CIT Bank N.A. v. Schiffman

18‐3287
CIT Bank N.A. v. Schiffman

UNITED STATES COURT OF APPEALS
F
OR THE SECOND CIRCUIT
_______________

August Term, 2019

(Submitted: January 13, 2020 Questions Certified: January 28, 2020)

Docket No. 18‐3287
_______________

CIT
BANK N.A.,

Plaintiff‐Counter‐Defendant‐Appellee,

– v. –

P
AMELA SCHIFFMAN, JERRY SCHIFFMAN,

Defendants‐Counter‐Claimants‐Appellants,

JP
MORGAN CHASE BANK, N.A., NEW YORK CITY PARKING VIOLATIONS BUREAU,

Defendants.
_______________

B e f o r e:

K
ATZMANN, Chief Judge, LYNCH, Circuit Judge, and KAPLAN, District Judge.
*

*
Judge Lewis A. Kaplan, of the United States District Court for the Southern
District of New York, sitting by designation.

2
______________

Appeal from an order of the United States District Court for the Eastern
District of New York (Irizarry, C.J.), adopting the Report and Recommendation of
Magistrate Judge Robert M. Levy and granting summary judgment in favor of
plaintiff‐counter‐defendant‐appellee CIT Bank N.A. in a foreclosure
action against
defendants‐counter‐claimants‐appellants Pamela and Jerry Schiffman. On appeal,
the Schiffmans argue that CIT failed to prove compliance with the pre‐foreclosure
notice requirements of New York Real Property Actions and Proceedings Law
(“RPAPL”) § 1304 and the pre‐foreclosure filing requirements of RPAPL § 1306.
Because
the Schiffmans’ appeal turns on questions of New York law for which no
controlling decisions of the New York Court of Appeals exist, we CERTIFY two
questions to the Court of Appeals.
_______________

Stephen J. Vargas, Gross Polowy, LLC, Westbury, NY, for Plaintiff‐
Counter‐Defendant‐Appellee.

Samuel Katz, Law
Office of Samuel Katz, PLLC, Brooklyn, NY, for
Defendants‐Counter‐Claimants‐Appellants.
_______________
K
ATZMANN, Chief Judge:
This appeal arises out of a foreclosure action that plaintiff‐counter‐
defendant‐appellee CIT Bank N.A. brought against defendants‐counter‐claimants‐
appellants Pamela and Jerry Schiffman. CIT moved for summary judgment, and
the district court (Dora L. Irizarry, C.J.) granted the motion after adopting the
Report and
Recommendation of Magistrate Judge Robert M. Levy. The Schiffmans
now challenge the district court’s decision, arguing that CIT failed to prove

3
compliance with the pre‐foreclosure notice requirements of New York Real
Property Actions and Proceedings Law (“RPAPL”) § 1304 and the pre‐foreclosure
filing requirements of RPAPL § 1306. With respect to § 1304, the Schiffmans argue
that CIT failed to show that it followed standard mailing procedures to
ensure that
pre‐foreclosure notices were properly addressed and mailed. And with respect to
§ 1306, the Schiffmans argue that CIT’s pre‐foreclosure filing with the
superintendent of financial services was deficient because it did not include
information about Jerry Schiffman. Because these arguments both turn on
questions of state
law for which no controlling decisions of the New York Court
of Appeals exist, we certify two questions to the Court of Appeals pursuant to 22
N.Y.C.R.R. § 500.27(a) and 2d Cir. R. 27.2(a).
B
ACKGROUND
On March 26, 2008, Pamela Schiffman took out a loan and executed a note
with IndyMac Bank, F.S.B., for the principal amount of $326,000. The note was
secured by a mortgage given by Pamela Schiffman and her husband, Jerry, on their
home in Brooklyn. On the same day that Pamela
Schiffman executed the note, the
Schiffmans both executed a Consolidation, Extension, and Modification
Agreement in which they agreed to “combin[e] into one set of rights and

4
obligations all of the promises and agreements stated in the Note[] and
Mortgage[],” and in which they “agree[d] to take over all of the obligations under
the Note[] and Mortgage[] as consolidated and modified by this Agreement as
Borrower.” J.A. 48. The mortgage was subsequently assigned to OneWest Bank,

F.S.B., which later became known as CIT Bank N.A. On October 30, 2014, the
Schiffmans executed a Loan Modification Agreement, in which they were both
listed as “Borrower,” J.A. 87, which increased the balance owed to $406,481.10.
The Schiffmans failed to make mortgage payments on and after December
1, 2014,
and CIT initiated a foreclosure action on October 17, 2016.
1
On February
28, 2018, CIT moved for summary judgment, and the case was referred to
Magistrate Judge Levy for preparation of a Report and Recommendation.
Magistrate Judge Levy issued his R&R on August 24, 2018, and he recommended
that the district court grant CIT’s motion, notwithstanding the Schiffmans’
arguments that
CIT had failed to prove compliance with the pre‐foreclosure notice
requirements of RPAPL § 1304 and the pre‐foreclosure filing requirements of

1
CIT also named JP Morgan Chase Bank, N.A. and the New York City
Parking Violations Bureau as defendants. The disputes involving these parties are
not at issue on appeal.

5
RPAPL § 1306. The Schiffmans renewed these arguments in their objections to the
R&R, but the district court adopted the R&R in its entirety and granted summary
judgment in favor of CIT in an order dated September 30, 2018, and filed October
3, 2018. The Schiffmans timely appealed, and
they now raise the same arguments
they raised below.
S
TANDARD OF REVIEW
“We review a grant of summary judgment de novo, construing the evidence
in the light most favorable to the non‐moving party.” Anderson v. Recore, 446 F.3d
324, 328 (2d Cir. 2006).
2
“If the party moving for summary judgment demonstrates
the absence of any genuine issue as to all material facts, the nonmoving party must,
to defeat summary judgment, come forward with evidence that would be
sufficient to support a jury verdict in its favor.” Burt Rigid Box, Inc. v. Travelers Prop.
Cas. Corp., 302 F.3d 83, 91 (2d Cir. 2002). “The nonmoving party may not rely
simply on conclusory statements or on contentions that the affidavits supporting
the motion are not credible.” Id.

2
Unless otherwise indicated, in quoting cases, all internal quotation marks,
alterations, emphases, footnotes, and citations are omitted.

6
D
ISCUSSION
The Schiffmans argue that the district court erred in concluding that CIT
proved compliance with the pre‐foreclosure notice requirements of RPAPL § 1304
and the pre‐foreclosure filing requirements of RPAPL § 1306. For the reasons
below, we conclude that these issues both turn on questions of New York
law for
which no controlling decisions of the New York Court of Appeals exist.
I. RPAPL § 1304
RPAPL § 1304(1) requires that, “with regard to a home loan, at least ninety
days before a lender, an assignee or a mortgage loan servicer commences legal
action against the borrower, or borrowers
at the property address and any other
address of record, including mortgage foreclosure, such lender, assignee or
mortgage loan servicer shall give notice to the borrower.” N.Y. Real Prop. Acts.
Law § 1304(1). Section 1304(2) specifies that this notice must be sent “by registered
or certified mail and also by
first‐class mail to the last known address of the
borrower, and to the residence that is the subject of the mortgage.” Id. § 1304(2).
“Proper service of RPAPL 1304 notice on the borrower or borrowers is a
condition precedent to the commencement of a foreclosure action, and the plaintiff
has
the burden of establishing satisfaction of this condition.” Deutsche Bank Nat.

7
Tr. Co. v. Spanos, 961 N.Y.S.2d 200, 202 (2d Dep’t 2013). Compliance with § 1304
can be “established with proof of the actual mailings, such as affidavits of mailing
or domestic return receipts with attendant signatures, or proof of a standard office
mailing procedure designed to ensure that
items are properly addressed and
mailed, sworn to by someone with personal knowledge of the procedure.”
Citibank, N.A. v. Conti‐Scheurer, 98 N.Y.S.3d 273, 277 (2d Dep’t 2019). As the New
York Court of Appeals has explained in an analogous context, proof of a standard
office mailing procedure gives rise
to a presumption that a notice was received,
although that presumption may be rebutted by “a showing that [the] routine office
practice was not followed or was so careless that it would be unreasonable to
assume that the notice was mailed.” Nassau Ins. Co. v. Murray, 386 N.E.2d 1085,
1086
(N.Y. 1978).
In support of its motion for summary judgment, CIT included a sworn
affidavit from one of its employees, Assistant Secretary Rachel Hook. As relevant
here, Hook stated that:
I have received training and have personal knowledge of CIT’s
standard office practice to prepare, address, mail and store letters
used
in its mortgage servicing business, and how to retrieve such
information. . . .

8
I am familiar with CIT’s standard practices and procedures used to
create, mail and store data regarding the 90 day pre‐foreclosure notice
(“90 Day Notice”) required by New York law and the notice of default
required by the mortgage (“Notice of Default”) that are designed to
ensure that
these letters are properly addressed and mailed and that
data reflecting those events are stored in CIT’s business records. . . .

As a standard business practice and procedure, the 90 Day Notice, a
current list of at least five housing counseling agencies serving the
county where the property is
located, and envelopes for both certified
and first‐class mail are created upon default. The envelopes are
addressed, from the data stored in CIT’s business records, with the
borrower(s)’ last known address and the address of the residence that
is subject to the Mortgage. The 90 Day Notices and list of
housing
counseling agencies are enclosed, separate from any other notice, in
both the certified and first‐class mail, postage prepaid envelopes. The
envelopes are sealed and provided to the United States Post Office for
mailing.

l hereby certify and affirm that, in accordance with CIT’s standard
business practice and procedures
and in compliance with RPAPL
§ 1304, a 90 Day Notice and a current list of at least five (5) housing
counseling agencies serving the county where the property is located
from the most recent listing available from the Department of
Financial Services were mailed to Pamela Schiffman by certified
and
first class mail, in an envelope separate from any other notice, to the
residence that is the subject of the Mortgage . . . and Jerry Schiffman
by certified and first class mail, in an envelope separate from any
other notice, to the residence that is the subject of the
Mortgage . . . .
The 90 Day Notice was mailed on November 18, 2015 . . . . A copy of
the 90 Day Notices are attached to this application.

9
J.A. 18–19. Along with Hook’s affidavit, CIT submitted copies of § 1304 notices
that were addressed to each of the Schiffmans, dated November 18, 2015, and
marked as having been sent via first‐class and certified mail.
The district court held that Hook’s affidavit was sufficient to demonstrate
compliance with § 1304, and the Schiffmans now challenge that holding in several
respects. First, the Schiffmans argue, Hook “attested that the envelopes [for
mailing § 1304 notices] are purportedly created upon default . . . , while the notices
in this action were dated and sent a year after the
default.” Appellants’ Br. 12.
Second, the Schiffmans contend that Hook “failed to attest to or describe any
procedure regarding when or by what process these envelopes are ever mailed.”
Id. And third, the Schiffmans assert that Hook failed to attach copies of the § 1304
notices described in her affidavit.
Regarding the latter two arguments, we conclude that the Schiffmans do not
raise triable issues about CIT’s compliance with § 1304. While it is true that Hook
did not describe the exact process by which notices are “provided to the United
States Post Office for mailing,” J.A. 19, such details are
unnecessary to prove
compliance. See, e.g., Wells Fargo Bank, N.A. v. Heiney, 93 N.Y.S.3d 84, 86 (2d Dep’t
2019) (plaintiff demonstrated compliance with § 1304 by providing affidavit that

10
“detailed the procedures of electronically recording, printing, and dating the
notices, appending a list of approved housing counseling agencies to them,
placing the notices in properly addressed certified and first‐class mailing
envelopes, and sealing the envelopes and delivering them to the United States
Postal Service for mailing”). Likewise,
although the Schiffmans argue that Hook
failed to attach copies of the § 1304 notices described in her affidavit, they do not
dispute that such copies were included with CIT’s summary judgment motion,
and they offer no reason to question the authenticity of these copies.
We nevertheless hesitate to affirm
the district court’s judgment in light of
the Schiffmans’ observation that the § 1304 notices are dated November 18, 2015,
whereas the Schiffmans defaulted on December 1, 2014. This nearly one‐year gap
is inconsistent with Hook’s statement in her affidavit that CIT’s § 1304 notices “are
created upon default,” J.A.
19, and it therefore casts doubt on whether CIT offered
adequate “proof of a standard office mailing procedure designed to ensure that
items are properly addressed and mailed.” Citibank, 98 N.Y.S.3d at 277.
Specifically, the untimely creation of the § 1304 notices suggests that the
Schiffmans may have rebutted the
presumption of receipt by “showing that [CIT’s]
routine office practice was not followed.” Murray, 386 N.E.2d at 1086.

11
We recognize that the delay in creating the Schiffmans’ § 1304 notices does
not necessarily imply that CIT otherwise failed to follow its routine procedures for
addressing and mailing notices. Indeed, CIT’s delay may be explained by its
acquisition of the Schiffmans’ mortgage after the Schiffmans defaulted. We have

been unable to find any controlling decisions from the New York Court of
Appeals, however, that discuss whether the presumption of receipt is rebutted by
any showing of a deviation from the assertedly routine office procedures for
preparing and mailing § 1304 notices, or whether instead the presumption is
rebutted
only by a showing of deviations directly related to the mailing process,
rather than to other aspects of the asserted routine. Nor have we found any
decisions from the Appellate Division that indicate how the Court of Appeals
would likely resolve the issue. Accordingly, we certify the following question to
the
Court of Appeals: Where a foreclosure plaintiff seeks to establish compliance with
RPAPL § 1304 through proof of a standard office mailing procedure, and the defendant
both denies receipt and seeks to rebut the presumption of receipt by showing that the
mailing procedure was not followed, what showing must the
defendant make to render
inadequate the plaintiff’s proof of compliance with § 1304?

12
II. RPAPL § 1306
Whereas RPAPL § 1304 requires that a foreclosure plaintiff give notice to the
borrower, RPAPL § 1306 requires that certain information be filed with the
superintendent of financial services. Section 1306(1) provides as a precondition of
a foreclosure action that a plaintiff must file “the
information required by
[§ 1306(2)]” within three business days of mailing a § 1304 notice. N.Y. Real Prop.
Acts. Law § 1306(1). Section 1306(2), in turn, requires that “[e]ach filing delivered
to the superintendent shall be on such form as the superintendent shall prescribe,
and shall include at a minimum,
the name, address, last known telephone number
of the borrower, and the amount claimed as due and owing on the mortgage, and
such other information as will enable the superintendent to ascertain the type of
loan at issue.” Id. § 1306(2). Section 1306(3) instructs the superintendent of
financial services to create
an electronic database for the required filings, see id.
§ 1306(3), and § 1306(4) states that the information contained in the filings “shall
be used by the superintendent exclusively for the purposes of monitoring on a
statewide basis the extent of foreclosure filings within this state, to perform an
analysis
of loan types which were the subject of a pre‐foreclosure notice and

13
directing as appropriate available public and private foreclosure prevention and
counseling services to borrowers at risk of foreclosure,” id. § 1306(4).
As above, CIT relied on Hook’s affidavit in support of its motion for
summary judgment. In her affidavit, Hook stated that the requisite § 1306 filing
was made
with the superintendent of financial services within three business days
of the mailing of the Schiffmans’ § 1304 notices. CIT also included in support of its
motion a proof of filing statement, which is dated November 18, 2015, the same
date that appears on the § 1304 notices. The filing
statement lists Pamela Schiffman
as the borrower, but it does not list Jerry Schiffman.
Throughout this litigation, the Schiffmans have maintained that CIT failed
to comply with § 1306 because the filing statement lists only Pamela Schiffman as
the borrower and does not include Jerry Schiffman. Neither Magistrate Judge Levy
nor
the district court addressed this argument, and CIT does not respond to it on
appeal. We believe that the argument warrants closer consideration, however, as
§ 1306(2) does not specify whether filings must include information about all
borrowers on a given loan, or whether it is sufficient to include information
about
only one borrower.

14
A review of New York case law does not resolve the matter. Although New
York courts have held that § 1304 requires strict compliance with respect to all
borrowers on a loan, see, e.g., Aurora Loan Servs., LLC v. Weisblum, 923 N.Y.S.2d 609,
616 (2d Dep’t 2011), we
have found no decisions from the New York Court of
Appeals or the Appellate Division that address whether § 1306 imposes an
analogous obligation.
On the one hand, it seems logical to assume that §§ 1304 and 1306 have
similar requirements, as the two provisions operate in tandem, with the
mailing
of a § 1304 notice triggering the deadline to make a § 1306 filing. Moreover, the
two provisions appear to have as shared purposes the protection of homeowners
and the prevention of foreclosures. See Weisblum, 923 N.Y.S.2d at 617 (stating that
§ 1304’s “manifest purpose is to aid the
homeowner in an attempt to avoid
[foreclosure] litigation”); TD Bank, N.A v. Oz Leroy, 995 N.Y.S.2d 625, 628 (3d Dep’t
2014) (describing § 1306’s purpose of “reduc[ing] the number of preventable
foreclosures” by “identify[ing] distressed homeowners as soon as possible”).
Given this overlap, it is plausible that both provisions require
compliance with
respect to all borrowers on a single loan.

15
On the other hand, there is some evidence that §§ 1304 and 1306 differ in
relevant respects. Indeed, while the Court of Appeals and Appellate Division seem
not to have addressed the question, a Justice of the New York Supreme Court, in
a pair of decisions issued after the
district court’s ruling in this case, has held that
§ 1306 does not require compliance with respect to all borrowers on a loan because
§ 1306, unlike § 1304, was intended “only to be a source of statistics for the state,”
such that “filing for either [borrower] would provide the
state with the same
statistical information it needed.” Bank of N.Y. Mellon v. Vasquez, 63 Misc. 3d
1220(A), 2019 WL 1891326, at *4 (N.Y. Sup. Ct. 2019) (unreported disposition); see
HSBC Bank USA, N.A. v. Ahmad, 62 Misc. 3d 1225(A), 2019 WL 1087863, at *6–7
(N.Y. Sup. Ct. 2019) (unreported
disposition). Relatedly, the superintendent of
financial services, who is charged under § 1306(2) with prescribing the form of the
filing statement and has authority under § 1306(5) “to promulgate such rules and
regulations as shall be necessary to implement the purposes of” § 1306, N.Y. Real
Prop. Acts. Law §
1306(5), has declined to interpret the provision as requiring
compliance with respect to all borrowers on a loan.
3
Instead, the superintendent

3
The Department of Financial Services website explains that:

16
has prescribed a filing form that provides for a maximum of two borrowers, even
if there are more borrowers on a loan.
Given these conflicting considerations and the lack of guidance from either
the Court of Appeals or the Appellate Division, we certify the following question
to the Court
of Appeals: Where there are multiple borrowers on a single loan, does

The [RPAPL § 1306] form requests information about a particular
home loan. Consequently, if there are multiple borrowers on a single
loan, the lender or servicer should not report them on multiple forms.

We recognize that RPAPL § 1306 requires the reporting of the name
of “the Borrower”. It does
not specifically anticipate multiple
borrowers. The purpose of the borrower information on the [RPAPL
§ 1306] Form is to assist mortgage counselors working with the
Department to contact the Borrower. When we developed the
electronic reporting form for bulk filings, we did not provide for
reporting more than two Borrowers. The
Department’s assumption in
preparing the [RPAPL § 1306] form was that, if a single 1‐to‐4 family
residence is the principal dwelling of multiple borrowers, (1) they
have the same interest in seeking counseling to avoid foreclosure, and
(2) even if their interests differ, it is difficult for New
York to allocate
resources to more than one borrower in a household. Consequently,
we do not believe RPAPL § 1306 should be interpreted as requiring
the reporting of more than two Borrowers on the bulk reporting form.

Pre‐foreclosure Information Form FAQs, N.Y. St. Dep’t Fin. Servs.,
https://on.ny.gov/3753YPA.

17
RPAPL § 1306 require that a lender’s filing include information about all borrowers, or
does § 1306 require only that a lender’s filing include information about one borrower?
4

III. Certification
“Although the parties did not request certification, we are empowered
to seek certification nostra sponte.” Corsair Special Situations Fund, L.P. v. Pesiri, 863
F.3d 176, 182–83 (2d Cir. 2017). Pursuant to the rules of the New York Court of
Appeals, “[w]henever it appears to . . . any
United States Court of Appeals . . . that
determinative questions of New York law are involved in a case pending before
that court for which no controlling precedent of the Court of Appeals exists, the
court may certify the dispositive questions of law to the Court of Appeals.” 22
N.Y.C.R.R. § 500.27(a); see also 2d Cir. R. 27.2(a) (“If state law permits, the court
may certify a question of state law to that state’s highest court.”).

4
In certifying this question, we have assumed that Jerry Schiffman is a
“borrower” within the meaning of RPAPL § 1306. We have made this assumption,
notwithstanding the fact that only Pamela Schiffman executed the note with
IndyMac Bank, F.S.B., because both Jerry and Pamela Schiffman executed, and are
listed as
borrowers in, the Consolidation, Extension, and Modification Agreement,
and the Loan Modification Agreement. If the Court of Appeals determines that
Jerry Schiffman is not in fact a “borrower” within the meaning of RPAPL § 1306
because of his failure to execute the note with IndyMac Bank, F.S.B., then this
certified question
will become moot.

18
Our decision to certify questions to the Court of Appeals is discretionary,
and when exercising that discretion we consider whether: (1) “the New York Court
of Appeals has not squarely addressed an issue and other decisions by New York
courts are insufficient to predict how the Court of Appeals
would resolve it”; (2)
“the statute’s plain language does not indicate the answer”; (3) “a decision on the
merits requires value judgments and important public policy choices that the New
York Court of Appeals is better situated than we to make”; and (4) “the questions
certified will control the outcome
of the case.” See Penguin Grp. (USA) Inc. v. Am.
Buddha, 609 F.3d 30, 42 (2d Cir. 2010). Each of those factors weighs in favor of
certification in this case.
First, as discussed above, the Court of Appeals has not decided the specific
questions of New York law raised here,
and similar questions have not “been
litigated in New York courts often enough that sufficient precedents exist for use
to make a determination concerning their proper outcome.” CFTC v. Walsh, 618
F.3d 218, 231 (2d Cir. 2010). Second, the plain language of RPAPL §§ 1304 and 1306
does not directly
speak to the questions at issue. Third, both questions turn on
policy determinations that the Court of Appeals is best suited to make, including
the balancing of lenders’ and borrowers’ interests, and the relative importance of

19
the state’s ability to collect and analyze foreclosure data. And fourth, the answers
to the questions will determine whether CIT demonstrated compliance with
§§ 1304 and 1306, thereby resolving this appeal. Because these factors weigh in
favor of certification, we certify the questions formulated above and restated
below.
C
ONCLUSION
For the reasons stated, the Court hereby certifies the following questions to
the New York Court of Appeals:
(1) Where a foreclosure plaintiff seeks to establish compliance with
RPAPL § 1304 through proof of a standard office mailing procedure,
and the defendant both denies receipt and seeks to rebut the
presumption of receipt by showing that the mailing procedure was
not followed, what showing must the defendant make to render
inadequate the plaintiff’s proof of compliance with § 1304?
(2) Where there are multiple borrowers on a single loan, does RPAPL
§ 1306 require that a lender’s filing include information about
all
borrowers, or does § 1306 require only that a lender’s filing include
information about one borrower?

20
We invite the Court of Appeals to reformulate these questions as it sees fit
or expand them to address any other issues of New York law that would assist this
Court in determining whether CIT demonstrated compliance with §§ 1304 and
1306.
It is hereby ORDERED that the Clerk
of this Court transmit to the Clerk of
the New York Court of Appeals this opinion as our certificate, together with a
complete set of briefs, appendices, and the record filed in this case by the parties.
This panel retains jurisdiction for purposes of resolving this appeal once the New
York Court of Appeals has responded to our certification.
Certificate
The foregoing is hereby certified to the New York Court of Appeals
pursuant to 22 N.Y.C.R.R. § 500.27(a) and 2d Cir. R. 27.2(a), as ordered by the
United States Court of Appeals for the Second Circuit.