Aurora Loan Servs., LLC v. Taylor
| Decision Date | 11 June 2015 |
| Docket Number | No. 83.,83. |
| Parties | AURORA LOAN SERVICES, LLC, Respondent, v. Monique TAYLOR, Also Known as Monique Pujol Taylor, et al., Appellants, et al., Defendants. |
| Court | New York Court of Appeals Court of Appeals |
Zinker & Herzberg, LLP, Hauppauge (Jeffrey Herzberg of counsel), for appellants.
Ballard Spahr LLP (Martin C. Bryce, Jr., of the Pennsylvania bar, admitted pro hac vice, of counsel), and Knuckles, Komosinski & Elliott, LLP, Elmsford (Michael Lee of counsel), for respondent.
Hiscock & Barclay, LLP, Buffalo (Charles C. Martorana and Kimberly A. Colaiacovo of counsel), for MERSCORP Holdings, Inc. and another, amici curiae.
.
The issue presented by this appeal is whether plaintiff Aurora Loan Services, LLC had standing to commence this mortgage foreclosure action. We now affirm that part of the Appellate Division order (114 A.D.3d 627, 979 N.Y.S.2d 819 [2d Dept.2014]
) upholding Supreme Court's grant of summary judgment in favor of plaintiff, and hold that Aurora did have standing.
Defendant Monique Taylor executed and delivered an adjustable rate note dated July 5, 2006 to First National Bank of Arizona, wherein she agreed to repay the bank $600,000, with interest. To secure the payment, Monique and Leonard Taylor
(the Taylors) executed a mortgage with the bank, granting Mortgage Electronic Registration Systems, Inc. (MERS), as nominee, a mortgage lien on the property located in Fleetwood, New York. The note, however, was not transferred to MERS with the mortgage.
Subsequent to the note's execution, pursuant to a March 2006 pooling and servicing agreement (PSA), the loan was made part of a residential mortgage-backed securitization trust. Deutsche Bank Trust Company Americas, as trustee, became the owner of the note through an allonge indorsing the note to Deutsche, as required under the PSA. The allonge shows the chain of ownership of the note through indorsements from First National Bank of Arizona, to First National Bank of Nevada, to Residential Funding Company, LLC, to Deutsche.
On April 1, 2008, Aurora assumed servicer obligations under the PSA pursuant to a March 10, 2008 master servicing assignment and assumption agreement (MSAAA). The mortgage was subsequently assigned by MERS to Aurora on August 13, 2009, and recorded with the County Clerk on October 29, 2009.
Thereafter, the Taylors defaulted under the note and mortgage by failing to make the payment due on January 1, 2010, and each month thereafter. The Taylors have never disputed their obligation to make the payments or their default. Multiple notices of default were mailed to the Taylors through May of 2010.
On May 14, 2010, Deutsche, by limited power of attorney, granted Aurora the right to perform certain acts in the trustee's name, including the execution of documents related to loan modification and foreclosure. Aurora, through its agents, asserts it took physical custody of the original note on May 20, 2010. Aurora commenced this foreclosure action by filing a summons and complaint with the Westchester County Clerk on May 24, 2010. These were personally served upon the Taylors on May 29, 2010. The Taylors filed an answer on June 29, 2010.
The Taylors filed a motion for summary judgment, asserting that Aurora did not have standing to bring this foreclosure action. Aurora cross-moved for summary judgment. In support of its cross motion, Aurora submitted the affidavit of Sara Holland (Holland affidavit), Aurora's legal liaison, who stated that based on her “personal knowledge” of the facts as well as her “review of the note, mortgage and other loan documents” and “related business records ... kept in the ordinary course of
the regularly conducted business activity,” the “original Note has been in the custody of Plaintiff Aurora Loan Services, LLC and in its present condition since May 20, 2010.” Holland also stated that, “prior to the commencement of the action, Aurora Loan Services, LLC, has been in exclusive possession of the original note and allonge affixed thereto, indorsed to Deutsche Bank Trust Company Americas as Trustee, and has not transferred same to any other person or entity.” A copy of the note and allonge were attached to the affidavit.
Supreme Court denied the Taylors' motion for summary judgment, granted Aurora's cross motion for summary judgment, and appointed a referee to determine the amount due under the note. Aurora then filed a motion for summary judgment of foreclosure and sale, which the Taylors opposed. The court granted that motion on April 29, 2013, adopting the referee's recommendation without a hearing. The Taylors appealed both orders.
The Appellate Division affirmed the first order, concluding that Aurora had proven its standing as a matter of law. The Court concluded that, under New York law, the Holland affidavit demonstrated that Aurora had obtained physical possession of the original note prior to commencement of this foreclosure action, and that such was legally sufficient to establish standing. The Court specifically noted that the Taylors “offered no evidence to contradict those factual averments and, therefore, failed to raise a triable issue of fact with respect to [Aurora's] standing” (114 A.D.3d at 629, 979 N.Y.S.2d 819
). However, the Court reversed the judgment of foreclosure and sale and remitted the matter to Supreme Court for further proceedings, concluding that Supreme Court erred in confirming the referee's report because the referee had computed the amount due to Aurora without holding a hearing on notice to the Taylors (see
id. at 629–630, 979 N.Y.S.2d 819 ). One Justice dissented, arguing that the Holland affidavit was insufficient to confer standing on Aurora because it did not give sufficient “factual details” regarding the physical delivery of the note to Aurora (id. at 631, 979 N.Y.S.2d 819, citing HSBC Bank USA v. Hernandez, 92 A.D.3d 843, 844, 939 N.Y.S.2d 120 [2d Dept.2012] ). Thereafter, the Appellate Division granted the Taylors' motion for leave to appeal, certifying the following question: “Was the decision and order of this Court ... properly made?” (2014 N.Y. Slip Op. 70548[U] [2d Dept.2014].)
The critical issue we must resolve is whether the record demonstrates a basis for finding that Aurora had standing to
commence this mortgage foreclosure action. The physical delivery of the note to the plaintiff from its owner prior to...
To continue reading
Request your trial
-
HSBC Bank USA, Nat'l Ass'n v. Ozcan
...it is either 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, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; Central Mtge. Co. v. Jahnsen, 150 A.D.3d 661, 56 N.Y.S.3d 107 ; HSBC Bank USA, N.A. v. Spitzer, 131 A.D......
-
PennyMac, Corp. v. Darren DiPrima
...standing as part of its prima facie showing of its entitlement to judgment as a matter of law (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355, 12 N.Y.S.3d 612, 34 N.E.3d 363 [2015] ; Loancare v. Firshing, 130 A.D.3d 787, 14 N.Y.S.3d 410 [2d Dept.2015] ; HSBC Bank USA, N.A. v. Baptiste......
-
Bank of N.Y. v. Morga
...possession of the requisite standing to prosecute its claims for foreclosure and sale (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355, 12 N.Y.S.3d 612, 34 N.E.3d 363, supra; U.S. Bank v. Ehrenfeld, 144 A.D.3d 893, 41 N.Y.S.3d 269 [2d Dept.2016] ; JPMorgan Chase Bank, Natl. Ass'n v. We......
-
21st Mortg. Corp. v. Rudman
...must have been the holder or assignee of the note at the time the action was 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 ), and "the note ... is the dispositive instrument that conveys standing to foreclose under New York law" ( i......