Wells Fargo Bank, N.A. v. Curtis
Categories
Attorneys and Parties
Brief Summary
Mortgage foreclosure; whether the lender strictly complied with Real Property Actions and Proceedings Law (RPAPL) 1304 [pre-foreclosure notice statute requiring that a 90-day notice be sent by registered or certified mail and by first-class mail, and, as then in effect, contain a list of at least five housing counseling agencies serving the borrower's region] before commencing the action.
The Supreme Court granted the plaintiff summary judgment on the complaint, issued an order of reference, later confirmed the referee's report, and entered a judgment of foreclosure and sale.
The Appellate Division reversed the order and judgment of foreclosure and sale, denied the plaintiff's requests for summary judgment and an order of reference, and denied as academic the plaintiff's later motion to confirm the referee's report and for a judgment of foreclosure and sale.
The plaintiff failed to make a prima facie showing that its RPAPL 1304 notice contained at least five housing counseling agencies serving the defendant's region. Because strict compliance with RPAPL 1304 is a condition precedent to foreclosure, summary judgment should have been denied. The defect could not be disregarded under CPLR 2001 [rule allowing certain nonprejudicial defects or irregularities to be disregarded].
Background
In August 2010, Wells Fargo Bank, N.A. commenced an action to foreclose a mortgage on residential property in Selden, New York. Walter Curtis answered and asserted affirmative defenses. In support of its 2019 motion for summary judgment, the plaintiff relied in part on an affidavit from a vice president of loan documentation stating that a 90-day notice had been mailed on April 14, 2010, along with a copy of the notice listing 17 United States Department of Housing and Urban Development (HUD) approved housing counseling agencies. Curtis argued that the plaintiff failed to comply with RPAPL 1304 because the notice did not establish that at least five listed agencies served the region where he lived.
Lower Court Decision
The Supreme Court, Suffolk County, granted the plaintiff's motion for summary judgment on the complaint and for an order of reference, denied the defendant's cross-motion for summary judgment dismissing the complaint, and referred the matter to a referee to compute the amount due. After procedural motion practice concerning the referee's report, the court ultimately confirmed a new referee's report and entered an order and judgment of foreclosure and sale.
Appellate Division Reversal
The Appellate Division held that the plaintiff did not establish, prima facie, strict compliance with RPAPL 1304 because it failed to show that at least five of the 17 housing counseling agencies listed in the notice served the defendant's region. As a result, the plaintiff was not entitled to summary judgment or an order of reference, regardless of the sufficiency of the defendant's opposition. The court therefore reversed the foreclosure judgment and modified the prior orders accordingly. However, it also held that the defendant was not entitled to summary judgment dismissing the complaint because he failed to prove, prima facie, that the listed agencies did not serve Long Island or that he had sought and been denied assistance on that basis.
Legal Significance
This decision reinforces that strict compliance with RPAPL 1304 is a condition precedent in New York residential mortgage foreclosure actions. A lender must do more than submit a copy of a 90-day notice listing counseling agencies; it must affirmatively demonstrate that the notice satisfied the statutory regional-agency requirement in effect when the action was commenced. The court also confirmed that this type of defect is not excused as a mere technical irregularity under CPLR 2001.
In a New York mortgage foreclosure case, a lender seeking summary judgment must prove exact compliance with RPAPL 1304, including the requirement that the 90-day notice list at least five housing counseling agencies serving the borrower's region. Failure to make that showing defeats summary judgment, even if the borrower cannot obtain outright dismissal.