21st Mortgage Corporation, as mortgage loan servicer for Wilmington Savings Fund Society, FSB, a federal savings bank doing business as Christiana Trust, a division of Wilmington Savings Fund Society, FSB, solely in its capacity as trustee for and on behalf of the Knoxville 2012 Trust, appellant,
Leandro Adames, et al., defendants, Vista Holdings, Inc., respondent. Index No. 14413/14
Helfand & Helfand, New York, NY (Brian R. Elliott of
counsel), for appellant.
& Scheuerman, New York, NY (Jonathon D. Warner and Karl
E. Scheuerman of counsel), for respondent.
WILLIAM F. MASTRO, J.P. REINALDO E. RIVERA SHERI S. ROMAN
SANDRA L. SGROI, JJ.
DECISION & ORDER
action to foreclose a mortgage, the plaintiff appeals from so
much of an order of the Supreme Court, Kings County (Ash,
J.), dated August 19, 2015, as denied that branch of its
motion which was for summary judgment on the complaint
insofar as asserted against the defendant Vista Holdings,
that the order is affirmed insofar as appealed from, with
April 11, 2006, Leandro Adames executed a note and mortgage
on real property in favor of Argent Mortgage Company, LLC
(hereinafter Argent). The subject property was thereafter
acquired by Vista Holdings, Inc. (hereinafter Vista).
"Effective as of" February 5, 2007, Argent assigned
the note and mortgage to Residential Funding Company, LLC
(hereinafter RFC). On February 13, 2007, Argent commenced an
action to foreclosure the mortgage, alleging that Adames had
defaulted by failing to make payments on the note. That
action was thereafter dismissed for lack of standing.
corrective assignment dated May 1, 2014, RFC assigned the
note and mortgage to Wilmington Savings Fund Society, FSB, a
federal savings bank doing business as Christiana Trust, a
division of Wilmington Savings Fund Society, FSB, solely in
its capacity as trustee for and on behalf of the Knoxville
2012 Trust (hereinafter Wilmington). Subsequently, the
plaintiff, purportedly as mortgage loan servicer for
Wilmington, commenced this action to foreclose the mortgage.
Vista answered the complaint, raising, inter alia, the
statute of limitations, lack of standing, and lack of
capacity to sue as affirmative defenses. The plaintiff moved,
among other things, for summary judgment on the complaint
insofar as asserted against Vista. The Supreme Court, inter
alia, denied that branch of the plaintiff's motion.
extent that the Supreme Court denied that branch of the
plaintiff's motion based upon a conclusion that there
were issues of fact as to whether the action was time-barred,
that was error. "As a general matter, an action to
foreclose a mortgage may be brought to recover unpaid sums
which were due within the six-year period immediately
preceding the commencement of the action" (Wells
Fargo Bank, N.A. v Burke, 94 A.D.3d 980, 982;
see CPLR 213). "However, even if a mortgage
is payable in installments, once a mortgage debt is
accelerated, the entire amount is due and the Statute of
Limitations begins to run on the entire debt'"
(Wells Fargo Bank, N.A. v Burke, 94 A.D.3d at 982,
quoting EMC Mtge. Corp. v Patella, 279 A.D.2d 604,
notice of default dated December 13, 2006, sent to Adames
prior to the commencement of the 2007 action, was nothing
more than a letter discussing acceleration as a possible
future event, which does not constitute an exercise of the
mortgage's optional acceleration clause (see Goldman
Sachs Mtge. Co. v Mares, 135 A.D.3d 1121, 1122-1123;
see generally Wells Fargo Bank, N.A. v Burke, 94
A.D.3d at 982-983). Further, the commencement of the 2007
action was ineffective to constitute a valid exercise of the
option to accelerate the debt since the plaintiff in that
action did not have the authority to accelerate the debt or
to sue to foreclose at that time (see Wells Fargo Bank,
N.A. v Burke, 94 A.D.3d at 983; EMC Mtge. Corp. v
Suarez, 49 A.D.3d 592).
the plaintiff failed to demonstrate, prima facie, that it had
standing to commence this action. Where, as here, the
plaintiff's standing has been placed in issue by a
defendant's answer, the plaintiff must prove its standing
as part of its prima facie showing on a motion for summary
judgment (see Flagstar Bank, FSB v Mendoza, 139
A.D.3d 898, 899; LaSalle Bank, N.A. v Zaks, 138
A.D.3d 788; Aurora Loan Servs., LLC v Mercius, 138
A.D.3d 650, 651). In a foreclosure action, a plaintiff has
standing if it is the holder or assignee of the underlying
note at the time the action is commenced (see Aurora Loan
Servs., LLC v Taylor, 25 N.Y.3d 355, 361-362; One W.
Bank, FSB v Albanese, 139 A.D.3d 831, 832; Aurora
Loan Servs., LLC v Mercius, 138 A.D.3d at 651). A
plaintiff may demonstrate that it is the holder or assignee
of the underlying note by showing either a written assignment
or physical delivery of the note (see Aurora Loan Servs.,
LLC v Mercius, 138 A.D.3d at 651).
in support of its motion, the plaintiff relied on the
affidavit of Jessica Lancaster, its "Legal
Coordinator." Lancaster averred that the subject
"loan" was part of a portfolio of assets purchased
by Berkshire Hathaway, Inc., and deposited into Wilmington.
Lancaster further averred that on February 1, 2013, "the
notes and mortgages relating to the Purchased Assets were
physically delivered to the offices of [the plaintiff]."
The affidavit, which was based upon Lancaster's review of
and familiarity with the plaintiff's records, was
sufficient to establish, prima facie, that "the notes
and mortgages relating to the Purchased Assets" were
physically delivered to the plaintiff. However,
Lancaster's averment that the subject "loan"
was among those purchased assets was hearsay for which she
failed to lay a proper foundation under the business records
exception to the hearsay rule (see CPLR 4518[a];
Aurora Loan Servs., LLC v Baritz, 144 A.D.3d 618,
620; U.S. Bank N.A. v Handler, 140 A.D.3d 948, 949).
Moreover, no further evidence was submitted to establish that
the subject note and mortgage were among the purchased
assets. Accordingly, the plaintiff failed to establish, prima
facie, its standing to commence this action.
addition, the plaintiff failed to establish, prima facie, its
capacity to commence this action. In that respect, the
plaintiff did not demonstrate, prima facie, that it had been
delegated the authority by Wilmington to act on its behalf
with respect to the subject mortgage since it failed to
submit any agreement, power of attorney, or similar
documentation of such alleged authority (cf. CWCapital
Asset Mgt., LLC v Great Neck Towers, LLC, 99 A.D.3d 850;
CWCapital Asset Mgt. LLC v Charney-FPG, 114 41st St.,
LLC, 84 A.D.3d 506; see generally Amica Mut. Ins.
Co. v Kingston Oil Supply Corp., 134 A.D.3d 750, 752).
the Supreme Court properly denied that branch of the
plaintiff's motion which was for summary judgment on the