PennyMac Corp. v. Arora

• Decision Date: 10 June 2020
• Docket Number: Index No. 701515/16,2017-07867
• Citation: 184 A.D.3d 652,125 N.Y.S.3d 441
• Parties: PENNYMAC CORP., Respondent, v. Ganesh ARORA, etc., Appellant, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

184 A.D.3d 652

125 N.Y.S.3d 441

PENNYMAC CORP., Respondent,

v.Ganesh ARORA, etc., Appellant, et al., Defendants.

2017-07867

Index No. 701515/16

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

Submitted—November 18, 2019

June 10, 2020

Law Office of Maggio & Meyer, PLLC, Bohemia, N.Y. (Holly C. Meyer of counsel), for appellant.

Blank Rome LLP, New York, N.Y. (Diana M. Eng and Andrea M. Roberts of counsel), for respondent.

MARK C. DILLON, J.P., SHERI S. ROMAN, HECTOR D. LASALLE, PAUL WOOTEN, JJ.

DECISION & ORDER

ORDERED that the order is affirmed insofar as appealed from, with costs.

The defendant Ganesh Arora (hereinafter the defendant) executed, in favor of the plaintiff's predecessors in interest, two promissory notes, both secured by mortgages on certain residential property. The defendant subsequently executed a consolidation, extension, and modification agreement (hereinafter CEMA), consolidating the notes and mortgages, and a consolidated note evidencing the total amount of the debt following consolidation, secured by a consolidated mortgage. Upon the defendant's alleged default in making payments on the debt, the plaintiff commenced this foreclosure action. The plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendant, to strike his answer, and for an order of reference. In an order entered October 5, 2018, the Supreme Court granted the plaintiff's motion and appointed a referee to ascertain and compute the amount due to the plaintiff. The defendant appeals.

Where, as here, the plaintiff's standing has been placed in issue by the defendant's answer, the plaintiff must prove its standing as part of its prima facie showing on a motion for summary judgment (see Deutsche Bank Natl. Trust Co. v. Kingsbury , 171 A.D.3d 871, 872, 95 N.Y.S.3d 893 ; JPMorgan Chase Bank, N.A. v. Rosa , 169 A.D.3d 887, 889, 94 N.Y.S.3d 602 ; U.S. Bank N.A. v. Greenberg , 168 A.D.3d 893, 894, 91 N.Y.S.3d 459 ). 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 ). "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, 753–754, 890 N.Y.S.2d 578 ; see Deutsche Bank Natl. Trust Co. v. Adlerstein , 171 A.D.3d 868, 870, 98 N.Y.S.3d 146 ; Nationstar Mtge., LLC v. Rodriguez , 166 A.D.3d at 992, 89 N.Y.S.3d 205 ).

Here, the plaintiff established, prima facie, that it was the holder of the underlying consolidated note at the time of the commencement of the action by attaching the consolidated note, endorsed in blank, to the summons and complaint when it commenced the action (see U.S. Bank N.A. v. Ahmed , 174 A.D.3d 661, 664, 106 N.Y.S.3d 78 ; U.S. Bank N.A. v. Mezrahi , 169 A.D.3d 952, 953–954, 94 N.Y.S.3d 611 ; Wells Fargo Bank, N.A. v. Zucker , 169 A.D.3d 856, 857–858, 93 N.Y.S.3d 677 ). Contrary to the defendant's contention, where the note is affixed to the complaint, it is unnecessary to give factual details of the delivery in order to establish that possession was obtained prior to a particular date (see Aurora Loan Servs., LLC v. Taylor , 25 N.Y.3d at 362, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; U.S. Bank N.A. v. Greenberg , 168 A.D.3d at 895, 91 N.Y.S.3d 459 ; U.S. Bank N.A. v. Henry , 157 A.D.3d 839, 841, 69 N.Y.S.3d 656 ). Moreover, the holder of a CEMA and consolidated note need not prove its interest with respect to each of the notes which are the subject of the consolidation. In opposition to the plaintiff's prima facie showing, the defendant failed to raise a triable issue of fact.

The plaintiff also established, prima facie, its compliance with statutory and contractual notice requirements. RPAPL 1304 provides that at least 90 days before a lender, an assignee, or a mortgage loan servicer commences an action to foreclose the mortgage on a home loan as defined in the statute, such lender, assignee, or mortgage loan servicer must give notice to the borrower. "Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action" ( Citibank, N.A. v. Conti–Scheurer , 172 A.D.3d 17, 20, 98 N.Y.S.3d 273 ; see Citimortgage, Inc. v. Banks, 155 A.D.3d 936, 936–937, 64 N.Y.S.3d 121 ; HSBC Bank USA, N.A. v. Ozcan, 154 A.D.3d 822, 825–826, 64 N.Y.S.3d 38 ), "and the plaintiff has the burden of establishing satisfaction of this condition" ( Aurora Loan Servs., LLC v. Weisblum , 85 A.D.3d 95, 106, 923 N.Y.S.2d 609 ). Further, where, as here, it is alleged that a plaintiff has failed to comply with a condition precedent to the enforcement of a mortgage, "the plaintiff must proffer sufficient evidence to establish, prima facie, that it complied with the condition precedent" ( U.S. Bank N.A. v. Kochhar , 176 A.D.3d 1010, 1012, 110 N.Y.S.3d 726 ; see RBS Citizens, N.A. v. Galperin , 135 A.D.3d 735, 736, 23 N.Y.S.3d 307 ). As far as the plaintiff's contractual obligations are concerned, paragraphs 15 and 22 of the mortgage agreement require the plaintiff, as a precondition to calling in the loan, to provide written notice of default to the defendant by mailing the notice by first-class mail or by actually delivering it to the defendant's "notice address if sent by other means."

" 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...