Aurora Loan Services, LLC, Respondent,v.Monique Taylor,, et al., Appellants, et al., Defendants.BriefN.Y.April 30, 2015To Be Argued By: JEFFREY HERZBERG Time Requested: 30 Minutes APL-2014-00138 Westchester County Clerk’s Index No. 13735/10 Appellate Division, Second Department Docket No. 2012-04138 Court of Appeals STATE OF NEW YORK AURORA LOAN SERVICES, LLC, Plaintiff-Respondent, —against— MONIQUE TAYLOR a/k /a Monique Pujol Taylor, LEONARD TAYLOR, Defendants-Appellants, NEW ROC PARCEL 1A, LLC, JOHN DOE, JOSEPH MALTESE, Defendants. REPLY BRIEF FOR DEFENDANTS-APPELLANTS d JEFFREY HERZBERG ZINKER & HERZBERG, LLP 300 Rabro Drive, Suite 114 Hauppauge, New York 11788 Telephone: (631) 265-2133 Facsimile: (631) 265-4233 Attorneys for Defendants-Appellants October 16, 2014 TABLE OF CONTENTS Introduction ………………………………………………………………….1 POINT I – Aurora Did Not Possess a Valid and Enforceable Mortgage as of the Commencement of the Mortgage Foreclosure Action …6 a. Aurora Never Disclosed that It was Merely Acting as a Mortgage Loan Servicer ……………………………………………7 POINT II – MERS Never Possessed a Valid and Enforceable Mortgage Lien ……………………………………………………………12 a. MERS Was Not the Agent of the First National Bank of Arizona ……………………………………………………….15 b. The Aurora Reference to RPL §291 Is Irrelevant ……………20 POINT III – An Affidavit from an In-House Official Can Not Substitute for the Production and Inspection of the Original Mortgage Note and If So Permitted, the Information That the Affidavit Must Contain and/or the Documentary Evidence Attached to the Affidavit to Demonstrate the Purported Date of the Receipt of the Mortgage Note ……………………………..…24 POINT IV – Aurora Is Not Permitted or Allowed to Re-Litigate the Issue as to Its Failure to Provide Proper Notice of the Referee’s Computation Hearing ………………………………………..30 CONCLUSION ……………………………………………………………35 TABLE OF AUTHORITIES Cases Bank of New York v. Silverberg, 86 A.D.3d 274, 926 N.Y.S.2d 532, 2011 N.Y. App. Div. LEXIS 4899, 2011 NY Slip Op 5002 (2 nd Dept., 2011) ...................................................................................14, 16 Bank of Tokyo Trust Company v. Urban Food Malls, Ltd., 229 A.D.2d 14 650, N.Y.S.2d 654, 1996 N.Y. App. Div. LEXIS 12253, 31 U.C.C. Rep. Serv.2d (Callaghan) 1132 (1 st Dept., 1996) ………………………….5 Banushi v. Law Office of Scott W. Epstein, 110 A.D.3d 558, 973 N.Y.S.2d 198, 2013 N.Y. App. Div. LEXIS 6825, 2013 NY Slip Op 6930 (1 st Dept., 2013) …………………………………………………………..32 Barrallier v. City of New York, 12 A.D.3d 168, 784 N.Y.S.2d 55, 2004 N.Y. App. Div. LEXIS 13038 (1 st Dept., 2004) ………………………………..28 Butner v. United States, 440 U.S. 48, 99 S.Ct. 914, 59 L.Ed.2d 136, 1979 U.S. LEXIS 58 (1979) …………………………………………………….17 CWCapital Asset Mgt LLC v. Charney-FPG 114 41 st Street, LLC, 84 A.D.3d 506, 923 N.Y.S.2d 453 (1 st Dept., 2011) ……………………………… 9, 10 CWCapital Asset Management, LLC v. Great Neck Towers, LLC, 99 A.D.3d 850, 953 N.Y.S.2d 89, 2012 N.Y. App. Div. LEXIS 6876, 2012 NY Slip Op 6911 (2 nd Dept., 2012) ………………………………..………9, 10 Carion v. 162 Pulaski, LLC, 117 A.D.3d 767, 986 N.Y.S.2d 164, 2014 N.Y. App. Div. LEXIS 3412, 2014 NY Slip Op 3470 (2 nd Dept., 2014) ..21 Cox v. NAP Construction Company, Inc., 40 A.D.3d 459, 837 N.Y.S.2d 612, 2007 N.Y. App. Div. LEXIS 6349, 2007 NY Slip Op 4402 (1 st Dept., 2007) …………………………………………………………..32 Dempsey v. Intercontinental Hotel Corporation, 126 A.D.2d 477, 511 N.Y.S.2d 10, 1987 N.Y. App. Div. LEXIS 41621 (1 st Dept., 1987) ..……27 Deutsche Bank National Trust Company, as Trustee v. Pietranco, 33 Misc.3d 528, 928 N.Y.S.2d 818, 2011 N.Y. Misc. LEXIS 3698, 2011 NY Slip Op 21261 (Sup. Ct., Suffolk Cty., 2011) aff’d on procedural grounds, 102 A.D.3d 724, 957 N.Y.S.2d 868, 2013 N.Y. App. Div. LEXIS 165, 2013 NY Slip Op 171 (2 nd Dept., 2013) …………………………….……16 Deutsche Bank National Trust Company v. Spanos, 102 A.D.3d 909, 961 N.Y.S 2d 200, 2013 N.Y. App. Div. LEXIS 682, 2013 NY Slip Op 451 (2d Dept, 2013) mot’n to appeal denied 21 N.Y.3d 1068, 997 N.E.2d 140, 974 N.Y.S.2d 315, 2013 N.Y. LEXIS 2505 (2013) ……………………………6 Emigrant Mortgage Company, Inc. v. Persad, 2014 N.Y. App. Div. LEXIS 3151, 2014 NY Slip Op 3229 (2 nd Dept., 2014) ………………………….13 Fairbanks Capital Corp. v. Nagel, 289 A.D.2d 99, 735 N.Y.S.2d 13 (1 st Dept., 2001) …………………………………………………………………8, 9, 10 Flick Lumber Company, Inc. v. Breton Industries, Inc., 223 A.D.2d 779, 636 N.Y.S.2d 169, 1996 N.Y. App. Div. LEXIS 22, 31 U.C.C. Rep. Serv.2d (Callaghan) (3 rd Dept., 1996) …………………………………….27 Garcia v. Biro Manufacturing Company, Inc., 63 N.Y.2d 751, 469 N.E.2d 834, 480 N.Y.S.2d 316, 1984 N.Y. LEXIS 4553 (1984) …………………26 Goldstein v. Gold, 106 A.D.2d 100, 483 N.Y.S.2d 375, 1984 N.Y. App. Div. LEXIS 21305 (2 nd Dept., 1984) aff’d 66 N.Y.2d 624, 485 N.E.2d 239, 495 N.Y.S.2d 32, 1985 N.Y. LEXIS 17152 (1985) ………………….21 Hecht v. City of New York, 60 N.Y.2d 57, 454 N.E.2d 527, 467 N.Y.S.2d 187, 1983 N.Y. LEXIS 3306 (1983) ………………………………………32 Homecomings Financial, LLC v. Guldi, 108 A.D.3d 506, 969 N.Y.S.2d 470, 2013 N.Y. App. Div. LEXIS 4963, 2013 NY Slip Op 5048 (2 nd Dept., 2013) ………………………………………………………………………13 In re Agard, 444 B.R. 231 (Bkrtcy. E.D.N.Y. 2011) rev’d for procedural reasons, 2012 U.S. Dist. LEXIS 43286 (E.D.N.Y. 2012) ………….……..17 In re Escobar, 457 B.R. 229 (Bkrtcy. E.D.N.Y. 2011) …………………………..17 In the Matter of UU v. VV, 119 A.D.3d 1117, 990 N.Y.S.2d 655, 2014 N.Y. App. Div. LEXIS 5151, 2014 NY Slip Op 5229 (3 rd Dept., 2014) ……….32 Kliamovich v. Kliamovich, 85 A.D.3d 867, 925 N.Y.S.2d 591, 2011 N.Y. App. Div. LEXIS 5117, 2011 NY Slip Op 5233 (2 nd Dept., 2011) ….……24 Knox v. Countrywider Bank, 2014 U.S. Dist. LEXIS 32229 (E.D.N.Y. 2014) …..6 LaSalle Bank, N.A. v. Bouloute, 28 Misc.3d 1227[A], 958 N.Y.S.2d 61, 2010 N.Y. Misc. LEXIS 4075, 2010 NY Slip Op 51513(U) (Sup.Ct., Kings Cty., 2010) ………………………………………………………….18 MERSCORP v. Romaine, 8 N.Y.3d 90, 861 N.E.2d 81, 828 N.Y.S.2d 266, 2006 N.Y. LEXIS 3699 (2006) ……………………………………………13 Merritt v. Bartholick, 36 N.Y.44, 1867 NY LEXIS 5 (1867) ……………………..6 Merritt v. Dansmith Corporation, 240 A.D. 338, 270 N.Y.S. 675, 1934 N.Y. App. Div. LEXIS 10647 (3 rd Dept., 1934) ………………………………...22 Mortgage Electronic Registration Systems, Inc. v. Coakley, 41 A.D.3d 674, 838 N.Y.S.2d 522 (2 nd Dept., 2007) …………………………………….…14 Posson v. Przestrzelski, 111 A.D.3d 1235, 976 N.Y.S.2d 298, 2013 N.Y. App. Div. LEXIS 7849, 2013 NY Slip Op 7919 (3 rd Dept., 2013) ……………...24 Schozer v. William Penn Life Insurance Company of New York, 84 N.Y.2d 639, 644 N.E.2d 1353, 620 N.Y.S.2d 797, 1994 N.Y. LEXIS 4118 (1994) ……………………………………………………………………...24 Wells Fargo Bank, N.A. v. Eisler, 118 A.D.3d 982, 988 N.Y.S.2d 682, 2014 N.Y. App. Div. LEXIS 4792, 2014 NY Slip Op 4753 (2 nd Dept., 2014) .....28 Statutes CPLR §3211(a) ……………………..……………………………………………16 CPLR §3212(b) ……………………..………………………………………....8, 25 CPLR §5513 ….……………...………..……………………………………...31, 32 RPAPL §1371(b) ………………………………………………………..................4 RPL §291……………………………………………………………….…20, 21, 22 UCC §101, et seq.,. ……………………………………………………….3, 4, 5, 25 UCC §9-102(3) …………………………………………………………………….4 UCC §9-104 ……………………………………………………………………......5 11 U.S.C. §362(d) ………………………………………………………….......4, 17 11 U.S.C. §506 …………………………………………………………………...17 Reference Books Black’s Law Dictionary [4 th ed. 1951] ………………………………………….18 1 Monique Taylor a/k/a Monique Pujol Taylor (“Monique”) and Leonard Taylor (“Lenny”)(Monique and Lenny are referred to in the aggregate as “Taylor”), by and through their attorneys, Zinker & Herzberg, LLP, filed the Brief for Defendants-Appellants dated August 5, 2014 and the Plaintiff Aurora Loan Services, LLC (“Aurora”), by and through its attorneys, Ballard Spahr LLP and Knuckles, Komosinski & Elliott, LLP, filed the Brief for Plaintiff-Respondent dated September 22, 2014. Taylor is now filing their reply to the Brief for Plaintiff-Respondent. Introduction It is worthy to note in this introduction that of the twenty-nine (29) cases referenced in the Table of Authorities in the Brief for Defendants-Appellants, Aurora only cited eight (8) of those cases as listed in the Table of Authorities of the Brief for Plaintiff-Respondent. And out of the thirty four (34) state court cases listed in the Table of Authorities in the Brief for Plaintiff-Respondent, thirteen (13) cases were not court of appeals or appellate division citations: eleven (11) were from trial court citations, two (2) citations were from other states (Pennsylvania and Maine) and an additional two (2) citations pertained to New York State criminal matters notwithstanding that this dispute pertains to residential mortgage foreclosure issues as applicable in the State of New York. And many of the 11 trial court citations arose from the Supreme Court of the State of New York, 2 County of Suffolk, and were opinions issued by the same judge, namely the Honorable Thomas F. Whelan. Notwithstanding how Aurora desires to characterize the issues in this appeal, there are only three (3) issues for consideration in this appeal. They are as follows: 1. Did Aurora possess a valid and enforceable mortgage as of the commencement of this mortgage foreclosure action to achieve standing to commence and prosecute this mortgage foreclosure action notwithstanding that the assignment of mortgage was recorded with the Westchester County Clerk approximately seven (7) months prior to its receipt of the note and/or assignment of the original mortgage note ? 2. Did the Mortgage Electronic Registration Systems, Inc. (“MERS”) ever possess a valid mortgage lien capable of being enforceable by an assignee of the mortgage? 3. Did the original mortgage note need to be produced for purposes of demonstrating standing, and, if not, can an affidavit from an in-house official substitute for the production and inspection of the original mortgage note and what information must be contained in the affidavit and/or the documentary 3 annexed thereto to demonstrate the purported date of receipt of the original mortgage note? Aurora further sought to add another issue, namely whether the Supreme Court of the State of New York, Appellate Division, Second Judicial Department (the “Second Department”) was correct in vacating the issuance of the judgment of foreclosure and sale by the Supreme Court of the State of New York, County of Westchester (“Supreme Court, Westchester County”) due to Aurora’s failure to provide proper notice of the referee’s computation hearing and the Supreme Court, Westchester County, having failed to consider the Taylor opposition to the referee’s computation. As will be discussed in Point IV of this reply brief, this issue was not preserved for appellate review by this Honorable Court. Additionally, Aurora expended several pages of the Brief for Plaintiff- Respondent addressing the provisions of the Uniform Commercial Code (the “UCC”), as applicable in the State of New York. However, Taylor never denied that Aurora had the right to seek enforcement of the mortgage note against Monique, however, Monique may have other defenses to the enforcement of the note. Included in these defenses are: (a) Aurora waiver of its right to seek a timely deficiency judgment against Monique after the foreclosure sale of the subject real property by failing to seek a deficiency judgment within ninety (90) days after the consummation of the sale as evidenced by the delivery of the deed and the filing of 4 the order confirming the sale. Please see RPAPL §1371(b); and (b) Monique and Leonard were granted discharges in bankruptcy and Aurora knew about the bankruptcy filing as they caused the bankruptcy automatic stay to be lifted to prosecute this mortgage foreclosure action pursuant to the provisions set forth in 11 U.S.C. §362(d). Please see pages 23 and 31 of the Brief for the Defendants- Appellants and TR-23 of the Appendix. Additionally, Article 3 of the UCC pertains solely to the enforceability of the negotiable instrument. Article 3 does not pertain to the underlying security collateralizing the negotiable instrument as evidenced by the provisions of UCC §3-103(2) which provides: “The provisions of this Article are subject to the provisions of the Article on ... and Secured Transactions (Article 9).” Article 9 of the UCC governs the enforceability of security interests taken on negotiable instruments; but it does not govern the enforceability of the actual mortgage or the underlying foreclosure proceeding. UCC §9-102(3) provides: “The application of this Article to a security interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this Article does not apply.” Further, Official Comment 4 to UCC §9-102 provides: “An illustration of subsection (3) is as follows: The owner of Blackacre borrows $10,000 from his neighbor, and secures his note by a mortgage on Blackacre. This article is not applicable to creation of the real estate mortgage. Nor is it applicable to the sale of the note. However, when the mortgagee pledges the note to secure his own obligation to X, this Article applies to the 5 security interest thus created, which is a security interest in an instrument even though the instrument is secured by a real estate mortgage. This Article leaves to other law the question of the effect on rights under the mortgage of delivery or non-delivery of the mortgage or of recording or non-recording of an assignment of the mortgagee’s interest. See §9-104(j). But under §3-304(5) recording of the assignment does not of itself prevent X from holding the note in due course.” Further, UCC §9-104 entitled: “Transactions Excluded from Article” provides in pertinent part: “This Article does not apply (j) except to the extent that provision is made for fixtures in Section 9- 313 or for a security interest in shares or other ownership interests evidenced by stock certificates or other instruments, and a leasehold evidenced by a proprietary lease or either of the foregoing from a corporation or partnership formed for the purpose of cooperative ownership of real property, to the creation or transfer of an interest in or lien on real estate, including a lease or rents thereunder.” (Emphasis Added). Therefore, Article 9 of the UCC applies to the validity and enforceability of debts secured by mortgage notes, but not to the enforcement of the applicable mortgage lien against the real property owner(s). Please see Bank of Tokyo Trust Company v. Urban Food Malls Ltd., 229 A.D.2d 14, 24, 650 N.Y.S.2d 654, 1996 N.Y. App. Div. LEXIS 12253, 31 U.C.C. Rep. Serv.2d (Callaghan) 1132 (1 st Dept., 1996). Accordingly, Aurora’s discussion as to the applicability of the provisions of the UCC in the Brief for Plaintiff-Respondent while interesting is largely inapplicable to this dispute. 6 POINT I AURORA DID NOT POSSESS A VALID AND ENFORCEABLE MORTGAGE AS OF THE COMMENCEMENT OF THE MORTGAGE FORECLOSURE ACTION Aurora did not possess a valid and enforceable mortgage as of the commencement of this mortgage foreclosure action. The assignment of the mortgage was: (a) delivered to Aurora approximately nine (9) months prior to the delivery of the purported mortgage note; and (b) recorded with the Westchester County Clerk approximately seven (7) months prior to the delivery of the purported mortgage note. As addressed on pages 12 through 15 of the Brief for the Defendants-Appellants: “As a mortgage is but an incident to the debt which it is intended to secure, the logical conclusion is that a transfer of the mortgage without the debt is a nullity, and no interest is acquired by it. The security cannot be separated from the debt and exist independently of it.” Merritt v. Bartholick, 36 N.Y. 44, 45, 1867 NY LEXIS 5 (1867). In fact, Aurora only addressed two (2) of the cases cited by Taylor in Point I of the Brief for Defendants-Appellants, namely Knox v. Countrywide Bank, 2014 U.S. Dist. LEXIS 32229 (E.D.N.Y. 2014) and Deutsche Bank National Trust Company v. Spanos, 102 A.D.3d 909. 961 N.Y.S.2d 200, 2013 N.Y. App. Div. LEXIS 682, 2013 NY Slip Op 451 (2 nd Dept., 2013) mot’n to appeal denied 21 N.Y.3d 1068, 997 N.E.2d 140, 974 N.Y.S.2d 315, 2013 N.Y. LEXIS 2505 (2013). And Aurora failed to address the holdings in both of these cases that an assignment of the 7 mortgage without the note is a “nullity”. As demonstrated in the Brief for Defendants-Appellants and above, Aurora caused the mortgage to travel on a divergent path from the mortgage note. (a) Aurora Never Disclosed that It Was Merely Acting as a Mortgage Loan Servicer In lieu thereof, Aurora sought to introduce an issue that was never raised previously, whether to the Supreme Court, Westchester County or to the Second Department, namely that “since April 1, 2008, Aurora has been the servicer of the loan.” Please see page 22 of the Brief for the Plaintiff-Respondent. First, Aurora never commenced an action to foreclose the subject mortgage in its capacity as a servicer. The caption of the summons and complaint was always: “Aurora Loan Services, LLC, Plaintiff(s) v. Monique Taylor a/k/a Monique Pujol Taylor, Leonard Taylor, Joseph Maltese, New Roc Parcel 1A, LLC, John Doe, Defendant(s). And, there was never any disclosure in the complaint that Aurora was merely serving in a servicing capacity for the purported owner and holder of the mortgage note. Please see TR-16 – TR-22, TR 394-395. Further, the assignment of the mortgage never disclosed that Aurora was the assignee of the assignment of the mortgage as a mortgage loan servicer; the assignment of the mortgage stated: “AURORA LOAN SERVICES LLC at 2617 COLLEGE PARK, SCOTTSBLUFF, NE 69361.” Please see TR-116. 8 Nor was there a reference that Aurora was serving as a servicing agent in the Order Pursuant to 11 U.S.C. §362(d) Modifying the Automatic Stay Imposed by 11 U.S.C. §362(a) issued by the United States Bankruptcy Court of the Southern District of New York dated October 15, 2009. Please see TR-23. Additionally, there was never a reference in the Affidavit in Support of Summary Judgment sworn to by Sara Holland on December 12, 2011 (the “Holland Affidavit”) that Aurora, whether in its principal capacity or as the servicer of the mortgage note, was in possession of the purported mortgage note prior to May 20, 2010. And, in fact, the Holland Affidavit never stated under oath, the identity of the purported principal/party which purportedly possessed and owned the original mortgage note prior to May 20, 2010. Assuming arguendo that the Holland Affidavit had identified the holder of the purported mortgage note prior to May 20, 2010, that part of the Holland Affidavit was “inadmissible hearsay”. Please see CPLR §3212(b). And an affidavit from an individual associated with the immediate prior purported holder of the original mortgage note was never introduced into evidence. A more extensive discussion of the evidence purportedly introduced by the Holland Affidavit will be addressed in Part III of this reply brief. Please see TR 91- 94. On pages 24 and 25 of the Brief for Plaintiff-Appellant, Aurora argued that a mortgage loan servicer has the lawful right to commence and prosecute a mortgage 9 foreclosure action, citing among other cases, CWCapital Asset Mgt LLC v. Charney-FPG 114 41 st Street, LLC, 84 A.D.3d 506, 923 N.Y.S.2d 453 (1 st Dept., 2011) and Fairbanks Capital Corp. v. Nagel, 289 A.D.2d 99, 735 N.Y.S.2d 13 (1 st Dept., 2001). However, Fairbanks Capital Corp. v. Nagel stated at 289 A.D.2d at 100: “Contrary to Nagel’s argument, FNB, which expressly maintained this action in its capacity as servicing agent for the Trustee, which the complaint identified as the mortgage holder, had standing to sue based on the Trustee’s delegation of authority over the subject mortgage.” CWCapital Asset Mgt LLC v. Charney-FPG 114 41 st Street, LLC stated at 84 A.D.3d at 507: “Although a plaintiff in a foreclosure action must generally establish ownership of the mortgage and mortgage note, and the plaintiff in this action does not hold the mortgage, it has standing to bring the foreclosure action and seek appointment of a receiver. The foreclosure complaint identified the trustee as the mortgage holder, the action was expressly maintained in plaintiff’s capacity as servicing agent, and, in the Pooling and Servicing Agreement, the trustee delegated to plaintiff authority to act with respect to the subject mortgage (see Fairbanks Capital Corp. v. Nagel, 289 AD2d 99, 735 NYS2d 13 [2001]).” (Citation Omitted). And CWCapital Asset Management, LLC v. Great Neck Towers, LLC, 99 A.D.3d 850, 953 N.Y.S.2d 89, 2012 N.Y. App. Div. LEXIS 6876, 2012 NY Slip Op 6911 (2 nd Dept., 2012), citing CWCapital Asset Mgt LLC v. Charney-FPG 114 41 st Street, LLC and Fairbanks Capital Corp. v. Nagel, stated at 99 A.D.3d at 851: 10 “Contrary to the defendants’ contention, CWCapital has standing to commence this foreclosure action because the complaint identified the Trust as the owner of the note and mortgage, the action was expressly maintained in CWCapital’s capacity as servicing agent, and in the PSA, Bank of America’s predecessor, as the Trustee for the Trust, delegated to CWCapital the authority to act with respect to the subject mortgage.” The current matter differs greatly from the holdings in Fairbanks Capital Corp. v. Nagel, CWCapital Asset Mgt LLC v. Charney-FPG 114 41 st Street, LLC and CWCapital Asset Management, LLC v. Great Neck Towers, LLC, as in those cases, while the servicing agent commenced and prosecuted the mortgage foreclosure action, the role of the servicing agent in the action plus the identity of the owner of the mortgage note, was expressly and clearly delineated in the caption of the complaint; in the current matter, as addressed above, the purported owner- principal of the mortgage note was never disclosed. This distinction makes those cases inapplicable to the current situation. Aurora commenced and prosecuted this mortgage foreclosure as the owner of the note based on the caption of summons and complaint and the complaint failing to ever address that Aurora was anything other than the principal and owner of the mortgage note. Therefore, at a bare minimum, Aurora lacked standing to commence and prosecute this mortgage foreclosure action. Accordingly, we are left with the situation where the assignment of the mortgage was: (a) delivered to Aurora approximately nine (9) months prior to the delivery of the purported mortgage note; and (b) recorded with the Westchester 11 County Clerk approximately seven (7) months prior to the delivery of the purported mortgage note. And as stated previously, “the transfer of the mortgage without the debt is a nullity, and no interest is acquired by it. The security cannot be separated from the debt and exist independently of it.” Therefore, the assignment of the mortgage from MERS, as nominee, to Aurora was void ab initio as Aurora did not possess the mortgage note as of the assignment and recordation of the mortgage assignment with the Westchester County Clerk. And since the assignment of the mortgage was delivered and recorded in the name of “Aurora”, no other party possessed a valid and enforceable mortgage interest in the subject real property. As stated several times in the Brief for Defendants- Appellants, in order to have standing to commence and prosecute a mortgage foreclosure action, the plaintiff must be the holder and owner of both: (a) the mortgage note or an assignment of the mortgage note; and (b) the mortgage as of the commencement of the action. Herein, while another party may hold and own the mortgage note, that party was not the owner and holder of the mortgage as of the commencement of the mortgage foreclosure action. Accordingly, for the reasons set forth in the Brief for the Defendants- Appellants and in this reply, the assignment of the mortgage was a nullity and this mortgage foreclosure action should have been dismissed ab initio. 12 POINT II MERS NEVER POSSESSED A VALID AND ENFORCEABLE MORTGAGE LIEN In a further attempt to mask the transparency of the rightful owner of the mortgage note and associated mortgage upon an assignment of the mortgage note, Aurora claimed that the initial separation of the note from the mortgage was irrelevant. Aurora claimed that under the laws of the State of New York when the original mortgage is delivered to and recorded in the name of the Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee, subsequent holders of the assignment of the mortgage note become the lawful and rightful owner of the mortgage even though there was a failure to record the mortgage assignment with the County Clerk and pay the recordation fee. And typically, the record mortgagee with the County Clerk remained MERS, as nominee. The identity of the current note holder and owner was and continued to be “anonymous”. And that Taylor had no right to question the identity of the current rightful holder of the mortgage note. Please see page 26 of the Brief for Plaintiff-Respondent. Taylor is not the only party that has questioned the validity of MERS mortgages (the mortgage note is given to the lender but the mortgage is delivered to MERS, as nominee, of that lender). This inconsistency was both questioned by the Honorable Justice Carmen Cipatrick and the Honorable Justice Judith S. Kaye as to the validity and enforceability of MERS mortgages in their concurrences in 13 MERSCORP, Inc. v. Romaine. Please see page 17 of the Brief for Defendants- Appellants. In fact, the Honorable Justice Judith S. Kaye was also concerned about, among other things: a. the “depletion of” the revenues for the County Clerk; and b. the inability of the mortgagor to learn the identity of his or her current note holder as MERS would only disclose the identity of the mortgage loan servicer, and not the actual holder of the mortgage note. Interestingly, Aurora never addressed either concern raised by the former Chief Judge Kaye. And, most, if not all, of the pertinent cases, require that the mortgagee demonstrate its standing to commence and prosecute a mortgage foreclosure action when the mortgagor raises the standing issue in the answer or dispositive motion pursuant to the provisions set forth in CPLR §3211. A mortgagee demonstrates its standing by demonstrating that it is the holder of both: (a) the original note or the original assignment of the mortgage note, and (b) the mortgage or the mortgage assignment. Emigrant Mortgage Company, Inc. v. Persad, 2014 N.Y. App. Div. LEXIS 3151 at *2, 2014 NY Slip Op 3229 (2 nd Dept., 2014), Homecomings Financial, LLC v. Guldi, 108 A.D.3d 506, 507-508, 969 N.Y.S.2d 470, 2013 N.Y. App. Div. LEXIS 4963, 2013 NY Slip Op 5048 (2 nd Dept., 2013). Herein, MERS never possessed the note to be given the right to assign the mortgage to Aurora. 14 On page 28 of the Brief for Plaintiff-Respondent, Aurora stated as follows: “The Taylors’ central argument in this appeal is rooted in their fundamentally incorrect assertion that both a valid assignment of mortgage and lawful possession of the note are required to confer standing under New York law. (Taylor Br. 11-12). To the contrary, and as aptly summarized by the court in Pietranico: One need not be ‘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.’ Pietranico, 928 N.Y.S.2d at 833 (citing Coakley, 41 A.D.3d 764, 838 N.Y.S.2d 622 (2d Dept 2007)). This conclusion follows from the fact that, as already discussed, the Note – and not the Mortgage – is the dispositive instrument that conveys standing to foreclose under New York law. It is further entirely consistent with the established legal principal that recordation of a mortgage and/or mortgage assignment is not a prerequisite to the validity of the underlying loan or the ability to enforce it (as the Taylors erroneously suggest), but rather is a voluntary mechanism designed to protect the mortgagee, i.e., not the borrower, by putting subsequent purchasers or lienholders on notice of lien priority. See, e.g., NY Real Property Law §291…” First, Bank of New York v. Silverberg, 86 A.D.3d 274, 926 N.Y.S.2d 532, 2011 N.Y. App. Div. LEXIS 4899, 2011 NY Slip Op 5002 (2 nd Dept., 2011) distinguished Coakley, 41 A.D.3d 764, 838 N.Y.S.2d 622 (2d Dept 2007) by stating that in Coakley, MERS possessed both the note and mortgage (please see pages 20-21 of the Brief for the Defendants-Appellants), unlike the current situation where MERS was never the holder or assignee of the mortgage note. According to Aurora, the note is the “dispositive” document. Therefore, according to Aurora, the mortgage document has little, if no, relevance, even to 15 subsequent mortgagees and/or judicial lien holders. We know that this argument is fallacious. In fact, if Aurora’s argument was taken to its logical conclusion: (a) a subsequent or potentially subsequent recorded lien holder can never contact the owner of the mortgage seeking information as to the lien or status of payment except through MERS and MERS would only provide the identity of the mortgage servicer; (b) the maker of the note can not lawfully contest the outstanding balance of the mortgage indebtedness due to his, her or its failure to name the lawful owner of the note in the caption of its complaint; (c) the maker of the note and/or a junior lien holder or the maker can never commence a lawful action to expunge and vacate the mortgage lien as they have failed to name the lawful and proper owner of the mortgage lien in the caption of their complaint; and (d) a holder of a note will always be secured by real property even if the note was intended to merely evidence an unsecured debt and/or a mortgage was never recorded to secure the debt. a. MERS Was Not the Agent of the First National Bank of Arizona Herein, there was a separation or divergence of the mortgage note from the MERS mortgage as MERS never possessed the original mortgage note or an assignment of the original mortgage note. As stated many times previously, the original mortgage note was given to the First National Bank of Arizona, who 16 purportedly assigned the mortgage note several times, but the recorded mortgagee remained MERS, as nominee, until its premature assignment to Aurora. Aurora based its argument on the validity and enforceability of the MERS mortgage that MERS was a mere agent of the actual lender, namely the First National Bank of Arizona, citing Pietranico, 928 N.Y.S.2d at 833. However, as set forth on page 22 of the Brief for the Defendants-Appellants, Pietranico was affirmed by the Second Department solely on the basis that the defendant- mortgagor defaulted in answering the mortgage foreclosure complaint; the Second Department held that if the standing issue was not raised as an affirmative defense in the answer or in a motion to dismiss, the standing issue was waived pursuant to the provisions set forth in CPLR §3211(a). Additionally, as recognized on page 22 of the Brief for the Defendants- Appellants, there are cases that hold that a MERS mortgage is invalid and unenforceable, while there are other cases which hold that a MERS mortgage is valid and the mortgage is enforceable notwithstanding the divergence between the note and mortgage. Interestingly, notwithstanding that Aurora cited Bank of New York v. Silverberg, 86 A.D.3d 274, 926 N.Y.S.2d 532, 2011 N.Y. App. Div. LEXIS 4899, 2011 NY Slip Op 5002 (2 nd Dept., 2011) three (3) times, Aurora never addressed the primary holding in Bank of New York v. Silverberg that if the MERS never possessed the original mortgage note, the MERS, as nominee, 17 mortgage was void ab initio. Aurora further cited In re Escobar, 457 B.R. 229 (Bkrtcy. E.D.N.Y. 2011), but failed to address the holding in In re Agard, 444 B.R. 231 (Bkrtcy. E.D.N.Y. 2011) rev’d for procedural reasons, 2012 U.S. Dist. LEXIS 43286 (E.D.N.Y. 2012), a holding by the Honorable Robert E. Grossman, a fellow bankruptcy judge from the United States Bankruptcy Court of the Eastern District of New York in Central Islip. In sum, out of the three (3) bankruptcy judges sitting in Central Islip, there is a split as to the enforceability of MERS mortgages in motions for relief from the stay proceeding pursuant to the provisions set forth in 11 U.S.C. §362(d) and in valuations of mortgage liens on residential real properties for purposes of 11 U.S.C. §506. Please note that the third bankruptcy judge, the Honorable Louis A. Scarcella only recently took the bench and the undersigned counsel is uncertain whether Judge Scarcella has yet to rule on the MERS issue. Please note that the validity of security interests in bankruptcy cases are governed by non-bankruptcy law, such as the laws of the state where the subject real property is situated. Butner v. United States, 440 U.S. 48, 99 S.Ct. 914, 59 L.Ed.2d 136, 1979 U.S. LEXIS 58 (1979) stated at 440 U.S. at 55: “Property interests are created and defined by state law. Unless some federal interest requires a different result, there is no reason why such interests should be analyzed differently simply because an interested party is involved in a bankruptcy proceeding. Uniform treatment of property interests by both state and federal courts within a State serves to reduce uncertainty, to discourage forum shopping, and to prevent a party from receiving ‘a windfall merely by reason of the happenstance of bankruptcy.’ Lewis v. Manufacturers National Bank, 364 U.S. 603, 609. The justifications for 18 application of state law are not limited to ownership interests; they apply with equal force to security interests, including the interest of a mortgagee in rents earned by mortgaged property.” Black’s Law Dictionary [4 th ed. 1951] defines the word “nominee” as: “One designated to act for another as his representative in a rather limited sense. It is used sometimes to signify an agent or trustee. It has no connotation, however, other than that of acting for another, in representation of another, or as the grantee of another.” According to the Supreme Court of Kansas in Landmark National Bank, 289 Kan. at 539: “The legal status of a nominee, then, depends on the context of the relationship of the nominee to its principal. Various courts have interpreted the relationship of MERS and the lender as an agency relationship. See In re Sheridan, 2009 Bankr. LEXIS 552, 2009 WL 631355, at *4 (Bankr. D. Idaho, March 12, 2009) (MERS ‘acts not on its own account. Its capacity is representative.’); Mortgage Elec. Registrations Systems, Inc. v. Southwest, 2009 Ark. 152, *4, 301 S.W.3d 1, 2009 WL 723182 (March 19, 2009) (‘MERS, by its terms of the deed of trust, and its own stated purposes, was the lender’s agent’); LaSalle Nat. Bank v. Lamy, 12 Misc.3d 1191[A], 824 N.Y.S.2d 769, 2006 NY Slip Op 51534[U] at *2 [Sup Ct., Suffolk County 2006])… (‘A nominee of the owner of a note and mortgage may not effectively assign the note and mortgage for want of an ownership interest in said note and mortgage by the nominee.’).” LaSalle Bank, N.A. v. Bouloute, 28 Misc.3d 1227[A], 958 N.Y.S.2d 61, 2010 N.Y. Misc. LEXIS 4075 at ***3-***4, 2010 NY Slip Op 51513(U) (Sup.Ct., Kings Cty., 2010). LaSalle Bank, N.A. v. Bouloute further stated at 2010 N.Y. Misc. LEXIS 4075 at ***6: “Recently, in Bank of New York v. Alderazi, 28 Misc 3d at 379-380, my learned colleague, Kings County Supreme Court Justice Wayne Saitta explained that: 19 A party who claims to be the agent of another bears the burden of proving the agency relationship by a preponderance of the evidence and ‘[t]he declarations of an alleged agent may not be shown for the purpose of proving the fact of agency.’ ‘[T]he acts of a person assuming to be the representative of another are not competent to prove the agency in the absence of evidence tending to show the principal’s knowledge of such acts or assent to them.’ Plaintiff has submitted no evidence to demonstrate that the original lender, the mortgagee America’s Wholesale Lender, authorized MERS to assign the secured debt.” (Citations Omitted). Herein, as stated previously, the assignment of the mortgage was from MERS, as nominee for the First National Bank of Arizona, to Aurora. There has never been admissible evidence presented that demonstrated that the First National Bank of Arizona or anyone other than MERS, ever authorized or permitted MERS to assign the mortgage from MERS, as nominee of the First National Bank of Arizona, to Aurora sworn to on August 13, 2009. In fact, the First National Bank of Arizona was defunct prior to August 13, 2009; accordingly, it would have been difficult to get their permission and authorization for the subject assignment of the mortgage. The fact that MERS was purportedly a membership organization is irrelevant; there still had to be a document that gave MERS the authority and permission from the First National Bank of Arizona to assign the mortgage to Aurora when said assignment of mortgage was made, especially as the assignment was not from a later purported holder of the purported note. Where is that authorization and permission document? Said authorization 20 and permission is certainly not contained in the assignment of the mortgage (please see TR-116) or in the Holland Affidavit. And assuming arguendo that there was said authorization, a non-holder of the original mortgage note or the assignment of the mortgage note would have no authority to proffer said authorization, especially following the maxim: the mortgage follows the note. Accordingly, the assignment of the mortgage was also defective as there is no admissible proof as to the authorization and approval of the assignment of the mortgage by MERS, as nominee for the First National Bank of Arizona, to Aurora, when made. And as will be discussed in the next section, none of the subsequent holders or assignees of the purported original note paid the required recording fee pursuant to the provisions set forth in RPL §291 to have a valid and enforceable mortgage assignment. b. The Aurora Reference to RPL §291 Is Irrelevant Aurora further cited RPL §291 in support of its argument that MERS mortgages are permissible and authorized. RPL §291 entitled “Recording of conveyances” provides: “A conveyance of real property, within the state, on being duly acknowledged by the person executing the same, or proved as required by this chapter, and such acknowledgment or proof duly certified when required by this chapter, may be recorded in the office of the clerk of the county where such real property is situated, and such county clerk shall, upon the request of any party, on tender of the lawful fees therefor, record the same in his said office. Every such conveyance not so recorded is void as against any person who subsequently purchases or acquires by 21 exchange or contracts to purchase or acquire by exchange, the same real property or any portion thereof, or acquires by assignment the rent to accrue therefrom as provided in section two hundred ninety-four-a of the real property law, in good faith and for a valuable consideration, from the same vendor or assignor, his distributees or devisees, and whose conveyance, contract or assignment is first duly recorded, and is void as against the lien upon the same real property or any portion thereof arising from payments made upon the execution of or pursuant to the terms of a contract with the same vendor, his distributees or devisees, if such contract is made in good faith and is first duly recorded. Notwithstanding the foregoing, any increase in the principal balance of a mortgage lien by virtue of the addition thereto of unpaid interest in accordance with the terms of the mortgage shall retain the priority of the original mortgage lien as so increased provided that any such mortgage instrument sets forth its terms of repayment.” (Emphasis Added). RPL §291 is a “race-notice” statute, which provides that the first lien holder to record its lien with the county clerk has priority over all subsequent recorded lien holders. For example, Carrion v. 162 Pulaski, LLC, 117 A.D.3d 767, 986 N.Y.S.2d 164, 2014 N.Y. App. Div. LEXIS 3412, 2014 NY Slip Op 3470 (2 nd Dept., 2014) stated at 117 A.D.3d at 768-769: “Pursuant to “New York’s Recording Act (Real Property Law §291), a mortgage loses its priority to a subsequent mortgage where the subsequent mortgagee is a good-faith lender for value, and records its mortgage first without actual or constructive knowledge of the prior mortgage’ (Washington Mut. Bank, FA v Peak Health Club, Inc., 48 Ad3d 793, 797, 853 N.Y.S.2d 112). Further, the plaintiff’s purchase money mortgage ‘is as much subject to the Recording Act as any other’ (Ebling Brewing Co. v Gennaro, 189 App Div 782, 786, 179 N.Y.S. 384; see Merritt v Dansmith Corp., 240 App Div 338, 339, 270 N.Y.S. 675).” Please see also Goldstein v. Gold, 106 A.D.2d 100, 101-102, 483 N.Y.S.2d 375, 1984 N.Y. App. Div. LEXIS 21305 (2 nd Dept., 1984) aff’d 66 N.Y.2d 624, 485 22 N.E.2d 239, 495 N.Y.S.2d 32, 1985 N.Y. LEXIS 17152 (1985), Merritt v. Dansmith Corporation, 240 A.D. 338, 339-340, 270 N.Y.S. 675, 1934 N.Y. App. Div. LEXIS 10647 (3 rd Dept., 1934). Accordingly, RPL §291 merely applies to the priority of liens and not to whether a mortgagee has a validly perfected mortgage lien. The purported holder of a void mortgage (i.e., the recorded mortgagee did not possess the mortgage note when recording the mortgage) seeking to foreclose the purported mortgage lien against the subject real property is not given any special rights or powers pursuant to the provisions set forth in RPL §291. Further, the subsequent assignees of the purported mortgage note never paid the applicable recording fee for the continuing validity of the mortgage lien in violation of the provisions of RPL §291. Additionally, the summons and complaint belied the endeavor to foreclose as a mortgage servicer given that the actual owner and holder of the purported mortgage note was not even referenced or identified as demonstrated above. And the original summons and complaint named among other parties, as party defendants: “Joseph Maltese”, “New Roc Parcel 1A, LLC” and “John Doe (said name being fictitious, it being the intention of Plaintiff to designate any and all occupants of premises being foreclosed herein, and any parties, corporations or entities, if any, having or claiming an interest or lien upon the mortgaged 23 premises)”, which Aurora had no right to foreclose their security or possessory interests as it never possessed an enforceable mortgage lien. In conclusion, a MERS, as nominee, mortgage is void ab initio and can not be given any force or effect in the State of New York unless MERS, as nominee, can demonstrate that it had possessed the original mortgage note as of the date of its receipt and, thereafter, recordation of the mortgage with the County Clerk. And even if MERS, had a valid and enforceable mortgage lien, the subsequent assignees of the mortgage note did not a valid and enforceable mortgage lien as: (a) they never paid the required recordation fees to the County Clerk; and (b) they failed to demonstrate by admissible evidence the fair consideration that they paid for the assignment of the purported mortgage note. 24 POINT III An Affidavit from an In-House Official Can Not Substitute for the Production and Inspection of the Original Mortgage Note and If So Permitted, the Information That the Affidavit Must Contain and/or the Documentary Evidence Attached to the Affidavit to Demonstrate the Purported Date of the Receipt of the Mortgage Note Pursuant to the Best Evidence Rule, the original mortgage note must be produced for examination whenever there is any doubt as to its existence or its authenticity. Schozer v. William Penn Life Insurance Company of New York, 84 N.Y.2d 639, 643-644, 644 N.E.2d 1353, 620 N.Y.S.2d 797, 1994 N.Y. LEXIS 4118 (1994), Kliamovich v. Kliamovich, 85 A.D.3d 867, 869, 925 N.Y.S.2d 591, 2011 N.Y. App. Div. LEXIS 5117, 2011 NY Slip Op 5233 (2 nd Dept., 2011). And Posson v. Przestrzelski, 111 A.D.3d 1235, 976 N.Y.S.2d 298, 2013 N.Y. App. Div. LEXIS 7849, 2013 NY Slip Op 7919 (3 rd Dept., 2013), citing Schozer v. William Penn Life Insurance Company of New York, stated at 111 A.D.3d at 1236: “Although the best evidence rule ‘requires the production of an original writing where its contents are in dispute and sought to be proven’, secondary evidence of the contents of an unproduced original document may be admitted where the court finds a sufficient explanation for the absence of the original, that the proponent ‘has not procured its loss or destruction in bad faith,’ and that the secondary evidence accurately reflects the original.” (Citations Omitted). Herein, there has been no allegation that the purported original note was lost, stolen or otherwise destroyed. Accordingly, there should be no excuse for the actual production of the purported original note to reflect that Aurora was actually in possession of the purported original note, and not in 25 possession of a mere copy thereof, as of the commencement of the mortgage foreclosure action. As stated in the Brief for the Defendants-Appellants, the production of the original mortgage note is extremely important for at least two (2) specific reasons; they are as follows: a. the robo-signing of mortgage documents; and b. the mortgage note is a negotiable instrument governed by the provisions of the UCC, whereby the note can be enforceable against the maker even if the note was lost, stolen or otherwise unavailable, and the maker’s personal defenses are unavailing. Notwithstanding the above, Aurora never produced the purported original mortgage note for inspection. In lieu thereof, they proffered the Holland Affidavit with a copy of the purported original mortgage note, in support of their opposition for the Taylor motion for summary judgment and the Aurora cross-motion for summary judgment for the issuance of an order of reference. CPLR §3212(b) provides in pertinent part: “The affidavit shall be by a person having knowledge of the facts; it shall recite all the material facts; and it shall show that there is no defense to the cause of action or that the cause of action or defense has no merit.” The Holland Affidavit conclusively stated in pertinent part: “That the original Note has been in the custody of Plaintiff Aurora Loan Services, LLC and in its present condition since May 20, 2010.” The Holland Affidavit never 26 provided any information as to the examination or review that she undertook to determine that the document she may have examined was the purported original Note, or even the date when and the location whereat she physically examined the purported document. The Holland Affidavit never attached any of the Aurora and/or the purported “owner” of the original Note business records, whether by Iportals or other corporate records, to establish conclusively the custody of the purported original Note as of May 20, 2010. Further, there has never been an affidavit submitted into evidence that MERS, as the nominee of the First National Bank of Arizona, a defunct financial institution, had the authority and the permission to assign the mortgage to Aurora. In Garcia v. Biro Manufacturing Company, Inc., 63 N.Y.2d 751, 469 N.E.2d 834, 480 N.Y.S.2d 316, 1984 N.Y. LEXIS 4553 (1984), this Honorable Court refused to grant summary judgment to a corporate defendant dismissing the action. The Court stated: “Defendant’s contention that the machine had a safety guard when manufactured which was thereafter removed rests on the affidavit of its president, which states the model number and serial number of the machine on the basis of advice of defendant’s attorneys, without stating the basis of the attorneys’ information. Defendant has, therefore, failed to meet its burden of proof of establishing its defense ‘sufficiently to warrant the court as a matter of law in directing judgment’ in its favor (CPLR 3212, subd [b]).” 27 Dempsey v. Intercontinental Hotel Corporation, 126 A.D.2d 477, 511 N.Y.S.2d 10, 1987 N.Y. App. Div. LEXIS 41621 (1 st Dept., 1987) stated at 126 A.D.2d at 479: “’A motion for summary judgment shall be supported by affidavit *** by a person having knowledge of the facts’. (CPLR 3212[b]). The assistant secretary of Otis International, in his affidavit claimed to ‘have caused a search to be made’ of relevant records which records revealed no basis for liability of Otis International. He failed to produce the records or identify the employees who completed the search. To support summary judgment, affidavits must cite material facts from affiants having knowledge thereof. Where an officer’s knowledge has been obtained either from unnamed and unsworn employees or unidentified and unproduced work records, the affidavit lacks any probative value and fails to fulfill such requirement. (Republic Natl. Bank v. Luis Winston, Inc., 107 AD2d 581).” Flick Lumber Company, Inc. v. Breton Industries, Inc., 223 A.D.2d 779, 636 N.Y.S.2d 169, 1996 N.Y. App. Div. LEXIS 22, 31 U.C.C. Rep. Serv.2d (Callaghan) 131 (3 rd Dept., 1996) stated at 223 A.D.2d at 780: “Although a corporate officer’s affidavit will not be deemed probative if it appears that the officer’s knowledge was obtained from unnamed and unsworn employees or unidentified and unproduced work records. Lewis alleged personal knowledge of the facts and circumstances and made numerous, detailed factual allegations pertaining to the counterclaim. In addition, the claims set forth in his affidavit are supported by documentary evidence which was attached to the affidavit; for example, a letter from one of the plaintiff’s employees acknowledging the problems Breton was experiencing with the boards. In view of these circumstances, and as Lewis’ affidavit sets forth a reasonably specific recitation of the claimed defects in the boards and the remedial measures Breton was required to undertake, we find that it was sufficient to require a determination by Supreme Court as to whether said affidavit raised a triable issue of fact, a task we will undertake since we are vested with the same power and discretion as Supreme Court.” 28 (Citations Omitted). Similarly, Barrallier v. City of New York, 12 A.D.3d 168, 784 N.Y.S.2d 55, 2004 N.Y. App. Div. LEXIS 13038 (1 st Dept., 2004) stated at 12 A.D.3d at 169: “Bovis did not set forth a prima facie showing of entitlement to summary judgment because the supporting affidavit of its executive vice president did not indicate the sources (e.g., documents he may have searched or reviewed, or persons he consulted) of his familiarity with the construction project at issue, or the company’s purported lack of involvement with same. Furthermore, the affidavit was insufficient because the officer claimed that Bovis did not have a project at the accident location on July 4, 2002, when, in fact, plaintiff asserted in her complaint that the accident took place on July 24 of that year.” (Citations Omitted). And just recently, Wells Fargo Bank, N.A. v. Eisler, 118 A.D.3d 982, 988 N.Y.S.2d 682, 2014 N.Y. App. Div. LEXIS 4792, 2014 NY Slip Op 4753 (2 nd Dept., 2014) stated at 2014 N.Y. App. Div. LEXIS 4792 at *2-*3: “In support of their cross motion, the Eisler defendants relied upon, inter alia, the affidavit of one of the plaintiff’s employees. The unsubstantiated and conclusory statements in this affidavit, which indicated that the required notice of default was sent in accordance with the terms of the mortgage, combined with the copy of the notice of default, failed to show that the required notice was mailed by first class mail or actually delivered to the notice address if sent by other means, as required by the mortgage agreement.” (Citations Omitted). Therefore, the Best Evidence Rule must come into effect as the Holland Affidavit has not demonstrated by admissible evidence that the purported original note was, in fact, the original note that Monique delivered and granted to the 29 former First National Bank of Arizona. Nor was there documentary evidence to substantiate the date of Aurora’s receipt of the original mortgage note. And as the original mortgage note is a negotiable instrument subject to enforcement by a thief or a finder of the document, an extremely careful review of all of the pertinent documents is required before summary judgment may be granted in favor of the mortgagee to permit the mortgagee to proceed with a mortgage foreclosure action. 30 POINT IV Aurora Is Not Permitted or Allowed to Re-Litigate the Issue as to its Failure to Provide Proper Notice of the Referee’s Computation Hearing The Second Department unanimously determined that the issuance of the judgment of foreclosure and sale must be vacated due to Aurora’s failure to provide proper notice of the referee’s computation hearing and the failure by the Supreme Court, Westchester County, to consider the Taylor objections to the referee’s computation. Specifically, the Order of the Second Department dated February 5, 2014 stated in pertinent part: “The Supreme Court erred, however, in confirming the referee’s report. The referee erred in computing the amount due to the plaintiff without holding a hearing on notice to the appellants. The plaintiff’s contention, in effect, that the appellant waived their right to a hearing is unavailing. The plaintiff served notice, by regular mail, on December 31, 2012, of a hearing to be held on January 9, 2013, before the referee. The notice advised that any objection to the plaintiff’s ‘affidavit of amount due’ had to be communicated to the plaintiff or the referee by January 2, 2013. Since January 1, 2013, was a holiday, that notice could not have been received by the appellants or their counsel prior to January 2, 2013, the date on which their objections were due. On January 2, 2013, having received no objections, the referee issued his report, without a hearing, adopting the computation in the plaintiff’s ‘affidavit of amount due.’ Under these circumstances, the appellants did not intentionally relinguish a known right so as to constitute a waiver. Additionally, it cannot be said that the appellants were not prejudiced by the error. Although the appellants timely opposed the plaintiff’s motion to confirm the referee’s report, the Supreme Court inexplicably indicated in the judgment that the plaintiff’s motion was unopposed. Accordingly, this is not a case in which the Supreme Court, as the ultimate arbiter of the dispute with the power to reject the referee’s report and make new findings (see CPLR 4403), considered the appellant’s evidence and arguments so that it could be said that there was no prejudice to them. 31 Accordingly, we remit the matter to the Supreme Court, Westchester County, for a hearing and a new report computing the amount due to the plaintiff, followed by further proceedings in accordance with CPLR 4403 and the entry of an appropriate amended judgment thereafter.” (Citations Omitted). As of the date of the drafting of this reply brief, Aurora has not sought to have a referee’s computation hearing held notwithstanding that Aurora knew or should have known of their computation problem of the amount due and owing since on or before February 5, 2014. Instead, Aurora seeks to raise this issue on pages 46 through 48 of the Brief for Plaintiff-Respondent. However, Aurora never: (a) filed a notice of appeal or cross-notice of appeal; or (b) sought permission from the Second Department to appeal this aspect of the Order of the Second Department dated February 5, 2014, to raise this issue for appellate review by this Honorable Court. Specifically, CPLR §5513(c) provides: “Additional time where adverse party takes appeal or moves for permission to appeal. A party upon whom the adverse party has served a notice of appeal or motion papers on a motion for permission to appeal may take an appeal or make a motion for permission to appeal within ten days after such service or within the time limited by subdivision (a) or (b) of this section, whichever is longer, if such appeal or motion is otherwise available to such party.” CPLR §5513(a) provides a thirty (30) day window after service of a copy of the judgment or order with a notice of entry, to file the notice; and CPLR §5513(b) also provides a thirty (30) day window to file a motion for leave to appeal to the 32 Second Department. Further, to appeal an issue to this Honorable Court based on an order granting permission to appeal by the appellate division, CPLR §5513(1) provides: “An appeal shall be taken by serving on the adverse party a notice of appeal and filing it in the office where the judgment or order of the court of original instance is entered except that where an order granting permission is made, the appeal is taken when such order is entered. A notice shall designate the party taking the appeal, the judgment or order or specific part of the judgment or order appealed from and the court to which the appeal is taken.” In interpreting these provisions, this Honorable Court stated in Hecht v. City of New York, 60 N.Y.2d 57, 454 N.E.2d 527, 467 N.Y.S.2d 187, 1983 N.Y. LEXIS 3306 (1983) at 60 N.Y.2d at 61-62: “The power of an appellate court to review a judgment is subject to an appeal being timely taken. And an appellate court’s scope of review with respect to an appellant, once an appeal has been timely taken, is generally limited to those parts of the judgment that have been appealed and that aggrieve the appealing party. The corollary to this rule is that an appellate court’s reversal or modification of a judgment as to an appealing party will not inure to the benefit of a nonappealing coparty unless the judgment was rendered against parties having a united and inseparable interest in the judgment’s subject matter, which itself permits no inconsistent application among the parties.” (Citations Omitted). Please see also In the Matter of UU v. VV, 119 A.D.3d 1117, 990 N.Y.S.2d 655, 2014 N.Y. App. Div. LEXIS 5151, 2014 NY Slip Op 5229 at FN 4 (3 rd Dept., 2014), Banushi v. Law Office of Scott W. Epstein, 110 A.D.3d 558, 559, 973 N.Y.S.2d 198, 2013 N.Y. App. Div. LEXIS 6825, 2013 NY Slip Op 6930 (1 st Dept., 2013), Cox v. NAP Construction Company, Inc., 40 A.D.3d 459, 33 462, 837 N.Y.S.2d 612, 2007 N.Y. App. Div. LEXIS 6349, 2007 NY Slip Op 4402 (1 st Dept., 2007). Herein, the deadline to file a notice of appeal/cross-appeal and/or motion for leave to appeal to this Honorable Court expired and Aurora never filed a notice of appeal or sought leave of the Second Department for permission or authorization to appeal. Additionally, Aurora never served the appellate record on the undersigned counsel, and presumably, has not filed the record with the Court of Appeals, notwithstanding that this issue was addressed in a second, independent appeal by Taylor to the Second Department, namely Docket No. 2013-5156. Accordingly, with all due respect to this Honorable Court, this Honorable Court lacks jurisdiction to hear and determine the issue raised on pages 46 through 48 of the Brief for Plaintiff-Respondent. Therefore, that part of the Order of the Second Department dated February 5, 2014 is now final and non-appealable. Assuming arguendo that this Honorable Court desires to hear and determine this issue, the findings of fact by the Second Department were correct as to: (a) the date of the service of the deadline notice to file objections to the proposed amount of the outstanding indebtedness as calculated by Aurora for the need to hold a referee’s computation hearing; and (b) the failure of the Supreme Court to reference the Taylor objections to the calculation of the amount due and owing in the issuance of the judgment of foreclosure and sale. 34 It should be further noted that the Taylor answer to the foreclosure complaint specifically requested that a referee’s computation hearing be conducted in an affirmative defense. And notwithstanding the specific request made in the answer, the notice dated December 31, 2012, which was mailed by regular mail on December 31, 2012 according to the affidavit of service, stated that a referee’s computation hearing will only be held if an objection to the proposed Aurora calculation of the amount of the indebtedness outstanding was received on or before January 2, 2013. When the objection was not received on or before January 2, 2012, the referee submitted his referee’s report to counsel for Aurora and the Taylor objections to the referee’s computation was not considered. Thereafter, Taylor filed an affirmation in opposition dated March 28, 2013 to the motion seeking the issuance of a judgment of foreclosure and sale (please see TR 75-83 of the Second Department Docket No. 2013-5156). Notwithstanding, the Judgment of Foreclosure and Sale dated April 29, 2013 issued by the Supreme Court, Westchester County, never even referenced said affirmation in opposition. Please see TR 6-14 of the Second Department Docket No. 2013-5156. 35 CONCLUSION For the reasons stated in the Brief for Defendants-Appellants and in this reply brief, Taylor respectfully requests this Honorable Court to declare: a. the assignment of the mortgage from MERS, as nominee of the First National Bank of Arizona, Inc. to Aurora was void ab initio; b. a MERS, as nominee, mortgage is unenforceable and invalid as of its recordation with the County Clerk, or alternatively: (i) that a mortgage servicer must clearly and specifically identify the actual holder and owner of the mortgage note in the caption of a mortgage foreclosure summons and complaint; and (ii) the subsequent assignees of the mortgage note must pay the applicable recording fees and demonstrate by admissible evidence the consideration that it gave in consideration for the assignment of the mortgage note; c. if the mortgage lien is not void, that the original mortgage note must be produced for inspection, or, in the alternative, a complete recital of the examination undertaken to insure that the purported document is, in fact, the original mortgage note, plus, the Iportals or other pertinent business records, be annexed to the affidavit from the mortgagee to reflect conclusively the date of the receipt of the original mortgage note or an assignment of the purported original mortgage 36 note in support of its motion for summary judgment to permit and allow the continuation of a mortgage foreclosure action; d. its refusal to consider for appellate review, the vacatur of the reversal of the issuance of the judgment of foreclosure pertaining to the calculation of the amount of debt due and owing as set forth in the Order of the Second Department dated February 5, 2014; and e. for such other and further relief as is just and proper. Dated: Hauppauge, New York October 14, 2014 ZINKER & HERZBERG, LLP Attorneys for Monique Pujol Taylor and Leonard Taylor By:__/s/ Jeffrey Herzberg______ Jeffrey Herzberg 300 Rabro Drive, Suite 114 Hauppauge, New York 11788 (631) 265-2133