U.S. Bank N.A. v Schaefer
Annotate this CaseDecided on February 11, 2019
Supreme Court, Suffolk County
U.S. Bank National Association, AS TRUSTEE FOR CITIGROUP MORTGAGE LOAN TRUST, INC. 2006-NC2, ASSET- BACKED PASS-THROUGH CERTIFICATES SERIES 2006-NC2, Plaintiff, James M.
against
Schaefer, DEBRA M. SCHAEFER, HUNTINGTON TOWN SUPERVISOR, LANCE TURNER, MD, NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, PEOPLE OF THE STATE OF NEW YORK, RAJMANI KRISHNAN, MD, SUFFOLK ANESTHESIOLOGY ASSOCIATES, SUFFOLK COUNTY DISTRICT COURT CLERK AND JOSEPH JONES, Defendants.
5826-2010
ALDRIDGE PITE, LLP
Attorneys for Plaintiff
40 Marcus Drive, Suite 200
Melville, New York 11747
KAFI HARRIS, ESQ.
Attorney for Defendants Schaefer
41 Hilton Avenue
Hempstead, NY 11550
Robert F. Quinlan, J.
This is an action to foreclose a mortgage on residential real property located at 15 Washington Avenue, "Brookhaven" ("Mastic"), Suffolk County, New York ("the property") given on June 7, 2006 by defendants James M. Schaeffer and Debra M. Schaefer ("defendants") to The New York Mortgage Company, LLC ("NYMC"), a predecessor in interest to plaintiff U.S. Bank National Association, as Trustee for Citigroup Mortgage Loan Trust, Inc. 2006-NC2, Asset-Backed Pass-Through Certificates Series 2006-NC2 ("plaintiff"), to secure a note given to NYMC of the same date.
The prior history of this action is set forth in the decision of the court placed on the record on November 10, 2016 after oral argument of plaintiff's motion for summary judgment. That decision granted plaintiff partial summary judgment pursuant to CPLR 32123 (g) amended the caption to read as indicated in the caption above, corrected the error in the complaint, dismissed all of defendant's affirmative defenses, but denied plaintiff summary judgment as issues remained as to plaintiff's compliance with the mailing requirements of RPAPL § 1304 pled in plaintiff's complaint, denied by defendants' answer and also argued by defendants' counsel in oral argument in opposition to plaintiff's motion. At that time the court issued a written discovery order and schedule which set a limited issue trial as to that issue pursuant to CPLR § 2218, allowed the parties a limited period of discovery on the issue and set a certification/compliance conference for April 12, 2017, after which a note of issue was to be filed.
After the certification conference of April 12, 2017 was held, a note of issue was filed on July 26, 2017. A conference was held on July 5, 2017, as well as pre-trial conferences on August 16, and November 8, 2017 as plaintiff and defendants were considering a possible loan modification. As there had been no success in the modification process, at the November 8, 2017 pre-trial conference the court set a trial date of February 23, 2018. On that date both sides appeared, indicating they were still discussing the possibility of a loan modification. The court adjourned the trial to May 15, 2018, but also set a March 27, 2018 "special conference" to see if a preliminary loan modification had been approved, which would obviate the need for a trial. On March 27, 2018 no loan modification had been approved and the May 15, 2018 trial date was confirmed.
TRIAL
At the trial plaintiff called Lucinda Calderon, an employee of plaintiff's servicer, to testify. She was able to established her ability to testify as to her employer's business records pursuant to CPLR 4518, and through her testimony copies of the notices with an enclosed of list of housing counseling agencies, a letter log and copies of the mortgage and note were admitted into evidence. Ms. Calderon's testimony, her review of the servicers' business records and the exhibits established proof of mailing of the notices and an enclosed list by certified mail and first class mail to defendants at "15 Washington Avenue, Brookhaven, New York 11950." No signed return receipt for the certified mailing was presented.
Defendants raised two significant questions concerning the mailing of the notices. The first was through the testimony of defendant Debra M. Schaefer, who testified that the actual address and mailing address of the property was "15 Washington Avenue, Mastic Park, New York," not "Brookhaven, New York," and that she never received the mailings. The evidence showed that "Brookhaven," aside from being the name of the township where the hamlet was located, was also a hamlet in the township, with a distinct USPS "zip code."
The second was that the list of housing counseling agencies required to be enclosed with the mailing by RPAPL § 1304 (2) when the notices were mailed in 2009 failed to provide "a list of at least five United States department of housing and urban development approved housing counseling agencies, or other housing counseling agencies as designated by the division of housing and community renewal, that serve the region where the borrower resides."
Plaintiff's counsel objected to the raising of both issues, claiming that as defendants' counsel had not raised these issues before at oral argument on November 10, 2016, she had waived them, and that because the court's order of that date stated that the only remaining issue for the trial was "whether plaintiff had complied with the mailing requirements of RPAPL § 1304," he had thought that the only issue was the proof of mailing of the notices. The court noted that the issue proof of compliance with the mailing requirements of RPAPL § 1304 is not simply proof of mailing of the notices, rather compliance means that the mailings must meet all of the requirements of the statute, including the clear requirements of RPAPL § 1304 (2) that a list of at least 5 counseling agencies serving the region where defendants reside be included in the mailing. The court also notes that defendant had raised the issue of the incorrect address in its filed opposition to plaintiff's summary judgment motion, as indicated below by the affidavit of defendant Debra M. Schaefer submitted at that time and admitted into evidence at the trial by plaintiff.
After noting on the record that based upon the proof at trial, the court found that plaintiff had proven the mailing of the notices to "15 Washington Avenue, Brookhaven, New York," the court reserved decision to allow the parties to submit simultaneous memorandums of law on the two issues raised by defendants above, and also as to plaintiff's argument that defendant had waived those issues by not raising them prior to trial. At the request of counsel, the court gave the parties until July 26, 2018 to simultaneously submit their memorandum.
POST TRIAL SUBMISSIONS
On July 23, 2018, chambers received an email by an attorney from the law firm representing plaintiff stating that trial counsel from the firm had left the firm without advising them of the need to file the post trial memorandum. As a review of his files for reassignment had just revealed that fact, the emailing attorney asked for an adjournment of the submission date so another attorney could prepare the memorandum. After contacting defendant's counsel, the court adjourned the simultaneous submissions to the date requested by plaintiff's counsel, September 27, 2018.
Defendants' counsel timely filed her memorandum of law. Plaintiff's counsel never filed a memorandum, nor did they seek a further adjournment of the submission date. The court now decides the remaining issues upon the record and submissions, plaintiff is in default of submitting its memorandum of law.
DECISION
Preliminarily, the court notes that plaintiff has failed to submit a memorandum to support its argument that defendants waived the claim that the list of housing counseling agencies was insufficient because they never raised it in their answer, a motion to dismiss, or at oral argument in opposition to plaintiff's motion and therefore cannot raise it for the first time at trial. Plaintiff has waived that opportunity to more fully present its argument to the court. Although the court may have been sympathetic to that [*2]argument, the court also recognizes that appellate courts have consistently held that compliance with the requirements of RPAPL § 1304 can be raised at anytime before judgment is entered (see First National Bank of Chicago v. Silver, 73 AD3d 162, 163, 89 NYS2d 256 [2d Dept., 2010]; Aurora Loan Services v. Weisblum, 85 AD3d 95, 923 NYS2d 609 [2d Dept., 2011] & CitiMortgage, Inc. v. Espinal, 134 AD3d 876, 879, 23 NYS3d 251 [2d Dept., 2015]; Bank of New York Mellon v Zavolunov, 157 AD3d 754 [2d Dept 2018]), including raising it for the first time in opposition to a judgment of foreclosure and sale when defendant had failed to raise it in opposition to summary judgment (see Emigrant Mortgage Co., Inc v Lifshitz, 143 AD3d 755 [2d Dept 2016]). Other than on a default in answering , where it can be raised if the default is cleared, (see Bank of America v. Agarwal, 150 AD3d 651 (2d Dept, 2017); HSBC Bank USA, N.A. v. Clayton, 146 AD3d 942 (2d Dept, 2017); Flagstar Bank v. Jambelli, 140 AD3d 829 (2d Dept, 2016), it appears that only if defendant waits to raise it for the first time on appeal is it barred (see 40 B, LLC v Katalikarn, 147 AD3d 710 [2d Dept 2017]; Bank of America, NA v Barton, 149 AD3d 676 [2d Dept 2017]; Bank of America, N.A. v Cudjoe, 157 AD3d 653 [2d Dept 2018]). Therefore, it is proper for defendants to raise plaintiff's failure to comply with this provision of RPAPL § 1304 (2) at trial.
Additionally, as compliance with RPAPL § 1304 was pled in plaintiff's complaint and denied by defendants' answer, as well as raised at the oral argument of plaintiff's summary judgment motion by defendants, plaintiff was required to provide proof of strict compliance with the requirements of the statute as part of its prima facie proof at trial, as it was on the motion for summary judgment (see Deutsche Bank Natl. Trust Co. v Spanos, 102 AD3d 909 [2d Dept 2013]; Bank of New York v. Aquino, 131 AD3d 1186 [2d Dept 2015]; Zarabi v. Movahedian, 136 AD3d 895 [2d Dept 2016]; M & T Bank v Joseph, 152 AD3d 579 [2d Dept 2017]; Bank of New York Mellon v Zavolunov, 157 AD3d 754 [2d Dept 2018]). As with any other required proof at trial, in any type of case, if defendants failed to raise this issue of compliance they would have waived it; here defendants raised the issue, objected to plaintiff's attempt to establish compliance, putting plaintiff to its proof.
MAILING TO WRONG ADDRESS DOES NOT COMPLY WITH RPAPL § 1304
As an issue concerning both the physical and mailing address of the property was raised during the trial, the court made the parties aware of its service as the Town Attorney for the Town of Brookhaven, where the property was located, before taking the Supreme Court bench. As submitted with defendants' memorandum, the hamlets of Brookhaven and Mastic are two separate areas within the Town of Brookhaven, with different USPS "zip codes:" Brookhaven 11719, Mastic 11950. They are not contiguous, as the hamlet of Shirely separates them.
The court questions Ms. Schaefer's statement at trial that her postal address is "Mastic Park," as there is no such postal address, political subdivision or hamlet bearing that name in the Town of Brookhaven. Although on the first page of the mortgage a reference is made to defendants' address as "15 Washington Avenue, Brookhaven, New York, 11950," the "property" to which the mortgage applied is defined under paragraph (F) of the mortgage as being "described below in the section titled 'Description of the Property." This description is commonly referred to as "Schedule A," and it is attached at the rear of the document. In the first paragraph of Schedule A, before the "metes and bounds" description, a reference is made to a "Map of Mastic Park... situate at Mastic, Town of Brookhaven, County of Suffolk, Long Island,...." This does not establish "Mastic Park" as part of a mailing address, in fact it refers to it as being in the hamlet of Mastic. Further, at the bottom of the page, beneath the section, block and lot numbers, it states:
Property Address: 15 Washington Avenue, Brookhaven, NY 11950
Mailing Address: 15 Washington Avenue, Mastic, NY 11950.
Additionally, in Ms. Schaefer's affidavit submitted in opposition to summary judgment, and admitted into evidence at the trial as plaintiff's exhibit "5," she states that her primary residence, and the address of the property, is 15 Washington Avenue, Mastic, New York 11950.
Clearly, the property is not located in the hamlet of Brookhaven, it is located in Mastic, Town of Brookhaven, as indicated by the above. If plaintiff's representatives had carefully reviewed their own documents, they would have seen the correct mailing address contained therein and would not have mailed the information required by RPAPL § 1304 to the wrong address.
There is no proof that a mailing made to "Brookhaven," but carrying the USPS "zip code" for Mastic, would have been routed to the Mastic US post office and delivered to defendants. In any event, the condition precedent required by the statute is not receipt, but proof of mailing of the notices by certified and first class mail. The mailing of the notices may have been proven, but as they were mailed to the wrong address, the mailings are insufficient. Plaintiff has not established strict compliance with RPAPL § 1304, and having failed in its required proof at trial, it is not entitled to judgment, and its complaint is dismissed.
VIOLATION RPAPL § 1304 - FAILURE LIST 5 HOUSING COUNSELING AGENCIES
Additionally, plaintiff's proof of compliance with the mailing requirements of RPAPL § 1304, even if the RPAPL § 1304 notices had been mailed to the defendants/borrowers' last known address and the "residence, which is the subject of the mortgage," would still be insufficient. To establish compliance with the mailing requirements set forth in RPAPL § 1304 (2) plaintiff must mail a notice that meets all the requirements of RPAPL § 1304 (1) and with it include a list of at least 5 housing counseling agencies, which in 2009 when the letters were mailed, were to be from a list of "United States department of housing and urban development approved housing counseling agencies, or other housing counseling agencies as designated by the division of housing and community renewal, that serve the region where the borrower resides." (Emphasis added). Here the list sent in an attempt to comply with the statute is insufficient to meet this requirement.
The court had asked the parties to address the issue of what "region" Suffolk County was in for 2009, as the court, being a dedicated foreclosure part, was familiar with the fact that the "regions" have changed over the years, eventually coming to a "Long Island Region," which included Nassau and Suffolk County, and now the present form of the statute requires that the agencies be in the county where the property is located. The court is familiar with the fact that at one time the "region" which included Suffolk County was broad enough to include Nassau County, New York City and part of the Mid Hudson area. The court is unaware of a region that included both Suffolk County and Jefferson County, where CCS of Central New York's Watertown office was located. That agency is included as one of the 5 agencies on the list of housing counseling agencies enclosed with the notices. As plaintiff has not supplied a memorandum, the court will not guess that Suffolk was ever included in a region including Jefferson County, which borders on Canada. Such a conclusion would defeat the purpose of the HOPA statutes and make them a mockery.
Plaintiff's counsel's argument at trial that there are 5 "agencies" on the list because it gives two addresses for one agency, Greenpath, Inc., in New York City, is without merit and flies in the face of the language of the statute. Assuming that Suffolk County and New York City were in the same region in 2009, the statute still required that at least 5 "agencies" be included in the notice. Multiple offices for the same [*3]agency do not meet the requirement of 5 agencies. If the Legislature had intended anything different than 5 agencies, it would have said so. The Court of Appeals has clearly stated that: "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]). Here, the statute clearly and plainly says "five agencies." This court cannot interpret that to allow anything else for compliance. Two office addresses for the same agency is still only one agency, not two. That fact appears to be recognized by the form used by plaintiff 's servicer, as it refers to Greenpath, Inc. singularly under the block entitled "Housing Agency" and then gives two addresses for it under the block for addresses.
Proper mailing of the information required by RPAPL §1304 (2) to defendants is a condition precedent to the commencement of a foreclosure action, and in support of its proof at trial plaintiff must provide sufficient admissible evidence to prove its strict compliance with that requirement or face denial of judgment and dismissal of its complaint (see Aurora Loan Servcs v. Weisblum, 85 AD3d 95 [2d Dept 2011]). Substantial compliance is not the standard set by the statute, the mandate that a list of 5 housing counseling agencies in the region must be included along with the notice must be fully met. As the evidence at trial shows that the list contained, at best, only 4 housing counseling agencies serving the region including Suffolk County in 2009, plaintiff's proof of compliance fails. Such defects in the mailings required by RPAPL § 1304 (2) are not errors or omissions that may be disregarded by the court pursuant to CPLR 2001 (see Aurora Loan Servcs v. Weisblum, 85 AD3d at 107, 108). As plaintiff's submissions fail to meet the mandates of the statute, plaintiff has failed to establish its prima facie case and the court must deny it judgment on this trial (see Hudson City Savings Bank v. DePasquale, 113 AD3d 595 [2d Dept 2014], Flagstar Bank v Damaro, 145 AD 858 [2d Dept 2016]). The court is compelled by the language of the statute and the holdings of the Second Department to apply the strict standard of compliance with RPAPL § 1304, deny plaintiff judgment and dismiss the action.
COMPLAINT DISMISSED
Having failed to establish its case, plaintiff is denied judgment and its complaint is dismissed. Defendant is to serve judgment with notice dismissing the action within 60 days of the date of this order. This constitutes the order and decision of the court
Dated: February 11, 2019
_______________________________________
Hon. Robert F. Quinlan, J.S.C.
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