 59 Misc.3d 1227[A], 2018 N.Y. Slip Op. 50726[U], *8, 2018 WL 2326174 ).

Thereafter, the plaintiff moved pursuant to CPLR 4404(b) to set aside the decision. In an order dated July 23, 2018, the Supreme Court denied the plaintiff's motion.

In a judgment dated July 23, 2018, upon the decision, the Supreme Court dismissed the complaint insofar as asserted against the defendants based upon the plaintiff's failure to establish its strict compliance with RPAPL 1304.

The plaintiff appeals from (1) the order dated September 26, 2017; (2) the decision dated May 21, 2018; (3) the order dated July 23, 2018; and (4) the judgment dated July 23, 2018.

The appeal from the decision must be dismissed, as no appeal lies from a decision (see Schicchi v. J.A. Green Const. Corp., 100 A.D.2d 509, 472 N.Y.S.2d 718 ). The appeals from the orders dated September 26, 2017, and July 23, 2018, also must be dismissed because the right of direct appeal therefrom terminated with the entry of the judgment 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 those orders are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1] ).

II. Discussion

A. Overview of RPAPL 1304

An RPAPL 1304 notice is a notice pursuant to the Home Equity Theft Prevention Act ( Real Property Law § 265–a ), "the underlying purpose of which is ‘to afford greater protections to homeowners confronted with foreclosure’ " ( Bank of N.Y. Mellon v. Forman, 176 A.D.3d 663, 665, 110 N.Y.S.3d 136, quoting Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d 95, 103, 923 N.Y.S.2d 609 ). " RPAPL 1304 was added to the Real Property Actions and Proceedings Law in 2008 as part of the legislative response to the subprime lending crisis and the epidemic of foreclosures" ( Sparta GP Holding Reo Corp. v. Lynch, 186 A.D.3d 894, 895, 131 N.Y.S.3d 17 ; see L 2008, ch 472, § 2). " RPAPL 1304 requires that at least 90 days before a lender, an assignee, or a mortgage loan servicer commences an action to foreclose the mortgage on a home loan as defined in the statute, such lender, assignee, or mortgage loan servicer must give notice to the borrower" ( Bank of N.Y. Mellon v. Porfert, 187 A.D.3d 1110, 1111–1112, 134 N.Y.S.3d 57 ). "Since RPAPL 1304 notice must be sent at least 90 days prior to the commencement of an anticipated foreclosure action, its manifest purpose is to aid the homeowner in an attempt to avoid litigation" ( Aurora Loan Servs., LLC v. Weisblum, 85...