U.S. Bank N.A. v Sausa

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U.S. Bank N.A. v Sausa 2017 NY Slip Op 31086(U) May 5, 2017 Supreme Court, Suffolk County Docket Number: 65267/2014 Judge: Howard H. Heckman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] Shon Form O rder SUPREME COURT - STATE OF NEW YORK IAS PART 18 - SUFFOLK COUNTY PRESENT: HON. HOWARD H. HECKMAN JR., J.S.C. INDEX NO.: 65267/2014 MOTION DATE: 10/18/2016 MOTION SEQ. NO.: 001 MG ----------------------------------------------------------------X U.S. BANK N.A., Plaintiffs, -againstGARY SAUSA, DIANE ERHARDT, Defendants. ----------------------------------------------------------------X PLAINTIFFS' ATTORNEY: ECKERT SEAMANS CHERIN & MELLOTT, LLC 10 BANK STREET, STE. 700 WHITE PLAINS, NY 10606 DEFENDANTS' ATTORNEYS: LAW OFFICES OF FRED M . SCHWARTZ 317 MIDDLE COUNTRY RD., STE. 5 SMITHTOWN, NY 11787 Upon the following papers numbered I lo 35 read on this motion : Notice of Motion/ Order to Show Cause and supporting papersj..:J..L: Notice of Cross Motion and supporting papers_ : Answering Affidavits and supporting papers 33-35 Replying Affidavits and supporting papers _ ; Other_ : (and after hearing coun~el in support and opposed to the motion) it is, ORDERED that this motion by plaintiff U.S. Bank, N.A. seeking an order: I) granting summary judgment striking the answer of defendants Gary Sausa and Diane Erhardt; 2) substituting "Mark Smith" and "Marge Smith" as named party defendants in place and stead of defendants designated as "John Doe #1" and "John Doe #2'' and discontinuing the action against defendants designated as "John Doe #3" through "John Doe #7"; 3) deeming all appearing and non-appearing defendants in default; 4) amending the caption; and 5) appointing a referee to compute the sums due and owing to the plaintiff in this mortgage foreclosure action is granted; and it is further ORDERED that plaintiff is directed to serve a copy of this order amending the caption upon the Calendar Clerk of the Court; and it is further ORDERED that plaintiff is directed to serve a copy of this order with notice of entry upon all parties who have appeared and not waived further notice pursuant to CPLR 2103(b)( l ),(2) or (3) within thirty days of the date of this order and to promptly file the affidavits of service with the Clerk of the Court. Plaintiff's action seeks to foreclose a mortgage in the original sum of $291 ,050.00 executed by defendants Gary Sausa and Diane Erhardt on January 31 , 2005 in favor of Sunset Mortgage Company, L.P. On the saine date both defendants executed a promissory note promising to re-pay the entire amount of the indebtedness to the mortgage lender. The mortgagors executed subsequent loan modification agreements creating a single lien in the sum of $323,206.70. The mortgage was assigned to the plaintiff by assignment dated April 6, 2012. Plaintiff claims that the mortgagor defendants defaulted under the terms of the mortgage and note by failing to make timely monthly mortgage payments beginning August 1, 2011. Plaintiffs motion seeks an order grai1ting summary [* 2] judgment striking defendants· answer and for the appointment of a referee. In opposition. <lclcndants Sausa and Erhardt submit an affidavit from defondam Sausa and an attorney's affirmation and claim that: I) plaintiff lacks standing to maintain this action: 2) plaintiff foiled to serve pre-l'orcclosurc notices or default in compliance with mortgage and RP APL 130-l n.:quiremcnts; 3) plaintiff's complaint foils to stale a valid cause of action; and 4) insunicient adn1issihlc proof is submitted to establ ish the validity of loan modifications by the lender's mortgage servicer. Defendant Sausa claims that he w111 suffer '"great financial hardship'" and '"loss" should plaintiffs motion be granted and requests that the action be schedu led for a preliminary conference so that discovery can be conducted In reply. the plaintiff submits an attorney's allinnation and argues that no basis exists to deny grun ting plaintiffs application for an award of summmy judgment. Plaintiff claims that the proof submitted in the form or an affidavit from the mortgage servicer's employee together with copies of the promissory note and mortgage agreements provide sufficient evidence enti tling the mortgage lender to foreclose the mortgage. Plaintiff contends the mortgage servicer's representative's affidavit detailing the bm1k records pertaining to the defendant's note and mortgage sati sfies the business records exception to the hearsay rule and reveals that defendants have defaulted under the terms of the mongage by failing to make mortgage payments for nearly the past six years. Plaintiff claims the evidence shows that U.S. Bank, ·.A. has standing to maintain this action based upon plaintiff having attached a copy of the indorscd promissmy note to its complaint based upon evidence that the mortgage lender has retained continuous physical possession of the promissory note since prior to the commencement of this action. Plaintiff also claims that the proof submitted shows that the dercndants were properly served with pre-foreclosure default notices in compliance with the terms or the mortgage and RP /\PL 1304. The proponent or a summary judgment motion must make a prima facie showing of entitlement to judgment as a matlc.:r of law. tendering sufficient evidence to eliminate any material question of fact from the case. The grant of summary judgment is appropriate only when it is dear that no material and triable issues or fact have been presented (.'• )i/1111011 ' '· Tmmtieth ( 'e11tmy-Fo.r Fi/111 Corp .. 3 NY2d 395 ( 1957)). The moving party bears the initial burden or proving entitlement to summary judgment ( ll'inew(I{/ \'. N H J /lledical ('enter. 64 NY2d 851 ( 1985)). Once such proor hus been proffered. the burden shins to the opposing. party who. to dcfi.;at the motion. must ofter evicknce in admissible rorm. and must set forth facts sufficient to rl!quirc a trial or any issue or fact (C PLR J2 l 2(b); %11cker111w11·. ( 'ity o/"Ne11· rork. 49 Y2d 557 ( 1980)). Summary judgment shall only be grunted \Vhen there an.: no issues or material foct and the evidence requires the court to direct a judgment in favor or the movant as a matter nf' law (l·i·iend,· <?{Ani1110/s 1·. Associated Fur ,\ lwll(/Ucl urers. 46 N Y2d I 065 ( 1979) }. Entitlement to summary judgment in f"avt11· of the foreclosing plaintiff is established. prima facic by the plainti If s production of the mortgage and the unpaid note, and evidence or default in payment (see //'ells Forgo !Jank 1 \U. 1·. Erulwha. 127 /\DJd 1176. 9 NYS3d 312 (2 .i Dept.. 2015): lf"el!s Fargo Honk. N. 1/. 1·. Ali. 122 /\D3d 726. 995 NYS2d 735 (2"'1 Dcpt..20 14)). Where the plaintifrs stamling is placed in issue by the defendant's ans\\'er. the plaintiff must also cstahlish its standing as part or its prima facie sluming (. lurora /.Oltll Senices \". 1(~dor. 15 Y3d 355. 12 11 1 YSJd 612 (2015): /,ou11cw·e ''· Firshing. 130 /\DJ<l 787. 14 NYS3d 410 (2 J Dcpt.. 2015): //.\"/JC 11 Hunk liS..t. N..1. ,.. /Joptiste. 128 AD3d 77. 10 NYSJd 255 (2 d Dept.. 2015)). In a foreclosure 11 -"- [* 3] action. a plainti IT has standing i r it is either the holder of. or the assignee of. the underlying note at the time that the action is commenced (Aurora /,oan Sen·ices 1·. Taylor. supra.: Emigrant Bank 1·. /,ari=:o. 129 J\D3d 94. 13 NYS3d 129 (2"J Dept.. 2015)). Either a written assignment of the note or the physical transfer or the note to the plainli ff prior to commencement of the action is sufficient to transl~r the ohligation and to provide standing (We/ls Fargo Rank. NA. r. Parker. 115 J\D3d 848. 5 NYS3d 130 (:!"J Dept.. :!015): C.S. Bank\·. vii) '. 125 J\ D3d 845, 5 NYS3d 116 (2"J Dept.. 2015)). A plainti n~s attachment of a duly indorsed note to its complaint or to the certificate of merit required pursuant to CJ>LR 30 I2(b). coupled with an affidavit in which it alleges that it had possession of the note prior to thc rnmmencement of the action. has been held to constitute due proof of the plaintiff s standing to pros<.x:utc its claims for foreclosure and sale (.fNvlorgan Chasf! Bank. NA. 1·. Weinberger. 142 J\D3d 643. 37 NYS3d 286 (2 11J Dept.. 20 16): FNMA'" fokup11tz ff. Inc.. 141 AD3d 506. 35 NYS3d 236 (2 11" Dept.. 2016): Deutsche Bank National Trust ( 'o. 1•. Leigh, 137 J\03d 841, 28 NYSJd 86 (211' 1 Dept.. 20 16 ); Nationslar Mortgage U .C 1•. Catbme. 127 J\D3d 1151 , 9 1 YS3d 3 15 (2 11J Dept.. 2015)). Proper service of RP APL 1304 notices on borrower(s) arc conditions precedent to the commencement or a forec losure action. and the plainli ff has the burden of establishing compliance with this condition (Aurorn f,ocm Sen•ices. LLC v. Weishlu111, 85 J\D3d 95. 923 NYS2d 609 (2 00 Dept.. 2011 ): First National Bank of Chicago v. Sih•er. 73 AD3d 162, 899 NYS2d 256 (2"d Dept.. 20 I 0) ). RP J\ PL 1304(2) provides that notice he sent by registered or certified mail and by first-class mail to the last known address or the borrower(s). and if different. to the residence that is the subject or the mortgage. The notice is considered given as of the date it is mailed and must be sent in a separate envelope from any other mailing or notice and the notice must be in J4-point type. The plainti tr s proof in support of its motion consists or: I) a copy of the adjustable rate promissory note and prepayment addendum to note signed by both dclCndants together with an allonge indorsed in blank and signed by the assistant secretary of the original mortgage lender. Sunset Mortgage Company: 2) copies of the January 31. 2005 mortgage and adjustable rate rider signed hy defendants Sausa and Erhardt. together with copies of three loan modification agreements dated .lune 11. 2006. February 4. 2009 and July 15, 20 I 0 each signed by defendants Sausa and Erhardt; 3) a copy of the assignment of' the mortgage dated April 6. 2012 from Mlm.S as nominee lt)r Sunset Mortgage Company. L.P. to U.S. Bank. N./\.: 4) an affidavit from Select Portfolio Servicing. l11c.'s (S I'S) docurncnt contrnl onicer kstilying about the contents ol' the loan (business) records maintained by the mortgage lender: 4) copies of the pre-foreclosure mortgage loan default notices dated ovcmher I. 20 I I (sent by a prior servicer- Chase) and March 18. 20 14 (sent by the current mortgage se1'\'ic.:cr- S PS ) . together with copies or the mortgage defoull notices and RP APL 90 day notices. anu a copy nf'the RPJ\PL D06 Proof of Filing Statement from the New York State lkpartment of Financial Ser\'iccs conlirming mailing of the <JO-day notices. t\t issue is "hcthcr the evidence submitted h) the plaintiff is sullicient to estahl ish its right to foreclose . l)es1)it1.: claimin!.!. ..!.!.reat linam:ial hardship·· hoth defendants have received a discharnc in ~ bankruptcy and neither defendant disput~s their continuing defoull in making any payments due urn.ler the terms <)f'the promissory note and mortgage agreements. Rather. the issues raised by the dd'cndants concern pl~1inti tr s compliance \\'ith mortg::ige and statutor) pre-foreclosure notice requirements. pl:i intirrs standing. and <lcfcndants· right to conduct discovery. -- [* 4] Short fonn Ord~r SUPREME COURT - STATE OF NEW YORK IAS PART 18 - SUFFOLK COUNTY PR E S ENT: HON . HOWARD H. HECKMAN JR., J.S.C. INDEX NO.: 65267/2014 MOTION DATE: 10/ 18/2016 MOllON SEQ. NO.: 001 MG ----------------------------------------------------------------X U.S. BANK N.A., P laintiffs, -againstGARY SAUSA, DIANE ERHARDT, Defendants. ----------------------------------------------------------------)( PLAINTIFFS' ATTORNEY: ECKERT SEAMANS CHERIN & MELLOTT, LLC 10 BANK STREET, STE. 700 WHITE PLAINS, NY 10606 DEFENDANTS' ATTORNEYS: LAW OFFICES OF FRED M. SCHWARTZ 317 MIDDLE COUNTRY RD., STE. 5 SMITHTOWN, NY 11787 Upon the following papers numbered I to 35 read on this motion : Notice of Motion/ Order to Show Cause and supporting papers~; Notice of Cross Motion and supporting papers_ ; Answering Affidavits and supporting papers 33-35 Replying Affidavi ts and supporting papers _ ; Other _ ; (and after hearing counse l in support and opposed to the motion) it is, ORDERED that this motion by plaintiff U.S. Bank, N.A. seeking an order: 1) granting summary judgment striking the answer of defendants Gary Sausa and Diane Erhardt; 2) substituting "Mark Smith" and "Marge Smith" as named party defendants in place and stead of defendants designated as "John Doe #1" and "John Doe #2" and discontinuing the action against defendants designated as "John Doe #3" through "John Doe #7"; 3) deeming all appearing and non-appearing defendants in default; 4) amending the caption; and 5) appointing a referee to compute the sums due and owing to the plaintiff in this mortgage foreclosure action is granted; and it is further ORDERED that plaintiff is directed to serve a copy of this order amending the caption upon the Calendar Clerk of the Court; and it is further ORDERED that plaintiff is directed to serve a copy of this order with notice of entry upon all parties who have appeared and not waived further notice pursuant to CPLR 2103 (b)(l),(2) or (3) within thirty days of the date of this order and to promptly file the affidavits of service with the Clerk of the Cou11. Plaintiff's action seeks lo foreclose a mortgage in the original sum of $291,050.00 executed by defendants Gary Sausa and Diane Erhardt on January 3 1, 2005 in favor of Sunset Mortgage Company, L.P. On the same date both defendants executed a promissory note promising to re-pay the entire amount of the inde btedness to the mortgage lender. The mo1tgagors executed subsequent loan modification agreements creating a single lien in the sum of $323,206. 70. The mortgage was assigned to the plaintiff by assignment dated April 6, 20 l 2. Plaintiff claims that the mortgagor defendants defaulted under the terms of the mortgage and note by failing to make timely monthly mortgage payments beginning August 1, 2011. Plaintiffs motion seeks an order granting summary [* 5] judg.111<.:llt ._triking <lel~n<lants· anS\\Cr and for the appointment Of a referee. In opposition. d1.:frndants Sausa and Erhardt submit an aflida\'il from defendant Sausa and an atlorncy"s affirmation and c.:laim that: l) plaintiff lacks standing to maintain this adion: 2) plaintiff foiled to serve pre-l(m..:c.:losure notices of default in compliance with mortgage and RPAPL 130..i requirements: 3) plaintirt~s complaint foils to stutc a valid cause or action: and 4) insuflic.:icnt admissible proof is submitted to establish the validity of loan modifications by the lender's mortgage servicer. Defendant Sausa t:laims th~lt he will su f'J<.:r ··great financial hardship·· and ··toss·· should plaintilrs motion he granted and requests that the action he scheduled for a preliminary conference so that disc.:on:ry can be conducted In reply. the plaintiff :;ubmits an attorney's anirmation and argues that no basis exists to <.kn) granting plaintilrs application for an award or summary judgment. Plaintiff claims that the proor subm illcd in the form or an a rtidavi t from the mortgage servicer' s employee together with copies or the promissory note and mortgage agreements provide sunicient cvidenc~ entitling the mortgage lentkr to foreclose the mortgage. Plainti IT contends the mortgage servicer's representati ve· s affidavit detailing the bank records pertaining to the defcndant·s note and mortgage satisfies the business records exception to the hearsay rule and reveals that defenda nts huvc defaulted under the terms of the mortgage by fi.1iling to make mortgage payments for nearly the past six years. Pl aintiff claims the e\'i<lencc shows that U.S. Hank. ./\..has standing to maintain this action based upon plaintiff having attached a copy or the indorsed promissory note to its complaint based upon evidence that the mortgage lender has retained continuous physical possession the promissory note since prior lo the commencement of this action. Plaintiff also claims that the proof submitted shows that the defendants were properly served with pre-foreclosure default notic·c s in comp!iancc with the terms or the mortgage um! RPAPI , 1304. or The.: proponent or a summary judgment motion must make a prirna facie showing of ent itkment to judgment as a math.:r of Jaw. tendering sufficient evidence to el iminate any material question or fact from the case. rhe grant or summary .i udgmcnt is appropriate only \\·hen it is clear that no material and triable issue!'l or fact han: been presented (Sil/mun 1·. f"ll'<.'llli<.'lh ( ·e11t111y-Fox Film ( ·orJJ.. 3 NY2d 395 ( 1957)). The moving party bears the initial burden of pn)\'i11g entitlement to summarv judgment ( H'inel!,r(((I 1·. N }'(i i\lediml Ce111er. 64 NY2d 851 (I 985)). Once such proor .~ ' has bccn prol'lercd. the burdtn sh ills to the opposing party who. to dd~at the motion. must offer e\·idence in admissible form. and must set forth fac ts sulfo:icnt lo require a trial or any issue of fact (CPI.I~ 32 I 2(h): /.11c/..ermm1 1·. City <?/Ne11· fork. 49 Y2d 557 (I 980)). Summary j udgment shall l'nly he granted when there arc nn issues or material fact and the c\·idcnce requires the court to direct a judgment in fann of the movant as a matter nf hi\\ (l·i·ie11£1., o(.·I11i11wl., 1· , 1.u odatecl Fur ,\/u111(/<1cturc·rs. -l(). Y2d 1()(>) ( 1979)). - l ~ nliticmenl t\l Sllllllll:lr)' judµrnenl in fovor or the foreclosing plaintilr is estahlislll'll. prirna 1:1ci~· h;.· th1..· plai11tilrs production or the mortgage rnH.I the unpaid note..:. und evidc..:nce 01· defoull in payment (s<'<' Wells Vargo /Jank :\ '.:I. 1·. l:.rahoha. 12 7 A I).)d 11 76. C) YSJd J 12 (2"J Dept.. 2015 ): //'('/Is Forgo //a11k. Y.I. r . . Iii. 122 /\D3d TYA <>95 NYS2d 735 C2 11" Dept.. 20 14)). Wh1..·re the p!:1intilrs sl<!nt.ling is plac.:cd in issut: hy the ddi.:mlan1·s ans\\Cr. the plaintiff must also cstahlish it:-; St<lllding as part or its prima foc.:ie sh(mi11g (. lurora / , ()((JI Sai·ice.\ r. Taylor. 25 I Y.1d 355. 12 : YS3d 612 (201.5): f ,ounrnre 1·. Firshi11g. 130 J\D3d 787. 14 1 YS3d 410 (2 11' 1 Dept.. 2015): /IS//(' flank l '. \ ·I. \'..·I. 1·. HC1/Jfi,·tc 28 /\.1)3d 77. 10 YS.1d 255 (2"u Dept.. 201))). In a forl..'.closurc 1 • -2- [* 6] action. a plainli ff has standing i r 1l is either the holder o[ or the assignee of. the underlying note at the time that the action is commenced (.I urorn /.ocm Se1Th·es \'. ·ray/or ..rnpru.: H111igrn111 /Junk\'. l.ari~::u. I 29 J\D3d 94. 13 NYS3d 129 (2 11 J Dcpl.. 2015 )). Either a written assignment of the note or the physical trnnskr of the note to the plaimi ff prior lo commencement of the action is sufficient to lra11s!Cr the obi igation and to provide standing (Well.\ F<HKO !Jank. N A. 1·. Purker. 125 AD3d 848. 5 I YSJd 130 ('.;"J LJ..:pl.. 20 I 5): ( '. S. Bunk r . U1~r. I 25 J\LJ3d 845. 5 1 YS3d I 16 (2"J Dept.. 2015) ).. \ plainti 1rs attachmenl of a duly inc.lorsed note 10 its complaint or to the certilicate of merit required pursuunt to CPLR 30 I 2(b), coupled with an al'lidavit in \vhich it alleges that it had possession or the note prior to th~· commcncemcnt oJ'the act inn bas been held to constitute due proof of the plain1itrs standing to prosecute its claims for foreclosure and sale (.!J>Mo1xu11 Chase IJank. NA . ,._ Weinherger. 142 /\D3d (1-n. 37 YS3d 286 (211" Dept.. 2016): FNM~ I 1·. Yukoput= fl. inc.. l·H /\D3d 506, J5 11 t YS3d 236 (2 " D.!pl.. 201 6 ): Deutsche Bank N ational li'ust Co. 1·. le!iKh 137 /\D3d 841. 28 N YS3d 86 (2'"1 Depl.. 20 I(>): 1 'a1 ionstar Mortgage I. LC l '. Cat i=<me. 127 J\ IBd I 151. 9 YS3d 3 15 \ 11 1 (2 ' Dept.. 20 15) ). Proper service orR PJ\PL 1104 notil:es on borrower(s) urc conditions prect:dent lo the cc.m1mcnccmcnt ora foreclosure action. and the plaintiff has the hurdcn of establishing compliance with this condition (Aurora / ,0011 :·)e1Tices. /,/,( · 1·. lf'eishlulJI. 85 AD3d 95. 923 NYS2d 609 (2 11J Dept.. 2011 ): First Nlltional /Jank <?/'C 'hicllgo '" Sifrer. 73 /\D3d 162. 899 NYS2d 256 (2 11J Dept.. 2010)). RP/\ PL 1304(2) provides that notice be sent by rcgisterc-d or certified mai l and by lirst-dass mail to the l~ist known address or the borrowcr(s). un<l if different. to the residence that is the subject or the mortgage. The notice is considered given as or the date it is mailed and must be sent in a separate envelope from any other mailing or notice and the notice must be in 14-point type. The plainti tr s proo f' in support or its motion consists of: I) a copy or the adjustahlc rate promissory 11ole and prepaym;,.:nt addcn<luin to note signed by hoth defendan t ~ together with an allonge indorsed in hlank and signed by the assist<ml secretary or the original mortgage lender. Sunsd Mortgage Company: 2) copies of the January 31. 2005 mortgage and adjustable rate rider signed hy dcl"cnc.lants Sausa and Erhardt. together with copies of three loan modi lie at ion agrecmt:nts <lated June 22. 2006. Fehruury -L 2009 and .July 15. 20 I 0 each signed by tldendanls Sausa and l:rhan.It: >)a copy or the assignment of the mortgage dated April 6. 2012 from Ml:RS as nomirK'e for Sunscl Mortgage Company. LY. to ll.S. Bank. N.J\.; 4) an artid:.ivit from Sclc<.:t Portfolio Servicing Jnc."s (SI'S) docu1ncn1 rn11trol ol'lil.:er tcstilying abnut the conten ts of the loan (business) records maintained h) the mortgagl! lender: 4) copies or the prc - for~·closun: mortgage loan default notice-; dated '<H'ernher I. 20 I I ( s~:nt b) a prior ser\'icer- ( 'hasc ) and March 18. 2014 (sent by the current mort!!agc sen iccr- SPS). together with copies of the mortgage default notices and RP1 \PL 90 day notices. and a copy of' the RP J\ PL 1306 Proof of Fi Iing Statement from th<; e\\ Ynrk Stnk lkpartme11t nr Financial Sen·iL:es conlirrning. muiling or the <JO-day notices. t\t issue is \\hether 1hc e\ idcnce submitted by the plaintiff is surticicnt tn establish its right 10 li.iredosL·. lkspite claiming · ·gr~·at financia l hardship·· both ddi.:ndants ha\·e ren·in:d a discharg.L' in hankruptc~ and neither ddi.:ndant disputes their continuing defoull in making any pa) menls due under thL· term-.; of the pni111i:-.s(1ry notL and nwnµagc agreements . Rather. the issues raised by thL' ' ddi.:ndants 1.:unci.:rn p!aimilrs compliance \\ ith mortgage :md s t:llutm~ pre-forcd os urL' rwtit.T requirements. pl:iintilrs standing. and defendants· right to condud disco\'ery. [* 7] ( 'J>LR 4518 provides: Busim.•ss records. (a) (icncra ii). /\ny \Hi ting or record. \\hcthcr in the form of an cntry in a book or othcr\\'isc. made a~ a mcnwrandum or record or any act. Lransaction. occurrence or event. shall bc ac.hrnssihle in evidence in proor of that acL transaction. occurrence or C\ clll. ir the j udgc finds that it\\ as made in the regular course of any business and that it wa-; lhc regular course of such business tn mnkc it. at the time the m:I. transaction. occurrence or event, or within a rcasonahlc time thercallcr. or The Court or/\ppcals in People 1·. Ciuidice. 83 NY2d 630. 635. 6 12 NYS2d350 ( 1994) c:-.;pluincd that ..the essence ol'thc business records exception to the hearsay rule is that records systematicully made ror the conduct of business ... arc inherently highly trustworthy because they arc routine reflections or duy-to-day operations and because the cntranr s obligation is to have them truthru l and accun1tc for purposes of the conduct of the enterprise:· (quoting People'" Ke111w£~\'. 68 NY2d 569. 579. 510 NYS2d 85> (1986)). It is a uni4uc hearsay exception since it represents hearsay deliberately crcutcd and <liffcrs from all other hearsay exceptions which assume that dcdarations \\hi ch come within them were not made dcliberntelv with liti!.!.ati<.>n in mind. Since a business n.:cord keeping system may be desigrn.:<l to meet the hearsay exception. it is important to provide pre<lictahility in this area and discretion should not normally be exercised to exdudl! such e,·idenee on grounds not foreseeable at the time the record was made (see frolli 1·. l:'.,·tme o(B11clw11a11. 2T2 /\D2d 660. 70(> YS2c.I 5:l.f (3 'J Dept.. 2000)). - .. l'he thrl·e foun<lational requircmcllls or CPLR 45 I 8(a) arc.:: I) the record must be made in the regular course business- rdkcting a routine. regularly com.luctcd husincss acti,·ity. needed and relied upon in the perli.mnancc of business runctions: 2) it must he the regular course or husincss lo make the records (i.e. the n.:corc.1 is made in accordance \\ith established procedures lor the routine. systematic making l)t'the recnrd): and :l) till' record must have hccn made at the time of the act. 1ransac1io11. occt11Tence or even t. or within a reasonable ti1rn.: thercalkr. assuring that the rccollcction is fairly :1ccuratc and thL' entri es routinely made (see l'eo1Jfe 1·. f..:l.!11m <(1'. SlfJJr<r (a 1 pp. 579-580)). Thl' .. mere Iii inµ 0 1 pupl' rs received from other c111iti<.:s. even ii' such papers arc retained in the regu lar · l'lHtrSL' ul'busincss. is insufficient to quali1)1 thc documents as business records:· (PC!OIJ/e ' " ( ·ru1shy. 8(1 NY2d 81. ')O. (l:29 NYS2d 992 ( 1995)). Thc records wi ll bt.: admissible .. if'thl' recipicnt can cstabl ish personal k1wwlcdgc or the maker· s business prncliccs and procedures. or th<Jt the records prm·id<.:d by the maker were incorporated into the recipient's l)\Vfl records or routinely relied upon h) lhe n:cipil·nt in its business:· (."Ital<' o(Ne\I' fork'" 158'" ,\/reel & Nil'c!rsicle l>ril'e llousi11g c "m11)((1~1 '. Inc.. 1001\D.ld 129.1. 12%. 956 YS2d 196 (2012); /c•c11•e cle!niecl. 20 NY3d 858 (20U)). In this regard \\ ith respect to mortgage foreclosures. a loan sen·icc1" s empk>ycc may tcsti 1) on hdial r of the mor1µagi.: lcmh:r and a rcprcscntatin: o!'an assignee of' the original lender Gill rd) upon husi ncss records or till· 1,rig.ina I lender to est a hi ish its claims f'()r f'l'C<n ery of' amounts due from t llL· botTO\\cr-; pnn-itkd lhc assig.ncc, plaintiff estahlishes that it n.:lil:d upon those ri.:cords in the regular \D.1d -t 18. 9.f I YS2d l.f.+ ( 1·1 course ol' business (l.c111c/111urk ( (/pilu/ fllr. Inc. r. l .i-Slw11 /l'ung. 9-t 1 lkp! .. 2Pl2 ): l': •rtfo lio Ne. ·m\ ·1:1 .fs.w c·iuh's. l.f.('. r. f. ul!. 127 .\!Ht! 57<). 8 . 1 Y~.'d !OJ ( ! ' 1 !kp!.. 2015): .\/errill l._ 1'11«'1 Husincss Fi11t111ciol Sen·ices. Inc 1· frotum.\ <'onstmctio11. Inc . .10 .\D.1d ."l.'<l. 819 N YS2d 22. (I ' ' I kpt.. 200() )). i or 1 0 -4- [* 8] /\s recent!) stated in the /\ppcllatc Division. Second Judicial Department decision in ( 'itigroup. etc.. \'. Kopelmrit::. et al.. 2017 ·y Slip Op 01331 (2nJ Dept.. 2122117): ·Then~ is no requirement that a plaintiff in a foreclosure action rel) upon any particular set of husinl.!ss records to establish a prima litcic case. so long as the plaintiff sat isfies the admissibility requirements ofCPl.R 4518(a). and the records thcmscl vcs a<.;tually evince the fo<.:ts for which they arc relied upon (citations omitted).". The anidavit submitted by the rno11gagc service provider·s document control officer provides the cvidcntiary foundation for C'tahlishing the mortgage lender"s right to roreclosc The arfidavi1 sets forth the servicer employee ·s review or the business records maimaincd by ·PS: the fact that the books and records arc made in the regular course of the prior scrviccrs and SPS"s business: that the n.:cords include an<l incorporate the computerized business records of prior scrvict:rs of the subjc1:t loan which an: routinely relied upon in the industry; that it was the mortgage scrviccr's regular course of business to maintain such records; that the rc<..:ords wen; made at or near the time the underlying transaction took place; and !hat the records were created by individuals with personal knowledge of the underlying transactions. Based upon submission or this affidavit. the plainti IT has provided an admissible evidcntiary foundation which sat isfies the business records exception to the hearsay rule with respect to issues raised in its summary judgment appl ieation. With respect to the issue of standing. plaintiff has submitted suflicient evidence in the form or the anidavit from the mortgage scrvicer·s document control officer lo prove the plaintiff has standing. as the holder or the endorsed in blank original promissory note signed hy the c.lclenc.lants which has been in its possession on or before .I uly I 0. 2014 which was the date the action was commenced (11uroro Loun .\'errices 1·. Tuy/or: s11prn.: Wells Fargo Bonk. N.A . 1•. Porker. s11rwu.: U..\'. /Junk. N.A. 1·. /:'/1n·1?/e/d. 14.+ /\.D3d 8<n. 41 NYS3d 269 (2 11J Dept.. 2016): (iJ\/1/C .\-fortguge. /./.(. ,._ Siclhen:r. l~-l /\ DJc.l 863. 40 l\YSJd 783 {211J Dept.. 2016)). In addition. plainliffcslahlishcd it s standing to maintain this action by attaching a c1:rtilied copy of the indorscd promissory note to its complaint together with the required affidavit (sec .ll'i\lor~cm Chase Hank. .\'.. I. 1·. ,,.einherger. ·'"/Jrll.: \'ati<mstur J \/ortgage /./,(' ''. ( "tlli:rme. supra. ) With respect to the issues concerning plaintilrs service of prc-fon:closurc tkfoult notices. the plaintiff has submittcd sunicicnt C\'idencc to estahlish that notices were ser\'ed in accordance "'ith 111ortgugc and stalutor) requin.:ments. With n.:spc<..:l lo RP/\PLl30-l noti<.:e requirc1rn:nts. plaintitrs pnH)I' consists or: I) the aflidm·it or mailing from the mortgage scrvicer·s document control oni<..:cr conlirming that service v\as made by the nirrent sen icer. SPS, by certilicd mail and first cla:;s mail to the mortgaged pn:miscs on ~arch 18. 201-l: aml ~)copies of the 130-l notices with tracking number-; rdated to the ccni lied matl ing together with a copy or the RP/\ PL 1306 Ii Iing slatem1.:n1. \\'ith n:spL'Ct to the mortgage dcl:n1lt notice. plaintirrs proorconsists or the anidm it li·om the mortgage servic.:cr"s document control orliccr conlinning service of the notice \\'a!:> made by the prior scn·icer. Chase. as required by the 1crms ol.Lhe mortgage. by lirst class mail to tliL' 1110rtgag.1.·d prl'llliSL'S by not ict: datt:d N<)\'cmber I. "20 I I together\\ ith copies or notices or de1:1ult datl'd tlVcmber I. 2011 lkfl:ndant Sa11sa·s conclusory assertion that he never n.:cci\·ed !lie notices and dl.'ll:nse cnunscl" s cone lusory claim that the not ices werL' not properly served on the dclcndmns. an.: 11ot supporkd b~ an: r.:k\ :mt. utlmissibk e\ idt:nt:~ suf'ficicnt to rai se an issu:.: of 1:1L:t \•:hid1 "' ould \ dl'li.:at plainti Ir s sum mar) j wJgmcnt application (see I' 1111 .\ lortgage ( 'or/>. 1·. ,\/11ric:r. 115 1 D.:ld T!.). 2-! 1 YS)d 137 (2"'1 Dept..2016): /IS/JC Hank'" /:'spinal. 137 1 \D.:ltl 1079. 28 , YS.:ld 107 (2'"1 I kpt.. 20 I(>)). -5- [* 9] With respect to defendant's remaining contention concerning the claimed .. invalidity" of the thn:e loan modifications granted the mortgagors. there is no supporting documentation submitted by the borrowers to show that each o f the signed agreements modifying. the terms of the original nwrtgage agreement were in any manner fraudulent or contained terms which did not reflect the agreements entered into by the mortgage lender with the borrowers. Absent any admissibk evidence lo prove that any orthe three modification agreements \vere fraudulent no legal basis exists to defeat the plaintiff's summary judgment motion on these grounds. The evidence submitted by the bank has shown. and the defendunts do not factually dispute. that the mortgagors have defaulted under the terms of the mortgages by failing to make timely monthly mortgage payments since August I. 2011. The bank. having proven entitlement to summary judgment, it is incumben t upon the defendants to subm it relevant, evidcntiary proof sufficiently substantive to raise genuine issues of fact concerning why the lender is nol entitled to foreclose the mortgage. Defendants have wholly failed to do so. While defondant Suusa·s allidavit alleges that: ··1 have and will continue to suffer great financial hardship and Joss. absent denial of plaintiff's application'·. the record remains undi sputed that mortgagor Sausa has not made a payment for well in excess of fi ve years. It is therefore difficult to understand what great financial hardship the mortgagor is referencing and absent submission of relevant. admiss ible proof Lo show that the defendants have not breached their obligations under the terms of the note and mortgages there is no basis to deny plaintiff's summary judgment motion. Finally. as the defendants have failed to raise any evidence to address any or their remaining. twenty two arlirmativc defenses and one counterclaim in opposition to plaintiffs motion, those affirmative dcrcnses and counterclaim must be deeml!d abandoned and arc hereby dismissed (see l\.ronick , .. L.f'. Theru11/t Co .. int·.. 70 AD3d 648. 892 NYS2d 85 (2nd Dept.. 2010): Citihank. NA. r. Van Brunt Properties. LLC. 95 AD3d I l 58., 945 NYS2d 330 (2"J Dept., 2012): Flag.\·fllr Bank v. 8elh.{/iore. 94 /\.D3d I 044, 943 N YS2d 551 (2"<1 Dept.. '.?.O 12): Wells Fargo Blmk Minnesota. NA 1•. 1 Pl!re::. 4 1 /\.D3d 590. 83 7 NYS2d 877 (2°' Dept.. 2007)). /\econ.Jingly the plaintiff's motion seeking an order granting summary judgment and for the appoi ntmcnt of a re feree is granted. The proposed order !or the appo intment of a referee has been signed simultaneously with the execution of this order. Bon. Howard H. Heckman Jr. Dated: May .5. 2017 J.S.C. - ()-

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