U.S. Bank v. Dejesus

2022 NY Slip Op 50461(U)

U.S. Bank National Association, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS TRUSTEE FOR THE RMAC TRUST, SERIES 2016-CTT, Plaintiff, v. Saturnino DeJesus, DOREEN DEJESUS, FIRST EQUITY CARD CORPORATION, Defendants.

Index No. 500487/2019

Supreme Court, Putnam County

June 1, 2022

Unpublished Opinion

HON GINA C. CAPONE, J.S.C.

The following papers, numbered 1-12, were read and considered on the motion of the Defendants Saturnino DeJesus and Doreen DeJesus which seeks leave to renew the Defendants' cross motion for summary judgment (Mot. Seq. 3) pursuant to CPLR 2221(e) and, upon renewal, an order vacating this Court's September 21, 2021, order, and granting the Defendants' renewed motion for summary judgment, dismissing the complaint.

PAPERS NUMBERED

Notice of Motion/ Statement of Material Facts/ Memorandum of Law -7

Affidavit of Saturnino DeJesus and Doreen DeJesus/ Exhibits A-C

Attorney Affirmation in Opposition/ Statement of Material Facts 8-11

Exhibits 1-2

Memorandum of Law in Reply 12

US Bank National Association, Not in Its Individual Capacity but Solely as Trustee for the RMAC Trust, Series 2016-CTT (hereinafter U.S. Bank) commenced this mortgage foreclosure action against, among others, the Defendants Saturnino DeJesus and Doreen DeJesus (hereinafter the Defendants) to foreclose upon property located at 129 Fairmont Road, Carmel NY 10541 (hereinafter the subject premises) on or about April 3, 2019. The Defendants interposed an answer in which they asserted various affirmative defenses, including, inter alia that the Plaintiff failed to comply with the notice requirements of RPAPL § 1304. The Defendants also asserted six counterclaims against U.S. Bank in their answer. Thereafter, the Plaintiff moved for leave to serve and file a supplemental summons, amended complaint and amended certificate of merit, which motion was granted by Decision and Order of this Court (Zugibe, J.), dated November 12 2019. Upon service of the supplemental summons, amended complaint, and amended certificate of merit, the Defendants filed an amended answer with counterclaims that was substantively similar to their original answer.

The Plaintiff thereafter moved, inter alia, for summary judgment on the complaint and for an order of reference and the Defendants cross-moved for summary judgment and dismissal the action insofar as asserted against them. Both the motion and cross motion were denied by Decision and Order of this Court dated September 21, 2021. As is relevant to this motion for renewal, this Court found that the Defendants had not met their prima facie burden of establishing that the Plaintiff had failed to strictly comply with RPAPL § 1304 and therefore, that branch of the cross motion which sought dismissal on that grounds was denied.

The Defendants' Motion to Renew

By notice of motion, filed February 22, 2022, the Defendants have now moved for leave to renew their prior motion for summary judgment in light of the Second Department's decision of Bank of America v Kessler (202 A.D.3d 10 [2d Dept 2021]), which was handed down December 15, 2021. Counsel for the Defendants argues that, in light of the holding of Kessler, the notices in this case were not compliant with RPAPL § 1304(2), in that the notices contained additional language and notices extraneous to the required statutory language. Accordingly, pursuant to Kessler, as well as subsequent decisional law from the Second Department interpreting and applying Kessler, the Defendants' motion for leave to renew should be granted and, upon renewal, the Defendants' cross motion for summary judgment dismissing the complaint insofar as asserted against them must be granted.

In opposition, counsel for the Plaintiff contends that, while the Second Department has held in Kessler that the inclusion of any language in addition to the language of RPAPL § 1304(1) violated RPAPL § 1304(2), the Second Department has not addressed whether federal

decisional or statutory law preempts RPAPL § 1304, nor has the Second Department addressed how RPAPL § 1304 should be construed given that it is a derogation of the common law right to foreclose a mortgage. Counsel goes on to assert that it was an error of the Appellate Division in Kessler to hold that the statutory required notices were to include only the language in RPAPL § 1304(1) and that the ruling by the Court in Kessler runs afoul of the Supremacy Clause because compliance with RPAPL § 1304(2), FDCPA, and the Bankruptcy Code is impossible. Counsel contends that, because the Appellate Division's interpretation of RPAPL § 1304 in Kessler failed to address the Supremacy Clause or the conflict between RPAPL § 1304(2), FDCPA, and the Bankruptcy Code, the Defendants' motion should be denied.

In reply, counsel for the Defendants note that, while Plaintiff's counsel may disagree with the propriety of the holding of Kessler, the law of the Second Department is binding upon these parties and this Court unless and until the Court of Appeals rules otherwise. Moreover, at least with respect to some of the Plaintiff's arguments with respect to Kessler the Second Department has considered the Plaintiff's contentions and rejected them. Accordingly, the Defendants' motion should be granted and, upon renewal the Defendants' cross motion for summary judgment should be granted and the complaint dismissed insofar as asserted against the Defendants.

Leave to Renew Pursuant to CPLR 2221(e)(2)

As is relevant to this motion, a motion for leave to renew "shall demonstrate that there has been a change in the law that would change the prior determination" (CPLR 2221[e][2]). "A clarification of the decisional law is a sufficient change in the law to support renewal" (Dinallo v DAL Elec., 60 A.D.3d 620 [2d Dept 2009]; Roundabout Theatre Co. v Tishman Realty & Constr. Co., 302 A.D.2d 272 [2d Dept 2003]). "[A] motion for leave to renew based upon a change in the law must be made prior to the entry of a final judgment or before the time to appeal has expired" (Dinallo v DAL Elec., 60 A.D.3d at 621).

Here, there is no dispute that the motion for leave to renew has been timely made, as final judgment has not been issued in this matter. Moreover, in opposing the motion, counsel for the Plaintiff has declined to raise any arguments contesting the propriety of seeking leave to renew at this juncture and, instead, has only asserted arguments addressing the merits of the underlying cross-motion for summary judgment upon renewal. Moreover, the law is well settled that a defendant can raise the argument that the plaintiff did not strictly comply with RPAPL § 1304 at any time during the action (see HSBC Bank USA, N.A. v Cardona, 193 A.D.3d 696, 698 [2d Dept 2021]).

RPAPL § 1304 (1) provides that "at least ninety days before a lender, an assignee or a mortgage loan servicer commences legal action against the borrower, ... including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give notice to the borrower." "The statute further provides the required content for the notice and provides that the notice must be sent by registered or certified mail and also by first-class mail to the last known address of the borrower" (Citibank, N.A. v Conti-Scheurer, 172 A.D.3d 17, 20 [2d Dept 2019]) and" in a separate envelope from any other mailing or notice" (RPAPL § 1304[2]). Strict compliance with RPAPL § 1304 notice to the borrower is a condition precedent to the commencement of a foreclosure action (see Citibank, N.A. v Conti-Scheurer, 172 A.D.3d at 20).

On December 15, 2021, in Bank of America, N.A. v Kessler (202 A.D.3d 10 [2d Dept 2021]), the Appellate Division, Second Department held, in a matter of first impression, that the "inclusion of any material in the separate envelope sent to the borrower under RPAPL § 1304 that is not expressly delineated in [the statute] constitutes a violation of the separate envelope requirement of RPAPL § 1304(2)" (Bank of America, N.A. v Kessler, 202 A.D.3d at 14 [emphasis added]).

In the months since Kessler was handed down, the Second Department has had the opportunity to apply its strict compliance standard across a number of cases and has consistently adhered to the bright line standard articulated in Kessler without exception (see Wells Fargo v Bedell, __A.D.3d__, 2022 NY Slip Op 03413 [2d Dept, May 25, 2022][inclusion of separate notice language pertaining to the rights of a debtor in military service and a debtor in bankruptcy violated separate envelope statutory requirement]; US Bank v Drakakis, __A.D.3d__, 2022 NY Slip Op 03022 [2d Dept, May 4, 2022][inclusion of document titled "Consumer Notice Pursuant to 15 USC Section 1692[G]" violated the "separate envelope" mandate of RPAPL § 1304(2)]; HSBC Bank v DiBenedetti, __A.D.3d__, 2022 NY Slip Op 02983 [2d Dept May 4, 2022][Plaintiff could not establish that it strictly complied with RPAPL § 1304 where additional material was sent in the same envelope as the 90-day notice]; Bank of New York Mellon v Govan, 204 A.D.3d 878 [2d Dept 2022][inclusion of separate notice concerning the rights of a debtor in bankruptcy and military service violates the separate envelope mandate of RPAPL § 1304(2)]; HSBC Bank USA, National Association v Jahaly, 204 A.D.3d 648 [2d Dept 2022][inclusion of additional notices not contemplated by RPAPL § 1304 constitute failure to strictly comply with RPAPL § 1304]; US Bank National Association v Hinds, 203 A.D.3d 1210 [2d Dept 2022][same]; Deutsche Bank v Bancic, 203 A.D.3d 1130 [2d Dept 2022][additional notices and verbiage referencing bankruptcy and the rights of military servicemembers]; Deutsche Bank v Salva, 203 A.D.3d 700 [2d Dept 2022][inclusion of "Important Disclosures" regarding bankruptcy and...