Bank of N.Y. Mellon v. Cronin

• Citation: 57 N.Y.S.3d 733,151 A.D.3d 1504
• Parties: BANK OF NEW YORK MELLON, Formerly Known as Bank of New York, as Trustee for the Certificate Holders of CWABS, INC., Asset–Backed Certificates, Series 2007–2, Respondent, v. Suzanne CRONIN, et al., Appellants, et al., Defendants.
• Decision Date: 29 June 2017
• Court: New York Supreme Court Appellate Division

151 A.D.3d 1504

57 N.Y.S.3d 733

BANK OF NEW YORK MELLON, Formerly Known as Bank of New York, as Trustee for the Certificate Holders of CWABS, INC., Asset–Backed Certificates, Series 2007–2, Respondent,

v.Suzanne CRONIN, et al., Appellants, et al., Defendants.

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

June 29, 2017.

Stephen A. Pechenik, PC, Troy (Stephen A. Pechenik of counsel), for Suzanne Cronin, appellant.

Robert Garrasi, Clifton Park, appellant pro se.

Frenkel Lambert Weiss & Gordon, LLP, Bay Shore (Christopher P. Kohn of counsel), for respondent.

Before: GARRY, J.P., LYNCH, ROSE, Clark and AARONS, JJ.

CLARK, J.

Appeal from an order of the Supreme Court (Crowell, J.), entered April 7, 2016 in Saratoga County, which, among other things, granted plaintiff's motion for summary judgment.

In 2007, defendant Suzanne Cronin executed a note in favor of America's Wholesale Lender in the amount of $405,450. The note was secured by a mortgage on certain real property in the Town of Clifton Park, Saratoga County issued in favor of Mortgage Electronic Registrations Systems, Inc., as nominee for America's Wholesale Lender. In November 2008, Cronin entered into a loan modification agreement that increased the principal balance of the existing mortgage to $427,977.76 and, shortly thereafter, she defaulted on the modified loan. The mortgage was assigned to plaintiff in May 2013 and, several weeks later, plaintiff commenced this mortgage foreclosure action. Cronin joined issue and asserted various affirmative defenses, including lack of standing.

In January 2015, Cronin executed a bargain and sale deed that conveyed the property to herself and defendant Robert Garassi as tenants in common. Supreme Court granted Garassi's subsequent motion to intervene pursuant to CPLR 1012(a)(3) and amended the caption accordingly. However, Supreme Court did not permit Garassi to interpose an answer and deemed Cronin's answer to also be Garassi's answer. After Supreme Court denied Cronin's motion to compel plaintiff's response to her combined discovery demands, plaintiff moved for summary judgment striking the answer and appointing a referee to compute the amount due. Cronin cross-moved for summary judgment dismissing the complaint or to compel disclosure, and Garassi separately cross-moved for summary judgment dismissing the complaint. Supreme Court, as relevant here, granted plaintiff's motion and denied the respective cross motions of Cronin and Garassi (hereinafter collectively referred to as defendants). Defendants now appeal.

We affirm. To establish its prima facie entitlement to summary judgment in a mortgage foreclosure action, a plaintiff must submit the mortgage, unpaid note and evidence of the mortgagor's default (see Wells Fargo Bank, N.A. v. Walker, 141 A.D.3d 986, 987, 35 N.Y.S.3d 591 [2016] ; Deutsche Bank Natl. Trust Co. v. Monica, 131 A.D.3d 737, 738, 15 N.Y.S.3d 863 [2015] ). Where, as here, a challenge is made to the plaintiff's standing to maintain the action, the plaintiff must also 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 U.S. Bank N.A. v. Carnivale, 138 A.D.3d 1220, 1220–1221, 29 N.Y.S.3d 643 [2016] ; Wells Fargo Bank, NA v. Ostiguy, 127 A.D.3d 1375, 1376, 8 N.Y.S.3d 669 [2015] ; Chase Home Fin., LLC v. Miciotta, 101 A.D.3d 1307, 1307, 956 N.Y.S.2d 271 [2012] ). However, "it is not necessary to have possession of the mortgage at the time the action is commenced," as "[a] transfer in full of the [note] obligation automatically transfers the mortgage as well[,] unless the parties agree that the transferor is to retain the mortgage" ( Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355, 361, 12 N.Y.S.3d 612, 34 N.E.3d 363 [2015] ; see Everhome Mtge. Co. v. Pettit, 135 A.D.3d 1054, 1055, 23 N.Y.S.3d 408 [2016] ). As such, it is the note, rather than the mortgage, that conveys standing to foreclose (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; Deutsche Bank Natl. Trust Co. v. Monica, 131 A.D.3d at 738, 15 N.Y.S.3d 863 ). "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" ( U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 754, 890 N.Y.S.2d 578 [2009] ; accord Chase Home Fin., LLC v. Miciotta, 101 A.D.3d at 1307, 956 N.Y.S.2d 271 ; see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361, 12 N.Y.S.3d 612, 34 N.E.3d 363 ).

Here, plaintiff produced evidence of the mortgage, the loan modification agreement, the unpaid note and Cronin's default, thereby establishing its prima facie entitlement to summary judgment (see JP Morgan Chase Bank, N.A. v. Venture, 148 A.D.3d 1269, 1270, 48 N.Y.S.3d 824 [2017] ; Deutsche Bank Natl. Trust Co. v. Monica, 131 A.D.3d at 738, 15 N.Y.S.3d 863 ). To establish its standing to maintain the action, plaintiff proffered the affidavits of Kindra Denny, Julie Brandstetter and Kyra Schwartz. Denny, an employee of Ditech Financial LLC, plaintiff's attorney-in-fact, stated that plaintiff was the holder of the note and was assigned the mortgage prior to the commencement of this action. Brandstetter, an officer of Bank of America, N.A. (hereinafter BANA), plaintiff's prior servicing agent, averred that BANA created and maintained records in its regular course of business as plaintiff's prior servicing agent and that, based upon her review of these records, BANA had received the original note in January 2007 and the mortgage in March 2007. She stated that BANA maintained the note and mortgage in a secure file room until they were, upon request, shipped to the offices of plaintiff's counsel. Schwartz, an employee at that law firm, asserted that, in its ordinary course of business, the firm received loan documents from clients, created and maintained records documenting the receipt of those documents at or about the time that they were received and placed the original loan documents in secure storage. Schwartz stated that, based upon her review of these records, the firm had received the original note on June 30, 2011 and that, upon comparison to the original note that was in storage under the firm's custody on...