Bayview Loan Servicing, LLC v. Charleston

• Court: New York Supreme Court — Appellate Division
• Citation: Bayview Loan Servicing, LLC v. Charleston, 175 A.D.3d 1229, 108 N.Y.S.3d 161 (N.Y. App. Div. 2019)
• Decision Date: 11 September 2019
• Docket Number: Index No. 2184/15,2017–01299
• Parties: BAYVIEW LOAN SERVICING, LLC, Respondent, v. Joel CHARLESTON, as Temporary Administrator of the Estate of Leonel Escobar, etc., Appellant, et al., Defendants.

175 A.D.3d 1229

108 N.Y.S.3d 161

BAYVIEW LOAN SERVICING, LLC, Respondent,

v.Joel CHARLESTON, as Temporary Administrator of the Estate of Leonel Escobar, etc., Appellant, et al., Defendants.

2017–01299

Index No. 2184/15

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

Submitted—April 26, 2019

September 11, 2019

Joel Charleston, as temporary administrator of the estate of Leonel Escobar, North Woodmere, NY, appellant pro se.

Woods Oviatt Gilman LLP, Rochester, N.Y. (Richard S. Mullen of counsel), for respondent.

WILLIAM F. MASTRO, J.P., ROBERT J. MILLER, BETSY BARROS, LINDA CHRISTOPHER, JJ.

DECISION & ORDER

ORDERED that the order is modified, on the law and the facts, by deleting the provision thereof denying that branch of the motion of the defendant Joel Charleston, as temporary administrator of the estate of Leonel Escobar, which was pursuant to CPLR 3124 to compel the plaintiff to produce the original note and endorsements, and substituting therefor a provision granting that branch of the motion; as so modified, the order is affirmed insofar as appealed from, with costs to the defendant Joel Charleston, as temporary administrator of the estate of Leonel Escobar.

On July 11, 2006, Leonel Escobar (hereinafter Escobar) executed and delivered to the original lender a note promising to repay a loan in the amount of $375,000, secured by a mortgage encumbering certain real property located in Inwood. By written assignment dated April 5, 2014, the mortgage allegedly was assigned to the plaintiff.

In March 2015, the plaintiff commenced the instant foreclosure action against Joel Charleston, as temporary administrator of the estate of Escobar (hereinafter the defendant), among others. Attached to the complaint was a copy of the note, with three endorsements, including an undated endorsement in blank from the plaintiff's immediate predecessor-in-interest. According to the plaintiff, the endorsements were stamped on the back of the last page of the note; therefore, "[n]o allonge was necessary or executed in relation to the subject note." The defendant interposed an answer in which he raised lack of standing as his sole affirmative defense.

On June 30, 2015, the defendant sent the plaintiff a notice for discovery and inspection, as well as a first demand for interrogatories. On January 21, 2016, the plaintiff answered the discovery demands by presenting some of the requested documents, including copies of the note and mortgage, but raising objections to most of the demands as being "overbroad, unduly burdensome, and vague" and "duplicative in nature." In June 2016, the defendant moved, inter alia, to compel the plaintiff to present for the personal inspection of the defendant's counsel the originals of the documents sought as part of the defendant's notice for discovery and inspection, and to compel the plaintiff to answer the defendant's interrogatories. The plaintiff opposed the motion. By order entered October 26, 2016, the Supreme Court denied the motion. The defendant appeals.

CPLR 3101 provides that "[t]here shall be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof, by ... a party, or the officer, director, member, agent or employee of a party" ( CPLR 3101[a][1] ). Pursuant to CPLR 3124, "[i]f a person fails to respond to or comply with any request, notice, interrogatory, demand, question or order ... the party seeking disclosure may move to compel compliance or a response." To prevail on its motion, the defendant was required to "satisfy the threshold requirement of demonstrating that the disclosure sought is ‘material and necessary’ to [its] affirmative defense alleging that the plaintiff lacked standing to commence this action" ( U.S. Bank N.A. v. Ventura, 130 A.D.3d 919, 920, 12 N.Y.S.3d 891 ; see Deutsche Bank Natl. Trust Co. v. Brewton, 142 A.D.3d 683, 686, 37 N.Y.S.3d 25 ; Altonen v. Kmart of N.Y. Holdings, Inc. , 94 A.D.3d 920, 942 N.Y.S.2d 363 ).

Here, the defendant contends that the documents and interrogatories at issue are "material and necessary" to prove the defense of lack of standing. We find there is merit to this contention to the extent that it pertains to the production, for the defendant's inspection, of the original note and endorsements.

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, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; Nationstar Mtge., LLC v. Rodriguez, 166 A.D.3d 990, 992, 89 N.Y.S.3d 205 ; Central Mtge. Co. v. Jahnsen, 150 A.D.3d 661, 663, 56 N.Y.S.3d 107 ; 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" ( Nationstar Mtge., LLC v. Rodriguez, 166 A.D.3d at 992, 89 N.Y.S.3d 205 [internal quotation marks omitted]; see Central Mtge. Co. v. Jahnsen, 150 A.D.3d at 663, 56 N.Y.S.3d 107 ; Deutsche Bank Trust Co. Ams. v. Garrison, 147 A.D.3d 725, 726, 46 N.Y.S.3d 185 ). A plaintiff may establish, prima facie, its standing as the holder of the note by demonstrating that a copy of the note, including an endorsement in blank, was among the exhibits annexed to the complaint at the time the action was commenced (see U.S. Bank N.A. v. Fisher, 169 A.D.3d 1089, 95 N.Y.S.3d 114 ; Nationstar Mtge., LLC v. Rodriguez, 166 A.D.3d at 992, 89 N.Y.S.3d 205 ; U.S. Bank N.A. v. Duthie, 161 A.D.3d 809, 811, 76 N.Y.S.3d 226 ; Deutsche Bank Natl. Trust Co. v. Carlin, 152 A.D.3d 491, 492–493, 61 N.Y.S.3d 16 ; JPMorgan Chase Bank, N.A. v. Weinberger, 142 A.D.3d 643, 645, 37 N.Y.S.3d...