| Aurora Loan Servs., LLC v Mercius |
| 2016 NY Slip Op 02599 [138 AD3d 650] |
| April 6, 2016 |
| Appellate Division, Second Department |
[*1]
| Aurora Loan Services, LLC, Appellant, v MarcMercius, Respondent, et al., Defendants. |
Ballard Spahr, LLP, New York, NY (Martin C. Bryce, Jr., Philadelphia, PA, pro hacvice, and Justin A. Angelo of counsel), for appellant.
Kathleen Ames, Brooklyn, NY (Jeffrey M. Austin of counsel), for respondent.
In an action to foreclose a mortgage, the plaintiff appeals from an order of theSupreme Court, Kings County (Edwards, J.), dated March 4, 2015, which denied itsmotion, inter alia, for summary judgment on the complaint, and granted the cross motionof the defendant Marc Mercius for summary judgment dismissing the complaint insofaras asserted against him for lack of standing and, in effect, to cancel the notice ofpendency filed against the subject property.
Ordered that the order is modified, on the law, by deleting the provision thereofgranting the cross motion of the defendant Marc Mercius for summary judgmentdismissing the complaint insofar as asserted against him for lack of standing and, ineffect, to cancel the notice of pendency filed against the subject property, andsubstituting therefor a provision denying the cross motion; as so modified, the order isaffirmed, without costs or disbursements, and the notice of pendency is reinstated.
The defendant Marc Mercius (hereinafter the defendant) executed a note datedOctober 17, 2006, in the amount of $558,000 in favor of MortgageIT, Inc. To securerepayment of the note, the defendant delivered to MortgageIT, Inc., a mortgage oncertain property in Brooklyn. In February 2010, Aurora Loan Services, LLC (hereinafterthe plaintiff), the assignee of the mortgage, commenced this foreclosure action, allegingthat the defendant defaulted on the loan by failing to make the monthly payment due onSeptember 1, 2009. In the order appealed from, the Supreme Court denied the plaintiff'smotion, inter alia, for summary judgment on the complaint and granted the defendant'scross motion for summary judgment dismissing the complaint insofar as asserted againsthim for lack of standing and, in effect, to cancel the notice of pendency filed against thesubject property. We modify.
"Generally, in moving for summary judgment in an action to foreclose a mortgage, aplaintiff establishes its prima facie case through the production of the mortgage, theunpaid note, and evidence of default" (Plaza Equities, LLC v Lamberti, 118 AD3d 688, 689[2014]). "Where, as in this case, the plaintiff's standing has been placed in issue byreason of the defendant's answer, the plaintiff additionally must prove its standing as partof its prima facie showing" (HSBC Bank USA, [*2]N.A. vBaptiste, 128 AD3d 773, 774 [2015]; see Wells Fargo Bank, N.A. v Rooney, 132 AD3d 980, 981[2015]). "A plaintiff establishes its standing in a mortgage foreclosure action bydemonstrating that it is the holder or assignee of the underlying note at the time theaction is commenced" (LNVCorp. v Francois, 134 AD3d 1071, 1072 [2015]; see Aurora Loan Servs., LLC vTaylor, 25 NY3d 355, 361-362 [2015]). A plaintiff may demonstrate that it isthe holder or assignee of the underlying note "by showing either a written assignment ofthe underlying note or the physical delivery of the note" (U.S. Bank N.A. v Guy, 125AD3d 845, 846-847 [2015]; see Wells Fargo Bank, N.A. v Gallagher, 137AD3d 898 [2d Dept 2016]).
Here, in support of its motion, the plaintiff attempted to demonstrate, prima facie, itsstanding by submitting the affidavit of Michael Woods, a vice president of NationstarMortgage, LLC (hereinafter Nationstar), the business to which the plaintiff allegedlydelivered the subject note after the commencement of the action. The purpose of Woods'affidavit was to establish that the plaintiff had physical possession of the note prior to thecommencement of the action. However, the plaintiff failed to demonstrate theadmissibility of the records relied upon by Woods under the business records exceptionto the hearsay rule (see CPLR 4518 [a]). "A proper foundation for the admissionof a business record must be provided by someone with personal knowledge of themaker's business practices and procedures" (Citibank, N.A. v Cabrera, 130 AD3d 861, 861 [2015]; see Palisades Collection, LLC vKedik, 67 AD3d 1329, 1331 [2009]). Woods, an employee of Nationstar, didnot attest that he was personally familiar with the record keeping practices andprocedures of the plaintiff (see Citibank, N.A. v Cabrera, 130 AD3d at 861; US Bank N.A. v Madero, 125AD3d 757, 758 [2015]). Wood's assertions based on these records wereinadmissible, and "[s]ince the motion was predicated on evidence that was not inadmissible form, the plaintiff failed to establish its prima facie entitlement to judgment asa matter of law" (US Bank N.A. v Madero, 125 AD3d at 758). Furthermore,although there was evidence that Mortgage Electronic Registration Systems, Inc.(hereinafter MERS), as nominee for MortgageIT, Inc., assigned the mortgage and note tothe plaintiff, the plaintiff failed to establish delivery or assignment of the note to MERSprior to the execution of the assignment (see Citibank, N.A. v Herman, 125 AD3d 587, 589 [2015]).Since the plaintiff failed to meet its prima facie burden, its motion was properly denied,regardless of the sufficiency of the defendant's opposition papers (see Winegrad vNew York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]).
However, the Supreme Court erred in granting the defendant's cross motion forsummary judgment dismissing the complaint insofar as asserted against him for lack ofstanding and to cancel the notice of pendency filed against the subject property. "[T]heburden is on the moving defendant to establish, prima facie, the plaintiff's lack ofstanding, rather than on the plaintiff to affirmatively establish its standing in order for themotion to be denied. To defeat a defendant's motion, the plaintiff has no burden ofestablishing its standing as a matter of law" (Deutsche Bank Trust Co. Ams. v Vitellas, 131 AD3d 52,59-60 [2015] [citations omitted]). Here, the defendant, as the moving party, failed tomake a prima facie showing that the plaintiff lacked standing (see id. at 59-60).Hall, J.P., Roman, LaSalle and Barros, JJ., concur.