FORECLOSURE - RPAPL 1304 DEFENSE FAILS AS RECEIPT IS NOT REQUIRED PROOF

Deutsche Bank Nat'l. Trust Co. v. Jimenez, NYLJ 12/20/18, Date filed: 2018-11-30, Court: Supreme Court, Suffolk County Judge: Justice Robert Quinlan, Case Number: 16236/2011:

"Before further discussion the court notes a flaw in defendants’ motion that would preclude dismissal of the action against both defendants on the basis of the mailings were not made, even if the court accepted many of the arguments for dismissal made by defendant Kevin Jimenez, based upon the alleged failure of plaintiff to establish the mailings not only of the RPAPL §1304 notices, but also the default notice required by the mortgage. The flaw is that only Mr. Jimenez provided an affidavit stating that he did not receive the RPAPL §1304 mailings. Although he states therein that “We both, however, deny ever receiving these 90 day notices,” that statement as to his wife is inadmissable hearsay. If the court was to accept his statement, and if the court found that plaintiff’s submissions in opposition were not sufficient to at least raise issues of fact as to the mailings, and if the court was to apply the line of cases following Citimortgage v. Pappas, 147 AD3d 900 (2d Dept 2017), the court would only dismiss the action as to him. Without a similar denial by affidavit submitted by Debra Jimenez, even in the light most favorable to defendants, the action could not be dismissed as to her. There is no argument made by defendants that if the action was dismissed against Mr. Jimenez, then the action against Ms. Jimenez must be dismissed because a necessary party is no longer joined. The court will not act sua sponte in that regard.

Unlike the line of cases emanating from Citimortgage v. Pappas, to establish the mailing of the RPAPL §1304 notices, plaintiff has submitted an affidavit from Richard Schwiner, an employee of Ocwen Financial Corporation. His affidavit establishes the relationship between Ocwen Financial Corporation and Ocwen Loan Servicing, LLC (“Ocwen”), a limited liability company of which Ocwen Financial Corporation is the sole member. Ocwen is the present servicer for plaintiff, having taken over those responsibilities from GMAC Mortgage, LLC (“GMACM”), the prior servicer in 2013.

The RPAPL §1304 notices were allegedly mailed by GMACM on January 6, 2011, more than ninety days prior to the filing of this action, to defendants at the property address. Through his affidavit Mr. Schwiner establishes his ability to testify as to Ocwen’s business records pursuant to the requirements of CPLR 4518 (a). Mr. Schwiner’s affidavit and the submissions establish that Ocwen assumed servicing responsibilities for plaintiff from GMACM in 2013. Although plaintiff argues that the incorporation by Ocwen of GMACM’s business records into its own upon assuming the servicing of the loan is sufficient to establish GMACM’s business records as Ocwen’s business records, and as such Mr. Schwiner is able to testify to them as Ocwen’s records pursuant to CPLR 4518, the court is compelled to disagree. The Second Department has long and consistently held that the mere filing of papers received from other entities which are retained in the recipient’s regular course of business do not qualify those papers as business records of the recipient so as to meet the requirements of CPLR 4518 as an exception to the rule against hearsay (see Standard Textile Company, Inc. v. National Equipment Rental, Ltd., 80 AD2d 911 [2d Dept 1981]). If an employee of plaintiff’s present servicer attempts to testify concerning business records of a prior servicer, that affiant must establish his/her ability to do so by showing personal knowledge and familiarity with the record keeping practices and procedures of that prior entity, (see Arch Bay Holding, LLC v. Albanese, 146 AD3d 849 [2d Dept 2017]; Aurora Loan Svcs, LLC v. Ang, 150 AD3d 649 [2d Dept 2017]; Wells Fargo Bank. N.A. v. Talley, 153 AD3d 583 [2d Dept 2017]; Bank of New York Mellon v. Alli, 156 AD3d 957 [2d Dept 2017]; Fulton Holding Group, LLC v. Lindoff, 165 AD3d 1053 [2d Dept 2018]).

But Mr. Schwiner also attests to the fact that prior to his employment at Ocwen, he was employed by GMACM, and although not in the same detail as to Ocwen’s records keeping practices, he sufficiently establishes his familiarity with GMACM’s business practices and procedures to establish his ability to testify to GMACM’s records pursuant to CPLR 4518 (a). His affidavit presents in detail the standard office practices and procedures used by GMACM to ensure and establish the mailings of the RPAPL §1304 notices to defendants which are reflected in their records. To establish mailing, plaintiff may provide proof of actual mailing or a description of its office’s practice and procedure for mailing (see New York & Presbyt. Hosp. v. Allstate Ins. Co. (29 AD3d 547 [2d Dept 2006]; Citibank, N.A. v. Wood, 150 AD3d 813 [2d Dept 2017]; Citimortgage Inc. v. Banks 155 AD3d 936 [2d Dept 2017]). Business records that detail a standard of office practice or procedure designed to ensure that items are properly addressed and mailed are sufficient to establish mailing (see Vivane Etienne Med. Care, P.C. v. Country Wide Ins. Co., 25 NY3d 498 [2015]; Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679 [2d Dept 2001]); Citimortgage v. Banks, 155 AD3d 936 [2d Dept 2017]; U.S. Bank, N.A. v. Sims, 162 AD3d 825 [2d Dept 2018]; Deutsche Bank Natl. Trust Co. v. Heitner, 165 AD3d 1038 [2d Dept 2018]). Internal computer records of a sender, supplied by an affiant able to testify as to sender’s business records pursuant to CPLR 4518 (a), have been held sufficient to demonstrate that the notices were indeed mailed to defendants (see One West Bank, FSB v. Simpson, 148 AD3d 920 [2d Dept 2017]; Citimortgage, Inc. v. Wallach, 163 AD3d 520 [2d Dept 2018]). By his affidavit testimony Mr. Schwiner is able to provide proof of his review of the both Ocwen’s records and those records of GMACM contained in Ocwen’s records, a description of computer entries made upon mailing by GMACM and GMACM’s practices to ensure proper mailing of the RPAPL §1304 notices to defendants at the property address.

Mr. Jimenez’ protestation that he did not receive them is to no avail, as the statutory condition precedent is not to establish receipt by defendants, but only their mailing be established, which Mr. Schwiner’s affidavit does. That portion of defendants’ motion seeking dismissal of the action because plaintiff cannot establish the mailing of the RPAPL §1304 notices is denied."