On December 15, 2021, the Second Department issued an opinion in the case of Bank of America v. Kessler that considered the strict application of RPAPL 1304.  The Court noted that the statute specifically provides that “[t]he notices required by this section shall be sent by the lender, assignee, or mortgage loan servicer in a separate envelope from any other mailing or notice.”  The Court held that “inclusion of any material in the separate envelope sent to the borrower under RPAPL 1304 that is not expressly delineated in these provisions constitutes a violation of the separate envelope requirement of RPAPL 1304(2).”  The Court disagreed with the dissent that suggested that the additional language was clear and unambiguous and did not violate the plan language, spirit or intent of the statute.

In the Kessler case, the Plaintiff acknowledged that RPAPL 1304 notice included other information in two separate notices relating to the rights of a debtor in bankruptcy and in military service.  The Court held given that the Plaintiff failed to strictly comply with the requirements of RPAPL 1304, summary judgment was properly denied.  The Court also held that Defendant had “established his prima facie entitlement to judgment as a matter of law dismissing the complaint, insofar as asserted against him by showing that the Plaintiff failed to comply with RPAPL 1304 when it sent additional material in the same envelope as the requisite notice under RPAPL 1304.

In the case of Wells Fargo v. DeFeo, decided by the Second Department on December 29, 2021, the Plaintiff failed to demonstrate strict compliance with RPAPL 1304(2).  Specifically, the 90-day notice submitted by Plaintiff included an additional notice under the Federal Home Affordable Modification Program.  The Court determined that where Plaintiff failed to demonstrate that the RPAPL 1304 notice was served in accordance with the statute, it failed to establish the strict compliance with RPAPL 1304 and Plaintiff’s Cross-Motion to Strike Defendant’s Answer with Affirmative Defenses and for an Order of Reference should have been denied.

The Second Department issued another decision and order on December 29, 2021 that also addressed compliance with RPAPL 1304.  In the case of City Mortgage, Inc. v. Dente, the Court considered whether the inclusion of extraneous information on the second page of the notice that stated “the purpose of this communication is to collect a debt and any information obtained will be used for that purpose.  TO THE EXTENT YOUR OBLIGATION HAS BEEN DISCHARGED OR IS SUBJECT TO AN AUTOMATIC STAY OF A BANKRUPTCY ORDER UNDER TITLE XI OF THE UNITED STATES CODE, THIS NOTICE IS FOR COMPLIANCE AND INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE A DEMAND FOR PAYMENT OR AN ATTEMPT TO COLLECT ANY SUCH OBLIGATION.”  The Court concluded that the Defendants had established that “the plaintiff failed to strictly comply with RPAPL 1304, on the ground that additional material was sent in the same envelope as the 90-day notice required by RPAPL 1304 (see Bank of America, N.A. v. Kessler, __________ A.D.3d ____________, 2021 N.Y. Slip Op. 06979 [2d Dept.]).  The plaintiff failed to raise a triable issue of fact in opposition.  Thus, the Supreme Court should have denied the plaintiff’s Motion for a Judgment of Foreclosure and Sale, and should have granted those branches of the defendants’ Cross-Motion which were for summary judgment dismissing the complaint, insofar as asserted against the defendants Dustin J. Dente and Elizabeth Dente.”

While these cases will be appealed, at this point the take away is that RPAPL 1304 must be strictly complied with, and no information or extraneous language beyond that set out in the statute should be included with the notice or even in the envelope sent to the borrowers.