BANC OF CALIFORNIA v. PLUMBING SUPPLY DISTRIBUTION LLC (2026)

DECISION & ORDER

In an action to foreclose a mortgage, the defendants Plumbing Supply Distribution, LLC, Mr. Commercial Group, LLC, Alta Huron Capital, LLC, Ryan Fisher, and Miranda Watson appeal from (1) an order of the Supreme Court, Kings County (Lawrence Knipel, J.), dated December 19, 2024, and (2) an order and judgment of foreclosure and sale (one paper) of the same court dated March 5, 2025.  The order granted the plaintiff's motion to confirm a referee's report and for a judgment of foreclosure and sale and denied the cross-motion of the defendants Plumbing Supply Distribution, LLC, Mr. Commercial Group, LLC, Alta Huron Capital, LLC, Ryan Fisher, and Miranda Watson, inter alia, to reject the referee's report.  The order and judgment of foreclosure and sale, upon an order of the same court dated May 16, 2024, granting those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants Plumbing Supply Distribution, LLC, Mr. Commercial Group, LLC, Alta Huron Capital, LLC, Ryan Fisher, and Miranda Watson and for an order of reference, and upon the order dated December 19, 2024, among other things, granted the same relief to the plaintiff as the order dated December 19, 2024, confirmed the referee's report, and directed the sale of the subject property.

ORDERED that the appeal from the order dated December 19, 2024, is dismissed;  and it is further,

ORDERED that the order and judgment of foreclosure and sale is reversed, on the law, the plaintiff's motion to confirm the referee's report and for a judgment of foreclosure and sale is denied, those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants Plumbing Supply Distribution, LLC, Mr. Commercial Group, LLC, Alta Huron Capital, LLC, Ryan Fisher, and Miranda Watson and for an order of reference are denied, and the orders dated May 16, 2024, and December 19, 2024, are modified accordingly;  and it is further,

ORDERED that one bill of costs is awarded to the defendants Plumbing Supply Distribution, LLC, Mr. Commercial Group, LLC, Alta Huron Capital, LLC, Ryan Fisher, and Miranda Watson.

The appeal from the order dated December 19, 2024, must be dismissed because the right of direct appeal therefrom terminated with the entry of the order and judgment of foreclosure and sale in the action (see Matter of Aho, 39 N.Y.2d 241, 248).  The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the order and judgment of foreclosure and sale (see CPLR 5501[a][1];  Matter of Aho, 39 N.Y.2d at 248).

In 2021, the plaintiff commenced this action against the defendants Plumbing Supply Distribution, LLC, Mr. Commercial Group, LLC, Alta Huron Capital, LLC, Ryan Fisher, and Miranda Watson (hereinafter collectively the defendants), among others, to foreclose a mortgage encumbering certain real property located in Brooklyn.  Thereafter, the plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendants and for an order of reference.  The defendants opposed the motion.  In an order dated May 16, 2024, the Supreme Court granted those branches of the plaintiff's motion.

In November 2024, the plaintiff moved to confirm a referee's report and for a judgment of foreclosure and sale.  The defendants opposed the motion and cross-moved, among other things, to reject the referee's report.  In an order dated December 19, 2024, the Supreme Court granted the plaintiff's motion and denied the defendants' cross-motion.  In an order and judgment of foreclosure and sale dated March 5, 2025, the court, inter alia, granted the same relief to the plaintiff, confirmed the referee's report, and directed the sale of the subject property.  The defendants appeal.

“It is well-settled that in order to establish prima facie entitlement to judgment as a matter of law in a foreclosure action, a plaintiff must submit the mortgage and unpaid note, along with evidence of the default” (B of I Fed. Bank v. Aramalla, 245 AD3d 663, 6645 [alteration and internal quotation marks omitted];  see MTGLQ Invs., L.P. v. Daleo, 228 AD3d 929, 932).  “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” (U.S. Bank Trust, N.A. v. Smith, 217 AD3d 899, 900;  see Deutsche Bank Trust Co. Ams. v Tagor, 238 AD3d 983, 986).  “[T]he business record exception to the hearsay rule applies to a ‘writing or record’ (CPLR 4518[a] ) [and] it is the business record itself, not the foundational affidavit, that serves as proof of the matter asserted” (Bank of N.Y. Mellon v. Gordon, 171 AD3d 197, 205 [citation omitted];  see U.S. Bank Trust, N.A. v. Smith, 217 AD3d at 900).  Without the introduction of the records themselves, “a witness's testimony as to the contents of the records is inadmissible hearsay” (Bank of N.Y. Mellon v. Gordon, 171 AD3d at 206 [internal quotation marks omitted] ).

The Supreme Court should have denied 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 on the ground that the plaintiff failed to establish, prima facie, the defendants' default in payment (see Bank of N.Y. Mellon v. DeLoney, 197 AD3d 548, 550;  Tri–State Loan Acquisitions III, LLC v Litkowski, 172 AD3d 780, 782).  Here, in an affidavit of Eric Hernandez, the plaintiff's vice president, which the plaintiff submitted in support of its motion, inter alia, for summary judgment on the complaint insofar as asserted against the defendants and for an order of reference, Hernandez did not aver that he had personal knowledge of the defendants' alleged default in payment.  To the extent that his knowledge was based on his review of business records, he did not identify what records he relied on and he did not attach them to his affidavit.  Thus, the plaintiff failed to submit evidence in admissible form to establish the defendants' default (see BNH Milf, LLC v. Milford St. Props., 192 AD3d 960, 962;  Deutsche Bank Natl. Trust Co. v McGann, 183 AD3d 700, 702).  Since the plaintiff failed to establish the defendants' default in payment, it failed to establish its prima facie entitlement to judgment as a matter of law, as well as its entitlement to an order of reference and a judgment of foreclosure and sale (see BNH Milf, LLC v. Milford St. Props., 192 AD3d at 962).

The plaintiff's failure to establish its prima facie entitlement to judgment as a matter of law requires a denial of 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 regardless of the sufficiency of the opposing papers (see Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853).

The parties' remaining contentions either are without merit or need not be reached in light of our determination.

BRATHWAITE NELSON, J.P., WOOTEN, TAYLOR and GOLDBERG VELAZQUEZ, JJ., concur.