Opinion
1489 Index No. 850190/21 Case No. 2023–00472
01-23-2024
5AIF SYCAMORE 2, LLC, Plaintiff–Appellant, v. 201 EB DEVELOPMENT III et al., Defendants–Respondents, New York State Department of Taxation and Finance et al., Defendants.
Vallely Law PLLC, Syosset (Erick R. Vallely of counsel), for appellant. Rosenberg & Estis, P.C., New York (Jake W. Bedor of counsel), for respondents.
Vallely Law PLLC, Syosset (Erick R. Vallely of counsel), for appellant.
Rosenberg & Estis, P.C., New York (Jake W. Bedor of counsel), for respondents.
Oing, J.P., Gesmer, Scarpulla, Rodriguez, Michael, JJ.
Order, Supreme Court, New York County (Francis A. Kahn, J.), entered December 23, 2022, which denied plaintiff's motion for summary judgment and for an order of reference and denied dismissal of defendants’ second affirmative defense, based on the failure to establish standing, unanimously affirmed, with costs.
Plaintiff failed to demonstrate, as a matter of law, that it had standing to foreclose ( JPMorgan Chase Bank, N.A. v. Caliguri, 36 N.Y.3d 953, 954, 136 N.Y.S.3d 225, 160 N.E.3d 693 [2020] ). To establish standing, plaintiff must prove that it is the holder or assignee of the underlying note at the time the action is commenced ( Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355, 361–362, 12 N.Y.S.3d 612, 34 N.E.3d 363 [2015] ). "Where there is no allonge or note that is either endorsed in blank or specially endorsed to the plaintiff, mere physical possession of a note at the commencement of a foreclosure action is insufficient to confer standing or to make a plaintiff the lawful holder of a negotiable instrument for the purposes of enforcing the note" ( U.S. Bank N.A. v. Moulton, 179 A.D.3d 734, 737, 116 N.Y.S.3d 86 [2d Dept. 2020] ).
Furthermore, the allonges at issue did not establish plaintiff's standing as the holder of note 1 and note 2 (see 938 St. Nicholas Ave. Lender LLC v. 936–938 Cliffcrest Hous. Dev. Fund Corp., 218 A.D.3d 417, 418, 193 N.Y.S.3d 22 [1st Dept. 2023] ; One Westbank FSB v. Rodriguez, 161 A.D.3d 715, 716, 78 N.Y.S.3d 63 [1st Dept. 2018] ; HSBC Bank USA, N.A. v. Roumiantseva, 130 A.D.3d 983, 985, 15 N.Y.S.3d 117 [2d Dept. 2015] ). The allonges at issue in this appeal did reference the same loan number as the note itself; however, since the allonges were undated and showed no evidence of having been securely attached, there are issues of fact as to plaintiff's status. Plaintiff's attempt to cure these defects with a reply affidavit was correctly rejected by the court as the affidavit was not intended to clarify an issue raised for the first time in opposition but sought to correct a defect in plaintiff's prima facie case (see Blackstock v. Accede Inc., 194 A.D.3d 476, 477, 148 N.Y.S.3d 443 [1st Dept. 2021] ).
Plaintiff asserts that Supreme Court erred by ignoring its alternative argument that it established standing based on " the dated, written notarized assignments of Note and Mortgage." We reject this argument for two reasons. First, plaintiff did not make this argument to the motion court. Second, the string of assignments that ended in the assignment to plaintiff do not show, as a matter of law, assignment of the notes at issue to plaintiff. In particular, some of the earlier assignments in the chain included a paragraph 5 confirming the assignment of the note together with the mortgage, but that paragraph does not appear in the assignment to plaintiff. For that reason, this case is not governed by our decision in ( Broome Lender LLC v. Empire Broome LLC, 220 A.D.3d 611, 612, 197 N.Y.S.3d 208 [1st Dept. 2023] ). Broome Lender made clear, by citing to ( Mortgage Stanley Private Bank, N.A. v. Ceccarelli, 210 A.D.3d 478, 479, 178 N.Y.S.3d 28 [1st Dept. 2022] ), that a foreclosure plaintiff, in order to establish standing, must have an assignment of the note in order to be relieved of the obligation to prove that, prior to commencement, it had physical possession of a note which is either endorsed in blank, endorsed to plaintiff, or has properly affixed allonges.