Wilmington Sav. Fund Soc'y v. LaFrate

• Decision Date: 06 April 2023
• Docket Number: 534804,No. 534804
• Citation: 2023 NY Slip Op 01824
• Parties: Wilmington Savings Fund Society, FSB, as Trustee, Respondent, v. Thomas F. LaFrate, Defendant, And Guardian Preservation LLC, Appellant.
• Court: New York Supreme Court — Appellate Division

2023 NY Slip Op 01824

Wilmington Savings Fund Society, FSB, as Trustee, Respondent, v. Thomas F. LaFrate, Defendant, And Guardian Preservation LLC, Appellant.

No. 534804

Supreme Court of New York, Third Department

April 6, 2023

Calendar Date: February 23, 2023

Sandra S. Poland Demars, Albany, for appellant.

Margolin, Weinreb & Nierer, LLP, Syosset (Owen M Robinson of counsel), for respondent.

Before: Lynch, J.P., Aarons, Pritzker, Fisher and McShan, JJ.

Fisher, J.

Appeal from an order of the Supreme Court (Thomas D. Buchanan, J.), entered January 18, 2022 in Schenectady County, which, among other things, granted plaintiff's motion for summary judgment against defendant Guardian Preservation LLC.

In 2007, defendant Thomas F. LaFrate executed a promissory note to borrow a sum of money secured by a mortgage on real property located in Warren County. In December 2013, LaFrate defaulted on his obligation to pay under the loan and, months later, transferred his interest in the subject property to defendant Guardian Preservation LLC. In September 2014, following the first assignment of the mortgage, Ocwen Loan Servicing, LLC commenced this mortgage foreclosure action against LaFrate. After at least two other assignments, the mortgage was ultimately assigned to plaintiff and, despite not being served or named in the caption, Guardian Preservation served an answer admitting the underlying debt and the default thereon. Guardian Preservation also asserted several affirmative defenses including lack of standing. Thereafter, plaintiff moved for summary judgment, which was denied by Supreme Court on the grounds that the affidavit claiming possession of the original note was "bare" and "ambiguous." Plaintiff filed a second motion for summary judgment, which was opposed by Guardian Preservation on several grounds including lack of standing. Without a decision, Supreme Court issued an order granting plaintiff's motion for summary judgment. Guardian Preservation appeals.

In order "to establish entitlement to summary judgment in a foreclosure action, a plaintiff must produce evidence of the mortgage and unpaid note along with proof of the mortgagor's default" (U.S. Bank N.A. v Ioannides, 192 A.D.3d 1405, 1407 [3d Dept 2021] [internal quotation marks, brackets and citation omitted]). Where, as here, a defendant raises standing as an affirmative defense, the plaintiff has the additional burden of demonstrating its standing in order to be entitled to relief (see Bayview Loan Servicing, LLC v Freyer, 192 A.D.3d 1421, 1422 [3d Dept 2021]; Bank of N.Y. Mellon v Slavin, 156 A.D.3d 1073, 1076 [3d Dept 2017], lv dismissed 33 N.Y.3d 1128 [2019]). A plaintiff demonstrates standing in a mortgage foreclosure action by establishing that "it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced" (Bayview Loan Servicing, LLC v Freyer, 192 A.D.3d at 1422 [internal quotation marks and citations omitted]; see Deutsche Bank Natl. Trust Co. v LeTennier, 189 A.D.3d 2022, 2023 [3d Dept 2020]). "With respect to the note, 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" (JPMorgan Chase Bank, N.A. v Verderose, 154 A.D.3d 1198, 1200 [3d Dept 2017] [internal quotation marks, brackets and citations omitted]; see U.S. Bank Trust, N.A. v Moomey-Stevens, 168 A.D.3d 1169, 1172 [3d Dept 2019]).Since the note is the dispositive document, "if the plaintiff demonstrates that it is the owner or holder of the note, the mortgage passes with the debt as an inseparable incident" (Deutsche Bank Natl. Trust Co. v LeTennier, 189 A.D.3d at 2023 [internal quotation marks and citations omitted]; see U.S. Bank, N.A. v Tecler, 188 A.D.3d 1320, 1322 [3d Dept 2020]).

In support of its motion for summary judgment, plaintiff relied upon Guardian Preservation's admissions regarding the underlying debt and its default thereon, as well as the affidavit of Daniel Delpesche, a contract management coordinator of PHH Mortgage Corporation, which is the successor by merger to Ocwen Loan Servicing, LLC. Based upon his review of the computerized records created and maintained in the regular course of his employer's business as the "prior servicer" of this foreclosure action Delpesche attested that plaintiff received physical possession of the original note with endorsements on April 9, 2014 - prior to the commencement of this action. According to plaintiff's moving attorney affirmation, attached to Delpesche's affidavit is a copy of the records relied upon in making his...