Citimortgage, Inc. v Rooney
Attorneys and Parties
Brief Summary
Mortgage foreclosure—establishing the amount due through admissible business records under the business records exception and proper foundation.
After allowing the plaintiff to serve supplemental business records, the Supreme Court confirmed the referee's report and entered a judgment of foreclosure and sale.
The order and judgment of foreclosure and sale was reversed; the motion to confirm the referee's report and for a judgment of foreclosure and sale was denied; the matter was remitted for a new computation and further proceedings under CPLR 4403 [court review of referee's report].
The plaintiff failed to lay a proper CPLR 4518(a) [business records exception to hearsay] foundation for the supplemental payment history because it was not identified or incorporated by the affiant and was submitted via an attorney letter without personal knowledge, leaving the amount-due proof as inadmissible hearsay and the referee's findings not substantially supported.
Background
Citimortgage commenced a 2013 foreclosure action on a Patchogue property against Mark and Danielle Rooney, who answered and counterclaimed. In 2022, the Supreme Court granted summary judgment and an order of reference to Citimortgage. In 2023, Citimortgage moved to confirm the referee's report and for judgment. The court found the initial business records insufficient to determine amounts due and, in January 2024, adjourned the motion to allow plaintiff to submit supplemental business records. In May 2024, relying on those supplemental records, the court granted the motion and entered an order and judgment of foreclosure and sale. On appeal, the direct appeal from the January 16, 2024 order was dismissed because it was subsumed by the final judgment, but its issues were reviewed on the appeal from the judgment (see CPLR 5501[a][1] [permits review of nonfinal orders that necessarily affect the final judgment]).
Lower Court Decision
The Supreme Court (Suffolk County) determined the initial records attached to the Benning affidavit (from the loan subservicer employee) did not sufficiently show the amount due but allowed supplementation. After plaintiff served supplemental business records and defendants were allowed to respond, the court granted the motion to confirm the referee's report and entered a judgment of foreclosure and sale on May 30, 2024.
Appellate Division Reversal
The Appellate Division held that although allowing supplemental records was permissible because defendants were given an opportunity to respond (no prejudice), the plaintiff did not establish a proper CPLR 4518(a) [business records exception to hearsay] foundation for the supplemental payment history. The supplemental records were not identified or incorporated by the affiant, and were submitted via an attorney who lacked personal knowledge of record-keeping practices, rendering the amount-due proof inadmissible hearsay. The referee's findings were therefore not substantially supported. The court reversed the order and judgment of foreclosure and sale, denied the motion to confirm the referee's report and for a judgment of foreclosure and sale, and remitted for a new computation and further proceedings under CPLR 4403 [court review of referee's report]. One bill of costs was awarded to the defendants.
Legal Significance
In foreclosure actions, a lender must lay a proper evidentiary foundation for loan payment histories under CPLR 4518(a) [business records exception to hearsay]. Payment histories must provide a monthly accounting and be authenticated and incorporated by a knowledgeable affiant or witness; submissions via attorney letters without personal knowledge are inadequate. Courts may allow supplementation where no prejudice occurs, but confirmation of a referee’s report requires admissible proof supporting the amount due, or the judgment will be reversed and remitted under CPLR 4403.
To confirm a referee’s report and obtain a foreclosure judgment, the lender must submit an authenticated, monthly payment history incorporated into the affiant’s testimony under CPLR 4518(a); attorney-submitted records not tied to the affiant are inadmissible hearsay and will not support a judgment.