HSBC Bank USA, N.A. v Bluestein;
Annotate this CaseDecided on February 4, 2019
Supreme Court, Suffolk County
HSBC Bank USA, N.A., Plaintiff,
against
Beth Bluestein; BOARD OF DIRECTORS OF THE VILLAS AT WEST HILLS OWNER ASSOCIATION, INC.; MAXWELL BLUESTEIN, Defendants.
27824-2013
FEIN, SUCH & CRANE, LLP
Attorneys for Plaintiff
1400 Old Country Road, Ste C103
Westbury, NY 11590
CHARLES WALLSHEIN, ESQ.
By: Michael W. DeTrano, Esq.
Attorney for Defendant Beth Bluestein
35 Pinelawn Road, Suite 106E Melville, NY 11747
Robert F. Quinlan, J.
Upon the following papers numbered 1 to 90 read on this motion by plaintiff for summary judgment upon the limited issues set by the courts order of December 12, 2016 and defendant's cross-motion for summary judgment seeking dismissal under the same order: Notice of Motion and supporting papers 1-43; Notice of Cross Motion and opposition 44-72 ; Affirmations and supporting papers in opposition and reply 73-90; it is
ORDERED that this motion by plaintiff HSBC Bank, USA, N.A. for summary judgment on the limited issues remaining for trial (Mot. Seq. #002) after the decision of the court placed on the record after oral argument on December 12, 2016 (Mot. Seq. #001), and for an appointment of a referee pursuant to RPAPL § 1321, is denied; and it is further
ORDERED that defendant Beth Bluestein's cross-motion for summary judgment (Mot. Seq. #003) seeking dismissal of the action on the grounds that plaintiff failed to mail the notices required by RPAPL § 1304 and that the notices purportedly mailed violated the prohibition in RPAPL § 1304 (2) by including another mailing or notice in the same envelope as the notices required by the statute, is denied; and it is further
ORDERED that although the court amended the caption in the decision placed on the record after oral argument on December 12, 2016 to substitute Maxwell Bluestein in place of the "John Doe # 1-5" and "Jane Doe # 1-5"defendants, the written discovery and scheduling order of the same date reflected the amended caption, and plaintiff has used the amended caption in this motion, to satisfy the requirements of the Suffolk County Clerk , the court amends the caption by this order and the caption shall now appear as follows:
X
HSBC BANK USA, N.A.
Plaintiff,
against -
BETH BLUESTEIN; BOARD OF DIRECTORS OF
THE VILLAS AT WEST HILLS OWNER
ASSOCIATION, INC.; MAXWELL BLUESTEIN,
Defendants.
Xand it is further;
ORDERED that plaintiff is to serve a copy of this order upon the calendar clerk of this part within thirty (30) days of this order, and all further proceedings are to be under the amended caption; and it is further
ORDERED that this action is scheduled for limited issue trial before this part in accordance with the terms this order on Monday, February 25, 2019 at 2:00 PM, in Part 27, Arthur M. Cromarty Court Complex, 210 Center Drive, 4th floor, Rm 17, Riverhead, NY.
PRIOR PROCEEDINGS
This is an action to foreclose a mortgage on residential real property located at 5 Villas Circle, Melville, Suffolk County, New York given by defendant Beth Bluestein ("defendant") to plaintiff HSBC Bank USA, N. A.'s ("plaintiff") predecessor in interest. The prior history of this action is contained in the court's decision set forth on the record on December 12, 2016 after oral argument of plaintiff's prior motion for summary judgment (Mot. Seq. #001). At that time the court granted plaintiff's applications to amend the caption to substitute Maxwell Bluestein in place of the "John Doe # 1-5" and "Jane Doe # 1-5"defendants, and to set the default of the non-appearing, non-answering defendants, yet only granted plaintiff partial summary judgment pursuant to CPLR 3212 (g) dismissing all of defendant's' affirmative defenses and counterclaims; but denied full summary judgment as plaintiff had not established proof of defendant's default in payment as part of its prima facie case for foreclosure, or compliance with the mailing requirements of the RPAPL § 1304 as plead in its complaint, which was denied by defendant's answer, and argued in opposition to plaintiff's motion by defendant. The court's written scheduling and discovery order granted the parties 120 days for discovery on the issues, after which the parties were to certify the case ready for trial, plaintiff was to file a note of issue and the parties were authorized successive motions for summary judgment on the limited issues set for trial. The court further directed that such motions were to be filed within 30 days of the filing of the note of issue (CPLR 3212 [a]). Plaintiff filed the note of issue on June 7, 2017 and a trial date was set for October 6, 2017. The court removed the action from its trial calendar upon the filing of plaintiff's (Mot. Seq. #002).
TIMELINESS OF SUMMARY JUDGMENT MOTIONS
Plaintiff's successive motion for summary judgment (Mot. Seq. #002) was mailed on September 1, 2017 and filed September 11, 2017 per the court's computer records. Although this was outside the time set by the court's order of December 12, 2016 directing that the motion was to be made within 30 days of filing of the note of issue, it was well within the 120 day limit set by CPLR 3212 (a). The court is aware that the rationale behind entertaining subsequent summary judgment motions is that if they are granted they can further the ends of justice while eliminating an unnecessary burden on court resources (see Detko v McDonald's Restaurants of New York, Inc, 198 Ad2d 208 [2d Dept 1993]; Valley National Bank v INI Holding, LLC, 95 AD3d 1108 [2d Dept 2012]; Graham v City of New York, 136 AD3d 754 [2d Dept 2016]; Kolel Damsek Eliezer, Inc. v Schlesinger, 139 AD3d 810 [2d Dept 2016]). It has been held that considering second summary judgment motions where the court has already granted a party [*2]partial summary judgment and limited the issues to a few eliminates the burden on judicial resources which otherwise require a trial (see Rose v Horton Med. Ctr., 29 AD3d 977 [2d Dept 2006]; Landmark Capital Investments, Inc. v Li-Shan Wang, 94 AD3d 418 [1st Dept 2012]), and to deny a subsequent summary judgment motion which could be dispositive for the sole reason of the general prohibition has been held to be an improvident exercise of the court's discretion (see Burbige v Siben & Ferber, 152 AD3d 641 [2d Dept 2017]). For this reason, as defendant did not raise an objection to the lateness of plaintiff's motion and as the motion meets the general 120 day requirement of CPLR 3212 (a), the court has considered plaintiff's motion.
Defendant's cross-motion raise a separate issue. Even if the court applies the 120 period set by CPLR 3212 (a), defendant's motion was marked received on December 11, 2017 by the court, 188 days after the note of issue was filed, well after the period allowed by CPLR 3212 (a). The general prohibition against considering late summary judgment motions (see Brill v City of New York, 2 NY3d 648 [2004]; Micelli v. State Farm Mut. Auto Ins. Co., 3 NY3d 725 [ 2004]) applies not just to "stand alone" summary judgment motions, but to cross-motions for summary judgment as well (see Podlaski v Long Island Paneling Center of Centereach, Inc., 58 AD3d 825 [2d Dept 2009]; Medina v R.M. Resources, 107 AD3d 859 [2d Dept 2013]). Any movant filing a late summary judgment must make a showing of good cause for delay establishing a satisfactory explanation of untimeliness, rather than the court simply permitting a meritorious, non prejudicial filing (see Brill v City of New York, supra; Micelli v. State Farm Mut. Auto Ins. Co., supra). Where, as here, a movant has failed to demonstrate in its papers good cause, the trial court was found to have improperly exercised its discretion to consider a summary judgment motion made over 128 days after filing of the note of issue (see Nationstar Mtg., LLC v Weisblum, 143 AD3d 866 [2d Dept 2016]). But where the underlying facts of a timely motion or cross-motion for summary judgment are identical to those addressed by an untimely motion or cross-motion for summary judgment, the trial court should consider the untimely motion (see Tapia v Prudential Richard Albert Realty Org., 79 AD3d 735 [2d Dept 2010]; Das v. Sun Wah Rest., 99 AD3d 752 [2d Dept 2012]; Vasquez v C2 Development Corp., 105 AD3d 729 [2d Dept 2013]; Medina v R. M. Resources, 107 AD3d 859 [2d Dept 2013]; Vitale v. Astoria Energy II, LLC, 138 AD3d 981 [2d Dept 2016]; Sheng Hai Tong v K and K 7619 Inc., 144 AD3d 887 [2d Dept 2016]; Sikorjak v City of New York, _AD3d_, 2019 NY Slip Op 00157 [2d Dept 2019]). Here defendant's untimely cross-motion is based on the same facts as plaintiff's timely motion; they both deal with the issues surrounding plaintiff's compliance with the mailing requirements of RPAPL § 1304. Further, plaintiff raises no objection to the cross-motion's timeliness. For these reasons the court will consider defendant's untimely motion.
PLAINTIFF FAILS TO ESTABLISH DEFENDANT'S DEFAULT IN PAYMENT
Plaintiff's counsel's affirmation and supporting exhibits thereto, as well as the affidavit of an employee of PHH Mortgage Corporation ("PHH") and the supporting exhibits attached thereto, fail to provide the necessary proof in admissible form to sustain a successful summary judgment motion on the two issues remaining before the court (see Winegrad v. New York University Medical Center, 64 NY2d 851[1985]; Gilbert Frank Corp. v. Federal Insurance, 70 [*3]NY2d 966[1988]; Torres v. Industrial Container, 305 AD2d 136 [1st Dept 2003]).
In an attempt to prove defendant's default in payment pursuant to the terms of the note an mortgage and the mailing of the notices in the form required by RPAPL § 1304, plaintiff relies upon the affidavit of the PHH employee. Although this affined may establish her ability to testify as to the business records of her employer pursuant to CPLR 4518 (a), the affidavit is of little assistance to plaintiff in meeting its burdens of proof on the remaining limited issues.
Neither counsel or the affined provide a copy of the servicing agreement between plaintiff and PHH, instead the affined, as well as counsel, refer to a document that follows the employees affidavit, but is not designated an exhibit as are the other documents attached to the affidavit. The document is entitled "HSBC Bank, USA, N.A. Assistant Corporate Secretary's Certificate," and is dated and signed April 2, 2014. It appears to be a resolution by plaintiff which set up an division within its own organization, an "additional Administrative Services Division-PHH of the Bank" which the document says is dedicated to supporting and coordinating plaintiff's relationship with PHH. It is not a servicing agreement, a fact confirmed by statements in the document that refer to "the Origination Services (as defined in the Agreements entered into between the bank and PHH (the 'Agreements');"this appears to be a reference to the servicing agreement which is not supplied. Nowhere, other than in the general, conclusory and unsupported statements of the affined, and counsel, is the servicing arrangement between PHH and plaintiff mentioned.
Further, counsel in his reply affirmation argues that this document (incorrectly referred to by him as Exhibit B to the affidavit, which is instead a copy of the original mortgage and MERS assignments) establishes the affined as an officer of the Administrative Services Division of plaintiff, not merely an employee of PHH as she states in her affidavit. If the affined was "dual employee" of plaintiff and PHH, upon establishing the requirements of CPLR 4518 (a), she could have testified to plaintiff's business records and provided admissible testimony to substantiate what her affidavit fails to, the default in payment of defendant and the mailing of the notices required by RPAPL § 1304. Instead, she attempts to set forth the "boarding" of plaintiff's records and those of other servicers into PHH's records, leaving the court with the insufficient and barren statements about a "boarding" process which she concludes "maintains quality control and verification procedures... to ensure the accuracy of the boarded records...." without any description or proof as to what those controls and procedures were (see Standard Textile Company, Inc. v National Equipment Rental, Ltd., 80 AD2d 911 [2d Dept 1981]; Arch Bay Holding, LLC v Albanese, 146 AD3d 849 [2d Dept 2017]; Aurora Loan Svcs, LLC v Ang, 150 AD3d 649 [2d Dept 2017]; Fulton Holding Group, LLC v Lindoff, 165 AD3d 1045 [2d Dept 2018]; Nationstar HECM Acquisition Trust 2015-2 v Andrews, 167 AD3d 1025 [2d Dept 2018]).
Additionally, although counsel's affirmation refers to a group of documents submitted as Exhibit G to his affirmation that he claims shows the payment history of the loan, he does not establish his personal knowledge of plaintiff's, PHH's or another servicer's business records which would make his statements admissible (see Matter of Zlomek, 40 AD3d 774 [2d Dept 2007]; US National Bank Assn. v Melton, 90 AD3d 742 [2d Dept 2011]; Bank of NY Mellon v Aiello, 164 AD3d 632 [2d Dept, 2018]) . As the affined never refers to these documents, there is no one with knowledge to explain what they mean, especially as some are entitled as coming from an entity known as "The Mortgage Service Center ."
The default in payment purportedly occurred with the payment due February 1, 2013, yet there is no record of when PHH became plaintiff's servicer. Without that date being established, the court cannot reasonably conclude that the statement by affiant is based upon the business records of PHH made at that time. An affidavit of plaintiff's servicer's representative based upon personal knowledge and review of books and business records which were made and maintained by plaintiff in the ordinary course of business pursuant to CPLR 4518 (a) can establish the default in payment of defendant (see Citigroup v Kopelowitz, 147 AD3d 1014 [2d Dept 2017]; Wells Fargo Bank, N. A. v Thomas, 150 AD3d 1312 [2d Dept 2017]); but where default occurred prior to the date affined's employer came into possession of records and affined did not establish her familiarity with a predecessor's records, her affidavit fails to establish her ability to testify as to those records pursuant to CPLR 4518 (a), the affined fails to establish defendant's default in payment as part of plaintiff's prima facie case requiring denial of that portion of plaintiff's motion (see Fulton Holding Group, LLC v Lindoff, 165 AD3d 1045 [2d Dept 2018]).
MAILING OF NOTICES REQUIRED BY RPAPL § 1304 NOT ESTABLISHED
The court must conclude that plaintiff's records " apparently" contain the proof of the mailing of the notices sent pursuant to RPAPL § 1304 ("the notices"), as they were addressed from plaintiff not PHH. The court says "apparently," as although the affiant refers to the notices as included in Exhibit D following her affidavit, there is nothing between the tabs for Exhibits D and E in the submission to the court. Although defendant submits copies as an exhibit to her opposition and cross-motion, she denied receiving them, therefore the court must guess that those documents come from plaintiff's submissions in Mot. Seq. #001. As the affiant cannot identify what is not there to identify, the court finds there is no copy of the notices sent to plaintiff before it in admissible form that could be used by either movant to support their motions. As plaintiff has not established what the notices mailed consisted of, it cannot met its burden of proof on this issue and its application for summary judgment on this issue must be denied.
Assuming for the sake of argument, that the notices submitted as an exhibit by defendant on her motion were the notices sent by plaintiff, the court would still deny plaintiff's motion, as the only evidence of mailing submitted is the affidavit of the employee of PHH, which is insufficient to establish the mailings. As indicated above, it is plaintiff's name which appears on the letterhead and also appears on the "signatory" line of the notices. The affiant failed to establish her familiarity with plaintiff's business records, practices and procedures, let alone its mailing practices, and therefore her affidavit is insufficient to establish their mailing by regular first class mail and certified mail as required by the statute.
An affidavit of plaintiff's representative which failed to establish affiant's personal knowledge of business practices and procedures of plaintiff or prior servicer was inadmissable as it failed to comply with the requirements of the Business Records Rule (CPLR 4518 [a]), and as such failed to provide proof establishing mailing of the notices based upon affiant's review of those business records (see JPMorgan Chase Bank v. Kutch, 142 AD3d 536 [2d Dept 2016]; Citimortgage, Inc. v Pappas, 147 AD3d 900 [2d Dept 2017]; M & T Bank v Joseph, 152 AD3d 579 [2d Dept 2017]; Aurora Loan Servs., LLC v Vrionedes, 167 AD3d 829 [2d Dept 2018]; Federal National Mortgage Assoc. v Marlin, _AD3d_, 2019 NY Slip Op 00095 [2d Dept 2019]). [*4]Even if an affiant establishes her ability to testify as to the business records of the sender pursuant to CPLR 4518, if the affiant merely states a review of the records establishes the notices were mailed by plaintiff by both regular and certified mail on a certain date, as here, such statements are considered unsubstantiated, conclusory and insufficient to establish the mailing required by the mortgage and RPAPL § 1304 (see Cenlar FSB v Censor, 139 AD3d 781 [2d Dept 2016]; US Bank, NA v Henderson, 163 AD3d 601[ 2d Dept 2018]); Wells Fargo Bank, N.A. v Sakizada, _AD3d_, 2019 NY Slip Op 00162 [2d Dept 2019]).
To establish mailing, plaintiff's affiant may provide proof of actual mailing or a description of its office's practice and procedure for mailing (see New York & Presbyt. Hosp. v Allstate Ins. Co. (29 AD3d 547 [2d Dept 2006]; Citimortgage Inc. v Banks 155 AD3d 936 [2d Dept 2017]). Actual proof of the mailing of the notices can be established by submission of an affidavit of service (see Emigrant Mortgage Co., Inc. v Persad, 117 AD3d 676 [2d Dept 2014]; Investors Savings Bank v Salas, 152 AD3d 752 [2d Dept 2017]) or an affidavit of mailing (see JPMorgan Chase Bank, NA v Schott, 130 AD3d 875 [2d Dept 2015]; Wells Fargo v Moza, 129 AD3d 946 [2d Dept 2015]). Proof of mailing may also be established through business records that detail a standard of office practice or procedure designed to ensure that items are properly addressed and mailed (see Vivane Etienne Med. Care, P.C. v Country Wide Ins. Co., 25 NY3d 498 [2015]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2d Dept 2001]); Deutsche Bank Natl. Trust Co. v Heitner, 165 AD3d 1038 [2d Dept 2018]; US Bank, N.A. v Cope, 167 AD3d 965 [2d Dept 2018]). An affiant must show her familiarity with office practices and procedures of the sender to establish office practices and procedures to insure proper addressing and mailing (see Wells Fargo Bank, NA v Trupia, 150 AD3d 1049 [2d Dept 2017]; US Bank v Henry, 157 AD3d 839 [2d Dept 2018]; J.P. Morgan Mtge. Acquistion Corp v Kagan, 157 AD3d 875 [2d Dept 2018];US Bank, NA v Henderson, 163 AD3d 601[ 2d Dept 2018]).
Even assuming the content of the notices themselves were established, as plaintiff's proof of mailing of the notices is insufficient to met the standards set forth above, that portion of plaintiff's motion must also be denied.
DEFENDANT'S CROSS-MOTION DENIED
Defendant argues that because plaintiff failed to establish the mailing of the notices by admissible proof, and because she denied receiving the notices, her cross-motion for summary judgment dismissing the action should be granted. The court does not agree. Although plaintiff's submissions may have been insufficient to establish its mailing of the notices required by RPAPL § 1304, they certainly raise questions of fact as to their mailing. Defendant's self-serving claim that the notices were not received does not establish that they were not mailed. As mailing, not receipt, is the burden imposed by RPAPL § 1304, defendant has not proven that the notices were not mailed. The proponent of summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, providing sufficient evidence to establish the absence of any material issues of fact, failure to do so requires the motion to be denied regardless of the sufficiency of the opposition (see Jacobsen v New York City Health & Hospitals Corp., 22 NY3d 824 [2014]; William J Jenack Estate Appraiser and Auctioneers v Rabizadeh, 22 NY3d 470 [2013]; Deleon v NY City Sanitation Dept., 25 NY3d 1102, 1106 [2015]). The harsh burden [*5]of dismissal should not be imposed under these circumstances, as in an analogous situation where plaintiff's proof failed to establish its mailing of the notice required by the mortgage, defendant was not entitled to summary judgment as his affidavit claiming non-receipt failed to present sufficient evidence to prove as a matter of law that the condition precedent was not fulfilled (see US Bank, NA v Sabloff, 153 AD3d 879 [2d Dept 2017]; see also HSBC Bank, USA, N.A. v Ozcan, 154 AD3d 822 [2d Dept 2017]).
More directly, the Second Department in Wells Fargo Bank, N. A. v Moran, _AD3d_, 2019 NY Slip Op 00637 [2d Dept 2019], recently affirmed that portion of the trial court's decision that denied defendant's motion to dismiss under identical facts. The court has reviewed the decision appealed from, a copy of which is available on the "eCourts" system (Index # 6846/2014, Sup. Ct., Nassau Co, Adams, J.), which shows the same set of facts as here: plaintiff was unable to establish the mailing of the notices and based upon plaintiff's failure of proof and defendant's own affidavit that he did not receive the mailings, defendant moved to dismiss. The Appellate Division affirmed Justice Adams' denial of defendant's motion stating that defendant had not established his prima facie entitlement to judgment as a matter of law on the issue. The same result must follow here.
NO VIOLATION OF RPAPL § 1304 (2)
Defendant's claims to summary judgment dismissing the complaint for plaintiff's failure to comply with defendant's counsel's interpretation of the requirements of RPAPL § 1304 (2) is without merit.
Defendant claims that plaintiff included another "mailing or notice" in the envelope with the notices in violation of the prohibition in RPAPL § 1304 (2) that the notice "shall be sent by lender, assignee or mortgage loan servicer in a separate envelope from any other mailing or notice." Defendant argues that as strict compliance with the provisions of RPAPL § 1304 is mandated, that the included language constitute other "notices" in the same envelope, and therefore the action must be dismissed.
When defendant's arguments are tested against the clear statutory language of RPAPL § 1304 (1), read in conjunction with RPAPL § 1304 (2), the lack of merit is apparent. There are no multiple notices here, only a single notice consisting of multiple pages. At the time the notices were mailed, RPAPL § 1304 did not, and does not now, require that the notice "only" contain the language mentioned in the body of RPAPL § 1304 (1). The statute states that plaintiff or servicer " shall give notice to the borrower in at least fourteen-point type which shall include the following" (emphasis added). This clearly implies that more than just the statutory language may be part of the notice (RPAPL § 1304 (1); see Citimortgage, Inc. v Bunger, 58 Misc 3d 333 [Sup. Ct, Suffolk Co. 2017]; Beneficial Homeowner Services Corp v Jordon-Thompson, 57 Misc 3d 1213 (A) [Sup. Ct., Suffolk County 2017]; JPMorgan Chase Bank, N.A. v Lebovic, 61 Misc 3d 1215 (A), 2018 NY Slip Op 51528 [Sup. Ct. Suffolk Co. 2018]; Bank of New York Mellon v Govan, 61 Misc 3d 1213 (A) 2018 NY Slip Op 51491 (U) [Sup. Ct. Suffolk Co. 2018]).Here defendant mischaracterizes the "FDCPA" language and a bankruptcy warning as separate notices; they are not. Her counsel acknowledges that the language begins "on the last line of the statutory notice page and continues onto a separate page...." Counsel's observation is correct, the [*6]language he refers to as separate notices are merely a continuation of page one of a two page notice. Plaintiff included in the notice the two short, plain and clear paragraphs defendant complains of, this does not violate the statute.
Defendant's counsel appears to make the unsupported conclusion that it was the unexpressed intent of the Legislature that the RPAPL § 1304 notices must contain only the language set forth in RPAPL § 1304 (1), and nothing else. This is contradicted by the plain and literal language of the statute referred to above. If counsel's interpretation had been the intent of the Legislature, the Legislature would have said so in the original statute or one of the six amendments since its first effective date. It has not, and the Court of Appeals has clearly and frequently stated: "A court cannot amend a statute by inserting words that are not there nor will a court read into a statute a provision which the Legislature did not see fit to enact.... an inference must be drawn that what is omitted or not included was intended to be omitted and excluded" (Chemical Specialties Mfrs. Ass'n v Jorling, 85 NY2d 382, 394 [1995]; see also People v Silburn, 31 NY3d 144, 174 [2018]; People v Tiger, 32 NY3d 91 [2018]); further, where the language of a statute is clear and unequivocal, it should be construed according to its plain meaning (see Schoenefeld v State of New York, 25 NY3d 22,26 [2015]). Following this principle, cited by defendant, the court will not read into RPAPL § 1304 (1) and (2) the requirement that the mandated notice must only contain the statutorily required language.
The court has considered defendant's remaining arguments and finds them to be without merit. Defendant's cross-motion is denied.
As the limited issues set for trial by the order of December 12, 2016 remain unresolved, the action is set for trial on Monday, February 25, 2019 at 2:00 PM before this part.
This constitutes the order and decision of the Court.
Dated: February 4, 2019
_______________________________________
Hon. Robert F. Quinlan, J.S.C.
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