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Bank of America, N.A. v. Barton

Supreme Court of New York, Second Department

April 5, 2017

Bank of America, N.A., etc., respondent,
v.
Rebecca Barton, et al., appellants, et al., defendants. Index No. 10965/12

          Charles H. Wallshein, Melville, NY (Charles Marino of counsel), for appellants.

          Frenkel Lambert Weiss Weisman & Gordon, LLP (Bryan Cave LLP, New York, NY [Suzanne M. Berger and Elizabeth Goldberg], of counsel), for respondent.

          REINALDO E. RIVERA, J.P. JOHN M. LEVENTHAL L. PRISCILLA HALL COLLEEN D. DUFFY, JJ.

          DECISION & ORDER

         In an action to foreclose a mortgage, the defendants Rebecca Barton and Raymond Barton appeal, as limited by their brief, from (1) so much of an order of the Supreme Court, Suffolk County (Rouse, J.), dated March 4, 2015, as, inter alia, denied that branch of their cross motion which was for leave to serve a second amended answer, and (2) so much of an order of the same court, also dated March 4, 2015, as granted that branch of the plaintiff's motion which was for summary judgment against them, struck their answer and amended answer, and appointed a referee to determine the amount due to the plaintiff.

         ORDERED that the orders are affirmed insofar as appealed from, with costs.

         The plaintiff commenced this action to foreclose a mortgage against, among others, the defendant homeowners Rebecca Barton and Raymond Barton (hereinafter together the Bartons), alleging that the Bartons failed to make payments pursuant to a note and mortgage in the principal sum of $243, 200. The Bartons appeared and answered, and then served an amended answer denying the allegation in the complaint that the plaintiff was the holder of the note and mortgage being foreclosed. They did not assert any affirmative defense based on any issues involving RPAPL 1304.

         The plaintiff subsequently moved, inter alia, for summary judgment on the complaint insofar as asserted against the Bartons, tendering copies of the note and mortgage, various assignments thereof, evidence of the Bartons' default, and copies of the notices sent pursuant to RPAPL 1304. The Bartons opposed the motion, contending that the plaintiff lacked standing to commence the action, and cross-moved, among other things, for leave to serve a second amended answer asserting standing as an affirmative defense. They did not challenge the sufficiency of the notices sent pursuant to RPAPL 1304, or assert an affirmative defense on that basis. In reply, the plaintiff proffered evidence that it had received the original note for the subject loan in 2001, and that it had maintained the note in a secure file room until it was shipped to the plaintiff's attorneys in 2011, almost a year before the action was commenced.

         The Supreme Court granted that branch of the plaintiff's motion which was for summary judgment, and denied that branch of the Bartons' cross motion which was for leave to serve a second amended answer. The Bartons appeal, contending that the Supreme Court erred in granting summary judgment to the plaintiff because it did not meet its initial burden on the motion to establish its standing to commence this action, and that they should have been granted leave to serve a second amended answer. The Bartons further contend, for the first time on appeal, that the notices sent pursuant to RPAPL 1304 were defective because they included the required text in Spanish as well as English.

         "In residential mortgage foreclosure actions... a plaintiff establishes its prima facie entitlement to judgment as a matter of law by producing the mortgage and the unpaid note and evidence of the default" (Midfirst Bank v Agho, 121 A.D.3d 343, 347; see U.S. Bank N.A. v Godwin, 137 A.D.3d 1260, 1261; HSBC Bank USA, N.A. v Espinal, 137 A.D.3d 1079, 1079; Plaza Equities, LLC v Lamberti, 118 A.D.3d 688, 689). Where, as here, "a fair reading of [the] answer reveals that it contained language which denied that the plaintiff was the owner and holder of the note and mortgage being foreclosed, " the plaintiff must prove its standing on a motion for summary judgment (Bank of Am., N.A. v Paulsen, 125 A.D.3d 909, 910; see U.S. Bank N.A. v Faruque, 120 A.D.3d 575, 576).

         A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that, when the action was commenced, it was the holder or assignee of the underlying note (see Aurora Loan Servs., LLC v Taylor, 25 N.Y.3d 355, 361; Deutsche Bank Natl. Trust Co. v Brewton, 142 A.D.3d 683, 684). "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; see JPMorgan Chase Bank, N.A. v Weinberger, 142 A.D.3d 643, 644-645; Deutsche Bank Natl. Trust Co. v Weiss, 133 A.D.3d 704, 705; Kondaur Capital Corp. v McCary, 115 A.D.3d 649, 650).

         Here, the plaintiff proffered an affidavit from one of its officers, who averred that the plaintiff received the original note on or about October 22, 2001, and the original recorded mortgage on or about February 2, 2002, and that both were placed in a secure file room for safe keeping, where they were held until they were shipped to the plaintiff's attorneys. The plaintiff's counsel affirmed that her review of the files maintained by her office revealed that the original note was received by her office on April 8, 2011, nearly a year before the action was commenced. This evidence, together with the copy of the note, endorsed in blank, which was attached to the plaintiff's motion for summary judgment, was sufficient to establish the plaintiff's standing (see PennyMac Corp. v Chavez, 144 A.D.3d 1006, 1007; JPMorgan Chase Bank, N.A. v Weinberger, 142 A.D.3d at 645; Security Lending, Ltd. v New Realty Corp., 142 A.D.3d 986, 987; Citimortgage, Inc. v Espinal, 134 A.D.3d 876, 879-880).

         The plaintiff established its prima facie entitlement to judgment as a matter of law against the Bartons through the production of the mortgage, the unpaid note, and evidence of default, and in response, the Bartons failed to raise a triable issue of fact (see U.S. Bank N.A. v Godwin, 137 A.D.3d at 1261-1262; HSBC Bank USA v Espinal, 137 A.D.3d at 1079; Plaza Equities, LLC v Lamberti, 118 A.D.3d at 689).

         The Bartons' contention that the plaintiff did not strictly comply with the terms of RPAPL 1304 is improperly raised for the first time on appeal (see Emigrant Bank v Marando, 143 A.D.3d 856, 857; PHH Mtge. Corp. v Celestin, 130 A.D.3d 703, 704; see also Federal Natl. Mtge. Assn. v Cappelli, 120 A.D.3d 621, 622).

         Although leave to amend a pleading "shall be freely given" in the absence of prejudice or surprise to the opposing party (CPLR 3025), here, the Supreme Court providently denied that branch of the Bartons' cross motion which was for leave to serve a second amended answer alleging an affirmative defense of lack of standing because the proposed amendment was palpably insufficient and patently devoid of merit (see ...


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