Windard Bora LLC v. Sotomayor

Background

Windward Bora, LLC brought this third foreclosure action concerning property identified in the opinion as 2359 Maple Avenue, Cortlandt Manor, New York. John Sotomayor signed the note secured by the mortgage, and Alexandria Loaiza was also named as a defendant. Windward moved for summary judgment against Sotomayor and Loaiza and for default judgment against American Express Centurion Bank, Midland Funding LLC, and Capital One Bank (USA), N.A. Sotomayor and Loaiza filed a cross-motion for summary judgment.

A prior foreclosure action brought by a predecessor was voluntarily discontinued in 2018. Windward then brought an earlier foreclosure action in 2019, which the court resolved in favor of Sotomayor and Loaiza because Windward could not prove compliance with required notices under New York Real Property Actions and Proceedings Law §§ 1303 and 1320. Windward later sent the required pre-foreclosure notices and filed this action in August 2021.

Summary-judgment standards and foreclosure claim

Summary judgment is appropriate when the evidence shows no genuine dispute about an important fact and the moving party is entitled to judgment under the law. In a mortgage-foreclosure case, the plaintiff generally must produce the mortgage, the unpaid note, and evidence of default.

The court found that Windward produced the mortgage and note, with the attached endorsements, and established that it owned and possessed them. The court also found that Windward’s affidavit and business records established the defendants’ default. Sotomayor and Loaiza did not provide evidence sufficient to dispute Windward’s ownership or the default. Any dispute about the exact amount owed could be resolved later and did not prevent summary judgment directing the foreclosure process.

Notice-related defenses

The defendants argued that Windward’s notices did not comply with several New York statutory requirements. The court found that the defendants abandoned the notice defenses they did not address in their opposition and cross-motion.

As to Real Property Actions and Proceedings Law § 1304, the court held that additional language concerning bankruptcy and debt collection did not invalidate the notices. The New York Court of Appeals had ruled that accurate information furthering the statutory purpose of informing borrowers does not constitute a separate, improper notice. The court therefore granted Windward summary judgment on this issue.

As to § 1320, Windward served the required language with the summons and complaint on separate sheets of paper. The court rejected the argument that the language had to appear on the summons form itself and held that Windward complied with the statute.

The defendants also argued that Windward had not complied with § 1331, which concerns filing a notice of pendency before a final judgment directing a sale. The court noted that no final judgment of sale had yet been entered and, in any event, found that Windward submitted evidence showing that the notice of pendency and complaint had been filed with the Westchester County Clerk. The court granted Windward summary judgment on this issue as well.

Statute of limitations

The defendants argued that the foreclosure was barred by New York’s six-year limitations period because the mortgage debt had been accelerated in 2013. Windward argued that the 2019 foreclosure action allowed it to use a New York savings provision permitting a new action within six months after certain earlier actions end.

The court applied the foreclosure-specific provision enacted by New York’s Foreclosure Abuse Prevention Act. It held that the 2019 action had not ended in a final judgment on the merits because it was dismissed for failure to satisfy procedural conditions that had to be met before bringing the action—compliance with §§ 1303 and 1320. The earlier ruling decided only that Windward had not complied with those notice requirements; it did not decide the merits of the foreclosure claim.

The court also rejected the argument that Windward could not use the savings provision because it was not the original plaintiff in the 2013 action. The relevant earlier action for this purpose was the 2019 action, which Windward itself had brought. The court therefore granted Windward summary judgment on the statute-of-limitations defense.

Other defenses and counterclaims

The defendants asserted additional defenses, including failure to state a claim, lack of standing, statute of frauds, delay, waiver, and claim preclusion. They also asserted a quiet-title counterclaim and a counterclaim for attorneys’ fees. Because they did not address most of these matters in their cross-motion or respond to Windward’s arguments, the court treated the defenses and quiet-title counterclaim as abandoned.

The court dismissed the attorneys’ fees counterclaim because its grant of summary judgment meant that the defendants had not successfully defended the foreclosure action.

Default judgment and disposition

Windward sought default judgment against American Express Centurion Bank, Midland Funding LLC, and Capital One Bank (USA), N.A. The court denied that request without prejudice because Windward had not followed the court’s individual practice requiring default-judgment requests to be made by an order to show cause. The court stated that Windward could renew the request.

The court granted in part and denied in part Windward’s motion. It granted summary judgment for Windward against Sotomayor and Loaiza, denied their cross-motion for summary judgment, and denied Windward’s motion for default judgment against the three other defendants without prejudice.