Tuesday, March 15, 2011

Courts Overstepped in Requiring NY Attorneys to Sign Affirmations in Foreclosures

By Andrew Keshner | New York Law Journal

A state judge on Long Island has ruled that court administrators overstepped their rule-making powers when they required lenders' attorneys to attest to the accuracy of the documents they file in residential foreclosure actions.

Supreme Court Justice Thomas F. Whelan in Suffolk County concluded in LaSalle Bank v. Pace, 15822-2008, that no statute or legislative action gave Chief Judge Jonathan Lippman the power to require the attorney affirmations.

The judge granted summary judgment to LaSalle Bank in the action, approving an order of reference on the foreclosure of a Hampton Bays house. Among other defenses, the homeowners claimed the bank failed to supply the required affirmation.

According to court papers, the bank's attorneys later submitted the affirmation as part of papers in support of summary judgment. At any rate, Justice Whelan observed that the affirmation could be supplied at a later stage of the proceedings.

However, he went further, saying that he was "not convinced that the subject order constitutes a permissible exercise of the rule making authority vested in the chief administrator of the courts."

The judge noted that the Legislature had delegated to the courts the power to regulate the practice and procedure of settlement conferences it had mandated, but he said the administrators' rule-making authority did not give them "carte blanche" to "enlarge or abridge rights conferred by statute."

"This court can find no legislative delegation to the chief administrator by statute or otherwise which empowers the chief administrator to impose the substantive requirements that touch upon the nature and sufficiency of proof which the plaintiff must supply to the court in mortgage foreclosure actions," Justice Whelan wrote.

The affirmation requirement had "significantly" impaired lenders' "statutory remedy for foreclosure and sale," he said, pointing to a "vast reduction" in case filings and a "resounding halt" in the prosecution of foreclosure actions. And he said the requirement had had a "chilling" effect on the court's ability to exercise its own authority.

Christopher H. Thompson of Staten Island, the attorney for homeowners James F. and Linda Pace, said he planned to appeal.

"I am disappointed with the decision and although I respect Judge Whelan, I believe he misunderstands the law," he said. "I believe the court seized the opportunity to challenge the enforceability of the chief administrative judge's rules and directives."

James G. Ryan and Justin F. Capuano of Cullen & Dykman in Garden City represented LaSalle Bank. Mr. Ryan declined to comment.

David Bookstaver, a spokesman for the Office of Court Administration, said the affirmation requirement is still in force.

"We are aware of the decision," he said. "However, we are not a party to the case and we'll be watching to see if there's an appeal filed."

Judge Lippman announced the affirmation requirement last fall, as national concern grew over inaccurate court documents in residential foreclosures. Since then, the number of foreclosure filings has plummeted, with observers attributing that decline, at least in part, to the affirmation requirement.

Other judges are still enforcing the affirmation requirement.

Supreme Court Justice Peter H. Mayer in Suffolk Countyrecently denied a foreclosure action and ordered a sanction hearing. The decision was due, in part, because he faulted a submitted attorney affirmation that replaced the affirmation's official language of "diligent" inquiry with "reasonable" inquiry.

"[T]his Court requires counsel to submit an attorney affirmation in the specific form and with the specific language originally mandated by [Chief Administrative Judge Ann Pfau's] order of October 20, 2010," the judge said in Bayview Loan Servicing v. Bozymowski, 00296-2010.

A call for comment to Rosicki, Rosicki & Associates of Plainview, the firm representing the lender, was not returned.

1 comment:

  1. Judge Thomas F. Whelan must know that allowing Fraud through forgery constitutes Fraud by the Court via the judge.