| Deutsche Bank Natl. Trust Co. v Monica |
| 2015 NY Slip Op 06453 [131 AD3d 737] |
| August 6, 2015 |
| Appellate Division, Third Department |
[*1]
| Deutsche Bank National Trust Company, as Trustee inTrust for Registered Holders of VCM Series 2009-1, Respondent, v Timothy Monica,Also Known as Timothy I. Monica, et al., Appellants, et al.,Defendants. |
Law Offices of Ronald J. Kim, PC, Saratoga Springs (Ronald J. Kim of counsel), forappellants.
Doonan, Graves & Longoria, LLC, Beverly, Massachusetts (Stephen M.Valente of counsel), for respondent.
Lynch, J. Appeal from an order of the Supreme Court (Chauvin, J.), entered February13, 2013 in Saratoga County, which, among other things, granted plaintiff's motion forsummary judgment.
In 2006, defendants Timothy Monica and Kathy Monica (hereinafter collectivelyreferred to as defendants) executed a note in favor of American Home MortgageAcceptance, Inc. (hereinafter AHMA) that was secured by a mortgage on real propertylocated in Saratoga County. For recording purposes, the mortgage names MortgageElectronic Registration Systems, Inc. (hereinafter MERS) as nominee and mortgagee.MERS assigned the mortgage to plaintiff in 2009. Plaintiff then commenced the [*2]instant foreclosure action in 2011, four years afterdefendants defaulted on the loan.[FN*] Following joinder of issue, plaintiffmoved for summary judgment striking defendants' answer and appointing a referee tocompute the amount owed. Defendants cross-moved for, among other things, summaryjudgment dismissing the complaint against them for lack of standing. Supreme Courtgranted plaintiff's motion and denied defendants' cross motion. Defendants appeal.
"In a foreclosure action, a [plaintiff] producing evidence of the mortgage, unpaidnote and the mortgagor's default will be entitled to summary judgment" (HSBC Bank USA, N.A. vSage, 112 AD3d 1126, 1127 [2013], lvs dismissed 22 NY3d 1172[2014], 23 NY3d 1015 [2014] [citations omitted]; see PHH Mtge. Corp. v Davis, 111 AD3d 1110, 1111[2013], lv dismissed 23 NY3d 940 [2014]). "Where, as here, the issue of standingis raised as an affirmative defense, the plaintiff must also prove its standing in order to beentitled to relief" (Wells FargoBank, NA v Ostiguy, 127 AD3d 1375, 1376 [2015] [citations omitted]; see Nationstar Mtge., LLC vCatizone, 127 AD3d 1151, 1152 [2015]). Standing in a mortgage foreclosureaction is established by proof that the plaintiff, at the time the action was commenced,was the holder or assignee of the mortgage and the holder or assignee of the underlyingnote (see Chase Home Fin.,LLC v Miciotta, 101 AD3d 1307, 1307 [2012]; Wells Fargo Bank, N.A. vWine, 90 AD3d 1216, 1217 [2011]). That said, the note, and not the mortgage,is the dispositive instrument that conveys standing to foreclose under New York law (see Aurora Loan Servs., LLC vTaylor, 25 NY3d 355, 361-362 [2015]).
Here, plaintiff produced the mortgage, the unpaid note, the notice of default that wassent to defendants by Acqura Loan Services—plaintiff's loan servicingcompany—and an affidavit by Doug Battin, a senior vice-president of Acqura,who confirmed defendants' default. While this documentation was sufficient to satisfyplaintiff's entitlement to an award of summary judgment, the core question here iswhether plaintiff proved that it has standing to obtain such relief. There is no dispute thatplaintiff received an assignment of the mortgage through MERS, but the assignee of onlya mortgage has no standing (seeBank of Am., N.A. v Paulsen, 125 AD3d 909, 911 [2015]; Citibank, N.A. v Herman, 125AD3d 587, 588 [2015]). Here, plaintiff maintains that it has standing through itsphysical possession of the note at the time that the action was commenced. Since the notehas only an undated indorsement in blank from the original lender, it does not evidenceplaintiff's possessory interest (see Bank of Am., N.A. v Kyle, 129 AD3d 1168, 1169[2015]). To establish physical possession, plaintiff produced the affidavit of Battin andanother Acqura employee recounting that Acqura acquired the underlying loandocumentation from plaintiff in June 2009, imaged the documentation into its ownrecords system and returned the original documentation to plaintiff. Based on thisdocumentation, Battin averred that the note was transferred to plaintiff "by way of anallonge and/or endorsement."
Defendants dispute the admissibility of Battin's affidavit on the ground that thebusiness records about which he attested were neither made in Acqura's regular course ofbusiness nor within his personal knowledge. While "the mere filing of papers receivedfrom other entities, even if they are retained in the regular course of business, isinsufficient to qualify the documents as business records" (People v Cratsley, 86NY2d 81, 90 [1995] [internal quotation marks and citation omitted]), such records arenonetheless admissible "if the recipient can establish personal knowledge of the maker'sbusiness practices and procedures, or that the records provided by the maker wereincorporated into the recipient's own records or routinely relied upon by the recipient inits business" (State of New Yorkv 158th St. & Riverside Dr. Hous. Co., Inc., 100 AD3d 1293, [*3]1296 [2012], lv denied 20 NY3d 858 [2013]). Tobe admissible, these documents should carry the indicia of reliability ordinarilyassociated with business records (see People v Cratsley, 86 NY2d at 91; One Step Up, Ltd. v Webster Bus.Credit Corp., 87 AD3d 1, 11 [2011]; Corsi v Town of Bedford, 58 AD3d 225, 231-232 [2008],lv denied 12 NY3d 714 [2009]). Given Acqura's agency status as servicer of theloan for plaintiff, we agree with plaintiff that the Acqura records qualify as businessrecords (see CPLR 4518 [a]; People v Cratsley, 86 NY2d at 90; Merrill Lynch Bus. Fin. Servs. Inc.v Trataros Constr., Inc., 30 AD3d 336, 337 [2006], lv denied 7 NY3d715 [2006]).
"[W]here [a] plaintiff possesses a note that, on its face or by allonge, contains anindorsement in blank or bears special indorsement payable to the order of the plaintiff,"such party is a holder of the note and entitled to enforce the instrument (Wells FargoBank, NA v Ostiguy, 127 AD3d at 1376; see Nationstar Mtge., LLC v Davidson, 116 AD3d 1294,1296 [2014], lv denied 24 NY3d 905 [2014]; see also Hartford Acc. &Indem. Co. v American Express Co., 74 NY2d 153, 159 [1989]). Here, Battin'saffidavit established that, prior to the commencement of the action, plaintiff possessedthe underlying note indorsed in blank by AHMA (compare Bank of Am., N.A. vKyle, 129 AD3d at 1169). Defendants, in turn, have failed to raise any question offact as to whether plaintiff continued to retain possession. As such, we conclude thatSupreme Court properly found that plaintiff had standing to bring the instant foreclosureaction (see Aurora Loan Servs., LLC v Taylor, 25 NY3d at 361-362;Nationstar Mtge., LLC v Davidson, 116 AD3d at 1296; HSBC Bank USA,N.A. v Sage, 112 AD3d at 1127-1128).
Garry, J.P., Egan Jr. and Rose, JJ., concur. Ordered that the order is affirmed, withcosts.
Footnote *:The record shows thattwo prior foreclosure actions were voluntarily discontinued.