Defendant Nationstar Mortgage LLC d/b/a Mr. Cooper moves for an order: 1) granting it summary judgment; and 2) decertifying the classes in the instant action pursuant to CPLR §902. Plaintiff Francesca Bloom moves for an order: a) granting, pursuant to CPLR Rule 3212, summary judgment to plaintiff/class representative, Fancesca Bloom, as to Nationstar’s liability; b) granting, pursuant to CPLR Rule 3212, summary judgment to plaintiff/class representative, Francesca Bloom, as to damages for Class Two, subject to notification of all class members pursuant to CPLR Rule 907(2), (5); or, in the alternative; c) granting, pursuant to CPLR 3212, summary judgment to plaintiff/class representative, Francesca Bloom, as to damages for Class One subject to notification of all class members pursuant to CPLR Rule 907(2), (5); d) enjoining Nationstar from further charging borrowers a fax fee for their residential payoff statements when less than five payoff statements were requested in a calendar year by the borrower pursuant to General Business Law §349(h); e) reserving judgment as to plaintiff’s request for attorneys’ fees and expenses incurred for notification to class members, and f) for such other and further relief this Court deems just and proper. The following papers were read: Notice of Motion — Defendant’s Memorandum of Law — 1-7 Statement of Material Facts — Affidavit of Alan Bloom — Exhibits — Affirmation of A. Kaplun — Exhibits Notice of Motion — Statement of Material Facts — 8-13 Affirmation in Support — Exhibits — Affidavit of Francesca Bloom — Memorandum of Law Defendant’s Reply Memorandum of Law — 14-20 Defendant’s Memorandum of Law in Opposition — Response to Statement of Material Facts — Affidavit of Alan Bunt — Exhibits — Affirmation of Aleksandra Kaplun — Exhibits Memorandum of Law — Affirmation in Reply — 21-24 Exhibits — Affidavit of Service DECISION & ORDER Upon the foregoing papers it is hereby ORDERED that the defendant Nationstar Mortgage LLC d/b/a Mr. Cooper’s motion for summary judgment and decertification is granted to the extent that Class Two is decertified and Class One is narrowed as set forth below. All other requested relief is denied. Plaintiff Francesca Bloom’s motion is granted to the extent that the description of Class One is amended to read as follows: “A class consisting of all mortgagor(s), after October 3, 2015, who were charged by Nationstar a Fax Fee for furnishing the first requested payoff statement via fax for their mortgage when it related to an owner occupied, one-to-six family residential structure or residential condominium unit in New York State, and then paid that fax fee to Nationstar.” It is undisputed that a Fax Fee was paid to Nationstar only when a loan was actually paid off. Accordingly, the statutory requirement that the payoff request be for the purpose of completing a transaction where the loan is reasonably expected to be paid off is satisfied. In addition, plaintiff Francesca Bloom has established as a matter of law that she is entitled to reimbursement of the $25 Fax Fee paid to defendant Nationstar Mortgage LLC. “Pursuant to Real Property Law §274-a(2)(a), [Nationstar] was prohibited from charging the plaintiff” for plaintiff’s first requested payoff letter in connection with the sale of her home (Dougherty v. North Fork Bank, 301 AD3d 491, 492 [2nd Dept., 2003] citing Negrin v. Norwest Mortg., Inc., 263 AD2d 39; see also Dowd v. Alliance Mortg. Co., 32 AD3d 894 [2nd Dept., 2006]; MacDonnell v. PHH Mortg. Corp., 45 AD3d 537 [2nd Dept., 2007]). Further, plaintiff’s motion for summary judgment is granted with respect to Class One as amended. It is uncontroverted that there were 10,383 “Single-Quote Owner-Occupied Borrowers” who were charged a Fax Fee for their first and only payoff statement. In addition, it is uncontroverted that these Single-Quote Owner-Occupied Borrowers paid a total of $229,566.69 in Fax Fees to the defendant. All of these Fax Fees were paid in violation of Real Property Law §274-a.1 Accordingly, plaintiff is entitled to summary judgment against the defendant in the amount of $229,566.69 plus interest at the rate of 9 percent per annum from March 2, 2019 with respect to Class One as amended. Plaintiff’s application to reserve judgment as to plaintiff’s request for attorney’s fees and expenses incurred for notification to class members is granted. All other requested relief is denied. On April 17, 2018 plaintiff Francesca Bloom’s attorney requested a faxed payoff statement from the defendant Nationstar Mortgage LLC for the upcoming sale of her single-family home. This was the first and only payoff request made by the plaintiff. Defendant provided the faxed payoff statement but included a $25 Fax Fee in the payoff figure. Accordingly, the only way for the plaintiff to pay the loan in full was to pay the Fax Fee. The plaintiff, in order to complete the sale of her home, paid defendant the $25 Fax Fee included in the payoff figure. Thereafter, the plaintiff commenced the instant action against the defendant for, inter alia, violation of Real Property Law §274-a. Real Property Law §274-a(2)(a) provides as follows: “The mortgagee of an owner-occupied, one-to six-family residential structure or residential condominium unit, shall deliver within thirty days, any mortgage related documents to an authorized individual making a bona fide written demand for such documents. The mortgagee shall not charge for providing the mortgage-related documents, provided, however, the mortgagee may charge not more than twenty dollars, or such amount as may be fixed by the superintendent of financial services, for each subsequent payoff statement provided under this subdivision. If the mortgagee fails to deliver the mortgage-related documents, the mortgagee shall be liable for the actual damages to the mortgagor by reason of such failure. In computing actual damages the court may consider the actual rate of interest on the mortgage debt and current prevailing rate or rates of interest on comparable debts. However, actual damages do not include pain and suffering, mental or emotional distress or the like. The replacement costs of a lost abstract of title required to be delivered hereunder, may be deducted from the amount required to satisfy the mortgage.” By charging the plaintiff for her first requested payoff statement in connection with the sale of her home, the defendant violated Real Property Law §274-a. Further, “the plaintiff does possess a private right of action for the defendant’s…violation of Real Property Law § 274-a” (Negrin v. Norwest Mortgage, Inc., 263 AD2d 39 [2nd Dept., 1999]; see also MacDonnell v. PHH Mortg. Corp., 45 AD3d 537 [2nd Dept., 2007]; Dowd v. Alliance Mortg. Co., 74 AD3d 867 [2nd Dept., 2010]; Dowd v. Alliance Mortg. Co., 32 AD3d 894 [2nd Dept., 2006]; Dougherty v. North Fork Bank, 301 AD2d 491 [2nd Dept., 2003]). While the plaintiff has a private right of action for defendant’s violation of Real Property Law §274-a, she does not have a private right of action for defendant’s alleged violation of 3 NYCRR 419.9. 3 NYCRR 419.9, now renumbered as 3 NYCRR 419.4, provides as follows: “A servicer shall not charge a fee for providing a payoff statement or for issuing a release upon full prepayment, provided that a servicer may charge a reasonable fee for providing a payoff statement after issuing five or more payoff statements to a borrower in any calendar year.” 3 NYCRR 419.9 is included within Part 419, which is “a regulatory scheme applicable to certain mortgage loan servicers and other entities engaged in servicing mortgage loans” (Wells Fargo Bank v. Vanderkamp, 45 Misc.3d 1213(A) [2014]). 3 NYCRR 419.9 is enforceable by New York State’s Department of Financial Services. “Where, as here, a [regulation] does not explicitly provide for a private right of action, recovery may only be had under the [regulation] if a legislative intent to create such a right of action may “fairly be implied” in the statutory provisions and their legislative history” (Kamins v. United Healthcare Insurance Company of New York, Inc., 171 AD3d 715, 716 [2nd Dept., 2019] citing Sheehy v. Big Flats Community Day, 73 NY2d 629, 633, 543 NYS2d 18, 541 NE2d 18; see Brian Hoxie’s Painting Co. v. Cato-Meridian Cent. School Dist., 76 NY2d 207, 211, 557 NYS2d 280, 556 NE2d 1087; Ader v. Guzman, 135 AD3d 671, 672, 23 NYS3d 292). The applicable “inquiry involves three factors: ‘(1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme’ ” (Kamins v. United Healthcare Insurance Company of New York, Inc., 171 AD3d 715, 716 [2nd Dept., 2019] citing Maimonides Med. Ctr. v. First United Am. Life Ins. Co., 116 AD3d 207, 211, 981 NYS2d 739 quoting Carrier v. Salvation Army, 88 NY2d 298, 302, 644 NYS2d 678, 667 NE2d 328; see Ader v. Guzman, 135 AD3d at 672-673, 23 NYS3d 292). “The third factor is often noted to be the ‘most important’” (Kamins v. United Healthcare Insurance Company of New York, Inc., 171 AD3d 715, 716 citing Ader v. Guzman, 135 AD3d at 673, 23 NYS3d 292, quoting Cruz v. TD Bank, N.A., 22 NY3d 61, 70, 979 NYS2d 257, 2 NE3d 221). “In that regard, the Court of Appeals has held that ‘regardless of its consistency with the basic legislative goal, a private right of action should not be judicially sanctioned if it is incompatible with the enforcement mechanism chosen by the Legislature or with some other aspect of the over-all statutory scheme’ ” (Cruz v. TD Bank, N.A., 22 NY3d at 70-71, 979 NYS2d 257, 2 NE3d 221 quoting Sheehy v. Big Flats Community Day, 73 NY2d at 634-635, 543 NYS2d 18, 541 NE2d 18; see Goldman v. Simon Prop. Group, Inc., 58 AD3d 208, 215, 869 NYS2d 125). Thus, where “ the legislature clearly contemplated administrative enforcement of the statute ‘ “[t]he question then becomes whether, in addition to administrative enforcement, an implied private right of action would be consistent with the legislative scheme”‘ “(Kamins v. United States Healthcare Insurance Company of New York, Inc., 171 AD3d 715, 716 [2nd Dept., 2019] citing Ader v. Guzman, 135 AD3d at 673, 23 NYS3d 292, quoting AHA Sales, Inc. v. Creative Bath Prods., Inc., 58 AD3d 6, 16, 867 NYS2d 169, quoting Uhr v. East Greenbush Cent. School Dist., 94 NY2d 32, 40, 698 NYS2d 609, 720 NE2d 886). “A review of the relevant portions of [Part 419] indicates that allowing such a private right of action would be inconsistent with the legislative scheme” (Bhandari v. Isis, 45 AD3d 619, 621 [2nd Dept., 2007] citing Pelaez v. Seide, 2 NY3d 186, 201, 778 NYS2d 111, 810 NE2d 393; Sheehy v. Big Flats Community Day, 73 NY2d 629, 634-635, 543 NYS2d 18, 541 NE2d 18). Accordingly, a private right action does not exist for violation of 3 NYCRR 419.9. Further, utilizing General Business Law §349 to allege a violation of 3 NYCRR 419.9 “would constitute an impermissible ‘end run’ around the absence of a private right of action under” 3 NYCRR 419.9 (Seller v. Citimortgage, Inc., 118 AD3d 511 [1st Dept., 2014]). Thus, Class Two must be decertified as it is based upon violation of 3 NYCRR 419.9. Class One, which is based upon violation of Real Property Law §274-a, survives as amended. The foregoing constitutes the Decision and Order of this Court. So Ordered. Dated: August 24, 2021
