On April 1, 2021, the Supreme Court of the United States issued its highly anticipated decision in the Facebook Inc. v. Duguid matter.  In a unanimous decision delivered by Justice Sonia Sotomayor, the Supreme Court addressed a hotly debated issue of statutory construction regarding the Telephone Consumer Protection Act (“TCPA”), and reversed the Court of Appeals for the Ninth Circuit’s decision holding that Facebook, Inc. (“Facebook”) used a text-message notification system that met the TCPA’s definition of an “autodialer.”  In short, the Court held that Facebook’s notification equipment did not meet the definition of an autodialer because it does not use a random or sequential number generator.  The Court rejected Plaintiff Noah Duguid’s more broad interpretation of the statute, noting that if an autodialer were any device that had the capacity to dial random numbers, the TCPA would encompass any equipment that stores and dials telephone numbers, such as a modern smartphone.

Continue Reading SCOTUS Issues Anticipated Decision in Facebook, Inc. v. Duguid And Unanimously Reverses Ninth Circuit, Holding Facebook’s Text Notification System Did Not Meet the TCPA’s Definition of An Autodialer Because It Did Not Use A Random Or Sequential Number Generator

CPLR 3215(c) requires a plaintiff to take proceedings for entry of judgment within one year of default or face dismissal of the action as abandoned, except where sufficient cause is shown why the complaint should not be dismissed.  The purpose of this provision is to prevent a plaintiff from taking advantage of a defendant’s default where the plaintiff has also been guilty of inaction.  See Myers v. Slutsky, 139 A.D.3d 2d 709 (2d Dep’t 2012).

Continue Reading To Forgive or Not to Forgive a CPLR 3215(c) Violation in a Residential Mortgage Foreclosure

Prior to the enactment of Real Property Actions and Proceeding Law (“RPAPL”) § 1302-a, defendants waived their affirmative defense of standing in a residential foreclosure action by failing to raise that defense in an answer or a pre-answer motion to dismiss.  See, e.g., JP Morgan Chase Bank, Nat’l Ass’n v. Butler, 129 A.D.3d 777, 780 (2d Dep’t 2015).  However, since the enactment of RPAPL § 1302-a, which became effective on December 23, 2019, defendants can raise a standing defense at any time in a residential foreclosure action.  This issue arises both where the borrower defaulted in the foreclosure action and seeks to vacate that default to assert a standing defense and where an answer was filed but no standing defense was initially asserted. The Second Department has recently issued decisions addressing both the interplay between the new statute and a borrower’s default in answering and an answering defendant’s ability to amend to assert a standing defense after summary judgment was granted. In addition, the Court of Appeals has recently clarified application of the statute in the context of an appeal of an order entered prior to the enactment of RPAPL § 1302-a.

Continue Reading The Appellate Courts Look at the Waiver of Standing Defenses post-RPAPL § 1302-a

In JPMorgan Chase Bank, N.A. v Caliguri, 36 N.Y.3d 953 (2020), the Court of Appeals recently clarified how a lender establishes standing in a foreclosure action.  Prior to this recent pronouncement, the standard set by that Court had been that a plaintiff evidences standing to foreclose by demonstrating that it possessed the original note agreement at commencement of the foreclosure action.  Aurora Loan Servs., LLC. v. Taylor, 25 N.Y.3d 355 (2015).  In Aurora, the lender demonstrated standing by averring, in an affidavit in support of a summary judgment motion, that it possessed the original note since prior to commencement, while attaching accompanying business records supporting such testimony, including the loan servicing agreement and records demonstrating that the note had been transferred to the plaintiff.  Id., at 356.  The Court in Aurora further held that a plaintiff need not demonstrate possession of the original mortgage at the time of commencement as the mortgage follows the note.  Nor was it necessary for a foreclosing plaintiff to detail how it came into possession of the original note, only to demonstrate possession of such at the time of commencement.

Continue Reading Recent Developments in Demonstrating Standing to Foreclose in New York as the Court of Appeals Weighs Back In

The Appellate Division, Third Department recently issued a decision in Citimortgage, Inc. v Ramirez, ___AD3d___, 2020 NY Slip Op 07970 (2020) (“Ramirez“), concerning the plaintiff lender’s appeal from the Supreme Court’s dismissal of an action for recovery on a note, where plaintiff’s two prior foreclosures had already been dismissed. In its decision reversing dismissal, the Third Department held that when a lender accelerates a mortgage debt and elects to commence a foreclosure of the mortgage, the six-year statute of limitations on any claim by the lender for money damages on the note is tolled during such foreclosure(s), at least to the extent the foreclosures were themselves timely when filed.

Continue Reading New York Appellate Divisions Reach Different Conclusions as to Whether Actions on the Note May be Maintained once the Statute of Limitations Bars Enforcement of the Mortgage, Leaving the Issue Ripe for the Court of Appeals

In a case of appellate first impression in New York, the Appellate Division, Second Department, held that a mortgagor cannot make a Real Property Actions and Proceedings Law (“RPAPL”) 1304 argument in opposition to a motion for Judgment of Foreclosure and Sale – even if that was pled as a defense in the mortgagor’s Answer – where the prior summary judgment motion was unopposed.

In Wells Fargo Bank, N.A. v. Harrigan,[1] after the lender commenced a foreclosure action in Suffolk County against the mortgagor, the mortgagor filed an Answer, containing an RPAPL 1304 compliance defense, specifically that a 90-day notice was not properly mailed.  The lender moved for summary judgment and the mortgagor failed to oppose that motion, apparently because of some unspecified law office failure.  Thereafter, the lender moved for Judgment of Foreclosure and Sale and the mortgagor cross-moved for vacatur of the summary judgment order and dismissal of the action based on the lender’s purported failure to demonstrate RPAPL 1304 compliance.

Continue Reading RPAPL Arguments May be Waived: Case of Appellate First Impression

In Curiale v. Hyundai Capital America, Inc., No. A-5565-18T3 (N.J. Sup. Ct. App. Div. Apr. 27, 2020), a two-judge panel of the New Jersey Superior Court, Appellate Division, reversed a trial court order denying Defendant Hyundai Capital America, Inc.’s (“Defendant”) application to compel arbitration against Plaintiffs Christopher D. Curiale and Jerome C. Curiale (“Plaintiffs”).  The Appellate Division held that the Defendant, as an assignee of a lease, could enforce an arbitration provision and class-action waiver contained in the motor vehicle retail order that was executed by Plaintiffs and the dealership.  The Appellate Division further held that the arbitration provision and class waiver were not ambiguous.

Continue Reading Auto Leasing Companies Can Enforce Arbitration Agreements from the Dealership’s Retail Order Forms

The Second Circuit of United States Court of Appeals in Duran v. La boom Disco, Inc. (“Duran”), broke from the majority position from the Third, Seventh, and Eleventh Circuits and found that a dialing system that called from a stored list of numbers qualified as an automatic telephone dialing system (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”). In doing so, the Second Circuit joins the Ninth Circuit in adopting a broad interpretation of what constitutes as an ATDS.

Continue Reading The Second Circuit adds to the Appellate split on the Definition of an ATDS under the TCPA

As the sheer impact of COVID-19 continues to unfold, federal agencies are implementing policies across the country in an effort to lessen the financial burden on Americans.  On March 18, 2020, the U.S. Department of Housing and Urban Development (“HUD”) authorized the Federal Housing Administration to place an immediate 60-day suspension on all evictions and foreclosures.  HUD Secretary, Ben Carson, is hopeful this moratorium “will provide homeowners with some peace of mind during these trying times[.]”

Continue Reading How COVID-19 is Impacting Mortgage Lenders

For institutional lenders, the filing of any foreclosure action requires careful navigation and compliance with various state and federal laws.  Notice to the mortgagor, for instance, is a prerequisite to any foreclosure; however, what if the property is subject to a residential lease? What obligation does a mortgagee then have to a third-party tenant?  For issues like these, states generally have their own specific tenant foreclosure notice requirements.  In many states, notice laws are drafted to mirror the federal provisions provided under the Protecting Tenants at Foreclosure Act (“PTFA”).

Introduced in 2009, the PTFA was originally enacted under Title VII of the Helping Families Save Their Homes Act.  The PTFA included a sunset clause, but on May 24 2018, the Trump Administration signed its permanent extension into law.  In addition to serving a notice on the mortgagor, the PTFA mandates that notices to foreclose must also be served on all tenants.  Generally, once the mortgagee issues a notice to foreclose, the PTFA permits tenants to stay in the foreclosed property for either: (1) 90-days from the date of the notice or (2) the remainder of their lease term, whichever is greater.  Significantly, however, the PTFA’s protections only apply to tenants with bona fide tenancies.

Continue Reading The Often Overlooked Federal Protections to Tenants in Foreclosure Actions