U.S. Bank National Association, etc., respondent, v. Michael Walker, et al., appellants, et al., defendants. (2026)

Argued—March 10, 2026

DECISION & ORDER

O/

In an action to foreclose a mortgage, the defendants Michael Walker and Lisa C. Walker appeal from two orders of the Supreme Court, Nassau County (James P. McCormack, J.), both dated May 7, 2024.  The first order, insofar as appealed from, granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants Michael Walker and Lisa C. Walker and for an order of reference and denied that branch of the cross-motion of the defendants Michael Walker and Lisa C. Walker which was for summary judgment dismissing the complaint insofar as asserted against them.  The second order, insofar as appealed from, granted the same relief to the plaintiff and referred the matter to a referee to compute the amount due to the plaintiff.

ORDERED that the first order is modified, on the law, by deleting the provision thereof granting those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants Michael Walker and Lisa C. Walker and for an order of reference, and substituting therefor a provision denying those branches of the motion;  as so modified, the order is affirmed insofar as appealed from, without costs or disbursements, and so much of the second order as granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants Michael Walker and Lisa C. Walker and for an order of reference and referred the matter to a referee to compute the amount due to the plaintiff is vacated;  and it is further,

ORDERED that the appeal from the second order is dismissed as academic in light of our determination on the appeal from the first order, without costs or disbursements.

In June 2008, the defendants Michael Walker and Lisa C. Walker (hereinafter together the defendants) executed a note in favor of Mortgage Lenders Network USA, Inc. The note was secured by a mortgage on certain residential property located in Valley Stream.  The defendants allegedly defaulted on their obligations under the note and mortgage, as modified by a modification agreement dated April 11, 2016.  In July 2017, the plaintiff commenced this action against the defendants, among others, to foreclose the mortgage.  The defendants interposed an answer asserting various affirmative defenses, including lack of standing.  In January 2024, 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 and cross-moved, among other things, for summary judgement dismissing the complaint insofar as asserted against them for failure to comply with RPAPL 1304 and lack of standing.  In an order dated May 7, 2024, the Supreme Court granted the plaintiff's motion and denied the defendants' cross-motion.  In a second order also dated May 7, 2024, the court granted the same relief to the plaintiff and referred the matter to a referee to compute the amount due to the plaintiff.  The defendants appeal.

Where, as here, the plaintiff's standing has been placed in issue by the defendant's answer, “ ‘the plaintiff must prove its standing as part of its prima facie showing on a motion for summary judgment’ ” (LNV Corp. v. Almberg, 246 AD3d 896, 899, quoting Deutsche Bank Natl. Trust Co. v Kingsbury, 171 AD3d 871, 872).  “ ‘A plaintiff has standing to commence a foreclosure action where it is the holder or assignee of the underlying note, either by physical delivery or execution of a written assignment prior to the commencement of the action with the filing of the complaint’ ” (LNV Corp. v. Allison, 206 AD3d 710, 712, quoting Nationstar Mtge., LLC v. Weisblum, 143 AD3d 866, 868).  “The plaintiff can establish standing by attaching a copy of the properly endorsed note to the complaint when commencing the action” (Wells Fargo Bank, N.A. v. Garland, 219 AD3d 962, 963).  However, “ ‘[w]here there is no allonge or note that is either endorsed in blank or specially endorsed to the plaintiff, mere physical possession of a note at the commencement of a foreclosure action is insufficient to confer standing or to make a plaintiff the lawful holder of a negotiable instrument for the purposes of enforcing the note’ ” (LNV Corp. v. Allison, 206 AD3d at 712, quoting U.S. Bank N.A. v. Moulton, 179 AD3d 734, 737).

Here, contrary to the plaintiff's contention, it failed to establish its standing based on its attachment of the note to the complaint.  The copy of the note attached to the complaint was not endorsed in blank and did not reflect that it was specially endorsed to the plaintiff, given that the name of the entity to whom the note was specifically endorsed did not exactly reflect the name of the plaintiff in this action (see Residential Mtge. Loan Trust 2013–TT2 v Kaodichimma, 212 AD3d 742, 743).  The assignments of mortgage in the record were also insufficient to establish the plaintiff's standing, as, according to those documents, the mortgage was not assigned to the plaintiff until December 2019, after the commencement of this action in July 2017.

Moreover, an affidavit of Talya Harris submitted in support of the plaintiff's motion was insufficient to establish, prima facie, the plaintiff's standing.  Harris stated that she was an employee of Nationstar, the plaintiff's loan servicer.  However, Harris did not state that Nationstar, as agent for the plaintiff, was in possession of the note at the time that the action was commenced (see Bank of N.Y. Mellon v. Ettinger, 176 AD3d 1152, 1155), and she failed to annex any business records establishing that Nationstar, as agent for the plaintiff, possessed the note at the time that the action was commenced (see Star201, LLC v. Duran, 233 AD3d 726, 728).

The evidence submitted in support of the plaintiff's motion also failed to establish that the plaintiff strictly complied with RPAPL 1304 prior to the commencement of the action.  RPAPL 1304(1) provides that “at least ninety days before a lender, an assignee or a mortgage loan servicer commences legal action against the borrower, ․ including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give notice to the borrower.”  “Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action” (Citibank, N.A. v. Conti–Scheurer, 172 AD3d 17, 20;  see Bank of Am., N.A. v. Gonzalez, 219 AD3d 433, 434).  “By requiring the lender or mortgage loan servicer to send the RPAPL 1304 notice by registered or certified mail and also by first-class mail, the Legislature implicitly provided the means for the plaintiff to demonstrate its compliance with the statute, i.e., by proof of the requisite mailing, which can be established with proof of the actual mailings, such as affidavits of mailing or domestic return receipts with attendant signatures, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure” (Deutsche Bank Natl. Trust Co. v Dennis, 181 AD3d 864, 866 [internal quotation marks omitted] ).

Here, the plaintiff failed to submit an affidavit of mailing or proof of mailing by the United States Postal Service evidencing that it properly mailed notice to the defendants pursuant to RPAPL 1304.  Instead, the plaintiff relied on the affidavit of Harris, copies of the purported notices, and a spreadsheet purportedly showing that the notices were mailed.  Although the notices contained the statement “Sent Via Certified Mail,” with a 22–digit number below it, no receipt or corresponding document issued by the United States Postal Service was submitted proving that the notices were actually sent by certified mail more than 90 days prior to commencement of the action (see Green Tree Servicing, LLC v Helmsorig, 227 AD3d 1053, 1055;  Deutsche Bank Natl. Trust Co. v Dennis, 181 AD3d at 866).  Further, the plaintiff failed to demonstrate the admissibility of the spreadsheet, as it did not demonstrate that a record, which was created by an entity that was never identified, was incorporated into the plaintiff's or its servicer's records and relied upon in the regular course of their business (cf.  Wells Fargo Bank, N.A. v. Kohli, 241 AD3d 1402, 1404;  U.S. Bank N.A. v. Romano, 231 AD3d 1079, 1081).  Harris's affidavit was also insufficient to establish a standard office mailing procedure designed to ensure that items are properly addressed and mailed.  Although Harris averred that the 90–day notices were mailed “by and through [the plaintiff's] agents,” she then stated that she was familiar with the plaintiff's practice and procedure, not the servicer's practice and procedure, for mailing the 90–day notices.  Harris did not aver that she was familiar with the mailing practices of the servicer which purportedly sent the notices and failed to otherwise demonstrate familiarity with a standard office practice and procedure designed to ensure that items are properly addressed and mailed (see Wilmington Trust, N.A. v. Singh, 241 AD3d 1404, 1407;  Deutsche Bank Natl. Trust Co. v Dennis, 181 AD3d at 866).

Accordingly, 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 without regard to the sufficiency of the defendants' opposition papers (see Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853).

However, the Supreme Court properly determined that the defendants were not entitled to summary judgment dismissing the complaint insofar as asserted against them on the ground of lack of standing.  On a cross-motion for summary judgment dismissing the complaint based upon the plaintiff's alleged lack of standing, “the burden is on the moving defendant to establish, prima facie, the plaintiff's lack of standing, rather than on the plaintiff to affirmatively establish its standing in order for the motion to be denied” (Deutsche Bank Trust Co. Ams. v. Vitellas, 131 AD3d 52, 59–60).  “To defeat a defendant's motion, the plaintiff has no burden of establishing its standing as a matter of law” (id. at 60;  see Phoenix Grantor Trust v. Exclusive Hospitality, LLC, 172 AD3d 923, 926).  Here, the defendants' submissions failed to eliminate triable issues of fact as to the plaintiff's standing as the holder of the note at the time of the commencement of the action (see U.S. Bank N.A. v. Smith, 221 AD3d 1043, 1045).

The Supreme Court also properly determined that the defendants were not entitled to summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff failed to comply with RPAPL 1304.  “[E]ven in the face of a plaintiff's failure to establish, prima facie, that a notice was properly mailed on a motion for summary judgment on the complaint ․ a defendant still has to meet its burden, on a cross motion for summary judgment dismissing the complaint, of establishing that the condition precedent was not fulfilled” (Deutsche Bank Natl. Trust Co. v Dennis, 181 AD3d at 870 [internal quotation marks omitted] ).  Contrary to the defendants' contention, they failed to provide particulars supporting their assertion that the plaintiff never mailed the RPAPL 1304 notice to their last known address (see Deutsche Bank Natl. Trust Co. v Dennis, 181 AD3d at 871).

The defendants' contention that the plaintiff's RPAPL 1304 notice contained additional information in violation of the “separate envelope” requirement of RPAPL 1304(2) is raised for the first time on appeal but may be reached as it involves a question of law that appears on the face of the record and could not have been avoided if brought to the court's attention at the proper juncture (see Deutsche Bank Natl. Trust Co. v Pirozzi, 230 AD3d 736, 740).  “The ‘separate envelope’ mandate of RPAPL 1304(2) provides that ‘[t]he notices required by this section shall be sent by the lender, assignee or mortgage loan servicer in a separate envelope from any other mailing or notice’ ” (Bank of Am., N.A. v. Gonzalez, 219 AD3d at 434).  Here, contrary to the defendants' contention, the minimal additional information in the 90–day notice, consisting mostly of warnings that the information contained therein was an attempt to collect a debt, did not violate the “separate envelope” requirement of RPAPL 1304(2), as it consisted of “accurate statements that further the underlying statutory purpose of providing information to borrowers that is or may become relevant to avoiding foreclosure” (Bank of Am., N.A. v. Kessler, 39 NY3d 317, 326;  see HSBC Bank USA, N.A. v. Berry, 241 AD3d 888, 889).

IANNACCI, J.P., DOWLING, LANDICINO and LOVE, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court