The question in this case is whether a bank complies with the statutory conditions precedent to a foreclosure action when it submits an affidavit suggesting that its practice in the foreclosure action at issue deviated from its usual practice and when its pre-suit filing lists only one of the property owners.
The conditions precedent in this suit are found in New York’s Real Property Actions and Proceedings Law (RPAPL). RPAPL § 1304 prevents a bank from bringing a foreclosure action unless, at least ninety days before suing, it notifies the borrower by first-class and registered or certified mail that the borrower is at risk of default. To create a presumption that the notice was properly mailed, a bank may submit an affidavit from an employee that the employee is familiar with the bank’s standard practice and that the bank’s standard practice is to comply with § 1304. The defendant may rebut that presumption by showing “that routine office practice was not followed.” In addition to that pre-suit notice requirement, RPAPL § 1306 provides a pre-suit filing requirement: within three days of mailing the notice that § 1304 requires, the bank must file with the Superintendent of Financial Services a form listing, among other information, the name, address, and last known phone number of the borrower.
This case involves a mortgage-foreclosure action brought in federal court by CIT Bank against Pamela and Jerry Schiffman, who defaulted on a loan secured by a CIT-held mortgage on their home. CIT sought to establish its compliance with RPAPL’s pre-suit notice and filing provisions through an affidavit by one of its employees. The employee said that it was CIT’s standard practice to create the statutorily required notices “upon default” and that notices were mailed to the Schiffmans “in accordance with CIT’s standard business practice.” The affidavit attached the notices. The affidavit also attached the statutorily required filing with the Superintendent of Financial Services.
The U.S. District Court for the Eastern District of New York granted CIT summary judgment, but the Second Circuit could not decide the case until the New York Court of Appeals answered two certified questions. First, the Second Circuit could not ascertain whether the Schiffmans had rebutted the presumption that CIT complied with § 1304. Although the CIT affidavit said that pre-suit notices were always created “upon default,” the notices attached to the affidavit were dated November 18, 2015–nearly a year after the Schiffmans defaulted. No New York case squarely addressed whether such a discrepancy rebuts the presumption. Second, the court could not decide whether CIT’s pre-suit filing complied with RPAPL § 1306. Section 1306 requires the bank to list “the name” of the borrower, and CIT’s notice listed only Pamela Schiffman, not Jerry. No New York case established whether the failure to list all borrowers renders the filing defective.
The Court of Appeals accepted the certified questions.
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