Opinion
527803
12-26-2019
U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC., MORTGAGE ASSET–BACKED PASS–THROUGH CERTIFICATES, SERIES 2005–EFC5, Respondent, v. Janice M. SHAUGHNESSY, Appellant, et al., Defendants.
Sandra Poland Demars, Albany, for appellant. Locke Lord, LLC, New York City (Robert H. King of counsel), for respondent.
Sandra Poland Demars, Albany, for appellant.
Locke Lord, LLC, New York City (Robert H. King of counsel), for respondent.
Before: Garry, P.J., Clark, Mulvey, Pritzker and Reynolds Fitzgerald, JJ.
MEMORANDUM AND ORDER
Clark, J.
In August 2005, defendant Janice M. Shaughnessy (hereinafter defendant) executed a promissory note in the amount of $154,760 in favor of EquiFirst Corporation. The note was secured by a mortgage executed in favor of Mortgage Electronic Recording System, Inc. on certain real property located in Warren County. Defendant first defaulted on the loan in April 2008, and, in October 2011, plaintiff commenced this mortgage foreclosure action. Defendant thereafter interposed an answer, in which she raised the issue of standing.
In 2017, plaintiff moved for summary judgment, primarily relying on an affidavit from Sony Prudent, a loan analyst with the loan servicing agent, to establish that it had possessed the original note since October 2005 and, therefore, had standing. Supreme Court denied the motion, without prejudice, finding that Prudent's affidavit was insufficient to establish, prima facie, that plaintiff possessed the note at the time that the action was commenced. The court found that plaintiff's submissions raised triable issues of fact, specifically noting that the copy of the note that plaintiff had attached to the complaint contained only one undated endorsement in blank, while the copy of the note attached to Prudent's affidavit contained two undated endorsements – one by EquiFirst Corporation to Residential Funding Corporation and another by Residential Funding Corporation to plaintiff.
Supreme Court further held that plaintiff failed to establish the admissibility of the records relied upon by Prudent as business records because he failed to aver that he was personally familiar with plaintiff's record-keeping practices.
In April 2018, plaintiff once again moved for summary judgment on the complaint and for the appointment of a referee to compute the amount due. Plaintiff also sought to strike defendant's answer and to amend the caption to, as relevant here, correct its name. In support of its motion, plaintiff relied on the affidavit of Sheila King, a senior loan analyst for the loan servicing agent, who attached a copy of the note containing the same undated endorsements that were reflected in the copy of the note attached to Prudent's affidavit. Supreme Court granted the motion in its entirety. With respect to its determination that plaintiff was entitled to summary judgment on the complaint, although it found that King's affidavit was insufficient to establish delivery and possession of the note, the court reasoned that plaintiff had established standing, prima facie, by alleging in the complaint that it is the holder of the note and attaching a copy of the note thereto, and that defendant had failed to raise a triable issue of fact in opposition. Defendant appeals.
Initially, defendant asserts that Supreme Court should not have even considered plaintiff's second motion for summary judgment. We disagree. Supreme Court denied the first motion without prejudice and the particular deficiencies identified by the court in connection with the first motion were such that they could have been explained or corrected in a subsequent motion. Thus, although successive summary judgment motions are ordinarily disfavored, we discern no abuse of discretion in Supreme Court's determination to entertain plaintiff's second motion for summary judgment (see Landmark Capital Invs., Inc. v. Li–Shan Wang, 94 A.D.3d 418, 419, 941 N.Y.S.2d 144 [2012] ; Town of Angelica v. Smith, 89 A.D.3d 1547, 1549, 933 N.Y.S.2d 480 [2011] ; Varsity Tr. v. Board of Educ. of City of N.Y., 300 A.D.2d 38, 39, 752 N.Y.S.2d 603 [2002] ).
We also reject defendant's assertion that Supreme Court erred in granting plaintiff leave to amend its name in the caption from "U.S. Bank National Association as Trustee" to "U.S. Bank National Association as Trustee for Residential Asset Mortgage Products, Inc., Mortgage Asset–Backed Pass–Through Certificates, Series 2005–EFC5." Pursuant to CPLR 2001, a court may, at any stage of an action, "permit a mistake, omission, defect or irregularity ... to be corrected, upon such terms as may be just" (see Dinstber v. Allstate Ins. Co., 96 A.D.3d 1198, 1199, 946 N.Y.S.2d 693 [2012] ). Here, despite omitting the name of the trust, the original caption did identify plaintiff as a trustee. Moreover, the complaint provided defendant with actual notice of the name of the trust on whose behalf plaintiff was acting, inasmuch as it referenced and attached a copy of the assignment of mortgage to plaintiff, wherein plaintiff was identified as "U.S. Bank National Association as Trustee for RAMP 2005EFC." Under the circumstances, including the absence of any demonstrated prejudice to defendant, we discern no error in Supreme Court's determination to allow an amendment to the caption to reflect plaintiff's correct name (see CPLR 2001 ; see generally Ivory Dev., LLC v. Roe, 135 A.D.3d 1216, 1221–1222, 25 N.Y.S.3d 686 [2016] ).
Turning to the merits, plaintiff established its prima facie entitlement to summary judgment by submitting the mortgage, a copy of the unpaid note (containing an undated endorsement to plaintiff), the relevant assignments of mortgage and evidence of defendant's default (see Bank of N.Y. Mellon v. Slavin, 156 A.D.3d 1073, 1076, 67 N.Y.S.3d 328 [2017], lv dismissed 33 N.Y.3d 1128, 109 N.Y.S.3d 209, 132 N.E.3d 1089 [2019] ; Bank of N.Y. Mellon v. Cronin, 151 A.D.3d 1504, 1506, 57 N.Y.S.3d 733 [2017], lv dismissed 31 N.Y.3d 1061, 77 N.Y.S.3d 329, 101 N.E.3d 970 [2018] ). Given that defendant challenged plaintiff's standing to maintain this action, plaintiff had the additional burden of demonstrating that, at the time of commencement, it was the holder or assignee of the mortgage and the underlying note (see BAC Home Loans Servicing, LP v. Uvino, 155 A.D.3d 1155, 1157–1158, 64 N.Y.S.3d 377 [2017] ; JPMorgan Chase Bank, N.A. v. Verderose, 154 A.D.3d 1198, 1200, 63 N.Y.S.3d 579 [2017] ). Written assignment of the underlying note or physical delivery of the note sometime prior to the commencement of the action is sufficient to transfer the obligation (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 [2015] ; Bank of N.Y. Mellon v. Rutkowski, 148 A.D.3d 1341, 1341, 48 N.Y.S.3d 851 [2017] ; U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 754, 890 N.Y.S.2d 578 [2009] ). "[T]he note ... is the dispositive instrument that conveys standing to foreclose," as the mortgage passes with the transfer of the note as an inseparable incident ( Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; see Bank of N.Y. Mellon v. Rutkowski, 148 A.D.3d at 1341, 48 N.Y.S.3d 851 ). Here, plaintiff failed to meet its heightened burden of establishing that it had standing to commence this action. Plaintiff's submissions established that defendant executed the subject note in favor of EquiFirst Corporation on August 30, 2005. King asserted in her affidavit that, based upon her review of the loan servicing agent's business records, the note was "transferred" to plaintiff roughly two months later, "on or before October 3, 2005." King did not, however, provide any detail in her affidavit as to whether the note was "transferred" by written assignment or physical delivery or state that plaintiff was the holder or assignee of the note at the time that the action was commenced (see U.S. Bank Trust, N.A. v. Moomey–Stevens, 168 A.D.3d 1169, 1172–1173, 91 N.Y.S.3d 788 [2019] ; Bank of Am., N.A. v. Kyle, 129 A.D.3d 1168, 1169, 13 N.Y.S.3d 253 [2015] ). Plaintiff asserted in its 2011 complaint that it was the "holder" of the note and attached to the complaint a copy of the note containing an undated endorsement in blank from EquiFirst Corporation. However, plaintiff's status as the holder of the note at the time of commencement was called into question by its attachment of a different version of the note to King's affidavit. That copy of the note contained an undated endorsement from EquiFirst Corporation to Residential Funding Corporation and a second undated endorsement from Residential Funding Corporation to plaintiff, thereby raising questions as to when and how plaintiff became the holder of the note. These questions of fact were further bolstered by a July 2008 assignment of mortgage from Mortgage Electronic Recording System, Inc. to Residential Funding Corp. and a March 2009 assignment of mortgage from Residential Funding Corp. to plaintiff (both of which were attached to King's affidavit), particularly in light of plaintiff's assertion that it was in possession of the note in 2005. Inasmuch as a question of fact persisted as to whether plaintiff was the holder or assignee of the note in October 2011, when this action was commenced, Supreme Court erred in granting plaintiff summary judgment on the complaint (see U.S. Bank Trust, N.A. v. Moomey–Stevens, 168 A.D.3d at 1172–1173, 91 N.Y.S.3d 788 ; Bank of Am., N.A. v. Kyle, 129 A.D.3d at 1169–1170, 13 N.Y.S.3d 253 ; compare JPMorgan Chase Bank, N.A. v. Verderose, 154 A.D.3d at 1200, 63 N.Y.S.3d 579 ; JP Morgan Chase Bank, N.A. v. Venture, 148 A.D.3d 1269, 1270–1271, 48 N.Y.S.3d 824 [2017] ).
Plaintiff's counsel asserts that, on January 10, 2018, plaintiff produced the original, wet-ink note for defendant's inspection. It is unclear whether Supreme Court was present for plaintiff's production of the original note.
ORDERED that the order is modified, on the law, without costs, by reversing so much thereof as granted that part of plaintiff's motion as sought summary judgment on the complaint, the appointment of a referee and to strike defendant's answer; motion denied to that extent; and, as so modified, affirmed.
Garry, P.J., Mulvey, Pritzker and Reynolds Fitzgerald, JJ., concur.