| JPMorgan Chase Bank, N.A. v Rosa |
| 2019 NY Slip Op 01206 [169 AD3d 887] |
| February 20, 2019 |
| Appellate Division, Second Department |
[*1]
| JPMorgan Chase Bank, National Association,Respondent, v Angel Rosa et al., Appellants, et al., Defendants. |
Riquet Figaro, Brooklyn, NY, for appellants.
Bonchonsky & Zaino, LLP, Garden City, NY (Peter R. Bonchonsky, Ellen W. Groarke, andKevin M. Butler of counsel), for respondent.
In an action to foreclose a mortgage, the defendants Angel Rosa and Lillian Torres-Rosa appealfrom (1) an order of the Supreme Court, Kings County (Noach Dear, J.), dated February 17, 2016,(2) an order of the same court, also dated February 17, 2016, and (3) an order of the same courtdated August 4, 2016. The first order dated February 17, 2016, insofar as appealed from, grantedthose branches of the plaintiff's motion which were for summary judgment on the complaint insofar asasserted against those defendants and to strike their answer, and for an order of reference. The secondorder dated February 17, 2016, insofar as appealed from, also granted those branches of the plaintiff'smotion which were for summary judgment on the complaint insofar as asserted against those defendantsand to strike their answer, and for an order of reference, and appointed a referee to ascertain andcompute the amount due to the plaintiff. The order dated August 4, 2016, denied those defendants'motion for leave to renew and reargue their opposition to the plaintiff's motion.
Ordered that the appeal from so much of the order dated August 4, 2016, as denied that branch ofthe motion of the defendants Angel Rosa and Lillian Torres-Rosa which was for leave to reargue isdismissed, as no appeal lies from an order denying reargument; and it is further,
Ordered that the orders dated February 17, 2016, are affirmed insofar as appealed from; and it isfurther,
Ordered that the order dated August 4, 2016, is affirmed insofar as reviewed; and it is further,
Ordered that one bill of costs is awarded to the plaintiff.
On November 10, 2008, the defendants Angel Rosa and Lillian Torres-Rosa (hereinafter togetherthe defendants) executed and delivered to Knightbridge Mortgage Bankers, LLC (hereinafterKnightbridge), a note whereby they promised to repay Knightbridge the principal sum of $518,161. Onthe same day, as collateral security for the note, the defendants executed and delivered to MortgageElectronic Registration Systems, Inc. (hereinafter MERS), solely as nominee for Knightbridge, itssuccessors and assigns, a mortgage, in the same principal amount, encumbering the defendants'property located at 1076 Lafayette Avenue in Brooklyn.
The plaintiff commenced this action to foreclose the mortgage. In their answer, the defendantsraised affirmative defenses, including lack of standing, "fraud in the original transaction," and waiverand/or estoppel.
The plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted againstthe defendants and to strike their answer, and for an order of reference. The defendants opposed themotion. The Supreme Court granted the motion in two orders, each dated February 17, 2016, and, inthe second order dated February 17, 2016, appointed a referee. The defendants moved for leave toreargue and renew their opposition to the plaintiff's motion. The court denied the motion, and thedefendants appeal from the three orders.
Generally, in an action to foreclose a mortgage, a plaintiff establishes its prima facie entitlement tojudgment as a matter of law through the production of the mortgage, the unpaid note, and evidence ofdefault (see HSBC Bank USA, N.A. vOscar, 161 AD3d 1055, 1056 [2018]; US Bank N.A. v Cohen, 156 AD3d 844, 845 [2017]; Deutsche Bank Natl. Trust Co. v Abdan,131 AD3d 1001, 1002 [2015]). "However, where, as here, a plaintiff's standing to commence aforeclosure action is placed in issue by a defendant, the plaintiff must also prove its standing as part ofits prima facie showing" (HSBC Bank USA, N.A. v Oscar, 161 AD3d at 1056; see USBank N.A. v Cohen, 156 AD3d at 845; Deutsche Bank Natl. Trust Co. v Abdan, 131AD3d at 1002). "A plaintiff has standing to commence a foreclosure action where it is the holder orassignee of the underlying note, either by physical delivery or execution of a written assignment prior tothe commencement of the action with the filing of the complaint" (HSBC Bank USA, N.A. vOscar, 161 AD3d at 1056 [internal quotation marks omitted]; see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361-362 [2015];US Bank N.A. v Cohen, 156 AD3d at 845). Once a note is transferred, the mortgage passesas an incident to the note (see Aurora Loan Servs., LLC v Taylor, 25 NY3d at 361; USBank N.A. v Cohen, 156 AD3d at 846).
Here, the plaintiff established, prima facie, that it had standing by demonstrating that it had physicalpossession of the note prior to the commencement of the action, as evidenced by its attachment of thenote, containing an endorsement to the plaintiff, executed by the original lender, to the summons andcomplaint when the action was commenced (see HSBC Bank USA, N.A. v Oscar, 161 AD3dat 1056; U.S. Bank N.A. v Henry, 157AD3d 839, 841 [2018]; US Bank N.A. v Cohen, 156 AD3d at 846; HSBC Bank USA, N.A. v Ozcan, 154AD3d 822, 824 [2017]; U.S. BankN.A. v Sabloff, 153 AD3d 879, 880 [2017]; U.S. Bank N.A. v Saravanan, 146 AD3d 1010, 1011 [2017]; JPMorgan Chase Bank, N.A. v Weinberger,142 AD3d 643, 645 [2016]). Under these circumstances, the defendants' arguments regarding thesufficiency of an affidavit of Jessica Dunn, an "authorized signer" for the plaintiff, the loan servicer, toprove the facts establishing the plaintiff's physical possession of the note prior to commencement of theaction, and the validity of a certain written assignment of mortgage, are irrelevant to the issue of standing(see Aurora Loan Servs., LLC v Taylor, 25 NY3d at 362).
The plaintiff further established its prima facie entitlement to judgment as a matter of law byproducing, in addition to the mortgage and the unpaid note, evidence of the defendants' default inrepayment of the loan (see HSBC Bank USA, N.A. v Oscar, 161 AD3d at 1056; US BankN.A. v Cohen, 156 AD3d at 845; Deutsche Bank Natl. Trust Co. v Abdan, 131 AD3d at1002).
In opposition to the plaintiff's showing, the defendants failed "to produce evidentiary proof inadmissible form sufficient to demonstrate the existence of a triable issue of fact as to a bona fidedefense" (Eastern Sav. Bank, FSB vSassouni, 68 AD3d 917, 917 [2009]; see State Bank of Albany v Fioravanti, 51NY2d 638, 647 [1980]; Solomon vBurden, 104 AD3d 839 [2013]; Wells Fargo Bank, N.A. v Webster, 61 AD3d 856 [2009]; Aames Funding Corp. v Houston, 44 AD3d692, 693 [2007]; Republic Natl. Bank of N.Y. v O'Kane, 308 AD2d 482 [2003]), "suchas waiver, estoppel, bad faith, fraud, or oppressive or unconscionable conduct on the part of theplaintiff" (Mahopac Natl. Bank v Baisley, 244 AD2d 466, 467 [1997]; see Nassau TrustCo. v Montrose Concrete Prods. Corp., 56 NY2d 175, 183 [1982]; Bank of Am., N.A. v DeNardo, 151 AD3d1008, 1010 [2017]; CitiMortgage, Inc. vGuillermo, 143 AD3d 852, 853 [2016]; Flushing Sav. Bank, FSB v Sharp Realty, LLC, 136 AD3d 652 [2016]).With regard to their allegations of fraud set forth in their affidavit, the defendants failed to raise a triableissue of fact as to the elements of material misrepresentation and justifiable reliance upon the allegedmisrepresentation (see Eurycleia Partners, LPv Seward & Kissel, LLP, 12 NY3d 553, 559 [2009]; Prompt Mtge. Providers of N. Am., LLC vZarour, 155 AD3d 912, 914 [2017]; JP Morgan Chase Bank, N.A. v Hall, 122 AD3d 576, 579 [2014]; House of Spices [India], Inc. v SMJ Servs.,Inc., 103 AD3d 848, 850 [2013]). First, the defendants' allegations that they "relied uponprior or contemporaneous statements of the plaintiff at the time of the execution of the note. . . violate the parol evidence rule and are barred" (M & T Mtge. Corp. vEthridge, 300 AD2d 286, 287 [2002]; see North Fork Bank & Trust Co. v Bernstein& Gershman, 201 AD2d 472 [1994]). " '[E]vidence of what may have been agreedorally between the parties prior to the execution of an integrated written instrument cannot be receivedto vary the terms of the writing' " (Bontempts v Aude Constr. Corp., 98 AD3d 1071, 1072 [2012], quotingBraten v Bankers Trust Co., 60 NY2d 155, 162 [1983]; see Gill v Bowne Global Solutions, Inc., 8 AD3d 339, 340 [2004];Del Vecchio v Cohen, 288 AD2d 426, 427 [2001]). Neither the purported oral agreement,entered into with Knightbridge's broker, Wilhelmina Smith, who allegedly represented that Knightbridgewould pay the defendants $100,000 for repairs at the closing, nor the purported modified oralagreement at the closing, to the effect that Knightbridge would pay the defendants that amount once thefunds cleared, was reflected anywhere in the written loan documents between Knightbridge and thedefendants. Thus, the defendants would not be permitted to submit evidence of the purported oralagreement or modified oral agreement at a trial (see Braten v Bankers Trust Co., 60 NY2d at161-162; Bontempts v Aude Constr. Corp., 98 AD3d at 1073; M & T Mtge. Corp. vEthridge, 300 AD2d at 287; North Fork Bank & Trust Co. v Bernstein &Gershman, 201 AD2d at 472-473). In addition, "[w]hile a general merger clause is ineffective toexclude parol evidence of fraud in the inducement, a specific disclaimer defeats any allegation that thecontract was executed in reliance upon contrary oral representations" (Legum v Russo, 133 AD3d 638, 640[2015] [internal quotation marks omitted]; seeBarnaba Realty Group, LLC v Solomon, 121 AD3d 730, 731 [2014]; DiBuono v Abbey, LLC, 95 AD3d1062, 1064 [2012]). Here, the defendants' claim of fraud in the inducement, based upon allegedprior oral agreements, is barred by their signatures acknowledging a "Notice of No Oral Agreements,"which specifically applied to, inter alia, "evidence of prior . . . oral agreements of theparties" (see Legum v Russo, 133 AD3d at 640).
Since the defendants rely on the same inadmissible evidence for their equitable estoppel defense,their " 'unsubstantiated allegations or assertions are insufficient' " to defeat the plaintiff'sshowing on that ground as well (State Bank of Albany v Fioravanti, 51 NY2d at 647, quotingZuckerman v City of New York, 49 NY2d 557, 562 [1980]).
Accordingly, we agree with the Supreme Court's determination granting those branches of theplaintiff's motion which were for summary judgment on the complaint insofar as asserted against thedefendants and to strike their answer, and for an order of reference.
Furthermore, we agree with the Supreme Court's determination denying that branch of thedefendants' motion which was for leave to renew. A motion for leave to renew "shall be based uponnew facts not offered on the prior motion that would change the prior determination" and "shall containreasonable justification for the failure to present such facts on the prior motion" (CPLR 2221 [e] [2],[3]). Renewal "is not a second chance freely given to parties who have not exercised due diligence inmaking their first factual presentation" (JPMorgan Chase Bank, N.A v Novis, 157 AD3d 776, 777 [2018][internal quotation marks omitted]; see Fardinv 61st Woodside Assoc., 125 AD3d 593, 595 [2015]; Jovanovic v Jovanovic, 96 AD3d 1019, 1020 [2012]). Here, thedefendants failed to set forth a reasonable justification for failing to present the alleged new facts inconnection with their prior opposition to the plaintiff's motion (see CPLR 2221 [e] [3]; DLJ Mtge. Capital, Inc. v David, 147 AD3d1024, 1026 [2017]; Cioffi v S.M.Foods, Inc., 129 AD3d 888, 891 [2015]; Jovanovic v Jovanovic, 96 AD3d at1020-1021). Rivera, J.P., Chambers, Cohen and Barros, JJ., concur.