Wells Fargo Bank, N.A. v Veras

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Wells Fargo Bank, N.A. v Veras 2021 NY Slip Op 32705(U) December 13, 2021 Supreme Court, Kings County Docket Number: Index No. 504495/17 Judge: Lawrence S. Knipel 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. [*FILED: 1] KINGS COUNTY CLERK 12/16/2021 12:19 PM NYSCEF DOC. NO. 153 INDEX NO. 504495/2017 RECEIVED NYSCEF: 12/16/2021 At an IAS Tenn, Part 57 of the Supreme Court of the State ofNew York, held in and for theCounty f Kings,. at the Courthouse, at Civic Center, Brooklyn, New York, on th1_3nd day of December, 021. PRESENT: HON. LAWRENCEKNIPEL, Justice; ~---~~-------------------------------~x WELLS FARGO BANK, N.A., Plaintiff, -against - Index No. 504495/17 ALGENIS VERAS, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NYC PARKING VIOLATIONS BUREAU, NYC TRANSIT ADJUDICATION BUREAU AND "JOHNDOE#l" THOUGH'"JOHNDOE#l0," THE LAST TEN NAMES BEINGFICTLTIOUS AND UNKNOWN TO THE PLAINTIFF, THE PERSON OR PARTIES, IF ANY, HAVING OR CLAJMING AN INTEREST IN OR LIEN UPON THE MORTGAGED PREMISES DESCRIBED IN THE COMPLAINT, Defendants. - -. - .. -.. , - - - - ,_ -. ·- - - - - - ·-· - - - -'- - - ·- - - - - - - - -· - - -X The following e-filed papers read herein: NYSCEF Doc Nos. Notice of Motion/Order to Show Cause/ Petition/Cross Motion and Affidavits (Affirmations) Annexed. _ _ __ 122-129 147-148 Opposing Affidavits ·(Affirmations),_ _ __ 147-148 149-151 Reply Affidavits (Affirmations) _ _ _ __ 149-151 Upon the foregoing papers 1n this action to foreclose a residential mortgage on th~ property at 688 Jefferson Avenue in Brooklyn (Block 1656, Lot·37) {Property), plaintiff Wells.Fargo Bank, N.A. (Wells Fargo) moves {in motion sequence [inot. seq.] six) for ail order, pursuant to CPLR 2221 (d); grantin,g .iUeave to reargue its motkm (mot.seq. five) 1 of 13 [*FILED: 2] KINGS COUNTY CLERK 12/16/2021 12:19 PM NYSCEF DOC. NO. 153 INDEX NO. 504495/2017 RECEIVED NYSCEF: 12/16/2021 for summary judgment,._ an order oftefotehce and other relief, which the cou_rt (Dear,. J.) denied by a March 2, 2020 decision and otder, and, upon reargument, granting Wells Fargo·'s·prior motion. D~fondaht Algenis Veras--{Veras). ~ross~moves (in mot. Sl!q. ~ight) for an order (l) ·dismissing this action, pursuant· to RP APL 13 .04 {2) "as P lairitiffs failure· to. mail [a.] pre,. foreclosure notice to Defendanes last known address warrants dismissal of the fostant ·a,ction[.] 1 or, altetmitively, (2) denying Wells.Fargo's motion.to rearg;ue.,:' Background OllMarch 7, 2017, Wells Fargo comme11ced this residential foreclosure aiztion by filing a summons, art unverified compiaint and a notice of pendenizy against the Property. _The coinplaint alleges. that on .or about June 16, 2010, Vetas ·executed artd delivered a promissory note in the.:principal amount of $424,297.00 in favor of-the ori_ginal lender, National Bank of Kansas City (National Bank), which was s~cµred by a mortgage on the Property-in favor of Mortgage. Electronic Registration Systems, Inc; (MERS) as nominee fot Nat.ional Bank (c_omplaint -at ,r1 i-3). The complaint, which annexes a copy ·of the note with an ailonge enqorsed by N~tional Bank in favor of Wells FargC>, alleges .that ,·,plaintiff is in possession of the original note with a proper endorsement and/or allonge -and is.therefore-, the holder ofboth the note and mortgage, which passes nqte" (id. at ,r 5) ... as incident.:to the The complaint aileges that Vetas; "failed to ·comply with the·terms, covenants and conditions of saicl note and mortgage by failing and omitting to pay, to the 1 See NYSCEF Doc No. 147. 2 2 of 13 [*FILED: 3] KINGS COUNTY CLERK 12/16/2021 12:19 PM NYSCEF DOC. NO. 153 INDEX NO. 504495/2017 RECEIVED NYSCEF: 12/16/2021 plaintiff, payments due on February 1, 2011 and said default has continued for a period in excess of fifteen (15) days" (id. aJ ,r 9). The complaint alleges, that"th ere currently [is] a pending proceeding at law or otherwise to collect or enforce said note arid mortgage which was filed under Index No. 501414/2014 and will be consolidated with the instant action" (the 2014 Foreclosure Action) (id. at~ 15). Notably, the cornplaint also alleges 'TuJport infonna tion and belief, plaintif f has complied with the provisions of Real Property Actions and Proceed ings Law §1304 and §1306 unless exemptfrom doing so" (id. at ,r 17 [emphasis added]). Defendant Veras filed a pre-answer motion to dismiss the complaint, pursuant to CPLR 3211 (a) (4), on the ground that there was another action pending (i.e., the 2014 Foreclosure Action). By an April 2J, 2018 "Consolidati011 Order/ the court (Dear, J.) consolidated this action and the 2014 Foreclosure Action for all purposes, On May 22, 2018, Veras answered the complaint, denied the material allegations therein, asserted twelve affirmative defenses, including lack of standing, and asserted eight counterclaims for: (l) predatory lending; (2) violation of the Truth in Lendin g Act (TILA); (3) violatio n of General Business Law§ 349 for deceptive business practices; (4) frauclµlent inducement; (5) an award ofattor neys' fees; (6) estoppel; (7) fraud; and (8) economic damages. On June 11,2018, Wells Fargo responded to Veras' counterclaims; Wells Fargo' s2019 Summa ry Judgment Motion On May 8, 2019, Wells Fargo moved (in mot. seq. five) for an order granting it summary judgment, striking Veras' answer, grantin g it an order ofrefer ence appointing a ~ ' 3 3 of 13 [*FILED: 4] KINGS COUNTY CLERK 12/16/2021 12:19 PM NYSCEF DOC. NO. 153 INDEX NO. 504495/2017 RECEIVED NYSCEF: 12/16/2021 referee to compute, granting it a default judgment against all non-answering and nonappearing defendants and amending the caption to remove the ''John Doe" defendants. Wells Fargo, in support of its motion, submitted an affidavit from Shae Smith (Smith), a Vice President Loan Documentation for Wells Fargo (see NYSCEF Doc No. 73). Regardingth e RPAPL 1304 pre-foreclosure 90-day notice, Smith attested that: . . "[b]y letters dated April 29, 2013 addressed to Algenis Veras at 688 Jefferson Ave, Brooklyn, NY· 11221-210 l, the subject property address, he was provided with anotice·in advance of· the commencement ofthis action that his loan was in default, and was provided with the amount due to cure the total delinquency ('90-day Notice'} It is Wells Fargo's regular practice to generate and mail such notices to defaulted bmrowers on the date of the notice, but no later than two business days, andonce mailed, to place a copy ofthe notice in Wells Fargo's file for that mortgage loan, as a record that the 90-day notice wc1s mailed. Two copies of each 90-day Notice are printed: one is sent by first class mail (reflected in the copy with the 10-digittrack ing code affixed to the top of the first page of the notice); and the other is sent by certified mail (reflected in the copy with the 20-digit United States Postal Service tracking code affixed to the top of the first page of the notice). A list of at least five governmentapproved housing counseling agencies is appended to each copy of the 90-day Notice that is sent to a borrower. I am familiar with such prac_tices in my capacity as Vice President Loan Documentation for Wells Fargo. Base.cl upon this knowledge and my review of Wells Fargo;s file for this mortgage loan, Wells Fargo's regular practice was adhered to here with respect to the 90-day Notice; A copy of the (l) letters s,ent via certified and first-class mail, as rhaintained in Wells Fargo's business records; (2) unclaimed certified mail envelope and return of receipt; (3} Trackright screens verifying the certified and firstclass mailings; and (4) Proof of Filing Statement [are] attached hereto as Exhibit E'' (emphasis added}. . 4 4 of 13 . [*FILED: 5] KINGS COUNTY CLERK 12/16/2021 12:19 PM NYSCEF DOC. NO. 153 INDEX NO. 504495/2017 RECEIVED NYSCEF: 12/16/2021 Thus, in its initial moving papers; Wells Fargo took the position that it complied with RPAPL 1304 by mailing Veras a pre-foreclosure90,.day notice at the Property address. On January 17, 2020, Veras opposed Wells Fargo's summary judgment motion on . . the grounds that triable issues of fact exist regarding Wells Fargo's strict compliance with RPAPL l304's pre,.foreclosure mailing and notice requirements; Wells Fargo's standing to foreclose and the statute of limitations. Regarding RPAPL 1304, Veras argued that Wells Fargo failed to subtnit sufficient proof of its compliance with the statute, "failed to mail the section 1304 notice to Defendant's lastknown addre,ss as required under the law at any point in this action ..." and claims that ''[t]he only notice sent was to the subject property address [in advance of the commencement of the 2014 Foreclosure Action], when Plaintiff should have been aware that Defendant did not live at that address'' (emphasis added). Veras argued that "[p]laintiff never sent an updated section 1304 notice to Defendant with the new amounts owing, even though it used his correct address [1895 Second Avenue] in serving the 2017 complaint.;' Veras argued that Wells Fargo's summary judgment motion should be denied because Wells Fargo failed to meet a condition precedent to foreclosure, Wells Fargo, in reply, submitted an attorney affirmation arguing that ''Plaintiff has established its compliance with RP APL § 1304 by way of the testimonial and documentary evidencein theSmith Affidavit." Regarding the RPAPL 1304 issue, Wells Fargo's counsel further assertsthat: "the Smith Affidavit establishes compliance with RPAPL § 5 of 13 [*FILED: 6] KINGS COUNTY CLERK 12/16/2021 12:19 PM NYSCEF DOC. NO. 153 INDEX NO. 504495/2017 RECEIVED NYSCEF: 12/16/2021 1304 by (1) establishing that the affiant is familiar with the relevant mailing practices and procedures, (2) swearing under oath based on a review ofthe relevant records that copies of the notice were sent to Defendants at the Property on November 28, 2016 by both first-class and certified mail, and (3} attaching documentary proof of mailing of the 90-day notice by first.-class and certified mail, Id. Accordingly, Plaintiffhas conclusively established its compliance with the 90-day notice requirements set forth iri RPAPL § 1304. . . ''Defendant's challenge to Plaintiff's compliance with RPAPL § 1304 arguing that Plaintiff did not mail the notices. to the borrower's last known address is without merit. Specifically considering the Defendant provides no evidence that Defendant notified Plaintiff of their change in address to receive notices. Plaintiffproperly mailed the RPAPL § 1304 notice to the properly address - the address on record to ·receive notices. "Pursuant to the foregoing, Plaintiff has proffered competent and admissible proof that the required RPAPL § 1304 notice was mailed to Defendant as required, and Defendant - who does not even deny receipt of the subject notice - does not offer arty evidence, let 11lone evidence in admissible form, sufficient to rebut Pli:iintiffs showing of proper mailing." Thus, Wells Fargo argued, throughout its sumtnary · judgment motion, that it fully complied with RP APL 1304' s 90-day pre-foreclosure notice requirement by mailing the 90-day notice to Veri:is at th,e Property. The Court's March 2, 2020 Decision and Order By a March 2,2020 decision and order, the court (Dear, J.) denied Wells Fargo's_ motion for summary judgment, an order of reference and other relief, and dire~ted the parties to cmnplete discovery and proceed to trial. Regarding the RP APL 13 04 issue,the court specifically held that: 6 6 of 13 [*FILED: 7] KINGS COUNTY CLERK 12/16/2021 12:19 PM NYSCEF DOC. NO. 153 INDEX NO. 504495/2017 RECEIVED NYSCEF: 12/16/2021 "[p]laintiff has not demonstrated compliance with RP APL 1304 (and does not appear[] to have complied therewith). It is undisputed that Plaintiff relies upon notices sent prior to the 2014 action - despite ·1earning during that action that Defendant lived at a different address. As such, it does not appear that Plaintiff c0111plied with the 'last known address' provision of 1304.i' Notice of entry of the March 2, 2020 decision and order was never served. On or about June 15, 2021, this action was administratively reassigned to this court following the unfortunate passing of Justice Dear. Wells Fargo's lnstaizt Motion to Reargue Meanwhile; on June 1 t 2021, Wells Fargo filed the instant motion for an order granting it leave to reargue its earlier motion for summary judgment and reference and, upon reargument, granting its prior motion. an order of Wells Fargo submits an attorney affirmation asserting that the court misapprehen ded and misapplied the law regarding Veras' ability to assert a defense to foreclosure under RPAPL 1304. Specifically, Wells Fargo's counsel argues that: "the Court overlooked that, as a matter of law, Defendant cannot assert an RPAPL 1304 defense; because he has repeatedly admitted - in sworn statements, submitted documents, and live testimony - that he has not lived at the mortgaged property since at least 2012, which is at least two years before this foreclosure cominenced, meaning the subject loan is not a 'home loan' and is not protected by RPAPL 1304 noticerequir ements as conditions precedent to foreclosure. Thus, Wells Fargo now asserts for the first time in its motion to teargue that RPAPL 1304's pre-foreclos ure notice requirement is not applicable and that Justice Dear 7 7 of 13 [*FILED: 8] KINGS COUNTY CLERK 12/16/2021 12:19 PM NYSCEF DOC. NO. 153 INDEX NO. 504495/2017 RECEIVED NYSCEF: 12/16/2021 "overlooked'' that contention, despite the fact that Wells Fargo never raised that argument 011 its prior motion. Wells Fargo submits Veras' Noveml:,er 16, 2015 affidavit, which was previously submitted in support of Veras' 2015 motion to dismiss the 2014 Foreclosure Action, and notes that Veras explicitly admitted that on February 18, 2014 (the day that the 2014 Foreclosure Action was commenced ) he did notJive at the Property, but resided at 1895 Second Avenue; Apt. 12F in Manhattan, and was still living at that address as of November 16, 2015. Wells Fargo notes that Veras previously submitted proof ofhis residency at 1895 Second Avenue, Apt. l2F, by submitting copies of his driver's license, New Yark City housing records, a utility bill and a lease. Wells Fargo further notes that the documents annexed to Veras' 2015 affidavit. included a New York .City Housing Authority (NYCHA) Admission/Income Review Transcript, dated May 19, 2015, which reflects that Veras was admitted to public housing, .and that he moved into his NYCHA. apartment on March 17, 2008. Wells Fargoaiso notes that Veras' May 19, 2015 "Lease Addendum and Rent Notice" from NYCHA states thatVeras' address in public housing was at 1895 Second Avenue, Apt. J2F, in New York. In addition; Wells Fargo submits the transcript of .the February 27, 2017 traverse hearing in the 2014 Foreclosure Action, cluring which Veras testified that his address was his NYCHA apaiiment at J 895 Second Avenue, Apt. 12F,in Manhattan, where he residedthroug;hout2013 and 2014. 8 8 of 13 [*FILED: 9] KINGS COUNTY CLERK 12/16/2021 12:19 PM NYSCEF DOC. NO. 153 INDEX NO. 504495/2017 RECEIVED NYSCEF: 12/16/2021 Veras' Opposition and Cross Motion Veras cross-moves for an order dismissing the complaint, pursuant to RPAPL 1304 {2), based on Wells Fargo's "failure to mail a pre-foreclosure notice to [his] last known address[,]" 2 or, alternatively, an order den)iil).g Wells Fargo's motion for leave to reargue. Veras submits an.attorney affirmation arguing that Wells Fargo conceded that it did not send the RPAPL 1304 notice to Veras at his last known address. Defense counsel argues that ''RPAPL § 1304 is applicable herebecause Defendantre sided at the Subject Propertyatth e time the loan agreenient was entered into [June 16,2010] and the Subject Property was used primarily fat residential purposes." Defense counsel cites to the transcript of the 2017 traverse hearing and the documentary evidence ofVeras' residency submitted in the 2014 Foreclosure Action and asserts that ''[dJefendant resided at the Subject Property from June 16~ 2010, at the same time the loan agreement between the parties was executed,> untiL2012;'' ·Defense counsel contends that "RPAPL §1304 applies to the case at bar despite the fact that Defendant did not reside at the Subject Premises at the time Plaintiff commenced its foreclosure action [in 2017]" becat1Se residency is determined at the time the loan was originated. Discussion "A motion for leave to reargµe shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include arty matters of fact not offered on the prior motion'' (CPLR 2221 (d] (2]). "While 2 SeeNYCSEF Doc No. 147. 9 9 of 13 [*FILED: 10] KINGS COUNTY CLERK 12/16/2021 12:19 PM NYSCEF DOC. NO. 153 INDEX NO. 504495/2017 RECEIVED NYSCEF: 12/16/2021 . . the determination to grant leave toreargue a motion lies within the sound discretion of the_ court, a motion for leave to reargue is not designed to provide art unsuccessful party with successive opportunities to reargue is.sues _previously decided~ or to present arguments different from· those originally presented" (Salcedo v Demon Trucking, Inc., 146 AD3d . . 839, 840 [2017] [quoting Ahn1ed v Pannone, ll6AD3d 802, 805 (2014)] [emphasis added]; Mazinov v Rella, 79 AD3 d 979, 980 [20 lO] [ same]; see also Haque v Daddazio, 84 AD3d 940, 942 [2011] [holding that trial court improvidently exercised its discretion in granting plaintiff's motion for leave·to reargue.his opposition to defendant's summary judgment motion · because "he improperly presented arguments not previously advanced"]). The Court of Appeals has held that ''[i]t is well settled that a motion to reargue 'is not art appropriate vehicle for raising new questions . . . which were not previously advanced"' since "where a new argument is presented on the motion [pursuant to CPLR 2221 (d)], that argument could not have been 'overlooked or mis~pprehended'" (People v D'Alessandro; 13 NY3d216, 219 [2009]}. Proper·service of the RP APL 1304 90-day pre'"foreclosure notice on the borrower 1s a condition precedent to the commencement of a residential foreclosure action reg\lrding a "home Ioart," and the plaintiff has the burden of establishing satisfaction of this condition (US. Bank Trust; N.A. v Sadique, 178 AD3d 984, 985 [2019]), RPAPL 1304 (2) requires that .such notice be sent by registered or certified mail_, and also by first~ class 111a:il;· to "the last known address of the borrower."3 ''Alternatively, the plaintiff Thus, by its plain language, RPAPL 1304 contemplates that a homeowner may no longer· .3 lO 10 of 13 [*FILED: 11] KINGS COUNTY CLERK 12/16/2021 12:19 PM NYSCEF DOC. NO. 153 INDEX NO. 504495/2017 RECEIVED NYSCEF: 12/16/2021 bears the burden of establishing, prhna fade, that RPAPL 1304 inapplicable, as the loan is not subject to the notice requirements set forth in RPAPL 1304" (id,, see also US Bank Nat. Assoc v Richard, 151 AD3d 1()01, 1002-1()03 [2917]). Wells Fargo's underlying motion for summary judgment and art order of reference was properly denied because Wells Fargo failed to establish its strict compliance with RPAPL 1304. Importantly; in support of its sunurtary judgment motion, Wells Fargo only argued that it complied with RPAPL 1304's pre-foreclosure notice requirements by serving Veras with a 90-day notice at the Property, and Wells Fargo never raised the argument that RP APL 1304 was inapplicable; However; Wells Fargo now, for the first time, argues that ''the Court overlooked that, as a matter of law, Defendant cannot assert an RPAPL 1304 defense .. _,i because "the subject loan is not a 'home loan' and is not protected by RPAPL 1304 notice requirements as conditions precedent to foreclosure." Thus, Wells Fargo's instantmotion for leave to reargue its summary judgment motion is improperly based on an argument that was not previously advanced on its underlying summary judgmenLmotion. For that reason a.lone, Wells Fargo's motion for leave to rea.rg:_ue its motion for smmnaiy judgment and an order ofreference is denied. In any event_, contraryto Wells Fargo's new argument; the Second Departmenthas indicated that a loan may be a '"home loan" subject to the pre-foreclosure notice requirements of RPAPL 1304 if the borrower resided at the Prqperty at the time that h~ executed the i:esidentiaJ mortgage (see HSBC Bank USA, Nat: Assoc. v Ozcan,. 154 AD3d reside atthe mortgaged property (se~ s_upra). 11 11 of 13 [*FILED: 12] KINGS COUNTY CLERK 12/16/2021 12:19 PM NYSCEF DOC. NO. 153 INDEX NO. 504495/2017 RECEIVED NYSCEF: 12/16/2021 822, 825 [2017] [holding that foreclosure action didnot involve a ''home· loan" subject to the notice requirements of RPAPL 1304 since "the record shows that the subjectprope rty is a multi-unit apartment building with several tenants, the defendant did not reside at the property atthe time he signed the mortgage orat the time the action was commenced, and the. deed transfening the property to the defendant was a commercial property deed"} [emphasis added]; see also Accredited Home Lenders~ Inc. v Hughes, 22 Misc.3d 323, 326-327 [Sup Ct Essex County 2008] [holding that "residertcy" for purposes ofRPAPL 1304 is determined at the time the loan was entered into]). Here, the record reflects that Veras resided at the Property from Juhe 16, 2010, the date on which the mortgage loan was executed, until he moved to NYCHA housing at 1895 Second Avenue, Apt. 12F, in NewYork in2012. Since Wells Fargo failed .to meet its prima facie burden of proving either that it complied with RPAPL 1304 or that RP APL 1304 is inapplicable, its ·motion for an order granting it summary judgment, an ordel' of reference and other relief was properly denied, and this comi will not disturb the March 2, 2020 decision and order of the court. Accordingly, it is hereby ORDERED that Wells Fargo's motion for leave to reargue (mot. seq. six) is denied; and it is further ORDERED that Veras' cross motion (mot. seq . eight) is granted to the extentthat 12 12 of 13 [*FILED: 13] KINGS COUNTY CLERK 12/16/2021 12:19 PM INDEX NO. 504495/2017 NYSCEF DOC. NO. 153 RECEIVED NYSCEF: 12/16/2021 Wells Fargo's motion is denied. This constitutes the qecjsion and order of the court. ENTER . . ~ J. HON. LAWRENCE KNf PEL ADMJN/STRATJVE JUDGE 13 13 of 13

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