Bank of Am., Nat'l Ass'n v. Wheatley, 2017–00933

• Decision Date: 21 February 2018
• Docket Number: Index No. 6707/11,2017–00933
• Citation: 158 A.D.3d 736,73 N.Y.S.3d 88
• Parties: BANK OF AMERICA, NATIONAL ASSOCIATION, etc., appellant, v. Cecil WHEATLEY, et al., defendants.
• Court: New York Supreme Court — Appellate Division

158 A.D.3d 736

73 N.Y.S.3d 88

BANK OF AMERICA, NATIONAL ASSOCIATION, etc., appellant,

v.Cecil WHEATLEY, et al., defendants.

2017–00933

Index No. 6707/11

Supreme Court, Appellate Division, Second Department, New York.

Submitted—November 2, 2017

February 21, 2018

Parker Ibrahim & Berg, New York, NY (Ben Z. Raindorf of counsel), for appellant.

REINALDO E. RIVERA, J.P., JEFFREY A. COHEN, SYLVIA O. HINDS–RADIX, VALERIE BRATHWAITE NELSON, JJ.

DECISION & ORDER

Appeal from an order of the Supreme Court, Queens County (Frederick D.R. Sampson, J.), entered April 12, 2016. The order denied the plaintiff's motion, inter alia, for summary judgment on the complaint and for an order of reference.

ORDERED that the order is affirmed, without costs or disbursements.

On March 19, 2007, the defendant Cecil Wheatley (hereinafter the defendant) executed a note in the sum of $242,000 in favor of Bravo Credit. The note was secured by a mortgage on residential property located in Queens County. In January 2010, Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), as nominee for Bravo Credit, assigned the mortgage to the plaintiff.

In March 2011, the plaintiff commenced this action against, among others, the defendant. The defendant served an answer in which he asserted various affirmative defenses, including that the plaintiff lacked standing and that the plaintiff failed to comply with RPAPL 1304, and two counterclaims. The plaintiff moved, inter alia, for summary judgment on the complaint and for an order of reference. The defendant did not oppose the motion. By order entered April 12, 2016, the Supreme Court denied the motion. The plaintiff appeals, and we affirm.

Contrary to the Supreme Court's determination, the plaintiff established, prima facie, that it had standing to commence this action. 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 (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355, 361–362, 34 N.E.3d 363 ; U.S. Bank, N.A. v. Noble, 144 A.D.3d 786, 787, 41 N.Y.S.3d 76 ; U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 753–754, 890 N.Y.S.2d 578 ).

"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" ( Deutsche Bank Trust Co. Ams. v. Garrison, 147 A.D.3d 725, 726, 46 N.Y.S.3d 185 ; see U.S. Bank N.A. v. Saravanan, 146 A.D.3d 1010, 1011, 45 N.Y.S.3d 547 ; Deutsche Bank Natl. Trust Co. v Logan, 146 A.D.3d 861, 862, 45 N.Y.S.3d 189 ).

Here, the plaintiff established, prima facie, its standing as the holder of the note by demonstrating that the note was in its possession at the time it commenced the action, as evidenced by its attachment of the note, which contained an endorsement in blank by Bravo Credit, the original lender, to the summons and complaint at the time the action was commenced (see U.S. Bank N.A. v. Sabloff, 153 A.D.3d 879, 60 N.Y.S.3d 343 ; Deutsche Bank Natl. Trust Co. v Carlin, 152 A.D.3d 491, 493, 61 N.Y.S.3d 16 ; Wells Fargo Bank, N.A. v. Thomas, 150 A.D.3d 1312, 1313, 52 N.Y.S.3d 894 ; U.S. Bank N.A. v. Saravanan, 146 A.D.3d at 1011, 45 N.Y.S.3d 547; Deutsche Bank Natl. Trust Co. v Logan, 146 A.D.3d at 862, 45 N.Y.S.3d 189 ; JPMorgan Chase Bank, N.A. v. Weinberger, 142 A.D.3d 643, 645, 37 N.Y.S.3d 286 ).

However, the Supreme Court properly determined that the plaintiff failed to establish, prima facie, its compliance with RPAPL 1304. RPAPL 1304(1) provides that, "at least ninety days before a lender, an assignee or a mortgage loan servicer commences legal action against the borrower, including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give notice to the borrower." RPAPL 1304(1) sets forth the requirements for the content of such notice and further provides that such notice must be sent by registered or certified mail and by first-class mail to the last known address of the borrower (see RPAPL 1304[2] ). "[P]roper service of RPAPL 1304 notice on the borrower or borrowers is a condition precedent to the commencement of a foreclosure action, and the plaintiff has the burden of establishing satisfaction of this condition" ( Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d 95, 106, 923 N.Y.S.2d 609 ; see CitiMortgage, Inc. v. Pappas, 147 A.D.3d 900, 901, 47 N.Y.S.3d 415 ; Deutsche Bank Natl. Trust Co. v Spanos, 102 A.D.3d 909, 910, 961 N.Y.S.2d 200 ).

Contrary to the plaintiff's contention, since the defendant raised the issue of compliance with RPAPL 1304 as an affirmative defense in his answer, the plaintiff was required to make a prima facie showing of compliance with RPAPL 1304 (cf. Flagstar Bank, FSB v. Jambelli, 140 A.D.3d 829, 830, ...