U.S. Bank, N.A. v. Zwisler

• Decision Date: 01 February 2017
• Citation: 2017 N.Y. Slip Op. 00682,46 N.Y.S.3d 213,147 A.D.3d 804
• Parties: U.S. BANK, N.A., etc., respondent, v. Lori ZWISLER, appellant, et al., defendants.
• Court: New York Supreme Court — Appellate Division

147 A.D.3d 804

46 N.Y.S.3d 213

2017 N.Y. Slip Op. 00682

U.S. BANK, N.A., etc., respondent,

v.Lori ZWISLER, appellant, et al., defendants.

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

Feb. 1, 2017.

Lori Zwisler, Hicksville, NY, appellant pro se.

Houser & Allison, APC, New York, NY (Jacqueline Muratore of counsel), and Dorf & Nelson, LLP, Rye, NY, for respondent (one brief filed).

LEONARD B. AUSTIN, J.P., JEFFREY A. COHEN, JOSEPH J. MALTESE, and COLLEEN D. DUFFY, JJ.

In an action to foreclose a mortgage, the defendant Lori Zwisler appeals, as limited by her brief, from so much of an order of the Supreme Court, Nassau County (Adams, J.), entered September 5, 2014, as granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against her and for an order of reference.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the appellant and for an order of reference are denied.

On September 26, 2005, the defendant Lori Zwisler (hereinafter the defendant) executed a note in the amount of $372,500 in favor of nonparty Home Funds Direct. The note was secured by a mortgage on residential property in Hicksville. On May 16, 2012, the plaintiff commenced this foreclosure action, alleging that the defendant defaulted under the terms of the note by failing to make the payments due on and after September 1, 2008. In her answer, the defendant asserted the defense of lack of standing.

Subsequently, the plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendant and for an order of reference. The defendant opposed on the ground, among other things, that the plaintiff lacked standing. The Supreme Court granted the plaintiff's motion.

"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" (Plaza Equities, LLC v. Lamberti, 118 A.D.3d 688, 689, 986 N.Y.S.2d 843 ; see Deutsche Bank Natl. Trust Co. v. Brewton, 142 A.D.3d 683, 684, 37 N.Y.S.3d 25 ). "Where, as here, standing is put into issue by a defendant, the plaintiff must prove its standing in order to be entitled to relief" (Aurora Loan Servs., LLC v. Taylor, 114 A.D.3d 627, 628, 980 N.Y.S.2d 475affd. 25 N.Y.3d 355, 12 N.Y.S.3d 612, 34 N.E.3d 363 [internal quotation marks omitted] ). A plaintiff in a mortgage foreclosure action has standing where it is the holder of the underlying note at the time the action is commenced (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355, 361, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; U.S. Bank N.A. v. Handler, 140 A.D.3d 948, 949, 34 N.Y.S.3d 463 ). "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 ).

Here, the plaintiff failed to demonstrate, prima facie, that it was a holder or assignee of the note prior to commencement of the action (see Deutsche Bank Natl. Trust Co. v. Brewton, 142 A.D.3d at 684, 37 N.Y.S.3d 25 ). A "promissory note [is] a negotiable instrument within the meaning of the Uniform Commercial Code" (Mortgage Elec. Registration Sys., Inc. v. Coakley, 41 A.D.3d 674, 674, 838 N.Y.S.2d 622 ; see UCC 3–104[2][d] ; Deutsche Bank Natl. Trust Co. v. Brewton, 142 A.D.3d at 684, 37 N.Y.S.3d 25 ). A "holder" is "the person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession" (UCC 1–201[b][21] ; ...