Opinion
05-31-2017
SILVERGATE BANK, respondent, v. CALKULA PROPERTIES, INC., appellant, et al., defendants.
Deutsch & Schneider, LLP, Glendale, NY (William J. Fielding of counsel), for appellant. Hogan Lovells U.S., LLP, New York, NY (Leah Rabinowitz Lenz and Chava Brandriss of counsel), for respondent.
Deutsch & Schneider, LLP, Glendale, NY (William J. Fielding of counsel), for appellant.
Hogan Lovells U.S., LLP, New York, NY (Leah Rabinowitz Lenz and Chava Brandriss of counsel), for respondent.
JOHN M. LEVENTHAL, J.P., SYLVIA O. HINDS–RADIX, HECTOR D. LaSALLE, and VALERIE BRATHWAITE NELSON, JJ.
In an action to foreclose a mortgage, the defendant Calkula Properties, Inc., appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Vaughan, J.), dated July 9, 2014, as granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against it, and for an order of reference.
ORDERED that the order is affirmed insofar as appealed from, with costs.
In 2003, the defendant Calkula Properties, Inc. (hereinafter the defendant), executed a note, secured by a mortgage on real property owned by it, in which it promised to repay a loan it received from GFI Mortgage Bankers, Inc. The note was endorsed to the plaintiff by a "Note Endorsement" dated December 12, 2008. The plaintiff commenced this action to foreclose the mortgage in June 2013. In its answer, the defendant raised the defense of lack of standing to foreclose.
To establish prima facie entitlement to judgment as a matter of law in a residential mortgage foreclosure action, a plaintiff must produce the mortgage, the unpaid note, and evidence of default (see Deutsche Bank Trust Co. Ams. v. Garrison, 147 A.D.3d 725, 726, 46 N.Y.S.3d 185 ; JPMorgan Chase Bank, N.A. v. Mantle, 134 A.D.3d 903, 904, 23 N.Y.S.3d 258 ; Deutsche Bank Natl. Trust Co. v. Abdan, 131 A.D.3d 1001, 1002, 16 N.Y.S.3d 459 ; HSBC Bank, USA v. Hagerman, 130 A.D.3d 683, 683–684, 11 N.Y.S.3d 865 ). Where, as here, a plaintiff's standing has been placed in issue by the defendant's answer, the plaintiff also must prove its standing as part of its prima facie showing (see Security Lending, Ltd. v. New Realty Corp., 142 A.D.3d 986, 987, 37 N.Y.S.3d 327 ; JPMorgan Chase Bank, N.A. v. Mantle, 134 A.D.3d at 904, 23 N.Y.S.3d 258 ; Loancare v. Firshing, 130 A.D.3d 787, 789, 14 N.Y.S.3d 410 ; HSBC Bank USA, N.A. v. Baptiste, 128 A.D.3d 773, 774, 10 N.Y.S.3d 255 ). A plaintiff establishes its standing in a mortgage foreclosure action 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 N.Y.3d 355, 361–362, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; Security Lending, Ltd. v. New Realty Corp., 142 A.D.3d at 987, 37 N.Y.S.3d 327 ; JPMorgan Chase Bank, N.A. v. Mantle, 134 A.D.3d at 904, 23 N.Y.S.3d 258 ; Loancare v. Firshing, 130 A.D.3d at 789, 14 N.Y.S.3d 410 ; Emigrant Bank v. Larizza, 129 A.D.3d 904, 905, 13 N.Y.S.3d 129 ). "Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident" (U.S. Bank N.A. v. Collymore, 68 A.D.3d 752, 754, 890 N.Y.S.2d 578 ; see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361–362, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; Dyer Trust 2012–1 v. Global World Realty, Inc., 140 A.D.3d 827, 828, 33 N.Y.S.3d 414 ).
Here, the plaintiff established, prima facie, its standing as the holder of the note by demonstrating, through the affidavit of its vice president, Kim Barr, that the original note was physically delivered to the plaintiff in or about December 2008, and was still in its possession at the time it commenced this action in June 2013. Contrary to the defendant's contentions, the plaintiff's submissions, including a copy of the "Note Endorsement" dated December 12, 2008, were sufficient to make a prima facie showing of standing (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361–362, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; Security Lending, Ltd. v. Realty Corp., 142 A.D.3d at 987, 37 N.Y.S.3d 327 ; Dyer Trust 2012–1 v. Global World Realty, Inc., 140 A.D.3d at 828, 33 N.Y.S.3d 414 ). The plaintiff further sustained its burden of demonstrating its prima facie entitlement to judgment as a matter of law by submitting copies of the mortgage, the note, and an affidavit of the loan servicer's vice president establishing the defendant's default in repaying the mortgage loan (see Deutsche Bank Trust Co. Ams. v. Garrison, 147 A.D.3d at 726, 46 N.Y.S.3d 185 ; JPMorgan Chase Bank, N.A. v. Mantle, 134 A.D.3d at 904, 23 N.Y.S.3d 258 ; Deutsche Bank Natl. Trust Co. v. Abdan, 131 A.D.3d at 1002, 16 N.Y.S.3d 459 ; HSBC Bank, USA v. Hagerman, 130 A.D.3d at 683–684, 11 N.Y.S.3d 865 ).
In opposition, the defendant failed to raise a triable issue of fact. Contrary to the defendant's contention, where, as here, the evidence establishes that the plaintiff had physical possession of the note at the time of the commencement of the action, validity of the various assignments of the mortgage is irrelevant to the issue of standing (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 362, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; New York Community Bank v. McClendon, 138 A.D.3d 805, 807, 29 N.Y.S.3d 507 ; Wells Fargo Bank, N.A. v. Charlaff, 134 A.D.3d 1099, 1100, 24 N.Y.S.3d 317 ).
The defendant's remaining contentions are without merit.