THE COURT OF APPEALS AND RPAPL 1306

CIT BANK NA v. Schiffman, 2021 NY Slip Op 1933 - NY: Court of Appeals March 30, 2021:

"The second certified question asks whether RPAPL 1306 requires that a lender's filing include information about all borrowers on a multi-borrower loan. RPAPL 1306 provides that as a "condition precedent" to commencing a foreclosure action, "[e]ach lender, assignee or mortgage loan servicer" file with the superintendent of financial services "within three business days of the mailing of the [section 1304 notice] . . . the information required by subdivision two" (RPAPL 1306[1]). Subdivision two directs, in relevant part, that "[e]ach filing . . . shall be on such form as the superintendent shall prescribe and shall include at a minimum, the name, address, last known telephone number of the borrower, and the amount claimed as due and owing on the mortgage . . .." (RPAPL 1306[2]). In this case, defendants do not dispute that CIT submitted the electronic filing—nor do they dispute that it was made within three days of the purported date of the mailing of the 90-day notices. Instead, defendants contend that the copy of the filing statement supplied by CIT was insufficient to establish compliance because it listed only Pamela Schiffman, and not Jerry Schiffman, as a borrower—arguing that the statute requires a lender to include "up to two, not only one" borrower on a multi-borrower loan. CIT asserts that only one borrower must be listed on an RPAPL 1306 filing in light of the plain language of the statute, which refers to "the borrower" in singular form, and the statute's primary purpose to provide data on defaulting loans to a state agency, which is satisfied by listing one borrower on the filing. We agree with CIT.

Whether the statute requires the lender to list the names of each individual or entity liable on a loan is a matter of statutory interpretation. "[O]ur primary consideration is to ascertain and give effect to the intention of the [l]egislature" (Samiento v World Yacht Inc., 10 NY3d 70, 77-78 [2008], quoting Matter of DaimlerChrysler Corp. v Spitzer, 7 NY3d 653, 660 [2006]). Because "the clearest indicator of legislative intent is the statutory text, the starting point in any case of interpretation must always be the language itself" (Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583 [1998]), with due consideration given to the statutory purpose and history, including the objectives the legislature sought to achieve through its enactment (see Abood v Hospital Ambulance Serv., 30 NY2d 295, 298 [1972]; Matter of Hernandez v Barrios-Paoli, 93 NY2d 781, 786, 788-789 [1999]; Riley v County of Broome, 95 NY2d 455, 463-464 [2000]).

Although the statute does not specify whether information must be supplied concerning each party when there are multiple individuals or entities on a single loan, a plain reading indicates that RPAPL 1306 is satisfied as long as one borrower is listed. The statute states that the filing must contain information about "the borrower," referring to the party in singular form—unlike RPAPL 1304, which references the "borrower, or borrowers." To be sure, words in the singular may generally be interpreted to encompass the plural, if doing so is consistent with the context and legislative intent (see General Construction Law § 35; Matter of Toys "R" Us v Silva, 89 NY2d 411, 421 n 2 [1996]). But it is significant that, despite using the singular and plural form in section 1304, the legislature chose to reference only the singular "borrower" in RPAPL 1306, a closely related statute.

Moreover, the conclusion that information relating to one borrower suffices is consistent with the primary purpose of the filing, which is expressed in the plain language of the statute. RPAPL 1306(4) provides that the data collected via the filing "shall be used by the superintendent [of financial services] exclusively for the purposes of monitoring on a statewide basis the extent of foreclosure filings within this state" with the ultimate purpose to "perform an analysis of loan types" at risk of foreclosure and to "direct[] as appropriate available public and private foreclosure prevention and counseling services to borrowers at risk of foreclosure" (RPAPL 1306[4] [emphasis added]). This provision shows that the principal objective of the filings is to provide statistical data permitting DFS to accurately track and analyze loans at risk of foreclosure and properly allocate foreclosure counseling resources statewide in order to combat the mortgage crisis—an aim also reflected in the legislative history (Governor's Program Bill, 2009 Mem, Bill Jacket, L 2009, ch 507 at 9, 11). This objective is fulfilled by a filing that references at least one borrower. Indeed, it appears that DFS—the agency charged with developing the filing form and database and otherwise implementing the statute—views RPAPL 1306 as requiring the listing of only one borrower (see Pre-foreclosure Information Form FAQs, NYS Department of Financial Services, available at https://www.dfs.ny.gov/apps_and_licensing/mortgage_companies/pre-foreclosure_filing_guide_faqs [last accessed Mar. 19, 2021] [RPAPL 1306 "does not specifically anticipate multiple borrowers" and "do(es) not believe RPAPL § 1306 should be interpreted as requiring the reporting of more than two Borrowers"]).

To be sure, the statutory text permits the agency to share information from the filing with certain housing counseling agencies that coordinate help for distressed borrowers, and DFS may use the information "to facilitate a review of whether the borrower might benefit from counseling or other foreclosure prevention services" (RPAPL 1306[2], [4]). But such ancillary uses of the data do not compel the conclusion that the statute is violated if each liable individual is not listed on the filing. In most instances, an electronic filing containing one borrower's information would not impede these downstream uses of the data. Indeed, in many cases the inclusion of additional information about a second borrower would be redundant—as reflected here, where the borrowers are married, reside at the subject property together, and their interests are aligned (as is evident from their joint representation by the same counsel). To read the statute as defendants urge would give an overly specific interpretation to "borrower," unsupported by the language of the statute or the primary legislative objective—to provide DFS with statewide data on properties at risk of foreclosure through a filing containing information about the loan and the "borrower." Thus, a filing that includes information about only one borrower is sufficient under the statute."