JPMorgan Chase Bank, Nat'l Ass'n v. Rosa, 2016–04625

• Decision Date: 20 February 2019
• Docket Number: 2016–10403,2016–13489,Index No. 2822/13,2016–04625
• Citation: 94 N.Y.S.3d 602,169 A.D.3d 887
• Parties: JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, Respondent, v. Angel ROSA, et al., Appellants, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

169 A.D.3d 887

94 N.Y.S.3d 602

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, Respondent,

v.Angel ROSA, et al., Appellants, et al., Defendants.

2016–04625

2016–10403

2016–13489

Index No. 2822/13

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

Argues - October 18, 2018

February 20, 2019

Riquet Figaro, Brooklyn, NY, for appellants.

Bonchonsky & Zaino, LLP, Garden City, N.Y. (Peter R. Bonchonsky, Ellen W. Groarke, and Kevin M. Butler of counsel), for respondent.

REINALDO E. RIVERA, J.P., CHERYL E. CHAMBERS, JEFFREY A. COHEN, BETSY BARROS, JJ.

DECISION & ORDER

ORDERED that the appeal from so much of the order dated August 4, 2016, as denied that branch of the motion of the defendants Angel Rosa and Lillian Torres–Rosa which was for leave to reargue is dismissed, as no appeal lies from an order denying reargument; and it is further,

ORDERED that the orders dated February 17, 2016, are affirmed insofar as appealed from; and it is further,

ORDERED that the order dated August 4, 2016, is affirmed insofar as reviewed; and it is further,

ORDERED that one bill of costs is awarded to the plaintiff.

On November 10, 2008, the defendants Angel Rosa and Lillian Torres–Rosa (hereinafter together the defendants) executed and delivered to Knightbridge Mortgage Bankers, LLC (hereinafter Knightbridge), a note whereby they promised to repay Knightbridge the principal sum of $518,161. On the same day, as collateral security for the note, the defendants executed and delivered to Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), solely as nominee for Knightbridge, its successors and assigns, a mortgage, in the same principal amount, encumbering the defendants' property located at 1076 Lafayette Avenue in Brooklyn.

The plaintiff commenced this action to foreclose the mortgage. In their answer, the defendants raised affirmative defenses, including lack of standing, "fraud in the original transaction," and waiver and/or estoppel.

The plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendants and to strike their answer, and for an order of reference. The defendants opposed the motion. The Supreme Court granted the motion in two orders, each dated February 17, 2016, and, in the second order dated February 17, 2016, appointed a referee. The defendants moved for leave to reargue and renew their opposition to the plaintiff's motion. The court denied the motion, and the defendants appeal from the three orders.

Generally, in an action to foreclose a mortgage, a plaintiff establishes its prima facie entitlement to judgment as a matter of law through the production of the mortgage, the unpaid note, and evidence of default (see HSBC Bank USA, N.A. v. Oscar, 161 A.D.3d 1055, 1056, 78 N.Y.S.3d 428 ; US Bank N.A. v. Cohen, 156 A.D.3d 844, 845, 67 N.Y.S.3d 643 ; Deutsche Bank Natl. Trust Co. v. Abdan, 131 A.D.3d 1001, 1002, 16 N.Y.S.3d 459 ). "However, where, as here, a plaintiff's standing to commence a foreclosure action is placed in issue by a defendant, the plaintiff must also prove its standing as part of its prima facie showing" ( HSBC Bank USA, N.A. v. Oscar, 161 A.D.3d at 1056, 78 N.Y.S.3d 428 ; see U.S. Bank N.A. v. Cohen, 156 A.D.3d at 845, 67 N.Y.S.3d 643 ; Deutsche Bank Natl. Trust Co. v. Abdan, 131 A.D.3d at 1002, 16 N.Y.S.3d 459 ). "A plaintiff has standing to commence a foreclosure action where it is the holder or assignee of the underlying note, either by physical delivery or execution of a written assignment prior to the commencement of the action with the filing of the complaint" ( HSBC Bank USA, N.A. v. Oscar, 161 A.D.3d at 1056, 78 N.Y.S.3d 428 [internal quotation marks omitted]; 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 ; US Bank N.A. v. Cohen, 156 A.D.3d at 845, 67 N.Y.S.3d 643 ). Once a note is transferred, the mortgage passes as an incident to the note (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; US Bank N.A. v. Cohen, 156 A.D.3d at 846, 67 N.Y.S.3d 643 ).

Here, the plaintiff established, prima facie, that it had standing by demonstrating that it had physical possession of the note prior to the commencement of the action, as evidenced by its attachment of the note, containing an endorsement to the plaintiff, executed by the original lender, to the summons and complaint when the action was commenced (see HSBC Bank USA, N.A. v. Oscar, 161 A.D.3d at 1056, 78 N.Y.S.3d 428 ; U.S. Bank N.A. v. Henry, 157 A.D.3d 839, 841, 69 N.Y.S.3d 656 ; US Bank N.A. v. Cohen, 156 A.D.3d at 846, 67 N.Y.S.3d 643 ; HSBC Bank USA, N.A. v. Ozcan, 154 A.D.3d 822, 824, 64 N.Y.S.3d 38 U.S. Bank N.A. v. Sabloff, 153 A.D.3d 879, 880, 60 N.Y.S.3d 343 ; U.S. Bank N.A. v. Saravanan, 146 A.D.3d 1010, 1011, 45 N.Y.S.3d 547 ; JPMorgan Chase Bank, N.A. v. Weinberger, 142 A.D.3d 643, 645, 37 N.Y.S.3d 286 ). Under these circumstances, the defendants' arguments regarding the sufficiency of an affidavit of Jessica Dunn, an "authorized signer" for the plaintiff, the loan servicer, to prove the facts establishing the plaintiff's physical possession of the note prior to commencement of the action, and the validity of a certain written assignment of mortgage, are irrelevant to the issue of standing (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 362, 12 N.Y.S.3d 612, 34 N.E.3d 363 ).

The plaintiff further established its prima facie entitlement to judgment as a matter of law by producing, in addition to the mortgage and the unpaid note, evidence of the defendants' default in repayment of the loan (see HSBC Bank USA, N.A. v. Oscar, 161 A.D.3d at 1056, 78 N.Y.S.3d 428 ; US Bank N.A. v. Cohen, 156 A.D.3d at 845, 67 N.Y.S.3d 643 ; Deutsche Bank Natl. Trust Co. v. Abdan, 131 A.D.3d at 1002, 16 N.Y.S.3d 459 ).

In opposition to the plaintiff's showing, the defendants failed "to produce evidentiary proof in admissible form sufficient to demonstrate the existence of a triable issue of fact as to a bona fide defense" ( Eastern Sav. Bank, FSB v. Sassouni, 68 A.D.3d 917, 917, 892 N.Y.S.2d 421 ; see State Bank of Albany v. Fioravanti, 51 N.Y.2d 638, 647, 435 N.Y.S.2d 947, 417 N.E.2d 60 ; Solomon v. Burden, 104 A.D.3d 839, 961 N.Y.S.2d 535 ; Wells Fargo Bank, N.A. v. Webster, 61 A.D.3d 856, 877 N.Y.S.2d 200 ; Aames Funding Corp. v. Houston, 44 A.D.3d 692, 693, 843 N.Y.S.2d 660 ; Republic Natl. Bank of N.Y. v. O'Kane, 308 A.D.2d 482, 764 N.Y.S.2d 635 ), "such as waiver, estoppel, bad faith, fraud, or oppressive or unconscionable conduct on the part of the plaintiff" ( Mahopac Natl. Bank v. Baisley, 244 A.D.2d 466, 467, 664 N.Y.S.2d 345 ; see Nassau Trust Co. v. Montrose Concrete Prods. Corp., 56 N.Y.2d 175, 183, 451 N.Y.S.2d 663, 436 N.E.2d 1265 ; Bank of Am., N.A. v. DeNardo, 151 A.D.3d 1008, 1010, 58 N.Y.S.3d 469 ; CitiMortgage, Inc. v. Guillermo, 143 A.D.3d 852, 853, 39 N.Y.S.3d 86 ; Flushing Sav. Bank, FSB v. Sharp Realty, LLC, 136 A.D.3d 652, 23 N.Y.S.3d 908 ). With regard to their allegations of fraud set forth in their affidavit, the defendants failed to raise a triable issue of fact as to the elements of material misrepresentation and justifiable reliance upon the alleged misrepresentation (see Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 559, 883 N.Y.S.2d 147, 910 N.E.2d 976 ; Prompt Mtge. Providers of N. Am., LLC v. Zarour, 155 A.D.3d 912, 914, 64 N.Y.S.3d 106 ; JP Morgan Chase Bank, N.A. v. Hall, 122 A.D.3d 576, 579, 996 N.Y.S.2d 309 ; House of Spices [India], Inc. v. SMJ Servs., Inc., 103 A.D.3d 848, 850, 960 N.Y.S.2d 443 ). First, the defendants' allegations that they "relied upon prior or contemporaneous statements of the plaintiff at the time of the execution of the note ... violate the parol evidence rule and are barred" ( M & T Mtge. Corp. v. Ethridge, 300 A.D.2d 286, 287, 751 N.Y.S.2d 741 ; see North Fork Bank & Trust Co. v. Bernstein & Gershman, 201 A.D.2d 472, 607 N.Y.S.2d 135 ). " ‘[E]vidence of what may have been agreed orally between the parties prior to the execution of an integrated written instrument cannot be received to vary the terms of the writing’ " ( Bontempts v. Aude Constr. Corp., 98 A.D.3d 1071, 1072, 951 N.Y.S.2d 561, quoting Braten v. Bankers Trust Co., 60 N.Y.2d 155, 162, 468 N.Y.S.2d 861, 456 N.E.2d 802 ; see Gill v. Bowne Global Solutions, Inc., 8 A.D.3d 339, 340, 777 N.Y.S.2d 712 ; Del Vecchio v. Cohen, 288 A.D.2d 426, 427, 733 N.Y.S.2d 479 ). Neither the purported oral agreement, entered into with Knightbridge's broker, Wilhelmina Smith, who allegedly represented that Knightbridge would pay the defendants $100,000 for repairs at the closing, nor the purported modified oral agreement at the closing, to the effect that Knightbridge would pay the defendants that amount once the funds cleared, was reflected anywhere in the written loan documents between Knightbridge and the defendants. Thus, the defendants would not be permitted to submit evidence of the purported oral agreement or modified oral agreement at a trial (see Braten v. Bankers Trust...