Wells Fargo Bank. N.A. v Bedell

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Wells Fargo Bank. N.A. v Bedell 2018 NY Slip Op 31177(U) June 13, 2018 Supreme Court, Suffolk County Docket Number: 16603/2012 Judge: Howard H. Heckman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [* 1] Shon Form O rder SUPREME COURT- STATE OF EW YORK IAS PART 18 - SUFFOLK COUNTY PRESENT: HON. HOW ARD H. HECKMAN JR., J.S. C. INDEX NO.: 16603/20 12 MOTION DATE: 05/29/2018 MOTION SEQ. NO.: #004 MG ----------------------------------------------------------------X WELLS FARGO BANK. N.A. Plaintiff -against- PLAINTIFF'S ATTORNEY: KNUCKLES. KOMOSINSKI & \tIANFRO. LLP 565 TAXTER RD. SUITE 590 ELMSFORD. NY 10523 WILLIAM BEDELL A/KIA WILLIAM A. BEDELL. m DEFENDANT'S ATTORNEY: Defendants. JEFFREY HERZBERG, ESQ. 300 RABRO DRIVE HAUPPAUGE. NY 11788 ----------------------------------------------------------------)( Upon the fol lowing papers numbered I to 28 read on this motion 1- 18 : Notice of Motion/ Order to Show Caus<:: ;md supporting papers_: Notice or Cross Motion and supporting papers_ : Answeri ng Affidavits and supporting papers 19-24 : Replying Affidavits and supporting papers 25-28 : Other_ : (and aficr heari ng coun sel in support and opposed to the motion) it is. ORDERED that this motion by plaintiff Wells Fargo Bank, N.A. seeking an order: 1) granting summary judgment striking the answer of defendant William Bedell and ; 2) deeming all appearing and non-appearing defendants in default: and 3) appointing a referee to compute the sums due and owing to the plaintiff in this mortgage foreclosure action is granted; and it is further ORDERED tha t plaintiff is directed to serve a copy of this order with notice of entry upon all parties who have appeared and not waived further notice pursuant to CPLR 2103(b)(l )(2) or (3) w ithin thirty days of the date of this order and to promptly file the affidavits of service with the Clerk of the Court. Plaintiffs action seeks to foreclose a mo11gage in the original sum of $336,000.00 executed by defendant William Bedell on May 7, 2007 in favor of World Sa~ings Bank, FSB. On the same date defendant Bedell executed a promissory note promising to re-pay the entire amount of the indebtedness to the mortgage lender. Plaintiff obtained ownership of the note and mortgage as a result of a merger with the original mortgage lender. Plaintiff claims thal defendant defaulted under the terms of the mortgage and note by failing to make timely monthly mortgage payments beginning November 1, 20 11 a nd continuing to date. Plaintiff commenced this actio n by filing a summons , complaint and notice of pendency in the Suffolk County Clerk's Office on May 30, 2012 . Defendant Bedell served a timely answer. By short form Order dated September 20. 2017 plaintiffs motion for an order granting summa1)' judgment and appointing a referee to compute the sums due and owing to the mo1tgage lender was granted to the extent that all defenses asserted in defendant's answer were dismissed with the sole exception being defendant's affirmative defonse claiming plaintiff failed to comply with RP APL 1304 req uireme nts. That order denied defendant's cross motions seeking dismissal of plaintiffs complaint and to compel add itional discovery. [* 2] The September 20, 20 17 short form Order also provided that the parties appear for the purpose of preparing for trial with respect to the remaining issue. or to provide a briefing schedule in preparation of submitting additional summary judgment motions. Plaintiffs motion seeks an order granting summary judgment against the defendant and for the appointment of a referee. In opposition, defendant claims that plaintiffs motion must be denied since plaintiff has failed to submit sufficient adm issible proof to show that the 90-day notices required pursuant to RP APL were served/ A court has discretion to consider a successive summary judgment motion when it is substantively valid and the granting of the motion w il l further the ends of justice and eliminate an unnecessary burden on the resources of the courts'' (see Kole! Damsek Efiezer. Inc. v. Schlesinger, 139 AD3d 810, 33 NYS3d 284 (2nd Dept., 2016) quoting Graham v. City of New York, 136 A03d 747, 748, 24 NYS3d 754 (2nd Dept., 2016); Landmark Capital Investments. Inc. v. Li-Shan Wang, 94 AD3d 418, 941NYS2d144 (2 11d Dept., 20 12); Town o_fAngelica v. Smith, 89 AD3d 1547, 933 NYS2d 480 (4 1h Dept., 201 l )). This cou1i deems consideration of this successive motion as ''substantively valid .. and in the interests of judicial economy and furthering the ends of justice. The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material question of fact from the case. The grant of summary judgment is appropriate only when it is clear that no material and triable issues of fact have been presented (Sillman v. TwenNeth Centw y-Fox Film Corp., 3 NY2d 395 (1957)). The moving party bears the initial burden of proving entitlement to summary judgment (Winegrad v. NYU Medical Center, 64 NY2d 85 l (1985)). Once such proof has been proffered, the burden shifts to the opposing party who, to defeat the motion, must offer evidence in admissible form. and must set forth facts sufficient to require a trial of any issue of fact (CPLR 3212(b); Zuckerman v. City ofNew York, 49 NY2d 557 ( 1980)). Summa1y judgment shall only be granted when there are no issues of material fact and the evidence requires the court to direct a judgment in favor of the movant as a matter of law (Friends ofAnimals v. Associated Fur Mam(facturers. 46 NY2d l 065 ( 1979)). Entitlement to summary judgment in favor of the fo reclosing plaintiff is established, prima facic by the plaintiff~s producti o n of the mortgage and the unpaid note. and evidence of defau lt in payment (see Wells Fargo Bank NA. v. Erobobo. 127 AD3d 11 76. 9 NYS3d 312 (2"d Dept. , 2015); Wells Fargo Bank, NA. v. Ali. 122 AD3d 726, 995 NYS2d 735 (2nJ Dept., 2014)). By short fonn Order dated September 20, 20 17 plainti ffs motion for an order granting summa1y judgment was granted as to all issues except with respect to the issue of service of the preforeclosure 90-day notices required pursuant to RP APL 1304. Proper service or such RP APL 1304 notices on borrO\.·ver(s) are conditions precedent to the commencement of a foreclosure action. and the plaintiff has the burden of establishing compliance wi th this condi ti on (Aurora loan Services, LLC ''· Weishlum. 85 AD3d 95, 923 NYS2d 609 (2nd Dept., 20 I l ); First National Bank ofChicago 1 Sifrer. 73 AD3d 162. 899 NYS2d 256 (2nd Dept.. 20 I 0)). RP APL 1304(2) provides that notice be sent by registered or ce1tifiecl mai I and by first-class mail to the last known address of the borrower(s), and if different, to the residence that is the subject of the mortgage. The notice is considered given as of the date it is mailed and must be sent in a separate envelope from any other mailing or notice and the notice must be in 1-1--point type. 1 • -2- [* 3] At issue is whether the evidence submitted by the plaintiff is sufficient to establish plaintiffs compliance with statutory pre-foreclosure notice requirements .. CPLR 4518 provides: Business records. (a) Generally. Any writing or record. whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction , occurrence or event, shall be admiss ible in evidence in proof of that act, transaction, occurrence or event. if the judge finds that it was made in the regular course of any business and that it was the regular course of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter. The Court of Appeals in People l'. Guidice, 83 N Y2d 630, 635, 612 N YS2d 350 (1994) explained that "'the essence of the business records exception to the hearsay rule is that records systematically made for the conduct of business ... are inherently highly trustworthy because they are routine reflections of day-to-day operations and because the entrant's obligation is to have them truthful and accurate for purposes of the conduct of the enterprise." (quoting People v. Kennedy, 68 NY2d 569, 579, 510 NYS2d 853 ( 1986)). It is a unique hearsay exception since it represents hearsay deliberately created and differs from all other hearsay exceptions which assume that declarations which come within them were not made deliberately with litigation in mind. Since a business record keeping system may be designed to meet the hearsay exception, it is important to provide predictability in this area and discretion should not normally be exercised to exclude such evidence on grounds not fo reseeable at the time the record was made (see Trotti v. Estate ofBuchanan, 272 AD2d 660, 706 NYS2d 534 (3rd Dept., 2000)). The three foundational requirements of CPLR 45 l 8(a) are: I ) the record must be made in the regular course of business- reOecting a routine, regularly conducted business activity, needed and relied upon in the performance of business functions; 2) it must be the regular course of business to make the records- (i.e. the record is made in accordance with established procedures for the routine, systematic making of the record); and 3) the record mus t h ave been mnde at the time of the act, transaction. occurrence or event. or within a reasonable time thereafter. assuring that the reco llection is fa irly accurate and the entries routinely made (see People v. Kennedy, supra @ pp. 579-58 0)). The " mere filing of papers recei ved from other entities, even if such papers arc retained in the regu lar course of business, is insuffici ent lo quali fy the documents as business records." (People v. Crarsley. 86 NY2d 81. 90. 629 NYS2d 992 ( 1995)). The records will be admissible ··if the recipient can establish personal knowledge of the maker's business practices and procedures. or that the records provided by the maker were incorporated into the recipient 's own records or routinely relied upon by the recipient in its business.'' (State ofNe\1 York v. 158'" Street & Ril•erside Drive Housing Col/lpany. Inc.. 1OOAD3d 1293, 1196, 956 NYS2d 196(2012); /eal·e denied, 20 NY3d 858 (2013): see also T'iviane Etienne 1'/edical Care. P. C. 1 Co1111t1y-IVide Insurance Company. 25 NY3d 498. 14 NYS3d 283 (20 15): Deutsche Bank National Trust Co. 1·. /l.lonica. l 3 1 AD3d 737, 15 NYS3d (3rJ Dept., 2015): I'eople v. DiSafro. 284 AD2d 547, 727 NYS2d 146 (2"d Dept.. 2001); Matter o( Carothers''· Gt:ICO, 79 i\.D3d 864, 914 NYS2d 199 (2"d Dept.. 20 10) ). 1 1 • -3- [* 4] The statute (CPLR 4518) clearly does not require a person to have personal knowledge of each and every entry contained in a business record (see Citibank NA. v. Abrams, 144 AD3d 1212. 40 NYS3d 653 (3rd Dept.. 2016); HSBC Bank USA. NA. v. Sage. 112 AD3d 1126, 977 NYS2d 446 (3rd Dept., 2013 ): Landmark Capital Inv. Inc. \'. LI-Shem Wang. supra.)). As the Appellate Division, Second Department stated in Citigroup v. Kopelowitz. 147 AD3d 1014, 48 NYS3d 223 (2nd Dept., 2017): "There is no requirement that a plaintiff in a foreclosure action rely on a particular set of business records to establish a prima facie case. so long as the plaintiff satisfies the admissibility requirements of CPLR 45 l 8(a) and the records themselves actually evince the facts for which they are relied upon.'' Decisions interpreting CPLR 4518 arc consistent to the extent that the three foundational requirements: l) that the record be made in the regular course of business; 2) that it is in the regular course of business to make the record: and 3) that the record must be made at or near the time the transaction occurred. - if demonstrated, make the records admissible since such records are considered trustwo11hy and reliable. Moreover, the language contained in the statute specifically authorizes the court discretion to determine admissibility by stating '·ifthejudge.fl.nd•;'' that the three foundational requirements are satisfied the evidence shall be admissible. The affidavits submitted from an assistant secretary employed by the loan servicer/attorney in fact (Rushmore Loan Management Services LLC) and from a vice president of loan documentation employed by plaintiff Wells Fargo Bank provide the evidentiary foundation for establishing the mortgage lender's right to foreclose. The affidavits sets forth both employees review of the business records maintained by the mortgagee/loan servicer; the fact that the books and records are made in the regular course of business of the mortgagee/loan servicer; that it was Wells Fargo ' s and Rushmore's regular course of business to maintain such records; that the records were made at or near the time the underlying transactions took place; and that the records were created by an individual with personal knowledge of the underlying transactions. The affidavit from the loan servicer's representative states that to the extent that a prior servicer created the records that such records were integrated and boarded into Rushmore's system; have become a part of Rushmore 's records; and that it is the regular practice of Rushmore to integrate the prior servicer's records and to rely upon the accuracy of such records in its loan servicing functions. The "affidavit of mailing of 90 day notice" from the mortgagee ' s vice president states that the mo11gage representative has acquired personal knowledge of Well's Fargo 's standard office practice "to prepare. address, mail and store letters" in its business and as a result of such training the testator is familiar with Wells Fargo's s tand.:ird practices a nd procedures used to create. mail and store data regarding 90 day pre- foreclosure notice required by New York law that are designed to ensure that these letters are properly addressed. mailed and data reflecting those events is stored in Wells Fargo ·s business records.'' Based upon the submission of these affidavits. the plaintiff has provided an admissible evidentiary foundation which satisfies the business records exception to the hearsay rule with respect to the remaining issue raised in thi s summary judgment application. As to service of the pre-loreclosurc RP APL 1304 90-day notices, the proof required to prove strict compliance with the statute (RP APL 1304) can be satisfied: 1) by plainti1Ts submission or an affidavit of service of the notices (see CitiJ\Jortgage. Inc. \'. Pappas. 147 AD3d 900, 47 NYS3d 415 (2"J Dept., 2017): Bank ofNell' fork 1\fe/1011 '" Aquino. 131 AD3d 1186. 16 NYS3d 770 (2"d Dept.. 2015): Deutsche Bank National Trnsl Co. \'. Spanos. l 02 AD3d 909, 961 NYS2d 200 (2nd Dept., 2013 )): or 2) by plaintiffs submission of sufficient proof to establish proof of mailing by the post office (see HSBC Bank USA. NA . v. Ozcan. 154 ADJd 822. 64 NYS3d 38 (2nd Dept., 2017); Citii\!ortgage. Inc. v. Pappas..rnpra pg. 90 I: see Wells Fargo Bank. NA. r. Trupia. 150 AD3d 1049, -4- [* 5] 55 NYS3d 134 (2"d Dept., 2017)). Once either method is established a presumption of receipt arises (see Viviane Etienne lv.ledical Care. P. C. v. Cozmt1y-Wide Insurance Co .. supra. ; Flagstar Bank v. Mendoza. 139 AD3d 898. 32 NYS3d 278 (2"d Dept .. 2016): Residenrial Holding COJp. '" Scousdale lnsurnnce Co., 286 AD2d 679, 729 NYS2d 766 (2"d Dept.. 2001 )). In this case, the record shows that there is sufficient evidence to prove that mailing by certified and first class mail was done by the post office proving strict compliance with RP APL 1304 mailing requirements. Plaintiff has submitted proof in the fom1 of two affidavits: one from a mortgage service representative and one from the bank's representative confirming that the mailings were done more than 90 days prior to commencing this action on January 24, 2012; together with copies of the 90 day notices and two ''certified mail receipts'' containing two twenty- two digit certified article (tracking) numbers (7107 168560601493 7665 & 7107168560601493 7818)-each of the 90-day notices were addressed to the defaulting mortgagor, William Bedell, at the mortgaged premises; the 90-day notices contained the then statutorily mandated five (5) United States department of housing and urban development approved housing counseling agencies "that serve the region where the borrower resides·' (RPAPL 1304(2)(emphasis added-- as the statute in existence in 2012 provided the agency be within the '·region'', and not the "county" (as required in the current statutory language)); together with a copy of an internal Wells Fargo business record entitled "Letter Log Recap for 2012" indicating notices sent by first class and certified mail on January 24, 2012; and a copy of an internal Rushmore business record entitled "3270 Explorer: Customer Service Notes (SERN)" indicating the return of the certified mailing receipt on February 16. 2012; and the RP APL 1306 filing statement with the New York State Banking Department confirming mailing of the notices to the defendant/mortgagor. Such proof is entirely consistent with the evidence submitted by the plaintiff in HSBC Bank USA, NA . v. Ozcan supra.. which the appellate court determined was in strict compliance with RP APL 1304 requirements (see also Bank ofAmerica, NA. v. Brannon, 156 AD3d 1. 63 NYS3d 352 (!51 Dept., 2017)). Defense counsel's conclusory denial of service, is not supported by any relevant, admissible evidence sufficient to raise a genuine issue of fact which would defeat plaintiff's summary judgment motion (see PHH lvfortgage Corp., v. Muricy, 135 AD3d 725. 24 NYS3d 137 (2"d Dept., 2016); HSBC Bank v. Espinal. 137 AD3d 1079. 28 NYS3d 107 (2"d Dept.. 2016)). With respect to defendant/ mortgagor's objection to the list of housing counseling agencies set forth in plaintiff's 90-day notice, the terms of the statute ( RP APL 1304('.2)) in effect when the notices were mailed in January, 2012 required "at least five housing counseling agencies as designated by the di vision of housing and community renewal. that serve the region where the borrower resides .., The statute did not require that the housing counseling agencies be located in Suffolk County, but in the region where the borrower resides. In this case plaintiffs notice complied with the statute to the extent that seventeen (17) agencies were listed with four (4) agencies located within the region where the borrower resided. While technically the notice did not contain a fifth agency listing in the region. the minimal defect does not negate plaintiff's compliance with statutory requirements. In this regard when faced with a near identical fact pattern in an action entitled Wells Fargo Bank. NA. v. Trnpia, Index# 61943-2014, Supreme Court Justice Thomas Whelan ruled such claim should be overlooked as a ..a minor irregularity or defecf'. This court agrees, and particularly so in view of sound reasoning behind the Honorable Thomas Whelan's memorandum decision. wherein he writes: ''Mindful of "the express policy of the state to preserve and guard the precious asset of home cqui ty" (Real Property Law 265-a[ 1][bJ). and the legislative intent "to provide -5- [* 6] a homeowner with information necessary ... to presen·e and protect home equity'· (Real Property Law 265-a[l](d]. upon a review of the entire record (emphasis added), this Court fo und that the plaintiff had satisfied those objectives." Similarly, in this case, defendant was afforded numerous opportunities to negotiate with the plaintiff after the RP APL 90-day notices had been served thereby accomplishing the goals and intent of the statute to bring the parties together in an effort to determine whether a workout could be arranged. This record shows that defendant Bedell was afforded six CPLR 3408 court mandated conferences beginning January 9, 2013 and ending January 8, 2014. During each of those conferences Bedell was represented by counsel. The legislative aim to encourage borrov<ers to participate in workout discussions was achieved despite the fact that no agreement was reached. Under such circumstances the fact that the 90-day notice served upon this defendant did not list a .fifth counseling agency in the region clearly had no detrimental, prejudicial or any negative effect on the defendant's abi I ity to participate at every stage of the negotiation process or this proceeding, particularly in vievv of the fact that defendant was represented by counsel during every stage of the process. And even were this court to acknowledge that the failure to list a.fifth agency was a "defect", the appellate court in the seminal case of Aurora Loan Services LLC v. Weisblum, 85 AD3d 95, 923 NYS2d 609 (2"d Dept., 201 1), specifically conceded that there may be some instances where such an error (or defect) would be '·so minimal as to warrant the exercise of the court's discretion under CPLR 2001 to avoid dismissal of the action (Weisblum@p.108)). Clearly given the entire history and fact pattern of this case, this omission is one such instance of a minimal defect which warrants the exercise of discretion to avoid the absurd result of dismissal. Accordingly, plaintiff's motion seeking summary judgment is granted. The proposed order of reference has been signed simultaneously with execution of this order. HON. HOWARD H. HECKMAN, JR. Dated: June 13, 2018 J.S.C. -6-

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