CIT Bank N.A. v. SchiffmanCIT Bank N.A. v. Schiffman
18-3287
CIT Bank N.A. v. Schiffman
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2019
(Submitted: January 13, 2020 Questions Certified: January 28, 2020)
Docket No. 18-3287
CIT BANK N.A.,
Plaintiff-Counter-Defendant-Appellee,
– v. –
PAMELA SCHIFFMAN, JERRY SCHIFFMAN,
Defendants-Counter-Claimants-Appellants,
JP MORGAN CHASE BANK, N.A., NEW YORK CITY PARKING VIOLATIONS BUREAU,
Defendants.
B e f o r e:
KATZMANN, Chief Judge, LYNCH, Circuit Judge, and KAPLAN, District Judge.*
Appeal from an order of the United States District Court for the Eastern District of New York (Irizarry, C.J.), adopting the Report and Recommendation of Magistrate Judge Robert M. Levy and granting summary judgment in favor of plaintiff-counter-defendant-appellee CIT Bank N.A. in a foreclosure action against defendants-counter-claimants-appellants Pamela and Jerry Schiffman. On appeal, the Schiffmans argue that CIT failed to prove compliance with the pre-foreclosure notice requirements of New York Real Property Actions and Proceedings Law (“RPAPL“) § 1304 and the pre-foreclosure filing requirements of RPAPL § 1306. Because the Schiffmans’ appeal turns on questions of New York law for which no controlling decisions of the New York Court of Appeals exist, we CERTIFY two questions to the Court of Appeals.
Stephen J. Vargas, Gross Polowy, LLC, Westbury, NY, for Plaintiff-Counter-Defendant-Appellee.
Samuel Katz, Law Office of Samuel Katz, PLLC, Brooklyn, NY, for Defendants-Counter-Claimants-Appellants.
This appeal arises out of a foreclosure action that plaintiff-counter-defendant-appellee CIT Bank N.A. brought against defendants-counter-claimants-appellants Pamela and Jerry Schiffman. CIT moved for summary judgment, and the district court (Dora L. Irizarry, C.J.) granted the motion after adopting the Report and Recommendation of Magistrate Judge Robert M. Levy. The Schiffmans now challenge the district court‘s decision, arguing that CIT failed to prove compliance with the pre-foreclosure notice requirements of New York Real Property Actions and Proceedings Law (“RPAPL“)
On March 26, 2008, Pamela Schiffman took out a loan and executed a note with IndyMac Bank, F.S.B., for the principal amount of $326,000. The note was secured by a mortgage given by Pamela Schiffman and her husband, Jerry, on their home in Brooklyn. On the same day that Pamela Schiffman executed the note, the Schiffmans both executed a Consolidation, Extension, and Modification Agreement in which they agreed to “combin[e] into one set of rights and obligations all of the promises and agreements stated in the Note[] and Mortgage[],” and in which they “agree[d] to take over all of the obligations under the Note[] and Mortgage[] as consolidated and modified by this Agreement as Borrower.” J.A. 48. The mortgage was subsequently assigned to OneWest Bank, F.S.B., which later became known as CIT Bank N.A. On October 30, 2014, the Schiffmans executed a Loan Modification Agreement, in which they were both listed as “Borrower,” J.A. 87, which increased the balance owed to $406,481.10.
The Schiffmans failed to make mortgage payments on and after December 1, 2014, and CIT initiated a foreclosure action on October 17, 2016.1 On February 28, 2018, CIT moved for summary judgment, and the case was referred to Magistrate Judge Levy for preparation of a Report and Recommendation. Magistrate Judge Levy issued his R&R on August 24, 2018, and he recommended that the district court grant CIT‘s motion, notwithstanding the Schiffmans’ arguments that CIT had failed to prove compliance with the pre-foreclosure notice requirements of
STANDARD OF REVIEW
“We review a grant of summary judgment de novo, construing the evidence in the light most favorable to the non-moving party.” Anderson v. Recore, 446 F.3d 324, 328 (2d Cir. 2006).2 “If the party moving for summary judgment demonstrates the absence of any genuine issue as to all material facts, the nonmoving party must, to defeat summary judgment, come forward with evidence that would be sufficient to support a jury verdict in its favor.” Burt Rigid Box, Inc. v. Travelers Prop. Cas. Corp., 302 F.3d 83, 91 (2d Cir. 2002). “The nonmoving party may not rely simply on conclusory statements or on contentions that the affidavits supporting the motion are not credible.” Id.
DISCUSSION
The Schiffmans argue that the district court erred in concluding that CIT proved compliance with the pre-foreclosure notice requirements of
“Proper service of
Compliance with
In support of its motion for summary judgment, CIT included a sworn affidavit from one of its employees, Assistant Secretary Rachel Hook. As relevant here, Hook stated that:
I have received training and have personal knowledge of CIT‘s standard office practice to prepare, address, mail and store letters used in its mortgage servicing business, and how to retrieve such information. . . .
I am familiar with CIT‘s standard practices and procedures used to create, mail and store data regarding the 90 day pre-foreclosure notice (“90 Day Notice“) required by New York law and the notice of default required by the mortgage (“Notice of Default“) that are designed to ensure that these letters are properly addressed and mailed and that data reflecting those events are stored in CIT‘s business records. . . .
As a standard business practice and procedure, the 90 Day Notice, a current list of at least five housing counseling agencies serving the county where the property is located, and envelopes for both certified and first-class mail are created upon default. The envelopes are addressed, from the data stored in CIT‘s business records, with the borrower(s)’ last known address and the address of the residence that is subject to the Mortgage. The 90 Day Notices and list of housing counseling agencies are enclosed, separate from any other notice, in both the certified and first-class mail, postage prepaid envelopes. The envelopes are sealed and provided to the United States Post Office for mailing.
I hereby certify and affirm that, in accordance with CIT‘s standard business practice and procedures and in compliance with RPAPL § 1304, a 90 Day
Notice and a current list of at least five (5) housing counseling agencies serving the county where the property is located from the most recent listing available from the Department of Financial Services were mailed to Pamela Schiffman by certified and first class mail, in an envelope separate from any other notice, to the residence that is the subject of the Mortgage and Jerry Schiffman by certified and first class mail, in an envelope separate from any other notice, to the residence that is the subject of the Mortgage . . . . The 90 Day Notice was mailed on November 18, 2015 . . . . A copy of the 90 Day Notices are attached to this application.
J.A. 18–19. Along with Hook‘s affidavit, CIT submitted copies of
The district court held that Hook‘s affidavit was sufficient to demonstrate compliance with
Regarding the latter two arguments, we conclude that the Schiffmans do not raise triable issues about CIT‘s compliance with
We nevertheless hesitate to affirm the district court‘s judgment in light of the Schiffmans’ observation that the
We recognize that the delay in creating the Schiffmans’
II. RPAPL § 1306
Whereas
directing as appropriate available public and private foreclosure prevention and counseling services to borrowers at risk of foreclosure,”
As above, CIT relied on Hook‘s affidavit in support of its motion for summary judgment. In her affidavit, Hook stated that the requisite
Throughout this litigation, the Schiffmans have maintained that CIT failed to comply with
A review of New York case law does not resolve the matter. Although New York courts have held that
On the one hand, it seems logical to assume that
On the other hand, there is some evidence that
has prescribed a filing form that provides for a maximum of two borrowers, even if there are more borrowers on a loan.
Given these conflicting considerations and the lack of guidance from either the Court of Appeals or the Appellate Division, we certify the following question to the Court of Appeals: Where there are multiple borrowers on a single loan, does RPAPL § 1306 require that a lender‘s filing include information about all borrowers, or does § 1306 require only that a lender‘s filing include information about one borrower?4
III. Certification
“Although the parties did not request certification, we are empowered to seek certification nostra sponte.” Corsair Special Situations Fund, L.P. v. Pesiri, 863 F.3d 176, 182–83 (2d Cir. 2017). Pursuant to the rules of the New York Court of Appeals, “[w]henever it appears to . . . any United States Court of Appeals . . . that determinative questions of New York law are involved in a case pending before that court for which no controlling precedent of the Court of Appeals exists, the court may certify the dispositive questions of law to the Court of Appeals.”
Our decision to certify questions to the Court of Appeals is discretionary, and when exercising that discretion we consider whether: (1) “the New York Court of Appeals has not squarely addressed an issue and other decisions by New York courts are insufficient to predict how the Court of Appeals would resolve it“; (2) “the statute‘s plain language does not indicate the answer“; (3) “a decision on the merits requires value judgments and important public policy choices that the New York Court of Appeals is better situated than we to make“; and (4) “the questions certified will control the outcome of the case.” See Penguin Grp. (USA) Inc. v. Am. Buddha, 609 F.3d 30, 42 (2d Cir. 2010). Each of those factors weighs in favor of certification in this case.
First, as discussed above, the Court of Appeals has not decided the specific questions of New York law raised here, and similar questions have not “been litigated in New York courts often enough that sufficient precedents exist for use to make a determination concerning their proper outcome.” CFTC v. Walsh, 618 F.3d 218, 231 (2d Cir. 2010). Second, the plain language of
the state‘s ability to collect and analyze foreclosure data. And fourth, the answers to the questions will determine whether CIT demonstrated compliance with
CONCLUSION
For the reasons stated, the Court hereby certifies the following questions to the New York Court of Appeals:
- Where a foreclosure plaintiff seeks to establish compliance with
RPAPL § 1304 through proof of a standard office mailing procedure, and the defendant both denies receipt and seeks to rebut the presumption of receipt by showing that the mailing procedure was not followed, what showing must the defendant make to render inadequate the plaintiff‘s proof of compliance with§ 1304 ? - Where there are multiple borrowers on a single loan, does
RPAPL § 1306 require that a lender‘s filing include information about all borrowers, or does§ 1306 require only that a lender‘s filing include information about one borrower?
We invite the Court of Appeals to reformulate these questions as it sees fit or expand them to address any other issues of New York law that would assist this Court in determining whether CIT demonstrated compliance with
It is hereby ORDERED that the Clerk of this Court transmit to the Clerk of the New York Court of Appeals this opinion as our certificate, together with a complete set of briefs, appendices, and the record filed in this case by the parties. This panel retains jurisdiction for purposes of resolving this appeal once the New York Court of Appeals has responded to our certification.
Certificate
The foregoing is hereby certified to the New York Court of Appeals pursuant to
Notes
Pre-foreclosure Information Form FAQs, N.Y. St. Dep‘t Fin. Servs., https://on.ny.gov/3753YPA.The [RPAPL § 1306] form requests information about a particular home loan. Consequently, if there are multiple borrowers on a single loan, the lender or servicer should not report them on multiple forms.
We recognize that RPAPL § 1306 requires the reporting of the name of “the Borrower“. It does not specifically anticipate multiple borrowers. The purpose of the borrower information on the [RPAPL § 1306] Form is to assist mortgage counselors working with the Department to contact the Borrower. When we developed the electronic reporting form for bulk filings, we did not provide for reporting more than two Borrowers. The Department‘s assumption in preparing the [RPAPL § 1306] form was that, if a single 1-to-4 family residence is the principal dwelling of multiple borrowers, (1) they have the same interest in seeking counseling to avoid foreclosure, and (2) even if their interests differ, it is difficult for New York to allocate resources to more than one borrower in a household. Consequently, we do not believe RPAPL § 1306 should be interpreted as requiring the reporting of more than two Borrowers on the bulk reporting form.