Aurora Loan Servs., LLC v. Baritz

RAS Boriskin, LLC, Westbury, N.Y. (Jason W. Creech of counsel; Knuckles, Komosinski & Elliott, LLP, Elmsford, N.Y. [Jordan J. Manfro of counsel], former counsel on the brief), for respondent.

RANDALL T. ENG, P.J., RUTH C. BALKIN, L. PRISCILLA HALL and BETSY BARROS, JJ.

In an action to foreclose a mortgage, the defendant Steven Baritz appeals (1) from a decision of the Supreme Court, Suffolk County (Rebolini, J.), dated August 12, 2014, and (2), as limited by his brief, from so much of an order of the same court, also dated August 12, 2014, as, upon the decision, granted those branches of the plaintiff's

motion which were for summary judgment on the complaint insofar as asserted against him and for an order of reference, and, in effect, denied that branch of his cross motion which was for leave to amend his answer to assert certain counterclaims.

ORDERED that the appeal from the decision is dismissed, as no appeal lies from a decision (see Schicchi v. J.A. Green Constr. Corp., 100 A.D.2d 509, 472 N.Y.S.2d 718 ); and it is further,

ORDERED that the order is modified, on the law, by deleting the provisions thereof granting those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant Steven Baritz and for an order of reference, and substituting therefor provisions denying those branches of the motion; as so modified, the order is affirmed insofar as appealed from; and it is further,

ORDERED that one bill of costs is awarded to the defendant Steven Baritz.

On May 27, 2005, the defendant Steven Baritz executed a note in the amount of $960,000 in favor of GreenPoint Mortgage Funding, Inc. (hereinafter GreenPoint). On the same date, to secure repayment of the note, Baritz executed a

mortgage in favor of Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), acting solely as nominee for GreenPoint, on property he owned in Lake Grove. Thereafter, the mortgage was assigned to the plaintiff. In April 2009, the plaintiff commenced this action to foreclose the mortgage, alleging that Baritz defaulted on his loan payments. Baritz answered the complaint and asserted as an affirmative defense that the plaintiff did not have standing to commence the action. The plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against Baritz and for an order of reference. Baritz cross moved, inter alia, for leave to amend his answer to assert certain counterclaims. The Supreme Court granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against Baritz and for an order of reference, and denied Baritz's cross motion. Baritz appeals.

Generally, in moving for summary judgment in an action to foreclose a mortgage, a plaintiff establishes its prima facie case by producing the mortgage and the unpaid note, and evidence of the default (see Wells Fargo Bank, N.A. v. Morgan, 139 A.D.3d 1046, 1048, 32 N.Y.S.3d 595 ; Flagstar Bank, FSB v. Mendoza, 139 A.D.3d 898, 899, 32 N.Y.S.3d 278 ; LaSalle Bank, N.A. v. Zaks, 138 A.D.3d 788, 29 N.Y.S.3d 514 ). Where, as here, the plaintiff's standing has been placed in issue by the defendant's answer, the plaintiff must also prove its standing as part of its prima facie showing (see Flagstar Bank, FSB v. Mendoza, 139 A.D.3d at 899, 32 N.Y.S.3d 278 ; LaSalle Bank, N.A. v. Zaks, 138 A.D.3d at 788, 29 N.Y.S.3d 514 ; Aurora Loan Servs., LLC v. Mercius, 138 A.D.3d 650, 651, 29 N.Y.S.3d 462 ). 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, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; One W. Bank, FSB v. Albanese, 139 A.D.3d 831, 832, 30 N.Y.S.3d 337 ; Aurora Loan Servs., LLC v. Mercius, 138 A.D.3d at 651, 29 N.Y.S.3d 462 ). 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, 29 N.Y.S.3d 462 ).

Here, the plaintiff failed to meet its prima facie burden to establish its standing.

In support of its motion, the plaintiff relied on the affidavit of Jaclyn Holloway, an assistant secretary of Nationstar Mortgage, LLC (hereinafter Nationstar). Holloway alleged that, after the action was commenced, the plaintiff delivered the note to NationStar. She alleged that, “pursuant to the business records of [the plaintiff],” the plaintiff had physical possession of the note when it commenced the action.

However, the plaintiff failed to demonstrate the admissibility of the records relied upon by Holloway under the business records exception to the hearsay rule (see CPLR 4518[a] ) since Holloway did not attest that she was personally familiar with the record-keeping practices and procedures of the plaintiff (see U.S. Bank N.A. v. Handler, 140 A.D.3d 948, 949, 34 N.Y.S.3d 463 ; Aurora Loan Servs., LLC v. Mercius, 138 A.D.3d at 652, 29 N.Y.S.3d 462 ; Citibank, N.A. v. Cabrera, 130 A.D.3d 861, 14 N.Y.S.3d 420 ). Consequently, Holloway's allegations based on those records were inadmissible (see Aurora Loan Servs., LLC v. Mercius, 138 A.D.3d at 652, 29 N.Y.S.3d 462 ; US Bank N.A. v. Madero, 125 A.D.3d 757, 758, 5 N.Y.S.3d 105 ), and, therefore, insufficient to meet the plaintiff's prima facie burden to establish its standing (see Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 ; U.S. Bank N.A. v. Handler, 140 A.D.3d at 949, 34 N.Y.S.3d 463 ; Aurora Loan Servs., LLC v. Mercius, 138 A.D.3d at 652, 29 N.Y.S.3d 462 ; Citibank, N.A. v. Cabrera, 130 A.D.3d at 861, 14 N.Y.S.3d 420 ; US Bank N.A. v. Madero, 125 A.D.3d at 758, 5 N.Y.S.3d 105 ).

The plaintiff could not rely on the affidavit of its vice president to meet its prima facie burden since the affidavit was improperly submitted for the first time in its reply papers (see HSBC Bank USA, N.A. v. Roumiantseva, 130 A.D.3d 983, 985, 15 N.Y.S.3d 117 ; Arriola v. City of New York, 128 A.D.3d 747, 749, 9 N.Y.S.3d 344 ; Poole v. MCPJF, 127 A.D.3d 949, 949–950, 7 N.Y.S.3d 399 ; DiLapi v. Saw Mill Riv., LLC, 122 A.D.3d 896, 900, 998 N.Y.S.2d 60 ). Additionally, although the plaintiff submitted evidence that MERS, as nominee for GreenPoint, assigned the mortgage and note to the plaintiff before the action was commenced, the plaintiff failed to establish delivery or assignment of the note to MERS prior to its execution of the assignment (see Aurora Loan Servs., LLC v. Mercius, 138 A.D.3d at 652, 29 N.Y.S.3d 462 ; HSBC Bank USA, N.A. v. Roumiantseva, 130 A.D.3d at 984, 15 N.Y.S.3d 117 ; Midland Mtge. Co. v. Imtiaz, 110 A.D.3d 773, 775, 973 N.Y.S.2d 257 ; Deutsche Bank Natl. Trust Co. v. Haller, 100 A.D.3d 680, 683, 954 N.Y.S.2d 551 ). Since the plaintiff failed to meet its prima facie burden, the Supreme Court should have denied those branches of its motion which were for summary judgment on the complaint insofar as asserted against Baritz and for an order of reference, without regard to the sufficiency of Baritz's opposition papers (see Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 ).

The Supreme Court providently exercised its discretion in denying that branch of Baritz's cross motion which was for leave to amend his answer to assert certain counterclaims, as the proposed amendments were either patently devoid of merit or their belated addition would have prejudiced the plaintiff, and Baritz failed to offer a reasonable excuse for his nearly

five-year delay in seeking to add them (see Yong Soon Oh v. Hua Jin, 124 A.D.3d 639, 640, 1 N.Y.S.3d 307 ; Brooks v. Robinson, 56 A.D.3d 406, 407, 867 N.Y.S.2d 133 ).

Baritz's remaining contention need not be reached in light of our determination.