Opinion
810163/2011
08-19-2014
FTBK INVESTOR II LLC, as Trustee for N.Y. Brooklyn Investor II Trust 2, Plaintiff v. GENESIS HOLDING LLC, New York State Department of Taxation and Finance, New York City Department of Finance, New York City Environmental Control Board, New York City Department of Housing Preservation and Development, and Sean Ku, Defendants.
Jerold Feuerstein Esq. and Matthew Klein Esq., Kriss & Feuerstein LLP, New York, for Plaintiff. Umar Sheikh Esq., Loanzon Sheikh, LLC, White Plains, for Defendant Genesis Holding LLC. Yat Man Esq., New York, for Defendant Ku.
Jerold Feuerstein Esq. and Matthew Klein Esq., Kriss & Feuerstein LLP, New York, for Plaintiff.
Umar Sheikh Esq., Loanzon Sheikh, LLC, White Plains, for Defendant Genesis Holding LLC.
Yat Man Esq., New York, for Defendant Ku.
Opinion
LUCY BILLINGS, J. Plaintiff sues to foreclose on an Amended and Restated Mortgage, Security Agreement, Assignment of Leases and Rents, and Fixture Filing, Aff. of Jerold Feuerstein Ex. A, at 25, and a Mortgage Consolidation, Modification and Extension Agreement, id. Ex. B2, at 3, both executed November 16, 2005, between defendant Genesis Holding LLC and the defunct nonparty Washington Mutual Bank. The mortgage is on real property at 2035 Adam Clayton Powell Jr. Boulevard, New York County, and secures loans from Washington Mutual to Genesis Holding.
Plaintiff has moved for summary judgment on the complaint's claims against Genesis Holding. C.P.L.R. § 3212(b). Genesis Holding has cross-moved (1) to amend its answer, C.P.L.R. § 3025(b), and (2) for summary judgment dismissing the complaint against Genesis Holding. C.P.L.R. § 3212(b). For the following reasons, the court denies plaintiff's motion and grants Genesis Holding's cross-motion in part as set forth below.
I. GENESIS HOLDING'S CROSS–MOTION TO AMEND ITS ANSWER
C.P.L.R. § 3025(b) permits amendments to an answer adding affirmative defenses as long as the proposed affirmative defenses, as alleged, are meritorious. Mezzacappa Bros., Inc. v. City of New York, 29 A.D.3d 494, 815 N.Y.S.2d 549 (1st Dep't 2006) ; Tishman Constr. Corp. of N.Y. v. City of New York, 280 A.D.2d 374, 377, 720 N.Y.S.2d 487 (1st Dep't 2001) ; Lanpont v. Savvas Cab Corp., 244 A.D.2d 208, 209–10, 664 N.Y.S.2d 285 (1st Dep't 1997) ; Norwood v. City of New York, 203 A.D.2d 147, 148, 610 N.Y.S.2d 249 (1st Dep't 1994). See Sterling Natl. Bank v. American Elite Props. Inc., 91 A.D.3d 581, 937 N.Y.S.2d 221 (1st Dep't 2012). Genesis Holding bears the burden to demonstrate the merits of the proposed defenses through admissible evidence. See Anoun v. City of New York, 85 A.D.3d 694, 695, 926 N.Y.S.2d 98 (1st Dep't 2011) ; Guzman v. Mike's Pipe Yard, 35 A.D.3d 266, 825 N.Y.S.2d 480 (1st Dep't 2006) ; Lanpont v. Savvas Cab Corp., 244 A.D.2d at 210, 664 N.Y.S.2d 285. While Genesis Holding need not establish at this stage that the proposed defenses will succeed, Genesis Holding still must show their viability, by alleging their elements in a proposed verified amended answer or supporting them with other admissible evidence. Anoun v. City of New York, 85 A.D.3d at 695, 926 N.Y.S.2d 98 ; CDR Créances S.A.S. v. Cohen, 77 A.D.3d 489, 490, 909 N.Y.S.2d 697 (1st Dep't 2010) ; Guzman v. Mike's Pipe Yard, 35 A.D.3d 266, 825 N.Y.S.2d 480. Genesis Holding seeks to add affirmative defenses that plaintiff lacks standing. Although Genesis Holding offers no explanation for the delay in seeking amendment, to defeat the amendments, the delay must have caused plaintiff surprise or other prejudice. Anoun v. City of New York, 85 A.D.3d 694, 926 N.Y.S.2d 98 ; Antwerpse Diamantbank N.V. v. Nissel, 27 A.D.3d 207, 208, 810 N.Y.S.2d 180 (1st Dep't 2006) ; Tishman Constr. Corp. of N.Y. v. City of New York, 280 A.D.2d at 377, 720 N.Y.S.2d 487 ; Cseh v. New York City Tr. Auth., 240 A.D.2d 270, 271, 658 N.Y.S.2d 618 (1st Dep't 1997). To show prejudice from the delay, plaintiff must demonstrate that the delay has hindered the preparation of support for plaintiff's claims. Anoun v. City of New York, 85 A.D.3d 694, 926 N.Y.S.2d 98 ; Antwerpse Diamantbank N.V. v. Nissel, 27 A.D.3d at 208, 810 N.Y.S.2d 180 ; Cseh v. New York City Tr. Auth., 240 A.D.2d at 271, 658 N.Y.S.2d 618 ; Norwood v. City of New York, 203 A.D.2d at 149, 610 N.Y.S.2d 249.
Genesis Holding's proposed seventh defense alleges that JPMorgan Chase did not hold the note and mortgage and thus lacked standing when JPMorgan Chase commenced this action. The proposed eighth defense alleges that the note and mortgage were never transferred to the current plaintiff, so that it lacks standing to prosecute this action.
Genesis Holding demonstrates that its delay in moving to add these defenses has not caused plaintiff surprise or other prejudice. Although Genesis Holding did not oppose plaintiff's motion to be substituted as plaintiff for JPMorgan Chase, C.P.L.R. § 1018, at least two reasons may explain Genesis Holding's silence at that earlier stage. First, Genesis Holding has never focused its dispute on the current plaintiff's possession of the note and mortgage. Second, the documents necessary to support a lack of standing defense were in plaintiff's control. Antwerpse Diamantbank N.V. v. Nissel, 27 A.D.3d at 208, 810 N.Y.S.2d 180. Then plaintiff made a prior motion for summary judgment, before plaintiff's current motion, and affirmatively presented evidence to show its standing. Only at that point, when plaintiff relied on documents that post-date commencement of the action to support standing upon commencement of the action as well as currently, may Genesis Holding have realized that a defense regarding standing might be viable.
More importantly, plaintiff's first motion for summary judgment indicated that plaintiff anticipated a lack of standing defense, undermining any claim of prejudice due to Genesis Holding subsequently seeking to plead this defense.See Lettieri v. Allen, 59 A.D.3d 202, 873 N.Y.S.2d 39 (1st Dep't 2009). Once plaintiff revealed the evidence relied on for standing, Genesis Holding raised plaintiff's lack of standing in opposition to its first summary judgment motion. See BMX Worldwide v. Coppola N.Y.C., 287 A.D.2d 383, 384, 731 N.Y.S.2d 701 (1st Dep't 2001). Although Genesis Holding has not explained why it did not then move to amend its answer to add this defense, under all the circumstances, Genesis Holding's delay between then and now does not, without more, amount to a waiver of the defense, see Cadles of Grassy Meadows II, L.L.C. v. Lapidus, 93 A.D.3d 535, 940 N.Y.S.2d 263 (1st Dep't 2012) ; CDR Créances S.A.S. v. Cohen, 77 A.D.3d at 490, 909 N.Y.S.2d 697 ; Centaur Props., LLC v. Farahdian, 29 A.D.3d 468, 817 N.Y.S.2d 7 (1st Dep't 2006) ; plaintiff does not identify any prejudice from this interval of delay; and the court discerns none. Tishman Constr.
Corp. of N.Y. v. City of New York, 280 A.D.2d at 378, 720 N.Y.S.2d 487.
The sole claim of prejudice to plaintiff is raised merely by its attorney, who suggests that a formal pleading of lack of standing might have dissuaded plaintiff from purchasing the note and mortgage. E.g., Murray v. City of New York, 74 A.D.3d 550, 903 N.Y.S.2d 34 (1st Dep't 2010) ; Coleman v. Maclas, 61 A.D.3d 569, 877 N.Y.S.2d 297 (1st Dep't 2009) ; 2084–2086 BPE Assoc. v. State of N.Y. Div. of Hous. & Community Renewal, 15 A.D.3d 288, 289, 790 N.Y.S.2d 92 (1st Dep't 2005) ; Figueroa v. Luna, 281 A.D.2d 204, 205, 721 N.Y.S.2d 635 (1st Dep't 2001). Even had an officer of plaintiff actually attested that it relied on the absence of that formal pleading in making the purchase, the possibility that a defendant that had answered would seek to add a lack of standing defense, as has occurred, or other defendants would answer and raise it, undermines any justification for such reliance. Therefore there would be no justifiable prejudice on this basis. Anoun v. City of New York, 85 A.D.3d 694, 926 N.Y.S.2d 98 ; Lettieri v. Allen, 59 A.D.3d 202, 873 N.Y.S.2d 39 ; Antwerpse Diamantbank N.V. v. Nissel, 27 A.D.3d at 208, 810 N.Y.S.2d 180 ; Tishman Constr. Corp. of N.Y. v. City of New York, 280 A.D.2d at 378, 720 N.Y.S.2d 487.
Absent prejudice on any basis, delay alone is insufficient to deny amendment to a pleading. Since plaintiff's current motion again affirmatively and vigorously litigates its standing, and, as discussed below, Genesis Holding's lack of standing defenses have merit, the court grants Genesis Holding's cross-motion to amend its answer to the extent of permitting inclusion of those defenses. C.P.L.R. § 3025(b) ; Anoun v. City of New York, 85 A.D.3d at 695, 926 N.Y.S.2d 98 ; Mezzacappa Bros., Inc. v. City of New York, 29 A.D.3d 494, 815 N.Y.S.2d 549 ; Tishman Constr. Corp. of N.Y. v. City of New York, 280 A.D.2d at 378, 720 N.Y.S.2d 487 ; Lanpont v. Savvas Cab Corp., 244 A.D.2d at 210, 664 N.Y.S.2d 285.
II. STANDARDS FOR SUMMARY JUDGMENT
To obtain summary judgment, the moving party must make a prima facie showing of entitlement to judgment as a matter of law, through admissible evidence eliminating all material issues of fact. C.P.L.R. § 3212(b) ; Vega v. Restani Constr. Corp., 18 N.Y.3d 499, 503, 942 N.Y.S.2d 13, 965 N.E.2d 240 (2012) ; Smalls v. AJI Indus., Inc., 10 N.Y.3d 733, 735, 853 N.Y.S.2d 526, 883 N.E.2d 350 (2008) ; JMD Holding Corp. v. Congress Fin. Corp., 4 N.Y.3d 373, 384, 795 N.Y.S.2d 502, 828 N.E.2d 604 (2005) ; Giuffrida v. Citibank Corp., 100 N.Y.2d 72, 81, 760 N.Y.S.2d 397, 790 N.E.2d 772 (2003). Only if the moving party satisfies this standard, does the burden shift to the opponent to rebut that prima facie showing, by producing evidence, in admissible form, sufficient to require a trial of material factual issues. Morales v. D & A Food Serv., 10 N.Y.3d 911, 913, 862 N.Y.S.2d 449, 892 N.E.2d 842 (2008) ; Hyman v. Queens County Bancorp, Inc., 3 N.Y.3d 743, 744, 787 N.Y.S.2d 215, 820 N.E.2d 859 (2004). If the moving party fails to meet its initial burden, the court must deny summary judgment despite any insufficiency in the opposition. Vega v. Restani Constr. Corp., 18 N.Y.3d at 503, 942 N.Y.S.2d 13, 965 N.E.2d 240 ; JMD Holding Corp. v. Congress Fin. Corp., 4 N.Y.3d at 384, 795 N.Y.S.2d 502, 828 N.E.2d 604 ; Scafe v. Schindler El. Corp., 111 A.D.3d 556, 557, 975 N.Y.S.2d 399 (1st Dep't 2013) ; Williams v. New York City Hous. Auth., 99 A.D.3d 613, 952 N.Y.S.2d 554 (1st Dep't 2012). In evaluating the evidence for purposes of the parties' summary judgment motions, the court construes the evidence in the light most favorable to the motion's opponent. Vega v. Restani Constr. Corp., 18 N.Y.3d at 503, 942 N.Y.S.2d 13, 965 N.E.2d 240 ; Cahill v. Triborough Bridge & Tunnel Auth., 4 N.Y.3d 35, 37, 790 N.Y.S.2d 74, 823 N.E.2d 439 (2004).
III. PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
The parties do not dispute that Genesis Holding executed a promissory note for $2,137,500.00 to Washington Mutual Bank November 16, 2005, secured by a mortgage on real property in New York County. The Federal Deposit Insurance Corporation (FDIC) became the receiver for Washington Mutual when it ceased operating September 25, 2008. Plaintiff claims that, as the assignee of the note and mortgage, it is entitled to enforce them and moves for summary judgment on those claims.
A. Plaintiff's Burden as an Assignee
To prevail on its mortgage foreclosure claim as an assignee, plaintiff is required to establish its standing by demonstrating that plaintiff held the mortgage and underlying promissory note when plaintiff commenced the foreclosure action. 71 Clinton St. Apts. LLC v. 71 Clinton Inc., 114 A.D.3d 583, 584, 982 N.Y.S.2d 6 (1st Dep't 2014) ; OneWest Bank FSB v. Carey, 104 A.D.3d 444, 445, 960 N.Y.S.2d 306 (1st Dep't 2013) ; Bank of N.Y. Mellon Trust Co. NA v. Sachar, 95 A.D.3d 695, 696, 943 N.Y.S.2d 893 (1st Dep't 2012). Assignment of a note and mortgage may be by an executed writing or by their physical delivery. U.S. Bank N.A. v. Dellarmo, 94 A.D.3d 746, 748, 942 N.Y.S.2d 122 (2d Dep't 2012) ; Citimortgage, Inc. v. Stosel, 89 A.D.3d 887, 888, 934 N.Y.S.2d 182 (2d Dep't 2011) ; Bank of N.Y. v. Silverberg, 86 A.D.3d 274, 280–81, 926 N.Y.S.2d 532 (2d Dep't 2011) ; Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d 95, 108, 923 N.Y.S.2d 609 (2d Dep't 2011). See Meyerson Capital V. LLC v. Anderson, 110 A.D.3d 468, 973 N.Y.S.2d 113 (1st Dep't 2013) ; OneWest Bank FSB v. Carey, 104 A.D.3d at 445, 960 N.Y.S.2d 306 ; Bank of N.Y. Mellon Trust Co. NA v. Sachar, 95 A.D.3d at 696, 943 N.Y.S.2d 893. A substituted plaintiff also must establish its standing by demonstrating that the note and mortgage were validly assigned to this new plaintiff, so that it is now the interested party. MLCFC 2007–9 Mixed Astoria, LLC v. 36–02 35th Ave. Dev., LLC, 116 A.D.3d 745, 747, 983 N.Y.S.2d 604 (2d Dep't 2014). When Genesis Holding or another defendant has raised an issue regarding plaintiff's standing, plaintiff must demonstrate its standing. Id. at 746, 983 N.Y.S.2d 604 ; U.S. Bank N.A. v. Dellarmo, 94 A.D.3d at 748, 942 N.Y.S.2d 122 ; Citimortgage, Inc. v. Stosel, 89 A.D.3d at 888, 934 N.Y.S.2d 182 ; CitiMortgage, Inc. v. Rosenthal, 88 A.D.3d 759, 761, 931 N.Y.S.2d 638 (2d Dep't 2011).
Defendants waive lack of standing as a defense by failing to raise it in an answer or a pre-answer motion to dismiss the complaint. Wells Fargo Bank, NA v. Edwards, 95 A.D.3d 692, 945 N.Y.S.2d 44 (1st Dep't 2012) ; Security Pac. Natl. Bank v. Evans, 31 A.D.3d 278, 280, 820 N.Y.S.2d 2 (1st Dep't 2006) ; CitiMortgage, Inc. v. Rosenthal, 88 A.D.3d at 761, 931 N.Y.S.2d 638. Thus, until Genesis Holding served its amended answer interposing plaintiff's lack of standing as a defense, Genesis Holding had not raised the defense so as to require that plaintiff affirmatively demonstrate its standing. Particularly since Genesis Holding raised the defense in opposition to plaintiff's first motion for summary judgment and plaintiff in that motion and this one in fact affirmatively addressed the issue, however, the court now has permitted Genesis Holding to include that defense. Therefore, even if plaintiff might have established its prima facie claim without demonstrating its standing, plaintiff now must demonstrate its standing in response to Genesis Holding's cross-motion.
B. The FDIC's Assignment to JPMorgan Chase
The affidavit of Robert Schoppe, FDIC's Receiver for Washington Mutual, dated October 2, 2008, attests that JPMorgan Chase acquired assets of Washington Mutual pursuant to a Purchase and Assumption Agreement (PAA), dated September 25, 2008, well before JPMorgan Chase commenced this action May 20, 2011. Feuerstein Aff. Ex. E, at 2 ¶ 4. The PAA, § 6.1, provides that the FDIC “assigns, transfers, conveys and delivers to the Assuming Bank” the records of Washington Mutual's assets. Id. Ex. E, PAA at 19. Although plaintiff presents the PAA, and Schoppe refers to it to the extent set forth above, neither he nor any other witness demonstrates any personal knowledge of the signatures that executed the PAA or otherwise authenticates it to render it admissible for purposes of summary judgment. IRB–Brasil Resseguros S.A. v. Portobello Intl. Ltd., 84 A.D.3d 637, 638, 923 N.Y.S.2d 508 (1st Dep't 2011) ; Rivera v. GT Acquisition 1 Corp., 72 A.D.3d 525, 526, 899 N.Y.S.2d 46 (1st Dep't 2010) ; Babikian v. Nikki Midtown, LLC, 60 A.D.3d 470, 471, 875 N.Y.S.2d 20 (1st Dep't 2009) ; Bermudez v. Ruiz, 185 A.D.2d 212, 214, 586 N.Y.S.2d 258 (1st Dep't 1992). See Singer Asset Fin. Co., LLC v. Melvin, 33 A.D.3d 355, 357–58, 822 N.Y.S.2d 68 (1st Dep't 2006) ; Acevedo v. Audubon Mgt., 280 A.D.2d 91, 95, 721 N.Y.S.2d 332 (1st Dep't 2001) ; People v. Bryant, 12 A.D.3d 1077, 1079, 785 N.Y.S.2d 201 (4th Dep't 2004) ; Fields v. S & W Realty Assoc., 301 A.D.2d 625, 754 N.Y.S.2d 348 (2d Dep't 2003). A certification precedes it, but refers to “the foregoing copy,” which is Schoppe's affidavit. Feuerstein Aff. Ex. E, at 4.
The affidavit of Lowell Bacchus, Special Credits Asset Manager II for JPMorgan Chase Bank, dated April 18, 2013, simply attests that the “promissory note was endorsed via allonge” to JPMorgan Chase. Id. Ex. C, at 2 ¶ 3. Likewise, although plaintiff also presents the allonge, id. Ex. C1, at 9, it is not authenticated as a public record, and neither Bacchus nor any other witness authenticates its execution. E.g., C.P.L.R. §§ 4520, 4540(a) and (b) ; People v. Smith, 258 A.D.2d 245, 249–50, 697 N.Y.S.2d 783 (4th Dep't 1999). See People v. Casey, 95 N.Y.2d 354, 362, 717 N.Y.S.2d 88, 740 N.E.2d 233 (2000) ; Cadles of Grassy Meadows II, L.L.C. v. Lapidus, 93 A.D.3d 535, 940 N.Y.S.2d 263 ; People v. Brown, 221 A.D.2d 270, 271, 634 N.Y.S.2d 84 (1st Dep't 1995) ; F.W. Woolworth Co. v. Southbridge Towers, 204 A.D.2d 174, 175, 611 N.Y.S.2d 555 (1st Dep't 1994). The conclusory recitations by Schoppe and Bacchus that JPMorgan Chase acquired assets of Washington Mutual pursuant to the PAA and that the note to Washington Mutual was endorsed via an allonge to JPMorgan Chase fail to establish its acquisition and hence its standing without admissible evidence of the documents from which the witnesses claim to be drawing their conclusions. PAF–PAR LLC v. Silberberg, 118 A.D.3d 446, 987 N.Y.S.2d 361 (1st Dep't 2014). See Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d at 109, 923 N.Y.S.2d 609 ; U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 754, 890 N.Y.S.2d 578 (2d Dep't 2009). Significantly, however, if the allonge's contents are to be considered, the allonge provides that it was executed October 3, 2012, well after JPMorgan Chase commenced this action May 20, 2011, yet was effective September 25, 2008. Feuerstein Aff. Ex. C1, at 9. Bacchus further attests that: “The Mortgage was assigned to JPMC pursuant to an Assignment of Security Interest and Loan Documents (the ‘Mortgage Assignment’) by the Federal Deposit Insurance Corporation....” Id. Ex. C, at 2 ¶ 5. Although he refers to this document as a “Mortgage Assignment” and claims the allonge assigned the note, the Mortgage Assignment also assigns all “documents that evidence or secure the obligations under the Note.” Id. Ex. C4, at 4 (emphasis added). This assignment is signed and notarized, establishing a presumption of the notarized signature's due execution and genuineness, C.P.L.R. § 4538 ; Genger v. Arie Genger 1995 Life Ins. Trust, 84 A.D.3d 471, 922 N.Y.S.2d 347 (1st Dep't 2011) ; Artigas v. Renewal Arts Realty Corp., 22 A.D.3d 327, 328, 803 N.Y.S.2d 12 (1st Dep't 2005) ; Seaboard Sur. Co. v. Earthline Corp., 262 A.D.2d 253, 692 N.Y.S.2d 375 (1st Dep't 1999) ; ABN AMRO Mtge. Group, Inc. v. Stephens, 91 A.D.3d 801, 803, 939 N.Y.S.2d 70 (2d Dep't 2012), which is undisputed. See Genger v. Arie Genger 1995 Life Ins. Trust, 84 A.D.3d at 472, 922 N.Y.S.2d 347 ; Bryant v. Bryant, 58 A.D.3d 496, 870 N.Y.S.2d 352 (1st Dep't 2010) ; Neuman v. Neumann, 109 A.D.3d 886, 888, 971 N.Y.S.2d 322 (2d Dep't 2013) ; John Deere Ins. Co. v. GBE/Alasia Corp., 57 A.D.3d 620, 622, 869 N.Y.S.2d 198 (2d Dep't 2008). Like the inadmissible allonge, the admissible assignment document provides that it was executed October 3, 2012, yet was effective September 25, 2008.
C. Retroactivity of the Assignment to JPMorgan Chase
When the parties executing the assignment of the mortgage and note from the FDIC to JPMorgan Chase October 3, 2012, made the assignment retroactive to September 25, 2008, more than four years before it was executed, that retroactivity was ineffective to assign the mortgage and note to JPMorgan Chase until the assignment, by its terms, was executed October 3, 2012. Countrywide Home Loans, Inc. v. Gress, 68 A.D.3d 709, 710, 888 N.Y.S.2d 914 (2d Dep't 2009) ; LaSalle Bank Natl. Assn. v. Ahearn, 59 A.D.3d 911, 912, 875 N.Y.S.2d 595 (3d Dep't 2009). Absent evidence that the mortgage and note were physically delivered to JPMorgan Chase September 25, 2008, or any time before commencement of this action, the assignment that was not executed until October 3, 2012, may not be given retroactive effect before then. U.S. Bank N.A. v. Dellarmo, 94 A.D.3d at 749, 942 N.Y.S.2d 122 ; LaSalle Bank Natl. Assn. v. Ahearn, 59 A.D.3d at 912, 875 N.Y.S.2d 595. Otherwise the execution date controls when the assignment takes effect. Wells Fargo Bank, N.A. v. Marchione, 69 A.D.3d 204, 210, 887 N.Y.S.2d 615 (2d Dep't 2009) ; LaSalle Bank Natl. Assn. v. Ahearn, 59 A.D.3d at 912, 875 N.Y.S.2d 595. Since JPMorgan Chase commenced this action May 20, 2011, before execution of the assignment October 3, 2012, the retroactive assignment may not be used to confer standing on the assignee JPMorgan Chase in an action commenced before the assignment's execution. Wells Fargo Bank, N.A. v. Marchione, 69 A.D.3d at 207, 210, 887 N.Y.S.2d 615 ; Countrywide Home Loans, Inc. v. Gress, 68 A.D.3d at 710, 888 N.Y.S.2d 914 ; LaSalle Bank Natl. Assn. v. Ahearn, 59 A.D.3d at 912–13, 875 N.Y.S.2d 595.
D. The Evidence Establishing the Chain of Assignments to the Current Plaintiff
Regarding the subsequent assignments, Josh Zegen, plaintiff's managing member, in an affidavit dated May 8, 2013, in turn attests that on August 19, 2011, JPMorgan Chase assigned the mortgage to N.Y. Brooklyn Investor II, LLC, of which plaintiff is the managing member, and on September 12, 2011, N.Y. Brooklyn Investor assigned the mortgage to plaintiff. These assignments also are signed, notarized, and undisputed. Feuerstein Aff. Exs. B4, at 3, and B5, at 3. Unlike the assignment from the FDIC to JPMorgan Chase, however, the subsequent assignment documents do not assign the promissory note with the mortgage.
The mortgage assignments, by themselves, fail to support any transfers from JPMorgan Chase on to plaintiff. A mortgage is merely security for a debt, here evidenced by the promissory note; independently of the debt, the mortgage is a nullity. U.S. Bank N.A. v. Dellarmo, 94 A.D.3d at 748, 942 N.Y.S.2d 122 ; Bank of N.Y. v. Silverberg, 86 A.D.3d at 280, 926 N.Y.S.2d 532 ; U.S. Bank, N.A. v. Collymore, 68 A.D.3d at 754, 890 N.Y.S.2d 578. Therefore “a transfer or assignment of only the mortgage without the debt is a nullity and no interest is acquired by it.” U.S. Bank N.A. v. Dellarmo, 94 A.D.3d at 748, 942 N.Y.S.2d 122. See MLCFC 2007–9 Mixed Astoria, LLC v. 36–02 35th Ave. Dev., LLC, 116 A.D.3d at 746, 983 N.Y.S.2d 604 ; Citimortgage, Inc. v. Stosel, 89 A.D.3d at 888, 934 N.Y.S.2d 182 ; Bank of N.Y. v. Silverberg, 86 A.D.3d at 280, 926 N.Y.S.2d 532 ; U.S. Bank, N.A. v. Collymore, 68 A.D.3d at 754, 890 N.Y.S.2d 578. If plaintiff is the assignee of only the mortgage, without the underlying note, plaintiff lacks standing now to maintain this action. Citimortgage, Inc. v. Stosel, 89 A.D.3d at 888, 934 N.Y.S.2d 182 ; Bank of N.Y. v. Silverberg, 86 A.D.3d at 280, 926 N.Y.S.2d 532 ; Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d at 109, 923 N.Y.S.2d 609. See MLCFC 2007–9 Mixed Astoria, LLC v. 36–02 35th Ave. Dev., LLC, 116 A.D.3d at 746, 983 N.Y.S.2d 604 ; U.S. Bank, N.A. v. Collymore, 68 A.D.3d at 754, 890 N.Y.S.2d 578.
The affidavit by Jake Bade, Special Credits Senior Asset Manager and Head of Commercial Term Lending Note Sales for JPMorgan Chase, also dated April 18, 2013, attempts to rectify this deficiency, at least in the assignment from JPMorgan Chase to N.Y. Brooklyn Investor. By simply attesting that JPMorgan Chase “assigned to N.Y. Brooklyn Investor II, LLC,” both a note and a mortgage dated November 16, 2005, describing the contents of the assignment on August 19, 2011, differently from Zegen, Bade nonetheless accomplishes nothing more than the affidavits by Schoppe and Bacchus regarding the earlier links in the chain of assignments. Feuerstein Aff. Ex. D, at 3 ¶ 3. See, e.g., Miller–Francis v. Smith–Jackson, 113 A.D.3d 28, 34–35, 976 N.Y.S.2d 34 (1st Dep't 2013). While Bade is an employee of JPMorgan Chase who may be familiar with JPMorgan Chase's transaction with N.Y. Brooklyn Investor, the authenticated assignment's contents, which “assigns unto the Assignee ... certain mortgages,” speak for themselves. Feuerstein Aff. Ex. B4, at 3.
Zegen does present two allonges regarding the promissory note, from JPMorgan Chase to N.Y. Brooklyn Investor, and from it to plaintiff. The latter allonge, dated September 12, 2011, bears the signature of Brian Schatz, as plaintiff's managing member then, signing for plaintiff as the assignor N.Y. Brooklyn Investor's managing member. Id. Ex. B1, at 13. Therefore, even though Zegen was plaintiff's managing member more recently, he makes no showing how he would be personally familiar with the assignment to plaintiff in September 2011, let alone with N.Y. Brooklyn Investor's earlier acquisition from JPMorgan Chase. Rodriguez v. Board of Educ. of City of N.Y., 107 A.D.3d 651, 652, 969 N.Y.S.2d 25 (1st Dep't 2013) ; Gogos v. Modell's Sporting Goods, Inc., 87 A.D.3d 248, 254, 926 N.Y.S.2d 53 (1st Dep't 2011) ; Babikian v. Nikki Midtown, LLC, 60 A.D.3d at 471, 875 N.Y.S.2d 20 ; Dorsey v. Les Sans Culottes, 43 A.D.3d 261, 842 N.Y.S.2d 360 (1st Dep't 2007). Even were the court to assume that, as a successor managing member of plaintiff, Zegen might be familiar with Schatz's signature, despite Zegen never so indicating, no such assumption is possible regarding the JPMorgan Chase officer's signature on the earlier allonge to N.Y. Brooklyn Investor. Feuerstein Aff. Ex. B1, at 12.
Even assuming further that Bade, who refers only to the August 2011 assignment of the mortgage, means to refer also to the allonge, he, too, fails to demonstrate how he, in 2013, would be personally familiar with the signature of a particular JPMorgan Chase officer in 2011. Without the allonges' certification or other authentication of their execution, Bade's affidavit, like the affidavits by Schoppe and Bacchus, at best does no more than recite the August 2011 allonge's contents, which, without the authentication to render the document admissible, is of course hearsay. People v. Joseph, 86 N.Y.2d 565, 570, 635 N.Y.S.2d 123, 658 N.E.2d 996 (1995) ; Miller–Francis v. Smith–Jackson, 113 A.D.3d at 34–35, 976 N.Y.S.2d 34 ; Advanced
Global Tech., LLC v. Sirius Satellite Radio, Inc., 44 A.D.3d 317, 318, 843 N.Y.S.2d 220 (1st Dep't 2007). See U.S. Bank N.A. v. Lieberman, 98 A.D.3d 422, 423, 950 N.Y.S.2d 127 (1st Dep't 2012) ; Mastroddi v. WDG Dutchess Assoc. Ltd. Partnership, 52 A.D.3d 341, 342, 861 N.Y.S.2d 11 (1st Dep't 2008) ; Chubb Natl. Ins. Co. v. Platinum Customcraft Corp., 38 A.D.3d 244, 245, 831 N.Y.S.2d 382 (1st Dep't 2007) ; Washington v. Montefiore Medical Ctr., 9 A.D.3d 271, 272, 780 N.Y.S.2d 322 (1st Dep't 2004).
E. The Applicable Federal Statutes' Effect
Despite these lapses in admissible evidence supporting the promissory note's assignment from JPMorgan Chase to N.Y. Brooklyn Investor and on to plaintiff, see MLCFC 2007–9 Mixed Astoria, LLC v. 36–02 35th Ave. Dev., LLC, 116 A.D.3d at 747, 983 N.Y.S.2d 604, Genesis Holding focuses its dispute on the critical earlier link in the chain of possession: the FDIC's assignment of the note and mortgage to JPMorgan Chase. Plaintiff, on the other hand, contends that this assignment does not require evidentiary support, since the assignment was effected by operation of law.
When the FDIC became the receiver for Washington Mutual, the FDIC unquestionably possessed all Washington Mutual's assets. 12 U.S.C. § 1821(d)(2)(A)(I) ; Ungar v. Ensign Bank, 196 A.D.2d 204, 206, 608 N.Y.S.2d 405 (1st Dep't 1994) ; Federal Deposit Ins. Corp. v. Kaye, 224 A.D.2d 578, 639 N.Y.S.2d 44 (2d Dep't 1996). 12 U.S.C. § 1821(d)(2)(G)(i)(II) then authorizes the FDIC to transfer assets and liabilities of an institution in default without approval, but subject to clause (ii), which provides that:
No transfer described in clause (i)(II) may be made to another depository institution (other than a new depository institution or a bridge depository institution established pursuant to section (m) or (n) of this section) without the approval of the appropriate Federal banking agency for such institution.
12 U.S.C. § 1821(d)(2)(G)(ii). Accepting the premise that the assignment to JPMorgan Chase was effected pursuant to 12 U.S.C. § 1821(d)(2)(G), plaintiff nonetheless fails to present any evidence either that a federal banking agency approved the transfer, as required by that statute, or that the requirement was inapplicable to JPMorgan Chase.
Nor does plaintiff support its proposition that the federal statutory requirements supplant the state law's requirements for transferring a promissory note and mortgage securing the note. Insofar as plaintiff relies on Monroig v. Washington Mut. Bank, FA, 19 A.D.3d 563, 800 N.Y.S.2d 416 (2d Dep't 2005), for 12 U.S.C. § 1821(d)(2)'s preemption of state requirements, the decision does not address 12 U.S.C. § 1821(d)(2). Even as to the preemption of state law by 12 U.S.C. §§ 1463(a) and 1464(a) that Monroig v. Washington Mut. Bank, FA, 19 A.D.3d at 564, 800 N.Y.S.2d 416, does address, the federal statutes and their implementing regulations do not preempt state laws that “only incidentally affect the lending operations of Federal saving associations,” particularly laws governing “(1) Contract and commercial law; (2) Real property law.” 12 C.F.R. § 560.2(c). See People v. First Am. Corp., 18 N.Y.3d 173, 183, 937 N.Y.S.2d 136, 960 N.E.2d 927 (2011) ; Hendrickson v. Adventurous Realty II Corp., 79 A.D.3d 420, 910 N.Y.S.2d 905 (1st Dep't 2010) ; Monroig v. Washington Mut. Bank, FA, 19 A.D.3d at 564, 800 N.Y.S.2d 416. Plaintiff has not shown that requiring assignment of a mortgage and underlying promissory note to an assuming bank, see, e.g., Feuerstein Aff. Ex. E, PAA at 19, here JPMorgan Chase, by a written assignment or by physical delivery, pursuant to New York law, would more than “incidentally affect the lending operations of Federal saving associations.” 12 C.F.R. § 560.2(c). See People v. First Am. Corp., 18 N.Y.3d at 183, 937 N.Y.S.2d 136, 960 N.E.2d 927. As long as the federal and those state requirements are consistent, the transfer also must meet the state requirements. People v. First Am. Corp., 18 N.Y.3d at 183–84, 937 N.Y.S.2d 136, 960 N.E.2d 927.
F. Disposition of Plaintiff's Motion for Summary Judgment
In sum, although an assignee of a note and mortgage maintains standing to commence a foreclosure action, 71 Clinton St. Apts. LLC v. 71 Clinton Inc., 114 A.D.3d at 584, 982 N.Y.S.2d 6 ; OneWest Bank FSB v. Carey, 104 A.D.3d at 445, 960 N.Y.S.2d 306 ; Bank of N.Y. Mellon Trust Co. NA v. Sachar, 95 A.D.3d 695, 943 N.Y.S.2d 893, the inadmissible contents of plaintiff's affidavits and the inadmissible PAA and allonge do not establish when JPMorgan Chase was assigned the note and mortgage by an executed written assignment.See JP Morgan Chase Bank, N.A. v. Shapiro, 104 A.D.3d 411, 412, 959 N.Y.S.2d 918 (1st Dep't 2013) ; Citimortgage, Inc. v. Stosel, 89 A.D.3d at 888, 934 N.Y.S.2d 182 ; Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d at 108, 923 N.Y.S.2d 609. The admissible assignment, as well as the allonge were it admissible, establish only that JPMorgan Chase was assigned the note and mortgage by a written assignment October 3, 2012. Nor do plaintiff's affidavits specify when JPMorgan Chase obtained physical possession of the note and mortgage. U.S. Bank N.A. v. Dellarmo, 94 A.D.3d at 749, 942 N.Y.S.2d 122 ; Citimortgage, Inc. v. Stosel, 89 A.D.3d at 888, 934 N.Y.S.2d 182 ; Bank of N.Y. v. Silverberg, 86 A.D.3d at 282, 926 N.Y.S.2d 532 ; Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d at 109, 923 N.Y.S.2d 609. See Meyerson Capital V. LLC v. Anderson, 110 A.D.3d 468, 973 N.Y.S.2d 113 ; OneWest Bank FSB v. Carey, 104 A.D.3d at 445, 960 N.Y.S.2d 306 ; Bank of
N.Y. Mellon Trust Co. NA v. Sachar, 95 A.D.3d at 696, 943 N.Y.S.2d 893. Therefore plaintiff's evidence fails to establish that they had been assigned to JPMorgan Chase when it commenced the action, as required to support its standing. MLCFC
2007–9 Mixed Astoria, LLC v. 36–02 35th Ave. Dev., LLC, 116 A.D.3d at 747, 983 N.Y.S.2d 604 ; U.S. Bank N.A. v. Dellarmo, 94 A.D.3d at 749, 942 N.Y.S.2d 122 ; Citimortgage, Inc. v. Stosel, 89 A.D.3d at 888, 934 N.Y.S.2d 182 ; Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d at 109, 923 N.Y.S.2d 609. See 71 Clinton St. Apts. LLC v. 71 Clinton Inc., 114 A.D.3d at 584, 982 N.Y.S.2d 6 ; OneWest Bank FSB v. Carey, 104 A.D.3d at 445, 960 N.Y.S.2d 306 ; Bank of N.Y. Mellon Trust Co. NA v. Sachar, 95 A.D.3d at 696, 943 N.Y.S.2d 893.
If the note and mortgage were not assigned to JPMorgan Chase until the written assignment was executed October 3, 2012, well after JPMorgan Chase commenced the action May 20, 2011, JPMorgan Chase did not own them when the current plaintiff claims JPMorgan Chase assigned them to plaintiff's assignor August 19, 2011, either. Nor does plaintiff independently establish that the note was assigned by an executed written assignment or physical delivery to plaintiff's assignor and from that assignor to plaintiff, to demonstrate that it now holds an ownership interest in the note and mortgage, as required to support its current standing. MLCFC 2007–9 Mixed Astoria, LLC v. 36–02 35th Ave. Dev., LLC, 116 A.D.3d at 747, 983 N.Y.S.2d 604.
Finally, even if compliance with the federal statutory requirements were sufficient to effect a transfer of the note and mortgage from the FDIC to JPMorgan Chase before May 20, 2011, plaintiff fails to present evidence establishing that compliance: in particular, the federal banking agency's approval required by 12 U.S.C. § 1821(d)(2)(G)(ii) or that requirement's inapplicability. Consequently, the court denies plaintiff's motion seeking summary judgment on the complaint's claims. C.P.L.R. § 3212(b).
IV. GENESIS HOLDING'S CROSS–MOTION FOR SUMMARY JUDGMENT
Genesis Holding cross-moves for summary judgment dismissing the complaint based on plaintiff's lack of standing to maintain this action, since the original plaintiff JPMorgan Chase lacked standing when JPMorgan Chase commenced the action.
A. Retroactivity of the Assignment to JPMorgan Chase
While plaintiff failed to present the allonge executed October 3, 2012, transferring the note to JPMorgan Chase in admissible form through any of plaintiff's affidavits, and its affidavits contain hearsay regarding that transfer, once presented by plaintiff to support its motion, Genesis Holding may rely on that evidence, including that allonge, in opposition. Mitchell v. Calle, 90 A.D.3d 584, 585, 936 N.Y.S.2d 23 (1st Dep't 2011) ; Ayala v. Douglas, 57 A.D.3d 266, 267, 869 N.Y.S.2d 47 (1st Dep't 2008) ; Navedo v. Jaime, 32 A.D.3d 788, 789–90, 822 N.Y.S.2d 43 (1st Dep't 2006) ; Thompson v. Abbasi, 15 A.D.3d 95, 97, 788 N.Y.S.2d 48 (1st Dep't 2005). See Joseph v. Board of Educ. of the City of NY, 91 A.D.3d 528, 529, 938 N.Y.S.2d 3 (1st Dep't 2012) ; Dembele v. Cambisaca, 59 A.D.3d 352, 874 N.Y.S.2d 72 (1st Dep't 2009) ; Hernandez v. Almanzar, 32 A.D.3d 360, 361, 821 N.Y.S.2d 30 (1st Dep't 2006). The allonge's retroactivity, just like the retroactivity of the assignment transferring the note with the mortgage to JPMorgan Chase, was ineffective to assign the note to JPMorgan Chase until the allonge, by its terms, was executed October 3, 2012. Countrywide Home Loans, Inc. v. Gress, 68 A.D.3d at 710, 888 N.Y.S.2d 914 ; LaSalle Bank Natl. Assn. v. Ahern, 59 A.D.3d at 912, 875 N.Y.S.2d 595. Nevertheless, just as plaintiff has not presented evidence that the note or mortgage was physically delivered to JPMorgan Chase September 25, 2008, or any time before commencement of this action, neither does Genesis Holding present any evidence that the note or mortgage was not physically delivered to plaintiff before it commenced the action. Therefore, even if neither the allonge nor the assignment, each executed October 3, 2012, may be given retroactive effect before then, U.S. Bank N.A. v. Dellarmo, 94 A.D.3d at 749, 942 N.Y.S.2d 122 ; Wells Fargo Bank, N.A. v. Marchione, 69 A.D.3d at 210, 887 N.Y.S.2d 615 ; LaSalle Bank Natl. Assn. v. Ahern, 59 A.D.3d at 912, 875 N.Y.S.2d 595, a factual issue remains whether the note and mortgage were physically delivered to plaintiff before May 20, 2011. MLCFC 2007–9 Mixed Astoria, LLC v. 36–02 35th Ave. Dev., LLC, 116 A.D.3d at 747, 983 N.Y.S.2d 604 ; U.S. Bank N.A. v. Dellarmo, 94 A.D.3d at 749, 942 N.Y.S.2d 122 ; Bank of N.Y. v. Silverberg, 86 A.D.3d at 282, 926 N.Y.S.2d 532 ; Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d at 109, 923 N.Y.S.2d 609. If so, plaintiff's physical possession of the note and mortgage would confer standing on plaintiff, even though it commenced the action before the written assignment's execution. OneWest Bank FSB v. Carey, 104 A.D.3d at 445, 960 N.Y.S.2d 306 ; Bank of N.Y. Mellon Trust Co. NA v. Sachar, 95 A.D.3d at 696, 943 N.Y.S.2d 893. See Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d at 109, 923 N.Y.S.2d 609 ; Wells Fargo Bank, N.A. v. Marchione, 69 A.D.3d at 207, 210, 887 N.Y.S.2d 615 ; Countrywide Home Loans, Inc. v. Gress, 68 A.D.3d at 710, 888 N.Y.S.2d 914 ; LaSalle Bank Natl. Assn. v. Ahern, 59 A.D.3d at 912–13, 875 N.Y.S.2d 595. B. Compliance With the PAA
Again, even though plaintiff failed to present the PAA in admissible form through Schoppe's affidavit, and his affidavit regarding the PAA's contents is hearsay, once presented by plaintiff to support its motion, Genesis Holding may rely on the PAA in opposition. The PAA, § 9.2, requires the FDIC and JPMorgan Chase “to execute and deliver such additional instruments and documents of conveyance ... as shall be necessary to vest title to the Assets in the Assuming Bank.” Feuerstein Aff. Ex. E, PAA at 21. Although these instruments or documents are required only upon the request by a party to the PAA, no evidence in the record indicates whether a party requested or did not request them or, if a party did so, the party receiving the request executed and delivered the instrument or document. Since no evidence addresses whether any party to the PAA requested instruments or documents of conveyance, or a requested instrument or document was executed and delivered, factual issues regarding satisfaction of this contractual condition preclude summary judgment on this ground to Genesis Holding. Sharon v. American Health Providers, 105 A.D.3d 508, 509, 963 N.Y.S.2d 194 (1st Dep't 2013) ; Danciger v. Baal Milchamot Realty Corp., 272 A.D.2d 208, 209, 708 N.Y.S.2d 379 (1st Dep't 2000). See BMX Worldwide v. Coppola N.Y.C., 287 A.D.2d at 384, 731 N.Y.S.2d 701.
C. Disposition of Genesis Holding's Cross–Motion
As discussed above, Genesis Holding's failure to present any evidence that (1) the note or mortgage was not physically delivered to plaintiff before it commenced the action, or (2) a party to that conveyance requested instruments or documents of conveyance, requires denial of summary judgment to Genesis Holding. Material factual issues, (1) when Genesis Holding's note and mortgage were physically delivered to JPMorgan Chase and (2) whether it or the FDIC requested, and the other party executed and delivered, an instrument or document of such a conveyance, remain unresolved.
As also discussed above, Genesis Holding has not shown that a transfer by the FDIC to JPMorgan Chase lacked the necessary approval by a federal banking agency. 12 U.S.C. § 1821(d)(2)(G)(ii). For each of these reasons, the court denies Genesis Holding's cross-motion for summary judgment. C.P.L.R. § 3212(b).
V. CONCLUSION
To recapitulate, the court denies plaintiff's motion, C.P.L.R. § 3212(b), and grants defendant Genesis Holding LLC's cross- motion to the extent of allowing amendment of its answer to add plaintiff's lack of standing as an affirmative defense, C.P.L.R. § 3025(b), but otherwise denies Genesis Holding's cross-motion. C.P.L.R. § 3212(b).