HSBC Bank USA, Nat'l Ass'n v. Bermudez

• Court: New York Supreme Court — Appellate Division
• Citation: HSBC Bank USA, Nat'l Ass'n v. Bermudez, 175 A.D.3d 667, 107 N.Y.S.3d 138 (N.Y. App. Div. 2019)
• Decision Date: 28 August 2019
• Docket Number: Index No. 12718/12,2016–09660
• Parties: HSBC BANK USA, NATIONAL ASSOCIATION, etc., Respondent, v. David BERMUDEZ, et al., appellants, et al., Defendant.

175 A.D.3d 667

107 N.Y.S.3d 138

HSBC BANK USA, NATIONAL ASSOCIATION, etc., Respondent,

v.David BERMUDEZ, et al., appellants, et al., Defendant.

2016–09660

Index No. 12718/12

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

August 28, 2019

Submitted—November 29, 2018

Rubin & Licatesi, P.C., Garden City, N.Y. (Richard H. Rubin and Amy J. Zamir of counsel), for appellants.

Hogan Lovells U.S. LLP, New York, N.Y. (David Dunn, Chava Brandriss, and Adam Weiss of counsel), for respondent.

REINALDO E. RIVERA, J.P., JEFFREY A. COHEN, ROBERT J. MILLER, BETSY BARROS, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the defendants David Bermudez and Offir Bermudez appeal from an order and judgment of foreclosure and sale (one paper) of the Supreme Court, Nassau County (Thomas A. Adams, J.), entered December 15, 2017. The order and judgment of foreclosure and sale, upon an order of the same court entered August 2, 2016, denying the motion of the defendants David Bermudez and Offir Bermudez for summary judgment dismissing the complaint insofar as asserted against them and granting the plaintiff's cross motion, inter alia, for summary judgment on the complaint insofar as asserted against those defendants and for an order of reference, and upon an order of the same court entered August 9, 2016, denying the motion of the defendants David Bermudez and Offir Bermudez for summary judgment dismissing the complaint insofar as asserted against them, granting the plaintiff's cross motion, inter alia, for summary judgment on the complaint insofar as asserted against those defendants and for an order of reference, and referring the matter to a referee to ascertain and compute the amount due to the plaintiff, inter alia, confirmed the referee's report and directed the sale of the subject premises.

ORDERED that the order and judgment of foreclosure and sale is affirmed, with costs.

In April 2007, the defendants David Bermudez and Offir Bermudez (hereinafter together the defendants) borrowed the sum of $413,600 from Wells Fargo Bank, N.A. (hereinafter Wells Fargo). The loan was memorialized in a promissory note and secured by a mortgage on property located in Elmont. Pursuant to a pooling and servicing agreement dated June 27, 2007 (hereinafter the PSA), the mortgage loan was securitized and assigned to a trust.

In October 2012, the plaintiff commenced this action to foreclose the mortgage. The defendants interposed an answer with various affirmative defenses. Thereafter, the defendants moved for summary judgment dismissing the complaint insofar as asserted against them on the grounds that the plaintiff lacked standing and failed to comply with RPAPL 1304. The plaintiff opposed the motion and cross-moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendants and for an order of reference. The defendants opposed the cross motion on the grounds advanced in their motion, as well as on the ground that the plaintiff failed to comply with RPAPL 1306. In an order entered August 2, 2016, the Supreme Court denied the defendants' motion and granted the plaintiff's cross motion. In an order entered August 9, 2016, the court denied and granted the same relief and referred the matter to a referee to ascertain and compute the amount due to the plaintiff. On December 15, 2017, the court entered an order and judgment of foreclosure and sale, inter alia, confirming the referee's report and directing the sale of the subject premises. The defendants appeal.

We agree with the Supreme Court's determination that the plaintiff established its standing to commence the action. " ‘Generally, in moving for summary judgment in an action to foreclose a mortgage, a plaintiff establishes its prima facie case through the production of the mortgage, the unpaid note, and evidence of default’ " ( Deutsche Bank Natl. Trust Co. v. Brewton, 142 A.D.3d 683, 684, 37 N.Y.S.3d 25, quoting Plaza Equities, LLC v. Lamberti, 118 A.D.3d 688, 689, 986 N.Y.S.2d 843 ). Additionally, where a defendant places standing in issue, the plaintiff must prove its standing in order to be entitled to relief (see Deutsche Bank Natl. Trust Co. v. Brewton, 142 A.D.3d at 684, 37 N.Y.S.3d 25 ; Aurora Loan Servs., LLC v. Taylor, 114 A.D.3d 627, 628, 980 N.Y.S.2d 475, affd 25 N.Y.3d 355, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; Wells Fargo Bank Minn., N.A. v. Mastropaolo, 42 A.D.3d 239, 242, 837 N.Y.S.2d 247 ). A plaintiff has standing in a mortgage foreclosure action when it is the holder or assignee of the underlying note at the time the action is commenced (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. Brewton, 142 A.D.3d at 684, 37 N.Y.S.3d 25 ). "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" ( U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 754, 890 N.Y.S.2d 578 ; see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361–362, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; Dyer Trust 2012–1 v. Global World Realty, Inc., 140 A.D.3d 827, 828, 33 N.Y.S.3d 414 ). Where a defendant moves to dismiss the complaint for lack of standing, the burden is on the moving defendant to establish, prima facie, the plaintiff's lack of standing, rather than on the plaintiff to affirmatively establish its standing in order for the motion to be denied (see LGF Holdings, LLC v. Skydel, 139 A.D.3d 814, 814, 32 N.Y.S.3d 243 ; Flagstar Bank, FSB v. Campbell, 137 A.D.3d 853, 854, 28 N.Y.S.3d 374 ; Deutsche Bank Trust Co. Ams. v. Vitellas, 131 A.D.3d 52, 59–60, 13 N.Y.S.3d 163 ).

In this case, by submitting a copy of the summons and complaint, to which the plaintiff attached a copy of the note, endorsed in blank, the defendants failed to meet their prima facie burden of establishing the plaintiff's lack of standing (see Deutsche Bank Natl. Trust Co. v. Homar, 163 A.D.3d 522, 523, 80 N.Y.S.3d 409 ). By relying upon the same evidence in support of its cross motion, the plaintiff established, prima facie, its standing to commence the action (see U.S. Bank N.A. v. Cohen, 156 A.D.3d 844, 846, 67 N.Y.S.3d 643 ; Deutsche Bank Natl. Trust Co. v. Carlin, 152 A.D.3d 491, 492, 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 ). In opposition, the defendants failed to raise a triable issue of fact (see generally Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 ).

The plaintiff demonstrated its compliance with RPAPL 1304 and 1306. In a residential foreclosure action, a plaintiff moving for summary judgment must tender "sufficient evidence demonstrating the absence of material issues as to its strict compliance with RPAPL 1304" ( Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d 95, 106, 923 N.Y.S.2d 609 ). RPAPL 1304(1), which applies to home loans, 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." The statute sets forth the requirements for the content of such notice (see Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d at 105, 923 N.Y.S.2d 609 ), and 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 and to the subject residence (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 at 106, 923 N.Y.S.2d 609 ; see Citibank, N.A. v. Wood, 150 A.D.3d 813, 814, 55 N.Y.S.3d 109 ; Flagstar Bank, FSB v. Damaro, 145 A.D.3d 858, 860, 44 N.Y.S.3d 128 ).

RPAPL 1306 provides, in pertinent part, that within three business days of the mailing of the foreclosure notice pursuant to RPAPL 1304(1), every lender or assignee "shall file" certain information with the superintendent of financial services, including "at a minimum, the name, address, last known telephone number of the borrower, and the amount claimed as due and owing...