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Green Tree Servicing LLC v. Bormann

Supreme Court of New York, Third Department

January 11, 2018

GREEN TREE SERVICING LLC, Respondent,
v.
EUGENE BORMANN, Also Known as EUGENE. BORMANN, et al., Appellants, et al., Defendants.

          Calendar Date: November 14, 2017

          The Clements Firm, Glens Falls (Thomas G. Clements of counsel), for appellants.

          Berkman, Henoch, Peterson, Peddy & Fenchel, PC, Garden City (Rajdai D. Singh of counsel), for respondent.

          Before: Garry, P.J., Lynch, Clark, Aarons and Pritzker, JJ.

          MEMORANDUM AND ORDER

          CLARK, J.

         Appeals from two orders of the Supreme Court (Auffredou, J.), entered December 29, 2016 in Warren County, which, among other things, granted plaintiff's motion for summary judgment.

         In November 1998, defendants Eugene Bormann and Barbara Bormann (hereinafter collectively referred to as defendants) executed a note in favor of "Mayflower DBA Home Funding, " which was secured by a mortgage on certain real property located in the Town of Lake Luzerne, Warren County [1]. Defendants ceased making payments on the note in July 2009, and, in March 2014, plaintiff commenced this mortgage foreclosure action. Defendants joined issue and asserted various affirmative defenses, including that plaintiff lacked standing to commence this action. Plaintiff thereafter moved for, as relevant here, summary judgment and for the appointment of a referee to compute the total amount due and owing. Defendants opposed the motion, arguing that plaintiff failed to produce sufficient evidence to establish its standing, and cross-moved for an order compelling plaintiff to comply with certain outstanding discovery demands. Supreme Court granted plaintiff's motion and denied defendants' cross motion, and defendants appeal.

         We affirm. Plaintiff established its prima facie entitlement to summary judgment as a matter of law by producing the mortgage, unpaid note and evidence of defendants' default (see Bank of N.Y. Mellon v Rutkowski, 148 A.D.3d 1341, 1341 [2017]; JP Morgan Chase Bank, N.A. v Hill, 133 A.D.3d 1057, 1057 [2015]; Wells Fargo Bank, NA v Ostiguy, 127 A.D.3d 1375, 1376 [2015]). Given that defendants raised the issue of standing as an affirmative defense, plaintiff was required to further demonstrate that, at the time that the action was commenced, it was the holder or assignee of the mortgage and the holder or assignee of the underlying note (see Bank of N.Y. Mellon v Cronin, 151 A.D.3d 1504, 1505-1506 [2017]; U.S. Bank N.A. v Carnivale, 138 A.D.3d 1220, 1220-1221 [2016]). "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" (Onewest Bank, F.S.B. v Mazzone, 130 A.D.3d 1399, 1400 [2015] [internal quotation marks and citations omitted]; accord U.S. Bank N.A. v Carnivale, 138 A.D.3d at 1221; see JP Morgan Chase Bank, N.A. v Venture, 148 A.D.3d 1269, 1270 [2017]).

         Plaintiff alleged in its complaint that it was the holder of the note and attached thereto a certified copy of the note, endorsed in blank, on which an attorney admitted to practice in this state certified that the copy of the note had been compared to the original and was found to be a true and accurate copy (see JPMorgan Chase Bank, N.A. v Verderose, 154 A.D.3d 1198, 1200 [2017]; JP Morgan Chase Bank, N.A. v Venture, 148 A.D.3d at 1270-1271). In support of its motion, plaintiff also relied on the sworn affidavit of Chelsie Hall, a document execution specialist employed by plaintiff [2]. Hall stated that she was familiar with plaintiff's record-keeping systems, that she personally examined plaintiff's financial books and business records, which were kept and maintained by plaintiff in the ordinary course of business, and that, as of the date of commencement, plaintiff was and remained in possession of the note. The certified copy of the note, together with Hall's affidavit, was sufficient to establish, prima facie, that plaintiff was the holder of the note prior to and at the time that this action was commenced in March 2014 and, therefore, had standing to bring this action (see JPMorgan Chase Bank, N.A. v Verderose, 154 A.D.3d at 1200; JP Morgan Chase Bank, N.A. v Venture, 148 A.D.3d at 1270-1271; U.S. Bank N.A. v Carnivale, 138 A.D.3d at 1221; compare Bank of Am., N.A. v Kyle, 129 A.D.3d 1168, 1169 [2015]).

         In opposition, defendants failed to come forward with any evidence raising a triable issue of fact as to whether plaintiff was the holder of the note and the mortgage at the time that it commenced this action (see Bank of N.Y. Mellon v Cronin, 151 A.D.3d at 1507; U.S. Bank N.A. v Carnivale, 138 A.D.3d at 1222; Deutsche Bank Natl. Trust Co. v Monica, 131 A.D.3d 737, 740 [2015]). While defendants argue that Supreme Court prematurely granted summary judgment to plaintiff, without allowing them the opportunity to obtain full and complete disclosure, defendants did not offer anything more than surmise and conjecture to support their contention that the requested disclosure would reveal a triable issue of fact as to plaintiff's holder status (see Chemical Bank v PIC Motors Corp., 58 N.Y.2d 1023, 1026 [1983]; Bank of N.Y. Mellon v Cronin, 151 A.D.3d at 1507; Gersten-Hillman Agency, Inc. v Heyman, 68 A.D.3d 1284, 1288 [2009]) [3]. Nor is, as defendants contend, a triable issue of fact raised by the fact that Mayflower assigned defendants' mortgage to two different entities, before the mortgage was ultimately assigned to plaintiff. In this regard, we emphasize that it is the note, and not the mortgage, that conveys standing to foreclose (see Aurora Loan Servs., LLC v Taylor, 25 N.Y.3d 355, 361-362 [2015]; Wells Fargo Bank, N.A. v Walker, 141 A.D.3d 986, 987 [2016]; Everhome Mtge. Co. v Pettit, 135 A.D.3d 1054, 1055 [2016]). As plaintiff established its standing through its physical possession of the note, it was not required to prove that the mortgage "had been validly assigned to it, and any issues concerning assignments were irrelevant" (BAC Home Loans Servicing, LP v Uvino, 155 A.D.3d 1155, 1159 [2017]; see Aurora Loan Servs., LLC v Taylor, 25 N.Y.3d at 361-362; CitiMortgage, Inc. v McKinney, 144 A.D.3d 1073, 1075 [2016]). In light of the foregoing, Supreme Court properly granted plaintiff's motion for summary judgment and denied defendants' cross motion to compel discovery.

         To the extent that we have not expressly addressed any of defendants' arguments, they have been reviewed and found to be lacking in merit.

          Garry, P.J., Lynch, Aarons and Pritzker, JJ., concur.

         ORDERED that the orders are ...


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