RPAPL Arguments May be Waived: Case of Appellate First Impression

In a case of appellate first impression in New York, the Appellate Division, Second Department, held that a mortgagor cannot make a Real Property Actions and Proceedings Law (“RPAPL”) 1304 argument in opposition to a motion for Judgment of Foreclosure and Sale – even if that was pled as a defense in the mortgagor’s Answer – where the prior summary judgment motion was unopposed.

In Wells Fargo Bank, N.A. v. Harrigan,[1] after the lender commenced a foreclosure action in Suffolk County against the mortgagor, the mortgagor filed an Answer, containing an RPAPL 1304 compliance defense, specifically that a 90-day notice was not properly mailed.  The lender moved for summary judgment and the mortgagor failed to oppose that motion, apparently because of some unspecified law office failure.  Thereafter, the lender moved for Judgment of Foreclosure and Sale and the mortgagor cross-moved for vacatur of the summary judgment order and dismissal of the action based on the lender’s purported failure to demonstrate RPAPL 1304 compliance.

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Auto Leasing Companies Can Enforce Arbitration Agreements from the Dealership’s Retail Order Forms

In Curiale v. Hyundai Capital America, Inc., No. A-5565-18T3 (N.J. Sup. Ct. App. Div. Apr. 27, 2020), a two-judge panel of the New Jersey Superior Court, Appellate Division, reversed a trial court order denying Defendant Hyundai Capital America, Inc.’s (“Defendant”) application to compel arbitration against Plaintiffs Christopher D. Curiale and Jerome C. Curiale (“Plaintiffs”).  The Appellate Division held that the Defendant, as an assignee of a lease, could enforce an arbitration provision and class-action waiver contained in the motor vehicle retail order that was executed by Plaintiffs and the dealership.  The Appellate Division further held that the arbitration provision and class waiver were not ambiguous.

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The Second Circuit adds to the Appellate split on the Definition of an ATDS under the TCPA

The Second Circuit of United States Court of Appeals in Duran v. La boom Disco, Inc. (“Duran”), broke from the majority position from the Third, Seventh, and Eleventh Circuits and found that a dialing system that called from a stored list of numbers qualified as an automatic telephone dialing system (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”). In doing so, the Second Circuit joins the Ninth Circuit in adopting a broad interpretation of what constitutes as an ATDS.

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How COVID-19 is Impacting Mortgage Lenders

As the sheer impact of COVID-19 continues to unfold, federal agencies are implementing policies across the country in an effort to lessen the financial burden on Americans.  On March 18, 2020, the U.S. Department of Housing and Urban Development (“HUD”) authorized the Federal Housing Administration to place an immediate 60-day suspension on all evictions and foreclosures.  HUD Secretary, Ben Carson, is hopeful this moratorium “will provide homeowners with some peace of mind during these trying times[.]”

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The Often Overlooked Federal Protections to Tenants in Foreclosure Actions

For institutional lenders, the filing of any foreclosure action requires careful navigation and compliance with various state and federal laws.  Notice to the mortgagor, for instance, is a prerequisite to any foreclosure; however, what if the property is subject to a residential lease? What obligation does a mortgagee then have to a third-party tenant?  For issues like these, states generally have their own specific tenant foreclosure notice requirements.  In many states, notice laws are drafted to mirror the federal provisions provided under the Protecting Tenants at Foreclosure Act (“PTFA”).

Introduced in 2009, the PTFA was originally enacted under Title VII of the Helping Families Save Their Homes Act.  The PTFA included a sunset clause, but on May 24 2018, the Trump Administration signed its permanent extension into law.  In addition to serving a notice on the mortgagor, the PTFA mandates that notices to foreclose must also be served on all tenants.  Generally, once the mortgagee issues a notice to foreclose, the PTFA permits tenants to stay in the foreclosed property for either: (1) 90-days from the date of the notice or (2) the remainder of their lease term, whichever is greater.  Significantly, however, the PTFA’s protections only apply to tenants with bona fide tenancies.

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Supreme Court Justices say no to applying the “discovery” rule on FDCPA claims

On December 10, 2019, the Supreme Court of the United States resolved a split among the Circuit Courts of Appeals over whether the one-year statute of limitations of the Fair Debt Collection Practices Act (“FDCPA”) begins to accrue from the time the alleged violation occurs, as opposed to when it is discovered.  The Supreme Court’s decision, delivered by Justice Thomas, in Rotkiske v. Klemm, et al., No. 18-328, held that claims brought under the FDCPA are strictly subject to the statutory language of the FDCPA and must be filed “within one year from the date on which the violation occurs.”

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New Jersey Issues Rule Proposal on Uniform Fiduciary standard

Yesterday the New Jersey Bureau of Securities (“NJBOS”) issued its Rule Proposal titled “Fiduciary Duty of Broker-Dealers, Agents, Investment Advisers, and Investment Adviser Representatives”.  Below is a link to the Press Release, which in turn includes a link to the Rule Proposal itself.  The Rule Proposal would amend existing section N.J.A.C. 13:47A-6.3 and then add new section N.J.A.C. 13:47A-6.4.

https://www.njconsumeraffairs.gov/News/Pages/04152019.aspx

We have reviewed the Rule Proposal and identify the below highlights.  The public comment period on the Rule Proposal ends June 14, 2019.  The Rule would take effect 90 days after a Notice of Adoption is published.  Let us know if we can be of any help, even if it is just to talk through the new proposed requirements.

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Appellate Division Rejects MacPherson Mortgage Acceleration Argument in Case of First Impression

In a case of appellate first impression in New York, the Appellate Division, Second Department held that a mortgage is accelerated upon a lender’s election to do so, notwithstanding an optional reinstatement clause in a mortgage.  In the Dieudonne matter,[1] the Second Department rejected the “MacPherson Argument,” first pronounced by the Supreme Court, Suffolk County[2] and affirmed the dismissal of the lender’s foreclosure complaint as time-barred. The MacPherson Argument reasons that a mortgage with an optional reinstatement clause is not accelerated until judgment enters, as the borrower has an continuous right to reinstate until that point.

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New Jersey Bureau of Securities (“NJBOS”) holds second public hearing on its Pre-Proposal for a Rule implementing a uniform fiduciary standard

As noted in our prior update, we continue to cover the NJBOS’ rulemaking activity relating to a uniform fiduciary standard applicable to all investment professionals.  On Monday, November 19, 2018 we attended the second public hearing held by the NJBOS.  There were approximately 40 attendees at the second hearing, with 16 speakers, representing diverse interests, putting formal comments on the record (there were seven speakers at the first hearing).

Three takeaways from the second hearing: Continue Reading

Today the New Jersey Bureau of Securities (“NJBOS”) began public hearings on its Pre-Proposal for a Rule implementing a Uniform Fiduciary Standard for Investment Professionals

This morning we attended the first public hearing held by the NJBOS concerning its pre-proposal to adopt a rule implementing a uniform fiduciary standard for investment professionals, including broker-dealers and investment advisers.  The hearing was administered by New Jersey officials, including Christopher Gerold, Chief of the NJBOS.  There were approximately 40 attendees from diverse backgrounds – investment firms, industry groups, in-house and outside counsel, and consultants.  Here are three takeaways from the hearing:

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