Bank of N.Y. Mellon v Esposito
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Bank of N.Y. Mellon v Esposito 2020 NY Slip Op 33012(U) September 11, 2020 Supreme Court, Suffolk County Docket Number: 25572/2012 Judge: Jr., Howard H. Heckman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [* 1] Shon Form Order SUPREME COURT - STATE OF NEW YORK IAS PART 18 - SUFFOLK COUNTY PR ESEN T: HON. HOWARD H. HECKMAN JR., J.S.C. INDEX NO.: 25572/2012 MOTION DATE: 9-1 1-2020 MOTION SEQ. NO.: #005 MG ----------------------------------------------------------------)( BANK OF NEW YORK MELLON, Plaintiff, PLAINTIFF'S ATTORNEY: LEOPOLD & ASSOCIATES, PLLC 80 BUSINESS PARK DRIVE, # 110 ARMONK, NY I 0504 -againstROBERT ESPOSITO, et al., Defendants. DEFENDANT'S ATTORNEY: DAVID A. BYTHEWOOD, ESQ. 85 WILLIS A VE., SUITE J MINEOLA, NY 11501 ----------------------------------------------------------------)( Upon the following papers numbered I to 33 read on this motion 1-13 : Notice of Motion/ Order to Show Cause and supporting papers_; Notice of Cross Motion and supporting papers_; Answering Affidavits and supporting papers 14-28 : Replying Affidavits and supporting papers 29-33 ; Other_ ; (and after hearing counsel in support and opposed to the motion) it is, ORDERED that this motion by plaintiff The Bank of New York Mellon seeking an order: 1) granting summary judgment striking the answer of defendant Robert Esposito ; 2) discontinuing the action against defendants designated as "John Doe #1" through "John Doe #12" ; 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)(1)(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 $432,000.00 executed by defendant Robert Esposito on July 22, 2005 in favor of America's Wholesale Lender. On the same date mortgagor Esposito executed a promissory note promising to re-pay the entire amount of the indebtedness to the mortgage lender. The mortgage and note were assigned to the plaintiff by assignment dated September 9, 2011 and corrective assignment dated May 3, 2012. Plaintiff claims that defendant defaulted under the terms of the mortgage and note by fai ling to make timely monthly mortgage payments beginning December l , 2010 and continuing to date. Plaintiff commenced this action by filing a summons, complaint and notice of pendency in the Suffolk County Clerk's Office on August 20, 2012. Defendant Esposito served an answer dated August 28, 2012 asserting three (3) affirmative defenses. Plaintiff's motion seeks an order granting summary judgment striking defendant's answer [* 2] and for the appointment of a referee. In opposition, defendant claims the plaintiff lacks standing and raises numerous other defenses nowhere asserted in Esposito's answer including violations of the borrower's federal and state constitutional and statutory rights. Defendant does not contest his continuing default in making any mortgage payments since December I, 20 I 0. The proponent of a summary judgment motion must make a prima facie showing of entitlement to j udgment as a matter of law, tendering suffic ient evidence to eliminate any material question of fact from the case. The grant of summary judgment is appropriate only when it is clear that no material and triable issues of fact have been presented (Sillman v. Twentieth Century-Fox Film Corp., 3 NY2d 395 (1957)). The moving party bears the initial burden of proving entitlement to summary judgment (Winegrad v. NYU Medical Center, 64 NY2d 851 ( 1985)). Once such proof has been proffered, the burden shifts to the opposing party who, to defeat the motion, must offer evidence in admissible form, and must set forth facts sufficient to require a trial of any issue of fact (CPLR 32 12(b); Zuckerman v. City of New York, 49 NY2d 557 (1980)). Summary judgment shall only be granted when there are no issues of material fact and the evidence requires the court to direct a judgment in favor of the movant as a matter of law (Friends o.f'Animals v. Associated Fur Manufacturers, 46 NY2d 1065 (1979)). Entitlement to summary judgment in favor of the foreclosing plaintiff is established, prima facie by the plaintiffs production of the mortgage and the unpaid note, and evidence of default in payment (see Wells Fargo Bank NA. v. Erobobo, 127 AD3d 11 76, 9 NYS3d 3 12 (2"d Dept., 2015); Wells Fargo Bank, NA. v. Ali, 122 AD3d 726, 995 NYS2d 735 (2"d Dept., 2014)). Where the plaintiff's standing is placed in issue by the defendant's answer, the plaintiff must also establish its standing as part of its prima facie showing (Aurora Loan Services v. Taylor, 25 NY3d 355, 12 NYS3d 61 2 (2015); Loancare v. Firshing, 130 AD3d 787, 14 NYS3d 410 (2"d Dept., 2015); HSBC Bank USA, N.A. v. Baptiste, 128 AD3d 77, 10 NYS3d 255 (2"d Dept., 20 15)). In a foreclosure action, a plaintiff has standing if it is either the holder of, or the assignee of, the underlying note at the time that the action is commenced (Aurora Loan Services v. Taylor, supra. ; Emigrant Bank v. Larizza, 129 A03d 94, 13 NYS3d 129 (2"d Dept., 2015)). Either a written assignment of the note or the physical transfer of the note to the plaintiff prior to commencement of the action is sufficient to transfer the obligation and to provide standing (Wells Fargo Bank, NA. v. Mandrin, 160 AD3d 1014 (2"d Dept., 2018) Tribeca Lending Corp. v. Lawson, 159 AD3d 936 (2"d Dept., 2018); Deutsche Bank National Trust Co. v. Jarrobino, 159 AD3d 670 (2"d Dept., 2018); Central Mortgage Company v. Detvis, 149 AD3d 898 (2"d Dept., 2017); US Bank, NA . v. E hrenfeld, 144 AD3d 893, 41 NYS3d 269 (2"d Dept., 2016); JPMorgan Chase Bank v. Weinberger, 142 AD3d 643, 37 NYS3d 286 (2"d Dept., 2016); CitiMortgage, Inc. v. Klein, 140 AD3d 9 13, 33 NYS3d 432 (2"d Dept., 2016); US. Bank, NA. v. Godwin, 137 AD3d 1260, 28 NYS3d 450 (2"ct Dept., 2016); Wells Fargo Bank, NA . v. Joseph, 137 AD3d 896, 26 NYS3d 583 (2"d Dept., 2016); Emigrant Bank v. Larizza, supra.; Deutsche Bank National Trust Co. v. Whalen, 107 AD3d 93 1, 969 NYS2d 82 (2"d Dept., 2013 ); Wells Fargo Bank, NA. v. Parker, 125 AD3d 848, 5 NYS3d 130 (2"d Dept., 2015); US. Bank v. Guy. 125 AD3d 845, 5 NYS3d 116 (2"d Dept., 2015)). A plaintifrs attachment of a duly indorsed note to its complaint or to the certificate of merit required pursuant to CPLR 3012(b), has been held to constitute due proof of the plaintiffs standing to prosecute its claims for foreclosure and sale (Nationstar Mortgage. LLC v. LaPorte, 162 AD 3d 784, 75 NYS3d 432 (2"d Dept., 2018); Bank of New York Mellon v. Theobalds, 161 AD3d 11 37 (2"d Dept., 20 18); HSBC Bank USA, NA. v. Oscar. 161 AD3d I 055. 78 NYS3d 428 (2"ct Dept., 20 18); CitiMortgage, Inc. v. McKenzie, 161 AD3d l 040, 78 NYS3d 200 (2"d Dept., 2018); US. Bank. N.A. v. Duthie, 161 AD3d 809, 76 NYS3d 226 (2"d -2- [* 3] Dept., 2018); Bank of New York Mellon v. Genova, 159 AD3d 1009, 74 NYS3d 64 (2"d Dept., 2018); Mariners At!. Port.folio, LLC v. Hector, 159 AD3d 686, 69 NYS3d 502 (2nd Dept., 2018); Bank of New York Mellon v. Burke, 155 AD3d 932, 64 NYS3d 114 (2nd Dept., 2017); JPMorgan Chase Bank, NA . v. Weinberger, 142 AD3d 643, 37 NYS3d 286 (2nd Dept., 2016); FNMA v. Yakaputz II, Inc., 141AD3d506, 35 NYS3d 236 (2nd Dept., 2016); Deutsche Bank National Trust Co. v. Leigh. 137 AD3d 841, 28 NYS3d 86 (2"d Dept., 2016); Nationstar Mortgage LLC v. Catizone, 127 AD3d 1151, 9 NYS3d 315 (2"d Dept., 2015)). At issue is whether the evidence submitted by the plaintiff is sufficient to establish its right to foreclose. The defendant does not contest his failure to make timely payments due under the tem1s of the promissory note and mortgage agreement since December 1, 2010. Rather, the issues raised by the defendant concerns whether the proof submitted by the mortgage lender provides sufficient admissible evidence to prove its entitlement to summary judgment based upon defendant's continuing default and plaintiffs standing. CPLR 4518 provides: Business records. (a) Generally. Any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence or event, shall be admissible in evidence in proof of that act, transaction, occurrence or event, if the judge finds that it was made in the regular course of any business and that it was the regular course of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter. The Court of Appeals in People v. Guidice, 83 NY2d 630, 635, 612 NYS2d 350 (1994) explained that "the essence of the business records exception to the hearsay rule is that records systematically made for the conduct of business... are inherently highly trustworthy because they are routine reflections of day-to-day operations and because the entrant's obligation is to have them truthful and accurate for purposes of the conduct of the enterprise." (quoting People v. Kennedy, 68 NY2d 569, 579, 510 NYS2d 853 (1986)). It is a unique hearsay exception since it represents hearsay deliberately created and differs from all other hearsay exceptions which assume that declarations which come within them were not made deliberately with litigation in mind. Since a business record keeping system may be designed to meet the hearsay exception, it is important to provide predictability in this area and discretion should not normally be exercised to exclude such evidence on grounds not foreseeable at the time the record was made (see Trotti v. Estate of Buchanan, 272 AD2d 660, 706 NYS2d 534 (3'd Dept., 2000)). The three foundational requirements ofCPLR 4518(a) are: 1) the record must be made in the regular course of business- reflecting a routine, regularly conducted business activity, needed and relied upon in the performance of business functions; 2) it must be the regular course of business to make the records- (i.e. the record is made in accordance with established procedures for the routine, systematic making of the record); and 3) the record must have been made at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter, assuring that the recollection is fairly accurate and the entries routinely made (see People v. Kennedy, supra@ pp. 579-580)). The "mere filing of papers received from other entities, even if such papers are retained in the regular ., -.)- [* 4] course of business, is insufficient to qualify the documents as business records." (People v. Cratsley, 86 NY2d 81, 90, 629 NYS2d 992 (1995)). The records will be admissible "if the recipient can establish personal knowledge of the maker's business practices and procedures, or that the records provided by the maker were incorporated into the recipient's own records or routinely relied upon by the recipient in its business." (Stale of New York v. 158'" S1ree1 & Riverside Drive Housing Company, Inc., 100AD3d 1293, 1296, 956 NYS2d 196 (2012); leave denied, 20 NY3d 858 (2013); see also Viviane Etienne Medical Care, P.C. v. Country-Wide Insurance Company. 25 NY3d 498, 14 NYS3d 283 (2015); Deutsche Bank National Trust Co. v. Monica, 131 AD3d 737, 15 NYS3d (3'd Dept., 2015); People v. DiSalvo, 284 AD2d 547, 727 NYS2d 146 (2°d Dept., 2001); Matter of Carothers v. GEICO, 79 AD3d 864, 914 NYS2d 199 (2"d Dept., 2010) ). The statute (CPLR 4518) clearly does not require a person to have personal knowledge of each and every entry contained in a business record (see Citibank NA . v. Abrams, 144 AD3d 1212, 40 NYS3d 653 (3 1d Dept., 2016); HSBC Bank USA, NA. v. Sage, 112 AD3d 1126, 977 NYS2d 446 (3'd Dept., 2013); Landmark Capital Inv. Inc. v. LI-Shan Wang, supra.)). As the Appellate Division, Second Department stated in Citigroup v. Kopefowitz, 14 7 AD3d 1014, 48 NYS3d 223 (2"d Dept., 2017): "There is no requirement that a plaintiff in a foreclosure action rely on a particular set of business records to establish a prima facie case, so long as the plaintiff satisfies the admissibility requirements ofCPLR 4518(a) and the records themselves actually evince the facts for which they are relied upon." Decisions interpreting CPLR 4518 are consistent to the extent that the three foundational requirements: 1) that the record be made in the regular course of business; 2) that it is in the regular course of business to make the record; and 3) that the record must be made at or near the time the transaction occurred. - if demonstrated, make the records admissible since such records are considered trustworthy and reliable. Moreover, the language contained in the statute specifically authorizes the court discretion to determine admissibility by stating "if the judge finds" that the three foundational requirements are satisfied the evidence shall be admissible. The affidavit submitted from the mortgage servicer/attorney-in-fact's (Newrez LLC's) foreclosure specialist dated August 21, 2019 ("Woods affidavit") provides the evidentiary foundation for establishing the mortgage lender's right to foreclose. The affidavit sets forth the employee's review of the business records maintained by the mortgage servicer; the fact that the books and records are made in the regular course ofNewrez's business; that it was Newrez's regular course of business to maintain such records; that the records were made at or near the time the underlying transactions took place; that the records were created by an individual with personal knowledge of the underlying transactions; and that to the extent the business records referred to were compiled by a prior servicer those records were integrated and incorporated into the business records maintained by Newrez in its regular course of business and are relied upon by Newrez in its regular course of business. The Appellate Division, Second Department's decision in Bank ofNew York Mellon v. Gordon, 171 AD3d 197, 97 NYS3d 286 (2"d Dept., 2019) reiterated the admissibility of testimony concerning business records maintained by a current servicer which were compiled by a prior servicer, and thereafter "incorporated into the recipient's own records and routinely relied upon by the recipient in its own business" (citations omitted- ID at page 209). Based upon the submission of this affidavit, plaintiff has provided an admissible evidentiary foundation which satisfies the business records exception to the hearsay rule with respect to the issues raised in this summary judgment application. With respect to the issue of standing, plaintiff has proven standing by its submission of -4- [* 5] documentary evidence in the form of a copy of the original indorsed in blank promissory note, together with the submission of the affidavit from the mortgage servicer's (Newrez's) foreclosure specialist ("Woods affidavit") attesting to plaintiff's possession of the original indorsed in blank promissory note beginning July 28, 2005 and continuously since that date which was prior to the date this action was commenced on August 20, 20I2(Aurora Loan Services v. Taylor, supra.; Wells Fargo Bank, NA v. Parker, supra.; US. Bank, NA. v. Ehrenfeld. 144 AD3d 893, 41NYS3d269 (2"d Dept., 2016); GMAC v. Sidberry, 144 AD3d 863, 40 NYS3d 783 (2"d Dept., 20 16); US. Bank, NA. v. Carnivale, 138 AD3d 1220 (3rd Dept., 2016)). Any alleged issues concerning the mortgage assignment is therefore irrelevant to the issue of standing since plaintiff has established possession of the promissory note prior to commencing this action (FNMA v. Yakaputz II, Inc.. 141AD3d506, 35 NYS3d 236 (2"d Dept., 2016); Deutsche Bank National Trust Company v. Leigh. 137 AD3d 841 , 28 NYS3d 86 (2"d Dept., 20 l 6)). With respect to the issue of the defendant's default in making payments, in order to establish prima facie entitlement to judgment as a matter of law in a foreclosure action, the plaintiff must submit the mortgage, the unpaid note and admissible evidence to show default (see Property Asset Management, Inc. v. Souffrant et al., 162 AD3d 919, 75 NYS3d 432 (2"d Dept., 2018); PennyMac Holdings, Inc. V Tomanelli, 139 AD3d 688, 32 NYS3d 181 (2"d Dept., 2016); North American Savings Bank v. Esposito-Como, 141 AD3d 706, 35 NYS3d 491 (2"d Dept., 2016); Washington Mutual Bank v. Schenk, 112 AD3d 615, 975 NYS2d 902 (2"d Dept., 2013)). Plaintiff has provided admissible evidence in the form of a copy of the note and mortgage, and an affidavit attesting to borrower Esposito 's undisputed default in making timely mortgage payments sufficient to sustain its burden to prove this defendant has defaulted under the terms of the parties agreement by failing to make timely payments since December 1, 2010. The record remains undisputed that defendant Esposito does not contest the fact that he has defaulted in making any payments for nearly a decade and in fact concedes such default with such an issue not in contest (CPLR 4518; see Wells Fargo Bank, NA. v. Thomas, supra. ; Citigroup v. Kopelowitz, supra.)). Accordingly, and in the absence of any proof to raise an issue of fact concerning the defendant's continuing default, plaintiffs application for summary judgment based upon defendant's breach of the mortgage agreement and promissory note must be granted. Defendant Esposito's remaining claims are without merit and need not be further addressed Moreover, the borrower has failed to submit any admissible evidence to support his remaining affirmative defenses in opposition to plaintiff's motion. Accordingly, those defenses must be deemed abandoned and are hereby dismissed (see Kronick v. L.P. Therault Co., Inc. , 70 AD3d 648, 892 NYS2d 85 (2"d Dept., 2010); Citibank, NA. v. Van Brunt Properties, LLC, 95 AD3d 1158, 945 NYS2d 330 (2"d Dept., 2012); Flagstar Bank v. Bellafiore, 94 AD3d 0144, 943 NYS2d 551 (2"d Dept., 2012); Wells Fargo Bank 1\!finnesota, N A. v. Perez, 41AD3d590, 837 NYS2d 877 (2"d Dept., 2007)). Accordingly, plaintiffs motion seeking an order granting summary judgment is granted. The proposed order of reference has been signed simultaneously with execution of this order. HON. HOWARD H. HECKMAN, JR. Dated: September 11. 2020 J.S.C. -5-
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