Deutsche Bank Nat'l Trust Co. v. Monica

• Decision Date: 06 August 2015
• Docket Number: 519460
• Citation: 15 N.Y.S.3d 863,131 A.D.3d 737,2015 N.Y. Slip Op. 06453
• Parties: DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee (Not in its Individual Capacity but Solely as Trustee) in Trust for Registered Holders of VCM Series 2009–1, Respondent, v. Timothy MONICA, also Known as Timothy I. Monica, et al., Appellants, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

131 A.D.3d 737

15 N.Y.S.3d 863

2015 N.Y. Slip Op. 06453

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee (Not in its Individual Capacity but Solely as Trustee) in Trust for Registered Holders of VCM Series 2009–1, Respondent

v.Timothy MONICA, also Known as Timothy I. Monica, et al., Appellants, et al., Defendants.

519460

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

Aug. 6, 2015.

Law Offices of Ronald J. Kim, P.C., Saratoga Springs (Ronald J. Kim of counsel), for appellants.

Doonan, Graves & Longoria, LLC, Beverly, Massachusetts (Stephen M. Valente of counsel), for respondent.

Before: GARRY, J.P., EGAN JR., ROSE and LYNCH, JJ.

Opinion

LYNCH, J.

Appeal from an order of the Supreme Court (Chauvin, J.), entered February 13, 2013 in Saratoga County, which, among other things, granted plaintiff's motion for summary judgment.

In 2006, defendants Timothy Monica and Kathy Monica (hereinafter collectively referred to as defendants) executed a note in favor of American Home Mortgage Acceptance, Inc. (hereinafter AHMA) that was secured by a mortgage on real property located in Saratoga County. For recording purposes, the mortgage names Mortgage Electronic Registration Systems, Inc. (hereinafter MERS) as nominee and mortgagee. MERS assigned the mortgage to plaintiff in 2009. Plaintiff then commenced the instant foreclosure action in 2011, four years after defendants defaulted on the loan.¹ Following joinder of issue, plaintiff moved for summary judgment striking defendants' answer and appointing a referee to compute the amount owed. Defendants cross-moved for, among other things, summary judgment dismissing the complaint against them for lack of standing. Supreme Court granted plaintiff's motion and denied defendants' cross motion. Defendants appeal.

“In a foreclosure action, a [plaintiff] producing evidence of the mortgage, unpaid note and the mortgagor's default will be entitled to summary judgment” (HSBC Bank USA, N.A. v. Sage, 112 A.D.3d 1126, 1127, 977 N.Y.S.2d 446 [2013], lvs. dismissed 22 N.Y.3d 1172, 985 N.Y.S.2d 472, 8 N.E.3d 849 [2014], 23 N.Y.3d 1015 [2014], 992 N.Y.S.2d 774, 16 N.E.3d 1253 [citations omitted]; see PHH Mtge. Corp. v. Davis, 111 A.D.3d 1110, 1111, 975 N.Y.S.2d 480 [2013], lv. dismissed 23 N.Y.3d 940, 987 N.Y.S.2d 593, 10 N.E.3d 1148 [2014] ). “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]; see Nationstar Mtge., LLC v. Catizone, 127 A.D.3d 1151, 1152, 9 N.Y.S.3d 315 [2015] ). Standing in a mortgage foreclosure action is established by proof that the plaintiff, at the time the action was commenced, was the holder or assignee of the mortgage and the holder or assignee of the underlying note (see Chase Home Fin., LLC v. Miciotta, 101 A.D.3d 1307, 1307, 956 N.Y.S.2d 271 [2012] ; Wells Fargo Bank, N.A. v. Wine, 90 A.D.3d 1216, 1217, 935 N.Y.S.2d 664 [2011] ). That said, the note, and not the mortgage, is the dispositive instrument that conveys standing to foreclose under New York law (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 [2015] ).

Here, plaintiff produced the mortgage, the unpaid note, the notice of default that was sent to defendants by Acqura Loan Services—plaintiff's loan servicing company—and an affidavit by Doug Battin, a senior vice-president of Acqura, who confirmed defendants' default. While this documentation was sufficient to satisfy plaintiff's entitlement to an award of summary judgment, the core question here is whether plaintiff proved that it has standing to obtain such relief. There is no dispute that plaintiff received an assignment of the mortgage through MERS, but the assignee of only a mortgage has no standing (see Bank of Am., N.A. v. Paulsen, 125 A.D.3d 909, 911, 6 N.Y.S.3d 68 [2015] ; Citibank, N.A. v. Herman, 125 A.D.3d 587, 588, 3 N.Y.S.3d 379 [2015] ). Here, plaintiff maintains that it has standing through its physical possession of the note at the time that the action was commenced. Since the note has only an undated indorsement in blank from the original lender, it does not evidence plaintiff's possessory interest (see Bank of Am., N.A. v. Kyle, 129 A.D.3d 1168, 1169, 13 N.Y.S.3d 253 [2015] ). To establish physical possession, plaintiff produced the affidavit of Battin and another Acqura employee recounting that Acqura acquired the underlying loan documentation from plaintiff in June 2009, imaged the documentation into its own records system and returned the original documentation to plaintiff. Based on this documentation, Battin averred that the note was transferred to plaintiff “by way of an allonge and/or endorsement.”

Defendants dispute the admissibility of Battin's affidavit on the ground that the business records about which he attested were neither made in Acqura's regular course of business nor within his personal knowledge. While “the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business records” (People v. Cratsley, 86 N.Y.2d 81, 90, 629 N.Y.S.2d 992, 653 N.E.2d 1162 [1995] [internal quotation marks and citation omitted] ), such records are nonetheless admissible “if the recipient can establish personal knowledge of the maker's business practices and procedures, or that the records provided by the maker were incorporated into the recipient's own records or routinely relied upon the recipient in its business” (State of New York v. 158th St. & Riverside Dr. Hous. Co., Inc., 100 A.D.3d 1293, 1296, 956 N.Y.S.2d 196 [2012], lv. denied 20 N.Y.3d 858, 2013 WL 452396 [2013] ). To be admissible, these documents should carry the indicia of reliability ordinarily associated with business records (see People v. Cratsley, 86 N.Y.2d at 91, 629 N.Y.S.2d 992, 653 N.E.2d 1162 ; One Step Up, Ltd. v. Webster Bus. Credit Corp., 87 A.D.3d 1, 11, 925 N.Y.S.2d 61 [2011] ; Corsi v. Town of Bedford, 58 A.D.3d 225, 231–232, 868 N.Y.S.2d 258 [2008], lv. denied 12 N.Y.3d 714, 2009 WL 1770158 [2009] ). Given Acqura's agency status as servicer of the loan for plaintiff, we agree with ...