Opinion
2016–00874 Index No. 9845/11
12-19-2018
AURORA LOAN SERVICES, LLC, Respondent, v. Chris VRIONEDES, Appellant, et al., Defendants.
Law Office of Lawrence Katz PLLC, Cedarhurst, NY, for appellant. Akerman LLP, New York, N.Y. (Jordan M. Smith and Ashley Miller of counsel), for respondent.
Law Office of Lawrence Katz PLLC, Cedarhurst, NY, for appellant.
Akerman LLP, New York, N.Y. (Jordan M. Smith and Ashley Miller of counsel), for respondent.
ALAN D. SCHEINKMAN, P.J., JOHN M. LEVENTHAL, ROBERT J. MILLER, VALERIE BRATHWAITE NELSON, JJ.
DECISION & ORDER In an action to foreclose a mortgage, the defendant Chris Vrionedes appeals from an order of the Supreme Court, Nassau County (Thomas A. Adams, J.), entered November 30, 2015. The 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 that defendant and dismissing the 6th affirmative defense and the 16th affirmative defense/6th counterclaim asserted by that defendant, and to appoint a referee to compute the amount due. ORDERED that the order is modified, on the law, by deleting the provision thereof granting those branches of the plaintiff's motion which were for summary judgment on the complaint and dismissing the 16th affirmative defense/6th counterclaim asserted by the defendant Chris Vrionedes, and to appoint a referee, and substituting therefor a provision denying those branches of the motion; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.
The plaintiff, Aurora Loan Services, LLC (hereinafter the bank), commenced this action against, among others, the defendant Chris Vrionedes (hereinafter the homeowner), to foreclose a mortgage. Annexed to the complaint was a copy of the note, which had been endorsed in blank.
The homeowner thereafter interposed an answer and counterclaims. As relevant here, the 6th affirmative defense alleged that the bank lacked standing. The 16th affirmative defense/6th counterclaim alleged that the bank failed to comply with RPAPL 1304.
The bank subsequently moved, inter alia, for summary judgment on the complaint insofar as asserted against the homeowner and dismissing the 6th affirmative defense and the 16th affirmative defense/6th counterclaim asserted by him, and to appoint a referee to compute the amount due. In an order entered November 30, 2015, the Supreme Court, among other things, granted those branches of the bank's motion. The homeowner appeals, and we modify. To establish a prima facie case in an action to foreclose a mortgage, a plaintiff must produce the mortgage, the unpaid note, and evidence of default (see HSBC Bank USA, N.A. v. Spitzer, 131 A.D.3d 1206, 1206–1207, 18 N.Y.S.3d 67 ; Emigrant Mtge. Co., Inc. v. Beckerman, 105 A.D.3d 895, 895, 964 N.Y.S.2d 548 ). Additionally, where, as here, the plaintiff's standing is placed in issue by a defendant, the plaintiff must prove its standing as part of its prima facie showing (see Flagstar Bank, FSB v. Mendoza, 139 A.D.3d 898, 32 N.Y.S.3d 278 ; U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 753, 890 N.Y.S.2d 578 ). "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" ( Dyer Trust 2012–1 v. Global World Realty, Inc., 140 A.D.3d 827, 828, 33 N.Y.S.3d 414 ; 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 ; Flagstar Bank, FSB v. Mendoza, 139 A.D.3d at 899, 32 N.Y.S.3d 278 ). "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" ( Dyer Trust 2012–1 v. Global World Realty, Inc., 140 A.D.3d at 828, 33 N.Y.S.3d 414 ; see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361–362, 12 N.Y.S.3d 612, 34 N.E.3d 363 ).
Here, the bank established, prima facie, that it had standing to prosecute this action by demonstrating that it was in physical possession of the note, which was annexed to the complaint, at the time the action was commenced (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 362, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; JPMorgan Chase Bank, N.A. v. Weinberger, 142 A.D.3d 643, 645, 37 N.Y.S.3d 286 ; Deutsche Bank Natl. Trust Co. v. Leigh, 137 A.D.3d 841, 842, 28 N.Y.S.3d 86 ; Emigrant Bank v. Larizza, 129 A.D.3d 904, 905, 13 N.Y.S.3d 129 ). Inasmuch as 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 ; see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361, 12 N.Y.S.3d 612, 34 N.E.3d 363 ), the homeowner's arguments regarding the validity and timing of the mortgage assignment failed to raise a triable issue of fact in opposition (see Flagstar Bank, FSB v. Mendoza, 139 A.D.3d at 900, 32 N.Y.S.3d 278 ). The homeowner's remaining contention with respect to this branch of the bank's motion is improperly raised for the first time on appeal (cf. HSBC Bank USA, N.A. v. Roumiantseva, 130 A.D.3d 983, 985, 15 N.Y.S.3d 117 ). Since the homeowner failed to raise a triable issue of fact in opposition to the bank's prima facie showing, we agree with the Supreme Court's determination granting that branch of the bank's motion which was for summary judgment dismissing the 6th affirmative defense (cf. US Bank N.A. v. Weinman, 123 A.D.3d 1108, 1109–1110, 2 N.Y.S.3d 128 ).
However, the bank failed to sustain its initial burden with respect to those branches of its motion which were for summary judgment on the complaint and dismissing the 16th affirmative defense/6th counterclaim, and to appoint a referee. "Although not jurisdictional, proper service of RPAPL 1304 notice on the borrower or borrowers is a condition precedent to the commencement of a residential foreclosure action, and the plaintiff has the burden of establishing satisfaction of this condition" ( HSBC Bank USA, N.A. v. Ozcan, 154 A.D.3d 822, 825–826, 64 N.Y.S.3d 38 ; see Flagstar Bank, FSB v. Damaro, 145 A.D.3d 858, 860, 44 N.Y.S.3d 128 ). "The statute requires that such notice be sent by registered or certified mail, and also by first-class mail, to the last known address of the borrower" ( CitiMortgage, Inc. v. Pappas, 147 A.D.3d 900, 901, 47 N.Y.S.3d 415 ; see RPAPL 1304[2] ).
"Although an affidavit of service may be a preferable method for a plaintiff to prove that it mailed the RPAPL 1304 notices in accordance with the statute, that is not the only method by which a residential foreclosure plaintiff may establish that it properly mailed the required notice" ( HSBC Bank USA, N.A. v. Ozcan, 154 A.D.3d at 826, 64 N.Y.S.3d 38 [citation omitted]; see Flagstar Bank, FSB v. Mendoza, 139 A.D.3d at 900, 32 N.Y.S.3d 278 ). As this Court has previously observed, "[t]here is no requirement that a plaintiff in a foreclosure action rely on any particular set of business records to establish a prima facie case, so long as the plaintiff satisfies the admissibility requirements of CPLR 4518(a), and the records themselves actually evince the facts for which they are relied upon" ( Citigroup v. Kopelowitz, 147 A.D.3d 1014, 1015, 48 N.Y.S.3d 223 ; see HSBC Bank USA, N.A. v. Ozcan, 154 A.D.3d at 826, 64 N.Y.S.3d 38 ). "[M]ailing may be proved by any number of documents meeting the requirements of the business records exception to the hearsay rule under CPLR 4518" ( HSBC Bank USA, N.A. v. Ozcan, 154 A.D.3d at 826, 64 N.Y.S.3d 38 ; see Viviane Etienne Med. Care, P.C. v. Country–Wide Ins. Co., 25 N.Y.3d 498, 508, 14 N.Y.S.3d 283, 35 N.E.3d 451 ; CitiMortgage, Inc. v. Pappas, 147 A.D.3d at 901, 47 N.Y.S.3d 415 ).
Here, the bank failed to submit an affidavit of service, or proof of mailing by the post office, evincing that it properly served the defendant pursuant to RPAPL 1304. Contrary to the Supreme Court's conclusion, the affidavit of the employee of the plaintiff's successor in interest failed to establish that the notices were sent to the defendant in the manner required by RPAPL 1304. The affiant did not aver that she was familiar with the mailing practices and procedures of the entity that allegedly sent the RPAPL 1304 notice. Accordingly, her affidavit did not establish proof of a standard office practice and procedure designed to ensure that items are properly addressed and mailed (see CitiMortgage, Inc. v. Pappas, 147 A.D.3d at 901, 47 N.Y.S.3d 415 ; Lindsay v. Pasternack Tilker Ziegler Walsh Stanton & Romano LLP, 129 A.D.3d 790, 793, 12 N.Y.S.3d 124 ; Nocella v. Fort Dearborn Life Ins. Co. of N.Y., 99 A.D.3d 877, 955 N.Y.S.2d 70 ). Nor was the affidavit of the employee of the plaintiff's successor in interest sufficient to lay a foundation for the admission of business records to establish a proper mailing. The affiant did not state that the records of the entity that allegedly sent the RPAPL 1304 notice had been incorporated into the records of the plaintiff's successor in interest and were routinely relied upon by the successor in interest in its business (cf. People v. Cratsley, 86 N.Y.2d 81, 90–91, 629 N.Y.S.2d 992, 653 N.E.2d 1162 ; Bank of Am., N.A. v. Brannon, 156 A.D.3d 1, 8, 63 N.Y.S.3d 352 ; State of New York v. 158th St. & Riverside Dr. Hous. Co., Inc., 100 A.D.3d 1293, 1296, 956 N.Y.S.2d 196 ; Matter of Carothers v. Geico Indem. Co., 79 A.D.3d 864, 865, 914 N.Y.S.2d 199 ; People v. DiSalvo, 284 A.D.2d 547, 548–549, 727 N.Y.S.2d 146 ; Plymouth Rock Fuel Corp. v. Leucadia, Inc., 117 A.D.2d 727, 728, 498 N.Y.S.2d 453 ). Since the bank's submissions failed to establish, prima facie, that the 90–day notice required by RPAPL 1304 was properly mailed to the homeowner, the court should have denied those branches of the bank's motion which were for summary judgment on the complaint insofar as asserted against the homeowner and dismissing the 16th affirmative defense/6th counterclaim asserted by the homeowner, and to appoint a referee. The issue of compliance with RPAPL 1304 will be determined at trial.
In light of the foregoing, we need not reach the parties' remaining contentions.
SCHEINKMAN, P.J., LEVENTHAL, MILLER and BRATHWAITE NELSON, JJ., concur.