HSBC Bank USA, National Association v Palmore
Categories
Attorneys and Parties
Brief Summary
Mortgage foreclosure; whether the lender strictly complied with Real Property Actions and Proceedings Law (RPAPL) 1304(1) [requires a lender, assignee, or mortgage loan servicer to give the borrower at least 90 days' notice before commencing a foreclosure action] by mailing separate 90-day notices to each borrower.
The Supreme Court, Suffolk County, granted the plaintiff summary judgment, struck the defendants' answer, issued an order of reference, later confirmed the referee's report, denied the defendants leave to renew, and entered a judgment of foreclosure and sale.
The Appellate Division reversed the order and judgment of foreclosure and sale insofar as appealed from, denied confirmation of the referee's report and foreclosure relief, granted renewal, vacated the relevant portions of the 2020 orders granting summary judgment and an order of reference, and granted the defendants' prior cross-motion for summary judgment dismissing the complaint insofar as asserted against them.
Because the plaintiff failed to satisfy RPAPL 1304: the 90-day notice was jointly addressed to both borrowers in a single envelope, rather than separately mailed to each borrower. After Wells Fargo Bank, N.A. v Yapkowitz clarified that separate mailings are required, renewal was proper and dismissal was warranted.
Background
HSBC commenced a foreclosure action in 2013 concerning residential property in Wyandanch. The defendants answered. In support of its 2019 summary judgment motion, HSBC relied on Wells Fargo servicing affidavits and mailing proof showing a 90-day notice dated April 19, 2012 that was jointly addressed to both defendants. The defendants argued that this did not comply with RPAPL 1304 and submitted an affirmation stating that the notice received came in a single envelope collectively addressed to both borrowers. After the trial court initially ruled for HSBC, the defendants later sought renewal based on subsequent appellate authority clarifying the separate-mailing requirement.
Lower Court Decision
The Supreme Court granted HSBC's motion for summary judgment on the complaint insofar as asserted against the defendants, struck their answer, and granted an order of reference in two orders dated October 13, 2020. It later granted HSBC's motion to confirm the referee's report and for a judgment of foreclosure and sale, while denying the defendants' cross-motion for leave to renew.
Appellate Division Reversal
The Appellate Division dismissed the direct appeal from the intermediate May 22, 2023 order because the right of direct appeal terminated upon entry of the order and judgment of foreclosure and sale, but reviewed those issues on the appeal from the final foreclosure judgment. It then reversed the order and judgment of foreclosure and sale insofar as appealed from, denied the plaintiff's requests to confirm the referee's report and obtain a foreclosure judgment, granted the defendants leave to renew, vacated the pertinent portions of the October 13, 2020 orders, denied the plaintiff's prior summary judgment and order-of-reference requests, and granted the defendants' prior cross-motion for summary judgment dismissing the complaint insofar as asserted against them.
Legal Significance
The decision reinforces that strict compliance with RPAPL 1304 is a condition precedent to foreclosure and that a jointly addressed 90-day notice mailed in one envelope to multiple borrowers is insufficient. It also confirms that a motion for leave to renew under CPLR 2221(e)(2) [permits renewal based on new facts or a change or clarification in the law] is an appropriate vehicle when later appellate precedent clarifies the governing legal rule.
In New York residential foreclosure actions, each borrower must receive an individually addressed RPAPL 1304 90-day notice in a separate envelope. If the lender used one jointly addressed mailing, the foreclosure action is vulnerable to dismissal, even after earlier summary judgment, if renewal is sought based on a later clarifying decision.