The Perils of an Erroneously-Granted Summary Judgment, By Adrienne B. Koch
New York Law Journal (June 26, 2020)
It is a well-known principle of New York law that on a summary judgment motion the moving party must demonstrate with admissible evidence that no material issue of fact exists. If that burden is not met, a court has no option but to deny the motion “regardless of the sufficiency of the opposing papers.” See Winegrad v. New York University Med. Cntr., 64 N.Y.2d 851, 853 (1985). The federal rule, while not quite as categorical, is similar: “courts, in considering a motion for summary judgment, must review the motion, even if unopposed, and determine from what it has before it whether the moving party is entitled to summary judgment as a matter of law.” Vermont Teddy Bear Co., Inc. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004) (internal quotation marks omitted).
On the surface, this seems simple enough: summary judgment motions should be properly supported. But it also stands as a signal of caution. If the court erroneously grants summary judgment where the moving party has not met its burden, the moving party may ironically be worse off than if the motion had been denied in the first place. This article explores why that is the case and what litigants and their counsel must do to prevent it.
Courts do make mistakes; that is why there are appellate courts. But in most circumstances, the appellate court is limited to determining whether the lower court correctly resolved the issues and arguments that were actually presented to it and will not reverse based on an argument that was not presented below. In contrast, because a motion for summary judgment that is not properly supported must be denied “regardless of the sufficiency of the opposing papers,” appellate courts can and do reverse orders granting summary judgment without considering whether the defects that lead to reversal were actually raised below.
The Second Department’s recent decision in U.S. Bank National Assoc. v. Herzberg, 180 A.D.3d 952 (2d Dept. 2020), provides an illustration. There, the plaintiff bank sued to foreclose on a mortgage, claiming that the defendant borrower had defaulted in making certain payments. The bank ultimately sought and was awarded summary judgment. The victory, however, was short-lived: the Second Department reversed.
The reason for this reversal was a seemingly technical defect in the bank’s proof. In his answer, the pro se defendant alleged that the bank did not comply with the notice requirements set forth in RPAPL 1304. That statute requires that certain notices be sent (a) by both registered or certified mail and first-class mail; and (b) both to the last known address of the borrower and, if different, to the residence that is the subject of the mortgage. Because the defendant raised the statute in his answer, to prevail the bank had to demonstrate that it had complied with those notice requirements. This, in turn, necessitated “[p]roof of the requisite mailing . . . 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.” U.S. Bank,180 A.D.3d at 953 (citation and internal quotation marks omitted).
In its motion for summary judgment, however, the bank “failed to submit an affidavit of service or any evidence of mailing by the post office demonstrating that it properly served the defendant pursuant to the terms of RPAPL 1304.” Id. at 953-54. Instead, it submitted an affidavit from a representative of its loan servicer that, the court held, did not establish that the representative had personal knowledge either of the mailing itself or “of a standard office mailing procedure designed to ensure that items are properly addressed and mailed.” Id. at 954 (citations and internal quotation marks omitted). As a result, the bank’s motion “should have been denied without regard to the sufficiency of the defendant’s opposition papers.” Id.
In U.S. Bank, the defendant apparently did raise these issues in the lower court. But the Appellate Division’s decision makes clear that it would not have mattered if he did not do so. He would have been entitled to a reversal anyway – “without regard to the sufficiency of [his] opposition papers” in the lower court – because proof of appropriate mailing was part of the bank’s prima facie burden on its motion.
For the bank, this result may have been worse than merely an appellate loss. It commenced the action in December of 2014, and was awarded summary judgment in June of 2018. See 180 A.D.3d at 953. At that point, a referee was also appointed to determine the amount due. Id. Summary judgment was reversed in February 2020 – more than a year and a half after it was entered, and more than five years after the litigation was commenced. Id. In other words, more than five years after bringing suit (and more than a year and a half after ostensibly prevailing on the merits), the bank was essentially sent back to the drawing board. All of this happened simply because the appellate court found that it failed to establish that the witness who signed its moving affidavit had personal knowledge of the “standard office mailing procedure” of its loan servicer.
It is of course not clear whether the bank could have done what the court said was required. Perhaps there was no available witness who could make the kind of affidavit the court held was missing. But in all events, the absence of such an affidavit proved costly.
There is an object lesson here. A party moving for summary judgment must pay scrupulous attention to the elements of the relevant claim or defense, and make sure to have the requisite evidentiary proof with respect to each of them. As the U.S. Bank case illustrates, a failure of proof on any one of those elements can be grounds for reversal of a favorable ruling. Accord, e.g., Couchman v. Nunez, 180 A.D.3d 645, 646 (2d Dept. 2020). Similarly, the moving affidavits should be from witnesses with actual, personal knowledge; lack of such knowledge is fertile ground for reversal. See, e.g., Dorsey v. Les Sans Culottes, 43 A.D.3d 261 (1st Dept. 2007). If the motion rests on business records, special care should be taken with respect to their qualifications; gaps in that regard frequently result in reversal of summary judgment. See, e.g., HSBC Bank USA, N.A. v. Williams, 177 A.D.3d 950, 953-54 (2d Dept 2019) (collecting cases).
In addition, where applicable rules require a statement of material facts supported with evidence, it must be specifically provided. If not, summary judgment can be reversed – even if the opposing party failed to controvert the asserted facts below. See, e.g., Giannullo v. City of New York, 322 F.3d 139, 142-43 (2d Cir. 2003). And particular caution should be taken with affirmations of counsel: unless the lawyer has personal knowledge of the facts, such affirmations “lack[] any probative value.” See Roemer v. Allstate Indemnity Insurance Co., 163 A.D.3d 1324, 1327 (3d Dept. 2018).
Summary judgment should be approached with the same care as a trial. Although it may be possible to get away with less, the result may ultimately set the moving party back so substantially as to do more harm than good.
Adrienne B. Koch is a litigation partner with Katsky Korins in New York.
Reprinted with permission from the June 29, 2020 edition of the “New York Law Journal”© 2020 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. ALMReprints.com – 877-257-3382 – reprints@alm.com.