Wells Fargo Bank, N.A. v. Morales

Factual and Procedural Background

The plaintiff, Wells Fargo Bank, N.A., commenced an action to foreclose a mortgage on residential property located in Queens against the defendants Jorge R. Morales, Emerito Rodriguez, and Piedad Rodriguez, among others. The defendants answered the complaint asserting affirmative defenses, including that the plaintiff failed to comply with RPAPL 1304, which mandates notice requirements prior to commencing foreclosure actions.

The plaintiff moved for summary judgment on the complaint, to strike the defendants' answer, and for an order of reference. The Supreme Court found that the plaintiff had demonstrated prima facie compliance with RPAPL 1304 and that the defendants failed to raise a triable issue of fact. The court granted the plaintiff's motion and referred the matter to a referee to compute the amount due on the mortgage loan.

Subsequently, the plaintiff moved to confirm the referee’s report and for a judgment of foreclosure and sale. The defendants did not oppose this motion. However, the Supreme Court denied the motion on the grounds that the plaintiff failed to comply with RPAPL 1304 and failed to submit evidence of the outcome of a mandatory foreclosure settlement conference pursuant to CPLR 3408(a). The plaintiff appealed this order.

Legal Issues Presented

1. Whether the plaintiff complied with the notice requirements under RPAPL 1304 prior to commencing the foreclosure action.
2. Whether the Supreme Court properly denied the plaintiff’s motion to confirm the referee’s report and for a judgment of foreclosure and sale based on alleged noncompliance with RPAPL 1304 and failure to submit evidence of the foreclosure settlement conference.
3. Whether the court may raise noncompliance with RPAPL 1304 sua sponte when the defendants did not oppose the motion on that basis.

Arguments of the Parties

Appellant's Arguments

• The plaintiff asserted it complied with RPAPL 1304 by providing the required notice to the defendants before commencing the foreclosure action, as demonstrated in the prior summary judgment motion and supporting evidence.
• The plaintiff contended that the Supreme Court erred in denying the motion to confirm the referee’s report and for judgment because the issue of RPAPL 1304 compliance had already been resolved in its favor and was thus law of the case.
• The plaintiff argued that since the defendants did not oppose the motion to confirm the referee’s report, the court should not have raised the RPAPL 1304 noncompliance issue sua sponte.
• Regarding the foreclosure settlement conference, the plaintiff submitted evidence that no settlement was reached at the conference, satisfying the procedural requirement under CPLR 3408(a).
• The plaintiff maintained it was entitled to judgment as a matter of law based on the mortgage, unpaid note, evidence of default, and the referee’s report, and that the defendants’ failure to oppose the motion warranted granting it.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d 95, 923 N.Y.S.2d 609	Proper service of RPAPL 1304 notice is a condition precedent to commencing foreclosure; plaintiff bears burden of proof.	Supported the requirement that plaintiff demonstrate compliance with RPAPL 1304 before proceeding.
CitiMortgage, Inc. v. Pappas, 147 A.D.3d 900, 47 N.Y.S.3d 415	Reinforces the burden on plaintiff to establish RPAPL 1304 compliance.	Affirmed the principle that RPAPL 1304 notice is mandatory and must be proven.
Deutsche Bank Natl. Trust Co. v. Spanos, 102 A.D.3d 909, 961 N.Y.S.2d 200	RPAPL 1304 notice requirements and burden on plaintiff.	Used to confirm plaintiff’s burden and compliance.
Bank of N.Y. Mellon v. Weber, 169 A.D.3d 981, 94 N.Y.S.3d 582	Defense of noncompliance with RPAPL 1304 may be raised at any time.	Clarified timing and availability of RPAPL 1304 defense.
Flagstar Bank, FSB v. Jambelli, 140 A.D.3d 829, 32 N.Y.S.3d 625	Where defense of RPAPL 1304 noncompliance is never raised, plaintiff need not disprove it; court should not raise it sua sponte if not opposed.	Applied to bar court from sua sponte raising RPAPL 1304 noncompliance at motion to confirm referee’s report.
U.S. Bank N.A. v. Carey, 137 A.D.3d 894, 28 N.Y.S.3d 68	Similar principle to Flagstar Bank regarding RPAPL 1304 defense and court’s role.	Supported limiting court’s sua sponte intervention absent opposition.
RPG Consulting, Inc. v. Zormati, 82 A.D.3d 739, 917 N.Y.S.2d 897	Doctrine of law of the case precludes reconsideration of issues previously decided.	Applied to bar reconsideration of RPAPL 1304 compliance once decided in plaintiff’s favor.
Thomas v. Dietrick, 284 A.D.2d 325, 725 N.Y.S.2d 557	Supports application of law of the case doctrine.	Used to reinforce preclusion of reconsideration of RPAPL 1304 issue.
Cafaro v. Tineo, 135 A.D.3d 887, 22 N.Y.S.3d 909	Establishes entitlement to judgment as a matter of law when plaintiff submits mortgage, note, evidence of default, and referee’s report, and defendant does not oppose.	Supported granting plaintiff’s motion to confirm referee’s report and judgment.

Court's Reasoning and Analysis

The court analyzed the plaintiff’s compliance with RPAPL 1304, noting that the defendants raised the noncompliance defense in their answer and that the plaintiff had previously submitted evidence demonstrating compliance. The Supreme Court had already decided the issue in the plaintiff’s favor on summary judgment, invoking the law of the case doctrine to preclude reconsideration of this issue at the motion to confirm the referee’s report.

Because the defendants did not oppose the motion to confirm the referee’s report, the court concluded it was improper for the Supreme Court to raise the RPAPL 1304 noncompliance issue sua sponte. Additionally, the plaintiff had submitted evidence indicating that a foreclosure settlement conference took place but no settlement was reached, satisfying the procedural requirement under CPLR 3408(a).

The plaintiff also demonstrated entitlement to judgment as a matter of law through submission of the mortgage, unpaid note, evidence of default, and the referee’s report. Given the defendants’ lack of opposition, the court found the motion should have been granted.

Holding and Implications

The order of the Supreme Court denying the plaintiff’s motion to confirm the referee’s report and for a judgment of foreclosure and sale is reversed.

The plaintiff’s motion is granted, confirming the referee’s report and awarding judgment of foreclosure and sale. This decision directly affects the parties by allowing the foreclosure process to proceed as the plaintiff established compliance with statutory notice requirements and procedural prerequisites. The court did not set any new precedent but applied established principles including the law of the case doctrine and procedural rules regarding opposition and sua sponte considerations.