Governor Cuomo recently signed an act that amends the CPLR by (1) adding a new section, 3012-b, and (2) amending subdivision (a) of CPLR 3408. This post is meant to function strictly as a practical interpretation of the changes created by the Act.
Section 1
Section 1 of the Act amends the CPLR to add section 3012-b. The most pertinent sections of 3012-b are as follows:
3012-b (A)
Statutory Language: 3012-b (A) states that “in any residential foreclosure action involving a home loan…in which the defendant is a resident of the property…the complaint shall be accompanied by a certificate, signed by the attorney for the Plaintiff, certifying that the attorney has:
(1) reviewed the facts of the case; and
(2) that, based on consultation with representatives of the Plaintiff…and the attorney’s review of pertinent documents, including the mortgage, security agreement and note or bond underlying the mortgage executed by the defendant and all instruments of assignment, if any, and any other instrument of indebtedness including any modification, extension, and consolidation, to the best of such attorney’s knowledge, information and belief that there is a reasonable basis for the commencement of such action and that the Plaintiff is currently the creditor entitled to enforce rights under such documents.”
Practical Application: In order to commence a residential foreclosure action of a home loan, Plaintiff’s attorney must file a Certificate along with the foreclosure complaint. In said certificate, Plaintiff’s counsel must affirmatively state that the attorney “reviewed the facts of the case” and that based upon a consultation with their client and a review of pertinent 3408 documents believe there is a reasonable basis to conclude that there was a default and that their client has standing to commence.
While the 3012-b Certificate requirement does not expressly do away with the OCA Affirmation requirement, it imposes nearly identical requirements on Plaintiff’s attorney. The only major difference between the two requirements is that the Certificate must be filed along with the Complaint whereas the OCA Affirmation was not required until the RJI filing.
3012-b (C)
Statutory Language: 3012-b (C) states that if “a copy of the mortgage, security agreement and note or bond underlying the mortgage executed by defendant, and all instruments of assignment, if any, and any other instrument of indebtedness including any modification, extension and consolidation shall be attached to the certificate.” If said documents are lost, the Plaintiff shall attach to the Certificate “supplemental affidavits by such attorney or representative of Plaintiff attesting” that said documents are lost “whether by destruction, theft or otherwise.”
Practical Application: 3408 documents must be included either within the complaint or the Certificate. At this point, most foreclosure attorneys include these documents along with the Complaint and this should not create too many issues.
3012-b (D)
Statutory Language: 3012-b (D) states that “subdivision (d) of rule 3015 of this article shall not be applicable to a defendant who is not represented by an attorney.” 3015 states that “unless specifically denied in the pleadings, each signature on a negotiable instrument [presented by Plaintiff] is admitted”.
Practical Application: Prior to the Act, all defendants had to challenge the signatures on Notes, Mortgages and Assignment of Mortgages within their answer. This subsection preserves the defense for pro se defendants indefinitely.
3012-b (E)
Statutory Language: 3012-b (E) states that where Plaintiff fails to provide the documents that are required by 3012-(a) and the court determines that said papers “ought to have been provided the court may dismiss the complaint” or impose a conditional order with regard to said failure and may impose penalties such as the “denial of the accrual of any interest, costs, attorneys’ fees and other fees…”. Further, “any such dismissal shall be without prejudice and shall not be on the merits.”
Practical Application: Taken literally, this subsection states that failure to comply with subsection (a) warrants, at the court’s discretion, dismissal and tolling of interest. Practically, this subsection will likely be interpreted to read that failure to comply with subsection (c) warrants the same penalties.
Section 2
Section 2 of the Act amends CPLR 3408. The most pertinent part is as follows:
Statutory Language: In residential foreclosure actions concerning a home loan (as defined by CPLR 3408), Plaintiff must file affidavits of service of resident defendants within “twenty days of such service, however service is made, and the court shall hold a [foreclosure settlement] conference within sixty days after the date when proof of service upon such defendant is filed with the county clerk.”
Practical Application: This section imposes two strict timeframes – (1) Where a resident defendant is served in a residential foreclosure action concerning a home loan, Plaintiff must file affidavits of service within twenty days. (2) The court must hold a foreclosure settlement conference within sixty days of said filing.
Conceptually, this leaves the courts to answer numerous questions. Must Plaintiff file an RJI with the affidavit of service? What if service of other defendants is not complete within the 20 day time period? What if the main defendant is served but there are other defendants left to be served by the time of the conference? What is the penalty for failure to file the affidavits of service timely? While this subsection lacks complete clarity, it certainly seems to suggest that Plaintiffs will need to move from Complaint to conference in a shorter time frame. As most service processors file their affidavits of service immediately upon completion, it’s not clear if this requirement will pose any difficulty on the average Plaintiff’s attorney.
Written By: Adam J. Friedman, Esq.
