| U.S. Bank N.A. v Fisher |
| 2019 NY Slip Op 01444 [169 AD3d 1089] |
| February 27, 2019 |
| Appellate Division, Second Department |
[*1]
| U.S. Bank National Association, as Trustee, Successor in Interest toWachovia Bank, N.A., as Trustee for J.P. Morgan Mortgage Trust Series 2005-A3,Respondent, v Robert I. Fisher, Also Known as Robert Fisher, Appellant, et al.,Defendants. |
Berger, Fischoff & Shumer, LLP, Syosett, NY (Gabrielle D. Wasenius of counsel),forappellant.
Eckert Seamans Cherin & Mellott, LLC, White Plains, NY (Jessica J. Yoo and GeraldineCheverko of counsel), for respondent.
In an action to foreclose a mortgage, the defendant Robert I. Fisher appeals from (1) an order ofthe Supreme Court, Nassau County (Thomas A. Adams, J.), entered November 18, 2015, and (2) anorder of the same court entered November 19, 2015. The order entered November 18, 2015, grantedthose branches of the plaintiff's motion which were for summary judgment on the complaint insofar asasserted against the defendant Robert I. Fisher and for an order of reference, and denied the crossmotion of that defendant, inter alia, to impose a sanction upon the plaintiff for failing to negotiate in goodfaith as required by CPLR 3408 (f). The order entered November 19, 2015, insofar as appealed from,granted and denied the same relief as the order entered November 18, 2015, and appointed a refereeto compute the amount due on the mortgage loan.
Ordered that the appeal from the order entered November 18, 2015, is dismissed, as that orderwas superseded by the order entered November 19, 2015; and it is further,
Ordered that the order entered November 19, 2015, is reversed insofar as appealed from, on thelaw, those branches of the plaintiff's motion which were for summary judgment on the complaint insofaras asserted against the defendant Robert I. Fisher and for an order of reference are denied, thatdefendant's cross motion is granted to the extent that the matter is remitted to the Supreme Court,Nassau County, for further proceedings consistent herewith, and the order entered November 18,2015, is vacated; and it is further,
Ordered that one bill of costs is awarded to the defendant Robert I. Fisher.
The plaintiff commenced this action against, among others, the defendant Robert I. Fisher and hisnow-deceased wife, seeking to foreclose the mortgage on their home in Locust Valley. Fisher joinedissue by verified answer, in which he raised affirmative defenses, including lack of standing and, ineffect, failure to comply with statutory notice requirements. The plaintiff and Fisher subsequentlyparticipated in statutorily mandated settlement conferences, meeting 11 times over the course ofapproximately 19 months, until the final conference, at which the plaintiff reported that the applicationfor a loan modification had been denied due to "lack of affordability."
The plaintiff moved, inter alia, for summary judgment on the complaint and for an order ofreference. Fisher opposed the motion and cross-moved, inter alia, to impose a sanction upon theplaintiff for failing to negotiate in good faith as required by CPLR 3408 (f). The Supreme Court, interalia, granted those branches of the plaintiff's motion and denied that branch of Fisher's cross motion.Fisher appeals.
We agree with the Supreme Court's determination that the plaintiff established its standing tocommence this action. Where, as here, the plaintiff's standing is placed in issue by a defendant, theplaintiff must prove its standing as part of its prima facie showing (see JPMorgan Chase Bank, N.A. v Weinberger, 142 AD3d 643, 644[2016]; U.S. Bank, N.A. v Collymore,68 AD3d 752, 753 [2009]). A plaintiff establishes its standing in a mortgage foreclosure action bydemonstrating that it was the holder or assignee of the underlying note at the time the action wascommenced (see Aurora Loan Servs., LLC vTaylor, 25 NY3d 355, 361 [2015]; Deutsche Bank Natl. Trust Co. v Brewton, 142 AD3d 683, 684 [2016]).Either a written assignment of the underlying note or the physical delivery of the note is sufficient totransfer the obligation, and the mortgage passes with the debt as an inseparable incident (seeJPMorgan Chase Bank, N.A. v Weinberger, 142 AD3d at 644; U.S. Bank, N.A. vCollymore, 68 AD3d at 753).
Here, a copy of the underlying note, which was endorsed in blank, was annexed to the complaint.Thus, the plaintiff established, prima facie, that it had standing to commence the action by demonstratingthat it had physical possession of the note when it commenced the action (see Wells Fargo Bank, N.A. v Frankson,157 AD3d 844, 845 [2018]; Bank ofN.Y. Mellon v Burke, 155 AD3d 932, 933 [2017]; Wells Fargo Bank, N.A. v Thomas, 150 AD3d 1312, 1313 [2017]; Deutsche Bank Natl. Trust Co. v Logan, 146AD3d 861, 862 [2017]). Contrary to Fisher's contention, there is no requirement that an entity inpossession of a negotiable instrument that has been endorsed in blank must establish how it came intopossession of the instrument in order to be able to enforce it (see UCC 3-204 [2]; WellsFargo Bank, N.A. v Thomas, 150 AD3d at 1313; Deutsche Bank Natl. Trust Co. vLogan, 146 AD3d at 863; JPMorgan Chase Bank, N.A. v Weinberger, 142 AD3d at645). "Further, where the note is affixed to the complaint, 'it is unnecessary to give factual details of thedelivery in order to establish that possession was obtained prior to a particular date' "(Deutsche Bank Natl. Trust Co. v Logan, 146 AD3d at 863, quoting JPMorgan ChaseBank, N.A. v Weinberger, 142 AD3d at 645; see Aurora Loan Servs., LLC v Taylor, 25NY3d at 362; HSBC Bank USA, N.A. vOzcan, 154 AD3d 822, 824 [2017]; Wells Fargo Bank, N.A. v Thomas, 150 AD3dat 1313). In opposition, Fisher failed to raise a triable issue of fact as to whether the plaintiff hadstanding (see JPMorgan Chase Bank, N.A. v Weinberger, 142 AD3d at 645; Flagstar Bank, FSB v Mendoza, 139 AD3d898, 900 [2016]).
RPAPL 1304 (1), which applies to home loans, provides that "at least ninety days before a lender,an assignee or a mortgage loan servicer commences legal action against the borrower, . . .including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give notice to theborrower." The statute sets forth the requirements for the content of such notice (see RPAPL1304 [1]), and provides that such notice must be sent by registered or certified mail and by first-classmail to the last known address of the borrower and to the subject residence (see RPAPL 1304[2]). "[P]roper service of RPAPL 1304 notice on the borrower or borrowers is a condition precedentto the commencement of a foreclosure action, and the plaintiff has the burden of establishing satisfactionof this condition" (Aurora Loan Servs., LLC vWeisblum, 85 AD3d 95, 106 [2011]; see Wells Fargo Bank, N.A. v Lewczuk, 153 AD3d 890, 891-892[2017]; Citibank, N.A. v Wood, 150AD3d 813, 814 [2017]; Flagstar Bank,FSB v Damaro, 145 AD3d 858, 860 [2016]).
Here, the plaintiff failed to demonstrate, prima facie, its strict compliance with RPAPL 1304 (see Wells Fargo Bank, N.A. v Trupia, 150AD3d 1049, 1050 [2017]; Citibank, N.A. v Wood, 150 AD3d at 814). The plaintiffsubmitted the affidavit of Sherry Benight, an officer of the plaintiff's loan servicer, Select PortfolioServicing, Inc. (hereinafter SPS), stating that her review of records maintained by SPS revealed that a"[ninety-day pre-foreclosure notice] dated September 13, 2012, . . . was sent toBorrower(s) by certified and first class mail." A copy of the notice to Fisher was annexed to Benight'saffidavit, which contained a bar code with a 20-digit number below it, but no language indicating that amailing was done by first-class or certified mail, or even that a mailing was done by the U.S. PostalService (see Bank of N.Y. Mellon vZavolunov, 157 AD3d 754, 756 [2018]; Wells Fargo Bank, N.A. v Lewczuk, 153AD3d at 892; Wells Fargo Bank, N.A. v Trupia, 150 AD3d at 1050). Further, Benight did notmake the requisite showing that she was familiar with the plaintiff's mailing practices and procedures,and therefore did not establish proof of a standard office practice and procedure designed to ensurethat items are properly addressed and mailed (see Bank of N.Y. Mellon v Zavolunov, 157AD3d at 757; Wells Fargo Bank, N.A. v Lewczuk, 153 AD3d at 892; Wells Fargo Bank,N.A. v Trupia, 150 AD3d at 1050; Citibank, N.A. v Wood, 150 AD3d at 814; CitiMortgage, Inc. v Pappas, 147 AD3d900, 901 [2017]). Since the plaintiff failed to establish, prima facie, that it strictly complied with therequirements of RPAPL 1304, the Supreme Court should have denied those branches of its motionwhich were for summary judgment on the complaint insofar as asserted against Fisher and for an orderof reference, regardless of the sufficiency of the opposing papers (see Bank of N.Y. Mellon vZavolunov, 157 AD3d at 754; Wells Fargo Bank, N.A. v Lewczuk, 153 AD3d at 892;Wells Fargo Bank, N.A. v Trupia, 150 AD3d at 1051; Citibank, N.A. v Wood, 150AD3d at 814).
In addition, the Supreme Court should not have denied Fisher's cross motion without firstconducting a hearing on the issue of whether the plaintiff negotiated in good faith as required by CPLR3408 (f). CPLR 3408 (f) requires the parties to a residential foreclosure action to attend settlementconferences at an early stage of the litigation, at which they must "negotiate in good faith to reach amutually agreeable resolution." In support of his cross motion, Fisher submitted evidence that theplaintiff "engaged in dilatory conduct by making piecemeal document requests, providing contradictoryinformation, and repeatedly requesting documents which had already been provided" (Deutsche Bank Natl. Trust Co. v Varelis,151 AD3d 934, 935 [2017]; see AuroraLoan Servs., LLC v Diakite, 148 AD3d 662, 663 [2017]; LaSalle Bank, N.A. v Dono, 135 AD3d827, 829 [2016]; Onewest Bank, FSB vColace, 130 AD3d 994, 996 [2015]). Since Fisher's submissions raise a factual issue as towhether the plaintiff negotiated in good faith and deprived him of a meaningful opportunity to resolve theaction through loan modification or other potential workout options (see CPLR 3408 [f]), thecourt should have held a hearing to determine this issue before deciding the plaintiff's motion (seeOnewest Bank, FSB v Colace, 130 AD3d at 996). Accordingly, we remit the matter to theSupreme Court, Nassau County, for a hearing to determine whether the plaintiff met its obligation tonegotiate in good faith pursuant to CPLR 3408 (f) and, if it did not, to impose an appropriate remedy(see CPLR 3408 [j]).
Fisher's contention that the Supreme Court erred in granting judgment against his deceased wife isnot properly before this Court (see WellsFargo Bank, N.A. v Bachmann, 145 AD3d 712, 713 [2016]). Balkin, J.P., Roman, Millerand Brathwaite Nelson, JJ., concur.