Appelllate judges on Sept. 25 quizzed attorneys in a Long Island foreclosure about the weight the judges should give a lower court finding that court administrators overstepped their powers in requiring lenders’ attorneys to vouch for the accuracy of documents they file.
Suffolk County Supreme Court Justice Thomas Whelan (See Profile) reached that conclusion in LaSalle Bank v. Pace, 2011-03219. But the Appellate Division, Second Department, could decide the appeal in the foreclosure at issue on other grounds.
Chief Judge Jonathan Lippman (See Profile) instituted the affirmation requirement in reaction to the national “robosigning” scandal, which required foreclosure attorneys to attest to the accuracy of their court documents (NYLJ, Oct. 21, 2010).
In Pace—launched before the affirmation was required—Whelan approved an order of reference after James and Linda Pace defaulted on a $1.3 million mortgage for their Hampton Bays home (NYLJ, March 9, 2011).
LaSalle Bank submitted the affirmation with court papers supporting their earlier summary judgment motion after the Paces raised as a defense that no affirmation had been submitted.
Whelan, in granting summary judgment to LaSalle, said the affirmation was not too late but observed that he was not persuaded the affirmation rule was a “permissible exercise” of the chief administrative judge’s rule-making powers.
Rather than being an “administrative” rule promoting efficiency in the courts, Whelan said the requirement wrongly imposed additional substantive requirements on the plaintiffs without legislative delegation permitting the action.
The Paces appealed the summary judgment motion, saying the requirement was within the bounds of court administrators’ powers, meant to ensure “smooth operation” of foreclosures. They argued in the Second Department that Whelan’s decision disposed of a rule “instilled to ensure that the documents submitted by Respondent in taking their home are truthful.”
They complained that they had not been given the chance to challenge the affirmation, saying that if it had been filed sooner, they could have “argued that the submitted documents were not truthful and, at a minimum, that validity of the documents left an issue of fact precluding summary judgment.”
In court papers, LaSalle Bank characterized Whelan’s view of the affirmation as “dicta” that was not needed for his summary judgment ruling. The lender said when Whelan discussed the affirmation’s validity, he did so only after saying the affirmation was not required at the beginning of the action.
As a result, it argued, any question raised by the Paces about constitutionality of the rule was “a red herring” with “absolutely no bearing on LaSalle’s entitlement to summary judgment, whatsoever.”
Addressing the Second Department panel, Christopher Thompson of West Islip, counsel to the Paces, said that Whelan’s negative comments about the rule was an integral part of his reasoning and the judge viewed his negative comments as “the law.”
But Justice Mark Dillon (See Profile) responded that dicta only becomes law after it has been cited by other courts.
“It’s the later case that becomes the law,” he said.
The New York State Attorney General’s Office intervened in the matter following Whelan’s February 2011 decision. Justice John Leventhal (See Profile) asked Assistant Solicitor General Laura Etlinger if the holding was “dicta.”
See the brief of the attorney general.
Etlinger responded that the office took no position on whether Whelan’s view was dicta, but urged the panel to deem the affirmation constitutional if it reached the issue.
In defending the affirmation’s validity, the office argued in its brief that “requiring plaintiffs to confirm the accuracy of the underlying foreclosure facts and documents during the initial stages of the litigation promotes judicial efficiency.”
Leventhal pointed out that Thompson still could have questioned the underlying documents before the affirmation was submitted.
Thompson said he did that in his initial opposition to the summary judgment motion, but those arguments before Whelan went “totally unaddressed.”
When Justin Capuano of Cullen and Dykman, representing LaSalle Bank, faced the panel, Leventhal asked him if any defenses had gone unexamined before Whelan.
“I believe all arguments were addressed below,” Capuano said.
In an interview after the arguments, Thompson said the Second Department has in several cases already considered compliance with the rule, implying that it regarded the rule itself as valid. See US Bank v. Boyce, 93 AD3d 782; Flagstar Bank v. Bellafiore, 94 AD3d 1044; Wells Fargo Bank v. Hudson, 2011-03529.
Thus, he acknowledged that the Second Department’s ruling has “really become a footnote, but it is a very real case for the Paces.”
In any case, he noted, “my position is because Judge Whelan treats [the invalidity of the affirmation requirement] as law, the higher court needs to step in and determine if it’s constitutional or not.”
One foreclosure attorney not involved in the case who did not want to be named to avoid antagonizing the courts or his clients said in an interview that the case was being watched closely.
“We’ve just gotten some consistency in how to do this,” he said. “Now if it’s overturned, what’s next? I would want an affirmance because that gives me consistency and certainty on what I need to do going forward. Reversal opens the door to judges making up their own rules and the Legislature getting involved eventually.”
@|Andrew Keshner can be contacted at email@example.com.