Citibank v. Abrams

• Decision Date: 03 November 2016
• Citation: 40 N.Y.S.3d 653,144 A.D.3d 1212,2016 N.Y. Slip Op. 07241
• Parties: CITIBANK, NA, as Trustee for CD 2003–6, Respondent, v. Kenneth ABRAMS, also known as Kenneth T. Abrams, et al., Appellants, et al., Defendant.
• Court: New York Supreme Court — Appellate Division

144 A.D.3d 1212

40 N.Y.S.3d 653

2016 N.Y. Slip Op. 07241

CITIBANK, NA, as Trustee for CD 2003–6, Respondent,

v.Kenneth ABRAMS, also known as Kenneth T. Abrams, et al., Appellants, et al., Defendant.

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

Nov. 3, 2016.

Ronald J. Kim, Saratoga Springs, for appellants.

Ballard Spahr LLP, New York City(Justin A. Angelo of counsel), for respondent.

Before: McCARTHY, J.P., LYNCH, ROSE, DEVINE and MULVEY, JJ.

MULVEY, J.

Appeal from an order of the Supreme Court(Nolan, Jr., J.), entered August 14, 2014 in Saratoga County, which, among other things, granted plaintiff's motion for summary judgment.

In May 2003, defendantsKenneth Abrams and Madeline Abrams(hereinafter collectively referred to as defendants) obtained a mortgage loan from Fleet National Bank for their purchase of real property in the City of Saratoga Springs, Saratoga County.Defendants executed a note dated May 22, 2003 in the amount of $509,000 and agreed to repay the loan to the order of Fleet or to the note holder.To secure payment of the note, defendants executed a mortgage on the real property, also dated May 22, 2003, in favor of Mortgage Electronic Registration Systems, Inc.(hereinafter MERS), as nominee for Fleet and its successors and assigns.The mortgage was recorded on June 5, 2003 in the Saratoga County Clerk's office.

Defendants failed to make the payment due in June 2010 and any payments thereafter.Pursuant to an assignment of mortgage dated May 13, 2011, which was recorded in the Saratoga County Clerk's office on May 26, 2011, MERS assigned the mortgage to plaintiff as trustee.By an undated allonge to the note by special indorsement, it was transferred to plaintiff by Cendant Mortgage Corporation as authorized agent for Fleet.Pursuant to a limited power of attorney, plaintiff appointed PHH Mortgage Corporation as its attorney-in-fact and loan servicing agent, including with respect to defendants' mortgage loan.Plaintiff commenced this action to foreclose the mortgage on May 11, 2012.Following joinder of issue, plaintiff moved for summary judgment.Defendants answered and contested plaintiff's motion on the ground that plaintiff lacked standing and cross-moved for, among other things, an order dismissing the complaint or, in the alternative, striking the complaint due to plaintiff's failure to answer their discovery demands.Supreme Court denied defendants' cross motion and granted plaintiff's motion, finding that plaintiff established its entitlement to summary judgment as a matter of law.Defendants now appeal.

We affirm.First addressing defendants' cross motion to strike the complaint due to plaintiff's failure to respond to defendants' discovery requests, we note that even though Supreme Court granted defendants' request for an extension of time to respond to plaintiff's motion, at no point did defendants request an order of disclosure.As is relevant here, “[w]hile it is true that a motion for summary judgment may be opposed with the claim that facts essential to justify opposition may exist but that such material facts are within the exclusive knowledge and possession of the moving party, a party's mere hope or speculation that evidence sufficient to defeat the motion may be uncovered during the discovery process is insufficient to postpone determination on the motion”(Gersten–Hillman Agency, Inc. v. Heyman,68 A.D.3d 1284, 1288, 892 N.Y.S.2d 209[2009][internal quotation marks, brackets and citations omitted];seeCPLR 3212[f];Clochessy v. Gagnon,58 A.D.3d 1008, 1010, 870 N.Y.S.2d 639[2009] ).CPLR 3126 authorizes a court to fashion an appropriate remedy when a party refuses to obey an order of disclosure or willfully fails to disclose information that the court finds ought to have been disclosed (seeCPLR 3126;CDR Créances S.A.S. v. Cohen,23 N.Y.3d 307, 317–318, 991 N.Y.S.2d 519, 15 N.E.3d 274[2014];Appler v. Riverview Obstetrics & Gynecology, P.C.,9 A.D.3d 577, 578, 780 N.Y.S.2d 188[2004] ).Here, defendants failed to obtain an order of disclosure and failed to demonstrate that plaintiff willfully failed to obey an order to disclose information that the court determined ought to have been disclosed.As such, defendants were not entitled to have the complaint stricken on this basis (seeCPLR 3126;CDR Créances S.A.S. v. Cohen,23 N.Y.3d at 317, 991 N.Y.S.2d 519, 15 N.E.3d 274;Appler v. Riverview Obstetrics & Gynecology, P.C.,9 A.D.3d at 578, 780 N.Y.S.2d 188 ).

A plaintiff establishes its entitlement to summary judgment in a mortgage foreclosure action by submitting the mortgage and unpaid note, along with evidence of default in payments (seePHH Mtge. Corp. v. Davis,111 A.D.3d 1110, 1111, 975 N.Y.S.2d 480[2013], lv. dismissed23 N.Y.3d 940, 987 N.Y.S.2d 593, 10 N.E.3d 1148[2014];Charter One Bank, FSB v. Leone,45 A.D.3d 958, 958, 845 N.Y.S.2d 513[2007];HSBC Bank USA v. Merrill,37 A.D.3d 899, 900, 830 N.Y.S.2d 598[2007], lv. dismissed8 N.Y.3d 967, 836 N.Y.S.2d 540, 868 N.E.2d 221[2007] ).“Where, as here, the issue of standing is raised as an affirmative defense, the plaintiff must also prove its standing in order to be entitled to relief”(Wells Fargo Bank, NA v. Ostiguy,127 A.D.3d 1375, 1376, 8 N.Y.S.3d 669[2015][citations omitted];seeDeutsche Bank Natl. Trust Co. v. Monica,131 A.D.3d 737, 738, 15 N.Y.S.3d 863[2015] ).It is well settled that “plaintiff has standing in a mortgage foreclosure action where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced”(Bank of Am., N.A. v. Kyle,129 A.D.3d 1168, 1169, 13 N.Y.S.3d 253[2015];seeChase Home Fin., LLC v. Miciotta,101 A.D.3d 1307, 1307, 956 N.Y.S.2d 271[2012] ).“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”(Bank of Am., N.A. v. Kyle,129 A.D.3d at 1169, 13 N.Y.S.3d 253[internal quotation marks and citations omitted];seeOnewest Bank, F.S.B. v. Mazzone,130 A.D.3d 1399, 1400, 15 N.Y.S.3d 505[2015] ).“Holder status is established where the plaintiff possesses a note that, on its face or by allonge, contains an indorsement in blank or bears a special indorsement payable to the order of the plaintiff”(Wells Fargo Bank, NA v. Ostiguy,127 A.D.3d at 1376, 8 N.Y.S.3d 669 ).Once a plaintiff demonstrates its status as a holder, the burden then shifts to the defendant to demonstrate, by competent and admissible proof, that a defense exists so to raise a question of fact as to his or her default (seePHH Mtge. Corp. v. Davis,111 A.D.3d at 1111, 975 N.Y.S.2d 480;Charter One Bank, FSB v. Leone,45 A.D.3d at 958, 845 N.Y.S.2d 513;HSBC Bank USA v. Merrill,37 A.D.3d at 900, 830 N.Y.S.2d 598 ).

Plaintiff's motion for summary judgment included, among other things, the affidavit of Felicia Polk, the assistant vice-president of PHH.Polk averred that the note and mortgage were transferred to plaintiff as trustee, and that the transfer “was memorialized by the delivery and endorsement of the underlying [n]ote and by an [a]ssignment of [m]ortgage.”We note that, here, plaintiff possessed the note that, by allonge, contained an indorsement specifically payable to it (seeDeutsche Bank Natl. Trust Co. v. Monica,131 A.D.3d at 739, 15 N.Y.S.3d 863;Wells Fargo Bank, NA v. Ostiguy,127 A.D.3d at 1376, 8 N.Y.S.3d 669 ).Thus, Polk's affidavit, coupled with the complaint's definitive statement in Schedule D—wherein it specifies that the note was indorsed by the original lender or its agent and was delivered to plaintiff prior to the commencement of this action—adequately demonstrates that plaintiff had physical possession as holder of the note at the relevant time (compareBank of Am., N.A. v. Kyle,129 A.D.3d at 1169, 13 N.Y.S.3d 253;Wells Fargo Bank, NA v. Ostiguy,127 A.D.3d at 1376–1377, 8 N.Y.S.3d 669 ).Polk's affidavit also established that the default amount due on the note and mortgage as of January 13, 2014 was $648,193.18.Plaintiff's documentary proof and proof by affidavit established its standing, as a matter of law, in that it was the holder of both the subject mortgage and the underlying note at the time that the action was commenced (seeDeutsche Bank Natl. Trust Co. v. Monica,131 A.D.3d at 739, 15 N.Y.S.3d 863 ).Thus, as plaintiff's motion was supported by the required documentation, the burden shifted to defendants to establish the existence of a viable defense to their alleged default (seePHH Mtge. Corp. v. Davis,111 A.D.3d at 1111, 975 N.Y.S.2d 480;HSBC Bank USA v. Merrill,37 A.D.3d at 900, 830 N.Y.S.2d 598;Charter One Bank, FSB v. Leone,45 A.D.3d at 958–959, 845...