Opinion
7889-2012
10-31-2018
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, Plaintiff, v. Mark LEBOVIC, Vicki Lebovic A/K/A Vicki R. Lebovic, Lehman Brothers Bank, FSB; Daniel Lebovic, Defendants.
SHAPRIO, DICARO & BARAK. LLC, 175 Mile Crossing Blvd, Rochester, NY 14624, Attorneys for Plaintiff. CHARLES WALLSHEIN, ESQ., 35 Pinelawn Road, Suite 106E, Melville, NY 11747, for Attorney for Defendants Lebovic. VALERIE S. MANZO, ESQ., Court Appointed Referee, 16 De Mont Street, Smithown, NY 11747.
SHAPRIO, DICARO & BARAK. LLC, 175 Mile Crossing Blvd, Rochester, NY 14624, Attorneys for Plaintiff.
CHARLES WALLSHEIN, ESQ., 35 Pinelawn Road, Suite 106E, Melville, NY 11747, for Attorney for Defendants Lebovic.
VALERIE S. MANZO, ESQ., Court Appointed Referee, 16 De Mont Street, Smithown, NY 11747.
Robert F. Quinlan, J.
Upon the following papers numbered 1 to 125 read on this motion for judgment of foreclosure and sale: Notice of Motion and supporting papers 1-75 ; Notice of Cross Motion for "reverse summary judgment" dismissal or alternatively to reject referee's report and supporting papers 76-108 ; Affirmations and supporting papers in opposition and reply 109-125; it is
ORDERED that this motion by plaintiff JPMorgan Chase Bank, National Association for an order pursuant to RPAPL § 1351 granting a judgment of foreclosure, approving plaintiff's request for attorney's fees and associated relief is denied as moot as plaintiff has withdrawn it, and it is further,
ORDERED that as plaintiff has withdrawn its' application for a judgment of foreclosure and sale, that portion of defendants Mark Lebovic and Vicki Lebovic's motion seeking to reject the referee's report, discharge the referee, appoint a new referee and deny plaintiff's motion for judgment of foreclosure and sale is also denied as moot; and it is further
ORDERED that portion of defendants Mark Lebovic and Vicki Lebovic's motion seeking "reverse summary judgment" dismissing the complaint for plaintiff's non-compliance with RPAPL §§ 1303 and 1304 is denied; and it is further
ORDERED that plaintiff is to discontinue the action or file an application for a judgment of foreclosure and sale within 120 days of the date of this order; and it is further
ORDERED that this action shall be calendared for a status conference on Wednesday, February 27, 2019 at 9:30 AM in Part 27 for the court to monitor the progress of this action. If the action is discontinued or a judgment of foreclosure and sale is filed with the court before that date, no appearance will be necessary; and it is further
ORDERED that failure to comply with any term of this order will not form the basis for a motion to dismiss the action, but will be the subject of the status conference at which future compliance will be determined.
This is an action to foreclose a mortgage on residential real property located at 3 Pam Drive, Commack, Suffolk County, New York given by defendants Mark and Vicki Lebovic ("defendants") to plaintiff JPMorgan Chase Bank, National Association's ("plaintiff") predecessor in interest on June 13, 2003 to secure a note given the same date by defendants to that predecessor in interest. Upon defendants' default in payment under the terms of the mortgage and note plaintiff commenced this action by filing a summons, complaint and notice of pendency with the Suffolk County Clerk and defendants eventually filed their answer which raised twenty-three affirmative defenses.
Plaintiff moved for summary judgment dismissing defendants' affirmative defenses and striking their complaint, amending the caption, fixing the default of the non-appearing, non-answering defendants and for an order of reference pursuant to RPAPL § 1321 (Mot. Seq. # 001). Defendant's cross-moved to amend their answer and in opposition to plaintiff's motion (Mot. Seq. # 002). Oral argument of both motions was held before this court on October 31, 2016, at which time defendant's motion was denied and plaintiff's motion was granted; a more complete history of the action and the court's rulings are contained in the court's decision placed on the record at that time.
Plaintiff brought the present motion for a judgment of foreclosure and sale and defendants cross-moved for "reverse summary judgment" based upon plaintiff's alleged non-compliance with RPAPL §§ 1303 and 1304, and alternatively to deny plaintiff's motion, to dismiss the referee appointed pursuant to RPAPL § 1321 for failure to hold a hearing before issuing her report and for what defendants claim are evidentiary insufficiencies in plaintiff's submissions to the referee.
By letter dated October 9, 2018 and faxed to the court on October 11, 2018, plaintiff requested to withdraw its motion for a judgment of foreclosure and sale, as defendants were being reviewed for loss mitigation and plaintiff feared that federal regulations prohibiting "dual tracking" might be violated if a decision on the motion was made by the court. Although the court could have held the motion in abeyance pending the decision on the loss mitigation, a party may withdraw its' own motion at any time, as long as there is no prejudice to another party. Under these circumstances the court cannot conceive of any legitimate claim of prejudice that could be made by defendants, therefore plaintiff's application to withdraw its motion is granted.
As the court has the inherent power and duty to monitor and control the progress of a case in it's inventory, the court orders that within 120 days of the date of this order plaintiff is to discontinue the action if the loan has been modified, or file a second motion for a judgment of foreclosure and sale, and the action shall be calendared for a status conference on Wednesday, February 27, 2019 at 9:30 AM in this part to monitor compliance. If the action is discontinued or a judgment of foreclosure and sale is filed with the court before that date, no appearance will be necessary.
The arguments made by defendants as to the judgment of foreclosure and sale and the procedures surrounding the referee's report are moot as the application for the judgment has been withdrawn. The court will address defendant's claims for dismissal pursuant to RPAPL §§ 1303 and 1304.
RPAPL §§ 1303 AND 1304 CLAIMS CONSIDERED
Defendants' motion raises an issue that has on many occasions frustrated this court (see Beneficial Homeonwer Services Corp. v. Jordon-Thompson, 57 Misc 3d 1213 [A], 2017 N Y Slip Op. 51424 [U] [Sup Ct, Suffolk County 2017]; Citimortgage, Inc. v. Bunger , 58 Misc 3d 333 [Sup Ct, Suffolk County 2017] ). Defendants are represented by competent experienced counsel who interposed an answer on behalf of defendants in April 2012. By that time it was clear that compliance with the requirements of RPAPL Article 13 were conditions precedent to a successful foreclosure action (see First Natl. Bank of Chicago v. Silver , 73 AD3d 162 [2d Dept 2010] ; Aurora Loan Services v. Weisblum , 85 AD3d 95 [2d Dept 2011] ), yet defendants' answer and affirmative defenses failed to raise any claims regarding compliance with the provisions of RPAPL §§ 1303 and 1304. Although defendants' seventeenth affirmative defense raised general claims of "failure to provide the appropriate notice .... which notices are a condition precedent to bringing this suit," there were no specific denials of performance or particularity required to give notice of the elements of such a claim as an affirmative defense raising any contractual or statutory condition precedent ( CPLR 3013 and 3015 [a] ) which would alert plaintiff and the court that RPAPL §§ 1303 and 1304 compliance was challenged. Defendants failed to raise the issue or argue that plaintiff failed to comply with those statutory provisions in their original cross-motion (Mot. Seq. # 002) or in opposition to plaintiff's summary judgment motion (Mot. Seq. # 001). Further, the affidavit submitted by defendants in support of Mot. Seq. # 002, as well as their affidavit submitted in support of the present cross-motion (Mot. Seq. # 004), fails to raise any claims of deficiencies in the RPAPL §§ 1303 and 1304 notices. In their cross-motion (Mot. Seq. # 002) to amend their answer, defendants did not seek to add claims of violations of RPAPL §§ 1303 and 1304 ; in fact, if the court had granted defendants' motion to file an amended answer, that amendment would have resulted in the withdrawal of their seventeenth affirmative defense, the only colorable claim by defendants that, if broadly read, could be said to place RPAPL Article 13 compliance in issue.
Having had a full opportunity to raise these issues in their answer, in opposition to plaintiff's motion for summary judgment, in cross-moving to amend their answer, or to move to renew/reague or to amend their answer to include these issues as affirmative defenses before the filing of a motion for a judgment of foreclosure and sale, defendants chose not to raise them until now, in opposition to plaintiff's motion for a judgment of foreclosure and sale. Under other circumstances, the court's inclination would be to deem defendants' "new found" objections waived, as it has long been held that if a party moves for summary judgment, it is incumbent upon an opponent to lay bare its proof and present evidentiary facts sufficient to raise a triable issue of fact (see Friends of Animals, Inc. v. Associated Fur Manufacturers, Inc. 46 NY2d 1065 [1979] ; Zuckerman v. City of New York , 49 NY2d 557 [1980] ; Morgan v. NY Tel. , 220 AD2d 728 [2d Dept 1995] ; Hovi v. City of New York , 226 AD2d 430 [1996] ; Avant v. Cepin Livery Corp. , 74 AD3d 533 [1st Dept 2010] ). But the emphasis placed upon strict compliance with the requirements of RPAPL§§ 1303 and 1304 by appellate decisions compels the court to treat this motion otherwise. It has been held that these issues can be raised for the first time as late as opposition to a motion for a judgment of foreclosure, in the discretion of the trial court (see Emigrant Mtge Co., Inc. v. Lifshitz , 143 AD3d 755 [2d Dept 2016] ) and that a clear waiver of these issues has been only held to have occurred when the first attempt to raise them is on appeal (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, the court believes it is compelled to consider defendants' "new" arguments.
Once pled by plaintiff in its complaint and denied by defendants in their answer or affirmative defenses, it is plaintiff's responsibility to establish compliance with RPAPL§§ 1303 and 1304 as part of its prima facie case (see Bank of New York v. Aquino , 131 AD3d 1186 [2d Dept 2015] ; Zarabi v. Movahedian , 136 AD3d 895 [2d Dept 2016] ; JPMorgan Chase Bank, N.A. v. Kutch , 142 AD3d 536 [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] ). But the court asks when does experienced defendants' counsel's failure to argue issues that were obviously present years ago become a waiver of those issues?
CPLR § 2001 APPLICABLE TO RPAPL § 1303 NOTICES
RPAPL § 1303 (3) sets forth the language required for the notices which are to be served with the summons and complaint. That language was amended, effective October 3, 2011, to reflect the substitution of the NYS Department of Financial Services ("DFS") in place of the NYS Banking Department ("Banking Dept.") in the notice. This singular change to the 2011 amendment reads as follows: "To locate an entity near you, you may call the toll-free helpline maintained by the New York State Department of Financial Services at (enter number) or visit the Department's website at (enter web address)." As the phone number remained 1-877-BANK-NYS (1-877-226-5697), the only substantive change other than to the name of the department was the DFS web address.
The parties acknowledge that the RPAPL § 1303 notices served upon defendants on March 15, 2012 contained the language from the "old form," which stated: "To locate an entity near you, you may call the toll-free helpline maintained by the New York State Banking Department at 1-877-BANK-NYS (1-877-226-5697) or visit the department's website at http://www.banking.state.ny.us." As the phone number remained the same, the only substantive difference in this notice from the correct one was the web address and the department name. Defendants claim that because "strict compliance" with the terms of RPAPL § 1303 is a mandated statutory condition precedent, the failure of plaintiff to refer to DFS and provide its web address requires that the action be dismissed.
The cases generally cited for the principle that strict compliance, not substantial compliance, with the notice requirements of RPAPL §§ 1303 or 1304 all involve significant problems of compliance with the notices. In Hudson City Savings Bank v. DePasquale , 113 AD3d 595 (2d Dept 2014) there was a factual inaccuracy in the notice; in Flagstar Bank v Damaro, 145 AD3d 858 (2d Dept 2016) the cure date for the default was set in the notice two days before the notice was sent, making it impossible to comply; in Aurora Loan Service, LLC v. Weisblum, supra, only one of the borrowers was sent the notice; and in First National Bank v. Silver, supra, the notice required by RPAPL § 1303 was not served with the complaint.
Here, there is nothing as dramatic; just that the name of the Banking Dept. incorrectly appeared rather than DFS and that the web address was for the Banking Dept., not DFS. The purpose in general of enacting RPAPL 1303 and the other "HEPTA" statutes was to provide information to defendants, to give them the ability to find and get assistance in the financial turmoil that was facing many New Yorkers as a result of the financial crisis of the mid-2000's and continuing. Here defendants, who promptly obtained counsel, submitted identical affidavits in both their original cross-motion and in this motion which nowhere state that they were confused by this defect/error, or that they relied upon the web address to their detriment. As already noted, they did not complain in any way about this RPAPL § 1303 notice or the RPAPL § 1304 notice, especially as to their ability to find and obtain assistance. Defendants have shown no prejudice to them whatsoever for what are considered by this court, in this instance, to be typographical or minor errors.
In Aurora Loan Service, LLC v. Weisblum, supra, at 107-108, in response to an argument by plaintiff that the failure to mail the RPAPL § 1304 notice to one defendant could be considered to be a defect or irregularity that a court could overlook pursuant to CPLR § 2001, the Second Department stated that although CPLR § 2001 could not apply to the facts in that case, it declined to express an opinion when, if ever, a defect or irregularity in a notice might be so minimal as to warrant the exercise of the court's discretion to disregard it under CPLR § 2001. The irregularity here is so minimal and inconsequential that it calls for the court to exercise its discretion and ignore this defect pursuant to CPLR § 2001. The fact that plaintiff used a version of the notice which contained merely the wrong department of the state and web address, but contained all the other language required by the statute, including the correct phone number to reach DFS for assistance, is of no real consequence in this case. Under these facts, the court applies the discretionary remedy of CPLR § 2001 and deems these errors to be minimal and inconsequential "defects" which are to be ignored (see Citimortgage, Inc. V. Bunger , supra; U.S. Bank Trust v. Dodd , Sup Ct, Suffolk County, April 5, 2017, Quinlan, J., Index # 60044-2013).
That portion of defendants' cross-motion seeking summary judgment dismissing plaintiff's action for failing to comply with RPAPL § 1303 is denied.
NO VIOLATION OF RPAPL § 1304 (2)
Defendants' claims to summary judgment dismissing the complaint for plaintiff's failure to comply with defendants' counsel's interpretation of the requirements of RPAPL § 1304 (2) is without merit.
Defendants' argue that because plaintiff included on the second page of the RPAPL § 1304 notice ("the notice") language in addition to that required to be included by RPAPL § 1304, the notice violates 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." Defendants argue that as strict compliance with the provisions of RPAPL § 1304 is mandated, the additional language constitutes other "notices" in the same envelope, and therefore the action must be dismissed. Defendants' counsel's reliance on Hudson City Savings Bank v. DePasquale , supra , for this proposition is misplaced since it did not involve additional notices in the same envelope, but, as stated above, dealt with a factual inaccuracy in the notice.
When defendants' 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 , supra; Beneficial Homeowner Services Corp v. Jordon-Thompson , supra). Here plaintiff included in the notice the two short, plain and clear paragraphs defendant complains of, as well as a list of housing counseling agencies. This does not violate the statute.
Defendants' counsel makes 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 that 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 , –––NY3d––––, 2018 NY Slip Op. 04377 [2018] ). Following this principle, the court will not read into RPAPL § 1304 (1) and (2) the requirement that the mandated notice must only contain the statutorily required language.
Defendants' counsel's argument that one of the additional paragraphs suggests to defendants that they may call plaintiff's loan servicer to discuss their options and perhaps consider a loan modification, and that this suggestion violates the intent of the notice, flies in face of the mandatory language contained on page one of the notice. The statutorily required language contained in the last sentence in the second paragraph of page one states:"If you wish, you may contact us directly at (800) 848-9380 and ask to discuss possible options." By merely restating that language again on the second page of the notice, plaintiff's servicer has by no means violated "the legislative intent of RPAPL § 1304."
Just as implausible is defendants counsel's claim that this same "additional" paragraph is an attempt to divert defendants from seeking assistance from the enclosed list of not for profit housing counseling agencies. The language counsel complains of only serves to warn defendants of possible "scam housing counseling" agencies, referring to a federal publication and provides a phone number to report such scams. Other than in the mind of defendants' counsel, there is nothing contained therein that attempts to divert defendants from the agencies on the enclosed list, nor attempts to deflect defendants to plaintiff's servicer for counseling advice. Further, the meaning behind counsel's vague reference that the notice makes "a statement about the Obama administration," is incomprehensible to the court and the court will not attempt to decipher it. The court notes that counsel does not complain of the paragraph which tells defendants to turn the notice over to their lawyer if they are represented.
Defendants additional claims that the inclusion of federally mandated language concerning debt collection and bankruptcy filings, all part of this one notice, violate RPAPL § 1304 are without merit for the reasons stated above.
That portion of defendant's cross-motion seeking summary judgment dismissing plaintiff's action for allegedly failing to comply with RPAPL § 1304 is denied.