Opinion
606973-2015
03-18-2019
NATIONSTAR MORTGAGE LLC, Plaintiff, v. Angelo CORRAO, Defendant.
SHAPIRO, DICARO & BARAK, LLC, Attorneys for Plaintiff, 175 Mile Crossing Boulevard, Rochester, NY 14624 GEORGE M. GAVALAS, Esq., Attorney for Defendant, 2929 Expressway Drive, North, Suite 310, Islandia, NY 11749
SHAPIRO, DICARO & BARAK, LLC, Attorneys for Plaintiff, 175 Mile Crossing Boulevard, Rochester, NY 14624
GEORGE M. GAVALAS, Esq., Attorney for Defendant, 2929 Expressway Drive, North, Suite 310, Islandia, NY 11749
Robert F. Quinlan, J.
Upon the following papers read on plaintiff's successive motion for summary judgment on the limited issues set by the court's order of February 16, 2017 and appointment of a referee to compute pursuant to RPAPL § 1321 (Mot. Seq. # 002): NYSCEF Docs # 41-60 ; defendant's opposition: NYSCEF Doc # 63 ; it is
ORDERED that portion of plaintiff Nationstar Mortgage, LLC's successive summary judgment motion seeking dismissal of defendant Angelo Corrao's 44th affirmative defense contesting plaintiff's standing to bring the action is granted; and it is further
ORDERED that portion of plaintiff Nationstar Mortgage, LLC's successive summary judgment motion seeking dismissal of defendant's 20th and 29th affirmative defenses which raise compliance with the mailing requirements of RPAPL § 1304, granting summary judgment dismissing and striking defendants answer and appointing a referee to compute pursuant to RPAPL § 1321 is denied; and it is further
ORDERED that plaintiff's proposed order submitted with this motion is marked "Not Signed;" and it is further
ORDERED that this action is scheduled for limited issue trial in accordance with this order on Friday, May 17, 2019 before this part at, 2:00 PM Cromarty Court Complex, 210 Center Drive, 4th floor, Rm 17, Riverhead, NY.
PRIOR PROCEEDINGS
This is an action to foreclose a mortgage on residential real property located at 6 Bayberry Lane, East Quogue, Suffolk County, New York given by defendant Angelo Corrao ("defendant") to a predecessor in interest to plaintiff Nationstar Mortgage, LLC ("plaintiff"). The prior history of this action is contained in the court's decision set forth on the record on February 16, 2017 after oral argument of plaintiff's prior motion for summary judgment (Mot. Seq. # 001). At that time the court granted plaintiff partial summary judgment pursuant to CPLR 3212 (g), amending the caption and dismissing all of defendant's affirmative defenses except those involving plaintiff's proof of its standing to bring the action (44th affirmative defense) and those raising compliance with the mailing requirements of the notices required by RPAPL § 1304 (20th and 29th affirmative defenses). Pursuant to CPLR § 2218, the court set those remaining issues for a limited issue trial, issued a written discovery and scheduling order which authorized limited discovery, set a compliance/certification conference for June 21, 2017 and authorized the parties to file successive summary judgment motions on those issues within 30 days of the filing of a note of issue. The compliance/certification conference was adjourned by the parties until October 11, 2017, at which time the court signed the certification/compliance order and scheduled a pre-trial conference for December 20, 2017. Plaintiff filed a note of issue on November 13, 2017, and then filed this successive summary judgment motion within the time authorized by the court's order of February 16, 2017, originally returnable January 11, 2018. The parties entered into agreements to adjourn the motion from the original return date and it was submitted on December 20, 2018.
STANDING ESTABLISHED
Plaintiff provides an affidavit of one of its employees, as well as an affirmation from an attorney from its counsel's law firm in an attempt to establish its standing to prosecute the action. Plaintiff establishes its standing by demonstrating that, when the action was commenced, it was either the holder or assignee of the underlying note (see Aurora Loan Servs., LLC v. Taylor ,25 NY3d 355 [2015] ; Wells Fargo Bank, NA v. Rooney , 132 AD3d 980 [2d Dept 2015] ). A written assignment or physical delivery of the note prior to the commencement of the action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident thereto (see U.S. Bank, NA v. Collymore , 68 AD3d 752 [2d Dept 2009] ; Bank of NY Mellon v. Gales , 116 AD3d 723 [2d Dept 2014] ; Bank of New York Mellon v. Lopes , 158 AD3d 662 [2d Dept 2018] ). A "holder" of the note is a person in possession of the negotiable instrument that is payable either to bearer or an identified person that is the person in possession ( UCC 1-201 [b] [21], 3-202 [1], 3-204 [2] ; see Deutsche Bank Natl. Trust Co. v. Brewton , 142 AD3d 683 [2d Dept 2016] ; US Bank Natl. Assoc. v. Cruz , 147 AD3d 1103 [2d Dept 2017] ).
An affidavit of plaintiff's representative based upon personal knowledge and review of books and business records maintained by plaintiff in the ordinary course of business that establishes facts of plaintiff's possession of the note and assignment on a date prior to commencement of the action is sufficient to establish plaintiff's standing (see Aurora Loan Services, LLC v. Taylor , supra ; Wells Fargo Bank, N.A. v. Charlaff , 134 AD3d 1099 [2d Dept 2015] ; Flagstar Bank v. Mendoza , 139 AD3d 898 [2d Dept 2016] ; US Bank, NA v. Ellis , 154 AD3d 710 [2d Dept 2017] ; Bank of America, N.A. v. Cord , 168 AD3d 896 [2d Dept 2019] ; Ocwen Loan Serving, LLC v. Fitzgerald , 168 AD3d 964 [2d Dept 2019] ). Although plaintiff's representative establishes his ability to testify as to his employer's business records pursuant to CPLR 4518, his affidavit is insufficient to establish plaintiff's standing. Although he provides proof that the allonge executed by Amalgamated Bank was firmly affixed to the note by a staple, he does not establish that the "page" also submitted, bearing an undated indorsement from the original lender America's Wholesale Lender to Amalgamated Bank, was a copy of the reverse side of the last page of the note or a separate document. Without such proof, the "page" appears to be an allonge and with no proof that it was firmly attached to the note, it would be an invalid indorsement ( UCC 3-202 [2] ; see Slutsky v. Blooming Grove Inn , 147 AD2d 208 [2d Dept 1989] ; HSBC Bank USA, N.A. v. Roumiantseva , 130 AD3d 983 [2d Dept 2015] ).
Plaintiff proves its standing through the affirmation of the attorney from its counsel's law firm which establishes its possession of the note before the action was filed on July 2, 2015. The attorney establishes his ability to testify to his firm's business records and practices pursuant to CPLR 4518. He states that the firm was in possession of the note and allonge on behalf of plaintiff from at least June 10, 2015 and that it remained in the firm's possession until October 23, 2015 when returned to plaintiff. He also establishes his personal review of the original note and allonge while it was in the firm's possession, that the "page" was actually the reverse side of the signatory page of the note, not a separate document, and that the undated allonge in blank from Amalgamated Bank was firmly attached to the note by a staple. An affirmation of counsel, or an affidavit of an employee of plaintiff's law firm, that establishes that plaintiff's attorneys were in possession of the original note bearing endorsements as here on a date prior to commencement of the action is sufficient to establish plaintiff's standing (see PennyMac Corp. v. Chavez , 144 AD3d 1006 [2d Dept 2016] ; US Bank, NA v. Cruz , 147 AD3d 1103 [2d Dept 2017] ;US Bank, NA v. Ellis , 154 AD3d710 [2d Dept 2017]; US Bank, NA v. Cardenas ,160 AD3d 784 [2d Dept 2018] ).
The unsupported claims made by defendant's counsel in his affirmation in opposition to plaintiff's proof of its standing are without merit. As plaintiff's proof has established its standing, defendant's 44th affirmative defense is dismissed.
MAILINGS NOT ESTABLISHED
In an attempt to establish the mailing of the notices required by RPAPL § 1304 (the "notices"), plaintiff submits another affidavit from the same employee. As with his first affidavit, the affiant establishes his familiarity with plaintiff's business practices, procedures and records enabling him to testify to those business records pursuant to CPLR 4518. The notices are attached as exhibits to his affidavit, along with other business records maintained by plaintiff that relate to the preparation and mailing of the notices. The court observes that the notices themselves comply with the requirements of the statute and include more than 5 housing counseling agencies in the Long Island Region, the applicable region at the time of the mailings.
Although the court acknowledges that the affiant also establishes his ability to testify to plaintiff's procedures for mailing, as those procedures ultimately rely upon the services and procedures of an entity engaged to actually mail the notices, the Walz Group, and their "Walz TrackRight" system ("Walz"), for his testimony to be sufficient, he must also establish his ability to testify to Walz' practices and procedures for mailing. The affiant fails to do so, showing no familiarity with Walz's procedures or his ability to testify to Walz' records pursuant to CPLR 4518. Merely stating a familiarity with what plaintiff sends to Walz and plaintiff's receipt in return from Walz, does not establish the mailing by Walz that occurred between these two plaintiff events.
As a dedicated foreclosure part, the court is familiar with Walz' system and program, and has heard testimony concerning its use for mailing in a number of limited issue trials. The court notes that the Walz documents submitted in this case are similar to the Walz documents and records seen in these other cases, but without the testimony of a witness qualified to testify as to what those documents and records represent, the court cannot substitute its "experiences" for the admissible evidence absent here.
Just as the court cannot rely on testimony from other cases before it to fill in the gaps here, the court does not rely upon its experience with Walz to determine that the mailings here were done by Walz, the records submitted by plaintiff establish that fact on their own. It is clearly indicated in Exhibit "B" submitted in conjunction with the affidavit (NYSCEF Doc # 48). Within the three "Transaction Information" boxes on the three documents bearing "Walz Group, Inc." copyrights it is noted that the notices were "Mailed By: Walz Facility." The notices were obviously mailed by Walz, not plaintiff using the "Walz TrackRight" system.
In the trials the court refers to above, witnesses provided information that the affiant has failed to provide here to establish mailing by Walz. The witnesses established their training in the Walz system, their familiarity with the procedures Walz used to ensure that the mailings were done in a manner which provided proof of actual mailing through a description of Walz's actual practice and procedure for mailing with the US Postal Service, all of which are essential to provide proof of mailing (see New York & Presbyt. Hosp. v. Allstate Ins. Co. (29 AD3d 547 [2d Dept 2006] ; Citibank, N.A. v. Wood , 150 AD3d 813 [2d Dept 2017] ; Citimortgage Inc. v. Banks 155 AD3d 936 [2d Dept 2017] ). In order to establish mailings a witness must be able to establish his/ her familiarity with the business records and practices of the entity which mailed the notices through admissible business records that detail a standard of office practice and procedure designed to ensure that items are properly addressed and mailed (see Vivane Etienne Med. Care, P.C. v. Country Wide Ins. Co. , 25 NY3d 498 [2015] ; Residential Holding Corp. v. Scottsdale Ins. Co. , 286 AD2d 679 [2d Dept 2001] ); Deutsche Bank Natl. Trust Co. v. Heitner , 165 AD3d 1038 [2d Dept 2018] ; Aurora Loan Servs., LLC v. Vrionedes , 167 AD3d 829 [2d Dept 2018] ; Wells Fargo Bank, N. A. v. Heiney , 168 AD3d 1126 [2d Dept 2019] ). Testimony which fails to establish affiant's personal knowledge of the business practices and procedures of the mailing entity pursuant to CPLR 4518 is inadmissable and ineffective to prove mailing (see Aurora Loan Servs., LLC v. Mercius , 138 AD3d 650 [2d Dept 2016] ; Deutsche Bank Natl. Trust Co. v. Brewton , 142 AD3d 683 [2d Dept 2016] ; Citimortgage, Inc. v. Pappas , 147 AD3d 900 [2d Dept 2017] ; M & T Bank v. Joseph , 152 AD3d 579 [2d Dept 2017] ). The witness must show his/her familiarity with office practices and procedures of the mailing entity to establish practices and procedures that insure proper addressing and mailing (see Wells Fargo Bank, NA v. Trupia , 150 AD3d 1049 [2d Dept 2017] ; Bank of America, NA v. Wheatley , 158 AD3d 736 [2d Dept 2018] ). The affidavit here fails to supply that information.
What arguments defendant makes in opposition to the plaintiff's proof of mailing are either erroneous, such as the claim that no mailing was made to defendant at the property, or without merit.
On the record presently before it, the court is compelled to find that plaintiff has failed to establish the mailing of the notices required by RPAPL § 1304 (20th and 29th affirmative defenses), therefore the court must deny plaintiff's motion for summary judgment dismissing those remaining affirmative defenses, striking defendants' answer and appointing a referee to compute pursuant to RPAPL § 1321.
Finally, defendant's counsel's arguments that do not address the issues set for the limited issue trial and attempt to renew or reargue arguments that were already determined by the court in dismissing the other 42 affirmative defenses are improperly submitted, barred by the doctrine of law of the case and are otherwise without merit.
As the parties have now had two opportunities to move for summary judgment the case is scheduled for the limited issue trial previously set by the order of February 16, 2017 on Friday, May 17, 2019 at 2:00 PM before this part. This constitutes the Order and decision of the Court.