Court Opinion

ID: 2742976
Source: CourtListenerOpinion
Date Created: 2014-10-16 15:06:06.368953+00
Date Added: 2024-06-11T13:27:24.100495
License: Public Domain

State of New York
                     Supreme Court, Appellate Division
                        Third Judicial Department
Decided and Entered: October 16, 2014                     517893
________________________________

TD BANK, N.A., as Successor
   by Merger to COMMERCE BANK,
   N.A.,
                    Respondent,
      v                                       MEMORANDUM AND ORDER

JENNIFER OZ LEROY,
                    Appellant,
                    et al.,
                    Defendants.
________________________________

Calendar Date:   September 5, 2014

Before:   Stein, J.P., McCarthy, Egan Jr., Lynch and Clark, JJ.

                               __________

      Rapport Meyers, LLP, Hudson (Victor M. Meyers of counsel),
for appellant.

      Phillips Lytle, LLP, Albany (Todd A. Ritschdorff of
counsel), for respondent.

                               __________

McCarthy, J.

      Appeal from an order of the Supreme Court (O'Connor, J.),
entered April 23, 2013 in Ulster County, which, among other
things, denied defendant Jennifer Oz Leroy's cross motion for
summary judgment dismissing the complaint against her.

      Defendant Jennifer Oz Leroy (hereinafter defendant) owns
real property in Ulster County which is encumbered by a note and
mortgages held by plaintiff. Plaintiff commenced this action
seeking to foreclose due to defendant's nonpayment. Defendant
answered and asserted various defenses. Plaintiff moved for
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summary judgment requesting that Supreme Court strike defendant's
answer and refer the matter to a referee to compute the amount
due. Defendant cross-moved for, among other things, summary
judgment dismissing the complaint. Supreme Court found, among
other things, that plaintiff had served defendant with notice as
required by RPAPL 1304 and that, even though plaintiff was
untimely when it made the filing required by RPAPL 1306, such
failure was not a jurisdictional defect and could be disregarded.
The court granted plaintiff's motion for summary judgment and
denied defendant's cross motion. Defendant appeals.

      Supreme Court erred in holding that plaintiff proved as a
matter of law that it properly served defendant with the notice
required by RPAPL 1304. A party seeking summary judgment bears
the burden of proving the absence of any triable issues of fact
and must carry this burden not "'by pointing to gaps in its
opponent's proof, but [by] affirmatively demonstrat[ing] the
merit of its claim or defense'" (Velasquez v Gomez, 44 AD3d 649,
650-651 [2007], quoting George Larkin Trucking Co. v Lisbon Tire
Mart, 185 AD2d 614, 615 [1992]; accord Deutsche Bank Natl. Trust
Co. v Spanos, 102 AD3d 909, 911 [2013], lv dismissed 21 NY3d 1068
[2013]). RPAPL 1304 requires a lender to notify a borrower of an
impending legal action at least 90 days before a foreclosure
action is commenced, using specific statutory language printed in
14-point type (see RPAPL 1304 [1]). The notice must be sent to
the borrower by first-class mail as well as registered or
certified mail (see RPAPL 1304 [2]). "[P]roper service of the
RPAPL 1304 notice containing the statutorily-mandated content is
a condition precedent to the commencement of [a] foreclosure
action [and t]he plaintiff's failure to show strict compliance
requires dismissal" (Aurora Loan Servs., LLC v Weisblum, 85 AD3d
95, 103 [2011]; see Hudson City Sav. Bank v DePasquale, 113 AD3d
595, 596 [2014]; Pritchard v Curtis, 101 AD3d 1502, 1504 [2012]).
Plaintiff alleged in the complaint that it complied with RPAPL
1304. "Thus, in support of its motion for summary judgment on
the complaint, [the lender] was required to prove its allegations
by tendering sufficient evidence demonstrating the absence of
material issues as to its strict compliance with RPAPL 1304, and
failure to make this showing requires denial of the motion,
regardless of the opposing papers" (Aurora Loan Servs., LLC v
Weisblum, 85 AD3d at 106 [citation omitted]).
                              -3-                517893

      Here, plaintiff submitted an affidavit of an assistant
vice-president who averred that she "confirmed [that] the notice
of default, if required, was properly mailed prior to
commencement of foreclosure." Plaintiff also submitted a copy of
a letter containing the statutorily-required language and dated
more than 90 days prior to commencement, along with a certified
mail receipt that contains defendant's name and address but does
not contain a postmark or date of mailing (compare Residential
Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2001]).
The record does not include an affidavit from anyone with
personal knowledge of the mailing. This evidence was
insufficient to prove that the RPAPL 1304 notice was properly
mailed to defendant (see Deutsche Bank Natl. Trust Co. v Spanos,
102 AD3d at 911). In response to the motion and in support of
the cross motion, defendant submitted an affidavit of counsel
arguing that proper service of the notice was not effected.
Defendant did not submit any proof by someone with personal
knowledge so as to carry her burden on the cross motion to
establish as a matter of law that plaintiff failed to comply with
that statute (see Deutsche Bank Natl. Trust Co. v Spanos, 102
AD3d at 911). Accordingly, neither party is entitled to summary
judgment on that issue because questions of fact exist regarding
service of the RPAPL 1304 notice.

      Defendant was entitled to summary judgment dismissing the
complaint based on plaintiff's failure to comply with RPAPL 1306.
That statute provides that lenders "shall file with the
superintendent of financial services (superintendent) within
three business days of the mailing of the notice required by
[RPAPL 1304]" a form containing certain information regarding the
borrower and mortgage (RPAPL 1306 [1]; see RPAPL 1306 [2]). The
statute further states that "[a]ny complaint served in [an
action] initiated pursuant to [RPAPL article 13] shall contain,
as a condition precedent to such [action], an affirmative
allegation that at the time the [action] is commenced, the
plaintiff has complied with the provisions of this section"
(RPAPL 1306 [1]).

      Plaintiff does not dispute that it failed to file with the
superintendent within three days, and instead waited more than
three months to file the form required by RPAPL 1306. Plaintiff
                              -4-                517893

alleged in its complaint that it complied with RPAPL 1306,
apparently under the impression that it had complied by filing
with the superintendent prior to commencing the action. The
statute's language is ambiguous, in that the condition precedent
could be read to mean – as plaintiff argues – that compliance
occurs if the lender files with the superintendent at any time
before commencement of the foreclosure action or – as defendant
argues – that a lender has only complied with the provisions of
RPAPL 1306 if it has filed with the superintendent within three
days of mailing the RPAPL 1304 notice. Although defendant's
interpretation tries to read the two sentences of RPAPL 1306 (1)
together, under that interpretation the language "at the time the
[action] is commenced" would be unnecessary. If a lender filed
the RPAPL 1306 form within three days of service it would always
necessarily have complied with RPAPL 1306 "at the time the
[action] is commenced," because a foreclosure action cannot be
commenced until 90 days after service of the RPAPL 1304 notice
(see RPAPL 1304 [1]). Due to this ambiguity, we must interpret
the statute by looking to the Legislature's intent as manifested
in the legislative history (see State of New York v Getty
Petroleum Corp., 89 AD3d 262, 265 [2011]; Matter of Albany Law
School v New York State Off. of Mental Retardation & Dev.
Disabilities, 81 AD3d 145, 149 [2011], mod 19 NY3d 106 [2012]).

      In addition to general statements about addressing the
mortgage crisis to protect borrowers and prevent a similar
foreclosure crisis in the future (see Governor's Program Bill
Mem, Bill Jacket, L 2009, ch 507, at 9), the legislative history
more particularly addresses this particular statute when it
indicates that "[i]n order to help reduce the number of
preventable foreclosures, it is critical to identify distressed
homeowners as soon as possible" (Governor's Program Bill Mem,
Bill Jacket, L 2009, ch 507, at 11). We can discern the
legislative intent by considering this goal along with the
statutory language. Viewed in that light, RPAPL 1306's condition
precedent to commencing a foreclosure action is strict compliance
with the first sentence of the statute. In other words, a lender
has only complied with the condition precedent if the lender has
filed the appropriate form with the superintendent within three
days of mailing the RPAPL 1304 notice to the borrower. Allowing
a lender to commence an action and allege compliance with the
                                -5-                517893

filing requirement based on a filing that was performed later –
as long as it was accomplished at any time prior to the
commencement – would frustrate the purpose of RPAPL 1306 (cf.
Aurora Loan Servs., LLC v Weisblum, 85 AD3d at 107). Hence,
plaintiff failed to prove that it satisfied a statutory condition
precedent to commencing this action.

      Plaintiff contends that the courts can disregard its
failure to strictly comply with the time period for filing with
the superintendent pursuant to RPAPL 1306.1 Courts may disregard
a defect or irregularity if a substantial right of a party is not
prejudiced (see CPLR 2001). Based on the legislative intent,
plaintiff's filing with the superintendent more than three months
later than required by statute – thereby failing to comply with
the mandatory condition precedent – "cannot be deemed a minor
irregularity which can be overlooked" (Aurora Loan Servs., LLC v
Weisblum, 85 AD3d at 108). Inasmuch as plaintiff admits that it
failed to strictly comply with the condition precedent required
by RPAPL 1306, and that failure is not excused, the complaint
must be dismissed (cf. Hudson City Sav. Bank v DePasquale, 113
AD3d at 596; Aurora Loan Servs., LLC v Weisblum, 85 AD3d at 103).

        Stein, J.P., Egan Jr., Lynch and Clark, JJ., concur.

    1
        While we agree that the filing with the superintendent
and the RPAPL 1306 condition precedent do not affect the court's
jurisdiction, plaintiff could only prevail on its motion for
summary judgment if it established that it complied with all
conditions precedent to commencing this action.
                              -6-                  517893

      ORDERED that the order is modified, on the law, without
costs, by reversing so much thereof as granted plaintiff's motion
for summary judgment and denied that portion of defendant
Jennifer Oz Leroy's cross motion seeking summary judgment; motion
denied, cross motion granted to that extent, summary judgment
awarded to said defendant and complaint dismissed; and, as so
modified, affirmed.

                             ENTER:

                             Robert D. Mayberger
                             Clerk of the Court