DEUTSCHE BANK NATIONAL TRUST COMPANY v. GORDON (2020)

DECISION & ORDER

In an action to foreclose a mortgage, the defendants Maris Gordon and Peter Gordon appeal from an order of the Supreme Court, Nassau County (Robert A. Bruno, J.), entered February 22, 2018. The order, insofar as appealed from, after a hearing, granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against those defendants and for an order of reference.

ORDERED that the order is affirmed insofar as appealed from, with costs.

In 2014, the plaintiff commenced this action against the defendants Maris Gordon and Peter Gordon (hereinafter together the defendants), among others, to foreclose a mortgage on certain real property located in Mineola. The defendants interposed an answer in which they raised affirmative defenses, including lack of standing. The plaintiff moved twice for summary judgment on the complaint insofar as asserted against the defendants and for an order of reference. After denying the two motions for failure to establish, prima facie, that the plaintiff had standing, the Supreme Court ordered a framed issue evidentiary hearing to determine the issue. After hearing the testimony and considering the evidence submitted at the hearing, the court found, in an oral determination from the bench, that the plaintiff was the holder of the note “prior to and at the time the foreclosure action was commenced.” Thereafter, the plaintiff moved, for a third time, inter alia, for summary judgment on the complaint insofar as asserted against the defendants and for an order of reference. The court granted the motion. The defendants appeal.

A plaintiff in a mortgage foreclosure action has standing where it is the holder or assignee of the underlying note at the time the action is commenced (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355, 361, 12 N.Y.S.3d 612, 34 N.E.3d 363; U.S. Bank N.A. v. Handler, 140 A.D.3d 948, 949, 34 N.Y.S.3d 463). Either a written assignment of the underlying note or the physical delivery of the note, properly endorsed, is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361–362, 12 N.Y.S.3d 612, 34 N.E.3d 363; U.S. Bank Trust, N.A. v. O'Driscoll, 168 A.D.3d 783, 784–785, 90 N.Y.S.3d 639; Deutsche Bank Natl. Trust Co. v. Iarrobino, 159 A.D.3d 670, 672, 69 N.Y.S.3d 503). Testimony from the loan's servicer may be used to establish standing (see U.S. Bank Trust, N.A. v. O'Driscoll, 168 A.D.3d at 785, 90 N.Y.S.3d 639; U.S. Bank N.A. v. Godwin, 137 A.D.3d 1260, 1261–1262, 28 N.Y.S.3d 450).

Contrary to the defendants' contentions, the plaintiff established that it had standing to commence this action by virtue of its actual possession of the subject note properly endorsed at the time the action was commenced (see Aurora Loan Servs., LLC v. Taylor, 114 AD3d 627, 628, 980 N.Y.S.2d 475, affd 25 N.Y.3d 355, 12 N.Y.S.3d 612, 34 N.E.3d 363; see also Citibank, N.A. v. Cabrera, 130 A.D.3d 861, 14 N.Y.S.3d 420).

Accordingly, we agree with the Supreme Court's determination granting those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants and for an order of reference.

RIVERA, J.P., MALTESE, BRATHWAITE NELSON and IANNACCI, JJ., concur.