Morgan Stanley Private Bank v. Lajaunie

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2023 NY Slip Op 32114(U)

MORGAN STANLEY PRIVATE BANK, NATIONAL ASSOCIATION, Plaintiff, v. PHILIP LAJAUNIE, BOARD OF MANAGERS OF THE 62 EAST FIRST ST CONDOMINIUM, ELIZABETH GREENWOOD REVOCABLE TRUST, ELIZABETH GREENWOOD TRUSTEE, FERRARI & FERRARI LLP, NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, JOHN DOE, Defendant.

Index No. 850341/2018, Motion Seq. No. 005, NYSCEF Doc. No. 121

Supreme Court, New York County

June 16, 2023

Unpublished Opinion

DECISION + ORDER ON MOTION

FRANCIS KAHN, III, A.J.S.C.

The following e-filed documents, listed by NYSCEF document number (Motion 005) 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76 77, 78, 79, 80, 81, 82, 83, 84, 85, 90, 92, 98, 99 were read on this motion to/for JUDGMENT - SUMMARY.

The within action is to foreclose on a mortgage encumbering a parcel of residential real property located 62 East 1^st Street, Unit 4S, New York, New York. The mortgage, dated January 22, 2015, was given by Defendant Philip Lajaunie ("Lajaunie") to Plaintiff and secures a loan with an original principal amount of $1,224,000.00. The loan is memorialized by an adjustable rate note of the same date. Plaintiff commenced this action and alleged that Lajaunie defaulted in repayment of the loan on or about July 1, 2018. Defendant Lajaunie answered and pled three [3] affirmative defenses.

Now Plaintiff moves for summary judgment against Defendant Lajaunie, striking the answer and affirmative defenses, a default judgment against all non-appearing parties, to appoint a Referee to compute and to amend the caption. Defendant Lajaunie opposes the motion pro se.

In moving for summary judgment, Plaintiff was required to establish prima facie entitlement to judgment as a matter of law though proof of the mortgage, the note, and evidence of Defendants' default in repayment (see U.S. Bank, N.A. v James, 180 A.D.3d 594 [1^st Dept 2020]; Bank of NY v Knowles, 151 A.D.3d 596 [1^st Dept 2017]; Fortress Credit Corp. v Hudson Yards, LLC, 78 A.D.3d 577 [1^st Dept 2010]). Proof supporting a prima facie case on a motion for summary judgment must be in admissible form (see CPLR §3212[b]; Tri-State Loan Acquisitions III, LLC v Litkowski, 172 A.D.3d 780 [1^st Dept 2019]).

In support of a motion for summary judgment on a cause of action for foreclosure, a plaintiff may rely on evidence from persons with personal knowledge of the facts, documents in admissible form and/or persons with knowledge derived from produced admissible records (see eg U.S. Bank N.A. v Moulton, 179 A.D.3d 734, 738 [2d Dept 2020]). No particular set of business records must be proffered, as long as the admissibility requirements of CPLR 4518 [a] are fulfilled and the records evince the facts for which they are relied upon (see eg Citigroup v Kopelowitz, 147 A.D.3d 1014, 1015 [2d Dept 2017]).

Plaintiffs motion was supported with an affidavit from Lauren Benning ("Benning"), a Vice-President-Document Execution of Cenlar FSB ("Cenlar"), the Plaintiffs servicing agent. Benning's affidavit laid a proper foundation for the admission of the records of Cenlar into evidence under CPLR §4518 (see Bank of N.Y. Mellon v Gordon, 171 A.D.3d 197 [2d Dept 2019]). The records of other entities were also admissible since Benning sufficiently established that those records were received from the makers and incorporated into the records Cenlar kept and that it routinely relied upon such documents in its business (see U.S. Bank N.A. v Kropp-Somoza, 191 A.D.3d 918 [2d Dept 2021]). Further, annexed to the motion were records referenced by Benning (cf. Deutsche Bank Natl. Trust Co. v Kirschenbaum, 187 A.D.3d 569 [1^st Dept 2020]).

Benning's affidavit and the referenced documents sufficiently evidenced the note and mortgage. As to the Mortgagor's default, it "is established by (1) an admission made in response to a notice to admit, (2) an affidavit from a person having personal knowledge of the facts, or (3) other evidence in admissible form" (Deutsche Bank Natl. Trust Co. v McGann, 183 A.D.3d 700, 702 [2d Dept 2020]). Here Benning's review of the attached account records demonstrated that the Mortgagor defaulted in repayment under the note (see eg ING Real Estate Fin. (USA) LLC v Park Ave. Hotel Acquisition, LLC, 89 A.D.3d 506 [1^st Dept 2011]).

Plaintiff did not raise an affirmative defense based upon RPAPL §1304 in the answer and claimed to lack sufficient knowledge and information to deny Plaintiffs allegation in the complaint that complied with the statute. However, Lajaunie did rely on same in his opposition to the motion for summary judgment. Failure to raise RPAPL §1304 in the answer did not constitute a waiver of that defense as it may be raised at any time prior to issuance of a judgment (see eg Nationstar Mtge., LLC v Gayle, 191 A.D.3d 1003 [2d Dept 2021]). Nevertheless, Plaintiff addressed the issue in the issue in its moving papers.

Proof of compliance with RPAPL §1304 requires Plaintiff to proffer "sufficient evidence demonstrating the absence of material issues as to its strict compliance with RPAPL 1304" (Aurora Loan Servs., LLC v Weisblum, 85 A.D.3d 95, 106 [2d Dept 2011]). The Court of Appeals has "has long recognized a party can establish that a notice or other document was sent through evidence of actual mailing or-as relevant here-by proof of a sender's routine business practice with respect to the creation, addressing, and mailing of documents of that nature" (Cit Bank N.A. v Schiffman, 36 N.Y.3d 550, 556 [2020][internal citations omitted]). A satisfactory office practice giving rise to the presumption "must be geared so as to ensure the likelihood that [the] notice . . . is always properly addressed and mailed" (Nassau Ins. Co. v Murray, 46 N.Y.2d 828, 830 [1978]) and can be demonstrated via an affiant who explains "among other things, how the notices and envelopes were generated, posted and sealed, as well as how the mail was transmitted to the postal service" (Cit Bank N.A. v Schiffman, supra). An affidavit from the person who performed the actual mailing is not necessary (see Bossuk v Steinberg, 58 N.Y.2d 916, 919 [1983]). Proof from a person with "personal knowledge of the practices utilized by the [sender] at the time of the alleged mailing" is sufficient (Preferred Mut. Ins. Co. v Donnelly, 22 N.Y.3d 1169, 1170 [2014]; see also Citibank, N.A. v Conti-Scheurer, 172 A.D.3d 17, 21 [2d Dept 2019][internal quotation marks omitted]). Fulfillment of this requirement can raise a presumption that the required notice was sent and received by the projected addressee (Cit Bank N.A. v Schiffman, supra).

Regarding the mailing of these notices, in addition to the affidavit of Benning, Plaintiff also submitted the affidavit of Kevin Miller ("Miller"), the CFO of Covius Document Services, LLC fka Walz Group, LLC ("Walz"). Although Benning and Miller claimed the records reviewed showed Plaintiff complied with RPAPL §1304, neither described the procedure used by Walz in any detail (see Freedom Mtge Corp v Granger, 188 A.D.3d 11631165 [2d Dept 2020]; M& T Bank v Biordi, 176 A.D.3d 11941196 [2d Dept 2019; cf. Citimortgage, Inc. v Ustick, 188 A.D.3d 793, 794 [2d Dept 2020]). Benning and Miller did not claim to have personal knowledge of the mailing itself and did not annex any records reviewed to support their assertions that Walz complied with its standard practice (cf. United States Bank Trust, N.A. v Mehl, 195 A.D.3d 1054 [2d Dept 2021]). Further, "although the envelopes accompanying the 90-day notices state 'First-Class Mail, and contain a bar code above a 20-digit number, the plaintiff failed to submit any receipt or corresponding document proving that the notices were actually sent by first-class and certified mail to the defendant more than 90 days prior to the commencement of the action" (see U.S. Bank v Zientek, 192 A.D.3d 1189, 1191 [2d Dept 2021]; US Bank v Hammer, 192 A.D.3d 846, 848-849 [2d Dept 2021]).

Miller's affidavit is also deficient in that no foundation under CPLR §4518 for any of the records he relied on was proffered (see eg Wells Fargo Bank, N.A. v Yesmin, 186 A.D.3d 1761, 1762 [2d Dept 2020]). Further, absent from Miller's affidavit is any evidence demonstrating Walz's authority to act on behalf Plaintiff (see US Bank v Tesoriero, 204 A.D.3d 1066, 1068 [2d Dept 2022]; HSBC Bank USA, NA v Betts, 67 A.D.3d 735 [2d Dept 2009]). Indeed, Miller averred that Walz was engaged by PHH Mortgage Corporation, not Plaintiff.

Accordingly, Plaintiff failed to establish prima facie that it sent pre-foreclosure notices pursuant to RPAPL §1304 of the mortgage.

In opposition to the motion, Lajauine's assertion that Plaintiff lacked standing when the action was commenced was waived by failing to raise that affirmative defense in the answer Dougherty v Rye, 63 N.Y.2d 989, 991 [1984]; Bank of Am., N.A. v Brannon, 156 A.D.3d 1, 2 [1^stDept 2017]). In any event, it is undisputed that Plaintiff, as the original lender, was in direct privity with the Lajauine when the action was commenced and, therefore, unquestionably had standing (see generally Wilmington Sav. Fund Socy., FSB v Matamoro, 200 A.D.3d 79, 90-91 [2d Dept 2021]).

Defendant's argument that the motion was untimely because it was made after a deadline imposed by this Court is without merit as it is within this Court's discretion to accept the motion despite the delay (see U.S. Bank NA v Hadar, 206 A.D.3d 688 [2d Dept 2022]). All the other arguments in opposition were entirely without merit.

As to the branch of the motion to dismiss Defendants' affirmative defenses, CPLR §3211 [b] provides that "[a] party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit". For example, affirmative defenses that are without factual foundation, conclusory or...