On the heels of its landmark Freedom Mortgage v. Engel decision, the New York Court of Appeals, responding to two certified questions from the U.S. Court of Appeals for the Second Circuit, took the opportunity to further clarify New York foreclosure law. On March 30, 2021, the high court answered the open questions of (1) what evidentiary showing a borrower must make to rebut a lender’s proof of a standard office procedure to establish compliance with RPAPL 1304’s notice requirement, and (2) whether lenders must provide information for all borrowers in RPAPL 1306 proof of filing statements. With respect to the first question, the court concluded, as lenders have long argued, that proof of a material deviation from a lender’s routine office practice, which calls into question whether an RPAPL 1304 90-day notice was properly mailed, must be made. As for the second question, the court concluded, in another win for lenders, that lenders must furnish information for only one borrower in RPAPL 1306 proof of filing statements. The high court’s answers to the Second Circuit’s questions not only resolve open questions concerning RPAPL 1304 and 1306, but also, perhaps more importantly, indicate that the high court is committed to both clarifying and rationalizing foreclosure law in New York.

The facts in CIT Bank N.A. v. Schiffman, 2021 NY Slip Op 01933, are straightforward. The plaintiff bank commenced a foreclosure action against the defendant borrowers, a husband and wife, in the U.S. District Court for the Eastern District of New York. The borrowers answered the complaint asserting, among other defenses, that the bank failed to comply with RPAPL 1304 and 1306. The bank moved for summary judgment arguing that it complied with RPAPL 1304 and 1306 by both mailing 90-day notices in accordance with RPAPL 1304 and timely filing a proof of filing statement with the Department of Financial Services (DFS) pursuant to RPAPL 1306. To demonstrate compliance with RPAPL 1304, the bank submitted an affidavit of an employee that attested to her personal knowledge of the bank’s routine office practice relating to the generation, addressing and mailing of 90-day notices, which she described in her affidavit. Copies of the notices and envelopes were attached. As relevant to the first certified question, the employee stated in her affidavit that as part of the bank’s standard practice, envelopes for 90-day notices are “created upon default.” A copy of the RPAPL 1306 proof of filing statement was also attached to the affidavit. However, the statement provided information for only one borrower. The borrowers opposed the motion, denying receipt of the 90-day notices and arguing that the affidavit was insufficient to create a presumption of receipt. As for RPAPL 1306, the borrowers argued that the proof of filing statement was insufficient because information for only one borrower was provided. The District Court granted the bank’s motion concluding that it complied with RPAPL 1304 and 1306. The borrowers appealed.