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USFN 25th Anniversary

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New York: The Attorney’s Affirmation — One Court’s Ruling

by Bruce J. Bergman
Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. – USFN Member (NY)

If lenders and servicers did not know how bizarre interpretation of the surfeit of rules in New York foreclosures has become, a new case illustrates the message. [U.S. Bank, N.A. v. Boyce, 93 A.D.3d 782, 940 N.Y. Sup. Ct. 2d 656 (2d Dept. 2012)].

Servicers are familiar with the court mandate in New York effective October 20, 2010, (Administrative Order 548/10 superseded by Administrative Order 431/11), requiring plaintiffs’ counsel in a residential foreclosure action to file an affirmation confirming the accuracy of the pleadings. For cases pending at the time where no judgment was entered, the filing was needed with the order of reference or the judgment. This affirmation is, by itself, controversial and contentious; however, for the moment it needs to be filed, and plaintiffs’ counsel complies.

Now, turning to what is so troubling about the Boyce case cited above. The plaintiff had filed its order of reference thirteen months before the mentioned administrative order was promulgated. Obviously, then, when the administrative order was submitted, there was no obligation to file the special attorney’s affirmation. Undaunted, the trial court denied the reference for want of the attorney affirmation! Although the court was considering the application for the reference after the affirmation became a requirement, the affirmation absolutely could not have been needed when the application was made.

Upon appeal, the order was appropriately reversed. Yes, observed the appeals court, while the foreclosing plaintiff would be obliged to file the affirmation when later applying for the judgment, no such imperative attached to the earlier order of reference.

So reason prevailed in the end and the foreclosure finally proceeded — but only at the considerable cost of an appeal and the loss of all the attendant time during which interest accrual increased the debt.

There are close calls in the law and unending nuance so that the need to sometimes pursue appeals is an understandable and acceptable aspect of litigation. But errors like this are beyond the pale and are indicative of the lender-servicer predicament in these extraordinary times. Lenders and servicers may win in the end, but it just might be a Pyrrhic victory.

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