Supreme Court, Suffolk County, January 19, 2022

RAS Boriskin, LLC, Westbury, for plaintiff.

John J. Caracciolo, East Northport, for John Gerrato and another, defendants.

It is ordered that this plaintiff's motion for summary judgment is denied, and it is further ordered that upon searching the record, summary judgment is granted to the defendants and the action is dismissed.

This is an action to foreclose a mortgage on the real property known as 411-413 Teddy Place, West Babylon, New York 11704 (the property). On May 6, 2005, defendant John Gerrato executed an adjustable-rate interest only note in favor of Argent Mortgage Company, LLC in the principal sum of $224,000. To secure said note, Gerrato gave Argent a mortgage also dated May 6, 2005, on the property. The mortgage was subsequently duly recorded in the Suffolk County Clerk's Office on June 21, 2005. Thereafter, by way of indenture executed on May 10, 2013, Gerrato transferred his interest in the property to the defendant Destiny Village, Inc. By way of an undated endorsement in blank with physical delivery, the note was allegedly transferred to plaintiff, Wells Fargo Bank, National Association, as Trustee for Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-HE3 (plaintiff), prior to commencement of this action. The note was subsequently modified by a modification agreement made between Gerrato and Nationstar Mortgage LLC, as lender on September 6, 2016, in which Gerrato acknowledged that as of September 1, 2016, the new principal balance was $619,410.32. Gerrato allegedly defaulted on payments required by the modification agreement commencing on or about March 1, 2017. After Gerrato allegedly failed to cure the default, plaintiff commenced this action by filing the summons, complaint and notice of pendency on January 23, 2018.

Defendants Gerrato and Destiny (defendants) interposed a joint answer and, among other things, asserted 17 affirmative defenses and three counterclaims; among the counterclaims is a claim that plaintiff failed to comply with the requirements of RPAPL 1304. Defendants Town Supervisor, Town of Babylon and Sunrise Property Associates appeared herein and waived all but certain notices; the remaining defendants have neither answered nor appeared.

The plaintiff's motion seeks an order granting it summary judgment on the complaint against the defendants, fixing the{**74 Misc 3d at 651} defaults of the non-answering defendants, appointing a referee and amending the caption (the motion was originally stayed by a bankruptcy filing by Gerrato, which counsel subsequently advised was lifted). In opposition to the motion, defendants' counsel has argued that plaintiff's purported notices sent in compliance with RPAPL 1304 violated the prohibition contained in RPAPL 1304 (2) that the required notice be mailed "in a separate envelope from any other mailing or notice." A copy of the notice plaintiff claims to have mailed is submitted by plaintiff in support of its motion (NY St Cts Elec Filing [NYSCEF] Doc No. 133, exhibit G) and has been reviewed by the court. That review reveals that the notice contains additional language not directed under the section.

The Second Department has recently held that "inclusion of any material in the separate envelope sent to the borrower under RPAPL 1304 that is not expressly delineated in these provisions constitutes a violation of the separate envelope requirement of RPAPL 1304 (2)" (Bank of Am., N.A. v Kessler, 202 AD3d 10, 14 [2d Dept 2021]). This "strict approach" provides clear guidelines that any "additional material" violates the requirements of RPAPL 1304.^[FN*] Here, the additional material provides a separate notice which is not within the section's language. Strict compliance with RPAPL 1304 is a condition precedent for the commencement of a foreclosure action (H&R Block Bank, FSB v Liles, 186 AD3d 813 [2d Dept 2020]). Having failed to establish compliance, summary judgment to the plaintiff must be denied.

Furthermore, upon searching the record (CPLR 3212 [b]), in light of the aforementioned determination that the notice required under RPAPL 1304 was improper and failed to meet the condition precedent, summary judgment must be award to the defendants, dismissing the action (compare Bank of Am., N.A. v Kessler, with U.S. Bank N.A. v Ehrlich, 195 AD3d 765 [2d Dept 2021]).

In light of the above determinations, it is unnecessary for the court to address the other deficiencies present in plaintiff's submissions which would have precluded granting of summary judgment, other than the court notes that although affidavits of an employee of plaintiff, or of its representative, may establish the ability of that affiant to testify to business records for{**74 Misc 3d at 652} the affiant's employer pursuant to CPLR 4518, without submission of the business records that the affiant relied upon, the affiant's statements are inadmissible hearsay (U.S. Bank Trust, N.A. v Bank of Am., N.A., 201 AD3d 769 [2d Dept 2022]; Bank of N.Y. Mellon v Deas, 200 AD3d 1023 [2d Dept 2021]; Deutsche Bank Trust Co. Ams. v Miller, 198 AD3d 867 [2d Dept 2021]; Bank of N.Y. Mellon v Gordon, 171 AD3d 197 [2d Dept 2019]).