Bank of New York Mellon, etc., respondent, v. Monica Prestia, et al., appellants, et al., defendants. (2026)

Argued—January 15, 2026

DECISION & ORDER

G/

In an action to foreclose a mortgage, the defendants Monica Prestia and John Prestia appeal from a judgment of foreclosure and sale of the Supreme Court, Suffolk County (Thomas F. Whelan, J.), entered February 14, 2018.  The judgment of foreclosure and sale, upon (1) an order of the same court dated May 26, 2017, inter alia, granting those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants Monica Prestia and John Prestia, to dismiss those defendants' affirmative defenses, and for an order of reference and denying those defendants' cross-motion, among other things, in effect, for summary judgment dismissing the complaint insofar as asserted against them, (2) an order of the same court dated September 20, 2017, denying those defendants' motion for leave to renew their opposition to those branches of the plaintiff's prior motion which were for summary judgment on the complaint insofar as asserted against them, to dismiss their affirmative defenses, and for an order of reference and their prior cross-motion, inter alia, in effect, for summary judgment dismissing the complaint insofar as asserted against them, and (3) an order of the same court dated February 2, 2018, granting those branches of the plaintiff's motion which were to confirm a referee's report and for a judgment of foreclosure and sale and denying those defendants' cross-motion pursuant to CPLR 4403 to reject the referee's report and to direct a hearing pursuant to CPLR 4313, among other things, confirmed the referee's report and directed the sale of the subject property.

ORDERED that the judgment of foreclosure and sale is reversed, on the law, with costs, those branches of the plaintiff's motion which were to confirm the referee's report and for a judgment of foreclosure and sale are denied, that branch of the cross-motion of the defendants Monica Prestia and John Prestia which was pursuant to CPLR 4403 to reject the referee's report is granted, the referee's report is rejected, the order dated February 2, 2018, is modified accordingly, and the matter is remitted to the Supreme Court, Suffolk County, for further proceedings in accordance herewith.

In November 2012, the plaintiff commenced this action against the defendants Monica Prestia and John Prestia (hereinafter together the defendants), among others, to foreclose a mortgage on certain real property located in Nissequogue.  The defendants interposed an answer in which they asserted various affirmative defenses, including lack of standing.

In November 2014, the plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendants, to dismiss the defendants' affirmative defenses, and for an order of reference.  The defendants cross-moved, among other things, in effect, for summary judgment dismissing the complaint insofar as asserted against them.

In an order dated April 17, 2017, the Supreme Court granted the plaintiff's motion and denied the defendants' cross-motion.  In an order dated May 26, 2017, the court granted the same relief to the plaintiff, denied the same relief to the defendants, and referred the matter to a referee to compute the amount due to the plaintiff.

In August 2017, the defendants moved for leave to renew their opposition to those branches of the plaintiff's prior motion which were for summary judgment on the complaint insofar as asserted against them, to dismiss their affirmative defenses, and for an order of reference and their prior cross-motion, inter alia, in effect, for summary judgment dismissing the complaint insofar as asserted against them.  The plaintiff opposed the motion.  In an order dated September 20, 2017, the Supreme Court denied the motion.

In November 2017, the plaintiff moved, among other things, to confirm the referee's report and for a judgment of foreclosure and sale.  The defendants cross-moved pursuant to CPLR 4403 to reject the referee's report and to direct the referee to conduct a hearing pursuant to CPLR 4313.  In an order dated February 2, 2018, the Supreme Court granted the plaintiff's motion and denied the defendants' cross-motion.  On February 14, 2018, the court entered a judgment of foreclosure and sale, inter alia, confirming the referee's report and directing the sale of the property.  The defendants appeal.

Contrary to the plaintiff's contention, the appeal from the judgment of foreclosure and sale brings up for review the issues raised on the defendants' appeals from the orders dated May 26, 2017, and September 20, 2017, which were dismissed on the ground that the right of appeal therefrom terminated with the entry of the judgment of foreclosure and sale in the action (see CPLR 5501[a][1];  Matter of Aho, 39 N.Y.2d 241, 248).

Generally, in moving for summary judgment in an action to foreclose a mortgage, a plaintiff establishes its prima facie case through the production of the mortgage, the unpaid note, and evidence of default (see Avail 1, LLC v. Singh, 239 AD3d 927, 928;  Deutsche Bank Natl. Trust Co. v Abdan, 131 AD3d 1001, 1002).  However, “[w]here, as here, a plaintiff's standing to commence a foreclosure action is placed in issue by the defendant, it is incumbent upon the plaintiff to prove its standing to be entitled to relief” (Wells Fargo Bank, N.A. v. Arias, 121 AD3d 973, 973–974 [internal quotation marks omitted];  see Avail 1, LLC v. Singh, 239 AD3d at 928).

“A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that, when the action was commenced, it was either the holder or assignee of the underlying note” (Dyer Trust 2012–1 v. Global World Realty, Inc., 140 AD3d 827, 828;  see Aurora Loan Servs., LLC v. Taylor, 25 NY3d 355, 361–362;  Avail 1, LLC v. Singh, 239 AD3d at 928).  “The plaintiff meets this burden with proof of either a written assignment of the underlying note or the physical delivery of the note endorsed in blank or specially to it prior to the commencement of the foreclosure action” (Wilmington Sav. Fund Socy., FSB v Racer, 217 AD3d 730, 732;  see Aurora Loan Servs., LLC v. Taylor, 25 NY3d at 361–362;  Avail 1, LLC v. Singh, 239 AD3d at 929).

Here, the plaintiff established, prima facie, its standing to commence the action by demonstrating that it was in physical possession of the note, endorsed in blank, at the time the action was commenced (see Avail 1, LLC v. Singh, 239 AD3d at 929;  Deutsche Bank Natl. Trust Co. v Abdan, 131 AD3d at 1002).  The defendants' contention that an affidavit of an officer of the plaintiff's former loan servicer constituted inadmissible hearsay is improperly raised for the first time on appeal (see Bank of Am., N.A. v. ABC Realty Holdings, Inc., 241 AD3d 615, 617;  Bank of New York Mellon v. Tedeschi, 240 AD3d 466, 468;  U.S. Bank N.A. v. Sallie, 215 AD3d 714, 716).  In opposition to the plaintiff's prima facie showing, the defendants failed to raise a triable issue of fact.

The plaintiff also established, prima facie, the defendants' default in payment (see Bank of N.Y. Mellon v. Tedeschi, 240 AD3d at 468).  “Among other things, a plaintiff can establish a default by submission of an affidavit from a person having personal knowledge of the facts or other evidence in admissible form” (Deutsche Bank Natl. Trust Co. v Pirozzi, 230 AD3d 736, 737;  see U.S. Bank Trust, N.A. v. Smith, 217 AD3d 899, 900;  BNH Milf, LLC v. Milford St. Props., LLC, 192 AD3d 960, 962).  The defendants' contention that affidavits submitted in support of the plaintiff's motion, among other things, for summary judgment on the complaint insofar as asserted against the defendants constituted inadmissible hearsay is improperly raised for the first time on appeal (see Bank of Am., N.A. v. ABC Realty Holdings, Inc., 241 AD3d at 617;  Bank of New York Mellon v. Tedeschi, 240 AD3d at 468;  U.S. Bank N.A. v. Sallie, 215 AD3d at 716).  In opposition to the plaintiff's prima facie showing, the defendants failed to raise a triable issue of fact.

Accordingly, the Supreme Court properly granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants, to dismiss the defendants' affirmative defenses, and for an order of reference and properly denied the defendants' cross-motion, inter alia, in effect, for summary judgment dismissing the complaint insofar as asserted against them.

The Supreme Court also properly denied the defendants' motion for leave to renew their opposition to those branches of the plaintiff's prior motion which were for summary judgment on the complaint insofar as asserted against them, to dismiss their affirmative defenses, and for an order of reference and their prior cross-motion, among other things, in effect, for summary judgment dismissing the complaint insofar as asserted against them.  A letter submitted by the defendants in support of their motion for leave to renew did not constitute a new fact “not offered on the prior motion” within the meaning of CPLR 2221(e)(2) (see Hernandez v Harrison Cent. School Dist., 36 AD3d 665, 666), as the record demonstrates that the letter was before the court when the court determined the parties' prior motion and cross-motion.  Moreover, the defendants failed to demonstrate a change in the law that would change the prior determination (see CPLR 2221[e][3] ).

Contrary to the defendants' contention, reversal is not required on the ground that the referee failed to hold a hearing pursuant to CPLR 4313.  “[A]s long as a defendant is not prejudiced by the inability to submit evidence directly to the referee, a referee's failure to notify a defendant and hold a hearing is not, by itself, a basis to reverse a judgment of foreclosure and sale and remit the matter for a hearing and a new determination of amounts owed” (U.S. Bank N.A. v. Glasgow, 218 AD3d 717, 720 [internal quotation marks omitted];  see Bank of Am., N.A. v. ABC Realty Holdings, Inc., 241 AD3d at 616).  Here, the defendants were not prejudiced by the referee's failure to hold a hearing, since, in opposing the plaintiff's motion, inter alia, to confirm the referee's report, they “had an opportunity to raise questions and submit evidence directly to the Supreme Court” (Bank of Am., N.A. v. Scher, 205 AD3d 989, 990).

Nevertheless, those branches of the plaintiff's motion which were to confirm the referee's report and for a judgment of foreclosure and sale should have been denied.  “The report of a referee should be confirmed whenever the findings are substantially supported by the record, and the referee has clearly defined the issues and resolved matters of credibility” (Real Estate Mtge. Network, Inc. v Mason, 217 AD3d 796, 797 [internal quotation marks omitted];  see TLOA Mtge., LLC v. 109–08 N. Blvd, LLC, 241 AD3d 963, 964;  U.S. Bank N.A. v. Jong Shin, 224 AD3d 933, 936).  However, computations based upon a review of unidentified and unproduced business records constitute inadmissible hearsay and lack probative value (see TLOA Mtge., LLC v. 109–08 N. Blvd, LLC, 241 AD3d at 964;  Real Estate Mtge. Network, Inc. v Mason, 217 AD3d at 798).

Here, the referee's report indicates, among other things, that “[t]he information contained herein was obtained from the books and records of plaintiff pertaining to the defendants' loan and payment history.”  However, the record does not reflect that those books and records were annexed to an affidavit of an another officer of the plaintiff's former loan servicer.  As the defendants contended in opposition to the plaintiff's motion, inter alia, to confirm the referee's report and in support of their cross-motion, among other things, pursuant to CPLR 4403 to reject the referee's report, and as they contend on appeal, the referee's computations as to the amounts due to the plaintiff for advances of taxes and insurance were based on unidentified and unproduced business records, and therefore, the referee's assertions in those regards constituted inadmissible hearsay and lacked probative value (see TLOA Mtge., LLC v. 109–08 N. Blvd, LLC, 241 AD3d at 965;  Deutsche Bank Natl. Trust Co. v Geslani, 222 AD3d 835, 838).

Accordingly, we reverse the judgment of foreclosure and sale and remit the matter to the Supreme Court, Suffolk County, for 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 (see TLOA Mtge., LLC v. 109–08 N. Blvd, LLC, 241 AD3d at 965;  Real Estate Mtge. Network, Inc. v Mason, 217 AD3d at 798).

The defendants' remaining contentions are without merit.

IANNACCI, J.P., FORD, VENTURA and QUIRK, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court