Caliber Home Loans, Inc. v. Weinstein

Citation: 2021 NY Slip Op 05021Docket: 2019-03746

Court: Appellate Division of the Supreme Court of the State of New York; September 22, 2021; New York; State Appellate Court

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In *Caliber Home Loans, Inc. v Weinstein*, decided on September 22, 2021, the Appellate Division of the Supreme Court of New York reversed a foreclosure order and judgment previously entered against defendants Herman and Paula Weinstein. The court found that the plaintiff's motions for summary judgment and to strike the defendants' answer were improperly granted. The ruling also denied the plaintiff's motion to confirm a referee’s report and enter a judgment of foreclosure and sale. The background involved a series of loans made by ABN AMRO Mortgage Group, Inc. to the defendants, secured by mortgages against their property in North Babylon, Suffolk County. The initial loan of $168,000 in September 2000 was followed by an additional loan of $8,302.41 in October 2001, leading to a consolidation of the two into a single note for $175,000. In May 2005, the defendants took on another loan of $57,808.86, which was consolidated with the prior note into a new total note of $205,000. The appeal from a subsequent order denying renewal of opposition to the plaintiff's motions was deemed academic based on the reversal of the foreclosure judgment. Costs were awarded to the appellants.

In November 2006, the defendants executed a note for $107,419.68 in favor of JP Morgan Chase Bank, which was secured by a mortgage on their property. They also executed a consolidation, extension, and modification agreement to combine this note with a previous one into a new consolidated note for $300,000, also in favor of JP Morgan. In June 2012, a loan modification agreement established a new balance of $308,808.71. In April 2016, the plaintiff initiated foreclosure proceedings on the modified November 2006 mortgage, claiming to be the holder of the note. The defendants raised affirmative defenses, including the alleged failure of the plaintiff to send the required 90-day notice under RPAPL 1304. 

The plaintiff moved for summary judgment, submitting an affidavit from Josh Cantu, a default servicing officer, who stated that the defendants defaulted by missing a payment due September 1, 2012, and that the 90-day notice had been mailed to them on November 19, 2015, at the subject property address. However, the notices were actually addressed to a different location in Seaford, Nassau County. The defendants contended that they did not receive the notice and argued that the plaintiff did not prove compliance with the mailing requirement of RPAPL 1304. They also pointed out that the mailings appeared to have been executed by a nonparty, Walz Group, Inc., rather than the plaintiff, questioning the validity of the assertions made by Cantu.

On March 7, 2018, the Supreme Court granted the plaintiff’s motion for summary judgment, ruling that the defendants failed to create a triable issue of fact regarding the receipt of the 90-day notices. Following this, the plaintiff sought to confirm the referee's report and obtain a judgment of foreclosure and sale. The defendants cross-moved for leave to renew their opposition to the plaintiff’s previous motions.

Defendants supported their cross motion with an affidavit from Herman, who, at 85 years old and legally blind, stated he did not open mail at the property due to his condition. He noted that his health had improved, allowing him to participate in the proceedings, and revealed that the 90-day notices were incorrectly addressed to a location in Seaford where the defendants had never lived. The plaintiff responded by submitting certified and first-class mail envelopes with barcodes matching those on the 90-day notices, along with a reply affidavit from Cantu, who confirmed that notices were sent to an authorized vendor for mailing.

On January 17, 2019, the Supreme Court granted the plaintiff's motion for foreclosure and sale, prompting the defendants to appeal. To establish entitlement to judgment in a foreclosure action, a plaintiff must submit the mortgage, note, and evidence of default. When a defendant raises a compliance issue with RPAPL 1304 as an affirmative defense, the plaintiff must demonstrate strict compliance with the statute. RPAPL 1304 mandates that lenders provide notice to borrowers at least 90 days before commencing legal action, which must be sent via registered or certified mail and first-class mail.

The plaintiff did not meet the prima facie requirement for strict compliance with RPAPL 1304. Although Cantu claimed the notices were mailed to the defendants, he did not provide evidence that the notices were sent to the correct property or documentation from the post office confirming the mailings. The documents submitted by the plaintiff in reply were inadequate to satisfy the initial burden of proof required for summary judgment, emphasizing that parties should present complete evidence from the outset and not expect multiple opportunities to do so.

Cantu claimed personal knowledge of the plaintiff's record-keeping procedures but did not demonstrate familiarity with the mailing practices of Walz, the third-party responsible for sending notices. Consequently, the plaintiff did not prove standard office practices to ensure proper addressing and mailing of these notices. As a result, the Supreme Court should have denied the plaintiff's motion for summary judgment, which sought to strike the defendants' answer and for an order of reference, regardless of the defendants' opposition. The defendants' request to strike interest under CPLR 5001 is not before the court as it remains unresolved. Other contentions raised by the parties are either not properly presented or unnecessary to address based on the court's determination.