Supreme Court, Suffolk County, July 26, 2023

Richland & Falkowski, PLLC, Long Island City, for plaintiff.

Justin F. Pane, P.C., Bohemia, for Richard Weber and others, defendants.

It is ordered that plaintiff's motion for summary judgment and an order of reference is granted and defendants' cross-motion to dismiss is denied.

West Coast Servicing Inc. (plaintiff), by its attorneys, moves this court in this residential foreclosure action for summary judgment (mot 002). Richard Weber, Frances Weber also known as Frances Kocivar, and Jeremy Kocivar as Trustee of the Weber Family Revocable Trust (defendants), by their attorneys, filed opposition to plaintiff's summary judgment motion and cross-moved to dismiss the case (mot 003). The cross-motion seeks an order (I) dismissing the amended complaint for failure to strictly comply with RPAPL 1304; and (II) awarding defendants damages on their second counterclaim.

First, defendants argue that plaintiff's summary judgment motion must be denied and the foreclosure action dismissed for plaintiff's failure to strictly comply with RPAPL 1304. Defendants argue that the (i) 90-day notice was addressed to both Richard and Frances Weber and this alone mandates dismissal; and (ii) 90-day notice was jointly "noticed, addressed, and mailed" to defendants which also requires dismissal.

This court is guided by the Court of Appeals decision in Bank of Am., N.A. v Kessler (39 NY3d 317, 326 [2023]) when it rejected the Second Department's "bright-line rule," by holding that "to the extent there is any ambiguity about how to interpret the statute, application of a bright-line rule would contravene the legislative purpose. RPAPL 1304 is a remedial statute that should be read broadly to help borrowers avoid foreclosure." The Court held that unlike its ruling in Freedom Mtge. Corp. v Engel (37 NY3d 1 [2021]), a bright-line rule would not be appropriate as "[d]etermining whether additional language in a section 1304 notice is permissible requires no examination of intent or extrinsic evidence, but rather an objective facial determination of the language's relevance, truth,{**80 Misc 3d at 1008} falsity, or potential to mislead or confuse." (Kessler, 39 NY3d at 327.) The Court rather relied on the "workable rule" standard as set forth in CIT Bank N.A. v Schiffman (36 NY3d 550 [2021]). (Kessler at 328.)

Here, inclusion of both spouses' names on the section 1304 notice is neither false nor misleading. Neither Richard Weber nor Frances Weber also known as Frances Kocivar (collectively the Webers) provide affidavits attesting to the confusion that befell them when they received the section 1304 notice addressed to both spouses. Neither exclaimed that because the section 1304 notice was addressed to both rather than each it caused them pause in reaching out to the lender to avoid foreclosure—the statute's intent.

The Webers also argue that this foreclosure action must be dismissed because they only received one envelope that contained one letter. Their argument is belied by the Webers' own affidavit. At paragraph 5 (NY St Cts Elec Filing [NYSCEF] Doc No. 129) the Webers swear that they "carefully reviewed the 90 day notice." They go further and swear that "[p]laintiff sent us one jointly noticed 90-day notice" that is attached to plaintiff's moving papers at document number 113. (Emphasis added.) It is clear however that the notice was sent not by plaintiff, as sworn to by the Webers, but rather the letterhead and salutation are from "The Margolin & Weinreb Law Group, LLP" not the plaintiff—West Coast Servicing Inc. What is clear is that the Webers' sworn testimony relates not to the 90-day notice that they refer to in their affidavit (i.e. NYSCEF Doc No. 113).[*2]

Moreover, the court finds the proper mailing of the section 1304 notice is corroborated by Sandy J. Stolar, Esq.'s contemporaneous affidavit of mailing evidencing that she mailed two different USPS certified mailings, one for each borrower.

As for the mailings by regular mail, Ms. Stolar's affidavit, notarized the same date that the 1304 notice is dated, swears that she served the

"90-day pre-foreclosure notice by depositing a true copy by certified mail return receipt requested and first-class mail thereof in a post-paid wrapper, in an official United States Postal depository under the care and custody of the United States Postal Service within the State of New York.

"Each of the notices were addressed to each of the following persons at the last known address set{**80 Misc 3d at 1009} forth after each name:

"Frances Weber

"5 Constance Court

"East Setauket, NY 11733

"Richard Weber

"5 Constance Court

"East Setauket, NY 11733." (Emphasis added.)

Finally, plaintiff further corroborates the separate mailings by including two separate proof of filing statements with the New York State Department of Financial Services that confirms on May 7, 2020 (the same date of the section 1304 notice and Ms. Stolar's affidavit of mailing), a section 1304 notice was sent to Richard Weber and Frances Weber. (NYSCEF Doc No. 113.)

Based upon the Court of Appeals decision in Bank of Am., N.A. v Kessler, the Webers' own affidavit (executed more than three years after the mailing), Ms. Stolar's contemporaneously prepared affidavit of mailing, and the two proof of filing statements, there is no basis to dismiss this foreclosure action because of any defect regarding plaintiff's obligation to satisfy RPAPL 1304.

Second, defendants argue that they are entitled to $12,000 in damages for plaintiff's noncompliance with 15 USC § 1641 (g) (1). However, defendants fail to make a prima facie showing of noncompliance. Section 1641 (g) (1) of title 15 of the United States Code requires plaintiff to notify the borrower that a loan was sold "not later than 30 days after the date on which a mortgage loan is sold or otherwise transferred." The statute of limitations for a private action for damages under TILA (Truth in Lending Act) is one year from the date of the occurrence. (15 USC § 1640 [e].) Here, the "occurrence" is when the loan was sold—not when the assignor executed the assignment.

"[B]ased on its plain language, Section 1641 (g)'s disclosure obligation is triggered only when ownership of the 'mortgage loan' or 'debt' itself is transferred, not when the instrument securing the debt (that is, the mortgage) is transferred." (Kuhl v U.S. Bank Trust N.A., 2022 WL 4088014, *5, 2022 US Dist LEXIS 160602, *11 [SD NY, Sept. 6, 2022, No. 19 CV 8403 (VB)].) "[A]n assignment of a note and mortgage need not be in writing and can be effectuated by physical delivery." (Bank of N.Y. v Silverberg, 86 AD3d 274, 280 [2d Dept 2011].) "[O]nce a promissory note is tendered to and accepted by an assignee,{**80 Misc 3d at 1010}the mortgage passes as an incident to the note." (Id. at 280.) "[A]ssignment of the debt [*3]carries with it the security therefor, even though such security be not formally transferred in writing." (Id.)

In support of their counterclaim, defendants simply point to the date that the assignments of mortgage were executed and conclude that since three of the assignments of mortgage were dated within one year of the complaint, then they have met their burden. Simply citing the date of the assignment of mortgage does not evidence the date that a loan was sold. Defendants fail to provide evidence of a purchase or sale agreement proving the date that each of the transferees acquired the loan. As such, defendants have failed to allege a plausible claim under 15 USC § 1641 (g).

The court notes that defendants withdrew their remaining affirmative defenses and counterclaims. (See NYSCEF Doc No. 128 ¶ 8.)

Based upon the foregoing, plaintiff's motion for summary judgment (mot seq 002) is granted and defendants' cross-motion to dismiss (mot seq 003) is denied. An order of reference will be entered simultaneously herein.