U.S. Bank Trust, N.A. v. Rose

• Decision Date: 16 October 2019
• Docket Number: Index No. 297/16,2017–06949,2017–01162
• Parties: U.S. BANK TRUST, N.A., etc., Respondent, v. Charles L. ROSE, etc., et al., Appellants, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

176 A.D.3d 1012

110 N.Y.S.3d 700

U.S. BANK TRUST, N.A., etc., Respondent,

v.Charles L. ROSE, etc., et al., Appellants, et al., Defendants.

2017–01162

2017–06949

Index No. 297/16

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

Argued—September 6, 2019

October 16, 2019

Jones Law, P.C., Florida, N.Y. (Douglas M. Jones of counsel), for appellants.

Stern & Eisenberg, P.C., Depew, N.Y. (Anthony P. Scali of counsel), for respondent.

WILLIAM F. MASTRO, J.P., SHERI S. ROMAN, FRANCESCA E. CONNOLLY, ANGELA G. IANNACCI, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the defendants Charles L. Rose and Jennifer Leigh Rose appeal from (1) an amended order of the Supreme Court, Orange County (Robert A. Onofry, Jr., J.), dated December 21, 2016, and (2) a judgment of foreclosure and sale of the same court entered April 18, 2017. The amended order, insofar as appealed from, granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants Charles L. Rose and Jennifer Leigh Rose, for an order of reference, and to strike those defendants' answer, and denied those defendants' cross motion to dismiss the complaint insofar as asserted against them or, in the alternative, to compel disclosure, in effect, pursuant to CPLR 3124. The judgment of foreclosure and sale, upon the amended order dated December 21, 2016, and upon an order of the same court dated December 19, 2016, appointing a referee to compute the sums due and owing to the plaintiff, inter alia, directed the sale of the subject property.

ORDERED that the appeal from the amended order is dismissed; and it is further,

ORDERED that the judgment of foreclosure and sale is reversed, on the law, those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants Charles L. Rose and Jennifer Leigh Rose, for an order of reference, and to strike those defendants' answer are denied, the amended order dated December 21, 2016, is modified accordingly, the answer of the defendants Charles L. Rose and Jennifer Leigh Rose is reinstated, and the order dated December 19, 2016, is vacated; and it is further,

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

The plaintiff commenced this action to foreclose a mortgage against, among others, the defendants Charles L. Rose and Jennifer Leigh Rose (hereinafter together the appellants), and thereafter moved, inter alia, for summary judgment on the complaint. The appellants cross-moved to dismiss the complaint insofar as asserted against them or, in the alternative, to compel disclosure, in effect, pursuant to CPLR 3124. In an amended order dated December 21, 2016, the Supreme Court granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the appellants, for an order of reference, and to strike the appellants' answer, and denied the appellants' cross motion. The court signed an order of reference, dated December 19, 2016, appointing a referee to compute the amount due and owing to the plaintiff. A judgment of foreclosure and sale was entered on April 18, 2017. These appeals are from the amended order dated December 21, 2016, and the judgment entered on April 18, 2017.

The appeal from the amended order dated December 21, 2016, must be dismissed, because the right of direct appeal therefrom terminated with the entry of the judgment in the action (see Matter of Aho , 39 N.Y.2d 241, 248, 383 N.Y.S.2d 285, 347 N.E.2d 647 ). The issues raised on the appeal from that amended order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1] ; Matter of Aho , 39 N.Y.2d at 248, 383 N.Y.S.2d 285, 347 N.E.2d 647 ).

Contrary to the Supreme Court's determination, the plaintiff failed to demonstrate its prima facie entitlement to judgment as a matter of law on the complaint insofar as asserted against the appellants. "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 ). When, as here, a defendant has challenged the plaintiff's standing in a foreclosure action, a plaintiff must also demonstrate that it was the holder or assignee of the note at the time the action was commenced (see e.g. U.S. Bank N.A v. Madero , 80 A.D.3d 751, 753, 915 N.Y.S.2d 612 ; U.S. Bank, N.A. v. Collymore , 68 A.D.3d 752, 753, 890 N.Y.S.2d 578 ). "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 at 754, 890 N.Y.S.2d 578 ; accord U.S. Bank N.A. v. 22 S. Madison, LLC , 170 A.D.3d 772, 773, 95 N.Y.S.3d 264 ).

On its motion for summary judgment, the plaintiff admitted that the original note had been lost. A plaintiff seeking to recover upon a lost note must provide "due proof" of the plaintiff's ownership of the note, the facts which prevent production of the note, and the note's terms ( UCC 3–804 ; see Ventricelli v. DeGennaro , 221 A.D.2d 231, 633 N.Y.S.2d 315 ; Marrazzo v. Piccolo , 163 A.D.2d 369, 369, 558 N.Y.S.2d 103 ; Kraft v. Sommer , 54 A.D.2d 598, 598, 387 N.Y.S.2d 318 ).

The evidence proffered by the plaintiff in support of its motion, inter alia, for summary judgment failed to demonstrate, prima facie, its ownership of the lost note. Among the evidence offered by the plaintiff was a lost note affidavit, signed by a representative of Beneficial Homeowner Service Corporation (hereinafter Beneficial), the purported predecessor-in-interest to the plaintiff, stating that the note was deemed lost as of November 14, 2013, and that Beneficial was "in possession of the original Note prior to its whereabouts becoming undeterminable." The evidence does not establish that the plaintiff was ever in physical possession of the subject note (cf. Deutsche Bank Natl. Trust Co. v. Anderson , 161 A.D.3d 1043, 1044–1045, 79 N.Y.S.3d 42 ).

The plaintiff also failed to demonstrate its ownership of the subject note by written assignment. The plaintiff submitted a document dated June 12, 2015, purporting to be a written assignment of the appellants' mortgage and underlying note to the plaintiff by Beneficial, signed by Caliber Home Loans, Inc. (hereinafter Caliber), as Beneficial's "attorney in fact." However, the plaintiff failed to demonstrate as a matter of law the validity of the written assignment, because the plaintiff did not produce sufficient evidence of Caliber's authority to execute the assignment as Beneficial's attorney-in-fact (see Deutsche Bank Natl. Trust Co. v. Haller , 100 A.D.3d 680, 683, 954 N.Y.S.2d 551 ; see also DLJ Mtge. Capital,...