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CitiMortgage, Inc. v. McKenzie
Factual and Procedural Background
In August 2010, John A. McKenzie and Sacha Singh (the defendants) executed a note for $360,150 in favor of Cole Taylor Bank, secured by a mortgage on real property in Baldwin, New York. The plaintiff, CITIMORTGAGE, INC., commenced a foreclosure action in September 2013, alleging the defendants defaulted by failing to make payments due from June 1, 2012, onward. The defendants answered asserting affirmative defenses, including plaintiff's alleged failure to comply with RPAPL 1304 and lack of standing. The plaintiff moved for summary judgment on the complaint and to appoint a referee, while the defendants cross-moved for summary judgment dismissing the complaint. The Supreme Court granted the plaintiff’s motion and denied the defendants’ cross motion. The defendants appealed this order.
Legal Issues Presented
- Whether the plaintiff established prima facie entitlement to judgment as a matter of law in the mortgage foreclosure action by producing the mortgage, unpaid note, and evidence of default.
- Whether the plaintiff had standing to commence the foreclosure action.
- Whether the plaintiff strictly complied with the requirements of RPAPL 1304.
- Whether the defendants raised triable issues of fact sufficient to defeat summary judgment.
Arguments of the Parties
Appellant's Arguments
- The plaintiff lacked standing to commence the foreclosure action.
- The plaintiff failed to strictly comply with RPAPL 1304 requirements.
Respondent's Arguments
- The plaintiff produced the mortgage, the unpaid note, and evidence of default, establishing prima facie entitlement to judgment as a matter of law.
- The plaintiff demonstrated standing by showing it was the holder of the note when the action was commenced, supported by an allonge and blank endorsement making the note payable to bearer.
- The plaintiff strictly complied with RPAPL 1304 requirements.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Deutsche Bank Natl. Trust Co. v. Abdan, 131 A.D.3d 1001 | Establishing prima facie entitlement to judgment in foreclosure requires mortgage, unpaid note, and default evidence. | Used to confirm plaintiff's burden to produce these documents to be entitled to summary judgment. |
| HSBC Bank, USA v. Hagerman, 130 A.D.3d 683 | Same as above regarding foreclosure summary judgment requirements. | Supported the court’s standard for prima facie entitlement in foreclosure actions. |
| Plaza Equities, LLC v. Lamberti, 118 A.D.3d 688 | Same principle on foreclosure summary judgment entitlement. | Reinforced the plaintiff’s evidentiary requirements. |
| Wells Fargo Bank, N.A. v. Arias, 121 A.D.3d 973 | When standing is challenged, plaintiff must prove standing to be entitled to relief. | Applied to require plaintiff to demonstrate standing as holder or assignee of the note. |
| Security Lending, Ltd. v. New Realty Corp., 142 A.D.3d 986 | Standing must be established by plaintiff in foreclosure actions. | Used to confirm plaintiff’s burden on standing issue. |
| Deutsche Bank Natl. Trust Co. v. Brewton, 142 A.D.3d 683 | Standing requires showing plaintiff was holder or assignee of note at commencement. | Supported plaintiff’s demonstration of standing via note and allonge. |
| Deutsche Bank Natl. Trust Co. v. Cunningham, 142 A.D.3d 634 | Same as above on standing requirement. | Confirmed plaintiff’s obligation to prove standing. |
| Dyer Trust 2012–1 v. Global World Realty, Inc., 140 A.D.3d 827 | Standing established by written assignment or physical delivery of note prior to commencement. | Applied to determine plaintiff’s standing based on allonge and endorsement. |
| Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355 | Note holder status establishes standing; mortgage passes with debt. | Guided court’s understanding of standing and note transfer. |
| Flagstar Bank, FSB v. Mendoza, 139 A.D.3d 898 | Standing and RPAPL 1304 compliance requirements. | Supported plaintiff’s compliance with statutory requirements. |
| Nationstar Mtge., LLC v. Catizone, 127 A.D.3d 1151 | Proof of standing by holder status. | Used to confirm plaintiff’s prima facie showing of standing. |
| Deutsche Bank Trust Co. Ams. v. Garrison, 147 A.D.3d 725 | Standing through note holder status. | Supported plaintiff’s demonstration of standing. |
| Deutsche Bank Natl. Trust Co. v. Leigh, 137 A.D.3d 841 | Establishing entitlement to judgment by showing mortgage, note, and default. | Reinforced plaintiff’s prima facie case. |
| Citimortgage, Inc. v. Banks, 155 A.D.3d 936 | Strict compliance with RPAPL 1304 required. | Applied to find plaintiff’s compliance with statutory notice requirements. |
| Onewest Bank, N.A. v. Mahoney, 154 A.D.3d 770 | Defendant must raise triable issue of fact to defeat summary judgment. | Used to reject defendants’ opposition as insufficient to raise triable issues. |
Court's Reasoning and Analysis
The court analyzed the plaintiff’s entitlement to summary judgment by confirming that the plaintiff submitted the mortgage, the unpaid note, and evidence of default, satisfying the prima facie burden. The plaintiff also demonstrated standing by attaching an allonge and a blank endorsement to the note, establishing that it was the holder of the note at the time the foreclosure action was commenced. The court further found that the plaintiff strictly complied with RPAPL 1304, which governs the notice requirements in foreclosure actions. The defendants failed to raise any triable issues of fact to counter the plaintiff’s prima facie case, and their arguments regarding lack of standing and noncompliance with RPAPL 1304 were insufficient. Consequently, the court affirmed the Supreme Court’s order granting summary judgment to the plaintiff and denying the defendants’ cross motion.
Holding and Implications
The court affirmed the Supreme Court's order granting summary judgment to the plaintiff on the complaint against the defendants and appointing a referee, and denying the defendants' cross motion for summary judgment dismissing the complaint.
This decision directly results in the continuation of the foreclosure proceeding against the defendants. No new legal precedent was established; rather, the ruling applied established principles regarding standing, evidentiary burdens in foreclosure actions, and compliance with RPAPL 1304.
John A. McKenzie, New York, NY, and Sacha Singh, Baldwin, NY, appellants pro se.
Akerman LLP, New York, N.Y. (Jordan M. Smith of counsel), for respondent.
SHERI S. ROMAN, J.P., HECTOR D. LASALLE, FRANCESCA E. CONNOLLY, LINDA CHRISTOPHER, JJ.
DECISION & ORDER
In an action to foreclose a mortgage, the defendants John A. McKenzie and Sacha Singh appeal from an order of the Supreme Court, Nassau County (Thomas A. Adams, J.), entered November 4, 2015. The order granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants John A. McKenzie and Sacha Singh and to appoint a referee, and denied the cross motion of the defendants John A. McKenzie and Sacha Singh for summary judgment dismissing the complaint insofar as asserted against them.
ORDERED that the order is affirmed, with costs.
In August 2010, the defendants John A. McKenzie and Sacha Singh (hereinafter together the defendants) executed a note in the sum of $360,150 in favor of Cole Taylor Bank, an Illinois Chartered Bank, which was secured by a mortgage encumbering real property in Baldwin. In September 2013, the plaintiff commenced this action to foreclose the mortgage, alleging that the defendants defaulted under the terms of the note by failing to make the payment due on June 1, 2012, and all payments due thereafter. The defendants served an answer asserting affirmative defenses, including that the plaintiff failed to comply with RPAPL 1304 and lacked standing to commence the action. Thereafter, the plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendants and to appoint a referee. The defendants cross-moved for summary judgment dismissing the complaint insofar as asserted against them, arguing that the plaintiff lacked standing and failed to strictly comply with RPAPL 1304. In the order appealed from, the Supreme Court granted those branches of the plaintiff's motion and denied the defendants' cross motion. The defendants appeal. To establish prima facie entitlement to judgment as a matter of law in an action to foreclose a mortgage, a plaintiff must produce the mortgage, the unpaid note, and evidence of default (see Deutsche Bank Natl. Trust Co. v. Abdan, 131 A.D.3d 1001, 16 N.Y.S.3d 459 ; HSBC Bank, USA v. Hagerman, 130 A.D.3d 683, 683–684, 11 N.Y.S.3d 865 ; Plaza Equities, LLC v. Lamberti, 118 A.D.3d 688, 689, 986 N.Y.S.2d 843 ). In addition, "[w]here, as here, a plaintiff's standing to commence a foreclosure action is placed in issue by [a] defendant, it is incumbent upon the plaintiff to prove its standing to be entitled to relief" ( Wells Fargo Bank, N.A. v. Arias, 121 A.D.3d 973, 973–974, 995 N.Y.S.2d 118 [internal quotation marks omitted]; see Security Lending, Ltd. v. New Realty Corp., 142 A.D.3d 986, 987, 37 N.Y.S.3d 327 ; Deutsche Bank Natl. Trust Co. v. Brewton, 142 A.D.3d 683, 684, 37 N.Y.S.3d 25 ; Deutsche Bank Natl. Trust Co. v. Cunningham, 142 A.D.3d 634, 635, 36 N.Y.S.3d 726 ). "A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that, when the action was commenced, it was either the holder or assignee of the underlying note" ( Dyer Trust 2012–1 v. Global World Realty, Inc., 140 A.D.3d 827, 828, 33 N.Y.S.3d 414 ; 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 ; Flagstar Bank, FSB v. Mendoza, 139 A.D.3d 898, 32 N.Y.S.3d 278 ). "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" (Dyer Trust 2012–1 v. Global World Realty, Inc., 140 A.D.3d at 828, 33 N.Y.S.3d 414; see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361–362, 12 N.Y.S.3d 612, 34 N.E.3d 363 ).
Here, attached to the plaintiff's complaint was a copy of the underlying note, to which was annexed an allonge dated August 8, 2010. The allonge, which made the note payable to the plaintiff, also bore a separate blank endorsement by the plaintiff making the note payable to bearer. Thus, the plaintiff established, prima facie, that it had standing to commence this action by demonstrating that it was the holder of the note when the action was commenced (see Nationstar Mtge., LLC v. Catizone, 127 A.D.3d 1151, 1152, 9 N.Y.S.3d 315 ; see also Deutsche Bank Trust Co. Ams. v. Garrison, 147 A.D.3d 725, 726, 46 N.Y.S.3d 185 ). Additionally, the plaintiff made a prima facie showing of entitlement to judgment as a matter of law by producing the mortgage, the unpaid note, and evidence of default (see Deutsche Bank Natl. Trust Co. v. Leigh, 137 A.D.3d 841, 842, 28 N.Y.S.3d 86 ). Further, the plaintiff established, prima facie, that it strictly complied with the requirements of RPAPL 1304 (see Citimortgage, Inc. v. Banks, 155 A.D.3d 936, 64 N.Y.S.3d 121 ; Flagstar Bank, FSB v. Mendoza, 139 AD3d at 900 ).
In opposition, the defendants failed to raise a triable issue of fact (see Onewest Bank, N.A. v. Mahoney, 154 A.D.3d 770, 772, 62 N.Y.S.3d 144 ).
Accordingly, we agree with the Supreme Court's determination to grant those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants and for an order of reference, and to deny the defendants' cross motion for summary judgment dismissing the complaint insofar as asserted against them.
ROMAN, J.P., LASALLE, CONNOLLY and CHRISTOPHER, JJ., concur.
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