OCWEN LOAN SERVICING LLC v. FITZGERALD

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Supreme Court, Appellate Division, Second Department, New York.

OCWEN LOAN SERVICING, LLC, Respondent, v. John FITZGERALD, et al., Appellants, et al., Defendants.

2015-11255

Decided: January 23, 2019

LEONARD B. AUSTIN, J.P., SHERI S. ROMAN, SANDRA L. SGROI, VALERIE BRATHWAITE NELSON, JJ. John C. Wirth, Jr., Poughkeepsie, NY, for appellants. RAS Boriskin, LLC (Greenberg Traurig, LLP, New York, N.Y. [Shan P. Massand], of counsel), for respondent.

DECISION & ORDER

ORDERED that the orders are affirmed insofar as appealed from, with one bill of costs.

In November 2006, the defendants John Fitzgerald and Sandra Fitzgerald (hereinafter together the defendants) executed a promissory note in the sum of $127,200 in favor of nonparty IndyMac Bank, FSB (hereinafter IndyMac).  The note was secured by a mortgage encumbering real property in Pleasant Valley, executed by the defendants in favor of Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), as nominee for IndyMac.  The note was endorsed in blank by IndyMac.  The defendants defaulted on the loan by failing to make the installment payment due November 1, 2010, and each month thereafter.  On July 13, 2011, MERS, as nominee for IndyMac, assigned the mortgage and the note to One West Bank FSB (hereinafter One West).  The note was transferred to the plaintiff by physical delivery on April 22, 2014.  An assignment executed on January 7, 2015, assigned the mortgage from One West to the plaintiff.

In November 2014, the plaintiff commenced this foreclosure action.  The defendants answered and the plaintiff moved, inter alia, for summary judgment on the complaint.  The defendants cross-moved, among other things, to dismiss the complaint insofar as asserted against them pursuant to CPLR 3211(a)(3) for lack of standing and to strike the complaint insofar as asserted against them for failure to respond to the defendants' discovery demand for document production pursuant to CPLR 3126(3).  The Supreme Court, inter alia, granted the plaintiff's motion for summary judgment on the complaint and denied the defendants' cross motion.

“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” (U.S. Bank, N.A. v. Zwisler, 147 A.D.3d 804, 805, 46 N.Y.S.3d 213 [internal quotation marks omitted]; see Deutsche Bank Natl. Trust Co. v. Brewton, 142 A.D.3d 683, 684, 37 N.Y.S.3d 25).  “Where, as here, standing is put into issue by a defendant, the plaintiff must prove its standing in order to be entitled to relief” (Aurora Loan Servs., LLC v. Taylor, 114 A.D.3d 627, 628, 980 N.Y.S.2d 475 [internal quotation marks omitted], affd 25 N.Y.3d 355, 12 N.Y.S.3d 612, 34 N.E.3d 363; see U.S. Bank, N.A. v. Zwisler, 147 A.D.3d at 805, 46 N.Y.S.3d 213).  “A plaintiff in a mortgage foreclosure action has standing where it is the holder of the underlying note at the time the action is commenced” (U.S. Bank, N.A. v. Zwisler, 147 A.D.3d at 805, 46 N.Y.S.3d 213; see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361, 12 N.Y.S.3d 612, 34 N.E.3d 363).  “Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident” (U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 754, 890 N.Y.S.2d 578).

Here, in support of that branch of its motion which was for summary judgment on the complaint, the plaintiff submitted the summons and complaint, the note and mortgage, proof of the defendants' default, and an affidavit of its employee, Richard Work, a contract management coordinator.  Work averred that the plaintiff received physical delivery of the note on April 22, 2014.  Thus, the plaintiff established, prima facie, that it was in possession of the note at the time the action was commenced.

Contrary to the defendants' contentions, “[t]here is simply no requirement that an entity in possession of a negotiable instrument that has been endorsed in blank must establish how it came into possession of the instrument in order to be able to enforce it” (JPMorgan Chase Bank, N.A. v. Weinberger, 142 A.D.3d 643, 645, 37 N.Y.S.3d 286; see UCC 3–204[2] ).  Further, “it is unnecessary to give factual details of the delivery in order to establish that possession was obtained prior to a particular date” (JPMorgan Chase Bank, N.A. v. Weinberger, 142 A.D.3d at 645, 37 N.Y.S.3d 286; see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 362, 12 N.Y.S.3d 612, 34 N.E.3d 363).  In addition, Work's affidavit was in admissible form (see Federal Natl. Mtge. Assn. v. Yakaputz II, Inc., 141 A.D.3d 506, 507, 35 N.Y.S.3d 236).

In opposition to the plaintiff's motion, the defendants failed to raise a triable issue of fact.  “The mere hope or speculation that evidence sufficient to defeat a motion for summary judgment may be uncovered during the discovery process is an insufficient basis for denying a motion for summary judgment” (612 Wortman, LLC v. Varsity Bus Co., Inc., 137 A.D.3d 1251, 1252, 29 N.Y.S.3d 46 [internal quotation marks omitted] ).

The defendants' remaining contentions are without merit.

AUSTIN, J.P., ROMAN, SGROI and BRATHWAITE NELSON, JJ., concur.

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